This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 49 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 49 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Who is considered as the father of modern accounting A) Gestonburg. B) Luca Friar Pacioli. C) J.betty. D) Henry Fayol. Show Answer Correct Answer: B) Luca Friar Pacioli. 2. Accounting information is ..... to the extent that it is verifiable, it is a faithful representation and is reasonably free from error and bias. A) Reliable. B) Consistent. C) Understandable. D) Relevant. Show Answer Correct Answer: A) Reliable. 3. A business whose owners enjoy limited liability is a A) Proprietorship. B) Sole proprietorship. C) Partnership. D) Corporation. Show Answer Correct Answer: D) Corporation. 4. Assets of the business are Rs.3, 00, 000 and its Liabilities are Rs.1, 00, 000. Find its Capital A) 4, 00, 000. B) 2, 00, 000. C) 1, 00, 000. D) 3, 00, 000. Show Answer Correct Answer: B) 2, 00, 000. 5. What form of business does not allow one owner? A) Sole proprietorship. B) Partnership. C) Corporation. D) All of the above. Show Answer Correct Answer: B) Partnership. 6. UNDER THE REVISED CONCEPTUAL FRAMEWORK, WHICH OF THE FOLLOWING IS A CHARACTERISTIC OF ASSET? A) PRESENT ECONOMIC RESOURCE. B) ECONOMIC RESOURCE IS A RIGHT THAT HAS THE POTENTIAL TO PRODUCE ECONOMIC BENEFITS. C) ECONOMIC RESOURCE IS CONTROLLED BY THE ENTIY AS A RESULT OF PAST EVENTS. D) ALL OF THESE CHARACTERIZE AN ASSET. Show Answer Correct Answer: D) ALL OF THESE CHARACTERIZE AN ASSET. 7. Which statement is incorrect regarding the timing of application of PFRSs? A) The FRSC has a general policy of exempting transactions occurring before a specific date from the requirements of new PFRSs. B) Until the effective date of a PFRS, the requirements of any PFRS that would be affected by proposals in an exposure draft remain in force. C) PFRSs apply from a date specified in the document. D) New or revised PFRSs set out transitional provisions to be applied on their initial application. Show Answer Correct Answer: A) The FRSC has a general policy of exempting transactions occurring before a specific date from the requirements of new PFRSs. 8. Maximum amount of capital that a company is allowed to raise is called ..... A) Authorized or Altered Capital. B) Authorized or Registered Capital. C) Maximum or Altered Capital. D) Maximum Capital. Show Answer Correct Answer: B) Authorized or Registered Capital. 9. The overriding purpose of financial accounting is to summarize financial activity in business in the ..... A) Profit and loss statement. B) Balance sheet. C) Cash flow statement. D) All of the above. Show Answer Correct Answer: D) All of the above. 10. The formula for calculating the total expenses ratio is total expenses divided by net income. A) True. B) False. Show Answer Correct Answer: B) False. 11. Business A has purchase of £10000, carriage outwards of £1000, carriage inwards of £2000 and purchase returns of 3000. What will be the purchase figure to be entered into the profit or loss statement. A) £8000. B) £7000. C) £9000. D) £10000. Show Answer Correct Answer: C) £9000. 12. In financial accounting only transaction A) In an orderly manner are considered. B) In monetary terms are considered. C) In non monetary terms are considered. D) In balance sheet considered. Show Answer Correct Answer: B) In monetary terms are considered. 13. It is assumed that the IndoJaya company purchased a production machine with a cash price of Rp. 70, 000, 000, -. Related expenses include VAT Rp. 3, 000, 000, travel insurance Rp. 500, 000, and installation of Rp. 1, 000, 000, -. Calculate the amount that should be reported as the cost of the machine A) Rp. 70.000.000. B) Rp. 74.000.000. C) Rp. 73.000.000. D) Rp, 74.500.000. Show Answer Correct Answer: D) Rp, 74.500.000. 14. The minimum subscription for public issue as per SEBI guideline is ..... of the issued amount A) 90%. B) 80%. C) 75%. D) 95%. Show Answer Correct Answer: A) 90%. 15. (e) ..... :A document of the company that lists the goods that the company has sent out to a customer. A) Debit advice. B) Credit advice. C) Purchase order. D) Goods received note (GRN). E) Goods dispatched (delivery) note (GDN). Show Answer Correct Answer: E) Goods dispatched (delivery) note (GDN). 16. The document which specifies the internal regulation of the business is A) MoA. B) AoA. C) Prospectus. D) None of above. Show Answer Correct Answer: B) AoA. 17. In the Income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded. A) True. B) False. Show Answer Correct Answer: B) False. 18. Describe how government agencies use financial accounting information. A) To ignore financial information and make decisions randomly. B) To make decisions, allocate resources, and assess the financial health of the organization. C) To create obstacles and hinder progress. D) To use financial information for personal gain. Show Answer Correct Answer: B) To make decisions, allocate resources, and assess the financial health of the organization. 19. Commission on consignment is ..... to consignee. A) Income. B) Expense. C) Asset. D) Loss. Show Answer Correct Answer: A) Income. 20. When preparing a departmental trading and profit and loss account, the best method of allocating expenses between departments is ..... A) To allocate expenses to each department in proportion to the sales of that department. B) To charge against each department those costs which are within its control. C) To allocate expenses to each department in proportion to the purchases of that department. D) None of the above. Show Answer Correct Answer: B) To charge against each department those costs which are within its control. 21. Prepaid Expenditure is A) Liability. B) Revenue. C) Expenditure. D) Asset. Show Answer Correct Answer: D) Asset. 22. Under Hire-purchase agreement the buyer agrees to pay A) Cash price only. B) Interest only. C) Cash price and interest. D) None of above. Show Answer Correct Answer: C) Cash price and interest. 23. Of the following errors, the one that will cause an inequality in the trial balance totals is: A) Failure to record a transaction. B) Recording the same transaction more than once. C) Posting a transaction to the wrong account with same normal balance as the correct account. D) Incorrectly computing an account balance. Show Answer Correct Answer: D) Incorrectly computing an account balance. 24. When a company using the allowance method writes off a specific customer's $ 100, 000 account receivable from the accounting system, which of the following statements is/are true?total stockholders' equity remains the sametotal assets remain the sametotal expenses remain the same A) 2. B) 1 and 3. C) 1 and 2. D) 1, 2, and 3. Show Answer Correct Answer: D) 1, 2, and 3. 25. What are unpresented cheques in a bank reconciliation statement? A) Money given to a business from the profit made by a public limited liability company. B) Cheques given to suppliers but not yet debited to the bank statement. C) Cheques/cash received from customers but not yet credited to the bank statement. D) Amount paid directly into the business bank account but not yet debited to the cash book. Show Answer Correct Answer: B) Cheques given to suppliers but not yet debited to the bank statement. 26. Which one of the following statement completely and correctly describes accounting? A) Recording, classifying and summarizing economic activities in informal manner. B) Accounting is the systematic process of recording social activities only. C) Recording, classifying and summarizing all activities in useful manner. D) Recording, classifying and summarizing economic activities in systematic way. Show Answer Correct Answer: D) Recording, classifying and summarizing economic activities in systematic way. 27. You have determined that company X estimates bad debt expense with an aging of accounts receivable schedule. Company X's estimate of uncollectible receivables resulting from the aging analysis equals $ 250. The beginning balance in Allowance for Doubtful Accounts was $ 220. Write-offs of bad debts during the period were $ 180. What amount would be recorded as bed debt expense for the current period? A) $ 180. B) $ 220. C) $ 210. D) $ 250. Show Answer Correct Answer: C) $ 210. 28. The information that is said to be material and has the ability to influence the decisions of users. A) Reliability. B) Understandability. C) Relevance. D) Comparability. Show Answer Correct Answer: C) Relevance. 29. A balance sheet reports a hospitality organization's financial position at a point in time. A) False. B) True. Show Answer Correct Answer: B) True. 30. Which of the following is an asset? A) Creditor. B) Loan. C) Cash in hand. D) Capital. Show Answer Correct Answer: C) Cash in hand. ← 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