Accounting Quiz 6

1 / 50

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

Money measurement concept

Going concern concept

Matching concept

Business entity concept

2 / 50

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

Historical cost ? Depreciation portion thereof

Original cost adjusted for general price-level changes

Historical cost ? Salvage Value

Replacement cost ? Accumulated Depreciation

3 / 50

The Balance Sheet gives information regarding the____________?

Financial position as on a particular date

Financial position during a particular period

Profit earning capacity for a particular period

Results of operations for a particular period

4 / 50

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

The bad debt expense is not matched with the related sales

Revenue is overstated in the year of sales

It violates the matching principle of accounting

All of the above

5 / 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

Credit balance of Provision for Bad Debts Account

Debit balance of Bad Debts Account

Debit balance of Provision for Bad Debts Account

6 / 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

Capital Reserve A/c

Profit & Loss A/c

Asset A/c

7 / 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 (iii) above

Both (i)and (iii) above

Only (i) above

8 / 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

9 / 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. 25,000

Rs. 8,000

Rs. 17,000

10 / 50

Period cost include which of the following ?

selling Expenses & administrative expenses

factory overhead

selling Expense

Direct labor

11 / 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

12 / 50

The Profit and Loss Account shows the:

Cost of goods sold during the period

Financial position of the concern on a particular date

Financial results of the concern for a period

Financial results of the concern on a particular date

13 / 50

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

Deferred revenue expenditure

Current assets

Not an asset

Intangible assets

14 / 50

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

Debts considered bad and written off

Loss on sale of undertaking

Liability arising from a breach of contract

Director?s remuneration

15 / 50

_________is the cost of converting raw material into finished products?

Job order cost

Prime cost

Explicit cost

Conversion cost

16 / 50

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

Both B. and C. above

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

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

200 is shown as current asset

17 / 50

Gross Profit is equal to_________?

Sales ? Closing Stock + Purchases

Opening Stock + Purchases ? Closing Stock

None of the above

Sales ? Cost of goods sold

18 / 50

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

Market value

Cost

Book value

Intrinsic value

19 / 50

Which of the following relationships is/are false?

Opening Stock + Purchases ? Closing Stock = Cost of Sales

Net Profit = Gross Profit ? Administration and Other expenses

Net Profit = Gross Profit + Administration expenses and Other expenses

Both B. and C. above

20 / 50

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

Interest Rate

Nominal interest rate

All of the above

Required rate of return

21 / 50

Which of the following is a current liability?

Prepaid expenses

Trademark

Discount on issue of shares

Outstanding Salaries

22 / 50

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

Finished goods

Work-in-process

Advance payments made to suppliers for raw materials

Stores and spares

23 / 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

24 / 50

Bad debts recovered is:

Reduced from debtors in Balance Sheet

Added to debtors in Balance Sheet

Credited to P&L A/c

Debited to P&L A/c

25 / 50

Which of the following equations is correct?

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

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

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

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

26 / 50

Outstanding salaries is shown as___________?

An Asset in the Balance Sheet

By adjusting it in the P & L A/c

Both B. and C. above

A Liability

27 / 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 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

28 / 50

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

Bad debts

Drawings

Reserve for discount on Sundry Creditors

Accrued expenses

29 / 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

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

Net Profits are ascertained on the basis of current costs

30 / 50

Which of the following are/is a current asset?

Prepaid insurance

Sundry Debtors

Stock

All

31 / 50

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

Current Assets

All of the above

Current Assets& current liabilities

Fixed Assets

32 / 50

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

All of the Above

Balance sheet

common size income statement

income statement

33 / 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

Retained Earning Statement

Cash Flow Statement

Balance Sheet

34 / 50

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

Directors? report

Chairman?s report

Balance Sheet

Notes on account to Balance Sheet

35 / 50

Depreciation appearing in the Trial Balance should be?

Both A. and C. above

Shown as liability in Balance Sheet

Debited to P&L A/c

Reduced from related asset in Balance Sheet

36 / 50

Insurance prepaid is shown as:___________?

Income

Current Liability

Fixed Asset

Current Asset

37 / 50

Which of the following is not a financial statement?

Profit and Loss Account

Trial Balance

Funds Flow Statement

Balance Sheet

38 / 50

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

General Partnership

Sole-proprietorship

Limited Partnership

Corporation

39 / 50

Net sales equals, sales minus:

cost of goods sold

carriage on sales

Return outwords

Return inwards

40 / 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

41 / 50

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

Credit Profit & Loss Account and deduct the provision from debtors

Credit Profit and Loss Account and add the provision to debtors

Debit Profit and Loss Account and deduct the provision from debtors

Debit Profit & Loss Account and add the provision to debtors

42 / 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 closing stock and deducting 2,200 each from debtors and sales

Adding 2,200 to closing stock

Deducting 1,800 from debtors

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

43 / 50

Prepaid expenses are valued on the Balance Sheet at

Cost to acquire less accumulated amortization

Cost less expired portion

Replacement cost

Current cost

44 / 50

Which of the following is not an intangible asset?

Franchise

Secret Profit

Trade mark

Accounts Receivable

45 / 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

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

46 / 50

Tax deducted at source appears in the Balance Sheet

On the assets side under current assets

On the liabilities side under current liabilities

On the assets side under loans and advances

On the liabilities side under provisions

47 / 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 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

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

48 / 50

LIFO stands for__________?

Lots in , Few out

?Last in, First Out

Last input, First Output

Link input, Format Output

49 / 50

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

Shown in the Balance Sheet at its replacement cost

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

50 / 50

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

Vehicle

Stock

Fixed deposit in bank

Both A. and C. above

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