Financial Accounting MCQs

By: Prof. Dr. Fazal Rehman | Last updated: May 21, 2025

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1. : When reporting financial data, rules and guidelines that should be followed are called:



2. : The definite and factual basis for asset valuation comes from which principle?



3. : The principle that assets are purchased for use and not for resale is called:



4. : The principle that assumes a business will continue for a long time is:



5. : The accounting principle that states companies and owners should be accounted for separately is:



6. : Personal expenses paid by Mr. A from his own pocket would not be recorded due to:



7. : The principle that deals with the valuation and recording of assets at cost is:



8. : The principle used for recording an expense is:



9. : Failing to disclose an imminent bankruptcy would violate the:



10. : The assumption that business activities are divided into artificial time periods is:



11. : Assets are recorded at their original securing price according to the:



12. : Management concealing important financial information violates the:



13. : When estimating unearned revenues, which principle applies?



14. : Switching accounting principles every year would violate the:



15. : Recording expenses and revenues in the same period in which they occur is called:



16. : Which accounting concept requires that amounts of goods taken from inventory by the proprietor of a business are treated as drawings?



17. : Non-current assets are valued at cost minus accumulated depreciation, not at their saleable value. This follows the:



18. : Inventories are valued at the lower of cost and net realizable value, according to the:



19. : Which of the following statements about accounting procedures is not correct?



20. : Accounting is the language of business because:



21. : Which explains the debit and credit rules relating to recording revenues and expenses?



22. : Business life is divided into accounting periods to measure income. This is:



23. : Which of the following statements is associated with the accrual basis of accounting?



24. : An accounting system is used by a business to:



25. : A business event that can be measured in terms of money and must be recorded in books of accounts is called:



26. : Liabilities are which of the following?



27. : The gross inflow of economic benefits is called:



28. : The decreases in gross economic benefits of the business are called:



29. : Double entry bookkeeping was fathered by:



30. : One of the detailed rules used to record business transactions is:



 

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