This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 70 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 70 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If services are rendered for credit, then A) Liabilities will increase. B) Liabilities will decrease. C) Assets will decrease. D) Owner's equity will increase. Show Answer Correct Answer: D) Owner's equity will increase. 2. A profit from business operations (gross profit minus operating expenses) before deduction of interest and taxes A) Operating Profit. B) Profit before tax. C) Profit after tax. D) None of above. Show Answer Correct Answer: A) Operating Profit. 3. Sale proceeds of fixed assets are a ..... A) Revenue profit. B) Capital profit. C) Revenue receipt. D) Capital receipt. Show Answer Correct Answer: D) Capital receipt. 4. ..... is a major source of income for Non-profit organisation A) Subscription. B) Donation. C) Admission fee. D) Life members fee. Show Answer Correct Answer: A) Subscription. 5. Use of assets to generate revenues or pay expenses of a business, such as paying rent or receiving cash from sale. A) Accounting. B) Investing activity. C) Operating activity. D) Financing activity. Show Answer Correct Answer: C) Operating activity. 6. Who is the target audience of financial accounting? A) All employees of the business. B) Regulators and the public. C) Existing and potential investors, lenders, and creditors. D) Internal managers. Show Answer Correct Answer: C) Existing and potential investors, lenders, and creditors. 7. Cost of depreciation fund computed as A) Profit. B) Long term loan capital. C) Dividend. D) Short term loan capital. Show Answer Correct Answer: B) Long term loan capital. 8. According to the concept of conservation, the stock-in-trade is valued at: A) Cost or Market which ever is higher. B) Cost Price. C) Cost or Market which ever is lower. D) Market Price. Show Answer Correct Answer: C) Cost or Market which ever is lower. 9. In what year was the KKLT used to prepare the financial statements issued? A) 2015. B) 2016. C) 2018. D) 2017. Show Answer Correct Answer: C) 2018. 10. As per AS-2, inventory should normally be valued at historical cost or market value whichever is lower. A) True. B) False. Show Answer Correct Answer: A) True. 11. The standards, conventions, and rules that accountants follow to prepare financial reports are known as: A) Generally accepted accounting principles. B) Accounting and audit procedures. C) Management accounting. D) Executive accounting. Show Answer Correct Answer: A) Generally accepted accounting principles. 12. The cost of a building is $ 36000 and the accountants have determined it useful life to be 20 years. What would be the monthly depreciation expense? A) $ 300. B) $ 600. C) $ 1200. D) $ 150. Show Answer Correct Answer: D) $ 150. 13. What is the frequency of report of managerial accounting? A) Once at the end of accounting period. B) As frequently as needed. Show Answer Correct Answer: B) As frequently as needed. 14. The amount of credit sales can be computed from A) Total debtors account. B) Total creditors account. C) Bills payable account. D) Bills receivable account. Show Answer Correct Answer: A) Total debtors account. 15. Following are the branches of Accounting A) Financial Accounting. B) Cost accounting. C) Management Accounting. D) All of Above. Show Answer Correct Answer: D) All of Above. 16. Which of the following items appear on the same side of the trial balance? A) Capital and Sales. B) Purchases and Discounts received. C) Motor expenses and Loan account. D) Accrued income and Accumulated depreciation. Show Answer Correct Answer: A) Capital and Sales. 17. Equity shareholders are A) Creditors. B) Owners. C) Customers. D) None of these. Show Answer Correct Answer: B) Owners. 18. Assets minus liabilities is..... A) Capital. B) Credit. C) Drawings. D) Profit. Show Answer Correct Answer: A) Capital. 19. Given the following data:Net Sales of P156, 000; Sales returns of P15, 000; Cost of Goods available for sale of 120, 000; Purchase returns of P20, 000. How much is the Gross profit if Gross profit is 30% of Cost of goods sold A) P101, 500. B) Impossible to determine. C) Give, 000. D) P120, 000. Show Answer Correct Answer: D) P120, 000. 20. Returns inwards is also known as ..... A) Purchases returns. B) Carriage Outward. C) Carriage Inward. D) Sales Returns. Show Answer Correct Answer: D) Sales Returns. 21. When Allotment is made and money is due, the entry will be ..... A) Debit:Share Capital Credit:Share Allotment Account. B) Debit:Share Allotment Account Credit:Share Capital. C) Debit:Cash Account Credit:Share Allotment Account. D) Debit:Share Allotment Account Credit:Cash Account. Show Answer Correct Answer: B) Debit:Share Allotment Account Credit:Share Capital. 22. When a public limited company raises capital from public, it needs to issue ..... to the public A) Prospectus. B) Letter of Offer. C) Letter of Invitation. D) None of the Above. Show Answer Correct Answer: A) Prospectus. 23. Trading and profit & loss A/c represent the summary of: A) All Personal Accounts. B) All Real Accounts. C) All Nominal Accounts. D) All Personal, Real & Nominal Accounts. Show Answer Correct Answer: C) All Nominal Accounts. 24. Which term represents the monies a company earns by selling its products and services? A) Expenses. B) Liabilities. C) Revenue. D) Equity. E) Assets. Show Answer Correct Answer: C) Revenue. 25. Ignoring work in progress, which one of the following statements correctly defines factory cost of production? A) D. Prime costs plus direct costs. B) Prime cost plus factory overheads. C) C. Prime cost minus factory overheads. D) A. Raw materials purchased plus indirect costs. Show Answer Correct Answer: B) Prime cost plus factory overheads. 26. The monthly or weekly total of the purchases book is posted to the A) Debit of the purchases account. B) Credit of the purchases account. C) Debit of the sales account. D) None of above. Show Answer Correct Answer: B) Credit of the purchases account. 27. Billy Bob just bought a new car. His car costs $ 75, 000. How much money will he pay in taxes for the car if the sales tax is 6%? A) 1000. B) 4000. C) 4500. D) 2000. Show Answer Correct Answer: C) 4500. 28. The relationship between consignor and consignee is that of ..... A) Employer and employee. B) Business partners. C) Owner and servant. D) Principal and agent. Show Answer Correct Answer: D) Principal and agent. 29. All the following are added to balance as per bank statement except A) Standing order. B) Bank charges. C) Uncredited cheque. D) Dividend. Show Answer Correct Answer: D) Dividend. 30. Trial balance contains the balances of ..... A) All real and personal accounts. B) All personal and nominal accounts. C) All nominal and real accounts. D) All accounts. Show Answer Correct Answer: A) All real and personal accounts. ← 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