Accounting Quiz 6

1 / 50

The Profit and Loss Account shows the:

Financial results of the concern on a particular date

Financial position of the concern on a particular date

Cost of goods sold during the period

Financial results of the concern for a period

2 / 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 debtors

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

Adding 2,200 to closing stock

3 / 50

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

Cash Flow Statement

Retained Earning Statement

Balance Sheet

Income Statement

4 / 50

Period cost include which of the following ?

factory overhead

Direct labor

selling Expense

selling Expenses & administrative expenses

5 / 50

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

Drawings

Bad debts

Reserve for discount on Sundry Creditors

Accrued expenses

6 / 50

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

Both A. and C. above

Fixed deposit in bank

Vehicle

Stock

7 / 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

8 / 50

The adjustment to be made for prepaid expenses is____________?

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

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

9 / 50

LIFO stands for__________?

Last input, First Output

?Last in, First Out

Lots in , Few out

Link input, Format Output

10 / 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

11 / 50

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

Directors? report

Balance Sheet

Notes on account to Balance Sheet

Chairman?s report

12 / 50

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

General Partnership

Sole-proprietorship

Corporation

Limited Partnership

13 / 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 Provision for Bad Debts Account

Debit balance of Bad Debts Account

14 / 50

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

Debit Profit and Loss Account and deduct the provision from debtors

Debit Profit & Loss Account and add the provision to debtors

Credit Profit & Loss Account and deduct the provision from debtors

Credit Profit and Loss Account and add the provision to debtors

15 / 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

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

Credit insurance company for 600

16 / 50

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

Loss on sale of undertaking

Debts considered bad and written off

Director?s remuneration

Liability arising from a breach of contract

17 / 50

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

200 is shown as current asset

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

Both B. and C. above

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

18 / 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

19 / 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

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

21 / 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

Capital Reserve A/c

Asset A/c

22 / 50

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

Debtors A/c

Profit & Loss Adjustment A/c

Profit & Loss Appropriation A/c

Profit & Loss A/c

23 / 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

Both (i)and (iii) above

Only (i) above

Only (iii) above

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

24 / 50

Which of the following is a current liability?

Prepaid expenses

Trademark

Discount on issue of shares

Outstanding Salaries

25 / 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 Overstated

17,000 Understated

7,000 Overstated

26 / 50

Prepaid expenses are valued on the Balance Sheet at

Cost less expired portion

Replacement cost

Cost to acquire less accumulated amortization

Current cost

27 / 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

28 / 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

All of the above

Nominal interest rate

Required rate of return

29 / 50

Depreciation appearing in the Trial Balance should be?

Reduced from related asset in Balance Sheet

Shown as liability in Balance Sheet

Debited to P&L A/c

Both A. and C. above

30 / 50

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

Current assets

Intangible assets

Deferred revenue expenditure

Not an asset

31 / 50

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

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

Net Profits are ascertained on the basis of current costs

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

32 / 50

Bad debts recovered is:

Debited to P&L A/c

Reduced from debtors in Balance Sheet

Added to debtors in Balance Sheet

Credited to P&L A/c

33 / 50

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

It violates the matching principle of accounting

The bad debt expense is not matched with the related sales

All of the above

Revenue is overstated in the year of sales

34 / 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

35 / 50

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

Original cost adjusted for general price-level changes

Historical cost ? Salvage Value

Replacement cost ? Accumulated Depreciation

Historical cost ? Depreciation portion thereof

36 / 50

Gross Profit is equal to_________?

None of the above

Sales ? Closing Stock + Purchases

Sales ? Cost of goods sold

Opening Stock + Purchases ? Closing Stock

37 / 50

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

Book value

Cost

Intrinsic value

Market value

38 / 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 its replacement cost

Written down to zero or its scrap value

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

39 / 50

Net sales equals, sales minus:

Return inwards

Return outwords

carriage on sales

cost of goods sold

40 / 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

Both B. and C. above

Net Profit = Gross Profit + Administration expenses and Other expenses

41 / 50

Outstanding salaries is shown as___________?

A Liability

By adjusting it in the P & L A/c

Both B. and C. above

An Asset in the Balance Sheet

42 / 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

43 / 50

Which of the following is not an intangible asset?

Accounts Receivable

Secret Profit

Trade mark

Franchise

44 / 50

Insurance prepaid is shown as:___________?

Fixed Asset

Income

Current Liability

Current Asset

45 / 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

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

A person who owes to the business is called Debtor

Balance Sheet discloses financial position of the business

46 / 50

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

Money measurement concept

Matching concept

Business entity concept

Going concern concept

47 / 50

Which of the following is not a financial statement?

Balance Sheet

Funds Flow Statement

Trial Balance

Profit and Loss Account

48 / 50

Which of the following are/is a current asset?

Stock

Sundry Debtors

All

Prepaid insurance

49 / 50

_________is the cost of converting raw material into finished products?

Job order cost

Conversion cost

Explicit cost

Prime cost

50 / 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

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