Accounting Quiz 6

1 / 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:

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

Adding 2,200 to closing stock

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

Deducting 1,800 from debtors

2 / 50

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

Liability arising from a breach of contract

Director?s remuneration

Loss on sale of undertaking

Debts considered bad and written off

3 / 50

Depreciation appearing in the Trial Balance should be?

Reduced from related asset in Balance Sheet

Debited to P&L A/c

Both A. and C. above

Shown as liability in Balance Sheet

4 / 50

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

Not an asset

Deferred revenue expenditure

Current assets

Intangible assets

5 / 50

Period cost include which of the following ?

selling Expenses & administrative expenses

Direct labor

selling Expense

factory overhead

6 / 50

Tax deducted at source appears in the Balance Sheet

On the assets side under current assets

On the liabilities side under provisions

On the liabilities side under current liabilities

On the assets side under loans and advances

7 / 50

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

Accrued expenses

Bad debts

Drawings

Reserve for discount on Sundry Creditors

8 / 50

LIFO stands for__________?

Lots in , Few out

Link input, Format Output

Last input, First Output

?Last in, First Out

9 / 50

Net sales equals, sales minus:

carriage on sales

cost of goods sold

Return outwords

Return inwards

10 / 50

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

All of the above

Nominal interest rate

Interest Rate

Required rate of return

11 / 50

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

Limited Partnership

Sole-proprietorship

General Partnership

Corporation

12 / 50

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

Shown on the liabilities side of the Balance Sheet

Credited to the Profit & Loss Account

Shown on the assets side of the Balance Sheet

Debited to the Profit & Loss Account

13 / 50

Which of the following is not a financial statement?

Funds Flow Statement

Trial Balance

Balance Sheet

Profit and Loss Account

14 / 50

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

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

Balance Sheet discloses financial position of the business

A person who owes to the business is called Debtor

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

15 / 50

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

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

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

Deduct the 800 from closing stock in the Trading Account

16 / 50

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

Stock

Both A. and C. above

Fixed deposit in bank

Vehicle

17 / 50

The Balance Sheet gives information regarding the____________?

Financial position during a particular period

Profit earning capacity for a particular period

Financial position as on a particular date

Results of operations for a particular period

18 / 50

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

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

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

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

19 / 50

Which of the following is a current liability?

Outstanding Salaries

Trademark

Prepaid expenses

Discount on issue of shares

20 / 50

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

Cost

Market value

Intrinsic value

Book value

21 / 50

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

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

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

22 / 50

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

Income Statement

Cash Flow Statement

Retained Earning Statement

Balance Sheet

23 / 50

The Profit and Loss Account shows the:

Financial results of the concern for a period

Financial position of the concern on a particular date

Financial results of the concern on a particular date

Cost of goods sold during the period

24 / 50

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

All of the above

Fixed Assets

Current Assets

Current Assets& current liabilities

25 / 50

Which of the following relationships is/are false?

Net Profit = Gross Profit ? Administration and Other expenses

Net Profit = Gross Profit + Administration expenses and Other expenses

Both B. and C. above

Opening Stock + Purchases ? Closing Stock = Cost of Sales

26 / 50

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

Business entity concept

Money measurement concept

Going concern concept

Matching concept

27 / 50

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

Credit Profit and Loss Account and add the provision to debtors

Credit Profit & Loss Account and deduct the provision from debtors

Debit Profit & Loss Account and add the provision to debtors

Debit Profit and Loss Account and deduct the provision from debtors

28 / 50

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

Revenue is overstated in the year of sales

The bad debt expense is not matched with the related sales

All of the above

It violates the matching principle of accounting

29 / 50

Which of the following is not an intangible asset?

Franchise

Trade mark

Secret Profit

Accounts Receivable

30 / 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

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

Only (i) above

Both (i)and (iii) above

Only (iii) above

31 / 50

Insurance prepaid is shown as:___________?

Fixed Asset

Current Liability

Income

Current Asset

32 / 50

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

Replacement cost ? Accumulated Depreciation

Historical cost ? Salvage Value

Historical cost ? Depreciation portion thereof

Original cost adjusted for general price-level changes

33 / 50

Which of the following equations is correct?

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

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

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

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

34 / 50

_________is the cost of converting raw material into finished products?

Job order cost

Conversion cost

Explicit cost

Prime cost

35 / 50

The adjustment to be made for prepaid expenses is____________?

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

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

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

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

36 / 50

Gross Profit is equal to_________?

Opening Stock + Purchases ? Closing Stock

None of the above

Sales ? Cost of goods sold

Sales ? Closing Stock + Purchases

37 / 50

Which of the following are/is a current asset?

Stock

Prepaid insurance

All

Sundry Debtors

38 / 50

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

Finished goods

Stores and spares

Advance payments made to suppliers for raw materials

Work-in-process

39 / 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

10,000 Overstated

17,000 Understated

7,000 Overstated

17,000 Overstated

40 / 50

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

200 is shown as current asset

Both B. and C. above

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

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

41 / 50

Prepaid expenses are valued on the Balance Sheet at

Cost to acquire less accumulated amortization

Cost less expired portion

Current cost

Replacement cost

42 / 50

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

Profit & Loss A/c

General Reserve A/c

Capital Reserve A/c

Asset A/c

43 / 50

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

Debit balance of Discount on Debtors Account

Debit balance of Provision for Bad Debts Account

Debit balance of Bad Debts Account

Credit balance of Provision for Bad Debts Account

44 / 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. 25,000

Rs. 8,000

Rs. 33,000

Rs. 17,000

45 / 50

Outstanding salaries is shown as___________?

Both B. and C. above

An Asset in the Balance Sheet

By adjusting it in the P & L A/c

A Liability

46 / 50

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

Notes on account to Balance Sheet

Balance Sheet

Directors? report

Chairman?s report

47 / 50

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

Profit & Loss A/c

Profit & Loss Appropriation A/c

Debtors A/c

Profit & Loss Adjustment A/c

48 / 50

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

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

Carried in the accounting records at cost until it is sold

Written down to zero or its scrap value

Shown in the Balance Sheet at its replacement cost

49 / 50

Bad debts recovered is:

Credited to P&L A/c

Reduced from debtors in Balance Sheet

Debited to P&L A/c

Added to debtors in Balance Sheet

50 / 50

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

All of the Above

income statement

common size income statement

Balance sheet

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