This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 46 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 46 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Accounting processes are broadly divided into two main categories:financial accounting and management accounting. A) False. B) True. Show Answer Correct Answer: B) True. 2. The resources owned by a business are called A) Assets. B) Liabilities. C) Capital. D) The accounting equation. Show Answer Correct Answer: A) Assets. 3. Debts and financial obligations (responsibilities). A) Liabilities. B) Assets. C) Negative Net Worth. D) Property. Show Answer Correct Answer: A) Liabilities. 4. Which of the following may have both Dr and Cr balance A) Only cash column of the cash book. B) Only bank column of the cash book. C) Both cash and bank column. D) Neither cash or bank balance. Show Answer Correct Answer: B) Only bank column of the cash book. 5. The business entity assumption is where A) Each business keeps its own books. B) A business owner can not mix business and personal expenses on the same books. C) Both a and b. D) Neither a nor b. Show Answer Correct Answer: C) Both a and b. 6. Which information is not included in the work sheet heading? A) The period covered. B) Accountant's name. C) Name of the accounting form. D) Business name. Show Answer Correct Answer: B) Accountant's name. 7. Standards approved by the FRSC include paragraphs in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles. Any limitation of the scope of a PFRS is made clear in the standard A) F, T. B) T, T. C) T, F. D) F, F. Show Answer Correct Answer: B) T, T. 8. According to AS-2 Inventories are held for sale in normal course of business. A) False. B) True. Show Answer Correct Answer: B) True. 9. What is the priority in managerial accounting? A) Being objective and precise. B) Following a strict framework. C) Being relevant and timely. D) Using estimates and shortcuts. Show Answer Correct Answer: C) Being relevant and timely. 10. What portion of the subsidiary stockholders' equity account balances should be eliminated in preparing the consolidated balance sheet? A) Common stock. B) Additional paid-in capital. C) Retained earnings. D) All of the balances are eliminated. Show Answer Correct Answer: D) All of the balances are eliminated. 11. To record the expense for the use of fixed assets is called A) Depletion. B) Depreciation. C) Adjustment. D) Amortization. Show Answer Correct Answer: B) Depreciation. 12. An external user of account is: A) One who supplies goods on credit. B) Someone who purchase goods and services. C) Someone who is considering to invest in the business. D) All of the above. Show Answer Correct Answer: D) All of the above. 13. The cost of developing software for a company engaged in software business is revenue expenditure. A) True. B) False. Show Answer Correct Answer: B) False. 14. The financial statements that show the beginning balance of equity, the changes in equity that resulted from new investments by the owner, net income (or net loss), withdrawals, and the ending balance of equity is the: A) Income statement. B) Balance sheet. C) Statement of changes in equity. D) Statement of financial position. E) Statement of cash flows. Show Answer Correct Answer: C) Statement of changes in equity. 15. Principle that declares that preparers of statements must use caution when recording transactions and err on the side of financial carefulness. A) Principle of Prudence. B) Principle of Sincerity. C) Principle of Noncompensation. D) Principle of Continuity. Show Answer Correct Answer: A) Principle of Prudence. 16. What is the most important difference between financial accounting and management accounting? A) User output information. B) Research subjects. C) Research techniques . D) Report output. Show Answer Correct Answer: A) User output information. 17. In a system of incomplete records, the opening capital is determined by preparing A) Trial balance. B) Balance sheet. C) Statement of affairs. D) Cash book. Show Answer Correct Answer: C) Statement of affairs. 18. Assumption a company intends to continue operations A) Matching principle. B) Going concern principle. C) Disclosure principle. D) Reliability principle. Show Answer Correct Answer: B) Going concern principle. 19. As per full disclosure principle, the financial statements should disclose all irrelevant information. A) False. B) True. Show Answer Correct Answer: A) False. 20. Trial balance is a rough draft of, A) Final accounts. B) P & L a/c. C) All the above. D) None of above. Show Answer Correct Answer: A) Final accounts. 21. Concept:The revenue from business activities and the expenses associated with earning that revenue are recorded in the same accounting period A) Complete disclosure. B) Matching expenses with revenue. C) Money measurement. D) Dual concept. Show Answer Correct Answer: B) Matching expenses with revenue. 22. A provision for doubtful debts is created A) When debtors become bankrupt. B) When debtors cease to be in business. C) To provide for possible bad debts. D) To write off bad debts. Show Answer Correct Answer: C) To provide for possible bad debts. 23. IASB is replaced by IASC in 2001? A) True. B) False. Show Answer Correct Answer: B) False. 24. One item of information available through a departmental accounting system is the A) Net income or net loss for each department. B) Administrative expenses for each department. C) Total operating expenses for each department. D) Gross profit from operations for each department. Show Answer Correct Answer: D) Gross profit from operations for each department. 25. Rent and rates to be apportioned on the basis of A) Space occupied by department. B) Based on unused area. C) Sales ratio. D) None of above. Show Answer Correct Answer: A) Space occupied by department. 26. When are cash control procedures most important? A) When customers pay using checks or money orders. B) When new employees are being trained to handle cash. C) When cash is being received or disbursed. D) When cash is in the form of bills and coins. Show Answer Correct Answer: C) When cash is being received or disbursed. 27. Total amount of depreciation of an asset cannot exceed its A) Depreciation value. B) Scrap value. C) Market value. D) None of these. Show Answer Correct Answer: A) Depreciation value. 28. The ..... accounting system provides a system of checks and balances A) Financial entry. B) Double entry. C) Triple entry. D) Single entry. Show Answer Correct Answer: B) Double entry. 29. Property was purchased on December 31, 2021 for 90 million baht. The general price index in the country was 60 on that date. On December 31, 2023, the general price index had risen to 270.4. If the entity operates in a hyperinflationary economy, what would be the carrying amount in the financial statements of the property after restatement? A) 405.6 million baht. B) 19.97 trillion baht. C) 180.3 billion baht. D) 320 million baht. Show Answer Correct Answer: A) 405.6 million baht. 30. Which of the following should be the taken into consideration by Company ABC when deciding whether or not to store their client information in external (instead of internal) databases? A) The possible increase in the cost of doing business with your company. B) A possible breach of confidential and private information. C) The possible increase in time that it will take to access your records. D) A need to remember yet another login and password. Show Answer Correct Answer: B) A possible breach of confidential and private information. ← 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