Accounting - Study Mode

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[#1756] When existing companies take over the business of another company or companies, it is known as

(A) Amalgamation

(B) Internal reconstruction

(C) External reconstruction

(D) Absorption

Correct Answer

(D) Absorption

[#1757] The principle that "an accountant should not anticipate profits, but must provide for all losses" is known as:

(A) The realisation concept

(B) The consistency concept

(C) The conservatism concept

(D) The materiality concept

Correct Answer

(C) The conservatism concept

[#1758] Match the following. List-I List-II a. Materiality concept 1. The same accounting method used by a firm from one period to another b. Going concern concept 2. An inappropriate assumption of a firm being bankrupT c. Historical cost concept 3. A normal basis used for accounting assets d. Consistency concept 4. Relates to the importance of an item or event

(A) a-4, b-2, c-3, d-1

(B) a-1, b-2, c-3, d-4

(C) a-2, b-3, c-4, d-1

(D) a-4, b-2, c-1, d-3

Correct Answer

(C) a-2, b-3, c-4, d-1

[#1759] When closing stock is included in the trial balance. It is to be recorded only in?

(A) Trading account

(B) Profit & loss account

(C) Profit & loss appropriation account

(D) Sales account

Correct Answer

Trading account

[#1760] Average profit of a firm is Rs. 9,000. Firm's capital is Rs. 60,000 and normal return on business is expected at 10%. The goodwill by capitalisation method will be:

(A) Rs. 30,000

(B) Rs. 20,000

(C) Rs. 25,000

(D) Rs. 40,000

Correct Answer

(A) Rs. 30,000