This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 56 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 56 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Purchase of pen is treated as a revenue expense, according to the concept of A) Cost. B) Materiality. C) Objectivity. D) Accounting Period. Show Answer Correct Answer: B) Materiality. 2. What is the rule of the Real account A) Debit the receiver Credit the Giver. B) Debit what comes in Credit what goes out. C) Debit all expenses and losses Credit Income and gain. D) None of these. Show Answer Correct Answer: B) Debit what comes in Credit what goes out. 3. Cash in Bank is classified as A) Noncurrent Liability. B) Current Liability. C) Noncurrent Asset. D) Current Asset. Show Answer Correct Answer: D) Current Asset. 4. The total value used to start the business is called ..... A) Capital. B) Liabilities. C) Loan. D) Asset. Show Answer Correct Answer: A) Capital. 5. The exclusive right to produce and sell an invention. A) Goodwill. B) Trademark. C) Patent. D) Franchises and license. Show Answer Correct Answer: C) Patent. 6. When a liability is decreased or reduced it is registered on the A) Debit or left side of the a/c. B) Debit or right side of the a/c. C) Credit or right side of the a/c. D) Credit or left side of the a/c. Show Answer Correct Answer: C) Credit or right side of the a/c. 7. What is meant by the abbreviation FRS. A) Financial Reporting Scotland. B) Financial Reporting Standards. C) Financial Regulations Scotland. D) Future Reporting Standards. Show Answer Correct Answer: B) Financial Reporting Standards. 8. Accounting is a service activity and its function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision. This accounting definition is given by A) Accounting Standard Council. B) AICPA Committee on Accounting Terminology. C) American Accounting Association. D) Board of Accountancy. Show Answer Correct Answer: C) American Accounting Association. 9. Which of the following is scientific system of maintaining Accounts. A) Contra entry system. B) Book entry. C) Double entry system. D) Single entry system. Show Answer Correct Answer: C) Double entry system. 10. Accounting Organizations in Indonesia A) IASB. B) KPP. C) FASB. D) IAI. Show Answer Correct Answer: D) IAI. 11. In accordance with FRS 102 section 17 Property Plant and Equipment, which of the following is not included in the cost of an asset: A) Transport costs. B) Non-refundable import duties and taxes. C) Administration costs. D) Professional fees. Show Answer Correct Answer: C) Administration costs. 12. Which of the following elements of a manufacturing account matches the definition below:Expenses which can be traced directly to the units manufactured. This can include royalties and hire of specialist equipment. A) Direct expenses. B) Direct materials. C) Direct wages. D) Indirect materials. Show Answer Correct Answer: A) Direct expenses. 13. What is the purpose of a bank reconciliation statement? A) To settle disagreements between a cash book and a bank statement. B) To calculate business profits. C) To prepare financial statements for the business. D) To record daily cash transactions. Show Answer Correct Answer: A) To settle disagreements between a cash book and a bank statement. 14. Which financial statement reports revenues, expenses, and net income over a specific period? A) Statement of Change in Equity. B) Statement of Cash Flow. C) Statement of Other Comprehensive Income. D) Statement of Financial Position. Show Answer Correct Answer: C) Statement of Other Comprehensive Income. 15. Main differences between normative and positive theories:Normative theories are prescriptive meanwhile Positive theories are descriptive, explanatory or predictive. A) True. B) False. Show Answer Correct Answer: A) True. 16. The amount of an intangible asset used up during the period. A) Depletion. B) Goodwill. C) Amortization. D) Depreciation. Show Answer Correct Answer: C) Amortization. 17. An income statement reports a business's: A) Financial condition over a specific period of time. B) Financial condition on a specific date. C) Financial progress over a specific period of time. D) Financial progress on a specific date. Show Answer Correct Answer: C) Financial progress over a specific period of time. 18. When Debtors are 20, 500.Write off Bad debts Rs 500. Create Provision for debtors 5%. Discount on Debtors 2%. What balance appears in balance sheet after above adjustments. A) 19, 090. B) 18, 620. C) 19, 085. D) 18, 945. Show Answer Correct Answer: B) 18, 620. 19. We have been told that we cannot show our asset of motor car at cost in one year and market value in the next year. What accounting concept is being applied? A) Historical cost. B) Consistency. C) Prudence. D) Going concern. Show Answer Correct Answer: B) Consistency. 20. At the time of bringing capital in the business, cash account is ..... A) Credited. B) Debited. C) Neither credited nor debited. D) None of the above. Show Answer Correct Answer: B) Debited. 21. What are the four main financial statements? A) Profit and loss statement, income tax statement, cash flow statement, equity statement. B) Tax statement, income summary, cash flow report, equity statement. C) Budget statement, expense report, revenue summary, profit and loss statement. D) Income statement, balance sheet, statement of cash flows, and statement of changes in equity. Show Answer Correct Answer: D) Income statement, balance sheet, statement of cash flows, and statement of changes in equity. 22. FOB shipping point means ..... A) Buyer pays freight cost. B) Seller pays freight cost. C) Buyer and seller didn't pay anything. D) Seller pays buyer. Show Answer Correct Answer: A) Buyer pays freight cost. 23. Prepaid expenses are A) Paid and recorded in an asset account before they are used or consumed. B) Paid and recorded in an asset account after they are used or consumed. C) Incurred but not yet paid or recorded. D) Incurred and already paid or recorded. Show Answer Correct Answer: A) Paid and recorded in an asset account before they are used or consumed. 24. Money invested in a business by an owner is called ..... A) Merchandise. B) Capital. Show Answer Correct Answer: B) Capital. 25. One of the objectives achieved by providing depreciation is saving cash resources for future replacement of assets. A) True. B) False. Show Answer Correct Answer: A) True. 26. For a public limited company, the maximum number of members are kept as ..... A) Limited. B) Unlimited. C) All of the Above. D) None of the Above. Show Answer Correct Answer: B) Unlimited. 27. The operating profit margin ratio is calculated by dividing operating profit by: A) Total assets. B) Total revenue. Show Answer Correct Answer: B) Total revenue. 28. Normal loss of goods sent on consignment is shown in Consignment Account. A) False. B) True. Show Answer Correct Answer: A) False. 29. What is the depreciation expense for plant and machinery? A) £8, 000. B) £10, 000. C) £15, 000. D) £12, 000. Show Answer Correct Answer: D) £12, 000. 30. Depreciation is an actual loss. A) True. B) False. Show Answer Correct Answer: B) False. ← 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