This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 54 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 54 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. OBJECTIVITY INCLUDES WHAT CONCEPT A) CLASSIFICATION. B) VERIFIABILITY. C) SUMMARIZATION. D) CONSERVATISM. Show Answer Correct Answer: B) VERIFIABILITY. 2. When a limited company takes over another limited company, if the purchase consideration is greater that the net assets of the business purchased, the excess is known as ..... A) Premium. B) Goodwill. C) Purchase Profit. D) Capital Reserve. Show Answer Correct Answer: B) Goodwill. 3. What is a ledger? A) A record of summarized transactions. B) Only b is true. C) A record of classified transactions. D) Only a is true. Show Answer Correct Answer: B) Only b is true. 4. Which of the following items has correctly been included in Hatton's revenue for the year? A) $ 2 million in relation to a fee negotiated for an advertising contract for Rees, one of Hatton's clients. Hatton acted as an agent during the deal and is entitled to 10% commission. B) $ 500, 000 relating to a sale of specialised equipment on 31 December 20X1. The full sales value was $ 700, 000 but $ 200, 000 relates to servicing that Hatton will provide over the next 2 years, so Hatton has not included that in revenue this year. C) $ 800, 000 relating to a sale of some surplus land owned by Hatton. D) $ 1 million in relation to a sale to a new customer on 31 December 20X1. Control passed to the customer on 31 December 20X1. The $ 1 million is payable on 31 December 20X3. Interest rates are 10%. Show Answer Correct Answer: B) $ 500, 000 relating to a sale of specialised equipment on 31 December 20X1. The full sales value was $ 700, 000 but $ 200, 000 relates to servicing that Hatton will provide over the next 2 years, so Hatton has not included that in revenue this year. 5. The purchase of a new delivery truck to be used in the business. A) Supplemental. B) Investing. C) Operating. D) Financing. Show Answer Correct Answer: B) Investing. 6. Which of the following represents the excess of issue price over nominal price of the shares A) Premium on issue of shares. B) Share Capital. C) Profit of the company. D) Discount on issue of shares. Show Answer Correct Answer: A) Premium on issue of shares. 7. The economic effect of an expense is incurred when the benefit expires or is used up, not when cash is paid. A) True. B) False. Show Answer Correct Answer: A) True. 8. Supplier is a person who ..... to the company A) Sells goods. B) Purchase goods. C) None of these. D) None of above. Show Answer Correct Answer: A) Sells goods. 9. Financial accounting is ..... A) A language which communicates economic information to interested parties. B) Is a financial type of accounting information and the reporting of the results and financial position of a business. C) Accumulation of accounting information for a company's internal users. D) Accumulation of accounting information for a company's external users. Show Answer Correct Answer: B) Is a financial type of accounting information and the reporting of the results and financial position of a business. 10. Who review, revise, amend, and defer approved accounting standards? A) Securities commission. B) State bank (central bank). C) MASB. D) Malaysian stock exchange. Show Answer Correct Answer: C) MASB. 11. Trading Account is prepared to ascertain A) Gross Profit. B) Opening Stock. C) Net Profit. D) Cost of Goods Old. Show Answer Correct Answer: A) Gross Profit. 12. As of 2018, how many chapters have the content and scope of the KKLT been compiled by the IASB? A) 2. B) 4. C) 6. D) 5. Show Answer Correct Answer: B) 4. 13. Which is not a part of Accounting System? A) Ledger Books. B) Trial Balance. C) Slam Book. D) Journal Books. Show Answer Correct Answer: C) Slam Book. 14. Copyrights, Patents and Trademarks are, A) Intangible assets. B) Investments. C) Fixed assets. D) Current assets. Show Answer Correct Answer: A) Intangible assets. 15. The process of recording financial data upto trial balance is A) Book keeping. B) Classifying. C) Analyzing. D) Summarsing. Show Answer Correct Answer: A) Book keeping. 16. Which of the following legal forms of organization is most expensive to organize? A) Limited partnership. B) Partnerships. C) Sole proprietorships. D) Corporations. Show Answer Correct Answer: D) Corporations. 17. Consignee is the person who sends goods to agents. A) True. B) False. Show Answer Correct Answer: B) False. 18. Long term loans are: A) Non-current assets. B) Non-current liabilities. C) Current liabilities. D) Current assets. Show Answer Correct Answer: B) Non-current liabilities. 19. Capitalizing a cost refers to: A) Disclosing the cost in the footnotes. B) Depreciating the asset. C) Expensing the cost as it is incurred. D) Adding the cost to the asset account. Show Answer Correct Answer: D) Adding the cost to the asset account. 20. The unfavourable balance of profit and loss account should be A) Subtracted from current assets. B) Added in liabilities. C) Subtracted from capital. D) Subtracted from liabilities. Show Answer Correct Answer: C) Subtracted from capital. 21. Assets = P410, 000 ; Capital = P139, 232. How much is the Liability? A) P 549, 232. B) P 270, 768. C) P 277, 068. D) P 594, 232. Show Answer Correct Answer: B) P 270, 768. 22. Treatment of Prepayments in Financial statements A) Increase expenses, increase Current asset. B) Decrease Income, increase Current asset. C) Decrease expenses, increase Current asset. D) Decrease expenses, increase Current Liability. Show Answer Correct Answer: D) Decrease expenses, increase Current Liability. 23. WHICH STATEMENT IS INCORRECT REGARDING CASH AND CASH EQUIVALENTS? A) CASH AND CASH EQUIVALENTS ARE FINANCIAL ASSETS. B) CASH COMPRISES CASH ON HAND AND DEMAND DEPOSITS. C) CASH EQUIVALENTS ARE HELD FOR INVESTMENT PURPOSES. D) AN EQUITY SHALL DISCLOSE THE COMPONENTS OF CASH AND CASH EQUIVALENTS. Show Answer Correct Answer: C) CASH EQUIVALENTS ARE HELD FOR INVESTMENT PURPOSES. 24. Which one of the following industries uses bauxite as a raw material? A) Steel. B) Cement. C) Jute. D) Aluminum. Show Answer Correct Answer: D) Aluminum. 25. Debits will increase liability balances A) True. B) False. Show Answer Correct Answer: B) False. 26. The recognized accounting body in Nigeria is A) ICAN. B) CIPM. C) IPSAS. D) ACCA. Show Answer Correct Answer: A) ICAN. 27. Duality Every asset should have A) A non monetary value. B) Tangible and intangible qualities. C) Monetary cost and future benefit. D) An adequate monetary value. Show Answer Correct Answer: C) Monetary cost and future benefit. 28. Calculate gross profit from following figures:Cost of goods sold 70800Sales RS. 130200 A) 79400. B) 29400. C) 69400. D) 59400. Show Answer Correct Answer: D) 59400. 29. The originator of Double Entry System A) Lucas Pacioli. B) Marshall. C) Pickles. D) Batliboi. Show Answer Correct Answer: A) Lucas Pacioli. 30. Recording of Financial Transactions in Chronological Order is Known as ..... ? A) Ledger Posting. B) Journal Entry. C) Balance Sheet. D) Trial Balance. Show Answer Correct Answer: B) Journal Entry. ← 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