Deck 13: Financial Statements and Accounting Principles

Question 1

Interest on debenture is

A)Adjustment of profit
B)appropriation of profit
C)charge on profit
D)none of these

Answer 1

charge on profit

Question 2

In the balance sheet of a company, debentures are shown under which heading

A)Secured loan
B)unsecured loan
C)provisions
D)reserves and surplus

Answer 2

Secured loan

Question 3

In the balance sheet of a company , the discount on issue of debentures is shown under which heading

A)Fixed asset
B)current asset
C)investment
D)miscellaneous expenditure

Answer 3

miscellaneous expenditure

Question 4

Advance payment of tax is in the nature of

A)Capital expenditure
B)prepaid expenses
C)outstanding expenses
D)revenue expenditure

Question 5

Debentures are shown in the balance sheet under head

A)Current asset loans and advances
B)investments
C)secured loan
D)unsecured loan

Question 6

Preliminary expense Is an example of

A)Fixed asset
B)current asset
C)investment
D)fictitious asset

Question 7

Divisible profit do not include

A)Insurance fund
B)reserve fund
C)profit and loss account balance
D)revaluation

Question 8

The transfer of profit to reserve should not exceed

A)5% of profit
B)10% of profit
C)15% of profit
D)20% of profit

Question 9

Loose tools are shown in the balance sheet under

A)Fixed asset
B)investment
C)current asset
D)miscellaneous expenditure

Question 10

Discount on shares and debentures are shown in

A)P/L Appropriation a/c
B)asset side of the b/s
C)liability side of the b/s
D)none of these.

Question 11

Calls in arrear Is

A)Shown as current asset
B)deducted from share capital
C)shown as current liability
D)shown under miscellaneous expenditure

Question 12

The amount set aside to meet the loss of bad debt is

A)Provision
B)liability
C)reserve
D)contingent liability

Question 13

When the proposed dividend exceeds 20% of the paid up capital, percentage of profit to be transferred to reserve is

A)10%
B)7.5%
C)2.5%
D)5%

Question 14

In the case of joint stock company, goodwill is sown on the asset side under the head

A)Fixed asset
B)investment
C)current asset
D)miscellaneous expenditure

Question 15

Advance payment of tax should be shown on the

A)Debit side of P/L a/c
B)debit side of P/L appropriation a/c
C)asset side of the B/S
D)liability side of the B/S

Question 16

Which of the following items will be taken in the P/L a/c below the line

A)Provision for taxation
B)transfer to sinking fund
C)contribution to PF
D)preliminary expenses written off

Question 17

Scrip dividend means

A)Unclaimed dividend
B)arrears of dividend
C)dividend paid other than cash
D)cash dividend

Question 18

Which of the following would not appear in a limited company's appropriation a/c

A)Transfer to revaluation reserve
B)proposed taxation
C)interim dividend
D)transfer to general reserve.

Question 19

As per the rules framed under the companies Act, 1956, if the dividend proposed by a company is 12% of the paid up capital, the amount to be transferred to reserve must not be less than

A)5% of current year profit
B)7.5% of the current year profit
C)10% of the current year profit
D)2.5% of the current year profit.

Question 20

Banks show the provision for income tax under the head

A)Contingent assets
B)contingent liabilities
C)other liabilities and provisions
D)borrowings.

Question 21

Rebate on bills discounted is

A)An item of income
B)a liability
C)income received in advance
D)accrued income.

Question 22

Which of the following does not include under the head "other asset"

A)Silver
B)interest accrued
C)gold
D)inter office adjustment

Question 23

A non banking asset is

A)An item of office equipment
B)any asset required from the debtors in satisfaction of claim
C)money at call and short notice
D)furniture and fixtures

Question 24

In a bank balance sheet, unclaimed dividend will be shown under the head

A)Contingent liabilities
B)other liabilities
C)borrowings
D)none of these.

Question 25

With effect from 31/03/2005, a doubt full asset is none which has remained in the substandard category for

A)18 month
B)12 month
C)6 month
D)none of these