Financial Statement MCQs

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MCQs 1 To 10

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1. A financial statement that summarizes company revenue and expenses is?

(a) Balance sheet

(b) Statement of owner equity

(d) Cash flow statement

Correct! Wrong!

2. Which one of the following tangible fixed assets would not normally be depreciated?

(a) Buildings

(b) Machinery

(d) Equipment

Correct! Wrong!

3. Which financial statement presents a summary of the Assets, Liabilities, and Owners' Equity of a firm?

(a) General ledger

(b) Work sheet

(d) Cash flow statement

Correct! Wrong!

4. Subtracting all expenses from revenues yields?

(a) Net profit/Loss

(b) Carrying value

(d) Net liabilities

Correct! Wrong!

5. A financial statement to show what a business owns and owes at a particular point in time?

(a) A cash flow statement

(b) The bank statement for the business

(d) A statement of retained earnings

Correct! Wrong!

6. If the Gross profit is Rs. 5,000 and the net profit is 25% of the Gross profit. The expenses must be?

(a) Rs. 3,750

(b) Rs. 1,250

(d) Rs. 6,250

Correct! Wrong!

7. A financial document that indicates the success or failure of a business trading over a period of time is called?

(a) A cash flow statement

(b) A retained earnings statement

(d) A bank statement

Correct! Wrong!

8. The report of company that shows overall profit on the sale of their goods or the provision of their services?

(a) Trading and Profit & loss account

(b) Cash flow statement

(d) Both a and c

Correct! Wrong!

9. A company has, by the end of its financial period, paid out more Tax than it has to pay. How would this be shown in the balance sheet?

(a) As an accrual Revenue

(b) As a Prepaid within current assets

(d) As a creditor due after more than one year'

Correct! Wrong!

10. Which of the following financial statements is also known as financial condition?

(a) Balance Sheet

(b) Income Statement

(d) Bank Statement

Correct! Wrong!

Financial Statements (1-10)

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MCQs 11 To 20

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11. Prepaid interest given in the adjusted trial balance will be treated as a (an)?

(a) Asset

(b) Liability

(d) Deferred expense

Correct! Wrong!

12. Which of the following is the largest single expense of most merchandising firms?

(a) Cost of goods sold

(b) Rent Expense

(d) Salaries Expense

Correct! Wrong!

13. The primary source of revenue for a wholesaler is?

(a) Investment income

(b) Service fees

(d) The sale of fixed assets the company owns

Correct! Wrong!

14. Retained earnings will change over time because of several factors. Which of the following factors would explain a decrease in retained earnings?

(a) Net loss

(b) Net income

(d) Investments by stock holders

Correct! Wrong!

15. A Profit is earned if?

(a) Assets exceed Expenditure

(b) Income exceeds Expenses

(d) Income exceeds Liabilities

Correct! Wrong!

16. What is the difference between the total incoming and the total outgoings?

(a) Net cash flow

(b) Cash inflow

(d) Indirect cost

Correct! Wrong!

17. Which of the following is true regarding the income statement?

(a) The income statement is sometimes called the statement of operations

(b) The income statement reports revenues, expenses, and liabilities

(d) It shows financial position of a business at a particular period of time

Correct! Wrong!

18. Presents the revenue earned and expenses are incurred by an entity during a specific time period?

(a) Income statement

(b) Statement of owner equity

(d) None of them

Correct! Wrong!

19. The format of the balance sheet reflects which of the following?

(a) The basic accounting equation

(b) Worksheet

(d) Income statement

Correct! Wrong!

20. How is the balance sheet linked to the other financial statements?

(a) The beginning retained earnings balance on the statement of retained earnings becomes the amount of retained earnings reported on the balance sheet

(b) Retained earnings is added to total assets and reported on the balance sheet

(c) Net income increases retained earnings on the statement of retained earnings, which ultimately increases retained earnings on the balance sheet

(d) There is no link between the balance sheet and the other statements

Correct! Wrong!

Financial Statements (11-20)

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Back To Accounting MCQs

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Related Exams

Principles of Accounting

Accounting Questions

Accounting Problems

Accounting Exam Questions

Accounting Workbook

References

Mukharji, A., & Hanif, M. (2003). Financial Accounting (Vol. 1). New Delhi: Tata McGraw-Hill Publishing Co.

Narayanswami, R. (2008). Financial Accounting: A Managerial Perspective. (3rd, Ed.) New Delhi: Prentice Hall of India.

Ramchandran, N., & Kakani, R. K. (2007). Financial Accounting for Management. (2nd, Ed.) New Delhi: Tata McGraw Hill.

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Financial Statement MCQs

MCQs 1 To 10

Click The Option and See Result

1. A financial statement that summarizes company revenue and expenses is?

2. Which one of the following tangible fixed assets would not normally be depreciated?

3. Which financial statement presents a summary of the Assets, Liabilities, and Owners' Equity of a firm?

4. Subtracting all expenses from revenues yields?

5. A financial statement to show what a business owns and owes at a particular point in time?

6. If the Gross profit is Rs. 5,000 and the net profit is 25% of the Gross profit. The expenses must be?

7. A financial document that indicates the success or failure of a business trading over a period of time is called?

8. The report of company that shows overall profit on the sale of their goods or the provision of their services?

9. A company has, by the end of its financial period, paid out more Tax than it has to pay. How would this be shown in the balance sheet?

10. Which of the following financial statements is also known as financial condition?

MCQs 11 To 20

Click The Option and See Result

11. Prepaid interest given in the adjusted trial balance will be treated as a (an)?

12. Which of the following is the largest single expense of most merchandising firms?

13. The primary source of revenue for a wholesaler is?

14. Retained earnings will change over time because of several factors. Which of the following factors would explain a decrease in retained earnings?

15. A Profit is earned if?

16. What is the difference between the total incoming and the total outgoings?

17. Which of the following is true regarding the income statement?

18. Presents the revenue earned and expenses are incurred by an entity during a specific time period?

19. The format of the balance sheet reflects which of the following?

20. How is the balance sheet linked to the other financial statements?

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