This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 48 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 48 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A person who beings capital in the business is called A) Debtor. B) Creditor. C) Proprietor. D) None of this. Show Answer Correct Answer: C) Proprietor. 2. Loss of goods by fire should be credited to: A) Sales A/c. B) Loss A/c. C) Profit and Loss A/c. D) Purchase A/c. Show Answer Correct Answer: D) Purchase A/c. 3. On January 2, Joy Company purchased a 30 percent interest in Pid Company for $ 250, 000. On this date, the book value of Pid's stockholders' equity was $ 500, 000. Pid reported net income of $ 100, 000 and paid no dividends. Joy accounts for this investment using the equity method. In its December 31 balance sheet, what amount should Joy report for this investment? A) $ 210, 000. B) $ 270, 000. C) $ 280, 000. D) $ 220, 000. Show Answer Correct Answer: C) $ 280, 000. 4. Amount spent for white washing the factory building is treated as Revenue Expenditure. A) False. B) True. Show Answer Correct Answer: B) True. 5. As per AS-9 revenue from interest should be recognized on the time proportion basis. A) False. B) True. Show Answer Correct Answer: B) True. 6. A video store's regular price of a video is $ 25.95, and it's on sale for 25% off. What is the sale price of the video? A) $ 6.49. B) $ 32.44. C) $ 19.46. D) $ 25.75. Show Answer Correct Answer: C) $ 19.46. 7. Single entry systems are maintained by A) D) Sole trader. B) (b) Income tax authorities. C) (a) Company. D) C) Government. Show Answer Correct Answer: A) D) Sole trader. 8. Which type of company is prohibited to raise capital from public A) Government Company. B) Public Company. C) Private Company. D) None of the Above. Show Answer Correct Answer: C) Private Company. 9. Losses on sale of fixed assets occur if..... A) The results obtained are smaller than the book value. B) The results obtained are greater than the book value. C) More expensive. D) The acquisition price is greater than the residual value. E) The residual value is greater than the acquisition price. Show Answer Correct Answer: A) The results obtained are smaller than the book value. 10. The ledger is a record containing all accounts used by the business A) True. B) False. Show Answer Correct Answer: A) True. 11. Dr. Roshidah, a specialist doctor, has given a treatment to her patients in June. Her patient promised to pay the cost of the treatment in July. Dr. Roshidah recorded the services revenue in her business book on June. A) Expense recognition. B) Going concern. C) Consistency. D) Revenue recognition. Show Answer Correct Answer: D) Revenue recognition. 12. Which of the following is NOT the correct accounting equation? A) Liabilities + Capital = Assets. B) Assets-Capital = Liabilities. C) Assets = Liabilities-Capital. D) Assets-Liabilities = Capital. Show Answer Correct Answer: C) Assets = Liabilities-Capital. 13. Records revenue when it is earned and matches expenses against the revenue they generate, even if cash is not received at the time. A) Accrual accounting. B) Deferred Expenses. C) Deferred Revenue. D) Depreciation. Show Answer Correct Answer: A) Accrual accounting. 14. Meaning of Double Entry System of Book-Keeping A) Two entries in one book. B) Two entries in one account. C) Entry in both sides of one transaction. D) Entry in two personal accounts. Show Answer Correct Answer: C) Entry in both sides of one transaction. 15. Converting Liabilities to Revenue What would be the impact on expenses? A) Expenses would increase. B) Expenses would remain constant. C) Expenses would decrease. D) None of the above. Show Answer Correct Answer: B) Expenses would remain constant. 16. The classified balance sheet format allows one to ascertain quickly which of the following? A) The most valuable asset of the company. B) The specific due date for all liabilities of the company. C) What liabilities must be paid within the upcoming year. D) None of the above. Show Answer Correct Answer: C) What liabilities must be paid within the upcoming year. 17. A general journal entry usually includes information about the date of a transaction, titles of affected accounts, dollar amount of each debit and credit and an explanation of the transaction. A) False. B) True. Show Answer Correct Answer: B) True. 18. What is a compound journal entry? A) Journal entry that affects more than one business. B) Journal entry that affects cash and accounts receivable. C) Journal entry to record compound interest. D) Journal entry involving 3 or more accounts. Show Answer Correct Answer: D) Journal entry involving 3 or more accounts. 19. The unification of control (over the company's net assets and operations) from shareholders with the aim of combining businesses with benefits and risks that will be shared together, is..... A) Acquisition Method. B) Purchase Method. C) Sales Method. D) Method of Pooling Ownership. Show Answer Correct Answer: D) Method of Pooling Ownership. 20. ..... is defined as a system of collecting, organizing, reporting and interpreting information about those financial transactions of a business. A) Income Statement. B) Debtors. C) Analysing. D) Accounting. Show Answer Correct Answer: D) Accounting. 21. In trial balance all these are credited except (a) (b) (c) (d) A) Sales. B) Capital. C) Creditors. D) Purchases. Show Answer Correct Answer: D) Purchases. 22. A debit entry is required for which of the following transaction? A) Decrease in Expense. B) Increase in Income. C) Decrease in assets. D) Decrease in Liability. Show Answer Correct Answer: D) Decrease in Liability. 23. ..... fluctuation in economic activity that an economy experiences over a period of time. A business cycle is basically defined in terms of periods of expansion or recession. A) Business cycle. B) Business functions. C) Recession. D) None of above. Show Answer Correct Answer: A) Business cycle. 24. An event related to an investment in debt securities thatdoes not require a journal entry is: A) Receipt of interest revenue from the debt investment. B) Acquisition of the debt investment. C) A change in the name of the firm issuing the debt securities. D) Sale of the debt investment. Show Answer Correct Answer: C) A change in the name of the firm issuing the debt securities. 25. The income statement shows which of the following? A) Assets and liabilities. B) Income and expenses. C) Receipts and payments. D) None of above. Show Answer Correct Answer: B) Income and expenses. 26. Information needed to prepare a balance sheet's Assets section is obtained from a work sheet's Account Title column and: A) Balance Sheet Debit column. B) Balance Sheet Credit column. C) Income Statement Debit column. D) Income Statement Credit column. Show Answer Correct Answer: A) Balance Sheet Debit column. 27. Adjusting entries are made: A) At the beginning of the year. B) At the end of the year. C) During the year. D) All of these. Show Answer Correct Answer: B) At the end of the year. 28. What is "advance buyer" in English? A) Prepayment for sellers. B) Trade receivables. C) Trade payables. D) Prepayment from buyers. Show Answer Correct Answer: D) Prepayment from buyers. 29. ..... are accounts in which income and expenditure are recorded(a) (b) (c) (d) A) Personal account. B) Cost account. C) Nominal account. D) Real account. Show Answer Correct Answer: C) Nominal account. 30. The government agency that regulates securities (stocks and bonds), enforces accounting laws, and dictates financial reporting rules. A) Stocks and Exchange Commission (SEC). B) Securities and Exchange Commission (SEC). C) Securities and Exchange Company (SEC). D) Securities and Equity Commission (SEC). Show Answer Correct Answer: B) Securities and Exchange Commission (SEC). ← 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