This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 85 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 85 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If total assets of a business are $ 10, 00, 000 and capital is $ 4, 00, 000. Calculate Creditors ..... A) 14, 00, 000. B) 8, 00, 000. C) 7, 00, 000. D) 6, 00, 000. Show Answer Correct Answer: D) 6, 00, 000. 2. (h) ..... :A document sent by a customer to a supplier in respect of goods returned or overpayment made. It is a formal request for the supplier to issue a credit note. A) Debit note. B) Credit note. C) Goods received note (GRN). D) Goods dispatched (delivery) note (GDN). E) Statement. Show Answer Correct Answer: A) Debit note. 3. Why is deferred taxation accounted for in financial statements? A) Tax losses occur and they have to be anticipated. B) Taxation rates vary between countries. C) The prudence principle dictates that it should be so. D) A mismatch can occur because GAAP recognition criteria for items of income and expense are different from the treatment of items under tax law. Show Answer Correct Answer: D) A mismatch can occur because GAAP recognition criteria for items of income and expense are different from the treatment of items under tax law. 4. When a business purchase an assets by cash ..... A) Asset increase, asset decrease. B) Asset decrease, Liability increase. C) Asset increase, liability increase. D) Expenses increase, asset increase. Show Answer Correct Answer: A) Asset increase, asset decrease. 5. Which of the following will be treated as preferential creditors? A) Government Taxes. B) Trade Creditors. C) Unsecured loans. D) None of above. Show Answer Correct Answer: A) Government Taxes. 6. Users of accounting information is? A) Potential Investors. B) Suppliers. C) Management. D) All of the above. Show Answer Correct Answer: D) All of the above. 7. Use information in question one to answer this question A) #16, 500. B) #11, 500. C) #9, 500. D) #6, 500. Show Answer Correct Answer: C) #9, 500. 8. In hire purchase system, the ownership passes immediately to the vendor on down payment A) True. B) False. Show Answer Correct Answer: B) False. 9. The US government agency with authority over the financial reporting requirements of publicly traded corporations is the ..... A) IRS. B) AICPA. C) FASB. D) SEC. Show Answer Correct Answer: D) SEC. 10. There's no difference between Accounting Concepts and Accounting Conventions. A) True. B) False. Show Answer Correct Answer: B) False. 11. A book of original entry where transactions are first recorded. A) Subsidiary Ledger. B) General Ledger. C) General Journal. D) Trial Balance. Show Answer Correct Answer: C) General Journal. 12. Shareholders receive annual accounts, prepared in accordance with legal and professional requirements A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 13. Managers are the ..... users of accounting. A) External. B) Internal. Show Answer Correct Answer: B) Internal. 14. The December 31, 2018 trial balance for Rueda Company included the following:Purchases, P40, 000; Purchase returns and allowances, P2, 000; Transportation in, P3, 000; ending inventory was P8, 000. What was the cost of goods sold for 2018? A) 39, 000. B) 33, 000. C) 38, 000. D) None of the choices. Show Answer Correct Answer: B) 33, 000. 15. Which of the following is most useful for managers? A) Tax records for the past five years. B) Financial statements for the last financial year. C) Budgets for the coming financial year. D) Bank statements for the past year. Show Answer Correct Answer: C) Budgets for the coming financial year. 16. A chart of accounts (COA) is an ordered listing of accounts that comprise a company's general ledger A) False. B) True. Show Answer Correct Answer: B) True. 17. Which of the following is a real account? A) Creditors account. B) Trading account. C) Plant account. D) Salaries account. Show Answer Correct Answer: C) Plant account. 18. Net Book Value is A) Cost + Depreciation. B) Cost-depreciation. C) Cost + Accumulated Depreciation. D) Cost-Accumulated Depreciation. Show Answer Correct Answer: D) Cost-Accumulated Depreciation. 19. Revenue expenditure is the outflow of funds to acquire an asset that will benefit the business for not more than one accounting period. A) True. B) False. Show Answer Correct Answer: A) True. 20. Prudence is a concept to recognise all losses and not profits. A) True. B) False. Show Answer Correct Answer: B) False. 21. Which is not a financial statement A) Statement of assets. B) Income statement. C) Balance sheet. D) Statement of cash flows. Show Answer Correct Answer: A) Statement of assets. 22. Wages paid for the construction of building were recorded in wages account. This is ..... A) Error of principle. B) Error of omission. C) Error of commission. D) Compensating error. Show Answer Correct Answer: A) Error of principle. 23. Rules for the way financial statements should be prepare that help guide businesses in accounting procedures. A) GAAP. B) Accounting Equation. C) Accounting. D) Accrual Accounting. Show Answer Correct Answer: A) GAAP. 24. According to straight line method of providing depreciation, the depreciation A) Remains constant. B) Increase each year. C) Decrease each year. D) None of them. Show Answer Correct Answer: A) Remains constant. 25. Recording of transactions and events as and when they occur and classifying them into suitable account heading is the subject matter of A) Financial accounting. B) Book keeping. C) Cost accounting. D) Management accounting. Show Answer Correct Answer: B) Book keeping. 26. Conversion method is also known as A) Statement of affairs method. B) Net worth method. C) Final account method. D) Expenditure method. Show Answer Correct Answer: C) Final account method. 27. In computing diluted EPS, dividends on convertible cumulative preference shares should be A) Deducted from net income, whether declared or not. B) Added to net income net of tax. C) Ignored. D) Deducted from net income only when declared. Show Answer Correct Answer: C) Ignored. 28. A financial statement that reports how much cash a business took in and where the cash went. A) Income statement. B) Cash flow statement. C) Balance sheet. D) All of the above. Show Answer Correct Answer: B) Cash flow statement. 29. Alicia went to the local farmer's market to buy some fresh produce. She bought carrots for 35% OFF the original price of $ 7.40. How much did Alicia pay for the carrots? A) 9.99. B) 2.59. C) 4.81. D) 3.50. Show Answer Correct Answer: C) 4.81. 30. It is the process of transferring data from the journal to the appropriate accounts in the ledger. A) Posting. B) Ledger. C) Accounting. D) Journalizing. Show Answer Correct Answer: A) Posting. ← 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