Financial Accounting MCQ
Question 1
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 the above
Answer: D
Question 2
Long term assets having no physical existence but, possessing a value are called
- A) Intangible assets
- B) Fixed assets
- C) Current assets
- D) Investments
Answer: A
Question 3
The assets that can be easily converted into cash within a short period, i.e., 1 year or less are known as
- A) Current assets
- B) Fixed assets
- C) Intangible assets
- D) Investments
Answer: A
Question 4
Copyrights, Patents and Trademarks are,
- A) Current assets
- B) Fixed assets
- C) Intangible assets
- D) Investments
Answer: C
Question 5
The debts which are to be repaid within a short period (a year or less) are referred to as,
- A) Current Liabilities
- B) Fixed liabilities
- C) Contingent liabilities
- D) All the above
Answer: A
Question 6
Gross profit is
- A) Cost of goods sold + Opening stock
- B) Excess of sales over cost of goods sold
- C) Sales fewer Purchases
- D) Net profit fewer expenses of the period
Answer: B
Question 7
Net profit is computed in the
- A) Profit and loss account
- B) Balance sheet
- C) Trial balance
- D) Trading account
Answer: A
Question 8
In order to find out the value of the closing stock during the end of the financial year we,
- A) do this by stocktaking
- B) deduct the cost of goods sold from sales
- C) deduct opening stock from the cost of goods sold
- D) look in the stock account
Answer: A
Question 9
Which of these best explains fixed assets?
- A) Are bought to be used in the business
- B) Are expensive items bought for the business
- C) Are items which will not wear out quickly
- D) Are of long life and are not purchased specifically for resale
Answer: D
Question 10
The charges of placing commodities into a saleable condition should be charged to
- A) Trading account
- B) P & L a/c
- C) Balance Sheet
- D) None of the above
Answer: B
