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. The double-entry system of accounting was introduced by: Adam Smith Luca Pacioli Karl Marx David Ricardo None 2. 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 3. Which of the following is NOT a characteristic of accounting? Reliability Consistency Predictability Comparability None 4. Which of the following accounts has a credit balance? Machinery Accounts Receivable Sales Prepaid Expenses None 5. Revenue is recognized when it is: Earned Collected Recorded Adjusted None 6. Which concept assumes that a business will continue its operations indefinitely? Matching Concept Going Concern Consistency Concept Conservatism None 7. The journal entry to record the purchase of goods on credit is: Debit Purchase; Credit Cash Debit Cash; Credit Purchase Debit Purchase; Credit Creditor Debit Creditor; Credit Purchase None 8. Depreciation is charged on: Current liabilities Fixed assets Current assets Intangible assets only None 9. The accounting standard related to cash flow statements is: AS 1 AS 3 AS 10 AS 13 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. The fundamental accounting equation is: Assets = Liabilities + Shareholders’ Equity Assets = Liabilities - Shareholders’ Equity Revenues = Expenses + Profit Liabilities = Assets - Shareholders’ Equity None 12. Outstanding expenses are classified as: Asset Liability Equity Income None 13. Which of the following is a capital receipt? Sale of goods Interest on investment Loan taken from a bank Commission received None 14. Prepaid expenses are classified as: Liability Asset Revenue Expense None 15. The trial balance is prepared to: Record transactions Summarize the financial position Check the arithmetical accuracy of accounts Record the closing entries None 16. The entry for depreciation is: Debit Depreciation; Credit Fixed Asset Debit Fixed Asset; Credit Depreciation Debit Depreciation; Credit Cash Debit Cash; Credit Depreciation None 17. If a liability decreases, the effect is: Increase in another liability Increase in an asset Decrease in equity Decrease in another liability None 18. Which of the following is an intangible asset? Land Building Goodwill Furniture None 19. An error that does not affect the agreement of the trial balance is: Error of omission Error of commission Compensating error All of the above None 20. Which of the following is NOT included in the cash flow statement? Depreciation Dividend Paid Cash Sales Accrued Income None 21. The goods given as charity should be credited to: Sales Account Charity Account Purchases Account Profit & Loss Account None 22. Purchase of machinery is recorded in: Purchase Account Machinery Account Capital Account Cash Account None 23. Goods withdrawn for personal use should be debited to: Drawings Account Purchases Account Sales Account Capital Account None 24. The reduction in the value of a fixed asset due to usage is called: Depletion Amortization Depreciation Capital Expenditure None 25. Provision for doubtful debts is shown in: Trading Account Profit & Loss Account Balance Sheet Trial Balance None 26. The accounting standard for inventories is: AS 2 AS 3 AS 6 AS 10 None 27. Which of the following is NOT a method of depreciation? Straight-line method Reducing balance method Inventory method Annuity method None 28. Profit and Loss Account is prepared to: Show financial position Ascertain net profit or loss Record day-to-day transactions Adjust the trial balance None 29. Which account is debited in case of bad debts? Bad Debts Account Debtor Account Profit & Loss Account Cash Account None 30. Outstanding rent is shown in: Trading Account Balance Sheet Profit & Loss Account Cash Flow Statement None 31. The Accounting Standard for fixed assets is: AS 6 AS 10 AS 16 AS 21 None 32. In accounting, goodwill is classified as: Fictitious Asset Current Asset Tangible Asset Intangible Asset None 33. Provision for tax is classified as: Current Liability Current Asset Reserve Contingent Liability None 34. Which of the following is NOT a book of original entry? Cash Book Sales Book Journal Ledger None 35. Rent received in advance is classified as: Current Liability Current Asset Fixed Asset Equity None 36. Drawings are deducted from: Revenue Expenses Capital Liabilities None 37. Suspense Account is used to: Record uncertain transactions Temporarily record differences in trial balance Adjust depreciation Record all reserves None 38. The term "deferred revenue expenditure" refers to: Future expenses Revenue earned but not received Capitalized expenses to be written off over time Prepaid expenses None 39. A bank overdraft is classified as: Asset Liability Expense Income None 40. The accrual basis of accounting means: Recording revenues when cash is received Recording expenses when cash is paid Recording revenues and expenses when incurred, regardless of cash flow None 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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