This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 31 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 31 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The following is the extract of Statement of Financial Position as at 31/12/20:Non Current AssetMotor vehicle RM 56, 000Machinery RM 25, 300 Motor vehicle are revalued at RM 35, 200 while machinery at RM23, 000. What is the correct changes for machinery? A) Increase RM 20, 800. B) Increase RM 2, 300. C) Decrease RM 20, 800. D) Decrease RM 2, 300. Show Answer Correct Answer: D) Decrease RM 2, 300. 2. Average Clause is a clause contained in a fire insurance policy. A) True. B) False. Show Answer Correct Answer: A) True. 3. Converting Assets to Expenses What would be the impact on net income A) Net income would increase. B) Net income would remain unchanged. C) Net income would decrease. D) None of the above. Show Answer Correct Answer: C) Net income would decrease. 4. Year of the latest Companies Act A) 1956. B) 2019. C) 2020. D) 2013. Show Answer Correct Answer: D) 2013. 5. The State Bank of India allocated how much amount towards the fight against Covid-19? A) Rs. 60 Cr. B) Rs. 70 Cr. C) Rs. 71 Cr. D) Rs. 92 Cr. Show Answer Correct Answer: C) Rs. 71 Cr. 6. A GAIN ON THE INITIAL RECOGNITION OF A NEWLY BORN BIOLOGICAL ASSET IS RECOGNIZED IN A) OTHER COMPREHENSIVE INCOME. B) PROFIT OR LOSS. C) SHARE PREMIUM. D) RETAINED EARNINGS. Show Answer Correct Answer: B) PROFIT OR LOSS. 7. Pre-Income tax is also known as ..... A) EBT. B) EBIT. C) EAT. D) EBITDA. Show Answer Correct Answer: A) EBT. 8. In the books of hire vendor the depreciation is charged A) True. B) False. Show Answer Correct Answer: B) False. 9. What is liability when asset is N4000, and capital is N2000? A) N20000. B) N1000. C) N6000. D) N2000. Show Answer Correct Answer: D) N2000. 10. What is the account number associated with the debt to the state A) 42. B) 44. C) 43. D) 50. Show Answer Correct Answer: C) 43. 11. In the purchase of a business, a buyer has paid more than the of the value of the net assets of the business. The excess payment is referred to as A) Premium. B) Goodwill. C) Net profit. D) Bonus. Show Answer Correct Answer: B) Goodwill. 12. Which of the following is not reported on the income statement? A) Revenues earned by a business. B) Expenses incurred by a business. C) Withdrawals. D) Net income. E) All of these answers are correct. Show Answer Correct Answer: C) Withdrawals. 13. ADJUSTING ENTRIES NORMALLY INVOLVED A) REAL ACCOUNTS ONLY. B) NOMINAL ACCOUNTS ONLY. C) REAL AND NOMINAL ACCOUNTS. D) LIABILITY ACCOUNTS ONLY. Show Answer Correct Answer: C) REAL AND NOMINAL ACCOUNTS. 14. Principle that prohibits adding fake positive items on financial statement to counterbalance real negative items. A) Principle of noncompensation. B) Principle of sincerity. C) Principle of prudence. D) None of above. Show Answer Correct Answer: A) Principle of noncompensation. 15. Before an adjusting entry for accrued salaries is made, the amount in Salaries Expense is understated and the amount in Salaries Payable is also understated. A) True. B) False. Show Answer Correct Answer: A) True. 16. Suspense account is usually closed when ..... A) Accounts are finalised. B) Accounts are audited. C) All the errors are rectified. D) Unbalanced account. Show Answer Correct Answer: C) All the errors are rectified. 17. Which of the following are the disadvantage of Corporation? A) Double Taxation. B) Great capacity of raising capital. C) Limited Life. D) Easy transfer of Ownership. Show Answer Correct Answer: A) Double Taxation. 18. Which of the following statements is false? Consolidated financial statements are useful to: A) Determine the profi tability of specifi c subsidiaries. B) Determine the full extent of total obligations of companies under common control. C) Determine the total profi tability of companies under common control. D) Determine the breadth of a parent company's operations. Show Answer Correct Answer: A) Determine the profi tability of specifi c subsidiaries. 19. Which one of the following industries manufactures telephones, computers etc. A) Cement. B) Iron and steel. C) Electronic. D) Chemical. Show Answer Correct Answer: C) Electronic. 20. Petty cash method where journalizing is done when replenishing A) Imprest Fund System. B) Fluctuative Fund System. C) Direct Write Off Method. D) Allowance Method. Show Answer Correct Answer: A) Imprest Fund System. 21. From an accounting standpoint, cash includes which of the following? A) Payments on credit. B) Physical assets. C) Credit accounts. D) Checks. Show Answer Correct Answer: D) Checks. 22. Discuss the limitations of double-entry accounting. A) Complexity, cost, and potential for human error. B) Simplicity, low cost, and accuracy. C) Transparency, reliability, and ease of use. D) Flexibility, efficiency, and reduced risk. Show Answer Correct Answer: A) Complexity, cost, and potential for human error. 23. What is the name of the accounting method created by Luca Pacioli? A) Double entry system. B) Triple entry system. C) Single entry system. D) Matching entry system. Show Answer Correct Answer: A) Double entry system. 24. Liabilities are resources owned by the business with the purpose of using it for generating future profits. A) False. B) True. Show Answer Correct Answer: A) False. 25. What is the role of GAAP (Generally Accepted Accounting Principles) in financial accounting? A) GAAP is not important in financial accounting. B) GAAP provides a standard framework for financial reporting. C) GAAP is only applicable to small businesses. D) GAAP is a flexible set of guidelines with no standard framework. Show Answer Correct Answer: B) GAAP provides a standard framework for financial reporting. 26. The system of acquiring a business as a going concern by another business is (a) business consideration (b) goodwill (c) redemption reserve (d) purchase of business. A) Purchase of business. B) Business consideration. C) Goodwill. D) Redemption reserve. Show Answer Correct Answer: A) Purchase of business. 27. According to traditional classification, the nature of consignee account is: A) Valuation. B) Real. C) Nominal. D) Personal. Show Answer Correct Answer: D) Personal. 28. When Capital is increased by an amount, it is recorded on the: A) Left or credit side of the accoun. B) Right or debit side of the account. C) Left or debit side of the account. D) Right or credit side of the account. Show Answer Correct Answer: D) Right or credit side of the account. 29. The financial statement that reports revenue and expenses on a specific date. A) Worksheet. B) Balance sheet. C) Income statement. D) None of above. Show Answer Correct Answer: C) Income statement. 30. Qwik Company showed the following balances at the end of its first year:Cash $ 8, 700Prepaid insurance 9, 400Accounts receivable 7, 000Accounts payable 5, 800Notes payable 9, 400Owner's Capital 2, 300Owner's Drawings 1, 400Revenues 44, 000Expenses 35, 000What did Qwik Company show as total credits on its trial balance? A) 62, 900. B) 70, 900. C) 61, 500. D) 52, 400. Show Answer Correct Answer: C) 61, 500. ← 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