Fin621 Quiz No. 1

for past SOLVED online quizzes & papers pls visit the following link for fin621 http://vusolutionspapers.blogspot.com/search/label/GURUs or simply visit VUsolutions Papers or VUsolutions GURU for all subjects' solved past papers and quizzes etc.

Question # 2 of 15 ( Start time: 01:22:08 AM ) Total Marks: 1
Company XYZ purchases Machinery on credit; Journal entry would be:
Select correct option:

Accounts Payable debit; Machinery Credit
Accounts Receivable debit; Machinery Credit
Machinery Debit; Accounts Payable credit
Machinery Debit; Accounts Receivable credit

Question # 3 of 15 ( Start time: 01:22:47 AM ) Total Marks: 1
Adjusting entries are required for which of the following accounts?
Select correct option:

Income Summary accounts
Revenue and expense accounts
All types of accounts
Assets and liabilities accounts

Question # 4 of 15 ( Start time: 01:24:15 AM ) 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

Question # 5 of 15 ( Start time: 01:25:44 AM ) Total Marks: 1
Which of the following would be considered a cash-flow item from an "operating" activity?
Select correct option:

Cash outflow to the government for taxes
Cash outflow to shareholders as dividends
Cash inflow to the firm from selling new common equity shares
Cash outflow to purchase bonds issued by another company

Question # 6 of 15 ( Start time: 01:27:05 AM ) Total Marks: 1
Which of the following account would be classified as a current asset on the balance sheet?
Select correct option:

Accumulated depreciation
Accounts receivable
Office equipment
Land

Question # 7 of 15 ( Start time: 01:27:41 AM ) Total Marks: 1
How the transactions in a journal are initially recorded?
Select correct option:

Alphabetical order
Ascending order
Chronological order
Alphanumeric order

Question # 8 of 15 ( Start time: 01:28:11 AM ) 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 # 9 of 15 ( Start time: 01:29:38 AM ) Total Marks: 1
Use the following information to calculate net cash from investing activities: sell a capital asset for Rs. 10,000 cash and a Rs. 1,000 gain; purchase a bond investment for Rs. 16,000; receive Rs. 2,000 interest payment from the bond investment; and pay off a Rs. 3,000 mortgage payable.
Select correct option:

Rs. 6,000 net cash
Rs. 4,000 net cash
Rs. 5,000 net cash
Rs. 9,000 net cash

Question # 10 of 15 ( Start time: 01:31:07 AM ) Total Marks: 1
A business has purchased a building on cash, how it would be recorded in the journal?
Select correct option:

Building - Debit; Cash - Credit
Cash - Debit; Building - Credit
Building - Debit; Owner’s equity - Credit
Building - Debit; Accounts Payable - Credit

Question # 11 of 15 ( Start time: 01:32:00 AM ) Total Marks: 1
Which of the following is NOT one of the four basic financial statements?
Select correct option:

Balance sheet
Audit report
Income statement
Statement of cash flows

Question # 12 of 15 ( Start time: 01:32:25 AM ) Total Marks: 1
Cash has been described as:
Select correct option:

The lifebuoy of the business
The lifeboat of the business
The lifeline of the business
The lifeblood of the business

Question # 13 of 15 ( Start time: 01:33:07 AM ) Total Marks: 1
Which of the following refers to the term “posting”?
Select correct option:

The recording of transactions
The system of giving numbers to the accounts
Transferring the debits and credits to ledger
Transferring the debits and credits to journal

Question # 14 of 15 ( Start time: 01:34:18 AM ) Total Marks: 1
An advantage of the single-step income statement over the multi-step form is:
Select correct option:

Its use in computing ratios
Its simplicity
Its comprehensiveness
The amount of information it provides

Question # 15 of 15 ( Start time: 01:35:48 AM ) Total Marks: 1
Which of the following is the next step after the preparation of trial balance?
Select correct option:

Adjusted trial balance
Financial statements
Adjusting entries
Closing entries

 

Question # 1 of 15 ( Start time: 07:31:56 PM ) Total Marks: 1

Which of the following is not true about the “Account”?

Select correct option:

Accounts are only prepared by the business entities

Account always reflects the amount of the single transaction only

Account is effected both by economic and non economic events

All of the given options

Question # 2 of 15 ( Start time: 07:33:17 PM ) Total Marks: 1

Which of the following is NOT one of the three items required to be shown in the heading of a financial statement?

Select correct option:

The preparation date of the financial statement

The title of the financial statement

The unit of measure in the financial statement

The name of the business entity

Question # 3 of 15 ( Start time: 07:34:12 PM ) Total Marks: 1

End product of the accounting cycle is known as the__________

Select correct option:

Tax return

Financial statements

Auditor’s annual report

Annual general meeting

Question # 4 of 15 ( Start time: 07:34:38 PM ) Total Marks: 1

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

Select correct option:

Both sides are always positive

Both sides are negative

Both sides are equal

Both sides are not linked which each other

Question # 5 of 15 ( Start time: 07:35:12 PM ) Total Marks: 1

How would an increase in owner’s equity be recorded?

Select correct option:

Debit

Credit

No effect

Statement is wrong

Question # 6 of 15 ( Start time: 07:35:41 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:

Rent expense

Revenue earned

Wages expense

Accumulated depreciation

Question # 7 of 15 ( Start time: 07:36:14 PM ) Total Marks: 1

How many parts does each account have?

Select correct option:

Two

Four

Three

Five

Question # 8 of 15 ( Start time: 07:36:38 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 # 9 of 15 ( Start time: 07:37:10 PM ) Total Marks: 1

Which of the following principle is used for recording a revenue?

Select correct option:

Matching Principle

Cost Principle

Realization Principle

Objectivity Principle

Question # 10 of 15 ( Start time: 07:38:14 PM ) Total Marks: 1

Mr. A purchases a piece of land for cash and debit made to machinery account. What would be the effect of this error on the trial balance?

Select correct option:

Debit side would be decrease with the same amount

Credit side would be increase with the same amount

Total of the trial balance would be agree in all aspect

None of the given options

Question # 11 of 15 ( Start time: 07:39:33 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 # 12 of 15 ( Start time: 07:40:18 PM ) Total Marks: 1

Which of the following is/are current asset?

Select correct option:

Rent paid for next six months

Cash at bank

Investments in stock market for two weeks

All of the given option

Question # 13 of 15 ( Start time: 07:41:03 PM ) Total Marks: 1

Which of the following is the third step of accounting cycle?

Select correct option:

Preparing financial statements

Preparing trial balance

Posting

Making adjusting entries

Question # 14 of 15 ( Start time: 07:42:30 PM ) Total Marks: 1

ABC Company has Rs. 150,000 cash, Rs. 80,000 as accounts receivables, Rs. 20,000 as allowance for doubtful accounts, Rs. 10,000 as work in progress inventory, Rs. 55,000 as prepaid expenses, Rs. 50,000 land purchased in the current year. Calculate the value of current assets.

Select correct option:

Rs. 275,000

Rs. 315,000

Rs. 365,000

Rs. 220,000

Question # 15 of 15 ( Start time: 07:43:54 PM ) Total Marks: 1

The definition of cash as used in “Cash Flow Statements” includes:

Select correct option:

Only cash balances

Only bank balances

Bank balances and bank overdrafts

Cash in hand plus bank balances less bank overdrafts


Question # 1 of 15 ( Start time: 03:29:51 PM ) Total Marks: 1
Which of the following is the next step after the preparation of trial balance?
Select correct option:


1. Adjusted trial balance
2. Financial statements
3. Adjusting entries (page#14)
4. Closing entries


Question # 2 of 15 ( Start time: 03:30:22 PM ) Total Marks: 1
Which of the following is the third step of accounting cycle?
Select correct option:


1. Preparing financial statements
2. Preparing trial balance
3. Posting (page#4)
4. Making adjusting entries


Question # 3 of 15 ( Start time: 03:30:47 PM ) Total Marks: 1
Mr. A purchases a piece of land for cash and debit made to machinery account. What would be
the effect of this error on the trial balance?
Select correct option:


1. Debit side would be decrease with the same amount
2. Credit side would be increase with the same amount
3. Total of the trial balance would be agree in all aspect
4. None of the given options




Question # 4 of 15 ( Start time: 03:31:23 PM ) Total Marks: 1
Which of the following truly represents expenses?
Select correct option:


1. Future benefits
2. Past results
3. Cost of doing business
4. Past receipts


Question # 5 of 15 ( Start time: 03:32:03 PM ) Total Marks: 1
Which of the following is a special temporary account used to close all of the revenue and
expense accounts?
Select correct option:


1. Close-out Summary
2. Owner’s Capital (page#35)
3. Income Summary
4. Temporary Summary


Question # 6 of 15 ( Start time: 03:32:26 PM ) Total Marks: 1
Adjusting entries are used to:
Select correct option:


1. Bring account balances up to date at year end
2. Close temporary accounts at year end
3. Close permanent accounts at year end
4. Bring account balances at zero


Question # 7 of 15 ( Start time: 03:33:06 PM ) Total Marks: 1
Which of the following expenses would normally be classified as Other or Non Operating
Expense on a multiple-step income statement?
Select correct option:


1. Interest expense
2. Depreciation expense
3. Insurance expense
4. Salaries expense


Question # 8 of 15 ( Start time: 03:33:32 PM ) Total Marks: 1
The investments made by the business for ten years in a saving scheme will be classified
as:
Select correct option:


1. Fixed assets
2. Long term asset
3. Liquid asset
4. Bonds
Question # 9 of 15 ( Start time: 03:34:39 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 # 10 of 15 ( Start time: 03:35:01 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 # 11 of 15 ( Start time: 03:35:25 PM ) Total Marks: 1
There are five main kinds of current assets. Which of the following is NOT among them?
Select correct option:


1. Cash and equivalents
2. Deferred income
3. Accounts receivable
4. Prepaid expenses


Question # 12 of 15 ( Start time: 03:36:13 PM ) Total Marks: 1
Current assets are those assets which management intends to convert into cash or consume
within:
Select correct option:


1. The operating cycle
2. One year
3. The longer of operating cycle or one year
4. The shorter of operating cycle or one year


Question # 13 of 15 ( Start time: 03:36:51 PM ) Total Marks: 1
Which of the following is the first step of the accounting cycle?
Select correct option:


1. Making adjusting entries
2. Preparation of the financial statements
3. Posting in the ledger accounts
4. Analyze and journalize transactions as they occur (page#36)




Question # 14 of 15 ( Start time: 03:37:18 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


Question # 15 of 15 ( Start time: 03:37:36 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

VUsolutions Quiz Start Time: 12:11 PM Time Left 90 sec(s) Question # 1 of 15 ( Start time: 12:11:51 PM ) Total Marks: 1 How many parts does each account have? Select correct option: Two Four Three Five

VUsolutions Quiz Start Time: 12:11 PM Time Left 78 sec(s) Question # 2 of 15 ( Start time: 12:12:52 PM ) Total Marks: 1 An entry that effects more than one accounts is knows as _____________. Select correct option: Journal entry Compound entry Adjusting entry Reversing entry

VUsolutions Quiz Start Time: 12:11 PM Time Left 78 sec(s) Question # 4 of 15 ( Start time: 12:16:19 PM ) Total Marks: 1 Which of the following account will appear in the post-closing trial balance? Select correct option: Owner’s Capital Service Fees Earned Income Summary Owner’s Withdrawals

VUsolutions Quiz Start Time: 12:11 PM Time Left 57 sec(s) Question # 5 of 15 ( Start time: 12:17:11 PM ) Total Marks: 1 ABC Company has Rs. 150,000 cash, Rs. 80,000 as accounts receivables, Rs. 20,000 as allowance for doubtful accounts, Rs. 10,000 as work in progress inventory, Rs. 55,000 as prepaid expenses, Rs. 50,000 land purchased in the current year. Calculate the value of current assets. Select correct option: Rs. 275,000 Rs. 315,000 Rs. 365,000 Rs. 220,000

VUsolutions Quiz Start Time: 12:11 PM Time Left 46 sec(s) Question # 6 of 15 ( Start time: 12:17:48 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: Realization principle Separate entity principle Matching principle Materiality principle

VUsolutions Quiz Start Time: 12:11 PM Time Left 63 sec(s) Question # 7 of 15 ( Start time: 12:18:44 PM ) Total Marks: 1 Which of the following is the most common adjusting entry? Select correct option: Un-earned revenue Pre-paid expense Depreciation expense Accrued revenue

VUsolutions Quiz Start Time: 12:11 PM Time Left 42 sec(s) Question # 8 of 15 ( Start time: 12:19:18 PM ) Total Marks: 1 On November 30, 2008 ABC Company borrowed Rs. 4,000 from bank by issuing an interest-bearing note payable. This loan is to be paid in three months along with interest computed at an annual rate of 9%. What will be the entry on Nov 30 to record this borrowing? Select correct option: Cash – Debit; Notes payable – Credit Notes payable – Debit; Cash – Credit Interest expense – Debit; Cash – Credit Interest payable – Debit; Notes payable - Credit

VUsolutions Quiz Start Time: 12:11 PM Time Left 50 sec(s) Question # 10 of 15 ( Start time: 12:22:02 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

VUsolutions Quiz Start Time: 12:11 PM Time Left 64 sec(s) Question # 11 of 15 ( Start time: 12:22:53 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

VUsolutions Quiz Start Time: 12:11 PM Time Left 53 sec(s) Question # 12 of 15 ( Start time: 12:23:45 PM ) Total Marks: 1 Use the following information to calculate net cash from investing activities: sell a capital asset for Rs. 10,000 cash and a Rs. 1,000 gain; purchase a bond investment for Rs. 16,000; receive Rs. 2,000 interest payment from the bond investment; and pay off a Rs. 3,000 mortgage payable. Select correct option: Rs. 6,000 net cash Rs. 4,000 net cash Rs. 5,000 net cash Rs. 9,000 net cash

VUsolutions Quiz Start Time: 12:11 PM Time Left 46 sec(s) Question # 14 of 15 ( Start time: 12:28:13 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