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MGT401 Financial Accounting II Quiz 1 Solution Spring 2014

1.Which one of the following is TRUE with respect to “FIFO” in inventory valuation?

First-In-First-Out

2. Which document contains the information about authorized share capital of a company?

Memorandum of Association

3.In which situation, company ABC and XYZ can be interconnected?

If they are associate to each other

If one is subsidiary of other

If one is parent of the other

All of the given options

4.Who sign the Memorandum of Association (MOA) of a company?

Managers of the company

5.Which activities by definition do not fulfill the recognition criteria according to IAS-38?

Development activities

Research activities

Both development and research activities

None of the given options

6.An inventory valuation system should include the cost of:

Both Carriage in & Carriage out

7.Which company is required to represent financial statements after every three, six and twelve months to SECP and shareholders by Companies Ordinance 1984?

Public Listed Company

8.Which organizations are required special approvals from SECP for their establishment?

Non Profit Organizations

9.Which of the following is recorded under Long Term Liabilities section of the Balance Sheet?

Provision for Taxation

10. Which of the following is INCORRECT with respect to Perpetual Inventory System?

Receipt of inventory is debited to Purchase Account

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