University Of Central Punjab

Financial Accounting
Assignment#4
Submitted to: Prof. Ghulam Mustafa

Submitted by: Faisal Bashir
L1F10MBAM0254
Bilal Qasim
L1F10MBAM2262

Section: P







Multiple Choices:

1) Many companies earned revenue in form of-------------
a) Cash
b) Debtors
c) Goods
d) None of them

2) Difference b/w cash flow and recognition of revenue and expenses are referred to
as------------
a) Accounting period
b) Deferrals
c) Accruals
d) Accruals and deferrals

3) Accounting cycle include---------- steps
a) Three
b) Five
c) Eight
d) Many

4) The fourth step of accounting cycle is------------
a) Trail balance
b) Adjusting entries
c) Unadjusted trail balance
d) Income statement

5) For the purpose of ------------company's life is dividing into accounting periods.
a) Fulfilling the companies ordinance
b) Differing the revenue and expenses
c) Measure income and preparing financial statements
d) Determining assets and liabilities

6) Adjusting entries relate to-----------years
a) Following
b) Previous
c) Next
d) Last and next

7) Adjusting entries are necessary to report the accurate amount of----------
a) Revenue and expenses
b) Assets and liabilities
c) Cash flow
d) None of them



8) There are-----------types of adjusting entries.
a) Four
b) Five
c) Six
d) Seven

9) An adjusting entry is allocation of a asset's cost from the balance sheet to income
statement as ---------------in deferral case
a) Expense
b) Revenue
c) Both
d) None of them

10) Expenses payable is an example of-------------- adjusting entry
a) Accrual
b) Deferral
c) Both
d) None of them

11) Adjusting entries affect on-------------
a) Income statement
b) Balance sheet
c) Cash flow
d) Income statement and balance sheet

12) In most adjusting entries there is indolent of-----------
a) Assets
b) Liabilities
c) Cash
d) Expenses

13) Converting assets to expenses shows that------------
a) Assets has been used
b) Expenses accrued
c) Revenue decrease
d) Liabilities increase

14) Expired assets becomes------------
a) An expenses
b) Revenue
c) Liability
d) None of them




15) What is deprecation?
a) Allocation of cost of assets to expenses
b) Decreasing in asset
c) Increasing in assets
d) None of them

16) Adjusting entry of depreciation is necessary because--------------
a) It is law
b) It is paid in advance
c) To show the actual value of asset
d) To check asset life

17) Depreciation is----------expense
a) Non cash
b) Estimated
c) Both above
d) None

18) Cost of supplies used is an example of----------
a) Realization principle
b) Matching principle
c) Cost principle
d) None

19) For the elimination of adjusting entries , charging of expenses instead of
recording asset is called---------concept
a) Materiality
b) Immateriality
c) Realization
d) Cost Principe

20) Mostly materiality concept can violets the---------principle
a) Matching
b) Realization
c) Cost
d) Accounting

ANSWERS

1) B 6 ) D 11) D 16) B
2) D 7) A 12) C 17) C
3) C 8) B 13) A 18) B
4) B 9) A 14) A 19) A
5) C 10) A 15) A 20) D