This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 40 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 40 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Preparing financial statements at the end of each monthly fiscal period is an application of the accounting concept: A) Accounting Period Cycle. B) Going Concern. C) Adequate Disclosure. D) Objective Evidence. Show Answer Correct Answer: A) Accounting Period Cycle. 2. Under which of the following circumstances will the asset of hire purchase legally belong to the purchaser? A) When the final instalment is paid. B) When the deposit is paid. C) When the hire purchase agreement is signed. D) When the first instalment is paid. Show Answer Correct Answer: A) When the final instalment is paid. 3. Employee salaries are paid every Saturday for 6 working days. Employee salary per person Rp. 50, 000/day. Cafe "Danbam" has 5 employees. The last salary payment was on December 28 2020. The adjusting entry at the end of December 2020 was..... A) Salaries Expense (D); Salaries Payable (K) Rp. 150.000. B) Salaries Expense (D); Salaries Payable (K) Rp. 250.000. C) Salaries Expense (D); Salaries Payable (K) Rp. 750.000. D) Salaries Expense (D); Salaries Payable (K) Rp. 50.000. Show Answer Correct Answer: C) Salaries Expense (D); Salaries Payable (K) Rp. 750.000. 4. The account that reflects money owed to the employees earned as of the end of the period but not paid. A) Liability. B) Interest Payable. C) Wages Payable. D) Depreciation Payable. Show Answer Correct Answer: C) Wages Payable. 5. When the issue price and face value are same, the issue is termed as ..... A) Issued at Premium. B) Issued at Par. C) Issued at Discount. D) All of the Above. Show Answer Correct Answer: B) Issued at Par. 6. On settlement of the vendors account, the correct accounting entries are debit vendor account and credit A) Goodwill account. B) Purchase consideration account. C) Bank account. D) Capital reserve account. Show Answer Correct Answer: C) Bank account. 7. A non-cash journal entry at the end of a period that adjust a balance sheet account. A) Liability Entry. B) Adjusting Entry. C) Reversing entry. D) Payable Entry. Show Answer Correct Answer: B) Adjusting Entry. 8. Which is not included in the category of current liabilities? A) Long-term obligation. B) Income received in advance. C) Note payable. D) Trade debt. Show Answer Correct Answer: A) Long-term obligation. 9. An asset-expense relationship exists with A) Revenue accounts. B) Prepaid expense adjusting entries. C) Liability accounts. D) Accrued expense adjusting entries. Show Answer Correct Answer: B) Prepaid expense adjusting entries. 10. Financial Statements A) Direct cost. B) Operative. C) Administrative. D) Balance Sheet, Income statement. Show Answer Correct Answer: D) Balance Sheet, Income statement. 11. Capital provided by the owner is treated as a liability. A) True. B) False. Show Answer Correct Answer: A) True. 12. Which of the following is not a transaction that will affect owner's equity? A) Paid cash for supplies. B) Received cash from sales. C) Received cash from owner as an investment. D) Sold services on account. Show Answer Correct Answer: A) Paid cash for supplies. 13. Memorandum joint venture account is prepared to find out amount due from co venture A) True. B) False. Show Answer Correct Answer: B) False. 14. What is the value of the closing inventory? A) £15, 680. B) £13, 480. C) £10, 980. D) £11, 180. Show Answer Correct Answer: B) £13, 480. 15. The following are the reasons why companies invest in debt or stock securities, except: A) To increase the company's liabilities. B) For strategic reasons. C) The company may have more money. D) To generate income from investments. Show Answer Correct Answer: A) To increase the company's liabilities. 16. A schedule showing the principle, interest, and remaining balance for each payment on a loan. A) Amortization Schedule. B) Depreciation Schedule. C) Interest Schedule. D) Payment Schedule. Show Answer Correct Answer: A) Amortization Schedule. 17. Dead Rent is also called as A) Outstanding Rent. B) Prepaid Rent. C) Minimum Rent. D) Post paid Rent. Show Answer Correct Answer: C) Minimum Rent. 18. The procedures and processes used by a company to safeguard assets, process information accurately, ensure compliance to rules and regulations. A) Internal control. B) Monitoring. C) Control Environment. D) Risk assessment. Show Answer Correct Answer: A) Internal control. 19. The process of collecting, measuring and recording an enterprise's transactions. A) Business Transaction. B) Financial Accounting. C) Bookkeeping. D) Financial Statements. Show Answer Correct Answer: C) Bookkeeping. 20. Buyer pays freight costs A) FOB. B) FOB Shipping Point. C) FOB Destination. D) FOB Merchandise. Show Answer Correct Answer: B) FOB Shipping Point. 21. There are 2 systems of accounting i.e cash basis system of accounting and ..... basis of accounting A) Single entry. B) Dual aspect. C) Double entry. D) Accrual. Show Answer Correct Answer: D) Accrual. 22. When funds are borrowed to pay for construction of assets that qualify for capitalization of interest, the excess funds not needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be A) Recognized as revenue of the period. B) Multiplied by an appropriate interest rate to determine the interest to be capitalized. C) Offset against interest cost incurred during construction. D) Increase the cost of assets being constructed. Show Answer Correct Answer: C) Offset against interest cost incurred during construction. 23. Accounting is defined as a process of the following, except ..... A) Recognizing. B) Recording. C) Summarizing. D) Classifying. Show Answer Correct Answer: A) Recognizing. 24. A cash book with a credit balance indicates a bank ..... A) Overdraft. B) Asset. C) Loan. D) Account. Show Answer Correct Answer: A) Overdraft. 25. Choose enhancing qualitative characteristics. A) Verifiability. B) Understandability. C) Timeliness. D) All of these. Show Answer Correct Answer: D) All of these. 26. Goodwill may be brought into the books when A) Assets are more than liabilities. B) No partner retires. C) A new partner is admitted. D) Profit for the period is high. Show Answer Correct Answer: C) A new partner is admitted. 27. What is the purpose of a trial balance? A) To ensure the accuracy of entries in a company's bookkeeping system. B) To record all cash and bank transactions. C) To keep track of all sales and revenue. D) To contain all impersonal accounts. Show Answer Correct Answer: A) To ensure the accuracy of entries in a company's bookkeeping system. 28. Which of the following is a direct cost? A) Factory rent. B) Production workers' wages. C) Factory supervisor's salary. D) Factory machine maintenance. Show Answer Correct Answer: B) Production workers' wages. 29. True or False. It is possible for a company to be profitable but have negative cash flows. A) False. B) True. Show Answer Correct Answer: B) True. 30. ..... concept has the basic of Continuity of life. A) Going concern concept. B) Business entity concept. C) None of the above. D) None of above. Show Answer Correct Answer: A) Going concern concept. ← 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