MCQ Financial Accounting

MCQ- Financial Accoun ng
1. What is the accoun ng equa on?
a) Assets = Liabili es + Equity

b) Assets + Liabili es = Equity
c) Equity = Assets - Liabili es
d) Liabili es = Assets - Equity
Answer: a
2. Which financial statement reports a company's revenues and expenses over a specific period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Retained earnings statement
Answer: b
3. Deprecia on is an example of which accoun ng principle?
a) Matching principle
b) Revenue recogni on principle
c) Historical cost principle
d) Going concern principle
Answer: a
4. What is the primary purpose of the statement of cash flows?
a) To report the financial posi on of a company at a specific point in me

b) To show the changes in a company's equity over a period
c) To provide informa on about a company's cash receipts and cash payments
d) To disclose a company's long-term debt obliga ons
Answer: c
5. Which financial statement represents a snapshot of a company's financial posi on at a specific point in me?
a) Income statement
b) Statement of cash flows
c) Retained earnings statement
d) Balance sheet
Answer: d
7. Which of the following is a contra asset account?
a) Prepaid expenses
b) Accumulated deprecia on
c) Accounts receivable
d) Common stock
Answer: b
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8. What does the term "liquidity" refer to in accoun ng?
a) The ability of a company to meet its short-term obliga ons

b) The profitability of a company
c) The efficiency of a company's opera ons
d) The long-term financial stability of a company
Answer: a
9. Which accoun ng method records revenues and expenses when they are incurred, regardless of when the
cash is exchanged?
a) Cash basis accoun ng

b) Accrual basis accoun ng
c) Cost basis accoun ng
d) Historical basis accoun ng
Answer: b
10. What is the purpose of the adjus ng entries in the accoun ng cycle?
a) To correct errors in the financial statements

b) To record transac ons that were missed during the accoun ng period
c) To update accounts for events that have occurred but are not yet recorded
d) To close temporary accounts at the end of the accoun ng period
Answer: c
11. Which financial statement is also known as the statement of owner's equity?
a) Income statement
d) Balance sheet
Answer: c
12. What is the purpose of the Sarbanes-Oxley Act?
a) To regulate environmental prac ces of companies

b) To prevent fraudulent financial ac vi es and improve corporate governance
c) To establish interna onal accoun ng standards
d) To regulate tax prac ces of corpora ons
Answer: b
13.Which inventory cos ng method assumes that the cost of the first items purchased is the first to be
recognized as cost of goods sold?
a) FIFO (First-In-First-Out)
b) LIFO (Last-In-First-Out)
c) Weighted average
d) Specific iden fica on Answer: a
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14. What is the formula for calcula ng the earnings per share (EPS)?
a) Net income / Average total assets

b) Net income / Average common stockholders' equity
c) Net income / Weighted average number of common shares outstanding
d) Total revenue / Total expenses
Answer: c
15.Which financial statement reports changes in a company's retained earnings over a specific period?
a) Income statement
d) Balance sheet
Answer: c
16. What is the purpose of the trial balance?
a) To summarize the closing entries

b) To verify the equality of debits and credits in the ledger
c) To prepare financial statements
d) To record adjus ng entries
Answer: b
17. Which of the following is an example of an intangible asset?
a) Land
b) Buildings
c) Patents
d) Inventory
Answer: c
18. How is the return on equity (ROE) calculated?

c) Net income / Total revenue
Answer: b
19. Which of the following is not a financial ra o?
a) Current ra o
b) Gross margin ra o
c) Double-entry ra o
d) Debt-to-equity ra o
Answer: c
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20. Ques on:
What is the purpose of the post-closing trial balance?
a) To verify the accuracy of the closing entries

b) To prepare financial statements
c) To record adjus ng entries
d) To summarize the opening entries
Answer:
21. Ques on:
Which of the following is an example of an external user of financial informa on?
a) Manager
b) Shareholder
c) Employee
d) Internal auditor
Answer:
b) Shareholder
22. Ques on:
What is the formula for calcula ng the debt-to-equity ra o?
a) Total liabili es / Total assets

b) Total assets / Total equity
c) Total liabili es / Total equity
d) Total equity / Total assets
Answer:
23. Ques on:
Which accoun ng principle states that an en ty will con nue to operate indefinitely?
Answer:
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24. Ques on:
What does the term "amor za on" refer to in accoun ng?
a) The process of alloca ng the cost of a long-term asset over its useful life
b) The process of recording interest on a loan
c) The process of adjus ng financial statements for infla on
d) The process of alloca ng the cost of a short-term liability over its useful life
Answer:
25. Ques on:
Which financial statement reports the cash inflows and ou lows from a company's opera ng, inves ng, and
financing ac vi es?
a) Income statement
d) Balance sheet
Answer:
26. Ques on:
What is the purpose of the general ledger in accoun ng?
a) To record specific transac ons in detail

c) To calculate financial ra os
d) To summarize the closing entries
Answer:
a) To record specific transac ons in detail
27. Ques on:
Which of the following is an example of an opera ng expense?
a) Purchase of equipment
b) Rent expense
c) Loan repayment
d) Issuance of common stock
Answer:
b) Rent expense
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28. Ques on:
If a company has a current ra o greater than 1, what does it indicate?
a) The company is in financial distress

b) The company is highly liquid
c) The company is not profitable
d) The company has high levels of debt
Answer:
29. Ques on:
Which accoun ng principle requires that revenue is recognized when it is earned, regardless of when the cash is
received?
d) Conserva sm principle
Answer:
30. Ques on:
What is the purpose of the double-entry accoun ng system?
a) To increase the complexity of financial transac ons

b) To ensure that every transac on affects at least two accounts
c) To reduce the need for financial statements
d) To eliminate the need for adjus ng entries
Answer:
b) To ensure that every transac on affects at least two accounts
31. Ques on:
Which financial statement reports the changes in a company's cash posi on over a specific period?
a) Income statement
d) Balance sheet
Answer: b
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32. Ques on:
What is the purpose of the accoun ng cycle?
a) To record adjus ng entries

Answer:
33. Ques on:
Which of the following is an example of a long-term liability?
a) Accounts payable
b) Salaries payable
c) Mortgage payable
d) Prepaid expenses
Answer:
c) Mortgage payable
34. Ques on:
What is the formula for calcula ng the current ra o?
a) Current assets / Current liabili es

b) Current liabili es / Current assets
c) Total assets / Total liabili es
d) Total liabili es / Total assets
Answer:
35. Ques on:
Which financial statement provides a summary of a company's revenues and expenses over a specific period?
a) Income statement
d) Balance sheet
Answer:
a) Income statement
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36. Ques on:
How is the gross profit calculated?
a) Total revenue - Total expenses

b) Net income - Cost of goods sold
c) Total revenue - Cost of goods sold
d) Net income - Gross margin
Answer:
37. Ques on:
Which accoun ng principle requires that the financial statements of a business be based on actual costs
incurred in business transac ons?
Answer:
38. Ques on:
What is the purpose of the retained earnings statement?
a) To provide informa on about a company's cash flows

b) To report changes in a company's equity over a specific period
c) To disclose a company's long-term debt obliga ons
Answer:
39. Ques on:
Which of the following is an example of a current asset?
a) Land
b) Buildings
d) Patents
Answer:
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40. Ques on:
If a company has a high debt-to-equity ra o, what does it suggest?
a) The company is financially stable

b) The company has low levels of debt
c) The company is highly leveraged
d) The company is not profitable
Answer:
41. Ques on:
What is the purpose of the closing entries in the accoun ng cycle?

b) To summarize the opening entries
c) To transfer net income or loss to the retained earnings account
d) To prepare financial statements
Answer:
42. Ques on:
Which financial statement shows the financial posi on of a company at a specific point in me?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
43. Ques on:
What does the term "deprecia on" refer to in accoun ng?
Answer:
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44. Ques on:
Which financial statement reports the changes in a company's equity resul ng from transac ons with owners?
a) Income statement
d) Balance sheet
Answer:
45. Ques on:
What is the formula for calcula ng the net profit margin?
a) Net income / Total assets

b) Net income / Total revenue
c) Total revenue / Total expenses
d) Total expenses / Net income
Answer:
46. Ques on:
Which of the following is an example of a contra account?
a) Accumulated deprecia on
b) Accounts payable
c) Common stock
d) Prepaid expenses
Answer:
47. Ques on:
What is the purpose of the statement of stockholders' equity?

c) To provide informa on about a company's cash receipts and cash payments
Answer:
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48. Ques on:
Which of the following is considered an intangible asset?
a) Land
b) Buildings
c) Equipment
d) Goodwill
Answer:
d) Goodwill
49. Ques on:
What is the formula for calcula ng the quick ra o?
a) (Current assets - Inventory) / Current liabili es

b) Current assets / (Current liabili es - Inventory)
c) (Current assets + Inventory) / Current liabili es
d) Current liabili es / (Current assets + Inventory)
Answer:
50. Ques on:
Which accoun ng principle emphasizes that expenses should be recorded in the same period as the revenues
they help to generate?
Answer:
51. Ques on:
What is the purpose of the Sarbanes-Oxley Act in the context of financial accoun ng?
a) Regulate environmental prac ces of companies

b) Improve corporate governance and prevent fraudulent financial ac vi es
c) Establish interna onal accoun ng standards
d) Regulate tax prac ces of corpora ons
Answer:
b) Improve corporate governance and prevent fraudulent financial ac vi es
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52. Ques on:
Which financial statement provides details about a company's equity, including common stock and retained
earnings?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
53. Ques on:
If a company's current ra o is less than 1, what does it suggest?

c) The company has low levels of debt
Answer:
54. Ques on:
Which of the following is an example of a contra revenue account?
b) Sales returns and allowances
c) Prepaid expenses
d) Common stock
Answer:
55. Ques on:
What is the purpose of the statement of comprehensive income?
a) To report changes in a company's equity over a specific period

b) To provide informa on about a company's cash flows
d) To show the total comprehensive income of a company
Answer:
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56. Ques on:
Which of the following is a characteris c of a classified balance sheet?
a) Includes only long-term assets and liabili es

b) Organizes assets and liabili es into current and non-current categories
c) Provides informa on about cash flows
d) Reports only revenues and expenses
Answer:
57. Ques on:
What is the purpose of the cash basis of accoun ng?
a) To record transac ons when cash is received or paid

b) To match revenues with expenses
c) To follow the accoun ng equa on
d) To provide a more accurate picture of a company's financial posi on
Answer:
58. Ques on:
Which financial statement is o en referred to as the "statement of financial posi on"?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
59. Ques on:
What is the primary purpose of the disclosure notes accompanying financial statements?
a) To provide addi onal informa on about specific items on the financial statements
b) To report the financial posi on of a company at a specific point in me
c) To summarize the closing entries
d) To disclose informa on about a company's long-term debt
Answer:
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60. Ques on:
Which accoun ng principle requires that financial statements should reflect the assump on that the business
will con nue opera ng?
Answer:
61. Ques on:
What is the purpose of the statement of retained earnings?

d) To show changes in the retained earnings account over a specific period
Answer:
62. Ques on:
Which of the following is an example of a con ngent liability?
a) Accounts payable
b) Salaries payable
c) Warranty obliga ons
d) Prepaid expenses
Answer:
63. Ques on:
What is the formula for calcula ng the debt ra o?

Answer:
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64. Ques on:
If a company uses the LIFO inventory cos ng method during a period of rising prices, what is the impact on the
income statement?
a) Higher cost of goods sold and lower net income

b) Lower cost of goods sold and higher net income
c) No impact on cost of goods sold or net income
d) Lower cost of goods sold and lower net income
Answer:
65. Ques on:
a) Manager
b) Shareholder
c) Employee
d) Internal auditor
Answer:
b) Shareholder
66. Ques on:
What is the formula for calcula ng the return on assets (ROA)?

d) Total assets / Net income
Answer:
67. Ques on:
Which financial statement reports the cash inflows and ou lows from opera ng, inves ng, and financing
ac vi es?
a) Income statement
d) Balance sheet
Answer:
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68. Ques on:
What is the purpose of the income summary account in the closing process?
a) To provide a summary of all income and expenses

b) To close temporary accounts at the end of the accoun ng period
Answer:
69. Ques on:
Which financial statement shows the ending balances of all accounts a er the closing process?
a) Income statement
c) Post-closing trial balance
d) Balance sheet
Answer:
70. Ques on:
What is the purpose of the accoun ng equa on?
a) To match revenues with expenses

b) To ensure the accuracy of financial statements
c) To provide informa on about cash flows
d) To show the rela onship between assets, liabili es, and equity
Answer:
71. Ques on:
Which of the following is an example of an opera ng ac vity in the statement of cash flows?
b) Payment of dividends
c) Sale of goods or services
Answer:
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72. Ques on:
What is the purpose of the statement of changes in equity?

c) To provide informa on about a company's cash flows
Answer:
73. Ques on:
Which financial statement is used to reconcile the ending cash balance in the statement of cash flows with the
cash account on the balance sheet?
a) Income statement
d) Cash flow reconcilia on statement
Answer:
74. Ques on:
What is the purpose of the perpetual inventory system?
a) To calculate the cost of goods sold at the end of the accoun ng period
b) To record changes in the inventory account only at the end of the accoun ng period
c) To con nuously update the inventory account as goods are bought and sold
d) To calculate the average cost of inventory
Answer:
75. Ques on:
Which accoun ng principle states that a company should use the same accoun ng methods and procedures
from period to period?
a) Consistency principle
c) Matching principle
d) Historical cost principle
Answer:
a) Consistency principle
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76. Ques on:
Which financial statement is prepared as of a specific date and summarizes a company's assets, liabili es, and
equity?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
77. Ques on:
If a company has a high return on equity (ROE), what does it indicate?

b) The company is not profitable
d) The company is genera ng strong returns for its shareholders
Answer:
d) The company is genera ng strong returns for its shareholders
78. Ques on:
What is the purpose of the statement of cash flows?

b) To provide informa on about a company's cash receipts and cash payments
Answer:
b) To provide informa on about a company's cash receipts and cash payments
79. Ques on:
Which of the following is an example of a current liability?
a) Bonds payable
b) Notes payable (due in 2 years)
c) Common stock
d) Retained earnings
Answer:
b) Notes payable (due in 2 years)
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80. Ques on:

d) To show all changes in equity, including non-owner changes
Answer:
d) To show all changes in equity, including non-owner changes
81. Ques on:
Which financial statement provides details about a company's revenues, expenses, gains, and losses over a
specific period?
a) Income statement
d) Balance sheet
Answer:
a) Income statement
82. Ques on:
What is the purpose of the contra account "Allowance for Doub ul Accounts"?
a) To record bad debt expenses

b) To es mate and reduce the reported amount of accounts receivable
c) To track the amount of cash reserves
d) To account for prepaid expenses
Answer:
b) To es mate and reduce the reported amount of accounts receivable
83. Ques on:
ac vi es?
a) Income statement
d) Balance sheet
Answer:
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84. Ques on:
What is the purpose of the cost of goods sold (COGS) on the income statement?
a) To report the total expenses incurred by a company

b) To show the total revenues earned by a company
c) To calculate the gross profit of a company
Answer:
85. Ques on:
Which financial statement is also known as the "statement of profit and loss"?
a) Income statement
d) Balance sheet
Answer:
a) Income statement
86. Ques on:
What is the purpose of the adjus ng entries in the accoun ng cycle?

Answer:
87. Ques on:
Which accoun ng principle requires that expenses should be recorded when they are incurred, not when the
cash is paid?
d) Cash basis accoun ng
Answer:
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88. Ques on:
What is the formula for calcula ng the earnings per share (EPS)?

Answer:
89. Ques on:
What does the term "liquidity" refer to in accoun ng?

b) The profitability of a company
c) The efficiency of a company's opera ons
d) The long-term financial stability of a company
Answer:
90. Ques on:
Which of the following is an example of an intangible asset?
a) Land
b) Buildings
c) Patents
d) Inventory
Answer:
c) Patents
91. Ques on:
What is the purpose of the trial balance?

b) To verify the accuracy of the closing entries
Answer:
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92. Ques on:
What is the formula for calcula ng the debt-to-equity ra o?

Answer:
93. Ques on:
Which financial statement represents a snapshot of a company's financial posi on at a specific point in me?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
94. Ques on:

Answer:
95. Ques on:
Which of the following is not a financial ra o?
a) Current ra o
Answer:
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96. Ques on:

Answer:
97. Ques on:

Answer:
98. Ques on:
a) Manager
b) Shareholder
c) Employee
d) Internal auditor
Answer:
b) Shareholder
99. Ques on:

Answer:
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100. Ques on:
Answer:
101. Ques on:

Answer:
102. Ques on:
a) Income statement
Answer:
103. Ques on:
Answer:
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104. Ques on:
Answer:
105. Ques on:

Answer:
106. Ques on:
Which financial statement is prepared as of a specific date and summarizes a company's assets, liabili es, and
equity?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
107. Ques on:
What is the formula for calcula ng the return on equity (ROE)?

Answer:
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108. Ques on:

Answer:
109. Ques on:
a) Land
b) Buildings
d) Patents
Answer:
110. Ques on:

Answer:
111. Ques on:
income statement?

Answer:
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112. Ques on:
What is the purpose of the disclosure notes accompanying financial statements?

c) To provide addi onal informa on about specific items on the financial statements
Answer:
113. Ques on:
a) Manager
b) Shareholder
c) Employee
d) Internal auditor
Answer:
b) Shareholder
114. Ques on:
Which inventory cos ng method assumes that the cost of the first items purchased is the first to be recognized
as cost of goods sold?
c) Weighted average
d) Specific iden fica on
Answer:
115. Ques on:
What is the purpose of the Sarbanes-Oxley Act?

Answer:
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116. Ques on:
What is the formula for calcula ng the gross profit ra o?
a) Gross profit / Net sales

b) Gross profit / Total assets
d) Net income / Average total assets
Answer:
117. Ques on:

b) To provide a summary of all income and expenses
Answer:
118. Ques on:
a) Income statement
d) Balance sheet
Answer:
119. Ques on:
What is the purpose of the cost of goods sold (COGS) on the income statement?
a) To report the total expenses incurred by a company

b) To show the total revenues earned by a company
Answer:
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120. Ques on:
a) Income statement
d) Balance sheet
Answer:
a) Income statement
121. Ques on:
What is the purpose of the accoun ng cycle?

Answer:
122. Ques on:
What does the term "deprecia on" refer to in accoun ng?
Answer:
123. Ques on:
Which financial statement shows the financial posi on of a company at a specific point in me?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
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124. Ques on:

Answer:
125. Ques on:
Which of the following is an example of a contra account?
b) Accounts payable
c) Common stock
d) Prepaid expenses
Answer:
126. Ques on:
What is the purpose of the statement of stockholders' equity?

Answer:
127. Ques on:
Which of the following is considered an intangible asset?
a) Land
b) Buildings
c) Equipment
d) Goodwill
Answer:
d) Goodwill
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128. Ques on:

Answer:
129. Ques on:
Which accoun ng principle requires that the financial statements of a business be based on actual costs
incurred in business transac ons?
Answer:
130. Ques on:
What is the purpose of the retained earnings statement?
a) To provide informa on about a company's cash flows

Answer:
131. Ques on:
Which financial statement reports the changes in a company's cash posi on over a specific period?
a) Income statement
d) Balance sheet
Answer:
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132. Ques on:

Answer:
133. Ques on:
Which of the following is an example of a long-term liability?
a) Accounts payable
b) Salaries payable
c) Mortgage payable
d) Prepaid expenses
Answer:
c) Mortgage payable
134. Ques on:

Answer:
135. Ques on:
a) Income statement
d) Balance sheet
Answer:
a) Income statement
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136. Ques on:
How is the gross profit calculated?

Answer:
137. Ques on:
Which accoun ng principle requires that expenses should be recorded in the same period as the revenues they
help to generate?
Answer:
138. Ques on:
Answer:
139. Ques on:
a) Income statement
d) Balance sheet
Answer:
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140. Ques on:

Answer:
141. Ques on:
Which financial statement provides details about a company's equity, including common stock and retained
earnings?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
142. Ques on:

Answer:
143. Ques on:
c) Prepaid expenses
d) Common stock
Answer:
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144. Ques on:

Answer:
145. Ques on:

Answer:
146. Ques on:

Answer:
147. Ques on:
Which financial statement is o en referred to as the "statement of financial posi on"?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
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148. Ques on:
What is the primary purpose of the disclosure notes accompanying financial statements?
b) To report the financial posi on of a company at a specific point in me
c) To summarize the closing entries
d) To disclose informa on about a company's long-term debt
Answer:
149. Ques on:
Which accoun ng principle requires that financial statements should reflect the assump on that the business
will con nue opera ng?
Answer:
150. Ques on:

Answer:
151. Ques on:
a) Accounts payable
b) Salaries payable
d) Prepaid expenses
Answer:
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152. Ques on:

Answer:
153. Ques on:
income statement?

Answer:
154. Ques on:
a) Manager
b) Shareholder
c) Employee
d) Internal auditor
Answer:
b) Shareholder
155. Ques on:

Answer:
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156. Ques on:
ac vi es?
a) Income statement
d) Balance sheet
Answer:
157. Ques on:
a) To provide a summary of all income and expenses

Answer:
158. Ques on:
a) Income statement
d) Balance sheet
Answer:
159. Ques on:

Answer:
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160. Ques on:
Answer:
161. Ques on:

Answer:
162. Ques on:
a) Land
b) Buildings
c) Patents
d) Inventory
Answer:
c) Patents
163. Ques on:
What is the formula for calcula ng the earnings per share (EPS)?

Answer:
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164. Ques on:

Answer:
165. Ques on:
Which financial statement represents a snapshot of a company's financial posi on at a specific point in me?
a) Income statement
d) Balance sheet
Answer:
d) Balance sheet
166. Ques on:

Answer:
167. Ques on:
Which of the following is not a financial ra o?
a) Current ra o
Answer:
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168. Ques on:

Answer:
169. Ques on:

Answer:
170. Ques on:
a) Manager
b) Shareholder
c) Employee
d) Internal auditor
Answer:
b) Shareholder
171. Ques on:

Answer:
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172. Ques on:
Answer:
173. Ques on:
a) Income statement
d) Balance sheet
Answer:
174. Ques on:

Answer:
175. Ques on:
Answer:
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176. Ques on:

Answer:
177. Ques on:
a) Income statement
Answer:
178. Ques on:
Answer:
179. Ques on:
Answer:
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180. Ques on:

Answer:
181. Ques on:

Answer:
182. Ques on:
Which of the following is considered a long-term liability?
a) Accounts payable
b) Salaries payable
c) Mortgage payable
d) Prepaid expenses
Answer:
c) Mortgage payable
183. Ques on:

Answer:
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184. Ques on:
income statement?

Answer:
185. Ques on:

Answer:
186. Ques on:
a) Income statement
d) Balance sheet
Answer:
a) Income statement
187. Ques on:

Answer:
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188. Ques on:
a) Income statement
d) Balance sheet
Answer:
189. Ques on:
Answer:
190. Ques on:
a) Income statement
d) Balance sheet
Answer:
191. Ques on:

Answer:
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192. Ques on:

Answer:
193. Ques on:

Answer:
194. Ques on:
a) Land
b) Buildings
d) Patents
Answer:
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Answer:
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as the cost of goods sold?
c) Weighted average
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a) Accounts payable
b) Salaries payable
d) Prepaid expenses
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c) Prepaid expenses
d) Common stock
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a) Land
b) Buildings
c) Equipment
d) Goodwill
Answer:
d) Goodwill
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a) Income statement
d) Balance sheet
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What is the formula for calcula ng the gross profit?

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help to generate?
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a) Accounts payable
b) Salaries payable
c) Mortgage payable
d) Prepaid expenses
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c) Mortgage payable
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Answer:
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income statement?

Answer:
225. Ques on:

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a) Income statement
d) Balance sheet
Answer:
a) Income statement
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Answer:
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a) Income statement
d) Balance sheet
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a) Income statement
d) Balance sheet
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a) Land
b) Buildings
d) Patents
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c) Weighted average
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a) Accounts payable
b) Salaries payable
d) Prepaid expenses
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c) Prepaid expenses
d) Common stock
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a) Land
b) Buildings
c) Equipment
d) Goodwill
Answer:
d) Goodwill
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a) Income statement
d) Balance sheet
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help to generate?
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a) Accounts payable
b) Salaries payable
c) Mortgage payable
d) Prepaid expenses
Answer:
c) Mortgage payable
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Answer:
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income statement?

Answer:
265. Ques on:

Answer:
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a) Income statement
d) Balance sheet
Answer:
a) Income statement
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Answer:
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a) Income statement
d) Balance sheet
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a) Income statement
d) Balance sheet
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a) Land
b) Buildings
d) Patents
Answer:
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c) Weighted average
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a) Accounts payable
b) Salaries payable
d) Prepaid expenses
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c) Prepaid expenses
d) Common stock
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a) Land
b) Buildings
c) Equipment
d) Goodwill
Answer:
d) Goodwill
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a) Income statement
d) Balance sheet
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help to generate?
Answer:
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Answer:
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a) Accounts payable
b) Salaries payable
c) Mortgage payable
d) Prepaid expenses
Answer:
c) Mortgage payable
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Answer:
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income statement?

Answer:
305. Ques on:

Answer:
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a) Income statement
d) Balance sheet
Answer:
a) Income statement
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Answer:
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a) Income statement
d) Balance sheet
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a) Income statement
d) Balance sheet
Answer:
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a) Land
b) Buildings
d) Patents
Answer:
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c) Weighted average
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Answer:
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Answer:
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MCQ Financial Accounting

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MCQ Financial Accounting

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MCQ- Financial Accoun ng

1. What is the accoun ng equa on?

a) Assets = Liabili es + Equity

3. Deprecia on is an example of which accoun ng principle?

4. What is the primary purpose of the statement of cash ﬂows?

a) To report the ﬁnancial posi on of a company at a speciﬁc point in me

7. Which of the following is a contra asset account?

8. What does the term "liquidity" refer to in accoun ng?

a) The ability of a company to meet its short-term obliga ons

a) Cash basis accoun ng

a) To correct errors in the ﬁnancial statements

12. What is the purpose of the Sarbanes-Oxley Act?

a) To regulate environmental prac ces of companies

a) Net income / Average total assets

16. What is the purpose of the trial balance?

a) To summarize the closing entries

17. Which of the following is an example of an intangible asset?

18. How is the return on equity (ROE) calculated?

a) Net income / Average total assets

19. Which of the following is not a ﬁnancial ra o?

20. Ques on:

What is the purpose of the post-closing trial balance?

a) To verify the accuracy of the closing entries

a) To verify the accuracy of the closing entries

21. Ques on:

Which of the following is an example of an external user of ﬁnancial informa on?

22. Ques on:

What is the formula for calcula ng the debt-to-equity ra o?

a) Total liabili es / Total assets

c) Total liabili es / Total equity

23. Ques on:

d) Going concern principle

24. Ques on:

What does the term "amor za on" refer to in accoun ng?

25. Ques on:

b) Statement of cash ﬂows

26. Ques on:

What is the purpose of the general ledger in accoun ng?

a) To record speciﬁc transac ons in detail

a) To record speciﬁc transac ons in detail

27. Ques on:

Which of the following is an example of an opera ng expense?

28. Ques on:

If a company has a current ra o greater than 1, what does it indicate?

a) The company is in ﬁnancial distress

b) The company is highly liquid

29. Ques on:

b) Revenue recogni on principle

30. Ques on:

What is the purpose of the double-entry accoun ng system?

a) To increase the complexity of ﬁnancial transac ons

b) To ensure that every transac on aﬀects at least two accounts

31. Ques on:

32. Ques on:

What is the purpose of the accoun ng cycle?

a) To record adjus ng entries

b) To prepare ﬁnancial statements

33. Ques on:

Which of the following is an example of a long-term liability?

34. Ques on:

What is the formula for calcula ng the current ra o?

a) Current assets / Current liabili es

a) Current assets / Current liabili es