Accounting Quiz 6

1 / 50

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

Current Assets

Fixed Assets

Current Assets& current liabilities

All of the above

2 / 50

Period cost include which of the following ?

selling Expense

factory overhead

selling Expenses & administrative expenses

Direct labor

3 / 50

Which of the following is not an intangible asset?

Franchise

Accounts Receivable

Trade mark

Secret Profit

4 / 50

LIFO stands for__________?

Link input, Format Output

Last input, First Output

Lots in , Few out

?Last in, First Out

5 / 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

Deducting 1,800 from debtors

Adding 2,200 to closing stock

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

6 / 50

Which of the following is not a financial statement?

Balance Sheet

Profit and Loss Account

Trial Balance

Funds Flow Statement

7 / 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

Required rate of return

Nominal interest rate

8 / 50

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

Credit Profit & Loss Account and deduct the provision from debtors

Debit Profit and Loss Account and deduct the provision from debtors

Debit Profit & Loss Account and add the provision to debtors

Credit Profit and Loss Account and add the provision to debtors

9 / 50

Insurance prepaid is shown as:___________?

Income

Current Liability

Current Asset

Fixed Asset

10 / 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

11 / 50

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

Market value

Intrinsic value

Cost

Book value

12 / 50

Outstanding salaries is shown as___________?

A Liability

Both B. and C. above

By adjusting it in the P & L A/c

An Asset in the Balance Sheet

13 / 50

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

Current assets

Not an asset

Deferred revenue expenditure

Intangible assets

14 / 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. 33,000

Rs. 25,000

Rs. 17,000

15 / 50

Gross Profit is equal to_________?

Sales ? Cost of goods sold

Sales ? Closing Stock + Purchases

None of the above

Opening Stock + Purchases ? Closing Stock

16 / 50

Which of the following are/is a current asset?

Prepaid insurance

Stock

All

Sundry Debtors

17 / 50

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

Directors? report

Chairman?s report

Balance Sheet

Notes on account to Balance Sheet

18 / 50

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

Drawings

Accrued expenses

Reserve for discount on Sundry Creditors

Bad debts

19 / 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

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

20 / 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 Overstated

17,000 Understated

21 / 50

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

Corporation

General Partnership

Sole-proprietorship

Limited Partnership

22 / 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

All of the above

Revenue is overstated in the year of sales

The bad debt expense is not matched with the related sales

23 / 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

Income Statement

Balance Sheet

Retained Earning Statement

24 / 50

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

Historical cost ? Salvage Value

Replacement cost ? Accumulated Depreciation

Original cost adjusted for general price-level changes

Historical cost ? Depreciation portion thereof

25 / 50

The Balance Sheet gives information regarding the____________?

Financial position as on a particular date

Financial position during a particular period

Results of operations for a particular period

Profit earning capacity for a particular period

26 / 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

27 / 50

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

Fixed deposit in bank

Both A. and C. above

Vehicle

Stock

28 / 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

29 / 50

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

Director?s remuneration

Loss on sale of undertaking

Debts considered bad and written off

Liability arising from a breach of contract

30 / 50

Which of the following statements is false ? select the false from below options

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

Assets are to be shown in the Balance Sheet at the realizable value

31 / 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

Both (i)and (iii) above

Only (i) above

32 / 50

The Profit and Loss Account shows the:

Financial results of the concern for a period

Financial position of the concern on a particular date

Financial results of the concern on a particular date

Cost of goods sold during the period

33 / 50

Prepaid expenses are valued on the Balance Sheet at

Current cost

Cost to acquire less accumulated amortization

Replacement cost

Cost less expired portion

34 / 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

35 / 50

Net sales equals, sales minus:

carriage on sales

Return inwards

cost of goods sold

Return outwords

36 / 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

37 / 50

The adjustment to be made for prepaid expenses is____________?

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

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 an asset

38 / 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

39 / 50

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

income statement

Balance sheet

common size income statement

All of the Above

40 / 50

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

Net Profits are ascertained on the basis of current costs

Net Profits as disclosed by P&L Account is not absolute

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

41 / 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

200 is shown as current asset

Both B. and C. above

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

42 / 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

43 / 50

Depreciation appearing in the Trial Balance should be?

Reduced from related asset in Balance Sheet

Debited to P&L A/c

Both A. and C. above

Shown as liability in Balance Sheet

44 / 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

Debit balance of Bad Debts Account

Debit balance of Discount on Debtors Account

Credit balance of Provision for Bad Debts Account

45 / 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

Business entity concept

Matching concept

46 / 50

_________is the cost of converting raw material into finished products?

Prime cost

Conversion cost

Job order cost

Explicit cost

47 / 50

Which of the following is a current liability?

Trademark

Outstanding Salaries

Prepaid expenses

Discount on issue of shares

48 / 50

Goods in stock worth 800 are destroyed by fire and the Insurance Co. is accepted the claim for 600. Adjustment would involve

Credit insurance company for 600

Deduct the 800 from closing stock in the Trading Account

Debit of 600 and 200 to insurance company and Profit and Loss Account respectively and credit of 800 to Trading Account

Debit of 800 to Trading Account and credit of 600 and 200 to insurance company and Profit and Loss Account respectively

49 / 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

50 / 50

Tax deducted at source appears in the Balance Sheet

On the liabilities side under current liabilities

On the assets side under loans and advances

On the liabilities side under provisions

On the assets side under current assets

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