Which of the following is not classified as inventory in the financial statements?

Related Mcqs:

1. Budgeted sales for the next year is 5,00,000 units. Desired ending finished goods inventory is 1,50,000 units and equivalent units in ending W-I-P inventory is 60,000 units. The opening finished goods inventory for the next year is 80,000 units, with 50,000 equivalent units in beginning W-I-P inventory How many equivalent units should be produced?

   A. 5,80,000
   B. 5,50,000
   C. 5,00,000
   D. 5,75,000

2. The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by

   A. 17,000 (overstated.
   B. 12,000 (understated.
   C. 7,000 (overstated.
   D. 7,000 (understated.

3. Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be?

   A. Written down to zero or its scrap value
   B. Shown in the Balance Sheet at its replacement cost
   C. Shown in the Balance Sheet at cost, but classified as a non-current asset
   D. Carried in the accounting records at cost until it is sold

4. Riaz holds an average inventory of 36,000(CP) with an inventory turnover of 5 times. If the firm makes a gross profit of 25% on sales, find the total sales of the company.

   A. 2,40,000
   B. 2,10,000
   C. 2,00,000
   D. 1,80,000

5. Financial accounting provides financial information to all of the following external users except:

   A. Government agencies
   B. investors
   C. Creditors
   D. Managers

6. Which of the following is the external user of financial statements?

   A. Manager of the business
   B. CEO of the business
   C. Creditor of the business
   D. Controller of the business

7. Which of the following is the internal user of financial statements?

   A. Creditor of the business
   B. Government agency
   C. Shareholder of the business
   D. Manager of the business

8. For which step of accounting process the accountants of business entity prepare financial statements?

   A. Identification of economic event
   B. Communication of financial information
   C. Recording financial information
   D. Making decisions about business

9. Financial statements differ from management account because

   A. They are mainly prepared for external users of financial information
   B. They are more complex and hard to prepare
   C. The are the summary of accounting data
   D. The are prepared on basis of actual concept

10. During the year 2011-2012, the value of closing inventory was overstated by 25,000. Which of the following is true?

    A. The cost of goods sold was overstated during 2011-2012 and income will be understated during 2012-2013
    B. The income was overstated during 2011-12 and closing inventory will be overstated during 2012-2013
    C. The retained earnings was overstated during 2011-2012 and retained earnings will be understated during 2012-2013
    D. The cost of goods sold was understated during 2011-2012 but retained earnings will not be affected during 2012-2013