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Financial Accounting Practice Test Questions
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Avg score: 26% • Most missed: “Under single entry system , drawings is _____ to know gross profit”

Financial accounting is a branch of accounting concerned with the summary, analysis and reporting of financial transactions related to a business. This involves the preparation of financial statements available for public use. (source: Wikipedia)

Most businesses use four primary types of financial statement: the balance sheet, the income statement, the statement of cash flow, and the statement of retained earnings.

Note: The 3 types of accounting are cost, managerial, and financial accounting. ​​ 

Financial Accounting Practice Test Questions
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25 Questions

1. ABC holds an average inventory of ` 36,000(CP) with an inventory turnover of 5 times. If the firm makes a gross profit of 25% on sales, find the total sales of the company
2. Receipts and Payments Account records
3. Branches may be classified into ________.
4. In an account if debit side > credit side, the balance is known as the:
5. In the funds flow statement, item of preliminary expenses written off during the year is:
6. The Income and expenditure account begins with
7. In the books of consignee the expenses incurred by him on consignment are debite
8. When a machinery is purchased for cash, the cash balance is reduced and to that extent, the amount of machinery as an asset is recorded. This is done to follow which of the following accounting principles:
9. Amount received from the proprietors as capital or loan receipt is treated as-
10. The portion of the acquisition cost of the asset yet to be allocated is known as
11. External users of accounting information do not include:
12. Branches not keeping full system of accounting is called
13. The following account has a credit balance
14. Under the net worth method, the profit can be ascertained by preparing
15. If the Going Concern concept is no longer valid, which of the following is true?
16. The amount salary paid to Suresh should be debited to
17. Which of the following items will affect the flow of funds?
18. The underlying assumption that assumes that the life of a company can be divided into artificial time periods is:
19. In the books of consignor the balance of the consignment stock account would be shown:
20. In which of the following cases, accounting estimates are needed?
21. Which of the following is true regarding closing entries?
22. From the following information provided, the income from subscription to be shown in the Income and Expenditure A/C for the year ending 31/12/2015 can be calculated at Rs. ______ (i) Subscription received during 2015 : for 2014 – Rs.5,000 for 2015 – Rs.30,000 for 2016 – Rs.6,000 (ii) Subscription received in advance as at 31/12/2014 – Rs.6,000 (iii) Subscription outstanding as at 31/12/2014 – Rs.6,000 (iv) Subscription outstanding as at 31/12/2015 – Rs.4,000
23. Goods returned from X is entered as
24. Excess of minimum rent over royalty is known as
25. The consignor is

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