Home » Quizzes » Introduction to financial accounting » Multiple choice questions (MCQs) quiz Introduction to financial accounting Multiple choice questions (MCQs) quiz Posted in: Introduction to financial accounting (quizzes) By: Rashid Javed | Updated on: August 28th, 2024 /25 167 ABOUT THIS QUIZChapter: Introduction to financial accountingQuiz type: Multiple choice questions (MCQs) quizNumber of questions: 25Estimated time required: 15 minutesYour result will be displayed at the end of the quiz. 1. The type or branch of accounting that generates reports for the use of external parties such as creditors, investors and government agencies is known as: Financial accounting Managerial accounting Tax accounting Forensic accounting 2. The branch of accounting that generates reports and information for the use of internal management is known as: Tax accounting Managerial or management accounting Auditing International accounting 3. Which one of the following is not an external user of accounting information? Investor Creditor Manager Customer 4. Which of the following is correct? Owner’s Equity = Liabilities + Assets Liabilities = Assets + Owner’s Equity Assets = Liabilities + Owner’s Equity Assets = Owner’s Equity 5. Who is known as the father of accounting? Leonardo da Vinci Fra Luca Pacioli Al Khawarizmy Al Mazendarany 6. Which of the following is correct about double entry system of accounting? Every business transaction brings at least two financial changes in business. Financial changes are recorded as debits or credits in two or more accounts. Every debit entry has a corresponding credit entry. All of the above 7. The format of account that tells the balance after each entry is known as: T-account format Advanced account format Running balance account format None of the above 8. A T-account format is used in situations where account balance is required: Periodically After each transaction At the end of the business None of the above 9. In a T-account, the balance is equal to: the total of all debit entries the total of all credit entries the difference between the total of debit entries and the total of credit entries the total of all debit and credit entries 10. A list of account names used in the general ledger of an organization is known as: balance sheet income statement account list chart of accounts 11. The type and number of accounts to be listed in a chart of accounts depends on: the nature and volume of business the need of internal management the need of external parties all of the above 12. Which one of the following is not a real account? machinery account sales account goodwill account equipment account 13. Which one of the following is not a nominal account? purchases account sales account salaries account cash account 14. Which one of the following is a personal account? vibrant media's account patent account loss on sale of equipment account plant account 15. Which one of the following is valuation (or contra) account? Accounts receivable account Gain on sale of fixed asset account Accumulated depreciation account Copyright account 16. Which one of the following is a withdrawal account? Cash account Dividend account Salaries account Capital account 17. Which one of the following is a characteristic of a valid business transaction? It is an event measurable in terms of money It affects the financial position of the business It should be supported by a source document All of the above 18. Which one of the following is an internal transaction? Recording salaries expense Purchase of goods from supplier Recording depreciation Purchase of equipment for cash 19. Which of the following normally has a debit balance? Liability accounts Equity or capital accounts Income or revenue accounts Asset accounts 20. When an asset increases, its account is: debited credited increased reduced 21. When a liability increases, its account is: debited credited not changed closed 22. An account used to determine the carrying or net value of another account is known as: reverse account opposite account contra account realization account 23. In accounting equation (Assets = Liabilities + Owner’s equity), the liabilities means the claim of external creditors against: the profit of the business the assets of the business the revenue of the business the goodwill of the business 24. Accumulated depreciation account and allowance for doubtful accounts account are two examples of contra asset account. The normal balance of these two accounts would be: a credit balance a debit balance similar to the related normal asset accounts nil balance 25. According to modern approach, the accounts are classified as: personal accounts, nominal accounts, real accounts and valuation accounts personal accounts, nominal accounts, revenue accounts, and expense accounts asset accounts, liability accounts, sales accounts, profit accounts asset accounts, liability accounts, capital accounts, withdrawal accounts, revenue accounts, and expense accounts 0% Restart quiz Next » Help us grow by sharing our content ♡
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