This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The value of this assets diminishes with the passage of time A) Fictitious asset. B) Wasting asset. C) Fixed asset. D) Current asset. Show Answer Correct Answer: B) Wasting asset. 2. A balance sheet reports financial information on a specific date and includes the assets, liabilities, and owner's equity. A) True. B) False. Show Answer Correct Answer: A) True. 3. Who is Father of Accounting? A) Luca Pacioli. B) Lewis Pacioli. C) J.R. Batliboi. D) None. Show Answer Correct Answer: A) Luca Pacioli. 4. Efficiency ratios highlights: A) How well assets and liabilities are managed. B) Measures how quickly assets can be converted to cash. C) Share of ownership in a company. D) A comparison of two amounts. Show Answer Correct Answer: B) Measures how quickly assets can be converted to cash. 5. On January 1, Jack Company purchased a 40 percent interest in Pur Company for $ 350, 000. On this date, the book value of Pur's stockholders' equity was $ 500, 000. Pur reported net income of $ 200, 000 and paid no dividends. Jack accounts for this investment using the equity method. In its December 31 balance sheet, what amount should Jack report for this investment? A) $ 420, 000. B) $ 470, 000. C) $ 430, 000. D) $ 410, 000. Show Answer Correct Answer: C) $ 430, 000. 6. What is the example of information that a managerial accountant will share to the decision makers to help them making decision? A) The anticipated profits or losses from a decision to be made. B) The name of the company. C) The company's profits reported several years ago. D) The past financial performance. Show Answer Correct Answer: A) The anticipated profits or losses from a decision to be made. 7. WHAT STATEMENT OF FINANCIAL POSITION IS PREPARED AT THE DATE OF TRANSITION TO PFRS FOR SME? A) OPENING STATEMENT OF FINANCIAL POSITION. B) CLOSING STATEMENT OF FINANCIAL POSITION. C) ORIGINATING STATEMENT OF FINANCIAL POSITION. D) PROVISIONAL STATEMENT OF FINANCIAL POSITION. Show Answer Correct Answer: A) OPENING STATEMENT OF FINANCIAL POSITION. 8. Common set of accounting rules and procedures; needed in accounting to maintain accuracy and consistency of financial reports A) IRS laws. B) Financial reporting. C) Generally accepted accounting practices (GAAP). D) Disclosure principle. Show Answer Correct Answer: C) Generally accepted accounting practices (GAAP). 9. (l) ..... :a list of goods sent or services provided, with a statement of the sum due for these; as a bill. A) Invoice. B) Credit advice. C) Quotation. D) Receipt. E) Debit advice. Show Answer Correct Answer: A) Invoice. 10. Means transactions or entries of one nature are grouped under one head of account. A) Journalizing. B) Recording. C) Summarizing. D) Classifying. Show Answer Correct Answer: D) Classifying. 11. Step 5 in the Accounting Cycle A) Adjusted trial balance. B) Closing entries. C) Trial balance. D) Source documents. Show Answer Correct Answer: A) Adjusted trial balance. 12. Cash book is journal as well as A) Journal & Ledger. B) Cash A/c. C) Ledger. D) Journal. Show Answer Correct Answer: A) Journal & Ledger. 13. Sale of goods to X will be debited to? A) Cash a/c. B) Sales a/c. C) X a/c. D) None of these. Show Answer Correct Answer: C) X a/c. 14. A ..... amount will appear on the left side of a T-account. A) Debit. B) Credit. Show Answer Correct Answer: A) Debit. 15. Income Statement, Statement of Financial Position, and Statement of Cash Flows. A) Accounting Equation. B) Financial Statements. C) Financial Accounting. D) Books of Accounts. Show Answer Correct Answer: B) Financial Statements. 16. Policies and procedures companies follow to safeguard their assets. A) Controls. B) Hoarding assets. C) Safeguarding. D) None of above. Show Answer Correct Answer: A) Controls. 17. Define the chart of accounts. Overdraft A) No. 1101. B) No. 101. C) No. 2101. D) No. 1201. Show Answer Correct Answer: C) No. 2101. 18. If any kind of error is made in preparing a check, A) VOID should be written on the check. B) VOID should be written on the check stub. C) A new check should be prepared. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. The business combination that ultimately result in the new company is called: A) Acquisition. B) Merger. C) Consolidation. D) None of the above. Show Answer Correct Answer: C) Consolidation. 20. What are the different types of accounts used in double-entry accounting? A) Cash, Check, Savings. B) Assets, Liabilities, Equity, Revenue, Expenses. C) Debits, Credits, Balances. D) Income, Expenditure, Profit. Show Answer Correct Answer: B) Assets, Liabilities, Equity, Revenue, Expenses. 21. Which is not an expense on the income statement of a sole proprietorship? A) Depreciation. B) Owner's drawing. C) Advertising. D) All of the above. Show Answer Correct Answer: B) Owner's drawing. 22. Sales discounts with terms 2/10, n/30 mean: A) 10 percent discount for payment within 30 days. B) 2 percent discount for payment within 10 days or the full amount (less returns) due within 30 days. C) Two-tenths of a percent discount for payment within 30 days. D) None of the above. Show Answer Correct Answer: B) 2 percent discount for payment within 10 days or the full amount (less returns) due within 30 days. 23. What is the definition of financial accounting? A) The process of analyzing stock market trends. B) The process of recording, summarizing, and reporting the transactions of a business for external users. C) The process of marketing financial products to consumers. D) The process of managing internal finances within a business. Show Answer Correct Answer: B) The process of recording, summarizing, and reporting the transactions of a business for external users. 24. Explain the concept of 'matching principle' in financial accounting. A) Matching principle only applies to non-operating expenses. B) Expenses should be recognized in a different period than the revenues to which they relate. C) Expenses should be recognized in the same period as the revenues to which they relate. D) Matching principle is not important in financial accounting. Show Answer Correct Answer: C) Expenses should be recognized in the same period as the revenues to which they relate. 25. John & Co sold an item of used machinery at $ 5000.What will be the effect on financial statements?1. Sales will increase by $ 5000 2. Profit will increase by $ 5000 3. Non-Current assets will decrease by $ 5000 A) 1, 2 & 3. B) 1 & 2. C) 1 & 3. D) 3 only. Show Answer Correct Answer: D) 3 only. 26. Which of the following is an assets? A) Insurance prepaid. B) Rent in arrears. C) Sales. D) Bad debt provision. Show Answer Correct Answer: A) Insurance prepaid. 27. What is the purpose of a Purchase Ledger? A) To record all cash and bank transactions. B) To keep track of all sales and revenue. C) To record all purchase invoices. D) To contain all impersonal accounts. Show Answer Correct Answer: C) To record all purchase invoices. 28. What is a cashbook? A) A statement prepared by a bank and sent to a current account holder. B) A statement prepared by a business owner to show monthly bank transactions. C) A statement prepared by a bank to show business profits. D) A prime entry showing actual cash/cheque received and paid on a daily basis. Show Answer Correct Answer: D) A prime entry showing actual cash/cheque received and paid on a daily basis. 29. Del credere commission is calculated on: A) Cash sales only. B) Credit sales only. C) Total of both cash and credit sales. D) Cost price of goods sold. Show Answer Correct Answer: C) Total of both cash and credit sales. 30. All the following accounts follow the principle of double entry except A) Cash book. B) Balance sheet. C) Sales account. D) Trading account. Show Answer Correct Answer: B) Balance sheet. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books