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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. Name the principle involved in the classification of Assets as Fixed and Current
2. Normally single entry system is suitable for:
3. The term Imprest system is related to………
4. Which of the following is not a contingent liability?
5. Which of the following statements is true with regard to written down value method of depreciation? i. The rate at which the asset is written off reduces year after year ii. The amount of depreciation provided reduces from year to year iii. The rate of depreciation as well as the amount of depreciation reduce year after year iv. The value of the asset gets reduced to zero over a period of time
6. On the debit side of a Sales A/c entry can be for which of these reasons
7. A company sends its cars to dealers on 'sale or return' basis. All such transactions ire however treated like actual sales and are passed through the sales day book. Just before the end of the financial year, two cars which had cost ` 55,000 each have been sent on sale or return and have been debited to customers at ` 75,000 each, cost of goods lying with the customers will be
8. Owing of the business are called —
9. Return of shares voluntarily by a shareholder to the company for cancellation is called:
10. Branch Account under Debtor System is
11. Generally sacrifice ratio is concerned with the situation of
12. Drawings account is the nature of
13. If Building (closing) Rs.100,000, Land (opening) Rs. 100,000, Creditors (opening) Rs.10,000 then opening capital:
14. General rules that are used as a guide in accounting and as a basis of accounting practices are called:
15. Which item comes under financing activities in cash flow statement?
16. Under the net worth method, the profit can be ascertained by preparing
17. Provision is created for —
18. The Balance Sheet gives information regarding the
19. Realisation Account is a:
20. 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:
21. In absence of LLP agreement the mutual rights of partners and the relation to LLP will be determined as per schedule _of LLP Act 2008
22. Trade discount allowed at the time of Sale of goods.
23. Consignee account is in the nature of
24. When benefit of a revenue expense extend beyond an accounting year, it is called
25. A revenue that is collected before it has been earned is called

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