Exam (elaborations)

FAC1502 - Financial Accounting Principles, Concept - Papers MCQS with Correct Answers - A+ Grade

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FAC1502 - Financial Accounting Principles, Concept

The document titled "FAC1502 - Financial Accounting Principles, Concept Papers MCQS with Correct Answers for A+ Grade" is a comprehensive collection of multiple-choice questions (MCQs) along with their respective correct answers. These questions are designed to test the understanding and knowledge ...

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Uploaded on September 9, 2023
Number of pages 75
Written in 2023/2024
Type Exam (elaborations)
Contains Questions & answers

fac1502
fac1502 financial accounting principles concept
financial accounting principles mcqs with correct
financial accounting mcqs correct with answers

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Financial Accounting Principles
Multiple choice Questions (MCQs)
with Correct Answers

Question 1:
Which accounting principle states that expenses should be recognized in the same
period as the revenues to which they relate?

A) Matching Principle
B) Revenue Recognition Principle
C) Cost Principle
D) Going Concern Principle

Correct Answer: A) Matching Principle

Question 2:
Under the accrual basis of accounting, when is revenue recognized?

A) When cash is received
B) When the product is delivered or the service is performed
C) When an invoice is sent
D) When the customer places an order

Correct Answer: B) When the product is delivered or the service is performed

Question 3:
Which accounting concept assumes that a business will continue to operate
indefinitely?

,A) Consistency Concept
B) Going Concern Concept
C) Materiality Concept
D) Conservatism Concept

Correct Answer: B) Going Concern Concept

Question 4:
According to the cost principle, assets are recorded on the balance sheet at:

A) Historical Cost
B) Current Market Value
C) Estimated Future Value
D) Original Purchase Price

Correct Answer: A) Historical Cost

Question 5:
Which accounting principle states that accounting information should be verifiable
and independent parties can reach the same conclusion?

A) Reliability Principle
B) Relevance Principle
C) Comparability Principle
D) Consistency Principle

Correct Answer: A) Reliability Principle

Question 6:
What is the primary purpose of the trial balance?

,A) To verify the accuracy of the financial statements
B) To determine the net income of a company
C) To calculate depreciation expense
D) To record adjusting entries

Correct Answer: A) To verify the accuracy of the financial statements

Question 7:
Which financial statement represents a "snapshot" of a company's financial position
at a specific point in time?

A) Income Statement
B) Statement of Cash Flows
C) Balance Sheet
D) Statement of Retained Earnings

Correct Answer: C) Balance Sheet

Question 8:
When a company recognizes revenue before receiving cash, it results in:

A) An increase in accounts receivable and revenue
B) A decrease in accounts receivable and revenue
C) An increase in accounts payable and revenue
D) A decrease in accounts payable and revenue

Correct Answer: A) An increase in accounts receivable and revenue

Question 9:

, Which accounting principle requires that expenses and liabilities should be recorded
as soon as possible, but revenue and assets should only be recorded when it is
certain they will be received?

A) Consistency Principle
B) Materiality Principle
C) Conservatism Principle
D) Revenue Recognition Principle

Correct Answer: C) Conservatism Principle

Question 10:
When a company makes a sale on credit, how does it affect the accounting
equation?

A) Assets increase; Liabilities increase
B) Assets increase; Equity increases
C) Assets decrease; Liabilities increase
D) Assets decrease; Equity decreases

Correct Answer: A) Assets increase; Liabilities increase

Question 11:
Which financial statement shows the changes in equity over a specific period of
time?

A) Income Statement
B) Statement of Cash Flows
C) Statement of Changes in Equity
D) Balance Sheet

Correct Answer: C) Statement of Changes in Equity

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Exam (elaborations)

FAC1502 - Financial Accounting Principles, Concept - Papers MCQS with Correct Answers - A+ Grade

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