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?

Matching concept

Going concern concept

Business entity concept

Money measurement concept

2 / 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

3 / 50

_________is the cost of converting raw material into finished products?

Explicit cost

Prime cost

Job order cost

Conversion cost

4 / 50

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

Intrinsic value

Book value

Market value

Cost

5 / 50

Tax deducted at source appears in the Balance Sheet

On the assets side under current assets

On the assets side under loans and advances

On the liabilities side under provisions

On the liabilities side under current liabilities

6 / 50

Bad debts recovered is:

Added to debtors in Balance Sheet

Reduced from debtors in Balance Sheet

Credited to P&L A/c

Debited to P&L A/c

7 / 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

Debts considered bad and written off

Director?s remuneration

8 / 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

9 / 50

The Balance Sheet gives information regarding the____________?

Results of operations for a particular period

Financial position during a particular period

Financial position as on a particular date

Profit earning capacity for a particular period

10 / 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

Replacement cost ? Accumulated Depreciation

Historical cost ? Salvage Value

11 / 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

Both (i)and (iii) above

Only (iii) above

Only (i) above

12 / 50

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

Balance Sheet

Retained Earning Statement

Cash Flow Statement

Income Statement

13 / 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

14 / 50

Gross Profit is equal to_________?

None of the above

Sales ? Closing Stock + Purchases

Opening Stock + Purchases ? Closing Stock

Sales ? Cost of goods sold

15 / 50

Insurance prepaid is shown as:___________?

Income

Fixed Asset

Current Asset

Current Liability

16 / 50

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

Shown on the liabilities side of the Balance Sheet

Debited to the Profit & Loss Account

Shown on the assets side of the Balance Sheet

Credited to the Profit & Loss Account

17 / 50

Period cost include which of the following ?

selling Expenses & administrative expenses

factory overhead

Direct labor

selling Expense

18 / 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

Revenue is overstated in the year of sales

The bad debt expense is not matched with the related sales

All of the above

19 / 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

Credit balance of Provision for Bad Debts Account

Debit balance of Bad Debts Account

Debit balance of Discount on Debtors Account

20 / 50

Which of the following is not a financial statement?

Trial Balance

Funds Flow Statement

Profit and Loss Account

Balance Sheet

21 / 50

Which of the following is not an intangible asset?

Franchise

Accounts Receivable

Secret Profit

Trade mark

22 / 50

The balance of Revaluation Reserve pertaining to an asset that has been disposed off or retired can be transferred to?

Capital Reserve A/c

Asset A/c

General Reserve A/c

Profit & Loss A/c

23 / 50

The adjustment to be made for prepaid expenses is____________?

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

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

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

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

24 / 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

25 / 50

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

Balance Sheet

Directors? report

Notes on account to Balance Sheet

Chairman?s report

26 / 50

Outstanding salaries is shown as___________?

A Liability

An Asset in the Balance Sheet

Both B. and C. above

By adjusting it in the P & L A/c

27 / 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

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

Net Profits are ascertained on the basis of current costs

28 / 50

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

Sole-proprietorship

General Partnership

Limited Partnership

Corporation

29 / 50

Prepaid expenses are valued on the Balance Sheet at

Current cost

Cost less expired portion

Cost to acquire less accumulated amortization

Replacement cost

30 / 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

31 / 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

All of the above

Interest Rate

Required rate of return

32 / 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

17,000 Overstated

10,000 Overstated

7,000 Overstated

33 / 50

Depreciation appearing in the Trial Balance should be?

Both A. and C. above

Debited to P&L A/c

Shown as liability in Balance Sheet

Reduced from related asset in Balance Sheet

34 / 50

Which of the following is a current liability?

Prepaid expenses

Outstanding Salaries

Discount on issue of shares

Trademark

35 / 50

The Profit and Loss Account shows the:

Financial results of the concern for a period

Cost of goods sold during the period

Financial results of the concern on a particular date

Financial position of the concern on a particular date

36 / 50

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

Accrued expenses

Bad debts

Drawings

Reserve for discount on Sundry Creditors

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 P&L 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

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

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

Credit Profit & Loss Account and deduct the provision from debtors

Debit Profit and Loss Account and deduct the provision from debtors

39 / 50

LIFO stands for__________?

Last input, First Output

?Last in, First Out

Link input, Format Output

Lots in , Few out

40 / 50

Which of the following are/is a current asset?

Stock

Sundry Debtors

All

Prepaid insurance

41 / 50

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

Stock

Vehicle

Fixed deposit in bank

Both A. and C. above

42 / 50

Net sales equals, sales minus:

carriage on sales

cost of goods sold

Return outwords

Return inwards

43 / 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 expenses and Other expenses

Net Profit = Gross Profit ? Administration and Other expenses

44 / 50

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

Current Assets& current liabilities

Fixed Assets

Current Assets

All of the above

45 / 50

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

Intangible assets

Current assets

Not an asset

Deferred revenue expenditure

46 / 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

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

Both B. and C. above

200 is shown as current asset

47 / 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

48 / 50

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

Profit & Loss A/c

Debtors A/c

Profit & Loss Adjustment A/c

Profit & Loss Appropriation A/c

49 / 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

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

50 / 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

A person who owes to the business is called Debtor

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

Balance Sheet discloses financial position of the business

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