Accounting Quiz 6

1 / 50

The adjustment to be made for prepaid expenses is____________?

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 an asset

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

2 / 50

Tax deducted at source appears in the Balance Sheet

On the liabilities side under provisions

On the liabilities side under current liabilities

On the assets side under loans and advances

On the assets side under current assets

3 / 50

Period cost include which of the following ?

selling Expense

Direct labor

factory overhead

selling Expenses & administrative expenses

4 / 50

The Profit and Loss Account shows the:

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

Cost of goods sold during the period

5 / 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

6 / 50

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

Finished goods

Stores and spares

Work-in-process

Advance payments made to suppliers for raw materials

7 / 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 Understated

10,000 Overstated

7,000 Overstated

17,000 Overstated

8 / 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

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 its replacement cost

9 / 50

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

All of the above

Current Assets& current liabilities

Fixed Assets

Current Assets

10 / 50

The Balance Sheet gives information regarding the____________?

Profit earning capacity for a particular period

Financial position as on a particular date

Results of operations for a particular period

Financial position during a particular period

11 / 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

12 / 50

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

Historical cost ? Depreciation portion thereof

Historical cost ? Salvage Value

Original cost adjusted for general price-level changes

Replacement cost ? Accumulated Depreciation

13 / 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

Balance Sheet discloses financial position of the business

A person who owes to the business is called Debtor

14 / 50

Which of the following is a current liability?

Trademark

Discount on issue of shares

Prepaid expenses

Outstanding Salaries

15 / 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

Credit balance of Provision for Bad Debts Account

Debit balance of Discount on Debtors Account

16 / 50

Which of the following is not an intangible asset?

Franchise

Accounts Receivable

Trade mark

Secret Profit

17 / 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 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

18 / 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

Asset A/c

Capital Reserve A/c

Profit & Loss A/c

19 / 50

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

Drawings

Reserve for discount on Sundry Creditors

Bad debts

Accrued expenses

20 / 50

Outstanding salaries is shown as___________?

Both B. and C. above

A Liability

An Asset in the Balance Sheet

By adjusting it in the P & L A/c

21 / 50

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

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

Both B. and C. above

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

200 is shown as current asset

22 / 50

Bad debts recovered is:

Reduced from debtors in Balance Sheet

Debited to P&L A/c

Credited to P&L A/c

Added to debtors in Balance Sheet

23 / 50

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

Debtors A/c

Profit & Loss Appropriation A/c

Profit & Loss A/c

Profit & Loss Adjustment A/c

24 / 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. 8,000

Rs. 25,000

Rs. 17,000

Rs. 33,000

25 / 50

LIFO stands for__________?

?Last in, First Out

Link input, Format Output

Lots in , Few out

Last input, First Output

26 / 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

27 / 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

Required rate of return

All of the above

Nominal interest rate

28 / 50

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

Sole-proprietorship

Limited Partnership

General Partnership

Corporation

29 / 50

Net sales equals, sales minus:

cost of goods sold

Return outwords

Return inwards

carriage on sales

30 / 50

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

Matching concept

Money measurement concept

Going concern concept

Business entity concept

31 / 50

Depreciation appearing in the Trial Balance should be?

Reduced from related asset in Balance Sheet

Shown as liability in Balance Sheet

Both A. and C. above

Debited to P&L A/c

32 / 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 & Loss Account and deduct the provision from debtors

Debit Profit and Loss Account and deduct the provision from debtors

Credit Profit and Loss Account and add the provision to debtors

33 / 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 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

34 / 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

It violates the matching principle of accounting

Revenue is overstated in the year of sales

All of the above

35 / 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 (iii) above

Only (i) above

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

36 / 50

Prepaid expenses are valued on the Balance Sheet at

Replacement cost

Current cost

Cost to acquire less accumulated amortization

Cost less expired portion

37 / 50

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

Balance sheet

income statement

All of the Above

common size income statement

38 / 50

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

Director?s remuneration

Liability arising from a breach of contract

Debts considered bad and written off

Loss on sale of undertaking

39 / 50

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

Vehicle

Both A. and C. above

Fixed deposit in bank

Stock

40 / 50

Which of the following are/is a current asset?

All

Stock

Prepaid insurance

Sundry Debtors

41 / 50

Gross Profit is equal to_________?

Sales ? Cost of goods sold

Sales ? Closing Stock + Purchases

None of the above

Opening Stock + Purchases ? Closing Stock

42 / 50

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

Cost

Book value

Market value

Intrinsic value

43 / 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

Cash Flow Statement

Balance Sheet

44 / 50

Insurance prepaid is shown as:___________?

Current Asset

Income

Fixed Asset

Current Liability

45 / 50

Which of the following is not a financial statement?

Funds Flow Statement

Balance Sheet

Trial Balance

Profit and Loss Account

46 / 50

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

Credited to the Profit & Loss Account

Shown on the assets side of the Balance Sheet

Debited to the Profit & Loss Account

Shown on the liabilities side of the Balance Sheet

47 / 50

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

Balance Sheet

Notes on account to Balance Sheet

Chairman?s report

Directors? report

48 / 50

_________is the cost of converting raw material into finished products?

Conversion cost

Explicit cost

Job order cost

Prime cost

49 / 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

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

Deduct the 800 from closing stock in the Trading Account

50 / 50

Which of the following relationships is/are false?

Both B. and C. above

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

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