621 Current Solved

Created By Muhammad Naveed
FIN621 CURRENT QUIZ SOLVED BY
Question # 1 of 15 ( Start time: 11:26:34 AM ) Total Marks: 1
Resources owned by a business are called:
Select correct option:
1. Owner equity
2. Assets (page# 18)
3. Reserves
4. Liabilities
Which of the following is deducted from the net income while preparing cash flow statement by
indirect method?
1. Decrease in inventories
2. Increase in accounts payable
3. Depreciation
4. Increase in inventories
Which of the following represents the negative future cash flows for an enterprise?
1. Assets
2. Ownerequity
3. Liabilities
4. Capital
Under which cost flow assumption is the ending inventory composed of the most recently
purchased merchandise?
1. FIFO
2. LIFO
3. Average cost
4. Specific identification
The information in statement cash flows assists the investors, creditors, and others in assessing:
1. Enterprise ability to meet its obligations

2. Enterprise ability to pay dividends
3. Enterprise needs for external financing
4. Enterprise needs for external financing
Which of the following should NOT be called “Sales “?
1. Goods sold for cash

2. Office fixtures sold
3. Goods sold on credit
4. Sale of item previously included in Purchasese
Which of the following account would NOT be closed to the income summary account at the end
of a period?
Rent expense
Revenue earned
Wages expense
Accumulated depreciation
A business has purchased a building on cash, how it would be recorded in the journal?
1. Building - Debit; Cash - Credit

2. Cash - Debit; Building - Credit
3. Building - Debit; Owner equity - Credit
4. Building - Debit; Accounts Payable - Credit
All of the following accounts would be closed in Income Summery Account EXCEPT:
1. Commission earned account

2. Prepaid insurance
3. Salaries Expense account
4. Wages account
In which of the following account, a credit balance would be an evidence for a mistake or an
error?
1. Mr. A Capital Account

2. Cash account
3. Notes payable account (page #6)
4. Drawings account
Which of the following principle is used for recording a revenue?
1. Matching Principle
2. Cost Principle
3. Realization Principle
4. Objectivity Principle
Revenue Recording is done on Realization Principle. In this case, the date of rendering
services or date of delivery of good sold is considered as the date of earning revenue.
Primary purpose of the cash flows statement is to provide the information about:
1. Errors or discrepancies between cash book and income statement

2. Receipts and payments of cash in the period
3. Non cash adjustment that effect the income statement
4. Cash paid to the customers and creditors of the business
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.
1. Rs. 170,000
2. Rs. 130,000
3. Rs. 120,000
4. Rs. 180,000
Audit opinions can NOT be classified as which of the following?
1. Adverse opinion
2. Unqualified opinion p--100
3. Qualified opinion
4. Disagreement of opinion
According to _______ the personal expenses paid by Mr. A from his own pocket would not be
recorded in business books of account.

1. Realization principle
2. Separate entity principle
3. Matching principle
4. Materiality principle
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?
Cash – Debit; Notes payable – Credit
Notes payable – Debit; Cash – Credit
Interest expense – Debit; Cash – Credit
Interest payable – Debit; Notes payable - Credit
Rs. 170,000
Rs. 130,000
Rs. 120,000
Rs. 180,000
There are five main kinds of current assets. Which of the following is NOT among them?
Cash and equivalents
Deferred income
Accounts receivable
Prepaid expenses
The most widely used means of estimating periodic depreciation expense is the ____________
method.
Straight line
Double declining balance

Sum of the year digit methods
Accelerated depreciation method
Which one of the following is usually classified as an inventory item?
Goods purchased for resale to customers
Items purchased and used by the company such as office supplies
Items purchased for a specific customer job
Items purchased and the quantity on hand does not need to be tracked
Accelerated depreciation method is mostly used for ____________.
Financial statements
Assets valuation 100%
Inventory valuation
Income tax returns
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?
Going concern assumption
Cost Principle
Separate entity principle
Objectivity principle
iii) Going-concern assumption: connected with cost principle, assets acquired for use and
not for resale.
Matching Principle
Cost Principle
Realization Principle
Objectivity Principle
A company has interest expense of Rs. 35,000, its accrued liabilities are increased by Rs. 7000.
Calculate the cash payments for the interest.
Rs. 28,000
Rs. 42,000
Rs. 30,000
Rs. 18,000
A company purchased the land in exchange for the capital stock; it would affect which of the
following?
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
It would not affect any section
Which one of the following transactions should be classified as a financing activity?
Purchase of equipment
Purchase of treasury stock 100%
Sale of trademarks
Income tax refund
Net current assets are equivalent to:
Stock plus debtors plus cash
Current liabilities less current assets
Working capital
Fixed assets plus current assets less current liabilities
Pre-paid expense is a(n) _________ type of account.
Liability
Asset
Revenue
Expense
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?
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
Adjusting entries are used to:
Bring account balances up to date at year end
Close temporary accounts at year end
Close permanent accounts at year end
Bring account balances at zero
Question # 1 of 15 ( Start time: 09:07:37 PM ) Total Marks: 1
Which of the following items are included in the financing activities section of the statement of
cash flows?
Cash effects of transactions involving making and collecting loans
Cash effects of acquiring and disposing of investments and property, plant, and equipment
Cash effects of transactions obtaining resources from owners and providing them with a return
on their investment
Cash effects of transactions that enter into the determination of net income
Matching Principle
Cost Principle
Adjusting entries are required for which of the following accounts?
Income Summary accounts
Revenue and expense accounts
All types of accounts
Assets and liabilities accounts
e) Making adjusting entries: These are the Entries required for those transactions which affect
revenues or expenses of more than one accounting period.
Depreciation is added back to profit when arriving at the cash flow from operating activities
because:
Depreciation is only an estimated amount ( offline quiz 2009)
Depreciation does not affect profit
Depreciation does not result in a flow of cash
Depreciation only affects the balance sheet, not the profit and loss account
FIFO
LIFO
Average cost
Specific identification

Deferred income
Accounts receivable
Prepaid expenses
______is helpful for the investors and creditors to assess the cash and non cash aspects of
investing and financing transactions on an entity’s financial position?
Balance Sheet
Income Statement
Statement of cash flows
Statement of changes in equity
Which of the following must be included in a company's summary of significant accounting

policies in the notes to the financial statements?
Description of current year equity transactions
Summary of long-term debt outstanding
Schedule of fixed assets
Revenue recognition policies
Which of the following terms present a cause and effect relationship with each other?
Income statement and balance sheet
Revenue and assets
Assets and liabilities
Revenues and expenses

Adverse opinion
Unqualified opinion
Qualified opinion
Disagreement of opinion
Which of the following expenses would normally be classified as Other or Non Operating
Expense on a multiple-step income statement?
Interest expense
Depreciation expense
Insurance expense
Salaries expense
Gross profit is:
Excess of sales over cost of goods sold
Sales less Purchases
Cost of goods sold + Opening stock
Net profit less expenses of the period
Which of the following principle states that the assets are purchased for the use and not for resale
purpose?
Stable Currency principle
Going-concern principle
Cost Principle
Which of the following would NOT be the characteristics of current assets?
Likely to change before the next accounting period is over
Not bought for resale

Use as part of the firm's trading operations
Liquidity
Which of the following would be affected by the difference between revenues and expenses?
Assets
Owner’s equity 100%
Liabilities
Capital

Resources owned by a business are called:
Owner equity
Assets
Reserves
Liabilities
Which of the following is deducted from the net income while preparing cash flow statement by
indirect method?
Decrease in inventories
Increase in accounts payable
Depreciation
Increase in inventories
Which of the following represents the negative future cash flows for an enterprise?

Assets
Owners equity
Liabilities
Capital
FIFO
LIFO
Average cost
Specific identification
The information in statement cash flows assists the investors, creditors, and others in assessing:
Enterpriseâ€™s ability to meet its obligations
Enterpriseâ€™s ability to pay dividends
Enterpriseâ€™s needs for external financing
Enterpriseâ€™s needs for external financing

Which of the following should NOT be called Sales?
Goods sold for cash
Office fixtures sold
Goods sold on credit

Sale of item previously included in Purchases
Which of the following account would NOT be closed to the income summary account at the end
of a period?
Rent expense
Revenue earned
Wages expense
Accumulated depreciation
A business has purchased a building on cash, how it would be recorded in the journal?
Building - Debit; Cash - Credit
Cash - Debit; Building - Credit
Building - Debit; Ownerâ€™s equity - Credit
Building - Debit; Accounts Payable - Credit

All of the following accounts would be closed in Income Summery Account EXCEPT:
Commission earned account
Prepaid insurance
Salaries Expense account
Wages account
In which of the following account, a credit balance would be an evidence for a mistake or an
error?

Mr. A Capital Account
Cash account
Notes payable account
Drawings account
Matching Principle
Cost Principle
Primary purpose of the cash flows statement is to provide the information about:
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

Rs. 170,000
Rs. 130,000
Rs. 120,000 100%

Rs. 180,000
Adverse opinion
Unqualified opinion
Qualified opinion
Disagreement of opinion
According to _______ the personal expenses paid by Mr. A from his own pocket would not be
recorded in business books of account.
Realization principle
Separate entity principle
Matching principle
Materiality principle
MC080200627 : Muhammad Naveed
Quiz Start Time: 12:11 PM
Question # 1 of 15 ( Start time: 12:11:25 PM )
Income Summary accounts

Revenue and expense accounts
All types of accounts
Assets and liabilities accounts
Which of the following depreciation method does NOT provide a better tax shield?
Straight line
Sum of the years digit
Double declining balance
Accelerated depreciation
Which one of the following statement shows the effects of cash inflows and outflows?
Balance Sheet
Statement of Owner’s Equity
Income Statement
Statement of Cash Flows
Which of the following would NOT represent the cash outflows for the business?
Purchase of building for cash
The sale of land for cash
Retirement of long term debt
The payment of cash for dividends

The true and fair presentation of the financial statements depends, among other things, upon
which of the following?
Strong financial position
Concept of materiality
Matching principle
Realization principle
A company has interest expense of Rs. 35,000, its accrued liabilities are increased by Rs. 7000.
Calculate the cash payments for the interest.
Rs. 28,000
Rs. 42,000
Rs. 30,000
Rs. 18,000
Which of the following is the next step after the preparation of trial balance?
Adjusted trial balance
Financial statements
Adjusting entries
Closing entries
Gross profit is:
Excess of sales over cost of goods sold

Sales less Purchases
Cost of goods sold + Opening stock
Net profit less expenses of the period
Which one of the following would lead to the decrease in the owner’s equity?
Purchasing a piece of land
Paying dividends to shareholders
Purchasing equipment on account
Paying back the principal of a loan
Which of the following is NOT an example of cash equivalents?
Certificates of Deposit
Money market accounts
Money market mutual funds
Euro Bond
Which of the following would be affected by the difference between revenues and expenses?
Assets
Owner’s equity
Liabilities
Capital
Which of the following account will appear in the post-closing trial balance?
Owner’s Capital
Service Fees Earned
Income Summary
Owner’s Withdrawals
Which of the following is NOT true about depreciation?
Depreciation causes perpetual and gradual fall in the value of asset
Depreciation does not depend upon on fluctuations in the market value of asset
Depreciation is a charged in case of fixed assets only
Depreciation is a charge against revenue of two or more accounting periods
Deferred income
Accounts receivable
Prepaid expenses
Which of the following is the most common adjusting entry?
Un-earned revenue
Pre-paid expense
Depreciation expense
Accrued revenue

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621 Current Solved

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Copyright:

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Created By Muhammad Naveed

FIN621 CURRENT QUIZ SOLVED BY

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

Resources owned by a business are called:

Select correct option:

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

Select correct option:

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

Select correct option:

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

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

Select correct option:

1. Enterprise ability to meet its obligations

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:

1. Goods sold for cash

Question # 7 of 15 ( Start time: 11:31:04 AM ) Total Marks: 1

Select correct option:

1. Building - Debit; Cash - Credit

Question # 9 of 15 ( Start time: 11:32:41 AM ) Total Marks: 1

Select correct option:

1. Commission earned account

Question # 10 of 15 ( Start time: 11:33:31 AM ) Total Marks: 1

Select correct option:

1. Mr. A Capital 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:

Question # 12 of 15 ( Start time: 11:36:18 AM ) Total Marks: 1

Select correct option:

1. Errors or discrepancies between cash book and income statement

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

Select correct option:

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:

Question # 15 of 15 ( Start time: 11:39:54 AM ) Total Marks: 1

Select correct option:

Cash – Debit; Notes payable – Credit

Notes payable – Debit; Cash – Credit

Interest expense – Debit; Cash – Credit

Interest payable – Debit; Notes payable - Credit

Cash and equivalents

Double declining balance

Accelerated depreciation method

Which one of the following is usually classified as an inventory item?

Goods purchased for resale to customers

Items purchased and used by the company such as office supplies

Items purchased for a specific customer job

Accelerated depreciation method is mostly used for ____________.

Assets valuation 100%

Income tax returns

Going concern assumption

Separate entity principle

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

Cash flow from operating activities

Cash flow from investing activities

Cash flow from financing activities

It would not affect any section

Which one of the following transactions should be classified as a financing activity?

Purchase of treasury stock 100%

Income tax refund