This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 43 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 43 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An advantage of the partnership as form of business organization would be A) Partners do not pay income taxes on their share in partnership income. B) A partnership is bound by the act of the partners. C) A partnership is created by mere agreements of the partners. D) A partnership may be terminated by the death or withdrawal of a partner. Show Answer Correct Answer: C) A partnership is created by mere agreements of the partners. 2. What is business A) An economic activity. B) An economic activity to earn profit. C) A social activity. D) None of them. Show Answer Correct Answer: B) An economic activity to earn profit. 3. The historical cost principles states that: A) Assets should be initially recorded at cost and adjusted when the fair value changes. B) Activities of an entity are to be kept separate and distinct from its owner. C) Assets should be recorded at their cost. D) Only transaction data capable of being expressed in terms of money be included in the accounting records. Show Answer Correct Answer: C) Assets should be recorded at their cost. 4. An agreement between a buyer and a seller about payment for merchandise is called A) Purchase order. B) Terms of sale. C) Time of purchase. D) Due date. Show Answer Correct Answer: B) Terms of sale. 5. What is the primary difference between bookkeeping and accounting? A) Bookkeeping focuses on recording transactions, while accounting involves financial analysis and decision-making. B) Bookkeeping is used for internal purposes, while accounting is primarily for external stakeholders. C) Bookkeeping is a subset of accounting, and the terms are often used interchangeably. D) Bookkeeping is only concerned with tax compliance, while accounting encompasses all financial activities. Show Answer Correct Answer: A) Bookkeeping focuses on recording transactions, while accounting involves financial analysis and decision-making. 6. What is the transaction for rendering services for cash? A) Debit cash, credit owner's capital. B) Debit cash, credit revenue. C) Debit cash, credit unearned revenue. D) Debit cash, credit supplies. Show Answer Correct Answer: B) Debit cash, credit revenue. 7. Each Department is Considered as A) Profit and Loss Centre. B) Profit or Loss Centre. C) Profit Centre. D) Loss Centre. Show Answer Correct Answer: C) Profit Centre. 8. On September 1, 2018, Pine Company issued a note payable to National Bank in the amount of P1, 800, 000, bearing interest at 12% and payable in three equal annual principal payments of P600, 000. On this date, the bank's prime rate was 11%. The first interest and principal payment was made on September 1, 2019. What amount should be reported as interest expense for 2019? A) 216, 000. B) 192, 000. C) 144, 000. D) 132, 000. Show Answer Correct Answer: B) 192, 000. 9. There is no difference between hire purchase and instalment system A) False. B) True. Show Answer Correct Answer: A) False. 10. Book keeping is mainly concerned with A) Recording of financial data relating to business operation. B) Designing the system in recording, classifying, summarizing the data. C) None of this. D) All of the above. Show Answer Correct Answer: A) Recording of financial data relating to business operation. 11. Tor Corp. acquired 80% of Sam Inc. on Jan 5, 2017. The acquisition was made at book value (no amortizations). During 2017, Sam sold goods for $ 450 to Tor at a mark-up of 20% and Tor still had $ 150 on hand at Dec 31, 2017. What is the elimination worksheet entry to eliminate intercompany sales? A) Dr. Sales $ 450Cr. Cost of sales $ 450. B) Dr. Cost of sales $ 450Cr. Inventory $ 450. C) Dr. Sales $ 540Cr. Cost of sales $ 540. D) Dr. Cost of sales $ 150Cr. Inventory $ 150. E) Dr. Cost of sales $ 540Cr. Inventory $ 540. Show Answer Correct Answer: A) Dr. Sales $ 450Cr. Cost of sales $ 450. 12. Non-for-profit organisations prepare ..... A) Trading account. B) Trading &profit &loss account. C) Income and Expenditure account. D) Profit and loss account. Show Answer Correct Answer: C) Income and Expenditure account. 13. ..... is the cost of transportation charged on goods purchased(a) A) Carriage Outwards. B) Returns Inwards. C) Carriage Inwards. D) Returns Outwards. Show Answer Correct Answer: C) Carriage Inwards. 14. In the double-entry system, which account type is debited when recording an increase in assets A) Asset accounts. B) Liability account s. C) Revenue accounts. D) Expense accounts. Show Answer Correct Answer: A) Asset accounts. 15. (a) ..... :A document sent to a customer by a company stating the fixed price that would be charged to produce or deliver goods or services. A) Statement. B) Quotation. C) Purchase order. D) Debit advice. E) Receipt. Show Answer Correct Answer: B) Quotation. 16. Nobes and Parker (2006) argue that there is no ideal model of enforcement of accounting standards which fits all countries as it depends on the overall regulatory system of the country. Two types of mechanisms, ....., can be used to enforce accounting regulations, helping to ensure quality in the financial reporting practices of a country (Craig & Diga, 1996; Saudagaran & Diga, 2000). A) Positive and negative. B) Conservatism and pluralism. C) Proactive and energetic. D) Preventive and punitive. Show Answer Correct Answer: D) Preventive and punitive. 17. Written records that summarize that results of financial transactions affecting a business and report its current financial position. A) Business finance. B) Accounting cycle. C) Financial Reports. D) Accounting finance. Show Answer Correct Answer: C) Financial Reports. 18. Which of the following is a floating income security? A) Preference share. B) Bond. C) Bond. D) Equity share. Show Answer Correct Answer: D) Equity share. 19. Find the term to match the meaning below:Money the business receives from customers from selling their goods and services A) Gross profit. B) Sales revenue. C) Sales returns. D) Warehouse expenses. Show Answer Correct Answer: B) Sales revenue. 20. WHICH STATEMENT IS CORRECT? A) THE BOARD OF ACCOUNTANCY IS COMPOSED OF FIFTEEN MEMBERS WITH A CHAIRMAN. B) THE FINANCIAL REPORTING STANDARD COUNCIL SHALL HAVE A CHAIRMAN WHO HAD BEEN OR PRESENTLY A SENIOR PRACTITIONER IN PUBLIC ACCOUNTANCY. C) A MEMBER OF THE AUDITING AND ASSURANCE STANDARD COUNCIL MUST BE A DULY REGISTERED CERTIFIED PUBLIC ACCOUNTANT WITH AT LEAST TEN YEARS OF WORK EXPERIENCE IN THE PRACTICE OF PUBLIC ACCOUNTANCY. D) COMPLIANCE WITH THE PHILIPPINES INTERPRETATION COMMITTEE IMPLEMENTATION GUIDANCE IS REQUIRED FOR THE FAIR PRESENTATION OF FINANCIAL STATEMETN IN ACCORDANCE WITH PFRS. Show Answer Correct Answer: D) COMPLIANCE WITH THE PHILIPPINES INTERPRETATION COMMITTEE IMPLEMENTATION GUIDANCE IS REQUIRED FOR THE FAIR PRESENTATION OF FINANCIAL STATEMETN IN ACCORDANCE WITH PFRS. 21. Another name for the balance sheet is A) Statement of Profit or Loss. B) Statement Of Operations. C) Statements Of Shareholders' Equity. D) Statement Of Financial Position. Show Answer Correct Answer: D) Statement Of Financial Position. 22. The cost a company pays to create and develop a product. A) Copyright. B) Trademark. C) Research and Development. D) Depletion. Show Answer Correct Answer: C) Research and Development. 23. Reduction in the ability of a fixed asset to provide service over time. A) Accrual accounting. B) Depreciation. C) Deferrals (revenue/expenses). D) GAAP. Show Answer Correct Answer: B) Depreciation. 24. A debt has been written off as bad even if there is still a chance that debtor may eventually pay it. What concept is being applied? A) Materiality. B) Going concern. C) Prudence. D) Substance over form. Show Answer Correct Answer: C) Prudence. 25. ACCOUNTING EQUATION is A) Assets = Equities. B) Assets = Internal Equities + External Equities. C) Assets = Capital + Liabilities. D) All of the above. Show Answer Correct Answer: D) All of the above. 26. What is the main purpose of GAAP? A) Create financial statements that are useful. B) Reduce crime. C) Create fairness. D) Create stability. Show Answer Correct Answer: A) Create financial statements that are useful. 27. Financial accounting provides accounting information to the ..... though the information is useful for internal purposes also A) External users. B) Internal users. C) Company. D) Competitors. Show Answer Correct Answer: A) External users. 28. The maximum number of members excluding persons who are employees of the company is ..... for a private company A) 5. B) 10. C) 12. D) 6. Show Answer Correct Answer: A) 5. 29. The amounts incurred in the process of earning revenue. A) Assets. B) Owner's Equity. C) Liabilities. D) Expenses. Show Answer Correct Answer: D) Expenses. 30. ..... = Sales revenue-Cost of goods A) Revenue. B) Gross Profit. Show Answer Correct Answer: B) Gross Profit. ← 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