Our team has conducted extensive research to compile a set of Financial Accounting MCQs. We encourage you to test your Financial Accounting knowledge by answering these multiple-choice questions provided below.
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A. Current Assets
B. Non current assets
C. Retained Earnings
D. Current Liability
E. Long term liability
A. A liability account
B. A cost of good account
C. A contra sales account
D. A contra asset account
A. An environmental lawsuit.
B. Notes payable.
C. Prepaid Rent.
D. Accrued payroll.
A. None are found on a typical income statement
B. Taxes payable
C. Tax liability
D. Taxes due
E. Tax expense
A. Net increase (decrease) in cash
B. Net increase (decrease) in Assets
C. Net increase (decrease) in Liabilities
D. Net increase (decrease) in Shareholder's Equity
A. Credit
B. Debit
A. debit
B. credit
C. loans
D. resources
A. Land is not depreciated.
B. Straight-line.
C. Double declining balance.
D. Weighted average balance
A. Direct write-off
B. Nonrecognition
C. Accrual
D. Cash basis
A. Assets + Liabilities = Owners Equity
B. Owners Equity = Liabilities+ Assets
C. Liabilities = Assets + Owners Equity
D. Assets = Liabilities + Owners Equity
A. An increase in inventory indicates that a company has sold more goods than it has purchased. Increasing inventory requires a cash inflow. Cash inflows have a negative effect on the company’s cash balance.
B. An increase in inventory indicates that a company has purchased more goods than it has sold. Increasing inventory requires a cash outflow. Cash outflows have a negative effect on the company’s cash balance.
A. Investing
B. Financing
C. Operating
D. Income
E. Not located on the cash flow statement
A. Asset
B. Liability
C. Shareholder Equity
D. Expense
E. Revenue
A. Currency Translation
B. Depreciation
C. Business Combinations
D. Revenue
E. Inventories
A. Goodwill
B. Accounts Receivable
C. Property, plant and equipment
D. Patents
A. Loans made by shareholders to the company
B. The amount shareholders contributed to the company in exchange for the shares of common stock or preferred stock less stated par value of the securities
C. The excess of purchase price over asset value when a company is acquired
D. Assets-Liabilities=Paid-in Capital
A. False
B. True
A. Trademarks
B. Buildings
C. Natural Resources
D. Fixtures
E. Land
A. Suppliers
B. Government agencies
C. Investors
D. Board of Directors
E. Lenders
A. Franchises
B. Equipment
C. Copyrights
D. Licenses
E. Patents
A. The remaining balance of Net Income after dividends have been subtracted.
B. The difference of cash holdings at the beginning of the year and cash at end of the year
C. Cash required to be held for loan repayment requirements
D. Liquid funds in escrow required by lender convenants
A. Manufacturing cost of product
B. Commodity pricing
C. Comparable industry analysis
D. High tech contract labor
A. 'Rent revenue' is a balance sheet account and 'Rent receivable' is an income statement account
B. 'Rent receivable' is a balance sheet asset account and 'Rent revenue' is an income statement account
A. Income Statement
B. Statement of Expenses
C. Balance Sheet
D. Statement of Cash flows
E. Statement of Shareholder's (Owner's) Equity
A. Equity
B. Accounts Payable
C. Property, Plant and Equipment
D. Depreciation
E. Cash or Bank Balance
A. Liabilities
B. Gains
C. Expenses
D. Losses
A. Interest on money lent to the company by its shareholders.
B. Part of the company profits used to reward the shareholders for their investment
C. The directors’ remuneration
D. None of these
E. An expense of running the company
A. Share of profits
B. Payroll
C. Salary
D. Gain
E. Distributions or Dividends
A. American Institute of Chartered Public Accountants
B. American Institute of Credentialed Public Accountants
C. American Institute of Certified Public Accountants
D. American Institute of Chartered Private Accountants
E. American Institute of Certified Private Accountants
A. Cash flows from shareholder contribution
B. Cash flows from operating activities
C. Cash flows from investing activities
D. Cash flows from financing activities
A. Accounts Payable
B. Cash
C. Inventory
D. Accounts Receivable
E. Goodwill
A. Investing
B. Not located on the cash flow statement
C. Operating
D. Financing
E. Income
A. Gross receipts earned by the company selling its goods or services
B. Gross receipts earned by the company selling its intangible assets or services
C. Gross receipts earned by the company selling its depreciated supplies or services
D. Gross receipts earned by the company selling its shares or services
E. Gross receipts earned by the company selling its goods or intangible assets
A. All of these
B. Limited Liability Corporation
C. Sole Proprietership
D. Partnership
A. It is assumed that items purchased are valued at the greater of cost or market value
B. It is assumed that items purchased last are sold first.
C. It is assumed that items purchased first are sold first.
D. The system updates inventory accounts after each purchase or sale.
A. Poor estimation efforts on the part of management.
B. Extraordinary events recognized by the accounting reporting process.
C. Standard cost is expected cost, actuals can be different.
D. The variability of commodity inputs.
A. Company's net worth
B. Company's net earnings or losses
C. Company's total expenses
D. Company's total investments
E. Company's total sales
A. Goodwill is an Asset account. When a company is purchased for more than the assets are worth the off setting account is called Goodwill.
B. Goodwill is something you do without wanting anything in return.
C. There is no such account that is considered Goodwill in accounting.
D. Goodwill is a charitable donation place. You can take household items to Goodwill and get a tax dedution.
A. Final Inventory, First Out
B. From Inventory For Orders
C. Fast In, First Out
D. Funds In For Outsiders
E. First in, First out
A. Accounts Payable
B. All of the listed accounts are Control Accounts
C. Accounts Receivable
D. Inventory
A. both of these
B. a record of financial transactions in order by date
C. book of original entry
A. property, plant, and equipment
B. inventories
C. intangible assets
D. other assets
A. The balancing account to Short Term Assets
B. Liabilities that are expected to liquidate within a year or normal operating cycle, whichever is longer
C. Debts that are callable by a creditor
D. A contra account to Long Term Liabilities
A. False
B. True
A. True
B. False
A. Net profits or net gain
B. Net income or net loss
C. Net accumulation or net income
D. Net dividends or net depreciation
E. Net earnings or net interest
A. Certified Professional Accountant
B. Certified Public Accountant
C. Chartered Public Accountant
D. Commerce Public Accountant
A. An examination of the financial reports to ensure that they represent what they claim and conform with GAAP.
B. An examination of the financial reports to ensure that they represent what they claim and conform with USPAP.
C. To make sure that the company does not get in trouble with the PCAOB.
D. To ensure that management is not cheating shareholders.
A. Revenue
B. Asset
C. Liability
D. Expense
E. Shareholder Equity
A. The estimated value that an asset will realize upon its sale at the end of its useful life
B. An industry standard, published valuation
C. The price that the parts of a piece of equipment could be sold for
D. What the property could be sold for today
A. Intangible assets
B. Physical assets
C. Depreciation
D. Liabilities
E. PP&E
A. Expense
B. Liability
C. Asset
D. Revenue
E. Shareholder Equity
A. Intangible Asset
B. Tangible Asset
C. Expense
D. Shareholders Equity
E. Revenue
A. -($10,000)
B. $40,000
C. $10,000
D. $5,000
A. Asset
B. Shareholder Equity
C. Liability
D. Revenue
E. Expense
A. CPAs
B. Financial analysts
C. Financial advisors
D. Investment attorneys
E. Lawyers
A. stockholder’s equity, liabilities, assets.
B. assets, stockholder’s equity, liabilities
C. liabilities, assets, stockholder’s equity.
D. assets, liabilities, stockholder’s equity.
A. GAAP
B. AAGP
C. GAP
D. PAAC
A. -($10,000)
B. $40,000
C. $10,000
D. $5,000
A. As Credit Owed
B. As an Asset
C. As a Liability
D. As a Short Term Liability
A. 2% penalty incurred if not paid within 10 days.
B. $2 discount within 10 days, no discount within 30 days
C. 2% discount if paid within 10 days, net amount due within 30 days.
D. 2 Days to get a $10 discount otherwise you pay in full.
A. A liability
B. A physical asset
C. Depreciation
D. PP&E
E. An intangible asset
A. determine which accounts the transaction affects
B. all of these
C. record the transactions in a ledger
D. measure the event in monetary terms
A. price to earnings ratio
B. amortized expenses
C. quick ratio
D. interest expense
E. liabilities
A. producing general purpose financial statements
B. producing financial statements for meeting regulatory requirements
C. All of the Above
D. producing information used by the management of a business entity for decision making, planning and performance evaluation
A. A student with a masters in accounting
B. A principal at an accounting firm only
C. CPA licensed individual only
D. An accounting major
E. Anyone
A. True
B. False
A. Shareholders Equity
B. Prepaid Expense
C. Accounts Payable
D. Property, Plant and Equipment
E. Depreciation
A. Revenue
B. Unearned Revenue
C. COGS
D. Taxes Payable
E. Salaries Payable
A. Filing information with the IRS
B. Creation of the Income Statement
C. Posting activity moves balances of journal entries to ledger accounts
D. Development of the Trial Balance
A. cash
B. credit
C. debit
D. accrual
A. Gross Revenues
B. Current Assets
C. Other Liabilities
D. Fixed Assets
A. sold
B. lend
C. bought
D. audited
A. All of these
B. Direct labor
C. Manufacturing overhead
D. Direct material
A. principles
B. all of these
C. assumptions
D. conventions
A. Journal, ledger, trial balance, and financial statements.
B. Financial statements, trial balance, ledger, and journal.
C. Financial statements, journal, ledger, and trial balance.
D. Ledger, trial balance, journal, and financial statements.
A. In accounts payable.
B. In stockholders’ equity.
C. In other expense.
D. In accounts receivable.
A. prepaid expenses
B. other assets
C. inventories
D. intangible assets
A. internal accounting system
B. international auditing standards
C. international assignment system
D. International accounting standards
E. included available sale
A. Asset
B. Liability
C. Revenue
D. Expense
E. Shareholder Equity
A. Last in, Last out
B. Last in final out
C. Lower interest, first out
D. Lower inventory for outsiders
E. Last in, first out
A. Management Consulting Services
B. None of these
C. Tax Services
D. Audit or Assurance Services
E. All of these
A. Retained Earnings before Interest expense deductions
B. Earnings before tax, interest and dividends
C. It is a form of taxable interest.
D. It is not an expression or acronym used in Financial Accounting
A. Expense
B. Revenue
C. Liability
D. Shareholder Equity
E. Asset
A. Expense
B. Shareholder Equity
C. Liability
D. Asset
E. Revenue
A. Temporary changes in market value of noncurrent investments.
B. Effects of accounting adjustments from earlier periods.
C. Foreign currency translation adjustments.
D. All of these
A. Depreciation
B. A liability
C. A physical asset
D. PP&E
E. An intangible asset
A. Above face value
B. Below face value
C. None of the other options
D. Face value
E. Any of the other options
A. Depreciation
B. PP&E
C. Intangible assets
D. Liabilities
E. Physical assets
A. First in,last out
B. Last in,last out
C. first-in, still-here
D. First in,first out
A. Retained earnings is too low.
B. Net income is too low.
C. Retained earnings is correctly stated, as the omission only affects the Income Statement.
D. Net income is too high.
A. Asset
B. Expense
C. Liability
D. Shareholder Equity
E. Revenue
A. $240,000
B. $260,000
C. $360,000
D. $300,000
A. Shareholder, Equity
B. Asset, Liability
C. Revenue, Loss
D. Expense, Income
E. Liability, Expense
A. It is assumed that items purchased last are sold first.
B. The system updates inventory accounts after each purchase or sale.
C. It is assumed that items purchased are valued at the greater of cost or market value
D. It is assumed that items purchased first are sold first.
A. Cash and cash equivalents
B. Inventories
C. Prepaid expenses
D. Dividends payable
A. Fixed Assets
B. Current Assets
C. Long-term Assets
D. Current Liabilities
E. Long-term Liabilites
A. Liability
B. Asset
C. Property, Plant and Equipment
D. Contra-Asset
A. statement of owners equity
B. all of these
C. balance sheet
D. statement of cash flows
E. income statement
A. Account Classification
B. Chart of accounts
C. Account Categorizing
D. Account Heads
E. Account Information