Accounting Quiz 6

1 / 50

Period cost include which of the following ?

selling Expense

Direct labor

selling Expenses & administrative expenses

factory overhead

2 / 50

Which of the following is a current liability?

Trademark

Discount on issue of shares

Outstanding Salaries

Prepaid expenses

3 / 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

4 / 50

Prepaid expenses are valued on the Balance Sheet at

Cost less expired portion

Replacement cost

Cost to acquire less accumulated amortization

Current cost

5 / 50

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

Going concern concept

Money measurement concept

Matching concept

Business entity concept

6 / 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

7 / 50

_________is the cost of converting raw material into finished products?

Job order cost

Conversion cost

Prime cost

Explicit cost

8 / 50

Which of the following is not an intangible asset?

Franchise

Accounts Receivable

Trade mark

Secret Profit

9 / 50

Net sales equals, sales minus:

Return inwards

carriage on sales

Return outwords

cost of goods sold

10 / 50

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

Stores and spares

Advance payments made to suppliers for raw materials

Work-in-process

Finished goods

11 / 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

7,000 Overstated

10,000 Overstated

17,000 Understated

17,000 Overstated

12 / 50

The adjustment to be made for prepaid expenses is____________?

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

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

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

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

13 / 50

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

Intangible assets

Not an asset

Deferred revenue expenditure

Current assets

14 / 50

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

Credit Profit & Loss Account and deduct the provision from debtors

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

15 / 50

LIFO stands for__________?

Last input, First Output

Link input, Format Output

Lots in , Few out

?Last in, First Out

16 / 50

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

Liability arising from a breach of contract

Loss on sale of undertaking

Director?s remuneration

Debts considered bad and written off

17 / 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

18 / 50

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

Debit balance of Bad Debts Account

Debit balance of Provision for Bad Debts Account

Debit balance of Discount on Debtors Account

Credit balance of Provision for Bad Debts Account

19 / 50

The Profit and Loss Account shows the:

Cost of goods sold during the period

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

20 / 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

21 / 50

The Balance Sheet gives information regarding the____________?

Profit earning capacity for a particular period

Results of operations for a particular period

Financial position as on a particular date

Financial position during a particular period

22 / 50

Insurance prepaid is shown as:___________?

Current Liability

Fixed Asset

Current Asset

Income

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. 33,000

Rs. 8,000

Rs. 25,000

Rs. 17,000

24 / 50

Bad debts recovered is:

Added to debtors in Balance Sheet

Credited to P&L A/c

Reduced from debtors in Balance Sheet

Debited to P&L A/c

25 / 50

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

Accrued expenses

Drawings

Bad debts

Reserve for discount on Sundry Creditors

26 / 50

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

Historical cost ? Salvage Value

Original cost adjusted for general price-level changes

Historical cost ? Depreciation portion thereof

Replacement cost ? Accumulated Depreciation

27 / 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 cost, but classified as a non-current asset

Shown in the Balance Sheet at its replacement cost

28 / 50

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

common size income statement

All of the Above

Balance sheet

income statement

29 / 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

Capital Reserve A/c

General Reserve A/c

Asset A/c

30 / 50

Tax deducted at source appears in the Balance Sheet

On the assets side under loans and advances

On the liabilities side under provisions

On the assets side under current assets

On the liabilities side under current liabilities

31 / 50

Gross Profit is equal to_________?

Sales ? Closing Stock + Purchases

Opening Stock + Purchases ? Closing Stock

None of the above

Sales ? Cost of goods sold

32 / 50

Which of the following relationships is/are false?

Net Profit = Gross Profit + Administration expenses and Other expenses

Opening Stock + Purchases ? Closing Stock = Cost of Sales

Both B. and C. above

Net Profit = Gross Profit ? Administration and Other expenses

33 / 50

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

General Partnership

Limited Partnership

Corporation

Sole-proprietorship

34 / 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

All of the above

Required rate of return

35 / 50

Which of the following is not a financial statement?

Funds Flow Statement

Profit and Loss Account

Balance Sheet

Trial Balance

36 / 50

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

Current Assets& current liabilities

All of the above

Current Assets

Fixed Assets

37 / 50

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

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

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

38 / 50

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

Book value

Market value

Cost

Intrinsic value

39 / 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

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

40 / 50

Which of the following are/is a current asset?

Stock

Sundry Debtors

All

Prepaid insurance

41 / 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

It violates the matching principle of accounting

The bad debt expense is not matched with the related sales

All of the above

42 / 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

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

Only (i) above

Both (i)and (iii) above

43 / 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 2,200 to closing stock

Deducting 1,800 from debtors

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

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

44 / 50

Outstanding salaries is shown as___________?

Both B. and C. above

By adjusting it in the P & L A/c

An Asset in the Balance Sheet

A Liability

45 / 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

Balance Sheet

Cash Flow Statement

Income Statement

46 / 50

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

Vehicle

Stock

Both A. and C. above

Fixed deposit in bank

47 / 50

Depreciation appearing in the Trial Balance should be?

Both A. and C. above

Reduced from related asset in Balance Sheet

Shown as liability in Balance Sheet

Debited to P&L A/c

48 / 50

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

Profit & Loss Adjustment A/c

Profit & Loss A/c

Debtors A/c

Profit & Loss Appropriation A/c

49 / 50

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

Notes on account to Balance Sheet

Balance Sheet

Directors? report

Chairman?s report

50 / 50

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

Shown on the assets side of the Balance Sheet

Credited to the Profit & Loss Account

Shown on the liabilities side of the Balance Sheet

Debited to the Profit & Loss Account

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