This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 24 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 24 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Trading account is prepared to find out the Gross profit or Gross loss of the organization. A) False. B) True. Show Answer Correct Answer: B) True. 2. Module in MYOB to record cash receipt transactions A) Inventory. B) Sales. C) Banking. D) Purchases. Show Answer Correct Answer: C) Banking. 3. Which of the following is not an assets A) Cash balance. B) Loan from K Harris. C) Debtors. D) Buildings. Show Answer Correct Answer: B) Loan from K Harris. 4. What is the total cost with sales tax? Price $ 330.00 Tax 7% A) $ 375.00. B) $ 23.10. C) $ 360.00. D) $ 353.10. Show Answer Correct Answer: D) $ 353.10. 5. Tax on company profits A) Corporation tax. B) Inheritance tax. C) Income tax. D) VAT. Show Answer Correct Answer: A) Corporation tax. 6. A properly designed internal control system: A) Eliminates the need for an audit. B) Requires the use of non-computerized systems. C) Lowers the company's risk of loss. D) Insures profitable operations. Show Answer Correct Answer: C) Lowers the company's risk of loss. 7. What is the correct double entry for partners introduce capital? A) DR Capital CR Assets. B) DR Assets CR Partners Current. C) DR Assets CR Partners Capital. D) DR Assets CR Appropriation. Show Answer Correct Answer: C) DR Assets CR Partners Capital. 8. Branches of "Accounting" A) Financial accounting. B) Coat accounting. C) Management accounting. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. If total liabilities decreased by $ 40, 000 and owner's equity increased by $ 30, 000 during a period of time, then total assets must change by what amount and direction during that same period? A) $ 10, 000 decrease. B) $ 10, 000 increase. C) $ 50, 000 increase. D) $ 50, 000 decrease. Show Answer Correct Answer: A) $ 10, 000 decrease. 10. According to the FASB conceptual framework, an entity's revenue may result from A) A decrease in an asset from primary operations. B) An increase in an asset from incidental transactions. C) An increase in a liability from incidental transactions. D) A decrease in a liability from primary operations. Show Answer Correct Answer: D) A decrease in a liability from primary operations. 11. Which of the following item will appear on the credit site of the Profit And Loss Appropriation Account? A) Partners' Drawings. B) Interest On Capital. C) Interest On Drawings. D) Partners' Salaries. Show Answer Correct Answer: C) Interest On Drawings. 12. Accounting equation is stated as A) Liabilities-Assets=Capital. B) Assets-Liabilities=Capital. C) Assets+Capital=Liabilities. D) None of above. Show Answer Correct Answer: B) Assets-Liabilities=Capital. 13. Due to the extreme financial difficulties, an entity negotiated a restructuring of a 10%, P5, 000, 000 note payable due on December 31, 2019. The unpaid interest on the note on such date is P500, 000. The creditor agreed to reduce the face amount to P4, 000, 000, forgive the unpaid interest, reduce the interest rate to 8% and extend the due date three years from December 31, 2019. The present value of 1 at 10% for three periods is 0.75 and the present value of an ordinary annuity of 1 at 10% for three periods is 2.49. Under IFRS, what is the gain on extinguishment for 2019? A) 1, 703, 200. B) 540, 000. C) 1, 203, 200. D) 2, 000, 000. Show Answer Correct Answer: A) 1, 703, 200. 14. ..... not include overhead expenses related to the general operation of the business. A) Cost of Goods Sold. B) Indirect Expenses. C) Gross Profit. D) SG & A Expenses. Show Answer Correct Answer: A) Cost of Goods Sold. 15. Cost Plus Profit is known as A) Invoice Price. B) Loaded Price. C) A or B. D) None of the Above. Show Answer Correct Answer: C) A or B. 16. In reference to intercompany transactions between an investor and an investee, when the investor can significantly influence the investee, which of the following statements is correct, assuming that the investor is using the equity method? A) There is the presumption of arms-length bargaining between the related parties. B) As long as the investor recognizes the effects of the transaction in its financial statements, it is not required to provide any additional disclosures. C) In reporting its share of earnings and losses of an investee, the investor must eliminate the effect of profits and losses on the intercompany transactions until they are realized. D) None of the above is correct. Show Answer Correct Answer: C) In reporting its share of earnings and losses of an investee, the investor must eliminate the effect of profits and losses on the intercompany transactions until they are realized. 17. "Assets = Liabilities + Owner's Equity" is referred to in accounting as A) The basic accounting equation. B) The balance sheet. C) The accountant's creed. D) The accountant's motto. Show Answer Correct Answer: A) The basic accounting equation. 18. Which of the following best describes the operative chart of accounts? A) Contains the operational accounts that are used to record the financial impact of an organization's day-to-day transactions. B) Used to enable companies to meet special country-specific reporting requirements. C) Contains only accounts receivable transaction. D) Contains accounts that are used by multiple companies to consolidate their financial reporting. E) Contains only accounts payable transactions. Show Answer Correct Answer: A) Contains the operational accounts that are used to record the financial impact of an organization's day-to-day transactions. 19. During 2015, Rani sold goods costing $ 1, 500 to its subsidiary, Moly, at a gross profit of 20%. Moly had $ 300 of these goods on hand at Dec 31, 2015. Which of the following journal entry is recorded by Moly in 2015? A) Dr. CoGS $ 1, 575Cr. Inventories $ 1, 575. B) Dr. Cash in Bank 1, 875Cr. Sales 1, 875. C) Dr. CoGS $ 1, 500Cr. Inventories $ 1, 500. D) Dr. Inventories $ 1, 800Cr. Cash in Bank $ 1, 800. E) Dr. Cash in Bank $ 1, 875Cr. Inventories $ 1, 875. Show Answer Correct Answer: A) Dr. CoGS $ 1, 575Cr. Inventories $ 1, 575. 20. Where was the first successful textile mill established in India? A) Mumbai. B) Ahmedabad. C) Bangalore. D) Bengal. Show Answer Correct Answer: A) Mumbai. 21. The basic principle of a closing entry is that, the account to be closed should be credited if it has a debit balance and the account to which it is transferred should be debited. A) False. B) True. Show Answer Correct Answer: B) True. 22. The business entity concept means A) The owner is part of the business entity. B) An entity is organised according to that country's law. C) An entity is organised according to teh rules set by the MASB. D) The entity is an individual economic unit for which data are recorded, analysed, and reported. Show Answer Correct Answer: D) The entity is an individual economic unit for which data are recorded, analysed, and reported. 23. The process of transferring the debit & credit items from a journal to their respective a/c in the ledger is termed as? A) Accounting. B) Balancing. C) Journalising. D) Ledger Posting. Show Answer Correct Answer: D) Ledger Posting. 24. Assets normally show A) Credit balances. B) Debit balances. C) Debit and credit balances. D) Debit or credit balances. Show Answer Correct Answer: B) Debit balances. 25. Which of the following group belongs to current assets? A) Cash at bank, motor vehicle, inventories. B) Account receivable, inventories, cash at bank. C) Cash in hand, furniture, inventories. D) Land, building, machinery. Show Answer Correct Answer: B) Account receivable, inventories, cash at bank. 26. The production cost is the total of: A) A. prime cost + factory overhead expenses. B) B. direct labour + direct materials + direct expenses. C) C. administrative expenses + selling expenses. D) None of the above. Show Answer Correct Answer: A) A. prime cost + factory overhead expenses. 27. Accounting information is ..... if it is capable to provide feedback. A) Relevant. B) Reliable. C) Consistent. D) Comparable. Show Answer Correct Answer: A) Relevant. 28. A company's list of all ledger accounts and the identification numbers assigned to each account. A) Trial balance. B) Journal. C) Source document. D) Chart of accounts. Show Answer Correct Answer: D) Chart of accounts. 29. Accrued income is added to ..... and it is treated as an ..... A) Income, asset. B) Expenses, asset. C) Income, expense. D) Income, liability. Show Answer Correct Answer: A) Income, asset. 30. If total expenses exceed total revenue, a net loss is reported A) True. B) False. Show Answer Correct Answer: A) True. ← 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