Accounting Quiz 6

1 / 50

Outstanding salaries is shown as___________?

By adjusting it in the P & L A/c

A Liability

Both B. and C. above

An Asset in the Balance Sheet

2 / 50

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

Debited to the Profit & Loss Account

Shown on the liabilities side of the Balance Sheet

Credited to the Profit & Loss Account

Shown on the assets side of the Balance Sheet

3 / 50

Depreciation appearing in the Trial Balance should be?

Both A. and C. above

Reduced from related asset in Balance Sheet

Debited to P&L A/c

Shown as liability in Balance Sheet

4 / 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

Required rate of return

Nominal interest rate

Interest Rate

5 / 50

Gross Profit is equal to_________?

Sales ? Closing Stock + Purchases

Opening Stock + Purchases ? Closing Stock

Sales ? Cost of goods sold

None of the above

6 / 50

LIFO stands for__________?

Last input, First Output

Lots in , Few out

Link input, Format Output

?Last in, First Out

7 / 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

8 / 50

Which of the following relationships is/are false?

Net Profit = Gross Profit + Administration expenses and Other expenses

Both B. and C. above

Opening Stock + Purchases ? Closing Stock = Cost of Sales

Net Profit = Gross Profit ? Administration and Other expenses

9 / 50

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

Both A. and C. above

Fixed deposit in bank

Vehicle

Stock

10 / 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

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

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

11 / 50

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

Chairman?s report

Directors? report

Balance Sheet

Notes on account to Balance Sheet

12 / 50

Which of the following equations is correct?

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

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

13 / 50

Which of the following is a current liability?

Discount on issue of shares

Prepaid expenses

Outstanding Salaries

Trademark

14 / 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 1,400

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

15 / 50

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

Balance sheet

common size income statement

All of the Above

income statement

16 / 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. 25,000

Rs. 8,000

Rs. 33,000

17 / 50

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

Going concern concept

Matching concept

Money measurement concept

Business entity concept

18 / 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 (i) above

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

Both (i)and (iii) above

Only (iii) above

19 / 50

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

Carried in the accounting records at cost until it is sold

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

Written down to zero or its scrap value

Shown in the Balance Sheet at its replacement cost

20 / 50

Bad debts recovered is:

Credited to P&L A/c

Added to debtors in Balance Sheet

Reduced from debtors in Balance Sheet

Debited to P&L A/c

21 / 50

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

Deduct the 800 from closing stock in the Trading Account

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

22 / 50

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

Advance payments made to suppliers for raw materials

Finished goods

Stores and spares

Work-in-process

23 / 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

Revenue is overstated in the year of sales

The bad debt expense is not matched with the related sales

24 / 50

_________is the cost of converting raw material into finished products?

Job order cost

Conversion cost

Explicit cost

Prime cost

25 / 50

Which of the following is not an intangible asset?

Accounts Receivable

Franchise

Secret Profit

Trade mark

26 / 50

Which of the following are/is a current asset?

Sundry Debtors

Prepaid insurance

Stock

All

27 / 50

Which of the following is not a financial statement?

Balance Sheet

Profit and Loss Account

Funds Flow Statement

Trial Balance

28 / 50

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

Accrued expenses

Reserve for discount on Sundry Creditors

Bad debts

Drawings

29 / 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

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

Deducting 1,800 from debtors

Adding 2,200 to closing stock

30 / 50

Prepaid expenses are valued on the Balance Sheet at

Cost less expired portion

Replacement cost

Cost to acquire less accumulated amortization

Current cost

31 / 50

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

Retained Earning Statement

Income Statement

Balance Sheet

Cash Flow Statement

32 / 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 an asset

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

33 / 50

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

Debts considered bad and written off

Director?s remuneration

Liability arising from a breach of contract

Loss on sale of undertaking

34 / 50

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

Not an asset

Current assets

Deferred revenue expenditure

Intangible assets

35 / 50

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

Balance Sheet discloses financial position of the business

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

A person who owes to the business is called Debtor

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

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

37 / 50

Net sales equals, sales minus:

Return inwards

carriage on sales

Return outwords

cost of goods sold

38 / 50

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

Debit Profit & Loss Account and add the provision to debtors

Credit Profit and 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

39 / 50

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

Historical cost ? Salvage Value

Historical cost ? Depreciation portion thereof

Replacement cost ? Accumulated Depreciation

Original cost adjusted for general price-level changes

40 / 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

17,000 Understated

10,000 Overstated

7,000 Overstated

41 / 50

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

Intrinsic value

Market value

Book value

Cost

42 / 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 Bad Debts Account

Credit balance of Provision for Bad Debts Account

Debit balance of Discount on Debtors Account

43 / 50

Insurance prepaid is shown as:___________?

Income

Fixed Asset

Current Asset

Current Liability

44 / 50

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

Sole-proprietorship

Corporation

Limited Partnership

General Partnership

45 / 50

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

Profit & Loss Appropriation A/c

Profit & Loss A/c

Debtors A/c

Profit & Loss Adjustment A/c

46 / 50

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

Current Assets& current liabilities

All of the above

Fixed Assets

Current Assets

47 / 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

48 / 50

The Balance Sheet gives information regarding the____________?

Results of operations for a particular period

Profit earning capacity for a particular period

Financial position as on a particular date

Financial position during a particular period

49 / 50

Tax deducted at source appears in the Balance Sheet

On the assets side under loans and advances

On the assets side under current assets

On the liabilities side under provisions

On the liabilities side under current liabilities

50 / 50

Period cost include which of the following ?

Direct labor

selling Expense

selling Expenses & administrative expenses

factory overhead

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