This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 23 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A summary of the revenue and expenses for a specific period of time, such as a month or a year. Shows the Net Income of a business. A) Balance Sheet. B) Income Statement. C) Retained Earnings Statement. D) Statement of Cash Flows. Show Answer Correct Answer: B) Income Statement. 2. Assets that are kept for less than a year is classified as: A) Liabilities. B) Current assets. C) Non-current assets. D) Fixed assets. Show Answer Correct Answer: B) Current assets. 3. Income earned in advance A) Liability. B) Asset. C) None. D) None of above. Show Answer Correct Answer: A) Liability. 4. Which should not be included in the acquisition cost of an asset. A) Taxes paid at time of purchase. B) Transportation charges. C) Interest paid on the loan to purchase the asset. D) Installation charges. Show Answer Correct Answer: C) Interest paid on the loan to purchase the asset. 5. Principle that assumes the business is in business for the long haul and is not expected to be interrupted or to close down in the short run. A) Principle of Periodicity. B) Principle of Consistency. C) Principle of Continuity. D) Principle of Permanence of Methods. Show Answer Correct Answer: C) Principle of Continuity. 6. Which of the following are assets? A) Buildings you own. B) Land. C) Office equipment. D) All of the answers are correct. Show Answer Correct Answer: D) All of the answers are correct. 7. Define the term 'depreciation' in the context of financial accounting. A) The process of acquiring a new asset for a business. B) Allocation of the cost of a tangible asset over its useful life. C) The increase in value of an asset over time. D) Selling an asset at a higher price than its original cost. Show Answer Correct Answer: B) Allocation of the cost of a tangible asset over its useful life. 8. Is gross salary before or after deductions? A) Before. B) After. C) During. D) None of the above. Show Answer Correct Answer: A) Before. 9. Pryor Company receives net proceeds of $ 42, 000 on the sale of stock investments that cost $ 39, 500. This transaction will result in reporting in the income statement a: A) Loss of $ 2, 500 under "Other expenses and losses.". B) Loss of $ 2, 500 under "Operating expenses.". C) Gain of $ 2, 500 under "Other revenues and gains.". D) Gain of $ 2, 500 under "Operating revenues.". Show Answer Correct Answer: C) Gain of $ 2, 500 under "Other revenues and gains.". 10. Journal Proper records A) All transactions. B) Only Credit Transaction. C) Only Cash Transaction. D) All the transaction not recorded in subsidiary book. Show Answer Correct Answer: D) All the transaction not recorded in subsidiary book. 11. Inventory recording system by carrying out stock taking at the end of each period A) Imprest System. B) Perpetual System. C) Periodic System. D) Fluctuative System. Show Answer Correct Answer: C) Periodic System. 12. Purchased for meeting consumption amounting to Rp. 300, 000.00 The journal to record the above transactions using the variable funds method is..... A) Not journaled. B) Consumption expenses IDR 300, 000 Bank cash IDR 300, 000. C) Consumption expenses IDR 300, 000 Petty Cash IDR 300, 000. D) Consumption expenses IDR 300, 000 Cash IDR 300, 000. Show Answer Correct Answer: C) Consumption expenses IDR 300, 000 Petty Cash IDR 300, 000. 13. Financial accounting reports are produced to meet the needs of: A) Investors and employees of the enterprise. B) Investors and lending people/institutions. C) Corporate employees and lending people/institutions. D) Investors and customers. Show Answer Correct Answer: B) Investors and lending people/institutions. 14. On October 1, 2020, the $ 12, 000 premium on a one-year insurance policy for the building was paid and recorded as Prepaid Insurance Expense. On December 31, 2020 (end of the accounting period), what adjusting entry is needed? A) Insurance expense (+E) 2, 000 Prepaid insurance expense (-A) 2, 000. B) Prepaid insurance expense (+A) 9, 000 Insurance expense (-E) 9, 000. C) Prepaid insurance expense (+A) 3, 000 Insurance expense (-E) 3, 000. D) Insurance expense (+E) 3, 000 Prepaid insurance expense (-A) 3, 000. Show Answer Correct Answer: D) Insurance expense (+E) 3, 000 Prepaid insurance expense (-A) 3, 000. 15. A consignee is paid del-credere commission for bearing the risk of bad debts on account of credit sales made by him. A) True. B) False. Show Answer Correct Answer: A) True. 16. Which of the following is not an Asset account? A) Unearned Revenue. B) Prepaid Expense. C) Accounts Receivable. D) Cash. Show Answer Correct Answer: A) Unearned Revenue. 17. WHICH OF THE FOLLOWING MAYBE CONSIDERED AN SME IN THE PHILIPPINES? A) A RETAIL COMPANY WITH TOTAL LIABILITIES OF P200, 000, 000. B) A BANK WITH TOTAL ASSETS OF P100, 000, 000. C) AN INSURANCE COMPANY WITH TOTAL LIABILITIES OF P230, 000, 000. D) A MANUFACTURING COMPANY WITH TOTAL ASSETS OF P500, 000, 000. Show Answer Correct Answer: A) A RETAIL COMPANY WITH TOTAL LIABILITIES OF P200, 000, 000. 18. Depreciation is calculated on A) Closing Stock. B) Liability. C) Asset. D) Capital. Show Answer Correct Answer: C) Asset. 19. COST ACCOUNTING IS USEFUL TO A) CONTROLLING COST. B) ASCERTAINMENT OF FINANCIAL POSITION. C) FIND OUT PROFIT OR LOSS. D) ALL THE ABOVE. Show Answer Correct Answer: A) CONTROLLING COST. 20. Where is profit recorded A) Current Asset. B) Non current asset. C) Current liability. D) OE. Show Answer Correct Answer: D) OE. 21. A three column cash book contains column for A) Cash, assets and liabilities. B) Bank, cash and asset. C) Cash, bank and return. D) Discount, cash and bank. Show Answer Correct Answer: D) Discount, cash and bank. 22. Departments operate in the same building along with the main office A) Yes. B) No. C) None of the above. D) All of the Above. Show Answer Correct Answer: A) Yes. 23. Reducing balance method for depreciation is followed to have a uniform charge for depreciation and repairs and maintenance together. A) True. B) False. Show Answer Correct Answer: A) True. 24. What is the role of management in using financial accounting information? A) To only focus on short-term financial goals and ignore long-term implications. B) To rely solely on financial accounting information without considering other factors. C) To make informed decisions, monitor financial health, and communicate financial performance. D) To ignore financial information and make decisions based on intuition. Show Answer Correct Answer: C) To make informed decisions, monitor financial health, and communicate financial performance. 25. Identify the type of expenditure. Cost of rebuilding warehouse wall which had fallen down A) Revenue. B) Capital. Show Answer Correct Answer: A) Revenue. 26. A place or location within an accounting system in which the increases and decreases in a specific asset, liability, or equity item is recorded and stored is called a(n): A) Trial balance. B) Account. C) Chart of accounts. D) Ledger. E) Journal. Show Answer Correct Answer: B) Account. 27. Assume that Company ABC purchased real estate for cash of Rp. 500, 000, 000, -. On the land stood an old warehouse which had to be razed because it was not suitable for the company's intended use. After deducting the proceeds from the sale of the remains of the old building, ABC Company still had to spend Rp. 60, 000, 000, -. The notary fee is IDR. 10, 000, 000, -, and brokerage commission of Rp. 8, 000, 000, -which is also borne by the company. How to record the land purchase. A) Tanah 578.000 (K) Kas 578.000. B) Kas 578.000 (K) Tanah 578.000. C) Kas 500.000 (K) Tanah 500.000. D) Tanah 500.000 (K) Kas 500.000. Show Answer Correct Answer: A) Tanah 578.000 (K) Kas 578.000. 28. Bought a factory machine for Rp. 55, 000, 000, related additional costs include, VAT of Rp. 5, 500, 000, insurance premium of Rp. 550, 000 and machine installation costs of Rp. 1, 450, 000. then the purchase price is..... A) Rp. 55.000.000. B) Rp. 65.500.000. C) Rp. 56.450.000. D) Rp. 62.500.000. E) Rp. 55.550.000. Show Answer Correct Answer: D) Rp. 62.500.000. 29. A bank reconciliation statement is A) Part of the cash book. B) Part of Bank account. C) Part of financial statement. D) None of the above. Show Answer Correct Answer: D) None of the above. 30. Debenture Interest is A) A payment made to a shareholder. B) Interest earned from a bank. C) Interest paid on a debenture. D) A long term loan. Show Answer Correct Answer: C) Interest paid on a debenture. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesFinancial Accounting Quiz 1Financial Accounting Quiz 2Financial Accounting Quiz 3Financial Accounting Quiz 4Financial Accounting Quiz 5Financial Accounting Quiz 6Financial Accounting Quiz 7Financial Accounting Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books