Financial accounting questions and answers. Financial Accounting Problems and Solutions 2022-11-07

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Financial accounting is a branch of accounting that focuses on the preparation and presentation of financial statements for decision makers, such as shareholders and creditors. It involves the recording, classification, and summarization of financial transactions, as well as the interpretation and communication of the resulting financial information.

Here are some common questions and answers about financial accounting:

  1. What is the purpose of financial accounting?

The primary purpose of financial accounting is to provide information that is useful in making business and economic decisions. This information is typically presented in the form of financial statements, which include the balance sheet, income statement, statement of cash flows, and statement of changes in equity. These statements provide an overview of a company's financial position, performance, and cash flows.

  1. What is the difference between financial accounting and managerial accounting?

Financial accounting is focused on the preparation and presentation of financial statements for external users, such as shareholders and creditors. Managerial accounting, on the other hand, is focused on providing information to internal users, such as managers and executives, to help them make informed decisions about the operations and performance of the company. While financial accounting is concerned with historical data, managerial accounting is more concerned with forward-looking information, such as budgets and projections.

  1. How is financial information recorded in financial accounting?

Financial information is typically recorded in financial accounting using a double-entry accounting system. This means that every financial transaction is recorded in at least two accounts: a debit account and a credit account. The debits and credits must balance in order for the financial statements to be accurate.

  1. How are financial statements prepared in financial accounting?

Financial statements are prepared using the information recorded in a company's accounting records. The process typically involves classifying and summarizing the transactions, calculating financial ratios and other metrics, and presenting the information in a clear and concise format. Financial statements are typically prepared on a regular basis, such as monthly or quarterly, and are presented in a standardized format that follows generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS).

  1. What is the role of a financial accountant?

A financial accountant is responsible for preparing and presenting financial information in a clear and accurate manner. This includes recording financial transactions, reconciling bank statements, preparing financial statements, and assisting with the preparation of budgets and forecasts. Financial accountants also play a key role in ensuring that a company's financial reporting is in compliance with GAAP or IFRS.

In summary, financial accounting is a critical function that helps businesses and other organizations understand their financial performance and position. It involves the recording, classification, and presentation of financial information, and is essential for making informed decisions about the operations and future of the organization.

300+ TOP Financial Accounting MCQs and Answers Pdf 2022

financial accounting questions and answers

Which of the following is not a business transaction? Economic life of an enterprise is split into the periodic interval as per ——- concept a. X endorsed the bill to Z. A Assets increased by Rs. Depreciation account is closed by a. A Solving tax disputes with tax authorities B Systematic recording of transactions C Ascertaining profit or loss D Ascertainment of financial position Answer: Solving tax disputes with tax authorities 23 An asset was purchased for Rs.


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Financial Accounting Problems and Solutions

financial accounting questions and answers

What is the declining balance depreciation method? An asset is purchased for Rs. But the trader recorded in his books for Rs. Undervaluation of liabilities 8. Institutions like insurance companies, pension funds, corporations, nonprofit organizations, and educational institutions, as mentioned above, may invest alongside private investors, either directly through investment contracts or, more frequently, through collective investment vehicles like mutual funds, exchange-traded funds, or REITs. Transferring to asset account d. Increasing every year c.

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100+ financial accounting interview questions

financial accounting questions and answers

Which processes are involved in using a double-entry system and when should it be avoided? The amount realized on the sale of an asset b. None of the above 11. Opening capital 9,000; closing capital 16,500; drawings during the year 2,600. Financial Accounting Multiple Choice Questions 1. A consistency B Conservatism C Realisation D Materiality Answer: Materiality 50 Business enterprise is separate from its owner according to……concept.

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Financial Accounting Quiz Questions and Answers

financial accounting questions and answers

The assets side of balance sheet d. Financial position of the unit over a period. At the end of 31st December 2009, the market value of such goods were Rs. Your candidates may describe many financial accounting skills they need to improve, such as time management or staying organized. Creating genera reserve b. They may also mention that they could calculate the percentage of bad debt by dividing the bad debt amount by the total accounts receivable and multiplying this by 100. An entry with more than one debit or credit is known as a.


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(PDF) Financial Accounting in Practice: Practical Questions and Answers for Students

financial accounting questions and answers

External users of accounting information is — a Owners b Management c Employee d Bank Answer— a Bank Question 27. How would you estimate and calculate bad debt? You can also use an Hire the best candidate with the right set of financial accounting interview questions The easiest method to evaluate the skills of your candidates for a financial accounting role is to build a comprehensive skills assessment and interview your applicants. Specific donation received should be shown on a. Candidates may mention many financial accounting skills when answering this question. Position of assets and liabilities over a period of time. For example, if your applicants have no experience with the financial accounting software your organization is using, this is the perfect time to ask how they would tackle this and learn how to use it. What are the most important steps when analyzing a balance sheet? A Real B Personal C Nominal D None Answer: Real 60 As per the Matching concept, Revenue —? In sinking fund method of depreciation, the amount of deprecation a.

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50 Financial Accounting Questions and Answers Multiple Choice

financial accounting questions and answers

Perhaps more importantly, correction of answers is entirely objective and comparatively easy. Liability- side of the balance-sheet comprises: a. This style of examination question has recently been adopted by the Institute of Chartered Accountants in Ireland and is also used in third level institutions. Financial position of the unit as on a particular date. It may also include purchasing insurance. Reduction in capital c. Explain what Microsoft Accounting Professional is.

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financial accounting questions and answers

For example, financial managers ensure that the company: 1 can service both maturing short-term debt repayments and scheduled long-term debt payments; and 2 has enough cash flow for current and upcoming operational needs. Which of the following account should be credited for the goods worth 15,000 withdrawn for personal use? Purchases book records- a All cash purchases b All credit purchases. The declining balance depreciation method involves reducing tax exposure by writing off the depreciation costs of an asset. The topics covered in each chapter are logically sequenced so that as the student progresses through the chapter they build up their knowledge and skills in relation to that topic. Only one answer is strictly correct. A Accrual B Going concern C Cost D Money measurement Answer: Accrual 47 If wages are paid for construction of business premises……. These lengthy strategic time frames often last five years or longer.

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financial accounting questions and answers

Debit and Credit c. A nticipate no profits and provide for all possible losses. Development finance, which is related, refers to non-commercial investments made by a quasi governmental entity in initiatives for economic development that would not otherwise be able to get financing. As per the business entity assumption, the business is different from the- a owners b banker c government d Assets Answer— a owners Question 6. Remains constant every year d. Income side of income and expenditure account b. This is essence of which of the following accounting principles- a Dual Aspect Principle b Materiality Principle c Consistency Principle d Conservatism Principl Answer— d Conservatism Principle Question 14.


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