Fin621 Quiz No. 2

Question # 1 of 15 ( Start time: 03:55:07 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 # 2 of 15 ( Start time: 03:55:30 AM ) Total Marks: 1
Which of the following is not true about the "Account"?
Select correct option:

Accounts are only prepared by the business entities
Account always reflects the amount of the single transaction only
Account is effected both by economic and non economic events
All of the given options

Question # 3 of 15 ( Start time: 03:55:53 AM ) Total Marks: 1
An entry that effects more than one accounts is knows as _____________.
Select correct option:

Journal entry
Compound entry
Adjusting entry
Reversing entry

Question # 4 of 15 ( Start time: 03:56:20 AM ) Total Marks: 1
In statement of cash flows, which of the following would not be considered an item from an "investing" activity?
Select correct option:

Collections on loan
Purchase of marketable securities
Purchase of fixed assets
Payments of dividends

Question # 5 of 15 ( Start time: 03:57:10 AM ) Total Marks: 1
When preparing a statement of cash flows under the indirect method, supplemental disclosure should be made for which of the following?
Select correct option:

Net cash consumed by operating activities
Cash dividend distributions
Cash paid for interest and taxes
Cash paid for wages

Question # 6 of 15 ( Start time: 03:58:38 AM ) Total Marks: 1
Which of the following is a special temporary account used to close all of the revenue and expense accounts?
Select correct option:

Close-out Summary
Owner's Capital
Income Summary
Temporary Summary

Question # 7 of 15 ( Start time: 03:59:03 AM ) Total Marks: 1
Company XYZ purchases Machinery on credit; Journal entry would be:
Select correct option:

Accounts Payable debit; Machinery Credit
Accounts Receivable debit; Machinery Credit
Machinery Debit; Accounts Payable credit
Machinery Debit; Accounts Receivable credit

Question # 8 of 15 ( Start time: 03:59:42 AM ) Total Marks: 1
On November 30, 2008 ABC Company borrowed Rs. 4,000 from bank by issuing an interest-bearing note payable. This loan is to be paid in three months along with interest computed at an annual rate of 9%. What will be the entry on Nov 30 to record this borrowing?
Select correct option:

Cash – Debit; Notes payable – Credit
Notes payable – Debit; Cash – Credit
Interest expense – Debit; Cash – Credit
Interest payable – Debit; Notes payable - Credit

Question # 9 of 15 ( Start time: 04:00:44 AM ) Total Marks: 1
Closing entries result in net income being calculated in the income summary account and then transferred to which of the following account?
Select correct option:

Revenue account
Common Stock account
Dividends account
Retained Earnings account

Question # 10 of 15 ( Start time: 04:01:09 AM ) Total Marks: 1
Net current assets are equivalent to:
Select correct option:

Stock plus debtors plus cash
Current liabilities less current assets
Working capital
Fixed assets plus current assets less current liabilities

Question # 11 of 15 ( Start time: 04:01:36 AM ) Total Marks: 1
Assets of the business are valued and recorded at cost in the financial statement as these are not for resale purposes, according to which of the following?
Select correct option:

Going concern assumption
Cost Principle
Separate entity principle
Objectivity principle

Question # 12 of 15 ( Start time: 04:01:52 AM ) Total Marks: 1
Which of the following is the third step of accounting cycle?
Select correct option:

Preparing financial statements
Preparing trial balance
Posting
Making adjusting entries

Question # 13 of 15 ( Start time: 04:02:13 AM ) Total Marks: 1
The right side of an account is a:
Select correct option:

Debit side
Credit side
Balance of that account
Carried to the next accounting period

Question # 14 of 15 ( Start time: 04:02:26 AM ) Total Marks: 1
How the transactions in a journal are initially recorded?
Select correct option:

Alphabetical order
Ascending order
Chronological order
Alphanumeric order

Question # 15 of 15 ( Start time: 04:02:43 AM ) Total Marks: 1
Which of the following is the next step after the preparation of trial balance?
Select correct option:

Adjusted trial balance
Financial statements
Adjusting entries
Closing entries

Question # 1 of 15 ( Start time: 02:40:03 PM ) Total Marks: 1
A journal entry that has more than one debit or credit is known as:
Select correct option:

1. Double entry
2. Multiple entry
3. Compound entry page#8
4. None of the given option



Question # 2 of 15 ( Start time: 02:41:04 PM ) Total Marks: 1
In the long run, a business must generate positive net cash flow from which of the
following activities, if it is to survive?
Select correct option:

1. Investing activities
2. Financing activities
3. Operating activities
4. Non cash activities

Question # 3 of 15 ( Start time: 02:41:49 PM ) Total Marks: 1
Which of the following is the next step after the preparation of trial balance?
Select correct option:

1. Adjusted trial balance
2. Financial statements
3. Adjusting entries
4. Closing entries

Question # 4 of 15 ( Start time: 02:42:14 PM ) 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's equity - Credit
4. Building - Debit; Accounts Payable - Credit

Question # 5 of 15 ( Start time: 02:42:36 PM ) Total Marks: 1
Decision makers compare net income to net cash from operating activities. To make these
amounts more comparable, the same accounts are included in each. The following accounts are used to compute both net income and net cash from operating activities EXCEPT:
Select correct option:

1. Dividends declared and paid
2. Dividend revenue
3. Interest expense
4. Interest revenue

Question # 6 of 15 ( Start time: 02:42:58 PM ) Total Marks: 1
Which of the following is the adjustment that is added during the reconciliation of net income to operating cash flows in indirect method?
Select correct option:

1. An increase in Accounts Receivable
2. An increase in Prepaid Expenses
3. Gain on sale of capital assets
4. Amortization Expense


Question # 7 of 15 ( Start time: 02:43:12 PM ) Total Marks: 1
The appropriate journal entry to record equipment depreciation expense would consist of a debit to Depreciation Expense and a credit to which of the following accounts?
Select correct option:

1. Equipment
2. Accumulated Depreciation: Equipment
3. Retained Earnings
4. Cash

Question # 8 of 15 ( Start time: 02:43:31 PM ) Total Marks: 1
In statement of cash flows, interest payment made on loan from bank is related to:
Select correct option:

1. Investing activity
2. Financing activity
3. Operating activity

4. Net changes in working capital


Question # 9 of 15 ( Start time: 02:44:44 PM ) Total Marks: 1
Net current assets are equivalent to:
Select correct option:

1. Stock plus debtors plus cash
2. Current liabilities less current assets
3. Working capital
4. Fixed assets plus current assets less current liabilities


Question # 10 of 15 ( Start time: 02:45:14 PM ) Total Marks: 1
The Drawing account is closed by which of the following entry?
Select correct option:

1. Capital – Debit; Drawing - Credit
2. Drawing – Debit; Capital - Credit
3. Income Summary – Debit; Drawing - Crediting
4. Drawing – Debit; Income Summary - Crediting

Question # 11 of 15 ( Start time: 02:45:42 PM ) Total Marks: 1
Which of the following is the largest single expense of most merchandising firms?
Select correct option:

1. Cost of goods sold
2. Rent Expense
3. Amortization Expense
4. Salaries Expense


Question # 12 of 15 ( Start time: 02:46:03 PM ) Total Marks: 1
The right side of an account is a:
Select correct option:

1. Debit side
2. Credit side
3. Balance of that account
4. Carried to the next accounting period


Question # 13 of 15 ( Start time: 02:46:43 PM ) Total Marks: 1
How the transactions in a journal are initially recorded?
Select correct option:

1. Alphabetical order
2. Ascending order
3. Chronological order
4. Alphanumeric order

Question # 14 of 15 ( Start time: 02:47:08 PM ) Total Marks: 1
The income statement of the UBL shows the interest revenue of Rs. 6,000, and the amount of accrued interest receivable has increased from Rs. 3000 to Rs. 4000 during the year.
Calculate the amount of interest received.
Select correct option:

1. Rs. 7000
2. Rs. 5000
3. Rs. 8000
4. Rs. 1000

Question # 15 of 15 ( Start time: 02:47:30 PM ) Total Marks: 1
If a company has paid dividends on its preference shares, under which one of the cash flow
statement headings would they appear?
Select correct option:

1. Returns on investments and servicing of finance
2. Financing
3. Equity dividends paid
4. Capital investment and financial investment