This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 32 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 32 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In cash book, discount allowed on a dishonored cheque is cancelled by A) Crediting the bank column. B) Journal entry. C) Crediting discount column. D) Debiting the discount column. Show Answer Correct Answer: B) Journal entry. 2. The Income Summary Account is A) A temporary account. B) The account from which the amount of profit or loss is transferred to the owners' capital accounts in a partnership. C) Not a permanent account. D) Used in the closing process to summarize the amounts of revenues and expenses. E) All of the above. Show Answer Correct Answer: E) All of the above. 3. Which term refers to an ordered listing of accounts that comprise a company's general ledger? A) General ledger. B) Balance sheet. C) Bank ledger. D) Chart of accounts (COA). E) None of the above. Show Answer Correct Answer: D) Chart of accounts (COA). 4. The final day of the financial year saw the passing of a new law which rendered the goods that we sell illegal and the business would have to close down. The accountant says that the assets in the financial statements cannot be shown at cost. What accounting concept is being applied? A) Substance over form. B) Historical cost. C) Going concern. D) Realisation. Show Answer Correct Answer: C) Going concern. 5. According to the cost concept the assets are valued at A) Current price. B) Purchase price. C) Purchase price. D) Market price. Show Answer Correct Answer: B) Purchase price. 6. A petty cashier operates with an imprest of D1, 000 per week. At the end of the week he had disbursed D920. How much is needed to restore the imprest? A) D1, 000. B) D920. C) D80. D) D1, 920. Show Answer Correct Answer: B) D920. 7. Buyers will get a 2% discount if payment is made within 10 days after the transaction and payment is made within 30 days. The correct term to express this is..... A) 2/10. B) 2/10, n/30. C) N/30. D) 2%/10, n/30. E) 2/10, EOM. Show Answer Correct Answer: B) 2/10, n/30. 8. If a company wants to increase its reported income by manipulating its investment accounts, which should it do? A) Sell its "winner" trading securities and hold its "loser" trading securities. B) Hold its "winner" trading securities and sell its "loser" trading securities. C) Sell its "winner" available-for-sale securities and hold its "loser" available-for-sale securities. D) Hold its "winner" available-for-sale securities and sell its "loser" available-for-sale securities. Show Answer Correct Answer: C) Sell its "winner" available-for-sale securities and hold its "loser" available-for-sale securities. 9. Which quality has predictive and confirmatory value? A) Relevance. B) Faithful representation. C) Timeliness. D) Understandability. Show Answer Correct Answer: A) Relevance. 10. What is known as manufacturing, merchandising and service? A) Business types. B) Business forms. C) Business structures. D) None of above. Show Answer Correct Answer: A) Business types. 11. Limitations of financial accounting include A) Recording of monetary transaction. B) Recording non monetary transaction. C) May be manipulated. D) Both a and c. Show Answer Correct Answer: D) Both a and c. 12. Ordinary shares issued as part of a business combination are included in the EPS calculation from A) The midpoint of the accounting year. B) The beginning of eh accounting period. C) The date of acquisition. D) The end of the accounting period. Show Answer Correct Answer: C) The date of acquisition. 13. What is the balance sheet and what does it show? A) It shows the company's marketing strategy. B) It displays the company's employee satisfaction levels. C) It indicates the company's future stock performance. D) It shows a company's financial position at a specific point in time. Show Answer Correct Answer: D) It shows a company's financial position at a specific point in time. 14. One of the external users of accounting information are A) Proprietors. B) Creditors. C) Managers. D) Employees. Show Answer Correct Answer: B) Creditors. 15. This concept assumes that, for accounting purposes, the business enterprise and its owners are two separate independent entities A) Business Entity Concept. B) Cost Concept. C) Money Measurement Concept. D) Going Concern Concept. Show Answer Correct Answer: A) Business Entity Concept. 16. Residue value (salvage) contains the meaning..... A) The value of fixed assets after their economic life has expired. B) Final value of goods. C) Purchase price minus depreciation. D) Acquisition Price reduced by depreciation. Show Answer Correct Answer: A) The value of fixed assets after their economic life has expired. 17. Owner's drawing will be deducted from A) Furniture. B) Closing stock. C) Capital. D) Sales. Show Answer Correct Answer: C) Capital. 18. Insurance paid Rp. 18, 000, 000 for a period of 1 year starting May 1 2020 and recorded as insurance expense. If adjustments to insurance are made on June 30 2020. Then the correct amount of insurance expense is..... A) Rp. 7.500.000. B) Rp. 10.500.000. C) Rp. 1.500.000. D) Rp. 3.000.000. Show Answer Correct Answer: D) Rp. 3.000.000. 19. The source of accounting standards in Indonesia is..... A) Financial Accounting Standards. B) Issuer's Annual Report. C) GAAP. D) Accounting Principle Bulletins. Show Answer Correct Answer: A) Financial Accounting Standards. 20. The process of copying journal information to the ledger is called: A) Journalizing. B) Posting. C) An internal business transaction. D) An external business transaction. E) Double-entering. Show Answer Correct Answer: B) Posting. 21. The main difference between them is that management accounting describes internal information and includes both financial and non-financial information, while financial accounting includes only financial figures and company's performance. A) True. B) False. Show Answer Correct Answer: A) True. 22. Where goodwill is acquired on an investment in an associate the goodwill is: A) Amortised across the useful life of the goodwill. B) Carried as a separate asset in the accounting records of the investor. C) Not subject to amortisation. D) Written off immediately against the carrying amount of the investment. Show Answer Correct Answer: C) Not subject to amortisation. 23. Identify the type of expenditure. Transportation costs on sales A) Capital. B) Revenue. Show Answer Correct Answer: A) Capital. 24. Journal Entry for Purchasing Machine in Cash is? A) Purchase A/C (Debit)-To Machine A/C (Credit). B) Machine A/C (Debit)-To Cash A/C (Credit). C) Machine A/C(Debit)-To Purchase A/c (Credit). D) Purchase A/C (Debit)-To Cash A/C (Credit). Show Answer Correct Answer: B) Machine A/C (Debit)-To Cash A/C (Credit). 25. On October 1 2019, IDR 2, 400, 000 was paid for advertising in the Republika daily, for a publication period of 1 year. The transaction is recorded in the prepaid advertising estimate of Rp. 2, 400, 000. On December 31 2019, the following adjusting journal will be made..... A) Advertising costs (DI) Rp. 600, 000.00 Prepaid advertising (K) Rp. 600, 000.00. B) Prepaid advertising (D) Rp. 600, 000.00 Advertising costs (K) Rp. 600, 000.00. C) Advertising costs (D) Rp. 2, 400, 000.00 Prepaid advertising (K) Rp. 2, 400, 000.00. D) Prepaid advertising (D) Rp. 1, 800, 000.00 Advertising costs (K) Rp. 1, 800, 000.00. E) Advertising costs (D) Rp. 1, 800, 000.00 Prepaid advertising (K) Rp. 1, 800, 000.00. Show Answer Correct Answer: A) Advertising costs (DI) Rp. 600, 000.00 Prepaid advertising (K) Rp. 600, 000.00. 26. During the year, Ferguson made the following accounting entries to account for the depreciation charge relating to motor vehicles:Debit Accumulated depreciation-motor vehicles $ 5, 000 Credit Depreciation expense-motor vehicles $ 5, 000What are the journal entries required to account correctly for the depreciation charge for motor vehicles for the year? A) Debit Motor vehicles $ 5, 000, and Credit Accumulated depreciation $ 5, 000. B) Debit Depreciation Expense $ 10, 000, and Credit Accumulated depreciation $ 10, 000. C) Debit Depreciation expense $ 5, 000, and Credit Accumulated depreciation $ 5, 000. D) Debit Accumulated depreciation $ 10, 000, and Credit Depreciation expense $ 10, 000. Show Answer Correct Answer: B) Debit Depreciation Expense $ 10, 000, and Credit Accumulated depreciation $ 10, 000. 27. Which category of accounts is category 2? A) Debt. B) Asset. C) Income. D) Owner's equity. Show Answer Correct Answer: A) Debt. 28. The following are the common causes of depreciation except ..... A) Wear and tear. B) Passage of time. C) Usage. D) Amount of bad debts. Show Answer Correct Answer: D) Amount of bad debts. 29. The ledger provides up-to-date financial information pertaining to which of the following? A) Patients. B) Insurance companies. C) Physician. D) Employees. Show Answer Correct Answer: A) Patients. 30. What is journal? A) Primary book. B) Secondary. C) Third book. D) None. Show Answer Correct Answer: A) Primary book. ← 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