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Finance and Business Accounting-Practice Quiz 2

Choose correct answer from each question from options given below:
Answer key is available on last page
...
The amount of income taxes recoverable in future periods in respect
of deductible temporary differences; to carry forward of unused tax
losses; and the carry forward of tax credits is called _________
...
Deferred tax
b
...
Deferred tax liabilities
2
...

a
...
Net realizable value (NRV)
c
...
The amount for which an asset could be exchanged, or a liability
settled, between knowledgeable, willing parties in an arm’s length
transaction is called ________
...
Fair value
b
...
None of these
4
...
The balancing figure will
represent the value of inventory on hand at the end of the period
...
Such system of inventory costing
is called ___________
...
The perpetual system
b
...
FIFO
5
...

a
...
Weighted average method
c
...
Systematic allocation of the depreciable amount of an asset over its
useful life is called __________
...
Depreciation
b
...
Revaluation
7
...

a
...
Fair value
c
...
The period over which the asset is expected to be available for use
by the entity; or the number of units expected to be obtained from
the entity’s use of the asset is called _______
...
Useful life
b
...
Business life
9
...

a
...
Book value
c
...

The excess of carrying amount over the recoverable amount is
called _______
...
Impairment loss
b
...
Amortization
11
...

a
...
Government grants

Prepared by Amjad Ali Buriro

Finance and Business Accounting-Practice Quiz 2
c
...

The period over which an asset is expected to be economically
usable by one or more users is called ________
...
Business life
b
...
Both A and B
13
...

a
...
Contingent liability
c
...

A qualitative characteristic of accounting information that
requires disclosure of all significant information in a way that aids
understanding and does not mislead; sometimes called the full
disclosure principle, is called ________
...
Comparability
b
...
None of these
15
...

a
...
Earning principle
c
...

Principle that requires that information important enough to
influence the decisions of an informed user of the financial
statement should be disclosed is called _________
...
Detail principle
b
...
Conversion
17
...

a
...
Full disclosure principle
c
...

Sale of long term assets for more than their book value is
called _______
...
Gains
b
...
Income
19
...

a
...
Gain
c
...

Principle that requires expenses should be recognized in the
period in which they are incurred to produce revenue is called
______
...
Matching principle
b
...
None of these
21
...

a
...
Matching principle
c
...

An assumption of the accountant that an entity’s life can be
divided into time periods for reporting its economic activities is
called _______
...
Periodicity assumption
b
...
None of these
23
...

a
...
Realization principle
c
...

A qualitative characteristic requiring that information
faithfully depicts for users what it purports to represent is called
________
...
Reliability
b
...
Disclosure principle
25
...

a
...
Truthfulness
c
...

Beginning inventory plus net cost of purchase is equal to
________
...
Cost of goods available for sale
b
...
Closing stock
27
...

a
...
Cost of goods available for sale
c
...


Net sales minus Cost of goods sold in equal to ________
...
Gross margin or gross profit
b
...
Closing stock

29
...

a
...
Net profit ratio
c
...

The quantity of goods available for sale any time is called
__________
...
Merchandise inventory
b
...
None of these
31
...

a
...
Purchase
c
...

Income from operations plus Non-operating revenues minus
Non-operating expense is equal to _________
...
Income
b
...
Gross income
33
...

a
...
Net purchase
c
...

Gross sales minus (Sales discounts plus sales returns and
allowances) are equal to __________
...
Gross sales
b
...
Sales
35
...

a
...
Operating expenses
c
...

Revenues not related to sale of products or services regularly
offered for sales by a business are called __________
...
Non-operating revenues
b
...
Revenues
37
...

a
...
Purchase discount account
c
...

An account used under periodic inventory procedure to record
the cost of merchandise returned to a seller and to record reduction
in selling prices granted by a seller because merchandise was not
satisfactory to a buyer; viewed as a reduction in the recorded cost of
purchase is called __________
...
Purchase returns and allowances account
b
...
None of these
39
...

a
...
Resellers
c
...

gross
a
...

c
...

Sales discount account
Gross sales account
None of these

41
...

a
...
Sales returns
c
...

Expenses a company incurs in selling and marketing efforts is
called ________
...
Delivery expenses
b
...
Administrative expenses
43
...

a
...
Transportation-in account
c
...

Cost of goods sold divided by Average inventory is equal to
________
...
Current ratio
b
...
Quick ratio
45
...

a
...
FIFO (First In-First Out)
46
...

a
...
20
c
...


Double entry bookkeeping was fathered by _________
...
F
...
Henry Fayol
c
...

Funds flow statement and sources and application statement
are ________
...
Synonymous
b
...
None of these
49
...

a
...
Amortization

Prepared by Amjad Ali Buriro

Finance and Business Accounting-Practice Quiz 2
c
...


Balance sheet is always prepared _________
...
For the year ended
b
...
None of these

51
...

a
...
Consolidated for Fire, Marine and, Accidents etc
c
...


Flexible budget is a budget with the following features;
a
...
Changes with variable expenses
c
...


Quick ratio can be computed as under __________
...
Quick Assets/Quick Liabilities
b
...
Current Assets/Current Liabilities

54
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Rupee one
b
...
None of these
55
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a
...
Depending on production capacity
c
...


Retained earnings are synonymous to ________
...
Accumulated profit and loss account
b
...
None of these

Prepared by Amjad Ali Buriro

Finance and Business Accounting-Practice Quiz 2
57
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a
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Cash items
c
...
No
...
No
...
No

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