Financial Accounting MCQ

Below Financial Accounting quiz are Multiple Choice Questions (MCQs) type Quiz. These Financial Accounting MCQ Questions helps you to refresh your Financial Accounting, you can see the correct option by clicking on it. .
  • 1. The Hire purchase Act came into force on 1st September, 1973

    • True
    • False
  • 2. Which of the following statements about contingent assets and contingent liabilities are correct?1-A contingent asset should be disclosed by note if an inflow of economic benefits is probable.2- A contingent liability should be disclosed by note if it is probable that a transfer of economic benefits to settle it will be required, with no provision being made.3 -No disclosure is required for a contingent liability if it is not probable that a transfer of economic benefits to settle it will be required.4 -No disclosure is required for either a contingent liability or a contingent asset if the likelihood of a payment or receipt is remote.

    • 1 and 4 only
    • 2 and 3 only
    • 2, 3 and 4
    • 1, 2 and 4
  • 3. Each instalment including down payment is treated as hire charges by the

    • Buyer
    • Seller
    • None of these
    • All of above
  • 4. The hire purchaser can record the asset at its

    • Hire purchase price
    • Cash down price
    • None of these
    • All of above
  • 5. When the lessor receives payment, he credits---------account

    • Royalty
    • Hire purchase
    • Shortworkings
    • profit and loss
  • 6. Under hire purchase system buyer becomes the owner

    • On payment of down payment
    • After receipts of goods
    • On payment of last instalment
    • On payment of first instalment
  • 7. Which one of the following would not be valid grounds for a provision?

    • A company has a policy has a policy of cleaning up any environmental contamination caused by its operations, but is not legally obliged to do so.
    • A company is leasing an office building for which it has no further use. However, it is tied into the lease for another year.
    • A company is closing down a division. The Board has prepared detailed closure plans which have been communicated to customers and employees.
    • A company has acquired a machine which requires a major overhaul every three years. The cost of the first overhaul is reliably estimated at $120,000.
  • 8. The cost of goods sold on hire purchase is transferred to

    • Sales a/c
    • Purchase a/c
    • Hire purchase a/c
    • Instalment a/c
  • 9. The amount paid at the time of entering the Hire-purchase transaction for the goods purchased is known as

    • Cash price
    • Down payment
    • First Instalment
    • Hire purchase price
  • 10. On sales of Rs. 1500 to A at 5% trade discount, the sales account will be -

    • Debited by Rs. 1425
    • Credited by Rs. 1425
    • Credited by Rs. 1500
    • Debited by Rs. 1575
  • 11. Which of the following statements is/are true?1- The IFRS Interpretations Committee is a forum for the IASB to consult with the outside world. 2 -The IFRS Foundation produces IFRSs. The IFRS Foundation is overseen by the IASB. 3 - One of the objectives of the IFRS Foundation is to bring about convergence of national accounting standards and IFRSs.

    • 1 and 3 only
    • 2 only
    • 2 and 3 only
    • 3 only
  • 12. Short workings irrecoverable are transferred to

    • Profit and loss a/c
    • Minimum Rent a/c
    • Royalty a/c
    • Land Lord a/c
  • 13. Royalty account is

    • Personal a/c
    • Real a/c
    • Nominal a/c
    • Capital a/c
  • 14. What is the role of the IASB?

    • Oversee the standard setting and regulatory process
    • Formulate international financial reporting standards
    • Review defective accounts
    • Control the accountancy profession
  • 15. Repairs to machinery is apportioned over the departments on the basis of

    • Number of machines in each department
    • Value of machine
    • Floor area of each machine
    • Rent rate of each machine
  • 16. Under the debtors system in branch a/c ,credit sales are

    • Debited to branch a/c
    • Credited to branch a/c
    • Debited to debtors a/c
    • Credited to debtors a/c
  • 17. Under Hire-purchase agreement the buyer agrees to pay

    • Cash price only
    • Interest only
    • Cash price and interest
    • None of these
  • 18. A compound journal entry

    • has equal debits and credits
    • generally extends to several pages
    • does not require narration
    • all of these
  • 19. Trial balance is prepared from

    • Ledger
    • Ledgers and journal
    • Ledger and cash book
    • None of these
  • 20. Who issues International Financial Reporting Standards?

    • The government
    • The International Accounting Standards Board
    • The stock exchange
    • The IFRS Advisory Committee
  • 21. Receipts and Payments Account is

    • Personal Account
    • Real Account
    • Nominal Account
    • Gross and Net Profit
  • 22. Legacies are generally

    • Treated as income
    • Capitalized and taken to balance sheet
    • Treated as expenditure
    • Treated as Revenue and payments
  • 23. Non trading institution prepare

    • Receipts and payments account
    • Income and expenditure account
    • Profit and Loss account
    • Both A & B
  • 24. Hire purchase price includes

    • Cash price and interest
    • Cash price and down payment
    • Down payment and interest
    • Total Price