This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 38 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 38 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is not a column of a three column cash book? A) Discount. B) Bank. C) Petty Cash. D) Cash. Show Answer Correct Answer: C) Petty Cash. 2. The profit and loss account shows the trading position of a business at the end of a specified accounting period. A) NO. B) YES. Show Answer Correct Answer: B) YES. 3. If a company reported the following items on its income statement (cost of goods sold $ 6, 000, income tax expense $ 2, 000, interest expense $ 500, operating expense $ 3, 500, sales revenue $ 14, 000), what amount would be reported for the subtotal "income from operations" ? A) $ 8, 000. B) $ 2, 000. C) $ 4, 000. D) $ 4, 500. Show Answer Correct Answer: D) $ 4, 500. 4. The money and things a company owns or controls. A) Assets. B) Accounts Payable. C) Shareholders Equity. D) None of above. Show Answer Correct Answer: A) Assets. 5. In the absence of a partnership agreement, additional capital contributions by partners attract interest of A) 5%. B) 12%. C) 10%. D) 15%. Show Answer Correct Answer: A) 5%. 6. Which user is matched correctly with its major need? A) User:Trade UnionNeed:Potential equity investment. B) User:ShareholderNeed:Assess managers' stewardship. C) User:Government Need:Analyse company's performance in relation to others. D) User:Trade creditorsNeed:Assess securities to provide loans. Show Answer Correct Answer: B) User:ShareholderNeed:Assess managers' stewardship. 7. Internal groups interested in Accounting information: A) Creditors. B) Government. C) Owners. D) None of above. Show Answer Correct Answer: C) Owners. 8. A business is started with the injection of $ 10, 000 in cash. In which account is the credit entry made? A) Cash. B) Capital. Show Answer Correct Answer: B) Capital. 9. Where will you record the following transaction:Cash purchase of goods A) Both debit and credit. B) Credit side. C) Debit side. D) None of above. Show Answer Correct Answer: B) Credit side. 10. Double entries of selling goods on credit to Ali A) Dr. AliCr. Sales. B) Dr. AliCr. Bank. C) Dr. BankCr. Sales. D) Dr. AliCr. Cash. Show Answer Correct Answer: A) Dr. AliCr. Sales. 11. The ratio to show the ability of own capital to generate profits for both preferred and ordinary shareholders is A) Net Earning Power Ratio. B) Rate of Return on Net Worth. C) Rate of Return on Equity. D) Earning Power of Equity. Show Answer Correct Answer: B) Rate of Return on Net Worth. 12. What are the objective of Financial Accounting. A) To find out the Profitability & Financial Position of any business at given point of time. B) To find out the Profitability of business. C) Recording the event. D) To find out the Financial Position of business. Show Answer Correct Answer: A) To find out the Profitability & Financial Position of any business at given point of time. 13. A company issues 100 000 new $ 1 ordinary shares at a premium of $ 0.20 each.Which effect does this have on the statement of financial position? A) Net assets increase by the nominal value of the shares but decrease by the value of the premium. B) Net assets increase by the nominal value of the shares plus the value of the premium. C) Equity increases by the nominal value of the shares but decreases by the value of the premium. D) Equity increases by the nominal value of the shares only. Show Answer Correct Answer: B) Net assets increase by the nominal value of the shares plus the value of the premium. 14. Investments made by the owner into the business A) Current Liability. B) Current Asset. C) Owner's Equity. D) Fixed Asset. Show Answer Correct Answer: C) Owner's Equity. 15. The basic rules of bookkeeping "Debit all expenses and losses and credit all incomes A) Personal account. B) Nominal account. C) Real account. D) None of above. Show Answer Correct Answer: B) Nominal account. 16. The cash book records all cash ..... A) Receipts. B) Payments. C) Receipts and payments. D) None of the above. Show Answer Correct Answer: C) Receipts and payments. 17. Assets, liabilities and equity reflect the value of current resources A) 1 time. B) 1 period. C) Nothingness. D) 1 point in time or 1 period of time. Show Answer Correct Answer: A) 1 time. 18. Return outwards are A) Goods returned from customer. B) Goods returned to supplier. C) Goods received from supplier. D) Goods sold to customers. Show Answer Correct Answer: B) Goods returned to supplier. 19. An assumption is that a sale is deemed to have taken place at the time at which the goods are delivered. A) Reliability. B) Matching Concept. C) Relevance. D) Revenue Recognition. Show Answer Correct Answer: D) Revenue Recognition. 20. An amount entered on the left side of a T account. A) Debit. B) Credit. C) Normal balance. D) All of the above. Show Answer Correct Answer: A) Debit. 21. As of December 31, 2020, Cancon Company has assets of $ 42, 000 and owner's equity of $ 22, 000. What are the liabilities for Cancon Company as of December 31, 2020? A) $ 22, 000. B) $ 42, 000. C) $ 64, 000. D) $ 20, 000. Show Answer Correct Answer: D) $ 20, 000. 22. What is the left side of a T account? A) Credit. B) Debit. Show Answer Correct Answer: B) Debit. 23. To convey the Language of Business, certain principles are required to be followed for maintaining Business transactions. A) Can't say. B) Depend on situation. C) True. D) False. Show Answer Correct Answer: C) True. 24. Paid Salary to Staff via Bank Transfer 1, 00, 000. A) A) Salary A/C (Debit)-To Bank A/C (Credit). B) A) Cash A/C (Debit)-To Bank A/C (Credit). C) A) Salary A/C (Debit)-To Income A/C (Credit). D) Salary A/C (Debit)-To Cash A/C (Credit). Show Answer Correct Answer: A) A) Salary A/C (Debit)-To Bank A/C (Credit). 25. Income and expenditure account is a ..... A) Personal account. B) Nominal account. C) Real account. D) Real and nominal account. Show Answer Correct Answer: B) Nominal account. 26. Owners equity, assets and liabilities are shown on which year end statement A) Income statement. B) Cash flow statement. C) Balance sheet. D) Profit and Loss Account. Show Answer Correct Answer: C) Balance sheet. 27. Find the term to match the meaning below:Inventory carried forward from the previous accounting period A) Opening Inventory. B) Closing Inventory. C) Purchases. D) Carriage In. Show Answer Correct Answer: A) Opening Inventory. 28. The calculation and interpretation of a financial ratio is called ratio analysis. A) True. B) False. Show Answer Correct Answer: A) True. 29. The most complex form of business organization. A) Corporation. B) Partnership. C) Sole Proprietorship. D) None of above. Show Answer Correct Answer: A) Corporation. 30. A reduction in the ability of plant asset to provide service over time is known as: A) Accrual accounting. B) Depreciation. C) GAAP. D) Deferrals. Show Answer Correct Answer: B) Depreciation. ← 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