Accounting Quiz 6

1 / 50

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

Debts considered bad and written off

Director?s remuneration

Liability arising from a breach of contract

Loss on sale of undertaking

2 / 50

The Balance Sheet gives information regarding the____________?

Profit earning capacity for a particular period

Financial position during a particular period

Financial position as on a particular date

Results of operations for a particular period

3 / 50

Period cost include which of the following ?

factory overhead

selling Expense

selling Expenses & administrative expenses

Direct labor

4 / 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

Written down to zero or its scrap value

Shown in the Balance Sheet at its replacement cost

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

5 / 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

6 / 50

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

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

Balance Sheet discloses financial position of the business

A person who owes to the business is called Debtor

7 / 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

8 / 50

Which of the following is not a financial statement?

Balance Sheet

Funds Flow Statement

Profit and Loss Account

Trial Balance

9 / 50

Which of the following equations is correct?

Gross Profit+ Sales+ Direct expenses+ Purchases+ Closing stock = Opening stock

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

10 / 50

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

Limited Partnership

Sole-proprietorship

General Partnership

Corporation

11 / 50

Net sales equals, sales minus:

Return inwards

carriage on sales

Return outwords

cost of goods sold

12 / 50

Prepaid expenses are valued on the Balance Sheet at

Cost less expired portion

Replacement cost

Current cost

Cost to acquire less accumulated amortization

13 / 50

LIFO stands for__________?

Link input, Format Output

Last input, First Output

?Last in, First Out

Lots in , Few out

14 / 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

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

Credit insurance company for 600

15 / 50

Depreciation appearing in the Trial Balance should be?

Reduced from related asset in Balance Sheet

Both A. and C. above

Shown as liability in Balance Sheet

Debited to P&L A/c

16 / 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 liabilities side under current liabilities

On the assets side under current assets

17 / 50

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

Reserve for discount on Sundry Creditors

Drawings

Bad debts

Accrued expenses

18 / 50

Which of the following is a current liability?

Outstanding Salaries

Prepaid expenses

Discount on issue of shares

Trademark

19 / 50

Which of the following relationships is/are false?

Net Profit = Gross Profit + Administration expenses and Other expenses

Opening Stock + Purchases ? Closing Stock = Cost of Sales

Net Profit = Gross Profit ? Administration and Other expenses

Both B. and C. above

20 / 50

Outstanding salaries is shown as___________?

A Liability

An Asset in the Balance Sheet

By adjusting it in the P & L A/c

Both B. and C. above

21 / 50

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

Market value

Book value

Intrinsic value

Cost

22 / 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 Appropriation A/c

Profit & Loss Adjustment A/c

23 / 50

Which of the following are/is a current asset?

Stock

All

Prepaid insurance

Sundry Debtors

24 / 50

Insurance prepaid is shown as:___________?

Current Asset

Current Liability

Fixed Asset

Income

25 / 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

Cash Flow Statement

Retained Earning Statement

Income Statement

26 / 50

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

Work-in-process

Stores and spares

Finished goods

Advance payments made to suppliers for raw materials

27 / 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

28 / 50

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

Asset A/c

Profit & Loss A/c

Capital Reserve A/c

General Reserve A/c

29 / 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

It violates the matching principle of accounting

All of the above

The bad debt expense is not matched with the related sales

30 / 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 debtors

Adding 2,200 to closing stock

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

31 / 50

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

200 is shown as current asset

Both B. and C. above

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

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

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

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 and Loss Account and add the provision to debtors

Debit Profit & Loss Account and add the provision to debtors

Credit Profit & Loss Account and deduct the provision from debtors

34 / 50

_________is the cost of converting raw material into finished products?

Prime cost

Conversion cost

Job order cost

Explicit cost

35 / 50

The Profit and Loss Account shows the:

Cost of goods sold during the period

Financial position of the concern on a particular date

Financial results of the concern on a particular date

Financial results of the concern for a period

36 / 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

37 / 50

Gross Profit is equal to_________?

Sales ? Cost of goods sold

Sales ? Closing Stock + Purchases

Opening Stock + Purchases ? Closing Stock

None of the above

38 / 50

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

Current assets

Deferred revenue expenditure

Not an asset

Intangible assets

39 / 50

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

Debited to the Profit & Loss Account

Shown on the liabilities side of the Balance Sheet

Credited to the Profit & Loss Account

Shown on the assets side of the Balance Sheet

40 / 50

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

Original cost adjusted for general price-level changes

Replacement cost ? Accumulated Depreciation

Historical cost ? Salvage Value

Historical cost ? Depreciation portion thereof

41 / 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

Nominal interest rate

Required rate of return

Interest Rate

42 / 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

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

43 / 50

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

Chairman?s report

Notes on account to Balance Sheet

Directors? report

Balance Sheet

44 / 50

The adjustment to be made for prepaid expenses is____________?

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

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

45 / 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

Business entity concept

Going concern concept

46 / 50

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

Vehicle

Both A. and C. above

Fixed deposit in bank

Stock

47 / 50

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

Current Assets

All of the above

Fixed Assets

Current Assets& current liabilities

48 / 50

Which of the following is not an intangible asset?

Trade mark

Secret Profit

Accounts Receivable

Franchise

49 / 50

If actual bad debts are more than the provision for bad debts, then there will be a_____________?

Debit balance of Bad Debts Account

Credit balance of Provision for Bad Debts Account

Debit balance of Discount on Debtors Account

Debit balance of Provision for Bad Debts Account

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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