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. 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 7. The double-entry system of accounting was introduced by: Adam Smith Luca Pacioli Karl Marx David Ricardo None 8. Which of the following is NOT a characteristic of accounting? Reliability Consistency Predictability Comparability None 9. Which of the following is NOT a type of error in accounting? Error of omission Error of commission Error of misappropriation Error of principle None 10. If a company uses the FIFO method of inventory valuation, the inventory is valued at: Latest cost Earliest cost Average cost Market value None 11. Net profit is calculated in which account? Trading Account Balance Sheet Profit & Loss Account Journal None 12. Income received in advance is classified as: Current Liability Current Asset Fixed Asset Intangible Asset None 13. Wages paid for installation of machinery is debited to: Wages Account Installation Expense Account Machinery Account Profit & Loss Account None 14. Which accounting concept requires expenses to match revenues in the same period? Matching Concept Consistency Concept Conservatism Concept Going Concern Concept None 15. Which of the following errors is revealed by a trial balance? Compensating errors Errors of omission Errors of principle Errors in balancing None 16. Which of the following accounts is NOT a nominal account? Salary Account Purchases Account Rent Account Debtors Account None 17. Accounting standards in India are issued by: RBI ICAI SEBI ICMAI None 18. Provision for bad debts is made according to which concept? Accrual Concept Prudence Concept Matching Concept Consistency Concept None 19. The balance in the petty cash book is classified as: Current Liability Expense Current Asset Contingent Liability None 20. In case of a fire, the loss of stock is debited to: Stock Account Trading Account Loss by Fire Account Profit & Loss Account None 21. The term "working capital" means: Fixed Assets - Current Liabilities Current Assets - Current Liabilities Total Assets - Total Liabilities Cash in hand + Cash at bank None 22. The main objective of the trial balance is to: Identify missing entries Ensure ledger accuracy Prepare financial statements Record transactions None 23. A bank overdraft is shown in the cash flow statement under: Operating Activities Investing Activities Financing Activities Not shown in the cash flow statement None 24. Which accounting principle requires that expenses should not be overstated or understated? Conservatism Accrual Materiality Full Disclosure None 25. Which of the following is NOT part of financial statements? Balance Sheet Cash Flow Statement Tax Computation Statement Profit & Loss Account None 26. Outstanding expenses are credited to: Expense Account Outstanding Expense Account Profit & Loss Account Cash Account None 27. Which method of depreciation results in equal depreciation every year? Written Down Value Method Sum of Years’ Digits Method Straight-Line Method Declining Balance Method None 28. A contingent liability is disclosed in: Notes to accounts Profit & Loss Account Cash Flow Statement Ledger Accounts None 29. Which of the following is an example of a real account? Rent Account Cash Account Commission Account Interest Account None 30. AS 1 deals with: Cash Flow Statements Disclosure of Accounting Policies Revenue Recognition Inventories None 31. Revenue is considered realized when: Goods are produced Goods are sold Goods are paid for Goods are ordered None 32. Which of the following is NOT an asset? Prepaid Rent Accounts Payable Inventory Machinery None 33. In the absence of a partnership deed, partners share profits and losses: Equally In their capital ratio According to their salary Based on mutual agreement None 34. Revenue expenditures are shown in the: Balance Sheet Cash Flow Statement Trading or Profit & Loss Account None of the above None 35. Carriage inward is shown in the: Trading Account (debit side) Trading Account (credit side) Profit & Loss Account (debit side) Profit & Loss Account (credit side) None 36. A credit note is issued when: Goods are sold on credit Goods are returned by the customer Goods are purchased on credit None of the above None 37. The profit-sharing ratio in a partnership is decided by: The balance sheet The partnership deed The trial balance The capital account None 38. The term "written off" is used for: Capital Receipts Revenue Receipts Bad Debts Reserves None 39. What is the treatment of provision for depreciation in financial statements? Added to fixed assets Deducted from fixed assets Shown as a liability Shown as income None 40. Partnership Accounts 11. Goodwill is valued when: A new partner is admitted A partner retires A partnership is dissolved All of the above 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. 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