Financial Accounting mcqs

5/5 - (1 vote)

If you’re looking to test your knowledge and understanding of financial accounting principles and concepts, you’ve come to the right place. Our MCQs cover a wide range of topics, including recording financial transactions, preparing financial statements, analyzing financial data, and more. Whether you’re a student studying accounting, a professional looking to refresh your knowledge, or just someone interested in learning more about financial accounting, our MCQs are a great way to assess your skills and improve your understanding. So, let’s get started and see how well you know financial accounting!

Financial Accounting MCQs

Q1. Which of the following is an example of a current asset?

A) Land

B) Buildings

C) Accounts receivable

D) Patents

C) Accounts receivable

Q2.Which of the following is an example of a contra account?

A) Accumulated depreciation

B) Accounts receivable

C) Common stock

D) Retained earnings

A) Accumulated depreciation

Q3. Which of the following is a liability?

A) Inventory

B) Prepaid expenses

C) Notes payable

D) Retained earnings

C) Notes payable

Q4. Which of the following is an example of an asset?

A) Accounts payable

B) Buildings

C) Salaries expense

D) Dividends paid

B) Buildings

Q5. Which of the following is not a financial statement?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Journal

D) Journal

Q6. Which financial statement shows a company’s revenues and expenses over a period of time?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

A) Income statement

Q7. Which financial statement shows a company’s assets, liabilities, and equity at a specific point in time?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

B) Balance sheet

Q8. Which of the following is not an asset?

A) Accounts payable

B) Inventory

C) Buildings

D) Cash

A) Accounts payable

Q9. Which of the following is not a liability?

A) Accounts payable

B) Notes payable

C) Salaries expense

D) Taxes payable

C) Salaries expense

Q10. Which accounting principle requires that a company record its expenses when they are incurred, regardless of when the payment is made?

A) Matching principle

B) Revenue recognition principle

C) Going concern principle

D) Time period principle

A) Matching principle

Q11. Which accounting principle requires that a company record revenue when it is earned, regardless of when the payment is received?

A) Matching principle

B) Revenue recognition principle

C) Going concern principle

D) Time period principle

B) Revenue recognition principle

Q12. Which financial statement shows a company’s cash inflows and outflows over a period of time?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

C) Cash flow statement

Q13. Which of the following is not a type of account?

A) Asset

B) Liability

C) Equity

D) Customer service

D) Customer service

Q14. What is the accounting equation?

A) Assets = Liabilities – Equity

B) Assets + Liabilities = Equity

C) Assets – Liabilities = Equity

D) Assets = Liabilities + Equity

D) Assets = Liabilities + Equity

Q15. Which accounting principle requires that a company use the same accounting methods and procedures from period to period?

A) Consistency principle

B) Materiality principle

C) Conservatism principle

D) Economic entity principle

A) Consistency principle

Q16. Which of the following is not an expense?

A) Rent expense

B) Utilities expense

C) Accounts receivable

D) Wages expense

C) Accounts receivable

Q17. Which financial statement shows the details of a company’s revenues and expenses over a period of time?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

A) Income statement

Q18. Which accounting principle requires that a company record the full amount of an expense in the period in which it is incurred, even if payment is not made until a later period?

A) Matching principle

B) Revenue recognition principle

C) Time period principle

D) Accruals principle

D) Accruals principle

Q19. Which of the following is an example of a long-term liability?

A) Accounts payable

B) Notes payable due within one year

C) Short-term loans

D) Bonds payable due in 10 years

D) Bonds payable due in 10 years

Q20. Which accounting principle requires that a company disclose all relevant information in the financial statements?

A) Materiality principle

B) Conservatism principle

C) Full disclosure principle

D) Economic entity principle

C) Full disclosure principle

Q21. Which of the following is an example of a contra-asset account?

A) Accumulated depreciation

B) Accounts receivable

C) Prepaid expenses

D) Inventory

A) Accumulated depreciation

22.Which financial statement shows the net changes in a company’s cash and cash equivalents over a period of time?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

C) Cash flow statement

Q23. Which accounting principle requires that a company record expenses and liabilities as soon as they are known, even if the amount is uncertain?

A) Materiality principle

B) Conservatism principle

C) Full disclosure principle

D) Matching principle

B) Conservatism principle

Q24. Which of the following is an example of a deferred revenue account?

A) Accounts payable

B) Wages payable

C) Unearned revenue

D) Interest payable

C) Unearned revenue

Q25. Which accounting principle requires that a company record revenues when they are earned, even if the payment has not been received?

A) Accruals principle

B) Revenue recognition principle

C) Matching principle

D) Time period principle

B) Revenue recognition principle

Q26. Which financial statement shows the changes in a company’s long-term debt over a period of time?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

D) Statement of changes in equity

Q27. If liabilities decrease, what happens to equity assuming assets stay the same?

A) Equity increases

B) Equity decreases

C) Equity stays the same

D) Cannot be determined

B) Equity decreases

Q28. Which of the following is an example of an intangible asset?

A) Land

B) Building

C) Inventory

D) Patent

D) Patent

Q29. If assets increase, what happens to equity assuming liabilities stay the same?

A) Equity increases

B) Equity decreases

C) Equity stays the same

D) Cannot be determined

A) Equity increases

Q30.Which of the following is an example of a prepaid expense?

a) Rent expense

b) Advertising expense

c) Interest expense

d) Insurance expense

d) Insurance expense

Q31. Which of the following is an example of an intangible asset?

a) Land

b) Buildings

c) Equipment

d) Patents

d) Patents

Q32. Which of the following is an example of a long-term liability?

a) Accounts payable

b) Salaries payable

c) Bank loan

d) Rent expense

c) Bank loan
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments