Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Financial Accounting Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email State 1. The primary objective of financial accounting is to: Assist in decision-making Provide information to stakeholders Assess financial performance and position Record daily transactions None 2. Which of the following is not a Fundamental Accounting Assumption? Going Concern Consistency Accrual Materiality None 3. Which financial statement shows the financial position of a business as of a specific date? Income Statement Cash Flow Statement Balance Sheet Statement of Retained Earnings None 4. Prepaid insurance is classified as a: Liability Asset Revenue Expense None 5. Which concept requires that revenue is recognized when earned, regardless of cash receipt? Accrual Concept Cash Basis of Accounting Realization Concept Matching Concept None 6. Goods worth ₹10,000 given as charity should be credited to: Sales Account Charity Account Purchases Account Trading Account None 7. Depreciation is an example of: Capital Expenditure Revenue Expenditure Deferred Revenue Expenditure None of the above None 8. Which of the following accounts is not classified as a nominal account? Salary Account Rent Account Machinery Account Discount Allowed Account None 9. The accounting equation is represented as: Assets = Liabilities + Equity Assets = Revenues - Expenses Liabilities = Assets + Equity Equity = Assets + Liabilities None 10. Bank reconciliation statement is prepared to: Check the accuracy of cash transactions Compare bank statement with the cash book Reconcile cash balance with bank balance Identify fraudulent transactions None 11. Capital receipts do not include: Sale of fixed assets Loan taken from a bank Dividend received Issue of shares None 12. Cash discount is allowed to: Increase sales Encourage prompt payment Reduce stock Attract customers None 13. The dual aspect principle is also known as: Money Measurement Principle Revenue Recognition Principle Double-Entry System Matching Principle None 14. In a trial balance, which of the following should have a credit balance? Sales Purchases Wages Rent None 15. Outstanding expenses are classified as: Asset Liability Equity Income None 16. Provision for doubtful debts is created to account for: Bad debts Future liabilities Depreciation Anticipated losses on receivables None 17. The primary objective of preparing a cash flow statement is to: Evaluate profitability Determine liquidity Assess financial position Identify capital expenditure None 18. The rectification of errors is done using: Adjustment Account Suspense Account Capital Account Profit and Loss Account None 19. Which of the following is a real account? Cash Account Salary Account Sales Account Interest Account None 20. Which document serves as a source of information for posting entries in the ledger? Journal Trial Balance Balance Sheet Cash Book None 21. The credit balance in the bank column of a cash book represents: Overdraft Cash in hand Deposit with the bank None of the above None 22. If closing stock is undervalued, the effect on the profit and loss account will be: No effect Overstated profit Understated profit Cannot be determined None 23. Which of the following is not shown in the financial statements? Contingent Liabilities Capital Reserve Fixed Assets Current Liabilities None 24. Which type of error affects the agreement of the trial balance? Omission Commission Compensating Posting None 25. Freight charges incurred on the purchase of goods should be: Debited to Freight Account Debited to Purchases Account Debited to Trading Account Credited to Purchases Account None 26. Goodwill is classified as: Current Asset Intangible Asset Fixed Asset Current Liability None 27. Which of the following is not a fixed asset? Land Buildings Machinery Inventory None 28. The purpose of depreciation is to: Generate revenue Reflect the market value of an asset Allocate the cost of an asset over its useful life Increase profits None 29. Gross profit is calculated as: Sales - Purchases Sales - Cost of Goods Sold Sales - Operating Expenses Sales - Returns None 30. If opening stock is ₹20,000, closing stock is ₹30,000, and purchases are ₹1,00,000, what is the cost of goods sold? ₹90,000 ₹1,00,000 ₹1,10,000 ₹1,20,000 None 31. Which accounting standard deals with "Revenue Recognition"? AS-1 AS-9 AS-10 AS-2 None 32. In case of a partnership firm, the partnership deed primarily outlines: Business objectives Profit-sharing ratio Liabilities of the firm Salaries of employees None 33. Inventory is valued at: Cost price Market price Cost or market price, whichever is lower Selling price None 34. If bad debts are recovered, the account to be credited is: Bad Debts Account Debtors Account Profit and Loss Account Bad Debts Recovered Account None 35. Carriage inwards is shown in: Profit and Loss Account Balance Sheet Trading Account None of the above None 36. Which accounting standard deals with "Cash Flow Statements"? AS-1 AS-3 AS-7 AS-9 None 37. Net Profit is transferred to: Capital Account Drawing Account Trading Account None of the above None 38. Wages paid for the installation of machinery should be debited to: Machinery Account Wages Account Installation Expenses Account Cash Account None 39. Errors disclosed by a trial balance are: Clerical Errors Errors of Omission Errors of Commission All of the above None 40. The written-down value of an asset is equal to: Cost Price - Depreciation Cost Price + Depreciation Market Price None of the above None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. 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