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 considered a non-operating expense? Cost of goods sold Depreciation Interest expense Direct labor None 2. Which of the following is an example of an opportunity cost? Interest paid on a loan Rent expense on office space Profit forgone from not investing in a project Depreciation on machinery None 3. The main objective of preparing the cash flow statement is to: Show the company’s profitability Reconcile the opening and closing balances of cash Determine the tax liability of the company Record all non-cash transactions None 4. What is the primary difference between a trading account and a profit and loss account? Trading account calculates gross profit, while profit and loss account calculates net profit Trading account includes administrative expenses, while profit and loss account does not Profit and loss account calculates gross profit, while trading account calculates net profit Trading account includes interest and tax, while profit and loss account does not None 5. Which of the following is an example of a semi-variable cost? Electricity bill with fixed and variable components Depreciation on machinery Salaries of factory workers Direct materials cost None 6. Which of the following is true about marginal costing? It includes both fixed and variable costs in the cost of goods sold It helps in determining the break-even point and contribution margin It is primarily used for external financial reporting It allocates fixed costs to each unit of production None 7. In a manufacturing company, which of the following is considered a prime cost? Administrative expenses Factory overheads Direct materials Sales expenses None 8. Which of the following statements is correct about the FIFO (First In, First Out) method of inventory valuation? It assumes that the most recently purchased items are sold first It results in lower taxes during inflationary periods It is used when inventory items are perishable It assumes that the oldest items are sold first None 9. Which of the following is the correct treatment of interest on capital in partnership accounts? It is debited to the profit and loss account It is charged as an expense before profit-sharing It is credited to the partners’ capital accounts It is paid only when there is sufficient profit None 10. Which of the following is considered an example of a fixed cost? Raw materials cost Wages of production workers Insurance premiums Sales commissions None 11. Which of the following is an example of an internal source of funds for a company? Bank loan Issuance of shares Retained earnings Issue of bonds None 12. Which of the following is a characteristic of process costing? It is used when products are customized or unique It is suitable for industries with mass production and homogeneous products It involves allocating costs based on the specific production orders It focuses on the calculation of direct materials and labor None 13. Which of the following is true about the matching principle in accounting? Expenses are recognized only when cash payments are made Revenue and expenses are recognized in the same period they occur Revenue is recognized when it is earned, regardless of when cash is received Expenses are recorded when the cash is received None 14. Which of the following is an example of a non-cash expense? Depreciation Wages paid to employees Interest on loans Rent payment None 15. What is the primary purpose of cost allocation in cost accounting? To determine the total revenue To assign indirect costs to products or services To calculate the fixed costs of a business To allocate profits among the partners None 16. Which of the following is an example of a financial ratio that measures a company’s profitability? Current ratio Return on equity Inventory turnover ratio Debt-to-equity ratio None 17. In which of the following cases would a company use the direct method for preparing the cash flow statement? When the company uses accrual accounting When the company wants to show operating cash inflows and outflows directly When the company has no cash transactions When the company uses the indirect method for financial reporting None 18. Which of the following is an example of a current asset? Machinery Buildings Accounts payable Inventory None 19. Which of the following is not a method of depreciation? Straight-line method Reducing balance method Double-declining balance method Net present value method None 20. Which of the following is an example of a short-term liability? Bank overdraft Bonds payable in 5 years Capital stock Retained earnings None 21. Which of the following is considered a financial activity in the cash flow statement? Payment of operating expenses Sale of property Issuance of long-term debt Purchase of raw materials None 22. The cash flow statement provides information about a company's: Profitability Ability to generate cash and cash equivalents Equity position Future earnings potential None 23. Which of the following accounts would appear on a company’s balance sheet under liabilities? Retained earnings Inventory Accounts payable Common stock None 24. Which of the following is true about cost behavior? Fixed costs vary in total with changes in production levels Variable costs remain constant per unit, regardless of the level of production Semi-variable costs are fixed over all levels of production Mixed costs include both fixed and variable elements None 25. Which of the following is a feature of job costing? It is used for mass production of identical goods It is suitable for industries with customized and unique products It does not track overhead costs It is primarily used for service-based businesses None 26. Which of the following is the correct treatment of overheads in marginal costing? Overheads are allocated to products on a fixed basis Overheads are included in the cost of goods sold Overheads are treated as period costs Overheads are capitalized as assets None 27. Which of the following is considered an intangible asset? Buildings Patents Machinery Accounts receivable None 28. Which of the following is true about standard costing? It involves comparing actual costs with expected costs It is used only in manufacturing industries It disregards variances in cost control It calculates net income for tax purposes None 29. Which of the following best describes a "contra asset" account? An account that offsets a liability An account that reduces the value of an asset An account that tracks revenue earned An account used for capital appreciation None 30. Which of the following statements is true about cost-volume-profit (CVP) analysis? It helps businesses determine the volume of sales required to cover fixed costs It is used to calculate depreciation on fixed assets It focuses only on direct material costs It is primarily concerned with cash flow management None 31. Which of the following is an example of a fixed cost? Raw material cost Sales commissions Rent for office space Direct labor cost None 32. Which of the following is true about activity-based costing (ABC)? It only applies to manufacturing businesses It assigns overheads based on the activities that generate costs It is used only for financial reporting purposes It does not differentiate between fixed and variable costs None 33. Which of the following would not be classified as an operating activity in the cash flow statement? Payment to suppliers for goods and services Cash received from customers Payment of interest on loans Issuance of shares to raise capital None 34. Which of the following is a characteristic of the FIFO (First In, First Out) method of inventory valuation? The most recently purchased items are sold first It is most suitable for perishable goods It assumes that the oldest items are sold first It is primarily used during periods of deflation None 35. Which of the following is not included in the cost of goods sold? Direct labor cost Direct material cost Selling expenses Manufacturing overheads None 36. What does the term "accrual accounting" refer to? Recognizing revenues when cash is received Recognizing revenues when earned, regardless of cash receipt Recognizing expenses only when paid Recognizing revenues and expenses when cash transactions occur None 37. Which of the following is true regarding job costing? It is used when products are mass-produced in large quantities It is used for customized, unique, or small batch production It does not track overhead costs It is used for non-manufacturing companies None 38. Which of the following is true about cost-volume-profit (CVP) analysis? It is used to analyze only fixed costs It assumes that variable costs are fixed in nature It helps determine the break-even point of a business It is used for preparing external financial reports None 39. What is the effect of an increase in accounts payable on the cash flow statement? It results in an increase in cash flow from investing activities It results in an increase in cash flow from operating activities It results in an increase in cash flow from financing activities It results in a decrease in cash flow from operating activities None 40. Which of the following is an example of an indirect expense? Wages of factory workers Direct material cost Rent for the factory building Depreciation on machinery used in production 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!
