17th
Apr
Financial Accounting MCQ

Financial Accounting MCQ

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  • 17th Apr, 2021
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Financial Accounting MCQ with Answers

Following are mostly asked Financial accounting MCQ test that are designed for professionals like you to crack you interviews. You can take this Financial accounting online test before appearing to you real interview. This Financial accounting quiz there are around 30+ multiple choice questions on Financial accounting with four options.

1) What is the main purpose of financial accounting?

  • A. Minimise company taxes
  • B. Organize Financial Information
  • C. Provide useful Financial information to outsiders
  • D. Keep track of Company expenses

2) Accounting provides information on .........

  • A. Cost and income for managers
  • B. Financial conditions of an institutions
  • C. Company's tax liability for a particular year
  • D. All of the above

3) Copyright patents and trademarks are which assets _____ .

  • A. Fixed assets
  • B. Current assets
  • C. Intangible assets
  • D. None of the above

4) Patents, Copyrights and Trademarks are________ .

  • A. Current assets
  • B. Intangible assets
  • C. Fixed assets
  • D. Investments

5) Are balance sheets prepared annualy?

  • A. True
  • B. False

6) Liquidity ratios are the ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources.

  • A. True
  • B. False

7) Any written evidence in support of a business transaction is called ______ .

  • A. Journal
  • B. Voucher
  • C. Ledger
  • D. Ledger posting

8) The account that records expenses, gains and losses is _____ .

  • A. Nominal account
  • B. Real account
  • C. Personal account
  • D. None of the above

9) In Journal, the business transaction is recorded _______ .

  • A. Next day
  • B. Same day
  • C. Once in a week
  • D. Once in a month

10) Liability- side of the balance-sheet comprises of ______ .

  • A. Long-term liabilities
  • B. Current liabilities
  • C. Capital and reserve
  • D. All of the above

11) Gross profit is _____ .

  • A. Cost of goods sold + Opening stock
  • B. Sales fewer Purchases
  • C. Excess of sales over cost of goods sold
  • D. Net profit fewer expenses of the period

12) Accounting furnishes data on ____ .

  • A. Income and cost for the managers
  • B. Financial conditions of the institutions
  • C. Company’s tax liability for a particular year
  • D. All of the above

13) Suppliers personal accounts are found in the _____ ledger.

  • A. Sales
  • B. Nominal
  • C. Purchase
  • D. General

14) What is customer value ?

  • A. Excess of satisfaction over expectation.
  • B. Ratio between the customer's perceived benefits and the resources used to obtained these benefits.
  • C. Post purchase dissonance
  • D. None of the above

15) The cost of capital method includes _______.

  • A. earning yield method
  • B. dividend yield method
  • C. dividend yield + growth in dividend method
  • D. All of the above

16) Cost of capital is helpful in corporative analysis of various _______.

  • A. Product
  • B. Source of Services
  • C. Source of Finance
  • D. Source of Material

17) Which of the following has the highest cost of capital ?

  • A. Loans
  • B. Bonds
  • C. Equity shares
  • D. Preference shares

18) The cost of debt capital is calculated on the basis of _____.

  • A. Capital
  • B. Annual Interest
  • C. Net proceeds
  • D. Arumal Depreciation

19) Depreciation is incorporated in cash flows because it Reduces Tax Liability.

  • A. True
  • B. False

20) Debt financing is a cheaper source of finance because of _____ .

  • A. Rate of Interest
  • B. Time value of Money
  • C. Tax deductibility of Interest
  • D. Dividends not payable to lenders.

21) What is the basic accounting equation?

  • A. Capital + Liabilities = assets
  • B. Capital + Assets = Liabilities
  • C. Assets + Liabilities = Capita
  • D. Liabilities - Capital = Assets

22) Which of the following is a liability in business?

  • A. Cash
  • B. Gold
  • C. Bonds
  • D. Creditors

23) What is equity?

  • A. Cash from the business
  • B. Liability of a business
  • C. Owner's claim on total liabilities
  • D. Owner's claim on total assets

24) Net loss occurs when expenses are greater than income.

  • A. True
  • B. False

25) Discount allowed is expense of business.

  • A. True
  • B. False

26) Present value fomula is PV = CF / (1 + r) ^t. State where the given statement is correct.

  • A. Yes
  • B. No

27) Which of the following is not a relevant cost in capital budgeting?

  • A. Sunk cost
  • B. Allocated overheads
  • C. Opportunity cost
  • D. Both (A) and (B) above

28) The branch of accounting that generates reports and information for the use of internal management is known as:

  • A. Auditing
  • B. Tax accounting
  • C. International accounting
  • D. Managerial or management accounting

29) AICPA full form is ________ .

  • A. American Institute of Certified Public Assistant
  • B. American Institute of Certified Public Accountants
  • C. American Institute of Certified Private Accountants
  • D. None of the above

30) Retained earnings formula is ( Current retained earnings + Net income - Dividends ). State whether the statement is True/False.

  • A. True
  • B. False

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