Principles Of Financial Accounting Quiz!

10 Questions

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Principles Of Financial Accounting Quiz!

Financial Accounting means to analyze, summarize, and record financial transactions as well as to show an accurate picture of the financial affairs of the company. This quiz has been developed to test your knowledge of Financial Accounting Concepts. Take your time, it's a bit difficult. So, let's try out the quiz. All the best!


Questions and Answers
  • 1. 
    The stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because the stock is easily transferred.
    • A. 

      True

    • B. 

      False

  • 2. 
    An authorized stock is the total number of shares outstanding.
    • A. 

      True

    • B. 

      False

  • 3. 
    When all of the authorized shares have the same rights and characteristics, the stock is called:
    • A. 

      Preferred stock

    • B. 

      Common stock

    • C. 

      Par value stock

    • D. 

      Stated value stock

    • E. 

      No-par value stock

  • 4. 
    Owners of preferred stock often do not have:
    • A. 

      Ownership rights to the assets of the corporation

    • B. 

      Voting rights

    • C. 

      Preference to dividends

    • D. 

      The rights to sell their stock on the open market

    • E. 

      Preference to assets at liquidation

  • 5. 
    A company had a beginning balance in Retained Earnings of $43,000. It had net income of $6,000 and paid cash dividends of $5,625 in the current period. The ending balance in Retained Earnings equals:
    • A. 

      $108,625

    • B. 

      $(12,625)

    • C. 

      $11,375

    • D. 

      $43,375

    • E. 

      $(11,375)

  • 6. 
    The type or branch of accounting that generates reports for the use of external parties such as creditors, investors and government agencies is known as:
    • A. 

      Financial accounting

    • B. 

      Managerial accounting

    • C. 

      Tax accounting

    • D. 

      Forensic accounting

  • 7. 
    The branch of accounting that generates reports and information for the use of internal management is known as
    • A. 

      Tax accounting

    • B. 

      Managerial or Management Accounting

    • C. 

      Auditing

    • D. 

      International Accounting 

  • 8. 
    Which one of the following is not an external user of accounting information?
    • A. 

      Investor

    • B. 

      Creditor

    • C. 

      Manager

    • D. 

      Customer

  • 9. 
    Which of the following is correct?
    • A. 

      Owner’s Equity = Liabilities + Assets

    • B. 

      Liabilities = Assets + Owner’s Equity

    • C. 

      Assets = Liabilities + Owner’s Equity

    • D. 

      Assets = Owner’s Equity

  • 10. 
    Who is known as the father of accounting?
    • A. 

      Leonardo da Vinci

    • B. 

      Fra Luca Pacioli

    • C. 

      Al Khawarizmy

    • D. 

      Al Mazendarany