Deck 41: Accounting and Financial Management : Part B

Question 1

The Accommodation bill is drawn

A)to finance actual purchase or sale of goods.
B)to facilitate trade transmission.
C)when both parties are in need of funds.
D)None of the above

Answer 1

when both parties are in need of funds.

Question 2

Balance of X's account in creditors ledger is transferred to X's account in debtors ledger, in this case

A)X's account in debtors ledger will be debited.
B)X's account in creditors ledger will be debited.
C)Suspense account will be debit

Answer 2

X's account in creditors ledger will be debited.

Question 3

Ground rent or surface rent means

A)Minimum rent
B)Maximum royalty payable
C)Minimum royalty payable
D)Fixed rent payable in addition to minimum rent

Answer 3

Fixed rent payable in addition to minimum rent

Question 4

Accounting standard in India are issued by

A)Government of India
B)Reserve Bank of India
C)The Institute of Chartered Accountants of India
D)The Institute of Accounting Standard of India

Question 5

As on 31st March, 2017 debtors and additional bad debts are ` 8,00,000 and ` 10,000 respectively. If the provision for bad debts is made at 5% on debtors then amount of such provision will be

A)40,000
B)50,000
C)39,500
D)40,500

Question 6

Income and Expenditure Account is a

A)Nominal Account
B)Real Account
C)Personal Account
D)Artificial Personal Account

Question 7

Creditors ledger adjustment account is opened in

A)General Ledger
B)Debtors Ledger
C)Creditors Ledger
D)Either (b) or (c)

Question 8

Receipts and Payments account is a

A)Nominal Account
B)Real Account
C)Personal Account
D)Artificial Personal Account

Question 9

A resource owned by the business with purpose of using it for generating future profit, is known as

A)Capital
B)Asset
C)Liability
D)Surplus

Question 10

Outward Invoice issued is a source document of

A)Purchase Book
B)Sales Book
C)Return Inward Book
D)Return Outward Book

Question 11

Which of the following is of capital nature?

A)Commission on purchases
B)Cost of repairs
C)Rent of factory
D)Wages paid for installation of machinery

Question 12

If any stock is taken by a co-venturer, it will be treated as

A)an income of the joint venture.
B)an expense of the joint venture.
C)to be ignored from joint venture.
D)it will be treated in the personal books of the co-venturer.

Question 13

Contingent liability would appear

A)on the liability side of the Balance Sheet.
B)on the assets side of the Balance Sheet.
C)do not shown in the books of accounts.
D)as a note in Balance Sheet.

Question 14

Income statement of a Charitable Institution is known as

A)Statement of profit and loss
B)Receipts and Payments Account
C)Income and Expenditure Account
D)Profit and Loss Account

Question 15

Which of the following account is mainly prepared at the time of dissolution of the firm

A)Revaluation A/c
B)Goodwill A/c
C)Realization A/c
D)Memorandum Revaluation A/c

Question 16

Advertisement expenses are apportioned among departments in the proportion of

A)sales of each department
B)purchases of each department
C)no. of units sold by each department
D)cost of sales of each department

Question 17

In Hire Purchase system cash price plus interest is known as

A)Capital value of asset
B)Book value of asset
C)Hire purchase price of asset
D)Hire purchase charges

Question 18

__________ is similar to the Profit and loss A/c

A)Income and Expenditure A/c
B)Receipts and Payments A/c
C)Balance Sheet
D)None of the Above

Question 19

Kuntal draws a bill on shyam for ` 7,000.Kuntal endorsed it to Ram. Ram endorsed it to Rahim. The payee of the bill will be:

A)Kuntal
B)Ram
C)Shyam
D)Rahim

Question 20

Bad debts are apportioned among departments in the proportion of

A)Sales of each department
B)Number of units sold by each department
C)Cost of sales of each department
D)None of the above

Question 21

Which of the following is not a Fundamental Accounting Assumption?

A)Going Concern
B)Consistency
C)Accrual
D)Materiality

Question 22

________ is equal to estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

A)Net Realizable value
B)Cost of Conversion
C)Cost of Purchase
D)None of the above

Question 23

_______ are investments which are held beyond the current period as to sale or disposal.

A)Non-current Investments
B)Current Investments
C)Current Liabilities
D)None of the above

Question 24

An obligation which may or may not materialize is a/an _______________.

A)Loss
B)Asset
C)Contingent Liability
D)None of the above

Question 25

________________ voucher denotes payment of cash.

A)Cash Payment
B)Cash Receipt
C)Bank Payment
D)All of the above

Question 26

Which of the following is an example of Capital Expenditure?

A)Inventory of raw materials, work-in-progress and finished goods.
B)Insurance premium.
C)Taxes and legal expenses.
D)None of the above.

Question 27

Which of the following errors is not disclosed by a Trial Balance?

A)Errors of Omission
B)Errors of Commission
C)Compensating Errors
D)All of the above

Question 28

___________ is specially suited to mines, oil wells, quarries, sandpits and similar assets of a wasting character.

A)Depletion
B)Depreciation
C)Amortisation
D)Dilapidation

Question 29

The following account has a credit balance

A)Plant and Equipment A/c
B)Loans A/c
C)Purchase A/c
D)None of the above

Question 30

From the following details estimate the capital as on 31.03.2017. Capital as on 01.04.2016 - `4,10,000. Drawings `40,000, Profit during the year ` 50,000

A)4,10,000
B)4,50,000
C)4,20,000
D)4,00,000

Question 31

A and B purchased a piece of land for ` 30,000 and sold it for `60,000 in 2016. Originally A had contributed `12,000 and B `8,000. The profit on venture will be

A)30,000
B)20,000
C)60,000
D)Nil

Question 32

AB Ltd. has signed at 31st December, 2017 the Balance Sheet date, a contract where the Total Revenue is estimated at ` 15 Crores and Total Cost is estimated at ` 20 Crores. No work began on the contract. Is the Contractor required to give any accounting effect for the year ended 31st December, 2017?

A)Recognize expected loss of `5 Crores
B)Recognize `15 Crores as Profit
C)No entry
D)None of the above

Question 33

Which of the following item does not match with receipts and payments account?

A)It is a summarized cash book
B)Transactions are recorded in it on cash basis
C)It records revenue transactions only
D)It serves the purpose of a real account

Question 34

Which of the following is/ are the basic features of a Joint Venture

A)The profit or loss on joint venture is shared between the co-venturers in the agreed ratio
B)The co-venturers may or may not contribute initial capital
C)The JV is dissolved once the purpose of the business is over
D)All of the above

Question 35

Excess of hire purchase price over cash price is known as

A)Installment
B)Cash down payment
C)Interest
D)Capital value of asset

Question 36

Which of the following is/are revenue expenditure?

A)Consumable Stores
B)Taxes and legal expenses
C)Rent of factory building
D)All of Above

Question 37

AS-9 is related to

A)Revenue Recognition
B)Cash Flow Statement
C)Accounting for Fixed Assets
D)Disclosure of Accounting policies

Question 38

The person to whom bill is endorsed is known as __________.

A)Endorsee
B)Drawee
C)Drawer
D)None of the above

Question 39

Which of the following is/are feature/features of Income and Expenditure Account?

A)It follows Nominal Account
B)All Capital incomes and expenditures are excluded
C)Profit on sale of asset is credited
D)All of the above

Question 40

The debts which are not bad is known as

A)Good debt
B)Bad Debt
C)Doubtful Debt
D)None of the above

Question 41

A transaction without immediate cash settlement is known as

A)Cash Transaction.
B)Credit Transaction.
C)Deferred Transaction.
D)None of the above.

Question 42

_________ liabilities represent proprietor's equity, i.e. all thoseamount which are entitled to the proprietor

A)External.
B)Debenture.
C)Internal.
D)None of the above.

Question 43

Goods are transferred from Department X to Department Y at a price so as to include a profit of 33.33% on cost. If the value of closing stock of Department Y is ` 48,000, then the amount of stock reserve on closing stock will be

A)12,000
B)9,000
C)18,000
D)None of the above

Question 44

Bad debts Recovered `1,000. It will be

A)Credited to Bad debts A/c
B)Credited to debtor's personal A/c
C)Debited to creditor's personal A/c
D)Credited to bad debts recovered A/c

Question 45

Which of the following purpose is served from the preparation of Trial Balance?

A)To check the arithmetical accuracy of the recorded transactions.
B)To ascertain the balance of any ledger account.
C)To facilitate the preparation of final accounts promptly.
D)All of the above.

Question 46

_________ contains the transactions relating to goods that are returned by us to our creditors

A)Return Inward.
B)Return Outward.
C)Sales Daybook.
D)None of the above.

Question 47

The basic principles of ____ concept is that business is assumed to exist for an indefinite period

A)Going Concern.
B)Business Entity.
C)Money Measurement.
D)None of the above.

Question 48

Capital Profit arises from which of the following?

A)Profit prior to incorporation.
B)Premium received on issue of shares.
C)Profit made on re-issue of forfeited shares.
D)All of the above.

Question 49

Which of the following cannot be detected by Trial Balance?

A)Errors of Omission.
B)Errors of Principal.
C)Errors of Misposting.
D)All of the above.

Question 50

The concept that business is assumed to exist for an indefinite period and is not established with the objective of closing down is referred to as

A)Money Measurement concept
B)Going Concern concept
C)Full Disclosure concept
D)Dual Aspect concept

Question 51

In the hire purchase system interest charged by vendor is calculated on the basis of

A)Outstanding cash Price
B)Hire purchase Price
C)Installment amount
D)None of the above

Question 52

Goods are transferred from Department A to Department B at a price so as to include a profit of 33.33% on cost. If the value of closing stock of Department Y is `36,000, then the amount of stock reserve on closing stock will be

A)12,000
B)9,000
C)18,000
D)None of the above

Question 53

Bad debts Recovered `750. It will be

A)Credited to Bad debts A/c
B)Credited to debtor's personal A/c
C)Debited to creditor's personal A/c
D)Credited to bad debts recovered A/c

Question 54

Which of the following is a function of journal:

A)Analytical Function
B)Recording Function
C)Historical Function
D)All of the above

Question 55

The out flow of funds to acquire an asset that will benefit the business for more than one accounting period is referred to as -

A)Miscellaneous Expenditure
B)Revenue Expenditure
C)Capital expenditure
D)Deferred Revenue Expenditure

Question 56

The cost of a Fixed Assets of a business has to be written off over its

A)Natural Life
B)Accounting Life
C)Physical Life
D)Estimated Economic Life

Question 57

Receipts and Payments Account records

A)Only revenue nature receipts
B)Only capital nature receipts and payment
C)Only revenue nature receipts and payments
D)Both the revenue and capital nature receipts and payments

Question 58

Excess of minimum rent over royalty is known as

A)Maximum rent
B)Excess workings
C)Short workings
D)Deficiency of actual royalty

Question 59

If any transaction is not recorded in the primary books the same is recorded in _______

A)Journal Proper
B)Sales Day Book
C)Cash Book
D)None of the above

Question 60

Which of the following is not a feature of Trial Balance

A)It is a list of debit and credit balances which are extracted from various ledger accounts.
B)It does not prove arithmetical accuracy which can be determined by audit.
C)It is not an account. It is only a statement of account.
D)All the transactions are primarily recorded in this book, hence it is the primary book of entry.

Question 61

The person in whose favour the bill is endorsed is known as __________.

A)Endorsee
B)Drawee
C)Drawer
D)None of the above

Question 62

Which of the following is/ are the basic features of a Joint Venture

A)The profit or loss on joint venture is shared between the co-venturers in the agreed ratio.
B)The co-venturers may or may not contribute initial capital.
C)The JV is dissolved once the purpose of the business is over.
D)All of the above.

Question 63

The following account has a credit balance

A)Plant and Equipment A/c
B)Purchase Returns A/c
C)Purchase A/c
D)None of the above

Question 64

When Sales = `3,60,000, Purchase = ` 3,20,000, Opening Stock = `68,000 and rate of the Gross Profit is 20% on cost, the Closing Stock would be

A)1,00,000
B)44,000
C)46,000
D)None of the above

Question 65

As per AS - 1, which of the following is not a Fundamental Accounting Assumptions?

A)Conservatism
B)Going Concern
C)Consistency
D)Accrual

Question 66

Name the book in which, entries are recorded on the basis of debit notes issued.

A)Sales book
B)Purchase Book
C)Sales Return Book
D)Purchase Return Book

Question 67

Name the principle involved in the classification of Assets as Fixed and Current

A)Cost Principle
B)Going Concern Principle
C)Matching Principle
D)Prudence Principle

Question 68

If a fixed amount is withdrawn on the first day of every month of calendar year by a partner in partnership firm, then for what period the interest on the total amount of drawings will be calculated?

A)4.5 months
B)5.5 months
C)6.5 months
D)7.5 months

Question 69

Del credere commission is allowed to consignee

A)for making cash sales
B)for making credit sales
C)for making extra sales
D)for undertaking risk of bad debts

Question 70

Any change in the accounting policy relating to inventories which has a material effect in the current or later periods should be disclosed. This is in accordance with the accounting principle of:

A)Going Concern
B)Conservatism
C)Consistency
D)Disclosure

Question 71

An amount spent in connection with obtaining a License for starting the factory is

A)Revenue Expenditure
B)Capital Expenditure
C)Pre-paid Expenditure
D)None of the above

Question 72

According to AS-15 (Revised) superannuation scheme which has relevance only to the final salary and number of years of service is

A)Defined Benefit Scheme
B)Defined Contribution Scheme
C)Non-Contributory Scheme
D)Both (a) and (b)

Question 73

Expenditures in respect of certain types of assets whose usefulness does not expires in the year of their occurrence but generally expires in the near future are called

A)Revenue Expenditure
B)Capital Expenditure
C)Deferred Revenue Expenditure
D)None of the above

Question 74

The main objective of average clause contained in a fire insurance policy is to

A)Encourage full Insurance
B)Discourage full Insurance
C)Encourage under Insurance
D)Encourage full Insurance and Discourage under Insurance

Question 75

Short working can be recouped out of

A)Minimum Rent
B)Excess of Actual Royalty over Minimum Rent
C)Excess of Minimum Rent over Actual Royalty
D)Profit and Loss Account

Question 76

AS-6 (revised) is applicable to which one of the following assets?

A)Goodwill
B)Live stock
C)Plantation
D)Plant and Machinery

Question 77

According to AS-3 (Revised) interest and dividends received in the case of a manufacturing enterprise should be classified as cash flow from

A)Operating Activities
B)Financing Activities
C)Investing Activities
D)Both (b) and (c)

Question 78

Provision for bad and doubtful debts is created in anticipation of actual bad debts on the basis of:

A)Business Entity Concept.
B)Conservatism Concept.
C)Accrual Concept.
D)Full Disclosure Concept.

Question 79

The out flow of funds to acquire an asset that will benefit the business for more than one accounting period is referred to as:

A)Miscellaneous Expenditure.
B)Revenue Expenditure.
C)Capital Expenditure.
D)Deferred Revenue Expenditure.

Question 80

Goods are sent to the Branch at cost plus 25%. The loading on invoice price is:

A)20%.
B)25%.
C)30%.
D)None of the above.