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Finance and Accounting-Practice Quiz 1
Choose correct answer from each question from options given below:
Answer key is available on Page 14
...
Assets = Liabilities + Stockholders’ Equity is called________
...
Accounting Equation
b
...
Owners’ equity
2
...

a
...
Fair representation
c
...
Bookkeeping mainly concern with
process?
a
...
Preparing Financial Statements
c
...
Business incorporated under the laws of one of the states and owned
by a few stockholders or by thousands of stockholders is called
_________
...
Company
b
...
Partnership
5
...

a
...
Dividend payment
c
...
All claims to, or interests in, assets; include liabilities and _________
...
Stockholders’ equity/Capital
b
...
Drawing
7
...

a
...
Turnover ratio
c
...
The assumption by the accountant that unless strong evidence
exists to the contrary, a business entity will continue operations
into the indefinite future is called __________
...
Going Concern (continuity) concept
b
...
Materiality concept
9
...

a
...
Owners’ Equity
c
...

Companies that buy materials, convert them into products,
and then sell the products to other companies or to final consumers
are called ____________
...
Trading companies
b
...
Producing companies
11
...

a
...
Work in progress
c
...

Accumulated net income
stockholders is called _________
...
Distributable earnings
b
...
Retained earnings

less

dividend

distributions

to

13
...

a
...
Solvency

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Finance and Accounting-Practice Quiz 1
c
...

Any written or printed evidence of a business transaction that
describes the essential facts of that transaction, such as receipt for
cash paid or received, is called _________
...
Source document
b
...
Bill
15
...

a
...
Statement of change in equity
c
...


The owners’ interest in a corporation is called _______
...
Stockholders’ equity
b
...
Share capital

17
...

b
...


Owners of corporations, who buy shares of stock, which are
of ownership, in the corporation, are called ________
...

The complete listing of the account titles and account holders
of all the accounts in the ledger; somewhat comparable to a table of
contents is called ________
...
Listed accounts
b
...
Nominal accounts
19
...

a
...
Double entry
c
...

The placing of (1) the account number of the ledger account in
the general journal and (2) the general journal page number in the
ledger account is called _________
...
Cross indexing
b
...
Referencing
21
...

a
...
Double-entry procedure
c
...

The calculation of dollar and/or percentage changes in an item
on the financial statement from one year to the next is called
_________
...
Vertical analysis
b
...
Cross analysis
23
...

a
...
Assets accounts
c
...

Recording in the ledger accounts of the information contained
in the journal is called _______
...
Journalizing transaction
b
...
Posting
25
...

a
...
Accrual journal entry
c
...

An account resembling the letter T, which is used for
illustrative purposes only and in which credits are entered on the
left side of account, and credits are entered on the right side of the
account is called ________
...
Nominal account
b
...
T-account
27
...

a
...
Removable accounts
c
...

Analysis that shows the percentage that each item in a
financial statement is of some significant total such as total assets
or sales is called ________
...
Analytical approach
b
...
Vertical analysis
29
...

a
...
Normal year
c
...

Assets and liabilities, that exists at the end of an accounting
period but have not yet been recorded and that represent rights to
receive or obligation to make, payments that are not legally due at
the balance sheet date
...
These are called _________
...
Payables
b
...
Unrecorded transactions

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Finance and Accounting-Practice Quiz 1
31
...

a
...
Depreciation account
c
...

For depreciable asset, cost
depreciation is called __________
...
Book value
b
...
Market value

of

asset

less

accumulated

33
...

a
...
Accumulated account
c
...

The difference between an asset’s cost and estimated residual
value is called ________
...
Depreciable amount
b
...
Net cost
35
...

a
...
Market value
c
...

Assets received from customers before services are performed
for them are called _________
...
Unearned revenue
b
...
Unrealized revenue
37
...


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acquired

with

Finance and Accounting-Practice Quiz 1
a
...
Cash equivalents
c
...

Temporary investments that a company makes to earn a
return on idle cash are called _______
...
Stock
b
...
Profits
39
...

a
...
Creditors
c
...

The time taken to start with cash, buy necessary items to
produce revenues (such as materials, supplies, labors, and/or
inventories), sell services or goods produced from those materials
etc, and receiving the cash by collecting the resulting receivables is
called ____________
...
Accounting cycle
b
...
Systematic cycle
41
...

a
...
Patent
c
...

A balance sheet showing only three major categories: assets,
liabilities and, stockholders’ equity is called _________
...
Unclassified balance sheet
b
...
Classified balance sheet
43
...


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Finance and Accounting-Practice Quiz 1
a
...
Completed Contract method
c
...

Being cautious or prudent and making sure that net assets and
net income are not overstated is called ________
...
Conservatism
b
...
Fair treatment
45
...

a
...
Consistency
c
...

The amount paid, or the fair market value of a liability
incurred or other resources surrendered, to acquire an asset and
place it in a condition and position for its intended use, is called
__________
...
Historical cost
b
...
Depreciable cost
47
...

a
...
Liquidation
c
...

A modifying convention that allows the accountant to deal
with immaterial (unimportant) items in an expedient but
theoretically incorrect manner and that is also qualitative
characteristic specifying that financial accounting reports only
information significant enough to influence decisions or evaluations
is called ______
...
Materiality
b
...
Neutrality

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Finance and Accounting-Practice Quiz 1
49
...

a
...
Neutrality
c
...


We can say that a business is in profit when _______
...
Assets exceed expenditure
b
...
Income exceeds liabilities

51
...

a
...
Administrative expenses
c
...

A deduction from the invoice price that can be taken only if
the invoice is paid within a specified time
...
This is also called
__________
...
Cash discount
b
...
Debit discount
53
...

a
...
Sales discount
c
...

Goods delivered to another party who attempts to sell the
goods for the owner at a commission are called _________
...
Consigned goods
b
...
Goods with agent
55
...

a
...
Goods on port
c
...

Goods free on board at shipping point in which buyer incurs all
transportation cost after the merchandise is loaded on a railroad car
or truck at the point of shipment are called _________
...
FOB shipping point
b
...
Goods in transit
57
...

a
...
Freight inward
c
...

time
a
...

c
...

Freight prepaid
Freight collects
Freight inward

59
...
It contains the details of a sale, such as number
of units sold, unit price, total price billed, terms of sale and manner
of shipment
...

a
...
Sheet
c
...

The expenses, other than cost of goods sold, incurred in the
normal business functions of a company are called ________
...
Operating expenses
b
...
Other expenses
61
...

a
...
Major revenues
c
...

A method of accounting for merchandise acquired for sale to
customers wherein the cost of merchandise sold and the cost of
merchandise on hand are determined only at the end of the
accounting period by taking a physical inventory in count is called
_________
...
FIFO
b
...
Physical stock count inventory system
63
...

a
...
Providing of benefits
c
...

A percentage deduction, or discount, from the specified list
price or catalogue price of merchandise to arrive at the gross
invoice price; granted to particular categories of customers (e
...

retailers and wholesalers) is called _______
...
Trade discount
b
...
Credit discount
65
...

a
...
Solvency
c
...

The financial statement that reflects a company’s profitability
is called _________
...
Cash flow
b
...
Trial balance
67
...
g
...

a
...
Income statement
c
...

An accounting transaction is a business activity or event that
causes a measurable change in the accounting equation, Assets =
Liabilities + Stockholders’ equity
...
True
b
...

Which of the following is not part of complete set of financial
statements?
a
...
The statement of financial position (as at the end of the period)
c
...

A dividend distribution normally
(Proposal-----Declaration-----Payment)
...
True
b
...

Profit or loss for a period before deducting tax expense is
called ________
...
Accounting profit
b
...
Taxable profit
72
...

a
...
Gross profit
c
...

The amount of income taxes payable (recoverable) in respect
of the taxable profit (tax loss) for a period is called ________
...
Current tax
b
...
Taxation
74
...

a
...
Deferred tax liabilities

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Finance and Accounting-Practice Quiz 1
c
...

The amount of income taxes payable in future periods to
respect of taxable temporary differences is called __________
...
Current tax
b
...
Deferred tax liability

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Finance and Accounting-Practice Quiz 1

ANSWER KEY
Q
...

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Correct Answer
a
c
c
a
b
a
a
a
a
b
a
c
b
a
b
a
a
b
a
b
b
b
a
b
a

Q
...

26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50

Correct Answer
c
c
c
a
b
a
a
c
a
c
a
b
b
a
b
b
a
b
b
b
a
b
b
b
b

Q
...

51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75

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Correct Answer
c
a
c
a
a
a
a
a
a
a
a
b
a
a
b
b
a
a
a
a
c
c
b
c
c



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