Financial Accounting multiple choice question answer Quiz

Financial Accounting multiple choice question answer Quiz

ACCOUNTING QUIZ

Accounts 2

account quiz 2

1. The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the

  1. balance sheet
  2. Income statement
  3. statement of cash flow

2.The financial statement that reports the assets, liabilities, and stockholders’ (owner’s) equity at a specific date is the

  1. income statement
  2. statement of cash flow
  3. balance sheet

3.Under the accrual basis of accounting, revenues are reported in the accounting period when the

  1. cash is received
  2. goods or service is received

4. Under the accrual basis of accounting, expenses are reported in the accounting period when the

  1. cash is paid
  2. expense matched the revenue or used up

5. Assets are usually reported on the balance sheet at which amount?

  1. current market value
  2. cost
  3. expected selling price

6. Unearned Revenues is what type of account?

  1. asset
  2. liability
  3. owners equity capital

7. Accounting entries involve a minimum of how many accounts?

  1. two
  2. three
  3. one

8. When cash is received, the account Cash will be

  1. debit
  2. credit

9. When a company pays a bill, the account Cash will be

  1. credited
  2. debited

10. What will usually cause an asset account to increase?

  1. debit
  2. credit

accounts 3

accounts 3

1.Patents ,Goods and Trademarks are Examples of

  1. intangible liabilities
  2. current assets
  3. intangible assets
  4. current liabilities

2. Which of the followings is notExample of Capital Expenditure

  1. spending on new computer hardware
  2. spending on new plant and machinery
  3. spending on new building
  4. spending on wages and salaries.

3. Which of the following is not categories as a current Asset

  1. cash in hand
  2. trade debtors
  3. stock
  4. plant and machinery

4. which of the following transaction would be classified as a trade creditor in the balance sheet

5. which of the following is example of long term Liability

  1. dividend payable
  2. bank loan due to be repaid
  3. Bank overdraft
  4. accrual year end cost

6. which of the following factor is used as multiplier of super profit in valuation of goodwill of business.

 

1. Assets are normally shown at cost price in the balance sheet, and the cost is the basis for all subsequent accounting for the asset.

  1. Historical cost
  2. full disclose
  3. Money measurement
  4. Matching

2.There are two sides to accounting, one represented by the assets and the other represented by the liabilities against them.

  1. Accrual
  2. Dual
  3. Matching
  4. Realising

3.Everything is recorded in terms of money. Items which cannot be recorded in terms of money are ignored and not included. It follows that the financial statements only give a partial picture of the state of a business.

  1. Time period
  2. Going concern
  3. Money measurement
  4. Business Entity

4.For accounting purposes the business is treated as a separate entity from the owner. The accounting records show transactions of the business not the owner.

  1. Time period
  2. Going concern
  3. Money measurement
  4. Business entity

5.Profit is earned (realized) at the time the goods or services are passed to the customer and the customer incurs liability for them

  1. Realization
  2. matching
  3. Dual
  4. Full disclosure

6.Accounting assumes the business will continue.

  1. Money measurement
  2. Going concern
  3. Business entity
  4. Time period

7.Profit is the difference between revenue and expenses not cash received and paid. Expenses are matched to revenues, for example if rent has been set as a percentage of sales (a turnover rent), then the rent is accrued in the accounts is the same period as the sales and not when the rent is actually paid.

  1. Revenue recognition
  2. Historical cost
  3. Matching
  4. Full disclosure

8. As per Income tax Act accounting period is

  1. From 1 January to 31st December
  2. From 1 st April to 31st march
  3. From 1 st July to 30th June
  4. From Diwali to Diwali

9 As per dual aspect Principle.

  1.  Asset = Liabilities – Capital
  2. Asset = Capital – Liabilities
  3. Asset = liabilities + Capital
  4. Capital = Asset + Liabilities

10.Concept of consistency means

  1. All firm in the same industry should use identical accounting principle and procedures.
  2. All principle and procedures of accounting are utilised
  3. Accounting principles and methods should remain consistent from one year to another.
  4. All of the above

11. Principle of conservatism takes into account

  1. All future profit and losses
  2. All future profit and not losses
  3. All future losses and not profit
  4. neither profit nor losses of future

12 According to principle of conservatism closing stock is value at

  1. At cost price
  2. At realizable Value
  3. Cost price or realisable value whichever is less
  4. At real Value

13.According to principle of conservatism

  1. Provision is made for bad and doubtful debts
  2. Depreciation is charged on assets
  3. Recording is made of outstanding expenses
  4. All of the above

14. According to which principal even the proprietor of the business is treated creditor of the business

  1. Going concern
  2. Cost principle
  3. Business Entity principle
  4. Accounting period Principle

15. Due to which principle qualitative transaction are not recorded in the books

  1. Business entity principle
  2. Money measurement principle
  3. Historical cost principle
  4. going concern concept

16.Accrual concept is based on

  1. Matching Principle
  2. Dual Aspect principle
  3. Cost Principle
  4. Going Concern concept

17. According to which principle the same accounting methods should be used each year.

  1. Prudence
  2. Full disclosure
  3. Materiality
  4. Consistencey

18. Due to which of the following contingent liabilites are shown in the balance sheet

  1. Dual aspect Principle
  2. Principle of Full Disclosure
  3. Principal of Materiality
  4. Going Concern concept

19 The cost of small calculator is accounted as an expense and not shown as an asset in financial statement of a business entity due to

  1. Materiality concept
  2. Matching concept
  3. Periodicity concept
  4. Principle of full disclosure

20 According to the cost concept

  1. Assets are recorded at lower of cost and market value
  2. Assets are recorded by estimating the market value at the time of purchases
  3. Assets are recorded at the value paid for acquiring it
  4. Assets are nor recorded.

21. Providing depreciation on fixed assets is in accordance with which of the following principles concepts

a) going concern b) Matching Principle c) Materialize

  1. 1 and 2
  2. 2 and 3
  3.  1 and 3
  4. all the above

22. The owner of the firm record the medical expense in the firm income statement indicate the principle that is violated

  1. cost principle
  2. prudence
  3. Full disclosure
  4. entity concept

23. M/s Raja has invested Rs 100000 in the shares of reliance industries ltd current market value of these shares is Rs. 120,000.Accountant of M/s Raja want to show Rs 120,000 as value of investment in the books of accounts which accounting convention restricts him from doing so

  1. Full disclosure
  2. Consistency
  3. Conservatism
  4. Materiality

24. Which of the following is not fundamental accounting assumption

  1. Going concern
  2. Consistency
  3. Accrual
  4. Materialilty

 

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