This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is the form of business combination? A) Merger. B) Consolidation. C) Acquisition. D) All of the above. Show Answer Correct Answer: D) All of the above. 2. Manufacturing Account is prepared to calculate A) Cost of production. B) Cost of capital. C) Cost of goods sold. D) Cost of sales. Show Answer Correct Answer: A) Cost of production. 3. During 2016, Tor sold goods costing $ 1, 500 to its subsidiary, Rab, at a gross profit of 40%. Rab had $ 200 of these goods on hand at Dec 31, 2016. What is the journal entry to record purchases of goods at Rab in 2016? A) Dr. CoGS $ 1, 500Cr. Inventories $ 1, 500. B) Inventories $ 2, 100. C) Dr. Cash in Bank $ 2, 500Cr. Sales $ 2, 500. D) Dr. Inventories 1, 500Cr. Cash in Bank 1, 500. E) Dr. Inventories 2, 500Cr. Cash in Bank 2, 500. Show Answer Correct Answer: E) Dr. Inventories 2, 500Cr. Cash in Bank 2, 500. 4. In which business form is the profit taxed separately from the owners? A) Sole proprietorship. B) Partnership. C) Corporation. D) All of the above. Show Answer Correct Answer: C) Corporation. 5. The account format that displays debits, credits, balances, and headings. A) Ledger account. B) General journal. C) General ledger. D) T-account. Show Answer Correct Answer: D) T-account. 6. Identify the main problems faced by the textile industry. A) Erratic power supply. B) Old and obsolete machinery. C) Stiff competition from the synthetic fibre industry. D) All of these. Show Answer Correct Answer: D) All of these. 7. Which of the following is a change in accounting policy in accordance with IAS8 A) An entity changes the warranty provisions, based upon more up-to-date information about claims frequency and value. B) An entity previously depreciated vehicles using the reducing balance method at 40% pa. It now uses the straight-line method over a period of five years. C) An entity previously charged interest incurred in connection with the construction of tangible non-current assets to the statement of profit or loss. Following the revision of IAS23 Borrowing Cost, and in accordance with the revised requirements of that standard, it now capitalizes this interest. D) Reducing the value of inventory from cost to net relisable value due to a valid adjusting event after the reporting period. Show Answer Correct Answer: C) An entity previously charged interest incurred in connection with the construction of tangible non-current assets to the statement of profit or loss. Following the revision of IAS23 Borrowing Cost, and in accordance with the revised requirements of that standard, it now capitalizes this interest. 8. Original cost minus scrap value is the depreciated value of an asset. A) True. B) False. Show Answer Correct Answer: A) True. 9. Which of the following describes a trial balance? A) It is a special account. B) It is a list of balance in the books. C) It reveals the financial position of a business. D) It shows all the entries in the books of a business. Show Answer Correct Answer: B) It is a list of balance in the books. 10. In theory formulation, it is known as a deductive approach. The deductive approach is..... A) The use of basic assumptions and rules that will be used to draw logical conclusions from the problem being analyzed. B) The development of theory is directed from the abstraction of the unreal world that exists in the human mind. C) Relates to how accounting concepts and practices can influence a person's behavior. D) Making conclusions that come from generalizations or phenomena that are specific (specific). Show Answer Correct Answer: A) The use of basic assumptions and rules that will be used to draw logical conclusions from the problem being analyzed. 11. It guides how the expenses should be matched with revenue for determining exact profit or loss for a particular period. A) Going Concern Concept. B) Revenue Recognition Concept. C) Matching Concept. D) Accrual Concept. Show Answer Correct Answer: C) Matching Concept. 12. In case of sub division of share capital, the total number of shares- A) Increases. B) Decreases. C) Doesn't change. D) None of above. Show Answer Correct Answer: A) Increases. 13. A petty cash fund system where the amount of petty cash is set at a certain amount so that the replacement of petty cash does not need to be the same as the amount that has been used is a petty cash fund system..... A) Cash overage. B) Imprest fund system. C) Pettycash. D) Fluctuation fund system. Show Answer Correct Answer: D) Fluctuation fund system. 14. Which of the following account will be credited when a typewriter is sold that has been used in the office? A) Stock Account. B) Office equipment Account. C) Sales Account. D) Purchases Account. Show Answer Correct Answer: B) Office equipment Account. 15. Unearned revenue is reported in the financial statements as A) An asset on the balance sheet. B) An unearned revenue on the income statement. C) A liability on the balance sheet. D) A revenue on the balance sheet. E) An operating activity on the statement of cash flows. Show Answer Correct Answer: C) A liability on the balance sheet. 16. In petty cash book the credit side is for A) Analysis columns. B) Debtors. C) Payment. D) Creditors. Show Answer Correct Answer: A) Analysis columns. 17. Rani acquired 70% of Moly on 2, Jan 2018, and the acquisition was made at book value (no amortizations). During the current year, Moly reported net income of $ 5, 000 and paid dividends of $ 2, 000. During 2018, Moly sold goods to Rani for $ 1, 200 at a mark-up of 25% and Rani still had $ 500 on hand at the end of the year. What is the journal entry to record noncontrolling interest in sub's earnings and dividends? A) Dr. Investment in Moly $ 1, 470Cr. Noncontrolling interest $ 1, 470. B) Dr. Noncontrolling interest share $ 1, 470Cr. Dividends $ 600Cr. Noncontrolling interest $ 870. C) Dr. Investment in Moly $ 1, 500Cr. Noncontrolling interest $ 1, 500. D) Dr. Noncontrolling interest $ 1, 500 Cr. Income from Moly $ 1, 500. E) Dr. Noncontrolling interest share $ 3, 500Cr. Dividends $ 1, 400Cr. Noncontrolling interest $ 2, 100. Show Answer Correct Answer: B) Dr. Noncontrolling interest share $ 1, 470Cr. Dividends $ 600Cr. Noncontrolling interest $ 870. 18. When is the origin of modern accounting? A) In 1794. B) In 1894. C) In 1694. D) In 1494. Show Answer Correct Answer: D) In 1494. 19. Large corporations must follow the ..... basis of accounting. A) Accrual. B) Cash. Show Answer Correct Answer: A) Accrual. 20. Which of the following is not an activity listed in the statement of cash flows? A) Funding Activities. B) Operating Activities. C) Financing Activities. D) Investing Activities. Show Answer Correct Answer: A) Funding Activities. 21. Agreement between partners is contained in the partnership A) Deed. B) Accord. C) Act. D) Deal. Show Answer Correct Answer: A) Deed. 22. When a company issues shares to the vendor for the Asset purchase, the issue is termed as ..... A) Issue of shares for Cash. B) Issue of shares for consideration other than cash. C) Issue of shares for ESOP. D) None of the Above. Show Answer Correct Answer: B) Issue of shares for consideration other than cash. 23. Compensation paid to employees who are retrenched is Capital expenditure. A) False. B) True. Show Answer Correct Answer: A) False. 24. Which is the formula for the debt ratio? A) Total AssetsTotal Liabilities. B) Total Notes PayableTotal Cash. C) Total LiabilitiesTotal Assets. D) Total Expenses Total Notes Payable. Show Answer Correct Answer: C) Total LiabilitiesTotal Assets. 25. The total amount of money owed to the creditors of a business. A) Account Title. B) Accounts Payable. C) Accounts Receivable. D) Account Balance. Show Answer Correct Answer: B) Accounts Payable. 26. Pre acquisition profit in subsidiary company is considered as A) Capital profit. B) Reserve. C) Goodwill. D) Revenue profit. Show Answer Correct Answer: A) Capital profit. 27. If a business has a net loss for the period, expenses should be reported before revenues on the income statement. A) False. B) True. Show Answer Correct Answer: A) False. 28. Sold goods worth list price of Rs. 8, 000 at 10% trade discount and 2% cash discount. 25% received at the time of transaction only. The amount posted to discount account will be: A) Rs. 144 on Credit side. B) Rs. 144 on debit side. C) Rs. 40 on credit side. D) Rs. 36 on debit side. Show Answer Correct Answer: D) Rs. 36 on debit side. 29. The recording of all the sales and purchases in accounting books in term of Ringgit Malaysia is in line with the concept of ..... A) Monetary measurement. B) Materiality. C) Historical cost. D) Consistency. Show Answer Correct Answer: A) Monetary measurement. 30. Section 24 of FRS 102 deals with government grants. Under this section which of the following statements is correct: A) Under the performance model grants received before the revenue recognition criteria are satisfied are recognised as an asset;. B) The accruals model only applies to capital grants. C) Under the performance model a grant that imposes future performance related conditions on the entity is recognised in income only when the performance related condition is met;. D) A grant is recognised in income even if there is no reasonable assurances that conditions on which it is based will be met;. Show Answer Correct Answer: C) Under the performance model a grant that imposes future performance related conditions on the entity is recognised in income only when the performance related condition is met;. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesFinancial Accounting Quiz 1Financial Accounting Quiz 2Financial Accounting Quiz 3Financial Accounting Quiz 4Financial Accounting Quiz 6Financial Accounting Quiz 7Financial Accounting Quiz 8Financial Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books