MCQOPTIONS
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MCQOPTIONS
This section includes 100 Mcqs, each offering curated multiple-choice questions to sharpen your Common Proficiency Test (CPT) - ICAI knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
In case of illegal agreements collateral agreements are _____ |
| A. | Valid |
| B. | Void |
| C. | Voidable |
| D. | None of these |
| Answer» C. Voidable | |
| 2. |
Standing offer means _____ |
| A. | Offer for a fixed period |
| B. | Accepted proposal |
| C. | Conditional acceptance |
| D. | All of the above |
| Answer» B. Accepted proposal | |
| 3. |
Nivya, Nitya and Kavya are partners in a firm sharing profits and losses in the ratio of 1:2:1. Nitya retired from the firm. Nivya and Kavya decided to share future profits and losses in the ratio of 3:1. They want to show the assets and liabilities in the new balance sheet at their old values. Then which account is to be prepared? |
| A. | Revaluation A/c |
| B. | Profit and Loss A/c |
| C. | Memorandum Revaluation A/c |
| D. | Profit and Loss Appropriation A/c |
| Answer» D. Profit and Loss Appropriation A/c | |
| 4. |
When preference shares are redeemed, otherwise than out of the proceeds of a fresh issue, there shall, out of profits which would otherwise have been available for dividend _____ of preference shares will be transferred to Capital Redemption Reserve A/c. |
| A. | Nominal Value |
| B. | Called-up Value |
| C. | Subscribed Value |
| D. | Paid-up Value |
| Answer» B. Called-up Value | |
| 5. |
If favourable balance as per cashbook is the starting point, a wrong posting of Rs.5,200 in the deposit column of passbook will be ______ while preparing the B.R.S. |
| A. | Added |
| B. | Subtracted |
| C. | Ignored |
| D. | None of the above |
| Answer» B. Subtracted | |
| 6. |
E’s Trial Balance contains the following information: Discount received Rs.15,000, Provision for discount on Trade Payables Rs.21,000. It is desired to maintain a provision for discount Trade Payables at Rs.19,600. The amount to be credited to the Profit & Loss Account is: |
| A. | 18,600 |
| B. | 19,600 |
| C. | 15,000 |
| D. | 13,600 |
| Answer» E. | |
| 7. |
Due to change in the accounting policy there is no material effect in the current year, but there is effect in the future years. This effect can be reasonably estimated. Then _______ |
| A. | The amount effected should be disclosed |
| B. | That fact should be disclosed |
| C. | Both the amount and the fact should be disclosed |
| D. | No disclosure is required. |
| Answer» D. No disclosure is required. | |
| 8. |
A purchased 1000 kg of rice costing Rs.200 per kg. Paid carriage Rs.2,000 and insurance Rs.3,000. 4/5th of the same were sold by B at Rs. 250 per kg. Remaining Inventories were taken over by B at cost. The value of Inventories taken over by B will be______ |
| A. | Rs. 40,000 |
| B. | Rs.41,000 |
| C. | Rs.50,000 |
| D. | Rs.50,200 |
| Answer» C. Rs.50,000 | |
| 9. |
Which of the following is not disclosed or recognized in the financial statements? |
| A. | Contingent Liability |
| B. | Contingent Asset |
| C. | Provision |
| D. | None of the above |
| Answer» C. Provision | |
| 10. |
Mr. X sent goods to Mr. Y on Consignment basis at invoice price. Mr. Y sold the goods to the customers. One of the customers returned the goods to Mr. Y because of defective quality. Mr. Y returned those goods to Mr. X paying Rs.5,000 for freight. The returned goods are valued at _______ |
| A. | Selling Price |
| B. | Cost Price |
| C. | Invoice Price |
| D. | Invoice Price + Rs.5,000 |
| Answer» D. Invoice Price + Rs.5,000 | |
| 11. |
A, B and C are the partners sharing profits and losses in the ratio of 2: 2:1. They changed the ratio to 3: 4: 5. They had workmen’s compensation fund. How it will be distributed on the change of ratio? |
| A. | Capital Ratio |
| B. | Old profit sharing ratio |
| C. | New profit sharing ratio |
| D. | Not at all distributed |
| Answer» C. New profit sharing ratio | |
| 12. |
__ is not an objective of accounting standards. |
| A. | To eliminate Non – Comparability of financial statements |
| B. | To override the statute |
| C. | To provide a set of standard accounting policies |
| D. | To improve the reliability of financial statements |
| Answer» C. To provide a set of standard accounting policies | |
| 13. |
On 1-03-2015 Kola sold goods to Tola for Rs.1,60,000. Tola accepted a bill for 3 months for this amount. On the due date Tola could pay Rs.40,000 in cash and agreed to pay the balance amount after one month at an interest of 10% per annum. Noting charges incurred Rs.600. How much interest will be charged? |
| A. | Rs.995 |
| B. | Rs.1005 |
| C. | Rs.1000 |
| D. | None |
| Answer» C. Rs.1000 | |
| 14. |
The Profits and Losses for the last three years were 2012 – Rs.2,08,000 (Profit); 2013 – Rs.94,000 (Loss); 2014 – Rs.2,64,000 (Profit) including a profit of Rs.30,000 earned exceptionally from a contract which will not be renewed further. The average capital employed is Rs.4,20,000. Rate of interest on investment is 10%. The remuneration of all the partners is estimated at Rs.5,000 per month. The value of goodwill on the basis of two years purchase of super profits based on average of three years profits will be |
| A. | Rs.1,68,000 |
| B. | Rs.28,000 |
| C. | Rs.48,000 |
| D. | Rs. 1,48,000 |
| Answer» C. Rs.48,000 | |
| 15. |
The book value of machinery on 01-04-2014 is Rs.1,62,000. Depreciation was charged at 10% per annum under WDV method. On 31-03- 2015 the method of depreciation is changed to straight line method with retrospective effect from 01-04-2012 and the rate being the same. |
| A. | Rs.5,800 depreciation to be charged |
| B. | Rs.5,800 depreciation written back |
| C. | Rs.2,000 depreciation to be charged |
| D. | Rs.2,000 depreciation written back |
| Answer» D. Rs.2,000 depreciation written back | |
| 16. |
Which is not the procedural aspect of accounting? |
| A. | Generating financial information |
| B. | Classification. |
| C. | Using financial information. |
| D. | None of the above |
| Answer» E. | |
| 17. |
Summarizing means ____ |
| A. | Presentation and Preparation of classified data |
| B. | Systematic analysis of the recorded data |
| C. | Methodical classification of the data |
| D. | Explaining the meaning and significance of the data. |
| Answer» B. Systematic analysis of the recorded data | |
| 18. |
Mr. X consigned goods of the invoice value of Rs.5,00,000 at cost plus 25% to Mr. Y. The expenses of X amounted to Rs.30,000. The expenses of Y amounted to Rs.24,000 other than selling expenses. The selling expenses amounted to Rs.8,000. 20% of the goods were lost in transit. 3/4th of the remaining goods were sold by Y. Calculate the value of consignment stock? |
| A. | Rs.1,12,000 |
| B. | Rs.1,06,000 |
| C. | Rs. 96,000 |
| D. | Rs.92,000 |
| Answer» B. Rs.1,06,000 | |
| 19. |
64,000, 12% preference shares of Rs.10 each are to be redeemed at a premium of 5%. Divisible profits available Rs.2,00,000. Face value of fresh equity share to be issued is Rs.80. Calculate the number of fresh equity shares to be issued. |
| A. | 4,400 |
| B. | 5,200 |
| C. | 5,900 |
| D. | 6,300 |
| Answer» D. 6,300 | |
| 20. |
A company wants to redeem 1,00,000, 10% preference shares at a premium of 10% by the issue of 10,000 equity shares of Rs.100 each at a premium of 10%. The amount to be transferred to capital redemption reserve will be ______ |
| A. | Rs.10,00,000 |
| B. | Rs.11,00,000 |
| C. | Rs.1,00,000 |
| D. | Nil |
| Answer» E. | |
| 21. |
The overdraft balance as per the cashbook Mitra is Rs.13,200. A amount of Rs.5,200 was deposited by a customer direct into the account of Mitra. And a cheque of Rs.2,000 deposited by Mitra was bounced. Mitra is unaware of these two transactions. The balance as per passbook will be________ |
| A. | Rs.10,000 (Favourable) |
| B. | Rs.10,000 (O.D) |
| C. | Rs.8,000 (O.D) |
| D. | Rs.10,200 (O.D) |
| Answer» C. Rs.8,000 (O.D) | |
| 22. |
On 1-7-2012 a second hand machinery was purchased for Rs.15,00,000 and an amount of Rs.1,00,000 was spent for its repairs. Depreciation is charged at 15% per annum under WDV method. The machinery was sold on 31-03-2015 for Rs.10,40,000. Calculate the profit or loss on the sale of machinery. |
| A. | Rs.29,300 Loss |
| B. | Rs.14,050 Profit |
| C. | Rs.1,67,000 Loss |
| D. | Rs.10,298.75 Profit |
| Answer» C. Rs.1,67,000 Loss | |
| 23. |
A bill is drawn for Rs.20,000 for 3 months. It is paid 1 month before the due date at 6% discount. The amount of discount is ______ |
| A. | Rs.100 |
| B. | Rs.200 |
| C. | Rs.300 |
| D. | Rs.400 |
| Answer» B. Rs.200 | |
| 24. |
A company issued shares of Rs.50 each at a premium of 10%. The minimum application money as per the Companies Act, 2013 will be |
| A. | Rs.2.50 |
| B. | Rs.3.00 |
| C. | Rs.5.00 |
| D. | Rs.4.50 |
| Answer» B. Rs.3.00 | |
| 25. |
The following are the valuation principles except _____ |
| A. | Current Cost |
| B. | Future Cost |
| C. | Historical Cost |
| D. | Realizable Value |
| Answer» C. Historical Cost | |
| 26. |
The difference between Passbook and Cashbook occurs due to ________ |
| A. | Errors in either cashbook or passbook |
| B. | Same entries not recorded in cashbook and passbook |
| C. | Dr. balance in cashbook appearing as Cr. Balance in passbook. |
| D. | None of the above |
| Answer» B. Same entries not recorded in cashbook and passbook | |
| 27. |
Lion and Tiger having capitals of Rs.2,00,000 each are sharing profits and losses equally. Leopard joins as an equal partner with a capital of Rs.2,50,000. Goodwill of the firm is valued at Rs.2,10,000. The revaluation profit is Rs.36,000. Find the closing capitals of Lion, Tiger and Leopard |
| A. | Rs.2,50,000; Rs.2,50,000; Rs.2,50,000 |
| B. | Rs.2,88,000; Rs.2,88,000; Rs.2,00,000 |
| C. | Rs.2,18,000; Rs.2,18,000; Rs.2,50,000 |
| D. | Rs.2,53,000; Rs.2,53,000; Rs.2,50,000 |
| Answer» E. | |
| 28. |
In case of death of a partner, his share in the profits of the firm till the date of his death will be debited to ______ A/c. |
| A. | Profit and Loss Appropriation |
| B. | Profit and Loss Suspense |
| C. | Profit and Loss Adjustment |
| D. | Profit and Loss |
| Answer» C. Profit and Loss Adjustment | |
| 29. |
Trade discount is recorded in _____ |
| A. | Debit side of three column cashbook |
| B. | Credit side of three column cashbook |
| C. | Debit side of two column cashbook |
| D. | None of the above |
| Answer» E. | |
| 30. |
On 1-3-15 Rohan sent goods costing Rs.60,000 at a profit of 25% on sales to Mohan on Sale or return basis. On 31-3-15 Mohan returned goods costing Rs.18,000. At the end of Financial Year the remaining goods were neither returned nor approved by Mohan. Rohan records the goods sent on approval as normal sale. In the balance sheet, for the goods sent but not yet approved __________. |
| A. | Rs.56,000 will be added to debtors |
| B. | Rs.56,000 will be deducted from debtors |
| C. | Rs.48,000 will be deducted from debtors |
| D. | Rs.52,500 will be deducted from debtors. |
| Answer» C. Rs.48,000 will be deducted from debtors | |
| 31. |
Decrease in Bank overdraft balance results in _ |
| A. | Increase in capital |
| B. | decrease in assets |
| C. | Increase in cash |
| D. | increase in assets |
| Answer» C. Increase in cash | |
| 32. |
Receipts of Promissory Notes and Hundies will be recorded in ____ for our convenience |
| A. | Bills receivable book |
| B. | Bills payable book |
| C. | Promissory Notes book |
| D. | Hundies book |
| Answer» B. Bills payable book | |
| 33. |
Decrease in the provision for doubtful debts amounts to ____ |
| A. | Increase in Net profit |
| B. | Decrease in Net Profit |
| C. | Increase in Net Assets |
| D. | Decrease in Net Assets |
| Answer» B. Decrease in Net Profit | |
| 34. |
When shares are issued at a price which is more than the par value, the excess price will be credited to ______ |
| A. | Capital A/c |
| B. | Securities Premium A/c |
| C. | Bank A/c |
| D. | None of the above |
| Answer» C. Bank A/c | |
| 35. |
The Portion of acquisition cost of an asset yet to be allocated is ____ |
| A. | Accumulated cost |
| B. | Realisation cost |
| C. | Written down value |
| D. | Historical cost |
| Answer» D. Historical cost | |
| 36. |
_____ A/c shows a debit balance. |
| A. | Contingency reserve |
| B. | General reserve |
| C. | Provision for Discount on Creditors |
| D. | JLP reserve |
| Answer» D. JLP reserve | |
| 37. |
Fixed deposit is a ____ A/c according to traditional approach and ____ A/c according to accounting equation approach. |
| A. | Capital, Profit |
| B. | Profit, Capital |
| C. | Asset, Real |
| D. | Real, Asset |
| Answer» E. | |
| 38. |
Contingent liability is ____ |
| A. | Not recognized |
| B. | Recognized |
| C. | A provision |
| D. | A liability |
| Answer» B. Recognized | |
| 39. |
Securities premium cannot be used for ___ |
| A. | The issue of bonus shares |
| B. | Writing off discount on issue of debentures. |
| C. | Writing off losses of the company. |
| D. | Writing off preliminary expenses |
| Answer» D. Writing off preliminary expenses | |
| 40. |
Which of the following statements are true about discount columns of cashbook? |
| A. | Not balanced |
| B. | Not an account |
| C. | They are totaled and transferred to respective discount paid / received A/cs. |
| D. | All of the above |
| Answer» E. | |
| 41. |
A bill is drawn by X on 06-03-2015, for a period of 30 days after sight. It is accepted on 10-03- 2015. The due date of the bill will be ___ |
| A. | 04-04-15 |
| B. | 08-04-15 |
| C. | 09-04-15 |
| D. | 12-04-15 |
| Answer» E. | |
| 42. |
In the balance sheet of a company, capital work in progress is shown under the head __ |
| A. | Shareholders Funds |
| B. | Fixed Assets |
| C. | Current Liabilities |
| D. | Current Assets |
| Answer» C. Current Liabilities | |
| 43. |
Out of the following which is not the external factor of depreciation? |
| A. | Effluxion of time |
| B. | Accidents |
| C. | Natural Wear and tear |
| D. | Obsolescence |
| Answer» D. Obsolescence | |
| 44. |
At the time of valuation of goodwill, weighted average price method is followed, if the profits of the firm are ____ |
| A. | In increasing trend |
| B. | In decreasing trend |
| C. | Either a) or b) |
| D. | None of the above |
| Answer» D. None of the above | |
| 45. |
Which of the following are not the methods of preparing the trial balance? |
| A. | Totals method |
| B. | Balances method |
| C. | Differences method |
| D. | Totals & Balances method |
| Answer» D. Totals & Balances method | |
| 46. |
1,500 boxes costing Rs.10 each were sent on consignment. Rs.12,000 spent on freight. A loss of 10% is unavoidable. Calculate the cost of each box. |
| A. | Rs.20 |
| B. | Rs.10 |
| C. | Rs.18 |
| D. | Rs.15 |
| Answer» B. Rs.10 | |
| 47. |
An investment of Rs.22,000 was not recorded in the books of account. The adjustment entry will be. |
| A. | Revaluation A/c Dr 22,000 To Investment A/c 22,000 |
| B. | Investment A/c Dr 22,000 To Revaluation A/c 22,000 |
| C. | Partners Capital A/c’s Dr 22,000 To Revaluation A/c 22,000 |
| D. | None of the above |
| Answer» C. Partners Capital A/c’s Dr 22,000 To Revaluation A/c 22,000 | |
| 48. |
P, Q, and R are partners sharing profits and losses in the ratio of 3:2:1. R retired. Future profit sharing ratio is 2:1. There was a joint life policy of Rs.6,00,000 with a surrender value of Rs.80,000. What will be the treatment in the Partner’s Capital A/c’s, if JLP is maintained at surrender value along with reserve? |
| A. | Rs.6,00,000 to be distributed to all the partners in old ratio |
| B. | Rs.5,20,000 to be distributed to all the partners in old ratio |
| C. | Rs.80,000 to be distributed to all the partners in old ratio |
| D. | Distribute JLP reserve account in old profit sharing ratio. |
| Answer» E. | |
| 49. |
On 2-03-2015, 50,000, 10% debentures of Rs.100 each are issued at a discount of 5%. On 10-3-2015, 80,000 , 6% preference shares of Rs.100 each are redeemed at a premium of 10% along with one month dividend. On 22-03- 2015, 40, 000 equity shares of Rs.100 each are issued at a premium of 15%. On 28-02-15, bank balance was Rs.6,34,000. What is the bank balance on 31-03-2015? |
| A. | Rs.11,84,000 |
| B. | Rs.11,44,000 |
| C. | Rs.7,04,000 |
| D. | Rs.16,34,000 |
| Answer» C. Rs.7,04,000 | |
| 50. |
Where the goods are of perishable nature, unpaid seller can |
| A. | Sue for price |
| B. | Repudiate the contract before due date |
| C. | Resell the goods |
| D. | Sue for damages |
| Answer» D. Sue for damages | |