Financial Accounting Quiz
1)
19/3/11
Which is not one of the three main forms of business org anization?
a)
Sole s
propri etorship
b) Creditorship c) Partnership
d) Company 2)
Which is not one of the three main business activities?
a)
Finan cing
b) Operating c) Advertising
d) Investing 3)
Prof it will result when: a) Assets ex ceed liabilities b) Liabilities ex ceed r evenue c) Expenses ex ceed s revenue
d) Revenue ex ceeds expenses 4)
Which f inan cial statement reports assets, liab ilities and equity?
a)
Statement
of chang es in equity
b) Income statement c) Balance sheet
d) Cash flow statement 5)
Valuing ass ets at their ma rket value rather than at their cost is inconsistent with the: a) Accounting period concept b) Accounting enti ty concept c) Cost principle
d) All of the above 6)
Which is not an indic ato r of prof itab ility?
a) Curr ent ratio b) Prof it ma rgin ratio c) Return on shareholders fund s
d) Return on ass ets ratio 7)
A gene ral ledg er: a) Contains only ass et and liab ility a ccounts b)
Should
show a ccounts in alphabetical order
c) Is a collection of the entire group of a ccount s maintained by an entity
d) Provides a chronologic al record of transactions
8)
Debits: a) Increase both ass ets and liabilities b) Decrease both ass ets and liabilities c) Increase ass ets and decr ease liabilities
d) Decrease ass ets and in crea se liabilities 9)
Using accrual accounting, expen ses a re recorded and reported only: a) If they are paid before they are incurred b) When they are incurred and paid at the same time c) When they a re incurred, whether or not cash is paid
d) If they are paid after they a re incurr ed 10) What is the a ccounting period concept? a) A business will oper ate for a lon g period of time b) The econom ic life of a business can be divided into artif ici al time periods c) The f inan cial year should correspond with the calendar year
d) None of the above 11) If net sales revenue is RM420,000, cost of goods sol d is RM320,000, and operating expenses are RM60,000, what is the gross p rof it? a) RM340,000 b) RM100,000 c) RM40,000
d) RM420,000 12) Which of the following will affect the gross p rof it ratio? a) An incr ease in sales return s b) An incr ease in the depreciation expense c) A de crease in the electricity expense
d) An incr ease in inte rest revenue 13) If beginning inventory is RM60,000, cost of good s purchased is RM380,000, and ending inventory is RM50,000, what is cost of goods sold?
a) RM390,000 b) RM370,000 c) RM330,000
d) RM420,000 14) Which of t hese would cause the inventory turnover ratio to increa se the mo st? a) Increasing the amount of inventory on hand b) Keeping the amount of inventory on hand constant but increasing sale s c) Keeping the amount of inventory on hand constant but decrea sing sales
d) Decrea sing the amount of inventory on hand and incr easing sale s
15) The prin ciples of inte rnal control do not in clude: a) Establishment of responsibility b) Documentation procedures c) External auditors
d) Independent internal verif ication 16) Depreciation is a process of: a) Valuation b) Cost allocation c) Cash accumulation
d) Appraisal 17) To be cla ssif ied a s a current liability, a debt must be expected to be paid: a) Within 1 year b) Within the operating cycle c) Within 2 years
d) Within 5 years 18) Amounts dedu cted f rom employees wag es but not yet p aid to Inland Revenue are recognized a s:
a) An asset b) An expense c) A liability
d) None of the above; they a re not recog nized 19) Which of the following is not a mea sure of liquidity? a) Debt to total ass ets ratio b) Working capital c) Current ratio
d) Quick ratio 20) Which of the following is not an equity a ccount? a)
Sh are
capital
b) Reserves c) Retained earnings
d) Dividend s payable 21) A low return on shareholders equity ratio indic ate s: a)
Sh areholde r
conf iden ce
b) Low prof itability on shareholders fund s c) Low return on ass ets
d) High leverage
22) The cash flow statement cla ssif ies cash receipts and cash payments by these activities: a) Operating and non-operating b) Investing, f inan cing, and operating c)
Finan cing,
ope rating, and non-operating
d) Investing, f inan cing, and non-operating 23) Which of the following are the ba sic tools used in f inancial statement analysis? a) Horizontal analysis b) Vertic al analy sis c) Ratio analy sis
d) All of the above 24) Which measur e is useful in evaluating the eff iciency in managing in ventories? a) Inventory turnover b) Averag e day s in inventor y c) Both a) and b)
d) None of the above 25) Which of the following is g enerally
not conside red
to be a l imi tation of f inan cial
statement analy sis?
a) Use of ratios b) Use of estimates c) Use of cost
d) Use of alternat ive a ccounting met hods
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End of paper
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