Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Financial AccountingTotal Number of Question: 40Time: 41 MinutesPlease check your email after completion of test for result.All the best... Name Phone No Email State 1. Which of the following is the main objective of financial accounting? To prepare financial statements for external users To provide detailed information for management To determine the cost of goods sold To calculate gross profit None 2. What is the primary purpose of the balance sheet? To show the profitability of the company To show the company's assets, liabilities, and equity To calculate tax payable To determine the amount of net income None 3. Which of the following is not a current liability? Bills payable Bank overdraft Long-term loans Sundry creditors None 4. The income statement is also known as: Profit and loss account Balance sheet Statement of changes in equity Cash flow statement None 5. Which of the following is a non-operating income? Sales revenue Interest income Rent income from business premises Dividend income None 6. A liability is classified as current if it is due to be settled within: 12 months from the balance sheet date 6 months from the balance sheet date 18 months from the balance sheet date 24 months from the balance sheet date None 7. In double-entry bookkeeping, every debit entry must have a corresponding: Debit entry Credit entry Cash entry Bank entry None 8. What is the accounting equation? Assets = Liabilities + Equity Assets = Revenue + Liabilities Assets = Expenses + Liabilities Revenue = Assets + Liabilities None 9. Which of the following is a primary objective of cost accounting? To determine the price of products To determine the financial position of a business To calculate the cost of products manufactured or services rendered To calculate profit or loss None 10. The statement of cash flows reports the cash inflows and outflows from: Operating, investing, and financing activities Operating and investing activities only Financing activities only Operating and financing activities only None 11. Which of the following is not a method of inventory valuation? FIFO LIFO WAC Gross profit method None 12. Which of the following is true about depreciation? Depreciation is a method of estimating the value of assets Depreciation is a non-cash expense Depreciation increases the value of the asset Depreciation is charged on current assets None 13. In the case of a partnership firm, which of the following is true? Partners receive a fixed salary irrespective of profit Profit is distributed as per the partnership deed Partners are not liable for any losses Partnership accounts are always maintained on a cash basis None 14. The cost of raw materials used in production is transferred to: Finished goods account Work-in-progress account Profit and loss account Trading account None 15. In the perpetual inventory system, inventory is updated: At the end of the accounting period As and when a transaction occurs Once every month At the end of each quarter None 16. A business’s revenue is recognized when: The payment is received The product is delivered or service is rendered The invoice is issued The agreement is signed None 17. Which of the following is not a characteristic of financial accounting? Historical in nature Provides detailed data for management decision-making Requires compliance with accounting standards Focuses on external reporting None 18. The matching principle in accounting refers to: Matching revenue with expenses in the same period Matching liabilities with assets Matching expenses with capital Matching revenue with capital None 19. What is the primary focus of cost accounting? To record the financial transactions To ascertain the cost of goods or services produced To prepare financial statements To manage cash flows None 20. Which of the following is a cost behavior classification? Variable costs Fixed costs Semi-variable costs All of the above None 21. In a manufacturing company, which of the following is an example of direct cost? Rent of factory building Cost of raw materials used in production Advertising expenses Salaries of administrative staff None 22. The term "stock turnover ratio" is used to measure: The efficiency of inventory management The profit made on each item sold The return on equity The level of cash in business None 23. Which of the following is a limitation of financial accounting? It does not provide detailed information about cost management It only focuses on the short-term financial position It is not governed by accounting standards It does not consider the financial position of a business None 24. A company’s profit before tax is Rs. 500,000. The depreciation on its machinery is Rs. 50,000. What is the profit after tax if the tax rate is 30%? Rs. 315,000 Rs. 35,000 Rs. 385,000 Rs. 400,000 None 25. Which of the following is an example of fixed cost? Direct materials Sales commissions Rent of factory building Direct labor None 26. Which of the following is an incorrect statement? Current assets are expected to be converted into cash or consumed within one year Non-current assets include tangible and intangible assets Liabilities are classified as current or non-current based on their due date Equity represents the total assets of the company None 27. The cost of finished goods manufactured during the year is transferred to: Work-in-progress account Trading account Profit and loss account Cost of goods sold account None 28. Which of the following accounts will have a debit balance? Liability account Revenue account Expense account Equity account None 29. The normal balance of an asset account is: Debit Credit Both debit and credit None of the above None 30. What is the main focus of financial accounting? Determining cost behavior External reporting of financial information Cost control Managing day-to-day operations None 31. Which of the following is an example of indirect cost? Direct materials Rent for factory building Wages of factory workers Sales commissions None 32. Which of the following is not a characteristic of cost accounting? Helps in planning and controlling costs Provides information for pricing decisions Required by external regulatory authorities Provides data for managerial decision-making None 33. Which of the following methods is used to allocate overheads to products? Activity-based costing Absorption costing Marginal costing Both A and B None 34. Which of the following accounts is not closed at the end of the accounting period? Revenue accounts Expense accounts Asset accounts Liability accounts None 35. Which of the following is the first step in the accounting cycle? Posting journal entries Preparing a trial balance Recording transactions in journals Preparing financial statements None 36. The cost of goods sold is calculated by: Opening stock + Purchases – Closing stock Purchases – Closing stock Opening stock + Purchases + Closing stock Opening stock – Purchases None 37. Which of the following is true about direct expenses? They are incurred for business administration They are related to the production of goods or services They are not included in the cost of goods sold They are expenses that do not vary with production levels None 38. What is the formula for calculating the gross profit margin? Gross profit / Sales Gross profit / Cost of Goods Sold Net income / Sales Net income / Assets None 39. The process of allocating a portion of fixed costs to various departments is known as: Absorption costing Activity-based costing Variable costing Marginal costing None 40. Which of the following statements is true about the cost-volume-profit (CVP) analysis? It helps in determining the break-even point It is used to determine long-term pricing strategies It is used for external financial reporting It focuses only on fixed costs None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test.Look out for results and future opportunities.Stay Connected !! Your quiz time is about to finish. Few seconds left. 1 2 3 4 Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
