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100 Solved MCQs of Financial Accounting
Skip to main content. Log In Sign Up. Gloria Ng. Scope paragraph. Opinion paragraph. Audit report date. Identify the most important infor mation included in the scope paragraph.
The auditor followed generally accepted auditing standards. The audit is designed to obtain reasonable assurance about whether the statements are free of material misstate ment. Discussion of the audit evidence accumulated. Statement that the auditor believes the evidence accumulated was appropriate for the circumstances to express the opinion presented.
Identify the most important infor mation included in the opinion paragraph. The most important information in the opinion paragraph includes: 1. The three general standards have been followed in all respects on the engagement. What is the nature of the additional paragraphs in the audit report? The introductory and opinion paragraphs also refer to the framework used to evaluate internal control.
Two addi. The separate paragraph should fully explain the departure and the reason why generally accepted accounting principles would have resulted in misleading statements. The entity changed from one generally accepted accounting principle to another generally accepted accounting principle. A shared report involving the use of other auditors.You have reached 0 of 0 points, 0.
Awesome your answer is correct. Your answer is incorrect. The John Marketing Company provides advertising services to an investment company in year A but receives advertising fee in year B.
The John Marketing Company recognizes this revenue in year A. This action of John Marketing Company is justified by:. Which accounting concept or principle states that the transactions of a business must be recorded separately from those of its owners or other businesses?
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Which of the following states that a transaction is not recorded in the books of accounts unless it is measurable in terms of money? Which one of the following states that the life of a business can be divided into equal time periods?
The revenue is not recognized until it is earned and realized or at least realizable. The auditor noticed that the financial statements of Meta Company were missing some footnotes important for users for decision making.
This action of the management is a violation of:.
This action is related to:. The Modern Enterprises reported all assets in the balance sheet at current market value. This action is a violation of:. Really interesting especially after you have revised a chapter. Thank you very much To whom it may concern. I found it a good way of getting my self upto date. I am trying to update my self and preparing myself for further studies.
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Answered Review. Question 1 of According to accrual concept of accounting, financial or business transaction is recorded:.Each excel link will download the file containing a spreadsheet for the problem and a template worksheet on which you can prepare the solution electronically.
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Alternative problems, with solutions, may be found at our partner website Bookboon. Video solutions to selected problems are available to students enrolling in the online course. The pdf version of the solutions manual also includes links to the video solutions. You can purchase the solutions manual in the bookstore. Problems - Chapter 1. The economic resources owned by an entity; entailing probable future benefits to the entity.
Generally accepted accounting principles -- encompass the rules, practices, and procedures that define the proper execution of accounting. Items acceptable to a bank for deposit and free from restrictions for satisfying current debts; includes coins, currency, bank deposits, etc. A record that is kept for each asset, liability, equity, revenue, expense, and dividend component of an entity.
Visit the Bookstore. Definitions, concepts, and awareness of accounting. Impact of transactions on fundamental accounting equation. To drill on the articulation of the core financial statements. Accounting equation and entity types. Preparing financial statements and cash Items acceptable to a bank for deposit and free from restrictions for satisfying current debts; includes coins, currency, bank deposits, etc. Basic cash flow analysis and statement of cash flows. Managerial Accounting.Here is a list of full accounting questions and answers that can be found on this site, along with a brief description of each one.
Please note that these are generally intermediate to advanced exercises. This will help ensure you're not taking too long to complete each question and will help you get used to doing exercises under exam settings. For your convenience, difficulty levels and time limits are stated for each of these exercises at the top of each exercise's page. The following questions full exercises were submitted by visitors like yourself from around the world and solved by the author.
Here are a bunch of accounting questions and answers on very specialized topics submitted by fellow accounting students from around the world:. Click here to get it on Amazon now.
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More Info. Popular Pages Home. Full Accounting Questions and Answers Here is a list of full accounting questions and answers that can be found on this site, along with a brief description of each one. Service business - no inventory but supplies on hand and used. Some testimonials from individuals who bought the Workbook : "Really helps!Well, I was quite good at accounting throughout, but in my masters, when I got a distinction, I decided to adopt this field as a profession.
Yes, I have worked as an accountant at two different places. I think all are good though, but Microsoft Accounting Professional is best because it offers reliable and fast processing of accounting transactions that saves time and increases proficiency.
It helps with financial analysis as well. The debit abbreviation is "dr" and credit abbreviation is "cr". There are two types of transactions in accounting, i.
It is a statement that states all the liabilities and assets of the company at a certain point. It is shown on the assets section, right after the head current asset.
It's an indirect tax other than the income tax. Its charges on the value of the service or product sold to a customer. Some countries have sales, service tax with works more or less the same as GST.
Yes, both are different terms in accounting. Inactive accounts mean that accounts have been closed and will not be used in the future as well. While dormant accounts are those that are not functional today but may be used in the future. It is the software used for accounting in small business and shops for managing routine accounting transactions.
It is a type of accounting in which a separate account is created for departments. It is managed separately as well as shown independently in the balance sheet.
These are the assets that cannot be shown or touch. Fictitious assets can only be felt such as goodwill, rights, etc. In the first one, i. In the periodic inventory system, the accounts are adjusted periodically.
Premises refer to fixed assets that are shown in the balance sheet. Yes, as per my knowledge there are total 33 accounting standards published so far by ICAI. The purpose of these standards is to implement the same policies and practices in any country. It is the abbreviation of the Institute of Chartered Accountants in India. We know that accounting is all about assets, liabilities, and capital. It is a type of accounting that is specifically designed for the business that offers services to users.
Public accounting offers audits and CPAs to review company financial records to ensure accountability. It is for the general public. To become a CPA, one should have to do many other qualifications as well. It is a qualification with a hour requirement. It means that one should complete credit hours at an accredited university. A reconciliation statement is prepared when the passbook balance differs from the cash book balance.
Public accounting is a type of accounting that is done by one company for another company. Private accounting is done for your own company. Yes, I do believe that accounting standards play a crucial role to prepare good quality and accurate financial reports.
It ensures reliability and relevance in financial statements. Accounting is all about recording daily business activities while auditing is the checking that whether all these events have been noted down correctly or not. As the name implies, the dual aspect concept states that every transaction has two sides.Which of the following is not an asset?
Which of the following is a liability? Which of the following best describes the meaning of Purchases?
Goods bought on credit Goods paid for Goods bought for resale Items bought. Which of the following should not be called Sales? Goods sold for cash Sale of item previously included in Purchases Office fixtures sold Goods sold on credit.
Given the following, what is the amount of Capital? Assets: Premises 20,; Stock 8,; Cash Liabilities: Creditors 3,; Loan from A Adams 4, 21, 21, Which of the following is correct? Profit reduces capital Profit increases capital Capital can only come from profit Profit does not alter capital. A credit balance of A credit balance of 95 A credit balance of A debit balance of Which of the following best describes a trial balance?
Shows all the entries in the books It is a list of balances on the books Shows the financial position of a business It is a special account. Is it true that the trial balance totals should agree? No, there are sometimes good reasons why they differ Yes, always Yes, except where the trial balance is extracted at the year end No, because it is not a balance sheet. Net profit is calculated in the: Profit and loss account Balance sheet Trial balance Trading account. To find the value of closing stock at the end of a period we do this by stocktaking deduct cost of goods sold from sales deduct opening stock from cost of goods sold look in the stock account.
The credit entry for net profit is on the credit side of: The trading account The drawings account The capital account The profit and loss account. Which of these best describes a balance sheet? A statement of assets A listing of balances An account proving the books balance A record of closing entries. Which of these best describes fixed assets?
Are bought to be used in the business Are expensive items bought for the business Are items which will not wear out quickly Are of long life and are not bought specifically for resale. Carriage inwards is charged to the trading account because: Carriage outwards goes in the profit and loss account It is an expense connected with buying goods It is not part of motor expenses.
Given figures showing: Sales 8,; Opening stock 1,; Closing stock ; Purchases 6,; Carriage inwardsthe cost of goods sold figure is: Another figure 6, 6, 7, The costs of putting goods into a saleable condition should be charged to: Trading account Profit and loss account Balance sheet None of these. Suppliers personal accounts are found in the: Sales ledger Nominal ledger Purchases ledger General ledger.
The Sales Day Book is best described as: Containing customers accounts Containing real accounts Part of the double entry system A list of credit sales.
Which of the following are personal accounts? If you want to make sure that your money will be safe if Cheques sent are lost in the post, you should: Always pay by cash Cross your Cheques Account Payee only, Not Negotiable Always take the money in person Not use the postal service in future.
When banking money in to your current account you should always use: A general ledger A cheque book A cash book A paying-in slip.
A debit balance of in a cash account shows that: There was cash in hand The total of cash received was less than was the total of cash paid out Cash has been overspent by A credit balance of on the cash columns of the cash book would mean: We have cash in hand Someone has stolen cash We have spent more than we have received.
Posting the transactions in bookkeeping means: Making the second entry of a double entry transaction Entering items in a cash book Making the first entry of a double entry transaction Something other than the above.
A cash discount is best described as a reduction in the sum to be paid: If payment is made by cash, not cheque If purchases are made for cash, not on credit If payment is made either by cash or cheque If payment is made within a previously agreed period. Discounts received are: Deducted by us when we pay our accounts Deducted when we receive cash Given by us when we sell goods on credit None of these.Accounting Interview Questions are the different type of frequently asked questions which are related to the concept of the accounting of which one must have knowledge in order to gain understanding about the different aspects of the accounting.
Accounting is such a vast topic that there are so many technical questions that can be asked. Still, each question can be answered in many different ways. In this article, we have put together a list of top 20 accounting interview questions and answers so that you can give your best shot in the accounting job interview. If you are new to accounting, you can also have a look at this basic accounting course.
I believe that the accounting team of any company has the responsibility of presenting a true and fair view to the shareholders and the management of the company. The accounting team is like the watchdog of the organization. This is why documentation becomes very important in accounting. Appropriate documentation needs to be checked and maintained so that a proper audit trail is maintained and justified as and when required. In order to make the financial statements meaningful, comparable and statutorily compliant, there are a set of standards which need to be followed by all business while maintaining their books of accounts.
These are more like a set of rules to be followed so that financial statements of different organizations are made on the same lines.
So the users of the financial statements know the assumptions behind the financial statements and can easily compare the financial statements across companies and sectors. Some of the important details to be mentioned in the FAR are the date of acquisition of asset, cost of acquisition, rate of depreciation, accumulated depreciation till date, depreciation for the current period, selling price of the asset if any, date of transfer, location of the asset in case of multiple business locations, this field is importantasset number a unique asset number should be assigned to every asset for ease of tracking.
This is especially helpful for assets where quantity is more than 1 like laptops. A summarised form of a Fixed Asset Register which will form a part of the Financial Statements is as follows:. Accounting software sets the foundation of accounting in any organization and it is therefore very important to choose software which suits the need of the organization. It has adequate controls, multiple modules which have access limitation, various reports can be extracted and customization is also possible.
However, the cost of SAP is on the higher side, it is the trade-off between risk and return which justifies the high cost of the ERP given the volume and scale of the business.
Reconciliation is a must when it comes to accounting. Internal reconciliations should also be done. These include quantity reconciliation of closing stockcost of goods sold reconciliations, etc.
For details, have a look at Reconciliation of Books. The procurement process starts with a purchase requisition or a purchase request from a particular department. This is then verified and approved by the HOD. On the basis of the purchase requisition, a purchase order is created for already purchased items.