Financial Accounting MCQs (Chapterwise Multiple Choice Questions)

what is IAS?

internal accounting system

international auditing standards

international assignment system

International accounting standards

included available sale

Answer & Explanation

Correct Answer: International accounting standards

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One million shares of common stock outstanding at the beginning of 1999 • 200,000 shares issued on the last day of March • 500,000 shares issued on the last day of June • 800,000 shares issued on the last day of September. What is the number of shares that should be used to compute 1999 earnings per share for the QRK Company?

1.9 million.

4.5

3.5 million.

2.5 million.

1.5 million.

Answer & Explanation

Correct Answer: 2.5 million.

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Corporations sell equity in the form of ________.

Stock

Ownership

Debt

Bonds

Notes

Answer & Explanation

Correct Answer: Stock

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Large corporations must follow the ___________ basis of accounting.

cash

credit

debit

accrual

Answer & Explanation

Correct Answer: accrual

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What is factoring of accounts receivable?

A weighted calculation of expected payment profiles of customers based on stratification.

A contra account named Allowance for doubtful accounts

A firm sells receivables at a discount to face value for immediate cash.

A review of the likelihood of repayment at the end of each accounting cycle.

Answer & Explanation

Correct Answer: A firm sells receivables at a discount to face value for immediate cash.

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What does LIFO stand for?

Last in, Last out

Last in final out

Lower interest, first out

Lower inventory for outsiders

Last in, first out

Answer & Explanation

Correct Answer: Last in, first out

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Which one of the following is NOT a principle of GAAP (US)?

Full Disclosure principle

Matching principle

Efficient Operations

Materiality

Going Concern

Answer & Explanation

Correct Answer: Efficient Operations

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Goods totaling $50,000 were puchased Febuary 2 with the terms of 2/10, n/30. Returns of $10,000 were made on Febuary 10. What discount, if any, can be availed of if the invoice was paid Febuary 12?

$800

$250

$1,000

$200

$0

Answer & Explanation

Correct Answer: $800

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A sinking fund is a(n):

Contra-asset

Expense

Liability

Contra-liability

Asset

Answer & Explanation

Correct Answer: Asset

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Which of the following is considered a cash expense?

Amortization

none of these

Depreciation

Tax expense

Bad debt

Answer & Explanation

Correct Answer: Tax expense

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Financial Accounting Quick Quiz

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