FIN621 Current Quiz

Question # 1 of 15 ( Start time: 11:26:34 AM ) Total Marks: 1

Resources owned by a business are called:

Select correct option:

Owner’s equity

Assets

Reserves

Liabilities

Question # 2 of 15 ( Start time: 11:26:41 AM ) Total Marks: 1

Which of the following is deducted from the net income while preparing cash flow statement by indirect method?

Select correct option:

Decrease in inventories

Increase in accounts payable

Depreciation

Increase in inventories

Question # 3 of 15 ( Start time: 11:27:53 AM ) Total Marks: 1

Which of the following represents the negative future cash flows for an enterprise?

Select correct option:

Assets

Owner’s equity

Liabilities

Capital

Question # 4 of 15 ( Start time: 11:29:14 AM ) Total Marks: 1

Under which cost flow assumption is the ending inventory composed of the most recently purchased merchandise?

Select correct option:

FIFO

LIFO

Average cost

Specific identification

Question # 5 of 15 ( Start time: 11:29:45 AM ) Total Marks: 1

The information in statement cash flows assists the investors, creditors, and others in assessing:

Select correct option:

Enterprise’s ability to meet its obligations

Enterprise’s ability to pay dividends

Enterprise’s needs for external financing

Enterprise’s needs for external financing

Question # 6 of 15 ( Start time: 11:30:45 AM ) Total Marks: 1

Which of the following should NOT be called “Sales�?

Select correct option:

Goods sold for cash

Office fixtures sold

Goods sold on credit

Sale of item previously included in ‘Purchases’

Question # 7 of 15 ( Start time: 11:31:04 AM ) 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 # 8 of 15 ( Start time: 11:32:33 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 # 9 of 15 ( Start time: 11:32:41 AM ) Total Marks: 1

All of the following accounts would be closed in Income Summery Account EXCEPT:

Select correct option:

Commission earned account

Prepaid insurance

Salaries Expense account

Wages account

Question # 10 of 15 ( Start time: 11:33:31 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 # 11 of 15 ( Start time: 11:34:53 AM ) 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 # 12 of 15 ( Start time: 11:36:18 AM ) Total Marks: 1

Primary purpose of the cash flows statement is to provide the information about:

Select correct option:

Errors or discrepancies between cash book and income statement

Receipts and payments of cash in the period

Non cash adjustment that effect the income statement

Cash paid to the customers and creditors of the business

Question # 13 of 15 ( Start time: 11:37:43 AM ) Total Marks: 1

Using the following information calculate Net Income: Sales Revenue Rs.200, 000, Loss on Sale of Equipment Rs.10, 000, Amortization Expense Rs.20, 000 and Cost of Goods Sold Rs.50, 000.

Select correct option:

Rs. 170,000

Rs. 130,000

Rs. 120,000

Rs. 180,000

Question # 14 of 15 ( Start time: 11:39:10 AM ) Total Marks: 1

Audit opinions can NOT be classified as which of the following?

Select correct option:

Adverse opinion

Unqualified opinion

Qualified opinion

Disagreement of opinion

Question # 15 of 15 ( Start time: 11:39:54 AM ) 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

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