Question 1

Which of the following should be deducted from the share capital to find out paid up capital&#10;A)Calls in advance&#10;B)Calls in arrear&#10;C)Shares forfeited account&#10;D)Discount on issue of shares.

Accepted Answer

Calls in arrear are deducted from the share capital to find out the paid-up capital because they represent the amount that has not been paid by the shareholders on the called-up capital.

Question 2

In the balance sheet of a company, the discount on issue of debentures is shown under which heading&#10;A)Fixed asset&#10;B)Current asset&#10;C)Investment&#10;D)Miscellaneous expenditure

Accepted Answer

The discount on issue of debentures is shown under the heading "Miscellaneous expenditure" on the asset side of a company's balance sheet. This is because it is an expense that is not directly related to the core operations of the company and is amortized over the period of the debentures.

Question 3

The original cost at which an asset or liability is acquired is known as --------&#10;A)Amortization&#10;B)Replacement cost&#10;C)Historical cost&#10;D)Carrying cost

Accepted Answer

Historical cost is the original cost at which an asset or liability is acquired and recorded in the financial statements.

Question 4

The international accounting standard Committee was set up in --------&#10;A)1982&#10;B)1976&#10;C)1967&#10;D)2009

Accepted Answer

The International Accounting Standards Committee (IASC) was established in 1973, not 1967, but 1967 is the closest option available.

Question 5

The process of converting foreign subsidiary financial statements into the home currency is known as -------&#10;A)Transmission&#10;B)Translation&#10;C)Consolidation&#10;D)Reconstruction

Accepted Answer

Translation is the correct term for converting foreign subsidiary financial statements into the home currency. This process is necessary for multinational corporations to consolidate their financial statements into a single currency for reporting purposes.

Question 6

Accounting in india is governed by the -----&#10;A)Income tax department&#10;B)Company law board&#10;C)Institute of chartered accountants of india&#10;D)Reserve bank of india

Accepted Answer

The Institute of Chartered Accountants of India (ICAI) is the national professional accounting body of India. It is responsible for setting the standards for accounting and auditing practices in India.

Question 7

Interim dividend paid is always shown&#10;A)In P/L Appropriation A/c&#10;B)On the asset side of the B/S&#10;C)On the liability side of the B/S&#10;D)None of these.

Accepted Answer

Interim dividends are declared and paid by a company's board of directors before the company's annual earnings have been calculated. They are typically recorded in the Profit & Loss Appropriation Account, which is used to show how the company's profit after tax is distributed, including dividends.

Question 8

Unclaimed dividend is shown in the B/S under the head&#10;A)Current liability&#10;B)Unsecured loan&#10;C)Reserve and surplus&#10;D)Provisions

Accepted Answer

Unclaimed dividends are considered a current liability because they represent an obligation of the company to its shareholders that is expected to be settled within the company's normal operating cycle or one year, whichever is longer.

Question 9

Debentures are shown in the B/S under head.&#10;A)Current assets, loans and advances&#10;B)Investment&#10;C)Non current liabilities&#10;D)Unsecured loan

Accepted Answer

Debentures are a type of long-term borrowing used by companies and are shown under non-current liabilities in the balance sheet because they are not due for payment within the next 12 months.

Question 10

Preliminary expenses is an example of&#10;A)Fixed asset&#10;B)Current asset&#10;C)Investment&#10;D)Fictitious asset

Accepted Answer

Preliminary expenses are considered fictitious assets because they do not have a physical existence or realizable value but are expenses incurred during the formation of a company, which are written off over a period of time against the company's earnings.

Question 11

Divisible profit do not include&#10;A)Insurance fund&#10;B)Reserve fund,&#10;C)profit and loss account balance&#10;D)revaluation reserve

Accepted Answer

The answer of Divisible profit do not include&#10;A)Insurance fund&#10;B)Reserve fund,&#10;C)profit...

Question 12

loose tools are shown in the B/S under the head.&#10;A)Fixed asset&#10;B)Investment&#10;C)Current asset&#10;D)Miscellaneous expenditure

Accepted Answer

The answer of loose tools are shown in the B/S...

Question 13

Discount on shares and debentures are shown in&#10;A)Profit and loss appropriation account&#10;B)Asset side of the balance sheet&#10;C)Liability side of the balance sheet&#10;D)None of these

Accepted Answer

The answer of Discount on shares and debentures are shown...

Question 14

In the case of joint stock company, goodwill is shown on the asset side under the head.&#10;A)Non current asset&#10;B)Investment&#10;C)Current asset&#10;D)Miscellanious expenditure

Accepted Answer

The answer of In the case of joint stock company,...

Question 15

Which of the following item will be taken in the surplus statement&#10;A)Provision for taxation&#10;B)Transfer to sinking fund&#10;C)Contribution to PF&#10;D)Preliminary expenses written off

Accepted Answer

The answer of Which of the following item will be...

Question 16

Which of the following would not appear in a limited company's surplus/Deficit statement&#10;A)Transfer to revaluation reserve&#10;B)Provision for taxation&#10;C)Interim dividends&#10;D)Transfer to general reserve

Accepted Answer

The answer of Which of the following would not appear...

Question 17

Outstanding expenditure is a __________ account.&#10;A)Nominal&#10;B)Personnel&#10;C)Real&#10;D)Current

Accepted Answer

The answer of Outstanding expenditure is a __________ account.&#10;A)Nominal&#10;B)Personnel&#10;C)Real&#10;D)Current...

Question 18

_________ deals with the depreciation account.&#10;A)AS4&#10;B)AS6&#10;C)AS10&#10;D)AS13

Accepted Answer

The answer of _________ deals with the depreciation account.&#10;A)AS4&#10;B)AS6&#10;C)AS10&#10;D)AS13...

Question 19

According to which concept, proprietor of a business is treated as a creditors to the extent of his capital&#10;A)Money measurement&#10;B)Cost&#10;C)Dual aspect&#10;D)Business entity

Accepted Answer

The answer of According to which concept, proprietor of a...

Question 20

Net worth of business means&#10;A)Total assets&#10;B)Fixed assets - current assets.&#10;C)Equity capital&#10;D)Total assets - total liabilities

Accepted Answer

The answer of Net worth of business means&#10;A)Total assets&#10;B)Fixed assets...

Question 21

The policy of anticipate no profit and provide for all possible losses arises due to&#10;A)Convention of consistency&#10;B)Convention of conservatism&#10;C)Convention of materiality&#10;D)Convention of full disclosure

Accepted Answer

The answer of The policy of anticipate no profit and...

Question 22

Capital account is a&#10;A)Fictitious account&#10;B)Personal account&#10;C)Liability account&#10;D)Nominal account

Accepted Answer

The answer of Capital account is a&#10;A)Fictitious account&#10;B)Personal account&#10;C)Liability account&#10;D)Nominal...

Question 23

Revenue is generally recognized as being earned at the point of time&#10;A)Sale is effected&#10;B)Cash is effected&#10;C)Production is completed&#10;D)All of the above

Accepted Answer

The answer of Revenue is generally recognized as being earned...

Question 24

The fundamental accounting equation Assets = liabilities is the formal expression of&#10;A)Matching concept&#10;B)Entity concept&#10;C)Going concern concept&#10;D)Dual aspect concept

Accepted Answer

The answer of The fundamental accounting equation Assets = liabilities...

Question 25

Depreciation is&#10;A)An accounting necessity only&#10;B)Tax necessity only&#10;C)Tax and accounting necessity&#10;D)Tax, account and audit necessity

Accepted Answer

The answer of Depreciation is&#10;A)An accounting necessity only&#10;B)Tax necessity only&#10;C)Tax...

Deck 22: Accounting Concepts and Principles