This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Reporting > Financial Reporting – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Reporting Quiz 7 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Another term for Creative Accounting is..... A) Aggressive accounting. B) Earning management. C) Profit smoothing. D) Impression management. E) Bank robbery. Show Answer Correct Answer: A) Aggressive accounting. 2. ..... is a regulatory body that is responsible to develop and regulate capital market in Malaysia. A) Malaysian National Bank. B) Malaysian Accounting Standards Board. C) Securities Commission. D) Registrar of Companies. Show Answer Correct Answer: C) Securities Commission. 3. The three major classifications of activities in a cash flow statement are: A) Inflows, outflows, and net flows. B) Operating, investing and financing. C) Revenues, expenses, and net income. D) None of above. Show Answer Correct Answer: B) Operating, investing and financing. 4. If tested more than once by different parties, the results show conclusions that are not much different A) Relevant. B) Reliable. C) Can be compared. D) Understandable. Show Answer Correct Answer: B) Reliable. 5. Which of the following disclosures regarding new accounting standards provides the most meaningful information to an analyst? A) The impact of adoption is discussed. B) The standard will have no material impact. C) Management is still evaluating the impact. D) None of above. Show Answer Correct Answer: A) The impact of adoption is discussed. 6. The most likely company to use a liquidity-based balance sheet presentation is a: A) Bank. B) Computer manufacturer holding inventories. C) Software company with trade receivables and payables. D) None of above. Show Answer Correct Answer: A) Bank. 7. How does financial reporting contribute to transparency in a company? A) By keeping all financial information confidential. B) By disclosing only favorable financial data. C) By providing accurate and comprehensive financial information to stakeholders. D) By sharing misleading information about the company's performance. Show Answer Correct Answer: C) By providing accurate and comprehensive financial information to stakeholders. 8. Which statements is false concerning users and their information needs? A) Lenders are interested in information that enables them to determine whether their loans and the interest on these loans will be paid when due. B) The providers of risk capital and their advisers are concerned with the risk inherent in, and return provided by their investment. C) Government and its agencies have an interest in information about the continuance of an enterprise especially when they have long-term involvement or are dependent on the enterprise. D) Employees and their representative groups are interested in information about the stability and profitability of the entity. Show Answer Correct Answer: C) Government and its agencies have an interest in information about the continuance of an enterprise especially when they have long-term involvement or are dependent on the enterprise. 9. Financial reports must be presented on time A) Relevant. B) Reliable. C) Can be compared. D) Understandable. Show Answer Correct Answer: A) Relevant. 10. William and Benjamin are studying for their business exam. Ava, their tutor, asks them, 'Which financial statement would you look at to find information about a company's assets and liabilities?' A) Balance Sheet. B) Cash Flow Statement. C) Statement of Financial Position. D) Statement of Income. Show Answer Correct Answer: A) Balance Sheet. 11. Accounting information is considered to be relevant when it A) Is capable of making a difference in a decision. B) Is verifiable and neutral. C) Can be depended on to represent the economic conditions and events that it is intended to represent. D) Is understandable by reasonably informed users of accounting information. Show Answer Correct Answer: A) Is capable of making a difference in a decision. 12. Jabroni's Meat Market recorded dividends of $ 30, 000. The correct journal entry to record the closing entry for the Dividends account is: A) Debit Retained Earnings, $ 30, 000; credit Dividends Payable, $ 30, 000. B) Debit Dividends, $ 30, 000; credit Retained Earnings, $ 30, 000. C) Debit Dividends Payable, $ 30, 000; credit Retained Earnings, $ 30, 000. D) Debit Retained Earnings, $ 30, 000; credit Dividends, $ 30, 000. Show Answer Correct Answer: D) Debit Retained Earnings, $ 30, 000; credit Dividends, $ 30, 000. 13. Which of the following is most likely to appear in the operating section of a cash flow statement under the indirect method? A) Net income. B) Cash paid to suppliers. C) Cash received from customers. D) None of above. Show Answer Correct Answer: A) Net income. 14. Which groups of people are most likely to be interested in the financial statements of a sole trader?1. Shareholders of the company2.The business's bank manager3. The tax authorities4. Financial analysts A) 1 and 2 only. B) 2 and 3 only. C) 2, 3 and 4 only. D) 1, 2 and 3 only. Show Answer Correct Answer: B) 2 and 3 only. 15. Bank overdraft is generally presented as A) Non-current assets'. B) Current assets. C) Short term liabilities. D) Long-term obligation. Show Answer Correct Answer: C) Short term liabilities. 16. It identifies the sources of cash inflows, the items on which cash was expended during the reporting period, and the cash balance as at reporting date A) Statement of Cash Inflows. B) Statement of Cash Inflows. C) Statement of Cash Flows. D) Statement of Cash Balance. Show Answer Correct Answer: C) Statement of Cash Flows. 17. In case of first time implementation of Ind AS, there is an option to record PPE at: A) Fair value. B) Cost. C) Both of the above. D) None of above. Show Answer Correct Answer: C) Both of the above. 18. An entity may decide to include income or expenses in other comprehensive income when doing so would result in the statement of profit or loss providing more relevant information, or providing a more faithful representation of the entity's performance for the period A) False. B) True. Show Answer Correct Answer: A) False. 19. On 31 December 2021. a company issued a $ 30 000 180-day note at 8 percent, using the cash received to pay for inventory, and issued $ 110 000 long-term debt al 11 percent annually, using the cash received to pay for new equipment. Which of the following most accurately reflects the combined effect of both transactions on the company's cash flows for the year ended December 31 2021 under IFRS? Cash flows from: A) Operations are unchanged. B) Financing increase $ 110, 000. C) Operating decrease $ 30, 000. D) None of above. Show Answer Correct Answer: B) Financing increase $ 110, 000. 20. Closing entries are made at the end of the fiscal period so that: A) The balance sheet will be up to date. B) The Capital account will be up to date. C) The income statement accounts will begin the next fiscal period with a zero balance. D) Both b) and c). Show Answer Correct Answer: D) Both b) and c). 21. These are those intended to meet the needs of users who are not in a position to demand reports tailored to meet their particular information needs. A) General Purpose Financial Statements. B) Special Purpose Financial Statements. C) All Purpose Financial Statements. D) None of above. Show Answer Correct Answer: A) General Purpose Financial Statements. 22. Which of the following statements is most likely not true regarding standards for interim reporting? A) Declines in inventory value should be deferred to future interim periods. B) Use of the gross margin method for computing cost of goods sold must be disclosed. C) Costs and expenses not directly associated with interim revenue must be allocated to interim periods on a reasonable basis. D) Gains and losses that arise in an interim period should be recognized in the interim period in which they arise if they would not normally be deferred at year-end. Show Answer Correct Answer: A) Declines in inventory value should be deferred to future interim periods. 23. Calculate Networth for the purpose of determining applicability of Ind AS in case of NBFC:Securities Premium:70 crores Deferred Expenditure:30 crores Capital reserve out of promoters contribution:20 crore Revaluation Reserve:10 crore A) 70 crore. B) 130 crore. C) 60 crore. D) 100 crore. Show Answer Correct Answer: C) 60 crore. 24. Benefits of Global GAAP Harmonization A) Capital markets have become broader, and capital investment can move throughout the world without any obstacles. B) High-quality financial reporting standards are used consistently throughout the world and improve efficiency in capital allocation. C) Investors can make better investment decisions, portfolios will be more diverse and financial risks will be reduced. D) Companies can improve the strategic decision making process in the field of mergers and acquisitions. E) A, B, C, D Benar. Show Answer Correct Answer: E) A, B, C, D Benar. 25. The main objectives of the IASB Framework are A) To prevent information that is useful for decision making. B) To distort information that is useful for decision making. C) To present information that is useful for decision making. D) To falsify information that is useful for decision making. Show Answer Correct Answer: C) To present information that is useful for decision making. 26. Companies do not use fair value because market value = expense recognition is not available A) Salah. B) Correct. Show Answer Correct Answer: A) Salah. 27. A business purchased a motor car on 1 July 20X3 for $ 20, 000. It is to be depreciated at 20 per cent per year on the straight line basis, assuming a residual value at the end of five years of $ 4, 000, with a proportionate depreciation charge in the years of purchase and disposal. The $ 20, 000 cost was correctly entered in the cashbook but posted to the debit of the motor vehicles repair account.How will the business profit for the year ended 31Desember 20X3 be affected by the eror? A) Understated by $ 18, 400. B) Understated by $ 16, 800. C) Overstated by $ 16, 800. D) Overstated by $ 18, 400. Show Answer Correct Answer: A) Understated by $ 18, 400. 28. Accrual accounting is used because A) Cash flows are considered less important. B) It provides a better indication of ability to generate cash flows than the cash basis. C) It recognizes revenues when cash is received and expenses when cash is paid. D) None of these answers are correct. Show Answer Correct Answer: B) It provides a better indication of ability to generate cash flows than the cash basis. 29. Which financial report content can be customized A) Policy. B) Commission Inbox. C) Prospect. D) Slip. Show Answer Correct Answer: D) Slip. 30. Which of these transactions requires an adjusting entry (debit) to Unearned Revenue? A) Revenue collected before being earned when it is later earned. B) Revenue earned before being collected, when it is later collected. C) Revenue collected but not yet earned. D) Revenue earned but not yet collected. Show Answer Correct Answer: A) Revenue collected before being earned when it is later earned. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesFinancial Reporting Quiz 1Financial Reporting Quiz 2Financial Reporting Quiz 3Financial Reporting Quiz 4Financial Reporting Quiz 5Financial Reporting Quiz 6Financial Reporting Quiz 8Financial Reporting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books