This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 37 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 37 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Accounting standard setting process began with formation IASC in London in A) 1973. B) 1972. C) 1975. D) 1974. Show Answer Correct Answer: A) 1973. 2. While putting the value or price of an entity in financial records the lowest price is recorded not the current price or current market value. This is known as A) Conservatism. B) Business Entity Concept. C) Expenditure Concept. D) Money Measurement Concept. Show Answer Correct Answer: A) Conservatism. 3. Describe the process of preparing a balance sheet. A) Compile all assets, liabilities, and equity of a company at a specific point in time. B) Summarize the cash flow of a company for a specific period of time. C) Calculate the total profit of a company by subtracting expenses from revenues. D) List all the expenses and revenues of a company over a specific period of time. Show Answer Correct Answer: A) Compile all assets, liabilities, and equity of a company at a specific point in time. 4. Which of the following is used to report data needed to meet legal and regulatory requirements? A) Assets. B) Equity. C) Tangible document. D) Financial statement. E) None of the above. Show Answer Correct Answer: D) Financial statement. 5. What are assets? A) What a company owns; anything of value owned by a business. B) Costs of operating a business. C) Detailed plans for the financial needs of individuals, families, and businesses. D) Differences between actual and budgeted performance. Show Answer Correct Answer: A) What a company owns; anything of value owned by a business. 6. Marketable securities bought and held primarily for salein the near term are classified as: A) Available-for-sale securities. B) Stock securities. C) Trading securities. D) Held-to-maturity securities. Show Answer Correct Answer: C) Trading securities. 7. Credits will increase equity balances A) True. B) False. Show Answer Correct Answer: A) True. 8. Profit and loss a/c starts with A) Gross profit. B) Net loss. C) Gross loss. D) Net profit. Show Answer Correct Answer: A) Gross profit. 9. All membership collected by a non trading concern must be entered in the assets side of the balance sheet A) False. B) True. Show Answer Correct Answer: A) False. 10. Each instalment including down payment is treated as hire charges by the A) Buyer. B) Seller. C) None of these. D) None of above. Show Answer Correct Answer: B) Seller. 11. The amount of money that an asset on the balance sheet is officially worth based on its age, style, and condition. A) Book value. B) Net worth. C) Purchase value. D) None of above. Show Answer Correct Answer: A) Book value. 12. Trade discount received on purchases is recorded in the books of account as follows: A) Trade discount is credited to discount received account. B) Trade discount is deducted from the invoice price and recorded at net value. C) None of the above. D) Any of (a) and (b). Show Answer Correct Answer: B) Trade discount is deducted from the invoice price and recorded at net value. 13. Bank reconciliation statement is prepared to arrive at the bank balance. A) False. B) True. Show Answer Correct Answer: A) False. 14. Rent and rates paid are apportioned among the departments on the basis of A) Sales. B) Number of employees. C) Space occupied. D) Purchase. Show Answer Correct Answer: C) Space occupied. 15. T-account format is used in situations where account balance is required A) Periodically. B) After each transaction. C) At the end of the business. D) None of the above. Show Answer Correct Answer: A) Periodically. 16. Based on the consideration obtained on the share issue, the issue is classified as ..... A) Issue of shares for cash. B) Issue of shares for consideration other than Cash. C) Both of the Above. D) None of the Above. Show Answer Correct Answer: C) Both of the Above. 17. Generally when an expense is involved in a transaction, an expense will be ..... A) Debited. B) Credited. Show Answer Correct Answer: A) Debited. 18. Who is the user of managerial accounting information? A) Investors. B) Creditors. C) Business competitors. D) Managers. Show Answer Correct Answer: D) Managers. 19. Find out the amount of capital, Assets Rs. 20, 000, Liabilities Rs. 5, 400 A) Rs. 4, 200. B) Rs. 14, 600. C) Rs. 5, 600. D) Rs. 12, 600. Show Answer Correct Answer: B) Rs. 14, 600. 20. Accounting provides data or information on A) Income and cost for the managers. B) Financial conditions of the institutions. C) Company's tax liability for a particular year. D) All the above. Show Answer Correct Answer: D) All the above. 21. Cash discount allowed is recorded in the books of account as follows: A) Cash discount is debited to discount allowed account. B) Cash discount is reduced from the invoice price. C) None of the above. D) Any of (a) and (b). Show Answer Correct Answer: A) Cash discount is debited to discount allowed account. 22. A tool used to increase or decrease each a account that is affected by a transaction. A) Credit. B) T account. C) Debit. D) Normal balance. Show Answer Correct Answer: B) T account. 23. The business entity concept requires that a business is treated as being separate from its owners A) True. B) False. Show Answer Correct Answer: A) True. 24. To decrease the balance in the following accounts, would you debit the account or would you credit the account?Prepaid Insurance A) Credit. B) Debit. Show Answer Correct Answer: B) Debit. 25. When the government spends more money than it receives in revenue, it is referred to as A) Debt. B) National debt. C) Banarupa. D) Deficit. Show Answer Correct Answer: D) Deficit. 26. Which of the following statements regarding reconciliation accounts are not true? A) Data are posted directly into them. B) Data are automatically posted into them after they are posted to the corresponding sub-ledger. C) The reconciliation account includes the sum of the postings of the sub-ledgers. D) None of the above. Show Answer Correct Answer: A) Data are posted directly into them. 27. Which category of accounts is category 1? A) Asset. B) Debt. C) Owner's equity. D) Income. Show Answer Correct Answer: A) Asset. 28. The primary objective of financial accounting is: A) To help organizations keep track of financing activities. B) To provide external reports to help users analyze an organization's activities. C) To help an organization define its ideas, goals, and actions. D) To help an organization to keep track of its buying and selling of resources. E) To prepare budgets. Show Answer Correct Answer: B) To provide external reports to help users analyze an organization's activities. 29. Any loss resulting on sale of repossessed goods can be recovered from hire purchaser A) False. B) True. Show Answer Correct Answer: A) False. 30. Wallowa Company purchased supplies costing $ 6, 000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of supplies revealed $ 1, 800 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be A) Debit Supplies Expense, $ 4, 200; Credit Supplies, $ 4, 200. B) Debit Supplies, $ 4, 200; Credit Supplies Expense, $ 4, 200. C) Debit Supplies Expense, $ 1, 800; Credit Supplies, $ 1, 800. D) Debit Supplies, $ 1, 800; Credit Supplies Expense, $ 1, 800. Show Answer Correct Answer: A) Debit Supplies Expense, $ 4, 200; Credit Supplies, $ 4, 200. ← 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