Accounting Quiz 6

1 / 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

2 / 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

Cash Flow Statement

Retained Earning Statement

Balance Sheet

3 / 50

The Profit and Loss Account shows the:

Financial results of the concern on a particular date

Cost of goods sold during the period

Financial results of the concern for a period

Financial position of the concern on a particular date

4 / 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

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

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

5 / 50

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

Current assets

Deferred revenue expenditure

Intangible assets

Not an asset

6 / 50

Net sales equals, sales minus:

carriage on sales

Return inwards

Return outwords

cost of goods sold

7 / 50

_________is the cost of converting raw material into finished products?

Explicit cost

Job order cost

Prime cost

Conversion cost

8 / 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 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

9 / 50

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

Original cost adjusted for general price-level changes

Historical cost ? Depreciation portion thereof

Historical cost ? Salvage Value

Replacement cost ? Accumulated Depreciation

10 / 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

11 / 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

12 / 50

Bad debts recovered is:

Added to debtors in Balance Sheet

Debited to P&L A/c

Reduced from debtors in Balance Sheet

Credited to P&L A/c

13 / 50

Depreciation appearing in the Trial Balance should be?

Debited to P&L A/c

Reduced from related asset in Balance Sheet

Shown as liability in Balance Sheet

Both A. and C. above

14 / 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

Balance Sheet discloses financial position of the business

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

15 / 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

Adding 2,200 to closing stock

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

16 / 50

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

Asset A/c

Capital Reserve A/c

Profit & Loss A/c

General Reserve A/c

17 / 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

18 / 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

19 / 50

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

Current Assets& current liabilities

Fixed Assets

All of the above

Current Assets

20 / 50

Prepaid expenses are valued on the Balance Sheet at

Replacement cost

Cost to acquire less accumulated amortization

Cost less expired portion

Current cost

21 / 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

22 / 50

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

Intrinsic value

Market value

Cost

Book value

23 / 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 1,400

Both B. and C. above

200 is shown as current asset

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

24 / 50

Which of the following are/is a current asset?

Stock

Prepaid insurance

Sundry Debtors

All

25 / 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

26 / 50

Period cost include which of the following ?

factory overhead

selling Expenses & administrative expenses

selling Expense

Direct labor

27 / 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

28 / 50

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

Debit Profit and Loss Account and deduct the provision from debtors

Credit Profit & Loss Account and deduct the provision from debtors

Credit Profit and Loss Account and add the provision to debtors

Debit Profit & Loss Account and add the provision to debtors

29 / 50

Which of the following is a current liability?

Trademark

Outstanding Salaries

Prepaid expenses

Discount on issue of shares

30 / 50

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

Profit & Loss Adjustment A/c

Profit & Loss Appropriation A/c

Debtors A/c

Profit & Loss A/c

31 / 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

32 / 50

The Balance Sheet gives information regarding the____________?

Results of operations for a particular period

Financial position as on a particular date

Profit earning capacity for a particular period

Financial position during a particular period

33 / 50

Which of the following is not an intangible asset?

Franchise

Secret Profit

Accounts Receivable

Trade mark

34 / 50

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

Credited to the Profit & Loss Account

Shown on the liabilities side of the Balance Sheet

Shown on the assets side of the Balance Sheet

Debited to the Profit & Loss Account

35 / 50

Outstanding salaries is shown as___________?

Both B. and C. above

An Asset in the Balance Sheet

A Liability

By adjusting it in the P & L A/c

36 / 50

Which of the following relationships is/are false?

Opening Stock + Purchases ? Closing Stock = Cost of Sales

Net Profit = Gross Profit + Administration expenses and Other expenses

Both B. and C. above

Net Profit = Gross Profit ? Administration and Other expenses

37 / 50

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

All of the above

Interest Rate

Nominal interest rate

Required rate of return

38 / 50

Gross Profit is equal to_________?

Sales ? Cost of goods sold

None of the above

Opening Stock + Purchases ? Closing Stock

Sales ? Closing Stock + Purchases

39 / 50

Insurance prepaid is shown as:___________?

Current Asset

Fixed Asset

Current Liability

Income

40 / 50

LIFO stands for__________?

?Last in, First Out

Last input, First Output

Lots in , Few out

Link input, Format Output

41 / 50

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

Limited Partnership

Corporation

General Partnership

Sole-proprietorship

42 / 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

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

Carried in the accounting records at cost until it is sold

Shown in the Balance Sheet at its replacement cost

43 / 50

Which of the following is not a financial statement?

Funds Flow Statement

Balance Sheet

Trial Balance

Profit and Loss Account

44 / 50

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

Reserve for discount on Sundry Creditors

Bad debts

Accrued expenses

Drawings

45 / 50

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

Fixed deposit in bank

Stock

Vehicle

Both A. and C. above

46 / 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

The bad debt expense is not matched with the related sales

It violates the matching principle of accounting

All of the above

47 / 50

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

Chairman?s report

Balance Sheet

Notes on account to Balance Sheet

Directors? report

48 / 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 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

49 / 50

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

Money measurement concept

Business entity concept

Matching concept

Going concern concept

50 / 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

7,000 Overstated

17,000 Understated

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