This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 68 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 68 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What are the basic financial statements in accounting? A) Profit statement, equity sheet, and income statement. B) Income statement, balance sheet, and cash flow statement. C) Expense report, liability statement, and revenue statement. D) Cash flow report, income summary, and balance statement. Show Answer Correct Answer: B) Income statement, balance sheet, and cash flow statement. 2. Under this method, prepayments of expenses are initially debited to an asset account, and recognized as expense the incurred portion at the end of the period. A) Expense Method. B) Asset Method. C) Income Method. D) Liability Method. Show Answer Correct Answer: B) Asset Method. 3. Tams Company reported a net loss of P40, 000. Its net sales was P150, 000 and a gross profit was 20% of net sales. Operating expenses amounted to how much? A) P 130, 000. B) P 50, 000. C) P 70, 000. D) P 110, 000. Show Answer Correct Answer: C) P 70, 000. 4. Which type of business organisation has the following characteristics?-conducts business separate from its owners-the owners have limited liability-the organisation is a taxable entity A) Sole trader. B) Partnership. C) Company/corporation. D) None of the above. Show Answer Correct Answer: C) Company/corporation. 5. The FRSC has a chairman who had been or presently a senior practitioner in A) Commerce & Industry. B) Public accountancy. C) Any scope of accounting practice. D) Academe. Show Answer Correct Answer: C) Any scope of accounting practice. 6. In the Stock and Debtors Method of accounting, balance of Branch Stock Account shows either Gross Profit or Gross Loss. A) True. B) False. Show Answer Correct Answer: A) True. 7. Capital in Balance Sheet is aggregate of A) Capital-Net Profit. B) Capital + Drawings + Net Profit. C) Capital-Drawings + Net Profit. D) Capital + Drawings + net Profit. Show Answer Correct Answer: C) Capital-Drawings + Net Profit. 8. Accrued revenues A) Are also called unearned revenues. B) Are listed on the balance sheet as liabilities. C) Are paid in advance. D) At the end of one accounting period often result in cash payments in the next period. E) At the end of one accounting period often result in cash receipts from customers in the next period. Show Answer Correct Answer: E) At the end of one accounting period often result in cash receipts from customers in the next period. 9. Yellowjacket Company reported the following January purchases and sales data for its only product. Using the periodic LIFO Inventory costing method, what is the cost of the ending inventory? A) $ 2, 225. B) $ 2, 140. C) $ 1, 140. D) $ 1, 225. Show Answer Correct Answer: C) $ 1, 140. 10. Though the instalments of a hire purchase agreement may be equal. The interest element in each instalment is not the same A) False. B) True. Show Answer Correct Answer: B) True. 11. The main objective of depreciation is A) To reduce tax. B) To calculate net profit. C) To show the previous profit. D) To satisfy the tax department. Show Answer Correct Answer: A) To reduce tax. 12. Which of these is not an example of a Factory Overhead? A) Direct Expenses. B) Depreciation of Factory Machinery. C) Factory Rates. D) Factory Insurance. Show Answer Correct Answer: A) Direct Expenses. 13. In absence of partnership deed, partners are entitled to interest on capital @ 6% p.a. A) True. B) False. Show Answer Correct Answer: B) False. 14. Which financial statement displays the revenues and expenses of a company for a period of time? A) Cash Flow Statement. B) Statement of Owners' Equity. C) Income Statement. D) Balance Sheet. Show Answer Correct Answer: C) Income Statement. 15. A form describing the goods or services sold, the quantity, the price, and the terms of sale. This is called a ..... A) Invoice. B) Check. C) Sales invoice. D) Journal. Show Answer Correct Answer: A) Invoice. 16. In the indirect method of preparing the statement of cash flows, depreciation expense is: A) Added back to net income. B) Deducted from net income. C) Ignored in the statement of cash flows. D) None of above. Show Answer Correct Answer: A) Added back to net income. 17. What amount of comprehensive income should John Corporation report on its statement of profit or loss and other comprehensive income given the following net of tax figures that represent changes in a period? A) 89, 500. B) 86, 500. C) 89, 000. D) 90, 500. Show Answer Correct Answer: B) 86, 500. 18. Analysis of Financial Statements is significant: A) For Creditors. B) For Managers. C) For Employees. D) For all of the above. Show Answer Correct Answer: D) For all of the above. 19. The construction of a theory begins with observation and moves toward generalized conclusion. Reasoning from particular statements to general statements refer to A) Inductive approach. B) Deductive approach. C) Economic approach. D) Eclectic approach. Show Answer Correct Answer: A) Inductive approach. 20. Income and Expenditure account shows surplus/deficit of of a non trading concern A) False. B) True. Show Answer Correct Answer: B) True. 21. A ..... is part of the annual financial statements and is used to calculate the cost of goods produced. A) Cost of production. B) Prime cost. C) Work in progress. D) Manufacturing account. Show Answer Correct Answer: D) Manufacturing account. 22. If opening stock is Rs. 50, 000, purchase is Rs. 4, 20, 000 and closing stock is Rs. 30, 000, then what is the cost of goods sold- A) Rs. 5, 00, 000. B) Rs. 4, 00, 000. C) Rs. 4, 70, 000. D) Rs. 4, 40, 000. Show Answer Correct Answer: D) Rs. 4, 40, 000. 23. Company and Employees are otherwise called as internal users of accounting A) False. B) True. Show Answer Correct Answer: B) True. 24. Goodwill is recognized in partnership accounts when A) A new partner is admitted. B) The business has good customer relationship. C) A partner is dormant. D) The business makes a huge profit. Show Answer Correct Answer: B) The business has good customer relationship. 25. Debit the receiver & credit the giver is ..... account A) Personal. B) Real. C) Nominal. D) All the above. Show Answer Correct Answer: A) Personal. 26. Aidil and Imran are partners in a partnership. On 1/1/20, they admitted Asyraf as a new partner. Opening capital for Aidil is RM 85, 000 and Imran is RM 55, 500. Asyraf contributed RM 20, 000 cash as his capital. Profit on revaluation for Aidil amounted to RM 5, 000 and Imran amounted to RM 2, 500. What is Imran's closing balance of capital? A) RM 58, 000. B) RM 53, 000. C) RM 90, 000. D) RM 20, 000. Show Answer Correct Answer: A) RM 58, 000. 27. Which of the following differences would result in future taxable amount? A) Expenses or losses that are deductible after they are recognized in accounting income. B) Revenues or gains that are taxable before they are recognized in accounting income. C) Revenues or gains that are recognized in accounting income but are never included in taxable income. D) Expenses or losses that are deductible before they are recognized in accounting income. Show Answer Correct Answer: D) Expenses or losses that are deductible before they are recognized in accounting income. 28. Deposited 10, 000 in Bank. A) Cash A/C (Debit)-To Capital A/C (Credit). B) Bank A/C (Debit)-To Cash A/C (Credit). C) Cash A/C (Debit)-To Bank A/C (Credit). D) Bank A/C (Debit)-To Capital A/C (Credit). Show Answer Correct Answer: B) Bank A/C (Debit)-To Cash A/C (Credit). 29. Which of the following is current liability? A) Account receivable. B) Account payable. C) Drawing. D) Salary. Show Answer Correct Answer: B) Account payable. 30. What is the current year depreciation expense for 2022 for the following asset placed in service in 2020?cost of $ 20, 000Salvage value $ 5, 000Useful life of 5 years A) 4, 000. B) $ 333.33. C) $ 250. D) 3, 000. Show Answer Correct Answer: D) 3, 000. ← 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