This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 28 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 28 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Misrepresenting the truth, cheating, or deceiving others on purpose. A) Fraud. B) White Collar Crime. C) Conning. D) None of above. Show Answer Correct Answer: A) Fraud. 2. If working capital of a company is nil, what will be the current ratio? A) 1:1. B) 2:1. C) 1:0. D) 0:1. Show Answer Correct Answer: A) 1:1. 3. Which statement is true A) Owners equity+assets=current liabilities. B) Total assets-Total liabilities=owners equity. C) Income+liabilities =owners equity. D) None of above. Show Answer Correct Answer: B) Total assets-Total liabilities=owners equity. 4. WHICH REPORT IS NOT A COMPONENT OF THE FINANCIAL STATEMENTS? A) NOTES TO FINANCIAL STATEMENTS. B) BOARD OF DIRECTORS REPORT. C) STATEMENT OF FINANCIAL POSITION. D) STATEMENT OF CHANGES EQUITY. Show Answer Correct Answer: B) BOARD OF DIRECTORS REPORT. 5. The owner invests personal cash in the business.-The Assets will A) Increase. B) Decrease. C) No affect. D) None of above. Show Answer Correct Answer: A) Increase. 6. Receipt & Payment Account only records the revenue nature of receipts and expenses. A) True. B) False. Show Answer Correct Answer: B) False. 7. A business omitted discounts allowed of $ 700 from its trial balance. During the year a machine had been sold for cash of $ 500 but the only accounting entry made was a debit in the bank account.What is the balance on the suspense account before these errors are corrected? A) $ 1200 debit. B) $ 1200 credit. C) $ 200 credit. D) $ 200 debit. Show Answer Correct Answer: D) $ 200 debit. 8. Current Assets / Current Liabilities =? Measures a relationship among amounts, and facilitates comparisons among companies of different sizes. A) Current Ratio. B) Quick Ratio. C) Return on Assets. D) Working Capital. Show Answer Correct Answer: A) Current Ratio. 9. Trial balance is prepared from A) Ledger. B) Ledgers and journal. C) Ledger and cash book. D) None of these. Show Answer Correct Answer: C) Ledger and cash book. 10. Company A buys 70% ownership of company B, an asset with a book value of IDR 400, 000, 000 and a fair value of IDR 600, 000, 000, then it will be recorded at? A) Rp 440.000.000. B) Rp 540.000.000. C) Rp 560.000.000. D) Rp 600.000.000. Show Answer Correct Answer: B) Rp 540.000.000. 11. When is a suspense account prepared A) When an error of principle is corrected. B) When a Balance Sheet fails to balance. C) When an error of omission is corrected. D) When a trial balance fails to balance. Show Answer Correct Answer: D) When a trial balance fails to balance. 12. Explain the concept of double-entry accounting. A) Double-entry accounting involves using only debit entries. B) Every transaction is recorded in at least two accounts, with one debit and one credit entry. C) Every transaction is recorded in only one account. D) There is no need for both debit and credit entries in double-entry accounting. Show Answer Correct Answer: B) Every transaction is recorded in at least two accounts, with one debit and one credit entry. 13. The objective of branch accounting is to know A) Profit and loss. B) Profit and loss of each department. C) Profit and loss of head office. D) Profit and loss of manufacturing companies. Show Answer Correct Answer: A) Profit and loss. 14. General Nature items are Recording in which account? A) General Trading Account. B) General Profit and Loss A/C. C) Balance Sheet. D) Position Statement of Departments. Show Answer Correct Answer: B) General Profit and Loss A/C. 15. The owner of business purchase a motor van for his private use and it is not been recorded in the business account. Which accounting concept did it follow? A) Business entity concept. B) Monetary measurement concept. C) Materiality concept. D) Consistency concept. Show Answer Correct Answer: A) Business entity concept. 16. Income that has been earned but not yet collected. A) Accrued income. B) Prepaid income. C) Unearned income. D) All of these. Show Answer Correct Answer: A) Accrued income. 17. The list of accounts unique to a specific company based on its business. These accounts are used to track dollar amounts coming into and going out of a company. A) Chart of accounts. B) T Account. C) Accounts list. D) None of above. Show Answer Correct Answer: A) Chart of accounts. 18. What is the transaction for the purchase of supplies? A) Debit unearned revenue, credit supplies. B) Debit supplies, credit Owner's capital. C) Debit Accounts payable, Credit supplies. D) Debit supplies, credit accounts payable. Show Answer Correct Answer: D) Debit supplies, credit accounts payable. 19. If a Personal Account carrying Credit balance is to be carried forward to the subsequent Accounting period it will be written in A) Cr. Side of Balance sheet. B) Asset side of Balance sheet. C) Dr side of Balance Sheet. D) Liability side of Balance sheet. Show Answer Correct Answer: D) Liability side of Balance sheet. 20. If petty cash is maintained using a fixed fund system, petty cash disbursement transactions are recorded when..... A) Establishment of a petty cash fund. B) Making adjusting journals. C) Petty cash replenishment. D) Petty cash withdrawals/disbursements. Show Answer Correct Answer: C) Petty cash replenishment. 21. The amount of money owed to others for goods or services bought on credit. A) Accounts payable. B) Accounts receivable. C) Loans. D) Expenses. Show Answer Correct Answer: A) Accounts payable. 22. Cash received from Debtor will be recorded in A) Cash Book. B) Journal Proper. C) Sales Book. D) Purchase Book. Show Answer Correct Answer: A) Cash Book. 23. If general expenses and trade expenses are given in Trial balance, then trade expenses will be taken in A) Trading Account. B) Profit and Loss Account. C) Balance Sheet. D) None. Show Answer Correct Answer: A) Trading Account. 24. How do financial statements help stakeholders make decisions? A) By creating confusion and uncertainty. B) By providing important financial information for decision-making. C) By providing irrelevant information. D) By causing delays and inefficiencies. Show Answer Correct Answer: B) By providing important financial information for decision-making. 25. A record of all accounts used by a business is called a: A) Trial balance. B) General Journal. C) Ledger. D) Book of original entry. E) Journal. Show Answer Correct Answer: C) Ledger. 26. Which is not a benefit of financial accounting?A. Maintaining systematic recordsB. Protecting and safeguarding business assetsC. Historical in natureD. Facilitates rational decision making A) Maintaining systematic records. B) Protecting and safeguarding business assets. C) Historical in nature. D) Facilitates rational decision making. Show Answer Correct Answer: C) Historical in nature. 27. What are the key differences between cash basis accounting and accrual basis accounting? A) Cash basis records transactions when invoices are exchanged, while accrual basis records transactions when they occur. B) Cash basis records transactions when cash is exchanged, while accrual basis records transactions when they occur. C) Cash basis records transactions when credit is exchanged, while accrual basis records transactions when they occur. D) Cash basis records transactions when checks are exchanged, while accrual basis records transactions when they occur. Show Answer Correct Answer: B) Cash basis records transactions when cash is exchanged, while accrual basis records transactions when they occur. 28. Land is an example of A) Current asset. B) Tangible asset. C) Intangible asset. D) None of above. Show Answer Correct Answer: B) Tangible asset. 29. Which is not an asset in the balance sheet of a bank? A) Deposits. B) Investments. C) Loans. D) Cash & Balance with RBIRBI. Show Answer Correct Answer: A) Deposits. 30. In a business combination, which of the following will occur? A) All identifiable assets and liabilities are recorded at fair value at the date of acquisition. B) All identifiable assets and liabilities are recorded at book value at the date of acquisition. C) Goodwill is recorded if the fair value of the net assets acquired exceeds the book value of the net assets acquired. D) None of the above is correct. Show Answer Correct Answer: A) All identifiable assets and liabilities are recorded at fair value at the date of acquisition. ← 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