FIN621 Quiz Nov 2010

Question # 1 of 15 ( Start time: 03:55:07 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 # 2 of 15 ( Start time: 03:55:30 AM ) 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 # 3 of 15 ( Start time: 03:55:53 AM ) 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

Question # 4 of 15 ( Start time: 03:56:20 AM ) Total Marks: 1

In statement of cash flows, which of the following would not be considered an item from an "investing" activity?

Select correct option:

Collections on loan

Purchase of marketable securities

Purchase of fixed assets

Payments of dividends

Question # 5 of 15 ( Start time: 03:57:10 AM ) Total Marks: 1

When preparing a statement of cash flows under the indirect method, supplemental disclosure should be made for which of the following?

Select correct option:

Net cash consumed by operating activities

Cash dividend distributions

Cash paid for interest and taxes

Cash paid for wages

Question # 6 of 15 ( Start time: 03:58:38 AM ) 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:

Close-out Summary

Owner’s Capital

Income Summary

Temporary Summary

Question # 7 of 15 ( Start time: 03:59:03 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 # 8 of 15 ( Start time: 03:59:42 AM ) 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

Question # 9 of 15 ( Start time: 04:00:44 AM ) Total Marks: 1

Closing entries result in net income being calculated in the income summary account and then transferred to which of the following account?

Select correct option:

Revenue account

Common Stock account

Dividends account

Retained Earnings account

Question # 10 of 15 ( Start time: 04:01:09 AM ) Total Marks: 1

Net current assets are equivalent to:

Select correct option:

Stock plus debtors plus cash

Current liabilities less current assets

Working capital

Fixed assets plus current assets less current liabilities

Question # 11 of 15 ( Start time: 04:01:36 AM ) Total Marks: 1

Assets of the business are valued and recorded at cost in the financial statement as these are not for resale purposes, according to which of the following?

Select correct option:

Going concern assumption

Cost Principle

Separate entity principle

Objectivity principle

Question # 12 of 15 ( Start time: 04:01:52 AM ) 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 # 13 of 15 ( Start time: 04:02:13 AM ) Total Marks: 1

The right side of an account is a:

Select correct option:

Debit side

Credit side

Balance of that account

Carried to the next accounting period

Question # 14 of 15 ( Start time: 04:02:26 AM ) Total Marks: 1

How the transactions in a journal are initially recorded?

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Alphabetical order

Ascending order

Chronological order

Alphanumeric order

Question # 15 of 15 ( Start time: 04:02:43 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