Set#05 (Accounting) Flashcards by Compitative Exams MCQs

Which of the following is not an intangible asset?
0

A. Trade mark
B. Franchise
C. Accounts Receivable
D. Secret Profit

C. Accounts Receivable

How well did you know this?

Not at all

Perfectly

Which of the following is a current liability?
0

A. Prepaid expenses
B. Trademark
C. Discount on issue of shares
D. Outstanding Salaries

D. Outstanding Salaries

How well did you know this?

Not at all

Perfectly

Based on which of the following concepts, is Share Capital Account shown on the liabilities side of a Balance Sheet?
0

A. Business entity concept
B. Money measurement concept
C. Going concern concept
D. Matching concept

A. Business entity concept

How well did you know this?

Not at all

Perfectly

Which of the following is not a contingent liability?
1

A. Debts included in Sundry Debtors which are doubtful in nature
B. Uncalled liability on partly paid shares
C. Claims against the company not acknowledged as debts
D. Arrears of fixed cumulative dividend

A. Debts included in Sundry Debtors which are doubtful in nature

How well did you know this?

Not at all

Perfectly

Which of the following are current assets of a business?
0

i. Income received in advance
ii. Stock
iii. Debtors
iv. Pre-paid expenses
v. Accrued income

A. Both (i) and (iv) above
B. Both (ii) and (iii) above
C. (i),(ii) and (iii) above
D. (ii),(iii),(iv) and (v) above

D. (ii),(iii),(iv) and (v) above

How well did you know this?

Not at all

Perfectly

Closing entries are generally passed:
0

A. At the time of opening new books of account
B. At the time of closing the accounts
C. During the course of accounting period any time
D. After certification of accounts

B. At the time of closing the accounts

How well did you know this?

Not at all

Perfectly

Closing stock appearing in the Trial Balance is shown in:
0

A. Trading A/c and Balance Sheet
B. Profit and Loss A/c
C. Balance Sheet only
D. Trading A/c only

C. Balance Sheet only

How well did you know this?

Not at all

Perfectly

Depreciation Account appearing in the Trial Balance is shown in:
0

A. Profit and Loss A/c
B. Trading A/c
C. Deducted from the concerned assets A/c
D. Shown on the liability side

A. Profit and Loss A/c

How well did you know this?

Not at all

Perfectly

Profit on sale of old plant is:___________?
0

A. In Trading A/c
B. In Profit and Loss Appropriation A/c
C. Profit and Loss A/c
D. Being a non operating item ignored

C. Profit and Loss A/c

How well did you know this?

Not at all

Perfectly

Carriage on goods purchased is shown in:___________?
0

A. Profit and Loss A/c
B. Capitalized with work in progress
C. Trading A/c
D. Shown in Balance Sheet

C. Trading A/c

How well did you know this?

Not at all

Perfectly

Which of these is not an operating income?
0

A. Income from sale of trading goods
B. Bad debts recovered
C. Interest on FDs
D. None

C. Interest on FDs

How well did you know this?

Not at all

Perfectly

Riaz holds an average inventory of 36,000(CP) with an inventory turnover of 5 times. If the firm makes a gross profit of 25% on sales, find the total sales of the company.
0

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

A. 2,40,000

How well did you know this?

Not at all

Perfectly

From the following details what will be the partners commission? Net profit before charging partners commission 65,000. Partners commission @ 11% after charging such commission.
0

A. 6441
B. 5431
C. 7654
D. 9876

A. 6441

How well did you know this?

Not at all

Perfectly

From the following details what will be the partners commission? Net profit before charging partners commission 65,000. Partners commission 11% before charging such commission
0

A. 6441
B. 5431
C. 7150
D. 5876

C. 7150

How well did you know this?

Not at all

Perfectly

Arrangement of Balance Sheet in a logical order is known as __________?
0

A. Dressing Balance Sheet
B. Marshalling Balance Sheet
C. Formatting Balance Sheet
D. Make up of Balance Sheet

B. Marshalling Balance Sheet

How well did you know this?

Not at all

Perfectly

Find the value of opening stock from the following data. Purchases 1,50,000, Closing stock 30,000 Sales 2,20,000, Gross profit 40,000.
0

A. 50,000
B. 55,000
C. 60,000
D. 65,000

C. 60,000

How well did you know this?

Not at all

Perfectly

A Bill of Exchange is drawn on 1st April, 2018 payable after 3 months. The due date of the bill is?
0

A. 30th June,2018
B. 1st July,2018
C. 4th July,2018
D. 4th August,2018

C. 4th July,2018

How well did you know this?

Not at all

Perfectly

When bill discounted with the bank is dishonored?
0

A. Acceptor‘s Account is debited in the books of drawer
B. Bills Receivable Account is credited in the books of drawer
C. Bank Account is debited in the books of drawer
D. Bills Payable Account is debited in the books of drawer

A. Acceptor‘s Account is debited in the books of drawer

How well did you know this?

Not at all

Perfectly

In the books of the drawer, the accounting treatment involved on receipt of a bill of exchange duly accepted by the drawee is?
0

i. Debit Bills Receivable Account
ii. Debit Drawee‘s Account
iii. Credit Drawee‘s Account
iv. Credit Sales Account

A. Only (i) above
B. Both (ii) and (iv) above
C. Both (i) and (iii) above
D. Both (i) and (iv) above

C. Both (i) and (iii) above

How well did you know this?

Not at all

Perfectly

The noting charges levied on dishonour of an endorsed bill by the Notary Public are to be borne by
0

A. The drawer of the bill
B. The person responsible for dishonour
C. The holder of the bill
D. The endorser of the bill

B. The person responsible for dishonour

How well did you know this?

Not at all

Perfectly

The drawer of a trade bill passes relevant entries with regard to the transaction involved in it. But, in case of an accommodation bill, he passes an entry in addition to the usual entries. The additional entry so passed is with respect to
0

A. Discounting of the bill with the bank
B. Payment of the bill on due date
C. Remitting or receiving the amount
D. Sending the bill to bank for collection

C. Remitting or receiving the amount

How well did you know this?

Not at all

Perfectly

Under which of the following situations, is journal entry not passed in the books of the drawer?
0

A. When a discounted bill is honoured by the drawee on the due date
B. When a bill is sent to the bank for collection
C. When a bill is renewed at the request of the drawee
D. When a debtor accepts a bill drawn by the drawer

A. When a discounted bill is honoured by the drawee on the due date

How well did you know this?

Not at all

Perfectly

Which of the following is not a feature of a promissory note?
0

A. It must be in writing
B. It contains an unconditional promise to pay
C. It is payable to the bearer
D. It must be signed by the maker

C. It is payable to the bearer

How well did you know this?

Not at all

Perfectly

How many parties are generally found in a Bill of Exchange?
0

A. 4
B. 2
C. 3
D. 5

C. 3

How well did you know this?

Not at all

Perfectly

Negotiable Instrument Act was enacted in_________? 0 A. 1981 B. 1881 C. 1871 D. 2001

B. 1881

Which of these is not an essential feature of a bill of exchange? 0 A. Unconditional B. Certainty of amount C. In writing D. Amount to be paid in foreign currency

D. Amount to be paid in foreign currency

A foreign bill of exchange is generally drawn up in___________? 0 A. Triplicate B. Duplicate C. Single D. Quadruplicate

A. Triplicate

Which of these are not required in a promissory note? 0 A. Acceptance B. Unconditional promise to pay C. Properly stamped D. Payment to be made legal currency

A. Acceptance

X draws a Bill of Exchange on Y for 10,000 on 1-1-2013 for 3 months. The due date of the bill will be_________? 0 A. 4-4-2013 B. 3-4-2013 C. 1-4-2013 D. 31-3-2013

A. 4-4-2013

Accommodation bills are generally for? 0 A. Genuine trade reasons B. For mutual financial accommodation C. To help augment money supply D. All the three

B. For mutual financial accommodation

A cash deposit made by business appears on the bank statement as _______ balance? 0 A. Debit B. Credit C. Expenses D. Liability

B. Credit

A check returned by bank marked “NSF” means that: 0 A. Bank can’t verify your identity B. There are not sufficient funds in your account C. Check has been forged D. Check can’t be cashed being illegal

B. There are not sufficient funds in your account

Bank reconciliation statement is prepared by____________? 0 A. Accountant of the business B. Manager of the business C. Controller of the bank D. Accountant of the bank

A. Accountant of the business

Bank charges amounting to $5000 was not entered in the cash book. Identify the correct adjustment in cash book? 0 A. Bank charges will be debited in cash book B. Bank charges will be added to cash book balance C. Bank charges will be credited in cash book D. Bank charges need no adjustment in cash book

C. Bank charges will be credited in cash book

Favorable balance of cash book implies that 0 A. Credit balance of cash book B. Debit balance of cash book C. Bank overdraft D. Adjusted balance of cash book

B. Debit balance of cash book

Bank reconciliation statement is the comparison of a bank statement (sent by bank) with the _________ (prepared by business). 0 A. Cash receipt journal B. Cash payment journal C. Cash book D. Financial statements

C. Cash book

In the Bank reconciliation statement “Deposit in transit” is usually: 0 A. Subtracted from bank balance B. Added to bank balance C. Added to Cash book balance D. Subtracted from cash book balance

B. Added to bank balance

Unpresented checks also referred as____________? 0 A. Uncollected checks B. Uncredited checks C. Outstanding checks D. Bounced checks

C. Outstanding checks

A discount of $2000 was given to a supplier on his prompt repayment of debt but the cashier entered the gross amount in cash book. What should be the adjustment in cash to work out the correct balance of cash book? 0 A. $2000 will be debited in cash book B. $2000 will be credited in cash book C. $4000 will be debited in cash book D. $4000 will be credited in the cash book

B. $2000 will be credited in cash book

Standing orders are ________ 0 A. Credited in the cash book B. Debited in the cash book C. Entered in the bank statement D. Entered in the petty cash balance

A. Credited in the cash book

Uncollected checks also referred as______________? 0 A. Unpresented checks B. Uncredited checks C. Outstanding checks D. Bounced checks

B. Uncredited checks

___________ are checks that are issued by the business but not yet presented to bank 0 A. Uncollected checks B. Uncredited checks C. Outstanding checks D. Bounced checks

C. Outstanding checks

Bank sent debit advice of $500 to company being interest on overdraft. It wasn’t entered in cash book. Identify the correct adjustment in cash book. 0 A. $500 will be debited B. $500 will be credited C. Non-adjustable D. $1000 will be subtracted

B. $500 will be credited

In bank reconciliation statement the amount of outstanding checks is added to ________ balance of cash book. 0 A. Adjusted B. Unadjusted C. Understated D. Overstated

A. Adjusted

Which of the following error results in unadjusted cash book balance? 0 A. Outstanding checks B. Unpresented checks C. Deposit in transit D. Omission of Bank charges

A. Outstanding checks

_________ Checks that are presented to bank but not yet credited by the bank. 0 A. Unpresented checks B. Uncredited checks C. Outstanding checks D. Bounced checks

B. Uncredited checks

Favorable balance of bank statement implies that 0 A. Credit balance B. Debit balance C. Bank overdraft D. Adjusted balance

A. Credit balance

Balance as per cash book(adjusted.=$1000, Unpresented checks=$2000, Uncredited checks=$500, Deposit in transit=$500. Compute the balance as per bank statement. 0 A. $2000 B. Zero C. $3000 D. $2500

A. $2000

A company was entered in hire purchase agreement and had to pay $1000 per month. Three payments were made via bank account but no entry was found in cash book. Identify the correct adjustment in cash book 0 A. $1000 will be added to cash book balance B. $2000 will be deducted from cash book balance C. $3000 will be added to cash book balance D. $3000 will be subtracted from cash book balance

D. $3000 will be subtracted from cash book balance

$5000 deposited in bank account was entered twice in the cash book. Identify the correct adjustment in cash book. 0 A. $5000 will be credited B. $5000 will be debited C. $10,000 will be credited D. $10,000 will be debited

A. $5000 will be credited

An entry which is made on both sides of a cash book is called__________? 0 A. Cash entry B. Contra entry C. Payment entry D. Compound entry

B. Contra entry

Cash book records:______________? 0 A. Cash payments B. Cash receipts C. Cash payments and cash receipts D. Neither cash payments nor cash receipts

C. Cash payments and cash receipts

Cash book is prepared by____________? 0 A. Bank B. Accountant of business C. Manager of a company D. Bank’s cashier

B. Accountant of business

Cash book is prepared by____________? 0 A. Bank B. Accountant of business C. Manager of a company D. Bank’s cashier

B. Accountant of business

Discount received is recorded on which of the following side of a cash book? 0 A. Receipts B. Payments C. Incomes D. Expenditures

B. Payments

The closing balance of petty cash book is considered as_________? 0 A. Liability B. Asset C. Expenses D. Income

B. Asset

A credit balance in cash book indicates? 0 A. Bank balance B. Cash at bank C. Bank overdraft D. Bank underdraft

C. Bank overdraft

Petty cash fund is supposed to be replenished? 0 A. Every day B. Every half year C. Every year D. At the end of every accounting period

D. At the end of every accounting period

Postdated checks are considered as__________? 0 A. Cash B. Bank balance C. Accounts receivable D. Cash reserve

C. Accounts receivable

Which of the following is generally not the party to a check? 0 A. Payee B. Payer C. Bank D. Seller

D. Seller

Cash book with cash and discount column is mostly referred as________? 0 A. Simple cash book B. Two column cash book C. Three column cash book D. Petty cash book

B. Two column cash book

A simple or one column cash book usually has which of the following main columns? 0 A. Bank B. Payments C. Discount D. Cash

D. Cash

Purchase of office equipment for cash will be recorded on which of the following sides of a cash book? 0 A. Receipts B. Payments C. Incomes D. Expenditures

B. Payments

Postage stamps on hand are considered as_________? 0 A. Bank B. Prepaid expenses C. Accounts receivable D. Creditor

B. Prepaid expenses

A cash book that is used to record the small payments of cash is generally referred as_________? 0 A. Simple cash book B. Two column cash book C. Three column cash book D. Petty cash book

D. Petty cash book

Drawings by owner of business are generally recorded on which of the following side of a cash book? 0 A. Receipts B. Payments C. Incomes D. Expenditures

B. Payments

Payment of rent expenses is recorded on which side of cash book? 0 A. Receipts B. Payments C. Income D. Expense

B. Payments

Cash discount is allowed on _______ repayment of debt. 4 A. Lump sum B. Prompt C. Actual D. None of them

B. Prompt

Introduction capital by owner of business is recorded on which side of a cash book? 0 A. Receipts B. Payments C. Incomes D. Expenditures

A. Receipts

A cash book with cash, bank and discount column is commonly referred as________? 0 A. Cash book B. Two columns cash book C. Three columns cash book D. Petty cash book

C. Three columns cash book

The most common imprest system is the ________ system? 0 A. Petty cash B. Cash book C. Cash receipt D. Discount

A. Petty cash

Which English alphabet is similar to the shape of an account? 0 A. I B. T C. H D. None

B. T

When production is equal to sales, which of the following is TRUE? 0 A. No change occurs to inventories for either use absorption costing or variable costing methods B. The use of absorption costing produces a higher net income than the use of variable costing C. The use of absorption costing produces a lower net income than the use of variable costing D. The use of absorption costing causes inventory value to increase more than they would though the use of variable costing

A. No change occurs to inventories for either use absorption costing or variable costing methods

An average cost is also known as________? 0 A. Variable cost B. Unit cost C. Total cost D. Fixed cost

B. Unit cost

Costs that change in response to alternative courses of action are called___________? 0 A. Relevant costs B. Differential costs C. Target costs D. Sunk costs

B. Differential costs

The total cost incurred in the operation of a business undertaking other than the cost of manufacturing and production is known as________? 0 A. Direct cost B. Variable cost C. Commercial cost D. Conversion cost

C. Commercial cost

Consider the following data for a company during the month of June 2012 Budgeted hours 4,000 Standard hours for actual production 4,400 Maximum possible hours in the budget period 4,800 Actual hours 3,800 The activity ratio of the company during the month is 1 A. 111% B. 120% C. 95% D. 117%

A. 111%

Which of the following bases is not appropriate for apportionment of Transport department‘s cost ? 0 A. Crane hours B. Crane value C. Truck Mileage D. Truck value

B. Crane value

The cost of obsolete inventory acquired several years ago, to be considered in a keep vs. disposal decision is an example of : 0 A. Uncontrollable cost B. Sunk cost C. Avoidable cost D. Opportunity cost

B. Sunk cost

Budgeted sales for the next year is 5,00,000 units. Desired ending finished goods inventory is 1,50,000 units and equivalent units in ending W-I-P inventory is 60,000 units. The opening finished goods inventory for the next year is 80,000 units, with 50,000 equivalent units in beginning W-I-P inventory How many equivalent units should be produced? 4 A. 5,80,000 B. 5,50,000 C. 5,00,000 D. 5,75,000

A. 5,80,000

If the asset turnover and profit margin of a company are 1.85 and 0.35 respectively, the return on investment is. 0 A. 0.65 B. 0.35 C. 1.50 D. 5.29

A. 0.65

A company is currently operating at 80% capacity level. The production under normal capacity level is 1,50,000 units. The variable cost per unit is ` 14 and the total fixed costs are ` 8,00,000. If the company wants to earn a profit of ` 4,00,000, then the price of the product per unit should be 1 A. 37.50 B. 38.25 C. 24.00 D. 35.00

C. 24.00

Consider the following data pertaining to the production of a company for a particular month : 2 Opening stock of raw material 11,570 Closing stock of raw material 10,380 Purchase of raw material during the month 1,28,450 Total manufacturing cost charged to product 3,39,165 Factory overheads are applied at the rate of 45% of direct labour cost. The amount of factory overheads applied to production is A. 65,025 B. 94,287 C. 95,020 D. 1,52,624

A. 65,025

If the minimum stock level and average stock level of raw material are 4,000 and 9,000 units respectively, find out its reorder quantity. 1 A. 8,000 units B. 11,000 units C. 10,000 units D. 9,000 units

C. 10,000 units

One of the most important tools in cost planning is__________? 0 A. Direct cost B. Cost Sheet C. Budget D. Marginal Costing.

C. Budget

A worker has a time rate of 15/hr. He makes 720 units of component (standard time : 5 minutes/ unit) in a week of 48 hours. His total wages including Rowan bonus for the week is 1 A. 792 B. 820 C. 840 D. 864

D. 864

A Ltd. Has sales of 2,200, total fixed cost of 570, variable cost of 1,540, raw material consumed of ` 1,100, number of units sold 22,000. What shall be the BEP 9 in units) if raw material price is reduced by 2%? 2 A. 18,387 B. 18,560 C. 18,750 D. 19,000

A. 18,387

Find the cost of goods sold if goods are sold for 2,000 at 25% profit on cost? 22 A. 1,600 B. 1,500 C. 1,000 D. 1,800

A. 1,600

The process of paying off debt over time in regular installment of interest & principal sufficient to repay the loan in fully by its maturity date. 0 A. Amortization B. Loan Payment C. Liability D. Securitization

A. Amortization

IFRS 9 explains about? 0 A. Inventory B. Accounts Payable C. Accounts Receivable D. Expenses

C. Accounts Receivable