MCQOPTIONS
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MCQOPTIONS
This section includes 657 Mcqs, each offering curated multiple-choice questions to sharpen your Testing Subject knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Insurance regulation and development authorities act came into effect in |
| A. | 1938 |
| B. | 1999 |
| C. | 2000 |
| D. | none of these |
| Answer» B. 1999 | |
| 2. |
In the revenue account bonus in reduction of premium is shown as |
| A. | Liability |
| B. | income |
| C. | expense |
| D. | none of these |
| Answer» D. none of these | |
| 3. |
When policy matures on the death of the insured, it is expressed as |
| A. | With profit policy |
| B. | without profit policy |
| C. | whole life policy |
| D. | none of these |
| Answer» B. without profit policy | |
| 4. |
General insurance policies are taken |
| A. | One year |
| B. | two year |
| C. | three year |
| D. | none of these |
| Answer» B. two year | |
| 5. |
Provision created for unsecured doubtful debt is |
| A. | 50% |
| B. | 75% |
| C. | 100% |
| D. | none of these. |
| Answer» D. none of these. | |
| 6. |
With effect from 31/03/2005, a doubt full asset is none which has remained in the substandard category for |
| A. | 18 month |
| B. | 12 month |
| C. | 6 month |
| D. | none of these |
| Answer» C. 6 month | |
| 7. |
Provision created for substandard is |
| A. | 10% |
| B. | 155 |
| C. | 20% |
| D. | none of these. |
| Answer» B. 155 | |
| 8. |
Which of the following does not include under the head “other asset” |
| A. | Silver |
| B. | interest accrued |
| C. | gold |
| D. | inter office adjustment |
| Answer» D. inter office adjustment | |
| 9. |
In a bank balance sheet, unclaimed dividend will be shown under the head |
| A. | Contingent liabilities |
| B. | other liabilities |
| C. | borrowings |
| D. | none of these. |
| Answer» C. borrowings | |
| 10. |
A non banking asset is |
| A. | An item of office equipment |
| B. | any asset required from the debtors in satisfaction of claim |
| C. | money at call and short notice |
| D. | furniture and fixtures |
| Answer» C. money at call and short notice | |
| 11. |
Banks show the provision for income tax under the head |
| A. | Contingent assets |
| B. | contingent liabilities |
| C. | other liabilities and provisions |
| D. | borrowings. |
| Answer» D. borrowings. | |
| 12. |
Rebate on bills discounted is |
| A. | An item of income |
| B. | a liability |
| C. | income received in advance |
| D. | accrued income. |
| Answer» D. accrued income. | |
| 13. |
As per the rules framed under the companies Act, 1956, if the dividend proposed by a company is 12% of the paid up capital, the amount to be transferred to reserve must not beless than |
| A. | 5% of current year profit |
| B. | 7.5% of the current year profit |
| C. | 10% of the current year profit |
| D. | 2.5% of the current year profit. |
| Answer» E. | |
| 14. |
Which of the following would not appear in a limited company’s appropriation a/c |
| A. | Transfer to revaluation reserve |
| B. | proposed taxation |
| C. | interim dividend |
| D. | transfer to general reserve. |
| Answer» C. interim dividend | |
| 15. |
Advance payment of tax should be shown on the |
| A. | Debit side of P/L a/c |
| B. | debit side of P/L appropriation a/c |
| C. | asset side of the B/S |
| D. | liability side of the B/S |
| Answer» D. liability side of the B/S | |
| 16. |
Scrip dividend means |
| A. | Unclaimed dividend |
| B. | arrears of dividend |
| C. | dividend paid other than cash |
| D. | cash dividend |
| Answer» D. cash dividend | |
| 17. |
Which of the following items will be taken in the P/L a/c below the line |
| A. | Provision for taxation |
| B. | transfer to sinking fund |
| C. | contribution to PF |
| D. | preliminary expenses written off |
| Answer» D. preliminary expenses written off | |
| 18. |
In the case of joint stock company, goodwill is sown on the asset side under the head |
| A. | Fixed asset |
| B. | investment |
| C. | current asset |
| D. | miscellaneous expenditure |
| Answer» B. investment | |
| 19. |
When the proposed dividend exceeds 20% of the paid up capital, percentage of profit to betransferred to reserve is |
| A. | 10% |
| B. | 7.5% |
| C. | 2.5% |
| D. | 5% |
| Answer» B. 7.5% | |
| 20. |
The amount set aside to meet the loss of bad debt is |
| A. | Provision |
| B. | liability |
| C. | reserve |
| D. | contingent liability |
| Answer» B. liability | |
| 21. |
Calls in arrear Is |
| A. | Shown as current asset |
| B. | deducted from share capital |
| C. | shown as current liability |
| D. | shown under miscellaneous expenditure |
| Answer» C. shown as current liability | |
| 22. |
Loose tools are shown in the balance sheet under |
| A. | Fixed asset |
| B. | investment |
| C. | current asset |
| D. | miscellaneous expenditure |
| Answer» D. miscellaneous expenditure | |
| 23. |
The transfer of profit to reserve should not exceed |
| A. | 5% of profit |
| B. | 10% of profit |
| C. | 15% of profit |
| D. | 20% of profit |
| Answer» C. 15% of profit | |
| 24. |
Preliminary expense Is an example of |
| A. | Fixed asset |
| B. | current asset |
| C. | investment |
| D. | fictitious asset |
| Answer» E. | |
| 25. |
Debentures are shown in the balance sheet under head |
| A. | Current asset loans and advances |
| B. | investments |
| C. | secured loan |
| D. | unsecured loan |
| Answer» D. unsecured loan | |
| 26. |
Advance payment of tax is in the nature of |
| A. | Capital expenditure |
| B. | prepaid expenses |
| C. | outstanding expenses |
| D. | revenue expenditure |
| Answer» C. outstanding expenses | |
| 27. |
In the balance sheet of a company, debentures are shown under which heading |
| A. | Secured loan |
| B. | unsecured loan |
| C. | provisions |
| D. | reserves and surplus |
| Answer» B. unsecured loan | |
| 28. |
In the balance sheet of a company , the discount on issue of debentures is shown under whichheading |
| A. | Fixed asset |
| B. | current asset |
| C. | investment |
| D. | miscellaneous expenditure |
| Answer» E. | |
| 29. |
Which of the following should be deducted from the shares capital to find out paid up capital |
| A. | Calls in advance |
| B. | calls in arrears |
| C. | shares forfeited account |
| D. | discount on issue of shares. |
| Answer» C. shares forfeited account | |
| 30. |
Interest on debenture is |
| A. | Adjustment of profit |
| B. | appropriation of profit |
| C. | charge on profit |
| D. | none of these |
| Answer» D. none of these | |
| 31. |
Dividends are usually paid on |
| A. | Authorized capital |
| B. | issued capital |
| C. | called up capital |
| D. | paid up capital |
| Answer» E. | |
| 32. |
When an existing company offers its shares for sale to the existing shareholders, it is knownas |
| A. | Private placement |
| B. | bonus shares |
| C. | right issue |
| D. | offer for sale |
| Answer» D. offer for sale | |
| 33. |
When forfeited shares (which were originally issued at a discount ) are reused at a premium,the amount of such premium will be credited to |
| A. | Shares forfeiture account |
| B. | security premium account |
| C. | capital reserve account |
| D. | none of these. |
| Answer» C. capital reserve account | |
| 34. |
The rate of discount on shares cannot exceed. |
| A. | 5% |
| B. | 10% |
| C. | 6% |
| D. | none of these |
| Answer» C. 6% | |
| 35. |
The rate of interest a company can charge on calls in arrears according to Table A of thecompanies act is |
| A. | 10% |
| B. | 6% |
| C. | 5% |
| D. | none of these |
| Answer» D. none of these | |
| 36. |
The excess price received on the par value of shares should be credited to |
| A. | Calls in advance account |
| B. | reserve capital |
| C. | security premium account |
| D. | none of these |
| Answer» D. none of these | |
| 37. |
As per Table A of the companies act, the interest on calls in advance is |
| A. | 5% |
| B. | 10% |
| C. | 6% |
| D. | none of these. |
| Answer» D. none of these. | |
| 38. |
The difference between subscribed capital and called up capital |
| A. | Paid up capital |
| B. | uncalled capital |
| C. | calls in advance |
| D. | calls in arrears. |
| Answer» C. calls in advance | |
| 39. |
The number of days required from the time of issue of the prospectus to the completeallotment should not exceed |
| A. | 30 days |
| B. | 60 days |
| C. | 90 days |
| D. | 120 days |
| Answer» E. | |
| 40. |
A newly established company cannot issue shares at par |
| A. | Par |
| B. | premium |
| C. | discount |
| D. | none of these |
| Answer» D. none of these | |
| 41. |
Share application is classified as |
| A. | Real account |
| B. | personal account |
| C. | impersonal account |
| D. | nominal account |
| Answer» B. personal account | |
| 42. |
Accumulated depreciation is an example of |
| A. | An expense |
| B. | an unrecorded revenue |
| C. | a liability |
| D. | a contra account. |
| Answer» E. | |
| 43. |
The term amortization applies to decrease in book value of |
| A. | Intangible fixed asset |
| B. | wasting assets |
| C. | tangible fixed assets |
| D. | current assets |
| Answer» B. wasting assets | |
| 44. |
For providing depreciation on lease hold property, the appropriate method is |
| A. | Revaluation method |
| B. | fixed installment method |
| C. | replacement method |
| D. | written down value method. |
| Answer» C. replacement method | |
| 45. |
The term ‘depletion’ applies to decrease in value of |
| A. | Tangible asset |
| B. | intangible asset |
| C. | wasting asset |
| D. | current asset. |
| Answer» D. current asset. | |
| 46. |
Under diminishing balance method, |
| A. | The rate of depreciation falls every year |
| B. | the amount on which deprecation is calculated falls every year |
| C. | the rate as well as amount of depreciation falls every year. |
| D. | the rate as well as amount of depreciation remains constant. |
| Answer» C. the rate as well as amount of depreciation falls every year. | |
| 47. |
If original cost of an asset is rs. 60000 and its scrap value is Rs. 10000, its depreciable cost is |
| A. | 70000 |
| B. | 50000 |
| C. | 60000 |
| D. | none of these. |
| Answer» C. 60000 | |
| 48. |
When provision for depreciation account is maintained, the amount of depreciation is debitedto |
| A. | Asset account |
| B. | depreciation account |
| C. | provision for depreciation account |
| D. | none of these. |
| Answer» C. provision for depreciation account | |
| 49. |
Depreciation arises because of |
| A. | Fall in market value of asset |
| B. | wear and tear |
| C. | recession |
| D. | none of these. |
| Answer» C. recession | |
| 50. |
Loss on sale of asset is |
| A. | Debited to asset account |
| Answer» E. | |