FIN621 CURRENT QUIZ June 2010

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Just for Idea


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

Question # 2 of 15 ( Start time: 11:26:41 AM ) Total Marks: 1
Which of the following is deducted from the net income while preparing cash flow statement by indirect method?
Select correct option:
1. Decrease in inventories
2. Increase in accounts payable (not sure)
3. Depreciation
4. Increase in inventories

Question # 3 of 15 ( Start time: 11:27:53 AM ) Total Marks: 1
Which of the following represents the negative future cash flows for an enterprise?
Select correct option:
1. Assets
2. Ownerequity
3. Liabilities
4. Capital

Question # 4 of 15 ( Start time: 11:29:14 AM ) Total Marks: 1
Under which cost flow assumption is the ending inventory composed of the most recently purchased merchandise?
Select correct option:


1. FIFO
2. LIFO
3. Average cost
4. Specific identification

Question # 5 of 15 ( Start time: 11:29:45 AM ) Total Marks: 1
The information in statement cash flows assists the investors, creditors, and others in assessing:
Select correct option:
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

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
2. Office fixtures sold
3. Goods sold on credit
4. Sale of item previously included in Purchasese

Question # 7 of 15 ( Start time: 11:31:04 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 # 8 of 15 ( Start time: 11:32:33 AM ) Total Marks: 1
A business has purchased a building on cash, how it would be recorded in the journal?
Select correct option:
1. Building - Debit; Cash - Credit
2. Cash - Debit; Building - Credit
3. Building - Debit; Owner equity - Credit
4. Building - Debit; Accounts Payable - Credit

Question # 9 of 15 ( Start time: 11:32:41 AM ) Total Marks: 1
All of the following accounts would be closed in Income Summery Account EXCEPT:
Select correct option:
1. Commission earned account
2. Prepaid insurance
3. Salaries Expense account
4. Wages account

Question # 10 of 15 ( Start time: 11:33:31 AM ) Total Marks: 1
In which of the following account, a credit balance would be an evidence for a mistake or an error?
Select correct option:
1. Mr. A Capital Account
2. Cash account
3. Notes payable account (page #6)
4. Drawings 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:
1. Matching Principle
2. Cost Principle
3. Realization Principle
4. Objectivity Principle

Question # 12 of 15 ( Start time: 11:36:18 AM ) Total Marks: 1
Primary purpose of the cash flows statement is to provide the information about:
Select correct option:
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

Question # 13 of 15 ( Start time: 11:37:43 AM ) Total Marks: 1
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.
Select correct option:
1. Rs. 170,000
2. Rs. 130,000
3. Rs. 120,000
4. Rs. 180,000

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:
1. Adverse opinion
2. Unqualified opinion
3. Qualified opinion
4. Disagreement of opinion

Question # 15 of 15 ( Start time: 11:39:54 AM ) Total Marks: 1
According to _______ the personal expenses paid by Mr. A from his own pocket would not be recorded in business books of account.
Select correct option:
1. Realization principle
2. Separate entity principle
3. Matching principle
4. Materiality principle