Accounting Quiz 6

1 / 50

Period cost include which of the following ?

Direct labor

factory overhead

selling Expenses & administrative expenses

selling Expense

2 / 50

Goods in stock worth 800 are destroyed by fire and the Insurance Co. is accepted the claim for 600. Adjustment would involve

Debit of 800 to Trading Account and credit of 600 and 200 to insurance company and Profit and Loss Account respectively

Credit insurance company for 600

Debit of 600 and 200 to insurance company and Profit and Loss Account respectively and credit of 800 to Trading Account

Deduct the 800 from closing stock in the Trading Account

3 / 50

Which of the following statements is false ? select the false from below options

Decrease in the value of the asset could decrease the value of a liability

Balance Sheet discloses financial position of the business

A person who owes to the business is called Debtor

Assets are to be shown in the Balance Sheet at the realizable value

4 / 50

The creation of provision for doubtful debts given as an adjustment requires____________?

Credit Profit and Loss Account and add the provision to debtors

Debit Profit & Loss Account and add the provision to debtors

Debit Profit and Loss Account and deduct the provision from debtors

Credit Profit & Loss Account and deduct the provision from debtors

5 / 50

Which of the following is a current liability?

Discount on issue of shares

Prepaid expenses

Trademark

Outstanding Salaries

6 / 50

Which of the following are/is a current asset?

Stock

Sundry Debtors

All

Prepaid insurance

7 / 50

Average Accounting Return is a measure of accounting profit relative to:

Intrinsic value

Market value

Cost

Book value

8 / 50

At the time of preparation of financial accounts, bad debt recovered account will be transferred to?

Profit & Loss A/c

Profit & Loss Adjustment A/c

Debtors A/c

Profit & Loss Appropriation A/c

9 / 50

Outstanding salaries is shown as___________?

A Liability

An Asset in the Balance Sheet

By adjusting it in the P & L A/c

Both B. and C. above

10 / 50

Computers taken on hire by a business for a period of twelve months should be classified as:___________?

Intangible assets

Current assets

Deferred revenue expenditure

Not an asset

11 / 50

Which of the following form of business organization is least regulated?

Limited Partnership

Corporation

Sole-proprietorship

General Partnership

12 / 50

Which of the following shall not be deducted from net profit while calculating managerial remuneration?

Debts considered bad and written off

Liability arising from a breach of contract

Director?s remuneration

Loss on sale of undertaking

13 / 50

The compensation paid by the borrower of fund to lender, from the borrower point of the cost of borrowing fund is called?

Nominal interest rate

Interest Rate

Required rate of return

All of the above

14 / 50

Property, Plant and Equipment are conventionally presented in the Balance Sheet at _________?

Original cost adjusted for general price-level changes

Replacement cost ? Accumulated Depreciation

Historical cost ? Depreciation portion thereof

Historical cost ? Salvage Value

15 / 50

Gross Profit is equal to_________?

Sales ? Closing Stock + Purchases

Opening Stock + Purchases ? Closing Stock

Sales ? Cost of goods sold

None of the above

16 / 50

Which of the following relationships is/are false?

Net Profit = Gross Profit ? Administration and Other expenses

Opening Stock + Purchases ? Closing Stock = Cost of Sales

Net Profit = Gross Profit + Administration expenses and Other expenses

Both B. and C. above

17 / 50

If actual bad debts are more than the provision for bad debts, then there will be a_____________?

Debit balance of Provision for Bad Debts Account

Debit balance of Discount on Debtors Account

Debit balance of Bad Debts Account

Credit balance of Provision for Bad Debts Account

18 / 50

Insurance prepaid is shown as:___________?

Current Liability

Fixed Asset

Current Asset

Income

19 / 50

Which of the following is not true with regard to preparation of Profit & Loss Account?

Net Profits are ascertained on the basis of current costs

Profit & Loss Account is prepared for a certain period and hence it is an interim statement

Net Profits as disclosed by P&L Account is not absolute

Profit & Loss Account does not disclose the effect of non-financial items

20 / 50

If unexpired insurance appears in the Trial Balance, it should be:

Debited to the Profit & Loss Account

Credited to the Profit & Loss Account

Shown on the liabilities side of the Balance Sheet

Shown on the assets side of the Balance Sheet

21 / 50

Which of the following will not appear in Profit and Loss Account of a business?

Accrued expenses

Bad debts

Reserve for discount on Sundry Creditors

Drawings

22 / 50

Which of the following entries is correct in respect of reserve for discounts on accounts payable?

Debit Accounts Payable A/c and Credit P&L A/c

Debit P&L A/c and Credit Reserve for Discount on Accounts Payable A/c

Debit Reserve for Discount on Accounts Payable A/c and credit Accounts Payable A/c

Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c

23 / 50

During the accounting period, sales revenue is Rs. 25,000 and accounts receivable increases by Rs. 8,000. What will be the amount of cash received from customers for the period?

Rs. 17,000

Rs. 33,000

Rs. 25,000

Rs. 8,000

24 / 50

LIFO stands for__________?

Lots in , Few out

?Last in, First Out

Last input, First Output

Link input, Format Output

25 / 50

If a company has contingent liabilities, they appear in the__________?

Balance Sheet

Chairman?s report

Directors? report

Notes on account to Balance Sheet

26 / 50

Which of the following is not a financial statement?

Profit and Loss Account

Balance Sheet

Trial Balance

Funds Flow Statement

27 / 50

Bad debts recovered is:

Added to debtors in Balance Sheet

Reduced from debtors in Balance Sheet

Credited to P&L A/c

Debited to P&L A/c

28 / 50

On scrutiny of a firm?s books of accounts, it was observed that the following errors have occurred in the previous years but have not yet been rectified. i. Depreciation for 2011-2012- 7,000 understated ii. Accrued expenses as at March 31, 2013 ? 10,000 understated

17,000 Overstated

7,000 Overstated

10,000 Overstated

17,000 Understated

29 / 50

The balance of Revaluation Reserve pertaining to an asset that has been disposed off or retired can be transferred to?

General Reserve A/c

Profit & Loss A/c

Asset A/c

Capital Reserve A/c

30 / 50

Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?

All of the above

It violates the matching principle of accounting

The bad debt expense is not matched with the related sales

Revenue is overstated in the year of sales

31 / 50

_________is the cost of converting raw material into finished products?

Explicit cost

Prime cost

Job order cost

Conversion cost

32 / 50

Recent developments have made much of a company?s inventory obsolete. This obsolete inventory should be?

Written down to zero or its scrap value

Carried in the accounting records at cost until it is sold

Shown in the Balance Sheet at its replacement cost

Shown in the Balance Sheet at cost, but classified as a non-current asset

33 / 50

Short term Assets expected to be converted into cash within 1 year or less than?

Fixed Assets

Current Assets

All of the above

Current Assets& current liabilities

34 / 50

Depreciation appearing in the Trial Balance should be?

Shown as liability in Balance Sheet

Debited to P&L A/c

Both A. and C. above

Reduced from related asset in Balance Sheet

35 / 50

The Balance Sheet gives information regarding the____________?

Results of operations for a particular period

Financial position as on a particular date

Profit earning capacity for a particular period

Financial position during a particular period

36 / 50

Which of the following is not classified as inventory in the financial statements?

Work-in-process

Stores and spares

Advance payments made to suppliers for raw materials

Finished goods

37 / 50

The adjustment to be made for prepaid expenses is____________?

Deduct prepaid expenses from respective expenses and show it as an asset

Deduct prepaid expenses from respective expenses and show it as a liability

Add prepaid expenses to respective expenses and show it as a liability

Add prepaid expenses to respective expenses and show it as an asset

38 / 50

The Profit and Loss Account shows the:

Cost of goods sold during the period

Financial results of the concern for a period

Financial results of the concern on a particular date

Financial position of the concern on a particular date

39 / 50

Which of the following accounts appear(s) in the Balance Sheet of a business? i. Stock at the end of the financial year ii. Stock at the beginning of the financial year iii. Drawings iv. Prepaid Rent

Only (iii) above

Both (i)and (iii) above

(i), (iii), (iv) and (v) above

Only (i) above

40 / 50

Tax deducted at source appears in the Balance Sheet

On the liabilities side under provisions

On the liabilities side under current liabilities

On the assets side under current assets

On the assets side under loans and advances

41 / 50

Prepaid expenses are valued on the Balance Sheet at

Cost less expired portion

Current cost

Replacement cost

Cost to acquire less accumulated amortization

42 / 50

Which of the following are/is not a fixed asset?

Both A. and C. above

Stock

Vehicle

Fixed deposit in bank

43 / 50

Which of the following is not an intangible asset?

Franchise

Trade mark

Secret Profit

Accounts Receivable

44 / 50

A club paid subscription fees of `1,400. Out of which ` 200 is prepaid. In such case

P&L A/C is debited with 1,400

Both B. and C. above

200 is shown as current asset

P&L A/C is debited with 1,200

45 / 50

Net sales equals, sales minus:

Return outwords

cost of goods sold

carriage on sales

Return inwards

46 / 50

Which of the following statement is considered as the accountant?s snapshot of firm?s accounting value as of a particular date?

Balance Sheet

Retained Earning Statement

Income Statement

Cash Flow Statement

47 / 50

Which of the following equations is correct?

Gross Profit ? Opening Stock + Direct expenses + Purchases +Closing stock = Sales

Gross Profit+ Sales+ Direct expenses+ Purchases- Closing stock = Opening Stock

Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock = Sales

Gross Profit+ Sales+ Direct expenses+ Purchases+ Closing stock = Opening stock

48 / 50

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

Matching concept

Money measurement concept

Going concern concept

Business entity concept

49 / 50

An income statement in which each item expressed as percentage of Sale?

common size income statement

All of the Above

income statement

Balance sheet

50 / 50

Sundry debtors as per Trial Balance is 43,000 which includes 2,200 due from ?H in respect of goods sent to him on approval basis, the cost price of which is 1,800. Rectification would involve:

Deducting 1,800 from debtors

Deducting 1,800 from closing stock and deducting 2,200 each from debtors and sales

Adding 2,200 to closing stock

Adding 1,800 to closing stock and deducting 2,200 each from debtors and sales

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