FIN621 Solved MCQs for Papers File 3

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Q1. of 15 ( Start time: 03:09:37 PM ) Total Marks: 1 Financial statements are a subset of which of the following?

1. Financial reporting

2. Financial statement analysis
3. Accounting information
4. Accounting system

Q2. of 15 ( Start time: 03:12:19 PM ) Total Marks: 1

Which of the following is an example of an accrual?

1. Equipment purchased for use in the business
2. Book-keeping fees collected but not yet earned
3. Six months’ rent paid in advance

4. Interest earned but not yet received

Q3. of 15 ( Start time: 03:13:46 PM ) Total Marks: 1

Which of the following is true about "After closing trial balance"?

1. It may consist of balances of only Real and Personal accounts

2. It may consist of balances of only Nominal and Real accounts
3. It may consist of balances of Nominal, Real and Personal accounts
4. It may consist of balances of only Nominal and Personal accounts

Q4. of 15 ( Start time: 03:15:06 PM ) Total Marks: 1

accounting cycle?

1. Determining the transaction amount
2. Determining the effected accounts
3. Identifying the event as a transaction

4. All of the given options

Q5. of 15 ( Start time: 03:16:17 PM ) Total Marks: 1

The basic purpose of financial statements is to assist users in evaluating the________

1. Financial position
2. Profitability of an organization
3. Future prospects

4. All of the given options

Q6. of 15 ( Start time: 03:16:56 PM ) Total Marks: 1

Which one of the following would lead to the decrease in the owner’s equity?

1. Purchasing a piece of land

2. Paying dividends to shareholders

3. Purchasing equipment on account
4. Paying back the principal of a loan

Q7. of 15 ( Start time: 03:18:14 PM ) Total Marks: 1

Which of the following type of reports is most frequently used by external users, such as investors?

1. Financial Statements

2. Tax Forms
3. Management Reports
4. Audit reports

Q8. of 15 ( Start time: 03:18:48 PM ) Total Marks: 1

How many parts does each account have?

1. Two

2. Four
3. Three
4. Five

Q9. of 15 ( Start time: 03:19:19 PM ) Total Marks: 1 Identify the statement that is NOT true about the Incomes Account and Expenses Account:

1. These are the temporary accounts
2. These are closed in Income summery account

3. These may included in closing trial balance

4. These are also known as Nominal Accounts

Q10. of 15 ( Start time: 03:20:47 PM ) Total Marks: 1

If the estimated amount of depreciation on equipment for a period is Rs.2000, the adjusting entry to record depreciation would be:

1. Depreciation expense - Debit; Equipment - Credit

2. Depreciation expense - Debit; Accumulated depreciation - Credit

3. Equipment - Debit; Depreciation expense - Credit
4. Accumulated depreciation - Debit; Depreciation expense - Credit