Question 1:
Non-convertible debenture refer to:
A.
owner's capital
B.
loan capital
C.
short-term fund
D.
None of these
Answer: _________
Question 2:
X Ltd. purchased 70% of the shares of Y Ltd. at a price on 1,00,000. Share capital of Y Ltd. was of Rs. 70,000 and its accumulated profits amounted to Rs. 90,000. What would be the amount of Minority Interest in the consolidated balance sheet?
A.
Rs. 25,000
B.
Rs. 70,000
C.
Rs. 1,00,000
D.
Rs. 40,000
Answer: _________
Question 3:
If there is a decrease of Rs. 6,000 in the value of creditors, the journal entry will be
A.
Revaluation A/c dr. 6,000 to creditors A/c 6,000
B.
Profit and loss A/c dr. 6,000 to creditors A/c 6,000
C.
Creditors A/c dr. 6,000 to revaluation A/c 6,000
D.
No Entry
Answer: _________
Question 4:
In the absence of an agreement retiring partners share in the firm will be purchase by the remaining partners in the
A.
Capital ratio
B.
Profit sharing ratio
C.
Equal ratio
D.
None of the above
Answer: _________
Question 5:
Accounting for price level changes is related to
A.
Cost Accounting
B.
Financial Accounting
C.
Management Accounting
D.
Inflation Accounting
Answer: _________
Question 6:
A trader does not keep a complete set of books and provides the following information- He started business on 1 st June, 2004 with Rs. 10,000. He made withdrawals at the rate of Rs. 500 per month during the last 6 months. During the year, a further capital of Rs. 2,000 was invested. His total assets as on 31 st December, 2004 were Rs. 23,700, his creditors were Rs. 3,000 on the same date and unpaid expenses were Rs. 500 then his net profit would be-
A.
Rs. 11,200
B.
Rs. 11,500
C.
Rs. 13,000
D.
Rs. 14,200
Answer: _________
Question 7:
A and B are partners in the ratio of 2 : 1. They admit C for $${frac{1}{4}^{{ ext{th}}}}$$ share. C brings Rs. 3,000 for his share of goodwill. The total value of the goodwill of the firm is:
A.
Rs. 3,000
B.
Rs. 9,000
C.
Rs. 12,000
D.
Rs. 15,000
Answer: _________
Question 8:
Recieved Rs. 5,000 from Ram wrongly posted to his account as Rs. 50,000. This is error of
A.
Error of commission
B.
Error of principle
C.
Compensating error
D.
None of the above
Answer: _________
Question 9:
Schedule VI given in Companies Act relates to:
A.
Specimen of Balance Sheet
B.
Memorandum of Association
C.
Prospectus
D.
Articles of Association
Answer: _________
Question 10:
The interest on the Capital Accounts of partners is credited to
A.
Interest A/c
B.
Partners Capital A/c
C.
Profit and Loss A/c
D.
Profit and Loss Appropriation A/c
Answer: _________
Question 11:
Concept of Realisation implies:
A.
When cash is received from debtors
B.
When goods are delivered to customer
C.
When order is received
D.
None of these
Answer: _________
Question 12:
Balance sheet is a:
A.
Statement
B.
Account
C.
Ledger
D.
Book
Answer: _________
Question 13:
An entry of Rs. 500 was wrongly posted to wages account instead of machinery account, as wages are to be capitalised. It is an error of:
A.
Commission
B.
Omission
C.
Principle
D.
Clerical error
Answer: _________
Question 14:
To test the liquidity of a concern, which of the following ratios are useful? I. Acid test ratio II. Capital turnover ratio III. Bad debts to sales ratio IV. Inventory turnover ratio Select the correct answer using the options given below:
A.
I and III
B.
I and IV
C.
II and IV
D.
II and III
Answer: _________
Question 15:
Preference shareholders are . . . . . . . . of the company:
A.
creditors
B.
owners
C.
customers
D.
borrowers
Answer: _________
Question 16:
From the following find out the correct equation: I. A represents opening stock II. B represents purchases III. C represents closing stock IV. D represents cost of goods sold
A.
A - C = D - B
B.
A + B = D - C
C.
D - A = B + C
D.
None of these
Answer: _________
Question 17:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I List-II a. Income measurement 1. Accrues to owner's equity b. Expense recognition 2. Revenue recognition c. Basis for realisation in accounting 3. Matching revenues d. Recognised revenue 4. Accounting period
A.
a-3, b-4, c-2, d-1
B.
a-3, b-4, c-1, d-2
C.
a-2, b-3, c-4, d-1
D.
a-2, b-3, c-1, d-4
Answer: _________
Question 18:
Sales of old material must be shown on the credit side of . . . . . . . .
A.
cash book
B.
income and expenditure account
C.
balance sheet
D.
trading account
Answer: _________
Question 19:
In triple column cash book, cash withdrawn from bank for office use will appear in:
A.
debit side of the cash book only
B.
both sides of the cash book
C.
credit side of the cash book only
D.
credit side of the bank account
Answer: _________
Question 20:
The process of transferring the credit and debit items form a journal to their respective accounts in the ledger is termed as . . . . . . . .
A.
Balancing
B.
Invoicing
C.
Double entry
D.
Posting
Answer: _________
Question 21:
Consider the following statements. 1. Realisation account and revaluation account are the same. 2. While preparing cash account or bank account (dissolution), the debit and credit side are same. 3. Items appearing in the balance sheet are posted at one place only. Which of the statements given above is/ are correct?
A.
Only 1
B.
Both 2 and 3
C.
All of the above
D.
None of the above
Answer: _________
Question 22:
Outstanding expenses are shown in balance sheet
A.
In trading account
B.
In profit and loss account
C.
Liability side of balance sheet
D.
Asset side of balance sheet
Answer: _________
Question 23:
Which of the following statements is true?
A.
Fixed capital account will always have a credit balance
B.
Current account can have a positive or negative balance
C.
Fluctuating capital account can have a positive or negative balance
D.
All of the above
Answer: _________
Question 24:
Security premium cannot be used for what purpose?
A.
Giving bonus shares to members
B.
Writing-off preliminary expenses of company
C.
Writing-off discount on issue of debenture
D.
Distribution of dividend to members
Answer: _________
Question 25:
P/V ratio =
A.
$$frac{{{ ext{S}} - { ext{V}}}}{{ ext{S}}}$$
B.
$$frac{{{ ext{S}} - { ext{V}}}}{{ ext{S}}} imes {{ ext{F}}_{ ext{c}}}$$
C.
$$frac{{{ ext{S}} - { ext{V}}}}{{ ext{S}}} imes 100$$
D.
$$frac{{{ ext{Profit}}}}{{{ ext{Sales}}}} imes 100$$
Answer: _________
Question 26:
A share of Rs. 10 is issue with Rs. 1 premium, on which Rs. 9 (including premium) is called-up and Rs. 7 (including premium) is paid up is forfeited. Share capital account will be debited by
A.
Rs. 8
B.
Rs. 9
C.
Rs. 7
D.
Rs. 10
Answer: _________
Question 27:
The 'Debenture Redemption Fund' of a company stood at Rs. 16,000 represented by Rs. 20,000 (nominal) investment. The company in order to redeem debentures of Rs. 10,000 at 1% premium sold Rs. 12000 (nominal) investments of Rs. 100 each at Rs. 84 each for the purpose of redeeming Rs. 10,000 debentures at a premium of 1%. After the redemption of debentures, the balance in the Debenture Redemption Fund a/c will be:
A.
Rs. 5,690
B.
Rs. 6,270
C.
Rs. 6,380
D.
Rs. 7,220
Answer: _________
Question 28:
If bonus shares are issued out of pre-acquisition profit, it will have
A.
Direct effect on the consolidated balance sheet
B.
No effect on the consolidated balance sheet
C.
No effect on net profit
D.
None of the above
Answer: _________
Question 29:
What is interest on drawing to the business?
A.
Preliminary expense
B.
Capital profit
C.
Profit
D.
Loss
Answer: _________
Question 30:
What is the meaning of outstanding rent?
A.
Rent is paid in cash
B.
Rent is received
C.
Rent is due, but payment has not beent made
D.
Rent has been paid in advance
Answer: _________
Question 31:
R and S are partners sharing profits in the ratio of 5 : 3. T joins the firm as a new partner. R given $${frac{1}{4}^{{ ext{th}}}}$$ of his share and S given $${frac{2}{5}^{{ ext{th}}}}$$ of his share to new partner. New profit sharing ratio of R, S and T will be
A.
15 : 01 : 26
B.
75 : 36 : 49
C.
25 : 15 : 26
D.
20 : 9 : 11
Answer: _________
Question 32:
According to AS-3 Cash Flow Statement is mandatory to
A.
all enterprises
B.
companies listed on stock exchange
C.
enterprises having turnover exceeding Rs. 50 crores
D.
both B and C
Answer: _________
Question 33:
Who among the following is a bear operator?
A.
A stock broker who sells shares now and buys the same shares later
B.
An investor who expects the price of a security or that of the whole securities market to rise
C.
An investor who sells securities anticipation of being able to repurchase them later at a lower price
D.
A broker who indulges in rigging of share prices
Answer: _________
Question 34:
Charging a period for the proportionate cost of an Intangible asset is termed as:
A.
depreciation
B.
diminution
C.
amortisation
D.
expiration
Answer: _________
Question 35:
Donation received for a specific purpose:
A.
should be credited to a separate account and shown on the liabilities side of the balance sheet
B.
should be credited to income and expenditure account
C.
should not be recorded at all
D.
should be debited to income and expenditure account
Answer: _________
Question 36:
One of the major difficulties in improving the industrial efficiency in enterprises is
A.
low investment
B.
low productivity
C.
ineffective marketing
D.
poor inventory control
Answer: _________
Question 37:
The discount on re-issue of forfeited shares is debited to . . . . . . . . a/c.
A.
share capital
B.
shares forfeited
C.
bank
D.
discount on issue of shares
Answer: _________
Question 38:
The excess of current assets over current liabilities is called . . . . . . . .
A.
Net tangible worth
B.
Networth
C.
Gross working capital
D.
Net working capital
Answer: _________
Question 39:
Companies may issue debentures as security against loans taken from banks/financial institutions.
A.
principal
B.
primary
C.
collateral
D.
chargeable
Answer: _________
Question 40:
Which of the following is an accounting equation?
A.
Assets - Capital - Liabilities
B.
Capital - Assets - Liabilities
C.
Assets - Liabilities - Capital
D.
Liabilities - Assets - Capital
Answer: _________
Question 41:
Dividend per share in a company Rs. 2, earning per share is Rs. 5 and the market value of the share is Rs. 25. What will be its yield?
A.
20%
B.
12.5%
C.
8%
D.
25%
Answer: _________
Question 42:
If the current ratio is 2 : 1 and working capital is Rs. 60,000, what is the value of the Current Assets?
A.
Rs. 60,000
B.
Rs. 1,00,000
C.
Rs. 1,20,000
D.
Rs. 1,80,000
Answer: _________
Question 43:
If current ratio is 1.75 : 1, working capital Rs. 1,12,500 and stock Rs. 82,500, then Acid test ratio will be:
A.
1.2 : 1
B.
2.9 : 1
C.
2.2 : 1
D.
1.7 : 1
Answer: _________
Question 44:
What is the generally accepted basis of valuation of fixed assets:
A.
Historical cost less depreciation
B.
Replacement cost
C.
Net realisable value
D.
Historical cost
Answer: _________
Question 45:
In which order should the following items be shown in the Balance Sheet of a company: 1. Fixed Assets 2. Share held as permanent investments 3. Current Assets 4. Profit and Loss (Dr.) Select your answer:
A.
1, 2, 3, 4
B.
3, 2, 1, 4
C.
1, 3, 2, 4
D.
4, 3, 1, 2
Answer: _________
Question 46:
Match the following: List-I List-II a. Compulsory Dissolution 1. Section 44 b. Dissolution by Court 2. Section 41 c. Dissolution by Notice 3. Section 42 d. Contingent Dissolution 4. Section 43
A.
a-4, b-3, c-2, d-1
B.
a-3, b-4, c-2, d-1
C.
a-2, b-1, c-4, d-3
D.
a-2, b-4, c-1, d-3
Answer: _________
Question 47:
X and Y are partners sharing the profit in the ratio of 3 : 2. They take Z as the new partner who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill, New profit sharing ratio is 1 : 1 : 1. Z is able to bring only his share of capital. How this will be treated in the books of the firm?
A.
X and Y will share goodwill bought by Z as Rs. 4,000 : Rs. 1,000
B.
Goodwill be raised to Rs. 30,000 in old profit sharing ratio
C.
Both A and B
D.
No treatment in the books of the firm
Answer: _________
Question 48:
A company pays to its sundry creditors a sum of Rs. 10,000. This transaction will:
A.
Decrease working capital by Rs. 10,000
B.
Increase working capital by Rs. 10,000
C.
Decrease working capital by Rs. 20,000
D.
Neither increase nor decrease working capital
Answer: _________
Question 49:
A and B sharing profits in the ratio of 3 : 2 took out a joint-life policy of Rs. 20,000 on 1 st January 2000 for 20 years, paying annual premium of Rs. 1000. The surrender values of the policy were: 2000 - nil, 2001 - Rs. 550, 2002 - Rs. 970. On 8 th march 2002 B was dead. What will be the amount to be paid to the policy holders-
A.
Rs. 7,250
B.
Rs. 7,380
C.
Rs. 8,407
D.
Rs. 9,360
Answer: _________
Question 50:
If cost of goods sold is Rs. 1,20,000, gross loss is 25% of sales, then what is amount of sales?
A.
Rs. 90,000
B.
Rs. 96,000
C.
Rs. 1,44,000
D.
Rs. 1,50,000
Answer: _________
Question 51:
Which of the following is not an accounting convention:
A.
Consistency
B.
Full disclosure
C.
Materiality
D.
Secrecy
Answer: _________
Question 52:
A purchase invoice for Rs. 1,250 was entered in the purchase book at Rs. 1,520 is called:
A.
Errors of omission
B.
Errors of commission
C.
Errors of principle
D.
Compensatory errors
Answer: _________
Question 53:
On issue of shares, the application money should not be less than
A.
2.5% of the nominal value of shares
B.
2.5% of the issue price of shares
C.
5.0% of the nominal value of shares
D.
5.0% of the issue price of shares
Answer: _________
Question 54:
The margin of safety/residue of security is equal to
A.
Fixed cost + profit
B.
Fixed cost + Support residue
C.
Sales income - Sales income at the break even point
D.
Sales income - Variable costs
Answer: _________
Question 55:
A and B are partners with a profit-sharing ratio of 2 : 1 and capitals of Rs. 3,00,000 and Rs. 2,00,000, respectively. They are allowed 6% per annum interest on their cap itals and are charged 10% per annum interest on their drawings. Their drawings during the year were Rs. 60,000 for A and Rs. 40,000 for B. B's share of net profit as per profit and loss appropriation account amounted to Rs. 40,000. The net profit of the firm before any appropriation was
A.
Rs. 1,22,000
B.
Rs. 1,13,000
C.
Rs. 1,17,000
D.
Rs. 1,45,000
Answer: _________
Question 56:
Which statement is true in case of Receipt and Payment A/c:
A.
It is a nominal account
B.
All cash and credit items are shown
C.
It begins with credit balance
D.
The closing balance indicates cash balance
Answer: _________
Question 57:
Advanced money received from a customer for supply of goods in future is a/an
A.
Income
B.
Expense
C.
Current Liability
D.
Current Asset
Answer: _________
Question 58:
The sum of the shares sacrificed by the old partners is equal to the share given to . . . . . . . . .
A.
Newly admitted partner
B.
Retired partner
C.
Old partner who is now going to retire
D.
Executors of the deceased partner
Answer: _________
Question 59:
If Opening Stock is Rs. 10,000, Net Purchase Rs. 70,000, Wages Rs. 2,500, Carriage Inward Rs. 500 and Closing Stock Rs. 15,000. What is the Manufacturing Cost?
A.
Rs. 65,000
B.
Rs. 83,000
C.
Rs. 68,000
D.
Rs. 73,000
Answer: _________
Question 60:
A worker is paid Rs. 1 per hour, and the standard time fixed in 10 hours. Whereas the rate of premium is 50%. One worker is able to complete the work in 8 hours. The wages payable to him under Halsey Plan will be:
A.
Rs. 8
B.
Rs. 10
C.
Rs. 9
D.
Rs. 11
Answer: _________
Question 61:
Profit prior to incorporation of a company:
A.
can be paid as dividend
B.
cannot be paid as dividend
C.
can be used for revenue expenses
D.
none of the above
Answer: _________
Question 62:
A and B are partner in partnership firm. They admitted C for $${frac{1}{4}^{{ ext{th}}}}$$ share in profit. New profit sharing ratio between A, B and C is
A.
3 : 2 : 1
B.
3 : 1 : 2
C.
3 : 3 : 2
D.
3 : 3 : 3
Answer: _________
Question 63:
Discount on issue of debenture should be shown in
A.
Asset side of balance sheet
B.
Liabilities side of balance sheet
C.
Dr. side of profit and loss account
D.
Cr. side of profit and loss account
Answer: _________
Question 64:
Which of the following is not the responsibility centre for control purposes?
A.
Cost centre
B.
Profit centre
C.
Investment centre
D.
Efficiency centre
Answer: _________
Question 65:
Advance payment of Income tax should be shown as
A.
Debit side of profit and loss a/c
B.
Asset side of balance sheet
C.
Liabilities side of balance sheet
D.
Credit side of profit and loss a/c
Answer: _________
Question 66:
For what, a company may utilise the securities premium amount?
A.
Writing off the discount on the issue of debentures
B.
Writing off any loss of revenue nature
C.
Writing off any loss on sale offixed assets
D.
Payment of dividends
Answer: _________
Question 67:
With the help of following information calculate provisions for bad and doubtful debts Debtors M: Rs. 3,200 Bad to be written off Debtors N: Rs. 8,000 expeected to realise only 70% Debtors O: Rs. 6,000 expected to realise only 60% Debtors P: Rs. 4,000 financial condition very poor, no recovery is likely
A.
Rs. 8,800
B.
Rs. 12,000
C.
Rs. 4,800
D.
Rs. 4,000
Answer: _________
Question 68:
Which of the following accounting principles differentiates between owner and management
A.
Business Entity
B.
Going Concern
C.
Dual Aspect
D.
None of these
Answer: _________
Question 69:
Arrange the following liabilities in the order of company's balance sheet. 1. Bank Overdraft 2. Bank Loan 3. Share Capital 4. Provision for Taxation
A.
1, 2, 3, 4
B.
4, 3, 2, 1
C.
3, 2, 1, 4
D.
3, 2, 4, 1
Answer: _________
Question 70:
X and Y are partners in a firm having capital balances Rs. 1,08,000 and Rs. 72,000, respectively. They admit Z into a partnership for $${frac{1}{3}^{{ ext{rd}}}}$$ share, and Z brings proportion ate amount of capital. The capital amount of Z is
A.
Rs. 22,500
B.
Rs. 90,000
C.
Rs. 1,80,000
D.
Rs. 54,000
Answer: _________
Question 71:
Consider the following statements: A credit purchase during the accounting year which was not recorded in the books of account but included in the closing stock is to be: I. added to the credit purchases account II. added to the creditors account III. subtracted from the closing stock IV. added to the opening stock Which of the statements given above is/are correct?
A.
III only
B.
I and II
C.
II and III
D.
II, III and IV
Answer: _________
Question 72:
Bills are drawn by . . . . . . . .
A.
Creditors
B.
Debtors
C.
Agent
D.
Brokers
Answer: _________
Question 73:
When goods are purchased for the joint venture out of joint bank A/C the amount is debited to:
A.
Joint bank A/C
B.
Joint venture A/C
C.
Purchases account
D.
None of these
Answer: _________
Question 74:
When furniture is sold for cash, the entry should be made in . . . . . . . .
A.
sales book
B.
cash book
C.
journal
D.
petty cash book
Answer: _________
Question 75:
While preparing the annual financial statements, the balance of rent account should be treated as the balance of a:
A.
Personal Account
B.
Nominal Account
C.
Real Account
D.
Deferred Expenditure Account
Answer: _________
Question 76:
Bank overdraft account is a:
A.
Personal Account
B.
Real Account
C.
Nominal Account
D.
All of these
Answer: _________
Question 77:
"Holding gains in relation to stocks should not be used for payment of dividend." Which one of the following accounting principles is involved in this?
A.
Consistency
B.
Cost
C.
Materiality
D.
Realisation
Answer: _________
Question 78:
The take over of a company in which most of the purchase price is paid with borrowed money is referred to as
A.
hostile takeover
B.
illegal takeover
C.
lever aged buy-out
D.
management buy-out
Answer: _________
Question 79:
Any revenue expenditure relating to special fund must be deducted from . . . . . . . .
A.
last fund
B.
special fund
C.
annual fund
D.
entrance fee
Answer: _________
Question 80:
Which one of the following statements is correct?
A.
Capital of a firm is reduced by borrowing
B.
When there is no change in proprietor's capital it is an indication of loss in business
C.
Nominal accounts refer to false transactions
D.
Real accounts relate to assets of a business
E.
Increases in liabilities are credits and decreases are debits
F.
Increases in assets are credits and decreases are debits
G.
Increases in capital are debits and decreases are credits
H.
Increases in expenses are credits and decreases are debits
I.
Depreciation is not the process of valuation of asset-it is a process of allocation of cost of asset to the period of its economic life
J.
If the cost of machinery is more than the book value, then depreciation need not be provided
K.
When the plant and machinery and maintained in good condition, through repairs and renewals, depreciation need not be provided
L.
In the absence of any legal provisions, if the auditor finds that provision made for depreciation is inadequate, then he is not required to refer to it in his report
Answer: _________
Question 81:
Which one of the following ratios is not a measure of financial soundness and stability of a business enterprise?
A.
Liquidity Ratio
B.
Current Ratio
C.
Proprietary Ratio
D.
Sales to Capital Employed Ratio
Answer: _________
Question 82:
Bills dishonoured by = Rs. 2,000 Customers = Rs. 13,000 Bills collected = Rs. 1,000 Bill received endorsed to creditors Rs. 1,000 less than at the beginning. The Amount of bills received from the customers was:
A.
Rs. 12,000
B.
Rs. 14,000
C.
Rs. 15,000
D.
Rs. 17,000
Answer: _________
Question 83:
After the new partnership agreement, assets and liabilities in a balance sheet are recorded at . . . . . . . .
A.
original value
B.
revalued figure
C.
realisable value
D.
None of these
Answer: _________
Question 84:
Stock does not include:
A.
goods in the hands of an agent
B.
goods out on approval (or sale or return)
C.
goods sold awaiting delivery to the buyer
D.
goods (meant for re-sale) hypothecated as security
Answer: _________
Question 85:
Debit the receiver and credit the giver is rule of:
A.
Nominal A/c
B.
Personal A/c
C.
Salary A/c
D.
Rent A/c
Answer: _________
Question 86:
In the absence of an agreement to the contrary, all partners sleeping or working share profits and losses in the
A.
capital ratio
B.
equal ratio
C.
Both A and B
D.
None of these
Answer: _________
Question 87:
Which of the following equations is not correct?
A.
Cost of the goods sold - Closing Stock - Purchases = Opening Stock
B.
Purchases + Opening Stock - Cost of the goods sold = Closing Stock
C.
Opening Stock + Purchases - Closing Stock = Cost of the goods
D.
Closing Stock + Cost of the goods sold - Purchases = Opening Stock
Answer: _________
Question 88:
Which of the following is not an accounting convention?
A.
Convention of full disclosure
B.
Convention of conservatism
C.
Convention of accrual accounting
D.
Convention of consistency
Answer: _________
Question 89:
Share warrants can be issued when shares are
A.
fully paid
B.
partly paid
C.
lost
D.
none of the above
Answer: _________
Question 90:
The debtors are Rs. 30,000 (before bad debts of Rs. 1,000 and provision of bad debts at 5%). A provision for discount on debtors @ 2% would be-
A.
Rs. 600
B.
Rs. 575
C.
Rs. 571
D.
Rs. 551
Answer: _________
Question 91:
Current ratio can be increased-
A.
By showing more current assets
B.
By showing more current liabilities
C.
By showing less current assets
D.
None of these
Answer: _________
Question 92:
When there is no agreement between partners for sharing profits and losses then it should be shared among partners in what ratio.
A.
2 : 3 : 5
B.
2 : 2 : 4
C.
4 : 5 : 1
D.
1 : 1 : 1
Answer: _________
Question 93:
If minimum subscription is not received, application money should be refunded within how many days?
A.
7
B.
10
C.
15
D.
30
Answer: _________
Question 94:
Accounting in modern age is regarded as:
A.
the art of recording, classifying and summarising the business transactions in monetary units
B.
the language of business
C.
the source of business information
D.
all the above
Answer: _________
Question 95:
A company redeemed its 2,00,000/- preference shares. For this it issued equity share capital of Rs. 1,50,000/- and Rs. 1,00,000/- bonus shares were also issued. What will be the net effect of these transactions on fund flow
A.
No effect on fund flow
B.
Increase of Rs. 50,000/- in working capital
C.
Decrease of Rs. 50,000/- in working capital
D.
None of the above
Answer: _________
Question 96:
When goods distributed as free samples and charity purpose, one of the following journal entry mentioned below is correct.
A.
Closing stock account Dr - To Purchase account
B.
Advertisement account Dr - To purchase account
C.
Profit & loss account Dr - To advertisement account
D.
Sales account Dr - To advertisement account
Answer: _________
Question 97:
X and Y are partners who share profit and loss in the ratio of 2 : 1, and who have capital balances (credit) of Rs. 40,000 and Rs. 30,000 respectively. If Z, with the consent of Y, acquired one-half of X's interest for Rs. 25,000, for what amount would Z's Capital Account be credited:
A.
Rs. 25,000
B.
Rs. 5,000
C.
Rs. 15,000
D.
Rs. 20,000
Answer: _________
Question 98:
The main source of working capital is-
A.
Public deposit
B.
Shares
C.
Debentures
D.
Retained earnings
Answer: _________
Question 99:
The people to adopt a new product first are called
A.
Early adopters
B.
First users
C.
Initial adopters
D.
Innovators
Answer: _________
Question 100:
A and B are partners. A died in an accident so:
A.
Firm will be dissolved
B.
Partnership will be ended
C.
firm and partnership both will be dissolved
D.
None of the above
Answer: _________
Question 101:
A club received Rs. 1,00,000 as a donation for the year 1998. The amount of donation received was Rs. 15,000 on 31 st December 1998 and Rs. 20,000 on 31 st December 1997. The amount of income as donation for year 1998 is-
A.
Rs. 1,05,000
B.
Rs. 90,000
C.
Rs. 1,15,000
D.
Rs. 95,000
Answer: _________
Question 102:
The 'y' axis in the break even chart represents
A.
Volume of sales in units
B.
Value of sales in rupees
C.
Cost and sales in rupees
D.
Value of production in rupees
Answer: _________
Question 103:
Which of the following expenditure is of capital nature:
A.
Postage on mailing of Share Certificates
B.
Payment of Underwriting Commission on issue of Shares
C.
Bank charges for payment of dividend warrants
D.
Expenses on printing of Annual Report
Answer: _________
Question 104:
Current ratio is
A.
Balance Sheet Ratio
B.
Profit & Loss account Ratio
C.
Combined Ratio
D.
Income Ratio
Answer: _________
Question 105:
Decrease in current liability indicates
A.
Inflow of cash
B.
Use of cash
C.
None of the A and B
D.
Both A and B
Answer: _________
Question 106:
Which of the following is not correct equation?
A.
Purchases + opening stock - cost of goods sold = closing stock
B.
Opening stock + purchases - closing stock = cost of goods sold
C.
Closing stock - cost of goods sold - purchases = Opening stock
D.
Cost of goods sold + closing stock - purchases = Opening stock
Answer: _________
Question 107:
Cash Flow Management involves: i. Lock-box system ii. Marketable securities iii. Playing the float iv. Concentration Bank Account
A.
i, ii and iii only
B.
ii, iii and iv only
C.
i, iii and iv only
D.
i, ii and iv only
Answer: _________
Question 108:
As per Revenue Recognition Concept, revenue is deemed to be realised
A.
when purchase order is received from the purchaser
B.
when goods are delivered to the purchaser
C.
when the title of the goods has been transferred to the purchaser
D.
when cash is received from the purchaser
Answer: _________
Question 109:
When investment in private debentures is cancelled then this profit/loss is credited/ debited to
A.
Debenture Redemption fund A/c
B.
General reserve A/c
C.
Capital reserve A/c
D.
Any of the above A/c
Answer: _________
Question 110:
Concept of conservation refers to taking into account:
A.
All profit
B.
Only cash profit
C.
Only profit realized
D.
Profit realized and all possible losses
Answer: _________
Question 111:
The premium received on issue of Shares cannot be used for
A.
Issue of fully paid bonus shares to the members of the company
B.
Writing off discount allowed on issue of debendtures of the company
C.
Paying remuneration to promoters for their services
D.
Paying premium payable on the redemption of debentures of the company
Answer: _________
Question 112:
Underwriting commission is classified as
A.
Capital Expenditure
B.
Capital loss
C.
Deferred Revenue Expenditure
D.
Capitalized Expenditure
Answer: _________
Question 113:
Income tax deducted from interest paid on debenture is shown in
A.
Asset side of balance sheet
B.
Liabilities side of balance sheet
C.
Credit side of profit and loss account
D.
Debit side of profit and loss account
Answer: _________
Question 114:
Assertion (A) When a company earns profit prior to its incorporation, it is called capital profit. Reason (R) Capital profit cannot be used for distribution as dividend to the shareholders.
A.
(A) is true, but (R) is false
B.
Both (A) and (R) are false
C.
(A) is false, but (R) is true
D.
Both (A) and (R) are true
Answer: _________
Question 115:
Environmental management accounting focuses on
A.
natural resources stock
B.
environmental cost information
C.
environmental liability costs
D.
none of the above
Answer: _________
Question 116:
A limited company forfeited 100 shares of Rs. 10 each fully called up on which Rs. 4 per share was paid up. The company reissued 50 shares at the rate of Rs. 8 each. The amount transferred to Capital Reserve will be
A.
Rs. 500
B.
Rs. 200
C.
Rs. 250
D.
Rs. 100
Answer: _________
Question 117:
Premium on issue of shares can be used for:
A.
Issue of bonus shares
B.
Payment of dividends
C.
Payment of operating expenses
D.
Redemption of debentures
Answer: _________
Question 118:
Which of the following is not a book of primary entry?
A.
Ledger
B.
Cash book
C.
Sales book
D.
Bills payable book
Answer: _________
Question 119:
Match the following. List-I List-II a. The formula for calculating the profit on reissue is . . . . . . . . 1. Article of Association b. Right shares must be first offerred to existing . . . . . . . . 2. Security premium c. Premium received on issue of debenture is credited to . . . . . . . . account 3. Amount forfeited less discount on reissue d. Redeemable preference shares can be issued only when it is authorised by its . . . . . . . . 4. Equity shareholders
A.
a-3, b-4, c-1, d-2
B.
a-3, b-1, c-4, d-2
C.
a-3, b-4, c-2, d-1
D.
a-4, b-3, c-2, d-1
Answer: _________
Question 120:
Accounting principles are based on
A.
Practicability
B.
Subjectivity
C.
Convenience in recording
D.
None of the above
Answer: _________
Question 121:
Average profit of a firm is Rs. 40,000, Its total assets amounted to Rs. 4,00,000 and its liabilities to Rs. 1,00,000. If return is similar of same firm is 10% on capital employed, what will be the value of goodwill of this firm:
A.
Rs. 2,00,000
B.
Rs. 4,00,000
C.
Rs. 1,00,000
D.
Rs. 3,00,000
Answer: _________
Question 122:
When working capital is Rs. 60,000 and current ratio is 3 : 1 the current liabilities will be:
A.
Rs. 30,000
B.
Rs. 80,000
C.
Rs. 90,000
D.
Rs. 1,20,000
Answer: _________
Question 123:
Capital is equal to:
A.
Fixed asset + current asset
B.
Total cash + Bank Balances
C.
Total assets - Total external liabilities
D.
None of these
Answer: _________
Question 124:
Credit sales of business assets are recorded in
A.
Sales journal
B.
Journal proper
C.
Cash book
D.
Sales account
Answer: _________
Question 125:
Identify, which of the following partnership's characteristic is a disadvantage?
A.
Voluntary association
B.
Minimal legal restrictions
C.
Limited liability
D.
None of the above
Answer: _________
Question 126:
Goodwill is shown on
A.
Asset side of Balance Sheet
B.
Liabilities side of Balance Sheet
C.
Debit side of Profit and Loss Account
D.
Debit side of Trading Account
Answer: _________
Question 127:
In the absence of any provision in the partnership agreement, partners are paid interest on partners loan @
A.
5% per annum
B.
6% per annum
C.
8% per annum
D.
10% per annum
Answer: _________
Question 128:
Standard costing means
A.
Actual cost
B.
Estimated cost
C.
Predetermined cost on scientific basis
D.
Predetermined cost on estimates
Answer: _________
Question 129:
Which of the following depreciation method would be most suitable for coal mines?
A.
Diminishing balance method
B.
Depletion method
C.
Fixed Installation method
D.
The sum of years digits method
Answer: _________
Question 130:
The share of outsiders in the net assets of subsidiary company is known as
A.
assets
B.
outsiders liability
C.
subsidiary company's liability
D.
minority interest
Answer: _________
Question 131:
X and Y are partners sharing profits in the ratio 2 : 1. Z is admitted for $${frac{1}{4}^{{ ext{th}}}}$$ share in profits and he brings his share of capital Rs. 12,000 in firm. The adjusted capital of Y is
A.
Rs. 18,000
B.
Rs. 16,000
C.
Rs. 20,000
D.
Rs. 12,000
Answer: _________
Question 132:
Income and Expenditure account dipicsts:
A.
Cash in hand
B.
Cash receipt and payment
C.
Surplus or deficit
D.
Capital of the firm
Answer: _________
Question 133:
Given: Stock turnover 6 times Total Sales Rs. 3,00,000 Gross profit Ratio 20% Closing stock is Rs. 4,000 more than the opening stock. The opening stock will be:
A.
Rs. 36,000
B.
Rs. 38,000
C.
Rs. 40,000
D.
Rs. 42,000
Answer: _________
Question 134:
What will be amount of gross profit/gross loss. If cost of goods sold Rs. 79,000, Sales Rs. 1,10,000, Purchases Rs. 30,000?
A.
Rs. 80,000 (Profit)
B.
Rs. 31,000 (Profit)
C.
Rs. 49,000 (Profit)
D.
Rs. 1,000 (Loss)
Answer: _________
Question 135:
Match List-I with List-II and choose the correct answer: List-I List-II a. Shareholder 1. Creditor of company b. Debenture holder 2. To be paid at the end of a pre-determined period c. Redeemable debenture 3. Co-owner of the company d. Bearer debenture 4. Transferable mere by delivery
A.
a-4, b-1, c-3, d-2
B.
a-3, b-1, c-2, d-4
C.
a-1, b-2, c-3, d-4
D.
a-2, b-3, c-1, d-4
Answer: _________
Question 136:
A firm has total current assets of Rs. 10,000 (including inventory of Rs. 4,000), and total current liabilities of Rs. 3,000. What will be the amount of short-term bank borrowings to make the quick ratio 1.5:
A.
Rs. 11,000
B.
Rs. 5,000
C.
Rs. 3,000
D.
Rs. 1,000
Answer: _________
Question 137:
Which among the following belongs to Nominal Account?
A.
Bad Debts Recovery A/C
B.
Bank A/C
C.
Bills Payable A/C
D.
Drawings A/C
Answer: _________
Question 138:
Accounting provides information on
A.
Cost and income for managers
B.
Company's tax liability for a particular year
C.
Financial conditions of an institutions
D.
All of the above
Answer: _________
Question 139:
The long term assets that have no physical existence but are rights that have value is known as
A.
Current assets
B.
Fixed assets
C.
Intangible assets
D.
Investments
Answer: _________
Question 140:
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A.
Current assets
B.
Fixed assets
C.
Intangible assets
D.
Investments
Answer: _________
Question 141:
Patents, Copyrights and Trademarks are
A.
Current assets
B.
Fixed assets
C.
Intangible assets
D.
Investments
Answer: _________
Question 142:
The debts which are to be repaid within a short period (year or less) are known as
A.
Current liabilities
B.
Fixed liabilities
C.
Contingent liabilities
D.
All of the above
Answer: _________
Question 143:
The sales income (Credit and Cash) of a business during a given period is called
A.
Transactions
B.
Sales Returns
C.
Turnover
D.
Purchase Returns
Answer: _________
Question 144:
Any written evidence in support of a business transaction is called
A.
Journal
B.
Ledger
C.
Ledger posting
D.
Voucher
Answer: _________
Question 145:
The account that records expenses, gains and losses is
A.
Personal account
B.
Real account
C.
Nominal account
D.
None of the above
Answer: _________
Question 146:
Real account records
A.
Dealings with creditors or debtors
B.
Dealings in commodities
C.
Gains and losses
D.
All of the above
Answer: _________
Question 147:
In Journal, the business transaction is recorded
A.
Same day
B.
Next day
C.
Once in a week
D.
Once in a month
Answer: _________
Question 148:
A and B are partners sharing profits and losses in 3 : 2. They admitted C in the firm. C acquired $${frac{1}{3}^{{ ext{rd}}}}$$ of A's shares and $${frac{1}{2}^{{ ext{nd}}}}$$ of B's share. What is the new profit sharing ratio?
A.
3 : 2 : 5
B.
2 : 1 : 2
C.
3 : 2 : 1
D.
3 : 2 : 2
Answer: _________
Question 149:
The original amount of preference share capital should be transferred to . . . . . . . . account in the time of amalgamation in the books of vendor co.
A.
Capital reserve account
B.
Equity share capital account
C.
Preference shareholders account
D.
None of the above
Answer: _________
Question 150:
Profit prior to incorporation is credited to:
A.
Profit and loss a/c
B.
General Reserve a/c
C.
Special Reserve a/c
D.
Capital reserve a/c
Answer: _________
Question 151:
The book in which credit note voucher is used for accounting is
A.
Sales book
B.
Purchase book
C.
Sales return book
D.
Purchase return book
Answer: _________
Question 152:
If sales are Rs. 6000, gross profit is $$frac{1}{3}$$ on cost, purchase are Rs. 4,900 and the closing stock is Rs. 900, the opening stock will be:
A.
Nill
B.
Rs. 500
C.
Rs. 2,000
D.
Rs. 4,900
Answer: _________
Question 153:
Jaggi and Lau's Model is related to:
A.
Social Accounting
B.
Human Resource Accounting
C.
Inflation Accounting
D.
None of the above
Answer: _________
Question 154:
Under the depreciation method, assets are shown every year at
A.
At original cost
B.
At cost less than projected value
C.
At calculated, price, which remains the same
D.
A calculated value, which keeps on decreasing
Answer: _________
Question 155:
How is the amount to be paid to the land owner determined?
A.
Royalty ⇔ minimum rent
B.
Minimum rent ⇔ Royalty
C.
Minimum rent ⇔ Short working
D.
Royalty or minimum rent, whichever is higher ⇔ Short working
Answer: _________
Question 156:
Which of the following is a correct accounting equation?
A.
Assets = owners equity
B.
Assets = liability + owner's equity
C.
Assets = liability - owner's equity
D.
Assets = liability = owner's equity
Answer: _________
Question 157:
Income earned and collected' results in:
A.
Increase of assets and increase in capital
B.
Decrease in assets and increase in capital
C.
Increase in assets and decrease in liability
D.
Decrease in assets and increase in liability
Answer: _________
Question 158:
Indicate the correct statement as regards the sources of funds for a Funds Flow Statement from the following: i. Increase in working capital ii. Decrease in working capital iii. Writing off the intangible/fictitious assets iv. Issuing equity shares for acquisition of a building for office v. Charging depreciation on fixed assets
A.
i, iii, iv
B.
ii, iii, v
C.
i, iv, v
D.
ii, iii, iv
Answer: _________
Question 159:
The cost of debt capital is as-
A.
Paid divident
B.
Paid interest
C.
Paid bonus
D.
None of the above
Answer: _________
Question 160:
A trader values his opening stock 10% over cost. It value of opening stock is written as Rs. 27,500 then its cost would be
A.
Rs. 30,000
B.
Rs. 24,750
C.
Rs. 25, 000
D.
Rs. 22,500
Answer: _________
Question 161:
Trial balance is prepared to ascertain-
A.
Profit and loss
B.
Cash transaction
C.
Credit transaction
D.
Arithmetical accuracy of financial transaction
Answer: _________
Question 162:
Under which method of depreciation, the value of machinery never comes to zero:
A.
Fixed installment method
B.
Depreciation fund method
C.
Diminishing balance method
D.
Depletion unit method
Answer: _________
Question 163:
Debenture holders are
A.
Creditors
B.
Owners
C.
Customers
D.
Regulators
Answer: _________
Question 164:
The balance of a partner's current accounts is
A.
Debit balance
B.
Credit balance
C.
Debit or Credit balance
D.
Neither debit nor credit balance
Answer: _________
Question 165:
The general manager is entitled to a commission of 10% on net profit after charging the commission of works manager. The works manager is entitled to a commission of 5% on the net profit after charging the commission of general manager. The profit before charging any commission is Rs. 7,000. The commission of the works manager, to the nearest rupee, will be
A.
Rs. 321
B.
Rs. 304
C.
Rs. 337
D.
Rs. 339
Answer: _________
Question 166:
An accounting system that does not take into consideration outstanding expenses and accrued incomes for computation of profit Is called
A.
Double Entry System
B.
Accrual Based System
C.
Single Entry System
D.
Cash System
Answer: _________
Question 167:
Which method of HR Accounting was developed by Lev and Schwartz?
A.
Capitalisation of historical cost model
B.
Opportunity cost model
C.
Present value of future earning model
D.
Replacement cost model
Answer: _________
Question 168:
Which of the following is an error of commission?
A.
A sale of Rs. 560 ommitted to be recorded
B.
A purchase of Rs. 840 was wrongly posted
C.
Treating charges as addition to asset
D.
Sales book over cost by Rs. 600 and purchase book was under cost by the same amount
Answer: _________
Question 169:
The loss on the sale of old furniture is debited to
A.
Profit and loss Account
B.
Furniture Account
C.
Trading Account
D.
Depreciation Account
Answer: _________
Question 170:
Match List-I (Items of expenditure and receipt) with List-II (Nature of expenditure and receipt) and select the correct answer using the options given below the lists: List-I List-II a. Compensation paid to retrenched workers of the factory for the loss of service 1. Capital expenditure b. Legal expenses incurred in connection with the purchase of a plot of land 2. Capital receipt c. Compensation received from the government for the compulsory removal of a business premises to another place 3. Revenue expenditure d. Sale proceeds of merchandise (goods) 4. Revenue receipt
A.
a-1, b-3, c-4, d-2
B.
a-1, b-3, c-2, d-4
C.
a-3, b-1, c-4, d-2
D.
a-3, b-1, c-2, d-4
Answer: _________
Question 171:
Rebate on bills discounted is shown in the Balance Sheet as . . . . . . . .
A.
advances
B.
other liabilities & provisions
C.
other income
D.
reserves & surplus
Answer: _________
Question 172:
The nominal value of preference shares to be redeemed can be provided out of . . . . . . . .
A.
general reserve
B.
capital reserve
C.
CRR
D.
securities premium
Answer: _________
Question 173:
Which one of the following should be considered as a revenue expenditure?
A.
Rs. 1,000 paid for the erection of a new plant
B.
Cost of Rs. 10,000 incurred in increasing the sitting accommodation of a hotel
C.
Damages paid on account of breach of a contract to supply certain goods
D.
Repairs to machinery purchased second hand
Answer: _________
Question 174:
A person who draws a bill of exchange is known as the:
A.
Drawee
B.
Drawer
C.
Payer
D.
Payee
Answer: _________
Question 175:
Which of the following is not a case of combination?
A.
external reconstruction
B.
internal reconstruction
C.
amalgamation
D.
absorption
Answer: _________
Question 176:
The proprietor of a business is treated as a creditor for capital introduced by him according to:
A.
money measurement concept
B.
cost concept
C.
business entity concept
D.
dual aspect concept
Answer: _________
Question 177:
Rs. 10,000 spent on the replacement of worn-out parts of an electronic machinery is treated as:
A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
Capital loss
Answer: _________
Question 178:
Payment of rent expenses is recorded on which side of cash book?
A.
Receipts
B.
Payments
C.
Income
D.
Expense
Answer: _________
Question 179:
An entry which is made on both sides of a cash book is called
A.
Cash entry
B.
Contra entry
C.
Payment entry
D.
Compound entry
Answer: _________
Question 180:
A cash book with cash, bank and discount column is commonly referrred to as
A.
Cash book
B.
Two columns cash book
C.
Three columns cash book
D.
Petty cash book
Answer: _________
Question 181:
Cash book records
A.
Cash payments
B.
Cash Receipts
C.
Cash payments and cash receipts
D.
Neither cash payments nor cash receipts
Answer: _________
Question 182:
Cash discount is allowed on ______ repayment of debt
A.
Lump sum
B.
Prompt
C.
Actual
D.
None of them
Answer: _________
Question 183:
Cash book is prepared by
A.
Bank
B.
Accountant of business
C.
Manager of a company
D.
Bank's cashier
Answer: _________
Question 184:
The most common imprest system is the ______ system
A.
Petty cash
B.
Cash book
C.
Cash receipts journal
D.
Discount
Answer: _________
Question 185:
Discount received is recorded on which of the following side of a cash book?
A.
Receipts
B.
Payments
C.
Income
D.
Expenditure
Answer: _________
Question 186:
Drawings by owner of business are generally recorded on which of the following side of a cash book?
A.
Receipts
B.
Payments
C.
Incomes
D.
Expenditures
Answer: _________
Question 187:
On 1 st January 1992 there was a balance of Rs. 4,000 in the plant and machinery account. An addition of Rs. 2,000 was made on 1 st July 1992. Accounts were closed for the year on 31 st December 1992. If depreciation was charged at 10% per annum, the balance in the plant and machinery account on the closing date would be:
A.
Rs. 5,300
B.
Rs. 5,400
C.
Rs. 5,500
D.
Rs. 5,600
Answer: _________
Question 188:
Valuation balance sheet is prepared by . . . . . . . .
A.
general insurance company
B.
life insurance company
C.
joint stock company
D.
banking company
Answer: _________
Question 189:
While preparing P/L account, rebate on bills discounted to be provided shall be deducted from discount received in . . . . . . . .
A.
Schedule 16
B.
Schedule 15
C.
Schedule 14
D.
Schedule 13
Answer: _________
Question 190:
If there is a prize fund and prizes are awarded, expenses and income are transferred to . . . . . . . .
A.
income and expenditure account
B.
assets side of the balance sheet
C.
the liabilities side of the balance sheet
D.
trading account
Answer: _________
Question 191:
Journal Proper is meant for recording . . . . . . . .
A.
credit purchase of fixed assets
B.
return of goods
C.
all such transactions for which no special journal has been kept by the business
D.
supply of goods
Answer: _________
Question 192:
The payment side of the cash book is undercast by Rs. 200. When overdraft as per pass book is the starting point, to get the overdraft as per cash book . . . . . . . .
A.
Rs. 200 will be deducted
B.
Rs. 200 will be added
C.
Rs. 400 will be added
D.
Rs. 400 will be deducted
Answer: _________
Question 193:
Wages paid to workers must be debited to . . . . . . . . account.
A.
Wages
B.
Machinery
C.
Factory expenses
D.
Offices expenses
Answer: _________
Question 194:
The convention of conservatism will have the effect of:
A.
Over statement of assets
B.
Under statement of assets
C.
Under statement of liabilities
D.
Under statement of provision for bad and doubtful debts
Answer: _________
Question 195:
Interest on debenture is . . . . . . . .
A.
an appropriation of profit
B.
a charge against profit
C.
an adjustment of profit
D.
None of these
Answer: _________
Question 196:
A company XYZ (parent co.) is required to present consolidated financial statements, except if it meets certain conditions. You need to identify those conditions from the following. 1. It is a subsidiary of another entity and all its other owners, including those not otherwise entitled to vote, have been informed about and do not object to, the parent not presenting consolidated financial statements. 2. Its debt or equity instruments are not treaded in a public market. 3. Its ultimate or any intermediate parent produces Ind AS complaint consolidated financial statements available for public use
A.
Both 1 and 3
B.
Both 2 and 3
C.
Both 1 and 2
D.
All of these
Answer: _________
Question 197:
A debenture holder gets:
A.
dividend
B.
right prescribed in articles
C.
ownership of the company
D.
interest at fixed rate
Answer: _________
Question 198:
Which one of the following is not an example of 'financing activities' with reference to cash flow statement?
A.
Repayment of bank loan
B.
Interest on debentures/Dividend paid
C.
Cash proceeds from public deposits
D.
Sale of fixed assets
Answer: _________
Question 199:
The first accounting standard issued by the Accounting Standard Board of India (ASBI) relates to:
A.
Valuation of Inventories
B.
Depreciation Accounting
C.
Disclosure of Accounting Policies
D.
Revenue Recognition
Answer: _________
Question 200:
Double Entry System was propounded by-
A.
Carter
B.
Pickles
C.
Malthus
D.
Lucas Pacioli
Answer: _________
Question 201:
Sale of furniture by a furniture dealer for cash is debited to:
A.
Cash account
B.
Sales account
C.
Furniture account
D.
None of the above
Answer: _________
Question 202:
Both of the old companies willnot exist in . . . . . . . .
A.
Amalgamation
B.
Internal reconstruction
C.
Absorption
D.
External reconstruction
Answer: _________
Question 203:
Which one is the principle of 'double entry system'?
A.
Purchase increases debit, income decreases credit
B.
Expense increases debit, income decreases credit
C.
Receiver is debit, giver is credit
D.
Receiver is credit, giver is dabit
Answer: _________
Question 204:
Purchases of a firm during the year is Rs. 60,000. Opening stock and closing stock for the year is Rs. 12,000 and Rs. 9,000 respectively. Gross profit is $${frac{1}{5}^{{ ext{th}}}}$$ of sales. Amount of gross profit is
A.
Rs. 15,700
B.
Rs. 14,000
C.
Rs. 12,500
D.
Rs. 17,250
Answer: _________
Question 205:
A department transferred goods to B department at cost + 25%. Out of it, stock of Rs. 10,000 remains with B department. Therefore, the amount of stock reserve will be
A.
Rs. 2,500
B.
Rs. 2,000
C.
Rs. 3,000
D.
Rs. 3,500
Answer: _________
Question 206:
50,000 equity shares of Rs. 10 each, issued at Rs. 20, for the purpose of redemption of preference share capital amounting Rs. 7,50,000. How much amount will be transferred to capital redemption reserve?
A.
Rs. 2,00,000
B.
Rs. 2,50,000
C.
Rs. 5,00,000
D.
Rs. 10,00,000
Answer: _________
Question 207:
A and B are partners sharing profits and losses in proportion 2 : 1. They admits new partner C hom they give $${frac{1}{5}^{{ ext{th}}}}$$ share in profits. The new profit sharing ratio will be:
A.
8 : 4 : 3
B.
3 : 2 : 1
C.
2 : 1 : 1
D.
4 : 2 : 1
Answer: _________
Question 208:
If current ratio is 2.5, acid test ratio is 1.5 and net working capital is Rs. 45,000, the amount of current liabilities will be:
A.
Rs. 15,000
B.
Rs. 45,000
C.
Rs. 30,000
D.
Rs. 75,000
Answer: _________
Question 209:
Dissolution of a firm takes place-
A.
by the death of any one of the partner
B.
by the retirement of any one of the partner
C.
by the insolvency of any one of the partner
D.
by the insolvency of all but except one partner
Answer: _________
Question 210:
Over capitalisation may be remedied by:
A.
increasing the number of equity shares
B.
increasing the par value of shares
C.
issuing additional preference shares
D.
redemption of debentures
Answer: _________
Question 211:
Statement I Capital expenditure benefits the current accounting period. Statement II Capital expenditure will also benefit the next accounting period.
A.
Both statements are correct
B.
Both statements are incorrect
C.
Statement I is correct, but statement II is incorrect
D.
Statement I is incorrect, but statement II is correct
Answer: _________
Question 212:
After redemption of debentures, the balance of Debenture Redemption Reserve Account is transferred to
A.
Capital Reserve Account
B.
General Reserve Account
C.
Sinking Fund Account
D.
Profit and Loss Account
Answer: _________
Question 213:
A dominant partner is one:
A.
Who has a smaller financial interest in the business
B.
Who represents himself as a partner of holding out
C.
Who neither contributes any capital nor takes any active part in the management
D.
A partner who has larger financial interest in the business
Answer: _________
Question 214:
The lower stock is the periodic indicator-
A.
Over investment in stock/inventory
B.
Monpoly position
C.
Payment/clearing status/position
D.
Overtrading
Answer: _________
Question 215:
An 'insolvent' is a person who is
A.
Unable to pay his daily expenses
B.
Does not pay his taxes
C.
Takes loan and refuses to pay
D.
Unable to pay his depts
Answer: _________
Question 216:
Funds will be considered inflow in the followiong situation if
A.
Payment of cash to creditors
B.
Cash received from debtors
C.
Cash machine was purchased
D.
All of the above
Answer: _________
Question 217:
A and B are partner in a partnership firm sharing profit and losses in 3 : 1. C is admitted for $${frac{1}{3}^{{ ext{rd}}}}$$ share. New profit sharing ratio between A, B and C is
A.
3 : 1 : 3
B.
3 : 1 : 2
C.
3 : 2 : 1
D.
6 : 5 : 4
Answer: _________
Question 218:
The most popular system of accounting used in public utility concerns is:
A.
Double Entry System
B.
Double Account System
C.
Single Entry System
D.
Government Accounting System
Answer: _________
Question 219:
The term 'Amortisation' is generally used to indicate the fall in value of the following:
A.
Tangible fixed assets
B.
Intangible fixed assets
C.
Current assets
D.
Quick assets
Answer: _________
Question 220:
In financial accounting, ledger posting is a process of:
A.
Summarising
B.
Classifying
C.
Recording
D.
Interpreting
Answer: _________
Question 221:
X, Y and Z are partners sharing profit and loss equally. Their capital balances on 31 th March 2012 are Rs. 80,000, Rs. 60,000 and Rs. 40,000, respectively. Their personal assets are worth as follows: X - Rs. 20,000, Y - Rs. 15,000 and Z - Rs. 10,000. The extent of their liability in the firm would be
A.
X - Rs. 80,000, Y - Rs. 60,000, Z - Rs. 40,000
B.
X - Rs. 20,000, Y - Rs. 15,000, Z - Rs. 10,000
C.
X - Rs. 1,00,000, Y - Rs. 75,000, Z - Rs. 50,000
D.
Equal
Answer: _________
Question 222:
When a company whatever amount is demanded after allotment is known as:
A.
Call money
B.
Paid up money
C.
Profit
D.
Share
Answer: _________
Question 223:
Match the following: List-I List-II a. New share (Admission) 1. Old share + Gaining share b. Gaining ratio 2. Old ratio - New ratio c. Sacrificing ratio 3. New ratio - Old ratio d. New share (Retirement) 4. Old share - Sacrifice share
A.
a-2, b-1, c-4, d-3
B.
a-3, b-4, c-2, d-1
C.
a-4, b-3, c-2, d-1
D.
a-4, b-3, c-1, d-2
Answer: _________
Question 224:
Which of the following equation is not correct?
A.
Purchase + Opening stock - Cost of goods sold = Closing stock
B.
Opening stock + Purchases - closing stock = Cost of goods sold
C.
Closing stock + cost of goods sold - Purchases = Opening stock
D.
Cost of goods sold - Closing stock - Purchases = Opening stock
E.
Assets = Liabilities + Capital
F.
Capital = Assets - Liabilities
G.
Liabilities = Assets - Capital
H.
Liabilities = Assets + Capital
Answer: _________
Question 225:
If the gross loss is $$frac{1}{4}$$ of the sales and the cost of goods sold is Rs. 3,60,000 the sales will be
A.
Rs. 2,70,000
B.
Rs. 2,88,000
C.
Rs. 4,32,000
D.
Rs. 4,50,000
Answer: _________
Question 226:
Which of the following is not a source of redemption of preference shares?
A.
divisible profit
B.
securities premium a/c
C.
realization of asset
D.
proceeds of fresh issue
Answer: _________
Question 227:
A sale of goods to Vidhya for cash should be debited to . . . . . . . .
A.
Vidhya's account
B.
Cash account
C.
Sale of goods account
D.
Purchases account
Answer: _________
Question 228:
Which one of the following accounting standards is not mandatory in India?
A.
Fixed assets accounting and revenue recognition
B.
Inventory and depreciation accounting
C.
Non-monetary assets and fixed assets
D.
Monetary assets and depreciation accounting
Answer: _________
Question 229:
The amount set aside to meet the loss of bad debt is . . . . . . . .
A.
liability
B.
reserve
C.
provision
D.
contingent liability
Answer: _________
Question 230:
A company cannot issue redeemable preference shares for a period exceeding . . . . . . . .
A.
6 years
B.
7 years
C.
10 years
D.
20 years
Answer: _________
Question 231:
Which of the following result in reduction of capital?
A.
Reducing share capital
B.
Reducing the amount payable to creditors
C.
Appreciation in the value of assets
D.
All of these
Answer: _________
Question 232:
Goods worth Rs. 200 returned by Mohan were taken into stock, but no entry was passed, is an error of . . . . . . . .
A.
Commission
B.
Principle
C.
Omission
D.
Compensatory
Answer: _________
Question 233:
Which of the following amounts shall be credited to Investor Education and Protection Fund, if they remain unpaid/unclaimed for seven years from the date they become due?
A.
Matured debentures of a company
B.
Tax arrears
C.
Proceeds of sale of property
D.
Provision for doubtful debts
Answer: _________
Question 234:
Provision for bad debts is calculated on . . . . . . . .
A.
Creditors
B.
Sales
C.
Purchases
D.
Debtors
Answer: _________
Question 235:
Payment of compensation to a worker, who has been discharged from service, is a:
A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred - revenue expenditure
D.
Non-business expenditure
Answer: _________
Question 236:
If earning per share of X Co. is Rs. 15 and the price earning ratio of other similar companies is 10, then the market value of shares of X Co. will be:
A.
Rs. 300
B.
Rs. 150
C.
Rs. 75
D.
Rs. 25
Answer: _________
Question 237:
The original cast of a asset is Rs. 4,15,000 is. The useful life of the asset is 20 year and net residual value of estimated at Rs. 65,000. The amount of depreciation each year will be
A.
Rs. 17,000
B.
Rs. 17,500
C.
Rs. 18,000
D.
Rs. 18,500
Answer: _________
Question 238:
Deficiency or surplus account in the liquidation of a company is called
A.
List-C
B.
List-D
C.
List-G
D.
List-H
Answer: _________
Question 239:
The basis of generally accepted accounting principles are
A.
Assumptions
B.
Rules
C.
Standards
D.
Conventions
Answer: _________
Question 240:
The bad debts that have been written off, if recovered subsequently then they are credited to
A.
Debtors account
B.
Sales account
C.
Trading account
D.
Profit and loss account
Answer: _________
Question 241:
Secret Reserve in a concern be created by the following:
A.
Undervaluing fixed assets
B.
Treating revenue expenses as capital expenses
C.
Undervaluing liabilities
D.
By A & B
Answer: _________
Question 242:
'Provision' under the companies act, 1956 means with holding of profit for the following
A.
For a known liability whose amount can be very accurately determined
B.
For a known liability whose amount cannot be very accurately determined
C.
For any unknown liability
D.
For any general or specific purpose
Answer: _________
Question 243:
If two companies have different accounting policies with respect to the same item, then they make necessary changes to adopt accounting policies.
A.
Uniform
B.
Fifo method
C.
Lifo method
D.
None of the above
Answer: _________
Question 244:
Everything a firm owns, it also owes out to somebody. This co-incidenceis explained by the . . . . . . . . concept.
A.
dual aspect
B.
prudence
C.
money measurement
D.
revenue recognition
Answer: _________
Question 245:
In journal transactions are recorded on
A.
Chronological basis
B.
Analytical basis
C.
Convenience basis
D.
Selective basis
Answer: _________
Question 246:
The amount spent to increase the earning capacity of a business is:
A.
Capital loss
B.
Deferred revenue expenditure
C.
Revenue expense
D.
Capital expenditure
Answer: _________
Question 247:
When any partner retires and the remaining partners carry on the business with the firm's property without any final settlements of accounts the outgoing partner is entitled to:
A.
Interest @ 6% per annum of the amount due to him
B.
Such share of the profits as may be proportionate to his share of the firm's property
C.
Interest at mutually agreed rate
D.
Interest at the rate charged by Banks on the amount due to him
Answer: _________
Question 248:
Where is the depreciation account appearing in the trial balance is shown?
A.
Profit and Loss A/c
B.
Liabilities side
C.
Deducted from the concerned assets
D.
All of the above
Answer: _________
Question 249:
Match the following: List-I List-II a. Partnership can be formed for the purpose of carrying . . . . . . . . 1. incoming partner b. Guaranteed profit is generally given to . . . . . . . . 2. business c. Every partner is a joint . . . . . . . . of the partnership property. 3. nominal d. Partners, who do not contribute any capital and have no interest in the business are known as . . . . . . . . partners. 4. owner
A.
a-2, b-1, c-4, d-3
B.
a-2, b-4, c-1, d-3
C.
a-4, b-3, c-2, d-1
D.
a-4, b-1, c-2, d-3
Answer: _________
Question 250:
Capital of Business is:
A.
Cash
B.
An asset
C.
A Liability
D.
None of the above
Answer: _________
Question 251:
Match List-I and List-II and Select the correct answer: List-I List-II a. Loss in business 1. Profit & Loss Adjustment A/c b. Partner loan 2. Joint Life Policy c. Death of Partners 3. Debit balance of Profit and Loss A/c d. Revaluation A/c 4. 6% Interest
A.
a-3, b-4, c-2, d-1
B.
a-1, b-2, c-3, d-4
C.
a-1, b-3, c-4, d-2
D.
a-3, b-2, c-1, d-4
Answer: _________
Question 252:
Responsibility accounting seeks to establish a relationship between planning and controlling by:
A.
establishing a system of collective responsibility
B.
fixing organisational responsibilities for profit planning and controlling
C.
devising standards of work performance
D.
controlling cost and performance
Answer: _________
Question 253:
A public company acquired the following assets and liabilities of a firm : Building Rs. 25,000, Machinery Rs. 15,000 Debtors Rs. 10,000, Stock Rs. 15,000 and Creditors Rs. 8,000. What will be the amount of goodwill or capital reserve if the purchase consideration of the business was Rs. 54,000.
A.
Rs. 3,000 goodwill
B.
Rs. 3,000 Capital reserve
C.
Rs. 11,000 Goodwill
D.
Rs. 11,000 Capital reserve
Answer: _________
Question 254:
Under which type of agreement royalty is paid on the basis of sale?
A.
Mining
B.
Patent
C.
Copy right
D.
Licensing
Answer: _________
Question 255:
What is the another name of managerial accounting?
A.
Cost accounting
B.
Traditional accounting
C.
Decision accounting
D.
None of these
Answer: _________
Question 256:
Which of the following is a selling expense?
A.
Any tax/freight is paid on purchases
B.
General salaries paid to laborers
C.
Tax & freight paid on sale
D.
Interest on deposits
Answer: _________
Question 257:
A debit balance in the bank statement indicates
A.
Cash at bank
B.
Bank overdraft
C.
Over payment to creditors
D.
Cash in hand
Answer: _________
Question 258:
Which one of the following is NOT true about capital expenditure?
A.
Creates future benefits
B.
Incurred to acquire fixed assets
C.
Incurred to increase the economic life of existing fixed assets
D.
Reduce the profit of the concern
Answer: _________
Question 259:
Which of the following is not an item of Balance Sheet?
A.
Accounts receivable
B.
Accounts payable
C.
Sales revenue
D.
Marketable securities
Answer: _________
Question 260:
In an account, when credit side total < debit side total, then, the balance is known as
A.
Negative balance
B.
Debit balance
C.
Positive balance
D.
Credit balance
Answer: _________
Question 261:
Which of the following is used to record financial transactions in chronological (day-to-day) order?
A.
Voucher
B.
General Journal
C.
General Ledger
D.
Trial Balance
Answer: _________
Question 262:
Net Profit = Gross Profit minus
A.
Operating expenses
B.
Product cost
C.
Deferred expenses
D.
Direct cost
Answer: _________
Question 263:
Money spent to acquire or upgrade physical assets is known as
A.
Revenue expense
B.
Capital expense
C.
Administrative expense
D.
Operating expense
Answer: _________
Question 264:
Salaries paid in advance should be shown on
A.
Asset side of the Balance sheet
B.
Liability side of the Balance sheet
C.
Credit side of the Trading account
D.
All of the above
Answer: _________
Question 265:
Which of the following assets are shown at written down value in Balance sheet?
A.
Current assets
B.
Liquid asset
C.
Floating assets
D.
Fixed asset
Answer: _________
Question 266:
Income accrued and received' results in-
A.
Decrease in assets and increase in capital
B.
Increase in assets and increase in capital
C.
Decrease in assets and increase in liabilities
D.
Increase in assets and increase in liabilities
Answer: _________
Question 267:
For equity-settled share-based payment transactions, the entity shall measure the goods or services received and the corresponding increase in equity, directly at the . . . . . . . . of the goods or services received, unless that it cannot be estimated reliably
A.
amortised cost
B.
net book value
C.
fair value
D.
historical cost
Answer: _________
Question 268:
In settling the accounts of a firm after dissolution losses including deficiencies of capital, shall be paid in which sequence? 1. By the partners individually in profit sharing ratio. 2. Out of profit. 3. Out of capital. Select the correct answer:
A.
1, 2 and 3
B.
2, 1 and 3
C.
3, 2 and 1
D.
2, 3 and 1
Answer: _________
Question 269:
Which of the following statements is true in connection with Receipt and Payment A/c.
A.
It begins with a credit balance
B.
It is a Real A/c
C.
Only revenue items are recorded in it
D.
The closing balance indicates profit or loss of the year
Answer: _________
Question 270:
Gross Profit Ratio is calculated by
A.
$$frac{{{ ext{Gross Profit}}}}{{{ ext{Gross Sales}}}} imes 100$$
B.
$$frac{{{ ext{Gross Profit}}}}{{{ ext{Net Sales}}}} imes 100$$
C.
$$frac{{{ ext{Net Profit}}}}{{{ ext{Gross Sales}}}} imes 100$$
D.
$$frac{{{ ext{Gross Receipts}}}}{{{ ext{Net Sales}}}} imes 100$$
Answer: _________
Question 271:
Securities premium reserve account is shown on the liabilities side in the balance sheet under the heading
A.
Reserves and surplus
B.
Current liabilities and provisions
C.
Share capital
D.
All of these
Answer: _________
Question 272:
Premium on issue of shares is determined by:
A.
Company Law Board
B.
Government
C.
Issuing Company
D.
Securities and Exchange Board of India
Answer: _________
Question 273:
The written down value of a plant is Rs. 60,000 (the original value being Rs. 1,00,000). It is sold for Rs. 1,20,000 during the current financial year. Which of the following is true in this regard?
A.
Capital profit = Rs. 60,000
B.
Revenue profit = Rs. 60,000
C.
Capital profit = Rs. 20,000 and Revenue profit = Rs. 40,000
D.
Capital profit = Rs. 1,20,000
Answer: _________
Question 274:
Which of the following equation is correct?
A.
Gross profit = Net sales - Cost of goods sold
B.
Gross profit = Sales + Closing stock - Opening stock Purchase
C.
Cost of goods sold + Gross profit = Sales
D.
All of the above
Answer: _________
Question 275:
Capitalisation of profit of a company is possible
A.
only by issue of fully paid bonus shares
B.
only by making partly paid shares fully paid
C.
by A and B both
D.
none of the above
Answer: _________
Question 276:
The definition of accounting will bring out the following functions: 1. Classifying 2. Interpreting 3. Recording 4. Summarising The correct sequence of these functions is
A.
3, 1, 4, 2
B.
3, 1, 2, 4
C.
4, 1, 3, 2
D.
1, 4, 3, 2
Answer: _________
Question 277:
Which one of the following is not the object of preparing Funds Flow Statement?
A.
To show the results of current financial management
B.
To show how general expansion on business has been financed
C.
To show the earnings of the business over a period of time
D.
To illustrate the relationship between profits from operations on the one hand and raising of new capital or contracting term loan on the other
Answer: _________
Question 278:
In the absence of specific direction cash paid by a new partner to purchase his share of goodwill, will be apportioned by the old partners in
A.
their old profit sharing ratio
B.
their sacrificing ratio
C.
their capital ratio
D.
none of the above
Answer: _________
Question 279:
Generally accepted basis of Valuation of a fixed asset is:
A.
Replacement cost
B.
Net realisable value
C.
Historical cost less depreciation
D.
Cost or market value whichever is lower
Answer: _________
Question 280:
Increasing trend in general pricelevelis known as
A.
depreciation
B.
inflation
C.
profit
D.
pricing
Answer: _________
Question 281:
In the absence of any agreement to the contrary, the partners have to share profits:
A.
In the ratio of their contribution to the capital of the firm
B.
In the ratio of time devoted by them to business
C.
In the ratio of sales effected by each of them
D.
In equal proportion
Answer: _________
Question 282:
Which of the following accounts should be credited if a debt becomes irrecoverable?
A.
Profit and loss a/c
B.
Debtors a/c
C.
Bad debs a/c
D.
Sales a/c
Answer: _________
Question 283:
From investor's point of view, the cost of capital is:
A.
Interest Rate
B.
Market Value
C.
Yield of Capital Sacrifice
D.
Stock Exchange Value
Answer: _________
Question 284:
Which of the following items will have a debit balance:
A.
Income received in advance
B.
Bank loan
C.
Prepaid insurance premium
D.
Reserve for doubtful debts
Answer: _________
Question 285:
Capital structure ratio
A.
Equity : Preference
B.
Equity : Reserve
C.
Equity : Debt
D.
Long term debt : Short term debt
Answer: _________
Question 286:
Mr. X a partner in a partnership firm withdraws Rs. 2,000 at the end of each month. Rate of interest is 5%. Interest on drawings at the end of the year will be
A.
Rs. 1,200
B.
Rs. 600
C.
Rs. 550
D.
Rs. 650
Answer: _________
Question 287:
X and Y are partners sharing profits and losses in 3 : 1. They admitted Z in the partnership and he bring Rs. 8,000 as his share of goodwill. New profit sharing ratio between X, Y and Z is 2 : 1 : 1, goodwill will be distributed to.
A.
X and Y Rs. 6,000 and Rs. 2,000 respectively
B.
X and Y Rs. 4,000 each
C.
Only X
D.
Only Y
Answer: _________
Question 288:
Match the following List-I List-II a. The document related to sales return is . . . . . . . . note. 1. Business b. Bank reconciliation statement is prepared by the . . . . . . . . enterprise. 2. Credit c. Purchases account will always have a . . . . . . . . balance. 3. Cash d. When the word 'paid' occurs, it means reduction of . . . . . . . . 4. Debit
A.
a-4, b-3, c-2, d-1
B.
a-2, b-1, c-4, d-3
C.
a-2, b-4, c-1, d-3
D.
a-3, b-4, c-1, d-2
Answer: _________
Question 289:
Accounting standard 8 is concerned with:
A.
Valuation of inventories
B.
Accounting for fixed assets
C.
Accounting for research and development
D.
Depreciation accounting
Answer: _________
Question 290:
All the possible losses should be anticipated in advance. This is in accordance with
A.
Conservation concept
B.
Disclosure concept
C.
Materiality concept
D.
Recovery concept
Answer: _________
Question 291:
At what price the stock is valued under conventional method:
A.
At cost price
B.
At market price
C.
At cost price or market price whichever is lower
D.
At cost price or market price whichever is higher
Answer: _________
Question 292:
Which of the following is not a formula of P/V Ratio?
A.
$${ ext{P/V Ratio}} = frac{{{ ext{S}} - { ext{V}}}}{{ ext{S}}} imes 100$$
B.
$${ ext{P/V Ratio}} = frac{{{ ext{Profit}}}}{{{ ext{MOS}}}} imes 100$$
C.
$${ ext{P/V Ratio}} = frac{{{ ext{Change in Profit}}}}{{{ ext{Change in Total Cost}}}} imes 100$$
D.
$${ ext{P/V Ratio}} = frac{{ ext{F}}}{{{ ext{BEP(Rs}}{ ext{.)}}}} imes 100$$
Answer: _________
Question 293:
If an equal amount is withdrawn by a partner at the beginning of each month for a period of 6 months, the interest on the total amount will be charged for
A.
2.5 months
B.
3 months
C.
3.5 months
D.
6 months
Answer: _________
Question 294:
The question contains two sentences. One is statement (A) and the other is Reason (R) . You have to examine both the sentence carefully and decide whether statement (A) and reason (R) correct and if so, reason is the correct explanation of statement. Mark these items in the answer sheet: Statement (A): Wages paid for installation of new machine is treated as capital expenditure. Reason (R): It is related to giving work to new asset.
A.
Both (A) and (R) are true but R is correct explanation of A
B.
Both (A) and (R) are true and R is not correct explanation of A
C.
A is correct but R is wrong
D.
A is wrong but R is correct
Answer: _________
Question 295:
Goodwill of a firm of A and B is valued at Rs. 30,000. It is appearing in the books at Rs. 12,000. C is admitted for $${frac{1}{4}^{{ ext{th}}}}$$ share. The amount of goodwill, which he is supposed to bring, will be:
A.
Rs. 4,500
B.
Rs. 3,000
C.
Rs. 7,500
D.
Rs. 10,500
Answer: _________
Question 296:
Under Hire Purchase System, the interest for each period is computed on
A.
Cash price remaining unpaid
B.
Installment price remaining unpaid
C.
The amount that has been agreed under hire purchase agreement
D.
Cash price minus the amount of hire purchase installment paid
Answer: _________
Question 297:
Which of the following is an implicit cost of increasing proportion of debt of a company?
A.
P.E. Ratio of the company would increase
B.
Rate of return of the company would decrease
C.
Tax-shield would not be available on new debts
D.
Equity shareholders would demand higher return
Answer: _________
Question 298:
Net credit sales of business was Rs. 1,75,000. Debtors Turnover ratio is 8 times. Closing debtors were in excess of opening debtors by Rs. 7,000. Opening debtors will be
A.
Rs. 18,375
B.
Rs. 21,875
C.
Rs. 25,375
D.
None of the above
Answer: _________
Question 299:
Which of the following accounts is a personal account?
A.
Drawings account
B.
Bank account
C.
Prepaid Rent account
D.
All of the above
Answer: _________
Question 300:
Dual aspect concept results in the following accounting equation
A.
Revenue = Expenses
B.
Capital + Profits = Assets + Expenses
C.
Capital + Liabilities = Assets
D.
Capital + Drawings - Owner's Equity
Answer: _________
Question 301:
Posting of a transaction means - That transaction is
A.
Written in two accounts
B.
Written in debit side of related account
C.
Written in credit side of related account
D.
Written on appropriate side of two accounts
Answer: _________
Question 302:
X and Y made a profit of Rs. 5,000 and invested Rs. 25,000 as capital in the firm. The expected average rate of return on capital is 15%. If it is valued at three year purchase then amount of goodwill will be
A.
Rs. 7,500
B.
Rs. 3,750
C.
Rs. 15,000
D.
Rs. 9,000
Answer: _________
Question 303:
Grouping of similar items and transferring those to the respective accounts is known as:
A.
Journalizing
B.
Ledger adjustment
C.
Posting
D.
Preparation of trial balance
Answer: _________
Question 304:
Which of the following transactions involving the issuance of shares does not come within the definition of a 'share based payment' under Ind AS-102?
A.
Employee share purchase plans
B.
Employee share option plans
C.
Share based payment relating to an acquisition of a subsidiary
D.
Share appreciation rights
Answer: _________
Question 305:
"Goods cost in transit" is an overhead of
A.
Sales
B.
Factory
C.
Office
D.
Delivery
Answer: _________
Question 306:
If the articles of association of the company remains silent as the rate of interest to be paid for calls in arrears the directors can charge interest:
A.
6% per annum
B.
6.5% per annum
C.
5% per annum
D.
5.5% per annum
Answer: _________
Question 307:
Unearned income is considered as
A.
Assets
B.
Liability
C.
Loss
D.
Capital
Answer: _________
Question 308:
Find the cost of closing stock from the following Current ratio = 2.5 Liquid ratio = 1.5 Working capital = 1,20,000 Fixed assets = 3,00,000
A.
Rs. 60,000
B.
Rs. 80,000
C.
Rs. 1,00,000
D.
Rs. 1,20,000
Answer: _________
Question 309:
Capitalist industries results in
A.
Decrease in capital creation over time
B.
Increase in capital
C.
Increase in service employment
D.
Increase in income tax
Answer: _________
Question 310:
If the fixed cost is Rs. 40,000, variable cost per unit Rs. 2 and if the selling price per unit is Rs. 3. What will break even point (in-units)?
A.
20,000 units
B.
30,000 units
C.
40,000 units
D.
50,000 units
Answer: _________
Question 311:
When amalgamation is in the nature of merger, the accounting method to be followed is
A.
equity method
B.
purchase method
C.
pooling of interest method
D.
consolidated method
Answer: _________
Question 312:
The main objective of preparing Income and Expenditure Account is to know:
A.
Cash Balance
B.
Financial Condition
C.
Total Sales Proceeds
D.
Surplus or Deficit
Answer: _________
Question 313:
Which of the following will not be the source for buying back of shares by a company?
A.
Company's free reserves
B.
Company's securities premium A/c
C.
Proceeds of any shares or other specified securities as per Section 77A (i) (iii)
D.
Company's borrowings from financial institutions
Answer: _________
Question 314:
Which of the following redeemable preference share due at Rs. 10 per share is suitable for redemption?
A.
On which only Rs. 2 application money has been paid
B.
On which application money and Rs. allotment money has been paid
C.
On which Rs. 7.50 per share has been paid
D.
On which Rs. 10 per share has been paid
Answer: _________
Question 315:
Which one of the following is not a method of depreciation?
A.
Insurance policy method
B.
Depreciated return method
C.
The sum of the year digits method
D.
Replacement cost method
Answer: _________
Question 316:
Which is the accounting concept that requires the practice of crediting closing stock to the trading account?
A.
Going concern
B.
Cost
C.
Realization
D.
Matching
Answer: _________
Question 317:
Which of the following is not an advance given by a bank?
A.
loan
B.
overdraft
C.
deposit
D.
cash credit
Answer: _________
Question 318:
Account current is a journal is . . . . . . . .
A.
True
B.
False
C.
Partly true
D.
Partly false
Answer: _________
Question 319:
If payment is made on the average due date it results in . . . . . . . .
A.
loss of interest to the creditor
B.
loss of interest to the debtor
C.
no loss of interest to either of them
D.
loss of interest to both the creditor and debtor
Answer: _________
Question 320:
Which one of the following arrangements represents the order of liquidity?
A.
Cash, Bills Receivable, Stock, Debtors
B.
Cash, Bills Receivable, Debtors, Stock
C.
Cash, Stock, Bills Receivable, Debtors
D.
Cash, Debtors, Bills Receivable, Stock
Answer: _________
Question 321:
. . . . . . . . implies issue and allotment of shares to a selected group of persons and not to general public.
A.
Initial public offer
B.
Right issue
C.
Private placement
D.
Pre-emptive right
Answer: _________
Question 322:
Depreciation, as the term is used in accounting, means:
A.
physical deterioration of a fixed asset
B.
decline in the market value of an asset
C.
allocation of the cost of fixed asset over its useful life
D.
making a provision for the replacement of the fixed asset
Answer: _________
Question 323:
Returns outward book makes a record of:
A.
goods returned to the suppliers
B.
goods returned to customers
C.
goods returned to proprietor
D.
goods returned to neighbours
Answer: _________
Question 324:
The balance in capital reduction a/c after writing off all accumulated loss, fictitious assets and overvalued assets are transferred to . . . . . . . .
A.
capital reserve
B.
general reserve
C.
reserve capital
D.
goodwill
Answer: _________
Question 325:
Forfeiture of shares results in compulsory termination of . . . . . . . . due to non-payment of allotment/call money.
A.
allotment
B.
membership
C.
subscription
D.
issue
Answer: _________
Question 326:
Recording of decline in the value of patents, copyright and goodwill is called as
A.
Depreciation
B.
Amortisation
C.
Depletion
D.
None of the above
Answer: _________
Question 327:
The portion of uncalled amount of capital that can be called up only on winding up of the company is known as
A.
Authorized capital
B.
Issued capital
C.
Subscribed capital
D.
Reserve capital
Answer: _________
Question 328:
Revenue is generally recognised being earned at the time when:
A.
Agreement of sale is effected
B.
Cash is received
C.
Production is completed
D.
Goods are delivered
Answer: _________
Question 329:
Which of the following items should be posted to Income and Expenditure account of a club?
A.
Sale of old newspaper
B.
Loss on the sale of some asset
C.
Payment of honorarium
D.
All of the above
Answer: _________
Question 330:
Which of the following is not fixed asset?
A.
Building
B.
Furniture
C.
Cash
D.
Machinery
Answer: _________
Question 331:
Upon dissolution, which is the proper order for application of the firm's assets? 1. Payment of partner's loan. 2. In paying, the debts of the firm to third partiy. 3. Distribution of surplus to partners in profit sharing ratio. 4. Payment of partners capital. Select the correct answer:
A.
1, 4, 3 and 2
B.
2, 1, 4 and 3
C.
2, 1, 3 and 4
D.
1, 2, 3 and 4
Answer: _________
Question 332:
Amount spent on increasing the seating capacity of a cinema hall is called
A.
Personal expenditure
B.
Nominal expenditure
C.
Capital expenditure
D.
Revenue expenditure
Answer: _________
Question 333:
When the Debt Turnover Ratio is 4, what is the average collection period?
A.
5 months
B.
4 months
C.
3 months
D.
2 months
Answer: _________
Question 334:
Which of the following is not a features of the Hire Purchase System?
A.
Price is paid in installments
B.
Possession is given immediately
C.
On default the seller has a right to repossess the goods
D.
Ownership is transferred immediately
Answer: _________
Question 335:
The written agreement between the partners to form a partnership is called
A.
Certificate of incorporation
B.
Memorandum of Association
C.
Certificate of Formation of Firm
D.
Partnership Deed
Answer: _________
Question 336:
Goods withdrawn by the proprietor from business for his personal use will be credited to:
A.
Sales account
B.
Purchases account
C.
Supplier's account
D.
Stock account
Answer: _________
Question 337:
According to accounting standard-14 purchase consideration is payable to which one of the following?
A.
Shareholder and debenture holder
B.
Debenture holder and creditor
C.
Shareholder and creditor
D.
Shareholder
Answer: _________
Question 338:
Operating performance is best measured by the rate of return on:
A.
Total Assets
B.
Fixed Assets
C.
Shareholder's Equity
D.
Net capital employed
Answer: _________
Question 339:
The 'Accounting Convention of Matching' means:
A.
Profit for the period to be matched with the sales revenue
B.
Profit for the period to be matched with the investment
C.
Expenses of one period to be matched against the expenses of another period
D.
Expenses of a period to be matched against the revenue of the same period
Answer: _________
Question 340:
In the calculation of net profit of Rs. 15,00,000 for the period, Rs. 20,000 profit on sale of an asset and Rs. 10,000 depreciation have been taken into consideration. In this case funds from operations will be
A.
Rs. 15,00,000
B.
Rs. 15,30,000
C.
Rs. 14,90,000
D.
Rs. 15,10,000
Answer: _________
Question 341:
The following shall not be taken into account in the decision to manufacture or buy
A.
Effective utilization of manufacturing capacity
B.
Variable cost of products
C.
Income from rent of the effective areas used by the production sector
D.
Fixed cost unchanged
Answer: _________
Question 342:
Which of the following should a business entity get at the earliest?
A.
Scheduled sales
B.
Break even point
C.
Profit earning on investment
D.
Market share
Answer: _________
Question 343:
On the admission of a new partner if the partners decide to record change occurred in the value of assets and liabilities in books but not accounts then the firm prepares.
A.
Profit and loss appropriation
B.
Profit and loss adjustment account
C.
Revaluation account
D.
Memorandum revaluation account
Answer: _________
Question 344:
A trader maintains his books of accounts on Single Entry basis. His books of accounts show that his total purchases during the year were Rs. 90,000 of which he returned goods worth Rs. 10,000. His credit sales were Rs. 50,000 and cash sales were Rs. 80,000 of the total sales goods returned were Rs. 30,000. Closing stock is Rs. 12,000. He sells his goods at cost plus $$33frac{1}{3}\% .$$ xa0His opening stock is:
A.
Rs. 12,000
B.
Rs. 10,000
C.
Rs. 8,000
D.
Rs. 7,000
Answer: _________
Question 345:
Acceptances, endorsements and obligations on behalf of a customer will be shown as . . . . . . . . in the balance sheet of a company.
A.
other asset
B.
other liability
C.
borrowings
D.
contingent liability
Answer: _________
Question 346:
Under the accrual concept, which one of the following will not be shown as an asset/liability in the balance sheet of an entity?
A.
Interest due but not paid
B.
Interest due but not received
C.
Interest due and paid
D.
Interest paid but not due
Answer: _________
Question 347:
The amount of depreciation under straight line method vis-a-vis written down value method, when the rate of depreciation is same, would be:
A.
equal in all years
B.
equal in the first year but higher is subsequent years
C.
equal in the first year but lower in subsequent years
D.
lower in the first year but equal in subsequent years
Answer: _________
Question 348:
Match List-I with List-II and select the correct answer using the options given below the list: List-I List-II a. Compensating errors 1. Not recording a business transaction b. Errors of omission 2. Charging a Revenue item to capital c. Errors of principle 3. Writing a debit item on the credit side and a credit item on the debit side of equal amount d. Errors of commission 4. Posting a correct amount to a wrong account
A.
a-3, b-1, c-4, d-2
B.
a-2, b-1, c-4, d-3
C.
a-3, b-1, c-2, d-4
D.
a-2, b-1, c-3, d-4
Answer: _________
Question 349:
Which of the following are prepared by the organisations keeping only incomplete accounting records? I. Cash book II. Customer's Accounts III. Expenses Accounts IV. Day Books Choose the correct answer using the options given below:
A.
I, II and III
B.
I, II and IV
C.
I, III and IV
D.
II, III and IV
Answer: _________
Question 350:
Contingent liability is shown in the balance sheet because of:
A.
Convention of consistency
B.
Convention of materiality
C.
Convention of disclosure
D.
Convention of adventure
Answer: _________
Question 351:
Admission fee income should be . . . . . . . .
A.
capitalized
B.
treated as a revenue
C.
treated as revenue unless the amount is pretty large
D.
treated as a liability
Answer: _________
Question 352:
If on 1 st January 1983 a plant is purchased for Rs. 1,20,000, its estimated life is ten years and its salvage value is Rs. 10,000 under which one of the following method would the 1983 depreciation be the largest?
A.
Straight line method
B.
Double-declining balance method
C.
Sum of the year's digits method
D.
15% on original cost
Answer: _________
Question 353:
The main purpose of preparing a bank reconciliation statement is . . . . . . . .
A.
to know the bank balance
B.
to compare the entries in the cash and pass books
C.
to correct the cash after comparing with pass books
D.
to reconcile cash balance as per pass book with the balance in the pass book
Answer: _________
Question 354:
Match the items of List-I with items of List-Il and indicate of correct matching List-I List-II a. Principle of separate entity 1. Valuing plant and machinery at cost less depreciation b. Principle of conservatism 2. Recording punctuality and honesty of an organization's employees c. Principle of money measurement 3. Capital contributed by proprietor is shown as liability in the balance sheet d. Historical cost concept 4. Valuing inventories at cost or market price whichever is less
A.
a-3, b-2, c-1, d-4
B.
a-3, b-4, c-2, d-1
C.
a-4, b-3, c-1, d-2
D.
a-3, b-1, c-2, d-4
Answer: _________
Question 355:
Which one of the following statements is not true:
A.
Both shares and debentures of a company can be issued at a discount up to a maximum of 10%
B.
Allotment of shares is done only when minimum subscription is received
C.
Preference shares have priority over equity shares with regard to distribution of income
D.
The Company cannot repurchase its own equity shares
Answer: _________
Question 356:
What is not prepared in final accounts of Not for profit organisation?
A.
Receipt and payment account
B.
Income and Expenditure account
C.
Trading A/c
D.
Balance sheet
Answer: _________
Question 357:
Given: Sales = Rs. 1,00,000 Variable cost = Rs. 50,000 Interest = Rs. 5,000 Fixed cost = Rs. 25,000
Operating leverage will be
A.
4
B.
2
C.
6
D.
1.8
Answer: _________
Question 358:
Obsolescence means decline in the value due to:
A.
Fall in market price
B.
Physical wear and tear
C.
Innovation
D.
Efflux of time
Answer: _________
Question 359:
X and Y are partners sharing profits and losses in the ratio of 3 : 2 (X's capital is Rs. 30,000 and Y's capital is Rs. 15,000). They admitted Z agreed to give $${frac{1}{5}^{{ ext{th}}}}$$ share of profits to him. How much Z should bring in towards his capital?
A.
Rs. 9,000
B.
Rs. 11,250
C.
Rs. 12,000
D.
Rs. 14,500
Answer: _________
Question 360:
Gamer vs Murray rule requires
A.
that the solvent partners should bear the loss arising due to insolvency of a partner in their last agreed capital ratio
B.
that the solvent partners should bring in cash equal to their respective shares of the loss on realisation
C.
Both A and B
D.
None of the above
Answer: _________
Question 361:
Which of the following parties cannot be granted shares or share optionsby the entity?
A.
Executive director
B.
Supplier of goods and services
C.
Chief Accountant
D.
None of the above
Answer: _________
Question 362:
Total of the two sides of account and to find out the difference is called
A.
Totalling
B.
Trialing
C.
Balancing
D.
Analysing
Answer: _________
Question 363:
On 1 st January, 2005 the plant and machinery was valued at Rs. 80,000 and on 31 st December, 2005 it was valued at Rs. 1,20,000. Rs. 10,000 was written off as depreciation during the year. This will result in:
A.
Source of Funds Rs. 30,000
B.
Application of funds Rs. 50,000
C.
Application of funds Rs. 40,000
D.
Source of fund Rs. 50,000
Answer: _________
Question 364:
With reference to the theory of contribution, which of the following statement is/are correct? 1. Contribution is the excess of sales over variable costs 2. Contribution is the excess of sales over total costs Select the correct answer:
A.
Only 1
B.
Only 2
C.
Both 1 and 2
D.
Neither 1 nor 2
Answer: _________
Question 365:
Which of the following statements is correct in regards to life-cycle costing? 1. It analyses the process of evaluating product profitability. 2. It helps planners to control costs more effectively.
A.
Only 1
B.
Only 2
C.
Both 1 and 2
D.
Neither 1 nor 2
Answer: _________
Question 366:
Arrange the following in chronological order about assets as per liquidity order. 1. Debtors 2. Building 3. Cash 4. Stock
A.
2, 3, 1, 4
B.
3, 4, 1, 2
C.
1, 4, 2, 3
D.
3, 1, 4, 2
Answer: _________
Question 367:
Which of the following accounting equation is not correct?
A.
Assets - Liabilities = Equity
B.
Assets - Equity = Liability
C.
Assets + Liabilities = Equity
D.
Liabilities + Equity = Asset
Answer: _________
Question 368:
Which of the following accounts is Nominal A/c?
A.
Interest A/c
B.
Accrued Interest A/c
C.
Outstanding Interest A/c
D.
Prepaid Interest A/c
Answer: _________
Question 369:
By which section of companies act, the final accounts of a company are governed?
A.
Sec. 210
B.
Sec. 211
C.
Sec. 212
D.
Sec. 213
Answer: _________
Question 370:
When the current ratio is 2 : 5 and the amount of current liabilities is Rs. 25,000, the amount of current assets would be:
A.
Rs. 62,000
B.
Rs. 12,500
C.
Rs. 10,000
D.
None of the above
Answer: _________
Question 371:
If original cost of a machine is Rs. 1,26,000 and its scrap value is Rs. 6000. what will be the amount of depreciation for II yr by using WDV method
A.
Rs. 10,800
B.
Rs. 11,340
C.
Rs. 15,000
D.
Rs. 14,000
Answer: _________
Question 372:
X and Y sharing profits in the ratio of 7 : 3, admit Z for $${frac{3}{7}^{{ ext{th}}}}$$ share in the new firm in which he takes $${frac{2}{7}^{{ ext{th}}}}$$ from X and $${frac{1}{7}^{{ ext{th}}}}$$ form Y. The new ratio of X, Y and Z will be
A.
7 : 3 : 3
B.
4 : 2 : 3
C.
14 : 6 : 15
D.
29 : 11 : 30
Answer: _________
Question 373:
The loss prior to incorporation cannot be treated
A.
by debiting it to Profit & Loss A/c
B.
by opening a goodwill account with the loss
C.
by debiting it to goodwill account when some price for goodwill is paid at the time of purchasing the business
D.
by debiting it to suspense A/c
Answer: _________
Question 374:
On the insolvency of partner, the deficiency of his capital account is borne by the solvent partners, according to the decision of Garner Vs. Murray's in
A.
equal ratio
B.
capital ratio
C.
profit sharing ratio
D.
none of the above
Answer: _________
Question 375:
Read the following Assertion (A): ''Share premium cannot be utilised for any purpose other than mentioned in Sec. 78 of the Companies Act." Reason (R): "Share premium is a capital receipt." Select the correct answer:
A.
Both A and R are True and R is the correct explanation of A
B.
Both A and R are true but R is not a correct explanation of A
C.
A is true but R is false
D.
A is false but R is true
Answer: _________
Question 376:
Assets and liabilities are . . . . . . . . for determination of capital?
A.
Revaluation
B.
Distribution
C.
Sacrifice
D.
All of the above
Answer: _________
Question 377:
Net profit + Non cash expenses = ?
A.
Gross profit
B.
Profit after tax
C.
Fund from operation activity
D.
Distributable profit
Answer: _________
Question 378:
The current ratio of X limited is 2 : 1 and the quick ratio is 1.5 : 1. If the current liability is Rs. 80,000, then the value of the stock will be-
A.
Rs. 1,60,000
B.
Rs. 1,20,000
C.
Rs. 40,000
D.
Rs. 80,000
Answer: _________
Question 379:
On purchase of old furniture Rs. 8,000 were spent on its repairs. This amount should be debited to
A.
Repairs account
B.
Furniture account
C.
Wages account
D.
None of the above
Answer: _________
Question 380:
The basic concept related to profit and loss account is/are
A.
realisation concept
B.
matching concept
C.
cost concept
D.
Both A and B
Answer: _________
Question 381:
If current ratio is 2.5 and working capital is Rs. 90,000 then the value of current assets would be
A.
Rs. 60,000
B.
Rs. 1,35,000
C.
Rs. 1,50,000
D.
Rs. 2,25,000
Answer: _________
Question 382:
The Debt-Equity Ratio is a test of
A.
Profitability
B.
Solvency
C.
Liquidity
D.
Managerial efficiency
Answer: _________
Question 383:
Break Even Point means
A.
Sales × P/V ratio - Variable cost
B.
Sales × P/V ratio + Fixed cost
C.
Sales × P/V ratio - Fixed cost
D.
Sales × P/V ratio + Variable cost
Answer: _________
Question 384:
In partnership, which of the following account(s) is/are opened under fixed capital account method?
A.
Partner's Capital A/c
B.
Partner's Current A/c
C.
Both A and B
D.
None of these
Answer: _________
Question 385:
Given: Total Assets: Rs. 8,00,000 Current Liabilities: Rs. 2,00,000 No. of shares: Rs. 40,000 Face value per share: Rs. 10 Value per share will be:
A.
Rs. 15.00
B.
Rs. 10.00
C.
Rs. 20.00
D.
None of these
Answer: _________
Question 386:
With reference to Provisions and Reserve, which of the following statement is/are correct? 1. Provision is a charge to profit and loss account 2. Reserve is created for a specific loss Select the correct answer:
A.
Only 1
B.
Only 2
C.
Both 1 and 2
D.
Neither 1 nor 2
Answer: _________
Question 387:
Which of the following factors generally contribute to the value of goodwill of a firm?
A.
Quality of goods sold by the firm
B.
Reputation of the owners
C.
Risk involved in the business
D.
All of the above
Answer: _________
Question 388:
Share warrants to bearers can be issued against:
A.
Fully paid up shares in private company
B.
Fully paid up shares in public company
C.
Any shares in private or public company
D.
Debentures of public company
Answer: _________
Question 389:
This is a debenture for which the company does not keeps any records and which can be transferred without any formal notice the debenture is-
A.
General debenture
B.
Convertible debenture
C.
Bearer debenture
D.
Representative debenture
Answer: _________
Question 390:
Which of the following is fixed asset?
A.
Bank balance
B.
Manufactured stock of goods
C.
Goodwill
D.
Small tools
Answer: _________
Question 391:
Assertion (A) Premium received on issue of shares is credited to share premium account, but not to profit and loss account. Reason (R) Since, share premium is not a trading profit, it is not distributed to shareholders.
A.
Both (A) and (R) are true and (R) is the correct explanation of (A)
B.
Both (A) and (R) are true, but (R) is not the correct explanation of (A)
C.
(A) is true, but (R) is false
D.
(A) is false, but (R) is true
Answer: _________
Question 392:
Assets are shown in balance sheet in order of
A.
In order of permanence
B.
On market price
C.
On Book value
D.
On the basis of liquidity
Answer: _________
Question 393:
Dissolution of partnership must take place when:
A.
a partner misbehave
B.
a partner becomes of unsound mind
C.
business is running at a loss
D.
a partner dies
Answer: _________
Question 394:
If the withdrawals are made by the partners evenly in the beginning of each month, interest is usually calculated for the whole of the amount (annual) for:
A.
5 months
B.
5 and half months
C.
6 months
D.
6 and half months
Answer: _________
Question 395:
In certainty equivalent approach, adjusted cash flows are discounted at:
A.
Accounting Rate of Return
B.
Internal Rate of Return
C.
Hurdle Rate
D.
Risk Free Rate
Answer: _________
Question 396:
Accounting Standard-14 is
A.
Accounting for amalgamation
B.
Accounting for government grant
C.
Accounting for investment
D.
Accounting for intangible asset
Answer: _________
Question 397:
Share capital account . . . . . . . . when shares are forfeited.
A.
Debit
B.
Both of the above
C.
Credit
D.
None of the above
Answer: _________
Question 398:
Working capital of previous year and current year are Rs. -50,000 and Rs. 60,000 respectively, then the amount of change in the working capital will be:
A.
Increase of Rs. 10,000
B.
Decrease of Rs. 10,000
C.
Increase of Rs. 1,10,000
D.
Decrease of Rs. 1,10,000
Answer: _________
Question 399:
On the dissolution of a firm, the amount realized from an unrecorded asset is transferred to
A.
Revaluation Account
B.
Realization Account
C.
Partner's Capital Account
D.
Credit side of Cash Account
Answer: _________
Question 400:
If cost is Rs. 18,000 and profit is $$33frac{1}{3}\% $$ xa0on cost the amount of profit is
A.
Rs. 2,000
B.
Rs. 3,000
C.
Rs. 6,000
D.
None of the above
Answer: _________
Question 401:
A partnership firm is illegal when
A.
Any of the partners is from enemy country
B.
Established for unlimited period
C.
There are seven partners
D.
Registered under the Partnership Act
Answer: _________
Question 402:
What is the use of managerial accounting?
A.
Mandatory
B.
Optional
C.
Mortgage
D.
None of these
Answer: _________
Question 403:
Purchase of machinery is recorded in:
A.
sales book
B.
journal proper
C.
purchases book
D.
sales returns book
Answer: _________
Question 404:
Wages paid for erection of machinery are debited to . . . . . . . .
A.
Wages account
B.
Machinery account
C.
Profit and loss account
D.
Deferred wages account
Answer: _________
Question 405:
In the case of marine insurance reserve for unexpired risk is . . . . . . . .
A.
50%
B.
100%
C.
40%
D.
None of these
Answer: _________
Question 406:
Depreciation Accounting is a process of:
A.
allocation of cost
B.
valuation of assets
C.
provision for replacement of assets
D.
estimation of net profit
Answer: _________
Question 407:
Which of the following accounts will invariably have a credit balance?
A.
Discount account
B.
Account payable account
C.
Cash account
D.
Purchases account
Answer: _________
Question 408:
Insurance Act came in to effect in . . . . . . . .
A.
1956
B.
1972
C.
1938
D.
None of these
Answer: _________
Question 409:
The following figures are taken from a balance sheet: Equity share capital = Rs. 1,10,000 6% preference share capital = Rs. 30,000 General reserve = Rs. 50,000 Reserve for contingencies = Rs. 20,000 6% mortgage debentures = Rs. 50,000 Sundry creditors = Rs. 20,000 Preliminary expenses = Rs. 5,000 Prepaid expenses = Rs. 4,000 In this case, the debt equity ratio is:
A.
1 : 2
B.
2 : 1
C.
24 : 1
D.
None of these
Answer: _________
Question 410:
A business concern provides the following details- Cost of goods sold = Rs. 1,50,000 Sales = Rs. 2,00,000 Opening stock = Rs. 60,000 Closing stock = Rs. 40,000 Debtors = Rs. 45,000 Creditors = Rs. 50,000 The concerns, purchses would amount to (in Rs.):
A.
130,000
B.
220,000
C.
260,000
D.
290,000
Answer: _________
Question 411:
If, Capital at the end = Rs. 7,000 Capital introduced = Rs. 5,000 Drawings = Rs. 8,000 Loss = Rs. 10,000 Then capital in the beginning is equal to:
A.
Rs. 12,000
B.
Rs. 16,000
C.
Rs. 20,000
D.
Rs. 30,000
Answer: _________
Question 412:
The accumulated losses and fictitious assets of the transferor company are transferred to . . . . . . . . a/c.
A.
equity share holders
B.
transferee company
C.
equity capital
D.
realization
Answer: _________
Question 413:
At the time of retirement of a partner profit on revaluation of assets and liabilities is credited to
A.
Capital Account of retiring partner
B.
Capital Accounts of all partners in their old profit sharing ratio
C.
Capital Accounts of remaining partners in their gaining ratio
D.
Capital Accounts of remaining partners in their new profit sharing ratio
Answer: _________
Question 414:
Premium received on the issue of shares is shown in:
A.
Debit side of Profit and Loss Account
B.
Credit side of Profit and Loss Account
C.
Assets side of the Balance Sheet
D.
Liabilities side of the Balance Sheet
Answer: _________
Question 415:
Which one of the following statements is incorrect?
A.
Share premium received on issue of shares can be utilized for writing off the preliminary expenses
B.
Capital Redemption Reserve is available only for issuing fully paid Bonus Shares
C.
Discount on issue of shares is shown as a reduction from capital
D.
At the time of Right issue, the existing share holders gain because the share are generally issued at a price lower than the market price
Answer: _________
Question 416:
$$frac{{{ ext{Profit}}}}{{{ ext{P/V Ratio}}}} = .,.,.,.,.,.,.,.$$
A.
Break Even Point
B.
Variable Cost
C.
Fixed Cost
D.
Margin of Safety
Answer: _________
Question 417:
Realization principle of accounting does not apply to:
A.
Service industry
B.
Mining industry
C.
Railway transport
D.
Long-term construction contracts
Answer: _________
Question 418:
Which of the following is a contingent liability?
A.
Outstanding wages
B.
Declared dividend
C.
Liability on bills discounted
D.
Prepaid salary
Answer: _________
Question 419:
If cash is Rs. 10,000, closing stock is Rs. 25,000, debtors is Rs. 5000, creditors is Rs. 22,000 and bank overdraft is Rs. 8000, then the current ratio will be
A.
3 : 4
B.
4 : 3
C.
2 : 1
D.
1 : 2
Answer: _________
Question 420:
Expenditure incurred by a publisher for acquiring copyrights is a
A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
Contingent expenditure
Answer: _________
Question 421:
Under the yield method of valuation of equity share capital, if for an equity share of Rs. 50 the normal rate of return is 10% and expectedrate of return is 5%, then the value of an equity share will be
A.
Rs. 25
B.
Rs. 40
C.
Rs. 50
D.
Rs. 100
Answer: _________
Question 422:
Given: Debentures = Rs. 5,00,000 Equity share capital = Rs. 25,00,000 Cash = Rs. 1,00,000 Debtor = Rs. 2,00,000 Debt Equity Ratio will be
A.
5 : 1
B.
0.2 : 1
C.
5.6 : 1
D.
None of these
Answer: _________
Question 423:
Marginal safety is associated with:
A.
Profit volume ratio/profit
B.
Sales-profit/profit volume ratio
C.
P/V ratio/Fixed cost + desired profit
D.
Sales/profit volume ratio
Answer: _________
Question 424:
Accounting Standards Board of India was established in the year
A.
1970
B.
1972
C.
1973
D.
1977
Answer: _________
Question 425:
Which is not included in current liability-
A.
Unclaimed Dividends
B.
Sundry Creditors
C.
Prepaid Insurance
D.
Bank Overdraft
Answer: _________
Question 426:
Given: Cash in hand: Rs. 10,000 Debtor: Rs. 20,000 Bills receivable: Rs. 5,000 Plant : Rs. 5,000 Creditor: Rs. 15,000 Net Working Capital will be
A.
Rs. 25,000
B.
Rs. 20,000
C.
Rs. 40,000
D.
None of these
Answer: _________
Question 427:
Average profit of a firm is Rs. 10,000. Firm's capital is Rs. 70,000 and normal return of this business is expected at 10%. By capitalisation method, Goodwill be
A.
Rs. 30,000
B.
Rs. 60,000
C.
Rs. 1,00,000
D.
Rs. 1,70,000
Answer: _________
Question 428:
As per the SEBI regulation, a minimum of . . . . . . . .% of the issued capital must be subscribed in order to validate a public share issue, failing of which, the issue may be cancelled and may be reissed on a future date.
A.
75
B.
80
C.
85
D.
90
Answer: _________
Question 429:
Prepaid rent is associated with:
A.
Nominal account
B.
Personal account
C.
Tangible real account
D.
Intangible real account
Answer: _________
Question 430:
What is the excess of net assets over consideration paid called?
A.
Capital reserve
B.
Reserve capital
C.
Security premium
D.
Goodwill
Answer: _________
Question 431:
Variable cost ratio is 30%, fixed cost is Rs. 63,000. The break even point will be
A.
Rs. 81,900
B.
Rs. 90,000
C.
Rs. 18,900
D.
Rs. 71,100
Answer: _________
Question 432:
Given: Sals - Rs. 2,00,000 Gross Profit - 25% of cost Stock velocity - 3 months Closing stock is Rs. 2,000 more than the opening stock.
A.
Rs. 1,50,000
B.
Rs. 1,60,000
C.
Rs. 1,62,000
D.
Rs. 1,72,000
Answer: _________
Question 433:
On the dissolution of a firm, loan from the wife of a partner is treated as
A.
loan from the partner
B.
outsider liability
C.
preferential liability
D.
liability payable after all other debts have been paid
Answer: _________
Question 434:
The profits of a firm for the last five years are Rs. 80,000, Rs. 90,000, Rs. 70,000, Rs. 85,000 and Rs. 1,00,000 respectively. The goodwill of the firm is calculated on basis of three year purchase of average profits of five years. The value of goodwill is
A.
Rs. 89,000
B.
Rs. 2,25,000
C.
Rs. 2,55,000
D.
Rs. 4,25,000
Answer: _________
Question 435:
A seller gives his goods worth Rs. 2,000 to a buyer for Rs. 1800. The differnce of Rs. 200 will be termed as
A.
Cash discount
B.
Trade discount
C.
Credit sales
D.
Bad debts
Answer: _________
Question 436:
As per AS-ll construction contracts, costs that may be attributable to contract activity in general and can be allocated to specific contracts include 1. insurance 2. freight 3. costs of design and technical assistance that is not directly related to a specific contract 4. manufacturing overheads 5. construction overheads Select the correct answer:
A.
1, 3 and 5
B.
2, 3 and 4
C.
3, 4 and 5
D.
1, 2 and 3
Answer: _________
Question 437:
Goodwill is a/an:
A.
Tangible Asset
B.
Intangible Asset
C.
Fictitious Asset
D.
Current Asset
Answer: _________
Question 438:
When a goodwill account is raised at the time of admission of a new partner, credit is given to old partners in their:
A.
New profit sharing ratio
B.
Old profit sharing ratio
C.
Sacrificing ratio
D.
Capital ratio
Answer: _________
Question 439:
A company issues 10% irredeemable preference shares. The face value per share is Rs. 100, but the issue price is Rs. 95. What is the cost of preference share?
A.
10.63%
B.
10.73%
C.
10.83%
D.
10.53%
Answer: _________
Question 440:
A, B and C are partners in a firm without any agreement. They have contributed Rs. 7,50,000, Rs. 7,30,000 and Rs. 7,20,000 by way of capital in the firm. A was unable to work for six months in a year due to illness. At the end of the year, the firm earned a profit of Rs. 7,15,000. A's share in the profit will be
A.
Rs. 77,500
B.
Rs. 73,750
C.
Rs. 75,000
D.
Rs. 72,500
Answer: _________
Question 441:
A, B and C are partners. They admit D as a partner and gurantee that his share of profit shall not be less than Rs. 20,000 p.a. Profits are to be shared in the ratio of 4 : 3 : 3 : 2 respectively. If total profits for a year were Rs. 96,000, A's share of profits will be:
A.
Rs. 30,400.00
B.
Rs. 32,000.00
C.
Rs. 33,777.78
D.
Rs. 24,000.00
Answer: _________
Question 442:
While calculating purchase price, the following values of assets are considered
A.
Book value
B.
New values fixed
C.
Average values
D.
Market values
Answer: _________
Question 443:
Given: Stock Trunover Ratio = 6 times Average Stock = Rs. 8,000 Selling price = 25% above cost What is the amount of gross profit?
A.
Rs. 20,000
B.
Rs. 4,000
C.
Rs. 10,000
D.
Rs. 12,000
Answer: _________
Question 444:
A retiring partner continues to be liable for obligations incurred after his retirement if
A.
Unpaid amount is transferred to his loan account
B.
He does not givea public notice
C.
He starts a similar business elsewhere
D.
In all the situations till he survives
Answer: _________
Question 445:
Realization account is prepared in a partnership firm:
A.
In case a partner takes leave from the firm
B.
In case of death of partner
C.
In case of admission of a partner
D.
In case of dissolution of a firm
Answer: _________
Question 446:
Which one of the following is not a method of valuation of shares?
A.
Asset Valuation Method
B.
Yield Valuation Method
C.
Super Profit Method
D.
None of these
Answer: _________
Question 447:
Variable cost ratio is 30% fixed cost is Rs. 1,26,000 then the break even point will be
A.
Rs. 1,80,000
B.
Rs. 1,42,200
C.
Rs. 1,63,800
D.
Rs. 37,800
Answer: _________
Question 448:
Which of the following is possible for a company under section 94 to alter its share capital
A.
Increase in share capital by issuing new shares
B.
Converting fully paid-up shares into stock
C.
Sub-division of share of larger denominations into smaller demonization
D.
Cancellation of shares to reduce share capital
Answer: _________
Question 449:
In partnership, unrecorded liability is shown in new Balance Sheet in
A.
Assets side
B.
Liabilities side
C.
Both sides
D.
None of the above
Answer: _________
Question 450:
If nothing otherwise mentioned, on admission of a new partner, the sacrificing ratio is same as the
A.
old ratio
B.
new ratio
C.
gaining ratio
D.
capital ratio
Answer: _________
Question 451:
A Company purchased 8% bonds at a cost of Rs. 12,00,000 (face value Rs. 10,00,000) on 1 st January 2003. Half yearly interest is payable on this investment on 30 th June and 31 st December each year. The company closes its accounts on 31 st March 2003. The amount of accured interest shown in profit and loss account for the year ended is:
A.
Rs. 40,000
B.
Rs. 60,000
C.
Rs. 20,000
D.
Rs. 80,000
Answer: _________
Question 452:
Provision for Income tax is shown in a bank's Balance Sheet as . . . . . . . .
A.
contingent liability
B.
contingent asset
C.
borrowings
D.
other liabilities and provisions
Answer: _________
Question 453:
Which of the following transactions will result in decrease in assets and decrease in liabilities?
A.
Payment of a promissory note with cash
B.
Materials returned to supplier on account
C.
Redemption of debentures
D.
All of these
Answer: _________
Question 454:
In the case of joint stock companies, the assets and liabilities in B/S are arranged in the order of . . . . . . . .
A.
serial number
B.
performance
C.
availability
D.
None of these
Answer: _________
Question 455:
Errors which affect one account can be . . . . . . . .
A.
errors of omission
B.
errors of principle
C.
errors of posting
D.
errors of commission
Answer: _________
Question 456:
The main aim of . . . . . . . . is to ascertain cost relating to the various activities of the business and to have cost control.
A.
financial accounting
B.
cost accounting
C.
management account
D.
human resource accounting
Answer: _________
Question 457:
In financial statements, adequate disclosure is ensured by companies as per the requirements of: I. management policies II. materiality concept III. disclosure concept IV. relevant provision of the Companies Act V. internal control Of these statements:
A.
I and III are correct
B.
I, II and III are correct
C.
II, III and V are correct
D.
II, III and IV are correct
Answer: _________
Question 458:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I (Types of accounts) List-II (Principles) a. Real Accounts 1. Debit the receiver credit the giver b. Nominal Accounts 2. Debit what comes in credit what goes out c. Personal Accounts 3. Debit all expenses credit all gains
A.
a-3, b-2, c-1
B.
a-1, b-3, c-2
C.
a-2, b-3, c-1
D.
a-1, b-2, c-3
Answer: _________
Question 459:
If the operating expenses exceed gross profit, the excess is referred to as:
A.
Operating income
B.
Operating loss
C.
Non-operating expenses
D.
Non-operating income
Answer: _________
Question 460:
Accounting for amalgamation is given in . . . . . . . .
A.
AS 14
B.
AS 16
C.
AS 20
D.
None of these
Answer: _________
Question 461:
Manager is provided 10% commission on net profit after charging such commission. If profit before commission is Rs. 77,000, then what is due/payble commission?
A.
Rs. 7,000
B.
Rs. 7,700
C.
Rs. 8,555
D.
Rs. 8,000
Answer: _________
Question 462:
All the centers of profit for an airline company except one
A.
Magazine in flight
B.
Sale of goods
C.
Maintenance of the airplane
D.
Ticket sales
Answer: _________
Question 463:
The balance of Forfeited share Account, after the reissue of forfeited shares, is transferred to:
A.
Capital Redemption Reserve Account
B.
General Reserve Account
C.
Capital Reserve Account
D.
Profit and Loss Account
Answer: _________
Question 464:
Which of the following is not a cash inflow?
A.
Decrease in creditors
B.
Decrease in debtors
C.
Issue of shares
D.
Sale of a fixed asset
E.
Sale of fixed asset
F.
Issue of debentures
G.
Cash from business operation
H.
Purchase of fixed asset
Answer: _________
Question 465:
Match the following. List-I List-II a. Partly paid preference share 1. Premiumon redemption of preference shares b. Capital redemption reserve 2. Current liabilities c. Security premium 3. Redemption out of free reserve d. Unclaimed dividend 4. Can not be redeem
A.
a-4, b-3, c-2, d-1
B.
a-2, b-1, c-4, d-3
C.
a-4, b-3, c-1, d-2
D.
a-4, b-1, c-2, d-3
Answer: _________
Question 466:
As per AS-14, purchase consideration is payable to
A.
debentureholders and creditors
B.
shareholders and creditors
C.
shareholders and debentureholders
D.
shareholders
Answer: _________
Question 467:
Gautam and Mahavir are partners in partnership firm sharing profits and losses 5 : 3. They admitted navin for $${frac{1}{5}^{{ ext{th}}}}$$ share. What will be new profit sharing ratio of partners?
A.
5 : 3 : 1
B.
5 : 3 : 2
C.
5 : 3 : 3
D.
None of the above
Answer: _________
Question 468:
A change in the registered office of the company from one State to another can be effected by:
A.
A resolution of the board of directors
B.
A resolution passed in the General Meeting of the Company
C.
A special resolution of the company and approval of the Central Government
D.
A special resolution and confirmation of the company Law Board
Answer: _________
Question 469:
Which one of the following is source of funds:
A.
Repayment of the long term loan
B.
Increase in Credit sales
C.
Increase in inventory
D.
Issue of new shares
Answer: _________
Question 470:
Which of the following is correct equation?
A.
Opening stock + closing stock - purchases = cost of goods sold
B.
Opening stock + purchases - closing stock = cost of goods sold
C.
Purchases + closing stock - opening stock = cost of goods sold
D.
Closing stock - Purchases - opening stock = Cost of goods sold
E.
Assets = Capital
F.
Assets = Liabilities - Capital
G.
Assets = Liabilities + Capital
H.
None of the above
Answer: _________
Question 471:
A company purchased a vehicle for Rs.6000. It will be used for 5 years and its residual value is expected to be Rs.1000. What is the annual amount of depreciation using straight line method of depreciation?
A.
Rs. 1000
B.
Rs. 2000
C.
Rs. 3000
D.
Rs. 5000
Answer: _________
Question 472:
Which of the following is the normal balance of an accumulated depreciation account?
A.
Debit balance
B.
Credit balance
C.
Nil balance
D.
None of the above
Answer: _________
Question 473:
How trial balance shows the accumulated depreciation?
A.
as a debit item
B.
as a credit item
C.
It doesn't show
D.
None of the above
Answer: _________
Question 474:
Which of the following is a double entry for deprecation expenses?
A.
Accumulated depreciation Debit and depreciation expenses Credit
B.
Depreciation expenses Debit and accumulated depreciation Credit
C.
Cash Debit and Depreciation expenses Credit
D.
Depreciation expenses Debit and Cash Credit
Answer: _________
Question 475:
An alternative term used for accumulated depreciation expenses?
A.
Provision for depreciation
B.
Cumulative depreciation
C.
Targeted depreciation
D.
Depletion
Answer: _________
Question 476:
Which of the following is/are kind of depreciation expenses?
A.
Amortization
B.
Depletion
C.
Both of them
D.
None of the above
Answer: _________
Question 477:
In depreciation calculation, the useful life of a fixed asset is:
A.
a certain figure
B.
an estimate
C.
a predetermined figure for all fixed assets
D.
None of the above
Answer: _________
Question 478:
Depreciable amount + Residual value of a fixed asset = ?
A.
Depreciation expenses
B.
Accumulated depreciation
C.
Cost of the fixed asset
D.
Future economic benefits of a fixed asset
Answer: _________
Question 479:
The purchase price of a software that will be used for more than 12 months should be regarded as
A.
a revenue expenditure
B.
a capital expenditure
C.
a long term expense
D.
an accounting period expense
Answer: _________
Question 480:
Petty cash may be used to pay . . . . . . . .
A.
the expenses relating to postage and conveyance
B.
salaries and wages to the final staff
C.
for the purchase of furniture and fittings
D.
other recurring expenses
Answer: _________
Question 481:
A debit balance in the income and expenditure account denotes excess of . . . . . . . . over . . . . . . . .
A.
income, expenditure
B.
assets, liabilities
C.
liabilities, assets
D.
expenditure, incomes
Answer: _________
Question 482:
Which of the following errors will not cause the trial balance to be out of order?
A.
Rs. 590 received from P. Das has been debited to (b) Rs. 10 Das
B.
A purchase of Rs. 258 from Lekhi has been debited to his account as Rs. 285
C.
The total of the discount columm of the cash book (cr.) is Rs. 20 short
D.
An invoice for Rs. 460 is entered in the sales book as Rs. 640
Answer: _________
Question 483:
Noting charges account is debited by . . . . . . . .
A.
the presenter of bill
B.
the discounting banker
C.
the acceptor
D.
the endorser
Answer: _________
Question 484:
Share application account is a . . . . . . . .
A.
nominal
B.
real
C.
personal
D.
None of these
Answer: _________
Question 485:
Which of the following is considered while calculating purchase consideration under Net asset method?
A.
Assets taken over
B.
Liabilities taken over
C.
Goodwill taken over
D.
All of the above
Answer: _________
Question 486:
An item of Rs. 72 has been debited to a personal account as Rs. 27, is an error of:
A.
Commission
B.
Omission
C.
Principle
D.
None of these
Answer: _________
Question 487:
Purchases made on credit not recorded at all would affect . . . . . . . .
A.
Purchases account
B.
Suppliers account
C.
Purchases account and suppliers account
D.
Wages account
Answer: _________
Question 488:
Bills payable book is a . . . . . . . .
A.
subsidiary book
B.
principal book
C.
ledger
D.
memorandum book
Answer: _________
Question 489:
Book-keeping is often confused with:
A.
Algebra
B.
Statistics
C.
Cashier
D.
Accounting
Answer: _________
Question 490:
Sale of an asset on credit at a price higher than written down value of the asset, would
A.
leave owner's equity unaffected
B.
increase owner's equity to the extent of less value
C.
increase owner's equity by the amount of sale
D.
increase owner's equity to the extent of profit on sale
Answer: _________
Question 491:
Which of the following will not be disclosed by trial balance?
A.
Error in entering an amount in the account
B.
Wrong totaling of an account
C.
Decrease in gross profit percentage
D.
Compensating error
Answer: _________
Question 492:
How many columns are there in ledger?
A.
5
B.
7
C.
8
D.
10
Answer: _________
Question 493:
Ideal current ratio is:
A.
1 : 1
B.
2 : 1
C.
1 : 2
D.
1 : 3
Answer: _________
Question 494:
The margin of safety can be increased by-
A.
reducing the fixed cost
B.
increasing the selling price
C.
reducing variable cost
D.
all the above ways
Answer: _________
Question 495:
In the double entry system of book keeping a transaction affects:
A.
one account twice
B.
two accounts at the same time
C.
one account in two ways
D.
two accounts in two ways each
Answer: _________
Question 496:
On retirement or death of a partner, the retired or deceased partner's capital account will be credited with
A.
His share of goodwill
B.
Goodwill of the firm
C.
Share of the goodwill of remaining partners
D.
None of the above
Answer: _________
Question 497:
When a business is purchased, any amount paid in excess of the total of assets, minus the liabilities taken, is called:
A.
Share Premium
B.
Goodwill
C.
Capital Employed
D.
Working Capital
Answer: _________
Question 498:
A firm which manufctures boats has a fixed cost of Rs. 2,60,000/- per month. The selling price of the boat is Rs. 35,000/- boat. Variable cost per boat is Rs. 15,000/-. The boat yard can manufacture 20 boats per month. The break even output of the firm will be
A.
It is not possible to determine from the above information
B.
13 boats
C.
25 boats
D.
20 boats
Answer: _________
Question 499:
The amount of short working is equal to:
A.
Minimum rent + Royalty
B.
Royalty - Minimum rent
C.
Minimum rent - Royalty
D.
Royalty - Amount paid to landlord
Answer: _________
Question 500:
The accounting concept where the business is a separate entity apart from its owners
A.
Going concern concept
B.
Dual aspect concept
C.
Business entity concept
D.
Realisation concept
Answer: _________
Question 501:
Cash Equivalent means
A.
Cash
B.
Bank
C.
Cash and Bank
D.
Highly liquid investment
Answer: _________
Question 502:
In case of absence of a partnership deed, what is the rule for charging interest on drawings?
A.
No interest is charged
B.
Interest @ 4% is charged
C.
Interest @ 5% is charged
D.
Interest @ 6% is charged
Answer: _________
Question 503:
Which of the following statements is/are correct?
A.
Dual aspect concept assumes an indefinite life of the entity
B.
In accounting, accrual basis is used for recording of transactions
C.
Both A and B
D.
None of the above
E.
The main purpose of any business is to earn profit
F.
If expenses exceed revenue then business is running loss
G.
Both A and B
H.
None of the above
Answer: _________
Question 504:
On dissolution of a firm, an unrecorded liability is
A.
Debited to Realization Account
B.
Credited to Realization Account
C.
Credited to Liability Account
D.
Debited to Revaluation Account
Answer: _________
Question 505:
Which of the following items would be specifically included in the statement of cash flows constructed in compliance with AS-3?
A.
Conversion of debt to equity
B.
Acquiring an asset through lease
C.
Operating and non-operating cash flow information
D.
Purchasing a building by giving a mortgage to the seller
Answer: _________
Question 506:
Heavy initial expenditure on advertising to introduce a new product is classified as
A.
Capital expenditure
B.
Revenue expenditure
C.
Deemed liability
D.
Deferred revenue expenditure
Answer: _________
Question 507:
Ideal acid test ratio is:
A.
2 : 1
B.
1 : 1
C.
1 : 3
D.
3 : 1
Answer: _________
Question 508:
Which of the following sets of expenses are the direct expenses of the business:
A.
Salaries, wages and shop rent
B.
Stationery, postage and telephone
C.
Wages, carriage inwards, local taxes
D.
Advertisement, legal fees, audit fees
Answer: _________
Question 509:
Subscription to Newspapers and Periodicals - Rs. 350.00 Sale proceeds of old Newspapers - Rs. 60.00 What amount is posted on the expenditure side of the income and Expenditure Account:
A.
Rs. 350.00
B.
Rs. 200.00
C.
Rs. 410.00
D.
Rs. 60.00
Answer: _________
Question 510:
Which of the following formula is correct to calculate provision on debtors to be transferred to Profit and Loss Account?
A.
Bad Debts + New Provision - Old Provision
B.
Provision on Debtors + New Provision + Bad Debts - Further Bad Debts
C.
Bad Debts + New Bad Debts + New Provision - Old Provision
D.
New Provision on Debtors + Old Provision made for Bad Debts
Answer: _________
Question 511:
Profit on re-issue of forfeited share is transferred to which account?
A.
Security premium account
B.
Capital reserve account
C.
Drawing account
D.
Share forfeiture account
Answer: _________
Question 512:
Debentures can be redeemed by:
A.
Purchase of own debentures in the open market
B.
Converting them into a new class of debentures
C.
Converting them into shares
D.
Any of the method mentioned in A, B and C above
Answer: _________
Question 513:
Distribution of income by way of public expenditure is
A.
Industrial development
B.
Development of Agriculture
C.
Social services
D.
None of the above
Answer: _________
Question 514:
If the cost of goods sold is Rs. 1 lakh, the value of opening and closing is Rs. 20,000 and Rs. 30,000 respectively, the stock turnover ratio will be:
A.
3.3 times
B.
4 times
C.
5 times
D.
5.5 times
Answer: _________
Question 515:
In absence of an agreement, loss arising out of a partner becoming insolvent shall be borne by solvent partner in
A.
Equal ratio
B.
Their capital ratio
C.
Their profit sharing ratio
D.
3 : 2 : 1 ratio
Answer: _________
Question 516:
An act of giving up the title to the shares by an allottee, in favour of his nominees either in full or in part is known as:
A.
Renunciation of allotment
B.
Nomination of shares
C.
Assignment of shares
D.
Transfer of shares
Answer: _________
Question 517:
If rate of profit is 25% of cost, then it is
A.
25% on sales price
B.
33% on sales price
C.
20% on sales price
D.
$$33frac{1}{3}\% $$ xa0on sales price
Answer: _________
Question 518:
As per section 205 (2A) a company is obliged to transfer at least what amount in reserve, if the rate of dividend is more than 20% of the paid up capital? or If the proposed dividend is 20% the percentage of profits to be transferred to reserve is:
A.
5%
B.
2.50%
C.
10%
D.
7.50%
Answer: _________
Question 519:
Preference shares can be redeemed
A.
partly out of issue of shares and balance out of free reserves
B.
out of proceed of issue of shares
C.
out of profits
D.
all of the above
Answer: _________
Question 520:
AB Co. Ltd. forfeited Rs. 800 on 100 shares of Rs. 10 each fully paid. Out of the forfeited shares, 50 shares were issued for Rs. 5 each as fully paid. The amount to be transferred to capital reserve will be:
A.
Rs. 800
B.
Rs. 150
C.
Rs. 650
D.
Rs. 350
Answer: _________
Question 521:
Which of the following is not correct in case of 'stock' of a company? The 'stock':
A.
is always fully paid
B.
can be directly issued to the public by the company
C.
do not bear distinctive number
D.
may be of unequal amounts
Answer: _________
Question 522:
X and Y are partners in a firm. They withdrew @ Rs. 1,500 and Rs. 1,000 respectively on 15 th day of every month for all the twelve months during 2009. Interest on drawings is chargable @ 10% per annum. What would be the interest on drawings respectively?
A.
Rs. 1,800 and Rs. 1,200
B.
Rs. 900 and Rs. 600
C.
Rs. 18,000 and Rs. 12,000
D.
Rs. 150 and Rs. 100
Answer: _________
Question 523:
A partner in partnership
A.
Cannot transfer his interest to an outsider
B.
Can transfer his interest to an outsider with consent of majority of partners
C.
Can transfer his interest to an outsider without consent of other partners
D.
Can transfer his interest to an outsider with the consent of all partners
Answer: _________
Question 524:
The going concern concept assumes the continuance of a business to
A.
Infinite period
B.
Reasonably long term
C.
Short term
D.
One year
Answer: _________
Question 525:
Net purchases Rs. 72,000, Sales Rs. 76,000, Sales returns Rs. 6,000 Cost of goods sold Rs. 60,000, the amount of gross profit will be
A.
Rs. 10,000
B.
Rs. 12,000
C.
Rs. 16,000
D.
Rs. 40,000
Answer: _________
Question 526:
If closing stock is shown in Trial Balance, then it should be shown in
A.
Trading A/c
B.
Balance Sheet
C.
Cash A/c
D.
Profit & Loss A/c
Answer: _________
Question 527:
The term 'Funds' as used in Funds Flow Analysis means
A.
Cash
B.
Current assets
C.
Current liabilities
D.
Current assets (-) Current liabilities
Answer: _________
Question 528:
Dividends are usually paid on
A.
Paid up capital
B.
Authorised capital
C.
Called up capital
D.
Issued capital
Answer: _________
Question 529:
X Ltd purchased 70% of the shares of Y Ltd at a price of Rs. 1,00,000. The share capital of Y Ltd was Rs. 70,000, and its accumulated profits amounted to Rs. 90,000. What would be the amount of minority interest in the consolidated balance sheet?
A.
Rs. 25,000
B.
Rs. 70,000
C.
Rs. 1,00,000
D.
Rs. 40,000
Answer: _________
Question 530:
Which one of the following statements is FALSE:
A.
Accounting is commonly treated as language of business
B.
There are many views about accounting principles
C.
There is no application of conservatism principle in accounting
D.
Accounting is based on accounting equation
E.
Realisation A/c is credited when the assets are realised
F.
Realisation A/c is directly credited when unrecorded asset is realised
G.
When goodwill is given in the books of a firm, then on dissolution of the firm goodwill A/c is also transferred to realisation A/c
H.
In case of gradual realisation of assets, the cash will be distributed amongst the partners in their profit-sharing ratio though their capitals are not in their profit-sharing ratio
Answer: _________
Question 531:
Which of the following is a revenue expenditure?
A.
Repairs on second hand asset purchased to put it into working condition
B.
Preliminary expenses
C.
Cost of Issuing shares and debentures
D.
Legal expenses to defend a suit filed by the competitor
Answer: _________
Question 532:
Opening Stock Rs. 15,000 Purchases Rs. 95,000 Closing Stock Rs. 29,000 Cash Received from Debtors Rs. 40,000 Gross profit on sales 10%. Amount of sales would be
A.
Rs. 60,000
B.
Rs. 72,000
C.
Rs. 80,000
D.
Rs. 90,000
Answer: _________
Question 533:
Bonus shares cannot be issued out of:
A.
Profit and Loss a/c
B.
Capital Redemption reserve
C.
General reserve
D.
Dividend equalisation fund
Answer: _________
Question 534:
A cash discount received is entered on the three column cash book on:
A.
Debit side
B.
Credit side
C.
No Entry is made
D.
Written as a note
Answer: _________
Question 535:
Short term analysis of financial statements is mainly related to
A.
Working capital analysis
B.
Stability of the institution
C.
Earning power potential of the organization
D.
The future position of the organization
Answer: _________
Question 536:
In Fund Flow Statement, non-current Asset is
A.
Sundry Creditors
B.
Sundry Debtors
C.
Goodwill
D.
None of the above
Answer: _________
Question 537:
Money received at the time share application when adjusted at the time of allotment is credited to which account?
A.
Share capital account
B.
Share allotment account
C.
Share application account
D.
Calls in advance account
Answer: _________
Question 538:
The process of identification and measurement of data related to human resource is called
A.
Value added accounting
B.
Social accounting
C.
Human resource accounting
D.
Human resource management
Answer: _________
Question 539:
Match List-I with List-II and select the correct answer List-I List-II a. Prepaid rent 1. Current liability b. Bank overdraft 2. Current assets c. Goodwill 3. Fictitious assets d. Profit & Loss A/c 4. Intangible assets
A.
a-1, b-2, c-3, d-4
B.
a-2, b-1, c-4, d-3
C.
a-3, b-4, c-1, d-2
D.
a-4, b-1, c-3, d-2
Answer: _________
Question 540:
A company forfeited 100 equity shares of Rs. 10 each on which a final call of Rs. 4 per share was unpaid. At what minimum rate per share these shares can be reissued by the company?
A.
Rs. 6
B.
Rs. 4
C.
Rs. 8
D.
Rs. 10
Answer: _________
Question 541:
Ram of Allahabad filed a petition in the court for adjudication as insolvent. At that time one month's salary due to five clerks amounted to Rs. 2,000, one month's wages due to ten workers amounted to Rs. 1,500, rent and rates due amounted to Rs. 500. Income tax due amounted to Rs. 1,200 and one month's rent due amounted to Rs. 1,000. The amount of preferential creditors would be:
A.
Rs. 2,000
B.
Rs. 3,200
C.
Rs. 4,200
D.
Rs. 6,200
Answer: _________
Question 542:
Outstanding wages will be classified as:
A.
capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
None of the above
Answer: _________
Question 543:
According to Garner Vs. Murray in absence of any contract to contrary deficiency arising on account of a partner becoming insolvent shall be borne by solvent partners in their
A.
Profit and loss ratio
B.
Capital ratio obtained after dissolution of firm
C.
Capital ratio before the dissolution of firm
D.
Equal ratio
Answer: _________
Question 544:
Which one of the following statements is not true?
A.
When there is one liquidation and one formation it is known as external construction
B.
Goodwill or Capital reserve arises only when the amalgamation is in the nature of merger
C.
Under the pooling of interest method, the transferee company incorporates the assets and liabilities of the transferor company at book value
D.
The vendor company transfers preliminary expenses (at the time of absorption) to equity shareholder's account
E.
In the absence of partnership deed profit and loss is distributed among partners in equal ratio
F.
Minor partner can get his share of profit
G.
The relation between partners are created through deed
H.
Registration of partnership is compulsory
I.
The job of book-keeping is analytical in nature
J.
Book-keeping is an art as well as a science of recording business transactions
K.
Transactions are recorded in a certain set of books
L.
Book-keeping is the method of recording in account books
M.
Conversion of debentures into preference shares will decrease debt-equity ratio
N.
Long-term liabilities due for payment within a year should be treated as current liabilities
O.
Higher operating ratio indicates higher profits
P.
Cost of sales is a better numerator than sales while calculating stock turnover
Answer: _________
Question 545:
Redeemable preference shares of Rs. 1,00,000 are redeemed at a premium of 5% for which fresh equity shares of Rs. 40,000 are issued at par. What amount should be transferred to Capital Redemption Reserve account:
A.
Rs. 1,05,000
B.
Rs. 60,000
C.
Rs. 40,000
D.
Rs. 0
Answer: _________
Question 546:
Profit or loss on revaluation will be borne by
A.
all the partners
B.
the new partners
C.
the old partners
D.
None of the above
Answer: _________
Question 547:
Profit on revolution of assets and liabilities in case of amalgamation of partnership firm is
A.
Debited to partner's capital account
B.
Credited to partner's capital account
C.
Credited to profit and loss account of new firm
D.
None of the above
Answer: _________
Question 548:
Segment Environmental accounting is the part of
A.
environmental management accounting
B.
environmental financial accounting
C.
environmental national accounting
D.
none of the above
Answer: _________
Question 549:
The transfer by a company of one or more of its business divisions to another newly set-up company is called
A.
Demerger
B.
Merger
C.
Equity carve-out
D.
Disinvestment
Answer: _________
Question 550:
Margin of safety means
A.
Difference between actual sales and total cost
B.
Difference between actual sales and variable cost
C.
Difference between actual sales and fixed cost
D.
Difference between actual sales and Break Even sales
Answer: _________
Question 551:
Which of the following is not correctly matched? In the term of Activity and Flow of Fund.
A.
Increase in working capital ⇔ Application of fund
B.
Depreciation ⇔ Sources of fund
C.
Taking long-term loan ⇔ Sources of fund
D.
Purchase of fixed assets by cash ⇔ Application of fund
Answer: _________
Question 552:
Which of the following are correct regarding rights of partners? 1. A partner has the right to allow the admission of a new partner. 2. Every partner has a right to take part in the management of business. 3. Every partner has a joint ownership of partnership property. 4. Every partner has a right to share the profit not the losses with other partners. 5. Every partner has a right to inspect the books of account and have a copy of the same. 6. In case of emergency, a partner has a right to act as a man of prudence. Select the correct answer:
A.
1, 2, 3, 4
B.
2, 3, 4, 6
C.
3, 4, 5, 6
D.
2, 3, 5, 6
Answer: _________
Question 553:
The partnership may come to an end due to the
A.
Death of a partner
B.
Insolvency of a partner
C.
Consent of all partners
D.
All of the above
Answer: _________
Question 554:
Making the provision for bad and doubtful debts in anticipation of actual bad debts is on the basis of:
A.
Convention of disclosure
B.
Convention of consistency
C.
Convention of conservatism
D.
Convention of disclosure and consistency
Answer: _________
Question 555:
Which of the following are methods of calculating goodwill? 1. Average profit method 2. Super profit method 3. Log method 4. Sum of years digit method 5. Capitalisation of average profit method 6. Capitalisation of super profit method 7. FIFO method Select the correct answer:
A.
1, 2, 5 and 6
B.
1, 2, 4 and 5
C.
1, 2, 4 and 6
D.
1, 2, 6 and 7
Answer: _________
Question 556:
The funds available with a company after paying all claims including tax and dividend is called
A.
net profit
B.
net operating profit
C.
capital profit
D.
retained earnings
Answer: _________
Question 557:
Match the items of a company given in List-A with the classification given in List-B and check your answer: List-A List-B a. Preliminary Expenses 1. Miscellanneous Expenditure b. Unclaimed Dividend 2. Loans and Advances c. Bills receivable 3. Current liability d. Live Stock 4. Fixed assets
A.
a-1, b-2, c-4, d-3
B.
a-2, b-3, c-4, d-1
C.
a-1, b-3, c-2, d-4
D.
a-4, b-1, c-3, d-2
Answer: _________
Question 558:
The raw material should be valued at:
A.
Market price
B.
Realised value
C.
Cost
D.
Cost or market price, whichever is lower
Answer: _________
Question 559:
The statement sent along with purchase return is:
A.
credit note
B.
bills payable book
C.
debit note
D.
purchases return book
Answer: _________
Question 560:
A bill drawn and accepted for a genuine trade transaction is termed as a . . . . . . . . bill.
A.
Trade
B.
Time
C.
Inland
D.
Personal
Answer: _________
Question 561:
While discounting the bill, debit should be given to . . . . . . . .
A.
bank account
B.
bill receivable account
C.
acceptor's account
D.
cash account
Answer: _________
Question 562:
Immediately after purchasing a new truck Rs. 1,000 is paid to have the name of the company and other advertising material painted on the truck this Rs. 1,000 is a:
A.
Capital expenditure
B.
Deferred revenue expenditure
C.
Revenue expenditure
D.
None of these
Answer: _________
Question 563:
Right shares are issued to . . . . . . . .
A.
directors
B.
promoters
C.
existing share holders
D.
debenture holders
Answer: _________
Question 564:
Which of the following should not be considered as a part of purchase consideration?
A.
Payment to equity shareholders
B.
Payment to preference shareholders
C.
Payment to debentureholders
D.
Cash payment to shareholders
Answer: _________
Question 565:
Calls in advance is shown in the balance sheet as . . . . . . . .
A.
current liabilities
B.
added to called-up capital
C.
current assets
D.
deduction from called-up capital
Answer: _________
Question 566:
The policy to anticipate no profit and provide for all possible losses arises due to convention of . . . . . . . .
A.
Consistency
B.
Disclosure
C.
Matching
D.
Conservatism
Answer: _________
Question 567:
Expenditure incurred on research is an example of . . . . . . . .
A.
capital expenditure
B.
revenue expenditure
C.
deferred revenue expenditure
D.
partly capital expenditure
Answer: _________
Question 568:
Unearned income account is:
A.
an asset
B.
a liability
C.
an expense
D.
an income
Answer: _________
Question 569:
Errors are _____ mistakes
A.
Intentional
B.
Undetected
C.
Unintentional
D.
None of the above
Answer: _________
Question 570:
Which error cannot be revealed on the preparation of trial balance?
A.
Wrong totalling of account
B.
Compensatory errors
C.
Error of commission
D.
Wrong balancing of an account
Answer: _________
Question 571:
Parties to a bill of exchange are
A.
Drawer
B.
Drawee
C.
Payee
D.
All of the above
Answer: _________
Question 572:
Accommodation bill is drawn
A.
To finance actual purchase or sale of goods
B.
To facilitate trade transmission
C.
To cater the fund requirements of both the parties
D.
None of the above
Answer: _________
Question 573:
Rs.5000 spent on maintenance of computer is
A.
Deferred capital expenditure
B.
Capital expenditure
C.
Revenue expenditure
D.
None of the above
Answer: _________
Question 574:
The assumption underlying the fixed installment method of depreciation is that of ____ of the asset over its useful life
A.
Equal usage
B.
Usage
C.
Charge
D.
None of the above
Answer: _________
Question 575:
_____ will generally show a debit balance
A.
Bank loan
B.
Bad debts recovered
C.
Drawings
D.
Salary payable
Answer: _________
Question 576:
Profit & Loss account is prepared for a period of one year by following
A.
Periodicity concept
B.
Business entity concept
C.
Accrual concept
D.
None of the above
Answer: _________
Question 577:
Which of the following enhances the earning capacity of an asset?
A.
Reduction in operating costs
B.
Increase in working capacity of an asset
C.
Replacing damage parts of an asset
D.
Both 'b' and 'c'
Answer: _________
Question 578:
Gross profit is equal to
A.
Opening stock + purchases - closing stock
B.
Net profit - expenses
C.
Sales - Closing stock + purchases
D.
Sales - Cost of goods sold
E.
Sales - Closing stock
F.
Sales - Cost of goods sold
G.
Sales - (opening stock + Purchases + Closing stock)
H.
(Sales + Closing stock) - (opening stock + Purchase + all direct and indirect expenses)
Answer: _________
Question 579:
The following is the position of current assets and current liabilities: 31 st December, 94 31 st December, 95 Debtors Rs. 30,000 Rs. 24,000 Creditors Rs. 20,000 Rs. 30,000 Stock Rs. 16,000 Rs. 20,000 Prepaid expenses Rs. 8,000 Rs. 12,000 Profit made during the year Rs. 5,00,000 after considering the following items: Depreciation on plant Rs. 20,000 Preliminary expenses written off Rs. 10,000 Transfer to general reserve Rs. 14,000 Profit on sale of land Rs. 6,000 The cash from operations is:
A.
Rs. 5,44,000
B.
Rs. 5,38,000
C.
Rs. 5,46,000
D.
Rs. 5,54,000
Answer: _________
Question 580:
The balance in share forfeiture account, after the reissue of all forfeited shares, should be
A.
transferred to Goodwill A/c
B.
transferred to Capital Reserve A/c
C.
shown as Share Forfeiture A/c
D.
added to paid-up capital
Answer: _________
Question 581:
Raj industires limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If the right issue price is Rs. 180 per share and the market value is Rs. 200 per share, then the value of a right is
A.
Rs. 20
B.
Rs. 180
C.
Rs. 200
D.
Rs. 40
Answer: _________
Question 582:
Assertion (A): Inspite of a higher operating ratio the profitability tends to be lower. Reason (R): Operating ratio shows a relationship between net operating profit and net sales. Now, select the correct answer:
A.
Both (A) and (R) are true and (R) is the correct explanation of (A)
B.
Both (A) and (R) are true, but (R) is not correct explanation of (A)
C.
(A) is true but (R) is false
D.
(A) is false but (R) is true
Answer: _________
Question 583:
Ram and Shyam are sharing profits in the ratio 3 : 2. They admit Mohan in the partnership and their new profit sharing ratio becomes 2 : 2 : 1. If Mohan brings `1,000 as goodwill then Shyam will get.
A.
Rs. 400
B.
Rs. 500
C.
None of the above
D.
Rs. 1,000
Answer: _________
Question 584:
In which Head, dividend received by Financial Enterprise is shown in the Cash Flow Statement?
A.
Operating Activities
B.
Investment Activities
C.
Financial Activities
D.
All of these
Answer: _________
Question 585:
The basis of income Measurement is
A.
Matching concept
B.
Accounting Period concept
C.
Money Measurement concept
D.
Cost concept
Answer: _________
Question 586:
From the following statements related to insolvency account mark your answer according to the answer code given: i. List A contains particulars relating to unsecured creditors. ii. All taxes due are considered preferential creditors. iii. Properties held by the insolvent in the fiduciary capacity can be distributed amongst his creditors. iv. List D contains the particulars relating to assets and properties.
A.
i and ii are correct
B.
i and iii are correct
C.
i and iv are correct
D.
ii and iv are correct
Answer: _________
Question 587:
Given, Net Profit after tax Rs. 3,25,000 Rate of Income tax 50% 12.5% convertible debentures of Rs. 100 each Rs. 4,00,000 Fixed assets (at cost) Rs. 12,30,000 Depreciation up-to-date Rs. 2,30,000 Current assets Rs. 7,50,000 Current liabilities Rs. 3,50,000 Return on Investment is
A.
25%
B.
30%
C.
40%
D.
50%
Answer: _________
Question 588:
A Trial Balance shows
A.
The balance of Profit and Loss Account
B.
Complete accuracy of accounting done by the accountant
C.
Arithmetical accuracy of ledger balances
D.
Balance between assets and liabilities
Answer: _________
Question 589:
Consider the following statements: Assertion (A): Value added statement is an improvement over the traditional method of preparing profit and loss account. Reason (R): Value added statement reflects the profit added by the firm and the share of various stockeholders of the business. Now, select your answer:
A.
Both A and R are true and R is the correct explanation of A
B.
Both A and R are true but R is not the correct explanation of A
C.
A is true but R is false
D.
A is false but R is true
Answer: _________
Question 590:
Assets of a business means:
A.
Liabilities - Capital
B.
Cash + Capital
C.
Liabilities + Capital
D.
Capital - Drawings
Answer: _________
Question 591:
The record of cash transactions by non-trading concerns is shown in
A.
Receipt and Payment A/c
B.
Income and Expenditure A/c
C.
Profit and Loss A/c
D.
Manufacturing A/c
Answer: _________
Question 592:
Which of the following is a capital expenditure:
A.
Repairs and painting of an old building
B.
Repairing and servicing of an old typewriter
C.
Retreading of truck tyers
D.
Repairing of staircases
Answer: _________
Question 593:
Assertion (A): Increasing the value of closing inventory increases profit. Reason (R): Increasing the value of closing inventory reduces the cost of goods sold In the context of the above two statements, which of the following is correct?
A.
Both (A) and (R) are correct
B.
Only (A) is correct
C.
Only (R) is correct
D.
Both (A) and (R) are incorrect
Answer: _________
Question 594:
Arrange the following liabilities in the order of company balance sheet. i. Bank Overdraft ii. Bank Loan iii. Share Capital iv. Provision for Taxation
A.
i, ii, iii, iv
B.
iv, iii, ii, i
C.
iii, ii, i, iv
D.
iii, ii, iv, i
Answer: _________
Question 595:
Which of the following will be debited in Income and expenditure account of a school?
A.
Income from tution fee
B.
Amount of annual prize which was given from prize account
C.
Maps purchased for Geography
D.
Monetary punishment received from students
Answer: _________
Question 596:
What shall be the amount of Shareholders fund, if Equity Share Capital is Rs. 16,00,000, 8% Preference Share Capital is Rs. 2,00,000, General Reserve Rs. 73,000, Profit and Loss account balance (Cr.) Rs. 41,000, Preliminary Expenses. Rs. 20,000 and Short-term liabilities Rs. 30,000:
A.
Rs. 15,00,000
B.
Rs. 18,94,000
C.
Rs. 19,14,000
D.
Rs. 19,34,000
Answer: _________
Question 597:
The objectives of a business organization do not include
A.
Maximisation of total investment
B.
Maximisation of profits
C.
Maximisation of sales
D.
Survival
Answer: _________
Question 598:
Which of the following is the reason for decapitalization?
A.
Company raises more capital than required
B.
Company commissioner buys assets at higher price
C.
Company has not provided adequate depreciation on assets
D.
Company has reinvested a large part of its excess projects
Answer: _________
Question 599:
Given, Total Assets Turnover 4 Net Profit 10% Total Assets Rs. 50,000 Net profit will be
A.
Rs. 15,000
B.
Rs. 10,000
C.
Rs. 25,000
D.
Rs. 20,000
Answer: _________
Question 600:
In the event of the death of a partner, the accumulated profit and losses are shared by the partners in their
A.
old profit sharing ratio
B.
new profit sharing ratio
C.
capital ratio
D.
equal ratio
Answer: _________
Question 601:
All the following are benefits of Accounting Standards except
A.
AS cannot override the statute
B.
AS reduce to a reasonable extent confusing variations in the accounting treatments used to prepare financial statements
C.
AS facilitates comparison of financial statements of companies
D.
AS may call for disclosure beyond that required by law
Answer: _________
Question 602:
Which reflects changes in the working capital?
A.
Balance sheet
B.
Sales
C.
Fund flow statement
D.
Profit
Answer: _________
Question 603:
Which of the following account is credited when shares are issued at a premium?
A.
Share allotment account
B.
Share forfeited account
C.
Share first call account
D.
Share premium account
Answer: _________
Question 604:
A machine with a written down value of Rs. 10,000 has been sold for Rs. 13,000. The amount realized is a:
A.
Capital receipt and profit involved should be transferred to capital reserve
B.
Revenue receipt
C.
Capital receipt and profit involved should be transferred to general reserve
D.
Capital receipt and profit involved should be transferred to Profit & Loss A/c
Answer: _________
Question 605:
Which of the following account's balance will not be transferred to realisation account?
A.
Provision for bad debts
B.
Debtors
C.
Goodwill
D.
Cash and Bank
Answer: _________
Question 606:
Which of the following items is a current liability:
A.
Arrears of wages
B.
Redeemable preference share
C.
Share premium
D.
Provision for machinery depreciation
Answer: _________
Question 607:
Statement I The profit and loss account shows the financial results of the concernfor a period. Statement II In profit and loss account, indirect expenses are charged against the gross profit.
A.
Both statements are correct
B.
Both statements are incorrect
C.
Statement I is correct, but statement II is incorrect
D.
Statement I is incorrect, but statement II is correct
Answer: _________
Question 608:
A transaction results in the flow of funds
A.
when a non-current asset is purchased out of a current assest
B.
when debentures are redeemed on cash
C.
when preference share capital is issued
D.
in all the above cases
Answer: _________
Question 609:
Which of the following items is not taken in profit and loss appropriation account?
A.
Transfer to dividend equalisation reserve
B.
Transfer to general reserve
C.
Provision for taxation
D.
Proposed dividend
Answer: _________
Question 610:
If the current ratio of a company is 2 : 1, which of the following transactions would improve the ratio?
A.
Issue of bonus shares
B.
Issue of warrant
C.
Purchase of stock of goods for cash
D.
Payment of current liabilities
Answer: _________
Question 611:
An expenditure is capital expenditure because
A.
the amount is paid in lump-sum
B.
the amount is large
C.
it is related to the benefit of current year
D.
it is related to the benefit of future
Answer: _________
Question 612:
Which of the following acid test ratio can be said to be satisfactory:
A.
2 : 1
B.
1 : 2
C.
1 : 1
D.
None of the above
Answer: _________
Question 613:
Match List-I with List-II and choose the correct option: List-I List-II a. Surrender Value 1. Stock b. Share holder becoming insane 2. Insurance policy c. Share warrant 3. Transfer of shares d. Fully-paid shares 4. Negotiable Document
A.
a-1, b-2, c-3, d-4
B.
a-4, b-2, c-3, d-1
C.
a-2, b-3, c-4, d-1
D.
a-4, b-2, c-1, d-3
Answer: _________
Question 614:
'Proposed dividend' is shown under which head in company's balance sheet?
A.
Current liabilities
B.
Provision
C.
Relevant
D.
Reserve and surplus
Answer: _________
Question 615:
Paid-up current ratio = 2.8 Acid test ratio = 1.5 Working capital = Rs. 1,62,000 What will be liquid asset?
A.
Rs. 2,52,000
B.
Rs. 1,35,000
C.
Rs. 90,000
D.
Rs. 2,43,000
Answer: _________
Question 616:
Under which of the following method of depreciation the amount of asset is never reduced to zero?
A.
Fixed Installation method
B.
Diminishing balance method
C.
Annuity method
D.
The sum of year digit method
Answer: _________
Question 617:
'Contingent liability' is a liability
A.
Which does not exist in present, but will arise in future
B.
Which will be paid by another person
C.
Which existence or non-existence depends on happening of a certain event
D.
Which is not paid in previous years
Answer: _________
Question 618:
A machine was bought on 1 st January, 1994 for Rs. 10,000. Its working life was estimated to be four years. The method of depreciation used is the 'sum of the year digit'. The machine was discarded and sold on 30 th June, 1996 for Rs. 1,000. The profit/loss on sale of the discarded machine was:
A.
Rs. 1,120 loss
B.
Rs. 2,250 loss
C.
Rs. 1,500 loss
D.
Rs. 1,000 loss
Answer: _________
Question 619:
If a cheque sent for collection is dishonoured, the debit is given to:
A.
suppliers account
B.
bank account
C.
customers account
D.
cash account
Answer: _________
Question 620:
Which of the following pairs are correctly matched? I. Business entity - Accounting standard II. Stock valuation - Consistency III. Capital - Drawings IV. Going concern - Assumption Select the correct answer using the options given below-
A.
II, III and IV
B.
I, II and III
C.
I, II and IV
D.
I, III and IV
Answer: _________
Question 621:
The discount column of a triple column cash book records . . . . . . . .
A.
trade discount
B.
cash discount
C.
quantity discount
D.
seasonal discount
Answer: _________
Question 622:
Specific donations received by a non-trading concern are usually . . . . . . . .
A.
revenue receipt
B.
capital receipt
C.
capital expenditure
D.
revenue expenditure
Answer: _________
Question 623:
The following information pertains to a cultural club: Stock of tinned provisions (as on 1 st April 1994) : Rs. 25,000 Purchased during the year : Rs. 1,50,000 Stock of tinned provisions (as on 31 st March 1995) : Rs. 50,000 Sale of tinned provisions during the year : Rs. 1,50,000 The amounts to be debited and credited respectively to the Income and Expenditure account would be:
A.
Rs. 1,75,000 and Rs. 1,50,000
B.
Rs. 1,25,000 and Rs. 1,75,000
C.
Rs. 1,25,000 and Rs. 1,50,000
D.
Rs. 1,75,000 and Rs. 1,25,000
Answer: _________
Question 624:
Stock is valued at . . . . . . . .
A.
cost price
B.
market price
C.
cost of market price whichever is lower
D.
odd price
Answer: _________
Question 625:
A scheduled bank is required to maintain with RBI . . . . . . . . at a prescribed percentage of their total time and demand deposit.
A.
SLR
B.
CRR
C.
statutory reserve
D.
branch adjustment
Answer: _________
Question 626:
Revenue expenditure is intended to benefit . . . . . . . .
A.
current period
B.
future period
C.
past period
D.
both A and B
Answer: _________
Question 627:
Which of the following statements best explains the relationship between journal and ledger?
A.
First recording in journal and then posting to ledger completes the double entry of the transaction
B.
The journal is the book of original entry where as the ledger is the book of second entry
C.
The journal is the book for analytical record and ledger is the book for chronological record
D.
The process of recording, in the journal is called journalising, the process of recording in the ledger is called posting
Answer: _________
Question 628:
Match List-I with List-II and select the correct answer using the options given below the Lists: List-I List-II a. Partner's current accounts 1. Dissolution of partnership b. Goodwill account 2. Admission of a partner c. Partner’s drawings account 3. Fixed capital of partners d. Realisation account 4. Goods taken by a partner for self-consumption
A.
a-1, b-4, c-2, d-3
B.
a-3, b-2, c-4, d-1
C.
a-1, b-2, c-4, d-3
D.
a-3, b-4, c-2, d-1
Answer: _________
Question 629:
The process of recording transactions in different journals is called
A.
Posting
B.
Entry making
C.
Adjusting
D.
Journalising
Answer: _________
Question 630:
Every business transaction affects at least ____ accounts
A.
One
B.
Two
C.
Three
D.
Infinite
Answer: _________
Question 631:
Discount allowed is a kind of deduction from
A.
Account Payable
B.
Account Receivable
C.
Cash account
D.
Discount account
Answer: _________
Question 632:
The other name of Journal is
A.
Ledger
B.
T account
C.
Day Book
D.
Cash Book
Answer: _________
Question 633:
The Journal entry in which two or more account is debited or credited is referred to as
A.
Journal entry
B.
Multi entry
C.
Additional entry
D.
Compound entry
Answer: _________
Question 634:
Goods returned by customer should be debited to which of the following accounts?
A.
Sales income account
B.
Sales account
C.
Return inward account
D.
Expenses account
Answer: _________
Question 635:
Discount allowed is
A.
Expense of business
B.
Income of business
C.
Loss of business
D.
Abnormal loss of business
Answer: _________
Question 636:
Which of the following will be debited if a business purchases goods on credit?
A.
Cash
B.
Debtor
C.
Creditor
D.
Purchases
Answer: _________
Question 637:
Which of the following accounts will be debited if the business's owner withdraws cash from business for personal use?
A.
Drawings
B.
Cash
C.
Business
D.
Stock
Answer: _________
Question 638:
Journals are also referred to as
A.
Book of entries
B.
Book of original entries
C.
T account
D.
Book of economic events
Answer: _________
Question 639:
Which of the following relates with social Accounting :
A.
Environment
B.
Community
C.
Energy
D.
All of the above
Answer: _________
Question 640:
Dependent branch can make
A.
Only cash sales
B.
Only credit sales
C.
Both cash and credit sales
D.
None of the above
Answer: _________
Question 641:
Cash from operations is equal to:
A.
Net profit + increase in current assets
B.
Net profit + decrease in current liabilities
C.
Profit from operation ± Adjustment of increase and decrease in current assets and liabilities
D.
Fund from operation ± Adjustment of increase and decrease in current assets and current liabilities
Answer: _________
Question 642:
The amount of share premium can be used wholly or partly for writing off:
A.
goodwill
B.
preliminary expenses
C.
deferred revenue expenses
D.
all of the above
Answer: _________
Question 643:
Which one of the following transactions will not affect the current ratio:
A.
Credit purchase of goods
B.
Cash sale of an old motor car
C.
Issue of equity shares in lieu of some machinery
D.
Cash purchase of a machine
Answer: _________
Question 644:
If profit is equal to 25% of cost then sales would be
A.
10%
B.
20%
C.
25%
D.
$$33frac{1}{3}\% $$
Answer: _________
Question 645:
Match List-I with List-II and select your answer: List-I List-II a. Surrender Value 1. Stock b. Insanity of shareholder 2. Insurance policy c. Share warrant 3. Transmission of shares d. Fully paid-shares 4. Negotiable instrument
A.
a-1, b-2, c-3, d-4
B.
a-4, b-2, c-3, d-1
C.
a-2, b-3, c-4, d-1
D.
a-4, b-2, c-1, d-3
Answer: _________
Question 646:
The most suitable coverage ratio for deciding the debt capacity of a firm is
A.
Interest Coverage Ratio
B.
Cash Flow Coverage Ratio
C.
Debt Service Coverage Ratio
D.
Fixed Assets Coverage Ratio
Answer: _________
Question 647:
Profit distributed in the mid of the year will be shown in
A.
Profit and loss account
B.
Profit and loss adjustment account
C.
Asset side of balance sheet
D.
Liabilities side of balance sheet
Answer: _________
Question 648:
The company's nationality is decidedby its
A.
shareholders
B.
registered office
C.
place at books of accounts are kept
D.
none of the above
Answer: _________
Question 649:
In a reconstruction scheme, the reduction of capital may take the form of
A.
reducing the liability of the shareholders in respect of any unpaid amount on the shares held by them
B.
paying off any paid-up share capital which is in excess of its requirement
C.
cancelling any paid-up share capital, which is lost or unrepresented by available assets
D.
all of the above
Answer: _________
Question 650:
Which of the following is capital profit:
A.
Premium paid on redemption of debentures
B.
Profit on sale of shares held as stock in trade
C.
Premium received on issue of shares
D.
Dividend received on shares held as permanent investment
Answer: _________
Question 651:
Which of the following practices is not in consonance with the convention of conservatism?
A.
Creating provision for bad debts
B.
Creating provision for discount on creditors
C.
Creating provision for discount on debtors
D.
Creating provision for tax
Answer: _________
Question 652:
If net profit is Rs. 30,000 and non-cash charges are Rs. 10,000 then the funds from operations will be:
A.
Rs. 30,000
B.
Rs. 20,000
C.
Rs. 40,000
D.
None of the above
Answer: _________
Question 653:
The Receipt and Payment Account of a club shows the following details of subscriptions: Arrears Rs. 500, current Rs. 10,500 advance Rs. 800. There are 1200 members each paying an annual subscription of Rs. 10. The amount of subscription to be credited to Income and Expenditure Account will be:
A.
Rs. 11,000
B.
Rs. 12,000
C.
Rs. 12,500
D.
Rs. 11,800
Answer: _________
Question 654:
The word 'receivables' includes-
A.
Trade creditors only
B.
Trade debtors only
C.
Trade debtors and bill receivable
D.
Trade creditors and bill payable
Answer: _________
Question 655:
On the admission of a new partner, any increase in the value of Buildings is credited to
A.
Buildings Account
B.
Profit and Loss Account
C.
Revaluation Account
D.
All Partner's Capital Account
Answer: _________
Question 656:
The term, 'imprest system' is used in relation to:
A.
Purchase Book
B.
Sales Book
C.
Cash Book
D.
Petty Cash Book
Answer: _________
Question 657:
Which one of the following pair is not correctly matched?
A.
Profit and Loss A/c ⇔ Dividend received
B.
Profit and Loss (Appropriation) A/c ⇔ Unclaimed Dividend
C.
Balance Sheet (Liability side) ⇔ Share-Premium A/c
D.
Balance Sheet ⇔ Preliminary Expenses (Assets side)
Answer: _________
Question 658:
When a purchasing company pays purchase consideration, it will be debited to
A.
Liquidator of selling company's account
B.
Business purchase account
C.
Assets account
D.
None of the above
Answer: _________
Question 659:
A, B and C are partners in a firm. Their profit sharing ratio is 4 : 3 : 2. What will be their sacrificing ratio upon admission of D?
A.
Equal
B.
4 : 3 : 2
C.
3 : 2 : 1
D.
5 : 3 : 2
Answer: _________
Question 660:
When liquidation expenses are paid and borne by the seller company, then it is debited to
A.
Realization A/c
B.
Bank A/c
C.
Goodwill A/c
D.
None of the above
Answer: _________
Question 661:
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
A.
High marginal tax rates and low non-interest tax benefits
B.
Low marginal tax rates and low non-interest tax benefits
C.
High marginal tax rates and high non-interest tax benefits
D.
Low marginal tax rates and high non-interest tax benefits
Answer: _________
Question 662:
Recording of business transaction in a systematic manner and classifying them in ledger is called
A.
Accounting
B.
Book-keeping
C.
Adjustment
D.
Measurement
Answer: _________
Question 663:
Preparation of consolidated statement as per AS-21 is
A.
optional
B.
mandatory for listed companies
C.
mandatory for Pvt. Ltd
D.
partnership firm
Answer: _________
Question 664:
Income and Expenditure A/c includes figures relating to:
A.
Previous year
B.
Current year
C.
Future year
D.
All the above
Answer: _________
Question 665:
Statement I IFRS are issued by International Accounting Standard Board (IASB). Statement II IFRS-16, i.e.'leases' applies to annual reporting periods beginning on or after 1 st January, 2019.
A.
Only statement I is true
B.
Only statement II is true
C.
Both statements are true
D.
Both statements are false
Answer: _________
Question 666:
Share can be issued at a discount only after . . . . . . . . year from the commencement of business.
A.
shares can not be issued at discount
B.
one
C.
two
D.
two and a half
Answer: _________
Question 667:
Consider the following statements. 1. The entity concept of accounting is not applicable to sole trading concerns and partnership concerns. 2. Assets are to be shown in the balance sheet at their replacement cost on liquidation. 3. Money measurement concept takes into account changes in the value of monetary unit. 4. When a creditor is paid, this results in decrease of one asset and a corresponding increase in other asset. Which of the statements given above are correct?
A.
Both 1 and 2
B.
Both 2 and 3
C.
Both 3 and 4
D.
None of the above
Answer: _________
Question 668:
Which of the following statement about a minor partner is incorrect?
A.
Minor can be admitted only to the benefits of an existing firm
B.
Minor cannot be admitted to the benefits of a new firm taking minor as a partner
C.
Minor cannot be a full-fledged partner in a firm
D.
Minor can be a full-fledged partner in a firm
Answer: _________
Question 669:
According to revised accounting standard-3, the purchase of fixed assets is considered
A.
Operational activity
B.
Investing activity
C.
Financing activity
D.
Inflow of cash
Answer: _________
Question 670:
Registration of Partnership firm is . . . . . . . . .
A.
Compulsory as per Indian partnership Act
B.
Compulsory as per Income Tax Act
C.
Compulsory as per companies Act
D.
Optional
Answer: _________
Question 671:
If debenture valuing Rs. 3,25,000 were issued against net assets of Rs. 3,50,000 the balance of Rs. 25,000 would be credited to-
A.
Capital reserve account
B.
General reserve account
C.
Profit and loss account
D.
Goodwill account
Answer: _________
Question 672:
Current assets are convertible into cash during which of the following periods?
A.
6 month
B.
12 month
C.
18 month
D.
24 month
Answer: _________
Question 673:
Management Accounting deals with
A.
Quantitative information
B.
Qualitative information
C.
Both the A and B
D.
None of the A and B
Answer: _________
Question 674:
Unless written off the loss on issue of debentures is shown:
A.
On the assets side of Balance Sheet
B.
On the debit side of Profit and Loss Account
C.
By way of deduction from the amount of debentures
D.
On the liabilities side of Balance Sheet
Answer: _________
Question 675:
If Price - earning ration is 0.05 and Earning per share (EPS) is Rs. 8 then the market value of shares will be
A.
40
B.
100
C.
160
D.
0.40
Answer: _________
Question 676:
On admission of new partner, increase in value of assets is credited to
A.
Profit and loss adjustment A/c
B.
Capital A/c of old partners
C.
Assets A/c
D.
Profit and loss A/c
Answer: _________
Question 677:
Match the following: List-I List-II a. Admission 1. Gaining ratio b. Retirement 2. Equal ratio c. Revaluation 3. Sacrificing ratio d. No partnership deed 4. Old ratio
A.
a-4, b-3, c-2, d-1
B.
a-2, b-1, c-4, d-3
C.
a-3, b-4, c-1, d-2
D.
a-3, b-1, c-4, d-2
Answer: _________
Question 678:
The first person to publish principles of double entry system was
A.
Lucas Pacioli
B.
Alfred Marshall
C.
F. W. Taylor
D.
Henri Fayol
Answer: _________
Question 679:
Match List-I with List-II and choose correct answer: List-I List-II P. Partner's loan 1. Debit balance of profit and loss Q. Death of a partner 2. 6% interest R. Loss in business 3. Joint life insurance policy S. Revolution account 4. Profit and loss adjustment account
A.
P-2, Q-3, R-1, S-4
B.
P-1, Q-2, R-3, S-4
C.
P-3, Q-2, R-1, S-4
D.
P-4, Q-1, R-2, S-3
Answer: _________
Question 680:
Accounting Standard relating to Accounting Policies is
A.
AS-1
B.
AS-2
C.
AS-3
D.
AS-4
Answer: _________
Question 681:
Original cost of an asset is Rs. 57,000, scrap value Rs.2,000 and estimated life 10 years. What will be the amount of depreciation in the first year according to the sum of the year's digits methods:
A.
Rs. 10,000
B.
Rs. 5,900
C.
Rs. 5,700
D.
Rs. 5,500
Answer: _________
Question 682:
The basic purpose of funds flow statement is to indicate the
A.
funancial position
B.
increase or decrease in working assets
C.
increase or decrease in liabilities
D.
increase or decrease in working capital
Answer: _________
Question 683:
The accounting standard related to amalgamation of company is
A.
AS-14
B.
AS-20
C.
AS-16
D.
AS-12
Answer: _________
Question 684:
When interest is to be allowed on the capitals of the partners, it is generally calculated on the:
A.
Capital in the beginning of the year
B.
Capital in the end of the year
C.
Average capital
D.
Capital at the end of the year less drawings, if any
Answer: _________
Question 685:
Out of the following, which four expenditures would be recorded in the motor van account? 1. Cost Rs. 2,00,000 2. Registration Rs. 5,000 3. Petrol Rs. 2,000 4. Salary to driver Rs. 4,000 5. Writing the company name Rs. 3,500 6. Road tax paid (one time) Rs. 4,500 Select the correct answer:
A.
1, 2, 3 and 4
B.
1, 2, 5 and 6
C.
1, 3, 5 and 6
D.
1, 2, 3 and 5
Answer: _________
Question 686:
Limited Partnership form of business organisation means
A.
the number of partners is limited
B.
the liability of some partners limited
C.
the liability of all partners is limited
D.
the amount of capital that can be raised is limited
Answer: _________
Question 687:
Dividend declared and paid by a company is
A.
an expense of the company
B.
an income of the company
C.
the distribution of profit earned by the company
D.
the source of fund for the company
Answer: _________
Question 688:
It is given in adjustment that during the accounting year, the trader distributed goods worth Rs. 5,000 as free samples. While preparing Final Accounts, this will be shown in
A.
Profit and Loss Account
B.
Both in Trading and Profit and Loss Account
C.
Trading Account
D.
Balance Sheet
Answer: _________
Question 689:
AS-37 does not apply to contingent liabilities of
A.
listed companies
B.
unlisted companies
C.
small business
D.
insurance companies
Answer: _________
Question 690:
X Ltd. goes into liquidation and a new company Z Ltd. purchases the business of X Ltd. It is a case of:
A.
Amalgamation
B.
Absorption
C.
Internal reconstruction
D.
External reconstruction
Answer: _________
Question 691:
Arrange the following in correct sequence in the event of dissolution of a partnership firm. 1. Residue, if any, divided among the partners. 2. Paying to each partner for his capital. 3. Paying the debts of third party. 4. Paying to each partner for advances made by him. Select the correct answer:
A.
4, 3, 2, 1
B.
2, 1, 4, 3
C.
3, 4, 2, 1
D.
3, 1, 4, 2
Answer: _________
Question 692:
Subscription recieved in 2009 is For the year 2008 ⇔ Rs. 1,300 For the year 2009 ⇔ Rs. 10,000 For the year 2010 ⇔ Rs. 1,200 Subscription outstanding on 31 st December, 2009 ⇔ Rs. 700. The amount of subscription to be posted to Income and Expenditure account of 2009 will be
A.
Rs. 10,000
B.
Rs. 12,500
C.
Rs. 13,200
D.
Rs. 10,700
Answer: _________
Question 693:
An asset was purchased for Rs. 5,00,000 with the down payment of Rs. 1,00,000 and bills adopted for Rs. 4,00,000. What would be the effect on the total asset and total liabilities in the Balance Sheet?
A.
Assets increased by Rs. 4,00,000 and liabilities increased by Rs. 4,00,000
B.
Assets decreased by Rs. 4,00,000 and liabilities decreased by Rs. 4,00,000
C.
Assets decreased by Rs. 4,00,000 and liabilities increased by Rs. 4,00,000
D.
Assets increased by Rs. 5,00,000 and liabilities increased by Rs. 4,00,000
Answer: _________
Question 694:
Securities premium can be used by a company for
A.
Issuing fully paid bonus shares to its members
B.
Redemption of preference Shares
C.
Payment of Dividend on Shares
D.
None of these
Answer: _________
Question 695:
By underwriting of shares, it is-
A.
convenient to get the accounts of the company audited
B.
easier to collect capital for the company
C.
easier to get the company registered
D.
easier to enter into contracts with the promoters of company
Answer: _________
Question 696:
You are given the following items- 1. Bill received 2. Investment 3. Debtors 4. Interest earned but not received Which of the following arrangement in order of liquidity is correct?
A.
1, 2, 3, 4
B.
2, 1, 4, 3
C.
2, 3, 1, 4
D.
3, 1, 4, 2
Answer: _________
Question 697:
According to which of the following concepts, fixed assets are depreciated over their useful life, rather than over a shorter period, on the expectation of early liquidation?
A.
Cost concept
B.
Matching concept
C.
Going concern concept
D.
Business entity concept
Answer: _________
Question 698:
X, Y and Z are partner in a partnership firm who share profits and loses in 4 : 2 : 1. It is decided that Z's share of profit will not be less than Rs. 7,500. If profit for the year is Rs. 31,500 then how will be profit distributed between each partner?
A.
X Rs. 16,000, Y Rs. 8,000, Z Rs. 7,500
B.
X Rs. 14,000, Y Rs. 10,000, Z Rs. 7,500
C.
X Rs. 15,500, Y Rs. 8,500, Z Rs. 7,500
D.
X Rs. 18,000, Y Rs. 6,000, Z Rs. 7,500
Answer: _________
Question 699:
The break-even chart signifies the relationship between:
A.
Cost and Volume of Sales
B.
Cost and Volume of Profit
C.
Cost and Volume of Production
D.
All the above
Answer: _________
Question 700:
Which of the following statement is incorrect?
A.
A person who receives profits is always a partner
B.
A person who receives profits is not necessarily a partner
C.
The true test of partnership is the mutual agency, i.e., agency relationship among partners
D.
Partnership comes into existence only through an agreement
E.
Calls-in-arrear do not form part of paid-up capital
F.
Preference shareholders get dividend at flexible rate
G.
Share application account is a personal account
H.
None of the above
Answer: _________
Question 701:
If sales are Rs. 14,900, Gross Profit Rs. 3,300, Net Loss Rs. 500. The operating expenses will be:
A.
Rs. 2,800
B.
Rs. 3,800
C.
Rs. 11,100
D.
Rs. 11,600
Answer: _________
Question 702:
The most precise test of liquidity is
A.
Quick ratio
B.
Current ratio
C.
Absolute liquid ratio
D.
None of the above
Answer: _________
Question 703:
Assertion (A): In preparing final accounts, if closing stock is given in the trial balance, it is shown only in the Balance Sheet. Reason (R): Any item appearing in the trial balance is treated only at one place i.e. either in the trading and profit & loss a/c or in the balance sheet. Now, select the correct answer:
A.
Both (A) and (R) are true and (R) is the correct explanation of (A)
B.
Both (A) and (R) are true, but (R) is not correct explanation of (A)
C.
(A) is true but (R) is false
D.
(A) is false but (R) is true
Answer: _________
Question 704:
In piecemeal distribution of cash on dissolution of a firm, cash is distributed to partners in the-
A.
Capital Ratio
B.
Profit Sharing Ratio
C.
Sacrificing Ratio
D.
None of these
Answer: _________
Question 705:
Revaluation method of depreciation is generally used in the case of:
A.
Plant
B.
Land & building
C.
Stock
D.
Loose Tools
Answer: _________
Question 706:
Wages Outstanding' is appearing in the Trial Balance of a company. While preparing the Income Statement and Balance Sheet, 'Wages Outstanding' should appear in-
A.
the Balance Sheet only
B.
the Income Statement only
C.
both Income Statement and Balance Sheet
D.
neither Income Statement nor Balance Sheet
Answer: _________
Question 707:
Interest on loan be allowed to partners where there is no express agreement between partners to this effect and also partnership deed does not have any provision regarding this
A.
No interest will be allowed
B.
Allowed Interest @ 12% per annum
C.
Allowed Interest @ 6% per annum
D.
None of these
Answer: _________
Question 708:
The cost of the motor car as on 1 st January 1987 is Rs. 70,000. The rate of depreciation is 10% P.A. The balance of motor car on 1 st January 1991 by fixed installation method and by written down value method will be
A.
Rs. 42,000, Rs. 45,927
B.
Rs. 45,927, Rs. 47,526
C.
Rs. 35,000, Rs. 39,415
D.
Rs. 45,927, Rs. 48,718
Answer: _________
Question 709:
Balance sheet shows financial position on a particular . . . . . . . . ?
A.
Date
B.
Month
C.
6 months
D.
Year
Answer: _________
Question 710:
Sales book is a record of:
A.
Only cash sales of goods
B.
Only sale of assets
C.
Only credit sales of goods
D.
All sales
Answer: _________
Question 711:
Consider the following statements: Assertion (A): Balance Sheet shows realisable value of business on a particular date. Reason (R): Accounting provides all information needed by a businessman. Now select your answer:
A.
Both A and R are true, and R is the correct explanation of A
B.
Both A and R are true, and R is not the correct explanation of A
C.
A is true, but R is false
D.
A is false but R is true
Answer: _________
Question 712:
When a partner draws a fixed sum at the beginning of each month, interest on total drawings will be equal to interest of . . . . . . . . at an agreed rate
A.
5 months
B.
5.5 months
C.
6 months
D.
6.5 months
Answer: _________
Question 713:
When purchase account is credited?
A.
When goods are purchased on credit
B.
When goods are purchased on cash
C.
When goods are sold
D.
When goods are taken by proprietor for personal use
Answer: _________
Question 714:
Match the following. List-I List-II a. Expenses of scheme 1. Not transferable to capital reduction b. Statutory reserve 2. Indicate and reduced c. Balance sheet after reduction 3. Transfer difference to capital reserve d. Reduction in paid-up value of shares 4. Debit capital reduction account
A.
a-4, b-3, c-2, d-1
B.
a-2, b-4, c-1, d-3
C.
a-4, b-2, c-1, d-3
D.
a-4, b-1, c-2, d-3
Answer: _________
Question 715:
Share allotment account is when share allotment becomes due
A.
Debit
B.
Credit
C.
Debit or Credit
D.
All of the above
Answer: _________
Question 716:
Double entry system was started in-
A.
India
B.
Italy
C.
England
D.
None of the above
Answer: _________
Question 717:
A, B and C are partners in a firm sharing profits in the ratio $$frac{2}{5}:,frac{2}{5}:,frac{1}{5}.$$ xa0 C retires from the firm and his share is bought by A and B in equal ratio. New profit sharing ratio will be.
A.
$${ ext{A}} = frac{1}{2}:{ ext{B}} = frac{1}{2}$$
B.
$${ ext{A}} = frac{3}{5}:{ ext{B}} = frac{2}{5}$$
C.
$${ ext{A}} = frac{2}{5}:{ ext{B}} = frac{3}{5}$$
D.
$${ ext{A}} = frac{1}{3}:{ ext{B}} = frac{2}{3}$$
Answer: _________
Question 718:
Subsequent expenditures that extend the useful life, improve the quality of output, or reduce operating costs of an existing asset beyond their originally estimated levels are
A.
Capital expenditures
B.
Revenue expenditures
C.
Deferred Revenue expenditures
D.
None of the above
Answer: _________
Question 719:
The rate of discount on issue of shares should not exceed . . . . . . . . % of the nominal value of shares.
A.
10
B.
2
C.
4
D.
5
Answer: _________
Question 720:
Which of the following items should be entered in the receipts and payments account of a club? I. Sale of old newspapers II. Loss on sale of some asset III. Payments for investment Select the correct answer using the options given below
A.
I, II and III
B.
I and III
C.
I and II
D.
II and III
Answer: _________
Question 721:
Which of the following are performing assets?
A.
Loss asset
B.
Standard asset
C.
Sub-standard asset
D.
Doubtful asset
Answer: _________
Question 722:
The . . . . . . . . in a ledger helps in locating the accounts contained in it.
A.
folio
B.
pages
C.
serial numbers
D.
part numbers
Answer: _________
Question 723:
Accounts receivable includes . . . . . . . .
A.
sundry debtors
B.
bill receivable
C.
promissory note
D.
all of the above
Answer: _________
Question 724:
Interest on drawings is:
A.
expenditure for the business
B.
expense for the business
C.
gain for the business
D.
loss for the business
Answer: _________
Question 725:
. . . . . . . . is a document prepared by the company before the issue of prospectus to the public for subscription of debentures.
A.
Debenture
B.
Trust deed
C.
Abridged prospectus
D.
Call letter
Answer: _________
Question 726:
An asset is never reduced to zero in the:
A.
fixed instalment method
B.
reducing balance method
C.
annuity method
D.
sum of years method
Answer: _________
Question 727:
An expenditure is treated as capital nature, when:
A.
the receiver of the amount is going to use it for the purchase of fixed assets
B.
it increases the quantity of fixed assets
C.
it is paid for meeting the normal expenses of the business
D.
it decreases the quantity of other assets
Answer: _________
Question 728:
If a companies tangible networth is a positive amount, it indicates:
A.
the probability of the company
B.
the liquidity of the company
C.
the solvency of the company
D.
Both A and B
Answer: _________
Question 729:
Which one of the following is capital expenditure?
A.
Cost of advertisement
B.
Purchase of delivery van
C.
Purchase of raw material
D.
Purchase of machine oil
Answer: _________
Question 730:
Following are the events which generally happen in the life of a public limited company 1. Public issue of shares (IPO) 2. Firm Incorporation 3. Preliminary expenditures 4. Issue of equity shares to promoters of the company Choose the correct sequence (chronological order) of the envets from the options given below:
A.
1, 2, 3, 4
B.
2, 3, 4, 1
C.
3, 2, 1, 4
D.
3, 2, 4, 1
Answer: _________
Question 731:
The cost of a machine is Rs. 70,000. Its life span is 10 years, after which its expected residual price will be Rs. 5,000. Based on straight line method, the depreciation for first four year will be
A.
Rs. 28,000
B.
Rs. 26,000
C.
Rs. 22,000
D.
Rs. 20,000
Answer: _________
Question 732:
'Funds' in the fund flow statements means-
A.
Cash
B.
Current assets
C.
Current liability
D.
Working capital
Answer: _________
Question 733:
Interest on capital is added with
A.
Capital
B.
Profit
C.
Loss
D.
Donation
Answer: _________
Question 734:
X and Y agree to form a partnership. X contributes Rs. 5,000 in assets and devotes one half time to partnership while Y contribution Rs. 20,000 in cash and devotes full time to the firm. How will the partners share the profits of the firm:
A.
1 : 4
B.
1 : 3
C.
1 : 2
D.
1 : 1
Answer: _________
Question 735:
Assertion (A): Accounting information refers to only events concerned with a business firm. Reason (R): Accounting information is presented in financial statements.
A.
(A) is correct, but (R) is incorrect
B.
Both (A) and (R) are correct
C.
(A) is incorrect, but (R) is correct
D.
Both (A) and (R) are incorrect
Answer: _________
Question 736:
Goodwill account is
A.
Personal account
B.
Real account
C.
Nominal account
D.
None of the above
Answer: _________
Question 737:
In liquidation proceedings of a company certain lists are attached with the statement of affairs of the company. Match list-I with list-II and select your answer: List-I List-II a. List E 1. Preference shareholders b. List F 2. Equity shareholders c. List G 3. Deficiency account d. List H 4. Unsecured creditors
A.
a-4, b-1, c-2, d-3
B.
a-1, b-3, c-4, d-2
C.
a-2, b-3, c-1, d-4
D.
a-4, b-2, c-1, d-3
Answer: _________
Question 738:
Subscription received in advance by a club will be shown on:
A.
Asset side of Balance sheet
B.
Liability side of Balance sheet
C.
Credit side of Income and Expenditure A/c
D.
Debit side of Income and Expenditure A/c
Answer: _________
Question 739:
Which of the following is not included into the final accounts?
A.
Trading and profit and loss account
B.
Profit and loss appropriation account
C.
Cash-book
D.
Balance sheet
Answer: _________
Question 740:
The value of goodwill of the business willbe the highest if the majority of the customers of the firm are of the nature of
A.
Cars
B.
Dogs
C.
Horses
D.
Bull
Answer: _________
Question 741:
Intrinsic value of a share is given by
A.
$$frac{{{ ext{Total net assets}}}}{{{ ext{Number of shares}}}}$$
B.
$$frac{{{ ext{Total assets}}}}{{{ ext{Number of shares}}}}$$
C.
$$frac{{{ ext{Share capital}}}}{{{ ext{Number of shares}}}}$$
D.
$$frac{{{ ext{Market capitalisation}}}}{{{ ext{Number of shares}}}}$$
Answer: _________
Question 742:
Assertion (A) Personal transactions of the owners of the business are not recorded in the books. Reason (R) According to the business entity concept, each business enterprise is considered as an accounting unit separate from owners.
A.
Both (A) and (R) are correct and (R) is the correct explanation of (A)
B.
Both (A) and (R) are correct, but (R) is not the correct explanation of (A)
C.
(A) is correct, but (R) is not correct
D.
(A) is wrong, but (R) is correct
Answer: _________
Question 743:
Given below are two statements, one labelled as Assertion (A) and the other as Reason (R): Assertion (A): Capital expenditure is incurred for the purpose of acquiring fixed assets. Reason (R): Capital expenditure item is shown in the asset side of the Balance sheet. Select the correct answer:
A.
Both (A) and (R) are true and (R) is the correct explanation of (A)
B.
Both (A) and (R) are correct but (R) is NOT the correct explanation of (A)
C.
(A) is true but (R) is false
D.
(A) is false but (R) is true
Answer: _________
Question 744:
On increase in sales price
A.
Does not affect Break-Even Point
B.
Lower Break-Even Point
C.
Raises Break-Even Point
D.
Lowers net profit
Answer: _________
Question 745:
If vendors are issued debentures of Rs. 1,00,000 in consideration of net assets of Rs. 1,20,000, the balance of Rs. 20,000 will be credited to:
A.
Goodwill Account
B.
Capital Reserve Account
C.
Profit and Loss Account
D.
General Reserve Account
Answer: _________
Question 746:
Match List-I with List-II and select the correct answer: List-I List-II a. Financial Leverage 1. Efficiency b. Quick Ratio 2. Profitability c. Stock Turnover 3. Risk d. Margin on sales 4. Liquidity
A.
a-3, b-4, c-1, d-2
B.
a-3, b-4, c-2, d-1
C.
a-4, b-3, c-1, d-2
D.
a-4, b-3, c-2, d-1
Answer: _________
Question 747:
A company can not redeem its debentures by:
A.
Selling them in the open market
B.
A single payment
C.
Conversion
D.
Annual drawings
Answer: _________
Question 748:
Recoupable short working are shown in the Balance Sheet as
A.
current assets
B.
fixed assets
C.
fixed liabilities
D.
none of the above
Answer: _________
Question 749:
You wish to invest a large of money in a company for a long-term. which of the following ratios will be most appropriate for you to reach a decision:
A.
Total Debts/Net Worth
B.
Long-term Debts/Total Capitalisation
C.
Total Debts/Total Equity Share-holdings
D.
Sales less Cost of goods sold/Total Sales
Answer: _________
Question 750:
The cost of right shares is
A.
subtracted from the cost of investments
B.
added to the cost of investments
C.
no treatment is required
D.
none of the above
Answer: _________
Question 751:
Sales + Closing stock - Purchases - Gross Profit =
A.
Purchase Returns
B.
Cost of Goods Sold
C.
Opening Stock
D.
None of the above
Answer: _________
Question 752:
Under which of the following Sections of the Company's Act, 1956 a company can use share premium for certain purposes?
A.
Section 52
B.
Section 65
C.
Section 78
D.
Section 80
Answer: _________
Question 753:
Which of the following is not correctly matched in the term of Loss/income and Nature?
A.
Interest payable on debentures ⇔ A charge against profit of the company
B.
Loss on issue of debenture ⇔ Deferred revenue expenditure
C.
Premium on issue of shares ⇔ Capital profits
D.
Pre-incorporation profit ⇔ Capital profits
Answer: _________
Question 754:
If for the redemption of preference share capital of Rs. 1,00,000, 5,000 equity shares of Rs. 10 each are issued at a discount of 10% the amount to be transferred to Capital Redemption Reserve Fund will be:
A.
Rs. 60,000
B.
Rs. 50,000
C.
Rs. 55,000
D.
Rs. 45,000
Answer: _________
Question 755:
Preliminary expenses of a company should be shown in the final accounts on
A.
Assets side of Balance Sheet
B.
Liabilities side of Balance Sheet
C.
Debit side of Trading A/c
D.
Credit side of Profit & Loss A/c
Answer: _________
Question 756:
The directors of Murfi Ltd made a final call of Rs. 50 per share on 1 st August, indicating the last date of payment of call money to be 31 st August. Mr. Akshit holding 5,000 shares paid the call money on 15 th October, if the company adopts Table A, the amount of interest on calls-in-arrears to be paid
A.
Rs. 3,125
B.
Rs. 1,562.50
C.
Rs. 1,875
D.
Rs. 1,500
Answer: _________
Question 757:
The Accounting Standards Board of India does not perform the following function:
A.
Formulation of Accounting Standards established by Institute of Chartered Accountants of India
B.
Review of Accounting Standards established by International Accounting Standards Committee
C.
Issue of guidelines and clarification notes on points arising from Accounting Standards
D.
Propagate the Accounting Standards and persuade business houses to adopt them
Answer: _________
Question 758:
An entity issues shares as consideration for the purchase of inventory. The shares were issued on 1 st January, 2017. The inventory is eventually sold on 31 st December, 2018. The value of the inventory on 1 st January, 2017, was Rs. 8,00,000. This value was unchanged upto the date of sale. The sale proceed was Rs. 12,00,000. The shares issued have a market value of Rs. 9,00,000. Which of the following statement correctly describes the accounting treatment of this share based payment transaction?
A.
Equity is increased by Rs. 8,00,000 and inventory is increased by Rs. 8,00,000. The inventory value is expensed on sale on 31 st December, 2018
B.
Equity is increased by Rs. 9,00,000, inventory is increased by Rs. 9,00,000, the inventory value is expensed on sale on 31 st December, 2018
C.
Equity is increased by Rs. 8,00,000 and inventory is increased by Rs. 8,00,000, the inventory value is expensed over the two years to 31 st December, 2018
D.
Equity is increased by Rs. 9,00,000, inventory is increased by Rs. 9,00,000, the inventory value is expensed over the two years to 31 st December, 2018
Answer: _________
Question 759:
State which of the following errors will not be revealed by the trial balance?
A.
errors of complete omission
B.
errors of carrying forward
C.
wrong totalling of the purchases book
D.
error of partial omission
Answer: _________
Question 760:
. . . . . . . . is a reserve created to meet any loss due to natural calamities.
A.
Revenue reserve
B.
Capital reserve
C.
Catastrophe reserve
D.
None of these
Answer: _________
Question 761:
Which of the following fictitious assets is not taken over by the transferee company?
A.
Preliminary expenses
B.
Underwriting commission
C.
Discount on issue of shares
D.
All of these
Answer: _________
Question 762:
Bonus payable on maturity of the policy is termed as:
A.
cash bonus
B.
capital bonus
C.
reversionary bonus
D.
None of these
Answer: _________
Question 763:
Profit under single entry system of Book Keeping means:
A.
the difference between opening and closing cash balances and reduced by fresh capital introduced
B.
the difference between opening net assets and closing net assets as increased by drawings and reduced by new capital introduced
C.
profit shown by Trading and Profit and Loss Account and Balance sheet
D.
the amount of closing cash balance as reduced by expenses
Answer: _________
Question 764:
In the case of a sole proprietorship, Assets in Balance sheet items are conveniently shown in:
A.
Order of fixity
B.
Order of liquidity
C.
Alphabetical order
D.
Order of dates of acquisition
Answer: _________
Question 765:
When debentures are redeemed out of profits, an equal amount is transferred to . . . . . . . .
A.
CRR
B.
capital reserve
C.
revenue reserve
D.
debenture redemption reserve
Answer: _________
Question 766:
Dividend may be declared out of . . . . . . . .
A.
current profit
B.
past reserves
C.
money provided by government
D.
All of these
Answer: _________
Question 767:
Debit means:
A.
Decrease in asset
B.
Increase in liability
C.
An entry on the left hand side of an account
D.
Moderate increase in liability
Answer: _________
Question 768:
Fictitious assets are shown on the asset side of the balance sheet of a company under the heading . . . . . . . .
A.
fixed asset
B.
current asset
C.
foot note
D.
None of these
Answer: _________
Question 769:
If there is mutual indebtedness between the transferor company and the transferee company in business combination, which of the following is correct?
A.
No adjustment is required in the books of the transferor company
B.
Adjustment is required in the books of the transferor company
C.
No adjustment is required in the books of the transferee company
D.
None of the above
Answer: _________
Question 770:
A, B and C are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. They agreed to take D into partnership and gave him $$frac{1}{8}$$ share. What will be their new profit sharing ratio?
A.
4 : 3 : 2 : 1
B.
28 : 21 : 14 : 9
C.
28 : 21 : 14 : 8
D.
4 : 1 : 2 : 1
Answer: _________
Question 771:
In a business net assets on 1 st January are Rs. 6,000 and on 31 st January are Rs. 7,500. If the withdrawals by the owner during January are Rs. 1,000 the net income for January is:
A.
Rs. 1,500
B.
Rs. 2,500
C.
Rs. 500
D.
None of these
Answer: _________
Question 772:
Shares issued to promoters for consideration other than cash is debited to-
A.
Promoter's account
B.
Goodwill account
C.
Preliminary expense account
D.
General expense account
Answer: _________
Question 773:
On the death of a partner, the amount received from Joint life policy should be credited to the capital accounts of
A.
only continuing partners
B.
only deceased partners
C.
all the partners
D.
none of these
Answer: _________
Question 774:
Capital employed in a business is Rs. 1,50,000. Profits are Rs. 50,000 and the normal rate of profit is 20%. The amount of goodwill by capitalisation method will be:
A.
Rs. 1,00,000
B.
Rs. 1,50,000
C.
Rs. 2,00,000
D.
Rs. 3,00,000
Answer: _________
Question 775:
Which of the following is true? i. Balance sheet is alway sprepared from the point of view of the business, but not from the point of view of the owners. ii. The financial relationship of the business to its owners is shown in the balance sheet. iii. Balance sheet is always related to a period of time.
A.
i and ii
B.
ii and iii
C.
i and iii
D.
i, ii and iii
Answer: _________
Question 776:
The Balance Sheet of a company includes, among other item, 10% Redeemable Preference Share of Rs. 1,60,000 fully paid, share premium Rs. 1,000 and a revenue reserve of Rs. 1,31,000. The company decided to redeem the above shares at a premium of 5% by issue of new shares. If the new issue of shares is to be at a premium of 20%, the minimum amount of new issue will be
A.
Rs. 28,800
B.
Rs. 32,000
C.
Rs. 36,000
D.
Rs. 37,000
Answer: _________
Question 777:
"Losses are anticipated and profits are not accounted until realized", is the part of following principle
A.
Consistency
B.
Comparability
C.
Conservatism
D.
Disclosure
Answer: _________
Question 778:
In the event of recoupment of short workings by the lessee, the lessor debits
A.
Minimum Rent Account
B.
Lessee's Account
C.
Royalty Reserve Account
D.
Profit and Loss Account
Answer: _________
Question 779:
While preparing the transferee company's financial statement under amalgamation in the nature of purchase, the assets and liabilities taken over from the transferor company should be incorporated at . . . . . . . .
A.
cost
B.
book value
C.
revised value
D.
None of these
Answer: _________
Question 780:
Unclaimed dividend is shown on the liability side of the balance sheet of a company as . . . . . . . .
A.
Share capital
B.
Current liabilities
C.
Reserves & Surplus
D.
Non-current liability
Answer: _________
Question 781:
The closing debit balance in the receipts and payments account indicates the . . . . . . . . balance at the end of the year.
A.
Opening
B.
Closing
C.
Trading
D.
Cash
Answer: _________
Question 782:
A second hand machinery was purchased for Rs. 1,00,000 five years ago and was overhauled by carrying out some current repairs at a cost of Rs. 10,000. It has also an accumulated depreciation of Rs. 50,000. It has been disposed of in the beginning of the sixth year for Rs. 60,000. Profit/loss on such disposal shall be
A.
Profit of Rs. 10,000
B.
Loss of Rs. 50,000
C.
Loss of Rs. 40,000
D.
No profit, no loss
Answer: _________
Question 783:
When own debentures are cancelled any profit on cancellation is transferred to . . . . . . . .
A.
general reserve
B.
capital reserve
C.
P/L Account
D.
None of these
Answer: _________
Question 784:
Sales to Shyam of Rs. 500 not recorded in the books would affect:
A.
Shyam's account
B.
Purchase account
C.
Sales account
D.
Cash account
Answer: _________
Question 785:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I List-II a. Financial leverage 1. Efficiency b. Quick ratio 2. Profitability c. Stock turnover 3. Liquidity d. Margin on sales 4. Risk
A.
a-4, b-3, c-1, d-2
B.
a-1, b-2, c-4, d-3
C.
a-4, b-2, c-1, d-3
D.
a-1, b-3, c-4, d-2
Answer: _________
Question 786:
Voluntary return of shares by shareholders to the company for cancellation is called:
A.
transfer of shares
B.
forfeiture of shares
C.
surrender of shares
D.
buyback of shares
Answer: _________
Question 787:
Internal reconstruction can be done by . . . . . . . .
A.
alteration of share capital
B.
reduction of share capital
C.
issue of share capital
D.
All of these
Answer: _________
Question 788:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I List-II a. Receipts and payments account 1. Revenue b. Income and expenditure account 2. Cash c. Dividend equalization reserve 3. Liability d. Subscription received in advance account 4. General reserve
A.
a-2, b-1, c-4, d-3
B.
a-3, b-4, c-1, d-2
C.
a-2, b-4, c-1, d-3
D.
a-3, b-1, c-4, d-2
Answer: _________
Question 789:
Money received in advance from shareholders before it is called-up by the directors is:
A.
Debited to calls in arrears account
B.
Debited to calls in advance account
C.
Credited to calls in arrears account
D.
Credited to calls in advance account
Answer: _________
Question 790:
In the case of hire purchase assets account is debited with
A.
Hire purchase price
B.
Cash price
C.
Cost price of the seller
D.
None of the above
Answer: _________
Question 791:
A plant was purchased on 1 st January 1999. It was depreciated at the rate of 12% P.A. by diminishing balance method. It was sold on 31 st March 2001 when its depreciated value was Rs. 1,50,234. What was its value on 1 st January 1999.
A.
Rs. 1,80,000
B.
Rs. 1,90,000
C.
Rs. 2,00,000
D.
None of the above
Answer: _________
Question 792:
The objective of social accountings is to find out
A.
efficiency
B.
profit earnd
C.
cost and benefit to society
D.
value of personnel
Answer: _________
Question 793:
A and B are partners sharing profits/losses in the ratio of 3 : 2. C is admitted as a partner. The new profit sharing ratio among A, B and C is 4 : 3 : 2. Find out sacrificing ratio-
A.
7 : 4
B.
7 : 3
C.
5 : 2
D.
5 : 3
Answer: _________
Question 794:
The dividend pay out ratio can be determined by dividing dividend per share by
A.
Earning per share
B.
Number of equity shares
C.
Market value per share
D.
Book value per share
Answer: _________
Question 795:
What is the amount of purchases, when: Opening stock is = Rs. 10,000 Closing stock is = Rs. 8,000 Sales is = Rs. 1,10,000 Cost of goods sold is = Rs. 80,000
A.
Rs. 78,000
B.
Rs. 30,000
C.
Rs. 82,000
D.
Rs. 92,000
Answer: _________
Question 796:
Classification of fixed and variable costs is important
A.
In determining unit costing
B.
Determination in operating cost
C.
Determining in contract
D.
In determining process cost
Answer: _________
Question 797:
The convertible preference shares are converted into:
A.
Participative preference shares
B.
debentures
C.
redeemable preference shares
D.
equity shares
Answer: _________
Question 798:
If the average collection period is 15 days and average book receivables is Rs. 60,000 then what will be the total annual credit sales?
A.
Rs. 14,00,000
B.
Rs. 9,00,000
C.
Rs. 2,16,00,000
D.
Rs. 1,08,00,000
Answer: _________
Question 799:
Purchase of fixed assets on credit is originally recorded in
A.
Purchases book
B.
Ledger
C.
Cash book
D.
Journal Proper
Answer: _________
Question 800:
The claims against the company not acknowledged as debts are shown as
A.
Current liabilities
B.
Loans and advances
C.
Notes to balance sheet
D.
Director's report
Answer: _________
Question 801:
Under cash basis of accounting, revenue is recognized when
A.
Sale is made
B.
Cash is received
C.
Goods are delivered
D.
Services are rendered
Answer: _________
Question 802:
The trade discount on purchases is recorded
A.
When it is received
B.
When the inventory is purchased
C.
When the inventory is sold
D.
Not at all recorded in the books
Answer: _________
Question 803:
Which of the following is a leverage ratio?
A.
Debt equity ratio
B.
Current ratio
C.
Quick ratio
D.
Earning power
Answer: _________
Question 804:
The document inviting offers from public to subscribe for the debentures or shares of a body corporate is a
A.
Share certificate
B.
Debenture
C.
Fixed deposit receipt
D.
Prospectus
Answer: _________
Question 805:
The portion of the acquisition cost of an asset yet to be allocated is known as
A.
Written down value
B.
Accumulated value
C.
Realizable value
D.
Salvage value
Answer: _________
Question 806:
Which of the following appears in the profit and loss appropriation account?
A.
Interest on debentures
B.
Dividend
C.
Provision for taxation
D.
Provision for bad debts
Answer: _________
Question 807:
Which of the following inventory valuation methods show higher profits during the period of rising prices?
A.
FIFO
B.
LIFO
C.
Weighted average cost method
D.
Simple average method
Answer: _________
Question 808:
The main objective of providing depreciation is to
A.
Calculate the true net profit
B.
Compute the actual cash profit
C.
Create funds for replacement of fixed assets
D.
Reduce tax burden
Answer: _________
Question 809:
The amount received over and above the par value is credited to which account?
A.
Share Capital A/c
B.
Calls-in-advance A/c
C.
Securities Premium A/c
D.
Share Forfeiture A/c
Answer: _________
Question 810:
A Ltd. issued a prospectus inviting applications for 2,000 shares. Applications were received for 3,000 shares and pro-data allotment was made on the applications of 2,400 shares. If A has been allotted 40 shares, how many shares he must have applied for ?
A.
40
B.
44
C.
48
D.
52
Answer: _________
Question 811:
Business means
A.
Commerce
B.
Industry and commerce
C.
Trade and commerce
D.
Buying and selling of goods
Answer: _________
Question 812:
Which of the following is not a capital gain:
A.
Profit prior to incorporation of the company
B.
Profit from the sale of fixed assets
C.
Premium on issue of shares
D.
Compensation received on the termination of a contract
Answer: _________
Question 813:
A and B are partners in a firm sharing profit and loss in the ratio of 3 : 2. They admit C into partnership for $${frac{1}{4}^{{ ext{th}}}}$$ share and the new ratio between A and B is 2 : 1. The sacrificing ratio is
A.
1 : 1
B.
2 : 1
C.
3 : 1
D.
2 : 3
Answer: _________
Question 814:
Profit sharing ratio of A, B and C is $$frac{1}{2},,frac{3}{{10}}$$ xa0 and $$frac{1}{5}$$ respectively C dies. What will be profit haring ratio between A and B?
A.
3 : 1
B.
2 : 1
C.
3 : 2
D.
5 : 3
Answer: _________
Question 815:
The application of the concept of conservatism in accounting:
A.
results in higher profits and lower liabilities
B.
requires the accountant not to anticipate profits, but to provide for all possible losses
C.
required the managers always to match effort to accomplishment
D.
does not allow any deviation from the policies or practices followed in the past
Answer: _________
Question 816:
Security premium account can be used for which of the following purpose?
A.
Write-off discount on issue of debenture of company
B.
Write-off preliminary expenses of the compnay
C.
Issue of bonus share
D.
All of the above
Answer: _________
Question 817:
The convention of conservatism when applied to a Balance Sheet results in:
A.
overstatement of assets
B.
overstatement of liabilities
C.
understatement of assets
D.
understatement of liabilities
Answer: _________
Question 818:
A, B and C were partners in a business who shared profits and losses in the ratio of $$frac{1}{5}:,frac{1}{3}:,frac{7}{{15}}$$ xa0 respectively. C retired and his share was purchased by A and B in the ratio of 3 : 2. The new profit sharing ratio of A and B will be:
A.
13 : 12
B.
12 : 15
C.
12 : 13
D.
14 : 15
Answer: _________
Question 819:
Intrinsic value of share can be determined by
A.
Fair value method
B.
Net asset method
C.
Yield method
D.
Stock exchange quotation
Answer: _________
Question 820:
In asset turnover ratio we see-
A.
How much property is to be sold
B.
Relationship between property and net sales
C.
Sales value of the property
D.
Market value of the property
Answer: _________
Question 821:
Fixed Assets Rs. 14,40,000 Net Worth Rs. 15,00,000 Debt (Long-term) Rs. 9,00,000 Other current assets Rs. 7,60,000 Currents liabilities Rs. 6,00,000 The currnet ratio is
A.
2.4 : 1
B.
2.6 : 1
C.
3.2 : 1
D.
3.5 : 1
Answer: _________
Question 822:
X and Y are partners in a firm sharing profits in the ratios of 2 : 1. Z is admitted with a $${frac{1}{3}^{{ ext{rd}}}}$$ profit sharing. What will be the new profit sharing ratio of X, Y and Z?
A.
3 : 3 : 3
B.
4 : 3 : 2
C.
4 : 2 : 3
D.
2 : 3 : 4
Answer: _________
Question 823:
The items which increases the owner's capital as a result of business transactions are called-
A.
Expenses
B.
Income
C.
Drawing
D.
Capital
Answer: _________
Question 824:
According to conservation concept, stock will be valued at
A.
Market price
B.
Cost price
C.
Cost price or market price whichever is less
D.
Cost price or market price whichever is more
Answer: _________
Question 825:
Liquidator's statement of receipts and payment is known as
A.
cash flow statement
B.
cash book
C.
liquidator's final statement of account
D.
deficiency account
Answer: _________
Question 826:
If, Sundry Debtors Rs. 15,000 Bill Receivable Rs. 12,500 Cash at Bank Rs. 17,500 Stock Rs. 15,000 Profit Rs. 20,000 Creditors Rs. 25,000 Bill payable Rs. 15,000 Sales Rs. 1,00,000 The Acid Test Ratio is
A.
1.5 : 1
B.
1.125 : 1
C.
2.4 : 2
D.
3 : 1
Answer: _________
Question 827:
If A = purchases, B = Opening stock, C = Closing stock, D = cost of goods sold, then which of the following equation is not correct?
A.
A + B - D = C
B.
B + A - C = D
C.
C + D - A = B
D.
D - C - A = B
Answer: _________
Question 828:
Which of the following expenditures are to be treated as revenue expenditure? I. Interest paid on money borrowed during construction period II. Cost of patent rights III. Loss of uninsured stock due to fire IV. Retirement gratuity paid to an employee Select the correct answer using the options given below:
A.
I, II and III
B.
II, III, and IV
C.
III and IV
D.
I and II
Answer: _________
Question 829:
Premium on redemption of preference shares can be provided out of . . . . . . . .
A.
securities premium account
B.
capital reserve account
C.
general reserve account
D.
All of these
Answer: _________
Question 830:
Every bank is required to maintain . . . . . . . . with RBI in the form of cash, gold and securities an amount not less than 25% of their demand and time liabilities.
A.
CRR
B.
SLR
C.
statutory reserve
D.
branch adjustment
Answer: _________
Question 831:
According to the going concern concept, a business entity is assumed to have:
A.
a long life
B.
a very short life
C.
an indefinite life
D.
a medium life
Answer: _________
Question 832:
A sales of Rs. 2000 wrongly entered in the purchase book:
A.
decreases the gross profit by Rs. 2000
B.
increases the gross profit by Rs. 2000
C.
increases the gross profit by Rs. 4000
D.
none of these
Answer: _________
Question 833:
Amount sacrificed by shareholders are credited to . . . . . . . .
A.
capital reserve
B.
general reserve
C.
capital reduction
D.
None of these
Answer: _________
Question 834:
Cost of goods purchased for resale is an example of:
A.
Deferred Revenue Expenditure
B.
Revenue Expenditure
C.
Capital Expenditure
D.
Common Expenditure
Answer: _________
Question 835:
In case of retirement of a partner, the partner's loan account would be shown
A.
in his capital account
B.
in his wife's loan account
C.
in his loan account
D.
in the total amount due to him
Answer: _________
Question 836:
In which one of the following methods of charge depreciation shall be balance never be reduced to zero?
A.
Fixed instalment method
B.
Depreciation fund method
C.
Diminishing balance method
D.
Depletion unit method
Answer: _________
Question 837:
What is the correct sequence of the preparation of the following accounts and statement of a non-profit organisation? I. Income and expenditure account II. Receipts and payment account III. Balance sheet Select the correct answer from the options given below:
A.
I, II, III
B.
I, III, II
C.
II, I, III
D.
II, III, I
Answer: _________
Question 838:
Stock of a Trading concern consists of
A.
Raw material
B.
Work in progress
C.
Merchandise inventory
D.
All of the above
Answer: _________
Question 839:
Expenditure incurred annually on renewal of patent is a
A.
Revenue expenditure
B.
Capital expenditure
C.
Financial expenditure
D.
Operating expenditure
Answer: _________
Question 840:
Which of the following account will be credited when the goods are purchased on cash?
A.
Stock account
B.
Cash account
C.
Supplier account
D.
Work in progress account
Answer: _________
Question 841:
Which of the following account will be credited when the goods are purchased on credit from Mr. Ali?
A.
Purchases account
B.
Mr. Ali account
C.
Cash account
D.
Sales account
Answer: _________
Question 842:
An informal accounting statement that lists the ledger account balances at a point of time and compares the total of debit balances with the total of credit balances is known as
A.
Income statement
B.
Balance sheet
C.
Trial balance
D.
Cash Book
Answer: _________
Question 843:
Documentary evidence, in a specific format used to record the details of a transaction is known as
A.
Account
B.
Voucher
C.
Journal
D.
Ledger
Answer: _________
Question 844:
Cost incurred for the maintenance of shop is considered as
A.
Deffered expense
B.
Capital expenditure
C.
Revenue expenditure
D.
Preliminary expense
Answer: _________
Question 845:
Double entry accounting system includes
A.
Accrual accounting only
B.
Cash accounting only
C.
Both cash and accrual accounting
D.
None of the above
Answer: _________
Question 846:
Which of the following financial statements show the financial health of an organisation at a stated point of time?
A.
Balance sheet
B.
Trading and Profit & Loss account
C.
Cash flow statement
D.
Statement of retained earnings
Answer: _________
Question 847:
The estimated value at which an asset is expected to be sold after the end of its useful life is called
A.
Residual value
B.
Salvage value
C.
Scrap value
D.
All of the above
Answer: _________
Question 848:
Drawings Account is
A.
Nominal Account
B.
Personal Account
C.
Real Account
D.
Fictitious Account
Answer: _________
Question 849:
Compensating error affects
A.
Trial balance
B.
Balance sheet
C.
Profit and loss a/c
D.
None of the above
Answer: _________
Question 850:
Match the following List I List II a. Revenue means the income of a . . . . . . . . nature. 1. Fixed assets b. Premium paid on the life insurance policy of the proprietor will be debited to . . . . . . . . account. 2. Regular c. Going concern concept is relevant for . . . . . . . . 3. Matching d. Recognition of cost in the same period as associated revenues is called . . . . . . . . principle. 4. Drawings
A.
a-4, b-3, c-2, d-1
B.
a-2, b-3, c-4, d-1
C.
a-2, b-1, c-4, d-3
D.
a-2, b-4, c-1, d-3
Answer: _________
Question 851:
Which of the following have contra entries?
A.
Simple cash book
B.
Petty cash book
C.
Three column cash book
D.
All cash books
Answer: _________
Question 852:
If the goodwill A/c is raised at the time of retirement of a partner and is to be written off, then the capital accounts of the remaining partners are debited in
A.
new profit sharing ratio
B.
capital ratio
C.
old profit sharing ratio
D.
sacrificing ratio
Answer: _________
Question 853:
Human Resource Accounting is the measurement and reporting . . . . . . . . and . . . . . . . . of people in organisational resources.
A.
benefit, opportunities
B.
cost, value
C.
contract, agreement
D.
none of these
Answer: _________
Question 854:
X Ltd. forfeited 20 shares of Rs. 10 each on which Rs. 6 per share was paid. If out of these, 8 shares were reissued to Hari as fully paid on payment of Rs. 5.50 per share what would be the amount to the credit of share forfeited A/c:
A.
Rs. 48
B.
Rs. 72
C.
Rs. 84
D.
Rs. 120
Answer: _________
Question 855:
The accounting concept that is used to prepare the Profit and Loss Account is known as:
A.
Cost
B.
Realisation
C.
Matching
D.
Disclosure
Answer: _________
Question 856:
Which of the following is not correctly matched? (Class : Ratio)
A.
Profitability ⇔ Operating Ratio
B.
Activity ⇔ Proprietary Ratio
C.
Liquidity ⇔ Current Ratio
D.
Long term Solvency ⇔ Debt equity ratio
Answer: _________
Question 857:
What is the underlying concept that support the immediate recognition of an estimated loss?
A.
Substance over form
B.
Consistency
C.
Matching
D.
Prudence
Answer: _________
Question 858:
Which of the following statement is/are true? 1. Tax shield on depreciation and interest is an important variable both for the lessor and the lessee. 2. Lease transactions in India are governed by the lease act. 3. A lessee should evaluate the lease options against the buying option. 4. As per AS-19, financial lease is shown in the balance sheet of the lessee as an asset.
A.
Both 1 and 4
B.
1, 3 and 4
C.
2, 3 and 4
D.
Only 2
Answer: _________
Question 859:
When all the debentures are redeemed, the balance left in the Debenture Sinking Fund Account is transferred to
A.
Debentures account
B.
Sinking Fund Investment Account
C.
Capital Redemption Reserve Account
D.
General Reserve Account
Answer: _________
Question 860:
In what order following items should be shown in company's balance sheet? i. Goodwill ii. Investment iii. Creditors iv. Preliminary expenses Choose answer from one of the options
A.
ii, iii, iv, i
B.
i, ii, iii, iv
C.
i, ii, iv, iii
D.
I, iii, iv, ii
Answer: _________
Question 861:
"Make sufficient provisions for future losses, but do not anticipate future profits." The statement is in accordance to the concept of
A.
Matching
B.
Objectivity
C.
Conservatism
D.
Materiality
Answer: _________
Question 862:
Whom of the following is paid at last on the dissolution of a company?
A.
Reserve creditor
B.
Equity shareholder
C.
Preference shareholder
D.
Debenture holder
Answer: _________
Question 863:
Functions of managerial accounting and cost accounting interacting with each other-
A.
Complementary nature
B.
Antagonistic in nature
C.
Neutral form of influence
D.
Statutory
Answer: _________
Question 864:
Liquidity ratios are used:
A.
To assess the financial position of a firm at a point of time
B.
To evaluate the performance of a firm over a period of time
C.
To judge a firm's ability to meet short-term obligations
D.
To assess the present and expected earnings of a firm
Answer: _________
Question 865:
A, B, Co. Ltd. forfeited 20 shares of Rs. 10 each, Rs. 7 called up on which C had paid application and allotment money of Rs. 5 per share. Of these, 15 shares were reissued to D @Rs. 6 per share as fully paid-up for Capital Reserve account would be:
A.
Rs. 15
B.
Rs. 20
C.
Rs. 75
D.
Rs. 100
Answer: _________
Question 866:
Secret reserves may result by:
A.
creating general reserve
B.
providing excessive depreciation
C.
overvaluing of stocks
D.
undervaluation of liabilities
Answer: _________
Question 867:
Fixed cost will be divided to get the break even point selling price in rupees
A.
Variable cost per unit
B.
Datum per unit
C.
Fixed cost per unit
D.
Profit volume ratio
Answer: _________
Question 868:
Match list-I with list-II and select the correct answer: List-I (Accounting
Standards) List-II (Objects) a. AS-1 1. Valuation of inventory b. AS-2 2. Cash Flow Statement c. AS-3 3. Revenue Recognition d. AS-4 4. Disclosure of Accounting Policies
A.
a-4, b-1, c-2, d-3
B.
a-4, b-1, c-3, d-2
C.
a-1, b-4, c-3, d-2
D.
a-1, b-4, c-2, d-3
Answer: _________
Question 869:
A company wants to pay dividend on shares. Which of the following should be used for this purpose
A.
Premium on share
B.
Profit on issue of forfeited share
C.
General reserve
D.
All of the above
Answer: _________
Question 870:
Expenses incurred for the installation of plant and machinery will be treated as
A.
Revenue expenditure
B.
Deferred revenue expenditure
C.
General expenditure
D.
Capital expenditure
Answer: _________
Question 871:
For which of the following purpose share premium can be used
A.
Writing-off discount on debenture
B.
Writing-off preliminary expenses of company
C.
Issue of bonus share
D.
All of the above
Answer: _________
Question 872:
Earning Per Share (EPS) is equal to:
A.
$$frac{{{ ext{Net Income}}- { ext{Preference Dividend}}}}{{{ ext{Number of Equity Shares}}}}$$
B.
$$frac{{{ ext{Net Income}}}}{{{ ext{Number of Shares}}}}$$
C.
$$frac{{{ ext{Total Income}}}}{{{ ext{Paid-up Capital}}}}$$
D.
$$frac{{{ ext{Net Income}}}}{{{ ext{Number of Equity Shares}}}}$$
Answer: _________
Question 873:
Following are essential elements of a partnership firm except
A.
At least two persons
B.
There is an agreement between all partners
C.
Equal share of profit and loss
D.
Partnership agreement is for some business
Answer: _________
Question 874:
Amongst the following, who is not a partner?
A.
Minor partner
B.
Sleeping partner
C.
Nominal partner
D.
Inactive partner
Answer: _________
Question 875:
Match the items given in List-A with the items given in List-B and check your answer: List-A List-B a. Leasehold asset 1. Depletion b. Oil wells 2. Amortisation c. Loose Tools 3. Fluctuation d. Stock 4. Revaluation
A.
a-2, b-1, c-4, d-3
B.
a-1, b-2, c-4, d-3
C.
a-3, b-1, c-2, d-4
D.
a-1, b-4, c-2, d-3
Answer: _________
Question 876:
Capital employed is equal to
A.
Equity
B.
Long term debt
C.
Both A and B
D.
None of the above
Answer: _________
Question 877:
Given, Current Assets Rs. 4,00,000 Current Liabilities Rs. 1,60,000 Reserves & Surplus Rs. 1,60,000 Proprietary Ratio (Fixed Assets/Proprietary Funds) 0.75 Fixed Assets will be
A.
Rs. 7,20,000
B.
Rs. 7,60,000
C.
Rs. 8,00,000
D.
Rs. 9,60,000
Answer: _________
Question 878:
Consider the following information: Share capital Rs. 2,00,000 Long term debts Rs. 1,00,000 Current liabilites Rs. 40,000 Fixed assets Rs. 1,80,000 Current assets Rs. 1,60,000 The Solvency ratio of the business is
A.
2.43 : 1
B.
3 : 2
C.
3.4 : 1.7
D.
4.75 : 1.43
Answer: _________
Question 879:
While preparing accounting records 'Window Dressing' is prohibited due to:
A.
Convention of conservation
B.
Convention of disclosure
C.
Convention of materiality
D.
Money measurement concept
Answer: _________
Question 880:
Match the following: List-I List-II a. . . . . . . . . is difference between old ratio and new ratio. 1. Dissolution b. Dissolution of partnership all the partners of firm is called . . . . . . . . of firm 2. Admitted c. A minor can be . . . . . . . . to the benefits. 3. Duties d. Every partner is bound to attend diligently to his . . . . . . . . 4. Sacrificing ratio
A.
a-4, b-3, c-1, d-2
B.
a-4, b-1, c-2, d-3
C.
a-4, b-3, c-2, d-1
D.
a-3, b-4, c-1, d-2
Answer: _________
Question 881:
Which of the following is not a current asset?
A.
Bank overdraft
B.
Closing stock
C.
Debtors
D.
Bills receivable
E.
Stock
F.
Preliminary expenses
G.
Debtors
H.
Cash balance
Answer: _________
Question 882:
Capital Redemption Reserve Account is available for
A.
redemption of redeemable preference shares
B.
redemption of redeemable debentures
C.
reorganisation of share capital
D.
issue of bonus shares
Answer: _________
Question 883:
Which one of the following statements about the admission of a new partner to a firm is true:
A.
In case memorandum account is opened, the assets and liabilities appear in the new Balance Sheet at their revised values
B.
In case the newly admitted partner pays cash for his share of goodwill, it will be credited to old partner's capital accounts in their sacrificing ratio
C.
All accumulated profits and reserves are to be transferred to the profit and loss adjustment account on admission of a new partner
D.
When goodwill account is appearing in the books at a proper value, the new partner has to pay proportionate amount by way of good will to the old partners
Answer: _________
Question 884:
Amount set aside to meet losses due to bad debts is a
A.
Reserve
B.
Provision
C.
Liability
D.
None of these
Answer: _________
Question 885:
When fixed cost is Rs. 7,000, profit is Rs. 3,000 and sales is Rs. 50,000 the profit volume ratio will be
A.
14%
B.
6%
C.
20%
D.
None of these
Answer: _________
Question 886:
Ledger is a books of
A.
Original entry
B.
Final entry
C.
Adjustment entry
D.
Rectification entry
Answer: _________
Question 887:
Interest on performing assets should be recognized on . . . . . . . . basis.
A.
actually received
B.
standard
C.
accrual
D.
None of these
Answer: _________
Question 888:
The following figures (all in Rs.) relate to non-trading concern: 1 st January, 1995 stock of medicines 5,000 1 st January, 1995 outstanding creditors for medicines 3,000 Amount paid for medicines during the years 15,000 Value of medicines spoiled during the year stock of medicines 400 On 31 st December, 1995 3,500 The amount to be debited to income and expenditure account would be
A.
Rs. 15,000
B.
Rs. 18,500
C.
Rs. 18,000
D.
Rs. 13,500
Answer: _________
Question 889:
Schedule 9 relates to . . . . . . . .
A.
fixed assets
B.
borrowings
C.
advances
D.
capital
Answer: _________
Question 890:
At the time of endorsement of a bill, the drawer credits . . . . . . . .
A.
the drawee
B.
endorsee personal account
C.
bills receivable account
D.
bills for collection account
Answer: _________
Question 891:
While preparing bank reconciliation statement, cheques paid into bank but not yet cleared are . . . . . . . .
A.
added to the balance as per cash book to arrive at the balance as per pass book
B.
deducted to the balance as per cash book to arrive at the balance as per pass book
C.
divided to the balance as per cash book to arrive at the balance as per pass book
D.
multiplied to the balance as per cash book to arrive at the balance as per pass book
Answer: _________
Question 892:
Realization loss is transferred to . . . . . . . .
A.
preference shareholders a/c
B.
equity shareholders a/c
C.
creditors a/c
D.
None of these
Answer: _________
Question 893:
A cartel is a combination firms
A.
Which are functioning in a particular industry
B.
Whose combined assets are worth more than 90% of total assets of the industry
C.
Who control major chunk of the market
D.
Whose combined profits are enormous
Answer: _________
Question 894:
Which preparing accounts from incomplete records, the amount of credit sales is determined by?
A.
preparing total creditors account
B.
preparing total debtors account
C.
ascertaining the balance in trading account other than closing stock
D.
ascertaining the balance in debtors account and cash book
Answer: _________
Question 895:
When the proposed dividend exceeds 20% of paid up capital, percentage of profit transferred to general reserve is . . . . . . . .
A.
2.5%
B.
5%
C.
7.5%
D.
10%
Answer: _________
Question 896:
Advance payment of tax is a . . . . . . . .
A.
prepaid expense
B.
general reserve
C.
interim dividend
D.
provision for taxation
Answer: _________
Question 897:
Introduction of capital by owner of business is recorded on which side of a cash book?
A.
Receipts
B.
Payments
C.
Incomes
D.
Expenditures
Answer: _________
Question 898:
Cash book with cash and discount column is mostly referred to as
A.
Simple cash book
B.
Two columns cash book
C.
Three columns cash book
D.
Petty cash book
Answer: _________
Question 899:
A cash book that is used to record the small payments of cash is generally referred to as
A.
Simple cash book
B.
Two columns cash book
C.
Three columns cash book
D.
Petty cash book
Answer: _________
Question 900:
Purchase of office equipment for cash will be recorded on which side of a cash book?
A.
Receipts
B.
Payments
C.
Incomes
D.
Expenditures
Answer: _________
Question 901:
Postdated cheques are considered as
A.
Cash
B.
Bank balance
C.
Accounts receivable
D.
Cash reserve
Answer: _________
Question 902:
Postage stamps on hand are considered as
A.
Bank balance
B.
Prepaid expenses
C.
Accounts receivable
D.
Creditors
Answer: _________
Question 903:
Petty cash fund is supposed to be replenished
A.
Every year
B.
Every half year
C.
At the end of every accounting period
D.
None of the above
Answer: _________
Question 904:
A credit balance in cash book indicates
A.
Bank balance
B.
Cash at bank
C.
Bank overdraft
D.
Bank underdraft
Answer: _________
Question 905:
Favourable balance of cash book implies
A.
Credit balance of cash book
B.
Debit balance of cash book
C.
Bank overdraft
D.
Adjusted balance of cash book
Answer: _________
Question 906:
A cash deposit made by business appears on the bank statement as ____ balance
A.
Debit
B.
Credit
C.
Expenses
D.
Liability
Answer: _________
Question 907:
Rajiv Limited forfeited 20 shares of Rs. 10 each on which Rs. 6 per share had been paid. Out of these, 10 shares are re-issued as fully paid at a price of Rs. 5.50 per share. The amount to be transferred to Capital Reserve Fund would be:
A.
Rs. 10
B.
Rs. 12
C.
Rs. 15
D.
Rs. 18
Answer: _________
Question 908:
Given: Gross Profit Rs. 60,000 Gross Profit rate 20% Debtors velocity 2 Month The amount of debtors will be:
A.
Rs. 12,000
B.
Rs. 50,000
C.
Rs. 1,20,000
D.
Rs. 3,00,000
Answer: _________
Question 909:
Assume that M = opening stock, N = Purchases, O = Closing stock, P = Cost of goods sold. Then correct equation will be
A.
M - N = O + P
B.
M - O = P - O
C.
M - O = P - N
D.
P - M = N + O
Answer: _________
Question 910:
A Ltd. forfeited 500 shares of M of Rs. 10 each fully called-up for non-payment of first call of Rs. 2 per share and final call of Rs. 2 per share. 300 of these shares were reissued at 9 per share, fully paid-up. What amount will be transferred to the Capital Reserve A/c?
A.
Rs. 2,000
B.
Rs. 1,200
C.
Rs. 1,500
D.
Rs. 1,800
Answer: _________
Question 911:
Accounting standards in India are issued by -
A.
Central Government
B.
State Government
C.
The Institute of Chartered Accountants of India
D.
RBI
Answer: _________
Question 912:
Which of the following features is not present with partnership form of organization?
A.
Perpetual succession
B.
Unlimited liability
C.
Creation by an agreement
D.
Voluntary registration
Answer: _________
Question 913:
If subsription received during the year is Rs. 4,460, outstanding subscription at the end of the year is Rs. 290, outstanding subscription at the beginning of the year is Rs. 90, advance subscription received for the next year is Rs. 160, the amount of subscription to be shown in income and expenditure account will be:
A.
Rs. 4,500
B.
Rs. 4,220
C.
Rs. 4,380
D.
Rs. 4,750
Answer: _________
Question 914:
Stock appearing in the Trial Balance is shown in
A.
Trading Account
B.
Profit and Loss Account
C.
Balance Sheet
D.
Trading Account and Balance Sheet
Answer: _________
Question 915:
If capital is Rs. 50,000, liability is Rs. 30,000 and fixed assets are Rs. 70,000, then the value of current assets will be
A.
Rs. 90,000
B.
Rs. 50,000
C.
Rs. 10,000
D.
Rs. 1,50,000
Answer: _________
Question 916:
Determination of cost from actual expenses incurred is termed as
A.
Direct costing
B.
Indirect costing
C.
Historical costing
D.
Standard costing
Answer: _________
Question 917:
Trial balance is a proof that:
A.
every transaction is recorded twice
B.
no error remains in the books of accounts
C.
books are authentically and correctly written
D.
None of these
Answer: _________
Question 918:
Any excess amount paid to preference share holders is debited to . . . . . . . . account.
A.
realisation
B.
preference shareholders
C.
P&L
D.
preference share capital
Answer: _________
Question 919:
The account current method in which the days are calculated from the date of transaction to the commencement date is known as . . . . . . . .
A.
Forward method
B.
Epoch method
C.
Daily balance method
D.
Backward method
Answer: _________
Question 920:
Receipts and payment account shows . . . . . . . .
A.
income and expenditure
B.
cash receipts and payments
C.
assets and liabilities
D.
profit on sale
Answer: _________
Question 921:
The difference between gross dividend receivable and dividend received is debited to . . . . . . . .
A.
interim dividend
B.
tax deducted at source
C.
net dividend
D.
difference adjustment
Answer: _________
Question 922:
Financial statement in relation to a company includes:
A.
Balance sheet
B.
Statement of P&L
C.
Cash flow statement
D.
All of these
Answer: _________
Question 923:
In case of accommodation bills, if one party becomes insolvent then that party credits the short remittance to:
A.
deficiency account
B.
cash account
C.
loan account
D.
bill account
Answer: _________
Question 924:
Land was reported at its selling price which is substantially higher than its cost. The increase in value was included in the income statement, which accounting principle is violated?
A.
Cost principle
B.
Going concern concept
C.
Entity concept
D.
Conservatism
Answer: _________
Question 925:
Accounting principles represent:
A.
a consensus at a particular time to the recording of accounting transactions
B.
inviolable laws fixed by the legal boards
C.
laws fixed by accounting experts
D.
laws fixed by the respective governments
Answer: _________
Question 926:
If equity share are forfeited then capital account is debited with
A.
Face value of share
B.
Prepaid amount of shares
C.
Called amount on shares
D.
Uncalled amount on shares
Answer: _________
Question 927:
Depreciation of fixed assets is an example of
A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
Real expenditure
Answer: _________
Question 928:
Gearing ratio means the following ratio:
A.
Long-term debt + Preference capital/Net worth
B.
Long-term debt/Equity capital
C.
Long-term debt/Preference capital
D.
Long-term debt/Equity capital + Preference capital
Answer: _________
Question 929:
Preference Shares dividend & ratio of net profit after tax and total number of equity shares mutual ratio known as:
A.
Solvency Ratio
B.
Overall Profitability Ratio
C.
Financial Position Ratio
D.
Earnings per share
Answer: _________
Question 930:
Which of the following should be shown on the asset side of the Balance sheet:
A.
Preliminary Expenses
B.
Outstanding Rent
C.
Share Premium A/c
D.
None of the above
E.
Prepaid insurance
F.
Share premium
G.
Outstanding wages
H.
Outstanding salaries
Answer: _________
Question 931:
Interest on capital provided to partners is calculated on
A.
Capital at the end-drawing
B.
Capital at the end of the year
C.
On Average capital
D.
Opening capital of the year
Answer: _________
Question 932:
Which of the following types of information dues Ind AS-107 not require to be disclosed about the significance of financial instruments?
A.
Fair value of financial instruments
B.
Carrying amounts of categories of financial instruments
C.
Information about the use of hedge accounting
D.
Information about financial instruments, contracts and obligations under share based payment transactions
Answer: _________
Question 933:
Which of the following is a deferred revenue expenditure?
A.
Legal expenses incurred on the purchase of land
B.
Expenses on a mega advertisement campaign while launching a new product
C.
Expenses incurred on installation of a new machine
D.
Wages paid for construction of an additional room in the building
Answer: _________
Question 934:
For non-profit organisations, net income is ascertained by preparing:
A.
Receipt and Payment Account
B.
Profit and Loss Account
C.
Fund Flow Statement
D.
Income and Expenditute Account
Answer: _________
Question 935:
Contingent liability is shown due to:
A.
concept of full disclosure
B.
concept of conservatism
C.
concept of materiality
D.
dual aspect concept
Answer: _________
Question 936:
In the event of death of a partner, the amount of joint life policy is credited to
A.
the account of dead partner only
B.
all the partner's capital accounts in the profit and loss ratio
C.
remaining partner's capital accounts in profit and loss ratio
D.
none of these
Answer: _________
Question 937:
The Balance Sheet of an Indian company should show, by way of notes, the following contingent liabilities :
A.
Claims against the company not acknowledged by as debts
B.
Uncalled liability on shares partly paid
C.
Arrears of fixed cumulative dividends
D.
All the above
Answer: _________
Question 938:
Which of the following is a current liability?
A.
Capital
B.
Reserve Fund
C.
Bills Payable
D.
Debenture
Answer: _________
Question 939:
The Garner Vs. Murray case was concerned with the settlement of accounts among the partners at the time of:
A.
Admission of a new partner
B.
Retirement of a partner
C.
Death of a partner
D.
Insolvency of a partner
Answer: _________
Question 940:
Under statement of closing work-in-progress in the period will
A.
understate cost of goodsmanufactured in that period
B.
overstate current assets
C.
overstate gross profit from sales in that period
D.
understate net income in that period
Answer: _________
Question 941:
Under the 'imprest system of petty cash book' the petty cashier submits the periodical statement and recovers
A.
budget allotted for the period
B.
actual amount spent
C.
budget allotted plus unspent amount
D.
petty amount of cash
Answer: _________
Question 942:
Net loss Rs. 20,000 Depreciation on Machinery Rs. 50,000 Amortisation of goodwill Rs. 5,000 Loss on the sale of old furniture Rs. 3,500 Profit on the sale of land Rs. 8,500 Funds from operation are
A.
Rs. 25,000
B.
Rs. 30,000
C.
Rs. 32,000
D.
Rs. 36,500
Answer: _________
Question 943:
Match the following List-I List-II a. Income is measured and financial position is assessed 1. Consistency concept b. Anticipate no profit and provide for all possible losses 2. Going concern concept c. Assets are depreciated on the basis of expected life rather than on the basis of market value 3. Conservatism concept d. The comparison of one accounting period with that in the past is possible 4. Matching concept
A.
a-4, b-3, c-2, d-1
B.
a-2, b-1, c-4, d-3
C.
a-4, b-3, c-1, d-2
D.
a-3, b-4, c-2, d-1
Answer: _________
Question 944:
Fixed Assets (Net): 31 st December,1994 = Rs. 1,50,000 31 st December, 1995 = Rs. 1,90,000 Provision for depreciation: A machine costing Rs. 70,000 (book value Rs. 40,000) was disposed for Rs. 25,000 during the
year 1995 The application of funds in respect of fixed assets during the year is:
A.
Rs. 1,10,000
B.
Rs. 1,80,008
C.
Rs. 2,05,000
D.
Rs. 2,20,000
Answer: _________
Question 945:
Which of the following is not a current liability:
A.
Bank overdraft
B.
Redeemable debentures
C.
Accounts payable
D.
Provision for bad debts
Answer: _________
Question 946:
The three column cash book represents
A.
Real accounts
B.
Nominal accounts
C.
Nominal and personal accounts
D.
Real, personal and nominal accounts
Answer: _________
Question 947:
Carriage inwards refers to the cost of transportation for
A.
Purchase of materials
B.
Sale of products
C.
Returns outward
D.
Return of unsold goods
Answer: _________
Question 948:
Right shares are the shares
A.
Issued by a newly formed company
B.
Legally issued to the public at large
C.
Offered to the existing equity shareholders
D.
That have a right of redemption
Answer: _________
Question 949:
Which of the following is a real account?
A.
Salary account
B.
Cash account
C.
Outstanding rent account
D.
Sundry creditors account
Answer: _________
Question 950:
Which of the following is not an item of revenue expenditure?
A.
Interest on deposits accepted
B.
Annual insurance premium on inventory
C.
Customs duty paid in connection with the import of equipment
D.
Repairs and maintenance on machinery
Answer: _________
Question 951:
Which of the following is/are fixed asset(s)?
A.
Closing inventory
B.
Fixed deposit in a bank
C.
Patents
D.
Prepaid expenses
Answer: _________
Question 952:
The expenses that have fallen due for payment but not paid are
A.
Outstanding expenses
B.
Deffered expenses
C.
Accrues expenses
D.
Prepaid expenses
Answer: _________
Question 953:
Which of the following subsidiary books serves the purpose of ledger too, in addition to the recording of accounting transaction?
A.
Purchases book
B.
Sales book
C.
Bills receivable book
D.
Cash Book
Answer: _________
Question 954:
Accounting is the process of matching
A.
Benefits and costs
B.
Revenues and costs
C.
Cash inflows and outflows
D.
Potential and real performance
Answer: _________
Question 955:
Which of the following event is subject matter of Accounting?
A.
Death of key executive of the business
B.
Strike of workers
C.
Payment of Rs.1000 to bank in discharge of outstanding loan
D.
Marriage of the daughter of the MD of the company
Answer: _________
Question 956:
A machine was purchased on 1 st January 1992 for Rs. 5,00,000. A further sum of Rs. 5,000 for railway freight, Rs. 500 for local carriage and Rs. 5,000 on installation was spent on it. Depreciation is to be charged at 10% per annum on the written-down value method. On 31 st December 1994 the book-value of the machinery will be:
A.
Rs. 3,64,500.00
B.
Rs. 3,68,145.00
C.
Rs. 3,72,154.00
D.
Rs. 3,50,000.00
Answer: _________
Question 957:
How are all adjustments made when capital accounts are fixed?
A.
Partner's current account
B.
Partner's capital account
C.
Partner's fixed account
D.
Partner's nominal account
Answer: _________
Question 958:
Match both the lists and select the correct answer: List-I List-II a. Liquidity test 1. $$frac{{{ ext{All business creditors}}}}{{{ ext{Average per day credit purchase}}}}$$ b. Functional ratio 2. $$frac{{{ ext{Subscribers fund}}}}{{{ ext{Total assets}}}}$$ c. Prosperity 3. $$frac{{{ ext{Gross profit}}}}{{{ ext{Net sales}}}} imes 100$$ d. General profitability 4. $$frac{{{ ext{Current assets}}}}{{{ ext{Current liabilities}}}}$$
A.
a-4, b-1, c-2, d-3
B.
a-4, b-3, c-2, d-1
C.
a-1, b-2, c-3, d-4
D.
a-3, b-4, c-1, d-2
Answer: _________
Question 959:
A, B and C enter into a partnership investing Rs. 35,000, Rs. 45,000 and Rs. 55,000 respectively. Find their respective shares in annual profit of Rs. 40,500.
A.
Rs. 10,500, Rs. 13,500, Rs. 19,500
B.
Rs. 10,500, Rs. 10,500, Rs. 21,500
C.
Rs. 10,500, Rs. 13,500, Rs. 17,500
D.
Rs. 10,500, Rs. 13,500, Rs. 16,500
Answer: _________
Question 960:
In case of a company limited by shares the liability of a member is limited to the extent of:
A.
Unpaid amount of shares held by him
B.
Paid amount of shares held by him
C.
Total amount of shares held by him
D.
None of the above
Answer: _________
Question 961:
For calculation of interest on drawing by a partner the following method can be used:
A.
Cost Method
B.
Supply Method
C.
Product Method
D.
None of the above
Answer: _________
Question 962:
Which of the following transactions involve flow of fund:
A.
Issue of shares for cash
B.
Payment of bonus in shares
C.
Cash paid to creditors
D.
Purchase of building in exchange of land
Answer: _________
Question 963:
A company may adopt policy to ''window dressing'' by manipulating the data such as 1. inventory valuation 2. omission of liability for goods purchased 3. treating short-term liability as long term debt 4. recording in advance cash receipts applicable to next accounting period Select the correct answer:
A.
1
B.
1 and 2
C.
1, 2 and 3
D.
1, 2, 3 and 4
Answer: _________
Question 964:
When the purchasing company makes payment of the purchase consideration, it debits
A.
Business Purchase A/c
B.
Assets A/c
C.
Cash A/c
D.
Vendor Company's A/c
Answer: _________
Question 965:
The sub-division of shares does not result in . . . . . . . . of capital.
A.
reduction
B.
increase
C.
sub-division
D.
none of these
Answer: _________
Question 966:
The accounts that are related with income expenditure, profit and loss are called
A.
Real account
B.
Nominal account
C.
Personal account
D.
None of the above
Answer: _________
Question 967:
Match List-I with List-II (subject) and select the correct answer: List-I List-II a. Preliminary expenses 1. Revenue expenditure b. Interest on loan for business 2. Revenue receipts c. Life subscription 3. Deferred revenue expenditure d. Interest on bank deposits 4. Capital Receipts
A.
a-4, b-1, c-2, d-3
B.
a-3, b-1, c-4, d-2
C.
a-4, b-3, c-2, d-1
D.
a-3, b-2, c-1, d-4
Answer: _________
Question 968:
In case of dissolution of the partnership, if a partner's capital account shows a debit balance and he subsequently turns out to be insolvent, what will be the accounting treatment? (Consider the case laws)
A.
The loss has to be borne in the capital ratio by the solvent partners
B.
The loss has to be borne in the existing profit sharing ratio
C.
The loss has to be borne in the adjusted profit sharing ratio after insolvency
D.
The loss has to be borne in the sacrificing ratio of the solvent partners
Answer: _________
Question 969:
Which of the following term is used to describe the process of writing down the long term investments in intangible assets:
A.
Amortisation
B.
Depreciation
C.
Depletion
D.
Dilapidation
Answer: _________
Question 970:
A company may issue, at a discount share in the company of a class already issued if:
A.
It is authorised by a resolution passed at the General Meeting and approved by the Company Law Board
B.
At least one year has elapsed since the receipt of the certificate to commence business
C.
The particulars of the discount allowed on the issue of shares are clearly mentioned in the prospectus issued
D.
All the above conditions are fulfilled
Answer: _________
Question 971:
Capital intensive industries cause:
A.
Reduction in overall capital formation
B.
Increase in the capital
C.
Increase in future employment potential
D.
Increase in tax revenue
Answer: _________
Question 972:
Share premium money can be used for
A.
Payment of dividend
B.
Writing off goodwill
C.
Issue of fully paid bonus shares
D.
None of the above
Answer: _________
Question 973:
Within how many days minimum subscription should be received?
A.
60
B.
100
C.
120
D.
150
Answer: _________
Question 974:
Secret reserves may be created by
A.
under valuation of liabilities only
B.
under valuation of assets only
C.
over valuation of assets only
D.
over valuation of liabilities and under valuation of assets
Answer: _________
Question 975:
Joint life policy is taken by the firm on the life of
A.
all the partners severally
B.
all the partners jointly
C.
Both A and B
D.
None of these
Answer: _________
Question 976:
Allocation means:
A.
Allotment of the whole item without division to a particular department
B.
Allotment is the distribution of proportionate items of cost
C.
It is a suitable basis for sub-division of the cost by cost centres
D.
Allocation and appropriation are both more or less same
Answer: _________
Question 977:
A company can redeem preference shares
A.
at par
B.
at premium
C.
out of free reserves
D.
all of these
Answer: _________
Question 978:
The appropriate ratio for indicating liquidity crisis is
A.
Operating ratio
B.
Sales turnover ratio
C.
Current ratio
D.
Acid test ratio
Answer: _________
Question 979:
From the following data, calculate P/V ratio. Sales Profit 2017 Rs. 50,000 Rs. 5,000 2018 Rs. 75,000 Rs. 10,000
A.
15%
B.
20%
C.
18%
D.
16%
Answer: _________
Question 980:
Which of the following comes under efficiency ratios?
A.
Average collection period
B.
Inventory turnover ratio
C.
Fixed assets turnover ratio
D.
All of the above
Answer: _________
Question 981:
Which of the following is a capital loss?
A.
Loss due to bad debts
B.
Loss of stock due to fire
C.
Loss on shares held as stock in trade
D.
Loss of a machine due to theft
Answer: _________
Question 982:
The director of 'M' Ltd., resolved to forfeit 2,000 equity shares of Rs. 10 each Rs. 7.50 per share paid up for non-payment of Final call of Rs. 2.50 per share. 1,000 of the forfeited shares were reissued of Rs. 6 per share fully paid up. Capital Reserve Account will be credited by
A.
Rs. 3,500
B.
Rs. 7,500
C.
Rs. 9,000
D.
Rs. 11,000
Answer: _________
Question 983:
Accounting equation, "Assets = Liabilities + Owners Equity", is represented through
A.
Income statement
B.
Cash flow statement
C.
Balance Sheet
D.
Funds flow statement
Answer: _________
Question 984:
In the absence of a partnership deed
A.
Interest will not be charged on partner's drawings
B.
Interest will be charged @ 5% p.a. on partner's drawings
C.
Interest will be charged @ 6% p.a. on partner's drawings
D.
Interest will be charged @ 12% p.a. on partner's drawings
Answer: _________
Question 985:
Assertion (A) Accounting information refers to only events which are concerned with business firm. Reason (R) Accounting information is presented in financial statements.
A.
Both (A) and (R) are true and (R) is the correct explanation of (A)
B.
Both (A) and (R) are true and R is not the correct explanation of (A)
C.
(A) is true, but (R) is false
D.
(A) is false, but (R) is true
Answer: _________
Question 986:
Which method has been specially designed to provide funds for replacement of assets?
A.
Depreciation at replacement price method
B.
Depreciation fund method
C.
Depletion mehtod
D.
Sum of year's digits mehtod
Answer: _________
Question 987:
Which of the following transactions are of capital nature?
A.
Replacement of old tyres and tubes by new ones
B.
Purchase of truck by a company
C.
Cost of painting the old building
D.
All the above
Answer: _________
Question 988:
Capital at the beginning of the year Rs. 10,500, Annual drawing Rs. 6,500, Additional capital introduced during the year Rs. 3,500. What will be capital at the end if there is no profit or loss?
A.
Rs. 7,500
B.
Rs. 13,500
C.
Rs. 20,500
D.
Rs. 500
Answer: _________
Question 989:
The unfavourable balance of Profit and Loss Account should be:
A.
Added in liabilities
B.
Substracted from assets
C.
Substracted from capital
D.
None of the above
Answer: _________
Question 990:
X, Y and Z share profit and losses in the ratio of 5 : 3 : 2, Z retires and his share is taken by X and Y in the ratio of 1 : 2. The new profit-loss sharing ratio between X and Y will be:
A.
17 : 13
B.
11 : 7
C.
10 : 7
D.
6 : 5
Answer: _________
Question 991:
Match List-I with List-II and select your answer: List-I List-II a. Shareholders 1. Creditors of the company b. Debenture holders 2. Paid at the end of a predetermined period c. Redeemable Debenture 3. Joint owners of the company d. Bearer 4. Transferred by Debenture mere delivery
A.
a-2, b-3, c-1, d-4
B.
a-3, b-1, c-2, d-4
C.
a-2, b-4, c-1, d-3
D.
a-1, b-3, c-4, d-2
Answer: _________
Question 992:
On dissolution of a firm, the balance of provision for Bad Debts Account is transferred to:
A.
General Reserve Account
B.
Debtors Account
C.
Realisation Account
D.
Partner's Capital Account
Answer: _________
Question 993:
A company, A Ltd., issued a prospectus inviting applications for 2,000 shares. Applications were received for 3,000 shares, and pro-rata allotments were made on the applications of 2,400 shares. If A was allotted 40 shares, for how many shares he must have applied?
A.
40
B.
44
C.
48
D.
52
Answer: _________
Question 994:
Suspense Account is shown in-
A.
Trading Account
B.
Profit and Loss Account
C.
Balance Sheet
D.
Not shown anywhere
Answer: _________
Question 995:
Suspense account is-
A.
A real account
B.
A Nominal account
C.
A personal account
D.
None of the above
Answer: _________
Question 996:
Naked debentures are those which:
A.
Are not secured by charge
B.
Are redeemable without notice
C.
Are transferable merely by delivery
D.
Do not specify any rate of interest
Answer: _________
Question 997:
In the absence of any contract to the contrary, capital profit on dissolution of a Partnership Firm is shared among partners in
A.
Equal ratio
B.
Capital ratio
C.
Profit-sharing ratio
D.
None of these
Answer: _________
Question 998:
Renewal fee for patents is
A.
Revenue expenditure
B.
Capital expenditure
C.
Deferred revenue expenditure
D.
Development expenditure
Answer: _________
Question 999:
When an existing company offers its shares for sale to the existing shareholders, it is known as:
A.
Private placing
B.
Bonus issue
C.
Rights issue
D.
Offer for sale
Answer: _________
Question 1000:
And reduced words are to be shown in balance sheet as per the requirement of
A.
Company Law
B.
Income Tax
C.
Accounting Standard
D.
SEBI
Answer: _________
Question 1001:
A retiring partner continues to be liable for obligations incurred after his retirement
A.
if unpaid amount is transferred to his loan account
B.
if he does not give public notice
C.
if he starts a similar business elsewhere
D.
in all the situations till he survives
Answer: _________
Question 1002:
It the partner's capital accounts are fixed, interest on capital willbe recorded on
A.
Credit side of the current account
B.
Credit side of the capital account
C.
Debit side of the current account
D.
Debit side of the capital account
Answer: _________
Question 1003:
The Main objective of Book-keeping is to:
A.
find out profit or loss
B.
keep correct and complete record of business transactions
C.
show the correct position of assets and liabilities
D.
examine the accuracy of business transactions
Answer: _________
Question 1004:
In case of dissolution of partnership firm provision for doubtful debts is transferred to
A.
Profit and loss account
B.
Realisation account
C.
Capital Account
D.
Misc. Debtor account
Answer: _________
Question 1005:
Part I of Schedule VI of Companies Act, 1956 prescribe the format which every company must follow to show a true and fair view of:
A.
Profit and loss
B.
Appropriation of profits
C.
State of affairs
D.
All the above
Answer: _________
Question 1006:
Capital account is a
A.
Personal account
B.
Impersonal account
C.
Real account
D.
None of the above
Answer: _________
Question 1007:
A sole trader introduced fresh capital during the year Rs. 10,000 and his drawings were Rs. 4,000. If the profit of the year is Rs. 3,000 and the closing balance of capital is Rs. 40,000, the the balance of capital at the beginning of the year will be
A.
Rs. 21,000
B.
Rs. 31,000
C.
Rs. 41,000
D.
Rs. 28,000
Answer: _________
Question 1008:
Cash withdrawn by the proprietor for his personal use should be debited to
A.
Sales account
B.
Capital account
C.
Drawings account
D.
Both B and C
Answer: _________
Question 1009:
The practice of appending notes regarding contingent liabilities in accounting statements is in pursuant to
A.
convention of consistency
B.
money measurement concept
C.
convention of conservatism
D.
convention of disclosure
Answer: _________
Question 1010:
Which group of the following items are application of funds: 1. Loss from operations 2. Loan from financial institutions 3. Redemption of debentures 4. Sale of fixed assents 5. Payment of dividends
A.
2, 3 and 4
B.
1, 3 and 5
C.
1, 2 and 4
D.
3, 4 and 5
Answer: _________
Question 1011:
Personal selling is not targeted towards
A.
Mass audiences
B.
Personal contact
C.
Two way communication
D.
Quick feedback
Answer: _________
Question 1012:
In case of a death of a partner, joint life policy is credited to the:
A.
All partners (including deceased partner) in their profit and loss ratio
B.
Only deceased partner capital account
C.
Alive partner capital account in their profit and loss ratio
D.
All partner capital account in their capital ratio
Answer: _________
Question 1013:
Bank reconciliation statement is prepared.
A.
To obtain deposits during the year
B.
To obtain drawing during the year
C.
To obtain actual bank balance
D.
To find profit of the organization
Answer: _________
Question 1014:
Which of the following sections of the companies Act. 1956 requires the maintenance of proper books of account:
A.
Section 211
B.
Section 205
C.
Section 209
D.
Section 217
Answer: _________
Question 1015:
Alteration of shares of larger denominations into smaller denominations is called . . . . . . . . of shares.
A.
consolidation
B.
surrender
C.
sub-division
D.
valuation
Answer: _________
Question 1016:
Sale of old newspaper is to be shown on the credit side of the . . . . . . . .
A.
cash book
B.
income and expenditure
C.
balance sheet
D.
trading account
Answer: _________
Question 1017:
Which of the following are not current liabilities?
A.
Bank overdraft
B.
Redeemable debentures
C.
Provision for doubtful debts
D.
Accounts payable
Answer: _________
Question 1018:
Book-keeping is mainly concerned with:
A.
recording of financial data relating to business operations
B.
designing the system in recording, classifying, summarizing the recorded data
C.
interpreting the data for internal and external end users
D.
only for internal purposes
Answer: _________
Question 1019:
Which of the following accounts may have a debit or credit balance?
A.
Discount received account
B.
Sales account
C.
Trade expenses account
D.
Loan account
Answer: _________
Question 1020:
Income and expenditure account records transaction of . . . . . . . .
A.
revenue nature only
B.
capital nature only
C.
both capital and revenue nature
D.
personal nature
Answer: _________
Question 1021:
Bonus in reduction of premium appears in the revenue a/c as . . . . . . . .
A.
an income
B.
an expense
C.
no where
D.
profit
Answer: _________
Question 1022:
Bank Reconciliation statement is . . . . . . . .
A.
ledger account
B.
part of the cash book
C.
a separate statement
D.
a sub division of the journal
Answer: _________
Question 1023:
A person started business with a cash of Rs. 22,000 and stock of Rs. 3,000 on 1 st January, 1996. During the year he made a profit of Rs. 6,000. His creditors were paid Rs. 4,500 for the office furniture supplied. He took goods worth Rs. 3,500 for his daugher's wedding on 30 th June, 1996. The gross assets of his business on 31 st December, 1996 was:
A.
Rs. 27,500
B.
Rs. 26,500
C.
Rs. 23,500
D.
Rs. 20,500
Answer: _________
Question 1024:
The information for the preparation of receipt and payments account is taken from . . . . . . . .
A.
cash book
B.
income and expenditure
C.
cash book and balance sheet
D.
revenue account
Answer: _________
Question 1025:
Exercising a degree of caution in the case of judgements needed under the condition of uncertainity is the assumption of which of the following accounting concepts?
A.
Matching concept
B.
Timeliness concept
C.
Accrual concept
D.
Prudence concept
Answer: _________
Question 1026:
Which one of the following concepts states that the publication or presentation of financial statements should not be delayed?
A.
Objectivity concept
B.
Timing concept
C.
Timeliness concept
D.
Reliability concept
Answer: _________
Question 1027:
Land on lease should be shown in Blance sheet contrary to the fact that the company does not own that piece of land is the implementation of which accounting concept?
A.
Matchig concept
B.
Accrual concept
C.
Prudence concept
D.
Substance over form concept
Answer: _________
Question 1028:
Depreciation is charged on fixed assets to comply with which of the following accounting principle?
A.
Matching concept
B.
Prudence concept
C.
Timeliness concept
D.
Reliability concept
Answer: _________
Question 1029:
Net profit is computed in which of the following?
A.
Balance sheet
B.
Income statement
C.
Cash flow statement
D.
Statement of changes in equity
Answer: _________
Question 1030:
In income statement, gross profit is always equal to
A.
Sales - expenses
B.
Income - expenses
C.
Sales - cost of goods sold
D.
Sales - selling costs
Answer: _________
Question 1031:
Office equipment is a ______ asset for a computer manufacturer and the same office equipment is a ____ asset for a company that deals in these equipments
A.
Current, fixed
B.
Fixed, intangible
C.
Tangible, intangible
D.
Fixed, current
Answer: _________
Question 1032:
Financial statements mainly help in
A.
Assumption of economic events
B.
Anticipation of economic events
C.
Recording of economic events
D.
Communication of economic events
Answer: _________
Question 1033:
Purchases + opening stock - closing stock = ?
A.
Amount of sales
B.
Gross profit
C.
Cost of goods sold
D.
Net income
Answer: _________
Question 1034:
Which of the following financial statements shows the financial position of a business at a specific date?
A.
Balance sheet
B.
Income statement
C.
Cash flow statement
D.
Statement of changes in equity
Answer: _________
Question 1035:
The ratios which measure the relative contribution of financing by owners and financing provided by outsiders are called:
A.
Liquidity ratios
B.
Leverage ratios
C.
Activity ratios
D.
Profitability ratios
Answer: _________
Question 1036:
In the absence of any contract, profit arising from partnership firm is credited to the partners capital account in:
A.
Equal proportion
B.
Capital ratio
C.
Profit sharing ratio
D.
Proportion to assets realized
Answer: _________
Question 1037:
Realisation account is prepared by a Partnership firm at the time of
A.
Admission of a new partner
B.
Retirement of a partner
C.
Dissolution of the firm
D.
Closing of every accounting year
Answer: _________
Question 1038:
Depreciation represents a decrease in:
A.
Market value of fixed assets
B.
Market value of floating assets
C.
Market value of debentures issued
D.
Book value of fixed assets
Answer: _________
Question 1039:
Receipt and Payment A/c is an abbreviate form of:
A.
Cash book
B.
Pass book
C.
Both A and B
D.
None of these
Answer: _________
Question 1040:
If profit is 50% of sales, then what is its percentage on cost?
A.
100%
B.
75%
C.
60%
D.
40%
Answer: _________
Question 1041:
Receipts and payments account is prepared by
A.
Manufacturing concerns
B.
Non-trading concerns
C.
Trading concerns
D.
Companies registered under the Companies Act, 1956
Answer: _________
Question 1042:
If a share of Rs. 10, on which an amount of Rs. 6 has been paid, is forfeited. It can be reissued at minimum price of
A.
Rs. 10
B.
Rs. 6
C.
Rs. 4
D.
None of these
Answer: _________
Question 1043:
If the sales and P/V ratio of a firm is Rs. 1000 and 80% respectively and the amount of interest paid is Rs. 400, then operating leverage of the firm is:
A.
4
B.
3
C.
2
D.
5
Answer: _________
Question 1044:
Following information is available: 1. 2,000 10% preference shares of Rs. 100 each Rs. 2,00,000 2. 10,000 Equity shares of Rs. 100 each Rs. 60 per share paid up Rs. 6,00,000 3. Expected profit per year before tax Rs. 3,20,000 4. Rate of Tax 50% 5. Transfer to general reserve every year 20% of net profit 6. Normal rate of earnings 15% The value of equity share as per yield value method would be:
A.
120
B.
93.32
C.
72
D.
64
Answer: _________
Question 1045:
A recovery of bad debt
A.
increases net income
B.
decreases net income
C.
increases gross profit
D.
increases gross profit and net income
Answer: _________
Question 1046:
What does 'aged debtors analysis' signify?
A.
shows how long debts have been outstanding
B.
How old the customers are
C.
How long does a business take to repay the bank loans
D.
Minimum number of old debtors
Answer: _________
Question 1047:
Which of the following is the most common cause of bad debt?
A.
Debtor refusal to repayment
B.
Debtor left the country
C.
Debtor committed a crime
D.
Debtor declared to be a bankrupt
Answer: _________
Question 1048:
Which accounting concept dictates the inclusion of 'provision for doubtful debts' in the financial statements?
A.
Accrual concept
B.
Matching concept
C.
Going concern concept
D.
Prudence concept
Answer: _________
Question 1049:
Which of the following is a commonly used base to create the provision for doubtful debts?
A.
Total purchases
B.
Total credit sales
C.
Total current assets
D.
Total current liabilities
Answer: _________
Question 1050:
Provision for doubtful debts account is a/an
A.
Asset account
B.
Contra asset account
C.
Nominal account
D.
Liability account
Answer: _________
Question 1051:
Provision for cash discount on debtors is a percentage of
A.
Debtors
B.
Net debtors
C.
Net debtors less provision for doubtful debts
D.
Net sales
Answer: _________
Question 1052:
The value of inventories or stock is figured out at the lower of cost and
A.
Purchase price
B.
Opportunity cost
C.
Realizable value
D.
Net realizable value
Answer: _________
Question 1053:
An overstatement in the value of closing stock overstates all of the following except
A.
Net income
B.
Current assets
C.
Capital of the business
D.
Cost of goods sold
Answer: _________
Question 1054:
All of the following are the methods of inventory costing except
A.
FIFO
B.
LIFO
C.
AVCO or average cost
D.
Stock take
Answer: _________
Question 1055:
An asset must be ________ by the business to be shown as an asset in its balance sheet.
A.
Possessed
B.
Owned
C.
Controlled
D.
Used
Answer: _________
Question 1056:
Which is the most important characteristic that all assets of a business have?
A.
Long life of assets
B.
Value of assets
C.
Intangible nature of assets
D.
Future economic benefits
Answer: _________
Question 1057:
What is the basic accounting equation?
A.
Capital + Liabilities = assets
B.
Assets + Liabilities = Capital
C.
Capital + Assets = Liabilities
D.
Liabilities - Capital = Assets
Answer: _________
Question 1058:
Which of the following is a liability?
A.
Cash
B.
Equipment
C.
Debtors
D.
Creditors
Answer: _________
Question 1059:
What is equity?
A.
Cash from the business
B.
Liability of a business
C.
Owner's claim on total assets
D.
Owner's claim on total liabilities
Answer: _________
Question 1060:
Identify the asset from the following
A.
Cash and cash equivalent
B.
Creditors
C.
Notes payable
D.
Bank loan
Answer: _________
Question 1061:
______ is the withdrawal of cash and goods by the owner of the business for his/her personal use
A.
Depreciation
B.
Drawings
C.
Outflow of cash
D.
Appreciation
Answer: _________
Question 1062:
Net loss occurs when
A.
Expenses are greater than income
B.
Expenses are less than income
C.
Expenses = Income
D.
Liabilities are greater than income
Answer: _________
Question 1063:
Double entry implies that
A.
Recording entries in Journal
B.
Recording entries in Ledger account
C.
Recording two aspects of every transaction
D.
Recording every transaction in books
Answer: _________
Question 1064:
Identify the nominal account
A.
Machinery account
B.
Building account
C.
Creditors account
D.
Rent expenses account
Answer: _________
Question 1065:
Which of the followeing is a leverage ratio?
A.
Debt-equity ratio
B.
Operating ratio
C.
Stock ratio
D.
Current ratio
Answer: _________
Question 1066:
Manager's commission is given at the rate of 10% on the profits after giving commission to him. If the profit before giving commission is Rs. 1,54,000, then payable commission will be
A.
Rs. 14,000
B.
Rs. 15,000
C.
Rs. 16,000
D.
None of the above
Answer: _________
Question 1067:
The relationship between liquidity and risk is
A.
Direct
B.
Inverse
C.
No relationship
D.
None of these
Answer: _________
Question 1068:
If the fully paid-up shares of Rs. 80,000 are issued to sellers in consideration of net assts of Rs. 60,000 the balance of Rs. 20,000 will be
A.
Debited to profit and loss account
B.
Debited to Goodwill account
C.
Credited to capital reserve account
D.
Eradiated to security premium account
Answer: _________
Question 1069:
A, B and C start a business with each investing Rs. 20,000. After 5 months, A withdrew Rs. 6,000, B withdrew Rs. 4,000 and C invested an additional Rs. 6,000. At the end of the year, a total profit of Rs. 69,900 was recorded. Find the share of each
A.
Rs. 20,400, Rs. 20,500, Rs. 18,700
B.
Rs. 21,500, Rs. 22,600, Rs. 21,700
C.
Rs. 20,500, Rs. 21,200, Rs. 28,200
D.
Rs. 21,900, Rs. 22,700, Rs. 27,300
Answer: _________
Question 1070:
Furniture of book value of Rs. 1,500 was sold for Rs. 600 and the new fixture of Rs. 1,000 was purchased and carriage of Rs. 25 paid. The amount of capital expenditure will be:
A.
Rs. 1,000
B.
Rs. 1,025
C.
Rs. 900
D.
Rs. 1,500
Answer: _________
Question 1071:
If company A purchases majority shares of company B, what is it called?
A.
Amalgamation
B.
Absorption
C.
Takeover
D.
None of the above
Answer: _________
Question 1072:
The closing balance of the debtors was Rs. 12,000. The sales made to the customers during the year were Rs. 21,500 and Rs. 23,600 were realized from the customers. Debtors opening balance was-
A.
Rs. 33,500
B.
Rs. 14,100
C.
Rs. 9,800
D.
Rs. 33,300
Answer: _________
Question 1073:
A and B are partners sharing profits in the ratio of 3 : 2. Their books showed goodwill at Rs. 3,000. C is admitted with $${frac{1}{4}^{{ ext{th}}}}$$ share of profit and brings Rs. 10,000 as his capital. But, he is not able to bring in cash for his share of goodwill Rs. 3,000. How will you treat this?
A.
Goodwill is raised by Rs. 12,000
B.
C will remain as debtor for Rs. 3,000
C.
C's A/c is debited for Rs. 3,000
D.
Goodwill is raised by Rs. 9,000
Answer: _________
Question 1074:
In India, which of the following is prepared on the guidelines of AS-3 (Accounting Standard-3)?
A.
Balance Sheet of a Company
B.
Funds Flow Statement
C.
Cash Flow Statement
D.
Consolidated Financial Statement
Answer: _________
Question 1075:
X and Y are partners in a firm who share profits and losses in 2 : 1. their capital balance are Rs. 50,000 and Rs. 30,000 respectively. If Z with consent of Y takes half of the share of X for Rs. 30,000 then Z's capital account will be credited by what amount.
A.
Rs. 25,000
B.
Rs. 5,000
C.
Rs. 15,000
D.
Rs. 20,000
Answer: _________
Question 1076:
The entity concept of Accounting is applicable to:
A.
Sole Proprietary Concern
B.
Partnership Firm
C.
Joint Stock Company
D.
All of the aforesaid
Answer: _________
Question 1077:
Machinery purchased in the journal entry for the transaction, machinery account will be
A.
Debited
B.
Credited
C.
Debited and Credited
D.
None of the above
Answer: _________
Question 1078:
A and B are partners sharing profit and loss in the ratio of 4 : 3. They admit C to the partnership for $$frac{1}{5}$$ profit of the firm to be borne $$frac{3}{{20}}$$ by A and $$frac{1}{{20}}$$ by B. The new profit sharing ratio of A, B and C will be:
A.
15 : 13 : 7
B.
23 : 17 : 10
C.
33 : 23 : 14
D.
59 : 53 : 28
Answer: _________
Question 1079:
Match the items of List-I with those of List-II and indicate the correct answer: List-I List-II a. AS-6 1. Accounting for consolidated financial statements b. As-3 2. Accounting for fixed assets c. AS-10 3. Depreciation accounting d. AS-21 4. Accounting for cash flow statement
A.
a-2, b-4, c-3, d-1
B.
a-3, b-4, c-2, d-1
C.
a-4, b-3, c-1, d-2
D.
a-1, b-2, c-3, d-4
Answer: _________
Question 1080:
A company bought assets worth Rs. 3,60,000 and in lieu issued debentures of Rs. 100 each at a discount of 10%. The number of debentures issued will be:
A.
3,900
B.
3,600
C.
3,000
D.
4,000
Answer: _________
Question 1081:
Discount allowed on issue of shares is an example of
A.
Capital Expenditure
B.
Deferred Revenue Expenditure
C.
Revenue Expenditure
D.
Accrued Income
Answer: _________
Question 1082:
Amount set apart to meet probable losses on account of bad debts is a:
A.
Liability
B.
Reserve
C.
Provision
D.
Contingent liability
Answer: _________
Question 1083:
Assertion (A) Sinking fund is a charge against profit and loss account. Reason (R) Sinking fund is created for repayment of a long-term liability.
A.
(A) is true, but (R) false
B.
Both (A) and (R) are true
C.
(A) is false, but (R) true
D.
Both (A) and (R) are false
Answer: _________
Question 1084:
In case of dissolution of a firm, in which order the following creditors should be paid? 1. Creditors having floating charge on the assets of the firm 2. Remuneration of liquidator 3. Provident fund money payable to employees 4. Bank overdraft
A.
1, 2, 3, 4
B.
1, 3, 4, 2
C.
2, 3, 4, 1
D.
2, 3, 1, 4
Answer: _________
Question 1085:
When the goods are returned to a supplier
A.
A Debit note is sent to him
B.
An Account sale is sent to him
C.
A receipt is sent to him
D.
Either 'b' or 'c'
Answer: _________
Question 1086:
Bills receivable endorsed are debited to
A.
Bills Payable A/c
B.
Debtor's A/c
C.
Endorsee A/c
D.
Bills Receivable A/c
Answer: _________
Question 1087:
Del-credere Commission is allowed to cover
A.
All types losses
B.
Abnormal loss
C.
Normal loss
D.
None of the above
Answer: _________
Question 1088:
Interest on Capital is _____ for the business
A.
Revenue
B.
Expense
C.
Gain
D.
None of the above
Answer: _________
Question 1089:
Accounts payable has ____ balance
A.
Credit
B.
Debit
C.
Unfavorable
D.
Favorable
Answer: _________
Question 1090:
The concept that "an accountant shouldn't anticipate profit, but must provide for all losses"
A.
Conservation concept
B.
Consistency concept
C.
Materiality concept
D.
Reduction concept
Answer: _________
Question 1091:
Patents accounts are
A.
Secured loan account
B.
Nominal account
C.
Real account
D.
Debtors account
Answer: _________
Question 1092:
Reserve capital means
A.
Part of subscribed uncalled capital
B.
Accumulated profit
C.
Part of Capital Reserve
D.
Part of Capital Redemption Reserve
Answer: _________
Question 1093:
Revenue from sale of product ordinarily is reported as part of earning in the period
A.
The planning takes place
B.
The sale is made
C.
The product is manufactured
D.
The cash is collected
Answer: _________
Question 1094:
When will the bill mature if the date of maturity of a bill is a holiday
A.
Holiday itself
B.
Other agreed day
C.
Preceding working day
D.
Next working day
Answer: _________
Question 1095:
After the redemption of debentures, any credit balance in the Sinking Fund a/c is transferred to . . . . . . . . a/c.
A.
general reserve
B.
capital reserve
C.
P&L
D.
None of these
Answer: _________
Question 1096:
According to records of a firm which not keep its accounts on double entry systems, all sales were made on credit so as to realise a profit of $$33frac{1}{3}\% $$ xa0on sales proceeds. The stock of unsold goods at the beginning and at the end of the trading period were valued at Rs. 21,000 and Rs. 18,000 respectively. Goods worth Rs. 1,39,500 were purchased for resale during the period. The proprietor withdraw goods worth Rs. 1,500 during accounting period for personal use. What were the total sales during the period?
A.
Rs. 1,80,000
B.
Rs. 2,11,500
C.
Rs. 2,25,000
D.
Rs. 2,31,500
Answer: _________
Question 1097:
Liquidation expenses paid by the transferee company is debited to . . . . . . . .
A.
General reserve account
B.
P/L Account
C.
Goodwill account
D.
None of these
Answer: _________
Question 1098:
A bill drawn and accepted for providing funds to a friend in need is known as:
A.
cheque
B.
promissory note
C.
accommodation bill
D.
demand bill
Answer: _________
Question 1099:
At the time of the renewal of a bill, interest account is . . . . . . . . in the books of the drawee.
A.
Credited
B.
Totalled
C.
Debited
D.
Posted
Answer: _________
Question 1100:
Which of the following is an equation?
A.
Assets = Equities
B.
Assets = Liabilities - Capital
C.
Assets = Liabilities - Equities
D.
Assets = Equities + Liabilities
Answer: _________
Question 1101:
. . . . . . . . is allowed to encourage early cash payment.
A.
Cash discount
B.
Trade discount
C.
Quantity discount
D.
Price discount
Answer: _________
Question 1102:
On standard asset a minimum provision of . . . . . . . . is required.
A.
0.25%
B.
0.10%
C.
0.40%
D.
None of these
Answer: _________
Question 1103:
Bank reconciliation statement is prepared by the:
A.
bank
B.
creditors of a business
C.
customer of a bank
D.
suppliers
Answer: _________
Question 1104:
Which of the following reserves cannot be distributed as dividend to share holders?
A.
securities premium
B.
profit on forfeiture of shares
C.
profit on sale of fixed assets
D.
All of these
Answer: _________
Question 1105:
The liability of a partner in respect of the firm's debt is limited upto the amount to:
A.
his capital in the firm
B.
his capital and loan given to the firm
C.
his guarantee to reimburse losses
D.
his share of capital and private property
Answer: _________
Question 1106:
Which of the following is not an accounting software?
A.
Tally
B.
Miracle
C.
Profit
D.
SPSS
Answer: _________
Question 1107:
At the time of death of a partner, firm gets . . . . . . . .
A.
policy amount
B.
surrender value
C.
Both A and B
D.
None of these
Answer: _________
Question 1108:
Personal selling includes:
A.
Oral communication
B.
Face to face interaction
C.
Conversation with customers
D.
All of the above
Answer: _________
Question 1109:
Consider the following parties and arrange them in the correct sequence in the event of dissolution of a firm i. Secured creditors ii. Unsecured creditors iii. Partners who have granted loans iv. Partners who have contributed over and above profit-sharing ratio
A.
ii, i, iii, iv
B.
i, ii, iii, iv
C.
i, ii, iv, iii
D.
ii, i, iv, iii
Answer: _________
Question 1110:
If sales is Rs. 1,20,000, gross profit is $${frac{1}{3}^{{ ext{rd}}}}$$ of cost, purchase is Rs. 98,000 and closing stock is Rs. 18,000 then opening stock will be
A.
Rs. 10,000
B.
Rs. 8,000
C.
Rs. 0
D.
Rs. 40,000
Answer: _________
Question 1111:
Stock of stationery on 1 st January 1991- Rs. 300, creditors for stationery on 31 st December 1991- Rs. 130, payment for stationery during 1991- Rs. 1,080, stock of stationary on 31 st December 1991- Rs. 50. What amount on account of stationery will be posted to income and expenditure A/c:
A.
Rs. 1,080
B.
Rs. 1,510
C.
Rs. 1,330
D.
Rs. 1460
Answer: _________
Question 1112:
The total charge of depreciation and maintenance of assets on the profit and loss account will be uniform under:
A.
Straight line method
B.
Diminishing balance method
C.
Annuity method
D.
Depreciation Fund method
Answer: _________
Question 1113:
According to the Money Measurement concept the following will be recorded in the books of Accounts:
A.
Quality control in business
B.
Commission payable to salesman
C.
Extra profits made due to introduction of a budgetary control system
D.
All of the above
Answer: _________
Question 1114:
The face value of a company share is Rs. 1000 per share. The company issued it at Rs. 150 per share. Mareket price of these shares is Rs. 200 per share at present. company declaired 20% dividend on these share. The amount of dividend per share will be
A.
Rs. 40
B.
Rs. 30
C.
Rs. 20
D.
Rs. 10
Answer: _________
Question 1115:
Read the following statements. 1. Financial statements are only interim reports. 2. Financial statements are prepared on the basis of realisable values. 3. The preparation of financial statements is not an ultimate aim. 4. Certain assumptions are necessary to prepare financial statements. Which of the following combinations consists of all true statements?
A.
1, 2 and 3
B.
2, 3 and 4
C.
1, 3 and 4
D.
1, 2 and 4
Answer: _________
Question 1116:
In the books of lessee the unrecouped amount of short workings is transferred to
A.
Royalty Account
B.
Minimum Rent Account
C.
Lessor's Account
D.
Profit and Loss Account
Answer: _________
Question 1117:
X and Y were sharing profit and loss of the business in the ratio of 3 : 2. They decided to admit Z, who will get $$frac{1}{3}$$ of X share of profit form X and $$frac{1}{2}$$ of Y share of profit from Y. New profit sharing ratio will be
A.
3 : 2 : 5
B.
2 : 1 : 2
C.
3 : 2 : 1
D.
3 : 2 : 2
Answer: _________
Question 1118:
ABC Ltd was incorporated with an authorized share capital of Rs. 1,00,000 equity shares of Rs. 10 each. The board of directors decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. Which account should be debited in the books of ABC Ltd?
A.
Promoter's account
B.
Service's account
C.
Goodwill account
D.
Share capital account
Answer: _________
Question 1119:
If vendors are issued fully paid shares of Rs. 12,000 in consideration of net assets of Rs. 9,000, then the balance of Rs. 3,000 will be
A.
credited to Securities Premium A/c
B.
credited to Capital Reserve A/c
C.
debited to Goodwill A/c
D.
debited to Profit and Loss A/c
Answer: _________
Question 1120:
A customer's cheque returned after being dishonored will be recorded in-
A.
Purchases Return Book
B.
Sales Return Book
C.
Three Column Cash Book
D.
Journal Proper
Answer: _________
Question 1121:
In holding companies dividends received out of profits of the subsidiary companies must be:
A.
Debited to investment account
B.
Credited to investment account
C.
Debited to revenue account
D.
Credited to revenue account
Answer: _________
Question 1122:
When a firm is dissolved, goodwill account is closed by transferring to
A.
Capital account of the partners
B.
Revaluation Account
C.
Profit and Loss Account
D.
Realisation Account
Answer: _________
Question 1123:
Reconstruction of a company takes place when 1. the company is undercapitalised. 2. company has incurred heavy losses which must be written off. 3. the company is overcapitalised. Select the correct answer:
A.
Both 1 and 2
B.
Both 1 and 3
C.
Both 2 and 3
D.
All of the above
Answer: _________
Question 1124:
The single accounting system is
A.
A accounting system in which only one account is affected at a time
B.
Initial stage of double entry
C.
Special accounting system for small traders
D.
An incomplete accounting system
Answer: _________
Question 1125:
A and B are partners sharing profits and losses in the ratio of 1 : 2. They admit c and agree to give him $$frac{1}{5}$$ of the share. The new profit sharing ratio will be:
A.
8 : 2 : 2
B.
6 : 4 : 3
C.
8 : 3 : 4
D.
4 : 8 : 3
Answer: _________
Question 1126:
Share forfeiture account is shown in the liabilities side under
A.
Reserve and surplus
B.
By adding it in the paid up capital
C.
Under current liabilities and provision
D.
None of the above
Answer: _________
Question 1127:
Amount of minimum share subscritption is
A.
Rs. 5 per share
B.
5% of face value of share
C.
10% of face value of share
D.
20% of face value of share
Answer: _________
Question 1128:
Right shares means those shares which are
A.
Issued to directors
B.
Offered to existing share holders
C.
Offered to existing debenture holders
D.
Issued to creditors of the company
Answer: _________
Question 1129:
When shares are forfeited, the share capital account is debited by
A.
nominal value of forfeited shares
B.
paid-up amount of forfeited shares
C.
called-up amount on forfeited shares
D.
forfeited amount of shares
Answer: _________
Question 1130:
Realisation principle of accounting does not apply to:
A.
Long-term construction contracts
B.
Electricity generation and distribution
C.
Shipping companies
D.
Railways
Answer: _________
Question 1131:
In an organization purchase book records-
A.
Cash transactions
B.
Cash purchase transactions
C.
Transactions related to credit purchase of raw material
D.
Credit purchase of goods
Answer: _________
Question 1132:
An insurance claim of Rs. 3,000 was accepted in respect of stock of Rs. 5,000 which was destroyed by fire. Balance of Rs. 2,000 would be debited to
A.
Trading Account
B.
Profit and Loss Account
C.
Stock Account
D.
Bad Debts Account
Answer: _________
Question 1133:
The balance amount in the Joint Life Insurance Policy Reserve Account is transferred to
A.
Deceased Partner's Personal Account
B.
Remaining Partner's Personal Accounts
C.
All Partner's Personal Accounts
D.
Joint Life Policy Insurance Account
Answer: _________
Question 1134:
As shareholders holding 500 shares of Rs. 10 each issued at 10% discount pays Rs. 2 on application and Rs. 3 on allotment. However he fails to pay Rs. 3 on first call. His shares were forfeited and re-issued at Rs. 6 per share. Amount transferred to capital reserve will be
A.
Rs. 1,000
B.
Rs. 2,000
C.
Rs. 2,500
D.
Rs. 3,000
Answer: _________
Question 1135:
Income and expenditure account of a non-profit organization is a
A.
Real account
B.
Nominal account
C.
Personal account
D.
Representative personal account
Answer: _________
Question 1136:
When accounting standard board of India is constituted?
A.
1969
B.
1977
C.
1918
D.
2007
Answer: _________
Question 1137:
Following information is given to you: Sales Rs. 4,00,000 Fixed cost Rs. 1,80,000 Variable cost Rs. 2,00,000 Calculate Break Even Point (BEP) of sales
A.
Rs. 6,53,800
B.
Rs. 5,52,300
C.
Rs. 5,53,846
D.
Rs. 5,67,803
Answer: _________
Question 1138:
Which of the following transactions has no effect in the current ratio?
A.
Machinery purchased for cash
B.
Motor car sold for cash
C.
Preference shares redeemed
D.
Bills receivables collected
Answer: _________
Question 1139:
Which of the following items will result in flow of funds:
A.
Credit sale of the Building
B.
Issue of Bonus Shares
C.
Goodwill written off
D.
Transfer of profit to General Reserve
Answer: _________
Question 1140:
On using reducing balance method on an asset of Rs. 20,000 at the rate of 10% per annum, depreciation for third year will be:
A.
Rs. 6,000
B.
Rs. 1,800
C.
Rs. 1,620
D.
Rs. 2,000
Answer: _________
Question 1141:
If the period for writing-off the short working has expired then it is transferred to which account by lessee?
A.
Profit and Loss A/c
B.
Land owner A/c
C.
Royalty A/c
D.
Minimum rent A/c
Answer: _________
Question 1142:
Assertion (A): Cash flow Statement and Fund Flow Statement disclose same information. Reason (R): Both are prepared out of the same date You are to examine these two statements carefully and select the answers:
A.
Both (A) and (R) are true and (R) is the correct explanation of (A)
B.
Both (A) and (R) are true, but (R) is not correct explanation of (A)
C.
(A) is true but (R) is false
D.
(A) is false but (R) is true
Answer: _________
Question 1143:
Which of the following is not an accounting principle?
A.
Dual aspect concept
B.
Cost concept
C.
Principle of materiality
D.
Principle of truthfullness
Answer: _________
Question 1144:
Cost of Asset = Rs. 21,000 Scrap value = Rs. 1,000 Depreciation rate = 10% p.a. What will be the depreciation for the second year if depreciation is charged by straight line method?
A.
Rs. 2,100
B.
Rs. 2,000
C.
Rs. 2,200
D.
Rs. 2,400
Answer: _________
Question 1145:
Which of the following is not a transaction?
A.
Goods are purchased on cash basis for Rs.1000
B.
Salaries are paid for the month of May 2010
C.
Land is purchased for Rs. 10 lacs
D.
An employee dismissed from the job
Answer: _________
Question 1146:
A promissory note is drawn by ______ in favor of _____
A.
Drawer, Drawee
B.
Maker, Payee
C.
Payer, Payee
D.
Drawer, Payee
Answer: _________
Question 1147:
____ principle requires that the same accounting method should be used from one accounting period to the next
A.
Conservatism
B.
Consistency
C.
Business entity
D.
Money measurement
Answer: _________
Question 1148:
The left side of an account is known as ___ and the right side as ____
A.
Debit, Credit
B.
Credit, Debit
C.
Liability, Asset
D.
None of the above
Answer: _________
Question 1149:
The cost of a small calculator is treated as an expense and not shown as an asset in a financial statement of a business entity due to
A.
Materiality concept
B.
Matching concept
C.
Periodicity concept
D.
Conservatism concept
Answer: _________
Question 1150:
A minimum quantity of stock always held as precaution against out of stock situation is called
A.
Zero stock
B.
Risk stock
C.
Base stock
D.
None of the above
Answer: _________
Question 1151:
Discounting of bill by the drawer is done with
A.
Creditor
B.
Drawee
C.
Bank
D.
Notary public
Answer: _________
Question 1152:
A bill of exchange when drawn requires
A.
Noting
B.
Discounting
C.
Acceptance
D.
None of the above
Answer: _________
Question 1153:
A bill of exchange is called a ____ by one who is liable to pay it on the due date
A.
Bill receivable
B.
Noted bill of exchange
C.
Bill payable
D.
None of the above
Answer: _________
Question 1154:
___ days of grace are allowed in case of time bills, for calculating date of maturity
A.
2
B.
4
C.
3
D.
5
Answer: _________
Question 1155:
The application money payable on a share should not be less than the following percentage of the value of the share:
A.
5%
B.
10%
C.
20%
D.
25%
Answer: _________
Question 1156:
What is the effect of increase in variable cost?
A.
It reduces the contribution
B.
It increases the profit quantity ratio
C.
It increases profit
D.
None of the above
Answer: _________
Question 1157:
Consider the following information: Net profit before depreciation and tax Rs. 44,000 Depreciation for the year Rs. 8,000 Goodwill written off Rs. 10,000 Rate of tax 50% Cash flow from operation will be
A.
Rs. 36,000
B.
Rs. 28,000
C.
Rs. 26,000
D.
Rs. 13,000
Answer: _________
Question 1158:
If current ratio is 2.4 : 1 and current liability is Rs. 20,000/-, then what will be the amount of current assets
A.
Rs. 44,000
B.
Rs. 48,000
C.
Rs. 50,000
D.
Rs. 8,333
Answer: _________
Question 1159:
Liability of partners for firm's debt is:
A.
Joint
B.
Separate
C.
Joint and separate
D.
None of the above
Answer: _________
Question 1160:
The cost of goods sold is Rs. 50,000. The value of opening and closing stock is Rs. 15,000 and Rs. 25,000 respectively. The stock turnover rate will be :
A.
2 times
B.
2.5 times
C.
3.3 times
D.
1.25 times
Answer: _________
Question 1161:
Given, 1 st January 31 st December Assets Rs. 30,000 - Liability Rs. 13,000 - Capital - Rs. 16,500 Drawing during the year is Rs. 4,000 Capital on 1 th January is:
A.
Rs. 12,500
B.
Rs. 16,500
C.
Rs. 7,000
D.
Rs. 43,000
Answer: _________
Question 1162:
In Companies Act, 1956 the proforma of B/S is given in:
A.
Section 211
B.
Section 213
C.
Section 263
D.
Section 221
Answer: _________
Question 1163:
Realisation account is a
A.
Personal account
B.
Nominal account
C.
Real account
D.
Suspense account
Answer: _________
Question 1164:
For amalgamation in the nature of merger, the shareholders holding atleast . . . . . . . . or more of the equity shares of the transferor company becomes the equity shareholders of transferee company.
A.
51%
B.
90%
C.
99%
D.
100%
Answer: _________
Question 1165:
Which of the following factor is not considered while selecting accounting policies?
A.
Prudence
B.
Substance over form
C.
Accountancy
D.
Materiality
Answer: _________
Question 1166:
X Ltd, has current ratio of 2 : 1 and Quick ratio of 1.5 : 1. If its current liabilities are Rs. 60,000, then the value of stock would be:
A.
Rs. 1,60,000
B.
Rs. 1,20,000
C.
Rs. 30,000
D.
Rs. 80,000
Answer: _________
Question 1167:
The need for showing contingent liability in the balance sheet arises out of the convention of:
A.
consistency
B.
materiality
C.
disclosure
D.
conservatism
Answer: _________
Question 1168:
As per Partnership Act, which of these rights are available to a partner?
A.
Bonus
B.
Salary
C.
Commission
D.
Equal profit
Answer: _________
Question 1169:
Unrealized dividend is shown under which of the following head in company balance sheet?
A.
Reserve and surplus
B.
Provision
C.
Current liabilities
D.
Different items
Answer: _________
Question 1170:
The 'going concern concept' is the underlying basis for
A.
Depreciating fixed assets over their useful life
B.
Consolidating the accounts of subsidiary companies with their parent companies
C.
Disclosing the market value of securities
D.
Disclosing the sales and other operating information in the income statement
Answer: _________
Question 1171:
Liability of a member in case of a private company can be
A.
limited
B.
unlimited
C.
Both A and B
D.
None of these
Answer: _________
Question 1172:
Match the following: List-I List-II a. Measurement of income 1. Accrues to the equility of curves b. Recognition of expense 2. Recognition of revenue c. Basis of realisation 3. Matching revenue with expenses d. Identification of revenue 4. Accounting period
A.
a-1, b-2, c-3, d-4
B.
a-2, b-1, c-3, d-4
C.
a-3, b-4, c-1, d-2
D.
a-3, b-4, c-2, d-1
Answer: _________
Question 1173:
If net loss is Rs. 5,000, General expenses are Rs. 14,500, Sales amount to Rs. 25,000, the Gross Profit will be:
A.
Rs. 20,000
B.
Rs. 11,000
C.
Rs. 9,000
D.
Rs. 9,500
Answer: _________
Question 1174:
Income and expenditure account reveals . . . . . . . .
A.
cash in hand
B.
surplus or deficiency
C.
capital account
D.
revenue account
Answer: _________
Question 1175:
Which of the following is not capital expenditure?
A.
Cost of issuing shares and debentures
B.
Wages paid for construction of building
C.
Repairs on a second-hand machinery newly purchased
D.
Purchase of new spark plug at a cost of Rs. 8.50 for a two-year old car
Answer: _________
Question 1176:
On forfeiture of shares, which of the following account is credited with the amount of money already received on such shares?
A.
shares forfeited a/c
B.
share capital a/c
C.
unpaid calls a/c
D.
share premium a/c
Answer: _________
Question 1177:
Cancelling the original bill and drawing a fresh acceptance is known as . . . . . . . .
A.
Retiring under rebate
B.
Renewal
C.
Discounting
D.
Bill sent to bank for collection
Answer: _________
Question 1178:
X started business with a capital of Rs. 20,000 and purchased goods worth Rs. 2,000 on credit. These transactions may be expressed in the from of 'Accounting Equation' such as:
A.
Rs. 22,000 = Rs. 20,000 + Rs. 2,000
B.
Rs.20,000 = Rs. 22,000 - Rs. 2,000
C.
Rs. 22,000 = Rs. 22,000 + 0
D.
Rs. 22,000 = 0 + Rs. 22,000
Answer: _________
Question 1179:
The appropriate book to record credit purchase of machinery is . . . . . . . .
A.
purchases book
B.
journal
C.
cash book
D.
petty cash book
Answer: _________
Question 1180:
Match List-I (Items of expenditure and receipt) with List-II (Nature of expenditure and receipt) and select the correct answer using the options given below the lists: List-I List-II a. Premium paid for a lease hold property 1. Revenue expenditure b. Insurance premium paid for risks against accidental losses of properties (fixed assets) 2. Capital receipt c. Amount realised from the sale of securities (investment)purchased earlier 3. Deferred revenue expenditure d. Huge sales promotion expenses 4. Capital expenditure
A.
a-4, b-2, c-1, d-3
B.
a-3, b-2, c-1, d-4
C.
a-4, b-1, c-2, d-3
D.
a-3, b-1, c-2, d-4
Answer: _________
Question 1181:
A particular firm provided the following data for an accounting year Current ratio = 2.5 : 1 Liquid ratio = 1.5 : 1 Net working capital = Rs. 6,00,000 Current assets and current liabilities of the firm are, respectively:
A.
Rs. 9,00,000 and Rs. 3,00,000
B.
Rs. 10,00,000 and Rs. 4,00,000
C.
Rs. 8,50,000 and Rs. 2,50,000
D.
Rs. 7,50,000 and Rs. 1,50,000
Answer: _________
Question 1182:
The cost of a machine having a span of life of 5 years is Rs. 1,00,000. It has a scrap value of Rs. 10,000. The amount of depreciation under the sum of years, digit method will be:
A.
Rs. 16,000
B.
Rs. 18,000
C.
Rs. 25,000
D.
Rs. 30,000
Answer: _________
Question 1183:
A bank can open a branch only at the permission of the . . . . . . . .
A.
SBI
B.
RBI
C.
Government
D.
None of these
Answer: _________
Question 1184:
Cash book is an example of-
A.
Simple journal
B.
Special journal
C.
(A) and (B) both
D.
None of the above
Answer: _________
Question 1185:
Liquid Ratio is calculated as follows:
A.
$$frac{{{ ext{Total Assets}}}}{{{ ext{Total Liabilities}}}}$$
B.
$$frac{{{ ext{Current Assets}}}}{{{ ext{Current Liabilities}}}}$$
C.
$$frac{{{ ext{Liquid Assets}}}}{{{ ext{Current Liabilities}}}}$$
D.
$$frac{{{ ext{Current Liabilities}}}}{{{ ext{Liquid Assets}}}}$$
Answer: _________
Question 1186:
What is the correct order of the following relating to the shares of a company?
A.
Issue, Application, Call and Forfeiture
B.
Application, Call, Forfeiture and Issue
C.
Call, Issue, Application and Forfeiture
D.
Forfeiture, Application, Issue and Call
Answer: _________
Question 1187:
Which of the following items will have credit balance?
A.
Deferred Revenue Expenditure
B.
Income accrued but not received
C.
Dividend declared but not paid
D.
Discount on issue of debentures
Answer: _________
Question 1188:
Amount due to outgoing partner is shown in the balance sheet as his
A.
Liability
B.
Asset
C.
Capital
D.
Loan
Answer: _________
Question 1189:
Given the following information, what is Debt Equity Ratio? Equity Capital Rs. 2,00,000 General Reserve Rs. 90,000 Debentures Rs. 1,50,000 Accumulated Profits Rs. 60,000
A.
15 : 20
B.
35 : 25
C.
15 : 29
D.
15 : 35
Answer: _________
Question 1190:
What will be the treatment, if assets are taken over by a creditor of the firm at the time of dissolution?
A.
Realisation A/c will be debited
B.
Realisation A/c will be credited
C.
No entry should be passed
D.
None of the above
Answer: _________
Question 1191:
Which of the following match is not correct?
A.
Convertible ⇔ Debenture
B.
Participative ⇔ Preference
C.
Secured ⇔ Mortgage
D.
Right share ⇔ Issued to new shareholders
Answer: _________
Question 1192:
X co. Ltd. forfeited 1,000 shares of Rs. 10 each fully called up for non-payment of final call of Rs. 1 per share. 400 of forfeited shares are reissued as fully paid at Rs. 8 per share. The balance of forfeited share account will be:
A.
Rs. 2,800
B.
Rs. 3,600
C.
Rs. 5,400
D.
Rs. 9,000
Answer: _________
Question 1193:
Depreciation is charged on
A.
Current asset
B.
Fixed asset
C.
Intangible asset
D.
Tangible asset
Answer: _________
Question 1194:
Consider the following statements: Assertion (A): Every shareholder has a right to receive a share-certificate from the company whose shares he has purchased. Reason (R): Share-certificate is a conclusive evidence of the title of the person to the shares which are written in his name in the certificate. Now select your answer:
A.
Both A and R are ture and R is the correct explanation of A
B.
Both A and R are true and R is not the correct explanation of A
C.
A is true, but R is false
D.
A is false, but R is ture
Answer: _________
Question 1195:
If Earnings-Price (E-P) ratio is 0.05 and Earnings Per Share (EPS) is Rs. 8 the market price of the share will be
A.
40
B.
100
C.
160
D.
0.40
Answer: _________
Question 1196:
Nominal account that shows debit balance is-
A.
Expense
B.
Profit
C.
Assets
D.
Liabilty
Answer: _________
Question 1197:
Which of the following account will be debited if purchases of goods are made on credit?
A.
Cash
B.
Debtor
C.
Creditor
D.
Puchases
Answer: _________
Question 1198:
Del-credere commision is paid to the agent for:
A.
His hard work
B.
Meeting incidental expenses
C.
Undertaking responsibility of payment from buyers
D.
Achieving targets of sales set by the principal
Answer: _________
Question 1199:
Anu and Tanu are equal partners with fixed capitals of Rs. 2,00,000 and Rs. 1,00,000, respectively. After closing the accounts for the year ending 31 st March 2019, it was dis covered that the interest on capitals @ 8% per annum was omitted to be provided. In the adjusting entry
A.
Anu will be credited with Rs. 6,000 and Tanu will be credited with Rs. 8,000
B.
Anu will be debited with Rs. 16,000 and Tanu will be debited with Rs. 8,000
C.
Anu will be credited with Rs. 4,000 and Tanu will be debited with Rs. 4,000
D.
Anu will be debited with Rs. 4,000 and Tanu will be credited with Rs. 4,000
Answer: _________
Question 1200:
On 28 th March, 2019 stock worth Rs. 10,000 was lost by fire. The insurance company admitted full claim. On 31 st March. 2019 while preparing Final Accounts, it will be shown
A.
Only in Trading Account
B.
Only in Profit and Loss Account
C.
Both in Trading and Profit and Loss Account
D.
Both in Trading Account and Balance Sheet
Answer: _________
Question 1201:
Debenture holders:
A.
are the owners of the company
B.
have the right to vote
C.
have the right to dividend
D.
are the creditors of the company
Answer: _________
Question 1202:
Credit balance of bank account represents-
A.
Capital
B.
A liability
C.
Asset
D.
None of the above
Answer: _________
Question 1203:
Bad Debt in Departmental Accounts is:
A.
Charged to general Profit and Loss Account
B.
Divided equally amongst the department
C.
Divided on the basis of debtors
D.
Divided on the basis of credit sales
Answer: _________
Question 1204:
According to the money measurement concept, which among the following will be recorded in the books of account of the business:
A.
Health of managing director of the company
B.
Quality of company's goods
C.
Value of plant and machinery
D.
None of these
Answer: _________
Question 1205:
A and B are partners in a firm and share profits and losses in the ratio of 3 : 2. C joins firm as new partner and contributes Rs. 6,000 as premium for goodwill in cash. Here, the premium for goodwill shall be shared by A and B on the basis of new profit sharing ratio, that is 5 : 3 : 2 as
A.
Rs. 3,600 : Rs. 2,400
B.
Rs. 3,000 : Rs. 3,000
C.
Rs. 2,400 : Rs. 3,600
D.
Rs. 2,000 : Rs. 4,000
Answer: _________
Question 1206:
Given Opening stock - Rs. 5,000 Closing stock - Rs. 7,000 Purchases - Rs. 10,000 Manufacturing expenses - Rs. 20,000 Loss of meterials by fire - Rs. 1,000 Manufacturing cost will be:
A.
Rs. 28,000
B.
Rs. 29,000
C.
Rs. 27,000
D.
Rs. 30,000
Answer: _________
Question 1207:
The total average cost of a firm on producing 5 units is Rs. 30/- and the average cost of producing 6 units is Rs. 32/-. The marginal cost of production of the sixth unit will be
A.
Rs. 2
B.
Rs. 12
C.
Rs. 32
D.
Rs. 42
Answer: _________
Question 1208:
A company can pay dividends out of
A.
Money provided by the government for such purpose
B.
Share premium account
C.
Any of the above
D.
None of the above
Answer: _________
Question 1209:
When a company buys its own debenture as an investment, the debenture account is debited with
A.
Face value of debenture
B.
Paid-up value of debentures
C.
Prepaid amount on debenture
D.
Difference between fall value and paid-up value on debenture
Answer: _________
Question 1210:
Which one of the following does not consititute a Current Liability:
A.
Bills payable
B.
Contingent liability
C.
Trade creditors
D.
Interest outstanding on debentures
Answer: _________
Question 1211:
Share premium received by issuing shares can be used for:
A.
Payment of dividends
B.
Issue of bonus shares
C.
Remuneration to management
D.
Any other business Purpose
Answer: _________
Question 1212:
The discount allowed on reissue of forfeited shares is debited to
A.
Share Capital A/c
B.
Profit and Loss A/c
C.
Capital Redemption Reserve A/c
D.
Forfeited Shares A/c
Answer: _________
Question 1213:
Accounting standard-19 (AS-19) relates to
A.
Leases
B.
Discontinued operations
C.
Intangible assets
D.
EPS
Answer: _________
Question 1214:
If a minor choose to continue as a partner on attaining the age of majority, he will be liable to the debts of the firm from the date of his
A.
attaining majority
B.
admission to the profits of the firm
C.
choosing to become a partner at a subsequent date
D.
none of the above
Answer: _________
Question 1215:
A manager is paid 5% commission on the net profit after charging such commission. The gross profit of the firm is Rs. 40,000 and the selling expense is Rs. 29,500. His commission will be
A.
Rs. 1,050
B.
Rs. 2,100
C.
Rs. 500
D.
Rs. 1,000
Answer: _________
Question 1216:
The closing stock of a sports club was of cricket bats worth Rs. 1,000. Bats worth 6,000 were used during the year. The opening stock of bats at the beginning was Rs. 800. Which of the following sentence is correct?
A.
Bats costing Rs. 6,200 were sold during the year
B.
Bats costing Rs. 6,200 were purchased during the year
C.
Bats costing Rs. 6,200 were re-valued during the year
D.
Bats costing Rs. 5,800 were distributed during the year
Answer: _________
Question 1217:
When goodwill is raised in the books, the capital accounts of the old partners are credited in:
A.
new profit sharing ratio
B.
old profit sharing ratio
C.
sacrificing ratio
D.
none of the above
Answer: _________
Question 1218:
Which of the following are the motives of mergers? Indicate the correct answer: 1. Gain the economies of scale. 2. Utilize under-utilized resources. 3. Break the monopoly. 4. Reduce tax liability
A.
1, 3 and 4
B.
1, 2 and 4
C.
2, 3 and 4
D.
1, 2 and 3
Answer: _________
Question 1219:
Under capitalisation method, goodwill is calculated by
A.
Number of years purchase × Average profit
B.
Number of years purchase × Super profit
C.
Average profit + Expected rate of return
D.
Super profit + Expected rate of return
Answer: _________
Question 1220:
Arrange the following in correct sequence in the event of dissolution of a partnership firm. 1. If surplus, it is distributed among the partners. 2. The assets of the firm are realised. 3. Amount realised is applied towards repayment of liabilities to outsiders and loan taken from partners. 4. Capital contributed by partners is repaid. Select the correct answer:
A.
4, 3, 2, 1
B.
2, 4, 1, 3
C.
2, 3, 4, 1
D.
2, 1, 4, 3
Answer: _________
Question 1221:
Under which head of the liability side of a company's balance sheet, 'unclaimed dividend' will be shown?
A.
Reserve and surplus
B.
Contingent liabilities
C.
Current liabilities
D.
Provisions
Answer: _________
Question 1222:
Rights shares are the shares
A.
that have a right of redemption
B.
offerred to the existing equity shareholders
C.
legally issued to the public at large
D.
issued by a newly formed company
Answer: _________
Question 1223:
Balance of petty cash book represents
A.
An expense
B.
A profit
C.
An assets
D.
A liability
Answer: _________
Question 1224:
A limited company issued equity shares of Rs. 100 each. It has called-up Rs. 75 on each share, but received only Rs. 60 per share. The share capital account will be credited with
A.
Rs. 75 per share
B.
Rs. 60 per share
C.
Rs. 100 per share
D.
None of the above
Answer: _________
Question 1225:
Which of the following is not correct:
A.
Purchases + Opening stock - Cost of goods sold = closing stock
B.
Opening stock + Purchases - closing stock = Cost of goods sold
C.
Closing stock + Cost of goods sold - Purchases = Opening stock
D.
Cost of goods sold - closing stock - Purchases = Opening stock
Answer: _________
Question 1226:
Rearrange the following items on Asset side of the Balance Sheet of Company Account according to the Schedule VI of Part I 1. Current Assets 2. Investments 3. Fixed Assets 4. Miscellaneous expenditure
A.
1, 2, 3, 4
B.
1, 3, 4, 2
C.
4, 2, 1, 3
D.
3, 2, 1, 4
Answer: _________
Question 1227:
Prepaid rent appearing in trial balance should be shown in
A.
Trading account
B.
Profit and loss account
C.
Liabilities side of balance sheet
D.
Asset side of balance sheet
Answer: _________
Question 1228:
Match the items in Column-I with the items in Column-2 Column-1 Column-2 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
Answer: _________
Question 1229:
Rent earned by a trading company is:
A.
Operating income
B.
Non-operating income
C.
Current assets
D.
Other assets
Answer: _________
Question 1230:
A company can reissue its forfeited shares:
A.
At a premium
B.
At face value
C.
At a discount
D.
All the above
Answer: _________
Question 1231:
X company purchased a machine paying cash Rs. 50,000, sold inventory for cash Rs. 10,000 (at cost), and collected bills receivables of Rs. 5,000 during a month. The net effect on fund flow would be:
A.
Rs. 35,000 application of funds
B.
Rs. 35,000 source of funds
C.
Rs. 50,000 application of funds
D.
Rs. 65,000 application of funds
Answer: _________
Question 1232:
Consider the following statements: I. Workmen's compensation and third party insurance are examples of guarantee insurance II. Re-insurance is more common under fire and marine insurance Which of the statements given above is/are correct?
A.
I only
B.
II only
C.
Both I and II
D.
Neither I nor II
Answer: _________
Question 1233:
Cash purchase in the account of:
A.
purchases account
B.
joint venture account
C.
venturers account
D.
cash account
Answer: _________
Question 1234:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I List-II a. Amortisation 1. Diminition in the life of the assets due to excessive use b. Depreciation 2. Exhaustion of natural resource c. Depletion 3. Expiration of tangible assets d. Obsolescence 4. Expiration of intangible assets 5. Economic deterioration due to improved inventions
A.
a-1, b-2, c-3, d-4
B.
a-1, b-2, c-4, d-5
C.
a-5, b-2, c-3, d-4
D.
a-4, b-3, c-2, d-5
Answer: _________
Question 1235:
Any written document in support of a business transaction is called a . . . . . . . .
A.
Voucher
B.
Bill
C.
Carbon copy
D.
Expense bill
Answer: _________
Question 1236:
The minimum amount of capital which must be subscribed by the public before allotment is called:
A.
allotment money
B.
minimum subscription
C.
subscribed capital
D.
None of these
Answer: _________
Question 1237:
Depreciation is appearing in the trial balance of a company. While making final accounts, it should be shown in:
A.
the profit and loss account
B.
the balance sheet as a deduction from the asset concerned
C.
the profit and loss account and balance sheet
D.
the profit and loss account or balance sheet
Answer: _________
Question 1238:
Penalty for delay in refunding application money:
A.
6%
B.
5%
C.
15%
D.
20%
Answer: _________
Question 1239:
Purchase for office furniture is recorded in:
A.
General Journal
B.
Cash book
C.
Purchase book
D.
Sales book
Answer: _________
Question 1240:
The cash price of a machine is Rs. 1,20,000 and its hire purchase price is Rs. 1,50,000 to be paid in five equal yearly instalments. If a company purchases the machine on hire purchase basis, the amount of capital expenditure will be:
A.
Rs. 1,20,000
B.
Rs. 1,35,000
C.
Rs. 1,50,000
D.
Rs. 1,60,000
Answer: _________
Question 1241:
Agreement of the trial balance may not indicate that:
A.
no error remains undetected
B.
double entry has been completed
C.
arithmetic accuracy is reasonably proved
D.
all ledger accounts have been correctly posted
Answer: _________
Question 1242:
Which of the following accounts can be classified as a real account?
A.
Rent expenses account
B.
Rent income account
C.
Insurance expenses account
D.
Cash account
Answer: _________
Question 1243:
Capital increases if ______ increases
A.
Expenses are greater than income
B.
Drawings
C.
Interest on capital
D.
Revenue
Answer: _________
Question 1244:
Capital of a business decreases if there is an increase in
A.
Drawings
B.
Income
C.
Gains
D.
Fresh capital
Answer: _________
Question 1245:
Net income equal to Revenues minus
A.
Gains
B.
Depreciation
C.
Expenses
D.
Capital expenditure
Answer: _________
Question 1246:
Payment of expenses will ______ the assets
A.
Increase
B.
Reduce
C.
Apportion
D.
Overstate
Answer: _________
Question 1247:
Which of the following accounting equation is correct?
A.
Cash + Other assets = Capital - Liabilities
B.
Capital + Liabilities = Assets + Income
C.
Assets - Liabilities = Capital
D.
Assets + Capital = Liabilities
Answer: _________
Question 1248:
Fresh capital introduction will increase
A.
Assets and Liabilities
B.
Assets and Equity
C.
Liabilities and equity and bank balance
D.
Capital and Liabilities
Answer: _________
Question 1249:
Current Assets - Current Liabilities = ?
A.
Capital + Liabilities = assets
B.
Absorbed capital
C.
Net assets
D.
Working capital
Answer: _________
Question 1250:
The process of recording in Journal is done
A.
Two times in a year
B.
Once in a year
C.
Frequently during the accounting period
D.
At the end of an accounting period
Answer: _________
Question 1251:
General Journal is a book of _____ entries
A.
First
B.
Original
C.
Secondary
D.
Generic
Answer: _________
Question 1252:
A, B and C are partner in a partnership firm sharing profit and losses in the ratio 5 : 3 : 2. What will be their sacrificing ratio upon admission of D
A.
4 : 3 : 2
B.
Equal
C.
3 : 2 : 1
D.
5 : 3 : 2
Answer: _________
Question 1253:
A partnership comes into existence by
A.
An agreement
B.
Operation of law
C.
Succession
D.
Relationship between persons
Answer: _________
Question 1254:
Deficiency A/c is prepared in the event of:
A.
Dissolution of partnership firm under insolvency
B.
Admission of a partner
C.
Retirement of a partner
D.
Amalgamation of firms
Answer: _________
Question 1255:
Arrange the following steps of adjustment of capital (reconstitution of firm) incorrect order. 1. Calculation of total capital of new firm. 2. Finding out the surplus/deficiency in each of partner's capital account. 3. Calculation of adjusted old capitals of partners. 4. Finding out the new capitals of partners. Select the correct answer:
A.
3, 4, 2, 1
B.
4, 3, 2, 1
C.
3, 1, 4, 2
D.
3, 2, 4, 1
Answer: _________
Question 1256:
Which one of the following ratios is not a measure of financial soundness and stability of a business enterprise:
A.
Proprietary ratio
B.
Current ratio
C.
Turnover to capital employed ratio
D.
Liquidity ratio
Answer: _________
Question 1257:
The amount of depreciation charged to profit and loss account varies every year under
A.
Fixed instalment method
B.
Annuity method
C.
Diminishing balance method
D.
Insurance policymethod
Answer: _________
Question 1258:
The maximum number of partners in case of an ordinary partnership firm should not exceed
A.
10
B.
20
C.
30
D.
40
Answer: _________
Question 1259:
If the net profit is Rs. 35,000 after writing off goodwill Rs. 6,000 and loss on the sale of furniture Rs. 1,000 then the funds from operation will be
A.
Rs. 28,000
B.
Rs. 29,000
C.
Rs. 35,000
D.
Rs. 42,000
Answer: _________
Question 1260:
If Return On Investment (ROI) is 10% and investment turnover 5, then net profit margin will be:
A.
0.5%
B.
2.0%
C.
20.0%
D.
50.0%
Answer: _________
Question 1261:
A, B and C started a business by investing Rs. 1,20,000, Rs. 1,35,000 and Rs. 1,50,000, respectively. Find the share of each, out of an annual profit of Rs. 56,700.
A.
Rs. 1,500, Rs. 1,300, Rs. 1,200
B.
Rs. 12,345, Rs. 12,354, Rs. 18,967
C.
Rs. 16,800, Rs. 18,900, Rs. 21,000
D.
Rs. 12,300, Rs. 11,500, Rs. 17,300
Answer: _________
Question 1262:
After sale of investment the balance of sinking fund investment account is transferred to
A.
Profit and loss account
B.
Capital reserve account
C.
Sinking fund account
D.
Debentures account
Answer: _________
Question 1263:
The only item that is not recorded in the books of account is-
A.
Goodwill
B.
Special Discount
C.
Trade Discount
D.
Cash Discount
Answer: _________
Question 1264:
Liability of a partner in a partnership firm
A.
limited
B.
unlimited
C.
restricted
D.
undefined
Answer: _________
Question 1265:
If opening stock is Rs. 2,45,000, Purchases Rs. 15,00,000, Sales Rs. 17,40,000 and Rate of gross profit on cost is 20%, then closing stock will be
A.
Rs. 3,53,000
B.
Rs. 2,95,000
C.
Rs. 2,45,000
D.
Rs. 1,95,000
Answer: _________
Question 1266:
When the reserve is to be capitalized the shares issued to the existing shares are called
A.
Right issue
B.
Bonus share
C.
Preference share
D.
All of the above
Answer: _________
Question 1267:
An arrangement under which a company raises funds by issuing securities which carry a fixed rate of interest or dividend which is less than the average earnings of the company with a view to increasing the return on equity shares, is known as:
A.
Under-capitalisation
B.
Over-capitalisation
C.
Trading on equity
D.
Capital gearing
Answer: _________
Question 1268:
On the admission of a new partner, Revaluation of assets and liabilities is to be made for the
A.
benefit of old partners
B.
benefit of new partner
C.
mutual benefit of old and new partners
D.
benefit of old partners who are sacrificing
Answer: _________
Question 1269:
Acid Test Ratio is:
A.
Current Assets : Current Liabilities
B.
Quick Assets : Current Liabilities
C.
Total Assets : Total Liabilities
D.
Fixed Assets : Fixed Liabilities
Answer: _________
Question 1270:
Cost volume profit analysis is not based on which of the following recognition-
A.
The sales mix of the products remains constants
B.
Quantity of stock is variable from year to year
C.
Income and cost are linear within the prescribed limits
D.
Value of goods and wages are immutable/constant
Answer: _________
Question 1271:
If preference shares of Rs. 2,50,000 are to be redeemed and for that 12,500 equity shares of Rs. 10 each are to be issued at 10% discount, then the amount transferred to capital redemption fund will be
A.
Rs. 1,75,000
B.
Rs. 1,25,000
C.
Rs. 1,37,000
D.
Rs. 1,12,000
Answer: _________
Question 1272:
Give: Current ratio 2.5 Liquid ratio 1.5 Working capital Rs. 1,20,000 Fixed Assets Rs. 3,00,000 Stock in trade will be:
A.
Rs. 60,000
B.
Rs. 80,000
C.
Rs. 1,00,000
D.
Rs. 1,20,000
Answer: _________
Question 1273:
Calls paid in advance is shown separately on the following:
A.
liabilities side of B/s
B.
asset side of B/s
C.
debit side of P.L. a/c
D.
credit side of P.L. a/c
Answer: _________
Question 1274:
The break even point at which-
A.
Total revenue is equal to total cost
B.
Contribution is equal to the total fixed cost
C.
Neither profit nor loss
D.
All of the above
Answer: _________
Question 1275:
Accounting process does not include:
A.
Recording
B.
Classifying
C.
Simplifying
D.
Summarising
Answer: _________
Question 1276:
A firms has inventory turnover of 3 and cost of goods sold is Rs. 2,70,000. With better inventory management, the inventory turnover is increased to 5. This would result in
A.
Increase in inventory by Rs. 54,000
B.
Decrease in inventory by Rs. 36,000
C.
Increase in cost of goods sold by Rs. 20,000
D.
Decrease in inventory by Rs. 90,000
Answer: _________
Question 1277:
Opening Stock Rs. 15,000 Purchases Rs. 40,000 Cost of goods sold Rs. 52,000 Sales Rs. 57,000 Gross profit on gross loss is?
A.
Rs. 12,000
B.
Rs. 5,000
C.
Rs. 5,000 (Loss)
D.
Rs. 7,000
Answer: _________
Question 1278:
What is the prescribed order of writing the following provisions in the Balance Sheet of companies as required by the Indian Companies Act, 1956, Part I, Schedule VI: 1. Provision for contingencies 2. Proposed dividends 3. Provision for taxation 4. Provision for Provident Fund scheme Select your answer:
A.
3, 4, 2, 1
B.
3, 2, 1, 4
C.
2, 1, 3, 4
D.
4, 3, 2, 1
Answer: _________
Question 1279:
IFRS-2 applies to share-based payment transactions in which an entity . . . . . . . . goods or services.
A.
acquires
B.
receives
C.
transfers
D.
Both A and B
Answer: _________
Question 1280:
Which of the following is correct? 1. Unrealised dividend is an asset to the company 2. Dividend declared between two annual general meeting is called interim dividend 3. A company can distribute both interim and final dividend in the same financial year Choose the correct answer:
A.
2 and 3
B.
1, 2 and 3
C.
1 and 3
D.
1 and 2
Answer: _________
Question 1281:
W, X, Y are partners. They admitted Z into the firm and gave him guarantee that his share in profits will not be less than Rs. 10,000 p.a.. Profits will be shared in 4 : 3 : 3 : 2. If profit for the year is Rs. 48,000 then what is profit share of each partner?
A.
W = 15,200, X = 11,400, Y = 11,400, Z = 10,000
B.
W = 16,000, X = 11,000, Y = 11,000, Z = 10,000
C.
W = 16,000, X = 12,000, Y = 12,000, Z = 8,000
D.
W = 15,200, X = 11,200, Y = 12,000, Z = 10,400
Answer: _________
Question 1282:
After reissue of forfeited shares the balance of Share Forfeited Account will be transferred to:
A.
Share Capital Account
B.
Capital Reserve Account
C.
Shareholder's Account
D.
General Reserve Account
Answer: _________
Question 1283:
A company was incorporated on 1 st May, 1997 for acquiring a business from 1 st January 1997. The sales for January, March and September is one and a half times, and the sale of December is twice and that of February is half of the average monthly sale of the year. The ratio of sale for the period prior to incorporation and after the incorporation will be:
A.
4 : 8
B.
17 : 37
C.
49 : 99
D.
59 : 109
Answer: _________
Question 1284:
GAAP required to:
A.
Global harmonization in accounting
B.
Value
C.
Price
D.
Journal
Answer: _________
Question 1285:
Match the items given in column-I with the appropriate particulars listed in column-II Column-I Column-II a. Debit balance of the cash book 1. Overdraft b. Debit balance of the passbook 2. Favourable balance c. Interest charged by bank 3. Debited in passbook d. Interest provided by bank 4. Credited in passbook
A.
a-2, b-1, c-3, d-4
B.
a-1, b-2, c-4, d-3
C.
a-3, b-4, c-1, d-2
D.
a-4, b-2, c-1, d-3
Answer: _________
Question 1286:
Capital Profits are earned from:
A.
Sale of Current Asset
B.
Sale of Fixed Asset
C.
Capital Restructuring
D.
Business Transactions
Answer: _________
Question 1287:
Which of the following should be deducted from the share capital to find out paid-up capital?
A.
Calls-in-advance
B.
Calls-in-arrear
C.
Securities premium
D.
Bonus
Answer: _________
Question 1288:
The accounting concepts which help in ascertaining the profit/loss correctly are:
A.
Realisation and matching
B.
Going concern and business
C.
Cost and equivalence
D.
Money measurement and cost
Answer: _________
Question 1289:
Which of the following is not a source of funds:
A.
Purchase of machinery
B.
Profit earned during the year
C.
Issue of share capital
D.
Long term loan raised
E.
Issue of share capital
F.
Sale of fixed assets
G.
Issue of bonus shares
H.
Share premium
Answer: _________
Question 1290:
Which one of the following is not a clerical error?
A.
Error of omission
B.
Error of commission
C.
Error of principle
D.
Compensating error
Answer: _________
Question 1291:
A, B, C and D are equal partners. A, B and D die together in a plane crash. The accident results in:
A.
dissolution of partnership
B.
dissolution of firm
C.
both dissolution of partnership and firm
D.
neither dissolution of partnership nor firm
Answer: _________
Question 1292:
Which of the following statement regarding the dissolution of a partnership firm is true:
A.
Only the assets of the firm can be used for the payment of the firm's liabilities
B.
Loss on realisation is transferred to partners, capital accounts in their capital ratio
C.
Any amount realised from the sale of an unrecorded asset is credited to the realisation account
D.
Partners loan to the firm is transferred to the realisation account with the liabilities of the firm
Answer: _________
Question 1293:
Interest on loan taken for the purchase of fixed assets is a
A.
Revenue Expenditure
B.
Capital Expenditure
C.
Deferred Revenue Expenditure
D.
Capital Loss
Answer: _________
Question 1294:
IFRS is based on
A.
Historical cost
B.
Fair value
C.
Both A and B
D.
None of these
Answer: _________
Question 1295:
Gopal held 100 shares of Rs. 10 each of a company on which he had paid Rs. 3 on the application and Rs. 2 on the allotment but could not pay Rs. 2 on the first call. The directors forfeited the above share. The share capital will be debited by
A.
Rs. 1,000
B.
Rs. 700
C.
Rs. 500
D.
Rs. 800
Answer: _________
Question 1296:
Which of the following items will be written in a partner's capital account when the capital accounts are fixed?
A.
Partner's drawings
B.
Additional capital introduced by the partner in the firm
C.
Loan taken by a partner from the firm
D.
Loan advancedby a partner to the firm
Answer: _________
Question 1297:
Depreciation is a process of:
A.
Allocation
B.
Valuation
C.
Both of allocation and valuation
D.
None of these
Answer: _________
Question 1298:
Given that, Inventory turnover ratio = Rs. 6 Time Average inventory = Rs. 8,000 Selling price = Rs. 25% More then the cost. What will be the amount of gross profit?
A.
Rs. 20,000
B.
Rs. 4,000
C.
Rs. 10,000
D.
Rs. 12,000
Answer: _________
Question 1299:
Donations received for a special purpose will be taken to the:
A.
Income and Expenditure Account
B.
Assets side of the Balance Sheet
C.
Liabilities side of the Balance Sheet
D.
None of the above
Answer: _________
Question 1300:
Which one of the following statement is true?
A.
Capital expenditure does not affect the profitability of a concern, but revenue expenditure does
B.
Capital expenditure affects the profitability of a concern directly, but revenue expenditure does not
C.
Capital expenditure affects the profitability of a concern indirectly, but revenue expenditure affects directly
D.
Both capital expenditure and revenue expenditure affect the profitability of a concern directly
Answer: _________
Question 1301:
Which of the following is a long term liability?
A.
Outstanding expenses
B.
Share capital
C.
Debentures
D.
All of the above
Answer: _________
Question 1302:
Drawing is a type of
A.
Expense
B.
Withdrawal of capital
C.
Income
D.
None of the above
Answer: _________
Question 1303:
Profit is a part of
A.
Income
B.
Owner's capital
C.
Assets
D.
All of the above
Answer: _________
Question 1304:
Promissory note is prepared by
A.
Drawer
B.
Endorsee
C.
Drawee
D.
All of the above
Answer: _________
Question 1305:
Which reserve is not shown in the Balance sheet?
A.
Secret reserve
B.
General reserve
C.
Capital reserve
D.
All of the above
Answer: _________
Question 1306:
Which liability is not included in the total of Balance Sheet?
A.
Current liabilities
B.
Contingent liabilities
C.
Fixed liabilities
D.
All of the above
Answer: _________
Question 1307:
Revenue expenditures are recorded in the
A.
Manufacturing account
B.
Trading account
C.
Profit & loss account
D.
All of the above
Answer: _________
Question 1308:
In case of opening Credit Balance, the word ______ are written on the credit side.
A.
By Balance b/d
B.
To Balance b/d
C.
By Balance c/d
D.
To Balance c/d
Answer: _________
Question 1309:
Preliminary expenses are treated as
A.
Fixed asstes
B.
Current assets
C.
Intangible assets
D.
Miscellaneous expenditure
Answer: _________
Question 1310:
If opening stock Rs. 50,000, closing stock Rs. 60,000 and cost of gold sold is Rs. 2,20,00, then stock turnover ratio will be
A.
Two times
B.
Three times
C.
Four times
D.
One times
Answer: _________
Question 1311:
Discount on issue of shares by a company should be shown on the:
A.
Debit side of the Profit and Loss account
B.
Asset side of the Balance Sheet
C.
Credit side of the Profit and Loss account
D.
Liability side of the Balance Sheet
Answer: _________
Question 1312:
"Every debit should have equal and corresponding credit." Which of the following Accounting Concept says so?
A.
Matching Concept
B.
Dual Aspect Concept
C.
Accrual Concept
D.
Business Entity Concept
Answer: _________
Question 1313:
The objective of hedge accounting is to represent, in the financial statements, the effect of an entity's that use financial instruments to manage arising from particular risks that could affect profit or loss.
A.
risk management activities, exposures
B.
risk mitigation activities, credit losses
C.
risk diversification activities, credit concentration
D.
risk mitigation activities, credit exposures
Answer: _________
Question 1314:
If the current ratio of a firm is 2.5 : 1 and working capital is Rs. 90,000 then the amount of current liabilities will be
A.
Rs. 2,25,000
B.
Rs. 1,35,000
C.
Rs. 60,000
D.
Rs. 36,000
Answer: _________
Question 1315:
Asha and Vipasha are equal partners with fixed capitals of Rs. 5,00,000 and Rs. 2,00,000, respectively. After closing the accounts for the year ending 31 st March 2019, it was discovered that the interest on capitals was provided @ 6% per annum instead of 5% per annum. In the adjusting entry
A.
Asha will be debited with Rs. 1,500 and Vipasha will be credited with Rs. 1,500
B.
Asha will be credited with Rs. 1,500 and Vipasha will be debited with Rs. 1,500
C.
Asha will be debited with Rs. 5,000 and Vipasha will be debited with Rs. 2,000
D.
Asha will be credited with Rs. 5,000 and Vipasha will be credited with Rs. 2,000
Answer: _________
Question 1316:
Match the items of the following two lists and indicate the correct answer: List-I List-II a. Earning ability of a firm 1. Basis of accounting b. Conservatism 2. P/V ratio c. Cash profit 3. Cash flow statement d. Cash and accrual 4. Prudence
A.
a-2, b-4, c-3, d-1
B.
a-2, b-1, c-4, d-3
C.
a-3, b-4, c-1, d-2
D.
a-3, b-4, c-2, d-1
Answer: _________
Question 1317:
The more accurate guide to liquidity of a firm is provided by:
A.
The current ratio
B.
The quick ratio
C.
The receivable-turnover ratio
D.
The inventory-turnover ratio
Answer: _________
Question 1318:
A machine was purchased on 1 st January 1987. It was depreciated by written down value method at the rate of 10% P.A. The depreciated value of machine as on 1 st January 1990 is Rs. 13,122. The cost of machine on 1 st January 1990 was
A.
Rs. 20,000
B.
Rs. 18,000
C.
Rs. 22,000
D.
Rs. 19,000
Answer: _________
Question 1319:
Closing stock appearing in the Trial Balance is shown in:
A.
The Balance Sheet only
B.
Both Trading Account and Balance Sheet
C.
Trading Account only
D.
None of the above
Answer: _________
Question 1320:
ABC Ltd., forfeited 20 shares of Rs. 10 each on which Rs. 6 per share were paid. If out of these shares 8 shares were reissued to Hari as fully paid up on payment of Rs. 5.50 per share, the amount that will stand to the credit of Share Forfeited A/c will be
A.
Rs. 48
B.
Rs. 72
C.
Rs. 84
D.
Rs. 96
Answer: _________
Question 1321:
Consider the following statements: Assertion (A): If a shareholder fails to pay the amount of one or more calls on his shares, the company may forfeit his shares. Reason (R): Even after the forfeiture of shares, that shareholder is responsible to pay the amount due from him until the company receives full amount on those shares. Now select your answer:
A.
Both A and R are true and R is the correct explanation of A
B.
Both A and R are true but R is not the correct explanation of A
C.
A is true but R is false
D.
A is false but R is true
Answer: _________
Question 1322:
Match List-I with List-II and select the correct answer: List-I List-II a. VED Analysis 1. Sources and uses of funds b. Ratio Analysis 2. Inventory control c. Funds Flow Analysis 3. Analysis & Interpretation of Financial Statement d. Income & Expenditure Analysis 4. Non-Profit organization
A.
a-1, b-4, c-2, d-3
B.
a-2, b-3, c-1, d-4
C.
a-1, b-3, c-2, d-4
D.
a-2, b-4, c-1, d-3
Answer: _________
Question 1323:
The balance of Debenture Sinking Fund is finally transferred to
A.
Profit and Loss account
B.
Debenture Redemption Fund investment account
C.
General Reserve
D.
Capital Reserve
Answer: _________
Question 1324:
Match List I with List II and select your answer: List-I List-II a. Cash 1. Equity Share Capital b. Profit 2. Fixed Assets c. Discount on issue of Shares 3. Fictitious Assets d. Machinery & Plant 4. Current Assets
A.
a-1, b-3, c-4, d-2
B.
a-4, b-1, c-3, d-2
C.
a-4, b-3, c-2, d-1
D.
a-2, b-3, c-1, d-4
Answer: _________
Question 1325:
The balance of which of the following items can also show the credit balance?
A.
Cash
B.
Bank
C.
Investment
D.
Stock
Answer: _________
Question 1326:
Net sales for the whole year is Rs. 2,50,000 and the debtor is Rs. 50,000, the daily average of credit sales will be
A.
60 days
B.
45 days
C.
42 days
D.
72 days
Answer: _________
Question 1327:
On dissolution of a firm while transferring the assets to realisation account. The realisation account is:
A.
Debit
B.
Credit
C.
Debit or Credit
D.
None of the above
Answer: _________
Question 1328:
In the absence of a partnership Deed, the allowable rate of interest on a partner's loan account will be:
A.
4% p.a./Annual
B.
5% p.a./Annual
C.
6% p.a./Annual
D.
7.5% p.a./Annual
Answer: _________
Question 1329:
X Ltd. forfeited 30 shares of Rs. 10 each fully called up for non payment of allotment money of Rs. 3 per share and call money of Rs. 4 per share. These share were re-issued for Rs. 8 per share fully paid. What is the amount to be transferred to Capital Reserve A/c:
A.
Rs. 300
B.
Rs. 60
C.
Rs. 30
D.
Rs. 90
Answer: _________
Question 1330:
As per the decision in the Garner vs Murray case, when the partner's capital accounts are fixed, any loss arising due to the capital deficiency in the insolvent partner's capital account is to be borne by solvent partners in the ratio of . . . . . . . .
A.
profit sharing ratio
B.
last agreed capital ratio
C.
sacrificing ratio
D.
gaining ratio
Answer: _________
Question 1331:
Consolidated financial statements are prepared on the principle
A.
In the form the companies are one entity, in sub stance they are separate
B.
In form companies are separate, in substance, they are one
C.
In form and substance, the companies are one entity
D.
In form and substance, the companies are separate
Answer: _________
Question 1332:
Which of the following is not an undistributed profit?
A.
General Reserve account
B.
Employee compensation reserve
C.
Security premium reserve
D.
Dividend Equalization reserve account
Answer: _________
Question 1333:
Variance analysis is related to
A.
Ratio analysis
B.
Standard costing
C.
Marginal costing
D.
None of these
Answer: _________
Question 1334:
Bonds or debentures issued by Securitization company should bear interest not less than
A.
Bank Rate
B.
Prime Lending Rate
C.
1.5% over the Bank Rate
D.
1.5% over the Saving Rate
Answer: _________
Question 1335:
Combined leverage can be used to measure the relationship between
A.
EBIT and EPS
B.
Sales and EPS
C.
Sales and EBIT
D.
PAT and EPS
Answer: _________
Question 1336:
The assumption that "Anticipate no profit and provide for all losses" is based on
A.
Convention of conservatism
B.
Convention of consistency
C.
Convention of materiality
D.
Convention of full disclosure
Answer: _________
Question 1337:
Trade discount is allowed for:
A.
Prompt payment of cash
B.
Purchasing products in bulk quantity
C.
Payment of cash within 30 days time period
D.
Opening of several units in different markets for business expansion
Answer: _________
Question 1338:
Security premium reserve cannot be used for
A.
Payment of dividend to Members
B.
Issue of bonus shares to members
C.
Writing off pre-liminary expenses of company
D.
Writing off discount on issue of debenture
Answer: _________
Question 1339:
Those adjustment expenses which are deducted from related expense and are shown as assets are called
A.
Accrued
B.
Prepaid expense
C.
Outstanding expense
D.
Capital expense
Answer: _________
Question 1340:
Financial Leverage is measured by:
A.
$$frac{{{ ext{EBIT}}}}{{{ ext{EAT}}}}$$
B.
$$frac{{{ ext{EBIT}}}}{{{ ext{EBT}}}}$$
C.
$$frac{{{ ext{EAIT}}}}{{{ ext{EBT}}}}$$
D.
$$frac{{ ext{C}}}{{{ ext{EBIT}}}}$$
Answer: _________
Question 1341:
The salary paid to a clerk Ramesh should be credited to:
A.
Ramesh's Account
B.
Salary Account
C.
Cash Account
D.
Profit and Loss Account
Answer: _________
Question 1342:
If the amalgamation is in the . . . . . . . ., the general reserveor profit and loss A/c balance will not be shown in the balance sheet.
A.
Form of merger
B.
Form of purchase
C.
Net assets method
D.
Consideration method
Answer: _________
Question 1343:
On 31 st December 2004, the assets and liabilities of a firm were Rs. 40,000 and Rs. 30,000 respectively. The firm was dissolved and a sum of 60 paisa per rupee was paid to the creditors. Profit/loss on realisation-
A.
Rs. 10,000
B.
Rs. 12,000
C.
Rs. 18,000
D.
Rs. 22,000
Answer: _________
Question 1344:
Identify the true statement of the following. 1. Balance sheet is always prepared from the point of view of the business, but not from, that of the owners. 2. The financial relationship of the business to its owners is shown in the balance sheet. 3. Balance sheet is always related to a period of time.
A.
Both 1 and 2
B.
Both 2 and 3
C.
Both 1 and 3
D.
All of the above
Answer: _________
Question 1345:
An asset was purchased for Rs. 10,00,000 with the down payment of Rs. 2,00,000 and bills accepted for Rs. 8,00,000. What is the effect on the total asset and total liabilities in the balance sheet?
A.
Assets increased by Rs. 8,00,000 and liabilities decreased by Rs. 8,00,000
B.
Assets decreased by Rs. 8,00,000 and liabilities increased by Rs. 8,00,000
C.
Assets increased by Rs. 10,00,000 and liabilities increased by Rs. 8,00,000
D.
Assets increased by Rs. 8,00,000 and liabilities increased by Rs. 8,00,000
Answer: _________
Question 1346:
The cost of three small files (of Rs. 4 each) was charged to expenses when purchased even though they had useful life of several years. This was done according to the
A.
cost principle
B.
conservatism principle
C.
disclosure principle
D.
materiality principle
Answer: _________
Question 1347:
If goodwill account is already opened in the books and new partner brings his share of goodwill in cash, then accounting effect would be
A.
Old goodwill account will be closed
B.
Goodwill bought by new partner will be distributed between old partners in sacrificing ratio
C.
A and B both
D.
None of the above
Answer: _________
Question 1348:
In case of debit balance, the words _____ are written on the debit side
A.
To Balance b/d
B.
To Balance c/d
C.
By Balance c/d
D.
By Balance b/d
Answer: _________
Question 1349:
Bank pass book is also known as
A.
Bank book
B.
Bank account
C.
Bank column
D.
Bank statement
Answer: _________
Question 1350:
Ram and Shyam are partners in a firm with capital of Rs. 4,80,000 and Rs. 3,10,000, respectively. They admitted Ganesh as a partner with $${frac{1}{4}^{{ ext{th}}}}$$ share of profit. Ganesh brings Rs. 3,00,000 as his capital. Ganesh's share of goodwill will be
A.
Rs. 1,00,000
B.
Rs. 27,500
C.
Rs. 17,500
D.
Rs. 70,000
Answer: _________
Question 1351:
Match the items of List-I with those of the List-II and indicate the correct answer: List-I List-II a. Debtors Turnover Ratio 1. Solvency Ratio b. Proprietary Ratio 2. Liquidity Ratio c. Operating Ratio 3. Activity Ratio d. Acid Test Ratio 4. Profitability Ratio
A.
a-2, b-4, c-3, d-1
B.
a-3, b-2, c-1, d-4
C.
a-3, b-1, c-4, d-2
D.
a-4, b-3, c-2, d-1
Answer: _________
Question 1352:
Ledger is an accounting book in which
A.
Only Real Accounts are opened
B.
Only Real and Personal Accounts are opened
C.
All the Real, Personal and Nominal Accounts are opened
D.
Only Trading and Profit and Loss Accounts are opened
Answer: _________
Question 1353:
The user group of accounting information is:
A.
Owners of the business
B.
Managers of the business
C.
Potential investors of the business
D.
All the above
Answer: _________
Question 1354:
In case of 'installment payment system', total interest receivable by the seller is credited to
A.
Interest Suspense Account
B.
Interest Account
C.
Sales Account
D.
None of the above
Answer: _________
Question 1355:
Which of the following is not an accounting equation?
A.
Assets = Liabilities + Capital
B.
Assets = Liabilities - Capital
C.
Liabilities = Assets - Capital
D.
Assets - Liabilities = Capital
Answer: _________
Question 1356:
The study of the effects of output volume on revenue, expenses and net income is known as
A.
Budgeting
B.
Cash Flow
C.
Cost Flow
D.
Cost Volume Profit Analysis
Answer: _________
Question 1357:
Which one of the following statements is not correct?
A.
As per AS-26 only purchased goodwill to be recorded in the books of accounts
B.
Self generated goodwill will have to be adjusted through partners Capital Accounts
C.
Goodwill is an intangible asset
D.
Goodwill is a fictitious asset
Answer: _________
Question 1358:
XYZ firm has imported a machine from abroad. Which of the following is NOT the element of the machine's cost?
A.
Purchase price of machine
B.
Import duty
C.
Demmurage charges
D.
Refundable tax
Answer: _________
Question 1359:
Which of the following foxed assets is not depreciated in the ordinary circumstances?
A.
Plant & Machinery
B.
Building account
C.
Land
D.
Equipment's
Answer: _________
Question 1360:
In the calculation of depreciation, all of the following items are actually estimates except:
A.
Useful life
B.
Residual value
C.
Historical cost
D.
Salvage value
Answer: _________
Question 1361:
Under which method of depreciation, the amount of depreciation expenses remains constant throughout the life of the asset?
A.
Reducing balance method
B.
Unit of activity method
C.
Straight line method
D.
None of these
Answer: _________
Question 1362:
An increase in the value of fixed asset is referred to as:
A.
Depreciation
B.
Appreciation
C.
Market capitalization
D.
Reverse depreciation
Answer: _________
Question 1363:
The term _______ is generally used for the depreciation of natural resources
A.
Amortization
B.
Depletion
C.
Appreciation
D.
Disposal value
Answer: _________
Question 1364:
Which of the following is a biological asset?
A.
Land
B.
Building
C.
Environment
D.
Living plants and animals
Answer: _________
Question 1365:
Which of the following is the effect on net income if a business decreases its provision for bad debts?
A.
It will increase net income
B.
It will decrease net income
C.
No effect
D.
It will increase gross profit and net income
Answer: _________
Question 1366:
A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debt ommission?
A.
Net profit would decrease
B.
Net profit would increase
C.
Gross profit would overstate
D.
Gross profit would understate
Answer: _________
Question 1367:
When it is certain that a debt won't be recovered. Which of the following is correct?
A.
Provision for bad debt is created
B.
Account receivable is credited
C.
Bad debts is credited
D.
Sales is debited
Answer: _________
Question 1368:
The abnormal loss debited to:
A.
profit & loss account
B.
consignee's account
C.
consignor's account
D.
consignment account
Answer: _________
Question 1369:
Capital redemption reserve can be utilized for . . . . . . . .
A.
declaring dividend
B.
writing of capital losses
C.
issue of fully paid up bonus shares
D.
None of these
Answer: _________
Question 1370:
Debenture represents . . . . . . . . of the company.
A.
deposit
B.
overdraft
C.
loan
D.
None of these
Answer: _________
Question 1371:
Match List-I (Items) with List-II (Headings) and select the correct answer using the options given below the lists: List-I (Items) List-II (Headings) a. Provision for income tax 1. Miscellaneous expenses not written off b. Share premium 2. Current liabilities c. Unclaimed dividend dividend 3. Reserves and surplus d. Discount issue of shares 4. Profit and loss account
A.
a-4, b-3, c-2, d-1
B.
a-2, b-3, c-4, d-1
C.
a-4, b-1, c-2, d-3
D.
a-2, b-1, c-4, d-3
Answer: _________
Question 1372:
Bills Receivable book is to keep record of . . . . . . . .
A.
bills received from customers
B.
bills received from supplier
C.
credit purchases
D.
credit sales
Answer: _________
Question 1373:
The capital in a business on 1 st January and 31 st January is Rs. 17,000 and Rs. 17,200 respectively. Investment by owner and withdrawal by owner during January amount to Rs. 1,000 and Rs. 700 respectively. What is the net income for January?
A.
Rs. 100 (Loss)
B.
Rs. 300
C.
Rs. 200
D.
Rs. 500
Answer: _________
Question 1374:
Market price or actual cost, whichever is less, is the generally accepted accounting principle for valuation of:
A.
Stock-in-trade
B.
Fixed assets
C.
Current assets
D.
All of these
Answer: _________
Question 1375:
Sales on account is recorded in:
A.
Cash book
B.
Journal
C.
Sales book
D.
General Journal
Answer: _________
Question 1376:
When capital at the end is Rs. 21,500 drawings Rs. 4,300 and capital in the beginning Rs. 19,400, what is the amount of profit or loss?
A.
Rs. 2,200 (profit)
B.
Rs. 2,200 (loss)
C.
Rs. 6,400 (profit)
D.
Rs. 6,400 (loss)
Answer: _________
Question 1377:
Which of the following is a method of redemption of debentures?
A.
draw of lots
B.
conversion
C.
open market purchase
D.
all of these
Answer: _________
Question 1378:
A company can re-issue its forfeited shares at a:
A.
premium
B.
face value
C.
a discount
D.
all of the above
Answer: _________
Question 1379:
In which order the following items will be shown on the liabilities side of the Balance Sheet of a Company: 1. Current liabilities and provisions 2. Secured loans 3. Share capital 4. Reserves and surplus Select the correct answer:
A.
3, 4, 2, 1
B.
1, 2, 3, 4
C.
4, 3, 2, 1
D.
3, 4, 1, 2
Answer: _________
Question 1380:
A, Y and Z are partners in the ratio of 5 : 4 : 1. Z is guaranteed that his share of profit will not be less than Rs. 80,000 and any deficiency will be borne by A and Y in the ratio of 3 : 2. If the firm's profit is Rs. 5,60,000, how much deficiencywill be borne by Y?
A.
Rs. 2,14,400
B.
Rs. 14,400
C.
Rs. 2,09,600
D.
Rs. 9,600
Answer: _________
Question 1381:
To provide funds to pay to the retiring partner or to the representatives of a partner, generally . . . . . . . . . is created by partners.
A.
sinking fund
B.
joint life policy
C.
reserve fund
D.
None of these
Answer: _________
Question 1382:
The adjustment entry passed to eliminate the inter company owing is
A.
Debit Amalgamation Adjustment A/c, Credit Sundry Debtors A/c
B.
Debit Sundry Debtors A/c, Credit Statutory Reserve A/c
C.
Debit Sundry Creditors A/c, Credit Sundry Debtors A/c
D.
Debit Amalgamation Adjustment A/c, Credit Statutory Reserve A/c
Answer: _________
Question 1383:
The expenditure incurred for enhancing the capacity of an existing equipment is:
A.
A revenue expenditure
B.
A deferred revenue expenditure
C.
A capital expenditure
D.
A charge on the profits of the business
Answer: _________
Question 1384:
Arrange the following parties in the event of dissolution of a firm. 1. Secured creditors 2. Unsecured creditors 3. Partners who have granted loans 4. Partners who have contributed over and above profit sharing ratio Select the correct answer:
A.
2, 1, 3, 4
B.
1, 2, 3, 4
C.
1, 2, 4, 3
D.
2, 1, 4, 3
Answer: _________
Question 1385:
Statement I In the traditional accounting, assets are shown at cost, year after year. Statement II The cost in inflation accounting represent the cost that prevails at the time of reporting. Which of the following is/are correct?
A.
Both statements are correct
B.
Both statements are incorrect
C.
Statement I is correct, but statement II is incorrect
D.
Statement II is correct, but statement I is incorrect
Answer: _________
Question 1386:
The liability of shareholder in a public company is limited to
A.
Amount paid on shares
B.
Nominal value of shares
C.
Market value of shares
D.
None of the above
Answer: _________
Question 1387:
A company has equity capital of Rs. 2,00,000 preference capital of Rs. 1,00,000, 12% debentures of Rs. 1,00,000, long-term loans of Rs. 2,00,000 and short-term loans of Rs. 1,00,000. The capital-gearing ratio will be:
A.
1 : 1
B.
0.5 : 1
C.
0.4 : 1
D.
None of the above
Answer: _________
Question 1388:
On 1 st January, 1996 the stock was valued at Rs. 7,000. During January the purchases of the stock amounted to Rs. 23,000 and the cost of sales during the same period amounted to Rs. 21,000. What had been the value of the stock on 31 st January, 1996:
A.
Rs. 7,000
B.
Rs. 5,000
C.
Rs. 2,000
D.
Rs. 9,000
Answer: _________
Question 1389:
What is the main objective of financial accounting?
A.
Profit and loss account only
B.
Balance sheet only
C.
Both profit and loss account and balance sheet
D.
Trial balance only
Answer: _________
Question 1390:
For assessing the firms efficiency of operation,we need to analyse the combined effect of which of the following pairs of ratios:
A.
Debt-to-net worth ratio and the Interest coverage ratio
B.
The current ratio and the inventory-turnover ratio
C.
Earnings per share and the coverage ratio
D.
The Net Profit margin and the net operating profit rate of return
Answer: _________
Question 1391:
Non-Trading Institutions prepare:
A.
Trading Account
B.
Trading, Profit and Loss Account
C.
Income & Expenditure Account
D.
None of the above
Answer: _________
Question 1392:
Short working means
A.
Excess of minimum rent over royalty
B.
Excess of royalty over minimum rent
C.
Surplus of royalty
D.
Excess of actual rent over minimum rent
Answer: _________
Question 1393:
Match the following. List-I List-II a. After reissue of forfeited shares the balance of share forfeiture account is transferred to . . . . . . . . 1. Assets b. Bonus issue is made out of . . . . . . . . 2. Free reserve c. Debentures secured by a charge on . . . . . . . . are termed as secured debentures. 3. Accumulated profits d. Workmen's compensation fund is . . . . . . . . to extent there is no compensation payable. 4. Capital Reserve A/c
A.
a-4, b-3, c-2, d-1
B.
a-4, b-3, c-1, d-2
C.
a-2, b-1, c-4, d-3
D.
a-2, b-4, c-1, d-3
Answer: _________
Question 1394:
The part of share capital, which can be called up only on the winding up of a company, is called:
A.
authorised
B.
called up capital
C.
winding up capital
D.
reserve capital
Answer: _________
Question 1395:
Depreciation refers to:
A.
Fixed assets
B.
Goodwill
C.
Floating assets
D.
All the three
Answer: _________
Question 1396:
A company has spent Rs. 20,000 on painting of its building. It should be recorded as
A.
Revenue expenditure
B.
Capital expenditure
C.
Personal expenditure
D.
Deferred revenue expenditure
Answer: _________
Question 1397:
A new partner brings in cash as his share of goodwill, this amount will be distributed among old partners in:
A.
Old profit sharing ratio
B.
Equal ratio
C.
Ratio of capitals
D.
Sacrifice ratio
Answer: _________
Question 1398:
According to which concept are the owners considered to be different from the business?
A.
Business entity concept
B.
Money measurement concept
C.
Going concern concept
D.
Accounting period concept
Answer: _________
Question 1399:
Unaccrued Income is a-
A.
Asset
B.
Liability
C.
Income
D.
Expense
Answer: _________
Question 1400:
Amount of security premium may be utilised for
A.
payment of dividend
B.
meeting routine expenses
C.
purchases of fixed asset
D.
writing off preliminary expenses
Answer: _________
Question 1401:
A, B and C are partners in a firm in the ratio of 5 : 3 : 2. B retires from the firm. A and C want to have the same previous ratio. The new ratio of A and C will be
A.
3 : 2
B.
5 : 3
C.
5 : 2
D.
3 : 5
Answer: _________
Question 1402:
Match List-I with List-II List-I List-II a. Ind AS-16 1. Income tax b. Ind AS-38 2. Leasing c. Ind AS-17 3. Intangible assets d. Ind AS-12 4. Property, plant and equipments
A.
a-4, b-3, c-1, d-2
B.
a-4, b-3, c-2, d-1
C.
a-3, b-2, c-4, d-1
D.
a-4, b-2, c-1, d-3
Answer: _________
Question 1403:
Match the items of List-I with the items of List-II and choose the correct answer: List-I List-II a. Provision for 1. Current assets taxation b. Livestock 2. Unsecured loans c. Sundry debtors 3. Fixed assets d. Interest accrued on unsecured loans 4. Provisions
A.
a-4, b-3, c-1, d-2
B.
a-4, b-3, c-2, d-1
C.
a-3, b-4, c-2, d-1
D.
a-2, b-1, c-3, d-4
Answer: _________
Question 1404:
Under Garner vs Murray rule, in the event of dissolution of a partnership firm, solvent partner will have to share the deficiency of insolvent partner in
A.
Profit Sharing Ratio
B.
Adjusted Capital Ratio
C.
Sacrificing Ratio
D.
None of these
Answer: _________
Question 1405:
Goodwill of a business is its:
A.
Current assets
B.
Wasting Assets
C.
Fictitious Assets
D.
Intangible Assets
Answer: _________
Question 1406:
Price earning ratio is more when:
A.
Earning per share is more
B.
Book value of share is more
C.
Market value of share is more
D.
All the above
Answer: _________
Question 1407:
Single entry system is defective because under this system:
A.
Trial Balance cannot be prepared
B.
Trading and Profit and Loss Account cannot be prepared
C.
Balance Sheet cannot be prepared
D.
All these cannot be prepared
Answer: _________
Question 1408:
Profit and loss account of business shows the:
A.
Net profit earned
B.
Gross profit earned
C.
Balance of all accounts
D.
Capital employed in business
Answer: _________
Question 1409:
Assets appearing in the book but having no value are known as:
A.
Wasting assets
B.
Intangible assets
C.
Current assets
D.
Fictitious assets
Answer: _________
Question 1410:
A cultural club discloses that subscriptions received during a particular accounting period as per receipts and payments account amount to Rs. 57,360. Subscription outstanding (opening and closing) was Rs. 4,800 and Rs. 6,000 respectively. Subscription received in advance (opening balance and closing balance) amounted to Rs. 3,600 and Rs. 2,160 respectively. The amount to be posted to income and expenditure account would be
A.
Rs. 57,360
B.
Rs. 54,000
C.
Rs. 60,000
D.
Rs. 63,360
Answer: _________
Question 1411:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I List-II a. Preliminary expense 1. Capital expenditure b. Travelling expenses of the salesman 2. Revenue expenditure c. Profit on sale of a part of the business building 3. Capital gain d. Nazrana paid on the purchase of land for business 4. Deferred revenue
A.
a-4, b-2, c-3, d-1
B.
a-4, b-2, c-1, d-3
C.
a-2, b-4, c-3, d-1
D.
a-2, b-4, c-1, d-3
Answer: _________
Question 1412:
A person named in the negotiable instrument to whom or to whose order the money in the instrument is directed to be paid is called as the:
A.
Payer
B.
Payee
C.
Consignor
D.
Consignee
Answer: _________
Question 1413:
Del Credere commission is allowed to the consignee to bear:
A.
normal loss
B.
abnormal loss
C.
loss on account of bad debts
D.
profit on account of sender
Answer: _________
Question 1414:
Subscriptions amounting to Rs. 7,500 appear on the credit side of income and expenditure account after adjusting subscriptions out standing Rs. 600 and subscriptions received in advance Rs. 450. The amount of subscriptions to be shown in the receipts and payments account for the same year will be:
A.
Rs. 6,450
B.
Rs. 7,350
C.
Rs. 7,650
D.
Rs. 8,550
Answer: _________
Question 1415:
Advanced tax paid by a banking company is shown as . . . . . . . . in the Balance Sheet.
A.
advance
B.
investment
C.
other assets
D.
contingent liability
Answer: _________
Question 1416:
Interest received on special fund investments will be added to . . . . . . . . fund in the balance sheet.
A.
investment fund
B.
bank fund
C.
general
D.
special
Answer: _________
Question 1417:
Redemption of preference shares should not be regarded as reduction of . . . . . . . . capital of the company.
A.
paid-up
B.
called-up
C.
subscribed
D.
authorized
Answer: _________
Question 1418:
ABC Ltd has declared 40% dividend. What does it mean?
A.
The company has declared 40% of net profit as a dividend
B.
The company has declared 40% of profits after tax as a dividend
C.
The company will provide a 40% dividend on issued capital
D.
The company will provide a 40% dividend on paid-up capital
Answer: _________
Question 1419:
Assets which have a fixed content and the value of asset goes down as the contents are taken out are called
A.
intangible assets
B.
fictitious assets
C.
wasting assets
D.
floating assets
Answer: _________
Question 1420:
A company can purchase, its own:
A.
Equity share
B.
Preference share
C.
Debentures
D.
All of the above
Answer: _________
Question 1421:
The technique of performance appraisal management is
A.
To motivate the employees
B.
To find out the qualifications of the employeess
C.
Promotion of employees
D.
To find out the difficulties of the employee
Answer: _________
Question 1422:
Statement I If an entity holds directly/indirectly 50% or more of the voting power of the investee, it is presumed thus such entity has significant influence. Statement II AS-24 deals with related party disclosures. Which of the following is/are correct?
A.
Only statement I is true
B.
Only statement II is true
C.
Both statements are true
D.
Both statements are false
Answer: _________
Question 1423:
The inter-se-relations of the partners between themselves is that of
A.
family friends
B.
business associates
C.
agents of each other
D.
close relatives
Answer: _________
Question 1424:
What items of inventories are outside the scope of AS-2? 1. Work-in-progress arising under construction contracts. 2. Raw materials including maintenance supplies. 3. Share, debentures held as stock-in-trade. 4. Machinery spares exclusively used with fixed assets. Select the correct answer:
A.
1, 3 and 4
B.
1, 2 and 4
C.
2, 3 and 4
D.
All of these
Answer: _________
Question 1425:
A club received the following donation in the year ending 31 st March, 2004. 31 st March, 2003 31 st March, 2004 Outstanding Donation Rs. 19,500 Rs. 25,500 Advance Donation Rs. 12,800 Rs. 9,500 The donation received in the year 2003 - 04 were Rs. 2,45,000. The club donation income for 2003 - 04 was
A.
Rs. 2,63,800
B.
Rs. 2,80,000
C.
Rs. 2,47,700
D.
Rs. 2,84,000
Answer: _________
Question 1426:
'Double entry system' refers to-
A.
Every business transaction has two aspects
B.
For every transaction, two accounts is prepared
C.
Every business transaction is written twice
D.
All of the above
Answer: _________
Question 1427:
Goodwill in a partnership firm can be valued at the time of
A.
admission
B.
retirement
C.
death
D.
All of these
Answer: _________
Question 1428:
Which one of the following concept is used as fund in the preparation of Funds Flow Statement?
A.
Current Assets
B.
Working Capital
C.
Cash
D.
All Financial Resources
Answer: _________
Question 1429:
The effect of surrender of shares is the same as of shares:
A.
Issue
B.
Forfeiture
C.
Re-Issue
D.
None of these
Answer: _________
Question 1430:
Calculate the interest on drawings assuming the rate @ 10% p.a for the year ended 31 st December 2016, for the withdrawals of Rs. 2000 made at the beginning of each month
A.
Rs. 1,100
B.
Rs. 1,200
C.
Rs. 1,300
D.
Rs. 1,400
Answer: _________
Question 1431:
The principle 'anticipate no profit and provide for all possible losses' emanates from:
A.
The convention of relevance
B.
The consistency concept
C.
The materiality concept
D.
The conservatism concept
Answer: _________
Question 1432:
Which of the following errors will not affect the trial balance?
A.
Goods for Rs. 300 purchased on cash, expenses account was debited instead of purchases account
B.
Purchases Returns Book for December was overcast by Rs. 200
C.
Sales book carried forward Rs. 2200 instead of Rs. 2000
D.
None of the above
Answer: _________
Question 1433:
If a share of Rs. 100 issued at a discount of Rs. 5 of which full amount has been called up is forfeited for nonpayment of final call of Rs. 20, the share capital account will be debited by
A.
Rs. 80
B.
Rs. 100
C.
Rs. 95
D.
Rs. 105
Answer: _________
Question 1434:
That portion of the share capital which can be called up only on the winding-up of the company is the
A.
reserve capital
B.
subscribed capital
C.
issued capital
D.
authorised capital
Answer: _________
Question 1435:
Consider the following items: i. Debentures ii. Prepaid rent iii. Interest accrued iv. Bank overdraft Which of them are current liabilities:
A.
i, ii, iii and iv
B.
iv
C.
ii, iii and iv
D.
i, ii and iii
Answer: _________
Question 1436:
During the Year 2004, the income from subscription was Rs. 4,500, subscription received in advance Rs. 360. On 31 st December 2004, the outstanding subscription was Rs. 140. The amount of subscription to be shown in Receipts and Payments a/c for the year 2004 would be
A.
Rs. 4,500
B.
Rs. 5,000
C.
Rs. 4,000
D.
None of the above
Answer: _________
Question 1437:
When a company takes over another one and clearly becomes a new owner, the action is called
A.
merger
B.
acquisition
C.
strategic alliance
D.
none of these
Answer: _________
Question 1438:
In case of inter-company holdings, the purchasing company, at the time of payment of the purchase consideration surrenders the shares in the vendor company by crediting
A.
Vendor Company's A/c
B.
Shares in the Vendor Company's A/c
C.
Share Capital A/c
D.
None of the above
Answer: _________
Question 1439:
Which of the following is 'true' regarding the Prudence Principle of Accounting?
A.
Taking care of the future losses
B.
Taking care of the future profits
C.
Taking care of bad debts
D.
Taking care of inventory and depreciation
Answer: _________
Question 1440:
Paid salary Rs. 2,000 to Mohan. Which account will be debited in this transaction?
A.
Mohan's account
B.
Cash account
C.
Trading account
D.
Salary account
Answer: _________
Question 1441:
In case the opening stock was Rs. 5,000, purchases Rs. 15,000 direct expenses Rs. 2,000 and closing stock Rs. 2,500, the cost of goods sold had been:
A.
Rs. 20,000
B.
Rs. 19,500
C.
Rs. 21,500
D.
Rs. 22,000
Answer: _________
Question 1442:
Balance of cash book shows-
A.
Deposited amount in bank
B.
Difference between income and expenditure
C.
Net real income
D.
Total available cash
Answer: _________
Question 1443:
The Chartered Accountants Act was enacted in the year:
A.
1951
B.
1955
C.
1959
D.
1949
Answer: _________
Question 1444:
If capital on 1 st January is Rs. 19,400 and on 31 st December is Rs. 21,500, drawing is Rs. 4,300. Find profit/loss?
A.
Rs. 2,000 Profit
B.
Rs. 2,200 Loss
C.
Rs. 6,400 Profit
D.
Rs. 6,400 Loss
Answer: _________
Question 1445:
The break even point is where-
A.
Maximizes profit
B.
Minimizes profit
C.
Neither profit or loss
D.
The company should stop production
Answer: _________
Question 1446:
On the admission of a new partner, the increases in the value of an asset is credited to
A.
Profit and Loss Account
B.
Asset Account
C.
Old Partners Capital Account
D.
Revaluation Account
Answer: _________
Question 1447:
All equity shareholder are
A.
Representative of company
B.
Owners of the company
C.
Lender of company
D.
Customers of company
Answer: _________
Question 1448:
Consider the following statement, while preparing annual financial statements, the balance of bills receivable account can be treated as- I. an accrued income II. an item of assets III. a "personal account" balance Of these statement:
A.
II and III are correct
B.
I and III are correct
C.
I and II are correct
D.
None of these
Answer: _________
Question 1449:
'Bank over draft' should be classified as:
A.
Current asset
B.
Current liability
C.
Intengible asset
D.
Intangible asset
Answer: _________
Question 1450:
Error of commission do not allow . . . . . . . .
A.
correct totalling of the balance sheet
B.
correct totalling of the trial balance
C.
the trial balance to agree
D.
correct totalling of the day book
Answer: _________
Question 1451:
Shares which carry preferential rights are called . . . . . . . .
A.
equity shares
B.
preference shares
C.
sweaty equity
D.
green shoe
Answer: _________
Question 1452:
When an incoming partner purchases his share from any one of the existing partners, then:
A.
total assets of the firm do not change
B.
total assets of the firm will be augmented to the extent of payment received from the new partner
C.
total assets of the firm will be reduced to the extent of payment received from the new partner
D.
change in total assets of the firm will depend upon the new profit sharing ratio of the partners
Answer: _________
Question 1453:
Which of the following is considered as an asset while calculating purchase consideration?
A.
Goodwill
B.
Patent
C.
Trademark
D.
All of these
Answer: _________
Question 1454:
A firm which keeps its books of accounts on single entry system has opening balance and closing balance of Bills Receivable as Rs. 9,000 and Rs. 11,000 respectively. Bills collected during the financial period amount to Rs. 20,000. Bills receivable received during the financial period amount to:
A.
Rs. 22,000
B.
Rs. 18,000
C.
Rs. 12,000
D.
Rs. 11,000
Answer: _________
Question 1455:
Reinsurance is common in . . . . . . . .
A.
life insurance
B.
general insurance
C.
marine insurance
D.
None of these
Answer: _________
Question 1456:
When a bill drawn by A and B endorsed to C is dishonoured on the due date, it is credited in the books of A to . . . . . . . .
A.
Bank account
B.
Bills receivable account
C.
Bank for collection of bills account
D.
C's account
Answer: _________
Question 1457:
Any revenue expense for when a separate fund is available will be . . . . . . . .
A.
debited to the separate fund
B.
debited to income and expenditure account
C.
capital issued and shown in the balance sheet
D.
credited to the separate fund
Answer: _________
Question 1458:
The term 'financial assets' includes all of the following except
A.
technical knowledge
B.
bank loan
C.
lease obligations
D.
shares, bonds and debentures
Answer: _________
Question 1459:
Which of the following does not increase in the working capital?
A.
On increase in movable assets
B.
On decrease in movable liability
C.
On decrease in movable assets
D.
None of these
Answer: _________
Question 1460:
Turnover ratios help the management in
A.
managing the resources
B.
evaluating the performance
C.
planning the production
D.
all the above
Answer: _________
Question 1461:
Registration of transfer of share is done
A.
In the agency
B.
In the company
C.
With the registrar of companies
D.
With the central government
Answer: _________
Question 1462:
Closing stock Rs. 53,400, cost of good sold Rs. 75,000 gross profit Rs. 5,000, purchases Rs. 82,000. Value of opening stock will be
A.
Rs. 46,400
B.
Rs. 41,400
C.
Rs. 60,400
D.
Rs. 55,400
Answer: _________
Question 1463:
Which one of the following statement is correct?
A.
Subscription received in advance is not shown in Receipts and Payments account
B.
Expenses and incomes on accrual basis are not shown in Receipts and Payments account
C.
Capital receipts and capital expenditures are recorded in Income and Expenditure account
D.
It is essential that balance sheet should accompany receipts and payments account
E.
A company consists of heterogeneous members
F.
A body corporate includes a cooperative society
G.
The expression 'corporation' or 'body corporate' are same
H.
A partner cannot contract with his firm, where as a member of a company can
Answer: _________
Question 1464:
Assertion (A): When a company earns profit prior to its incorporation, it is called capital profit. Reason (R): Capital profit cannot be used for distribution as a dividend to shareholders. Which of the following is correct?
A.
(A) is correct, but (R) is incorrect
B.
Both (A) and (R) are correct
C.
(A) is incorrect, but (R) is correct
D.
Both (A) and (R) are incorrect
Answer: _________
Question 1465:
Inventory turnover ratio is
A.
Activity Ratio
B.
Profitability Ratio
C.
Solvency Ratio
D.
Liquidity Ratio
Answer: _________
Question 1466:
Five years ago, on old machine was purchased for Rs. 1,00,000 and Rs. 10,000 was paid on its repairing charges. There was also accumulated depreciation of Rs. 50,000 on this machinery. At the beginning of the sixth year it was sold for Rs. 60,000. Profit or loss from this sale will be
A.
Profit of Rs. 10,000
B.
Loss of Rs. 50,000
C.
Loss of Rs. 40,000
D.
No profit or no loss
Answer: _________
Question 1467:
If preference share capital of Rs. 5,00,000 is to be redeemed, and 25,000 equity shares of Rs. 10 each have been issued at a discount of 10%. For this purpose, the amount to be transferred to Capital Redemption Reserve will be:
A.
Rs. 3,50,000
B.
Rs. 2,50,000
C.
Rs. 2,75,000
D.
Rs. 2,25,000
Answer: _________
Question 1468:
A bank pass book is a copy of:
A.
the cash column of a customers cash book
B.
the bank column of a customers cash book
C.
the customer's account in the banks ledger
D.
the customer's account in the suppliers ledger
Answer: _________
Question 1469:
LIFO inventory method was used in year I, FIFO in year II and weighted average in year III. Which accounting principle is violated?
A.
Cost principle
B.
Consistency
C.
Materiality
D.
No principle of accounting is violated
Answer: _________
Question 1470:
Life insurance is a contract of . . . . . . . .
A.
indemnity
B.
guarantee
C.
contribution
D.
None of these
Answer: _________
Question 1471:
Accounting is:
A.
the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events which are, in part at best financial in character, and interpreting there of
B.
a systematic and regular record of events affecting a firm with a view to obtaining a clear financial picture
C.
preparation of various financial statements over a period of time of a firm to measure its performance in monetary terms
D.
nothing but book-keeping
Answer: _________
Question 1472:
A bill which is not an inland bill is a . . . . . . . . bill.
A.
Outward
B.
Inward
C.
Foreign
D.
New
Answer: _________
Question 1473:
Shankar introduces Rs. 5000 as additional capital in the business. This amount will be considered as:
A.
capital receipt
B.
revenue receipt
C.
capital and revenue receipt
D.
deferred revenue expenditure
Answer: _________
Question 1474:
A bank reconciliation statement is prepared by . . . . . . . .
A.
Customer of the bank
B.
Bank
C.
Reserve Bank of India
D.
Either B or C
Answer: _________
Question 1475:
Outstanding salaries are shown as:
A.
an expense
B.
a liability
C.
an asset
D.
an income
Answer: _________
Question 1476:
Which one of the following depreciation methods is most suitable for a coal mine?
A.
Diminishing balance method
B.
Depletion method
C.
Fixed instalment method
D.
Sum of year's digits method
Answer: _________
Question 1477:
A Cheque received and deposited in the bank on the same day is recorded in the . . . . . . . .
A.
cash column of the cash book
B.
bank column of the cash book
C.
credited in the cash book
D.
debited in the cash book
Answer: _________
Question 1478:
Receipts and payments Account is a summary of:
A.
Income and Expenditure Account
B.
Cash Book
C.
Balance Sheet
D.
Bank Account
Answer: _________
Question 1479:
In what order, the following assets are shown in the balance sheet of a company? i. Trade receivables ii. Cash iii. Furniture and fittings iv. Investment in shares and debentures
A.
ii, i, iv, iii
B.
i, ii, iii, iv
C.
iii, iv, i, ii
D.
iv, iii, ii, i
Answer: _________
Question 1480:
In the context of dissolution of a firm, which of the following statements is true:
A.
Dissolution of a firm automatically result in dissolution of a partnership
B.
Only firm's assets can be used for payment of firm's liabilities
C.
Partner's loan is transferred to the Realisation account with other liabilities of the firm
D.
A loan from partner's wife is transferred to the partner's loan account
Answer: _________
Question 1481:
Under Royalty Accounts, if there is strike for a certain period then:
A.
Royalty is reduced proportionately
B.
Short workings is reduced proportionately
C.
Minimum rent is reduced proportionately
D.
All of the above
Answer: _________
Question 1482:
Sale proceeds of grass in case of a sport club is:
A.
a capital receipt
B.
an asset
C.
a revenue receipt
D.
None of the above
Answer: _________
Question 1483:
"Higher the ratio, the more favourable it is". This statement does not apply with respect to
A.
Stock Turnover Ratio
B.
Net Profit Ratio
C.
Gross Profit Ratio
D.
Operating Ratio
Answer: _________
Question 1484:
The Gross Working Capital means
A.
Total Current Assets + Total Current Liabilities
B.
Total Current Assets - Total Current Liabilities
C.
Total of Current Assets
D.
None of these
Answer: _________
Question 1485:
Cash discount allowed to a debtor should be credited to
A.
Discount Account
B.
Customer's Account
C.
Sales Account
D.
Purchases Account
Answer: _________
Question 1486:
Insurance expenses paid to bring an equipment from the place of purchase to the place of installation is a type of
A.
Revenue expenditure
B.
Capital expenditure
C.
Deferred revenue expenditure
D.
Operating expense
Answer: _________
Question 1487:
In case of Installment Payment System, which one of the following statements is not true?
A.
Payment of purchase price is made in agreed installments
B.
On default of payment of installment, seller has a right to take back the goods
C.
Purchaser prepares Assets Account, Seller's Account and Interest Suspense Account in his books
D.
Purchaser has right to sell the asset at any time after receiving the delivery
Answer: _________
Question 1488:
If sales is Rs. 8,00,000, cost of sales is Rs. 4,80,000 and indirect expenses is Rs. 1,20,000, then the net profit ratio will be:
A.
15%
B.
20%
C.
25%
D.
30%
Answer: _________
Question 1489:
For the purpose of final accounts, stock is normally valued according to:
A.
cost or market value whichever is lower
B.
market value
C.
replacement cost
D.
net realisable value
Answer: _________
Question 1490:
X, Y and Z are equal partners with fixed capitals of Rs. 5,00,000, Rs. 3,00,000 and Rs. 1,00,000, respectively. After closing the accounts for the year ending 31 st March 2019, it was discovered that the interest on capitals was provided @ 6% per annum instead of 5% per annum. In the adjusting entry
A.
X was debited with Rs. 2,000 and Z was credited with Rs. 2,000
B.
X was credited with Rs. 2,000 and Z was debited with Rs. 2,000
C.
Dr. X and Cr. Y by Rs. 2,000
D.
Cr. X and Dr. Y by Rs. 2,000
Answer: _________
Question 1491:
Total Assets Turnover = 4 Net profit = 10% Total assets = Rs. 50,000 The amount of Net profit would be:
A.
Rs. 5,000
B.
Rs. 10,000
C.
Rs. 20,000
D.
Rs. 25,000
Answer: _________
Question 1492:
When Partnership Act was passed?
A.
1930
B.
1932
C.
1950
D.
1956
Answer: _________
Question 1493:
Given, Current ratio = Rs. 2.5 Quick ratio = Rs. 2.5 Net working capital = Rs. 30,000 The amount of current liabilities will be
A.
Rs. 20,000
B.
Rs. 30,000
C.
Rs. 50,000
D.
Rs. 60,000
Answer: _________
Question 1494:
The expense incurred for increasing the productive capacity of business is called as
A.
Revenue expense
B.
Capital expenditure
C.
General expense
D.
Deferred revenue expenditure
Answer: _________
Question 1495:
Ashoka Ltd.purchased a machine from Tata & Sons for Rs. 1,50,000. This is
A.
A transaction
B.
An event
C.
A non financial data
D.
None of the above
Answer: _________
Question 1496:
Permanent working capital is generally financed through
A.
Long term Capital Funds
B.
Government Assistance
C.
Internal Financing
D.
Short term loans from Banks
Answer: _________
Question 1497:
Arrange the following items in the order of their appearance in the preparation of financial statements. 1. Net profit 2. Gross profit 3. Cash at bank
A.
1, 2, 3
B.
3, 2, 1
C.
2, 1, 3
D.
2, 3, 1
Answer: _________
Question 1498:
At the time of retirement of a partner, the existing profit and loss balance is transferred to which account?
A.
Realisation
B.
Revaluation
C.
Goodwill
D.
Existing partners capital
Answer: _________
Question 1499:
According to which of the following accounting concepts, the owner of the business is also considered a creditor to the extent of the capital?
A.
Money measurement concept
B.
Cost concept
C.
Dual aspect concept
D.
Business entity concept
Answer: _________
Question 1500:
Which of the following will result in flow of funds:
A.
Appreciation in value of buildings
B.
Depreciation of assets
C.
Purchase of furniture
D.
Writing off goodwill
Answer: _________
Question 1501:
Which is the best depreciation method in case of mineral deposit?
A.
Depletion method
B.
Revaluation method
C.
Annuity method
D.
None of the above
Answer: _________
Question 1502:
There is decrease in the ownership of the owners by-
A.
Issue of bonus share
B.
Redemption of debentures
C.
Redemption of preference share
D.
Purchase of building
Answer: _________
Question 1503:
Which of them are current liabilities? 1. Debentures 2. Prepaid rent 3. Interest accrued 4. Bank overdraft Select the correct answer:
A.
1, 2, 3 and 4
B.
Only 4
C.
2, 3 and 4
D.
1, 2 and 3
Answer: _________
Question 1504:
Responsibility accounting aims to
A.
ensure that a manager is punished if things go wrong
B.
ensure that costs become the responsibility of a specific manager
C.
allocate costs to all areas of a business
D.
reduce the costs that a department incurs
Answer: _________
Question 1505:
A firm stands dissolve in the following cases 1. the partners agree that the firm should be dissolved. 2. the business becomes legal. 3. in case of partnership at will, a partner gives notice of dissolution. 4. the court orders dissolution. Select the correct answer:
A.
1, 2 and 4
B.
Only 3
C.
Both 2 and 3
D.
Only 2
Answer: _________
Question 1506:
Kinds of share capital is:
A.
Bond
B.
Mutual fund
C.
Equity share capital
D.
All of these
Answer: _________
Question 1507:
Which of the following item will have credit balance?
A.
Deferred revenue income
B.
Income earned but not received
C.
Declared but unpaid dividend
D.
Deduction on issue of debentures
Answer: _________
Question 1508:
If the good will raised at the time of retirement of a partner is to be written off, then the capital accounts of the remaining partners are debited in:
A.
New profit sharing ratio
B.
Capital ratio
C.
Old profit sharing ratio
D.
Sacrificing ratio
Answer: _________
Question 1509:
Provision for doubtful debts account is a:
A.
Personal account
B.
Real account
C.
Nominal account
D.
None of these
Answer: _________
Question 1510:
An amount of Rs. 1000 is debited twice in the pass book. When overdraft as per the cash book is the starting point . . . . . . . .
A.
Rs. 1000 will be deducted
B.
Rs. 1000 will be added
C.
Rs. 2000 will be deducted
D.
Rs. 2000 will be added
Answer: _________
Question 1511:
Income and expenditure account is prepared by . . . . . . . . concerns.
A.
non-trading
B.
trading
C.
partnership
D.
sole proprietor
Answer: _________
Question 1512:
In purchase method, the excess of net asset of the transferor company acquired by the transferee company over the purchase consideration should be recognized as . . . . . . . .
A.
P&L
B.
goodwill
C.
general reserve
D.
capital reserve
Answer: _________
Question 1513:
Prepaid insurance is:
A.
Nominal account
B.
Personal account
C.
Real account
D.
Prepaid account
Answer: _________
Question 1514:
The balance of the petty cash book is . . . . . . . .
A.
an asset
B.
a liability
C.
an income
D.
an expenditur
Answer: _________
Question 1515:
Which English alphabet is similar to the shape of an account?
A.
I
B.
T
C.
H
D.
Y
Answer: _________
Question 1516:
Under the scheme of buyback of shares, the company in order to perform its obligations, is required to open an . . . . . . . . account.
A.
fixed deposit
B.
escrow deposit
C.
savings deposit
D.
current deposit
Answer: _________
Question 1517:
The credit balance of bank account indicates:
A.
amount payable by the bank
B.
amount payable to the bank
C.
cash at bank
D.
loan from bank
Answer: _________
Question 1518:
A private company does not:
A.
Restrict the right to transfer the shares
B.
Limit the number of its members
C.
Appoint auditor
D.
Publicly invite subscription to shares
Answer: _________
Question 1519:
A and B are partners sharing profit and losses in 5 : 3. They decided to admit C and provide him $${frac{3}{{10}}^{{ ext{th}}}}$$ share in profits. what will be new profit sharing ratio between A, B and C?
A.
10 : 20 : 30
B.
1 : 7 : 2
C.
3 : 6 : 1
D.
35 : 21 : 24
Answer: _________
Question 1520:
In case of insolvency of a partner, any balance in Reserve Fund or Profit and Loss A/c is distributed in all partners
A.
equally
B.
in profit sharing ratio
C.
in the ratio of their capital
D.
none of the above
Answer: _________
Question 1521:
Inventory of a manufacturing enterprise includes:
A.
Raw materials
B.
Work in progress
C.
Finished stock
D.
All the above
Answer: _________
Question 1522:
Cost, salvage and useful life of an asset are Rs. 10,000, Rs. 1,000 and 3 years respectively. The amount of depreciation as per sum of the years digit method for the first year will be
A.
Rs. 5,000
B.
Rs. 4,500
C.
Rs. 3,333
D.
Rs. 3,000
Answer: _________
Question 1523:
Excess of cost of investment over paid-up value of the shares is considered as
A.
goodwill
B.
capital reserve
C.
minority interest
D.
none of the above
Answer: _________
Question 1524:
Loss caused by theft of cash by cashier during business hours is a loss of
A.
Revenue nature
B.
Capital nature
C.
Deferred revenue nature
D.
None of these
Answer: _________
Question 1525:
A company cannot redeem its debentures
A.
Out of accumulated profits
B.
Out of accumulated losses
C.
By purchase of own debentures from market
D.
By conversion of debentures into shares
Answer: _________
Question 1526:
Statement I If the going concern concept is no longer valid, then all prepaid assets would be completely written-off immediately. Statement II Also land held as an investment would be valued at its realisable value.
A.
Both statements are correct
B.
Both statements are incorrect
C.
Statement I is correct, but Statement II is incorrect
D.
Statement I is incorrect, but Statement II is correct
Answer: _________
Question 1527:
Match the following: List-I List-II a. At the beginning of each month 1. 5 and 1 / 2 month b. At the end of each month quarter 2. 6 and 1 / 2 month c. At the beginning of each quarter 3. 4 and 1 / 2 month d. At the end of each 4. 7 and 1 / 2 month
A.
a-2, b-1, c-4, d-3
B.
a-4, b-3, c-2, d-1
C.
a-4, b-3, c-1, d-2
D.
a-3, b-4, c-1, d-2
Answer: _________
Question 1528:
Using 'lower of cost and net realisable value' for the purpose of inventory valuation is the implementation of which of the following concepts?
A.
The going concern concept
B.
The separate entity concept
C.
The prudence concept
D.
Matching concept
Answer: _________
Question 1529:
The concept of 'separate entity' is applicable to which of the following types of businesses?
A.
Sole proprietorship
B.
Corporation
C.
Partnership
D.
All of the above
Answer: _________
Question 1530:
Does prudence concept allow a business to build substantially higher reserves or provisions than that are actually required?
A.
Yes
B.
No
C.
To some extent
D.
It depends on the type of business
Answer: _________
Question 1531:
The revenue recognition principle dictates that all types of incomes should be recorded or recognized when
A.
Cash is received
B.
At the end of accounting period
C.
When they are earned
D.
When interest is paid
Answer: _________
Question 1532:
The matching concept matches which of the following?
A.
Asset with liabilities
B.
Capital with income
C.
Revenues with expenses
D.
Expenses with capital
Answer: _________
Question 1533:
The allocation of owner's private expenses to his/her business violates which of the following?
A.
Accrual concept
B.
Matching concept
C.
Separate business entity concept
D.
Consistency concept
Answer: _________
Question 1534:
The going concern concept assumes that
A.
The entity continue running for forseeable future
B.
The entity continue running until the end of accounting period
C.
The entity will close its operation in 10 years
D.
The entity can't be liquidated
Answer: _________
Question 1535:
American companies prepare their financial statement in Dollars whereas Japanese companies produce financial statement in Yen. This is an example of:
A.
Stable monetary unit concept
B.
Unit of measurement concept
C.
Money value concept
D.
Current swap concept
Answer: _________
Question 1536:
Which of the following is time spann into which the total life of a business is divided for the purpose of preparing financial statements?
A.
Fiscal year
B.
Calendar year
C.
Accounting period
D.
Accrual period
Answer: _________
Question 1537:
Information about an item is _______ if its ommission or misstatement might influence the financial decision of the users taken on the basis of that information
A.
Concrete
B.
Complete
C.
Immaterial
D.
Material
Answer: _________
Question 1538:
Legal expenses in respect of claims of an insurance company is shown in . . . . . . . .
A.
P&L a/c
B.
Revenue a/c
C.
Balance sheet
D.
Surplus a/c
Answer: _________
Question 1539:
Where separate set of books are maintained, the ledger accounts required are . . . . . . . .
A.
Memorandum joint venture and joint venture account with the other party
B.
Joint venture account and the personal account of the other party
C.
Joint bank account, co-venturer capital accounts and joint bank account
D.
Joint bank account and joint venture account with the other party
Answer: _________
Question 1540:
. . . . . . . . represents that part of discount received during the year by a bank which relates to the next accounting year.
A.
Trade discount
B.
Normal discount
C.
Unexpired discount
D.
Cash discount
Answer: _________
Question 1541:
What is the correct sequence of the following in the preparation of periodical financial statements? I. preparation of Balance sheet II. preparation of Funds flow statement III. preparation of Trial balance IV. preparation of Profit/Loss statement Select the correct answer from the options given below and mark your answer sheet accordingly
A.
IV, II, I, III
B.
III, IV, I, II
C.
II, IV, III, I
D.
I, III, II, IV
Answer: _________
Question 1542:
Cash book prepared on imprest system is:
A.
two column cash book
B.
cash book
C.
petty cash book
D.
purchase book
Answer: _________
Question 1543:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I (Accounting concept) List-II (Principle involved) a. Consistency 1. Losses are anticipated and accounted for in advance but profits are not accounted for until realised. b. Comparability 2. All the relevant financial informations should be summarised and presented in the accounting statements. c. Conservatism 3. Accounting procedures in an entity should be followed uniformly from period to period. d. Disclosure 4. Accounting statement of different periods of an entity and those of different entities of a period should be based on the same accounting principles and procedures. 5. Personal Judgement of accountants should not influence accounting measurements.
A.
a-4, b-3, c-5, d-2
B.
a-3, b-4, c-1, d-2
C.
a-4, b-3, c-1, d-5
D.
a-3, b-4, c-2, d-5
Answer: _________
Question 1544:
Dividend declared in between two annual general meeting is called . . . . . . . .
A.
unclaimed dividend
B.
interim dividend
C.
proposed dividend
D.
scrip dividend
Answer: _________
Question 1545:
Goods destroyed by fire should be credited to:
A.
purchases account
B.
sales account
C.
loss of goods by fire account
D.
insurance account
Answer: _________
Question 1546:
Use of subsidiary books can be made by:
A.
Only large business concerns
B.
Only small business concerns
C.
Only medium size business concerns
D.
All of these
Answer: _________
Question 1547:
Double entry principle means:
A.
Having debit for every credit and similarly credit for each debit
B.
Writing all the entries twice in the book
C.
Maintaining the double account for all business transactions
D.
Writing two times the same entry
Answer: _________
Question 1548:
Minimum number of members in case of public company is
A.
7
B.
5
C.
2
D.
1
Answer: _________
Question 1549:
In Internal reconstruction
A.
No company is dissolved
B.
Only one company is dissolved
C.
One or more companies are dissolved
D.
Two or more companies are dissolved
Answer: _________
Question 1550:
While preparing a Fund Flow Statements the provision for taxation should be taken as:
A.
A current liability only
B.
An appropriation of profit only
C.
As a current liability or an appropriation of profit
D.
Both as a current liability as well as an appropriation of profit
Answer: _________
Question 1551:
The Share Capital, General Reserve and Profit and Loss Account (Cr.) of B. Ltd. stood at Rs. 6,00,000 (divided into 60,000 shares of Rs. 10 each), Rs. 1,20,000 and Rs. 1,80,000 respectively. A majority of 40,000 shares had been acquired by A. Ltd. and at the time of acquisition undistributed profit and General Reserve amounted to Rs. 1,00,000. The present value of the minority interest would be:
A.
Rs. 2,00,000
B.
Rs. 2,60,000
C.
Rs. 2,66,667
D.
Rs. 3,00,000
Answer: _________
Question 1552:
Which of the following is not intangible asset?
A.
Goodwill
B.
Creditor
C.
Copyright
D.
Patent
Answer: _________
Question 1553:
Journal is a book of:
A.
First entry
B.
Original entry
C.
Datewise entry
D.
All of the above
Answer: _________
Question 1554:
When forfeited share are re-issued then the balance of share forfeiture account is transferred to:
A.
Share capital
B.
Capital reserve
C.
Share allotment
D.
Share first call
Answer: _________
Question 1555:
As per the matching concept, revenue - ? = profit
A.
Expenses
B.
Liabilities
C.
Losses
D.
Assets
Answer: _________
Question 1556:
Given, Net Loss Rs. 20,000 Depreciation on machinery Rs. 50,000 Amortisation of Goodwill Rs. 5,000 Loss on sale of old furniture Rs. 3,500 Profit on sale of land Rs. 8,500 Provision for Bad Debts Rs. 2,500 Funds from operation are
A.
Rs. 25,000
B.
Rs. 30,000
C.
Rs. 32,500
D.
Rs. 38,500
Answer: _________
Question 1557:
Partner X and Y withdraws Rs. 3,000 and Rs. 5,000 in the beginning of every month during the year. Interest on drawing @ 10% p.a. for the year will be
A.
Rs. 5,200
B.
Rs. 5,100
C.
Rs. 5,150
D.
Rs. 9,600
Answer: _________
Question 1558:
The practice of valuation of inventory 'at cost or market price, whichever is lower' is an example of:
A.
Cost Concept
B.
Consistency Concept
C.
Conservatism Concept
D.
Realization Concept
Answer: _________
Question 1559:
Which of the following statements is incorrect?
A.
When proposed dividend does not exceed 10%. It is not obligatory on the company to transfer any profit to its reserve
B.
Capital redemption reserve can be utilised for writing off miscellaneous expenses and losses
C.
Dividends is not payable on the calls paid in advance by shareholders
D.
Reserves created by revaluation of fixed assets are not permitted to be capitalised
Answer: _________
Question 1560:
In order to implement the provisions of partnership deed, the firm prepares
A.
Profit and Loss Adjustment Account
B.
Profit and Loss Appropriation Account
C.
Revaluation Account
D.
Profit and Loss Account
Answer: _________
Question 1561:
A Ltd has allotted 10,000 shares to the applicants of 14,000 shares on pro-rata basis, The amount payable an application is Rs. 2. Mr. X applied for 420 shares. The number of shares allotted and the amount carried forward for adjustment against allotment money due from X is
A.
60 shares, Rs. 120
B.
320 shares, Rs. 200
C.
340 shares, Rs. 160
D.
300 shares, Rs. 240
Answer: _________
Question 1562:
The charter of a company is its:
A.
Prospectus
B.
Memorandum of Association
C.
Certificate of Incorporation
D.
Article of Association
Answer: _________
Question 1563:
Donation received during the year Rs. 5,000. Donation received in advance Rs. 500, outstanding donation Rs. 300. Amount credited in Income and expenditure will be
A.
Rs. 5,100
B.
Rs. 4,800
C.
Rs. 5,500
D.
Rs. 5,300
Answer: _________
Question 1564:
In the absence of an agreement, interest to be allowed to the partners on their capital, according to Indian Partnership Act, will be at the rate of:
A.
5%
B.
6%
C.
9%
D.
0%
Answer: _________
Question 1565:
Which of the following errors will not be disclosed by Trial Balance?
A.
Errors of Commission
B.
Errors of Principle
C.
Errors of finding balance
D.
None of the above
Answer: _________
Question 1566:
Which of the following items is not taken in to account while computing Current Ratio?
A.
Sundry Creditors
B.
Sundry Debtors
C.
Furniture
D.
Bank Overdraf
Answer: _________
Question 1567:
Bank Reconciliation statement is the comparision of a bank statement (sent by bank) with the
A.
Cash receipt journal
B.
Cash payment journal
C.
Cash book
D.
Financial statements
Answer: _________
Question 1568:
A cheque returned by bank marked "NSF" means that
A.
Bank can't verify your identity
B.
There are not sufficient funds in your account
C.
Cheque has been forged
D.
Cheque can't be cashed being illegal
Answer: _________
Question 1569:
Bank Reconciliation statement is prepared by
A.
Accountant of business
B.
Manager of business
C.
Controller of business
D.
Accountant of the bank
Answer: _________
Question 1570:
Unpresented cheques are also referred to as
A.
Uncollected cheques
B.
Uncredited cheques
C.
Outstanding cheques
D.
Bounced cheques
Answer: _________
Question 1571:
_______ are cheques that are issued by the business but not yet presented to bank for payment
A.
Uncollected cheques
B.
Uncredited cheques
C.
Outstanding cheques
D.
Bounced cheques
Answer: _________
Question 1572:
Accrued expenses are considered as
A.
Asset
B.
Liability
C.
Gain
D.
Income
Answer: _________
Question 1573:
Prepaid expenses are considered as
A.
Asset
B.
Liability
C.
Loss
D.
Capital
Answer: _________
Question 1574:
Earned but not yet received income is treated as
A.
Asset
B.
Liability
C.
Loss
D.
Capital
Answer: _________
Question 1575:
Revenue earned but not yet received by the business is known as
A.
Contra asset revenue
B.
Accrued expenses
C.
Accrued revenue
D.
Unearned revenue
Answer: _________
Question 1576:
Which of the following is not regarded as the fundamental concept that is identified by IAS-1?
A.
The going concern concept
B.
The separate entity concept
C.
The prudence concept
D.
Correction concept
Answer: _________
Question 1577:
Ledger is also called . . . . . . . .
A.
principal book of accounts
B.
cash books
C.
subsidiary books
D.
petty cash book
Answer: _________
Question 1578:
The fundamental accounting equation, Assets = Equities + liabilities is the formal expression of:
A.
dual aspect concept
B.
matching concept
C.
going - concern concept
D.
money measurement concept
Answer: _________
Question 1579:
Which of the following errors are revealed by trial balance?
A.
Omission of an amount from the trial balance
B.
Posting of the wrong amount
C.
Wrong totalling of the book of original entry
D.
None of these
Answer: _________
Question 1580:
When a bill is drawn by A on B, it is debited in the books of A to . . . . . . . .
A.
Cash account
B.
B's account
C.
Bills Receivable account
D.
Bills Payable account
Answer: _________
Question 1581:
A business entity has assets of Rs. 26,000 and liabilities of Rs. 6,000. Owner's equity in this case is:
A.
Rs. 32,000
B.
Rs. 26,000
C.
Rs. 20,000
D.
Rs. 6,000
Answer: _________
Question 1582:
Excess of income over expenditure is shown on the . . . . . . . . side of income and expenditure account.
A.
Credit
B.
Debit
C.
Upper
D.
Lower
Answer: _________
Question 1583:
Final Account is:
A.
one account
B.
two account
C.
three account
D.
four account
Answer: _________
Question 1584:
When a bill is drawn by A on B and before the date of maturity, B becomes insolvent then in the books of A it is debited to . . . . . . . .
A.
Bills receivable account
B.
Bank account
C.
B's account
D.
Bank for collection of bills
Answer: _________
Question 1585:
When an existing company takes over the business of one or more existing companies, it is called . . . . . . . .
A.
amalgamation
B.
absorption
C.
internal reconstruction
D.
None of these
Answer: _________
Question 1586:
Both assets and owners equity would be increased by . . . . . . . .
A.
capital brought in
B.
purchase of an asset on credit
C.
payment of creditors
D.
proprietors drawings
Answer: _________
Question 1587:
Creating provision for bad and Doubtful debts is based on which accounting concept?
A.
Principal of disclosure
B.
Concept of stability
C.
Conservatism concept
D.
Principle of consistency
Answer: _________
Question 1588:
Who among the following can be appointed as a debenture trustee?
A.
A scheduled bank carrying on commercial activity
B.
Beneficiary holding shares in a company
C.
Beneficiary entitled to receive the money which is to be paid by the company to the debenture trustee
D.
Who is not subject to any gurantee in respect of principal loans reserved by way of debentures or interest thereon
Answer: _________
Question 1589:
The most rigorous test of liquidity is:
A.
Current Ratio
B.
Acid Test Ratio
C.
Absolute Ratio
D.
Stock Turnover Ratio
Answer: _________
Question 1590:
A machine was purchased for Rs. 10,000 and its life was estimated to be 3 years, and at the end of its life, its book value was Rs. 5,120. If depreciation is calculated according to Diminishing Balance method, the rate of depreciation would be:
A.
25%
B.
15%
C.
20%
D.
10%
Answer: _________
Question 1591:
Bill discounted from bank is
A.
Contingent liability
B.
Current liability
C.
Current assets
D.
None of the above
Answer: _________
Question 1592:
Profit on sale of sinking fund investment will be debited to
A.
Profit and Loss A/c
B.
Sinking Fund A/c
C.
Sinking Fund Investment A/c
D.
Revaluation A/c
Answer: _________
Question 1593:
The current cost on producing 5 units is Rs. 100/-. If fixed cost is Rs. 40/- then what will be the total average cost of 5 units
A.
Rs. 28
B.
Rs. 60
C.
Rs. 12
D.
Rs. 140
Answer: _________
Question 1594:
When funds from operations are Rs. 42,000 and amount of depreciation on plant and machinery is Rs. 5,000, the amount of net profit will be
A.
Rs. 37,000
B.
Rs. 42,000
C.
Rs. 47,000
D.
a sum which cannot be computed
Answer: _________
Question 1595:
Opening Debtors Rs. 10,000 Sales Returns Rs. 7,000 Bad Debts Rs. 3,000 Cash Received from Debtors Rs. 40,000 Closing Debtor Rs. 13,000 Find out the amount of credit sales.
A.
Rs. 63,000
B.
Rs. 53,000
C.
Rs. 46,000
D.
None of the above
Answer: _________
Question 1596:
Net working capital is equal to
A.
Excess of total assets over total liabilities
B.
Excess of current assets over current liabilities
C.
Aggregate current assets of the firm
D.
Excess of total assets over total current liabilities
Answer: _________
Question 1597:
Cash selling of stock to current ratio-
A.
Increases
B.
Reduces
C.
Remains unaffected
D.
None of these
Answer: _________
Question 1598:
Assertion (A): Sinking fund is a charge against profit and loss account. Reason (R): Sinking fund is created for repayment of a long-term liability. Which of the following statements is correct?
A.
(A) is correct, but (R) is incorrect
B.
Both (A) and (R) are correct
C.
(A) is incorrect, but (R) is correct
D.
Both (A) and (R) are incorrect
Answer: _________
Question 1599:
Sale of long term investment indicates:
A.
a change in current assets
B.
application of funds
C.
increase in working capital
D.
source of funds
Answer: _________
Question 1600:
Which of the following is a non operating expense?
A.
Salary of Managing Director
B.
Depreciation
C.
Advertisement expenditure
D.
Interest on loan
Answer: _________
Question 1601:
In the case of dissolution of a firm, which one of the following statements is correct?
A.
All the types of assets are not transferred to Realisation A/c
B.
Accumulated Profit & Loss is transferred to Realisation A/c
C.
All the types of assets are transferred to Realisation A/c
D.
Contingent liabilities are transferred to Realisation A/c
Answer: _________
Question 1602:
Indicate the item that appears in the surplus account
A.
Proposed dividend
B.
Provision for taxation
C.
Contribution to provident fund
D.
None of these
Answer: _________
Question 1603:
Consider the following statements. 1. Inventory includes raw material, finished goods and goods in process. 2. Inventory is the part of working capital. 3. Inventory includes goods likely to be purchased in the coming months. Which of the statements given above are correct?
A.
Both 1 and 2
B.
Both 2 and 3
C.
Both 1 and 3
D.
All of the above
Answer: _________
Question 1604:
Which of the following is not incorporated in the Partnership Act?
A.
Profit and loss are to be shared equally
B.
No interest is to be charged on capital
C.
Allloans are to be charged interest @ 6%p.a
D.
All drawings are to be charged interest
Answer: _________
Question 1605:
A and B are partners sharing profits in the ratio of 2 : 1 They admit C who agrees that his share of goodwill Rs. 15,000 be debited to his capital he is required to bring in. The future profit sharing ratio of A, B and C will be 2 : 3 : 3 respectively. A's Capital account in lieu of goodwill will be credited by:
A.
Rs. 10,000
B.
Rs. 15,000
C.
Rs. 16,533
D.
Rs. 16,667
Answer: _________
Question 1606:
The primary function of the book-keeping is to
A.
Designing the system of recording the transactions
B.
Assigning the responsibility to accountant
C.
Recording of financial data
D.
Classifying the recorded data
Answer: _________
Question 1607:
The main purpose of this . . . . . . . . accounting is to ascertain profit or loss during a specific period, to show financial position of the business.
A.
financial accounting
B.
cost accounting
C.
management account
D.
human resource accounting
Answer: _________
Question 1608:
Given that the value of furniture on 1 st Januray 1993 is Rs. 8,000, furniture purchased during the year is Rs. 4,000, sale of furniture no loss no profit basis is Rs. 2,000, and the furniture is valued at Rs. 7,000 on 31 st December 1993, the depreciation for the year 1993 will be:
A.
Rs. 1,000
B.
Rs. 3,000
C.
Rs. 5,000
D.
Rs. 7,000
Answer: _________
Question 1609:
The preparation of a Trial balance helps in:
A.
Locating errors of principle
B.
Locating errors of ommission
C.
Locating clerical errors
D.
Locating compensatory errors
Answer: _________
Question 1610:
Rebate on bills discounted is . . . . . . . . from interest and discount in the P/L account.
A.
added
B.
deducted
C.
not deducted
D.
None of these
Answer: _________
Question 1611:
Public limited companies cannot issue . . . . . . . .
A.
equity shares
B.
deferred shares
C.
preference shares
D.
right shares
Answer: _________
Question 1612:
When a bill is discharged, the acceptor debits . . . . . . . .
A.
Creditor's account
B.
Cash account
C.
Bills payable account
D.
Bills receivable account
Answer: _________
Question 1613:
When a bill drawn by A on B (and retained till the date of maturity is dishonoured on the due date), it is debited (in the books of A) to . . . . . . . .
A.
Bill Receivable Account
B.
B's Account
C.
Bills Payable Account
D.
Cash Account
Answer: _________
Question 1614:
If the rate of gross profit on sales is 25% and the cost of goods sold is Rs. 75,000, then the amount of total sales will be:
A.
Rs. 1,00,000
B.
Rs. 93,750
C.
Rs. 92,150
D.
Cannot be known
Answer: _________
Question 1615:
If the cost of goods sold is Rs. 1,20,000 and the rate of gross loss is $$frac{1}{4}$$ on sales, the amount of sales is:
A.
Rs. 1,20,000
B.
Rs. 90,000
C.
Rs. 80,000
D.
Rs. 96,000
Answer: _________
Question 1616:
Goods of the value of Rs. 1500 taken by the proprietor for his personal use should be debited to:
A.
drawing account
B.
sales account
C.
purchases account
D.
stock account
Answer: _________
Question 1617:
Audit of partnership firm's accounts is prescribed by:
A.
Indian partnership Act
B.
Indian Companies Act
C.
Institute of Chartered Accountants of India Act
D.
None of the above (A), (B) and (C)
Answer: _________
Question 1618:
Which of the following is freely transferable:
A.
Share Warrant
B.
Share Certificate
C.
Debenture
D.
Term Deposit Receipt
Answer: _________
Question 1619:
Accounting Standard-3 is in respect of:
A.
Fund Flow Statement
B.
Cash Flow Statement
C.
Financial Ratios
D.
None of the above
Answer: _________
Question 1620:
In which of the following methods, the asset account is shown at its original cost throughout its life?
A.
Annuity Method
B.
Depreciation Fund Method
C.
Sum of Year's Digits Method
D.
Machine Hour Rate Mehod
Answer: _________
Question 1621:
Which type of company's shares are freely transferable?
A.
Private company
B.
Public company
C.
Both A and B
D.
None of these
Answer: _________
Question 1622:
X, Y and Z are sharing profits in the ratio of 6 : 5 : 3. A is admitted into partnership for $${frac{1}{8}^{{ ext{th}}}}$$ share. The sacrificing ratio of X, Y and Z is
A.
equal
B.
6 : 5 : 3
C.
$$frac{5}{{14}}:frac{4}{{14}}:frac{5}{{14}}$$
D.
4 : 5 : 5
Answer: _________
Question 1623:
Current ratio 2.7 : 1, Quick Ratio 1.8 : 1, current liabilities Rs. 60,000, Value of stock will be:
A.
Rs. 60,000
B.
Rs. 54,000
C.
Rs. 1.08,000
D.
Rs. 1,62,000
Answer: _________
Question 1624:
Managerial accounting is related to which of the following?
A.
Presentation of accounting data
B.
Recording of accounting data
C.
Recording the cost data
D.
All of these
Answer: _________
Question 1625:
At the time of forfeiture of shares, the share capital A/c is
A.
debited with the face value of forfeited shares
B.
credited with called-up amount of forfeited shares
C.
debited with the called-up amount of forfeited shares
D.
debited with the amount received on forfeited shares
Answer: _________
Question 1626:
The standard is contained in the cost method-
A.
Fixing the estimated cost
B.
Determination of standard cost
C.
Fixing the budgeted cost
D.
In minimizing losses
Answer: _________
Question 1627:
The strongest letter of credit is
A.
Confirmed and irrecoverable
B.
Cancelable
C.
Irrecoverable
D.
Confirmed
Answer: _________
Question 1628:
Profit earned before acquisition of share is treated as
A.
capital profit
B.
revenue profit
C.
general reserve
D.
revaluation loss
Answer: _________
Question 1629:
Arrange the following steps of preparation of consolidated balance sheet correctly. 1. Calculation of pre-acquisition profits 2. Calculation of minority interest 3. Calculation of post-acquisition profits 4. Calculation of cost of capital
A.
4, 3, 2, 1
B.
2, 4, 1, 3
C.
3, 1, 4, 2
D.
3, 4, 1, 2
Answer: _________
Question 1630:
Match the following: List-I List-II a. Interest on partner's capital is chargeable to the extent of available . . . . . . . . 1. competing b. The amount due to the retiring partner can be made by . . . . . . . . payment method. 2. mutual c. A partner must not carry on a . . . . . . . . business. 3. profit d. Partners are . . . . . . . . for each other. 4. lumpsum
A.
a-4, b-3, c-1, d-2
B.
a-3, b-4, c-1, d-2
C.
a-3, b-4, c-2, d-1
D.
a-4, b-3, c-2, d-1
Answer: _________
Question 1631:
In the case of retirement of a partner, the total amount of goodwill is credited to the account of:
A.
retiring partners only
B.
the remaining partners only
C.
all partners
D.
none of the above
Answer: _________
Question 1632:
An asset is purchased for Rs. 50,000 on which depreciation is charged according to straight line method. The useful life of asset is 10 years and its residual value is Rs. 10,000. The rate of depreciation will be
A.
20%
B.
18%
C.
10%
D.
8%
Answer: _________
Question 1633:
Income and Expenditure accounts shows-
A.
Gross profit
B.
Net profit
C.
Financial condition
D.
None of the above
Answer: _________
Question 1634:
Match the items of the following two lists List-I List-II a. Zero-base budgeting 1. Internal reconstruction b. Goodwill or capital reserve 2. Earnings per share c. Reduction of capital 3. Control of expenditure d. Basic and diluted 4. Business combination
A.
a-3, b-4, c-2, d-1
B.
a-4, b-3, c-1, d-2
C.
a-4, b-1, c-3, d-2
D.
a-3, b-4, c-1, d-2
Answer: _________
Question 1635:
Match List-I with List-II and select the correct answer: List-I List-II a. Cost of pulling down an old structure preparatory to construct a new one 1. Capital loss b. Purchase of a new spark plug for an old car 2. Revenue loss c. Expenditure incurred on Research and Development 3. Capital expenditure d. Theft by cashier during business hours 4. Revenue expenditure e. Motor car burnt during a riot 5. Deferred revenue expenditure
A.
a-4, b-3, c-5, d-1, e-2
B.
a-3, b-4, c-5, d-2, e-1
C.
a-2, b-5, c-3, d-1, e-4
D.
a-5, b-4, c-3, d-2, e-1
Answer: _________
Question 1636:
Shares are of following types
A.
4
B.
3
C.
2
D.
5
Answer: _________
Question 1637:
Which one of the following methods of inventory costing yields highest taxable income?
A.
FIFO
B.
LIFO
C.
AVCO or averrage cost
D.
Standard cost method
Answer: _________
Question 1638:
Which one of the following methods of inventory costing produces ending stock cost close to the market value of the inventory?
A.
FIFO
B.
LIFO
C.
AVCO or averrage cost
D.
None of the above
Answer: _________
Question 1639:
Which one of the following inventory costing methods is supposed to issue the most recently purchased goods?
A.
FIFO
B.
LIFO
C.
AVCO or averrage cost
D.
Moving average
Answer: _________
Question 1640:
Opening inventory + Net purchases = ?
A.
Ending inventory
B.
Closing stock
C.
Cost of goods manufactured
D.
Cost of goods available for sale
Answer: _________
Question 1641:
Cost of goods available for sale - closing inventory = ?
A.
Opening inventiry
B.
Cost of opening finished goods inventory
C.
Work in progress ending inventory
D.
Cost of goods sold
Answer: _________
Question 1642:
NRV or net realizable value of inventory is the expected selling price or market value less
A.
Carry value of the inventory
B.
Expenses necessary to complete sale
C.
Cost of the stock
D.
Replacement cost
Answer: _________
Question 1643:
Under which method of inventory costing, a pre-determined cost is assigned to all items of inventory?
A.
Replacement cost method
B.
Standard cost method
C.
AVCO or average cost
D.
FIFO method
Answer: _________
Question 1644:
Term 'Credit' means _____ by the business
A.
Receiving of benefits
B.
It has no effect on business
C.
Providing benefits
D.
It depends upon items
Answer: _________
Question 1645:
When a liability is reduced or decreased, it is recorded on the:
A.
Left or credit side of the account
B.
Right or debit side of the account
C.
Right or credit side of the account
D.
Left or debit side of the account
Answer: _________
Question 1646:
When capital is increased by an amount, it is recorded on the:
A.
Left or credit side of the account
B.
Right or debit side of the account
C.
Right or credit side of the account
D.
Left or debit side of the account
Answer: _________
Question 1647:
Noting charges are paid at the time of
A.
Renewal of the bill
B.
Retirement of the bill
C.
Dishonor of the bill
D.
None of the above
Answer: _________
Question 1648:
Dismantling and demolition charges is a
A.
Deferred Revenue expenditure
B.
Capital expenditure
C.
Revenue expenditure
D.
None of the above
Answer: _________
Question 1649:
The owner of consignment stock is
A.
Consignor
B.
Consignee
C.
Debtors
D.
None of the above
Answer: _________
Question 1650:
Which account is the odd one out?
A.
Office furniture and equipment
B.
Freehold land and building
C.
Stock of raw materials
D.
Plant and machinery
Answer: _________
Question 1651:
X draws a bill on Y. X endorsed the bill to Z. ____ will be the payee of the bill.
A.
X
B.
Y
C.
Z
D.
None of the above
Answer: _________
Question 1652:
Interest on drawings is ___ for the business
A.
Loss
B.
Expense
C.
Gain
D.
None of the above
Answer: _________
Question 1653:
Narrations are given at the end of
A.
Final accounts
B.
Trial Balance
C.
Each Ledger account
D.
Each journal entry
Answer: _________
Question 1654:
The basic consideration(s) in distinction between capital and revenue expenditure is/are
A.
Nature of business
B.
Effect on revenue generating capacity of the business
C.
Purpose of expenses
D.
All of the above
Answer: _________
Question 1655:
"Treating a revenue expenditure as a capital expenditure" is an example of
A.
Compensating error
B.
Error of principle
C.
Error of omission
D.
Error of commission
Answer: _________
Question 1656:
If an effect of an error is cancelled by the effect of some other error, it is commonly known as
A.
Error of principle
B.
Compensatory errors
C.
Error of omission
D.
Error of commission
Answer: _________
Question 1657:
The excess of purchase consideration over net assets of the transferor company acquired by the transferee company should be recognized as . . . . . . . . in purchase method.
A.
capital reserve
B.
general reserve
C.
goodwill
D.
P&L
Answer: _________
Question 1658:
The amount spent on unsuccessful patent rights is a:
A.
Capital expenditure
B.
Deferred revenue expenditure (if the amount is large)
C.
Revenue expenditure (even though the amount is large)
D.
None of these
Answer: _________
Question 1659:
In order to determine the amount of sales, to which of the following records one should refer?
A.
Sales book
B.
Sales account
C.
Journal
D.
Total debtors account
Answer: _________
Question 1660:
. . . . . . . . is the account created in connection with internal reconstruction.
A.
Realization a/c
B.
Capital reduction a/c
C.
Adjustment a/c
D.
CRR a/c
Answer: _________
Question 1661:
Life membership fee received by a club are shown in . . . . . . . .
A.
balance sheet
B.
profit and loss account
C.
income and expenditure account
D.
revenue account
Answer: _________
Question 1662:
Trade discount allowed on sales is:
A.
debited to customer's account
B.
credited to customer's account
C.
debited to profit and loss account
D.
None of these
Answer: _________
Question 1663:
Profits can be fraudulently inflated by:
A.
Suppression of sales returns
B.
Treating capital expenditure as revenue
C.
Overestimation of liabilities
D.
Omission of prepaid expenses
Answer: _________
Question 1664:
NPA for a period not exceeding 12 months is called as . . . . . . . . asset.
A.
loss
B.
standard
C.
sub-standard
D.
doubtful
Answer: _________
Question 1665:
Which one of the following entry is not recorded in the residuary journal?
A.
Opening entry
B.
Closing entry
C.
Adjustment entry
D.
Credit sales
Answer: _________
Question 1666:
Credit sales are recorded in:
A.
sales book
B.
cash book
C.
journal proper
D.
purchases book
Answer: _________
Question 1667:
For allocation of income and expenses, the date of . . . . . . . . is not considered.
A.
take over
B.
commencement
C.
year end
D.
all of these
Answer: _________
Question 1668:
Subscriptions outstanding from the members of a club are shown on the:
A.
Liability side of the Balance Sheet
B.
Assets side of the Balance Sheet
C.
Debit side of the Income and Expenditure Account
D.
Payment side of Receipt and Payment Account
Answer: _________
Question 1669:
Preference shares can be reduced out of:
A.
Profits available for dividend
B.
Proceeds of a fresh issue of shares
C.
Both A and B
D.
Capital profits
Answer: _________
Question 1670:
Which of the following statement is true?
A.
Minor cannot be admitted as a partner
B.
Minor can be admitted as a partner only into the benefits of the partnership
C.
Minor can be admitted as a partner, but his rights and liabilities are the same as the adult partner
D.
None of the above
Answer: _________
Question 1671:
Which of the following ratios is a Primary Ratio:
A.
Current Ratio
B.
Return on Investment (ROI)
C.
Debt-Equity Ratio
D.
Inventory-Turnover Ratio
Answer: _________
Question 1672:
Generally, . . . . . . . . method is used for preparation of trial balance
A.
Total method
B.
Balance method
C.
Total and balance method
D.
None of the above
Answer: _________
Question 1673:
Under which of the following methods the asset is shown at original cost throughout its life:
A.
Straight line
B.
Diminishing balance
C.
Depreciation fund
D.
None of these
Answer: _________
Question 1674:
Cash flow statement is prepared by-
A.
Balance sheet
B.
Profit and loss account
C.
Additional informations
D.
All of these
Answer: _________
Question 1675:
When debentures are issued as security against a loan then such as issue of debentures is called:
A.
Secured
B.
Partly secured
C.
Collateral security
D.
Bilateral security
Answer: _________
Question 1676:
Assets very easily convertible into cash are:
A.
Current assets
B.
Fixed assets
C.
Fictitious assets
D.
Liquid assets
Answer: _________
Question 1677:
Debenture is also named as
A.
Share
B.
Bond
C.
Reserve
D.
Equity
Answer: _________
Question 1678:
Which of the following is the most important document of the company?
A.
Memorandum of association
B.
Articles of association
C.
Annual report
D.
Prospectus
Answer: _________
Question 1679:
Authorized share capital is also known as
A.
Registered capital
B.
Issued capital
C.
Paid up capital
D.
Called up capital
Answer: _________
Question 1680:
The maximum amount with which a company is registered is called
A.
Authorized capital
B.
Issued capital
C.
Paid up capital
D.
Called up capital
Answer: _________
Question 1681:
Which one of the following is NOT true about revenue expenditure?
A.
These are the running expenses of the business
B.
They improve the financial position of the business
C.
They reduce the profit of the concern
D.
They do not appear in the balance sheet
Answer: _________
Question 1682:
Which one of the following statement is CORRECT about long term liabilities?
A.
These are due within one year
B.
These consist of all debts, payabke after 12 months
C.
In working capital, these are deducted from current assets
D.
All of the above
Answer: _________
Question 1683:
Which one of the following can offer its share to public at large?
A.
Private limited company
B.
Listed company
C.
Partnership firm
D.
Trust
Answer: _________
Question 1684:
The persons who sign Articles and Memorandum of the company and contribute in the initial share capital of the company are called
A.
Subscribers
B.
Shareholders
C.
Managers
D.
Directors
Answer: _________
Question 1685:
Which of the following are the owners of a company?
A.
Proprietors
B.
Partners
C.
Shareholders
D.
Managers
Answer: _________
Question 1686:
General office expenses are charged to which of the following head?
A.
Administrative expenses
B.
Marketing expenses
C.
Selling expenses
D.
Financial expenses
Answer: _________
Question 1687:
X and Y are partners in a firm sharing profits in the ratio of 3 : 1. They admit Z as a partner with new profit sharing ratio of 2 : 1 : 1. The amount of goodwill brought in by new partner will be credited to
A.
X and Y equally
B.
Only X
C.
Only Y
D.
None of these
Answer: _________
Question 1688:
Part of capital which can be called-up at the time of winding up of company is called:
A.
Reserve capital
B.
Uncalled capital
C.
Issued capital
D.
Authorised capital
Answer: _________
Question 1689:
Garner Vs Murray case arised in
A.
India
B.
Japan
C.
Italy
D.
England
Answer: _________
Question 1690:
Which of the following types of goodwill is considered to be the best?
A.
Dog goodwill
B.
Cat goodwill
C.
Rat goodwill
D.
Cow goodwill
Answer: _________
Question 1691:
Transferring entries from journal to ledger account is commonly known as
A.
Recording
B.
Transferring
C.
Posting
D.
Entering
E.
Recording
F.
Transferring
G.
Posting
H.
Entry making
Answer: _________
Question 1692:
Receipt and payment account record transactions of:
A.
Revenue receipts and payments only
B.
Capital receipts and payments only
C.
All receipts and relating to the current year only
D.
All receipts and payments relating to the current year, succeeding year as well as preceding year
Answer: _________
Question 1693:
Liquidity of a firm can be measured with the help of the following ratio:
A.
Current ratio
B.
Acid test or quick ratio
C.
Cash to current assets
D.
All of the above
Answer: _________
Question 1694:
Arrange the following steps of 'adjustment of old partners' capital on the basis of incoming partner's capital in a correct order. 1. Ascertain the present capital of the old partners. 2. Calculation of total capital of firm on the basis of new partner's capital. 3. Finding the surplus/deficit capital. 4. Determining the new capital of each partner. Select the correct answer:
A.
2, 4, 1, 3
B.
3, 2, 1, 4
C.
4, 3, 2, 1
D.
1, 4, 2, 3
Answer: _________
Question 1695:
If Goods worth Rs. 10,000 are sold on the basis of sale on approval, the adjustment of this transaction on the date of accounting is done in
A.
Sales
B.
Stock
C.
Debtors
D.
All of the above
Answer: _________
Question 1696:
Insufficient working capital may result into which combination of the following?
i. Failures to adapt to changes. ii. Enhancement in credit-worthiness of the firm. iii. Reduced availability of trade and cash discounts. iv. Reduced volume of sales.
A.
i. ii. Iii, iv
B.
i, iii, iv
C.
i, ii, iv
D.
i, ii, iii
Answer: _________
Question 1697:
Consider the following statements: Assertion (A): Accounting is the language of business. Reason (R): Accounting provides all information needed by a businessman. Now select your answer:
A.
Both A and R are true, and R is the correct explanation of A
B.
Both A and R are true, and R is not the correct explanation of A
C.
A is true, but R is false
D.
A is false but R is true
Answer: _________
Question 1698:
Which of the following companies can adopt "Table A" in place of articles of association:
A.
Private limited company
B.
Companies limited by guarantee
C.
Public limited company
D.
Unlimited companies
Answer: _________
Question 1699:
Cash flow Statement is governed by
A.
Accounting Standard-2
B.
Accounting Standard-3
C.
Accounting Standard-1
D.
Accounting Standard-4
Answer: _________
Question 1700:
Unexpired discount on discounted bill is
A.
An item of income
B.
A liability
C.
Income received in advance
D.
Outstanding income
Answer: _________
Question 1701:
Method/methods of accounting for amalgamation
A.
The Pooling of Interest Method
B.
The Purchase Method
C.
Both A and B
D.
None of the above
Answer: _________
Question 1702:
Which one of the following does not form part of the managerial skills:
A.
Conceptual skills
B.
Behavioral skills
C.
Entrepreneurial skills
D.
Analytical skills
Answer: _________
Question 1703:
The Double Entry System of accounting originated in:
A.
America
B.
Russia
C.
Italy
D.
England
Answer: _________
Question 1704:
If the cost of goods sold is Rs. 1,20,000 and gross loss is $${frac{1}{4}^{{ ext{th}}}}$$ of the selling price, then the selling price would be or If cost of goods sold is Rs. 1,20,000 and gross loss is 25% of sales, then what will be the amount of sales?
A.
Rs. 90,000
B.
Rs. 96,000
C.
Rs. 1,20,000
D.
Rs. 1,26,000
Answer: _________
Question 1705:
When there is change in the value of rupee, it is said to be change in
A.
over all price level
B.
general price level
C.
individual price level
D.
discounting price level
Answer: _________
Question 1706:
For purpose of redemption of preference share company can issue
A.
debentures at premium
B.
equity shares
C.
bonds
D.
fixed deposits certificates
Answer: _________
Question 1707:
The General Manager is entitled to a comission of 10% on net profit after charging the commission of Works Manager. The Works Manager is entitled to a commission of 5% on the net profits after charging the commission of General Manager. The profit before charging any commission is Rs. 7,500. The commission of the Works manager, to the nearest rupee, will be:
A.
Rs. 321
B.
Rs. 333
C.
Rs. 337
D.
Rs. 339
Answer: _________
Question 1708:
Which of the following is not capital reserve it:
A.
Premium on the issue of shares
B.
Profit prior to incorporation
C.
Equitable dividend reserve
D.
Profit on sale of fixed assets
Answer: _________
Question 1709:
A . . . . . . . . is used to reflect the changes in purchasing power of money or a whole.
A.
general price index
B.
special price index
C.
monetary value index
D.
discount factor index
Answer: _________
Question 1710:
Which one of the following error do not affect the agreement of trial balance?
A.
Casting and posting errors
B.
Amount omitted from trial balance
C.
Recording of asset as expense
D.
Omission of an entry into ledger
Answer: _________
Question 1711:
. . . . . . . . is considered as the father of modern accounting system-
A.
J. R. Batliboi
B.
Louis First
C.
Lucas Pacioli
D.
Philip Kotler
Answer: _________
Question 1712:
Which of the following are the benefits of responsibility accounting? 1. It facilitates the centralisation of decision taking. 2. It provides a system of closer control. 3. It measures the performance of individuals in an objective manner. 4. It develops a sense of cost consciousness among managers and their subordinates.
A.
1, 2 and 3
B.
2, 3 and 4
C.
1, 2 and 4
D.
1, 3 and 4
Answer: _________
Question 1713:
Opening stock Rs. 80,000, closing stock Rs. 1,00,000, cost of goods sold Rs. 3,60,000. Hence stock turnover is
A.
2 times
B.
4 times
C.
4.5 times
D.
None of these
Answer: _________
Question 1714:
A limited company follows the written down value method of depreciating machinery year after year due to
A.
Comparability
B.
Convenience
C.
Consistency
D.
None of these
Answer: _________
Question 1715:
The term banking is defined in section . . . . . . . .
A.
Section 5 of Banking Regulation Act
B.
Section 4
C.
Section 7
D.
None of these
Answer: _________
Question 1716:
Which of the following represents term deposit?
A.
Savings deposit
B.
Current deposit
C.
Fixed deposit
D.
None of these
Answer: _________
Question 1717:
Errors of carry forward from one year to another year affect . . . . . . . .
A.
personal account
B.
real account
C.
nominal account
D.
both personal and real account
Answer: _________
Question 1718:
What does GAAP represents?
A.
Generally Accepted Audit Procedure
B.
Generally Accepted Accounting Principles
C.
General Agreement on Audit Principles
D.
General Agreement on Accounting Principles
Answer: _________
Question 1719:
Which one of the following error will affect the agreement of the trial balance?
A.
A sale of Rs. 20 to Ram entered in the sales book as Rs. 200
B.
Purchase of Rs. 500 credited to Ram instead of Shyam
C.
Sale returns of Rs. 1000 correctly entered in the sales returns book but posted to the debit of Sundar
D.
Cash sale of furniture credited to sales account
Answer: _________
Question 1720:
Rs. 500 spent on servicing office typewriter should be debited to . . . . . . . .
A.
Expenses account
B.
Typewriter account
C.
Repairs account
D.
Services account
Answer: _________
Question 1721:
Contingent liability appears as a footnote in the balance sheet. This is in accordance with the accounting principle of . . . . . . . .
A.
Consistency
B.
Disclosure
C.
Materiality
D.
Conservatism
Answer: _________
Question 1722:
Cost of goods sold is Rs. 1,00,000 rate of gross profit on sales is 20%. What is the amount of sales?
A.
Rs. 1,20,000
B.
Rs. 80,000
C.
Rs. 1,25,000
D.
None of these
Answer: _________
Question 1723:
Which one of the following errors is an error of principle?
A.
Debiting repairs account instead of furniture account
B.
Sale of Rs. 200 entered in the books as Rs. 2000
C.
Cash sale of Rs. 500 wrongly entered in sales book
D.
Purchase transaction entered in purchases return book
Answer: _________
Question 1724:
If immediate payment is not made to a partner taking leave from the firm then the due amount is transferred to
A.
Current account
B.
Loan account
C.
Reserve account
D.
None of the above
Answer: _________
Question 1725:
The money received by owner in business is known as-
A.
Capital
B.
Goods
C.
Assets
D.
Building
Answer: _________
Question 1726:
Contra entries in cashbook are made when
A.
Petty Cashbook is maintained
B.
Simple Cashbook is prepared
C.
Triple Column Cashbook is maintained
D.
All of the above
Answer: _________
Question 1727:
An item is considered material if it
A.
relates to real account
B.
relates to raw material
C.
is significant for the users
D.
all of the above
Answer: _________
Question 1728:
The asset account is debited from the original value of the asset in the books of buyer and . . . . . . . . account is debited with the total amount of interest
A.
Interest account
B.
Interest suspense account
C.
Seller account
D.
All of the above
Answer: _________
Question 1729:
Purchase Book is used to record
A.
All purchases of goods
B.
All purchases
C.
All credit purchases of goods
D.
None of the above
Answer: _________
Question 1730:
Managerial accounting is
A.
Making accounts
B.
Management of accounts
C.
Presentation of accounting information
D.
Classification of accounts
Answer: _________
Question 1731:
Money embezzled by an employee of a trader is:
A.
Capital Expenditure
B.
Revenue Expenditure
C.
Capital Expenses
D.
Revenue Loss
Answer: _________
Question 1732:
When a company is not earning profits, then which of the following securities proves a burden on the finances of the company?
A.
Equity Shares
B.
Preference Shares
C.
Redeemable Preference Shares
D.
Debentures
Answer: _________
Question 1733:
Receipts and payment account record receipt and payments of . . . . . . . .
A.
revenue nature only
B.
capital nature only
C.
both revenue and capital nature
D.
capital receipts
Answer: _________
Question 1734:
Which of the following errors is an error of omission?
A.
Sale of Rs. 800 was written in the purchase journal
B.
Wages paid to Sohan have been debited to his account
C.
The total of sales journal has not posted to the sales account
D.
The total of sales journal has posted to the sales account
Answer: _________
Question 1735:
Which of the following is not a long-term borrowing of a company?
A.
Debentures
B.
Term loans
C.
Loans repayable on demand from banks
D.
Long-term finance lease obligations
Answer: _________
Question 1736:
A bill of exchange payable after a certain period is known as . . . . . . . . bill.
A.
Time
B.
Accommodation
C.
Revenue
D.
Dishonored
Answer: _________
Question 1737:
Preference shareholders are entitled to a fixed rate of . . . . . . . .
A.
interest
B.
dividend
C.
coupon
D.
capital
Answer: _________
Question 1738:
In life insurance, the risk insured is
A.
certain to occur and also the timing of its occurrence is known
B.
certain to occur, but its timing of occurrence is not known
C.
not certain to occur and also the timming of its occurrence is not known
D.
not likely to occur
Answer: _________
Question 1739:
. . . . . . . . of net surplus of a life insurance company is given to policyholders as bonus.
A.
90%
B.
80%
C.
95%
D.
None of these
Answer: _________
Question 1740:
Capital reduction account is used to . . . . . . . .
A.
write off losses
B.
transfer to capital
C.
issue bonus shares
D.
None of these
Answer: _________
Question 1741:
Which of the following accounts is increased by credit entries?
A.
Bank Overdraft
B.
Purchases Account
C.
Goodwill Account
D.
Sales Returns Account
Answer: _________
Question 1742:
Under . . . . . . . . policy, the sum assured becomes payable on the attainment of a specific age or on death whichever is earlier.
A.
whole time life policy
B.
endowment policy
C.
with profit policy
D.
None of these
Answer: _________
Question 1743:
Match List-I with List-II and select the correct answer: List-I List-II a. Credit purchase of an asset 1. Purchase Return b. Cash sales of an asset 2. Sales Return c. Return inward 3. Cash Book d. Return outward 4. Journal Proper
A.
a-1, b-2, c-3, d-4
B.
a-3, b-1, c-4, d-2
C.
a-4, b-3, c-2, d-1
D.
a-1, b-3, c-2, d-4
Answer: _________
Question 1744:
Which of the following is not an example of contingent liability?
A.
Liability under guarantee
B.
Interim dividend
C.
Liability in respect of bills discounted
D.
None of the above
Answer: _________
Question 1745:
The current ratio of a firm is 2 : 1. Which one of the following suggestion would improve the ratio?
A.
To pay a current liability
B.
To borrow money for a short period on an interest bearing promissory note
C.
To purchase goods for cash
D.
To give an interest bearing promissory note to a creditor in payment of the full amount due to him
Answer: _________
Question 1746:
The convention of conservation will have the effect of-
A.
overstatements of assets
B.
understatements of assets
C.
understatements of liabilities
D.
understatements of provision for bad and doubtful debts
Answer: _________
Question 1747:
Horizontal analysis is
A.
Dynamic analysis
B.
Average analysis
C.
Trend analysis
D.
Static analysis
Answer: _________
Question 1748:
The liquidity position of a business enterprise is best reflected by:
A.
Current ratio and debtors turnover ratio
B.
Quick ratio and asset turnover ratio
C.
Current ratio and net profit ratio
D.
Quick ratio and ROI
Answer: _________
Question 1749:
Which one of the follwoing is not a function of accounting?
A.
Keeping systematic record
B.
Protecting the properties of the Business
C.
Maximising the results
D.
Meeting legal requirements
Answer: _________
Question 1750:
A company issued shares of Rs. 100 each on which Rs. 80 has been paid-up and the company declares a dividend of 25%. The amount of dividend per share comes to Rs. 20. On the basis of normal rate of return of 10%, the market value of share will be
A.
Rs. 40/40
B.
Rs. 120/120
C.
Rs. 160/160
D.
Rs. 200/200
Answer: _________
Question 1751:
What is the main function of accounting?
A.
Recording of economic data
B.
Provide information base for work
C.
Recording and classification of business transaction
D.
Achievement of non-economic goals
Answer: _________
Question 1752:
Assertion (A) The Partnership Act does not make it obligatory that a firm must a deed in writing. Reason (R) It is better to have it in writing to avoid confusion.
A.
(A) is true, but (R) is false
B.
(A) is false, but (R) is true
C.
Both (A) and (R) are true
D.
Both (A) and (R) are false
Answer: _________
Question 1753:
A budget which provides an estimated profit and loss account and a summary of all functional budgets is known as
A.
Capital budget
B.
Sales budget
C.
Master budget
D.
Flexible budget
Answer: _________
Question 1754:
Amalgamate adjustment account is opened in the books of transferee company to incorporate
A.
the assets of the transferor company
B.
the liabilities of the transferor company
C.
the statutory reserves of the transferor company
D.
the non-statutory reserves of the transferor company
Answer: _________
Question 1755:
The capital of firm is Rs. 80,000. The normal rate of return is 7.5%. If the profit earned by the firm during the last five years is Rs. 8,000, Rs. 9000, Rs. 7000, Rs. 8,500 and Rs. 10,000 then the super profit of the firm will be.
A.
Rs. 2,000
B.
Rs. 2,500
C.
Rs. 3,000
D.
Rs. 3,500
Answer: _________
Question 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
Answer: _________
Question 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
Answer: _________
Question 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
Answer: _________
Question 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
Answer: _________
Question 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
Answer: _________
Question 1761:
Right shares refers to those shares which are
A.
Issued to promoters of company
B.
Issued to sellers of company
C.
Issued to directors of company
D.
Issued to existing shareholders of company
Answer: _________
Question 1762:
The minimum share application money is
A.
10% of the issue price of shares
B.
Rs. 1 per share
C.
15% of the facevalue of shares
D.
5% of the facevalue of shares
Answer: _________
Question 1763:
A partnership firm prepared realisation account at the time of
A.
Admission of new partner
B.
A partner taking leave from the firm
C.
Dissolution of firm
D.
At the end of financial year
Answer: _________
Question 1764:
Consider the following activities: 1. Summarising the performance of a business 2. Analysing of the business transactions 3. Interpreting the results 4. Recording the transactions
A.
1234
B.
4213
C.
4321
D.
3142
Answer: _________
Question 1765:
Comparison of the financial statements of the current year with the performance of previous years of the same firm', is known as:
A.
Trend Analysis
B.
Horizontal Analysis
C.
Intra-firm comparison
D.
All of the above
Answer: _________
Question 1766:
What will be the difference in the receipt of book debts?
A.
Current ratio will increase
B.
Current ratio will decrease
C.
There will be no effect on the current ratio
D.
None of the above
Answer: _________
Question 1767:
Depreciation is caused by
A.
price fluctuations
B.
accident
C.
use of asset
D.
none of the above
Answer: _________
Question 1768:
Which of the following statements is true relating to Income and Expenditure Account?
A.
It begins with a debit balance
B.
It is a nominal account
C.
It is prepared to ascertain financial position of the concern
D.
It is prepared by all profit making organisations
Answer: _________
Question 1769:
Which one of the following statements is not correct:
A.
Net capital employed equals fixed assets
B.
Low sales in relation to fixed assets mean underutilisation of fixed assets
C.
Expenses ratios reflect the profit earning capacity of the concern
D.
The analysis for short term solvency of a company attempts to focus attention on the cash generation power of the company
Answer: _________
Question 1770:
Balance of share forfeiture account is shown in the Balance Sheet under the heading
A.
Current Liability & Provisions
B.
Reserves and Surplus
C.
Share Capital
D.
Unsecured Loan
Answer: _________
Question 1771:
Premium paid on the Joint Life Policy of the partners is
A.
Credited to the respective partner's capital account
B.
Debited to the respective partner's capital account
C.
Credited to profit and loss account
D.
Debited to profit and loss account
Answer: _________
Question 1772:
If the value of net-assets employed be Rs. 25,00,000. Average profit for the preceeding three years be Rs. 3,00,000 and the normal rate of return be 10%, the value of Goodwill by capitalization method will be:
A.
Rs. 15,00,000
B.
Rs. 5,00,000
C.
Rs. 22,00,000
D.
Rs. 2,50,000
Answer: _________
Question 1773:
Which one of the following will be treated as revenue expenditure?
A.
Cost incurred for a new exit as required under the local bodies, by laws
B.
Interest paid on loan during the construction of works
C.
Cost of pulling down on old building as also the payment made to the architect for the plan of a new building
D.
A dealer in purchases sewing machines and spends some money on the repair of the machines damaged while goods in transit
Answer: _________
Question 1774:
Bill Receivable Book is a part of the:
A.
Ledger
B.
Balance Sheet
C.
Journal
D.
Profit and Loss Account
Answer: _________
Question 1775:
Preliminary expenses are an example of:
A.
Deferred Revenue Expenditure
B.
Revenue Expenditure
C.
Capital Expenditure
D.
Common Expenditure
Answer: _________
Question 1776:
Ayush started business on 1 st April, 1995 with a capital of Rs. 25,000 and a loan of Rs. 12,500. Total assets and liabilities at the end of 31 st March, 1996 amounted to Rs. 75,000 and Rs. 12,500 respectively. He invested a further capital of Rs. 12,500 during the year and withdrew Rs. 7,500 during the relevant financial, period. His closing capital and profits would be respectively:
A.
Rs. 62,500 and Rs. 32,500
B.
Rs. 50,000 and Rs. 40,000
C.
Rs. 70,000 and Rs. 47,500
D.
Rs. 55,000 and Rs. 42,500
Answer: _________
Question 1777:
Errors which affect one side of an account are called:
A.
single sided errors
B.
double sided errors
C.
triple sided errors
D.
compensation errors
Answer: _________
Question 1778:
Subscription received in advance is . . . . . . . .
A.
an income
B.
an asset
C.
a liability
D.
an expense
Answer: _________
Question 1779:
The term "Imprest system" is used in relation to:
A.
Purchase book
B.
Sales book
C.
Cash book
D.
Petty cash book
Answer: _________
Question 1780:
Which one of the following is an example of an intangible asset?
A.
Preliminary expenses
B.
Discount on issue of debentures
C.
Investments
D.
Copyrights
Answer: _________
Question 1781:
Premium on issue of debentures is a . . . . . . . .
A.
capital loss
B.
capital profit
C.
revenue profit
D.
revenue loss
Answer: _________
Question 1782:
The credit balance in the bank account is:
A.
an asset
B.
a liability
C.
an expense
D.
contingent liability
Answer: _________
Question 1783:
Which one of the following statements is not true as per the rule laid down in Garner Vs. Murray:
A.
The solvent partners should bring in cash their share of loss on realisation
B.
The loss on account of insolvency of a partner should then be borne by the solvent partners in the ratio of their capitals, after bringing in cash such loss on realisation
C.
A solvent partner having debit balance in his capital account just before the dissolution will not be required to bear the loss on account of insolvency of a partner
D.
A solvent partner having debit balance in his capital account, just before dissolution should bring in sufficient cash to raise his capital to his profit ratio
Answer: _________
Question 1784:
Net worth of a business means:
A.
equity capital
B.
total assets
C.
fixed assets - current assets
D.
total assets - total external liabilities
Answer: _________
Question 1785:
High ratio low profitability' is applicable to:
A.
Net profit ratio
B.
Rate of return on investment
C.
Operating ratio
D.
Stock turnover ratio
Answer: _________
Question 1786:
The discount on issue of debentures is written off
A.
before redemption of debentures
B.
after redemption of debentures
C.
in any period decided by the company
D.
in no case later than the date of redemption
Answer: _________
Question 1787:
The present value of the future contributions of employees is one of the methods of
A.
HR accounting
B.
inflation accounting
C.
social accounting
D.
responsibility accounting
Answer: _________
Question 1788:
Match the following List I List II a. Capital is the difference between 1. Cost of goods sold from sales b. Gross profit is ascertained by deducting 2. To find out cost of production c. Wages paid for erecting machines are 3. Assets and liabilities d. The manufacturing account is prepared 4. Debited to machinery account
A.
a-4, b-3, c-2, d-1
B.
a-4, b-3, c-1, d-2
C.
a-3, b-4, c-1, d-2
D.
a-3, b-1, c-4, d-2
Answer: _________
Question 1789:
Trade mark, goodwill and building are shown under which head in company's balance sheet?
A.
Fixed asset
B.
Current asset
C.
Loans and Advances
D.
Investment
Answer: _________
Question 1790:
Opening stock Rs. 2,000 Closing stock Rs. 3,000 Purchases Rs. 31,000 Debentures (representing 1 / 3 of owner's capital) Rs. 5,000 Sales Rs. 50,000 Capital turnover ratio will be:
A.
150%
B.
200%
C.
250%
D.
333.33%
Answer: _________
Question 1791:
Share Allotment Account is a
A.
Personal Account
B.
Nominal Account
C.
Real Account
D.
Impersonal Account
Answer: _________
Question 1792:
Incomplete method of accounting cannot be used by which of the following?
A.
Sole trader
B.
Partnership firm
C.
Public limited company
D.
A Lawyer
Answer: _________
Question 1793:
Which of the following is not an accounting concept?
A.
Matching Concepts
B.
Dual Aspect Concepts
C.
True and Fair Concepts
D.
Going Concern Concept
Answer: _________
Question 1794:
The following accounting information is given by a company Total assets turnover 3 times the net profit margin: 10% Total assets: Rs. 1,00,000. The net profit is
A.
Rs. 10,000
B.
Rs. 15,000
C.
Rs. 25,000
D.
Rs. 30,000
Answer: _________
Question 1795:
Which of the following transactions would affect the current ratio:
A.
cash received from debtors
B.
selling the old machine for cash
C.
converting the debentures into equity shares
D.
cash purchases
Answer: _________
Question 1796:
On account purchases of goods at a current ratio of 2 : 1
A.
Increase current ratio
B.
Decrease current ratio
C.
Increase gross profit percentage
D.
Decrease gross profit percentage
Answer: _________
Question 1797:
Return on Investment (ROI) is computed as
A.
Net Profit Ratio × Capital Turnover Ratio
B.
Operating Net Profit Ratio × Shareholders
C.
$$frac{{{ ext{Net Profit}}}}{{{ ext{Sales}}}}$$
D.
$$frac{{{ ext{Cost of Sales}}}}{{{ ext{Capital Employed}}}}$$
Answer: _________
Question 1798:
According to the profit and loss account, the net profit for the year is Rs. 1,50,000. The total interest on partner's capital is Rs. 18,000 and, interest on partner's drawings is Rs. 2,000. The net profit as per profit and loss appropriation account will be
A.
Rs. 1,66,000
B.
Rs. 1,70,000
C.
Rs. 1,30,000
D.
Rs. 1,34,000
Answer: _________
Question 1799:
A and B are partners sharing profits and losses in the ratio 3 : 1. They decided to admit C. C will be given $${frac{1}{4}^{{ ext{th}}}}$$ share in future profits of the firm which he takes from A and B in ratio 2 : 1. New profit sharing ratio will be:
A.
4 : 3 : 1
B.
7 : 2 : 3
C.
3 : 1 : 7
D.
7 : 3 : 2
Answer: _________
Question 1800:
Subscriptions outstanding 31 st December, 1993 Rs. 200 Subscriptions received in advance in year 1993: 1994 ⇔ 300 1995 ⇔ 100 Total subscriptions received during 1994 Rs. 5,800 Subscriptions outstanding on 31 st December, 1994: 1993 ⇔ 50 1994 ⇔ 250 Subscriptions received in advance in 1994: 1995 ⇔ 350 1996 ⇔ 150 Subscriptions to be shown in Income and Expenditure Account for the year ended 31 st December, 1994 is:
A.
Rs. 5,600
B.
Rs. 5,700
C.
Rs. 5,800
D.
Rs. 5,900
Answer: _________
Question 1801:
Sometimes all the partners including the new partner may agree not to alter the book value of assets and liabilities even when they agree to revalue them. In order to record this, . . . . . . . . is opened.
A.
Revaluation A/c
B.
Goodwill A/c
C.
Suspense A/c
D.
Memorandum Revaluation A/c
Answer: _________
Question 1802:
A and B are partners sharing profit and loss in 2 : 1 ratio. They admitted C who agreed to contribute Rs. 50,000 towards his capital. The future profit sharing ratio of A, B and C is 2 : 3 : 3 respectively. C agreed to transfer Rs. 15,000 for Goodwill from his capital account. A's capital account will be credited by
A.
Rs. 15,000
B.
Rs. 16,333
C.
Rs. 16,667
D.
Rs. 17,333
Answer: _________
Question 1803:
Which of the following transactions affects the flow of funds?
A.
A transaction both aspects of which affect current accounts
B.
A transaction both aspectys of which affect non-current accounts
C.
A transaction one aspect of which affects current accounts and the other affects non current accounts
D.
None of the above
Answer: _________
Question 1804:
Debit is equal to credit-
A.
Sometimes true in accounting
B.
Sometimes false in accounting
C.
Always true in accounting
D.
True in special conditions
Answer: _________
Question 1805:
Redeemable preference shares of Rs. 1,00,000 are redeemed at par for which purpose fresh equity shares of Rs. 80,000 are issued at a discount of 10%. The amount to be transferred to Capital Redemption Reserve Fund will be:
A.
Rs. 20,000
B.
Rs. 28,000
C.
Rs. 1,00,000
D.
Rs. 80,000
Answer: _________
Question 1806:
Direction-The question have two statements. One is labelled as Assertion (A) and the other as Reason (R) . You have to examine both the statements carefully and decide whether Assertion (A) and Reason (R) separately are true and if so then reason is the correct explanation of the assertion. Mark these items on the answer sheet. Assertion (A): Interest payable on working capital should be treated as an item of operating expenses. Reason (R): Interest is the cost of capital used in the business.
A.
Both A and R are correct and R is the correct explanation of A
B.
Both A and R are correct and R is not the correct explanation of A
C.
A is correct but R is wrong
D.
A is wrong but R is correct
Answer: _________
Question 1807:
A firm had a Capital Balance of Rs. 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of Rs. 1,50,000 and total liabilities of Rs. 70,000. If the total withdrawals during the period were Rs. 30,000, what was the amount of net profit/net loss for the year:
A.
Rs. 10,000 profit
B.
Rs. 20,000 loss
C.
Rs. 50,000 loss
D.
Rs. 10,000 loss
Answer: _________
Question 1808:
A company issued debentures of Rs. 60,000 at discount of Rs. 3,000 on 1 st April 1996. they are repayable in 3 equal instalments each on 31 st March, every year. The financial year of the company ends on 31 st December every year. How much discount will be written off in the second year:
A.
Rs. 1,000
B.
Rs. 625
C.
Rs. 1,500
D.
Rs. 1,125
Answer: _________
Question 1809:
M. Ltd. forfeited 50 shares of Rs. 100 each issued to X (Rs. 80 called up) on which the allotment money of Rs. 30 and the first call money of Rs. 20 have not been received. The company reissued these shares @ Rs. 90 per share as fully paid up. The amount to be transferred to Capital Reserve Account would be:
A.
Rs. 500
B.
Rs. 1,000
C.
Rs. 1,500
D.
Rs. 2,000
Answer: _________
Question 1810:
Capital, at the beginning of the accounting year, is ascertained by preparing
A.
Debtor account
B.
Cash account
C.
Statement of affairs
D.
None of the above
Answer: _________
Question 1811:
As per Section 37 of the Indian Partnership Act 1932, the executors of a deceased partner would be entitled at their choice to the interest calculated from the date of death till the date of payment on the final amount due to the partner at . . . . . . . . per annum.
A.
12%
B.
10%
C.
6%
D.
5%
Answer: _________
Question 1812:
Which of the following are the applications of funds? 1. Redemption of preference share capital 2. Payment of dividend 3. Increase in working capital
A.
Only 1 and 2
B.
Only 2 and 3
C.
Only 1 and 3
D.
All of the above
Answer: _________
Question 1813:
Memorandum Joint Venture account is a
A.
Personal account
B.
Real account
C.
Nominal account
D.
None of the above
Answer: _________
Question 1814:
_____ is not required in Promissory Note
A.
Acceptance
B.
Noting
C.
Discounting
D.
None of the above
Answer: _________
Question 1815:
Loss leads to reduction in
A.
Capital
B.
Income
C.
Liabilities
D.
None of the above
Answer: _________
Question 1816:
Transaction between business and owner are recorded following ____ concept
A.
Periodicity
B.
Business entity
C.
Prudence
D.
Going concern
Answer: _________
Question 1817:
One of the Fundamental accounting assumption is
A.
Materiality
B.
Going concern
C.
Business entity
D.
Dual aspect
Answer: _________
Question 1818:
Contra-entries are passed only when
A.
Double column cash book is prepared
B.
Three column cash book is prepared
C.
Simple cash book is prepared
D.
None of the above
Answer: _________
Question 1819:
Petty cash balance is
A.
Liability
B.
Income
C.
Expense
D.
Asset
Answer: _________
Question 1820:
Dividends are usually paid as a percentage of
A.
Net profit
B.
Authorized share capital
C.
Called up capital
D.
Paid up capital
Answer: _________
Question 1821:
A proforma invoice is sent by
A.
Consignee to consignor
B.
Consignee to debtors
C.
Debtors to consignee
D.
Consignor to consignee
Answer: _________
Question 1822:
Commission to promote credit sale by consignee is known as
A.
Del credere commission
B.
Over riding commission
C.
Ordinary commission
D.
Special commission
Answer: _________
Question 1823:
. . . . . . . . debentures are secured by a charge on the assets of the company.
A.
Naked
B.
Simple
C.
Unsecured
D.
Mortgage
Answer: _________
Question 1824:
Cash sales are recorded in:
A.
Sales book
B.
Cash book
C.
Journal
D.
Purchase book
Answer: _________
Question 1825:
Purchase of Typewriter would result in . . . . . . . . of fund.
A.
Change
B.
Application
C.
Service
D.
No flow
Answer: _________
Question 1826:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I List-II a. Heavy amount of premium on redemption of preference shares 1. Capital expenditure b. Excess of sale proceeds fixed assets over their original cost 2. Deferred revenue expenditure c. Cost of installation of an old machine 3. Capital gain d. Freight paid on purchase of raw material 4. Revenue of expenditure
A.
a-2, b-3, c-4, d-1
B.
a-3, b-2, c-4, d-1
C.
a-2, b-3, c-1, d-4
D.
a-3, b-2, c-1, d-4
Answer: _________
Question 1827:
Which item is shown on the debit side of a trial balance?
A.
Rent outstanding
B.
Prepaid expenses
C.
Purchases returns
D.
Excess of income over expenses by the firm
Answer: _________
Question 1828:
The method of current account usually employed by the banker is known as . . . . . . . .
A.
Daily balance method
B.
Red ink interest
C.
Current account
D.
Product method
Answer: _________
Question 1829:
Loss on issue or discount on issue of debenture is a . . . . . . . . asset.
A.
tangible
B.
current
C.
fictitious
D.
None of these
Answer: _________
Question 1830:
The following information is provided by a cultural club: Stock of sports goods : Rs. 20,000 Purchase of sports goods during the accounting period : Rs. 80,000 Sports goods sold as scrap : Rs. 500 Closing balance : Rs. 30,000 The amount to be charged to Income and Expenditure Accounts as sports goods consumed will be:
A.
Rs. 69,500
B.
Rs. 70,000
C.
Rs. 70,500
D.
Rs. 80,000
Answer: _________
Question 1831:
An invoice of Rs. 560 is entered in the sales book as Rs. 650. The total of the debit side of the trial balance is Rs. 21,440. Assuming no other error what is the total of the credit side of the trial balance?
A.
Rs. 21,240
B.
Rs. 21,350
C.
Rs. 21,330
D.
None of these
Answer: _________
Question 1832:
Revenue is considered as being earned when:
A.
cash is received
B.
production is done
C.
sale is effected
D.
purchase is done
Answer: _________
Question 1833:
If sales are Rs. 18,000 gross profit Rs. 5,000 net loss Rs. 1,000, then the amount of operating expenses will be
A.
Rs. 4,000
B.
Rs. 6,000
C.
Rs. 13,000
D.
Rs. 17,000
Answer: _________
Question 1834:
Stock turnover ratio refers to the ratio of the average amount of stock available in the museum with
A.
Quantity of material used in a given period
B.
Quantity of material purchased in a given period
C.
Quantity of material produced in a given period
D.
None of the above
Answer: _________
Question 1835:
The cash inflow per annum will be-
A.
Accounting profit-tax
B.
Accounting profit-tax depreciation
C.
Only accounting profit
D.
None of the above
Answer: _________
Question 1836:
Only personal and real accounts are shown in:
A.
Trial balance
B.
Balance sheet
C.
Profit and loss A/c
D.
Trading A/c
Answer: _________
Question 1837:
Match the following: List-I List-II a. Revaluation account is prepared at the time of 1. may or may not be surrendered at the time of retirement of a partner b. Joint Life Policy 2. to settle the claim of the outgoing partner c. Premium on Joint Life Policy taken up on the lives of all partners is paid by 3. admission of a partner d. The objective of taking Joint Life Policy by a partnership firm is 4. partnership firm
A.
a-4, b-3, c-2, d-1
B.
a-3, b-1, c-4, d-2
C.
a-2, b-1, c-4, d-3
D.
a-2, b-4, c-1, d-3
Answer: _________
Question 1838:
With the help of following information, find out the value of fixed assets- Share capital = Rs. 7,20,000 Working capital = Rs. 2,52,000 Current Ratio = 2.5 Proprietary Ratio = 0.7
A.
Rs. 5,04,000
B.
Rs. 5,40,000
C.
Rs. 3,60,000
D.
Rs. 5,88,000
Answer: _________
Question 1839:
Cash flow statement is not helpful in:
A.
Planning the repayment of loans and replacement of fixed assets
B.
Projecting the profits of the business in the long run
C.
Detecting the causes of poor cash position inspite of substantial profits
D.
Evaluation of cash position of a firm
Answer: _________
Question 1840:
A, B and C who are partners had a credit balance of Rs. 5,000, Rs. 10,000 and Rs. 20,000 respectively in their capital accounts when the firm was dissolved and the assets disposed off piecemeal. If in the first instalment the realisation is Rs. 10,000 and the Garner Vs. Murray rule is applicable, the distribution among the partners will be:
A.
Rs. 3,333, Rs. 3,333, Rs. 3,334
B.
Rs. 1,667, Rs. 3,333, Rs. 5,000
C.
Rs. 1,429, Rs. 2,857, Rs. 5,714
D.
Rs. 1,500, Rs. 3,000, Rs. 5,500
Answer: _________
Question 1841:
The loss arising from the acquisition of business to its incorporation should be debited to:
A.
Profit and loss account
B.
Capital reserve account
C.
Goodwill account
D.
Profit and loss adjustment account
Answer: _________
Question 1842:
According to Companies Act, 2013 shares can be issued by a company at
A.
Par
B.
Discount
C.
Par or Premium
D.
Premium
Answer: _________
Question 1843:
Which of these is not an essential feature of a partnership firm?
A.
Mutual agency
B.
Compulsory registration
C.
Association of two or more persons
D.
Existence of business
Answer: _________
Question 1844:
As per section 55 of Companies Act 2013, the redemption of preference shares can be made:
A.
Out of profits available for dividend
B.
From the issue of new shares
C.
Partially from available profits and partially from issue of new shares
D.
All are correct
Answer: _________
Question 1845:
Break-Even Point is
A.
Where total revenue equals total costs
B.
Where total revenue equals total fixed cost
C.
Where total revenue equals total variable cost
D.
Where total revenue exceeds the total costs
Answer: _________
Question 1846:
Firm has earned exceptionally high profits from a contract, which will not be renewed. In such a case, this profit will not be included in . . . . . . . .
A.
profit share of the partners
B.
calculation of the goodwill
C.
Both A and B
D.
None of these
Answer: _________
Question 1847:
Which of the following is not a subsidiary book?
A.
Purchase book
B.
Sales book
C.
Bills receivables book
D.
Assets books
Answer: _________
Question 1848:
Match list-I with list-II and select your answer: List-I (Assets) List-II (Method of Depreciation) a. Patterns 1. Annuity Method b. Motor Lorries 2. Revalution Method c. Copy-right 3. Fixed Instalment Method d. Live Stock 4. Diminishing Balance Method
A.
a-3. b-4, c-1, d-2
B.
a-1, b-3, c-2, d-4
C.
a-2. b-3, c-4, d-1
D.
a-4, b-2, c-1, d-3
Answer: _________
Question 1849:
A, B and C are partners sharing profits and losses in 5 : 3 : 2. What will be new profit sharing ratio between A and C if B decided to take leave from the firm?
A.
5 : 3
B.
5 : 1
C.
5 : 2
D.
3 : 2
Answer: _________
Question 1850:
Which of the following errors cannot be located by the Trial Balance:
A.
Errors in making totals of the ledger accounts
B.
Errors in carrying forward of totals
C.
Errors of omission in posting
D.
Errors in balancing the ledger accounts
Answer: _________
Question 1851:
Which of the following statements is true:
A.
Building account is a nominal account
B.
Outstanding rent account is a non-personal account
C.
Every debit has a corresponding credit
D.
Incomes are debited
Answer: _________
Question 1852:
Assests in the Balance Sheet of a company are arranged in the order of
A.
Market value
B.
Permanence
C.
Book value
D.
None of the above
Answer: _________
Question 1853:
How many columns are there in trial balance?
A.
8
B.
5
C.
4
D.
2
Answer: _________
Question 1854:
Cost of Depreciation fund is
A.
Explicit cost
B.
Opportunity cost
C.
Average cost
D.
None of the above
Answer: _________
Question 1855:
A and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit X as a partner for $$frac{1}{3}$$ share in profits of the firm. The new profit sharing ratio of A, B and X is
A.
3 : 2 : 1
B.
3 : 2 : 2
C.
3 : 2 : 3
D.
6 : 4 : 5
Answer: _________
Question 1856:
Sales of a firm are Rs. 74 lakh, variable costs Rs. 40 lakh, fixed costs Rs. 8 lakh. Operating leverage of the firm will be
A.
1.48
B.
1.78
C.
1.31
D.
2.42
Answer: _________
Question 1857:
Break Even Point (BEP) is a point where
A.
Profits and losses are equal
B.
No profit no loss
C.
Profits are higher than losses
D.
Losses are higher than profits
Answer: _________
Question 1858:
To account profit on sale of investment should be debited to?
A.
Profit and Loss A/c
B.
Capital Reserve A/c
C.
Investment A/c
D.
Sinking Fund A/c
Answer: _________
Question 1859:
Net profit before following adjustment is Rs. 3,60,000 Outstanding salary is Rs. 20,000 Prepaid insurance is Rs. 26,000 After adjustment net profit is
A.
Rs. 3,66,000
B.
Rs. 3,80,000
C.
Rs. 3,46,000
D.
Rs. 3,86,000
Answer: _________
Question 1860:
When a firm is dissolved, the profit or loss shared on the realization by the partners is
A.
Equal
B.
In the ratio of their capital balances
C.
In the profit-sharing ratio
D.
In the ratio laid down in Garner vs Murray
Answer: _________
Question 1861:
On dissolution of a firm, the assets of firm are transferred to realization account at their
A.
Book value
B.
Market value
C.
Realizable value
D.
Agreed value among partners
Answer: _________
Question 1862:
Identify the correct sequence of accounting process
A.
Communicating -> Recording -> Identifying
B.
Recording -> Communicating -> Identifying
C.
Identifying -> Communicating -> Recording
D.
Identifying -> Recording -> Communicating
Answer: _________
Question 1863:
Bookkeeping mainly consists of which part of accounting process?
A.
Analysing
B.
Preparing financial statements
C.
Recording financial information
D.
Auditing the books of accounts
Answer: _________
Question 1864:
Auditing refers to
A.
Reporting the financial information
B.
Examination of financial information
C.
Preparation of financial statements
D.
Maintaining the ledger accounts
Answer: _________
Question 1865:
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
Answer: _________
Question 1866:
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
Answer: _________
Question 1867:
________ is the first phase of accounting cycle
A.
Identifying an economic event or transaction
B.
Preparing Journal
C.
Posting entries to Ledger accounts
D.
Making decisions about business
Answer: _________
Question 1868:
______ is a separate legal entity whose total capital can be divided into many shares
A.
Partnership
B.
Sole Proprietorship
C.
Company
D.
Non-profit organization
Answer: _________
Question 1869:
An asset possesses which of the following?
A.
Future economic benefits for the business
B.
All kinds of benefits for the business
C.
Expenses for the business
D.
Merits & Demerits for the business
Answer: _________
Question 1870:
Liabilities are which of the following?
A.
Resources
B.
Obligations
C.
Future benefits
D.
Expenses
Answer: _________
Question 1871:
_______ is the gross inflow of economic benefits
A.
Assets
B.
Liabilities
C.
Income
D.
Expenses
Answer: _________
Question 1872:
If an entity owns directly or indirectly more than 50% of voting rights, control is presumed unless clearly proven that it is not control. Sometimes control exists, even if there is less than 50% of voting rightes exist. State which of the followings is/are example(s) of control even if voting power is less than 50%
A.
Power to govern financial and operating policies under statute
B.
Power to remove/appoint majority members of BOD that controls the entity
C.
Power to cost majority of votes at meetings of BOD that controls the entity
D.
All of the above
Answer: _________
Question 1873:
By which of the following the working capital will not change?
A.
Cash purchase of goods
B.
Cash purchase of machine
C.
Purchase of machine by cheque
D.
Sale of old machine by cheque
Answer: _________
Question 1874:
Which of the following is transferable merely by delivery:
A.
an equity share
B.
a preference share
C.
a share warrant
D.
a debenture
Answer: _________
Question 1875:
In case of a retirement of a partner total amount of goodwill is credited to:
A.
Only retiring partner capital account
B.
Only remaining partner capital account
C.
All partner capital account
D.
None of the above
Answer: _________
Question 1876:
Mr. Smith applied for 200 shares at Rs. 10 per share, but 160 shares were alloted to him. After paying Rs. 2 per share on application he did not pay the allotment money of Rs. 2 per share and first call money of Rs. 3 per share. What is the outstanding amount on the shares alloted to Mr. Smith?
A.
Rs. 800
B.
Rs. 1,280
C.
Rs. 320
D.
Rs. 720
Answer: _________
Question 1877:
The originator of the double entry system, Lucas Pacioli was resident of
A.
America
B.
Italy
C.
India
D.
Japan
Answer: _________
Question 1878:
Capital account comes under which concept?
A.
Separate entity concept
B.
Accounting period concept
C.
Accrual concept
D.
Realisation concept
Answer: _________
Question 1879:
A limited company forfeited 100 share (fully called-up) for non-payment of Rs. 4 per share. Out of these 50 share were re-issued at Rs. 8 per share. What will be amount transferred to capital reserve
A.
Rs. 800
B.
Rs. 200
C.
Rs. 250
D.
Rs. 100
Answer: _________
Question 1880:
Best indicator of the overall efficiency of a business concern is:
A.
Profitability ratio
B.
Debt equity ratio
C.
Acid test ratio
D.
Current ratio
Answer: _________
Question 1881:
The credit balance in the Income and Expenditure A/c indicates:
A.
the excess of cash receipts over cash payments
B.
the excess of income over expenditure
C.
the excess of expenditure over income
D.
the excess of cash payments over cash receipts
Answer: _________
Question 1882:
Does IFRS-B allow an entity to combine information about operating segments into one reportable segment?
A.
Yes, if the operating segments do not meet the quantitative thresholds
B.
Yes, if the operating segments share the majority of the aggregation criteria listed in this IFRS
C.
Yes, if the operating segments have similar economic characteristics
D.
All of the above
Answer: _________
Question 1883:
Loss arising due to insolvency of a partner is to be borne by other partners:
A.
in equal proportion
B.
in the ratio of their capital
C.
in the profit sharing ratio
D.
none of the above
Answer: _________
Question 1884:
Which of the following is not a business transaction?
A.
Bought furniture of Rs. 26,000 for business
B.
Paid Rs. 2,000 for salaries of employees
C.
Paid Rs. 5,000 from a personal bank account for domestic use
D.
All of the above
Answer: _________
Question 1885:
The value of HR is the function of the average salary of the employees and their average employment tenure in the organisation. This is the essence of
A.
five-dimensional model
B.
unpurchased goodwill model
C.
aggregate payment model
D.
casual, intervening and end-result model
Answer: _________
Question 1886:
Calculate the profit volume ratio from the following statement: Year Sales Profit 2006 4,00,000 (-) 24,000 2007 5,00,000 (+) 30,000
A.
20%
B.
40%
C.
15%
D.
50%
Answer: _________
Question 1887:
X Ltd company goes into liquidation, and a new company Z Ltd purchases the business of X Ltd. It is a case of
A.
Amalgamation
B.
Absorption
C.
Internal reconstruction
D.
External reconstruction
Answer: _________
Question 1888:
Which one of the following is not true of cash Budget?
A.
The shortage or excess of cash would appear in a particular period
B.
All inflows world arise before outflows for those periods
C.
Only revenue nature cash flows are shown
D.
Proceeds from issue of share capital is shown as an inflow
Answer: _________
Question 1889:
Under capitalization can be resolved by
A.
Issue of bonus share
B.
Redemption of preference share
C.
Redemption of debenture
D.
By paying interest on debentures
Answer: _________
Question 1890:
Proprietary ratio relates the shareholders fund to:
A.
Total assets
B.
Profit
C.
Loss
D.
Dividend
Answer: _________
Question 1891:
The head office of "The Institute of Cost and Works Accountants of India" is located at
A.
Delhi
B.
Mumbai
C.
Chennai
D.
Kolkata
Answer: _________
Question 1892:
If the preference shares are to be redeemed at a premium, the amount of premium may be paid from
A.
Security premium or profit and loss A/c
B.
Share-capital account
C.
Profit and loss A/c
D.
Capital redemption fund
Answer: _________
Question 1893:
A and B are partners who share profit and loss equally. A with drawing Rs. 400 regularly at the end of each month for half year ended at 30 th June 2008. What will be the amount of interest if 5% p.a. interest is charged on drawing?
A.
Rs. 200
B.
Rs. 100
C.
Rs. 25
D.
Rs. 50
Answer: _________
Question 1894:
Given below are two statements, one labelled as Assertion (A) and the other as Reason (R) Assertion (A): Gross profit ratio is calculated on the basis of net sales. Reason (R): Gross profit ratio measure overall profitability of a concern. Choose the correct answer:
A.
Both (A) and (R) are true and (R) is correct explanation of (A)
B.
Both (A) and (R) are true but (R) is not be correct explanation of (A)
C.
(A) is true but (R) is false
D.
(A) is false but (R) is true
Answer: _________
Question 1895:
The difference between 'subscribed capital' and 'called up capital' is called
A.
Calls in arrear
B.
Calls in advance
C.
Uncalled capital
D.
Paid up capital
Answer: _________
Question 1896:
Wages paid for installation of new machines is debited to wages account. This is an error of
A.
Omission
B.
Principle
C.
Sumation
D.
Wrong account
Answer: _________
Question 1897:
The Indian Accounting Standard 10 is related to
A.
Valuation of Inventories
B.
Accounting for Government Grants
C.
Depreciation Accounting
D.
Accounting for fixed Assets
Answer: _________
Question 1898:
Assertion (A): Personal transactions of the business owners are not recorded in the books. Reason (R): According to the business entity concept, each business enterprise is considered an accounting unit separate from owners.
A.
Both (A) and (R) are correct, and (R) is the correct explanation of (A)
B.
Both (A) and (R) are correct, but (R) is not the cor rect explanation of (A)
C.
(A) is correct, but (R) is incorrect
D.
(A) is incorrect, but (R) is correct
Answer: _________
Question 1899:
Net working Capital refers to:
A.
Current assets
B.
Current assets minus current liabilities
C.
Equity share capital minus fixed assets
D.
Retained earnings
Answer: _________
Question 1900:
A trader transfers 20% of his profit to General Reserve. On the basis of which concept, he does so?
A.
Concept of conservatism
B.
Concept of uniformity
C.
Realization concept
D.
Money-measurement concept
Answer: _________
Question 1901:
Which of the followingstatements istrue?
A.
Capital expenditure does not affectthe profitability of a concern, but revenue expenditure does affect the profitability of a concern
B.
Capital expenditure affects the profitability of a concern directly,but revenueexpenditure does not affectdirectly
C.
Capital expenditure affects the profitability of a concern indirectly, but revenue expenditure affects directly
D.
Both capital expenditure and revenue expenditure affectthe profitability of a concern directly
Answer: _________
Question 1902:
Adjustment entry for outstanding rent will be
A.
Outstanding rent A/c Dr - To Rent A/c
B.
Rent A/c Dr - To outstanding A/c
C.
Profit and Loss A/c Dr - To rent A/c
D.
Outstanding rent A/c Dr - To Profit and Loss A/c
Answer: _________
Question 1903:
Which of the following correctly depicts the difference between a merger and an acquisition of srock?
A.
Acquisition of stock results in the total absorption of a firm, but a merger does not
B.
In case of a merger, the firm can deal directly with the shareholders of the acquired firm, but not in the caseof acquisition of stock
C.
Shareholders of the acquired or target firm vote by their response to a tender offer in the acquisition of stock, but cast a formal vote in a merger situation
D.
A formal vote by the acquired firm's shareholders is required for the acquisition of stock but not for a merger
Answer: _________
Question 1904:
Debt-Equity Ratio is a kind of
A.
Liquidity Ratio
B.
Profitability Ratio
C.
Capital Structure Ratio
D.
Ratio of Efficiency
Answer: _________
Question 1905:
Who was insolvent in Garner vs. Murray case:
A.
Murray
B.
Wilkins
C.
Garner
D.
Garry
Answer: _________
Question 1906:
What is the correct sequence of the following actions required for the preparation of final accounts? 1. Preparation of Trial Balance 2. Balance of accounts 3. Preparation of annual financial statements 4. Making adjustment entries Select the correct answer
A.
1, 2, 3, 4
B.
4, 3, 2, 1
C.
4, 2, 1, 3
D.
2, 1, 4, 3
Answer: _________
Question 1907:
The value of plant and machinery as on 1 st January, 2005 was Rs. 80,000/- and its value as on 31 th December 2005 was Rs. 1,20,000/-. During the year Rs. 10,000/ was written off as depreciation. This will result in
A.
Sources of funds Rs. 30,000/-
B.
Utilization of funds Rs. 50,000/-
C.
Utilization of funds Rs. 40,000/-
D.
Sources of funds Rs. 50,000/-
Answer: _________
Question 1908:
A company issued 1,00,000 equity shares of the face value of Rs. 100 each at Rs. 100 per share. So far Rs. 75 per share has been called up including Rs. 25 on allotment and Rs. 25 on first call. X to whom 200 shares were issued failed to pay the first call. His shares were forfeited and re-issued to Y at Rs. 70 per share as fully paid-up. The amount to be transferred to Capital Reserve a/c would be:
A.
Rs. 4,000
B.
Rs. 6,000
C.
Rs. 8,000
D.
Rs. 10,000
Answer: _________
Question 1909:
When subsidiary books are maintained, the entry for special discounts to customers is done in:
A.
Journal
B.
Sales book
C.
Cash book
D.
None of these
Answer: _________
Question 1910:
Debtors = Rs. 8,400 Reserve for bad debts = Rs. 400 Cost of sales = Rs. 36,000 Profit = Sales of 40% Debt collection period is:
A.
45 days
B.
49 days
C.
75 days
D.
86 days
Answer: _________
Question 1911:
Which of the following is/are feature(s) of equity share capital
A.
dividend is payable only if company has earned profit
B.
dividend become payable only if such payment has been recommended by board of directors and passed by the Annual General Meeting of Company
C.
both, dividend is payable only if company has earned profit and dividend become payable only if such payment has been recommended by board of director and passed by the Annual General Meeting of company
D.
None of these
Answer: _________
Question 1912:
The convention of conservatism implies that:
A.
Expected future losses must be provided for
B.
Revenue must not be recognised unless it is accrued
C.
Both the above A and B
D.
None of the above
Answer: _________
Question 1913:
Redeemable Preference Shares of Rs. 2,00,00 are to be redeemed at par for which purpose fresh Equity Shares of Rs. 80,000 are issued at a discount of 10%. What amount should be transferred to Capital Redemption Reserve Accounts?
A.
Rs. 72,000
B.
Rs. 1,20,000
C.
Rs. 1,28,000
D.
Rs. 2,00,000
Answer: _________
Question 1914:
Which one of the following is Activity Ratio?
A.
Net Profit Ratio
B.
Current Ratio
C.
Debtor Turnover Ratio
D.
None of these
Answer: _________
Question 1915:
If cost is Rs. 48,000 and gross profit is 20% on sales then calculate amount of gross profit?
A.
Rs. 12,000
B.
Rs. 60,000
C.
Rs. 8,000
D.
Rs. 24,000
Answer: _________
Question 1916:
The depreciation of fixed assets is computed on their
A.
Book value
B.
Market value
C.
Realizable value
D.
Scrap value
Answer: _________
Question 1917:
A company wants to redeem 9% 450 debentures of the face value of Rs. 100 per debenture at a premium of 10%. How many shares of the face value of Rs. 10 is to be issued if they are issued at a premium of 10%:
A.
4,000 share
B.
4,500 share
C.
5,000 share
D.
5.500 share
Answer: _________
Question 1918:
Capitalization method of valuation is used for the valuation of
A.
Shares only
B.
Goodwill only
C.
Shares and Goodwill both
D.
Fixed assets only
Answer: _________
Question 1919:
The current account of a partner
A.
may have a debit or a credit balance
B.
will always have a debit balance
C.
will always have a credit balance
D.
will never have a balance
Answer: _________
Question 1920:
Which of the following books should be used to record purchase of furniture on credit?
A.
Cash book
B.
Journal proper
C.
Purchases book
D.
Sales book
Answer: _________
Question 1921:
The cash book records:
A.
all cash payments
B.
all cash receipts
C.
all cash receipts and payments
D.
only credit payments
Answer: _________
Question 1922:
Overcasting of purchases journal would affect . . . . . . . .
A.
Sales account
B.
Purchase account
C.
Suppliers account
D.
Sales returns account
Answer: _________
Question 1923:
Rs. 19,500 debited to building repairs on 31 st December 1993 included Rs. 9,500 as the cost of building a small room for the watch man. A bill of Rs. 800 for colour wash of the whole building during the year was not received till 1993 December. The amount to be debited to profit and loss account would be:
A.
Rs. 20,300
B.
Rs. 19,500
C.
Rs. 10,800
D.
Rs. 9,500
Answer: _________
Question 1924:
Assets which do not carry more than normal credit risk is known as . . . . . . . .
A.
loss asset
B.
risk asset
C.
standard asset
D.
None of these
Answer: _________
Question 1925:
In book-keeping posting means:
A.
to record the transactions from the journal to ledger
B.
to record the transactions in the journal
C.
to record the transactions in the subsidiary books
D.
to record the transactions in the cash book
Answer: _________
Question 1926:
Subscriptions for the current year received during the current year are to be . . . . . . . .
A.
credited to receipts and payments account
B.
debited to income and expenditure account
C.
credited to income and expenditure account
D.
credited to revenue account
Answer: _________
Question 1927:
A reserve is charge against:
A.
Trading account
B.
Profit and loss account
C.
Profit and loss appropriation account
D.
None of these
Answer: _________
Question 1928:
Accounting standard-AS-2 provides that inventories should be valued at
A.
lower of historical cost and net realisable value
B.
lower of historical cost and market value
C.
only estimated selling price
D.
All of these
Answer: _________
Question 1929:
Donations received by a non-profit organisation are usually a . . . . . . . .
A.
revenue receipt
B.
capital receipt
C.
capital expenditure
D.
revenue expenditure
Answer: _________
Question 1930:
Assets are held for the purpose of . . . . . . . .
A.
earning revenue
B.
resale
C.
conversion into cash
D.
personal purpose
Answer: _________
Question 1931:
The process of recording financial transactions in the journal is called . . . . . . . .
A.
Journalizing
B.
Utilizing
C.
Posting
D.
Balancing
Answer: _________
Question 1932:
Insurance Regulatory and Development Authorities Act came in to effect in:
A.
2001
B.
2004
C.
1999
D.
None of these
Answer: _________
Question 1933:
Which of the following accounts have only credit balance?
A.
Accounts payable account
B.
Salaries outstanding account
C.
Reserve fund account
D.
All of the above accounts
Answer: _________
Question 1934:
Total debtors account will be affected by:
A.
Cash sales
B.
Credit sales
C.
B/R closing balance
D.
All of these
Answer: _________
Question 1935:
Opening debtors Rs. 12,000, closing debtors Rs. 15,000 cash received from debtors Rs. 25,000 what is the amount for sales?
A.
Rs. 22,000
B.
Rs. 28,000
C.
Rs. 2,000
D.
None of these
Answer: _________
Question 1936:
How does an over costing of purchase day book affect the cost of sales and profit?
A.
Cost of sales is decreased while profit is increased
B.
Cost of sales is increased while profit is decreased
C.
Both cost of sales and profit are increased
D.
Cost of sales is increased, gross profit is decreased, but net profit remains unaffected
Answer: _________
Question 1937:
Any profit on the sale of furniture of a cricket club will be taken to . . . . . . . .
A.
income and expenditure account
B.
cash account
C.
profit and loss account
D.
furniture account
Answer: _________
Question 1938:
Stock is a consolidation of . . . . . . . . shares.
A.
partly paid
B.
fully paid
C.
equity
D.
sweat
Answer: _________
Question 1939:
Unclaimed dividend is shown in . . . . . . . .
A.
P/L account
B.
P/L appropriation account
C.
Balance sheet
D.
None of these
Answer: _________
Question 1940:
Which of the following financial reports shows the profitability of a business?
A.
Income statement
B.
Balance sheet
C.
Cash flow statement
D.
Statement of changes in equity
Answer: _________
Question 1941:
Assets minus liabilities equal to
A.
Goodwill
B.
Working capital
C.
Net income
D.
Capital
Answer: _________
Question 1942:
Which of the following financial statements shows the movement of cash and cash equivalents during an accounting period?
A.
Income statement
B.
Balance sheet
C.
Cash flow statement
D.
Statement of changes in equity
Answer: _________
Question 1943:
Goodwill is classified as which one of the following assets?
A.
Fixed
B.
Long term
C.
Current
D.
Intangible
Answer: _________
Question 1944:
Which of the following does not appear in Balance sheet?
A.
Building
B.
Cash
C.
Goodwill
D.
Rent expenses
Answer: _________
Question 1945:
Current assets are also known as
A.
Gross working capital
B.
Invested capital
C.
Assets
D.
Cash
Answer: _________
Question 1946:
The expenses related to the main operations of a business are referred to as
A.
Administration expense
B.
Non-administration expense
C.
Selling expense
D.
Operating expense
Answer: _________
Question 1947:
A current asset that is convertible to cash within 3 months can be referred to as
A.
Cash asset
B.
Operating asset
C.
Intangible assets
D.
Cash equivalent
Answer: _________
Question 1948:
What is depreciation?
A.
Cost of a fixed asset
B.
Cost of a fixed asset's repair
C.
The residual value of a fixed asset
D.
Portion of a fixed asset's cost consumed during the current accounting period
Answer: _________
Question 1949:
Under which depreciation method, the amount of depreciation expenses remains same throughtout the life of the asset?
A.
Straight line method
B.
Reducing balance method
C.
Number of units produced method
D.
Machine hours method
Answer: _________
Question 1950:
Security premium is a
A.
Capital receipt
B.
Revenue receipt
C.
Personal receipt
D.
Current liability
Answer: _________
Question 1951:
Which of the following is not a capital reserve?
A.
Premium on issue of shares
B.
Profits prior to incorporation
C.
Dividend equalisation reserve
D.
Reserve created out of profit on the sale of fixed assets
Answer: _________
Question 1952:
Royalty payable by lessee is transferred to
A.
Royalty A/c
B.
Land Lord A/c
C.
Profit & Loss A/c
D.
Short workings A/c
Answer: _________
Question 1953:
Partnership has been defined by partnership act of:
A.
Sec. 4, 1932
B.
Sec. 8, 1935
C.
Sec. 10, 1942
D.
Sec. 18, 1881
Answer: _________
Question 1954:
Rs. 10000 machinery purchased, wrongly debited purchases account. This is
A.
Clerical error
B.
Error of principle
C.
Compensating error
D.
None of these
Answer: _________
Question 1955:
Accounting concepts are based on
A.
Certain assumptions
B.
Certain facts and figures
C.
Certain accounting records
D.
Government guidelines
Answer: _________
Question 1956:
Which of the following items will not appear in the Balance Sheet of a club:
A.
Subscriptions received for the next year
B.
Subscriptions received for the current year
C.
Subscriptions not received for the current year
D.
Outstanding salary
Answer: _________
Question 1957:
The Nature of advance tax payment is:
A.
Assets
B.
Liability
C.
Prepaid expense
D.
Revenue expenditure
Answer: _________
Question 1958:
In accounting, the profit prior to incorporation is treated as
A.
Revenue reserve
B.
Secret reserve
C.
Capital reserve
D.
General reserve
Answer: _________
Question 1959:
If opening stock is Rs. 10,000, purchases Rs. 30,000 direct expenses Rs. 4,000 and closing stock Rs. 5,000, the cost of goods sold would be:
A.
Rs. 39,000
B.
Rs. 40,000
C.
Rs. 41,000
D.
Rs. 44,000
Answer: _________
Question 1960:
Choose the odd one out. The court has the option to order dissolution of a firm, where 1. a partner is of sound mind. 2. a partner do not suffer from permanent in capacity. 3. a partner is not guilty of misconduct of the business. 4. a partner transfers his interest or share to a third party. Select the correct answer:
A.
Both 1 and 2
B.
Only 3
C.
Both 2 and 3
D.
Only 4
Answer: _________
Question 1961:
If a share of Rs. 10 each on which Rs. 8 has been called and Rs. 6 is paid is forfeited then, the share capital account should be debited with
A.
Rs. 10
B.
Rs. 8
C.
Rs. 6
D.
Rs. 4
Answer: _________
Question 1962:
Balance of share forfeiture after re-issue of forfeited share is transferred to which account?
A.
is added to paid-up capital
B.
is added to goodwill account
C.
is transferred to capital reserve
D.
is transferred to share forfeiture A/c
Answer: _________
Question 1963:
When goodwill is brought by the incoming partner in the form of cash. The goodwill amount is credited to the old partners in:
A.
Old profit sharing ratio
B.
New profit sharing ratio
C.
Sacrificing ratio
D.
Old capital ratio
Answer: _________
Question 1964:
Charulata is a partner in a firm. She withdrew Rs. 10,000 in each quarter during the year ending on 31 st March 2019. The interest on her drawings @ 9%per annum will be
A.
Rs. 1,350
B.
Rs. 2,250
C.
Rs. 900
D.
Rs. 1,800
Answer: _________
Question 1965:
Income received in advance is a
A.
An asset
B.
An income
C.
A liability
D.
None of the above
Answer: _________
Question 1966:
Which method is legally accepted for redemption of preference share?
A.
Issue of equity share
B.
Issue of Deventures
C.
Sale of fixed assets of company
D.
Public deposit
Answer: _________
Question 1967:
Window dressing is prohibited because of
A.
Conservative convention
B.
Convention of disclosure
C.
Convention of materiality
D.
Arrear of book accounts
Answer: _________
Question 1968:
Arrange the steps of adjustment of partner's capital on the admission of a new partner in sequence. 1. Calculate the adjusted capital of old partners. 2. Calculate the proportionate capital of a new partner. 3. All adjustments should be made. 4. Calculate the total capital of new firm. Select the correct answer:
A.
3, 1, 4, 2
B.
3, 4, 1, 2
C.
4, 3, 2, 1
D.
3, 4, 2, 1
Answer: _________
Question 1969:
Which of the following is not the purpose of admission of a partner?
A.
For procuring additional capital
B.
For acquiring additional managerial skill
C.
For progress of the firm
D.
For increasing competition
Answer: _________
Question 1970:
What type of expenses are paid out of Gross Profit?
A.
General expenses
B.
Financial expenses
C.
Selling expenses
D.
All of the above
Answer: _________
Question 1971:
Which of the following is NOT an example of intangible assets?
A.
Franchise rights
B.
Goodwill
C.
Patents
D.
Land
Answer: _________
Question 1972:
Which of the following is an example of business liability?
A.
Land
B.
Building
C.
Cash
D.
Creditors
Answer: _________
Question 1973:
The unfavorable balance of Profit and Loss account should be
A.
Added to liabilities
B.
Subtracted from current assets
C.
Subtracted from capital
D.
Subtracted from liabilities
Answer: _________
Question 1974:
Which of the following account will be credited, if business bought goods on credit from Mr. Z?
A.
Purchases account
B.
Mr. Z account
C.
Cash account
D.
Sales account
Answer: _________
Question 1975:
Interest on loan paid by business is an example of
A.
Revenue expense
B.
Income
C.
Asset
D.
Return outward
Answer: _________
Question 1976:
Which of the following account will be credited when a typewriter is sold that has been used in the office?
A.
Office equipment account
B.
Cash account
C.
Sales account
D.
Purchase account
Answer: _________
Question 1977:
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as
A.
Appreciation
B.
Depreciation
C.
Fluctuation
D.
None of the above
Answer: _________
Question 1978:
Which of the following item will be shown on debit side of debtors account?
A.
Discount received
B.
Return inwards
C.
Discount allowed
D.
Credit sales
Answer: _________
Question 1979:
When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called
A.
Error of principle
B.
Error of omission
C.
Error of commission
D.
Error of original entry
Answer: _________
Question 1980:
Any increase in the value of assets is . . . . . . . . to capital reduction.
A.
debited
B.
credited
C.
ignored
D.
None of these
Answer: _________
Question 1981:
Which of the following is not shown on the liability side of a balance sheet of a company?
A.
Authorized capital
B.
Issued capital
C.
Paid up capital
D.
Reserve capital
Answer: _________
Question 1982:
Interest on capital is credited to . . . . . . . . account.
A.
Expenses account
B.
Income account
C.
Capital account
D.
Asset account
Answer: _________
Question 1983:
Valuing the stock in trade at market price or cost price which is less is an example of the convention of:
A.
consistency
B.
disclosure
C.
knowing the value
D.
None of these
Answer: _________
Question 1984:
Which method of inventory valuation is most widely used in accounting?
A.
Cost price
B.
Market price
C.
Cost or market price whichever is greater
D.
Cost or market price whichever is lower
Answer: _________
Question 1985:
A manufacturing company spent the following amounts on the import and installation of machine: 1. Rs. 50,000 : Price of the machine 2. Rs. 5,000 : Freight 3. Rs. 1,050 : Insurance premium 4. Rs. 6,000 : Replacement of a part damaged intransit, not covered under the
insurance policy Based on the above data, capital expenditure would be:
A.
Rs. 50,000
B.
Rs. 56,050
C.
Rs. 62,050
D.
Rs. 51,050
Answer: _________
Question 1986:
Purchase journal is kept to record . . . . . . . .
A.
cash sales
B.
credit sales of assets
C.
credit sales of goods
D.
credit purchases
Answer: _________
Question 1987:
Profit on sale of sinking fund investment is credited to . . . . . . . .
A.
general reserve
B.
capital reserve
C.
sinking fund
D.
None of these
Answer: _________
Question 1988:
Amount paid for acquiring goodwill is . . . . . . . .
A.
revenue expenditure
B.
deferred revenue expenditure
C.
capital expenditure
D.
deferred capital expenditure
Answer: _________
Question 1989:
Any donation received for a specific purpose is a . . . . . . . .
A.
liability
B.
assets
C.
revenue receipts
D.
capital receipts
Answer: _________
Question 1990:
A limited liability company forfeited 30 shares of Rs. 10 each (fully called-up) for non payment of allotment amount of Rs. 3 per share and call amount of Rs. 4 per share. These shares were re-issued at Rs. 8 per share. In such situation amount transferred to capital reserve will be
A.
Rs. 300
B.
Rs. 60
C.
Rs. 30
D.
Rs. 90
Answer: _________
Question 1991:
Preference share of a company cannot be redeemed
A.
At par
B.
At premium
C.
At Discount
D.
At face value
Answer: _________
Question 1992:
The overall performance of a business unit is measured by:
A.
Return on investment
B.
Inventory turnover ratio
C.
Net profit to sales ratio
D.
Proprietary ratio
Answer: _________
Question 1993:
Underwriter is a person, who
A.
Who arranges insurance policy
B.
Manages import and export
C.
Promises to purchase share unpurchased by public
D.
Sells things on commission
Answer: _________
Question 1994:
X, Y and Z are partners in the ratio $$frac{1}{2}:frac{2}{5}$$ xa0 and $$frac{1}{{10}}$$. If X retires then what is the profit sharing ratio between remaining partners?
A.
2 : 1
B.
4 : 1
C.
5 : 1
D.
3 : 1
Answer: _________
Question 1995:
Receipts and Payments Account is:
A.
Real account
B.
Personal account
C.
Capital account
D.
Nominal account
Answer: _________
Question 1996:
If out of net annual income of the year Rs. 42,000 the preference dividend and equity dividend paid are Rs. 7,000 and Rs. 24,000 respectively, and total equity capital be Rs. 1,40,000 the return on equity capital will be:
A.
30%
B.
27%
C.
25%
D.
22%
Answer: _________
Question 1997:
The basic principle of accounting "debit the receiver and credit the giver" is applicable to
A.
Profit and loss account
B.
Real account
C.
Personal account
D.
Cash account
Answer: _________
Question 1998:
Which of the following items should not be entered in Receipts and Payments Account of a club:
A.
Sale of old newspaper
B.
Loss on the sale of used asset
C.
Payment of honorarium
D.
Realisation from the sale of furniture
Answer: _________
Question 1999:
An increase in current liabilities in the schedule of changes in working capital shows
A.
increase in working capital
B.
no change in working capital
C.
decrease in working capital
D.
proportionate change in working capital
Answer: _________
Question 2000:
No journal entry is required to be passed when there is
A.
Loss by theft
B.
Normal loss
C.
Loss of bad debts
D.
Abnormal loss of business
Answer: _________
Question 2001:
There must be a gap of at least ___ month between two calls
A.
3
B.
1
C.
6
D.
2
Answer: _________
Question 2002:
Difference of total of debit and credit side of the trial balance is transferred to
A.
Suspense A/c
B.
Difference A/c
C.
P & L A/c
D.
Trading A/c
Answer: _________
Question 2003:
Municipal tax Rs.6000 under dispute is a
A.
Contingent liability
B.
Revenue expenditure
C.
Current liability
D.
Current asset
Answer: _________
Question 2004:
Joint venture account is a
A.
Nominal account
B.
Personal account
C.
Real account
D.
Dummy account
Answer: _________
Question 2005:
Capital expenditures are recorded in the
A.
Trading account
B.
Profit & Loss account
C.
Balance sheet
D.
All of the above
Answer: _________
Question 2006:
Recovery of bad debt is a
A.
Revenue expenditure
B.
Revenue receipt
C.
Deferred expenses
D.
Capital receipt
Answer: _________
Question 2007:
Bills receivable is a
A.
Intangible fixed asset
B.
Tangible fixed asset
C.
Current asset
D.
Investment
Answer: _________
Question 2008:
The party who sends the goods for sales on fixed commission basis is known as
A.
Drawer
B.
Drawee
C.
Payee
D.
Consignor
Answer: _________
Question 2009:
Endorsement, discounting and collection of bills of exchange is made by
A.
Debtors
B.
Creditors
C.
Drawee
D.
Drawer
Answer: _________
Question 2010:
Assertion (A): The matching concept requires that costs should be recognised as expenses in the period in which revenue is realised Reason (R): There may not be a matching between expenditure and expense over a short period In the context given above, which one of the following is correct?
A.
Both A and R are true, and R is the correct explanation of A
B.
Both A and R are true, but R is not a correct explanation of A
C.
A is true, but R is false
D.
A is false, but R is true
Answer: _________
Question 2011:
The profit on re-issue of shares is transferred to . . . . . . . .
A.
general reserve
B.
capital reserve
C.
P/L account
D.
P/L appropriation account
Answer: _________
Question 2012:
Money measurement concept of accounting theory is based on the assumption that the value of money will:
A.
remain constant
B.
fluctuate
C.
decrease
D.
go up
Answer: _________
Question 2013:
Premium received on issue of shares is a . . . . . . . .
A.
capital receipt
B.
revenue receipt
C.
deferred capital receipt
D.
deferred revenue receipt
Answer: _________
Question 2014:
In which of the following methods, the asset account appears at its original cost through out its life?
A.
Annuity method
B.
Depreciation fund method
C.
Sum of years, digits method
D.
Machine hour rate method
Answer: _________
Question 2015:
The balance left in the capital accounts on dissolution of a firm is transferred to
A.
Realisation Account
B.
Profit and loss Account
C.
Bank Account
D.
None of these
Answer: _________
Question 2016:
Errors of principle arise when . . . . . . . .
A.
proper distinction is not made between capital and revenue
B.
there is an omission of transaction
C.
wrong amounts are entered in the subsidiary books
D.
transactions are entered in the wrong subsidiary books
Answer: _________
Question 2017:
Insurance unexposed account is a . . . . . . . .
A.
Real account
B.
Personal account
C.
Nominal account
D.
Representative account
Answer: _________
Question 2018:
Consider the following statements: I. In case of the marine insurance, the insurable interest must exist at the time the loss occurs II. In case of fire insurance, insurable interest must exist both at the time of the contract and at the time of loss Which of the statements given above is/are correct?
A.
I only
B.
II only
C.
Both I and II
D.
Neither I nor II
Answer: _________
Question 2019:
Debit balance in cash book means:
A.
overdraft as per pass book
B.
overdraft as per cash book
C.
credit balance as per pass book
D.
debit balance as per day book
Answer: _________
Question 2020:
Partner by estoppel is a
A.
Partner with limited power
B.
Nominal partner
C.
Sleeping partner
D.
Partner under special situation
Answer: _________
Question 2021:
Accrual concept is related to:
A.
Revenue
B.
Items
C.
Depreciation
D.
None of these
Answer: _________
Question 2022:
A company wishes to issue 1,000 7% debentures of Rs. 100 each repayable after 10 years for which the company will have to incur the following expenses: Underwriting commission ⇔ 1.5% Brokerage ⇔ 0.5% Printing and Miscellaneous expenses ⇔ Rs. 1,000 The annual cost of capital would be:
A.
7.3%
B.
7.0%
C.
6.5%
D.
6.0%
Answer: _________
Question 2023:
If at the end of a financial year capital is Rs. 20,000, drawing during the year is Rs. 10,000, capital at the beginning of the year is Rs. 12,000, additional capital introduced during the year is Rs. 14,000. Then find net profit for the year?
A.
Rs. 5,600
B.
Rs. 3,200
C.
Rs. 4,000
D.
Rs. 4,200
Answer: _________
Question 2024:
Consider the following statements: Statement (A): Balance sheet shows liquidity position of a business on a particular date. Reason (R): Balance sheet is prepared on basis of actual transactions which are recorded in the books of accounts. Give the correct answer:
A.
A and R both are correct and R is correct explanation of A
B.
A and R both are correct and R is not correct explanation of A
C.
A is correct but R is wrong
D.
A is wrong but R is correct
Answer: _________
Question 2025:
The balance in the capital reduction A/c after writing off accumulated losses is transferred to:
A.
General Reserve A/c
B.
Capital Reserve A/c
C.
Share Capital A/c
D.
None of the above
Answer: _________
Question 2026:
The International Accounting Standard-2 lays down guide lines for inventory valuation and presentation. Which one of the following is not true as per these standards:
A.
The inventory should be valued at historic cost or net realisable value, whichever is lower
B.
The cost of damaged raw material should be added in arriving at the value of the stock of manufactured goods
C.
Usually either the FIFO or the Weighted Average Cost Method should be used for valuation of inventory
D.
The basis and policy of valuation of inventory should not clearly be stated
Answer: _________
Question 2027:
When the cost incurred on recruiting, training and developing the employees is considered for determining the value of employees, it is called
A.
the opportunity cost approach
B.
the historical cost approach
C.
the replacement cost approach
D.
the marginal cost approach
Answer: _________
Question 2028:
The amount of minimum rent is determined on which of the following basis ?
A.
Time
B.
Area
C.
Time or Area
D.
None of the above
Answer: _________
Question 2029:
Raja and Ram are partners sharing profits in ratio 3 : 1. Ashok is admitted for $${frac{1}{4}^{{ ext{th}}}}$$ share in profits. New profit sharing ratio between Raja, Ram and Ashok is?
A.
9 : 3 : 4
B.
3 : 1 : 1
C.
2 : 1 : 2
D.
3 : 4 : 9
Answer: _________
Question 2030:
A bill of exchange is drawn by a:
A.
Creditor
B.
Debtor
C.
Shareholder
D.
Debentureholder
Answer: _________
Question 2031:
Profit as per accounts from incomplete records may constructed as equivalent of:
A.
Excess of assets over liabilities at the close of the period
B.
Excess of capital at the end over the capital at the beginning
C.
Excess of assets over liabilities at the commen-cement of the period
D.
Excess of capital at the beginning over the capital at the end
Answer: _________
Question 2032:
Depreciation is provided on:
A.
Current Assets
B.
Liquid Assets
C.
Fictitious Assets
D.
Fixed Assets
Answer: _________
Question 2033:
Sales to Benson Rs. 500 posted to his account as Rs. 50 would affect . . . . . . . .
A.
Sales account
B.
Bensons account
C.
Cash account
D.
Purchases account
Answer: _________
Question 2034:
The assets of a business can be classified as . . . . . . . .
A.
only fixed assets
B.
only current assets
C.
fixed and current assets
D.
fictitious assets
Answer: _________
Question 2035:
A gross profit is transferred to the . . . . . . . . side of the profit and loss account.
A.
Debit
B.
Credit
C.
Current
D.
Asset
Answer: _________
Question 2036:
If the rate of gross profit is 25% on cost by goods sold and the sales are Rs. 200000, the amount of profit will be . . . . . . . .
A.
Rs. 50000
B.
Rs. 40000
C.
Rs. 45000
D.
Rs. 65000
Answer: _________
Question 2037:
The short-term advances made by a bank to the stock brokers and bill brokers are called . . . . . . . .
A.
money at call
B.
short loan
C.
short provision
D.
inter-office adjustment
Answer: _________
Question 2038:
Match List-I (financial statements and accounts) with List-II (special matters associated with statements and accounts) and select the correct answer using the options given below the lists: List-I List-II a. Receipts and payments 1. Revenue account b. Income and expenditure account 2. Cash c. Dividend equalisation reserve 3. Liability d. Club subscription received in advance account 4. Balance sheet 5. General reserve
A.
a-2, b-1, c-4, d-3
B.
a-3, b-2, c-4, d-5
C.
a-2, b-1, c-5, d-3
D.
a-1, b-2, c-4, d-5
Answer: _________
Question 2039:
Assets acquired by a bank in satisfaction of a claim are known as . . . . . . . .
A.
non-banking assets
B.
performing assets
C.
standard assets
D.
None of these
Answer: _________
Question 2040:
The dividend per share in a company is Rs. 2, earning per share is Rs. 5 and the market value of shares is Rs. 25. What will be the yield?
A.
20%
B.
12.5%
C.
8%
D.
25%
Answer: _________
Question 2041:
X Ltd allotted 25,000 equity shares to the applicants of 36,000 shares for Rs. 10 each on pro-rata basis. A applied for 1800 equity shares. Shares allotted to him are . . . . . . . . and he had paid an application money of Rs. 5 per share . . . . . . . . is the excess amount received that can be utilised towards allotment money.
A.
1,500 shares, Rs. 1,500
B.
1,250 shares, Rs. 2,750
C.
1,350 shares, Rs. 2,250
D.
1,050 shares, Rs. 3,750
Answer: _________
Question 2042:
Payment to creditors results in-
A.
Increase in total assets
B.
Decrease in total assets
C.
Increase in total liabilities
D.
Decrease in total liabilities and total assets
Answer: _________
Question 2043:
Which of the following is correct if there is mutual indebtedness between the transferor company and the transferee company in a business combination?
A.
No adjustment is required in the books of the transferor company
B.
Adjustment is required in the books of the trans feror company
C.
No adjustment is required in the books of the transferee company
D.
None of the above
Answer: _________
Question 2044:
A piece of land was given to a firm free of cost six months back. Its fair value then was Rs. 12 lakhs and now it is worth Rs. 14 Lakhs. Under the conventional accounting system it will be reported in the Balance Sheet as on today at:
A.
12 lakhs
B.
14 lakhs
C.
2 lakhs
D.
Not to be reported at all
Answer: _________
Question 2045:
The current ratio of a firm is 5 : 3. Its working capital is Rs. 20,000. The value of its current assets will be:
A.
Rs. 30,000
B.
Rs. 50,000
C.
Rs. 20,000
D.
Rs. 60,000
Answer: _________
Question 2046:
Unpaid calls is shown in the balance sheet of the company?
A.
Added to the share capital
B.
Deducted from the called up capitals
C.
Under head current Assets
D.
Under head current liabilities
Answer: _________
Question 2047:
If increase in retained earning = Rs. 6,00,000 Preliminary expense = Rs. 10,000 Provision for taxation = Rs. 60,000 Transfer to General reserve = Rs. 10,000 Net profit before taxation = ??
A.
Rs. 6,40,000
B.
Rs. 6,80,000
C.
Rs. 6,70,000
D.
Rs. 6,20,000
Answer: _________
Question 2048:
A, B, and C are partners in a firm sharing profit and loss in the ratio of 4 : 3 : 2. They agreed to take D into partnership and gave him $$frac{1}{8}$$ share. What will be the new profit-sharing ratio?
A.
4 : 3 : 2 : 1
B.
28 : 21 : 14 : 9
C.
28 : 21 : 14 : 8
D.
4 : 1 : 2 : 1
Answer: _________
Question 2049:
In absence of an agreement. Partner is entitle to receive
A.
Equal share in profit and loss
B.
Interest on capital @ 12%
C.
Interest on loan @ 18%
D.
All of the above
Answer: _________
Question 2050:
A 'Sale and lease back' arrangement is more suitable for a lessee having
A.
liquidity crisis
B.
surplus fund
C.
high profit
D.
no-profit no-loss
Answer: _________
Question 2051:
$$frac{{{ ext{Changes in Profit}}}}{{{ ext{Changes in Sales}}}} imes 100 = .,.,.,.,.,.,.,.$$
A.
Break Even Point
B.
P/V Ratio
C.
Contribution
D.
% increase in sales
Answer: _________
Question 2052:
The nature of 'Commission' received in advance account is
A.
Real account
B.
Unreal account
C.
Personal account
D.
None of the above
Answer: _________
Question 2053:
X Ltd. forfeited 40 share of Rs. 10 each and on which Rs. 4 per share were paid. If the forfeited share are reissued as Rs. 8 per share paid up, what is the minimum price the company must charge?
A.
Rs. 2 per share
B.
Rs. 4 per share
C.
Rs. 8 per share
D.
Rs. 10 per share
Answer: _________
Question 2054:
If a share of Rs. 10 Issued at a discount of 10%, on which full amount has been called up, is forfeited for non-payment of final call of Rs. 2, the share capital account should be debited by:
A.
Rs. 8
B.
Rs. 9
C.
Rs. 10
D.
Rs. 11
Answer: _________
Question 2055:
A prospectus for inviting subscription in shares or debentures can be issued only by
A.
Public Company
B.
Private Company
C.
Both of the above
D.
None of the above
Answer: _________
Question 2056:
If the face value of share is Rs. 10, earning per share is Rs. 4 and dividend per share is Rs. 2, then dividend payout ratio will be
A.
20%
B.
40%
C.
25%
D.
50%
Answer: _________
Question 2057:
Statement I These is no standard method for environmental accounting. Statement II Environmental accounting is applied to textile industries. Which of the following is/are correct?
A.
Statement I is true, but Statement II is false
B.
Statement I is false, but Statement II is true
C.
Both statements are true
D.
Both statements are false
Answer: _________
Question 2058:
A and B are partners sharing profits in the firm in the ratio of 2 : 3. Goodwill appears in the books of firm at Rs. 10,000. C joins the firm for $$frac{1}{5}$$ share of profits. His share of Goodwill is estimated to be Rs. 15,000. The old partner's account will be credited with Goodwill by
A.
Rs. 50,000
B.
Rs. 40,000
C.
Rs. 75,000
D.
Rs. 65,000
Answer: _________
Question 2059:
Good worth Rs. 500 have been taken by the proprietor for his personal use, for which no entry has been passed in the books. This is an
A.
error of compensation
B.
error of principle
C.
error of commission
D.
error of omission
Answer: _________
Question 2060:
Which of the following equation is not correct
A.
Cost of goods sold + closing stock - purchase = opening stock
B.
Opening stock + Purchase - closing stock = cost of goods sold
C.
Opening stock + purchases + closing stock - cost of good sold
D.
Closing stock + cost of goods sold - purchase = opening stock
Answer: _________
Question 2061:
Dividend policy of a company mainly concerns with 1. Dividend payout 2. Stability of dividend Select the correct answer:
A.
Only 1
B.
Only 2
C.
Both 1 and 2
D.
Neither 1 nor 2
Answer: _________
Question 2062:
While computing profit before incorporation operating expenses are divided on the basis of
A.
Revenue and capital expenditure
B.
Time period
C.
Sales ratio
D.
Capital Ratio
Answer: _________
Question 2063:
Which one of the following is not a part of the Profitability Ratios:
A.
Operating Ratio
B.
Rate of Return on Capital Employed
C.
Inventory Turnover Ratio
D.
Gross margin/Sales Ratio
Answer: _________
Question 2064:
Match the items of List-I with those of List-II and indicate the correct answer: List-I (Accounting Standard) List-II (Relationship) a. AS-6 1. Accounting for Consolidated Financial Statements b. AS-3 2. Accounting For Fixed Asset c. AS-10 3. Depreciation Accounting d. AS-21 4. Accounting For Cash Flow Statement
A.
a-2, b-4, c-3, d-1
B.
a-3, b-4, c-2, d-1
C.
a-4, b-3, c-1, d-2
D.
a-1, b-2, c-3, d-4
Answer: _________
Question 2065:
The Partnership Deed provides for a salary of Rs. 7,000 per month to partner X. It will be
A.
Credit to Profit and Loss Account (Adjustment Account)
B.
Credited to the Current Account of Partner X
C.
Credited to Salary Payable A/c
D.
Debited to Capital A/c of X
Answer: _________
Question 2066:
A and B invest Rs. 2,00,000 and Rs. 1,00,000 respectively in a partnership, and agree to divide profit and loss equally after providing for interest @ 10% per annum on original capital, and salaries of Rs. 24,000 and Rs. 48,000 respectively. How much amount A would get if the period's net income (before interest and salaries) is Rs. 90,000:
A.
Rs. 45,000
B.
Rs. 89,000
C.
Rs. 36,000
D.
Zero
Answer: _________
Question 2067:
Match the following: List-I List-II a. Intangible assets 1. Ind AS-31 b. Impairment of assets 2. Ind AS-34 c. Interim financial reporting 3. Ind AS-36 d. Interests in joint ventures 4. Ind AS-38
A.
a-1, b-2, c-3, d-4
B.
a-4, b-3, c-2, d-1
C.
a-4, b-1, c-2, d-3
D.
a-4, b-2, c-1, d-3
Answer: _________
Question 2068:
Amongst the following statements, find the odd one out with regards to book keeping.
A.
Book keeping has limited scope and concerned with recording, classifying & summarizing
B.
Book keeping is essentially a clerical work
C.
Book keeping depends on Accounting for making accounting records more useful
D.
Book keeping only considers monetary transactions
Answer: _________
Question 2069:
Balance Sheet depicts:
A.
Only the assets position
B.
Only the liability position
C.
Cash position
D.
Financial position
Answer: _________
Question 2070:
A prepayment of insurance premium will appear in the Balance Sheet and in the Insurance Premium account respectively as:
A.
A liability and a debit balance
B.
An asset and a debit balance
C.
An asset and a credit balance
D.
A liability and a credit balance
Answer: _________
Question 2071:
In case of forfeiture of share, share forfeiture account is credited with
A.
Money received
B.
Money due
C.
Equal value
D.
None of the above
Answer: _________
Question 2072:
A share of Rs. 10 issued at 2 ruppes premium on which full amount is called is forfeited due to non-payment of Rs. 4. What will be amount recorded in share capital account
A.
Rs. 12
B.
Rs. 10
C.
Rs. 8
D.
Rs. 6
Answer: _________
Question 2073:
Depreciation is admissible on which of the following asset?
A.
Animal
B.
Tea plant
C.
Goodwill of business
D.
Patent
Answer: _________
Question 2074:
The method/criteria that cannot be used for the measurement of social cost benefit of a particular project is
A.
capital output ratio
B.
value added method
C.
saving in foreign exchange
D.
total cost concept
Answer: _________
Question 2075:
Correct equation of balance sheet is
A.
Assets = Liability + owner's equity
B.
The claim of outsiders against the business is the residual claim
C.
Owner's equity increases by loss
D.
Increase in asset leads to increase in owner's equity
Answer: _________
Question 2076:
Money received on issue of share which is more than the nominal value of shares is credited to which account?
A.
Security premium account
B.
Discount account
C.
Share capital account
D.
Profit and loss account
Answer: _________
Question 2077:
Net asset of a business on 1 st January and 31 st January are Rs. 39,000 and Rs. 38,000 respectively. Additional capital and drawing made by owner during the month is Rs. 2,000 and Rs. 6,000. What is net income earned during the month of January?
A.
Rs. 1,000 (Loss)
B.
Rs. 3,000
C.
Rs. 5,000
D.
Rs. 4,000
Answer: _________
Question 2078:
A company proposes to introduce a new product in the market. The company wants to maintain P/V Ratio at 25%. If variable cost of the product is 300, what will be the selling price?
A.
Rs. 100
B.
Rs. 200
C.
Rs. 300
D.
Rs. 400
Answer: _________
Question 2079:
Which of the following is not a ratio for analysis of profitability?
A.
Operating ratio
B.
Net Profit ratio
C.
Acid test ratio
D.
None of these
Answer: _________
Question 2080:
The surplus or deficit revealed by income and expenditure account is transferred to:
A.
Receipts and payments account
B.
Profit and loss account
C.
Capital account
D.
Capital fund
Answer: _________
Question 2081:
When dividend is actually received on due date
A.
the pro-rata amount relating the period before the date of acquisition is entered in the income column (Cr) of the following investment account
B.
the pro-rata amount relating to the period after the date of acquisition is entered in the income column (Cr) of the investment account
C.
the entire amount is entered in the income column (Dr) of the investment account
D.
the entire amount is entered in the capital column (Cr) of the investment account
Answer: _________
Question 2082:
If the cost of goods sold is Rs. 1,00,000, the value of opening stock is Rs. 20,000 and closing stock is Rs. 80,000, then the stock turnover ratio will be:
A.
5 times
B.
4 times
C.
2 times
D.
1 times
Answer: _________
Question 2083:
Which of the following statements is not true?
A.
An expenditure intended to benefit the current year is revenue expenditure
B.
Amount paid for acquiring goodwill is capital expenditure
C.
Wages paid for the installation of a new machine is usually debited to wages account
D.
Revenue expenditure is not intended to benefit future period
Answer: _________
Question 2084:
Premium on issue of equity shares is:
A.
Capital income
B.
Revenue income
C.
Incidental income
D.
None of these
Answer: _________
Question 2085:
Inventory Turnover Ratio is:
A.
Sales/closing stock
B.
Cash sales/average stock
C.
Cost of sales/average stock
D.
Cost of sales/closing stock
Answer: _________
Question 2086:
When a partner is guilty of fraud or negligence within the scope of his authority:
A.
Only he will be liable for his act
B.
He can be expelled
C.
All partners are liable if there is an agreement to this effect
D.
All partners are liable even if there is no such agreement
Answer: _________
Question 2087:
Underwriting commission and brokerage on the issue of shares cannot exceed the following percent of issue price of shares:
A.
2.5%
B.
3%
C.
5%
D.
6%
Answer: _________
Question 2088:
The balance of DDR or Deposit Fund account is transferred to
A.
Profit & Loss
B.
General Reserve Account
C.
Deposit Fund Investment Account
D.
None of the above
Answer: _________
Question 2089:
Which one of the following is a capital expenditure:
A.
Painting delivery truck at a cost of Rs. 1,000
B.
Spent Rs. 250 for repairs in building
C.
Purchase of pencil sharpener
D.
Purchase of a type-writer
Answer: _________
Question 2090:
The standard format of Journal does not include which of the following?
A.
Assets column
B.
Date column
C.
Description column
D.
Amount column
Answer: _________
Question 2091:
In which of the following order, data is entered into the Journal?
A.
Alphabetical order
B.
Numeric order
C.
Bullets order
D.
Chronological order
Answer: _________
Question 2092:
Which of the following accounts will be credited if a company purchases building for cash?
A.
Capital account
B.
Fixed assets account
C.
Building account
D.
Cash account
Answer: _________
Question 2093:
Discount for quick repayment of debt is normally referred to as
A.
Trade discount
B.
Prompt payment discount
C.
Cash discount
D.
Bulk discount
Answer: _________
Question 2094:
Which of the following specialized journal records "goods returned by customers"?
A.
Purchase journal
B.
Sales journal
C.
Purchase return journal
D.
Sales return journal
Answer: _________
Question 2095:
Sales on credit is recorded in which of the following journal?
A.
Purchase journal
B.
Sales journal
C.
Purchase return journal
D.
Sales return journal
Answer: _________
Question 2096:
Transactions that a business does not record in any specialized journal are recorded in which of the following books?
A.
Cash payment journal
B.
Cash receipt journal
C.
Purchases return journal
D.
General journal
Answer: _________
Question 2097:
Which of the following specialized journal records "goods returned by the business"?
A.
Purchase journal
B.
Sales journal
C.
Purchase return journal
D.
Sales return journal
Answer: _________
Question 2098:
Sales and purchase journal doesn't record
A.
Credit sales
B.
Credit purchases
C.
Credit sales and purchases
D.
Cash sales and purchases
Answer: _________
Question 2099:
Cash received from debtor is recorded in which of the following specialized journals?
A.
Purchase Journal
B.
Sales Journal
C.
Cash receipts journal
D.
Cash payments journal
Answer: _________
Question 2100:
Any expenditure incurred in order to reduce the operating expenses is . . . . . . . .
A.
capital expenditure
B.
revenue expenditure
C.
deferred revenue expenditure
D.
promotional expenditure
Answer: _________
Question 2101:
. . . . . . . . is a liability which may or may not arise in future depending on happening of some uncertain future event.
A.
contingent liability
B.
bills for collection
C.
non-banking liability
D.
bills payable
Answer: _________
Question 2102:
Pooling of interest method is applicable for amalgamation in the nature of . . . . . . . .
A.
merger
B.
consolidation
C.
reconstruction
D.
realization
Answer: _________
Question 2103:
Average due date can be called as . . . . . . . .
A.
mean due date
B.
median due date
C.
mode due date
D.
zero date
Answer: _________
Question 2104:
When one of the following reflects the over all efficiency with which capital is used?
A.
Return on shareholders funds
B.
Investment turnover ratio
C.
Earning per share
D.
Operating ratio
Answer: _________
Question 2105:
. . . . . . . . is an annual payment made by a life insurance company in consideration form a lump sum received.
A.
Claim
B.
Annuity
C.
Bonus
D.
Premium
Answer: _________
Question 2106:
Which of the following is not an alteration of capital?
A.
Consolidation of shares
B.
Sub-division of shares
C.
Conversion of shares into stock
D.
Paid offpaid up capital in excess of needs of the company
Answer: _________
Question 2107:
At present, a company limited by shares cannot issue . . . . . . . . preference shares.
A.
redeemable
B.
irredeemable
C.
convertible
D.
None of these
Answer: _________
Question 2108:
According to which of the following concepts even the owner of the business who provides capital treated as a creditor of the business?
A.
Entity concept
B.
Cost concept
C.
Money measurement concept
D.
Convention of disclosure
Answer: _________
Question 2109:
Discount on issue of debentures is a . . . . . . . .
A.
capital loss
B.
capital profit
C.
revenue loss
D.
revenue profit
Answer: _________
Question 2110:
The statutory meeting of a company is convened
A.
once in a year
B.
once in the life time of the company
C.
once in 6 months
D.
once in 3 months
Answer: _________
Question 2111:
Wages paid for erection of new plant (machinery) should be debited to:
A.
Wages account
B.
Cash account
C.
Plant account
D.
None of the above
Answer: _________
Question 2112:
If the purchase consideration is calculated by adding the various payments to be made, the method is called
A.
Lumpsum method
B.
Networth method
C.
Net payment method
D.
Value of share method
Answer: _________
Question 2113:
The estimated life of a machine costing Rs. 9,00,000 is 9 years. The firm follows the 'Sum of Year Digit' Method of depreciation. The amount of depreciation provision on the machine in the sixth year of its life will be:
A.
Rs. 40,000
B.
Rs. 60,000
C.
Rs. 80,000
D.
Rs. 90,000
Answer: _________
Question 2114:
Consider the following statements- Statement (A): Ratio analysis is an important tool to gain knowledge about the financial soundness of a company. Reason (R): Ratio analysis is the only for an indicator to decide whether to invest or not in a company. Give the correct answer:
A.
Both A and R are correct and R is the correct explanation of A
B.
Both A and R are correct and R is not the correct explanation of A
C.
A is correct but R is wrong
D.
A is wrong but R is true
Answer: _________
Question 2115:
Which of the following is the use of funds:
A.
Purchase of machinery
B.
Redemption of debentures
C.
Payment of dividend
D.
All of the above
Answer: _________
Question 2116:
Which of the following is a personal account:
A.
Investment
B.
Commission
C.
Outstanding salary
D.
Share premium
E.
Pre-paid Salary Account
F.
Drawings Account
G.
Outstanding Rent Account
H.
All of the above
Answer: _________
Question 2117:
Which of the following loan commitments are within the scope of IFRS-9?
A.
Loan commitments that can be settled net in cash or by delivering or issuing another financial instrument
B.
Commitment to provide a loan at a below market interest rate
C.
Loan commitment that the entity designates as financial liabilities at fair value through profit or loss
D.
All of the above
Answer: _________
Question 2118:
Which of the following receipts is of revenue nature?
A.
Amount realised from sale of investments
B.
Dividend received on investments
C.
Amount borrowed from a bank
D.
Compensation received from municipality corporation on acquisition of land for the construction of road
Answer: _________
Question 2119:
Profit prior to incorporation can be used:
A.
In writing off goodwill
B.
In making good the capital losses
C.
In both A and B
D.
None of the above
Answer: _________
Question 2120:
Revenue is generally recognised as being earned at the point of time, when:
A.
Sale is effected
B.
Profit and loss account is prepared
C.
Production is completed
D.
Cash is received
Answer: _________
Question 2121:
The cost of a machine having a span of life 5 years is Rs. 10,000. It has a scrap value of Rs. 1,000. The amount of depreciation in the first year under the sum of year's digit method will be:
A.
Rs. 1,600
B.
Rs. 1,800
C.
Rs. 2,500
D.
Rs. 3,000
Answer: _________
Question 2122:
Depreciation on fixed assets is: OR Depreciation is:
A.
A source of funds
B.
An application of funds
C.
Neither a source nor an application of funds
D.
Both A and B
Answer: _________
Question 2123:
. . . . . . . . rule is applicable at the time of any partner becoming insolvent.
A.
Garner vs Murray
B.
Derry vs Peek
C.
Salomon vs A Salomon and Corporation Limited
D.
Mohiri Bibi vs Dharamdas Ghosh
Answer: _________
Question 2124:
X and Y are partners in a firm. X is entitled to a salary of Rs. 2,000 per month together with a commission of 10% of net profit before chargin any commission. Y is entitled to a salary of Rs. 5000 per annum together with a commission of 10% of net profit after charging all commissions. Net profit before charging any commission for the year was Rs. 55,000. What will be the net profits to be distributed to X and Y respectively?
A.
Rs. 20,000 and Rs. 2,30,000
B.
Rs. 2,15,000 and Rs. 23,500
C.
Rs. 22,000 and Rs. 22,500
D.
Rs. 22,350 and Rs. 22,450
Answer: _________
Question 2125:
The quick ratio is 1.5 : 1 and the quick assets is Rs. 30,000. The quick liability will be
A.
Rs. 20,000
B.
Rs. 50,000
C.
Rs. 45,000
D.
Rs. 30,000
Answer: _________
Question 2126:
Current Cost Accounting method attempted to match the current incomeagainst which cost?
A.
Past cost
B.
Current cost
C.
General cost
D.
Individual cost
Answer: _________
Question 2127:
The adjusted net profit of a business is Rs. 2,00,000 and the amount of capital employed is Rs. 12,50,000. If goodwill is to be calculated on basis of 3 year purchase of super profit and the normal rate of return is 10% then the value of goodwill will be
A.
Rs. 20,00,00
B.
Rs. 22,50,00
C.
Rs. 25,00,00
D.
Rs. 30,00,00
Answer: _________
Question 2128:
Which type of share hold only one right and that of a fixed rate of dividend
A.
Cumulative
B.
Non-cumulative
C.
Participating
D.
Non-participating
Answer: _________
Question 2129:
A and B were Sharing Profit of a business in the ratio of 3 : 2. They admit C into partnership, who gets $$frac{1}{3}$$ of the share of profit from A, $$frac{1}{2}$$ of the share of profit from B. What will be the new profit sharing ratio now:
A.
3 : 2 : 5
B.
2 : 1 : 2
C.
3 : 2 : 1
D.
3 : 2 : 2
Answer: _________
Question 2130:
Cumulative Preference Shareholders can claim unpaid dividend of earlier years as a matter of right only when:
A.
There are sufficient profits
B.
Company goes into winding up
C.
There are sufficient liquid funds
D.
Directors propose to pay dividend to equity shareholders before giving dividends to them
Answer: _________
Question 2131:
Which of the following is the final stage of accounting as a process of information?
A.
Analysis and interpretation of information
B.
Communication of information
C.
Recording of data in books of accounts
D.
Preparation of summary in form of financial statement
Answer: _________
Question 2132:
Which of the following transactions is of capital nature:
A.
Purchase of a truck
B.
Replacement of old tyres
C.
Cost of repairing of truck
D.
All the above
Answer: _________
Question 2133:
The final accounts of a manufacturing company generally include the following statements. Select the correct sequence in the which the statements are prepared i. Balance sheet ii. Manufacturing account iii. Profit and loss account iv. Trading account v. Profit and loss appropriation account
A.
i, ii, iii, iv, v
B.
ii, iv, iii, v, i
C.
v, ii, iv, iii, i
D.
i, iv, iii, ii, v
Answer: _________
Question 2134:
Calculate the BEP in units from the following figures Sales price Rs. 15/unit Variable cost Rs. 8/unit Fixed cost Rs. 14,000 Unit produced 6,000
A.
1,500
B.
2,000
C.
2,500
D.
3,000
Answer: _________
Question 2135:
Earning ratio shows the relationship between earning per share and what?
A.
Net profit
B.
Equity share capital/No of equity share
C.
Market price per share
D.
Dividend per share
Answer: _________
Question 2136:
If share of face value of Rs. 10 is sold at Rs. 12 then Rs. 2 will be regarded as
A.
Premium
B.
Discount
C.
Gift
D.
None of the above
Answer: _________
Question 2137:
Which of the following has the purpose of taking responsibility?
A.
Aunthenticity
B.
Fairness of recorded amount
C.
Ownership
D.
None of the above
Answer: _________
Question 2138:
The profit sharing ratio of ABC is $$frac{1}{2},,frac{2}{5},,frac{1}{{10}}.$$ xa0 After retirement of A, remaining partner's ratio will be
A.
4 : 1
B.
5 : 1
C.
3 : 1
D.
2 : 1
Answer: _________
Question 2139:
The directors of company forfeited 1,000 shares of Rs. 10 each, Rs. 7.5 paid-up for non-payment of call money @ Rs. 2.5 per share, 700 of this shares are re-issued @ Rs. 7 per share. The amount transfer to Capital Reserve A/c would be
A.
Rs. 2,500
B.
Rs. 3,150
C.
Rs. 3,500
D.
Rs. 5,400
Answer: _________
Question 2140:
Which of the following is a type of cash receipt journal + cash payment journal?
A.
Bank statement
B.
Statement of cash flow
C.
Cash book
D.
Cash documents
Answer: _________
Question 2141:
Cash purchases is recorded in which of the following specialized journals?
A.
Purchase Journal
B.
Sales Journal
C.
Purchase return journal
D.
Cash payments journal
Answer: _________
Question 2142:
A brief explanation recorded below every entry in General Journal is commonly known as
A.
Narration
B.
Explanation
C.
Summary
D.
Other Information
Answer: _________
Question 2143:
Debit note is the basis for recording a transaction in which of the following journals?
A.
General journal
B.
Cash journal
C.
Purchase journal
D.
Purchase return journal
Answer: _________
Question 2144:
Credit note is the basis for recording a transaction in which of the following journals?
A.
Purchase Journal
B.
Sales return journal
C.
General journal
D.
Cash receipt journal
Answer: _________
Question 2145:
Specialized journals are more adequate for which type of businesses?
A.
Small businesses
B.
Big businesses
C.
Sole proprietorship
D.
Partnership
Answer: _________
Question 2146:
An 'account' records the ______ in the balance of an item
A.
Increase
B.
Decrease
C.
Increase or decrease
D.
Appreciation
Answer: _________
Question 2147:
_____ will be credited if goods are given as charity
A.
Cash
B.
Charity
C.
Purchases
D.
Sales
Answer: _________
Question 2148:
Which of the following is known as the base for preparing trial balance?
A.
Journal
B.
Cash account
C.
Ledger account
D.
Balance Sheet
Answer: _________
Question 2149:
Under net payment method, purchase consideration includes all payments made to the shareholders in the form of . . . . . . . .
A.
equity share
B.
preference share
C.
cash
D.
All of these
Answer: _________
Question 2150:
Depreciation deducted from the concerned . . . . . . . .
A.
Liability
B.
Asset
C.
Expenses
D.
Incomes
Answer: _________
Question 2151:
Purchases for office furniture on account is recorded in . . . . . . . .
A.
general journal
B.
cash book
C.
purchases book
D.
sales book
Answer: _________
Question 2152:
The term loan of Rs. 5,00,000 was received from IFCI. It was used as under: I. Rs. 2,00,000 was advanced to suppliers for capital work-in-progress II. Rs. 3,00,000 was used for financing the working capital The interest payable would be treated:
A.
on both I and II as capital expenditure
B.
on I as capital expenditure and on II as revenue expenditure
C.
on I as deferred expenditure and on II as revenue expenditure
D.
on I as deferred revenue expenditure and on II as capital expenditure
Answer: _________
Question 2153:
Goods worth Rs. 24,000 were returned by X. The accountant, however, credited the sales returns account by Rs. 42,000. In order to rectify this error, what should be done?
A.
Debit the sales return account by Rs. 42,000
B.
Credit the sales return account by Rs. 24,000
C.
Debit the sales return account by Rs. 66,000
D.
Debit the sales return account by Rs. 18,000
Answer: _________
Question 2154:
Accounting records transactions in terms of:
A.
Commodity units
B.
Monetary units
C.
Production units
D.
None of these
Answer: _________
Question 2155:
While assertaining profit in single entry system the amount of additional capital introduced is:
A.
added to the capital in the beginning
B.
deducted from the capital in the beginning
C.
added to the capital at the end
D.
deducted from the capital at the end
Answer: _________
Question 2156:
Income and expenditure matches all . . . . . . . . receipts against . . . . . . . . payments pertaining to the relevant accounting years.
A.
revenue, revenue
B.
cash, cash
C.
cash, credits
D.
credit, cash
Answer: _________
Question 2157:
If trial a balance does not tally inspite of thorough scrutiny and the difference is substantial, then which one of the following courses would be accountant adopt?
A.
Defer preparation of financial statements
B.
Open suspense A/C
C.
Write off the difference to profit and loss A/C
D.
Ignore the difference and prepare financial statements
Answer: _________
Question 2158:
A return Inwards book is kept to record:
A.
return of goods sold
B.
returns of anything purchased
C.
returns of goods purchased
D.
returns of anything sold
Answer: _________
Question 2159:
Underwriting commission is due on which basis?
A.
On issue price of shares
B.
On face value of shares
C.
On market price of shares
D.
On called up value of shares
Answer: _________
Question 2160:
The cost of taking 'license' to run cinema is
A.
Revenue
B.
Capital
C.
Investment
D.
None of the above
Answer: _________
Question 2161:
Which is the convention of accounting, where in there is no overvaluation of assets and incomes:
A.
Uniformity
B.
Materiality
C.
Conservatism
D.
Continuity
Answer: _________
Question 2162:
Ram and Shyarn are partners in a firm with a capital of Rs. 4,80,000 and Rs. 3,10,000 respectively. They admitted Ganesh as a partner with $${frac{1}{4}^{{ ext{th}}}}$$ share of profit, and Ganesh brings Rs. 3,00,000 as his capital. Ganesh's share of goodwill will be
A.
Rs. 1,10,000
B.
Rs. 27,500
C.
Rs. 17,500
D.
Rs. 70,000
Answer: _________
Question 2163:
Match List-I with List-II and choose answer List-I List-II a. Cash 1. Equity share capital b. Profit 2. Permanent property c. Discount on issue of shares 3. Virtual asset d. Machinery and plant 4. Current asset
A.
a-1, b-3, c-4, d-2
B.
a-4, b-1, c-3, d-2
C.
a-4, b-3, c-2, d-1
D.
a-2, b-3, c-1, d-4
Answer: _________
Question 2164:
In case of a company "Buy Back" is related to:
A.
Prospectus
B.
Shares
C.
Debentures
D.
Cheques
Answer: _________
Question 2165:
Indicate which of the following is correct?
A.
Net profit + Operating expenses + Cost of goods sold = Sales
B.
Net loss + Operating expenses + Purchases = Sales
C.
Gross profit + Net loss - Cost of goods sold = Net profit
D.
Sales + Net loss - Gross profit = Cost of goods sold
Answer: _________
Question 2166:
On what value the depreciation is charged in the books of the buyer in case of hire purchase method?
A.
Hire purchase price
B.
Cash price
C.
Hire purchase price or cash price whichever is more
D.
Assumed price
Answer: _________
Question 2167:
Which one of the following statements is false:
A.
Accounting is commonly treated as language of business
B.
There are many views about accounting principles
C.
There is no application of conservatism principle in accounting
D.
Accounting is based on accounting equation
E.
Realisation A/c is credited when the assets are realised
F.
Realisation A/c is directly credited when unrecorded asset is realised
G.
When goodwill is given in the books of a firm, then on dissolution of the firm goodwill A/c is also transferred to realisation A/c
H.
In case of gradual realisation of assets, the cash will be distributed amongst the partners in their profit-sharing ratio though their capitals are not in their profit-sharing ratio
Answer: _________
Question 2168:
While preparing Funds Flow Statement an increase in working capital is regarded as:
A.
Application of funds
B.
Source of funds
C.
Neither application nor source of funds
D.
Both application as well as source of funds
Answer: _________
Question 2169:
For which purpose the profits before incorporation can not be used?
A.
To write off capital loss
B.
To write off goodwill
C.
To create capital accumulation
D.
To distribute dividend
Answer: _________
Question 2170:
According to Garner Vs Murray rule, loss on account of a partner becoming insolvent should be distributed to remaining partners in
A.
Capital ratio
B.
Profit and loss ratio
C.
Average ratio
D.
None of the above
Answer: _________
Question 2171:
An ordinary partnership firm can have maximum
A.
5 partners
B.
10 partners
C.
150 partners
D.
20 partners
Answer: _________
Question 2172:
The following will be entered in the Total Debtor's Account:
A.
Cash Sales
B.
Credit Sales
C.
Total Sales
D.
None of these
Answer: _________
Question 2173:
A balance sheet shows financial condition of an organization.
A.
For the whole year
B.
The day on which if is prepared
C.
For a month
D.
For a week
Answer: _________
Question 2174:
Right shares are those share which are proposed to
A.
To the directors of company
B.
To the debenture holders
C.
To the existing shareholders
D.
To the creditors of company
Answer: _________
Question 2175:
A and B are partners of 5 : 3 ratio. C Joins and the new ratio agreed 4 : 2 : 2. Find out the sacrificing ratio of A and B.
A.
1 : 2
B.
1 : 3
C.
1 : 1
D.
None if the above
Answer: _________
Question 2176:
A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. They admit D for $$frac{1}{3}$$ profit of the firm. The sacrificing ratio of A, B and C will be:
A.
3 : 2 : 1
B.
4 : 2 : 1
C.
4 : 3 : 2
D.
5 : 3 : 2
Answer: _________
Question 2177:
Retirement of a partner leads to . . . . . . . . of remaining partners.
A.
gain in profit sharing ratio
B.
loss in profit sharing ratio
C.
no change in profit sharing ratio
D.
none of the above
Answer: _________
Question 2178:
Which of the following items will be written on credit side of the partner's capital accounts when the accounts are floating?
A.
Interest on drawings
B.
Loan advanced by a partner to the firm
C.
Partner's share in the firm's loss
D.
Salary to the active partners
Answer: _________
Question 2179:
A machinery was purchased on 1 st January 2000 at a cost of Rs. 1,20,000 and was depreciated by diminishing balance method at the rate of 15% p.a. It was sold on 31 st March 2002 for Rs. 80,000 what was the loss on sale of machine
A.
Rs. 3,449
B.
Rs. 3,658
C.
Rs. 3,251
D.
None of the above
Answer: _________
Question 2180:
'X' Ltd. has a liquid ratio of 2 : 1. If its stock is Rs. 40,000 and its current liabilities are of Rs. 1 Lac, its current ratio will be:
A.
1.4 times
B.
2.4 times
C.
1.2 times
D.
3.4 times
Answer: _________
Question 2181:
The minimum application money to be paid as per SEBI shall not be more than:
A.
15% of the issue price
B.
20% of the issue price
C.
25% of the issue price
D.
30% of the issue price
Answer: _________
Question 2182:
Unclaimed dividends should be shown in the balance sheet of a company under the heading of:
A.
Reserve and Surplus
B.
Provisions
C.
Current Liabilities
D.
Miscellaneous Items
Answer: _________
Question 2183:
Which one of the following pairs is not correctly matched
A.
Suppression of Invoices ⇔ External decoradtion
B.
Surchage deprecition ⇔ Secret reserve
C.
Debtors cash receipt ⇔ Reduction of fund sales
D.
Deletion of credit sales ⇔ Understatment of liabilties
Answer: _________
Question 2184:
Which of the following is a Personal Account:
A.
Investment
B.
Commission
C.
Outstanding salary
D.
Share premium
E.
Pre-paid Salary Account
F.
Drawings Account
G.
Outstanding Rent Account
H.
All of the above
Answer: _________
Question 2185:
Which of the following is an intangible asset?
A.
Furniture
B.
Patent
C.
Investment
D.
Losse tools
Answer: _________
Question 2186:
In Sinking Fund for redemption of Debentures Account, the amount is transferred every year from
A.
Reserve Account
B.
Profit and Loss Account
C.
Capital Account
D.
Surplus Account
Answer: _________
Question 2187:
Sony and Romy are equal partners with fixed capitals of Rs. 4,00,000 and Rs. 3,00,000, respectively. After closing the accounts for the year ending 31 st March 2019, it was discovered that the interest on capitals was provided @ 8% per annum instead of 10% per annum. In the adjusting entry
A.
Sony will be credited with Rs. 8,000 and Romy will be credited with Rs. 6,000
B.
Sony will be debited with Rs. 8,000 and Romy will be debited with Rs. 6,000
C.
Sony will be debited with Rs. 1,000 and Romy will be credited with in Rs. 1,000
D.
Sony will be credited with Rs. 1,000 and Romy will be debited with Rs. 1,000
Answer: _________
Question 2188:
The return of goods by a customer is debited to:
A.
Sales Return Account
B.
Customer's Account
C.
Purchase Account
D.
Stock Account
Answer: _________
Question 2189:
. . . . . . . . is a document which either creates or acknowledges a debt.
A.
Debenture
B.
Trust deed
C.
Security
D.
Articles of Association
Answer: _________
Question 2190:
Which of the following is a statutory reserve?
A.
Development Allowance Reserve
B.
Capital Reserve
C.
Workmen's Compensation Fund
D.
CRR
Answer: _________
Question 2191:
A cricket club has 50 members and each member pays Rs. 200 as monthly subscription 5 members paid advance subscription for the financial year 1994-95 and 10 members failed to pay subscription for the year 1993-94. The amount to be credited as subscription to income and expenditure account would be:
A.
Rs. 12,000
B.
Rs. 10,000
C.
Rs. 9,600
D.
Rs. 8,000
Answer: _________
Question 2192:
Sales to Mr. Gill recorded in purchase journal would affect . . . . . . . .
A.
Sales account
B.
Sales account, purchases account and Mr. Gill's account
C.
Purchases account and sales account
D.
Journal proper
Answer: _________
Question 2193:
When A advances money to B in the course of joint venture then A debits such money to . . . . . . . .
A.
Joint bank account
B.
Joint venture account
C.
B's personal account
D.
Expenses account
Answer: _________
Question 2194:
Salary account is of the nature of a:
A.
real account
B.
nominal account
C.
personal account
D.
trading account
Answer: _________
Question 2195:
Expenses incurred on research and development is an example of:
A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
None of these
Answer: _________
Question 2196:
Subscriptions received in advance will figure in the . . . . . . . .
A.
balance sheet
B.
receipts and payment account
C.
income and expenditure account
D.
revenue account
Answer: _________
Question 2197:
Match List-I with List-II and select the correct answer using the options given below the lists: List-I List-II a. Uncertain liability 1. Amortisation b. Expiry of tangible asset 2. Long-term liability c. Basis for all valuations in the balance sheet 3. Research and development d. Accounting standard-As-8 4. Estimated obligation 5. Conservatism convention
A.
a-5, b-1, c-2, d-3
B.
a-4, b-3, c-5, d-1
C.
a-5, b-3, c-4, d-1
D.
a-4, b-1, c-5, d-3
Answer: _________
Question 2198:
Which of the following represents source of fund in the balance sheet of a company?
A.
secured loan
B.
share capital
C.
reserves & surplus
D.
All of these
Answer: _________
Question 2199:
Accounting equation is based on-
A.
Going concern concept
B.
Dual aspect concept
C.
Money measurement concept
D.
Cost concept
Answer: _________
Question 2200:
Some of the items of liability are given below i. Bank overdraft ii. Debenture iii. Loan from financial institution iv. Unpaid wages v. Creditors Current liabilities in the above are
A.
iv and v
B.
i, iii and iv
C.
i, iv and v
D.
All of these
Answer: _________
Question 2201:
State which of the following is not a capital expenditure?
A.
Payment of Rs. 1,00,000 for purchase of land for agricultural farm
B.
Rs. 3,00,000 excise duty paid on manufactured sugar
C.
Investment of Rs. 50,000 in government debt
D.
Payment of Rs. 60,000 on contruction of railway siding
Answer: _________
Question 2202:
As per Section 52 of the companies Act, 2013, the balance in the Security Premium Account cannot be utilized for
A.
payment of dividend
B.
writing off discount on issue of shares
C.
issue of fully paid-up bonus share
D.
capital losses
Answer: _________
Question 2203:
Income and expenditure account is a:
A.
personal account
B.
real account
C.
nominal account
D.
suspense account
Answer: _________
Question 2204:
In which of the following account(s), accounting entries are made at the book value of assets and liabilities?
A.
Revaluation
B.
Capital
C.
Realisation
D.
Suspense
Answer: _________
Question 2205:
Under purchase method, any excess of the amount of purchase consideration over the acquired assets of the transferor company should be recognised as
A.
statutory reserve
B.
amalgamation adjustment
C.
equity shares
D.
goodwill
Answer: _________
Question 2206:
"The business organization will be going concern" it is
A.
An accounting principle
B.
An accounting concept
C.
An accounting convention
D.
An accounting imagination
Answer: _________
Question 2207:
If debt is Rs. 220, cash balance is Rs. 20 and equity is Rs. 300, then the gearing ratio is
A.
20%
B.
40%
C.
50%
D.
30%
Answer: _________
Question 2208:
A share of Rs. 20 originally issued at a discount of Rs. 2, was forfeited and the amount received on it was Rs. 4. The maximum discount on reissue of such forfeited share will be
A.
Rs. 6
B.
Rs. 4
C.
Rs. 3
D.
Rs. 5
Answer: _________
Question 2209:
"Du Pont Chart" used in financial analysis relates to analysis of:
A.
Capital Structure
B.
Liquidity position
C.
Overall performance
D.
Movement in share prices
Answer: _________
Question 2210:
Match the items of list-I with those of list-II and check your answer: List-I List-II a. Accrued Interest 1. Real Account b. Special donation received for hockey tournament 2. Income and expenditure c. Football club 3. Balance sheet d. Patent Rights 4. Personal Account
A.
a-2, b-3, c-4, d-1
B.
a-3, b-2, c-4, d-1
C.
a-4, b-3, c-2, d-1
D.
a-1, b-2, c-3, d-4
Answer: _________
Question 2211:
Which of the following error will not affect trial balance?
A.
Rs. 5,000 goods purchased on cash, by mistake expense account debited in place of purchase account
B.
Overcasting of purchase return book Rs. 500 in December
C.
Total of sales book carried forward from 2000 to 2200
D.
None of the above
Answer: _________
Question 2212:
Which of the following activities should be shown separately in the cash flow statement prepared as per Accounting Standard-3? 1. Cash flow from borrowing activities 2. Cash flow from operating activities 3. Cash flow from financing activities 4. Cash flow from investing activities 5. Cash flow from miscellaneous activitie
A.
1, 2 and 3
B.
1, 3 and 5
C.
1, 3 and 4
D.
1, 2 and 5
Answer: _________
Question 2213:
Liquid Assets are equal to:
A.
Value of all current assets
B.
Sum of cash and Bank Balances
C.
Current Assets less Inventories
D.
Current Assets less Inventories and Prepaid Expenses
Answer: _________
Question 2214:
Cost volume profit analysis does not present a statement of the impact of net profit on-
A.
Change in selling price
B.
Change in variable cost
C.
Change in contribution
D.
Change in fixed cost
Answer: _________
Question 2215:
A is regularly drawing Rs. 500 on 16 th of every month. if he is to pay interest on Rs. 6000 at a given rate, then the interest for the total period will be
A.
5 months
B.
6 months
C.
7 months
D.
$$5frac{1}{2}$$ months
Answer: _________
Question 2216:
After recognition, an entity applies
A.
revaluation model to the exploration and evaluation assets
B.
cost model to the exploration and evaluation assets
C.
Either A or B
D.
Both A and B
Answer: _________
Question 2217:
When a partner is given guarantee lay the other partner, loss on such guarantee will be borne by . . . . . . . .
A.
partner giving guarantee
B.
partner with highest ratio
C.
partnership firm
D.
all the other partners
Answer: _________
Question 2218:
A and B are partners sharing profits in the ratio of 3 : 2. Their books showed goodwill at Rs. 3,000. C is admitted with $${frac{1}{4}^{{ ext{th}}}}$$ share of profits and brings Rs. 10,000 as his capital. But, he is not able to bring in cash for his share of the goodwill of Rs. 3,000. How will you treat this?
A.
Goodwill is raised by Rs. 12,000
B.
C will remain as debtor for Rs. 3,000
C.
C's account is debited by Rs. 3,000
D.
Goodwill is raised by Rs. 9,000
Answer: _________
Question 2219:
A company cannot issue redeemable preference shares for a period exceeding
A.
10 years
B.
20 years
C.
30 years
D.
15 years
Answer: _________
Question 2220:
The following error will affect the Trial Balance
A.
Error of partial omission
B.
Error of principle
C.
Error of complete omission
D.
All of the above
Answer: _________
Question 2221:
Income includes
A.
Income earned
B.
Income received
C.
Income receivable
D.
All of the above
Answer: _________
Question 2222:
Cash Account is
A.
Personal account
B.
Real account
C.
Nominal account
D.
None of the above
Answer: _________
Question 2223:
Heavy amount spent for the advertisement of new company product is
A.
Revenue expenditure
B.
Deferred Revenue expenditure
C.
Capital expenditure
D.
Either 'a' or 'c'
Answer: _________
Question 2224:
Liability for bill discounted is a
A.
Contingent liability
B.
Fixed liability
C.
Current liability
D.
None of the above
Answer: _________
Question 2225:
Interest on debentures is calculated on
A.
Purchase value of debentures
B.
Market value of debentures
C.
Face value of debentures
D.
All of the above
Answer: _________
Question 2226:
The parties to joint venture are called
A.
Friends
B.
Principal and agent
C.
Partners
D.
Co-ventures
Answer: _________
Question 2227:
Under diminishing balance method, depreciation
A.
Is constant every year
B.
Increases every year
C.
Decreases every year
D.
None of the above
Answer: _________
Question 2228:
Legal expenses incurred on a suit for breach of contract to supply goods is a
A.
Capital expenditure
B.
Deferred Revenue expenditure
C.
Revenue expenditure
D.
Both 'b' and 'c'
Answer: _________
Question 2229:
Double entry system of bookkeeping refers to a system where:
A.
the number of accounts with a debit balance must agree with the number of accounts with the credit balance
B.
each transaction is recorded twice, once in journal and then in ledger
C.
equal debit and credit entries are made for each transaction
D.
each transaction is recorded in two set of account books
Answer: _________
Question 2230:
After completing . . . . . . . . years a company can issue shares at discount.
A.
2
B.
3
C.
1
D.
4
Answer: _________
Question 2231:
On calls in advance, interest is payable @ . . . . . . . .
A.
5%
B.
6%
C.
4%
D.
Nil
Answer: _________
Question 2232:
General insurance is a contract of . . . . . . . .
A.
contribution
B.
indemnity
C.
guarantee
D.
None of these
Answer: _________
Question 2233:
The following items are shown in profit and loss appropriation account as . . . . . . . .
A.
Dividend declared
B.
Discount on issue of shares
C.
Non-operating expenses
D.
Current assets
Answer: _________
Question 2234:
How many sides does an account have?
A.
One
B.
Two
C.
Three
D.
Four
Answer: _________
Question 2235:
Legacies are generally:
A.
capitalized and taken to balance sheet
B.
treated as income
C.
treated as expenditure
D.
treated as other incomes
Answer: _________
Question 2236:
Journal proper is issued to record . . . . . . . .
A.
all purchases of goods
B.
all sales of goods
C.
all business expenses paid in cash
D.
all adjusting and rectification entries
Answer: _________
Question 2237:
Which one of the following securities cannot be issued by a public limited company in India?
A.
Participating preference shares
B.
Redeemable preference shares
C.
Deferred shares
D.
Debentures
Answer: _________
Question 2238:
Subscription received during the year were Rs. 800 for the current year. Rs. 100 for the previous year and Rs. 100 for the next year. In the receipts and payments account the receipts from subscriptions would appear at:
A.
Rs. 700
B.
Rs. 800
C.
Rs. 900
D.
Rs. 1000
Answer: _________
Question 2239:
Which one of the following errors will affect the Trial Balance:
A.
In a Purchase Book, Total is carried forward to next page with Rs. 105 less
B.
Amount spent as wages on construction of a room was credited to wages account
C.
Total in purchase return book found to be less by Rs. 53
D.
None of the above
Answer: _________
Question 2240:
Environmental accounting concept is applied on
A.
cement industries
B.
steel industries
C.
textile industries
D.
All of these
Answer: _________
Question 2241:
A, B and C are three equal partners. D is admitted for $${frac{1}{4}^{{ ext{th}}}}$$ share. What is the sacrificing ratio?
A.
1 : 1 : 1
B.
1 : 2 : 1
C.
2 : 1 : 1
D.
1 : 1 : 2
Answer: _________
Question 2242:
Preparation of consolidated Balance Sheet of Holding Company and its subsidiary company is done as per
A.
AS 11
B.
AS 21
C.
AS 22
D.
AS 23
Answer: _________
Question 2243:
Which one of the following ratios is the indicator of the long term solvency of a firm?
A.
Acid test ratio
B.
Debit equity ratio
C.
Time interest earned ratio
D.
Return on investment ratio
Answer: _________
Question 2244:
A Ltd issued a prospectus inviting applications for 2,000 shares. Applications were received for 3,000 shares and pro-rata allotment was made on the applications of 2,400 shares. If A has been allotted 40 shares, how many shares he must have applied for?
A.
40
B.
44
C.
48
D.
52
Answer: _________
Question 2245:
Which one of the following will not affect the working capital?
A.
Realisation of cash from debtors
B.
Sale of plant and machinery in cash
C.
Issue of equity shares
D.
Redemption of debentures
Answer: _________
Question 2246:
The maximum number of partners in a firm has been specified by
A.
The Partnership Act, 1932
B.
The Companies Act, 1956
C.
The Contract Act, 1872
D.
None of the above
Answer: _________
Question 2247:
If a firm considers advance received from its clients as its income, then it violates which of the following concepts?
A.
Money measurement concept
B.
Cost concept
C.
Realisation concept
D.
Separate entity concept
Answer: _________
Question 2248:
Capital is considered as a business liability according to following concept of
A.
separate business entity
B.
matching
C.
going concern
D.
conservation
Answer: _________
Question 2249:
Which of the following would NOT be considered as a component of 'cost' of stock?
A.
Transportation inward costs
B.
Import duties
C.
Salaries of selling staff
D.
Purchase price
Answer: _________
Question 2250:
Which of the following is TRUE about the treatment of insurance premium paid in advance
A.
Current asset
B.
Current liability
C.
Short term liability
D.
Fixed asset
Answer: _________
Question 2251:
Which of the following is (are) type(s) of Public Limited Companies?
A.
Listed companies
B.
Non listed companies
C.
Private limited companies
D.
Both listed and non listed companies
Answer: _________
Question 2252:
The charter of a company which defines the limitations and powers of the company is called
A.
Memorandum of Association
B.
Articles of Association
C.
Statutory Report
D.
Certificate of Commencement
Answer: _________
Question 2253:
Merchandise on hand at either the beginning or end of the accounting period is called
A.
Raw material
B.
Cost of goods sold
C.
Work in progress
D.
Inventory
Answer: _________
Question 2254:
Which of the following items of balance sheet are useful in evaluating a company's liquidity?
A.
Current assets and other assets
B.
Current liabilities and current assets
C.
Current liabilities and plant and equipment
D.
In current liabilities and other assets
Answer: _________
Question 2255:
Which of the following can be distributed among the shareholders?
A.
Capital reserve
B.
General reserve
C.
Revaluation reserve
D.
All of the above
Answer: _________
Question 2256:
Which of the following is non-profit organization?
A.
Sole proprietorship
B.
Partnership
C.
Limited company
D.
Trust
Answer: _________
Question 2257:
How many companies are involved in the scheme of internal reconstruction?
A.
One
B.
Two
C.
Three
D.
Unlimited
Answer: _________
Question 2258:
Outstanding Expenses Account is:
A.
Income and Expenditure Account
B.
Nominal Account
C.
Personal Account
D.
Real Account
Answer: _________
Question 2259:
If profits are 25% of selling price, percentage of profit to cost would be
A.
20%
B.
25%
C.
$$33frac{1}{3}\% $$
D.
30%
Answer: _________
Question 2260:
"Double entry system is that system of book keeping where accounting is done through personal and impersonal accounts." This definition was given by-
A.
William Pickles
B.
M. J. Killer
C.
R. N. Carter
D.
None of the above
Answer: _________
Question 2261:
A machine was purchased for Rs. 1,000 and its life was estimated to be 3 years and at the end of life its book value will be Rs. 512. If depreciation is calculated according to written down value method. The rate of depreciation would be:
A.
25%
B.
15%
C.
20%
D.
10%
Answer: _________
Question 2262:
Premium on issue of shares is shown in balance sheet as:
A.
An asset
B.
A liability
C.
An expense
D.
A revenue
Answer: _________
Question 2263:
Bank account is . . . . . . . . on receipt of first call.
A.
Debit
B.
Credit
C.
Debit or Credit
D.
None of the above
Answer: _________
Question 2264:
If the average recovery period is 15 days and the average book receipts are Rs. 45,000, then what will be the total annual credit sales?
A.
Rs. 10,80,000
B.
Rs. 16,20,000
C.
Rs. 6,75,000
D.
Rs. 1,87,500
Answer: _________
Question 2265:
Interest on investments received Rs. 500 which includes Rs. 100 in respect of interest accrued in the preceding year. What amount will be posted in the Income and expenditure Account:
A.
Rs. 100
B.
Rs. 500
C.
Rs. 600
D.
Rs. 400
Answer: _________
Question 2266:
X Ltd. forfeited 20 shares of Rs. 10 each (Rs. 8 called up) on which John had paid application and allotment money of Rs. 5 per share. Of these, 15 shares were reissued to Parker as fully paid up for Rs. 6 per share. What is the balance in the share forfeiture account after the relevant amount is transferred to the capital reserve account?
A.
NIL
B.
Rs. 5
C.
Rs. 25
D.
Rs. 100
Answer: _________
Question 2267:
Call option is:
A.
a contract to buy a certain number of shares at a stated price within a specified period of time
B.
a contract to sell a certain number of shares at a stated price within a specified period of time
C.
the option of the issuing company to demand the shareholders to pay for the partly paid shares
D.
the option available to the convertible debenture holders to demand equity shares in conversion of debentures
Answer: _________
Question 2268:
In a partnership business if there is no specific agreement among partners, profit is distributed in the:
A.
ratio of capital contributions
B.
ratio of time spent in the business
C.
ratio to be decided by the court
D.
equal ratio
Answer: _________
Question 2269:
Assets in the balance sheet are shown at cost less depreciation rather than their replacement cost because of the accounting convention . . . . . . . .
A.
going concern
B.
matching
C.
realization
D.
money measurement
Answer: _________
Question 2270:
Following data appear in the books of XY & Co. as on 31 st March 2003 Capital account = Rs. 13,00,000 Drawings account = Rs. 12,000 Land & building account = Rs. 10,00,000 Goodwill account = Rs. 3,50,000 Suspense account (Dr) = Rs. 50,000 Loss by theft account = Rs. 20,000 Business loss = Rs. 50,000 Loan given to AB & Co = Rs. 60,000 What will be the amount of sundry creditors?
A.
Rs. 2,30,000
B.
Rs. 1,72,000
C.
Rs. 3,42,000
D.
Rs. 2,42,000
Answer: _________
Question 2271:
Bills receivable endorsed are debited to:
A.
Debtor's Account
B.
Creditor's Account
C.
Bills payable Account
D.
Bills receivable Account
Answer: _________
Question 2272:
If the total charge of depreciation and maintenance is considered as the method which would provide a unifrom charge is:
A.
annuity method
B.
straight line method
C.
diminishing balance method
D.
insurance policy method
Answer: _________
Question 2273:
Which of the following a/c is debited when statutory reserve of the transferor company is taken over by the transferee company?
A.
Goodwill a/c
B.
Amalgamation adjustment a/c
C.
Capital reserve a/c
D.
Statutory reserve
Answer: _________
Question 2274:
Which one of the following is not taken into account in adjusting the cash balance?
A.
Mistakes in the cash book
B.
Mistakes in the pass book
C.
Bank charges debited in pass book
D.
Interest and dividend credited in pass book
Answer: _________
Question 2275:
Base date is otherwise called as . . . . . . . .
A.
zero date
B.
leave date
C.
working days
D.
grace days
Answer: _________
Question 2276:
. . . . . . . . days of grace are allowed in case of time bills for calculation date of maturity.
A.
Five
B.
Seven
C.
Three
D.
Two
Answer: _________
Question 2277:
On 1 st January 2012 X drawn of Rs. 20,000 on Y for three months. X discounted the bill with bank for Rs. 19,900. On due date, the bill was dishonoured. For dishonour in the books of X. Bank account will be credited by
A.
Rs. 19,900
B.
Rs. 20,000
C.
Rs. 20,100
D.
Rs. 19,800
Answer: _________
Question 2278:
Which one of the following receipts is of revenue nature?
A.
Amount realised from the sale of investments
B.
Dividend received on investment
C.
Amount borrowed from a bank
D.
Compensation received from municipal corporation for the acquisition of land for the construction of road
Answer: _________
Question 2279:
Authorised share capital is
A.
Capital amount paid-up by share holders
B.
Maximum amount of capital for which shares can be issued by the company
C.
Total Share capital of the company
D.
Total amount called-up on share capital
Answer: _________
Question 2280:
In what order are the followingassetsshown in the balance sheet of a company? i. Trade receivables ii. Cash iii. Furniture and fittings iv. Investment in shares and debentures
A.
ii, i, iv, iii
B.
i, ii, iii, iv
C.
iii, iv, i, ii
D.
iv, iii, ii, i
Answer: _________
Question 2281:
The main objective of accounting standards is to
A.
Prepare the accounting reports easily understood by the common man
B.
Comply with the legal formalities
C.
Harmonize diversified accounting practices
D.
Comply with the requirements of the International Accounting Standards (IAS)
Answer: _________
Question 2282:
Amount spent on an advertisement campaign, the benefit of which is likely to last for three years is a:
A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
Contingent expenditure
Answer: _________
Question 2283:
Deferred revenue expenditure is associated with
A.
An expenditure for entertainment of executives
B.
Past expenditure made by a company now adjusted from the current profit
C.
Expenditure which is revenue in nature is spread over a number of years
D.
An expenditure which cannot be taken into account due to non-availability of a cash
Answer: _________
Question 2284:
The main objective of Accountancy is to know about the:
A.
Profit or Loss and Assets and Liabilities of the business
B.
Position of the Stock of Goods
C.
Position of Cash
D.
Errors and frauds of the employees
Answer: _________
Question 2285:
What is the correct sequence of the following actions required for the preparation of financial accounts? 1. Trading account 2. Making adjusting entries 3. Balance sheet 4. Profit and Loss account Select the correct answer:
A.
4, 2, 1 and 3
B.
2, 4, 3 and 1
C.
2, 1, 4 and 3
D.
4, 2, 3 and 1
Answer: _________
Question 2286:
The Accounting Standard No. 2 of the International Accounting Standards Committee is on the subject of
A.
Valuation and presentation of inventories
B.
Depreciation Accounting
C.
Information to be disclosed in financial statements
D.
None of the above
Answer: _________
Question 2287:
Long term solvency is indicated by
A.
Asset Liability Ratio
B.
Debt Equity Ratio
C.
Interest Coverage Ratio
D.
All are correct
Answer: _________
Question 2288:
Automation and Computerization make an office:
A.
Workless
B.
Powerless
C.
Paperless
D.
Leaderless
Answer: _________
Question 2289:
Mr. Ashok Kumar has taken a mine on lease whose minimum rent is Rs. 1,00,000. The rate of royalty is Rs. 1 per ton. The production in a particular year is Rs. 80,000 tonnes. What will be the amount to be paid by Mr. Ashok?
A.
Rs. 80,000
B.
Rs. 1,00,000
C.
Rs. 90,000
D.
Rs. 50,000
Answer: _________
Question 2290:
After admission of a new partner the capital of all the partner must be in
A.
New profit sharing ratio
B.
Old profit sharing ratio
C.
Equal ratio
D.
Mutually agreed ratio
Answer: _________
Question 2291:
The convention of conservatism is applicable in:
A.
providing for discount on creditors
B.
making provision for bad and doubtful debts
C.
creating reserve for financial stability
D.
none of these
Answer: _________
Question 2292:
At Break-Even point, contribution is equal to
A.
Variable cost
B.
Fixed cost
C.
Total cost
D.
Sales price
Answer: _________
Question 2293:
Under Hire Purchase System the relationship between buyer and seller is
A.
Debtor and creditor
B.
Pawner and pawnee
C.
Bailor and bailee
D.
Lender and the borrower
Answer: _________
Question 2294:
Under the 'purchase method of accounting', the transferee company incorporates in its books
A.
The assets, liabilities and reserves of the transferor company
B.
The assets, liabilities and not statutory reserves of the transferor company
C.
The assets, liabilities and statutory reserves of the transferor company
D.
The assets and liabilities of the transferor company
Answer: _________
Question 2295:
'P' and 'Q' are partners, sharing profits in the ratio of 8 : 5 respectively. On 1 st April 2016, they admitted R into partnership. The new profit sharing ratio among P, Q and R is fixed as 6 : 4 : 3 respectively. The sacrifice ratio of 'P' will be
A.
$$frac{2}{{13}}$$
B.
$$frac{1}{{13}}$$
C.
$$frac{3}{{13}}$$
D.
None of these
Answer: _________
Question 2296:
If capitals are fluctuating, which of the following will not be added while determining capital ratio?
A.
General reserve fund
B.
Balance of profit and loss
C.
Profit on realization
D.
Balance of cash A/c
Answer: _________
Question 2297:
Balance sheet is prepared primarily with the following group in view of . . . . . . . .
A.
Owners
B.
Creditors
C.
Government
D.
Management
Answer: _________
Question 2298:
Noting charges are paid in the event of . . . . . . . . of a bill.
A.
Withdrawal
B.
Payment
C.
Dishonour
D.
Deposit
Answer: _________
Question 2299:
Schedule 16 relates to . . . . . . . .
A.
interest earned
B.
interest expended
C.
operating expenses
D.
None of these
Answer: _________
Question 2300:
Which of the following is related to nominal account?
A.
Bank account
B.
Commission account
C.
Furniture account
D.
Interest received account
Answer: _________
Question 2301:
A limited company has to redeem redeemable preference shares of the value of Rs. 1,00,000 for which the company has issued 3000 equity shares of Rs. 10 each at a premium of 10%. The amount to be transferred to capital redemption reserve account will be:
A.
Rs.1,00,000
B.
Rs. 97,000
C.
Rs. 70,000
D.
Rs. 67,000
Answer: _________
Question 2302:
Given that Opening capital : Rs. 5,000 Closing capital : Rs. 6,000 Drawings : Rs. 1,000 New capital invested : Rs. 500 The profit for the year will be:
A.
Rs. 2,000
B.
Rs. 1,500
C.
Rs. 1,000
D.
Rs. 500
Answer: _________
Question 2303:
The amount of surrendered shares is credited to . . . . . . . .
A.
CRR
B.
sinking fund
C.
capital reduction account
D.
reserve
Answer: _________
Question 2304:
A receipts and payments account, the payments are recorded on the . . . . . . . . side.
A.
Credit
B.
Debit
C.
Upper
D.
Lower
Answer: _________
Question 2305:
Mr. X forfeited 100 share of Rs. 10 each on which payment of Rs. 2 per share in the first call and Rs. 3 per share in the final call was not received. These shares were re-issued at a deduction of Rs. 1.50 paise per share. Amount transferred to capital reserve will be
A.
Rs. 350
B.
Rs. 500
C.
Rs. 150
D.
Rs. 50
Answer: _________
Question 2306:
A contributory is
A.
a creditor
B.
a shareholder
C.
a debentureholder
D.
a convertible debentureholder
Answer: _________
Question 2307:
Quick ratio is a check
A.
Solvency
B.
Profitability
C.
Performance capacity
D.
Liquidity
Answer: _________
Question 2308:
The basic accounting equation is based on
A.
Cost concept
B.
Accounting period concept
C.
Accrual concept
D.
Dual aspect concept
Answer: _________
Question 2309:
Which of the following is not a feature of debenture?
A.
Debenture represent borrowed funds
B.
Dividend are firstly paid on debentures
C.
General debentures do not carry voting rights
D.
Debenture comprises a charge on the assets of the company
Answer: _________
Question 2310:
On the retirement of a partner, the reserves created out of profits should be transferred to the capital accounts of:
A.
The remaining partners in their new profit sharing ratio
B.
The remaining partners in their old profit sharing ratio
C.
All the partners in the old profit-sharing ratio
D.
All the partners in the ratio of their capital balances
Answer: _________
Question 2311:
Which of the following account does not start with the opening balance?
A.
Income and expenditure A/c
B.
Receipt and payment A/c
C.
Profit and loss A/c
D.
Realisation A/c
Answer: _________
Question 2312:
Which of the following statements are correct? 1. Analysis and interpretation of financial statements, is a function of accounting. 2. Profit and Loss account is prepared for ascertaining financial postition of a firm. 3. Goodwill is a wasting asset. 4. Balance Sheet is prepared for ascertaining financial position of a firm Select the correct answer
A.
1 and 2
B.
1 and 3
C.
1 and 4
D.
2 and 3
Answer: _________
Question 2313:
Which one of the following is an investment activity as per AS-7?
A.
Redemption of debentures
B.
Cash in hand
C.
Purchase of fixed assets
D.
Interest paid
Answer: _________
Question 2314:
The real accounts are accounts of Assets, Liabilities and
A.
Expenses
B.
Revenues
C.
Capital
D.
Drawing
Answer: _________
Question 2315:
If a transaction is completely omitted from the books of accounts, will it effect the agreement of Trial Balance?
A.
Yes
B.
No
C.
Transactions can not be omitted
D.
None of the above
Answer: _________
Question 2316:
_______ is the common base for preparing a trial balance
A.
Ledger accounts
B.
General Journal
C.
Specialized journals
D.
Balance sheet
Answer: _________
Question 2317:
Which of the following is true about a trial balance?
A.
It lists down the balances of accounts
B.
It lists down the balances of a balance sheet
C.
It is a kind of financial statement
D.
It is not a part of accounting cycle
Answer: _________
Question 2318:
Debit balance = Credit balance in a trial balance indicates that
A.
No error in recording transactions
B.
No error in posting entries to ledger accounts
C.
Account balances are correct
D.
Mathematically Capital + Liabilities = Assets
Answer: _________
Question 2319:
Trial Balance is commonly prepared
A.
Frequently during the year
B.
At the end of an accounting period
C.
At the end of a month
D.
At the end of a year
Answer: _________
Question 2320:
Which of the following will affect the agreement of a trial balance?
A.
Complete omission of a transaction
B.
Partial omission of a transaction
C.
Error of principle
D.
Compensating errors
Answer: _________
Question 2321:
If debit balances = credit balances, trial balance only shows or checks the _________ and it does not indicate that no errors were made during recording and posting.
A.
Arithmetic accuracy
B.
Errors of commission
C.
Omissions of economic events
D.
Understatements of balances
Answer: _________
Question 2322:
Which of the following account with normal balance is shown at the debit side of a trial balance?
A.
Rent income account
B.
Creditors account
C.
Unearned income account
D.
Cash account
Answer: _________
Question 2323:
Which of the following account with normal balance is shown at the credit side of a trial balance?
A.
Cash account
B.
Bank account
C.
Equipment account
D.
Accrued expenses account
Answer: _________
Question 2324:
Financial activities in a cash flow statement as per AS-7 do not include
A.
issue of shares
B.
buy back of shares
C.
purchase of building
D.
dividend paid
Answer: _________
Question 2325:
Which one of the following is a revenue expenditure
A.
Cost of extension of factory building
B.
Legal cost of purchase of a building
C.
Purchase of freehold building
D.
Cost of painting old building
Answer: _________
Question 2326:
Operating Leverage and Financial Leverage of a firm are 3 and 2, respectively. If sales increase by 6%, then earnings before tax will rise by:
A.
18%
B.
12%
C.
36%
D.
30%
Answer: _________
Question 2327:
Which one of the following is not correct?
A.
Margin of Safety $$ = frac{{{ ext{Profit}}}}{{{ ext{P/V ratio}}}}$$
B.
P/V Ratio $$ = frac{{{ ext{Change in Contribution}}}}{{{ ext{Change in sales}}}} imes 100$$
C.
Break-even point in units $$ = frac{{{ ext{Fixed cost}}}}{{{ ext{Contribution per unit}}}}$$
D.
Required sales to earn desired profits $$ = frac{{{ ext{Desired profit}}}}{{{ ext{P/V ratio}}}}$$
Answer: _________
Question 2328:
Machine Hour Rate method of charging depreciation is useful when:
A.
Ouput can be effectively measured
B.
Use of asset can be measured in terms of time
C.
Utility of the asset can be directly related to its productive use
D.
Entire production process is mechanised
Answer: _________
Question 2329:
Over capitalization is . . . . . . . . than undercapitalization.
A.
Less dangerous
B.
More dangerous
C.
Not dangerous
D.
None of the above
Answer: _________
Question 2330:
Which one of the following methods of Inflation Accounting has been proposed by Sandilands Committee of UK?
A.
General Price Level Method
B.
Specific Price Level Method
C.
Current Cost Accounting Method
D.
Generally Accepted Accounting Principles
Answer: _________
Question 2331:
Given, 2014 2015 Current Assets Rs. 5,00,000 Rs. 3,20,000 Current Liabilities Rs. 3,60,000 Rs. 4,00,000 The decrease in working capital will be:
A.
Rs. 1,20,000
B.
Rs. 2,20,000
C.
Rs. 3,20,000
D.
Rs. 20,000
Answer: _________
Question 2332:
Allahabad company limited forfeited 50 shares of Rs. 10 each. Rs. 6 per share were paid on then. Out of these 10 shares were re-issued at Rs. 6.50 Per share fully paid up. Amount transferred to capital reserve will be
A.
65
B.
35
C.
25
D.
32.50
Answer: _________
Question 2333:
Given below are two statement, one labelled as Assertion (A) and the other as Reason (R) Assertion (A): In accounting, a distinction is made between the business and the owner. Reason (R): Accounting concepts are based on self-consciousness and not on subjectivity. Select the correct answer
A.
Both (A) and (R) are correct and (R) is the correct explanation for (A)
B.
Both (A) and (R) are correct but (R) is not the correct explanation for (A)
C.
(A) is correct (R) is incorrect
D.
Both (A) and (R) are incorrect
Answer: _________
Question 2334:
Petty cash system is designed:
A.
to meet the needs of small businesses
B.
to cover small and miscellaneous income
C.
to cover the small expenditure to be paid in cash
D.
to cover both small incomes and expenditures
Answer: _________
Question 2335:
Which of the following assets does not depreciate?
A.
Machinery and equipment
B.
Patents
C.
Land
D.
Furniture
Answer: _________
Question 2336:
The main objective of providing depreciation is to:
A.
create secret reserves
B.
reduce the book value of assets
C.
value the assets properly
D.
allocate cost of the assets
Answer: _________
Question 2337:
Preparation of trial balance helps in the deduction of . . . . . . . .
A.
error of principle
B.
compensating errors
C.
errors of whole omission
D.
clerical errors
Answer: _________
Question 2338:
Bills receivable account is:
A.
an expense Account
B.
an asset Account
C.
a liability Account
D.
a revenue Account
Answer: _________
Question 2339:
Which one of the following is treated as revenue expenditure?
A.
Cost incurred for a new exit as required under the local bodies by laws
B.
Interest paid on loan during the construction of works
C.
Cost of pulling down an old building
D.
A dealer in purchasing sewing machines and spent some money on the repairs
Answer: _________
Question 2340:
Banks are required to transfer . . . . . . . . of their profits to statutory reserve.
A.
20%
B.
25%
C.
10%
D.
None of these
Answer: _________
Question 2341:
While preparing the books of the transferee company in purchase method, the difference between purchase consideration and share capital of the transferor company should be adjusted in . . . . . . . .
A.
share capital
B.
reserves
C.
assets
D.
liabilities
Answer: _________
Question 2342:
A withdrawal of cash from business by the proprietor of the firm should be credited to:
A.
Capital Account
B.
Cash Account
C.
Drawing Account
D.
Proprietor's Account
Answer: _________
Question 2343:
Which one of the following is an example of personal account?
A.
Capital account
B.
Building account
C.
Cash account
D.
Investment account
Answer: _________
Question 2344:
The requirement of working capital depends on:
A.
The period of operating cylce
B.
The size of the business
C.
The turnover of current assets
D.
All the above A, B and C
Answer: _________
Question 2345:
The meaning of net invested capital is
A.
Total assets - Current Liabilities
B.
Total assets - Total Liabilities
C.
Total assets - Fictitious Assets - Current Liabilities
D.
None of the above
Answer: _________
Question 2346:
Contribution is
A.
Sales - Purchase
B.
Sales - Variable Cost
C.
Sales - Fixed Cost
D.
None of these
Answer: _________
Question 2347:
Which among the following is wrong?
A.
$${ ext{P/V Ratio}} = frac{{{ ext{Contribution}}}}{{{ ext{Sales}}}}$$
B.
$${ ext{P/V Ratio}} = frac{{{ ext{Fixed Cost + Profit}}}}{{{ ext{Sales}}}}$$
C.
$${ ext{P/V Ratio}} = frac{{{ ext{Sales }} - { ext{ Variable Cost}}}}{{{ ext{Sales}}}}$$
D.
$${ ext{P/V Ratio}} = frac{{{ ext{Contribution}}}}{{{ ext{Change in Sales}}}}$$
Answer: _________
Question 2348:
Which of the following is not a tool of management accounting?
A.
Financial Accounting
B.
Inflation Accounting
C.
Standard Costing
D.
Analysis of Financial Statements
Answer: _________
Question 2349:
Assets of an organization is Rs. 21,315 and liabilities is Rs. 4,120. The capital of owner is
A.
Rs. 21,315
B.
Rs. 17,195
C.
Rs. 25,435
D.
Rs. 4120
Answer: _________
Question 2350:
The current ratio is ratio between:
A.
Current assets and current liabilities
B.
Liquid assets and current liabilities
C.
Debts and equity
D.
Fixed assets and sales
Answer: _________
Question 2351:
On 1 st June 2018, a partner introduced an additional capital Rs. 50,000 in the firm. In the absence of a part nership deed, on 31 st March 2019, he will receive an interest of
A.
Rs. 3,000
B.
Zero
C.
Rs. 2,500
D.
Rs. 1,800
Answer: _________
Question 2352:
Amount spent on advertisement campaign, the benefit of which is likely to last for at least three years, is OR Rs. 1,00,000 spent on special advertising compaign will be:
A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
Contingent expenditure
Answer: _________
Question 2353:
Realisation concept would apply when:
A.
Money is realised from the debtors
B.
Goods are delivered to customer
C.
Order is received
D.
none of the above
Answer: _________
Question 2354:
Commercial accounting is based on
A.
Single entry book keeping
B.
Double entry book keeping
C.
Both single and double entry book keeping
D.
Cash basis of book keeping
Answer: _________
Question 2355:
An asset that is NOT physical in nature is called
A.
Intangible asset
B.
Liquid asset
C.
Current asset
D.
Fixed asset
Answer: _________
Question 2356:
In which of the following interim dividend is treated?
A.
In profit and loss account
B.
In profit and loss appropriation account
C.
On the asset side of the Balance sheet
D.
In trading account
Answer: _________
Question 2357:
Which of the following documents contains rules and regulations for internal management of the business?
A.
Memorandum of association
B.
Articles of association
C.
Prospectus
D.
Statutory Declaration
Answer: _________
Question 2358:
Which of the following is NOT a cash inflow?
A.
Decrease in creditors
B.
Decrease in debtors
C.
Issue of shares
D.
Sale of a fixed asset
E.
Sale of fixed asset
F.
Issue of debentures
G.
Cash from business operation
H.
Purchase of fixed asset
Answer: _________
Question 2359:
Which of the following is quoted company?
A.
Private limited company
B.
Public limited company
C.
Listed company
D.
Non listed company
Answer: _________
Question 2360:
Which of the following capital is required for the registration of the company?
A.
Issued capital
B.
Subscribed capital
C.
Authorized capital
D.
Reserve capital
Answer: _________
Question 2361:
Accounts receivable & inventory are the examples of
A.
Current assets
B.
Liquid asset
C.
Fixed asset
D.
Capital asset
Answer: _________
Question 2362:
Which of the following account will be credited in the books of XYZ Co. Ltd, if the business purchases a vehicle thriugh cheque?
A.
Vehicle account
B.
Business account
C.
Bank account
D.
Debtors account
Answer: _________
Question 2363:
In which of the following condition, a company will have positive working capital?
A.
If current assets>current liabilities
B.
If current assets
C.
If current assets = current liabilities
D.
None of the above
Answer: _________
Question 2364:
Liquidity ratio does not include-
A.
Cash
B.
Bank balance
C.
Debtors
D.
Stock
Answer: _________
Question 2365:
If the rate of gross profit is 25% of the sales and the cost of goods sold is Rs. 1,00,000 the amount of gross profit will be:
A.
Rs. 25,000
B.
Rs. 20,000
C.
Rs. 30,000
D.
Rs. 33,333
Answer: _________
Question 2366:
Sacrifice ratio is used
A.
on the death of a partner
B.
on the retirement of a partner
C.
on the dissolution of a firm
D.
on the change in the profit sharing ratio
Answer: _________
Question 2367:
X and Y are partners in the firm. Their profit sharing ratio is 2 : 3. Rs. 10,000 goodwill is appearing in the books. Z becomes new partner in the firm for $${frac{1}{5}^{{ ext{th}}}}$$ share. His share of goodwill is calculated as Rs. 15,000. Amount of goodwill credited to old partners capital account will be
A.
Rs. 50,000
B.
Rs. 40,000
C.
Rs. 75,000
D.
Rs. 65,000
Answer: _________
Question 2368:
Company with a paid up capital of 5000 equity shares Rs. 10 each has a turnover of four times with a margin of 8% on sales. The ROI of the company will be:
A.
28%
B.
32%
C.
35%
D.
42%
Answer: _________
Question 2369:
Stock = Rs. 14,000 Debtors = Rs. 20,000 Stock Turnover = 5 Time Debtor's collection period = 73 days Creditors = Rs. 20,000 Outstanding expenses 15% Lendars Current Assets Turnover will be:
A.
2.06
B.
2.94
C.
1.52
D.
2.0
Answer: _________
Question 2370:
A machinery was purchased on 1 st January 1999 and was depreciated at the rate of 10% on diminishing balance method. It was sold on 31 st March 2001 when its value was Rs. 67,129 what was its value on 1 st January 1999?
A.
Rs. 90,000
B.
Rs. 85,000
C.
Rs. 82,000
D.
None of the above
Answer: _________
Question 2371:
ABC Ltd was incorporated with an authorised share capital of Rs. 1,00,000 equity shares of Rs. 10 each. The Board of Directors of the company decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. Which account should be debited in the books of ABC Ltd?
A.
Promoter's A/c
B.
Service's A/c
C.
Goodwill A/c
D.
Share Capital A/c
Answer: _________
Question 2372:
Jagdish and Brij are partners in a firm who share profits and losses in 3 : 2. They admitted Ramesh for $$frac{1}{3}$$ share. Their new profit sharing ratio will be?
A.
3 : 2 : 1
B.
6 : 4 : 5
C.
3 : 2 : 3
D.
3 : 2 : 2
Answer: _________
Question 2373:
Which of the following is accounting equation:
A.
Capital = Assets + Liabilities
B.
Capital = Assets - Liabilities
C.
Assest = Liabilities - Capital
D.
Liabilities = Assets + Capital
Answer: _________
Question 2374:
If a partner takes leaves from the firm then his share of goodwill is debited to remaining partners capital account in . . . . . . . . ratio?
A.
Sacrifice
B.
Profit gained
C.
Old
D.
New
Answer: _________
Question 2375:
After redemption of debentures, the balance of Sinking Fund Account is transferred to
A.
General Reserve Account
B.
Capital Reserve Account
C.
Profit and Loss Account
D.
Debenture Account
Answer: _________
Question 2376:
Assessment year starts from:
A.
1 st December
B.
1 st April
C.
1 st June
D.
1 st March
Answer: _________
Question 2377:
A company incorporated on 1 st April 2001 took over a running business from 1 st January, 2001 and prpared its final accounts on 31 st December, 2001. Its grows profit was Rs. 24,000 and sales were as under: January - Twice the average sale February - Equal to average sale May to August - $${frac{1}{4}^{{ ext{th}}}}$$ of average sale, each month October and November - 3 times the average sale each month What is the Gross Profit prior to incorporation:
A.
Rs. 7,000
B.
Rs. 8,000
C.
Rs. 7,500
D.
Rs. 8,500
Answer: _________
Question 2378:
Match the following: List-I List-II a. A new partner can be admitted with the consent of . . . . . . . . existing partners. 1. current b. Increase in liability at the time of retirement is debited to . . . . . . . . account. 2. all c. Buying and selling is . . . . . . . . power of partners. 3. revaluation d. The . . . . . . . . account of partner may have a debit or credit balance. 4. implied
A.
a-4, b-1, c-2, d-3
B.
a-1, b-3, c-4, d-2
C.
a-2, b-4, c-1, d-3
D.
a-2, b-3, c-4, d-1
Answer: _________
Question 2379:
Which of the following is the base for preparing trial balance?
A.
Journal
B.
Ledger
C.
Cash Book
D.
Balance Sheet
Answer: _________
Question 2380:
If a person starts business with Rs. 50,000 cash, goods worth Rs. 50,000 and fixed assets worth Rs. 1,00,000 then his capital would be:
A.
Rs. 2,00,000
B.
Rs. 1,50,000
C.
Rs. 1,00,000
D.
Rs. 50,000
Answer: _________
Question 2381:
Discount allowed on reissue of forfeited shares is debited to
A.
Share Capital A/c
B.
Profit & Loss A/c
C.
Forfeited Shares A/c
D.
Discount on Issue of Shares A/c
Answer: _________
Question 2382:
Income is measured on the basis of
A.
dual aspect concept
B.
consistency concept
C.
matching concept
D.
none of the above
Answer: _________
Question 2383:
Which of the following techniques for appraisal of investment proposals are based on time value of money? 1. Accounting Rate of Return 2. Internal Rate of Return 3. Profitability Index Method 4. Earnings Per Share
A.
1 and 2
B.
2 and 3
C.
1 and 4
D.
1, 2 and 4
Answer: _________
Question 2384:
Which of the following statement is true? Redeemable Preference Shares can be redeemed
A.
even if they are not fully paid
B.
only after the winding up of the company
C.
out of profits
D.
out of the proceeds of a fresh issue of Debentures
Answer: _________
Question 2385:
Calls in advance account is whown seperately in
A.
Dr. side of profit and loss account
B.
Cr. side of profit and loss account
C.
liability side of balance sheet
D.
Asset side of balance sheet
Answer: _________
Question 2386:
Leasehold property is generally depreciated by:
A.
Annuity method
B.
Fixed installment method
C.
Written down value method
D.
Insurance policy method
Answer: _________
Question 2387:
Minimum number of members in case of private companyis
A.
1
B.
2
C.
5
D.
10
Answer: _________
Question 2388:
From which of the following accounts can bonus shares be issued?
A.
Balance in the Profit and Loss A/c
B.
Share Premium A/c
C.
General Reserve A/c
D.
All of the above
Answer: _________
Question 2389:
Ploughing-back of profits means:
A.
Dividend declared but not claimed by shareholders
B.
Non-declaration of dividend in any year
C.
Profits earned from illegal sources and employed in business
D.
Retaining the earnings of business for future expansion programme
Answer: _________
Question 2390:
If credit side of a bank account is greater than debit side, it indicates:
A.
Bank overdraft
B.
Cash at bank
C.
Bank balance
D.
Current asset
Answer: _________
Question 2391:
Debit: all Expenses and Losses Credit: all Gains or Income This formula is applicable for:
A.
Representative Personal Accounts
B.
Tangible Real Accounts
C.
Natural Personal Accounts
D.
Intangible Real Accounts
Answer: _________
Question 2392:
Interest on partner's loan is given to partners
A.
5%
B.
6%
C.
8.25%
D.
9%
Answer: _________
Question 2393:
Match the following. List-I List-II a. Buy-back of equity shares must be authorised by 1. Not allowed b. Buy-back of partly paid equity shares 2. Governs buy back of shares c. Redemption of preference shares 3. Article of Association d. Section 68 of the Companies Act 4. Only fully paid
A.
a-3, b-4, c-2, d-1
B.
a-3, b-1, c-4, d-2
C.
a-4, b-3, c-2, d-1
D.
a-2, b-1, c-4, d-3
Answer: _________
Question 2394:
Assertion (A): A joint stock company can issue Bonus shares out of its Capital Reserve. Reason (R): The company can satisfy the share holders and avoid the outflow of cash from business by utilizing only the Capital reserve for the issue of bonus shares. Select the correct answer:
A.
Both (A) and (R) are true and (R) is the correct explanation of (A)
B.
Both (A) and (R) are true, but (R) is not correct explanation of (A)
C.
(A) is true but (R) is false
D.
(A) is false but (R) is true
Answer: _________
Question 2395:
In balance sheet redeemable debenture whose payment has not been received by the debenture holder will be shown in
A.
Unsecured loan
B.
Secured loan
C.
Contingent liability
D.
Current liability
Answer: _________
Question 2396:
A machine is purchased on 1 st January, 2001 for Rs. 1,00,000. Depreciation is to be charged at the rate of 10% P.A. by diminishing balance method. What will be the amount of depreciation shown is the profit and loss account for the year ending 31 st December, 2004?
A.
Rs. 10,000
B.
Rs. 8,100
C.
Rs. 20,000
D.
Rs. 7,290
Answer: _________
Question 2397:
Earned net profit + Non activity and non-fund expenses are equal to
A.
Use of fund
B.
Fund from activities
C.
Sinking fund
D.
Means of fund
Answer: _________
Question 2398:
Which of the following items cannot be shown as reserves?
A.
Capital Reserve
B.
Capital Redemption Reserve
C.
Securities Premium
D.
None of the above
Answer: _________
Question 2399:
Cost of Goods sold in Hire-purchase system is transferred to
A.
Sales A/c
B.
Purchase A/c
C.
Hire Purchase Trading A/c
D.
Profit & Loss A/c
Answer: _________
Question 2400:
Measuring cost and value of personnel for organisation is related to:
A.
Social Accounting
B.
Inflation Accounting
C.
Environmental Accounting
D.
Human Resource Accounting
Answer: _________
Question 2401:
Read the following statements and give your answer according to the codes given below: i. Credit on investment is calculated as a part of the final account preparation process ii. Stock valuation is necessary to determine profit by creating a business account iii. Working audit is a statutory requirement for auditing a company iv. Garner vs. Murray case deals with the settlement of accounts in case of bankruptcy of a partner of a partnership firm
A.
i and iv are correct
B.
ii and iv are correct
C.
iii and iv are correct
D.
i and iii are correct
Answer: _________
Question 2402:
Imprest system relates to:
A.
Cash Book
B.
Petty Cash Book
C.
Profit & Loss Account
D.
Balance Sheet
Answer: _________
Question 2403:
Outstanding salary given inside trial balance will be shown in
A.
Trading account & balance sheet
B.
Profit & loss account & balance sheet
C.
Liability side of balance sheet
D.
Asset side of balance sheet
Answer: _________
Question 2404:
Fixed assets are reported in the Balance Sheet at historical cost basis. This is done in order to comply with the accounting principle of:
A.
Going concern principle
B.
Conservatism principle
C.
Constant money value principle
D.
Realisation principle
Answer: _________
Question 2405:
Issue of debenture is a-
A.
Use of cash
B.
Source of cash
C.
Profit from operation
D.
None of the above
Answer: _________
Question 2406:
Arrange the following categories of share capital of a company in the correct order. 1. Paid-up capital 2. Issued capital 3. Called-up capital 4. Subscribed share capital
A.
2, 4, 3, 1
B.
1, 2, 3, 4
C.
3, 2, 4, 1
D.
3, 2, 1, 4
Answer: _________
Question 2407:
The term 'risk capital' denotes:
A.
Equity capital
B.
Debt capital
C.
Preference share capital
D.
Long term liabilities
Answer: _________
Question 2408:
Bonus Shares can be issued out of:
A.
Balance of Profit and Loss Account
B.
Share premium Account
C.
Capital Reserve
D.
All of the above
Answer: _________
Question 2409:
The source of cash inflow in cash flow statement is:
A.
Non-trading payment
B.
Increase in current assets
C.
Decrease in liabilities
D.
None of the above
Answer: _________
Question 2410:
If the average stock of a firm is Rs. 40,000 and its opening stock is Rs. 5,000 less than the closing stock, what would be the value of Opening Stock?
A.
Rs. 42,000
B.
Rs. 40,000
C.
Rs. 35,000
D.
Rs. 37,500
Answer: _________
Question 2411:
Capital account is opened in case of:
A.
Merger
B.
Partnership of business
C.
Purchase of business
D.
Trading
Answer: _________
Question 2412:
According to Section 80 of the Companies Act, 1956, a company cannot redeem its Preference shares out of:
A.
Revenue Profits
B.
Net proceeds of fresh issue
C.
Partly out of Revenue Profit and partly out of net proceeds of fresh issue
D.
Out of sale proceeds of fixed assets
Answer: _________
Question 2413:
A person starts a business with a capital of Rs. 45,000. He purchased goods on credit worth Rs. 5,000. These transactions can be expressed in an accounting equation as-
A.
Rs. 50,000 = Rs. 50,000 - Rs. 45,000
B.
Rs. 50,000 = Rs. 50,000 + 0
C.
Rs. 50,000 = Rs. 45,000 + Rs. 5,000
D.
Rs. 45, 000 = Rs. 50,000 - Rs. 5,000
Answer: _________
Question 2414:
Those preference shares which do not carry the right of share in excess profits are known as . . . . . . . . preference shares.
A.
irredeemable
B.
non-cumulative
C.
non-convertible
D.
non-participating
Answer: _________
Question 2415:
. . . . . . . . is given to promote sales.
A.
Cash discount
B.
Trade discount
C.
Quantity discount
D.
Price discount
Answer: _________
Question 2416:
Accounting does not record non-financial transactions because of:
A.
Entity concept
B.
Accrual concept
C.
Measurement concept
D.
Double entry concept
Answer: _________
Question 2417:
Which of the following are applicable to sinking fund method of depreciation? I. Periodic depreciation is smaller than the assets, actual annual depreciable cost II. Amount of interest constantly declines due to assets, reducing balances III. Annual net incidence on profit and loss account remains constant due to incorporation of only fixed depreciation IV. Periodic depreciation is recorded through the assets account Select the correect answer using the options given below:
A.
II and IV
B.
I and III
C.
I, II and III
D.
II, III and IV
Answer: _________
Question 2418:
Dividend is paid on . . . . . . . . capital.
A.
called
B.
paid up
C.
issued
D.
None of these
Answer: _________
Question 2419:
Which of the following are current assets?
A.
Bank loan for three years
B.
Account receivable
C.
Long-term investments
D.
Debentures sinking fund investments
Answer: _________
Question 2420:
Accounting principles are generally based on:
A.
practicability
B.
subjectivity
C.
convenience in recording
D.
applicability
Answer: _________
Question 2421:
In stock valuation, appilcation of the principle 'at cost price or market price whichever is lower' will result in the valuation of stock sometimes at cost price and at other times at market price. This is an application of the principle of:
A.
Consistency
B.
Materiality
C.
Conservatism
D.
Disclosure
Answer: _________
Question 2422:
The purpose of depreciation is to:
A.
reduce fixed assets to market value each year
B.
save income tax and wealth tax
C.
reduce fixed assets to nil as soon as possible assets top expense over their working lives
D.
allocate the cost of fixed
Answer: _________
Question 2423:
Under purchase method of amalgamation, . . . . . . . . of the transferor company continues to appear in the balance sheet of the transferee company.
A.
capital reserve
B.
general reserve
C.
statutory reserve
D.
specific reserve
Answer: _________
Question 2424:
The single entry system is defective because- I. only one account is maintained II. the trial balance cannot be prepared III. the net profit cannot be accurately calculated IV. the possibility of fraud and misappropriation is great Select the correct answer from the following:
A.
I, III and IV
B.
I and II
C.
II, III and IV
D.
I only
Answer: _________
Question 2425:
Which of the following represents policy holders a/c?
A.
P/L a/c
B.
Revenue a/c
C.
Balance sheet
D.
None of these
Answer: _________
Question 2426:
Closing stock is valued at:
A.
Market price
B.
Cost price
C.
Cost price or market price whichever is lower
D.
Cost price or market price whichever is higher
Answer: _________
Question 2427:
. . . . . . . . is a device of reducing the risk undertaken by an insurance company.
A.
Re-insurance
B.
Double insurance
C.
Risk insurance
D.
None of these
Answer: _________
Question 2428:
Which of the following accounts will invariably have a debit balance?
A.
Bank account
B.
Accounts receivable account
C.
Accounts payable account
D.
Loan account
Answer: _________
Question 2429:
The basic rule of book-keeping, debit the receiver and credit the giver is applicable to:
A.
nominal account
B.
real account
C.
personal account
D.
drawing account
Answer: _________
Question 2430:
According to money measurement concept, which one of the following will be recorded in the books of accounts . . . . . . . .
A.
excellent morale of workers
B.
quality control in the business
C.
managing ability of the manager
D.
cost of machinery
Answer: _________
Question 2431:
. . . . . . . . is deducted from the called-up capital in order to calculate paid-up capital.
A.
calls in arrear
B.
calls in advance
C.
uncalled capital
D.
reserve capital
Answer: _________
Question 2432:
Capital redemption reserve is created out of:
A.
Dividend equalization fund
B.
P/L account
C.
General reserve account
D.
All of these
Answer: _________
Question 2433:
Under which of the following circumstances can a company resort to internal reconstruction?
A.
accumulated huge losses
B.
shortage of capital
C.
over valued assets
D.
All of these
Answer: _________
Question 2434:
A, B and C are partners. They share profits and losses in $$frac{1}{2}:,frac{1}{3}:,frac{1}{6}.$$ xa0 C died what will be the gaining ratio of A and B?
A.
3 : 2
B.
2 : 3
C.
$$frac{1}{2}:,frac{1}{3}$$
D.
1 : 1
Answer: _________
Question 2435:
Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as
A.
liability
B.
contingent liability
C.
provision
D.
None of these
E.
Contingent liability
F.
Liability
G.
Provision
H.
Reserve
Answer: _________
Question 2436:
Which one of the following statement is incorrect?
A.
Bonus shares are issued without payment
B.
Only revenue reserves should be used when bonus is declared in order to make partly paid shares into fully paid shares
C.
Fully paid bonus shares are issued only out of capital reserves
D.
The process of issue of bonus shares is also known as capitalisation of reserves
Answer: _________
Question 2437:
M/s Stationary Mart will debit the purchase of stationary to:
A.
General Expenses A/c
B.
Purchases A/c
C.
Stationary A/c
D.
None of the above
Answer: _________
Question 2438:
What will be shareholder's funds. If equity share capital is Rs. 16,00,000, 8% preference share is Rs. 20,000, Reserve and surplus is Rs. 73,000, profit and loss is Rs. 41,000 (cr. balance), preliminiary expense is Rs. 20,000 and short-term creditors are Rs. 30,000.
A.
Rs. 15,00,000
B.
Rs. 18,94,000
C.
Rs. 19,14,000
D.
Rs. 19,34,000
Answer: _________
Question 2439:
X and Y are partners in the ratio of 3 : 2. Their capitals are Rs. 2,00,000 and Rs. 1,00,000 respectively. The interest on capitals is allowed @ 8% per annum. The firm earned a profit of Rs. 60,000 for the year ending on 31 st March 2019. The interest on capital will be
A.
X - Rs. 16,000, Y - Rs. 8,000
B.
X - Rs. 8,000, Y - Rs. 4,000
C.
X - Rs. 14,400, Y - Rs. 9,600
D.
No interest will be allowed
Answer: _________
Question 2440:
Total capital employed is equal to
A.
Fixed Assets
B.
Fixed Assets + Net Working Capital
C.
Total Assets (including accumulated depreciation)
D.
Net Worth
Answer: _________
Question 2441:
In case of fund flow statement, 'Fund' means
A.
Only the cash
B.
Only capital
C.
Net working capital
D.
None of the above
Answer: _________
Question 2442:
X Ltd. issued debentures of Rs. 100 at 5% discount for purchase of machinery worth Rs. 95,000. The number of debenture issued will be
A.
95,000
B.
950
C.
1,045
D.
1,000
Answer: _________
Question 2443:
An expenditure is called capital expenditue when
A.
The amount is big
B.
The amount is paid in lump-sum
C.
The expenditure is made for future profits
D.
The expenditure is made for current periods profit
Answer: _________
Question 2444:
Rebate on bills discounted is also called . . . . . . . .
A.
unexpired discount
B.
earned discount
C.
expired discount
D.
received discount
Answer: _________
Question 2445:
The system of recording transactions based on dual aspect concept is called:
A.
double account system
B.
double entry system
C.
single entry system
D.
single account system
Answer: _________
Question 2446:
Receipts and payments account is a . . . . . . . .
A.
Personal account
B.
Nominal account
C.
Real account
D.
Representative account
Answer: _________
Question 2447:
Which of the following is/are capitalised along with the purchase price a fixed asset? I. Import duty II. Delivery and handling cost III. Cash discount IV. Cost of installation Select the correct answer using the options given below:
A.
III only
B.
II and III
C.
I, II and IV
D.
I, II, III and IV
Answer: _________
Question 2448:
Accumulated depreciation account is shown in the final accounts:
A.
on the liability side of the balance sheet
B.
on the debit side of the profit and loss account
C.
by deducting from the related asset account in the balance sheet
D.
on the credit side of the profit and loss account
Answer: _________
Question 2449:
Buyback of shares should not exceed . . . . . . . . of paid up capital and free reserve of the company.
A.
50%
B.
10%
C.
5%
D.
25%
Answer: _________
Question 2450:
An example of revenue expenditure is . . . . . . . .
A.
Purchase of land
B.
Salaries
C.
Lease
D.
Purchase of buildings
Answer: _________
Question 2451:
Which of the following does not involve liquidation of any company?
A.
internal reconstruction
B.
amalgamation
C.
absorption
D.
external reconstruction
Answer: _________
Question 2452:
Which account is generally used for rectification of errors?
A.
Memorandum account
B.
Suspense account
C.
Rectification account
D.
Adjustment account
Answer: _________
Question 2453:
The balance sheet is a . . . . . . . . of the assets, liabilities and capital of a concern as on particular date.
A.
Statement
B.
Document
C.
Picture
D.
Balance
Answer: _________
Question 2454:
If the net sales of the year is Rs. 2,50,000 and the debtors is Rs. 50,000, then the average collection period will be
A.
45 day
B.
54 day
C.
73 day
D.
37 day
Answer: _________
Question 2455:
An adjustment entry for prepaid expenses affects
A.
Assets and Expenses
B.
Assets and Income
C.
Liabilities and Expenses
D.
Liabilities and Assets
Answer: _________
Question 2456:
Over-capitalisation can be remedied:
A.
By redemption of debentures
B.
By increasing the rate of interest on debentures
C.
By issue of bonus shares
D.
By increasing the number of shares
Answer: _________
Question 2457:
On dissolution of a firm, if goodwill does not appear in the Balance Sheet of the firm, it is
A.
calculated
B.
not calculated
C.
calculated and credited to Realisation a/c
D.
calculated and directly credited to capital accounts of partners
Answer: _________
Question 2458:
Accounts do not record:
A.
Profit and Loss
B.
Liabilities
C.
Number of Employees
D.
Assets
Answer: _________
Question 2459:
A decreasing current ratio indicates:
A.
A stable liquidity
B.
An increasing liquidity
C.
A strained liquidity
D.
Satisfactory current solvency
Answer: _________
Question 2460:
Which of the following is not a business activity?
A.
A person earns Rs. 500 profit selling his old T.V.
B.
Activities of an insurance company
C.
Running a provisional store
D.
Cooking and selling food in a hotel
Answer: _________
Question 2461:
In the absence of any contract to the contrary, profit on dissolution of a partnership firm is credited to the partner's capital accounts:
A.
In the ratio of their capitals just before dissolution
B.
In the ratio of their capitals as originally contributed by them
C.
In their profit sharing ratio
D.
None of the above
Answer: _________
Question 2462:
Assertion (A): Premium receivedon issue of shares is credited to share premium account but not to profit and loss account. Reason (R): Since share premium is not a trading profit, it is not distributed to shareholders.
A.
Both (A) and (R) are correct, but (R) is not the correct explanation of (A)
B.
(A) is incorrect, but (R) is correct
C.
Both (A) and (R) are correct, and (R) is the correct explanation of (A)
D.
(A) is correct, but (R) is incorrect
Answer: _________
Question 2463:
Total capital employed is equal to:
A.
fixed assets
B.
fixed assets + net working capital
C.
total assets
D.
net worth
Answer: _________
Question 2464:
The normal balance of capital account is
A.
Credit balance
B.
Debit balance
C.
Cash balance
D.
Neither debit nor credit balance
Answer: _________
Question 2465:
The normal balance of asset account is
A.
Credit balance
B.
Debit balance
C.
Cash balance
D.
Neither debit nor credit balance
Answer: _________
Question 2466:
The normal balance of liability account is
A.
Credit balance
B.
Debit balance
C.
Cash balance
D.
Neither debit nor credit balance
Answer: _________
Question 2467:
Which of the following statements is incorrect regarding capital account?
A.
Debit increases the capital account balance
B.
Credit increases the capital account balance
C.
Fresh capital increases the capital account balance
D.
Net income increases the capital account balance
Answer: _________
Question 2468:
Which of the following is the normal balance of a rent expense account?
A.
Credit balance
B.
Cash balance
C.
Overdraft
D.
Debit balance
Answer: _________
Question 2469:
Revenue and expense accounts are referred to as
A.
Nominal accounts
B.
Real account
C.
Cash account
D.
Bank account
Answer: _________
Question 2470:
Office equipment's account is classified as
A.
Nominal accounts
B.
Real account
C.
Cash account
D.
Capital account
Answer: _________
Question 2471:
Which of the following are closed at the end of an accounting period?
A.
Nominal accounts
B.
Personal accounts
C.
Real accounts
D.
None of them
Answer: _________
Question 2472:
Which of the following is the closing balance of a ledger account?
A.
Balance c/d
B.
Balance b/d
C.
Balance e/d
D.
Balance f/c
Answer: _________
Question 2473:
Trial Balance is prepared to check accuracy of
A.
Ledger account balances
B.
Balance sheet balances
C.
Income statement balances
D.
Cash flow statement balances
Answer: _________
Question 2474:
The balance of Capital Redemption Reserve Account is available for:
A.
Redemption of redeemable preference shares
B.
Redemption of redeemable debentures
C.
Re-organisation of share capital
D.
Issue of bonus shares
Answer: _________
Question 2475:
Earning return ratio shows the relationship between earning per share and whom?
A.
Net profit
B.
Number of equity share
C.
Market price per share
D.
Divided per share
Answer: _________
Question 2476:
Current assets are valued at:
A.
Net replacement cost
B.
Market value
C.
Cost or market price whichever is lower
D.
Depreciated value
Answer: _________
Question 2477:
According to which concept, it is necessary to disclose all the necessary information in financial statements?
A.
Materiality concept
B.
Dual-aspect concept
C.
Concept of full disclosure
D.
Concept of uniformity
Answer: _________
Question 2478:
Cost of goods sold is Rs. 20,000, gross profit is Rs. 5,000 and sales return is Rs. 10,000. On the basis of above data find sales?
A.
Rs. 15,000
B.
Rs. 27,000
C.
Rs. 25,000
D.
Rs. 35,000
Answer: _________
Question 2479:
Bonus shares can be issued from:
A.
Credit balance in Profit & Loss A/c
B.
Share Premium A/c
C.
General Reserve A/c
D.
All of the above A, B and C
Answer: _________
Question 2480:
Bonus is:
A.
paid to industrial workers only
B.
always linked with productivity
C.
a defered wage
D.
Paid out of profits only
Answer: _________
Question 2481:
Interpretation of Financial Statement includes-
A.
Criticism and Analysis
B.
Comparison and Trend Study
C.
Drawing Conclusions
D.
All the above
Answer: _________
Question 2482:
Which of the following error will not affect the trial balance?
A.
Posting in wrong side
B.
Wrong totaling of account
C.
Compensating error
D.
Ascertain wrong balance of account
Answer: _________
Question 2483:
A company forfeited 30 share of Rs. 10 each for non-payment of allotment Rs. 3 share and call money Rs. 4 per share. The company re issued these shares as fully paid-up shares at the rate of Rs. 8 per share. Amount transferred to capital reserve will be
A.
Rs. 300
B.
Rs. 60
C.
Rs. 90
D.
Rs. 30
Answer: _________
Question 2484:
AS-3 is related to
A.
Cash Flow Statement
B.
Fund Flow Statement
C.
Accounting for Depreciation
D.
None of these
Answer: _________
Question 2485:
Which one of the following statement is not true?
A.
The object of trial balance is to test the accuracy of the books
B.
Trial balance provides basis for preparation of final accounts
C.
Errors of principles do not affect the agreement of the trial balance
D.
Compensatory errors are also known as equalising errors
Answer: _________
Question 2486:
Gross Profit is equal to
A.
Opening stock + purchases - closing stock
B.
Net profit - expenses
C.
Sales - Closing stock + purchases
D.
Sales - Cost of goods sold
E.
Sales - Closing stock
F.
Sales - Cost of goods sold
G.
Sales - (opening stock + Purchases + Closing stock)
H.
(Sales + Closing stock) - (opening stock + Purchase + all direct and indirect expenses)
Answer: _________
Question 2487:
Dissolution of partnership between all partners of firm is called . . . . . . . .
A.
dissolution of firm
B.
dissolution of partnership
C.
dissolution of firm name
D.
none of the above
Answer: _________
Question 2488:
Amount received from joint life policy in case of a death of a partner will be credited in partner's capital account to
A.
To all partners in profit sharing ratio
B.
To remaining partners in profit sharing ratio
C.
to only deceased partner's account
D.
None of the above
Answer: _________
Question 2489:
In case of a company, total assets less outside liabilities is called:
A.
Net working capital
B.
Gross working capital
C.
Deferred liabilities
D.
Net worth
Answer: _________
Question 2490:
For paying liabilities not taken over by the purchasing company, the vendor company credits
A.
Realisation A/c
B.
Bank A/c
C.
Liabilities A/c
D.
Assets A/c
Answer: _________
Question 2491:
A motor car which was purchased for Rs. 20,000 had its book value Rs. 12,000 was sold for Rs. 25,000, the capital profits will be:
A.
Rs. 5,000
B.
Rs. 8,000
C.
Rs. 13,000
D.
Rs. 25,000
Answer: _________
Question 2492:
If a machinery of Rs. 7,20,000 is purchased against the issue of fully paid shares of Rs. 8,00,000, then balance of Rs. 80,000 is debited to
A.
Goodwill account
B.
Capital reserve account
C.
Profit and Loss account
D.
Discount on the issue of shares account
Answer: _________
Question 2493:
The minimum amount that should be called by a company with application for its shares is the following per cent of face value of shares:
A.
2%
B.
5%
C.
10%
D.
15%
Answer: _________
Question 2494:
As per Garner V. Murray Rule, the loss resulting from a partner's insolvency is borne by other partners in
A.
equal ratio
B.
their capital ratio
C.
their profit sharing ratio
D.
3 : 1 ratio
Answer: _________
Question 2495:
Alteration of shares of smaller amounts into shares of larger amount is called . . . . . . . . of share capital.
A.
surrender
B.
subdivision
C.
consolidation
D.
None of these
Answer: _________
Question 2496:
The movement of securities from one stock exchange to another with the object of reaping a profit from the disparity in share prices is called
A.
Averaging
B.
Arbitraging
C.
Back wardation
D.
Forward trading
Answer: _________
Question 2497:
Trading account is prepared to find out:
A.
gross profit or loss
B.
net profit or loss
C.
financial position
D.
position of the partners
Answer: _________
Question 2498:
A sale of goods to Vaibhav Deep for cash should be debited to:
A.
Vaibhav's A/C
B.
Cash A/C
C.
Sale of goods A/C
D.
None of these
Answer: _________
Question 2499:
That part of the capital which will be called up only in the event of winding up of the company is called . . . . . . . . capital.
A.
issued
B.
paid-up
C.
reserve
D.
uncalled
Answer: _________
Question 2500:
Which of the following errors will cause the trial balance to be out of balance?
A.
The total of the Purchase book is Rs. 1000 short
B.
Goods received back from Mahesh, Rs. 250 have not been entered in the Returns Inward book
C.
Office furniture purchased from Ravi and Co. Rs. 950 has been entered in the Purchase book
D.
A purchase of Rs. 251 from Gopal and Co. has been entered in the Purchase book as Rs. 215
Answer: _________
Question 2501:
A Purchases returns of Rs. 200 to Mr. P if entered in the sales book would affect:
A.
P's account
B.
purchases returns account
C.
sales account
D.
purchases returns account and sales account
Answer: _________
Question 2502:
The balance of cash account indicates . . . . . . . .
A.
net income for the period
B.
net loss for the period
C.
net worth of the business
D.
net cash on hand
Answer: _________
Question 2503:
Wages is an example of:
A.
capital expenses
B.
indirect expenses
C.
direct expenses
D.
revenue expenses
Answer: _________
Question 2504:
Which of the following statements is not correct?
A.
The amount received by selling goods and services is called revenue
B.
The money invested by owner in the business is called capital
C.
The grouping of transaction of same nature at one place is called recording
D.
Assets - External liablities = capital
E.
Managerial accounting and cost accounting both are complementary to each of the in nature
F.
Managerial accounting is concerned with the accounting information that is useful to management
G.
Managerial accounting includes details of quantitative information only
H.
Managerial accounting depends on cost accounting
Answer: _________
Question 2505:
When capitals of partners are fluctuating, then in the case of dissolution of the firm, the deficiency of the insolvent partner's capital is borne by the solvent partners according to Garner Vs. Murrary decision:
A.
In their profit-sharing ratio
B.
In the ratio of their capitals as they stood before the commencement of dissolution
C.
In the ratio of their capitals arrived at after the adjustment of accumulated profit & loss on realisation but before profit and loss on realisation
D.
In the ratio of their capital arrived at after the adjustment of accumulated profit & loss and profit & loss on realisation
Answer: _________
Question 2506:
Return on investment is the ratio between:
A.
Net profit and capital employed
B.
Investment and profit
C.
Sales and capital invested
D.
Net profit and dividend
Answer: _________
Question 2507:
On the basis of the following information, what will be the EBIT corresponding to financial indifference point? Total capital outlay Rs. 60,00,000 Financing Plans 1. 100% Equity @ Rs. 10/- per share 2. Debt - equity ratio 2 : 1 Rate of interest 18% p.a., corporate tax rate 40%
A.
Rs. 10,00,000
B.
Rs. 12,00,000
C.
Rs. 10,80,000
D.
Rs. 12,80,000
Answer: _________
Question 2508:
Which of the following is not a movable property?
A.
Debtors
B.
Pre-paid expenses
C.
Stock
D.
Furniture in the clothing business
Answer: _________
Question 2509:
If accounting information is based on facts and it is verifiable by documents, it has the quality of
A.
relevance
B.
understandability
C.
reliability
D.
comparability
Answer: _________
Question 2510:
Sweat Equity Shares can be issued by a
A.
special resolution
B.
special resolution and sanction from NCLT
C.
ordinary resolution and sanction from NCLT
D.
none of the above
Answer: _________
Question 2511:
Patent rights account is:
A.
Personal Account
B.
Real Account
C.
Nominal Account
D.
All of the above
Answer: _________
Question 2512:
Which of the following statement is correct?
A.
Accounting principles represent laws fixed by the respective governments
B.
Accounting principles represent laws fixed by accounting expert
C.
Accounting principles represent inviolable laws fixed by a legal board
D.
Accounting principles represent a consensuses at a particular time to the recording of accounting transactions
E.
Rights shares are first offered to employees
F.
Rights shares are offered in lieu of dividends
G.
Rights shares are offered to the existing shareholders in proportion to the equity shares held by them
H.
Rights shares are those shares which are offered to the promoters
Answer: _________
Question 2513:
Read the following statements and mark your answer: i. Return on Investment (R.O.I.) is calculated as part of final accounts preparation exercise ii. Inventory valuation is a must for ascertaining profit by preparation of Trading Account iii. Operational audit is a statutory requirement for a company auditor iv. Garner Vs. Murray case relates to settlement of accounts on insolvency of a partner of the firm
A.
i and iv are correct
B.
ii and iv are correct
C.
ii and iii are correct
D.
i and iii are correct
Answer: _________
Question 2514:
Interest on calls in arrears according to Table 'A' is charged at
A.
5%
B.
6%
C.
12%
D.
18%
Answer: _________
Question 2515:
Given, Cash Rs. 10,000 Creditors Rs. 12,000 Debitors Rs. 20,000 Bills payable Rs. 8,000 Stock Rs. 30,000 Bank loan Rs. 10,000 If bank loan is increased by Rs. 20,000. the current ratio will decrease by
A.
20%
B.
25%
C.
30%
D.
40%
Answer: _________
Question 2516:
Match the following List-I List-II a. . . . . . . . . . concept is related to recognition of income. 1. Rent b. Trading account and profit and loss account are . . . . . . . . statements. 2. Realisation c. . . . . . . . . is a tangible fixed assets. 3. Periodic d. Outstanding rent will be debited to . . . . . . . . account. 4. Land
A.
a-2, b-3, c-4, d-1
B.
a-4, b-3, c-2, d-1
C.
a-2, b-1, c-4, d-3
D.
a-2, b-4, c-1, d-3
Answer: _________
Question 2517:
At the time of dissolution of firm, balance of cash is shown in
A.
Cash account
B.
Revolution account
C.
Profit and loss account
D.
Realisation account
Answer: _________
Question 2518:
Which of the following is not a source of finance for a company?
A.
Equity share capital
B.
Preference share capital
C.
Fixed assets
D.
Debentures
Answer: _________
Question 2519:
If a company buys its own debenture of Rs. 1000 from the market for Rs. 975, the difference of Rs. 25 will be considered as
A.
Profit on redemption of debenture
B.
Loss on redemption of debenture
C.
Goodwill
D.
None of the above
Answer: _________
Question 2520:
X, the Works manager, gets 5% commission of net profits after charging his commission and Y's commission. Y, the General Manager, gets 10% commission on net profits after charging his commission and X's commission. If the profit before charging commission of X and Y is Rs. 1,000, the commission of X will be:
A.
Rs. 42.50
B.
Rs. 45.00
C.
Rs. 47.00
D.
Rs. 49.00
Answer: _________
Question 2521:
Pre-fix of "CS" of members of the institute has been granted by ICSI on:
A.
23 rd - 24 th June, 2007
B.
17 th - 19 th February, 2008
C.
24 th - 27 th December, 2006
D.
15 th - 18 th October, 2005
Answer: _________
Question 2522:
Which accounting standard is used for depreciation accounting?
A.
AS-2
B.
AS-5
C.
AS-6
D.
AS-13
Answer: _________
Question 2523:
Double entry system keeps record of
A.
Personal account
B.
Real account
C.
Nominal account
D.
All of the above
Answer: _________
Question 2524:
Profit on the sale of furniture in a non profit organisation is to be shown on the:
A.
Credit side of Profit and Loss a/c
B.
Credit side of Income and Expenditure account
C.
Receipt side of Receipts and Payment account
D.
Assets side of Balance Sheet
Answer: _________
Question 2525:
Pooling of interest is a method of
A.
valuation of inventory
B.
calculation of purchase consideration
C.
accounting of amalgamation
D.
valuing goodwill
Answer: _________
Question 2526:
Match List-I with List-II and select the correct answer: List-I List-II a. Separate Entity concept 1. Past events b. Dual Aspect concept 2. Accounting Equations c. Money Measure concept 3. Business is distinct from its owner d. Historical concept 4. Translation of events/transaction in money terms
A.
a-1, b-2, c-3, d-4
B.
a-2, b-1, c-4, d-3
C.
a-3, b-2, c-4, d-1
D.
a-4, b-3, c-2, d-1
Answer: _________
Question 2527:
The statement of changes in financial position shows
A.
Sources and uses of funds
B.
Assets and Liabilities
C.
Income and Expenses
D.
None of these
Answer: _________
Question 2528:
Depreciation takes into account
A.
Fall in value of asset
B.
Decrease in usefulness
C.
Decrease in the obsolescence of the asset
D.
Decrease in asset due to wear and tear
Answer: _________
Question 2529:
A company shifted its factory after construction of a new building. During this process, Rs. 20,000 was spent on demolishing the old structure and Rs. 2,000 in moving the old stock. How will these expenses be classified?
A.
Capital expenditure
B.
Revenue expenditure
C.
Capital and revenue expenditure respectively
D.
Deferred revenue expenditure
Answer: _________
Question 2530:
Match the following List-I List-II a. The document from which the returns to suppliers are recorded is known as . . . . . . . . 1. Assets b. Wages paid on erection of a new machinery should be debited to . . . . . . . . 2. Debit note c. Prepaid expense is an item of . . . . . . . . 3. Credit note d. The receiver of goods returned will send a . . . . . . . . to the person, who return the goods. 4. Machinery account
A.
a-2, b-1, c-4, d-3
B.
a-4, b-1, c-2, d-3
C.
a-2, b-4, c-1, d-3
D.
a-4, b-3, c-1, d-2
Answer: _________
Question 2531:
To measure the profitability of a business, among the following which ratio will be used? i. Acid test ratio ii. Return on capital employed iii. Net profit ratio iv. Interest protection ratio v. Stock periodic ratio 6. Debt equity ratio
A.
Only iii
B.
i and iii
C.
ii and iii
D.
i, ii, iii and iv
Answer: _________
Question 2532:
Consider the following statements: Assertion (A): In double account system, the final accounts of a company fails to disclose the true condition of its assets. Reason (R): Because the assets of the company are shown at their cost price even when they are completely worn out. Now, select your answer:
A.
Both A and R are correct and R is the correct explanation of A
B.
Both A and R are correct but R is not the correct explanation of A
C.
A is true but R is false
D.
A is false but R is true
Answer: _________
Question 2533:
The liability of partners is . . . . . . . . .
A.
Limited
B.
Unlimited
C.
Both limited and unlimited
D.
None of these
Answer: _________
Question 2534:
A company with total assets amounting to Rs. 15,00,000 (including Goodwill Rs. 1,50,000 discount on issue of shares Rs. 2,00,000 and accumulated loss Rs. 2,00,000) and the total liabilities amounting to Rs. 2,20,000 (including a contingent liability of Rs. 40,000) has been taken over by a new company for a purchase consideration of Rs. 11,50,000. the Goodwill a/c in the vendee company's books will appear at:
A.
Rs. 90,000
B.
Rs. 1,50,000
C.
Rs. 4,20,000
D.
Rs. 2,40,000
Answer: _________
Question 2535:
The question contains two statement. One is Assertion (A) and the other is Reason (R) . You have to examine both the statements carefully and decide whether the Assertion (A) and Reason (R) are separately true? and If so, then Reason is the correct explanation of the Assertion . Mark these items in the balance sheet. Assertion (A) Balance sheet does not reveal ownership of business. Reason (R) Assets are just unrefined cost.
A.
A and R both are correct and R is correct explanation of A
B.
A and R both are correct and R is not correct explanation of A
C.
A is correct but R is correct
D.
A is wrong, but R is correct
Answer: _________
Question 2536:
The term 'depletion' is used in relation to
A.
Fixed assets
B.
Wasting assets
C.
Current assets
D.
Intangible assets
Answer: _________
Question 2537:
A retiring partner continues to be liable for obligations incurred after his retirement:
A.
If unpaid amount is transferred to his loan account
B.
If he does not give public notice
C.
It he starts a similar business elsewhere
D.
In all the situations till he survies
Answer: _________
Question 2538:
Which of the following is not current asset?
A.
Debtors
B.
Prepaid expense
C.
Stock
D.
Purchase
Answer: _________
Question 2539:
The profit ratio of A, B and C, who are partners in a firm is 4 : 3 : 2. After D is admitted their sacrificing ratio will be:
A.
Equal
B.
4 : 3 : 2
C.
3 : 2 : 1
D.
5 : 3 : 2
Answer: _________
Question 2540:
Study the following transactions. 1. Raising of short-term loans. 2. Goods purchased for cash. 3. Payment of bonus in the form of shares. 4. Issue of shares in lieu of raw materials. Select the correct answer:
A.
Only 4
B.
2, 3 and 4
C.
Both 3 and 4
D.
all of the above
Answer: _________
Question 2541:
A partnership agreement comes to an end
A.
When a partner takes leave from the firm
B.
On a death of a partner
C.
On a partner becoming insolvent
D.
All of the above
Answer: _________
Question 2542:
Which of the following is not true?
A.
When all the forfeited shares are not reissued, the forfeited shares account will also show credit balance equal to gain on forfeiture of shares not yet reissued
B.
Losson the reissue of shares cannot be more than the gain on forfeiture of those shares
C.
At the time of forfeiture of shares, the securities premium is debited along with share capital when the premium has not been received
D.
When forfeited shares are issued at a premium, the premium amount is credited to the capital reserve account
Answer: _________
Question 2543:
Which method of depreciation is suggested for coal mines:
A.
Diminishing Balance Method
B.
Fixed Instalment Method
C.
Sum of Years Digits Method
D.
Depletion Method
Answer: _________
Question 2544:
In case of sub-lease royalty earned by the lessor is credited to
A.
Sub-Lease Account
B.
Profit and Loss Account
C.
Short Working Account
D.
Royalty Receivable Account
Answer: _________
Question 2545:
Rs. 500 posted to wages account instead of machinery account. Identify the type of error?
A.
Clerical error
B.
Error of omission
C.
Error of principle
D.
Recording error
Answer: _________
Question 2546:
"Discount" on issue of debenture is a:
A.
Real asset
B.
Fictitious asset
C.
Fixed asset
D.
Current asset
Answer: _________
Question 2547:
Which of the following is not a cash flow?
A.
Sale of fixed assets
B.
Purchase of machinery on credit
C.
Issue of debentures
D.
Cash from business operations
Answer: _________
Question 2548:
P, Q and R are equal partners with fixed capitals of Rs. 5,00,000, Rs. 4,00,000 and Rs. 3,00,000, respectively. After closing the accounts for the year ending 31 st March 2019, it was discovered that the interest on capitals was provided @ 7% per annum instead of 9% per annum. In the adjusting entry
A.
P will be credited with Rs. 2,000 and Q will be debited with Rs. 2,000
B.
P will be debited with Rs. 2,000 and Q will be credited with Rs. 2,000
C.
P will be debited with Rs. 2,000 and R will be credited with Rs. 2,000
D.
P will be credited with Rs. 2,000 and R will be debited with Rs. 2,000
Answer: _________
Question 2549:
Which of the following transactions results in flow of funds:
A.
Bills issued to creditors
B.
Shares issued for machinery
C.
Cash realised from debtors
D.
Debentures issued partly for cash and partly for raw materials
Answer: _________
Question 2550:
Subscription received in 1998: For the year 1997 For the year 1998 For the year 1999 Subscription outstanding on 31 st December, 1998 was Rs. 4,000. What amount of subscription will appear in income and Expenditure account of 1998:
A.
Rs. 20,000
B.
Rs. 19,000
C.
Rs. 22,000
D.
Rs. 16,000
Answer: _________
Question 2551:
Bonus shares mean shares issued to:
A.
Workers in lieu of their share in profit
B.
Existing equity shareholders
C.
Existing preference shareholders
D.
Existing equity shareholders and preference shareholders both
Answer: _________
Question 2552:
Which one of the following is INCORRECT about closing stock?
A.
It is added into current assets
B.
It is deducted from Material available for use
C.
It becomes opening stock of next year
D.
It reduces the resources of business
Answer: _________
Question 2553:
Outsider's claim against the assets of the business is called
A.
Liability
B.
Expense
C.
Income
D.
Capital
Answer: _________
Question 2554:
An expenditure whose benefit is finished or enjoyed immediately is called
A.
Expense
B.
Liability
C.
Cost
D.
Income
Answer: _________
Question 2555:
A company's merchandise, raw materials, finished and unfinished products which have not yet been sold is known as
A.
Sales
B.
Purchases
C.
Inventory
D.
Work in progress
Answer: _________
Question 2556:
What is nature of Capital account?
A.
Debit
B.
Credit
C.
Expenses
D.
Loss
Answer: _________
Question 2557:
The assets which have a limited useful life are termed as
A.
Limited assets
B.
Depreciable assets
C.
Unlimited assets
D.
None of the above
Answer: _________
Question 2558:
A decrease in value of a fixed asset due to age, wear and tear is known as
A.
Depreciation
B.
Accumulated depreciation
C.
Appreciation
D.
Written Down Value (WDV)
Answer: _________
Question 2559:
In balance sheet, fixed assets are shown at
A.
Cost price
B.
Market value
C.
Fair value
D.
Written Down Value (WDV)
Answer: _________
Question 2560:
The accrual basis of accounting records revenues when they are
A.
Collected
B.
Earned
C.
Contracted
D.
Readily available for use
Answer: _________
Question 2561:
Owners equity balance at the end is Rs. 21,000. During the year additional capital introduced by owner is Rs. 6,000 and drawings made is Rs. 4,000. If net profit for the year is Rs. 8,000. Then what is the balance of owner is equity in the beginning?
A.
Rs. 23,000
B.
Rs. 21,000
C.
Rs. 19,000
D.
Rs. 11,000
Answer: _________
Question 2562:
Amount set aside out of divisible profit and invested outside is known as:
A.
Reserve
B.
Fund
C.
Capital Reserve
D.
Secret Reserve
Answer: _________
Question 2563:
The private property of a partner should be used to
A.
pay his private debts first
B.
if there is any surplus it can be used to pay firm's liabilities
C.
Both A and B
D.
None of the above
Answer: _________
Question 2564:
Closing balance of depreciation fund is transferred to which of the following account
A.
General reserve
B.
Capital reserve
C.
Asset account
D.
Capital redemption reserve account
Answer: _________
Question 2565:
The rate of interest @ . . . . . . . . p.a is to be allowed to a partner for Advances/Loans given, assuming the partnership deed stays silent on the matter.
A.
4%
B.
5%
C.
6%
D.
8%
Answer: _________
Question 2566:
Accounting Standard-6, relating to depreciation, is recommended for use by
A.
companies listed on a recognized stock exchange
B.
companies engaged in manufacturing business
C.
companies engaged in manufacturing and trading business
D.
all types of business undertakings
Answer: _________
Question 2567:
Formula for net cash inflow of a project is:
A.
Sales - Operating Expenses - Interest - Tax
B.
Sales - Operating Expenses
C.
Net Profit after tax + Depreciation
D.
Gross Profit + Depreciation
Answer: _________
Question 2568:
On attaining majority if a minor partner in the firm elects to continue as a partner, he shall be liable to the debts of the firm, from.
A.
Date of attaining majority
B.
From the date he enters into partnership to get profit
C.
When he decides to be a partner
D.
Date of his admission into the firm
Answer: _________
Question 2569:
X, Y and Z are partners and share profit and loss in the ratio of $$frac{1}{2},,frac{1}{3}$$ xa0 and $$frac{1}{6}$$. Z dies. The gaining ratio of X and Y will be
A.
3 : 2
B.
2 : 3
C.
$$frac{1}{2}$$ and $$frac{1}{3}$$
D.
1 : 1
Answer: _________
Question 2570:
On 31 st March, 2019, total debtors are Rs. 25,000 and bad debts are Rs. 1,000 so if rate of discount on debtors is 2% and rate of provision for bad debts is 5% then the amount of discount on debtors will be
A.
Rs. 456
B.
Rs. 475
C.
Rs. 480
D.
Rs. 500
Answer: _________
Question 2571:
Opening and closing inventories are recorded in
A.
Journal proper
B.
Purchase book
C.
Sales book
D.
Bill receivable book
Answer: _________
Question 2572:
Which of the following instruments is not a negotiable instrument?
A.
Bearer cheque
B.
Promissory note
C.
Crossed cheque
D.
Bills of exchange
Answer: _________
Question 2573:
The installation expenses for a new machinery will be debited to
A.
Cash A/c
B.
Profit & Loss A/c
C.
Machinery A/c
D.
Installation expenses A/c
Answer: _________
Question 2574:
When obligation is not probable or the amount expected to be paid to settle the liability cannot be measured with sufficient reliability, it is called
A.
Contingent liability
B.
Provision
C.
Secured loan
D.
None of the above
Answer: _________
Question 2575:
A Trial Balance contains the balances of
A.
Only Real A/c
B.
Real A/c and Nominal A/c
C.
Personal A/c
D.
Both 'b' and 'c'
Answer: _________
Question 2576:
Error which affect only one account can be
A.
Error of complete omission
B.
Error of posting
C.
Compensatory errors
D.
None of the above
Answer: _________
Question 2577:
In case goods are manufactured and segregated for specified consumers, the best method for valuation of inventory would be
A.
FIFO
B.
Simple average
C.
Base stock
D.
Specific identification method
Answer: _________
Question 2578:
Overriding commission is generally calculated on
A.
Cash sale only
B.
Total sales exceeding invoice value/cost
C.
Credit sales
D.
None of the above
Answer: _________
Question 2579:
Economic life of an enterprise Is split into periodic interval as per ____ concept
A.
Materiality
B.
Periodicity
C.
Accrual
D.
Conservation
Answer: _________
Question 2580:
. . . . . . . . profit means profit which would otherwise be available for distribution of dividend.
A.
Capital
B.
Gross
C.
Net
D.
Divisible
Answer: _________
Question 2581:
Which of the following accounts is increased by debit entries?
A.
Machinery account
B.
Purchases return account
C.
Discount received account
D.
Commission received account
Answer: _________
Question 2582:
Sales A/c Dr To Trading A/c Is an example of . . . . . . . .
A.
closing entry
B.
adjusting entry
C.
opening entry
D.
transaction entry
Answer: _________
Question 2583:
Bills Payable book is to keep a record of . . . . . . . .
A.
bills payable to creditors
B.
bills received from supplier
C.
credit purchases
D.
credit sales
Answer: _________
Question 2584:
Which of the following does not represent application of fund of a company?
A.
fixed asset
B.
good will
C.
debentures
D.
debtors
Answer: _________
Question 2585:
The basic function of financial accounting is to:
A.
record all business transactions
B.
interpret the financial data
C.
assist the management in performing functions effectively
D.
information to management
Answer: _________
Question 2586:
Assets in the beginning of the year Rs. 10,000, Assets at the end of the year Rs. 18,000, Drawing during the year Rs. 2,000. Therefore the profit is:
A.
Rs. 6,000
B.
Rs. 8,000
C.
Rs. 10,000
D.
None of these
Answer: _________
Question 2587:
Conversion of physical shares into electronic securities is called . . . . . . . .
A.
dematerialization
B.
price rigging
C.
re-materialization
D.
None of these
Answer: _________
Question 2588:
Company accounting conforms more to dual aspect concept than to incomplete recording system because: I. Companies Act insists upon the adoption of double entry systems of book keeping II. Balance sheet could not be preprared under sec. 211 of Company's Act according to the incomplete recording system III. To show true and fair view of the affairs of the company IV. To ensure adequate disclosure Select the correct answer from the options given below and mark your answer sheet accordingly.
A.
I and II
B.
II and III
C.
II, III and IV
D.
I, II and III
Answer: _________
Question 2589:
The prime function of accounting is to:
A.
record economic data
B.
provide the informational basis for action
C.
classifying and recording business transactions
D.
attain non-economic goals
Answer: _________
Question 2590:
The purpose of ledger is to
A.
Classify the transactions
B.
Grouping of transactions
C.
Find balance in each account
D.
All of the above
Answer: _________
Question 2591:
In case of dissolution, prior to final distribution to partners, the balance of cash should be equal to
A.
the sale of assets plus the beginning balance of cash after payment of liabilities
B.
the balance of cash prior to the sale of assets plus or minus a gain or loss from realisation
C.
the sale of assets minus the beginning balance of cash prior to payment of liabilities
D.
the total capital balances
Answer: _________
Question 2592:
A company can buy back equity shares out of
A.
its securities premium account
B.
the proceeds of preference shares
C.
its free reserves
D.
all of the above
Answer: _________
Question 2593:
Excess of face value over issue price of a share is called
A.
Profit
B.
Discount
C.
Loss
D.
Security premium
Answer: _________
Question 2594:
When two or more companies liquidate to form a new company, it is called
A.
amalgamation
B.
absorption
C.
reconstruction
D.
purchase of business
Answer: _________
Question 2595:
Final accounts and statements mean:
A.
Balance sheet
B.
Profit and loss A/c
C.
Trading Account
D.
All the above
Answer: _________
Question 2596:
One of the following statements is wrong if there is absence of partnership deed.
A.
No partner has the right to receive salary
B.
No interest is allowed on capital
C.
No interest is to be charged on drawings
D.
Interest @ 5% is to be allowed on the partner's loan to the firm
Answer: _________
Question 2597:
The surplus credit balance of share premium account is transferred to:
A.
Profit and loss account
B.
Capital redemption reserve account
C.
Capital reserve account
D.
Sinking fund reserve account
Answer: _________
Question 2598:
The formula is $$ = frac{{{ ext{Debt(long term)}}}}{{{ ext{Equity(Shareholder's Funds)}}}}$$
A.
Debt and total funds ratio
B.
Ownership Ratio
C.
Capital Turnover Ratio
D.
Debt-Equity Ratio
Answer: _________
Question 2599:
Which one of the following statements is True:
A.
Excess expenditure over income is shown on the debit side of Income and Expenditure Account
B.
Subscription received in advance is not shown in receipt and payment account
C.
Special subscription received by a club for Governor's Party will be shown in the Balance Sheet
D.
Subscription received in 1996 for the year 1997 will be shown on the liability side of the Balance Sheet
Answer: _________
Question 2600:
In a firm, opening stock plus purchases minus closing stock is called:
A.
cost of goods purchased
B.
cost of goods sold
C.
cost of goods in hand
D.
cost of goods produced
Answer: _________
Question 2601:
X and Y are partners and sharing profits-losses in the ratio of 4 : 3. They admit Z in partnership giving $${frac{1}{3}^{{ ext{rd}}}}$$ share in profits/losses. If Z receives his share from X and Y in equal proportion, the share of Y in profits/loses in future will be
A.
$$frac{{11}}{{42}}$$
B.
$$frac{{17}}{{42}}$$
C.
$$frac{{14}}{{42}}$$
D.
$$frac{{28}}{{42}}$$
Answer: _________
Question 2602:
Which of the following is conclusive evidence of partnership?
A.
Sharing of profits
B.
Mutual agency
C.
Carrying of some business
D.
All of the above
Answer: _________
Question 2603:
Capital of firm in the beginning of a financial year was Rs. 1,00,000. At the end, total assets were Rs. 1,50,000 and total liabilities were Rs. 70,000. If total drawing during the year was Rs. 30,000, what is the gross profit or gross loss?
A.
Rs. 10,000 Profit
B.
Rs. 20,000 Loss
C.
Rs. 50,000 Loss
D.
Rs. 10,000 Loss
Answer: _________
Question 2604:
In case of issue of shares at discount, the rate of discount should not be more than
A.
5%
B.
$$7frac{1}{2}\% $$
C.
10%
D.
11%
Answer: _________
Question 2605:
Which of the following statements is/are true? i. Tax-shield on depreciation and interest is an important variable both for the lessor and the lessee. ii. Lease transactions in India are governed by the Lease Act. iii. A lessee should evaluate the lease options against the buying option. iv. As per AS-19, financial lease is shown in the balance sheet of the lessee as an asset.
A.
i and iv
B.
i, iii and iv
C.
ii, iii and iv
D.
Only ii
Answer: _________
Question 2606:
Unrecorded liability, when paid by a firm on its dissolution is debited to:
A.
Partner's Capital
B.
Unrecorded Liability Account
C.
Realisation Account
D.
None of these
Answer: _________
Question 2607:
Purchase of goods for cash-
A.
Will increase the gross profit percentage
B.
Will decrease the current ratio
C.
Will increase the current ratio
D.
Will not affect the current ratio
Answer: _________
Question 2608:
Collection from debtors
A.
Decreases current ratio
B.
Increases current ratio
C.
Has no effect on current ratio
D.
Improves the solvency ratio
Answer: _________
Question 2609:
Rate of commission payble on issue of share should not exceed
A.
2%
B.
3%
C.
4%
D.
5%
Answer: _________
Question 2610:
In case of a firm's dissoultion, the capital accounts are finally closed by
A.
Realisation Account
B.
Profit and Loss Account
C.
Cash or Bank Account
D.
Profit and Loss Appropriation Account
Answer: _________
Question 2611:
Assertion (A) Human resource accounting is the measurement of the cost and value of people to the organisation. Reason (R) Human resource accounting involves measuring costs incurred by the, organisations to recruit, select, hire, train and develop employees and judge their economic value to the organisation.
A.
(A) and (R) are true and (R) is the correct explanation of (A)
B.
(A) and (R) are true and (R) is not the correct explanation of (A)
C.
(A) is true, but (R) is false
D.
Both (A) and (R) are false
Answer: _________
Question 2612:
Premium on redemption of debentures account, until redeemed, is shown in-
A.
Current liabilities
B.
Current provisions
C.
Provisions for liabilities
D.
Long-term provisions
Answer: _________
Question 2613:
Double Account system is applicable to:
A.
Consumer industries
B.
Chemical industries
C.
Public enterprises
D.
Public utility concern
Answer: _________
Question 2614:
What is the meaning of book keeping?
A.
Recording in preliminary books
B.
Preparation of profit and loss account
C.
Calculation of net profit
D.
Writing partnership deed
Answer: _________
Question 2615:
"Book keeping is an art of recording of business and other transactions in monetary terms." This definition has been given by
A.
Spicer and Pegler
B.
J. R. Batliboy
C.
Carter
D.
John Macneil
Answer: _________
Question 2616:
Prepaid insurance account is:
A.
an expense
B.
a revenue
C.
an asset
D.
a liability
Answer: _________
Question 2617:
In an organization, provision for Bad debts is Rs. 5,000 in the beginning. At the end total sales is Rs. 6,00,000 out of which Rs. 1,00,000 is cash sales. 1% provision is to be created on remaining debtors. The amount to be debited to profit and loss account in respect of provision is.
A.
Rs. 6,000
B.
Rs. 5,000
C.
Rs. 1,000
D.
Zero
Answer: _________
Question 2618:
Opening Stock = Rs. 10,000 Purchases = Rs. 90,000 Closing stock = Rs. 28,000 Gross Profit = 10% of sales The amount of sales will be
A.
Rs. 60,000
B.
Rs. 72,000
C.
Rs.80,000
D.
Rs. 90,000
Answer: _________
Question 2619:
Find gross profit/gross loss if, Cost of goods sold Rs. 7,900 Sales Rs. 11,000 Purchase Rs. 3,000
A.
Rs. 8,000
B.
Rs. 4,900
C.
Rs. 3,100
D.
Rs. 100 (Profit)
Answer: _________
Question 2620:
Bank overdraft should be categorized as
A.
Current asset
B.
Current liability
C.
Fixed asset
D.
Fixed liability
Answer: _________
Question 2621:
According to double entry system, interest on bank loan is shown in
A.
Revenue account
B.
Pure revenue account
C.
Capital account
D.
Cash account
Answer: _________
Question 2622:
Current Ratio is 2.7 : 1, Quick Ratio 1.8 : 1, Current Liabilities Rs. 60,000 The Value of Stock shall be
A.
Rs. 54,000
B.
Rs. 60,000
C.
Rs. 1,08,000
D.
Rs. 1,62,000
Answer: _________
Question 2623:
The balance of Short workings A/c is shown in
A.
Assets side of Balance sheet
B.
Liabilities side of Balance sheet
C.
Debit side of Profit & Loss A/c
D.
Credit side of Profit & Loss A/c
Answer: _________
Question 2624:
Which type of shares may have dividends in arrears:
A.
Ordinary shares
B.
Cumulative preference shares
C.
Non-cumulative preference shares
D.
Redeemable preference shares
Answer: _________
Question 2625:
When company reserves part of its capital to be called up at the time of winding up, it is known as
A.
Reserve Capital
B.
Capital Reserve
C.
Uncalled Capital
D.
Subscribed Capital
Answer: _________
Question 2626:
A complete set of financial statements under Ind AS includes the following. 1. Balance sheet at the end of the period. 2. Statement of profit and loss for the period. 3. Statement of changes in equity for the period. 4. Statement of cash flow for the period. 5. Balance sheet at the beginning of the preceding period. Which statements given above are correct?
A.
1, 2 and 4
B.
Both 3 and 5
C.
2, 3 and 5
D.
All of the above
Answer: _________
Question 2627:
Which one of the following pairs is not correctly matched:
A.
Secured Mortgage Deed ⇔ Debentures
B.
Rights shares ⇔ Issued to new shareholders
C.
Convertible ⇔ Debentures
D.
Redeemable ⇔ Preference shares
Answer: _________
Question 2628:
Which of the following is correct about 'Margin of Safety Ratio'?
A.
$$frac{{{ ext{Capital employed}}}}{{{ ext{Net worth}}}}$$
B.
$$frac{{{ ext{Contribution}}}}{{{ ext{Sales Volume}}}}$$
C.
$$frac{{{ ext{Operating Profit}}}}{{{ ext{Contribution}}}}$$
D.
$$frac{{{ ext{Contribution}}}}{{{ ext{Sales BEP}}}}$$
Answer: _________
Question 2629:
Under hire-purchase system, the formula to calculate value of stock at cost equivalent is
A.
Selling Price - Variable Cost
B.
$$frac{{{ ext{Installment Outstanding}}}}{{{ ext{Selling Price}}}} imes { ext{Cash Price}}$$
C.
$$frac{{{ ext{Rate of Interest}}}}{{100}}{ ext{ + Rate of Interest}}$$
D.
Actual Average Profit - Normal Profit
Answer: _________
Question 2630:
The following is (are) the type(s) of Journal
A.
Purchase Journal
B.
Sales Journal
C.
Cash Journal
D.
All of the above
Answer: _________
Question 2631:
The process of entering all transactions from the Journal to Ledger is called
A.
Posting
B.
Entry
C.
Accounting
D.
None of the above
Answer: _________
Question 2632:
The following is a statement showing the financial status of the comapany at any given time
A.
Trading account
B.
Profit & Loss statement
C.
Balance Sheet
D.
Cash Book
Answer: _________
Question 2633:
The following is a statement of revenues and expenses for a specific period of time
A.
Trading account
B.
Trial Balance
C.
Profit & Loss statements
D.
Balance Sheet
Answer: _________
Question 2634:
Balance sheet is a statement of
A.
Assets
B.
Liabilities
C.
Capital
D.
All of the above
Answer: _________
Question 2635:
Balance sheets are prepared
A.
Daily
B.
Weekly
C.
Monthly
D.
Annually
Answer: _________
Question 2636:
The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources
A.
Liquidity ratio
B.
Leverage ratio
C.
Activity ratio
D.
Profitability ratio
Answer: _________
Question 2637:
The measure of how efficiently the assets resources are employed by the firm is called
A.
Liquidity ratio
B.
Leverage ratio
C.
Activity ratio
D.
Profitability ratio
Answer: _________
Question 2638:
The following is (are) the current liability (ies)
A.
Bills payable
B.
Outstanding expenses
C.
Bank Overdraft
D.
All of the above
Answer: _________
Question 2639:
Current ratio =
A.
Quick assets/Current liabilities
B.
Current assets/Current liabilities
C.
Debt/Equity
D.
Current assets/Equity
Answer: _________
Question 2640:
Assertion (A): The maximum number of partners has been specified in the Companies Act. 1956. Reason (R): The Partnership Act, 1932 has been merged with the Companies Act, 1956. Select the correct answer:
A.
Both (A) and (R) are true and (R) is the correct explanation of (A)
B.
Both (A) and (R) are true, but (R) is not correct explanation of (A)
C.
(A) is true but (R) is false
D.
(A) is false but (R) is true
Answer: _________
Question 2641:
Which of the following statements is not correct:
A.
Bonus shares cannot be issued except out of the profits of the company
B.
Bonus shares can be issued either at par or at a premium
C.
Only fully paid bonus shares can be issued out of capital redemption reserve
D.
Bonus can be utilised for making partly paid up shares as fully paid up
Answer: _________
Question 2642:
Buy back of equity shares in any financial year shall not exceed
A.
5% of its total capital
B.
25% of nominal share capital
C.
25% of fully paid equity share capital
D.
None of the above
Answer: _________
Question 2643:
As applied in Accounting, depreciation:
A.
is a process of asset valuation for balance sheet purposes
B.
applies only to long life intangible assets
C.
is used to indicate a decline in the market value of long-life asset
D.
is an accounting process which allocates to cost of long-life asset to various accounting periods
Answer: _________
Question 2644:
Advertising expenses done on launching of a new product are treated as
A.
Capital Expenditure
B.
Revenue Expenditure
C.
Deferred Revenue Expenditure
D.
None of these
Answer: _________
Question 2645:
The Debt Equity ratio of a company for three consecutive years was as follows: Year Debt Equity Ratio 1989 $$frac{{399}}{{28}}$$ 1990 $$frac{{493}}{{34}}$$ 1991 $$frac{{624}}{{42}}$$ The aforesaid ratios show:
A.
That the company's financial structure is sound
B.
That the company is capable of meeting its shrot-term liabilities
C.
That the interests of creditors are not safe in the company
D.
That the long-term liquidity of the company is improving from year to year
Answer: _________
Question 2646:
A and B are partners in a partnership firm without any agreement. A has given a loan of Rs. 50,000 to the firm. At the end of the year, the business incurred loss. The following interest may be paid to A by the firm
A.
5% per annum
B.
6% per annum
C.
6% per month
D.
As there is a loss in the business, interest cannot be paid
Answer: _________
Question 2647:
In which method of depreciation, asset account is debited with interest?
A.
Sum of year's digit method
B.
Annuity method
C.
Insurance policy method
D.
Diminishing Balance Method
Answer: _________
Question 2648:
Unless otherwise stated, a Preference Share is always presumed to be
A.
cumulative, participating and non-convertible
B.
non-cumulative, non-participating and non convertible
C.
cumulative, non-participating and non convertible
D.
non-cumulative, participating and non convertible
Answer: _________
Question 2649:
Which of the following is not business transaction?
A.
Purchase Rs. 1,00,00 furniture for business
B.
Paid his son's fee Rs. 20,000 from his personal bank account
C.
Paid employees salary Rs. 50,000
D.
Purchased goods worth Rs. 75,000
Answer: _________
Question 2650:
Consider the following statements. 1. Atleast three persons are necessary for forming a partnership. 2. The right to share a profit is full proof of one being a partner. 3. The business of the firm can be conducted even by one partner. Which of the statement(s) given above is/are correct?
A.
Both 1 and 3
B.
Only 3
C.
All of the above
D.
None of the above
Answer: _________
Question 2651:
A new partner for acquiring his share in the profit brings
A.
Amalgamation
B.
Goodwill
C.
Sacrifice
D.
All of the above
Answer: _________
Question 2652:
X Ltd. forfeited 20 shares of Rs. 10 each on which Rs. 6 per share were paid. Out of these shares, 8 shares were reissued as fully paid up on payment of Rs. 5.50 per share. The amount to be transferred to capital reserve account will be:
A.
Rs. 12
B.
Rs. 36
C.
Rs. 84
D.
Rs. 120
Answer: _________
Question 2653:
Accounting rules, procedures and methods should be observed alike and should not be changed from year to year. This is called accounting convention of:
A.
Consistency
B.
Full disclosure
C.
Conservation
D.
Going concern
Answer: _________
Question 2654:
Cost of capital from all the sources of funds is called
A.
Specific cost
B.
Composite cost
C.
Implicit cost
D.
Simple Average cost
Answer: _________
Question 2655:
The famous case of Garner Vs. Murray in Partnership is applicable in the event of:
A.
admission of a partner in order to decided the sacrificing ratio
B.
dissolution of partnership in the event of insolvency
C.
death of a partner while distributing profits
D.
retirement of a partner
Answer: _________
Question 2656:
Which of the following conditions have to be met to receive calls-in-advance?
A.
It should be authorised by a special resolution of the company
B.
It should be authorised by an ordinary resolution of the company
C.
It should be approved by the Company Law Board
D.
It should be authorised by the articles
Answer: _________
Question 2657:
A public Limited Company can issue
A.
Redeemable Equity Shares
B.
Secured Equity Shares
C.
Redeemable Debentures
D.
All of the above
Answer: _________
Question 2658:
X and Y are partners Sharing profits in the ratio of 3 : 1. They admit Z as a partner who pays Rs. 4,000 as Goodwill. If the new profit sharing ratio is 2 : 1 : 1 among X, Y and Z respectively, the Goodwill amount will be credited to:
A.
X and Y as Rs. 3,000 and Rs. 1,000 respectively
B.
X and Y as Rs. 2,000 each
C.
X only
D.
Y only
Answer: _________
Question 2659:
As per the rule of Garner V. Murray, the deficiency of the insolvent partner is shared by the solvent partners in their
A.
Profit sharing Ratio
B.
Capital Ratio
C.
Current Account Ratio
D.
Equal Ratio
Answer: _________
Question 2660:
The fair value of share is the average of:
A.
Par value and market value
B.
Intrinsic value and par value
C.
Intrinsic value and yield value
D.
Par value and yield value
Answer: _________
Question 2661:
Which of the following rules is not correct with regard to issue and forfeiture of shares?
A.
For each call, at least 14 days notice to be given
B.
An interval of 30 days is required between two successive share calls
C.
Not more than 40% of the nominal value of the share can be called at a time as a call
D.
As prescribed by SEBI, capital issues have to be made fully paid up within 12 months, if the total issue size is less than Rs. 500 crore
Answer: _________
Question 2662:
In case of a news agent, which of the following is a revenue receipt?
A.
The proceeds of the sale of plant and equipment
B.
Money received from insurance company as a result of crashing a delivery vehicle
C.
A refund received from a supplier as compensation for damaged stock supplied
D.
None of the above
Answer: _________
Question 2663:
When sales volume is Rs. 10,000, variable cost is Rs. 6,000 and profit is Rs. 2,000, the profit-volume ratio will be
A.
20%
B.
33%
C.
40%
D.
60%
Answer: _________
Question 2664:
Outstanding wages is
A.
Current asset
B.
Current liability
C.
Capital expenditure
D.
Revenue expenditure
Answer: _________
Question 2665:
When the partnership firm is dissolved, the following account is opened in the books of firm
A.
Revaluation account
B.
Profit and loss adjustment account
C.
Realisation account
D.
Profit and loss appropriation account
Answer: _________
Question 2666:
Match the following List-I List-II a. IFRS-3 1. Operating segments b. IFRS-8 2. Leases c. IFRS-9 3. Business combinations d. IFRS-16 4. Financial Instruments
A.
a-1, b-2, c-3, d-4
B.
a-2, b-4, c-1, d-3
C.
a-3, b-1, c-4, d-2
D.
a-4, b-3, c-2, d-1
Answer: _________
Question 2667:
X and Y are two equal partners in a firm. On 1 st January, 2004 they admitted Z on the condition that he will bring Rs. 10,000 as capital and Rs. 5000 as goodwill. In future they will share profits in the ratio of 2 : 1 : 2. The proportion of goodwill distribution between X and Y will be:
A.
1 : 1
B.
3 : 1
C.
1 : 3
D.
2 : 1
Answer: _________
Question 2668:
A and B partners sharing profits in the ratio of 7 : 3. C is admitted for $$frac{3}{7}$$ share in the profit. The new profit-sharing ratio of the partners will be:
A.
14 : 6 : 15
B.
7 : 6 : 7
C.
7 : 3 : 3
D.
5 : 3 : 3
Answer: _________
Question 2669:
Pre-emptive right is:
A.
A right of equity shareholders to get newly issued shares
B.
A right of the debenture-holders to get newly issued shares in lieu of debentures
C.
A right of the manager to get newly issued shares
D.
A right of the employees to get shares of the company
Answer: _________
Question 2670:
When a partner retires, the decrease in the values of a liability is credited to:
A.
Liability a/c
B.
P & L Adjustment a/c
C.
Realisation a/c
D.
None of the above
Answer: _________
Question 2671:
Amount of underwriting commission payable on the issue of debentures is limited to:
A.
2%
B.
$$2frac{1}{2}\% $$
C.
3%
D.
5%
Answer: _________
Question 2672:
Stock A/c is a
A.
Personal A/c
B.
Nominal A/c
C.
Real A/c
D.
Statement
Answer: _________
Question 2673:
Preference share on which a shareholder can claim voting rights due to non-payment of dividend for two years are called
A.
Residuary preference shares
B.
Convertible preference share
C.
Cumulative preference share
D.
Non-preference share
Answer: _________
Question 2674:
In the case of admission of a new partner, the amount of goodwill brought in by him in the firm is shared by the old partners :
A.
In their old profit-sharing ratio
B.
In the ratio of their capital
C.
In their sacrificing ratio
D.
In their new profit-sharing ratio
Answer: _________
Question 2675:
Current liability in the following is-
A.
Outstanding wages
B.
Machine preference share
C.
Provision for depreciation on the machine
D.
Share profit
Answer: _________
Question 2676:
Out of following a new partner could be admitted in a partnership with consent of
A.
All existing partners
B.
Any of the partner in the firm
C.
Majority of partners
D.
$$frac{2}{3}$$ majority of partner
Answer: _________
Question 2677:
Which of the following is not recorded in current assets?
A.
Debtors
B.
Cash
C.
Goodwill
D.
Business stock
Answer: _________
Question 2678:
Goodwill brought in by new partner in cash is called
A.
capital
B.
loan
C.
drawings
D.
premium
Answer: _________
Question 2679:
Garner Vs. Murray rule is applicable when-
A.
All partners are insolvent
B.
All partners are solvent
C.
Some partners are insolvent
D.
None of the above
Answer: _________
Question 2680:
Current liabilities are equal to-
A.
Current assets - Working capital
B.
Working capital - Current assets
C.
Current assets + Working capital
D.
None of these
Answer: _________
Question 2681:
The equation to find opening stock is
A.
Opening stock = Cost of good sold - closing stock + Total purchase
B.
Opening stock = cost of goods sold - closing stock - Total purchase
C.
Opening stock = cost of goods sold + closing stock + Total purchase
D.
Opening stock = cost of goods sold + closing stock - Net purchase
Answer: _________
Question 2682:
Mortgage loan is shown in
A.
Liabilities side of balance sheet
B.
Asset side of balance sheet
C.
Dr. side of profit and loss account
D.
None of these
Answer: _________
Question 2683:
When does the buyer get the ownership in the hire purchase method?
A.
On signing the contrast
B.
On payment of first installment
C.
On payment of last installment
D.
When the seller so desires
Answer: _________
Question 2684:
If closing stock is given in adjustment then it would be shown in-
A.
Trading account
B.
Asset side of balance sheet
C.
Both A and B
D.
None of the above
Answer: _________
Question 2685:
Which one of the following is not a generally accepted accounting principle:
A.
Sales, revenues and incomes should not be anticipated or materially overstated
B.
There must be proper cut off accounting for inventories and liabilities for costs and expenses
C.
Non-recurring and extraordinary gains and losses should be recognised in the period they accrue, but should be shown separately from the usual operations
D.
Long-term investments in securities should ordinarily be carried at market quotations
Answer: _________
Question 2686:
Which of the following statement is wrong?
A.
Minimum number of partner in partnership is three
B.
Minimum number of members in private company is two
C.
Sole-proprietorship is oldest form of business organisation
D.
It is necessary to register a public company
Answer: _________
Question 2687:
Over-capitalization results in:
A.
Misapplication of the resources of the community
B.
Better application of the resources of the community
C.
Over-utilization of the resources of the community
D.
Causing no harm to the use of the resources of the community
Answer: _________
Question 2688:
Cash sales during the year - Rs. 46,000 Cash collected from customers during the year - Rs. 1,26,000 Amount regarded as collected from the customers at the end of the year decreased by Rs. 4,940 as compared to the collectable amount at the beginning of the year. One account of the amount of Rs. 1,300 was determined worthless during the year. The amount of credit sales during the year was
A.
Rs. 1,27,700
B.
Rs. 1,22,360
C.
Rs. 1,32,940
D.
Rs. 1,36,730
Answer: _________
Question 2689:
A, B and C are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. They agreed to take D into partnership and gave him $${frac{1}{8}^{{ ext{th}}}}$$ share. What will be their new profit sharing ratio?
A.
4 : 3 : 2 : 1
B.
28 : 21 : 14 : 9
C.
28 : 21 : 14 : 8
D.
4 : 1 : 2 : 1
Answer: _________
Question 2690:
Accounting starts where book keeping ends and . . . . . . . . begins where accounting ends
A.
Auditing
B.
Certification
C.
Stock
D.
Purchase
Answer: _________
Question 2691:
A concern should select an accounting policy which enables it to
A.
pay the proper amount of income tax
B.
calculate the correct amount of cash in hand
C.
present a true and fair view of its state of affairs and profit or loss
D.
Both A and B
Answer: _________
Question 2692:
If the operating ratio is 75% then the net ratio will be
A.
15%
B.
25%
C.
20%
D.
None of these
Answer: _________
Question 2693:
A powerhouse originally built for Rs. 4,00,000 is to be replaced by a new one. The total cost of consturction is Rs. 14,00,000. But the estimated cost of construction of the original size powerhouse at present is Rs. 6,00,000. The revenue cost will be
A.
Rs. 4,00,000
B.
Rs. 4,50,000
C.
Rs. 5,00,000
D.
Rs. 6,00,000
Answer: _________
Question 2694:
Match List-I with List-II and select the correct answer: List-I List-II a. Measurement of income 1. Accrues to the equity of owners b. Recognition of expense 2. Recognition of revenue c. Basis of realization 3. Matching revenue with expenses d. Identification of revenue 4. Accounting period
A.
a-1, b-2, c-3, d-4
B.
a-2, b-1, c-3, d-4
C.
a-3, b-4, c-1, d-2
D.
a-3, b-4, c-2, d-1
Answer: _________
Question 2695:
A and B are partners sharing profit and losses in 3 : 2. C is admitted in the firm for $${frac{1}{5}^{{ ext{th}}}}$$ share and he brings Rs. 10,000 as capital. What will be adjusted capital of B?
A.
Rs. 10,000
B.
Rs. 12,000
C.
Rs. 14,000
D.
Rs. 16,000
Answer: _________
Question 2696:
Average profit Rs. 20,000, normal profit Rs. 5,000, calculate goodwill on the basis of 3 year purchase of super profit
A.
Rs. 40,000
B.
Rs. 60,000
C.
Rs. 50,000
D.
Rs. 45,000
Answer: _________
Question 2697:
If profits are $$frac{1}{4}$$ of cost, what is the share of profit in sales?
A.
$$frac{1}{3}$$
B.
$$frac{1}{4}$$
C.
$$frac{1}{5}$$
D.
$$frac{1}{6}$$
Answer: _________
Question 2698:
A and B share profits in the ratio of 7 : 3. They admitted C as a partner. A surrenders $${frac{1}{4}^{{ ext{th}}}}$$ of his share and B $${frac{1}{3}^{{ ext{rd}}}}$$ share to C. New profit sharing ratio among A, B and C would be:
A.
6 : 2 : 1
B.
6 : 2 : 2
C.
12 : 6 : 7
D.
21 : 8 : 11
Answer: _________
Question 2699:
A and B are partners sharing profit in the ratio of 2 : 3. They admit C for $${frac{1}{4}^{{ ext{th}}}}$$ share in the business. The sacrificing ratio of A and B is
A.
3 : 1
B.
1 : 4
C.
2 : 3
D.
1 : 1
Answer: _________
Question 2700:
The conversion of capital expenditure into revenue expenditure leads to which of the following result?
A.
Secret reserve
B.
Revenue expenditure
C.
Capital reserve
D.
None of the above
Answer: _________
Question 2701:
In which method of calculating depreciation, interest on the cost of the asset is taken into consideration:
A.
Annuity method
B.
Fixed instalment method
C.
Insurance policy method
D.
Sinking fund method
Answer: _________
Question 2702:
In which of the following cases Garner vs Murray rule is not applicable?
A.
Only one partner is solvent
B.
All partners are insolvent
C.
Partnership deed provides for a specific method to be followed in case of insolvency of a partner
D.
All of the above
Answer: _________
Question 2703:
As per AS-2 valuation of inventories, inventories are assets 1. held for sale in the ordinary course of business. 2. held for sale in the special course of business. 3. in the process of production for such sale. 4. in the form of materials or supplies to be consumed in the production processor or in the rendering of services. 5. in the process of services for such sale. Select the correct answer:
A.
1, 2, 3 and 4
B.
1, 4 and 5
C.
1, 3 and 4
D.
2, 4 and 5
Answer: _________
Question 2704:
Consider the following statements: Assertion (A): Rights shares are given to equity shareholders in proportion to their share capital in the company. Reason (R): Equity shareholders assume the greatest risk in company finance. Now select your answer:
A.
Both A and R are true, and R is the correct explanation of A
B.
Both A and R are true, and R is not the correct explanation of A
C.
A is true, but R is false
D.
A is false but R is true
Answer: _________
Question 2705:
Which of the following is shown in Balance sheet?
A.
Tangible asset
B.
Fictitious asset
C.
Both A and B
D.
None of the above
Answer: _________
Question 2706:
X Ltd forfeited 40 shares of Rs. 10 each and on which Rs. 4 per share were paid. If the forfeited shares are reissued as Rs. 8 per share paid-up. What is the minimum price the company must charge?
A.
Rs. 2 per share
B.
Rs. 1 per share
C.
Rs. 8 per share
D.
Rs. 10 per share
Answer: _________
Question 2707:
Consider the particulars given below: Sales = Rs. 60,000 Variable cost = Rs. 25,000 Fixed cost = Rs. 30,000 Based on these data, the operating leverage shall be:
A.
5
B.
7
C.
8
D.
9
Answer: _________
Question 2708:
Under pooling interest method, the difference between the purchase consideration and share capital of the transferee company should be adjusted to
A.
General Reserve A/c
B.
Amalgamation Adjustment A/c
C.
Goodwill or Capital Reserve A/c
D.
None of the above
Answer: _________
Question 2709:
Liquid or Quick assets =
A.
Current assets - (Stock + Work in progress)
B.
Current assets + Stock + Work in progress
C.
(Current assets + Stock) + Work in progress
D.
(Current assets + Work in progress) - Stock
Answer: _________
Question 2710:
Lower the Debt Equity ratio
A.
Lower the protection to creditors
B.
Higher the protection to creditors
C.
It does not affect the creditors
D.
None of the above
Answer: _________
Question 2711:
A higher inventory ratio indicates
A.
Better inventory management
B.
Quicker turnover
C.
Both A and B
D.
None of the above
Answer: _________
Question 2712:
Return on Investment Ratio (ROI) =
A.
(Gross profit / Net sales) x 100
B.
(Gross profit x Sales / Fixed assets) x 100
C.
(Net profit / Sales) x 100
D.
(Net profit / Total assets) x 100
Answer: _________
Question 2713:
A low Return on Investment Ratio (ROI) indicates
A.
Improper utilization of resources
B.
Over investment in assets
C.
Both A and B
D.
None of the above
Answer: _________
Question 2714:
Sales expenditure budget is prepared by estimating the expense(s) of
A.
Advertisement
B.
Market analysis
C.
Salesman's salary
D.
All of the above
Answer: _________
Question 2715:
Budgeting is difficult to apply in the following cases
A.
Products subjected to rapid changes
B.
Job order manufacturing
C.
Uncertain market condition
D.
All of the above
Answer: _________
Question 2716:
A Master Budget consists of
A.
Sales budget
B.
Production budget
C.
Material budget
D.
All of the above
Answer: _________
Question 2717:
The accounting process involves recording
A.
Quantifiable economic event
B.
Non Quantifiable economic event
C.
All of them
D.
None of them
Answer: _________
Question 2718:
In accounting, an economic event is referred to as
A.
Cash
B.
Bank statement
C.
Transaction
D.
Exchange of money
Answer: _________
Question 2719:
Accrual system of accounting is also known as
A.
Cash system
B.
Mercantile system
C.
Receipt system
D.
Government system
Answer: _________
Question 2720:
Match the following List-I List-II a. Ind AS-223 1. Impairment of assets b. Ind AS-27 2. Borrowing costs c. Ind AS-36 3. Agriculture d. Ind AS-41 4. Separate financial statements
A.
a-3, b-2, c-1, d-4
B.
a-2, b-4, c-1, d-3
C.
a-4, b-2, c-3, d-1
D.
a-1, b-2, c-3, d-4
Answer: _________
Question 2721:
Earned, but yet not received income is treated as
A.
Assets
B.
Liability
C.
Loss
D.
Capital
Answer: _________
Question 2722:
Secret reserves may not result by:
A.
Premium on issue of shares
B.
Profits prior to incorporation
C.
Dividend equalization reserve
D.
Reserve created out of profit on the sale of Fixed Assets
Answer: _________
Question 2723:
If the operating ratio is 91.5 operating profit ratio will be:
A.
159.5%
B.
8.5%
C.
9.5%
D.
None of the above
Answer: _________
Question 2724:
The balance of property at cost has been Rs. 20,000 and Rs. 17,000 in 2015 and 2016, respectively. The profit on the sale of property of Rs. 2,000 is credited to capital reserve account and a new property costing Rs. 5,000 was bought in 2016. Determine the sale proceeds from the property.
A.
Rs. 3,000
B.
Rs. 7,000
C.
Rs. 10,000
D.
Rs. 15,000
Answer: _________
Question 2725:
In the balance sheet, the preliminary expense of Rs. 10,000 was reduced to Rs. 500. It will be considered as.
A.
Sale of pre-liminary expenses
B.
Current asset
C.
Adjustment in profit from operation
D.
None of the above
Answer: _________
Question 2726:
A partner of a firm becomes insolvent, loss due to it will be shared by other partners:
A.
equally
B.
in the ratio of their capital
C.
in profit sharing ratio
D.
none of the above
Answer: _________
Question 2727:
Minimum rent is also known as
A.
Dead rent
B.
Fixed rent
C.
Flat rent
D.
All of the above
Answer: _________
Question 2728:
Hire-purchase price of a machinery is Rs. 30,000 and its cash price is Rs. 24,000. Payment is to be made in three equal installments. State the interest of second installment.
A.
Rs. 1,500
B.
Rs. 3,000
C.
Rs. 2,000
D.
Rs. 2,400
Answer: _________
Question 2729:
Z is admitted in a firm for 14 shares in the profit where he brings Rs. 30,000 for goodwill. It will be taken away by the old partners X and Y in
A.
Old profit-sharing ratio
B.
New profit-sharing ratio
C.
Sacrificing ratio
D.
Capital ratio
Answer: _________
Question 2730:
On admission of a new partner increase in the value of an assets is credited to
A.
Old Partner's Capital Account
B.
Revaluation Account
C.
Assets Account
D.
All Partner's Capital Account
Answer: _________
Question 2731:
The accounting concepts related to Balance Sheet are 1. Realisation Concept 2. Cost Concept 3. Matching Concept 4. Accounting Equivalence Concept Select the correct answer
A.
1 and 4 are correct
B.
2 and 3 are correct
C.
1 and 3 are correct
D.
2 and 4 are correct
Answer: _________
Question 2732:
A, B and C are partners. A's capital is Rs. 3,00,000 and B's capital is Rs. 1,00,000. C has not invested any amount as capital but alone manages the whole business. C wants Rs. 30,000 per annum as salary. The firm earned a profit of Rs. 1,50,000. How much will be each partner's share of profit?
A.
A - Rs. 60,000, B - Rs. 60,000, C - Nil
B.
A - Rs. 90,000, B - Rs. 30,000, C - Nil
C.
A - Rs. 40,000, B - Rs. 40,000, C - 40,000
D.
A - Rs. 50,000, B - Rs. 50,000, C - 50,000
Answer: _________
Question 2733:
Improvement of profit-volume ratio can be done by
A.
Increasing selling price
B.
Altering sales mixture
C.
Reducing variable cost
D.
All of the above
Answer: _________
Question 2734:
Stock turnover is:
A.
Profitability ratio
B.
Activity ratio
C.
Leverage ratio
D.
Liquidity ratio
Answer: _________
Question 2735:
Under copyright agreement the amount of royalty is computed on the basis of
A.
Number of books published
B.
Number of books sold
C.
Total cost of books published
D.
Total sale price of the books sold
Answer: _________
Question 2736:
Schedule III Part II of the Companies Act, 2013 deals with which one of the following?
A.
Format of Balance Sheet
B.
Format of Profit and Loss Account
C.
Format of Trading Account
D.
Format of Cash Flow
Answer: _________
Question 2737:
A company issued 50,000 Equity shares of Rs. 10 each, Rs. 8 paid up and 50,000 8% Preference shares of Rs. 100 each. Expected profits are Rs. 10,00,000 Normal rate of dividend on Equity shares is 16%, Provision for taxation 60% and 10% of the profit is transferred to reserves. The value of equity share will be:
A.
40
B.
50
C.
45
D.
None of the above
Answer: _________
Question 2738:
The installation expenses for a new machinery will be debited to:
A.
Installation Expense Account
B.
Cash Account
C.
Profit & Loss Account
D.
Machinery Account
Answer: _________
Question 2739:
A machinery having a residual value of Rs. 5,000 was purchased on 1 st January 1998 for Rs. 1,00,000 and was depreciated @ 9.5% on a straight line method. On 1 st January 1998, it was estimated that its useful life has been reduced to eight years. Under the changed circum-stances, the annual depreciation charges for the year 1991 and onwards will be:
A.
Rs. 11,875
B.
Rs. 13,300
C.
Rs. 9,500
D.
Rs. 12,500
Answer: _________
Question 2740:
An accountant is mainly concerned with:
A.
Audit work
B.
Preparation of budget for his employees
C.
Management Constancy Services
D.
Filling tax returns
Answer: _________
Question 2741:
Given, subscription received in 1990: For the year 1989 - Rs. 500 For the year 1990 - Rs. 7,000 For the year 1991 - Rs. 400 1990 - subscription outstanding on 31 st December 1990 : Rs. 250 The amount of subscription to be posted to income and expenditure account of 1990 is:
A.
Rs. 7,000
B.
Rs. 7,250
C.
Rs. 7,900
D.
Rs. 8,150
Answer: _________
Question 2742:
Long-term liabilities are:
A.
Fixed assets minus current assets
B.
Fixed assets minus current liabilities
C.
Current assets plus current liabilities
D.
Total liabilities minus current liabilities
Answer: _________
Question 2743:
A company purchased the following assets and paid through 1,00,000 fully paid equity shares of Rs. 10 at a premium of Rs. 2: Building = Rs. 5,00,000 Machinery = Rs. 4,00,000 Stock in trade = Rs. 1,00,000 In the context of funds flow statement, this transaction will result in:
A.
Funds in flow of Rs. 10,00,000
B.
Funds in flow of Rs. 12,00,000
C.
Funds in flow of Rs. 1,00,000
D.
Funds in flow of Rs. 9,00,000
Answer: _________
Question 2744:
Sales to Ram Rs. 336 posted to his account as Rs. 363 would effect:
A.
sales account
B.
Ram's account
C.
cash account
D.
bank account
Answer: _________
Question 2745:
Depreciation is:
A.
A source of fund
B.
A use of fund
C.
Neither a source nor a use of fund
D.
Partly a source and partly an application of fund
Answer: _________
Question 2746:
The receipts and payments account begins with . . . . . . . .
A.
debit balance
B.
credit balance
C.
no balance
D.
normal balance
Answer: _________
Question 2747:
Which of the following reserve does not appear in the balance sheet of a company?
A.
secret reserve
B.
general reserve
C.
capital reserve
D.
specific reserve
Answer: _________
Question 2748:
Quantitative transactions are not recorded in accounts due to:
A.
dual concept
B.
accrual concept
C.
money measurement concept
D.
none of these
Answer: _________
Question 2749:
At the time of retirement of a partner, the adjustment of goodwill is done, in which ratio?
A.
Old profit sharing ratio
B.
Gaining ratio
C.
Sacrificing ratio
D.
New profit sharing ratio
Answer: _________
Question 2750:
The system of recording transaction based on dual aspect concept is called:
A.
Double account system
B.
Double entry system
C.
Single entry system
D.
None of these
Answer: _________
Question 2751:
Trial balance is
A.
Part of double entry system
B.
Part of final accounts
C.
A rememberance account
D.
None of the above
Answer: _________
Question 2752:
Income tax on interest, dividends and rent should be
A.
Debited to Profit and Loss Account
B.
Debited to Profit and Loss Appropriation Account
C.
Debited to provision for taxation
D.
None of these
Answer: _________
Question 2753:
Higher the ratio, lower the profitability is applicable to-
A.
Gross Profit Ratio
B.
Net Profit Ratio
C.
Operating Ratio
D.
Return on Investment
Answer: _________
Question 2754:
Accounting Standards in India are prescribed by:
A.
Securities and Exchange Board of India
B.
Company Law Board
C.
Institute of Costs and Works Accountants of India
D.
Institute of Chartered Accountants of India
Answer: _________
Question 2755:
The capital of a partner at the end of the year is Rs. 20,000. His share of profit and drawing during the year is 10,000 and 5,000 respectively. His opening capital would be
A.
Rs. 17,000
B.
Rs. 20,000
C.
Rs. 15,000
D.
Rs. 16,500
Answer: _________
Question 2756:
Which one of the following Entries is correct. When there is loss of goods by fire and the claim is admitted partially by the Insurance Company?
A.
Insurance claim account Dr - Loss due to fire account Dr - To Trading Account
B.
Insurance claim account Dr - Profit & loss account Dr - To insurance company
C.
Insurance company account Dr - Profit & loss account Dr - To fire loss Account
D.
Profit & loss account Dr - Insurance premium account Dr - To Trading Account
Answer: _________
Question 2757:
Given: Contribution = Rs. 1,00,000 Fixed cost = Rs. 50,000 Interest = Rs. 10,000 Income Tax = Rs. 10,000 Combined leverage will be:
A.
2.5
B.
2.0
C.
1.6
D.
1.25
Answer: _________
Question 2758:
A business firm has earned a net profit of Rs. 60,000 in a year. The total sales for the year were Rs. 1,20,000 and the debtors in the beginning and the end of the year were Rs. 40,000 and Rs. 30,000 respectively. The cash flow from operation was
A.
Rs. 60,000
B.
Rs. 1,20,000
C.
Rs. 10,000
D.
Rs. 70,000
Answer: _________
Question 2759:
Which one of the following accounting equations is correct?
A.
Assets = Owner's equity
B.
Assets = Liabilities + Owner's equity
C.
Assets = Liabilities - Owner's equity
D.
Assets + Liabilities = Owner's equity
Answer: _________
Question 2760:
Purchase book is maintained to record
A.
All credit purchases
B.
All cash purchases
C.
Purchases of goods
D.
None of the above
Answer: _________
Question 2761:
A document sent to customer when he returns the goods is called
A.
Promissory note
B.
Invoice
C.
Credit note
D.
Debit note
Answer: _________
Question 2762:
Those transactions for which there is no separate book, are recorded in the
A.
Cash book
B.
Bills receivable book
C.
Bills payable book
D.
Journal Proper
Answer: _________
Question 2763:
The person from whom the goods are purchased on credit are called
A.
Debtors
B.
Creditors
C.
Accounts receivable
D.
None of the above
Answer: _________
Question 2764:
Which of the following sets of expense are the direct expense of business?
A.
Wages, Carriage Inward, Octroi
B.
Postage, Wages, Carriage Inward
C.
Purchases, Wages, Coal Expenses
D.
Both 'a' and 'c'
Answer: _________
Question 2765:
Suspense account given in the trial balance will be entered in the
A.
Manufacturing account
B.
Balance sheet
C.
Trading account
D.
Profit and loss account
Answer: _________
Question 2766:
The accounting equation is based on
A.
Dual aspect
B.
Business entity
C.
Going concern concept
D.
All of the above
Answer: _________
Question 2767:
Different accounting policies can be adopted in the following area(s)
A.
Valuation of inventories
B.
Valuation of Investments
C.
Calculation of depreciation
D.
All of the above
Answer: _________
Question 2768:
Normally the following accounts are balanced
A.
Real account and Nominal account
B.
Personal account and Real account
C.
Only Nominal account
D.
All accounts
Answer: _________
Question 2769:
You have a large residual fund which you wish to invest in a firm for long term. Which of the following ratio would be most appropriate for you to decide
A.
$$frac{{{ ext{Gross debt}}}}{{{ ext{Net debt}}}}$$
B.
$$frac{{{ ext{Long term debt}}}}{{{ ext{Gross capitalization}}}}$$
C.
$$frac{{{ ext{Gross debt}}}}{{{ ext{Gross equity share capital}}}}$$
D.
$$frac{{{ ext{Net average profit}}}}{{{ ext{Gross share capital}}}}$$
Answer: _________
Question 2770:
A company issued Rs. 1,00,000 worth of $$7frac{1}{2}\% $$ xa0Debentures of Rs. 100 each at a discount of 5%. These debentures are repayable after 10 years in a lum-sum at a premium of 5%. The amount of loss on issue of debentures to be written-off each year will be
A.
Rs. 1,000
B.
Rs. 5,000
C.
Rs. 500
D.
Rs. 1,500
Answer: _________
Question 2771:
As per AS-2 this standard should be applied in accounting for inventories other than 1. work-in-progress arising under constrution contracts, including directly related service contracts (see Accounting Standard (AS)-7, construction contracts). 2. work-in-progress arising in the ordinary course of business of service providers. 3. shares, debentures and other financial instruments held as stock-in-trade. 4. producer's inventories of livestock, agricultural and forest products and mineral oils, ores and gases to the extent that they are measured at net realisable value in accordance with well established practices in those industries. 5. work-in-progress arising in the special course of business of service providers. Select the correct answer:
A.
1, 2 and 3
B.
1, 2, 3 and 4
C.
2, 3, 4 and 5
D.
3, 4 and 5
Answer: _________
Question 2772:
On 1 st January, 2004, 'A' took a mine on lease for 10 years. The rate of profession fee is 50 paise per tonne and the minimum fare is Rs. 8,000 per annum. Short working amount has the right to be recovered till 31 st December, 2008. Production was as follows- 2004 ⇔ 3,000 ton, 2005 ⇔ 10,000 ton, 2006 ⇔ 20,000 ton, 2007 ⇔ 28,000 ton, 2008 ⇔ 14,200 ton. The amount to be given to the landlord for the year 2006 is
A.
Rs. 8,000
B.
Rs. 9,000
C.
Rs. 10,000
D.
Rs. 12,000
Answer: _________
Question 2773:
When shares are forfeited, the share capital account is debited with . . . . . . . . and the share forfeiture accountis credited with . . . . . . . .
A.
calls-in-arrear of shares forfeited, amount received on shares forfeited
B.
called-up capital of shares forfeited, amount received on shares forfeited
C.
called-up capital of shares forfeited, calls-in-arrear of shares forfeited
D.
paid-up capital of shares forfeited, called-up capital of shares forfeited
Answer: _________
Question 2774:
Redeemable preference shares can be redeemed
A.
if they are paid not less than 50% of the nominal value of shares
B.
only if they are fully paid
C.
even if they are partly paid
D.
only if they are issued at premium
Answer: _________
Question 2775:
If profit is 25% of cost price and sales is Rs. 5,000 then what is amount of profit?
A.
Rs. 1,250
B.
Rs. 4,000
C.
Rs. 1,000
D.
None of the above
Answer: _________
Question 2776:
Interest is always calculated on the
A.
market value
B.
cost of purchase
C.
nominal/face value
D.
higher of cost and fair value
Answer: _________
Question 2777:
The amount of goodwill brought in by new partner is transferred to old partners in . . . . . . . .
A.
old ratio
B.
new ratio
C.
sacrificing ratio
D.
gaining ratio
Answer: _________
Question 2778:
Profit before tax of the company is Rs. 2,00,000 if the interest period is 5, what will be the amount of interest?
A.
Rs. 20,000
B.
Rs. 33,333
C.
Rs. 40,000
D.
Rs. 50,000
Answer: _________
Question 2779:
Which of the following is not an accounting software package?
A.
Quick Books
B.
Sage one
C.
Sage M
D.
Sage 50
Answer: _________
Question 2780:
When drawings are made at the end of each month. Interest on drawings is calculate for
A.
5 months
B.
6 months
C.
5.5 months
D.
6.5 months
Answer: _________
Question 2781:
Expenditure, which result increase in the earning capacity of a business is
A.
capital expenditure
B.
revenue expenditure
C.
deferred revenue expenditure
D.
All of the above
Answer: _________
Question 2782:
Capital redemption reserve is created due to
A.
volunta
B.
legal requirements
C.
Both A and B
D.
None of these
Answer: _________
Question 2783:
In what proportion the deficiency of insolvent partner's capital is shared by other partners as per decision of Garners Vs. Murray:
A.
In profit sharing ratio
B.
In capital ratio
C.
In pre-distribution capital ratio
D.
Gaining ratio
Answer: _________
Question 2784:
The statement of assets and liabilities is-
A.
Balance sheet
B.
Trial balance
C.
Trading account
D.
Profit and loss account
Answer: _________
Question 2785:
Trial balance checks
A.
arithmetical accuracy of accounting entries
B.
equality of all assets and liabilities
C.
all types of errors
D.
valuation of closing stock
Answer: _________
Question 2786:
While determining the normal rate of return for the valuation of shares in market value method, which of the following should be taken into consideration?
A.
The degree of risk involved
B.
The current rate of interest on gilt-edged securities
C.
Weighted average cost of capital
D.
All of the above
Answer: _________
Question 2787:
Cash received from debtors Rs. 12,000 and furniture purchased Rs. 7,000 the net effect on fund flow will be
A.
Net increase in working captial is Rs. 5,000
B.
Net decrease in working captial is Rs. 5,000
C.
Net increase in working captial is Rs. 19,000
D.
Net decrease in working captial is Rs. 7,000
Answer: _________
Question 2788:
Which of the following is true when a debtor pays his dues?
A.
The asset side of the balance sheet will decrease
B.
The asset side of the balance sheet will increase
C.
The liability side of the balance sheet will increase
D.
There is no change in total assets or total liabilities
Answer: _________
Question 2789:
Which of the following ratios indicate the short-term liquidity of a business?
A.
Inventory turnover ratio
B.
Debt equity ratio
C.
Acid test ratio
D.
Proprietary ratio
Answer: _________
Question 2790:
The maximum amount beyond which a company is not allowed to raise funds by issue of shares is
A.
Issued capital
B.
Reserve capital
C.
Nominal capital
D.
Subscribed capital
Answer: _________
Question 2791:
Based on which of the following concepts, is share capital account shown on the liability side of a balance sheet?
A.
Business entity concept
B.
Money measurement concept
C.
Cost concept
D.
Going concern concept
Answer: _________
Question 2792:
Which of the following is not considered as Research & Development costs?
A.
Testing in search for product alternatives
B.
Legal work on patent application
C.
Modification of design of a process
D.
Searching for application of new research findings
Answer: _________
Question 2793:
Amortization of unidentified intangible assets is in terms of
A.
Conservatism concept
B.
Materiality concept
C.
Matching concept
D.
Cost concept
Answer: _________
Question 2794:
Declared dividend should be classified in the balance sheet as a
A.
Provision
B.
Current liability
C.
Reserve
D.
Current asset
Answer: _________
Question 2795:
If the opening inventory of a business is undercast, it will
A.
Increase gross profit and decrease net profit
B.
Decrease gross profit as well as net profit
C.
Increase value of assets
D.
Increase gross profit as well as net profit
Answer: _________
Question 2796:
Which of the following is not a financial statement?
A.
Profit and loss account
B.
Profit and loss appropriation account
C.
Balance sheet
D.
Trial Balance
Answer: _________
Question 2797:
Provision for bad debts is made as per the
A.
Conservatism concept
B.
Cost concept
C.
Consistency concept
D.
Going concern concept
Answer: _________
Question 2798:
A and B have been in partnership sharing profits in the ratio of 7 : 3. C is admitted as a partner. A surrender $$frac{1}{7}$$ of his share and B surrenders $$frac{1}{3}$$ of his share in favour of C. The new profit sharing ratio will be-
A.
1 : 1 : 3
B.
3 : 1 : 1
C.
1 : 3 : 1
D.
2 : 1 : 1
Answer: _________
Question 2799:
On maturity of joint life policy the amount received from insurance company will be distributed amongst partners:
A.
Equally
B.
In profit-sharing ratio
C.
In capital ratio
D.
None of the above
Answer: _________
Question 2800:
Which one of the following is not a function of accounting?
A.
Profit maximization
B.
Meeting statutory requirements
C.
Protecting the assets of business
D.
Organizing business records
Answer: _________
Question 2801:
The expenditure on raw material is-
A.
Fixed cost
B.
Variable cost
C.
Opportunity cost
D.
Short-term cost
Answer: _________
Question 2802:
Which of the following is/are the method(s) of Human Resource Accounting?
A.
Capitalisation of historical cost model
B.
Replacement cost model
C.
Present value of future earning model
D.
All of the above
Answer: _________
Question 2803:
Chartered Accountants are-
A.
Skilled Auditor
B.
Government Auditor
C.
Professional Auditor
D.
None of the above
Answer: _________
Question 2804:
Which of the following is not prepared to ascertain the income of a non-trading concern:
A.
Profit and Loss account
B.
Balance sheet
C.
Receipt and payment Account
D.
Income and Expenditure account
Answer: _________
Question 2805:
Ram and Shyam are partners in a firm with capital of Rs. 4,50,000 and Rs. 3,10,000 respectively. They admitted Ganesh as a partner with $${frac{1}{4}^{{ ext{th}}}}$$ share of profit. Ganesh brings Rs. 3,00,000 as his capital. Ganesh's share of goodwill will be
A.
Rs. 1,10,000
B.
Rs. 27,000
C.
Rs. 17,500
D.
Rs. 70,000
Answer: _________
Question 2806:
Redeemable preference shares of Rs. 2,00,000 are redeemed at par for which purpose fresh equity shares are issued for Rs. 80,000 at par, The amount be transferred to Capital Redemption Reserve Account would be:
A.
Rs. 80,000
B.
Rs. 1,20,000
C.
Rs. 2,00,000
D.
Rs. 40,000
Answer: _________
Question 2807:
When the sale is expected to occur beyond one year, the entity shall measure the costs to sell at their present value. Any increase in the present value of the costs to sell that arises from the passage oftime shall be presented in
A.
Capital Reserve A/c
B.
Profit or loss as a financing cost
C.
General Reserve A/c
D.
None of the above
Answer: _________
Question 2808:
When a company purchases its own debentures as an investment, 'own debentures account' is debited with:
A.
Paid-up value of debentures
B.
Face value of debentures
C.
Amount paid for such debentures
D.
Amount equal to the difference between the face value of the debentures and the amount paid for such debentures
Answer: _________
Question 2809:
Bonus shares can be issued out of i. General reserve ii. Capital Gain iii. Revaluation iv. Profit and loss (Cre.) Which of the following is correct
A.
i or iv
B.
ii or iii
C.
i, ii or iv
D.
ii, iii or iv
Answer: _________
Question 2810:
Fees paid to lawyer for drawing a purchase deed of land is which type of expenditure?
A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
None of the above
Answer: _________
Question 2811:
The partnership of R and S was dissolved. Rs. 38,000 was received from sale of all assets. Rs. 14,000 claim of all parterres were paid. If R's capital is twice of capital balance of S, then the balance of S's capital will be
A.
Rs. 14,000
B.
Rs. 12,000
C.
Rs. 8,000
D.
Rs. 6,000
Answer: _________
Question 2812:
Purchased a machinery for Rs. 50,000, but debited to purchases account. It is a:
A.
Clerical error
B.
Error of principle
C.
Compensating error
D.
None of the above
Answer: _________
Question 2813:
What should the seller do if the buyer fails to make the installments?
A.
can sue the buyer
B.
take back his property
C.
get compensation from the buyer
D.
all of the above
Answer: _________
Question 2814:
Which of the following are shown is profit and loss appropriation account? 1. Salary to staff 2. Salary to partners 3. Interest on capital 4. Fresh capital introduced 5. Share of profit 6. Amount of drawings 7. Interest on drawings Select the correct answer:
A.
1, 4, 5, 6
B.
2, 3, 5, 7
C.
1, 2, 6, 7
D.
2, 3, 6, 7
Answer: _________
Question 2815:
A, B and C were partners sharing profits and losses in the ratio of 3 : 2 : 1. They decided to dissolve the partnership and to distribute the sale proceeds as and when realised. The partner's capitals were: A - Rs. 10,000, B - Rs. 9,000 and C - Rs. 5,000, B's loan amounted to Rs. 3,000, and Sundry Creditors to Rs. 6,000. Assets realisation and expenses were as under: Assets Realised Expenses July Rs. 5,300 Rs. 500 August Rs. 3,600 Rs. 200 September Rs. 4,500 Rs. 300 October Rs. 4,500 Rs. 200 In September B will receive:
A.
Rs. 1,400
B.
Rs. 1,467
C.
Rs. 1,633
D.
Rs. 1,933
Answer: _________
Question 2816:
On dissolution of a partnership firm the debit balance of profit and loss A/c is transferred to:
A.
Realisation A/c
B.
Reserve A/c
C.
Revalution A/c
D.
Partner's Capital A/c
Answer: _________
Question 2817:
Nominal A/c is:
A.
Wages A/c
B.
Patent A/c
C.
Prepaid A/c
D.
All of these
Answer: _________
Question 2818:
Which of the following items will not be included in Income and Expenditure Account of a club:
A.
Sale of old news papers
B.
Loss on the sale of an asset
C.
Payment of honorarium
D.
Amount of sale of furniture
Answer: _________
Question 2819:
Which of the following are examples of cash flow from operating activities as per AS-7? 1. Cash receipts from the sale of goods and the rendering of services. 2. Cash receipts from disposal of intangible assets. 3. Cash receipts from royalties, fees, commissions and other revenue. 4. Cash payments to suppliers for goods and services. 5. Cash proceeds from issuing shares or other similar instruments. 6. Cash payments to and on behalf of employees. Select the correct answer:
A.
1, 3, 4 and 6
B.
2, 5 and 6
C.
1, 2, 3 and 4
D.
2, 3, 4 and 6
Answer: _________
Question 2820:
Those assets which are purchased to increase profitability in business and not to be resold are called
A.
Intangible asset
B.
Current asset
C.
Fixed asset
D.
Depreciable asset
Answer: _________
Question 2821:
Which of the following are the consequences in case of insolvency of partner? 1. The partner adjudicated as insolvent ceases to be a partner. 2. He ceases on the date on which the order of adjudication is made. 3. The firm is dissolved on the date of the order. 4. The estate of the insolvent partner is liable for any act of the firm after the date of the order of adjudication. 5. The firm can be held liable for any acts of the insolvent partners after the date of the order of adjudication. Select the correct answer:
A.
Only 5
B.
Both 4 and 5
C.
3, 4 and 5
D.
1, 2 and 3
Answer: _________
Question 2822:
A and B are partners in a firm. They are entitled to interest on their capitals, but the net profit was not sufficient for interest. In this case, the net profit will be distributed among partners in
A.
Agreed ratio
B.
Profit-sharing ratio
C.
Capital ratio
D.
Equally
Answer: _________
Question 2823:
With reference to margin of safety, which of the following will improve it? 1. By lowering BEP through reduction of fixed cost. 2. By adopting a better profitable product mix. Select the correct answer:
A.
1 Only
B.
2 Only
C.
Both 1 and 2
D.
Neither 1 nor 2
Answer: _________
Question 2824:
X Ltd. purchased land and building worth Rs. 28,80,000 and in lieu issued debentures of Rs. 100 each at a discount of 4%. The number of debentures issued will be:
A.
28,800
B.
30,000
C.
32,000
D.
None of the above
Answer: _________
Question 2825:
Which of the following is not deferred revenue expenditure?
A.
Heavy advertisement expenditure
B.
Expenses incurred in shifting the business to convenient premises
C.
Preliminary expenses
D.
Depreciation on fixed assets
Answer: _________
Question 2826:
Repairs of second hand machinery purchased is debited to repairs account. It is an error of
A.
Compensating
B.
Omission
C.
Commission
D.
Principle
Answer: _________
Question 2827:
Which of the following item of trial balance will be debited in trading account?
A.
Outstanding wages
B.
Wages and salary
C.
Advance Payment of wages
D.
None of the above
Answer: _________
Question 2828:
A company cannot issue:
A.
Redeemable Equity shares
B.
Redeemable Preference shares
C.
Redeemable Debentures
D.
Fully Convertible Debentures
Answer: _________
Question 2829:
In the absence of any agreement, it is presumed that the new partner acquires his share in profits from the old partners in the:
A.
New ratio
B.
Old ratio
C.
Sacrificing ratio
D.
Gaining ratio
Answer: _________
Question 2830:
Given below are two statements, are labelled as Assertion (A) and other as Reason (R): Assertion (A): The fixed assets in the balance sheet are required to be shown at cost less depreciation. Reason (R): The balance sheet and profit and loss account disclose a true and fair view. Choose the correct answer
A.
Both (A) and (R) are true and (R) is correct explanation of (A)
B.
Both (A) and (R) are true but (R) is not the correct explanation of (A)
C.
(A) is true but (R) is false
D.
(A) is false but (R) is true
Answer: _________
Question 2831:
According to the Double Entry System, salary paid to a clerk Ramesh is a
A.
Real Transaction
B.
Personal Transaction
C.
Nominal Transaction
D.
Both Real and Personal Transaction
Answer: _________
Question 2832:
Which of the following should be shown on the asset side of the Balance Sheet:
A.
Preliminary Expenses
B.
Outstanding Rent
C.
Share Premium A/c
D.
None of the above
E.
Prepaid insurance
F.
Share premium
G.
Outstanding wages
H.
Outstanding salaries
Answer: _________
Question 2833:
Which of the following ratios are taken into consideration by a banker before sanctioning the loan?
A.
Proprietory Ratio
B.
Stock-Turnover Ratio
C.
Debt-Equity Ratio
D.
All of the above
Answer: _________
Question 2834:
Which of the following shows position at specific Date?
A.
Trading account
B.
Profit and loss account
C.
Manufacturing account
D.
Balance sheet
Answer: _________
Question 2835:
Value added statement is a statement prepared under:
A.
Financial Accounting
B.
Management Accounting
C.
Human Resource Accounting
D.
Social Accounting
Answer: _________
Question 2836:
Which of the following pairs is/are correctly matched?
A.
When a company issues its securities at a price more than the face value ⇔ Shares issued at discount
B.
When shares issued at an amount less than par value of shares ⇔ Shares issued at premium
C.
When shares are issued at their face value ⇔ Shares issued at par
D.
All of the above
Answer: _________
Question 2837:
After realization of investment balance of sinking fund adjustment account is transferred to
A.
Profit and loss a/c
B.
Debenture a/c
C.
Sinking fund a/c
D.
Cash a/c
Answer: _________
Question 2838:
Match the following: List-I List-II a. Goodwill of a company 1. Current liability b. Overdraft 2. Fixed assets c. Preliminary expenses 3. Reserves surplus d. Premium on issue of shares 4. Fictitious assets
A.
a-2, b-1, c-4, d-3
B.
a-1, b-2, c-4, d-3
C.
a-1, b-2, c-3, d-4
D.
a-2, b-1, c-3, d-4
Answer: _________
Question 2839:
What type of account is revaluation account?
A.
Personal account
B.
Nominal account
C.
Real account
D.
None of the above
Answer: _________
Question 2840:
Gross Book Value of a fixed assets is its
A.
Cost less depreciation
B.
Historical cost
C.
Fair market value
D.
Realizable value
Answer: _________
Question 2841:
Factory manager gets 10% commission on net profit after charging such commission. If profit is Rs. 2200 then commission will be?
A.
Rs. 220
B.
Rs. 200
C.
Rs. 240
D.
Rs. 244.44
Answer: _________
Question 2842:
The measure of a stock variable is-
A.
during a month
B.
during a year
C.
during a period
D.
at a time
Answer: _________
Question 2843:
Preparation of consolidated statement of accounts as per AS-21 is:
A.
Optional
B.
Mandatory for Private Ltd. Companies
C.
Mandatory for Listed Companies
D.
Mandatory for all Companies
Answer: _________
Question 2844:
Garner Vs Murray rule is aplicable when
A.
All partner become insolvent
B.
All partners are solvent
C.
When some partners are solvent
D.
None of the above
Answer: _________
Question 2845:
Discount on issue of Shares Account until written off is shown under
A.
'Issued and Subscribed Capital' on the Liabilities side of the Balance Sheet
B.
'Reserve and Surplus' on Liabilities side of the Balance Sheet
C.
'Miscellaneous Expenditure' on Asset side of Balance Sheet
D.
'Profit and Loss Account' on the debit side
Answer: _________
Question 2846:
Margin of Safety is calculated by using
A.
$$frac{{{ ext{Profit}}}}{{{ ext{P/V ratio}}}}$$
B.
$$frac{{{ ext{Fixed Cost}}}}{{{ ext{Contribution}}}}$$
C.
$$frac{{{ ext{Break Even Sales}}}}{{{ ext{Sales}}}}$$
D.
$$frac{{{ ext{Profit}}}}{{{ ext{Sales}}}}$$
Answer: _________
Question 2847:
Number of columns made in journal are-
A.
4
B.
5
C.
6
D.
8
Answer: _________
Question 2848:
Any amount received towards endowment fund is a . . . . . . . . receipt.
A.
Ordinary
B.
Special
C.
Revenue
D.
Capital
Answer: _________
Question 2849:
Which of the following errors is revealed by trial balance?
A.
Wrong amount entered in the book of original entry
B.
Wrong amount entered in a ledger account
C.
Complete omission of an entry from the book of original entry
D.
All of these
Answer: _________
Question 2850:
Consistency with reference to application of accounting principles refers to the fact that:
A.
Companies in the same industry use identical accounting procedures and methods, and are consistent
B.
Income and assets have not been over stated
C.
Accounting methods and procedures used have been consistently applied from year to year
D.
All methods and procedures have been utilised
Answer: _________
Question 2851:
If some goods from business are given away as charity to a particular person or institution, it should be . . . . . . . .
A.
debited to charity account
B.
credited to charity account
C.
debit sales account
D.
debit to donation account
Answer: _________
Question 2852:
Generally, under single entry system:
A.
only personal accounts are maintained
B.
only personal, cash and bank accounts are maintained
C.
all accounts are maintained
D.
no account is maintained
Answer: _________
Question 2853:
While making an adjustment entry in respect of interest on capital, credit is made to:
A.
Capital account
B.
Interest on capital account
C.
Profit & loss account
D.
Interest account
Answer: _________
Question 2854:
. . . . . . . . supplies the management significant information in order to assist the management to discharge its various functions such as planning, control and decision making.
A.
Financial accounting
B.
Cost accounting
C.
Management account
D.
Human resource accounting
Answer: _________
Question 2855:
The distinction between capital and revenue is necessary for the preparation of . . . . . . . .
A.
fund flow statement
B.
receipts and payment account
C.
final accounts
D.
cash flow statement
Answer: _________
Question 2856:
Cost of goods sold - Rs. 13,300, Gross Profit - Rs. 3,200, Netprofit - Rs. 700, what is the amount of sales?
A.
Rs. 14,000
B.
Rs. 10,100
C.
Rs. 16,500
D.
Rs. 17,200
Answer: _________
Question 2857:
Match List-I (Items) with List-II (Standards) and select the correct answer using the options given below the lists: List-I (Items) List-II (Standards) a. Accounting for fixed assets 1. AS-9 b. Revenue recognition 2. AS-10 c. Depreciation accounting 3. AS-3 d. Cash flow statement 4. AS-6
A.
a-2, b-3, c-4, d-1
B.
a-4, b-1, c-2, d-3
C.
a-2, b-1, c-4, d-3
D.
a-4, b-3, c-2, d-1
Answer: _________
Question 2858:
Which of the following defines outstanding salary account?
A.
Natural personal account
B.
Artificial personal account
C.
Representative personal account
D.
Real account
Answer: _________
Question 2859:
Which one of the following statements is wrong?
A.
Only fully-paid Preference Shares can be redeemed by a company
B.
Premium payable on Redemption of preference Shares can be privided for out of company's share premium account
C.
Partly-paid Bonus Shares cannot be issued out of capital redemption reserve fund
D.
Redeemable Preference Shares can be redeemed only out of profits of the company
Answer: _________
Question 2860:
The Purpose of providing depreciation is:
A.
to reduce the book value of fixed assets to the level of their market value each year
B.
to save income tax and wealth tax
C.
to reduce fixed assets to nil value as soon as possible
D.
to allocate the cost of fixed assets over their working life
Answer: _________
Question 2861:
Ram has 50 shares of Rs. 100 each on which Rs. 80 per share have been received. Due to non payment of final call these shares were forfeited so in this case share forfeiture account will be cridited by
A.
Rs. 5,000
B.
Rs. 4,000
C.
Rs. 2,000
D.
None of the above
Answer: _________
Question 2862:
Goodwill arising on amalgamation is to be
A.
retained in the books of the transferee company
B.
amortised to income on a systematic basis normally five years
C.
adjusted against reserves or profit and loss account balance
D.
all of the above
Answer: _________
Question 2863:
In order to raise finance, which of the following securities can be issued by a company? 1. Equity Shares 2. Redeemable Equity Shares 3. Redeemable Debentures 4. Redeemable Preference Shares 5. Bonus Shares Select the correct answer:
A.
1, 2 and 3
B.
1, 3 and 4
C.
1, 2 and 4
D.
2, 4 and 5
Answer: _________
Question 2864:
Which of the following has the highest price?
A.
Cash
B.
Hire-Purchase system
C.
Interest
D.
Depreciation
Answer: _________
Question 2865:
Share warrant can be issued by a company when
A.
application money has been paid on shares
B.
shares are partly paid
C.
shares are fully paid
D.
shares are lost
Answer: _________
Question 2866:
In case net sale in a year is Rs. 2,00,000 and the amount of debtors is Rs. 40,000, the average collection period will be:
A.
60 days
B.
45 days
C.
73 days
D.
75 days
Answer: _________
Question 2867:
A company can buy back
A.
partly paid share
B.
fully paid share
C.
partly called up
D.
none of these
Answer: _________
Question 2868:
Which of the following reports have to be submitted before the company's annual general meeting as per the Companies Act?
A.
Director's Report
B.
Auditor's Report
C.
Statement of Profit and Loss and Balance Sheet
D.
All of the above
Answer: _________
Question 2869:
Match the following. List-I List-II a. Absorption 1. Profit on reissue of shares is to be transferred to . . . . . . . . b. Accumulated losses and fictitious assets 2. When there are one or more liquidation and no formation, it is known as . . . . . . . . c. Consolidated revenue profits 3. Internal reconstruction is generally resorted to write off . . . . . . . . d. Capital reserve 4. The group share of proposed dividends by the subsidiary is added to . . . . . . . .
A.
a-4, b-3, c-2, d-1
B.
a-3, b-4, c-2, d-1
C.
a-2, b-3, c-4, d-1
D.
a-3, b-4, c-1, d-2
Answer: _________
Question 2870:
Under which section of the Companies Act provision has been made for the use of share premium?
A.
Section 52
B.
Section 65
C.
Section 78
D.
Section 80
Answer: _________
Question 2871:
Profit on revaluation of assets in case of retirement of a partner shall be distributed to capital accounts of:
A.
Remaining partners, in their old profit sharing ratio
B.
Remaining partners in their new profit sharing ratio
C.
All partners, in their profit sharing ratio
D.
None of the above
Answer: _________
Question 2872:
The amount of depreciation provided in the Sinking Fund Method when compared to Annuity Method is:
A.
Higher
B.
Lower
C.
Equal
D.
Unpredictable
Answer: _________
Question 2873:
When fixed cost is Rs. 10,000 and the profit volume ratio is 20% then break even point will be
A.
Rs. 2,000
B.
Rs. 5,000
C.
Rs. 50,000
D.
Rs. 10,000
Answer: _________
Question 2874:
A and B are equal partners. When partnership was dissolved their capitals are Rs. 30,000 and Rs. 40,000 respectively. After all assets are sold and liabilities paid, there is cash balance of Rs. 60,000. The amount of profit or loss on realisation is:
A.
Profit of Rs. 10,000
B.
Profit of Rs. 20,000
C.
Profit of Rs. 30,000
D.
Loss of Rs. 10,000
Answer: _________
Question 2875:
Pre-acquisition profit in a subsidiary company is considered as
A.
Revenue profit
B.
Capital profit
C.
Goodwill
D.
Minority interest
Answer: _________
Question 2876:
A journal entry, in which two or more accounts are debited/credited, is known as
A.
Double entry
B.
Multi entry
C.
Additional entry
D.
Compound entry
Answer: _________
Question 2877:
The stock of stationary on 1 st January 2002 is Rs. 300, payment for stationary during the year is 2002 Rs. 1,080 and stock of stationary on 31 st December 2002 is Rs. 50. What will be the amount shown in income and expenditure account for the year ending 31 st December, 2002?
A.
Rs. 1,330
B.
Rs. 830
C.
Rs. 1,080
D.
Rs. 1,380
Answer: _________
Question 2878:
If Rs. 3,000 was outstanding at the beginning of the year towards subscription, and Rs. 20,000 is received during the year, with Rs. 5,000 still outstanding at the end of the year, the amount to be taken to Income and Expenditure Account will be:
A.
Rs. 22,000
B.
Rs. 17,000
C.
Rs. 20,000
D.
Rs. 28,000
Answer: _________
Question 2879:
At the time of sale of a firm, the purchase consideration received in the form of shares and debentures will be distributed among the partners, in the ratio of:
A.
final amounts due to partners
B.
capital
C.
profit sharing
D.
equal
Answer: _________
Question 2880:
If total sales are Rs. 1,00,000 cash sales included in total sales Rs. 20,000, sales back Rs. 7,000. Total debtors for sale as on 31 st March, 1993 Rs. 9,000, and bills receivable as on 31 st March, 1993 is only Rs. 2,000. The average payout period would be for the year 1992 - 93.
A.
60 days
B.
45 days
C.
90 days
D.
55 days
Answer: _________
Question 2881:
A and B are partners in a firm sharing profit and loss in the ratio of 3 : 2. They admit C into a partnership for $${frac{1}{8}^{{ ext{th}}}}$$ share, and the new ratio between A and B is 4 : 3. The sacrificing ratio is
A.
1 : 1
B.
2 : 1
C.
4 : 1
D.
2 : 3
Answer: _________
Question 2882:
Given Net Profit = Rs. 1,50,000 Preference Dividend = Rs. 25,000 Taxes = Rs. 10,000
Equity Capital (Rs. 10 each) = Rs. 10,00,000 What is the Earning Per Share (EPS)?
A.
Rs. 1.50
B.
Rs. 1.25
C.
Rs. 1.15
D.
None of the above
Answer: _________
Question 2883:
BEP is computed by:
A.
Fixed cost/PV ratio
B.
Fixed cost/100
C.
100/Fixed cost
D.
Sales/Profit
Answer: _________
Question 2884:
Which of the following assets do not attract depreciation
A.
Land
B.
Building
C.
Plant
D.
Furniture
Answer: _________
Question 2885:
Which one of the following is not included in the classification of flow?
A.
Vertical
B.
Horizointal
C.
Drawing
D.
Nonverbal
Answer: _________
Question 2886:
When two or more firm merge then the process is known as
A.
Amalgamation
B.
Merge
C.
Reconstruction
D.
None of the above
Answer: _________
Question 2887:
Goodwill' is what type of asset?
A.
Intangible asset
B.
Fictitious asset
C.
Tangible asset
D.
Liquid asset
Answer: _________
Question 2888:
In case a sports fund is kept expenses on account of sports events should be:
A.
charged to sports fund
B.
charged to the income and expenditure account
C.
Taken to the balance sheet on the asset side
D.
Taken to the balance sheet on the liability side
Answer: _________
Question 2889:
Match List-I (Item of expenditure/receipt) with List-II (Nature of expenditure/receipt) and select the correct answer using the options given below the lists: List-I List-II a. Carriage charges on a new machine purchased for factory 1. Revenue receipt b. Legal expenses incurred in defending a case of violation of a provision of Factories Act 2. Revenue expenditure c. Grant-in-aid received from the Government for the construction of a building 3. Deferred revenue expenditure d. Amount received for a part of the office building sublet 4. Capital expenditure 5. Capital receipt
A.
a-2, b-3, c-1, d-5
B.
a-4, b-2, c-5, d-1
C.
a-3, b-4, c-1, d-5
D.
a-4, b-3, c-1, d-5
Answer: _________
Question 2890:
A credit sale of goods to Shiva should be debited to . . . . . . . .
A.
Sales account
B.
Goods account
C.
Shiva account
D.
Purchase account
Answer: _________
Question 2891:
If a receipt of Rs. 200 from Rajesh out debtor has not been recorded in the books, the profit would show:
A.
an increase of Rs. 200
B.
a decrease of Rs. 200
C.
neither an increase nor a decrease
D.
none of these
Answer: _________
Question 2892:
Under the annuity method the amount of total depreciation is determined by:
A.
deducting the scrap value from the cost of the asset
B.
deducting the amount of interest from the cost of the asset
C.
adding the cost of the assets and interest there on
D.
adding the cost of the assets and expected cost of maintenance
Answer: _________
Question 2893:
A company may resort to "window dressing" by manipulating the data such as: I. inventory valuation II. omission of liability for goods purchased III. treating a short-term liability long-term debt IV. recording in advance cash receipts applicable to next accounting period
A.
I, III and IV
B.
II and IV
C.
I, II and III
D.
I, II, III and IV
Answer: _________
Question 2894:
Which of the following errors in an error of principle?
A.
Rs. 1000 received from Ganesh has been debited to his account
B.
Purchase of Rs. 3000 has been entered in the sales journal
C.
Repairs to machinery have been debited to machinery account
D.
Repairs to scooter have been debited to repairs account
Answer: _________
Question 2895:
A business is considered to be having and indefinite life according to:
A.
accounting period concept
B.
cost concept
C.
going concern concept
D.
dual aspect concept
Answer: _________
Question 2896:
Interest on non-performing assets should be recognized on . . . . . . . . basis.
A.
actually received
B.
accrual
C.
standard
D.
None of these
Answer: _________
Question 2897:
The amount brought in by the proprietor in the business should be credited to:
A.
cash account
B.
capital account
C.
drawing account
D.
bank account
Answer: _________
Question 2898:
Govind, Hari and Pratap are partners. On the retirement of Govind, the goodwill already appears in the balance sheet at Rs. 24,000. The goodwill will be written off by
A.
Debiting all partner's capital accounts in their old profit-sharing ratio
B.
Debiting remaining partner's capital accounts in their new profit-sharing ratio
C.
Debiting retiring partner's capital accounts from his share of goodwill
D.
None of the above
Answer: _________
Question 2899:
A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. C retires, and his capital after making adjustments for reserves and profits on revaluation is Rs. 2,30,000. A and B agree to pay him Rs. 50,000 in full and final settlement of his claims. The amount of goodwill be
A.
Rs. 50,000
B.
Rs. 2,00,000
C.
Rs. 20,000
D.
Rs. 1,00,000
Answer: _________
Question 2900:
Minority interest includes
A.
share in share capital
B.
share in capital profit
C.
share in revenue profit
D.
all of the above
Answer: _________
Question 2901:
Premium earned on issue of Shares' is an example of
A.
Capital expenditure
B.
Revenue receipt
C.
Deferred revenue expenditure
D.
None of these
Answer: _________
Question 2902:
Under CCA method, surplus or deficit due to change in value of assets and adjustment in profit and loss statement should be adjusted to
A.
General Reserve A/c
B.
Profit and Loss statement
C.
Revaluation Reserve A/c
D.
None of the above
Answer: _________
Question 2903:
Accounting Standard-6 is meant for
A.
Accounting for Fixed Assets
B.
Accounting treatment for goodwill
C.
Depreciation Accounting
D.
Disclosure of Accounting policies
Answer: _________
Question 2904:
Revenue from sale of products ordinarily is reported as part of earning in the period in which:
A.
the sale is made
B.
the cash is collected
C.
the order is received
D.
the cheque is received
Answer: _________
Question 2905:
Which of the following can not be used for redemption of preference shares?
A.
Insurance Fund
B.
Workmen's Compensation Fund
C.
General Reserve
D.
Profit Prior to Incorporation
Answer: _________
Question 2906:
Donations received by a charitable institution for some specific purpose are taken to:
A.
Assets side of Balance Sheet
B.
Liabilities side of Balance Sheet
C.
Income side of Income and Expenditure Account
D.
Expenditure side of Income and Expenditure Account
Answer: _________
Question 2907:
If current ratio is 2.5, quick ratio 1.5 and net working capital Rs. 15,000. The value of inventory will be:
A.
Rs. 10,000
B.
Rs. 15,000
C.
Rs. 37,500
D.
Rs. 52,500
Answer: _________
Question 2908:
Which of the following item/items will be included in income and expenditure account? I. Accrued expenses II. Credit purchases III. Prepaid expenses IV. Opening cash balance Select the correct answer from the options given below and mark your answer sheet accordingly.
A.
I
B.
I and II
C.
II and III
D.
III and IV
Answer: _________
Question 2909:
The following are the figures relating to a trader: Opening stock - Rs. 10,000 Closing stock - Rs. 11,000 Purchase - Rs. 70,000 The goods are sold at a profit of 30% on cost. The amount of sales will be:
A.
Rs. 1,04,000
B.
Rs. 91,000
C.
Rs. 89,700
D.
Rs. 21,000
Answer: _________
Question 2910:
Subscription in arrears (given in adjustment) is shown on the . . . . . . . .
A.
credit side of income and expenditure account and assets side of balance sheet
B.
debit side of the income and expenditure and liabilities side of the balance sheet
C.
only in the assets side of balance sheet
D.
only in the liabilities side of balance sheet
Answer: _________
Question 2911:
Revenue receipts are . . . . . . . . in the business.
A.
Non-recurring
B.
Recurring
C.
Accumulating
D.
Non-accumulating
Answer: _________
Question 2912:
The written down value of a plant is 6,000 (the original value being Rs. 10,000). It is sold for Rs. 12,000 during the current financial year. Which one of the following is true in this regard?
A.
Capital profit = Rs. 6,000
B.
Revenue profit = Rs. 6,000
C.
Capital profit = Rs. 2,000
D.
Revenue profit = Rs. 4,000
Answer: _________
Question 2913:
A company pays dividend out of:
A.
Profits of the company for year for which dividends are to be paid
B.
Undistributed profit of the previous financial years
C.
Money provided by the central and state governments for the payment of dividends in pursuance of their guaranters
D.
All of these
Answer: _________
Question 2914:
The income and expenditure account is prepared on the basis of . . . . . . . . system of accounting.
A.
Basic
B.
Main
C.
Cash
D.
Mercantile
Answer: _________
Question 2915:
Jay account is:
A.
a nominal account
B.
a personal account
C.
a real account
D.
a trading account
Answer: _________
Question 2916:
Given the following data extracted from the book of Abdul traders: Opening stock = Rs. 30,000 Closing stock = Rs. 40,000 Purchases = Rs. 1,25,000 Carriage inwards = Rs. 2,000 Carriage outwards = Rs. 3,000 Return outwards = Rs. 5,000 Sales = Rs. 1,50,000 The cost of goods sold will be
A.
Rs. 1,30,000
B.
Rs. 1,12,000
C.
Rs. 1,20,000
D.
Rs. 1,15,000
Answer: _________
Question 2917:
Valuation balance sheet is prepared by a life insurance company to find out:
A.
profit or loss
B.
financial position
C.
surplus or deficiency
D.
net liability
Answer: _________
Question 2918:
Profit or loss on revaluation is shared among the partners in . . . . . . . . ratio.
A.
old profit sharing
B.
new profit sharing
C.
sacrificing
D.
equal
Answer: _________
Question 2919:
While putting the value and price of the entity in financial records, the lowest prices recorded, not the current price or current market value, is known as
A.
Business entity concept
B.
Money measurement concept
C.
Conservatism
D.
Expenditure concept
Answer: _________
Question 2920:
The sales of 10,000 unit is rupees 30,000, variable cost is Rs. 15,000 and fixed cost is Rs. 9,000 security limits will be
A.
4,000 units
B.
5,000 units
C.
6,000 units
D.
8,000 units
Answer: _________
Question 2921:
Fixed cost = Rs. 4,00,000, profit = Rs. 2,00,000 and profit-quantity ratio will 40%, then amount of sales will be
A.
Rs. 1,00,000
B.
Rs. 12,00,000
C.
Rs. 15,00,000
D.
Rs. 8,00,000
Answer: _________
Question 2922:
In absence of an agreement, partner
A.
Is entitle to receive interest on capital, in case of profit
B.
Is entitle to receive interest on capital irrespective of profit or loss
C.
Is entitle to receive interest on capital at the bank rate
D.
Is not entitle to receive interest on capital
Answer: _________
Question 2923:
Capital structure and leverage decisions come in the ambit of
A.
Investment decisions
B.
distribution decisions
C.
financing decisions
D.
dividend decisions
Answer: _________
Question 2924:
The effect of investment by the owner of the business shall be
A.
Increase in capital and decrease in liability
B.
Increase in capital and increase in liability
C.
Increase in capital and decrease in assets
D.
Increase in capital and increase in assets
Answer: _________
Question 2925:
Which of the following is the scientific way of main taining accounts?
A.
Single entry
B.
Double entry
C.
Contra entry
D.
Book entry
Answer: _________
Question 2926:
If the current stock price is Rs. 50 per share and a new right share is assigned to an investor holding 4 at a contribution price of Rs. 45 per share, what will be value of right?
A.
Rs. 2
B.
Rs. 4
C.
Rs. 6
D.
Rs. 1
Answer: _________
Question 2927:
Which of the following is/are the form(s) of environmental accounting?
A.
Environmental Management accounting
B.
Environmental Financial accounting
C.
Environmental National accounting
D.
All of the above
Answer: _________
Question 2928:
What is the next step to Journalizing in accounting cycle?
A.
Recording
B.
Posting
C.
Balancing
D.
Analyzing
Answer: _________
Question 2929:
The Works Manager is entitled to 5% commission on net profits after charging his commission and General Manager's commission
the General Manager gets 10% commission on net profits remaining after charging his commision and Works Manager's commission. If the net prifits before charging any commission is Rs. 1,000 the General Manager's commission will be
A.
Rs. 79
B.
Rs. 85
C.
Rs. 87
D.
Rs. 93
Answer: _________
Question 2930:
If Fixed cost = Rs. 2,50,000
Variable cost = Rs. 10 per unit Selling price = Rs. 15 per unit and Production level = 75,000 units Calculate profit earned by using marginal costing technique
A.
Rs. 1,25,000
B.
Rs. 1,50,000
C.
Rs. 2,50,000
D.
Rs. 3,75,000
Answer: _________
Question 2931:
Select the correct amount of purchases, given on the following information: Cost of goods sold - Rs. 1,20,000
Carriage inwards - Rs. 1,890
Opening stock - Rs. 43,640
Closing stock - Rs. 38,500
Purchase returns - Rs. 2,150
Sales - Rs. 2,82,650
A.
Rs. 1,15,120
B.
Rs. 62,650
C.
Rs. 1,10,420
D.
None of these
Answer: _________
Question 2932:
On 31 st March, 1995 the following balances of accounts appeared in the books of a firm Capital Account Rs. 2,00,000 General Reserve Rs. 50,000
Sundry Creditors Rs. 50,000 and Cash in hand Rs. 10,000. The firm is dissolved, and the assets realised Rs. 1,25,000. The loss on realisation is:
A.
Rs. 1,75,000
B.
Rs. 1,65,000
C.
Rs. 1,15,000
D.
Rs. 1,05,000
Answer: _________
Question 2933:
When net profit is Rs. 2,25,000
taxes Rs. 25,000 and net worth Rs. 10,00,000 what is the rate of return on shareholder's equity?`
A.
22.5%
B.
20%
C.
25%
D.
Cannot be calculated
Answer: _________
Question 2934:
If trade creditors are Rs. 10,000 unpaid expenses 10% of creditors
current rato 2 : 1 and stock Rs. 7,000, then the quick assets will be:
A.
Rs. 10,000
B.
Rs. 12,000
C.
Rs. 14,000
D.
Rs. 15,000
Answer: _________
Question 2935:
Which of the following capital is taken up by the general public?
A.
Issued capital
B.
Subscribed capital
C.
Authorized capital
D.
Reserve capital
Answer: _________
Question 2936:
Shares for which amount is paid by public are called ____ shares
A.
Authorized
B.
Paid up
C.
Bonus shares
D.
All of the above
Answer: _________
Question 2937:
Given- Stock - Rs. 14,000
Debtors - Rs. 20,000
Creditors - Rs. 30,000
Stock - turnover 5 times
Credit collection period - 73 days
Administrative expenses - 20% of sales
All sales are made on credit. The net profit will be-
A.
Rs. 10,000
B.
Rs. 20,000
C.
Rs. 25,000
D.
Rs. 30,000
Answer: _________
Question 2938:
Net sales for a period is Rs. 6,00,000
cost of goods sold is Rs. 3,10,000 and operating expenses Rs. 80000. The operating ratio will be-
A.
60%
B.
65%
C.
66.23%
D.
62%
Answer: _________
Question 2939:
If, Selling price is Rs. 10
Variable cost per unit is Rs. 6 and Total fixed costs are Rs. 48,000 Then the Break Even Point will be
A.
Rs. 72,000
B.
Rs. 96,000
C.
Rs. 1,20,000
D.
Rs. 1,60,000
Answer: _________
Question 2940:
Petty cash is used for payment of
A.
Salaries & wages of the staff
B.
For purchase of assets
C.
Small expenses relating to postage's and conveyance etc.
D.
All of the above
Answer: _________
Question 2941:
Owners equity stands for
A.
Fixed assets - Flood liabilities
B.
Fixed assets - Current liabilities
C.
Current assets - Fixed liabilities
D.
Total assets - Total outside liabilities
Answer: _________
Question 2942:
Stock Rs. 14,000
Debtors Rs. 20,000: Creditors Rs. 20,000
Credit balance of profit and loss account at the beginning of the year Rs. 18,000
administration and selling expenses Rs. 20,000
10% dividend on equity capital Rs. 3,000. The following ratios are also given: Stock turnover: 5 times Current ratio 2 : 1 Debtors collection period: 73 days Outstanding expenses: 15% of creditors Ratio of net profit after tax to net tangible assets is 1: 10 Rate of Income tax: 5% Ratio of fixed assets to paid up capital is 9: 10. The total assets of the firm are:
A.
Rs. 70,000
B.
Rs. 73,000
C.
Rs. 75,000
D.
Rs. 78,000
Answer: _________
Question 2943:
Sales of a firm are Rs. 40 lacs
variable costs Rs. 10 lacs
fixed costs Rs. 15 lacs
interest Rs. 5 lacs. Combined leverage of the firm will be
A.
2.5
B.
3
C.
2
D.
8
Answer: _________
Question 2944:
Cost of a fixed asset - Accumulated depreciation expenses of the fixed asset = ?
A.
Book value of a fixed asset
B.
Market value of a fixed asset
C.
Historical cost of a fixed asset
D.
Recoverable amount if a fixed asset
Answer: _________
Question 2945:
Which account will be debited with the nominal value of shares, when shares are issued to promoters for the service offered by them?
A.
Preliminary expenses
B.
Assets
C.
Goodwill
D.
Share capital
Answer: _________
Question 2946:
A, B and C were partners with a capital of Rs. 50,000
Rs. 40,000 and Rs. 30,000, respectively, carrying on business in partnership. The firm's reported profit for the year was Rs. 80,000. As per the provision of the Indian Partnership Act, 1932, find the share of each partner in the above amount, taking into consideration that interest has not been provided on an advance of Rs. 20,000 by A in addition to his capital contribution.
A.
Rs. 26,267 for partner B and C, and Rs. 27,466 for partner A
B.
Rs. 26,667 each partner
C.
Rs. 33,333 for partner A, Rs. 26,667 for partner B and Rs. 20,000 for partner C
D.
Rs. 30,000 for each partner.
Answer: _________
Question 2947:
Four milkmen, A, B, C and D rented a pasture. A grazed 24 cows for 3 months
B grazed 10 cows for 5 months
C grazed 35 cows for 4 months
D grazed 21 cows for 3 months. If A's share of rent is Rs. 720, find the total rent of the field
A.
Rs. 3,000
B.
Rs. 3,200
C.
Rs. 3,250
D.
Rs. 3,300
Answer: _________
Question 2948:
The closing balance of petty cash book is considered as
A.
Liability
B.
Asset
C.
Expenses
D.
Income
Answer: _________
Question 2949:
Stock as on 5 th January - Rs. 27,000
purchases between 31 st December and 5 th January - Rs. 700
cost of sales between 31 st December and 5 th January - Rs. 1,500 what was the stock on 31 st December?
A.
Rs. 27,800
B.
Rs. 26,200
C.
Rs. 26,300
D.
Rs. 28,500
Answer: _________
Question 2950:
If cash sales is Rs. 40,000
credit sales Rs. 80,000 and the amount of debtors Rs. 20,000, the average collection period will be (consider 360 days in a year):
A.
180 days
B.
120 days
C.
90 days
D.
60 days
Answer: _________
Question 2951:
The director of a limited company resolved to forfeit 1000 equity shares of Rs. 10 each
Rs. 7.50 paid up for non-payment of the final call money of Rs. 2.50 per share. 700 of these forfeited shares were reissued at Rs. 7 per share. The amount to be transferred to the capital reserve would be
A.
Rs. 2,500
B.
Rs. 1,500
C.
Rs. 3,500
D.
Rs. 3,150
Answer: _________
Question 2952:
Fixed cost Rs. 12,00,000 (including depreciation Rs. 80,000)
Selling price per units Rs. 1,200
Variable cost per unit Rs. 900
Loan Installment Rs. 2,00,000. Cash Break Even Point will be
A.
4,367 units
B.
4,400 units
C.
4,000 units
D.
4,933 units
Answer: _________
Answer Key
1:
B
2:
B
3:
C
4:
B
5:
D
6:
A
7:
C
8:
A
9:
A
10:
B
11:
B
12:
A
13:
C
14:
B
15:
B
16:
A
17:
A
18:
B
19:
B
20:
D
21:
B
22:
C
23:
D
24:
D
25:
C
26:
A
27:
D
28:
B
29:
B
30:
C
31:
B
32:
D
33:
C
34:
C
35:
A
36:
B
37:
B
38:
C
39:
C
40:
B
41:
A
42:
C
43:
A
44:
A
45:
A
46:
C
47:
B
48:
D
49:
B
50:
B
51:
D
52:
B
53:
C
54:
C
55:
D
56:
D
57:
C
58:
A
59:
B
60:
C
61:
B
62:
C
63:
A
64:
D
65:
B
66:
A
67:
A
68:
A
69:
C
70:
B
71:
B
72:
A
73:
B
74:
B
75:
A
76:
B
77:
D
78:
C
79:
B
80:
D, E, I
81:
D
82:
C
83:
B
84:
C
85:
B
86:
B
87:
A
88:
C
89:
A
90:
D
91:
A
92:
D
93:
B
94:
D
95:
C
96:
B
97:
D
98:
D
99:
D
100:
C
101:
D
102:
C
103:
B
104:
A
105:
B
106:
C
107:
C
108:
C
109:
A
110:
D
111:
C
112:
C
113:
B
114:
D
Solution: Both (A) and (R) are true Explanation: Before incorporation, any profit earned by a company is termed as capital profit. This profit cannot be distributed as dividends to shareholders because dividends can only be distributed from profits earned after incorporation, known as revenue profits. Therefore, both Assertion (A) and Reason (R) are true, and Reason (R) correctly explains Assertion (A).
115:
B
116:
D
117:
A
118:
A
119:
C
120:
C
121:
C
122:
A
123:
C
124:
B
125:
D
126:
A
127:
B
128:
D
129:
B
130:
D
131:
D
132:
C
133:
B
134:
B
135:
B
136:
D
137:
A
138:
D
Solution: Accounting plays a crucial role in providing various types of financial information to different stakeholders. 1. Cost and Income for Managers: Accounting helps managers in decision-making by providing detailed records of costs and revenues, enabling effective budgeting and financial planning. 2. Company's Tax Liability: It assists in determining the organization's tax obligations by maintaining accurate financial records, ensuring compliance with tax laws. 3. Financial Condition of Institutions: Accounting provides a clear picture of an entity's financial health through financial statements such as the balance sheet and income statement, which are useful for investors, creditors, and other stakeholders. Since accounting covers all these aspects, the correct answer is Option D: All of the above.
139:
C
Solution: The long term assets that have no physical existence but are rights that have value is known as Intangible assets. An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets.
140:
A
Solution: The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as Current assets. Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets.
141:
C
Solution: Patents, Copyrights and Trademarks are Intangible assets. An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets.
142:
A
Solution: The debts which are to be repaid within a short period (year or less) are known as Current liabilities. Current liabilities are a company's debts or obligations that are due within one year or within a normal operating cycle.
143:
C
Solution: Turnover refers to the total sales revenue generated by a business from selling goods or services during a specific period, including both credit and cash sales. Transactions is incorrect because it refers to any business activity involving the exchange of goods, services, or funds, not specifically sales income. Sales Returns is incorrect because it refers to goods that customers return to the business after purchase, reducing the total sales income. Purchase Returns is incorrect because it refers to goods that the business returns to suppliers, not related to sales income. Therefore, the correct answer is Turnover .
144:
D
Solution: Any written evidence in support of a business transaction is called Voucher. Vouchers are the primary evidence of business transactions having taken place.
145:
C
Solution: The account that records expenses, gains and losses is Nominal account. A nominal account is an account in which accounting transactions are stored for one fiscal year.
146:
B
Solution: Real account records Dealings in commodities.
147:
A
Solution: In Journal, the business transaction is recorded Same day. A journal, which is also known as a book of original entry, is the first place that a transaction is written in accounting records.
148:
B
149:
C
150:
D
151:
C
152:
B
153:
B
154:
A
155:
D
156:
B
157:
A
158:
B
159:
B
160:
C
161:
D
162:
C
163:
A
164:
C
165:
B
166:
D
167:
C
168:
B
169:
A
170:
D
171:
B
172:
A
173:
C
174:
B
175:
B
176:
C
177:
B
178:
B
Solution: Payment of rent expenses is recorded on Payments side of cash book. All cash payments are recorded by date on the right-hand side.
179:
B
Solution: An entry which is made on both sides of a cash book is called Contra entry. In the dual entry accounting system, a Contra Entry is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, it will be recorded on the credit side and vice-versa.
180:
C
Solution: A cash book with cash, bank and discount column is commonly referrred to as Three columns cash book. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.
181:
C
Solution: Cash book records Cash payments and cash receipts. A Cash Book is a type of subsidiary book where cash (or) bank receipts and cash (or) bank payments made during a period are recorded in a chronological order.
182:
B
Solution: A cash discount is a reduction in the invoice amount granted by the seller to the buyer as an incentive for early payment. This type of discount encourages buyers to pay their bills promptly to receive the discount. Lump sum , Actual , and None of them are incorrect because they do not correctly describe the condition under which a cash discount is typically allowed. Therefore, the correct answer is Prompt .
183:
B
Solution: Cash book is prepared by Accountant of business. A cash book is set up as a ledger in which all cash transactions are recorded according to date. It is a book of original entry and final entry.
184:
A
Solution: The most common imprest system is the Petty cash system. The base characteristic of an imprest system is that a fixed amount is reserved, which after a certain period of time or when circumstances require, because money was spent, it will be replenished.
185:
B
Solution: Discount received is recorded on the payments side of a cash book because it represents a reduction in the amount payable to creditors. In accounting , a business may receive a discount from suppliers when making early payments or bulk purchases. This discount received reduces the cash outflow and is considered an income for the business, but it is recorded on the payments side of the cash book. Example: Suppose a business purchases goods worth ₹10,000 on credit from a supplier. The supplier offers a ₹1,000 discount for early payment. The business will pay only ₹9,000 instead of ₹10,000. Cash Book Entry: ₹9,000 will be recorded as an actual payment to the supplier. ₹1,000 (Discount Received) will be recorded separately on the payments side to adjust the total liability. Why Not Other Options? Receipts: Used for recording cash inflows (money received), but discount received is not a cash receipt. Income: Though discount received is an income, it is not recorded in the income section of the cash book. Instead, it appears as a reduction in payment. Expenditure: This includes expenses paid, whereas discount received reduces expenditure rather than increasing it. Thus, Discount Received is correctly recorded on the Payments side of the cash book.
186:
B
Solution: Drawings by owner of business are generally recorded on Payments side of a cash book. Drawings are money or assets that are withdrawn from a company by its owners for personal use.
187:
C
188:
B
189:
D
190:
C
191:
C
192:
A
193:
A
194:
B
195:
B
196:
D
197:
D
198:
D
199:
C
200:
D
201:
A
202:
A
203:
C
204:
A
205:
B
206:
B
207:
A
208:
C
209:
D
210:
D
211:
A
212:
B
213:
N/A
214:
A
215:
D
216:
C
217:
B
218:
B
219:
B
220:
B
221:
B
222:
A
223:
C
224:
D, H
225:
B
226:
C
227:
B
228:
C
229:
C
230:
B
231:
D
232:
C
233:
A
234:
D
235:
B
236:
B
237:
B
238:
D
239:
A
240:
D
241:
D
242:
B
243:
A
244:
A
245:
A
246:
D
247:
C
248:
C
249:
A
250:
C
251:
A
252:
B
253:
B
254:
C
255:
C
256:
C
Solution: Tax & freight paid on sale is a selling expense. Selling expense (or sales expense) includes any costs incurred by the sales department.
257:
B
Solution: A debit balance in the bank statement indicates Bank overdraft. Overdrafts are where the bank account becomes negative and the businesses in effect have borrowed from the bank.
258:
D
Solution: Capital expenditure does not reduce the profit of the concern. Capital expenditures refer to funds that are used by a company for the purchase, improvement, or maintenance of long-term assets to improve the efficiency or capacity of the company.
259:
C
Solution: Sales revenue is not an item of Balance Sheet. Sales revenue is the amount realized by a business from the sale of goods or services.
260:
B
Solution: In an account, when credit side total < debit side total, then, the balance is known as Debit balance. It is the positive balance in the left side of the account.
261:
B
Solution: General Journal is used to record financial transactions in chronological (day-to-day) order.
262:
A
Solution: Net Profit = Gross Profit minus Operating expenses.
263:
B
Solution: Money spent to acquire or upgrade physical assets is known as Capital expense, as the asset is expected to be utilised in a long run.
264:
A
Solution: Salaries paid in advance should be shown on Asset side of the Balance sheet. An advance paid is recorded as a current asset in the company's balance sheet.
265:
D
Solution: Fixed asset are shown at written down value in Balance sheet. If the asset is not impaired and the company operates under GAAP, then the cost model must be used.
266:
B
267:
C
268:
D
269:
B
270:
B
271:
A
272:
C
273:
A
274:
D
275:
C
276:
A
277:
D
278:
B
279:
C
280:
B
281:
D
282:
B
283:
C
284:
C
285:
C
286:
C
287:
C
288:
B
289:
C
290:
A
291:
C
292:
C
293:
C
294:
A
295:
A
296:
A
297:
D
298:
A
299:
D
300:
C
301:
D
302:
B
303:
C
304:
C
305:
D
306:
C
307:
B
308:
B
309:
A
310:
C
311:
C
312:
D
313:
D
314:
D
315:
B
316:
D
317:
C
318:
B
319:
C
320:
B
321:
C
322:
C
323:
A
324:
A
325:
B
326:
B
327:
D
328:
D
329:
D
330:
C
331:
C
332:
C
333:
C
334:
D
335:
D
336:
B
337:
D
338:
D
339:
D
340:
C
341:
D
342:
B
343:
D
344:
D
345:
D
346:
C
347:
B
348:
C
349:
B
350:
C
351:
C
352:
C
353:
D
354:
B
355:
D
356:
C
357:
B
358:
C
359:
B
360:
C
361:
D
362:
C
363:
B
364:
A
365:
C
366:
B
367:
C
368:
A
369:
B
370:
C
371:
A
372:
D
373:
A
374:
B
375:
B
376:
A
377:
C
378:
C
379:
B
380:
D
381:
C
382:
B
383:
C
384:
C
385:
A
386:
A
387:
D
388:
B
389:
C
390:
C
391:
A
392:
A
393:
D
394:
D
395:
D
396:
A
397:
A
398:
C
399:
B
400:
C
401:
A
402:
B
403:
B
404:
B
405:
B
406:
A
407:
B
408:
C
409:
D
410:
A
411:
C
412:
A
413:
B
414:
D
415:
C
416:
D
417:
D
418:
C
419:
B
420:
A
421:
A
422:
B
423:
D
424:
D
425:
C
426:
B
427:
A
428:
D
429:
N/A
430:
A
431:
B
432:
C
433:
B
434:
C
435:
B
436:
A
437:
B
438:
C
439:
D
440:
C
441:
A
442:
B
443:
D
444:
B
445:
D
446:
C
447:
A
448:
D
449:
B
450:
A
451:
C
452:
D
453:
D
454:
B
455:
C
456:
B
457:
D
458:
C
459:
B
460:
A
461:
A
462:
C
463:
C
464:
A, H
465:
C
466:
D
467:
B
468:
D
469:
D
470:
B, G
471:
A
Solution: Cost of the asset = Rs. 6,000
Salvage Value = Rs. 1,000
Total Depreciation Cost = Cost of asset – Salvage Value = 6000 – 1000 = Rs. 5000
Useful life of the asset = 5 years
Thus, annual depreciation cost = (Cost of asset – Salvage Cost)/Useful Life = 5000/5 = Rs. 1000.
472:
B
Solution: Credit balance is the normal balance of an accumulated depreciation account. Accumulated depreciation has a credit balance, because it aggregates the amount of depreciation expense charged against a fixed asset.
473:
B
Solution: Trial balance shows the accumulated depreciation as a credit item. Accumulated depreciation has a credit balance, because it aggregates the amount of depreciation expense charged against a fixed asset.
474:
B
Solution: Depreciation expenses Debit and accumulated depreciation Credit is a double entry for deprecation expenses.
475:
A
Solution: Provision for depreciation is an alternative term used for accumulated depreciation expenses. Depreciation expense is recognized on the income statement as a non-cash expense that reduces the company's net income.
476:
C
Solution: Amortization and Depletion are kind of depreciation expenses. Depreciation, depletion, and amortization (DD&A) are accounting techniques that enable companies to gradually expense resources of economic value.
477:
B
Solution: In depreciation calculation, the useful life of a fixed asset is an estimate. Depreciation is “the systematic and rational allocation of the acquisition cost of an asset, less its estimated salvage value or residual value, over the assets estimated useful life.” Simply said, it's a way of allocating a portion of the cost of an asset over the period it can be used.
478:
C
Solution: Depreciable amount + Residual value of a fixed asset = Cost of the fixed asset. Fixed assets are depreciated only to the extent of their depreciable amount, which equals cost minus the salvage value.
479:
B
Solution: The purchase price of a software that will be used for more than 12 months should be regarded as a capital expenditure. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset.
480:
A
481:
D
482:
D
483:
A
484:
C
485:
D
486:
A
487:
C
488:
A
489:
D
490:
D
491:
D
492:
C
493:
B
494:
D
495:
B
496:
A
497:
B
498:
B
499:
C
500:
C
501:
D
502:
A
503:
A, E
504:
A
505:
C
506:
D
507:
B
508:
C
509:
A
510:
C
511:
B
512:
D
513:
C
514:
B
515:
C
516:
C
517:
C
518:
C
519:
D
520:
B
521:
B
522:
B
523:
D
524:
A
525:
A
526:
B
527:
D
528:
A
529:
C
530:
C, H
531:
D
532:
D
533:
D
534:
B
535:
A
536:
C
537:
B
538:
C
539:
B
540:
B
541:
D
542:
B
543:
C
544:
B, H, I, O
545:
B
546:
C
547:
B
548:
A
549:
A
550:
D
551:
B
552:
D
553:
D
554:
C
555:
A
556:
D
Solution: Let's break down why: Net Profit (Option A): This is the profit a company makes *before* paying out dividends to shareholders or setting aside money for future use. Net Operating Profit (Option B): This focuses on the profit from a company's core business operations. It doesn't account for things like taxes or dividends. Capital Profit (Option C): This comes from selling assets (like property or equipment) for more than you originally paid. It's not the profit left after *all* expenses are paid. Retained Earnings (Option D): This is the profit a company has left over *after* paying all its expenses (including taxes) and distributing dividends to shareholders. It's the money the company "retains" for reinvestment or other future needs. This is the definition that perfectly matches the question.
557:
C
558:
C
559:
A
560:
A
561:
A
562:
C
563:
C
564:
C
565:
A
566:
D
567:
C
568:
B
569:
C
Solution: Errors are Unintentional mistakes. Some unintentional act, omission, or error arising from ignorance, surprise, imposition, or misplaced confidence. A state of mind not in accord with reality.
570:
B
Solution: Compensatory errors cannot be revealed on the preparation of trial balance. Compensating Errors are error on the debit side and is compensated by an error of equal amount on the credit side.
571:
D
Solution: Parties to a bill of exchange are Drawer, Drawee and Payee.
572:
C
Solution: Accommodation bill is drawn to cater the fund requirements of both the parties. A bill, draft, or note made, drawn, accepted, or endorsed by one person for another without consideration to enable that other to raise money or obtain credit thereby.
573:
C
Solution: Rs.5000 spent on maintenance of computer is Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.
574:
A
Solution: The assumption underlying the fixed installment method of depreciation is that of Equal usage of the asset over its useful life.
575:
C
Solution: Drawings will generally show a debit balance. A drawing account is an accounting record maintained to track money withdrawn from a business by its owners. A drawing account is used primarily for businesses that are taxed as sole proprietorships or partnerships.
576:
A
Solution: Profit & Loss account is prepared for a period of one year by following Periodicity concept. It is the concept that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported upon.
577:
D
Solution: Increase in working capacity of an asset and Replacing damage parts of an asset enhances the earning capacity of an asset.
578:
D, F
Solution: Gross profit is equal to Sales - Cost of goods sold.
579:
B
580:
B
581:
A
582:
A
583:
C
584:
A
585:
A
586:
A
587:
D
588:
C
589:
A
590:
C
591:
A
592:
A
593:
A
594:
D
595:
C
596:
B
597:
A
598:
C
599:
D
600:
A
601:
A
602:
C
603:
D
604:
D
605:
D
606:
A
607:
B
608:
D
609:
C
610:
D
611:
D
612:
C
613:
C
614:
B
615:
B
616:
B
617:
C
618:
D
619:
B
620:
D
621:
B
622:
B
623:
C
624:
C
625:
B
626:
A
627:
D
628:
B
629:
D
Solution: The process of recording transactions in different journals is called Journalising. Journalizing is the process of recording a business transaction in the accounting records. This activity only applies to the double-entry bookkeeping system.
630:
B
Solution: Every business transaction affects at least two accounts, our accounting system is known as a double-entry system.
631:
B
Solution: Discount allowed is a kind of deduction from Account Receivable.
632:
C
Solution: The other name of Journal is Day Book. A journal is also named the book of original entry, from when transactions were written in a journal prior to manually posting them to the accounts in the general ledger or subsidiary ledger.
633:
D
Solution: The Journal entry in which two or more account is debited or credited is referred to as Compound entry. A compound journal entry is an accounting entry in which there is more than one debit, more than one credit, or more than one of both debits and credits.
634:
C
Solution: Goods returned by customer should be debited to Return inward account.
635:
A
Solution: Discount allowed is Expense of business. When the buyer receives a discount, this is recorded as a reduction in the expense (or asset) associated with the purchase, or in a separate account that tracks discounts.
636:
D
Solution: Purchases will be debited if a business purchases goods on credit.
637:
A
Solution: Drawings accounts will be debited if the business's owner withdraws cash from business for personal use. Goods withdrawn for personal use by the owner of a business reduce inventory and are recorded on a drawings account.
638:
B
Solution: Journals are also referred to as Book of original entries. The information in these books is then summarized and posted into a general ledger, from which financial statements are produced.
639:
D
640:
C
641:
C
642:
B
643:
C
644:
B
645:
C
646:
B
647:
B
648:
B
649:
D
650:
C
651:
B
652:
C
653:
B
654:
C
655:
C
656:
D
657:
B
658:
A
659:
B
660:
A
661:
A
662:
B
663:
B
664:
B
665:
C
666:
A
667:
D
668:
D
669:
B
670:
D
671:
A
672:
B
673:
C
674:
A
675:
D
676:
A
677:
D
678:
A
679:
A
680:
A
681:
A
682:
D
683:
A
684:
A
685:
B
686:
B
687:
C
688:
B
689:
D
690:
D
691:
B
692:
D
693:
A
694:
A
695:
B
696:
C
697:
C
698:
A
699:
D
700:
A, F
701:
B
702:
C
703:
A
704:
B
705:
D
706:
A
707:
C
708:
A
709:
A
710:
C
711:
A
712:
D
713:
D
714:
D
715:
A
716:
B
717:
A
718:
A
719:
A
720:
B
721:
B
722:
A
723:
D
724:
C
725:
B
726:
B
727:
B
728:
C
729:
B
730:
D
731:
B
Solution: Understanding Depreciation: Depreciation is the decrease in the value of an asset over time due to wear and tear, obsolescence, or other factors. Straight-Line Method: This is a simple way to calculate depreciation. It assumes the asset loses value evenly over its useful life. Calculating Depreciation: First, find the total depreciation amount: Cost of the machine - Residual value In this case, that's Rs. 70,000 - Rs. 5,000 = Rs. 65,000 Next, divide the total depreciation by the asset's lifespan (in years): Total Depreciation / Useful Life So, Rs. 65,000 / 10 years = Rs. 6,500 per year Depreciation for Four Years: Finally, to find the depreciation for the first four years, multiply the annual depreciation by four: Rs. 6,500/year * 4 years = Rs. 26,000 Therefore, the correct answer is Option B: Rs. 26,000
732:
D
733:
A
734:
D
735:
B
736:
B
737:
A
738:
B
739:
C
740:
A
741:
A
742:
D
743:
A
Solution: Assertion (A): Capital expenditure is incurred for the purpose of acquiring fixed assets. This statement is TRUE . Capital expenditure is money spent to buy things that will last a long time and help the business make money in the future. Think of things like buildings, machinery, or land. These are called fixed assets . Reason (R): Capital expenditure item is shown in the asset side of the Balance sheet. This statement is also TRUE . The Balance Sheet is a snapshot of what a company owns (assets) and owes (liabilities) at a specific point in time. Because fixed assets are things the company *owns*, they are listed on the asset side of the Balance Sheet. Now, the important question is: Does Reason (R) *explain* why Assertion (A) is true? Yes, It is correct explanation of Assertion. So, the correct answer is: Option A: Both (A) and (R) are true and (R) is the correct explanation of (A)
744:
B
745:
B
746:
A
747:
A
748:
A
749:
B
750:
B
751:
C
752:
C
753:
C
754:
C
755:
A
756:
B
757:
D
758:
A
759:
A
760:
C
761:
D
762:
C
763:
B
764:
B
765:
D
766:
D
767:
C
768:
A
769:
A
770:
B
771:
B
772:
B
773:
C
774:
A
775:
A
776:
C
777:
C
778:
C
779:
C
780:
B
781:
D
782:
D
783:
B
784:
C
785:
A
786:
C
787:
D
788:
A
789:
D
790:
B
791:
C
792:
C
793:
B
794:
A
795:
A
796:
B
797:
D
798:
A
799:
D
Solution: Purchase of fixed assets on credit is originally recorded in Journal Proper. On the assumption that the asset was purchased on credit, the initial entry is a credit to accounts payable and a debit to the applicable fixed asset account for the cost of the asset.
800:
C
Solution: The claims against the company not acknowledged as debts are shown as notes to balance sheet. All claims which the company does not acknowledge as debts should be disclosed. Claims against the company by the labour union for additional wages, compensation, etc. come under this category.
801:
B
Solution: Under cash basis of accounting, revenue is recognized when Cash is received. Realizable means it is reasonable to expect that cash will be received in the future.
802:
D
Solution: The trade discount on purchases are not all recorded in the books. Trade discount is not separately shown in the books of accounts, and all amounts recorded in a purchases or sales book are done in the net amount only.
803:
A
Solution: Debt equity ratio is a leverage ratio. The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as risk, gearing or leverage.
804:
D
Solution: The document inviting offers from public to subscribe for the debentures or shares of a body corporate is a Prospectus.
805:
A
Solution: The portion of the acquisition cost of an asset yet to be allocated is known as Written down value. Written-down value is the value of an asset after accounting for depreciation or amortization.
806:
B
Solution: Dividend appears in the profit and loss appropriation account. The main intention of preparing a profit and loss appropriation account is to show the distribution of profits among the partners.
807:
A
808:
C
Solution: The main objective of providing depreciation is to Create funds for replacement of fixed assets. The main objective of charging depreciation is to accumulate adequate fund to replace old asset with the new one after the useful life. Depreciation is charged to fixed assets which helps to show the current value of the asset.
809:
C
810:
C
811:
B
812:
D
813:
D
814:
D
815:
B
816:
D
817:
C
818:
C
819:
B
820:
B
821:
B
822:
C
823:
B
824:
C
825:
C
826:
B
827:
D
828:
C
829:
D
830:
B
831:
A
832:
D
833:
C
834:
B
835:
D
836:
C
837:
C
838:
C
Solution: Stock of a Trading concern consists of Merchandise inventory. Merchandise inventory is the cost of goods on hand and available for sale at any given time. Merchandise inventory (also called Inventory) is a current asset with a normal debit balance meaning a debit will increase and a credit will decrease.
839:
A
Solution: Expenditure incurred annually on renewal of patent is a Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.
840:
B
Solution: Cash account will be credited when the goods are purchased on cash.
841:
B
Solution: Mr. Ali account will be credited when the goods are purchased on credit from Mr. Ali.
842:
C
Solution: An informal accounting statement that lists the ledger account balances at a point of time and compares the total of debit balances with the total of credit balances is known as Trial balance. A trial balance is a bookkeeping worksheet in which the balance of all ledgers are compiled into debit and credit account column totals that are equal.
843:
B
Solution: Documentary evidence, in a specific format used to record the details of a transaction is known as Voucher. Voucher is documentary evidence in a specific format that records the details of a transaction. It is accompanied by the evidence of transaction.
844:
C
Solution: Cost incurred for the maintenance of shop is considered as Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.
845:
C
Solution: Double entry accounting system includes both cash and accrual accounting. Double entry, a fundamental concept underlying present-day bookkeeping and accounting, states that every financial transaction has equal and opposite effects in at least two different accounts.
846:
A
Solution: Balance sheet financial statements show the financial health of an organisation at a stated point of time. A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure.
847:
D
Solution: The estimated value at which an asset is expected to be sold after the end of its useful life is called Residual value, Salvage value and Scrap value.
848:
B
849:
D
850:
B
851:
C
852:
C
853:
B
854:
B
855:
C
856:
B
857:
D
858:
C
859:
D
860:
B
861:
C
862:
B
863:
A
864:
C
865:
A
866:
B
867:
D
868:
A
869:
C
870:
D
871:
D
872:
A
873:
C
874:
D
875:
A
876:
C
877:
A
878:
A
879:
B
880:
B
881:
A, F
882:
A
883:
B
884:
B
885:
C
886:
B
887:
C
888:
D
889:
C
890:
C
891:
B
892:
B
893:
A
894:
B
895:
D
896:
A
897:
A
Solution: Introduction of capital by owner of business is recorded on Receipts side of a cash book.
898:
B
Solution: Two Column Cash Books - In this discounts is also recorded with cash transactions. So both discounts received and the discount that is given is recorded here. If any organization is in a general practice of giving or receiving discounts this is the preferable option.
899:
D
Solution: A cash book that is used to record the small payments of cash is generally referred to as Petty cash book. Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the day-to-day normal expenditures of the business which is not related to the direct line of the business.
900:
B
Solution: Purchase of office equipment for cash will be recorded on Payments side of a cash book. All transactions in the cash book have two sides: debit and credit. All cash receipts are recorded on the left-hand side, and all cash payments are recorded by date on the right-hand side.
901:
C
Solution: Postdated cheques are considered as Accounts receivable. If the postdated check was received as payment on accounts receivable, the accounts receivable balance is not reduced until the date of the check.
902:
B
Solution: Postage stamps on hand are considered as Prepaid expenses. Prepaids are any expense the business pays for in advance, such as rent, insurance, office supplies, postage, travel expense, or advances to employees.
903:
C
Solution: Petty cash fund is supposed to be replenished at the end of every accounting period. Replenish means to return the amount of actual cash in the petty cash box back to the amount appearing in the general ledger account Petty Cash. This is done whenever the amount of actual cash in the petty cash box is low and at the end of each accounting period.
904:
C
Solution: A credit balance in cash book indicates Bank overdraft. Overdrafts are where the bank account becomes negative and the businesses in effect have borrowed from the bank. This is shown in the cash book as a credit balance.
905:
B
Solution: Favourable balance of cash book implies balance at Bank. The credit balance as per the cash book indicates bank overdraft.
906:
B
Solution: A cash deposit made by business appears on the bank statement as Credit balance.
907:
C
908:
B
909:
C
910:
C
911:
C
912:
A
913:
A
914:
C
915:
C
916:
C
917:
A
918:
A
919:
B
920:
B
921:
B
922:
D
923:
A
924:
B
925:
A
926:
C
927:
B
928:
B
929:
D
930:
A, E
931:
D
932:
D
933:
B
934:
D
935:
A
936:
B
937:
A
938:
C
939:
D
940:
D
941:
D
942:
B
943:
A
944:
A
945:
B
946:
D
Solution: The three column cash book represents Real, personal and nominal accounts. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.
947:
A
Solution: Carriage inwards refers to the cost of transportation for Purchase of materials. The carriage inwards costs are considered to be part of the cost of items purchased, since an asset's cost is defined as all costs that are necessary to get the asset in place and ready for use.
948:
C
Solution: Right shares are the shares Offered to the existing equity shareholders. A rights offering (rights issue) is a group of rights offered to existing shareholders to purchase additional stock shares, known as subscription warrants, in proportion to their existing holdings.
949:
B
Solution: Cash account is a real account. Real accounts show up on a company's balance sheet, which is the financial statement that lists all the accounts that a company has and their balances.
950:
C
Solution: Customs duty paid in connection with the import of equipment is not an item of revenue expenditure. Customs duty paid on import of raw materials. It is capital expenditure.
951:
C
Solution: Patents are fixed assets. The accounting process for patents is similar to other fixed assets. Companies allocate or amortize the costs over the life of the patent.
952:
A
Solution: The expenses that have fallen due for payment but not paid are Outstanding expenses. Outstanding expenses are those expenses which have been incurred during the current accounting period and are due to be paid, however, the payment is not made.
953:
D
Solution: Cash Book serves the purpose of ledger too, in addition to the recording of accounting transaction. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. Entries in the cash book are then posted into the general ledger.
954:
B
Solution: Accounting is the process of matching Revenues and costs. The matching concept is an accounting practice whereby firms recognize revenues and their related expenses in the same accounting period. Firms report "revenues," that is, along with the "expenses" that brought them.
955:
C
Solution: Payment of Rs.1000 to bank in discharge of outstanding loan is subject matter of Accounting.
956:
C
957:
A
958:
A
959:
D
960:
A
961:
C
962:
A
Solution: When we talk about the flow of funds, we refer to the movement of cash or liquid assets between parties. Let’s analyze each option: Option A: Issue of shares for cash → Correct. In this case, the company receives cash from the investors in exchange for shares. This is a direct flow of funds, as cash is coming into the company. Option B: Payment of bonus in shares → Incorrect. Here, the company is issuing shares as a bonus rather than paying in cash. Although this transaction involves a change in the company’s equity, it does not involve an actual flow of funds. Option C: Cash paid to creditors → Incorrect. While cash is leaving the company, this is a payment for an obligation rather than a new source of funds coming in or out, so it is not considered a flow of funds in the sense of generating new capital. Option D: Purchase of building in exchange of land → Incorrect. This is a non-cash transaction. The company is exchanging land for a building, and there is no flow of cash involved. Thus, the correct answer is Option A: Issue of shares for cash , as it directly involves a flow of cash into the company.
963:
B
964:
D
965:
A
966:
B
967:
B
968:
A
969:
A
970:
D
971:
A
972:
C
973:
C
974:
D
975:
C
976:
A
977:
D
978:
D
979:
B
980:
D
981:
D
982:
A
983:
C
984:
A
985:
C
986:
B
987:
B
988:
A
989:
C
990:
A
991:
B
992:
C
993:
C
994:
C
995:
A
996:
A
997:
A
998:
A
999:
C
1000:
A
1001:
C
1002:
A
1003:
B
1004:
B
1005:
C
1006:
A
1007:
B
1008:
C
1009:
D
1010:
B
1011:
A
1012:
A
1013:
C
1014:
C
1015:
C
1016:
B
1017:
B
1018:
A
1019:
D
1020:
A
1021:
B
1022:
C
1023:
A
1024:
A
1025:
D
Solution: Exercising a degree of caution in the case of judgements needed under the condition of uncertainity is the assumption of Prudence concept. Prudence Concept or Conservatism principle is a key accounting principle which makes sure that assets and income are not overstated and provision is made for all known expenses and losses whether the amount is known for certain or just an estimation.
1026:
C
Solution: Timeliness concept states that the publication or presentation of financial statements should not be delayed. Timeliness principle in accounting refers to the need for accounting information to be presented to the users in time to fulfill their decision making needs.
1027:
D
Solution: Land on lease should be shown in Blance sheet contrary to the fact that the company does not own that piece of land is the implementation of Substance over form concept.
1028:
A
Solution: Depreciation is charged on fixed assets to comply with Matching concept which requires that revenues must be matched with associated expenses to get a complete and accurate picture of profit and loss.
1029:
B
Solution: Net profit is computed in Income statement. Net income, also called net profit, is a calculation that measures the amount of total revenues that exceed total expenses. It other words, it shows how much revenues are left over after all expenses have been paid.
1030:
C
Solution: In income statement, gross profit is always equal to Sales - cost of goods sold.
1031:
D
Solution: Office equipment is a Fixed asset for a computer manufacturer and the same office equipment is a current asset for a company that deals in these equipments.
1032:
D
Solution: Financial statements mainly help in Communication of economic events.
1033:
C
Solution: Purchases + opening stock - closing stock = Cost of goods sold.
1034:
A
Solution: Balance sheet financial statements shows the financial position of a business at a specific date. The balance sheet, sometimes called the statement of financial position, lists the company's assets, liabilities,and stockholders ' equity (including dollar amounts) as of a specific moment in time. That specific moment is the close of business on the date of the balance sheet.
1035:
B
1036:
A
1037:
C
1038:
D
1039:
A
1040:
A
1041:
B
1042:
C
1043:
C
1044:
C
1045:
A
Solution: A recovery of bad debt increases net income. Bad debt recovery is a payment received for a debt that was written off and considered uncollectible. The receivable may come in the form of a loan, credit line, or any other accounts receivable. Because it generally generates a loss when it is written off, bad debt recovery usually produces income.
1046:
A
Solution: Aged debtors analysis shows how long debts have been outstanding. An aged debtors report is a totalled list of all the invoices your customers haven't yet paid you for, less any credit notes you've issued to your customers and not yet refunded them for.
1047:
D
Solution: Debtor declared to be a bankrupt is the most common cause of bad debt. A bad debt is a monetary amount owed to a creditor that is unlikely to be paid and, or which the creditor is not willing to take action to collect for various reasons, often due to the debtor not having the money to pay, for example due to a company going into liquidation or insolvency.
1048:
D
Solution: Prudence concept dictates the inclusion of 'provision for doubtful debts' in the financial statements.
1049:
B
Solution: Total credit sales is a commonly used base to create the provision for doubtful debts. The provision for doubtful debts is the estimated amount of bad debt that will arise from accounts receivable that have been issued but not yet collected. It is identical to the allowance for doubtful accounts.
1050:
B
Solution: Provision for doubtful debts account is an Contra asset account. It is used along with the account Accounts Receivable in order for the balance sheet to report the net realizable value of the company's accounts receivable.
1051:
C
Solution: Provision for cash discount on debtors is a percentage of Net debtors less provision for doubtful debts.
1052:
D
Solution: The value of inventories or stock is figured out at the lower of cost and Net realizable value.
1053:
D
Solution: An overstatement in the value of closing stock overstates all of the following except Cost of goods sold.
1054:
D
Solution: Stock take is not the methods of inventory costing. Stock-taking or "inventory checking" or "wall-to-wall" is the physical verification of the quantities and condition of items held in an inventory or warehouse. This may be done to provide an audit of existing stock. It is also the source of stock discrepancy information.
1055:
B
Solution: In accounting, for an item to be recognized as an asset on a business's balance sheet, it must be owned by the business. Ownership implies that the business has legal control and rights over the asset, allowing it to use, sell, or otherwise benefit from the asset's economic value. Options A, C, and D are not sufficient conditions for an item to be classified as an asset: Option A: Possessed implies physical control but does not necessarily guarantee legal ownership. Possession alone does not confer the rights associated with ownership. Option C: Controlled may indicate influence or management over an asset, but it does not necessarily imply legal ownership. Control alone is not sufficient for an item to be recognized as an asset on the balance sheet. Option D: Used suggests the utilization of an asset, but again, it does not guarantee legal ownership. Using an asset does not automatically confer ownership rights. Therefore, Option B: Owned is the correct choice because ownership is a fundamental requirement for an item to be classified as an asset in accounting.
1056:
D
Solution: Future economic benefits is the most important characteristic that all assets of a business have.
1057:
A
Solution: Capital + Liabilities = assets is the basic accounting equation. The fundamental accounting equation, also called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a person or business. It is the foundation for the double-entry bookkeeping system.
1058:
D
Solution: Creditors are a liability. Creditors means the persons to whom business owes money. Creditors are the persons to whom the money is payable by the business in future. So it is a liability of business towards creditors to pay them in future so it comes under current liabilities in balance sheet.
1059:
C
Solution: Owner's claim on total assets is equity. Total claims include liabilities, which are all the debts that the business owes but has not yet paid out, as well as owners' equity, the value of the business that was granted by owner investment.
1060:
A
Solution: Cash and cash equivalent are the asset from the following. Cash and cash equivalents (CCE) are the most liquid current assets found on a business's balance sheet. Cash equivalents are short-term commitments "with temporarily idle cash and easily convertible into a known cash amount".
1061:
B
Solution: Drawings is the withdrawal of cash and goods by the owner of the business for his/her personal use. Assets in the form of Cash or Goods which are withdrawn from a business by the owner(s) for their personal use are termed as drawings.
1062:
A
Solution: Net loss occurs when Expenses are greater than income. A net loss, sometimes referred to as a net operating loss (NOL), occurs when expenses exceed the income or total revenue produced for a given period of time.
1063:
C
Solution: Double entry implies that recording two aspects of every transaction. The double-entry system of accounting or bookkeeping means that for every business transaction, amounts must be recorded in a minimum of two accounts.
1064:
D
Solution: Rent expenses account is the nominal account. In other words, nominal accounts are the accounts that report revenues, expenses, gains, and losses.
1065:
A
1066:
A
1067:
B
1068:
B
1069:
C
1070:
B
1071:
C
1072:
B
1073:
C
1074:
C
1075:
A
1076:
D
1077:
A
1078:
D
1079:
B
1080:
D
1081:
B
1082:
C
1083:
B
1084:
B
1085:
A
Solution: When the goods are returned to a supplier a Debit note is sent to him which indicates that his/her account has been debited with the repective amount.
1086:
C
Solution: Bills receivable endorsed are debited to Endorsee A/c. The endorsee will be the owner of the bill and he will realise the payment of the bill on the due date from the drawee.
1087:
D
Solution: Del Credere Commission. It is a special commission given by the consignor to the consignee. When of commission is given, the consignee undertakes upon himself the risk of any .bad debts arising out of the credit So this Del Credere commission in the form of insurance premium against the risk of bed debts.
1088:
B
Solution: Interest on Capital is expense for the business and is debited to the profit and loss appropriation account.
1089:
A
Solution: Accounts payable has Credit balance. Since Accounts Payable is a liability account, it should have a credit balance.
1090:
A
Solution: Conservation concept states that "an accountant shouldn't anticipate profit, but must provide for all losses". The concept that an accountant shouldn't anticipate profit, but must provide for all losses is known as The conservatism concept.
1091:
C
Solution: Patents accounts are Real account. Patent right is classified as intangible asset and appear on balance sheet, that is why it is of nature of real account. The balances of real accounts are not cancelled out at the end of an accounting period but are carried over to the next period.
1092:
A
Solution: Reserve capital means Part of subscribed uncalled capital. Reserve Capital is defined as a part of subscribed uncalled capital, which will not be called up until and unless the company goes into liquidation.
1093:
B
Solution: Revenue from sale of product ordinarily is reported as part of earning in the period when the sale is made.
1094:
C
Solution: Preceding working day the bill will mature if the date of maturity of a bill is a holiday, where the date of maturity is a public holiday, the instrument will become due on the preceding business day.
1095:
A
1096:
B
1097:
C
1098:
C
1099:
C
1100:
D
1101:
A
1102:
C
1103:
C
1104:
D
1105:
D
1106:
D
1107:
C
1108:
D
1109:
B
1110:
A
1111:
D
1112:
A
1113:
B
1114:
C
1115:
C
1116:
D
1117:
B
1118:
C
1119:
C
1120:
D
1121:
B
1122:
D
1123:
C
1124:
D
1125:
D
1126:
B
1127:
B
1128:
B
1129:
C
1130:
A
1131:
D
1132:
B
1133:
C
1134:
A
1135:
B
1136:
B
1137:
C
1138:
D
1139:
A
1140:
C
1141:
A
1142:
D
1143:
D
1144:
B
1145:
D
Solution: An employee dismissed from the job is not a transaction. A transaction is an agreement between a buyer and a seller to exchange goods, services or financial instruments.
1146:
B
Solution: A promissory note is drawn by Maker in favor of Payee. Maker or Drawer is the person who makes or draws the promissory note. He is also called the promisor. Drawee or Payee is the person in whose favour the promissory note is drawn.
1147:
B
Solution: Consistency principle requires that the same accounting method should be used from one accounting period to the next.
1148:
A
Solution: The left side of an account is known as Debit and the right side as Credit. Asset accounts such as Cash, Accounts Receivable, Inventory, and Equipment should have debit balances. Liabilities are on the right side of the accounting equation.
1149:
A
Solution: The cost of a small calculator is treated as an expense and not shown as an asset in a financial statement of a business entity due to Materiality concept. The materiality concept refers to a situation where the financial information of a company is considered to be material from the point of view of the preparation of the financial statements if it has the potential to alter the view or opinion of a reasonable person.
1150:
C
Solution: A minimum quantity of stock always held as precaution against out of stock situation is called Base stock.
1151:
C
Solution: Discounting of bill by the drawer is done with Bank. An accepted draft or bill of exchange sold for early payment to a bank or credit institution at less than face value after the bank deducts fees and applicable interest charges.
1152:
C
Solution: A bill of exchange when drawn requires acceptance. By acceptance, the drawee engages himself to pay the amount from the bill of exchange to the person who will bear or hold it on the due term.
1153:
C
Solution: A bill of exchange is called a Bill payable by one who is liable to pay it on the due date. It is a written, unconditional order by one party (the drawer) to another (the drawee) to pay a certain sum, either immediately (a sight bill) or on a fixed date (a term bill), for payment of goods and/or services received.
1154:
C
Solution: 3 days of grace are allowed in case of time bills, for calculating date of maturity. Legal due date of a term/usance bill will be the last day of grace ( maturity date plus three days of grace is the legal due date).
1155:
A
1156:
A
1157:
A
1158:
B
1159:
C
1160:
B
1161:
C
1162:
A
1163:
B
1164:
B
1165:
C
1166:
C
1167:
C
1168:
D
1169:
C
1170:
A
1171:
C
1172:
B
1173:
D
1174:
B
1175:
D
1176:
A
1177:
C
1178:
A
1179:
B
1180:
C
1181:
B
1182:
D
1183:
B
1184:
A
1185:
C
1186:
A
1187:
C
1188:
D
1189:
D
1190:
C
1191:
D
1192:
A
1193:
B
1194:
A
1195:
C
1196:
A
1197:
D
1198:
C
1199:
C
1200:
D
1201:
D
1202:
B
1203:
D
1204:
C
1205:
B
1206:
A
1207:
D
1208:
A
1209:
A
1210:
B
1211:
B
1212:
D
1213:
A
1214:
B
1215:
C
1216:
D
1217:
B
1218:
B
1219:
D
1220:
C
1221:
C
1222:
B
1223:
C
1224:
A
1225:
D
1226:
D
1227:
D
1228:
A
1229:
B
1230:
D
1231:
C
1232:
C
1233:
D
1234:
D
1235:
A
1236:
B
1237:
A
1238:
C
1239:
A
1240:
A
1241:
D
1242:
D
Solution: Cash account can be classified as a real account. A real account is an account that retains and rolls forward its ending balance from period to period. The areas in the balance sheet in which real accounts are found are assets, liabilities, and equity.
1243:
D
Solution: Capital increases if revenue increases. The extent to which an increase in revenue will affect company's working capital depends on how efficiently business operates.
1244:
A
Solution: Capital of a business decreases if there is an increase in Drawings. Drawing is always deducted from capital.
1245:
C
Solution: Net income equal to Revenues minus Expenses. Revenue is the income generated before any expenses are taken out. Therefore, when a company is said to have "top-line growth," the company's revenue is growing. Revenue is also called net sales which is revenue minus any returns of purchased merchandise.
1246:
B
Solution: Payment of expenses will reduce the assets. When an expense is recorded at the same time it is paid for with cash, the cash (asset) account declines, while the amount of the expense reduces the retained earnings account.
1247:
C
Solution: Assets - Liabilities = Capital is correct. The Accounting Equation states that the Assets are always equal to the sum of Capital & Liabilities.
1248:
B
Solution: Fresh capital introduction will increase Assets and Equity. Capital will increase the Equity. Cash at Bank will increase the Asset.
1249:
D
Solution: Current Assets - Current Liabilities = Working capital. Working capital is calculated as current assets minus current liabilities.
1250:
C
Solution: The process of recording in Journal is done frequently during the accounting period. An organization begins its accounting cycle with the recording of transactions using journal entries.
1251:
B
Solution: General Journal, sometimes also known as the Book of Original Entry, because it is the first place a transaction is entered into the books. Journal Entries are made from source documents, which can be anything from receipts to invoices to bank statements.
1252:
D
1253:
A
1254:
A
1255:
C
1256:
C
1257:
C
1258:
B
1259:
D
1260:
B
1261:
C
1262:
C
1263:
C
1264:
B
1265:
B
1266:
B
1267:
C
1268:
C
1269:
B
1270:
B
1271:
C
1272:
B
1273:
A
1274:
D
1275:
C
1276:
B
1277:
B
1278:
B
1279:
D
1280:
A
1281:
A
1282:
B
1283:
D
1284:
A
1285:
A
1286:
B
1287:
B
1288:
A
1289:
A, G
1290:
C
1291:
C
1292:
C
1293:
B
1294:
B
1295:
B
1296:
B
1297:
C
1298:
D
1299:
C
1300:
C
1301:
C
Solution: Debentures is a long term liability. Long-term liabilities are financial obligations of a company that become due more than one year. In accounting, they form a section of the balance sheet that lists liabilities not due within the next 12 months including debentures, loans, deferred tax liabilities and pension obligations.
1302:
B
Solution: Drawing is a type of Withdrawal of capital. An owner's drawing affects the capital account of a balance sheet, whereas a withdrawal has no such effect.
1303:
B
Solution: Profit is a part of Owner's capital. When a company generates a profit and retains a portion of that profit after subtracting all of its costs, the owner's equity generally rises.
1304:
A
Solution: Promissory note is prepared by Drawer. Promissory note is prepared and signed by the a person / organisation ( borrower) while borrowing money from a lender.
1305:
A
Solution: Secret reserve is not shown in the Balance sheet. The term secret reserve refers to a reserve the existence of which is not disclosed in the Balance Sheet. It can be said that there is a surplus of assets over liabilities and that surplus is not disclosed or shown by the Balance Sheet.
1306:
B
Solution: Contingent liabilities is not included in the total of Balance Sheet. The contingent liability will be disclosed in the notes to the financial statements.
1307:
D
Solution: Revenue expenditures are recorded in the Manufacturing account, Trading account and Profit & loss account.
1308:
A
Solution: In case of opening Credit Balance, the word By Balance b/d are written on the credit side.
1309:
D
Solution: Preliminary expenses are treated as Miscellaneous expenditure. Preliminary expenses are those that are incurred before incorporation of a company or commencement of business.
1310:
C
1311:
B
1312:
B
1313:
A
1314:
C
1315:
A
1316:
A
1317:
B
1318:
B
1319:
A
1320:
B
1321:
C
1322:
B
1323:
C
1324:
B
1325:
B
1326:
D
1327:
A
1328:
C
1329:
C
1330:
B
1331:
C
1332:
A
1333:
B
1334:
C
1335:
B
1336:
A
1337:
B
1338:
A
1339:
B
1340:
B
1341:
C
1342:
B
1343:
B
1344:
D
1345:
D
1346:
D
1347:
C
1348:
A
Solution: In case of debit balance, the words To Balance b/d are written on the debit side.
1349:
D
Solution: Bank pass book is also known as Bank statement. A bank passbook or statement is a truncated copy of the record of your account maintained by the bank.
1350:
B
1351:
C
1352:
C
1353:
D
1354:
A
1355:
B
1356:
D
1357:
D
1358:
D
Solution: XYZ firm has imported a machine from abroad. Refundable tax is NOT the element of the machine's cost.
1359:
C
Solution: Land foxed assets is not depreciated in the ordinary circumstances. Land is not depreciated, since it has an unlimited useful life.
1360:
C
Solution: In the calculation of depreciation, all of the following items are actually estimates except Historical cost. A historical cost is a measure of value used in accounting in which the price of an asset on the balance sheet is based on its nominal or original cost when acquired by the company.
1361:
C
Solution: Under Straight line method of depreciation, the amount of depreciation expenses remains constant throughout the life of the asset.
1362:
B
Solution: An increase in the value of fixed asset is referred to as Appreciation. Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates.
1363:
B
Solution: The term Depletion is generally used for the depreciation of natural resources. Depletion is an accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals, and oil from the earth.
1364:
D
Solution: Living plants and animals is a biological asset. Biological asset is any living plant or animals owned by the business, and are typically measured at fair value minus selling costs.
1365:
A
Solution: Net income will increase is the effect on net income if a business decreases its provision for bad debts.
1366:
B
Solution: A firm has not recorded the bad debts by mistake. Net profit would increase is the effect of bad debt ommission.
1367:
B
Solution: When Account receivable is credited it is certain that a debt won't be recovered.
1368:
A
1369:
C
1370:
C
1371:
A
1372:
A
1373:
A
1374:
A
1375:
C
1376:
C
1377:
D
1378:
D
1379:
A
1380:
D
1381:
B
1382:
C
1383:
C
1384:
B
1385:
A
1386:
B
1387:
B
1388:
D
1389:
C
1390:
D
1391:
C
1392:
A
1393:
B
1394:
D
1395:
A
1396:
A
1397:
D
1398:
A
1399:
B
1400:
D
1401:
C
1402:
B
1403:
A
1404:
B
1405:
D
1406:
C
1407:
D
1408:
A
1409:
D
1410:
C
1411:
A
1412:
B
1413:
C
1414:
B
1415:
C
1416:
D
1417:
D
1418:
D
1419:
C
1420:
D
1421:
C
1422:
B
1423:
C
1424:
A
1425:
A
1426:
A
1427:
D
1428:
B
1429:
D
1430:
C
1431:
D
1432:
A
1433:
B
Solution: When a share is forfeited, we need to reverse the entries made when the share was originally issued. Share Capital Account is originally credited when shares are issued. Therefore, on forfeiture, we need to debit the Share Capital Account. The amount to be debited is the called-up capital on the forfeited shares. In this case, the face value of the share is Rs. 100, and the full amount has been called up. Even though the share was issued at a discount, the called-up amount is still based on the face value. The non-payment of the final call of Rs. 20 doesn't change the fact that the full Rs. 100 has been called up. Therefore, the Share Capital Account will be debited by Rs. 100. So, the correct answer is Option B: Rs. 100
1434:
A
1435:
B
1436:
D
1437:
B
1438:
B
1439:
A
1440:
D
1441:
B
1442:
D
1443:
D
1444:
C
1445:
C
1446:
D
1447:
B
1448:
A
1449:
B
1450:
C
1451:
B
1452:
A
1453:
D
1454:
A
1455:
B
1456:
D
1457:
A
1458:
A
1459:
C
1460:
D
1461:
B
1462:
A
1463:
B, H
1464:
B
1465:
A
1466:
D
1467:
C
1468:
C
1469:
B
1470:
B
1471:
A
1472:
C
1473:
A
1474:
A
1475:
B
1476:
B
1477:
B
1478:
B
1479:
C
1480:
A
1481:
C
1482:
C
1483:
D
1484:
C
1485:
B
1486:
B
1487:
B
1488:
C
1489:
A
1490:
A
1491:
C
1492:
B
1493:
A
1494:
B
1495:
A
1496:
A
1497:
C
1498:
D
1499:
D
1500:
C
1501:
A
1502:
A
1503:
B
Solution: Current liabilities are obligations that a company needs to settle within a year. 1. Debentures are long-term liabilities, not current liabilities. 2. Prepaid rent is considered an asset, not a liability. 3. Interest accrued is a current liability as it represents interest that is owed but not yet paid. 4. Bank overdraft is a current liability because it is a short-term borrowing from a bank. Therefore, the only correct current liability among the options is the bank overdraft.
1504:
B
1505:
D
1506:
C
1507:
C
1508:
C
1509:
B
1510:
B
1511:
A
1512:
D
1513:
B
1514:
A
1515:
B
1516:
B
1517:
B
1518:
D
1519:
D
1520:
B
1521:
D
1522:
B
1523:
A
1524:
A
1525:
B
1526:
D
1527:
A
1528:
C
Solution: A cash book with cash bank and discount column is commonly referred as The prudence concept. Under the prudence concept, do not overestimate the amount of revenues recognized or underestimate the amount of expenses.
1529:
D
Solution: Ownership in business entities can be a sole proprietorship, partnership, or corporation. From the accounting perspective and its purpose these types of business are considered separate entities from their owners. The corporation is only one considered as a separate legal entity.
1530:
B
Solution: Prudence is the application of caution in the exercise of the judgements needed in making the estimates required under conditions of uncertainty, such that assets or income are not overstated and liabilities or expenses are not understated. However, the exercise of prudence does not allow, for example, the creation of hidden reserves or excessive provisions, the deliberate understatement of assets or income, or the deliberate overstatement of liabilities or expenses, because the financial statements would not be neutral and therefore, not have the quality of reliability.
1531:
C
Solution: The revenue recognition principle dictates that all types of incomes should be recorded or recognized when they are earned. The revenue recognition principle, a combination of accrual accounting and the matching principle, stipulates that revenues are recognized when realized and earned, not necessarily when received.
1532:
C
Solution: The matching concept matches revenues with expenses. The matching concept is an accounting practice whereby firms recognize revenues and their related expenses in the same accounting period.
1533:
C
Solution: The allocation of owner's private expenses to his/her business violates Separate business entity concept. The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses.
1534:
A
Solution: The going concern concept assumes that the entity continue running for forseeable future. The going concern principle is the assumption that an entity will remain in business for the foreseeable future.
1535:
B
Solution: American companies prepare their financial statement in Dollars whereas Japanese companies produce financial statement in Yen. This is an example of Unit of measurement concept.
1536:
C
Solution: Accounting period is time spann into which the total life of a business is divided for the purpose of preparing financial statements. This period defines the time range over which business transactions are accumulated into financial statements, and is needed by investors so that they can compare the results of successive time periods.
1537:
D
Solution: Materiality is a concept in financial accounting and reporting that firms may disregard trivial matters, but they must disclose everything that is important to the report audience. Items that are important enough to matter are material items.
1538:
B
1539:
C
1540:
C
1541:
B
1542:
C
1543:
B
1544:
B
1545:
A
1546:
D
1547:
A
1548:
A
1549:
A
1550:
C
1551:
D
1552:
B
1553:
D
1554:
B
1555:
A
1556:
B
1557:
A
1558:
C
1559:
B
1560:
B
1561:
D
1562:
B
1563:
B
1564:
D
1565:
B
1566:
C
1567:
C
Solution: Bank Reconciliation statement is the comparision of a bank statement (sent by bank) with the Cash book. In other words, the balance shown in the Pass Book given by the bank should tally with the balance of Bank Account Kept in his ledger or Cash Book (Bank Column).
1568:
B
Solution: A cheque returned by bank marked "NSF" means that There are not sufficient funds in your account. Non-sufficient funds (NSF) is a term used in the banking industry to indicate that a cheque cannot be honored because insufficient funds are available in the account on which the instrument was drawn.
1569:
A
Solution: Bank Reconciliation statement is prepared by Accountant of business. Bank reconciliation statement is generally prepared by the company accountant or the bookkeeper with the purpose to compare the bank's records with your own company records. It is done on monthly basis whenever bank statement arrives.
1570:
C
Solution: Unpresented cheques are also referred to as Outstanding cheques. An unpresented check is a check written by a company and entered in its records, but the check has not yet cleared the company's checking account. In other words, the check has not yet been paid by the bank on which the check is drawn. An unpresented check is also known as an outstanding check.
1571:
C
Solution: Outstanding cheques are cheques that are issued by the business but not yet presented to bank for payment.
1572:
B
Solution: Accrued expenses are considered as Liability. Accrued expenses are typically periodic, and are documented on a company's balance sheet as current liabilities.
1573:
A
Solution: Prepaid expenses are considered as Asset. Prepaid expenses are future expenses that have been paid in advance. You can think of prepaid expenses as costs that have been paid but have not yet been used up or have not yet expired. The amount of prepaid expenses that have not yet expired are reported on a company's balance sheet as an asset.
1574:
A
Solution: Earned but not yet received income is treated as Asset. It is income earned during a particular accounting period but not received until the end of that period. It is treated as an asset for the business.
1575:
C
Solution: Revenue earned but not yet received by the business is known as Accrued revenue. Accrued income is very important in accounting because companies receive advances for their goods or services all the time. To prevent overstating certain accounts, companies need to differentiate between the revenue that they have earned versus revenue that they have not earned yet.
1576:
D
Solution: Correction concept is not regarded as the fundamental concept that is identified by IAS-1.
1577:
A
1578:
A
1579:
C
1580:
C
1581:
C
1582:
B
1583:
C
1584:
C
1585:
B
1586:
A
1587:
C
1588:
D
1589:
C
1590:
C
1591:
A
1592:
C
1593:
A
1594:
A
1595:
B
1596:
B
1597:
C
1598:
C
1599:
D
1600:
A
1601:
A
1602:
A
1603:
A
1604:
D
1605:
D
1606:
C
1607:
A
1608:
B
1609:
C
1610:
B
1611:
B
1612:
C
1613:
B
1614:
A
1615:
C
1616:
A
1617:
D
1618:
A
1619:
B
1620:
B
1621:
C
1622:
B
1623:
B
1624:
D
1625:
C
1626:
A
1627:
A
1628:
A
1629:
B
1630:
B
1631:
C
1632:
D
1633:
D
1634:
D
1635:
B
1636:
C
1637:
A
Solution: FIFO methods of inventory costing yields highest taxable income. First-in, first-out, or FIFO, applies the earliest costs first. In rising markets, FIFO yields the lowest cost of goods sold and the highest taxable income.
1638:
A
Solution: FIFO methods of inventory costing produces ending stock cost close to the market value of the inventory. FIFO (First-in, first-out) method is based on the perception that the first inventories purchased are the first ones to be sold. It is a cost flow assumption for most companies. Since the theory perfectly matches to the actual flow of goods, therefore it is considered as the right way to value inventory.
1639:
B
Solution: LIFO inventory costing methods is supposed to issue the most recently purchased goods. LIFO, which stands for last-in-first-out, is an inventory valuation method which assumes that the last items placed in inventory are the first sold during an accounting year.
1640:
D
Solution: Opening inventory + Net purchases = Cost of goods available for sale. The cost of goods available for sale equals the beginning value of inventory plus the cost of goods purchased.
1641:
D
Solution: Cost of goods available for sale - closing inventory = Cost of goods sold.
1642:
B
Solution: NRV or net realizable value of inventory is the expected selling price or market value less Expenses necessary to complete sale. Net realizable value is generally equal to the selling price of the inventory goods less the selling costs (completion and disposal).
1643:
B
Solution: Under Standard cost method of inventory costing, a pre-determined cost is assigned to all items of inventory. A standard cost is described as a predetermined cost, an estimated future cost, an expected cost, a budgeted unit cost, a forecast cost, or as the "should be" cost. Standard costs are often an integral part of a manufacturer's annual profit plan and operating budgets.
1644:
A
Solution: Term 'Credit' means Receiving of benefits by the business. The terms which indicate when payment is due for sales made on account (or credit).
1645:
D
Solution: When a liability is reduced or decreased, it is recorded on the Left or debit side of the account.
1646:
C
Solution: When capital is increased by an amount, it is recorded on the Right or credit side of the account.
1647:
C
Solution: Noting charges are paid at the time of Dishonor of the bill. When a Bill of Exchange is dishonoured, in order to prove the fact, the drawer (or holder) may get the bill of exchange noted and protested through a public official known as “Notary Public” Noting is the recording of the fact of dishonour by a Notary public which becomes an evidence of dishonour.
1648:
C
Solution: Dismantling and demolition charges is a Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.
1649:
A
Solution: The owner of consignment stock is Consignor.
1650:
C
Solution: Stock of raw materials is the odd one out. Raw materials inventory is the total cost of all component parts currently in stock that have not yet been used in work-in-process or finished goods production. There are two subcategories of raw materials, which are: Direct materials.
1651:
C
Solution: X draws a bill on Y. X endorsed the bill to Z. Z will be the payee of the bill.
1652:
C
Solution: Interest on drawings is gain for the business. Interest on drawings is an income to the firm, and hence it is credited to the profit and loss appropriation account. On the other hand, interest on drawings is an expense to the partners, and hence it is debited to their capital accounts.
1653:
D
Solution: Narrations are given at the end of each journal entry. Each journal entry includes the date, the amount of the debit and credit, the titles of the accounts being debited and credited (with the title of the credited account being indented), and also a short narration of why the journal entry is being recorded.
1654:
D
Solution: The basic considerations in distinction between capital and revenue expenditure are Nature of business, Effect on revenue generating capacity of the business and Purpose of expenses.
1655:
B
Solution: "Treating a revenue expenditure as a capital expenditure" is an example of Error of principle. An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly.
1656:
B
Solution: If an effect of an error is cancelled by the effect of some other error, it is commonly known as Compensatory errors. A compensating error is an accounting error that offsets another accounting error. These errors can be difficult to spot when they occur within the same account and in the same reporting period, since the net effect is zero.
1657:
C
1658:
C
1659:
C
1660:
B
1661:
A
1662:
C
1663:
A
1664:
C
1665:
D
1666:
A
1667:
B
1668:
B
1669:
C
1670:
B
1671:
A
1672:
B
1673:
C
1674:
D
1675:
C
1676:
D
1677:
B
Solution: Debenture is also named as Bond. In a sense, all debentures are bonds , but not all bonds are debentures. Whenever a bond is unsecured, it can be referred to as a debenture.
1678:
A
Solution: Memorandum of association is the most important document of the company. It is the charter of the company, which defines the objects of the company's formation and the utmost possible scope of its operations beyond which its actions cannot go.
1679:
A
Solution: Authorized share capital is also known as Registered capital. The authorized capital of a company is the maximum amount of share capital that the company is authorized by its constitutional documents to issue to shareholders.
1680:
A
Solution: The maximum amount with which a company is registered is called Authorized capital.
1681:
B
Solution: Revenue expenditure does not improve the financial position of the business. Revenue expenditures are typically referred to as ongoing operating expenses.
1682:
B
Solution: Long term liabilities consist of all debts, payabke after 12 months. Long-term liabilities are obligations not due within the next 12 months or within the company's operating cycle if it is longer than one year.
1683:
B
Solution: Listed company can offer its share to public at large. Listed company is a corporation whose ownership is dispersed among the general public in many shares of stock which are freely traded on a stock exchange or in over-the-counter markets.
1684:
A
Solution: The persons who sign Articles and Memorandum of the company and contribute in the initial share capital of the company are called Subscribers. They are called subscribers because, as part of the company formation.
1685:
C
Solution: Shareholders are the owners of a company. A shareholder, also referred to as a stockholder, is any person, company, or institution that owns at least one share of a company's stock.
1686:
A
Solution: General office expenses are charged to Administrative expenses head because we know that all types of official expenses are known as administrative expense.
1687:
B
1688:
A
1689:
D
1690:
B
1691:
C, G
1692:
D
1693:
D
1694:
A
1695:
D
1696:
B
1697:
A
1698:
C
1699:
B
1700:
B
1701:
C
1702:
C
1703:
C
1704:
B
1705:
B
1706:
B
1707:
D
1708:
C
1709:
A
1710:
C
1711:
C
1712:
C
1713:
B
1714:
C
1715:
A
1716:
C
1717:
A
1718:
B
1719:
C
1720:
C
1721:
B
1722:
C
1723:
A
1724:
B
1725:
A
1726:
C
1727:
C
1728:
B
1729:
C
1730:
C
1731:
D
1732:
D
1733:
C
1734:
C
1735:
C
1736:
A
1737:
B
1738:
C
1739:
C
1740:
A
1741:
A
1742:
B
1743:
C
1744:
B
1745:
A
1746:
B
1747:
C
1748:
B
1749:
C
1750:
D
1751:
C
1752:
A
1753:
C
1754:
C
1755:
B
1756:
D
1757:
C
1758:
C
1759:
N/A
1760:
A
1761:
D
1762:
D
1763:
C
1764:
B
1765:
D
1766:
C
1767:
C
1768:
B
1769:
A
1770:
C
1771:
D
1772:
B
1773:
A
1774:
C
1775:
B
1776:
A
1777:
A
1778:
C
1779:
D
1780:
D
1781:
B
1782:
B
1783:
D
1784:
D
1785:
C
1786:
D
1787:
C
1788:
B
1789:
A
1790:
D
1791:
A
1792:
C
1793:
C
1794:
D
1795:
B
1796:
B
1797:
A
1798:
D
1799:
B
1800:
B
1801:
D
1802:
C
1803:
C
1804:
C
1805:
B
1806:
D
1807:
A
1808:
D
1809:
B
1810:
C
1811:
C
1812:
D
1813:
C
Solution: Memorandum Joint Venture account is a Nominal account.
1814:
A
Solution: Acceptance is not required in Promissory Note. It does not require any acceptance because payer is only the maker of the promissory note. It requires acceptance by the drawee or someone else on his behalf as the drawer is not the payer.
1815:
A
Solution: Loss leads to reduction in Capital. The reduction of capital is done by companies for numerous reasons, including increasing shareholder value and producing a more efficient capital structure.
1816:
B
Solution: Transaction between business and owner are recorded following Business entity concept. The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses.
1817:
B
Solution: One of the Fundamental accounting assumption is Going concern. Going concern is an accounting term for a company that has the resources needed to continue operating indefinitely until it provides evidence to the contrary.
1818:
A
Solution: Contra-entries are passed only when Double column cash book is prepared. The reason for making two entries is to comply with the principle of double entry.
1819:
D
Solution: Petty cash balance is Asset. The petty cash amount may appear as the first or second item listed in the current asset section of the balance sheet.
1820:
D
Solution: Dividends are usually paid as a percentage of Paid up capital.
1821:
D
Solution: A proforma invoice is sent by Consignor to consignee. A Pro-forma invoice is a document prepared by the consignor which is sent to the consignee along with the goods. It contains the details with respect to the quantity of goods sent, rates at which the goods are sent and other terms and conditions for sending the goods on consignment.
1822:
A
Solution: Commission to promote credit sale by consignee is known as Del credere commission. It is a special commission given by the consignor to the consignee.
1823:
D
1824:
B
1825:
C
1826:
C
1827:
B
1828:
A
1829:
C
1830:
A
1831:
B
1832:
C
1833:
B
1834:
D
1835:
B
1836:
B
1837:
B
1838:
D
1839:
B
1840:
A
1841:
C
1842:
C
1843:
B
1844:
D
1845:
A
1846:
B
1847:
D
1848:
B
1849:
C
1850:
C
1851:
C
1852:
B
1853:
C
1854:
A
1855:
A
1856:
C
1857:
B
1858:
C
1859:
A
1860:
C
1861:
A
1862:
D
Solution: Identifying -> Recording -> Communicating is the correct sequence of accounting process.
1863:
C
Solution: Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business. Bookkeeping refers mainly to the record-keeping aspects of financial accounting, and involves preparing source documents for all transactions, operations, and other events of a business.
1864:
B
Solution: Auditing refers to Examination of financial information. A financial audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent.
1865:
C
Solution: Creditor of the business is the external user of financial statements. External users are people outside the business entity (organization) who use accounting information.
1866:
D
Solution: Manager of the business is the internal user of financial statements. Internal users are people within a business organization who use financial information.
1867:
A
Solution: Identifying an economic event or transaction is the first phase of accounting cycle, which includes any transaction involving the use or exchange of a company's assets.
1868:
C
Solution: Company is a separate legal entity whose total capital can be divided into many shares.
1869:
A
Solution: An asset possesses future economic benefits for the business. An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit.
1870:
B
Solution: Liabilities are Obligations. Liabilities are defined as a company's legal financial debts or obligations that arise during the course of business operations.
1871:
C
Solution: Income is the gross inflow of economic benefits during the period arising from the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants.
1872:
D
1873:
A
1874:
C
1875:
C
1876:
D
1877:
B
1878:
A
1879:
B
1880:
A
1881:
B
1882:
D
1883:
C
1884:
C
1885:
C
1886:
B
1887:
D
1888:
C
1889:
A
1890:
A
1891:
D
1892:
A
1893:
C
1894:
C
1895:
C
1896:
B
1897:
D
1898:
A
1899:
B
1900:
A
1901:
C
1902:
B
1903:
C
1904:
C
1905:
B
1906:
C
1907:
B
1908:
A
1909:
A
1910:
B
1911:
C
1912:
C
1913:
C
1914:
C
1915:
A
1916:
A
1917:
B
1918:
B
1919:
A
1920:
B
Solution: Cash Book: This is for recording transactions where cash is immediately received or paid out . Since the furniture was bought on credit (meaning you didn't pay cash right away), this isn't the right place. Purchases Book: This book is specifically for recording credit purchases of goods that your business buys for resale . Furniture is an asset used in the business, not something you sell to customers. Sales Book: This book records credit sales of goods that your business sells to customers. This has nothing to do with buying furniture. Journal Proper: This is the "catch-all" book. It's used for recording transactions that don't fit into any of the specialized journals like the cash book, purchases book, or sales book. Credit purchases of assets like furniture fall into this category. That's why the Journal Proper is the correct answer!
1921:
C
1922:
B
1923:
C
1924:
C
1925:
A
1926:
C
1927:
C
1928:
A
1929:
A
1930:
A
1931:
A
1932:
C
1933:
D
1934:
B
1935:
B
1936:
B
1937:
A
1938:
B
1939:
C
1940:
A
Solution: Income statement shows the profitability of a business. The income statement is the most important report for many analysts. It shows the company's operating results for an entire year.
1941:
D
Solution: Assets minus liabilities equal to Capital, it shows that a company's total amount of assets equals the total amount of liabilities plus owner's (or stockholders') equity.
1942:
C
Solution: Cash flow statement shows the movement of cash and cash equivalents during an accounting period. A cash flow statement, also known as statement of cash flows or funds flow statement, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities.
1943:
D
Solution: Goodwill is classified as Intangible assets. The goodwill amounts to the excess of the "purchase consideration" (the money paid to purchase the asset or business) over the total value of the assets and liabilities. It is classified as an intangible asset on the balance sheet, since it can neither be seen nor touched.
1944:
D
Solution: Rent expenses does not appear in Balance sheet.
1945:
A
Solution: Current assets are also known as Gross working capital. Gross working capital is the sum of all of a company's current assets (assets that are convertible to cash within a year or less).
1946:
D
Solution: The expenses related to the main operations of a business are referred to as Operating expense. The operating expenses refer to the specific costs after gross revenue is defined in the income statement.
1947:
D
Solution: A current asset that is convertible to cash within 3 months can be referred to as Cash equivalent. Cash and cash equivalents refer to the line item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately.
1948:
D
Solution: Portion of a fixed asset's cost consumed during the current accounting period is known as depreciation. Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.
1949:
A
Solution: Under Straight line method, the amount of depreciation expenses remains same throughtout the life of the asset. In a straight line depreciation method, it is assumed that the asset uniformly depreciates over its useful life.
1950:
A
1951:
C
1952:
C
1953:
A
1954:
B
1955:
A
1956:
B
1957:
A
1958:
C
1959:
A
1960:
B
1961:
B
1962:
C
1963:
C
1964:
D
1965:
C
1966:
A
1967:
B
1968:
A
1969:
D
1970:
D
Solution: General expenses, Financial expenses and Selling expenses are paid out of Gross Profit.
1971:
D
Solution: Land is NOT an example of intangible assets. An intangible asset is an asset that is not physical in nature.
1972:
D
Solution: Creditors is an example of business liability. A liability is defined as a company's legal financial debts or obligations that arise during the course of business operations.
1973:
C
Solution: Loss is subtracted from capital account and profit is added to capital account.
1974:
B
Solution: Mr. Z account account will be credited, if business bought goods on credit from Mr. Z.
1975:
A
Solution: Interest on loan paid by business is an example of Revenue expense. A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred.
1976:
A
Solution: Office equipment account will be credited when a typewriter is sold that has been used in the office.
1977:
B
Solution: The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the as set, is termed as Depreciation. Depreciation is any method of allocating such net cost to those periods in which the organization is expected to benefit from use of the asset. The asset is referred to as a depreciable asset.
1978:
D
Solution: Credit sales will be shown on debit side of debtors account. Credit sales means allowances of goods to customers in order to pay in advance.
1979:
A
Solution: When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called Error of principle. An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting.
1980:
B
1981:
D
1982:
C
1983:
D
1984:
D
1985:
C
1986:
C
1987:
C
1988:
C
1989:
D
1990:
C
1991:
C
1992:
A
1993:
C
1994:
B
1995:
A
1996:
C
1997:
C
1998:
B
1999:
C
2000:
B
Solution: No journal entry is required to be passed when there is Normal loss. Normal loss increases the cost of production of the usable goods realized.
2001:
B
Solution: There must be a gap of at least 1 month between two calls.
2002:
A
Solution: Difference of total of debit and credit side of the trial balance is transferred to Suspense A/c. Suspense accounts are used when your trial balance is out of balance or when you have an unidentified transaction. The suspense account is a general ledger account that acts as a holding account until the error is discovered or the unknown transaction is identified.
2003:
A
Solution: Municipal tax Rs.6000 under dispute is a Contingent liability. Contingent liabilities are liabilities that may be incurred by an entity depending on the outcome of an uncertain future event such as the outcome of a pending lawsuit.
2004:
A
Solution: Joint venture account is a Nominal account.
2005:
C
Solution: Capital expenditures are recorded in the Balance sheet. A capital expenditure is recorded as an asset, rather than charging it immediately to expense. It is classified as a fixed asset, which is then charged to expense over the useful life of the asset, using depreciation.
2006:
B
Solution: Recovery of bad debt is a Revenue receipt. Revenue receipts are money received by a business as a result of its normal business operations.
2007:
C
Solution: Bills receivable is a Current asset. Bills receivable is often used as an alternative term for accounts receivable but more specifically relates to amounts due to a business under bills of exchange.
2008:
D
Solution: The party who sends the goods for sales on fixed commission basis is known as Consignor. Person or firm (usually the seller) who delivers a consignment to a carrier for transporting it to a consignee (usually the buyer) named in the transportation documents.
2009:
D
Solution: Endorsement, discounting and collection of bills of exchange is made by Drawer. The individual or firm that issues or signs a draft instructing the drawee to pay a specified sum of money to, or to the order of, a named person (payee), or to bearer.
2010:
B
2011:
B
2012:
A
2013:
A
2014:
B
2015:
C
2016:
A
2017:
B
2018:
C
2019:
C
2020:
D
2021:
A
2022:
A
2023:
C
2024:
A
2025:
B
2026:
D
2027:
B
2028:
C
2029:
A
2030:
A
2031:
B
2032:
D
2033:
B
2034:
C
2035:
B
2036:
B
2037:
A
2038:
A
2039:
A
2040:
C
Solution: Dividend yield is calculated as: Dividend Yield = (frac{ ext{Dividend per Share}}{ ext{Market Value per Share}} imes 100\%) Given: Dividend per share = Rs. 2 Market value per share = Rs. 25 So, Dividend Yield = (frac{2}{25} imes 100 = 8\%) Hence, the correct answer is Option C: 8% .
2041:
B
2042:
D
2043:
A
2044:
A
2045:
B
2046:
B
2047:
D
2048:
B
2049:
A
2050:
A
2051:
B
2052:
C
2053:
B
2054:
C
2055:
A
2056:
D
2057:
C
2058:
D
2059:
D
2060:
C
2061:
C
2062:
B
2063:
C
2064:
B
2065:
B
2066:
C
2067:
A
2068:
N/A
2069:
D
2070:
B
2071:
A
2072:
B
2073:
C
2074:
B
2075:
A
2076:
A
2077:
B
2078:
D
2079:
C
2080:
D
2081:
B
2082:
C
2083:
C
2084:
A
2085:
C
2086:
D
2087:
C
2088:
B
2089:
D
2090:
A
Solution: The standard format of Journal does not include Assets column. An asset purchased on account is not recorded in the purchase journal. But many are of opinion to record all credit transactions in multi-column purchase journal.
2091:
D
Solution: In Chronological order, data is entered into the Journal. Journal entries are typically entered in chronological order and debits are entered before credits – debits are entered in a column to the left, and credits are entered to the right.
2092:
D
Solution: Cash account will be credited if a company purchases building for cash. Cash is credited because cash is an asset account that decreased because cash was used to pay the bill.
2093:
C
Solution: Discount for quick repayment of debt is normally referred to as Cash discount. It is called cash discount which might be offered or received.
2094:
D
Solution: Sales return journal records "goods returned by customers". Sales Return (Journal) Book Sales return books are used to record the goods returned by customers to them on credit.
2095:
B
Solution: The sales journal is used to record all of the company sales on credit. Most often these sales are made up of inventory sales or other merchandise sales.
2096:
D
Solution: Transactions that a business does not record in any specialized journal are recorded in General journal.
2097:
C
Solution: Purchase return journal records "goods returned by the business". The Purchases Returns Book is written up from the credit notes received from the suppliers.
2098:
D
Solution: Sales and purchase journal doesn't record Cash sales and purchases.
2099:
C
Solution: Cash received from debtor is recorded in Cash receipts journal. The cash receipts journal is a special journal used to record cash received by a business.
2100:
A
2101:
A
2102:
A
2103:
A
2104:
A
2105:
B
2106:
D
2107:
B
2108:
A
2109:
A
2110:
B
Solution: The statutory meeting of a company is convened once in the life time of the company . A statutory meeting is a one-time meeting of shareholders and directors that occurs shortly after the company's incorporation. The purpose of this meeting is to discuss important matters such as the company's formation, appointment of directors, and initial financial matters. Therefore, the correct option is once in the life time of the company .
2111:
C
2112:
C
2113:
C
2114:
C
2115:
D
2116:
C, H
2117:
D
2118:
B
2119:
C
2120:
A
2121:
D
2122:
C
2123:
A
2124:
N/A
2125:
A
2126:
B
2127:
B
2128:
D
Solution: In accounting, a Non-participating share holds only one right, which is that of a fixed rate of dividend. Non-participating shares do not have the additional right to participate in any further profits beyond the fixed dividend rate. Therefore, the correct option is Non-participating .
2129:
B
2130:
D
2131:
B
2132:
A
2133:
B
2134:
B
2135:
B
2136:
A
2137:
C
2138:
A
2139:
B
2140:
C
Solution: Cash book is a type of cash receipt journal + cash payment journal. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals.
2141:
D
Solution: Cash purchases is recorded in Cash payments journal. Cash payment journal or cash disbursement journal is used to record all cash payments made by the business.
2142:
A
Solution: A brief explanation recorded below every entry in General Journal is commonly known as Narration. A short explanation of each transaction is written under each entry which is called narration.
2143:
D
Solution: Debit note is the basis for recording a transaction in Purchase return journal. The source document for recording entries in the purchases return journal is generally a debit note.
2144:
B
Solution: Credit note is the basis for recording a transaction in Sales return journal. A credit note or credit memo is a commercial document issued by a seller to a buyer.
2145:
B
Solution: Specialized journals are more adequate for Big businesses.
2146:
C
Solution: An 'account' records the Increase or decrease in the balance of an item. An account is an individual accounting record of increase and decrease in a specific asset, liability or stockholders equity item.
2147:
C
Solution: Purchases will be credited if goods are given as charity. When accounting for goods given as charity, purchases are reduced with the exact cost of goods contributed. The amount is reduced from purchases in the trading account. It is shown as an expense on the debit side of the income statement.
2148:
C
Solution: Ledger account is known as the base for preparing trial balance. The trial balance can then be prepared by listing each closing balance from the general ledger accounts as either a debit or a credit balance.
2149:
D
2150:
B
2151:
A
2152:
B
2153:
C
2154:
B
2155:
D
2156:
A
2157:
B
2158:
A
2159:
A
2160:
B
2161:
C
2162:
B
2163:
B
2164:
B
2165:
A
2166:
B
2167:
C, H
2168:
A
2169:
D
2170:
A
2171:
D
2172:
B
2173:
B
2174:
C
2175:
C
2176:
C
2177:
A
2178:
D
2179:
A
2180:
B
2181:
C
2182:
C
2183:
A
2184:
C, H
2185:
B
2186:
D
2187:
D
2188:
A
2189:
A
2190:
A
2191:
B
2192:
B
2193:
B
2194:
B
2195:
C
2196:
A
2197:
D
2198:
D
2199:
B
2200:
C
2201:
B
2202:
A
2203:
C
2204:
C
Solution: Correct Answer: C) Realisation Let's break down why: * Revaluation Account: This account is used to record the change in value (increase or decrease) of assets and liabilities. It reflects current market prices, not the original book value. * Capital Account: This account tracks the owner's investment and profits/losses in a business. It doesn't directly deal with the book value of individual assets and liabilities during their disposal. * Realisation Account: This account is specifically used when a partnership firm is being dissolved (closed down). The key thing is that assets are transferred to the realisation account at their original book value . Then, when the assets are sold or liabilities are paid off, the difference between the book value and the sale price (or settlement amount) is recorded as a profit or loss in the realisation account. * Suspense Account: This is a temporary account used to hold amounts when there's uncertainty or a balancing issue in accounting. It's not related to the disposal of assets and liabilities at their book value. Therefore, the Realisation Account is where assets and liabilities are initially recorded at their book value before they are sold or settled during dissolution.
2205:
D
2206:
B
2207:
B
2208:
B
2209:
C
2210:
A
2211:
A
2212:
D
2213:
D
2214:
D
2215:
B
2216:
C
2217:
A
2218:
D
2219:
B
Solution: A company cannot issue redeemable preference shares for a period exceeding 20 years. A company may issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue under section 55 of the Companies Act 2013.
2220:
A
Solution: Error of partial omission will affect the Trial Balance. This error occurs when a transaction that should have been posted as a debit is posted as credit, for example, in a cash sale, sales are debited and cash is credited.
2221:
D
Solution: Income includes Income earned, Income received and Income receivable.
2222:
B
Solution: Cash Account is Real account. A real account is an account that retains and rolls forward its ending balance from period to period. The areas in the balance sheet in which real accounts are found are assets, liabilities, and equity.
2223:
B
Solution: Heavy amount spent for the advertisement of new company product is Deferred Revenue expenditure. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods.
2224:
A
Solution: Liability for bill discounted is a Contingent liability. Contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event.
2225:
C
Solution: Interest on debentures is calculated on Face value of debentures. This interest amount is paid periodically, generally yearly or half-yearly. The interest is a charge against the profit of the company.
2226:
D
Solution: The parties to joint venture are called Co-ventures. With individuals, when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are "co-venturers".
2227:
C
Solution: Under diminishing balance method, depreciation decreases every year. Since the book value reduces every year, hence the amount of depreciation also reduces every year. Under this method, the value of the asset never reduces to zero.
2228:
C
Solution: Legal expenses incurred on a suit for breach of contract to supply goods is a Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.
2229:
C
2230:
C
2231:
B
2232:
B
2233:
A
2234:
B
2235:
A
2236:
D
2237:
C
2238:
D
2239:
B
2240:
D
2241:
B
2242:
B
2243:
B
2244:
C
2245:
A
2246:
B
2247:
C
2248:
A
2249:
C
Solution: Salaries of selling staff would NOT be considered as a component of 'cost' of stock. When investors purchase shares of stock, the price paid includes two components: the price of the stock and the fee charged by the brokerage firm, called commission.
2250:
A
Solution: Current asset is TRUE about the treatment of insurance premium paid in advance. Current assets represent all the assets of a company that are expected to be conveniently sold, consumed, utilized or exhausted through the standard business operations, which can lead to their conversion to a cash value over the next one year period.
2251:
D
Solution: Listed companies are public limited companies with shares quoted and traded on a recognized stock exchange. Due to such type of conditions, these companies are regulated highly by the laws and regulations of the stock exchange, where they have to make disclosures towards the public relating to their financial condition. Non-listed companies are also public limited companies, but their shares are not quoted and traded on any stock exchange. These companies do not need to offer such an intensity of public disclosures as the listed companies, but they still maintain the essential qualities of the public companies, where at least seven shareholders can be identified . Public limited companies Therefore, the public limited companies may either be listed companies or non-listed companies based on their shares being traded in a public forum. Private limited companies Private limited companies are different from the public limited companies in which, ownership is relatively more controlled by limited persons and the shares are not allowed to be sold in a public forum.
2252:
A
Solution: The memorandum of association of a company is the charter and defines the limitation of the power of the company established under Companies Act. Memorandum of Association is the most important document of a company. It states the objects for which the company is formed. It contains the rights, privileges and powers of the company. Hence it is called a charter of the company. It is treated as the constitution of the company. It determines the relationship between the company and the outsiders.
2253:
D
Solution: Merchandise on hand at either the beginning or end of the accounting period is called Inventory. Inventory is the array of finished goods or goods used in production held by a company. Inventory is classified as a current asset on a company's balance sheet, and it serves as a buffer between manufacturing and order fulfillment.
2254:
B
Solution: Current liabilities and current assets items of balance sheet are useful in evaluating a company's liquidity.
2255:
B
Solution: General reserve can be distributed among the shareholders. General reserve can be used for distribution of dividend among shareholders when profit is insufficient. Reserves and surpluses are shown in liabilities side of balance sheet.
2256:
D
Solution: Trust is non-profit organization. A nonprofit organization is a business that has been granted tax-exempt status by the Internal Revenue Service (IRS) because it furthers a social cause and provides a public benefit.
2257:
A
2258:
C
2259:
C
2260:
C
2261:
C
2262:
B
2263:
A
2264:
A
2265:
D
2266:
C
2267:
A
2268:
D
2269:
A
2270:
D
2271:
B
2272:
B
2273:
B
2274:
B
2275:
A
2276:
C
2277:
B
2278:
B
2279:
B
2280:
C
2281:
C
2282:
C
2283:
C
2284:
A
2285:
A
2286:
A
2287:
B
2288:
C
2289:
B
2290:
D
2291:
B
2292:
B
2293:
C
2294:
C
2295:
A
2296:
D
2297:
A
2298:
C
2299:
C
2300:
B
2301:
C
2302:
B
2303:
C
2304:
A
2305:
A
2306:
B
2307:
D
2308:
D
2309:
B
2310:
C
2311:
B
2312:
C
2313:
C
2314:
C
Solution: The real accounts are accounts of Assets, Liabilities and Capital. The accounting formula essentially shows that what the firm owns (its assets) is purchased by either what it owes (its liabilities) or by what its owners invest (its shareholders equity or capital).
2315:
B
Solution: If a transaction is completely omitted from the books of accounts, No it wont effect the agreement of Trial Balance.
2316:
A
Solution: Ledger accounts is the common base for preparing a trial balance. This process is known as 'balancing off' the general ledger accounts. The trial balance can then be prepared by listing each closing balance from the general ledger accounts as either a debit or a credit balance.
2317:
A
Solution: Trial balance It lists down the balances of accounts. The debit balance values will be listed in the debit column of the trial balance and the credit value balance will be listed in the credit column.
2318:
D
Solution: Debit balance = Credit balance in a trial balance indicates that Mathematically Capital + Liabilities = Assets.
2319:
B
Solution: Trial Balance is commonly prepared at the end of an accounting period. It is usually prepared at the end of an accounting period to assist in the drafting of financial statements.
2320:
B
Solution: Partial omission of a transaction will affect the agreement of a trial balance. When only one aspect of a transaction is posted to the ledger, it is called as error of partial omission.
2321:
A
Solution: If debit balances = credit balances, trial balance only shows or checks the Arithmetic accuracy and it does not indicate that no errors were made during recording and posting.
2322:
D
Solution: Cash account with normal balance is shown at the debit side of a trial balance.
2323:
D
Solution: Accrued expenses account with normal balance is shown at the credit side of a trial balance.
2324:
C
2325:
D
2326:
C
2327:
D
2328:
B
2329:
B
2330:
C
2331:
B
2332:
C
2333:
B
2334:
C
2335:
C
2336:
D
2337:
D
2338:
B
2339:
A
2340:
B
2341:
B
2342:
B
2343:
A
2344:
D
2345:
B
2346:
B
2347:
N/A
2348:
B
2349:
B
2350:
A
2351:
B
2352:
C
2353:
B
2354:
B
Solution: Commercial accounting is based on Double entry book keeping. Commercial accounting is something about providing right informatin to right people on right time. In commercial accounting, the system is maintained by the business organizations. The main objective of commercial accounting is to know the profit or loss and the financial position of any business.
2355:
A
Solution: An asset that is NOT physical in nature is called Intangible asset. An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets.
2356:
B
Solution: In profit and loss appropriation account interim dividend is treated. An interim dividend is a dividend payment made before a company's annual general meeting (AGM) and the release of final financial statements.
2357:
B
Solution: Articles of association contains rules and regulations for internal management of the business. Articles of Association is a document which prescribes the rules and bye-laws for the general management of the company and for the attainment of its object as given in the memorandum.
2358:
A, H
Solution: Purchase of fixed asset is NOT a cash inflow. Cash inflow is the money received by an organization as a result of its operating activities, investment activities, and financing activities.
2359:
C
Solution: Listed company is quoted company. The CA 2006 definition of 'quoted company' in s. 385 refers to companies listed on 'regulated markets' including the Main Market, but not AIM.
2360:
C
Solution: Authorized capital is required for the registration of the company. The authorized capital of a company (sometimes referred to as the authorized share capital, registered capital or nominal capital, particularly in the United States) is the maximum amount of share capital that the company is authorized by its constitutional documents to issue (allocate) to shareholders.
2361:
A
Solution: Accounts receivable & inventory are the examples of Current assets. Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets. Current assets are important to businesses because they can be used to fund day-to-day business operations and to pay for the ongoing operating expenses.
2362:
C
Solution: Bank account will be credited in the books of XYZ Co. Ltd, if the business purchases a vehicle thriugh cheque.
2363:
A
Solution: If current assets>current liabilities, a company will have positive working capital. When a company has more current assets than current liabilities, it has positive working capital.
2364:
D
2365:
D
2366:
D
2367:
D
2368:
B
2369:
B
2370:
B
2371:
C
2372:
B
2373:
B
2374:
B
2375:
A
2376:
B
2377:
A
2378:
D
2379:
B
2380:
A
2381:
C
2382:
C
2383:
B
2384:
C
2385:
C
2386:
A
2387:
B
2388:
D
2389:
D
2390:
A
Solution: Option A: Bank overdraft A bank overdraft occurs when the credit side of a bank account is greater than the debit side, indicating that more funds have been withdrawn from the account than have been deposited. This results in a negative balance in the bank account. Option B: Cash at bank "Cash at bank" refers to the amount of money that a company has in its bank account. It represents the total funds available in the bank account, including deposits, withdrawals, and any interest earned. Option C: Bank balance The bank balance is the net amount of funds in a bank account at a specific point in time. It is calculated by subtracting the total debits (withdrawals) from the total credits (deposits) in the bank account. A positive bank balance indicates that the account has more funds than liabilities, while a negative balance indicates an overdraft. Option D: Current asset A current asset is an asset that is expected to be converted into cash or used up within one year or one operating cycle, whichever is longer. Cash in the bank is considered a current asset because it is readily available for use in the company's operations. Conclusion: Given that the credit side of the bank account is greater than the debit side, it suggests that more funds have been credited (deposited) into the account than debited (withdrawn). This situation typically indicates a bank overdraft, as it implies that the account has been overdrawn, resulting in a negative balance. Therefore, the correct answer is Option A: Bank overdraft.
2391:
N/A
2392:
B
2393:
B
2394:
C
2395:
B
2396:
D
2397:
B
2398:
D
2399:
C
2400:
D
2401:
B
2402:
B
2403:
C
2404:
A
2405:
B
2406:
A
2407:
A
2408:
D
2409:
D
2410:
D
2411:
B
2412:
D
2413:
C
2414:
D
2415:
B
2416:
C
2417:
B
2418:
B
2419:
B
2420:
A
2421:
C
2422:
D
2423:
C
2424:
C
2425:
B
2426:
C
2427:
A
2428:
B
2429:
C
2430:
D
2431:
A
2432:
D
2433:
D
2434:
A
2435:
C, G
2436:
C
2437:
B
2438:
B
2439:
A
2440:
B
2441:
C
2442:
D
2443:
C
2444:
A
2445:
B
2446:
B
2447:
C
2448:
A
2449:
D
2450:
B
2451:
A
2452:
B
2453:
A
2454:
C
2455:
A
2456:
A
2457:
B
2458:
C
2459:
C
2460:
A
2461:
C
2462:
C
2463:
B
2464:
A
Solution: The normal balance of capital account is Credit balance. Normal balance is the side where the balance of the account is normally found. Asset accounts normally have debit balances, while liabilities and capital normally have credit balances. Income has a normal credit balance since it increases capital .
2465:
B
Solution: The normal balance of asset account is Debit balance. Normal balance is the side where the balance of the account is normally found.
2466:
A
Solution: The normal balance of liability account is Credit balance. Normal balance is the side where the balance of the account is normally found. Asset accounts normally have debit balances, while liabilities and capital normally have credit balances. Income has a normal credit balance since it increases capital .
2467:
A
Solution: Debit increases the capital account balance statements is incorrect regarding capital account. It decreases the capital account balance.
2468:
D
Solution: Debit balance is the normal balance of a rent expense account. Asset accounts normally have debit balances.
2469:
A
Solution: Revenue and expense accounts are referred to as Nominal accounts because each period they are closed out to Income Summary in the closing process.
2470:
B
Solution: Office equipment's account is classified as Real account.
2471:
A
Solution: Nominal accounts in accounting are the temporary accounts, Revenue or Expense are transferred to profit and loss account and closed at the end of each accounting year.
2472:
A
Solution: Balance c/d is the closing balance of a ledger account.
2473:
A
Solution: A Trial Balance is a statement that shows the total of debit and credit balances of accounts. The total of debit amounts shall be equal to the credit amounts for the trial balance to tally. Hence, it verifies the arithmetical accuracy of the postings in the ledger accounts.
2474:
D
2475:
B
2476:
C
2477:
C
2478:
C
2479:
D
2480:
D
2481:
D
2482:
C
2483:
D
2484:
A
2485:
A
2486:
D, F
2487:
A
2488:
A
2489:
D
2490:
B
2491:
C
2492:
D
2493:
B
2494:
B
2495:
C
2496:
B
2497:
A
2498:
B
2499:
C
2500:
A
2501:
D
2502:
C
2503:
C
2504:
C, G
2505:
C
2506:
A
2507:
C
2508:
D
2509:
C
2510:
A
2511:
B
2512:
D, G
2513:
B
2514:
A
2515:
A
2516:
A
2517:
A
2518:
C
2519:
A
2520:
B
2521:
A
2522:
C
2523:
D
2524:
B
2525:
C
2526:
C
2527:
A
2528:
A
2529:
C
2530:
C
2531:
C
2532:
A
2533:
B
2534:
C
2535:
A
2536:
B
2537:
B
2538:
D
2539:
B
2540:
A
2541:
D
2542:
D
2543:
D
2544:
D
2545:
C
2546:
B
2547:
B
2548:
D
2549:
D
2550:
A
2551:
B
2552:
D
Solution: Closing stock does not reduce the resources of business. Closing stock is the amount of inventory that a business still has on hand at the end of a reporting period.
2553:
A
Solution: Outsider's claim against the assets of the business is called Liability. Liabilities are defined as a company's legal financial debts or obligations that arise during the course of business operations.
2554:
A
Solution: An expenditure whose benefit is finished or enjoyed immediately is called Expense. An expense is the cost of operations that a company incurs to generate revenue.
2555:
C
Solution: A company's merchandise, raw materials, finished and unfinished products which have not yet been sold is known as Inventory.
2556:
B
Solution: Credit is nature of Capital account. Asset accounts normally have debit balances, while liabilities and capital normally have credit balances.
2557:
B
Solution: The assets which have a limited useful life are termed as Depreciable assets. The assets which are held by a business for the production and supply of goods and services, expected to be used for more than an accounting year and have a limited useful life are known as Depreciable Assets.
2558:
A
Solution: A decrease in value of a fixed asset due to age, wear and tear is known as Depreciation. Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.
2559:
D
Solution: In balance sheet, fixed assets are shown at Written Down Value (WDV). If the asset is not impaired and the company operates under GAAP, then the cost model must be used.
2560:
B
Solution: The accrual basis of accounting records revenues when they are earned. In other words, under the accrual basis of accounting, the receipt of cash and the payment of cash are not the focus of reporting revenues and expenses.
2561:
D
2562:
B
2563:
C
2564:
D
2565:
C
2566:
A
2567:
C
2568:
B
2569:
A
2570:
A
2571:
A
Solution: Opening and closing inventories are recorded in Journal proper.
2572:
C
Solution: Crossed cheque is not a negotiable instrument. A cheque is a negotiable instrument. It can either be open or crossed. While a crossed cheque is not payable over the counter but shall be collected only through a banker. The amount payable for the crossed cheque is transferred to the bank account of the payee.
2573:
C
Solution: The installation expenses for a new machinery will be debited to Machinery A/c.
2574:
A
Solution: When obligation is not probable or the amount expected to be paid to settle the liability cannot be measured with sufficient reliability, it is called Contingent liability. Contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event.
2575:
D
Solution: A Trial Balance contains the balances of Real A/c and Nominal A/c and Personal A/c.
2576:
B
Solution: Error which affect only one account can be Error of posting. An error in which amount is posted to the wrong side of the same account is known as error of posting. For example, goods sold to X wrongly credited to his account.
2577:
D
Solution: In case goods are manufactured and segregated for specified consumers, the best method for valuation of inventory would be Specific identification method. Specific identification inventory valuation method is a way of keeping track of all items in an inventory individually.
2578:
B
Solution: Overriding commission is generally calculated on Total sales exceeding invoice value/cost. Overriding Commission is the extra commission allowed to the consignee in addition to the normal commission usually for making extra efforts to sell a new product in the market.
2579:
B
Solution: Economic life of an enterprise Is split into periodic interval as per Periodicity concept. It is the concept that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported upon.
2580:
D
2581:
A
2582:
A
2583:
A
2584:
C
2585:
A
2586:
C
2587:
A
2588:
D
2589:
C
2590:
D
2591:
A
Solution: In case of dissolution , the cash available for final distribution to the partners consists of two main components: 1. The sale of assets: This refers to the proceeds received from the sale of the partnership's assets, which will be converted into cash. 2. The beginning balance of cash: This is the amount of cash the partnership had before the sale of assets. After payment of liabilities: Liabilities must be settled before distributing any remaining cash to partners. Once the liabilities are cleared, the remaining cash is available for distribution. Option B: is incorrect because the balance of cash before the sale of assets does not account for the proper settlement of liabilities and does not specify the final amount available for distribution. Option C: is incorrect because it subtracts the beginning balance of cash from the sale of assets, which is not a correct method of calculating cash available for distribution. Option D: is incorrect because the total capital balances represent the partners' investments, not the cash available after asset sales and liability payments. Conclusion: The correct answer is Option A , as it properly reflects the cash available for distribution after asset sales and liability payments.
2592:
D
2593:
B
2594:
A
2595:
D
2596:
D
2597:
C
2598:
D
2599:
D
2600:
B
2601:
A
2602:
B
2603:
A
2604:
C
2605:
B
2606:
C
2607:
D
2608:
C
2609:
D
2610:
C
2611:
C
2612:
D
2613:
D
2614:
A
2615:
A
2616:
C
2617:
D
2618:
C
2619:
C
2620:
B
2621:
D
2622:
A
2623:
C
2624:
B
2625:
A
2626:
D
2627:
B
2628:
D
2629:
B
2630:
D
Solution: The following are the types of Journal: Purchase Journal, Sales Journal and Cash Journal.
2631:
A
Solution: The process of entering all transactions from the Journal to Ledger is called Posting. Posting refers to the process of transferring entries in the journal into the accounts in the ledger. Posting to the ledger is the classifying phase of accounting.
2632:
C
Solution: Balance Sheet is a statement showing the financial status of the comapany at any given time. The balance sheet, together with the income statement and cash flow statement, make up the cornerstone of any company's financial statements.
2633:
C
Solution: Profit & Loss statements is a statement of revenues and expenses for a specific period of time, usually a fiscal quarter or year.
2634:
D
Solution: Balance sheet is a statement of Assets, Liabilities and Capital.
2635:
D
Solution: Balance sheets are prepared annually. It lists the current and fixed assets on the left side of the sheet and liabilities and owner's equity (capital) on the right.
2636:
A
Solution: The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources is known as Liquidity ratio.
2637:
C
Solution: The measure of how efficiently the assets resources are employed by the firm is called Activity ratio. Activity ratios are a category of financial ratios that measure a firm's ability to convert different accounts within its balance sheets into cash or sales.
2638:
D
Solution: Bills payable, Outstanding expenses and Bank Overdraft are the current liabilities.
2639:
B
Solution: Current ratio = Current assets/Current liabilities. Current ratio is a comparison of current assets to current liabilities, calculated by dividing your current assets by your current liabilities.
2640:
C
2641:
A
2642:
C
2643:
D
2644:
C
2645:
C
2646:
B
2647:
B
2648:
C
2649:
B
2650:
C
2651:
B
2652:
A
2653:
A
2654:
B
2655:
B
2656:
D
2657:
C
2658:
C
2659:
B
2660:
C
2661:
C
2662:
C
2663:
C
2664:
B
2665:
C
2666:
C
2667:
C
2668:
A
2669:
A
2670:
B
2671:
B
2672:
C
2673:
C
2674:
C
2675:
A
2676:
A
2677:
C
2678:
D
2679:
C
2680:
A
2681:
D
2682:
A
2683:
C
2684:
C
2685:
D
2686:
A
2687:
A
2688:
B
2689:
B
2690:
A
2691:
C
2692:
B
2693:
D
2694:
D
2695:
D
2696:
D
2697:
C
2698:
D
2699:
C
2700:
A
2701:
A
2702:
D
2703:
C
2704:
A
2705:
C
2706:
B
2707:
B
2708:
C
2709:
A
Solution: Liquid or Quick assets = Current assets - (Stock + Work in progress).
2710:
B
Solution: Lower the Debt Equity ratio higher is the protection to creditors. Creditors usually like a low debt to equity ratio because a low ratio (less than 1) is the indication of greater protection to their money.
2711:
C
Solution: A higher inventory ratio indicates Better inventory management and Quicker turnover.
2712:
D
Solution: Return on Investment Ratio (ROI) = (Net profit / Total assets) x 100. Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.
2713:
C
Solution: A low Return on Investment Ratio (ROI) indicates Improper utilization of resources and Over investment in assets.
2714:
D
Solution: Sales expenditure budget is prepared by estimating the expense(s) of Advertisement, Market analysis and Salesman's salary.
2715:
D
Solution: Budgeting is difficult to apply in the Products subjected to rapid changes, Job order manufacturing and Uncertain market condition.
2716:
D
Solution: A Master Budget consists of Sales budget, Production budget and Material budget. The master budget is the aggregation of all lower-level budgets produced by a company's various functional areas, and also includes budgeted financial statements, a cash forecast, and a financing plan.
2717:
A
Solution: The accounting process involves recording Quantifiable economic event. An accounting event is a transaction that is recognized in the financial statements of an accounting entity.
2718:
C
Solution: In accounting, an economic event is referred to as Transaction. An accounting event is a transaction that is recognized in the financial statements of an accounting entity. In accounting, a transaction includes such things as recording the depreciation of an asset or payment of dividends. Accounting events can be either external or internal.
2719:
B
2720:
B
2721:
A
2722:
C
2723:
B
2724:
C
2725:
C
2726:
C
2727:
D
2728:
C
2729:
C
2730:
B
2731:
D
2732:
D
2733:
D
2734:
B
2735:
D
2736:
B
2737:
A
2738:
D
2739:
A
2740:
A
2741:
B
2742:
D
2743:
C
2744:
B
2745:
A
2746:
A
2747:
A
2748:
C
2749:
B
2750:
B
2751:
A
2752:
D
2753:
C
2754:
D
2755:
C
2756:
A
2757:
B
2758:
D
2759:
B
Solution: Assets = Liabilities + Owner's eq accounting equations is correct. It shows that a company's total amount of assets equals the total amount of liabilities plus owner's (or stockholders') equity.
2760:
A
Solution: A purchase book is a special purpose subsidiary book prepared by a business to record all credit purchases.
2761:
C
Solution: A document sent to customer when he returns the goods is called Credit note. A credit note or credit memo is a commercial document issued by a seller to a buyer.
2762:
D
Solution: Those transactions for which there is no separate book, are recorded in the Journal Proper. Only those transactions, which cannot be conveniently recorded in any of the other books of original entry i.e., subsidiary books or which are not sufficiently numerous to necessitate a special book being devised for them, are recorded in this book.
2763:
B
Solution: The person from whom the goods are purchased on credit are called Creditors. The person, firm or an organization from whom goods or services are purchased on credit by the business are called creditors of the business.
2764:
D
Solution: Wages, Carriage Inward, Octroi and Purchases, Wages, Coal Expenses sets of expense are the direct expense of business.
2765:
B
Solution: Suspense account given in the trial balance will be entered in the Balance sheet. If the Trial Balance does not agree, the difference is put to Suspense A/c. Suspense A/c on credit side of Trial Balance will be entered on the liabilities side of Balance Sheet. Suspense A/c on debit side of Trial Balance will be entered on the assets side of Balance Sheet.
2766:
A
Solution: The accounting equation is based on Dual aspect. The accounting equation is made visible in the balance sheet, where the total amount of assets listed must equal the total of all liabilities and equity.
2767:
D
Solution: Different accounting policies can be adopted in the Valuation of inventories, Valuation of Investments and Calculation of depreciation.
2768:
B
Solution: Normally the Personal account and Real account are balanced. Only accounts relating to assets and liabilities ,that is real account and personal accounts are balanced periodically.
2769:
B
2770:
A
2771:
B
2772:
A
2773:
B
2774:
B
2775:
C
2776:
C
2777:
C
2778:
C
2779:
C
2780:
C
2781:
A
2782:
B
2783:
B
2784:
A
2785:
A
2786:
D
2787:
D
2788:
D
Solution: When a debtor pays his dues there is no change in total assets or total liabilities because debtor in current assets decrease and cash & bank in current assets increase.
2789:
C
Solution: Acid test ratios indicate the short-term liquidity of a business. The acid-test ratio uses a firm's balance sheet data as an indicator of whether it has sufficient short-term assets to cover its short-term liabilities.
2790:
C
Solution: The maximum amount beyond which a company is not allowed to raise funds by issue of shares is Nominal capital. Nominal capital, also known as authorized capital, represents the securities that are designated for shareholders.
2791:
A
Solution: Based on Business entity concept, share capital account shown on the liability side of a balance sheet. The business entity concept also explains why owners' equity appears on the liability side of a balance sheet (i.e. credit side).
2792:
B
Solution: Legal work on patent application is not considered as Research & Development costs. Research and development (R&D) expenses are associated with the research and development of a company's goods or services.
2793:
C
Solution: Amortization of unidentified intangible assets is in terms of Matching concept. In the Matching Concept of Accounting, all the expenses matched with the revenue of an accounting period should only be taken into consideration.
2794:
B
Solution: Declared dividend should be classified in the balance sheet as a Current liability. Dividends payable are dividends that a company's board of directors has declared to be payable to its shareholders. Until such time as the company actually pays the shareholders, the cash amount of the dividend is recorded within a dividends payable account as a current liability.
2795:
D
Solution: If the opening inventory of a business is undercast, it will Increase gross profit as well as net profit.
2796:
D
Solution: Trial Balance is not a financial statement. Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first step towards the preparation of financial statements. It is usually prepared at the end of an accounting period to assist in the drafting of financial statements.
2797:
A
Solution: Provision for bad debts is made as per the Conservatism concept. The conservatism principle is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.
2798:
B
2799:
B
2800:
A
2801:
B
2802:
D
2803:
C
2804:
A
2805:
B
2806:
B
2807:
B
2808:
C
2809:
A
2810:
A
2811:
C
2812:
B
2813:
B
2814:
B
2815:
D
2816:
D
2817:
A
2818:
D
2819:
A
2820:
C
2821:
D
2822:
C
2823:
C
2824:
B
2825:
D
2826:
D
2827:
B
2828:
A
2829:
B
2830:
A
2831:
C
2832:
A, E
2833:
C
2834:
D
2835:
D
2836:
C
2837:
A
2838:
D
Solution: Goodwill of a company is considered as an intangible asset , hence it falls under fixed assets . Overdraft is a current liability as it represents the amount owed to a bank. Preliminary expenses are considered as capitalized expenses and are amortized over a period of time, hence they are part of reserves surplus . Premium on issue of shares is the amount received by the company over and above the face value of shares issued, it is categorized as fictitious assets . Correct Answer: Option D: a-2, b-1, c-3, d-4
2839:
B
2840:
B
2841:
B
Solution: Here's how to solve this commission problem: The factory manager gets a commission on the net profit *after* the commission itself is deducted . This means we can't simply take 10% of Rs. 2200. Let's say the commission amount is 'C'. Then the net profit *after* commission is (Rs. 2200 - C). The commission is 10% of this net profit, so we can write the equation: C = 0.10 * (2200 - C) . Now, let's solve for C: C = 220 - 0.10C C + 0.10C = 220 1.10C = 220 C = 220 / 1.10 C = 200 Therefore, the commission will be Rs. 200 . So, the correct answer is Option B: Rs. 200 .
2842:
C
2843:
C
2844:
C
2845:
C
2846:
A
2847:
B
2848:
A
2849:
B
2850:
C
2851:
A
2852:
B
2853:
A
2854:
C
2855:
B
2856:
C
2857:
C
2858:
C
2859:
D
2860:
D
2861:
B
2862:
B
2863:
B
2864:
B
2865:
C
2866:
C
2867:
B
2868:
D
2869:
C
2870:
C
2871:
C
2872:
B
2873:
C
2874:
D
2875:
B
2876:
D
2877:
D
Solution: To find the amount shown in the income and expenditure account for the year ending 31st December 2002, we need to calculate the total expenditure on stationary during the year. This can be done by adding the opening stock to the amount paid for stationary during the year and then subtracting the closing stock. So, the calculation would be: Opening stock + Payment during the year - Closing stock = Rs. 300 + Rs. 1,080 - Rs. 50 = Rs. 1,330 Therefore, the correct amount shown in the income and expenditure account for the year ending 31st December 2002 is Rs. 1,330.
2878:
A
2879:
A
2880:
D
2881:
C
2882:
C
2883:
A
2884:
A
2885:
D
2886:
A
2887:
A
2888:
A
2889:
B
2890:
C
2891:
C
2892:
C
2893:
C
2894:
C
2895:
C
2896:
A
2897:
B
2898:
A
2899:
C
2900:
D
2901:
D
2902:
C
2903:
C
2904:
A
2905:
D
2906:
B
2907:
A
2908:
B
2909:
C
2910:
A
2911:
B
2912:
A
2913:
D
2914:
A
2915:
A
2916:
B
2917:
C
2918:
A
2919:
C
2920:
A
2921:
C
2922:
D
2923:
C
2924:
D
2925:
B
2926:
D
2927:
D
2928:
B
Solution: Posting is the next step to Journalizing in accounting cycle. 10 Steps of Accounting Cycle are
Analyzing and Classify Data about an Economic Event. Journalizing the transaction. Posting from the Journals to General Ledger. Preparing the Unadjusted Trial Balance. Recording Adjusting Entries. Preparing the Adjusted Trial Balance. Preparing Financial Statements.
2929:
C
2930:
A
2931:
D
2932:
B
2933:
A
2934:
D
2935:
A
Solution: Issued capital refers to the portion of authorized capital that is offered to and taken up by the general public or shareholders. Subscribed capital is the part of issued capital that shareholders have agreed to buy. Authorized capital is the maximum amount of capital a company is allowed to issue. Reserve capital is not typically taken up by the general public
it's set aside for specific purposes. Therefore, the correct answer is Option A: Issued capital .
2936:
B
Solution: Shares for which amount is paid by public are called Paid up shares. Paid-Up Share Capital All paid-up capital is listed under the shareholders' equity section of the issuing company's balance sheet. Share capital can fall into four categories
paid-up share capital, called-up share capital, authorized share capital, and issued share capital.
2937:
A
2938:
B
2939:
C
2940:
C
Solution: Petty cash is used for payment of Small expenses relating to postage's and conveyance etc. Petty Cash is a current asset account
it is part of a company's cash.
2941:
D
Solution: The correct answer is D: Total assets - Total outside liabilities Here's why: * Owner's Equity (also called Net Worth or Capital) represents the owner's stake in the company. * Think of it this way: If you sold all the company's assets and paid off all its debts, what would be left over belongs to the owner(s). * Total Assets are everything the company owns (cash, buildings, equipment, etc.). * Total outside liabilities are everything the company owes to others (loans, accounts payable, etc.). * The Accounting Equation is: Assets = Liabilities + Owner's Equity. * We can rearrange this equation to solve for Owner's Equity: Owner's Equity = Assets - Liabilities * Therefore, Total Assets - Total outside liabilities = Owner's Equity. Let's look at why the other options are incorrect: * Option A: Fixed assets - Flood liabilities * Incorrect: This only considers a specific type of asset and a specific, and quite unusual, type of liability. * Option B: Fixed assets - Current liabilities * Incorrect: Again, this is too narrow. It doesn't include all assets or all liabilities. * Option C: Current assets - Fixed liabilities * Incorrect: Same reason as A and B
only considers specific assets and liabilites, not the overall view.
2942:
B
2943:
B
2944:
A
Solution: Cost of a fixed asset - Accumulated depreciation expenses of the fixed asset = Book value of a fixed asset. Except for the cost of land, the cost of a fixed asset is spread over its estimated useful life to the business
the amount allocated to each period is called depreciation expense.
2945:
D
Solution: When shares are issued to promoters for the services they have provided, the nominal value of the shares is typically debited to the Share capital account. This reflects the issuance of shares as part of the company's share capital. Option A: Preliminary expenses are not directly related to the issuance of shares and are usually amortized over time. Option B: Assets may be affected indirectly by the issuance of shares, but the nominal value of the shares is not directly debited to the Assets account. Option C: Goodwill is not typically debited when shares are issued
it's related to the purchase of a business at a premium. So, the correct answer is Option D: Share capital , as it reflects the nominal value of the shares issued to promoters.
2946:
A
2947:
C
2948:
B
Solution: The closing balance of petty cash book is considered as Asset. Petty Cash is a current asset account
it is part of a company's cash.
2949:
B
2950:
C
2951:
D
2952:
B