This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 47 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 47 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Pond Corporation uses the fair value method of accounting for its investment in Swan Company. Which one of the following events would affect the Investment in Swan Co. account? A) Investee losses. B) Investee dividend payments. C) An increase in the investee's share price from last period. D) All of the above would affect the Investment in Swan Co. account. Show Answer Correct Answer: C) An increase in the investee's share price from last period. 2. The amount set aside out of profit earned by a company which are not meant for liability or contingencies are A) Reserve. B) Dividend. C) Provisions. D) Retained profit. Show Answer Correct Answer: A) Reserve. 3. Financial Accounting is focused on the ..... financial statements of a company. A) Internal. B) External. Show Answer Correct Answer: B) External. 4. There are 4 owners in a business partnership. The business makes a profit of $ 100. Each owner makes: A) $ 25 profit. B) $ 100 profit. C) $ 400 profit. D) $ 20 profit. Show Answer Correct Answer: A) $ 25 profit. 5. Three column cash book has how many columns? A) Two. B) One. C) Three. D) None of the above. Show Answer Correct Answer: C) Three. 6. A disadvantage of single-entry bookkeeping is that it A) Is hard to learn. B) Is time-consuming. C) Makes errors hard to spot. D) Is the most expensive system to set up. Show Answer Correct Answer: C) Makes errors hard to spot. 7. The time period covered by an accounting report is called ..... A) Accounting period. B) Going concern. Show Answer Correct Answer: A) Accounting period. 8. What is not included in the characteristics of the Federation is..... A) Limited liability. B) Limited time period. C) Try together. D) Have shares/rights in the partnership. Show Answer Correct Answer: A) Limited liability. 9. Total of purchases return book is recorded A) Debit of purchases account. B) Credit of purchases account. C) Credit of purchases return account. D) Debit of purchases return account. Show Answer Correct Answer: C) Credit of purchases return account. 10. A business has Current asset of £100, 000, Non current asset of 50, 000, Current liabilities of £20, 000 what is the net current asset? A) £130000. B) £80, 000. C) £30000. D) £150, 000. Show Answer Correct Answer: B) £80, 000. 11. Cash book records A) All transactions. B) All cash transactions. C) All credit transactions. D) All of the above. Show Answer Correct Answer: B) All cash transactions. 12. If the capital of a business is $ 5, 00, 000 and liabilities are $ 200, 000. Calculate total assets of the business. A) 7, 00, 000. B) 2, 50, 000. C) 10, 00, 000. D) 3, 00, 000. Show Answer Correct Answer: A) 7, 00, 000. 13. The amount of interest is credited by the buyer to A) Asset Account. B) Vendor Account. C) Depreciation Account. D) Interest Account. Show Answer Correct Answer: B) Vendor Account. 14. When a company receives applications for less number of shares than what is issued, the situation is called as ..... A) Over Subscription. B) Higher Subscription. C) Under Subscription. D) Lower Subscription. Show Answer Correct Answer: C) Under Subscription. 15. Tells you how well you are operating your event business on a day-to-day basis A) Income Statement. B) Statement of Retained Earnings. C) Balance Sheet. D) Expenses. Show Answer Correct Answer: A) Income Statement. 16. Companies are required to comply with the following provisions regarding financial accounting and reporting:The printed annual report shall be issued to the company's shareholders within a period not exceeding 6 months from the close of the financial year of a company. The annual audited accounts together with the auditor's and directors' reports shall be given to Exchange for public release, within a period not exceeding 4 months from the close of the financial year of the company. Corporations are required to comply with the Quarterly Reporting requirements where they are required to file the quarter report with the Exchange for public release. The above statutory requirements are referred to: A) Security Commission Guidelines. B) Companies Act 2016. C) Financial Reporting Act 1997. D) Regulations by Bursa Malaysia. Show Answer Correct Answer: D) Regulations by Bursa Malaysia. 17. The agency responsible for regulating the accounting profession in Thailand is A) Federation of Accounting Professions Under the Royal Patronage of His Majesty the King. B) Office of the Securities and Exchange Commission. C) Stock Exchange of Thailand. D) Bank of Thailand. Show Answer Correct Answer: A) Federation of Accounting Professions Under the Royal Patronage of His Majesty the King. 18. Tangible assets are non-physical items such as trademarks and patents. A) False. B) True. Show Answer Correct Answer: A) False. 19. A machine has been bought for $ 5 000 and entered in the machine account at that amount even though it is worth $ 12 000. What accounting concept is being applied? A) Prudence. B) Realisation. C) Historical cost. D) Dual aspect. Show Answer Correct Answer: C) Historical cost. 20. WHICH OF THE FOLLOWING ADJUSTING ENTRIES MAY NOT REQUIRE REVERSING ENTRY? A) DEFERRED INCOME USING THE LIABILITY METHOD. B) ACCRUED EXPENSE. C) ACCRUED INCOME. D) PREPAID EXPENSE USING THE EXPENSE METHOD. Show Answer Correct Answer: A) DEFERRED INCOME USING THE LIABILITY METHOD. 21. If it is known that the Gross Profit Margin of a company is 67%, it can be interpreted as..... A) Shows the company's ability to generate operating profits is 67% of the company's total assets. B) Shows the company's ability to generate operating profit is 67% of sales. C) Shows the company's ability to generate gross profit is 67% of sales. D) Shows the company's ability to generate gross profit is 67% of the company's total assets. Show Answer Correct Answer: C) Shows the company's ability to generate gross profit is 67% of sales. 22. Should an asset be revalued every year if the revaluation policy is chosen? A) Yes to market value. B) No only when necessary. Show Answer Correct Answer: B) No only when necessary. 23. When closing stock is given in Trial Balance it will appear in A) Trading Account. B) Profit and Loss Account. C) Both Trading and Balance sheet. D) Balance Sheet. Show Answer Correct Answer: D) Balance Sheet. 24. If an event business paid $ 10, 000 for a catering truck, but the catering truck was worth $ 15, 000, how much is recorded in the books? A) $ 10, 000. B) $ 5, 000. C) $ 15, 000. D) $ 0. Show Answer Correct Answer: A) $ 10, 000. 25. All these items of revenue nature which received during the period of accounts, are only shown in the Income and Expenditure Account. A) True. B) False. Show Answer Correct Answer: B) False. 26. Assuring that financial statements contain all information necessary to understand a business's financial condition is an application of the accounting concept: A) Adequate Disclosure. B) Going Concern. C) Accounting Period Cycle. D) Objective Evidence. Show Answer Correct Answer: A) Adequate Disclosure. 27. Why does a business provide for depreciation on fixed assets? A) To charge the cost of fixed assets against profits in the year of purchase. B) To retain cash in the business for replacement of the assets. C) To ensure that the matching principle is applied when preparing final accounts. D) To ensure that the realisable value of assets is shown in the Balance Sheet. Show Answer Correct Answer: C) To ensure that the matching principle is applied when preparing final accounts. 28. Receipt and Payment Account is summary of cash transactions A) True. B) False. Show Answer Correct Answer: A) True. 29. The process of identify, classify, recording and communicating business transaction is called as book-keeping. A) True. B) False. Show Answer Correct Answer: B) False. 30. Principle requiring that accounting should be split into periods of the same time length and each transaction should be accounted for in a given period; long-run events might have to be split across many periods if necessary. A) Principle of Prudence. B) Principle of Periodicity. C) Principle of Permanance of Methods. D) Principle of Sincerity. Show Answer Correct Answer: B) Principle of Periodicity. ← 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