This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 7 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Credit notes that are sent to customer as result of prompt payment discount will be entered into ..... A) Discount receive day book. B) Discount allowed day book. C) Sales day book. D) Purchase day book. Show Answer Correct Answer: B) Discount allowed day book. 2. Which account is on the Statement of Changes in Equity A) Revenue. B) Loan. C) M. Smith, capital. D) Cash. Show Answer Correct Answer: C) M. Smith, capital. 3. Accounting standards are..... A) Consensus on recording economic resources, liabilities, capital, results, costs and changes thereto in the form of financial reports. B) Document transactions that must be recorded, disclosed and presented in the Financial Report. C) Useful approach to decision-usefulness. D) All true. Show Answer Correct Answer: A) Consensus on recording economic resources, liabilities, capital, results, costs and changes thereto in the form of financial reports. 4. Bank reconciliation A) Helps with internal control. B) Is conducted by multiple people in a company. C) Reduces the amount of cash on hand. D) Controls cash payments. Show Answer Correct Answer: A) Helps with internal control. 5. Historical cost less accumulated depreciation is referred to as: A) Loss on sale. B) Fair market value. C) Net book value. D) Depreciable cost. Show Answer Correct Answer: C) Net book value. 6. The Matching Concept states that revenue should only be recognised when it is earned and not received. If a company sells goods on credit in March and receives payment in May, this would be shown in the sales figure for? A) The month the goods were sold. B) The month the goods were produced. C) The month the cash is creceived from the customer. D) None of the above. Show Answer Correct Answer: A) The month the goods were sold. 7. Costs that are not added to the purchase price of fixed assets in connection with efforts to place said fixed assets in a place and condition that is ready for use are..... A) Value-added tax. B) Freight Costs. C) Installation costs. D) Advertising Costs. Show Answer Correct Answer: D) Advertising Costs. 8. Depreciation is a charge against profit. A) False. B) True. Show Answer Correct Answer: B) True. 9. Send bills to collect money from customers for unpaid service fees. You can save your account by A) Debit Accounts Receivable, Credit Cash. B) Debit accounts receivable, credit service income. C) Debit cash, credit creditor. D) Debit payable, credit cash. Show Answer Correct Answer: B) Debit accounts receivable, credit service income. 10. Journal entry will be made when the premium amount is payable on allotment- A) Share Allotment A/c Dr.Securities Prem. A/c Dr.To Share Capital A/c. B) Share Allotment A/C Dr.To Share Capital A/c To Securities Prem. A/c. C) Bank A/c Dr.To Share Capital A/c To Securities Prem. A/c. D) Share Allotment A/c Dr.Securities Prem. A/c Dr.To Bank A/c. Show Answer Correct Answer: B) Share Allotment A/C Dr.To Share Capital A/c To Securities Prem. A/c. 11. Which branch of accounting is less regulated? A) Tax accounting. B) Financial accounting. C) Managerial accounting. D) Audit. Show Answer Correct Answer: C) Managerial accounting. 12. Perpetual Inventory system is a ..... count of all inventory in a corporation. A) Continuous. B) Hand count. C) One time per year. D) End of fiscal period. Show Answer Correct Answer: A) Continuous. 13. Revenue = 1000Cost of Goods Sold = 200Expenses = 300Gross Profit =? A) 800. B) 500. C) 700. D) 300. Show Answer Correct Answer: A) 800. 14. On January 2 2011, ABC company purchased a machine for Rp. 100, 000, 000 with an economic life of 4 years. The machine has no residual value. What is the book value at the end of 2012 using the double declining balance method? A) Rp. 12.500.000. B) Rp. 25.000.000. C) Rp. 50.000.000. D) Rp. 6.250.000. E) Rp. 75.000.000. Show Answer Correct Answer: B) Rp. 25.000.000. 15. Under hire purchase system the buyer is called ..... A) Debtor. B) Hirer. C) Buyer. D) Hire Vendor. Show Answer Correct Answer: B) Hirer. 16. During 2018, Jack sold goods costing $ 400 to its subsidiary, Chan, at a mark-up of 25%. Chan had $ 100 of these goods on hand at Dec 31, 2018. What is the elimination worksheet entry to defer profit in ending inventory? A) Dr. Sales $ 20Cr. Cost of sales $ 20. B) Dr. Sales $ 25Cr. Cost of sales $ 25. C) Dr. Sales $ 25Cr. Cost of sales $ 25. D) Dr. Inventory $ 25Cr. Cost of sales $ 25. E) Dr. Cost of sales $ 20Cr. Inventory $ 20. Show Answer Correct Answer: E) Dr. Cost of sales $ 20Cr. Inventory $ 20. 17. Under the equity method, the investor records dividendsreceived by crediting: A) Dividend Revenue. B) Revenue from Investment. C) Stock Investments. D) Investment Income. Show Answer Correct Answer: C) Stock Investments. 18. A company is a going concern if A) It is a public limited company. B) Its balance sheet shows a strong financial position. C) There is no evidence that it will or will have to cease operations within foreseeable future. D) Its income statement for the current year shows huge profit. Show Answer Correct Answer: C) There is no evidence that it will or will have to cease operations within foreseeable future. 19. The main revenue generating activity of the company is..... A) Investment Activities. B) Operational Activities. C) Sales Activities. D) Funding Activities. Show Answer Correct Answer: B) Operational Activities. 20. Converting Assets to Expenses What would be the effect on liabilities? A) Liabilities would increase. B) Liabilities would remain constant. C) LIabilities would decrease. D) None of the above. Show Answer Correct Answer: B) Liabilities would remain constant. 21. Unearned income a/c is A) Accrued income. B) Asset. C) Liability. D) Expense. Show Answer Correct Answer: B) Asset. 22. Voyage A/c (Sea Travel Account) is- A) Real account. B) Nominal ledger. C) Personal account. D) None of these. Show Answer Correct Answer: B) Nominal ledger. 23. Which basic journal is used to record specific basic transactions? A) General journal. B) Special journal. C) General ledger. D) All correct. Show Answer Correct Answer: B) Special journal. 24. A ..... is a copy of the bank's customer's account in the books of the bank. A) Cash Book. B) Bank Reconciliation Statement. C) Bank Statement. D) None of above. Show Answer Correct Answer: C) Bank Statement. 25. The main objective of financial reporting is to provide information A) To government departments. B) About the profitability of the business. C) Useful for making investment and lending decisions. D) Regarding sources and uses of cash. Show Answer Correct Answer: C) Useful for making investment and lending decisions. 26. A system of accounting which Is not based on double entry system is called A) Mahajani system of accounting. B) Non of these. C) Cash system. D) Incomplete accounting system. Show Answer Correct Answer: D) Incomplete accounting system. 27. The statement that provides information on the financial position of the entity. A) Statement of Cash Flows. B) Statement of Profit and Loss. C) Statement of Financial Position. D) Statement of Comprehensive Income. Show Answer Correct Answer: C) Statement of Financial Position. 28. How do calculate a company's Net Sales? A) Sales Discounts-(Sales) + Sales Returns & Allowances). B) Sales Returns & Allowances-Sales Discounts + Sales. C) Sales-(Sales Discounts + Sales Returns & Allowances). D) Sales Returns & Allowances-(Sales Discounts + Sales). Show Answer Correct Answer: C) Sales-(Sales Discounts + Sales Returns & Allowances). 29. Repairs to machinery is apportioned over the departments on the basis of A) Floor area of each machine. B) Value of machine. C) Rent rate of each machine. D) Number of machines in each department. Show Answer Correct Answer: B) Value of machine. 30. How do creditors utilize financial accounting information? A) To determine the company's employee benefits. B) To provide marketing strategies for the company. C) To assess the financial health and creditworthiness of a company, make lending decisions, and determine the terms of credit extended to the company. D) To assess the company's environmental impact. Show Answer Correct Answer: C) To assess the financial health and creditworthiness of a company, make lending decisions, and determine the terms of credit extended to the company. ← 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 8Financial Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books