Financial Accounting MCQ Quiz in বাংলা - Objective Question with Answer for Financial Accounting - বিনামূল্যে ডাউনলোড করুন [PDF]
Last updated on Apr 3, 2025
Latest Financial Accounting MCQ Objective Questions
Top Financial Accounting MCQ Objective Questions
Financial Accounting Question 1:
Phoenix Co. incurred the following costs related to a new product development project during the year ended 31 December 20X6:
- Initial research costs (January - March): $80,000 (no certainty of success).
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Development costs - Phase A (April - June): $120,000. This phase achieved technical feasibility and commercial viability was considered probable.
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Development costs - Phase B (July - September): $90,000. Further refinement and testing of the product.
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Marketing and advertising costs for product launch (October - December): $50,000.
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Training staff to operate the new production machinery (November): $10,000.
The new product is expected to be launched and commence commercial production on 1 February 20X7. Phoenix Co. uses the straight-line method for amortisation.
What is the total amount that should be expensed to the statement of profit or loss for the year ended 31 December 20X6, in accordance with IAS 38 Intangible Assets?
Answer (Detailed Solution Below)
Financial Accounting Question 1 Detailed Solution
The correct option is option 1
Additional Information:
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Initial research costs ($80,000): These are research costs as there was "no certainty of success" and are expensed as incurred.
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Development costs - Phase A ($120,000): These costs are capitalised from the point at which the criteria for capitalisation were met (i.e., technical feasibility and commercial viability became probable). So, this amount is capitalised.
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Development costs - Phase B ($90,000): These are further development costs incurred after the capitalisation criteria were met, and they contribute to bringing the asset to its intended use. So, this amount is capitalised.
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Marketing and advertising costs for product launch ($50,000): These are selling costs and cannot be capitalised as part of the intangible asset. They are expensed as incurred.
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Training staff to operate the new production machinery ($10,000): These are training costs and cannot be capitalised as part of the intangible asset. They are expensed as incurred.
Total expenses for 20X6 = Research costs + Marketing and advertising costs + Training costs = $80,000 + $50,000 + $10,000 = $140,000.
No amortisation is charged for 20X6 because commercial production has not yet commenced (it begins on 1 February 20X7).
Short Explanation of Incorrect Options:
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Option 2. $200,000: Incorrect. This option likely includes all development costs as expensed, which is incorrect as they meet capitalisation criteria from Phase A onwards.
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Option 3. $180,000: Incorrect. This might include research costs and part of the development costs, or misclassify marketing/training costs.
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Option 4. $80,000: Incorrect. This only includes the initial research costs, omitting other costs that should also be expensed (marketing and training).
Financial Accounting Question 2:
Which of the following scenarios describes an intangible asset that would NOT be amortised according to IAS 38 Intangible Assets?
Answer (Detailed Solution Below)
Financial Accounting Question 2 Detailed Solution
The correct option is option 3
Additional Information:
A brand name acquired as part of a business combination, which the company intends to maintain indefinitely through marketing efforts, and historical data supports its perpetual existence.
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According to IAS 38, an intangible asset with an indefinite useful life is not amortised but is subject to an annual impairment review. An intangible asset has an indefinite useful life when there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. A brand name, if actively maintained and supported by evidence of its perpetual existence, can be considered to have an indefinite useful life.
Short Explanation of Incorrect Options:
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Option 1. A patent for a new pharmaceutical drug, valid for 20 years, where the company plans to sell the drug for the full patent life. Incorrect. A patent has a finite legal life (20 years) and the company intends to use it for that period, indicating a finite useful life. Therefore, it would be amortised over 20 years or its economic life, whichever is shorter.
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Option 2. Development costs capitalised for a new software product, expected to generate revenue for 7 years, after which a new version will be released. Incorrect. The software product has a clearly defined period (7 years) over which it is expected to generate benefits, implying a finite useful life. Thus, the capitalised development costs would be amortised over 7 years.
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Option 4. A license to operate a specific frequency for a telecommunications company, granted for a fixed term of 10 years, with no renewal option. Incorrect. The license has a finite contractual and useful life of 10 years. It would be amortised over this 10-year period.
Financial Accounting Question 3:
Which body is responsible for issuing IFRS Standards?
Answer (Detailed Solution Below)
Financial Accounting Question 3 Detailed Solution
The correct option is option 3
Additional Information:
- The Board is responsible for issuing IFRS Standards.
Financial Accounting Question 4:
A company is preparing its statement of cash flows for the year ended 31 December 20X2.
Relevant extracts from the accounts are as follows.
| Statement of profit or loss | $ |
| Depreciation | 15,000 |
| Profit on sale of non-current assets | 40,000 |
| Statement of financial position | 20X2 | 20X1 |
| $ | $ | |
| Plant and machinery - cost | 185,000 | 250,000 |
| Plant and machinery - depreciation | 45,000 | 50,000 |
Plant and machinery additions during the year were $35,000. What is the cash flow arising from the sale of non-current assets?
Answer (Detailed Solution Below)
Financial Accounting Question 4 Detailed Solution
The correct option is option 3
Additional Information:
| $ | |
| Sale proceeds (balancing figure) | 120,000 |
| Carrying amount (see below) | 80,000 |
| Profit on sale | 40,000 |
| Carrying amount at 31 December 20X1 (250,000 - 50,000) | 200,000 |
| Additions | 35,000 |
| 235,000 | |
| Carrying amount of disposals (balancing figure) | (80,000) |
| Depreciation | (15,000) |
| Carrying amount at 31 December 20X2 (185,000 -45,000) | 140,000 |
Financial Accounting Question 5:
Your organisation has received a statement of account from one of its suppliers, showing an outstanding balance due to them of $1,350. On comparison with your ledger account, the following is determined:
- Your ledger account shows a credit balance of $260.
- The supplier has disallowed a settlement discount of $80 due to late payment of an invoice.
- The supplier has not yet allowed for goods returned at the end of the period of $270.
- Cash in transit of $830 has not been received by the supplier.
Following consideration of these items, what is the unreconciled difference between the two records?
Answer (Detailed Solution Below)
Financial Accounting Question 5 Detailed Solution
The correct option is option 3
Addiitonal Information:
| $ | |
| Ledger balance | 260 |
| Add back: disallowed discount | 80 |
| returns goods | 270 |
| cash in transit | 830 |
| Total balance | 1,440 |
| As stated by the supplier | 1,350 |
| Unreconciled difference | 90 |
Financial Accounting Question 6:
A machine was purchased for $100,000 on 1 January 20X1 and was expected to have a useful life of 10 years. After three years, management revised their expectation of the remaining useful life to 20 years. The business depreciates machines using the straight line method.
What is the carrying amount of the machine at 31 December 20X5?
Answer (Detailed Solution Below)
Financial Accounting Question 6 Detailed Solution
The correct option is option 1
Additional Information:
- Carrying amount at the end of year 3: 100,000 - (100,000 x 3/10) = $70,000
- Carrying amount at the end of year 5: 70,000 - (70,000 x 2/20) = $63,000
Financial Accounting Question 7:
Which of the following represents an error of original entry?
Answer (Detailed Solution Below)
Financial Accounting Question 7 Detailed Solution
The correct option is option 1
Addiitonal Information:
- The second and third options are errors of principle, the fourth option is an error of omission.
Financial Accounting Question 8:
A company's quick ratio has increased from 0.9:1 at 31 December 20X1 to 1.5:1 at 31 December 20X2. Which of the following events could explain this increase?
Answer (Detailed Solution Below)
Financial Accounting Question 8 Detailed Solution
The correct option is option 3
Additional Information:
- Quick ratio = current assets excluding inventories/current liabilities.
- The quick ratio does not include inventories or long term loans, so the first and second options will have no effect. An increase in payables would reduce the quick ratio.
Financial Accounting Question 9:
Financial analysts calculate ratios from the published financial statements of large companies.
Which one of the following reasons is UNLIKELY to be a reason why they calculate and analyse financial ratios?
Answer (Detailed Solution Below)
Financial Accounting Question 9 Detailed Solution
The correct option is option 2
Additional Information:
- Ratios can be used to analyse financial performance, and to make comparisons of performance over time and between different businesses in the same industry, but they cannot usually provide a reliable indicator of insolvency, especially if they are prepared only once a year.
Financial Accounting Question 10:
Prince Co acquired 100% of the $100,000 ordinary share capital of Khushi Co for $1,200,000 on 1 January 20X5 when the retained earnings of Khushi Co were $550,000 and the balance on the revaluation surplus was $150,000. At the date of acquisition, the fair value of plant held by Khushi Co was $80,000 higher than its carrying amount.
What is the goodwill arising on the acquisition of Khushi Co?
Answer (Detailed Solution Below)
Financial Accounting Question 10 Detailed Solution
The correct option is option 1
Additional Information:
| $ | $ | |
| Fair value of consideration | 1,200,000 | |
| Net assets at acquisition as represented by | ||
| Share capital | 100,000 | |
| Retained earnings | 550,000 | |
| Revaluation surplus | 150,000 | |
| Fair value adjustment | 80,000 | |
| (880,000) | ||
| Goodwill | 320,000 |