Fin621 Online Quiz (04-05-2010)

Question # 1 of 15 ( Start time: 03:09:37 PM ) Total Marks: 1

Financial statements are a subset of which of the following?

Select correct option:



1. Financial reporting
2. Financial statement analysis
3. Accounting information
4. Accounting system




Question # 2 of 15 ( Start time: 03:12:19 PM ) Total Marks: 1

Which of the following is an example of an accrual?

Select correct option:



1. Equipment purchased for use in the business
2. Book-keeping fees collected but not yet earned
3. Six months’ rent paid in advance
4. Interest earned but not yet received





Question # 3 of 15 ( Start time: 03:13:46 PM ) Total Marks: 1

Which of the following is true about "After closing trial balance"?

Select correct option:



1. It may consist of balances of only Real and Personal accounts
2. It may consist of balances of only Nominal and Real accounts
3. It may consist of balances of Nominal, Real and Personal accounts
4. It may consist of balances of only Nominal and Personal accounts



Question # 4 of 15 ( Start time: 03:15:06 PM ) Total Marks: 1

Which of the following may include the “analyzing the transaction” the first step of the accounting cycle?

Select correct option:



1. Determining the transaction amount
2. Determining the effected accounts
3. Identifying the event as a transaction
4. All of the given options







Question # 5 of 15 ( Start time: 03:16:17 PM ) Total Marks: 1

The basic purpose of financial statements is to assist users in evaluating the________

Select correct option:

1. Financial position
2. Profitability of an organization
3. Future prospects
4. All of the given options



Question # 6 of 15 ( Start time: 03:16:56 PM ) Total Marks: 1

Which one of the following would lead to the decrease in the owner’s equity?

Select correct option:

1. Purchasing a piece of land
2. Paying dividends to shareholders
3. Purchasing equipment on account
4. Paying back the principal of a loan





Question # 7 of 15 ( Start time: 03:18:14 PM ) Total Marks: 1

Which of the following type of reports is most frequently used by external users, such as investors?

Select correct option:



1. Financial Statements
2. Tax Forms
3. Management Reports
4. Audit reports





Question # 8 of 15 ( Start time: 03:18:48 PM ) Total Marks: 1

How many parts does each account have?

Select correct option:



1. Two
2. Four
3. Three
4. Five



Question # 9 of 15 ( Start time: 03:19:19 PM ) Total Marks: 1

Identify the statement that is NOT true about the Incomes Account and Expenses Account:

Select correct option:

1. These are the temporary accounts
2. These are closed in Income summery account
3. These may included in closing trial balance
4. These are also known as Nominal Accounts







Question # 10 of 15 ( Start time: 03:20:47 PM ) Total Marks: 1

If the estimated amount of depreciation on equipment for a period is Rs.2000, the adjusting entry to record depreciation would be:

Select correct option:



1. Depreciation expense - Debit; Equipment - Credit
2. Depreciation expense - Debit; Accumulated depreciation - Credit
3. Equipment - Debit; Depreciation expense - Credit
4. Accumulated depreciation - Debit; Depreciation expense - Credit



Question # 11 of 15 ( Start time: 03:22:02 PM ) Total Marks: 1

Which of the following terms present a cause and effect relationship with each other?

Select correct option:


1. Income statement and balance sheet
2. Revenue and assets
3. Assets and liabilities
4. Revenues and expenses
not sure




Question # 12 of 15 ( Start time: 03:23:06 PM ) Total Marks: 1

Accounting is called the “language of business” because____________:

Select correct option:



1. It communicates the financial information to the Management only
2. In order to run a business one must have knowledge about accounting
3. Different business accounts are involved in financial statements
4. It helps to organize and communicate financial information to end users





Question # 13 of 15 ( Start time: 03:23:55 PM ) Total Marks: 1

Which one of the following statement shows the effects of cash inflows and outflows?

Select correct option:



1. Balance Sheet
2. Statement of Owner’s Equity
3. Income Statement
4. Statement of Cash Flows







Question # 14 of 15 ( Start time: 03:24:28 PM ) Total Marks: 1

Which of the following would represent a non-cash expense for the business?

Select correct option:



1. Cost of building
2. Cost of inventory
3. Cost of office equipment
4. Depreciation of building
5.




Question # 15 of 15 ( Start time: 03:25:12 PM ) Total Marks: 1

In which of the following account, a credit balance would be an evidence for a mistake or an error?

Select correct option:



1. Mr. A Capital Account
2. Cash account
3. Notes payable account
4. Drawings account













Question # 1 of 15 ( Start time: 03:27:58 PM ) Total Marks: 1

All of the following accounts would be closed in Income Summery Account EXCEPT:

Select correct option:



1. Commission earned account
2. Prepaid insurance
3. Salaries Expense account
4. Wages account





Question # 2 of 15 ( Start time: 03:28:56 PM ) Total Marks: 1

Which of the following is NOT one of the four basic financial statements?

Select correct option:



1. Balance sheet
2. Audit report
3. Income statement
4. Statement of cash flows
5.




Question # 3 of 15 ( Start time: 03:29:40 PM ) Total Marks: 1

Which of the following account would be classified as a current asset on the balance sheet?

Select correct option:



1. Accumulated depreciation
2. Accounts receivable
3. Office equipment
4. Land




Question # 4 of 15 ( Start time: 03:30:23 PM ) Total Marks: 1

Which of the following may include the “analyzing the transaction” the first step of the accounting cycle?

Select correct option:



1. Determining the transaction amount
2. Determining the effected accounts
3. Identifying the event as a transaction
4. All of the given options





Question # 5 of 15 ( Start time: 03:30:54 PM ) Total Marks: 1

Financial statements are a subset of which of the following?

Select correct option:



1. Financial reporting
2. Financial statement analysis
3. Accounting information
4. Accounting system







Question # 6 of 15 ( Start time: 03:31:32 PM ) Total Marks: 1

Which of the following account would NOT be closed to the income summary account at the end of a period?

Select correct option:



1. Rent expense
2. Revenue earned
3. Wages expense
4. Accumulated depreciation



Question # 7 of 15 ( Start time: 03:32:13 PM ) Total Marks: 1

A business has purchased a building on cash, how it would be recorded in the journal?

Select correct option:



1. Building - Debit; Cash - Credit
2. Cash - Debit; Building - Credit
3. Building - Debit; Owner’s equity - Credit
4. Building - Debit; Accounts Payable - Credit





Question # 8 of 15 ( Start time: 03:33:03 PM ) Total Marks: 1

Pre-paid expense is a(n) _________ type of account.

Select correct option:



1. Liability
2. Asset
3. Revenue
4. Expense not sure
5.




Question # 9 of 15 ( Start time: 03:33:56 PM ) Total Marks: 1

An entry that effects more than one accounts is knows as _____________.

Select correct option:



1. Journal entry
2. Compound entry
3. Adjusting entry
4. Reversing entry







Question # 10 of 15 ( Start time: 03:34:29 PM ) Total Marks: 1

Which of the following would be affected by the difference between revenues and expenses?

Select correct option:



1. Assets
2. Owner’s equity
3. Liabilities
4. Capital



Question # 11 of 15 ( Start time: 03:35:51 PM ) Total Marks: 1

According to _______ the personal expenses paid by Mr. A from his own pocket would not be recorded in business books of account.

Select correct option:



1. Realization principle
2. Separate entity principle
3. Matching principle
4. Materiality principle








Question # 12 of 15 ( Start time: 03:37:01 PM ) Total Marks: 1

Which of the following is true about the “Profit” earned by the business?

Select correct option:



1. It shows the amount that is received from the customer in cash only
2. It always results in increase in closing cash balance of a period
3. It affects the owner’s equity and liabilities in balance sheet
4. It may improves the liquidity position of a business
5.




Question # 13 of 15 ( Start time: 03:38:29 PM ) Total Marks: 1

Which of the following term refers to each element of the Balance Sheet?

Select correct option:



1. Ledger
2. Journal General
3. T- Account
4. Account





Question # 14 of 15 ( Start time: 03:39:37 PM ) Total Marks: 1

Which of the following is TRUE about both sides of the trial balance?

Select correct option:



1. Both sides are always positive
2. Both sides are negative
3. Both sides are equal
4. Both sides are not linked which each other
5.





Question # 15 of 15 ( Start time: 03:40:19 PM ) Total Marks: 1

Which of the following represents the negative future cash flows for an enterprise?

Select correct option:



1. Assets
2. Owner’s equity
3. Liabilities
4. Capital

Question # 1 of 15 ( Start time: 03:09:37 PM ) Total Marks: 1
Financial statements are a subset of which of the following?
Select correct option:

Financial reporting
Financial statement analysis
Accounting information
Accounting system

Question # 2 of 15 ( Start time: 03:12:19 PM ) Total Marks: 1
Which of the following is an example of an accrual?
Select correct option:

Equipment purchased for use in the business
Book-keeping fees collected but not yet earned
Six months’ rent paid in advance
Interest earned but not yet received

Question # 3 of 15 ( Start time: 03:13:46 PM ) Total Marks: 1
Which of the following is true about "After closing trial balance"?
Select correct option:

It may consist of balances of only Real and Personal accounts
It may consist of balances of only Nominal and Real accounts
It may consist of balances of Nominal, Real and Personal accounts
It may consist of balances of only Nominal and Personal accounts
Question # 4 of 15 ( Start time: 03:15:06 PM ) Total Marks: 1
Which of the following may include the “analyzing the transaction” the first step of the accounting cycle?
Select correct option:

Determining the transaction amount
Determining the effected accounts
Identifying the event as a transaction
All of the given options

Question # 5 of 15 ( Start time: 03:16:17 PM ) Total Marks: 1
The basic purpose of financial statements is to assist users in evaluating the________
Select correct option:

Financial position
Profitability of an organization
Future prospects
All of the given options

Question # 6 of 15 ( Start time: 03:16:56 PM ) Total Marks: 1
Which one of the following would lead to the decrease in the owner’s equity?
Select correct option:

Purchasing a piece of land
Paying dividends to shareholders
Purchasing equipment on account
Paying back the principal of a loan


Question # 7 of 15 ( Start time: 03:18:14 PM ) Total Marks: 1
Which of the following type of reports is most frequently used by external users, such as investors?
Select correct option:

Financial Statements
Tax Forms
Management Reports
Audit reports

Question # 8 of 15 ( Start time: 03:18:48 PM ) Total Marks: 1
How many parts does each account have?
Select correct option:

Two
Four
Three
Five

Question # 9 of 15 ( Start time: 03:19:19 PM ) Total Marks: 1
Identify the statement that is NOT true about the Incomes Account and Expenses Account:
Select correct option:

These are the temporary accounts
These are closed in Income summery account
These may included in closing trial balance
These are also known as Nominal Accounts


Question # 10 of 15 ( Start time: 03:20:47 PM ) Total Marks: 1
If the estimated amount of depreciation on equipment for a period is Rs.2000, the adjusting entry to record depreciation would be:
Select correct option:

Depreciation expense - Debit; Equipment - Credit
Depreciation expense - Debit; Accumulated depreciation - Credit
Equipment - Debit; Depreciation expense - Credit
Accumulated depreciation - Debit; Depreciation expense - Credit

Question # 11 of 15 ( Start time: 03:22:02 PM ) Total Marks: 1
Which of the following terms present a cause and effect relationship with each other?
Select correct option:

Income statement and balance sheet
Revenue and assets
Assets and liabilities
Revenues and expenses

Question # 12 of 15 ( Start time: 03:23:06 PM ) Total Marks: 1
Accounting is called the “language of business” because____________:
Select correct option:

It communicates the financial information to the Management only
In order to run a business one must have knowledge about accounting
Different business accounts are involved in financial statements
It helps to organize and communicate financial information to end users

Question # 13 of 15 ( Start time: 03:23:55 PM ) Total Marks: 1
Which one of the following statement shows the effects of cash inflows and outflows?
Select correct option:

Balance Sheet
Statement of Owner’s Equity
Income Statement
Statement of Cash Flows

Question # 14 of 15 ( Start time: 03:24:28 PM ) Total Marks: 1
Which of the following would represent a non-cash expense for the business?
Select correct option:

Cost of building
Cost of inventory
Cost of office equipment
Depreciation of building

Question # 15 of 15 ( Start time: 03:25:12 PM ) Total Marks: 1
In which of the following account, a credit balance would be an evidence for a mistake or an error?
Select correct option:

Mr. A Capital Account
Cash account
Notes payable account
Drawings account