602 + Mcqs in Financial Accounting McqOptions

1.	In the books of consignor, the balance in the goods sent on consignment account is shown
A.	On the asset side to balance sheet
B.	On the liability side of balance sheet
C.	On the credit side of trading A/c
D.	On the credit side of consignment A/c
Answer» D. On the credit side of consignment A/c

Discussion

2.	The account to which the difference in the trial balance is temporarily placed , so that the trial balance is made totally, such an account is called
A.	Customers account
B.	Suspense account
C.	Bank account
D.	Capital account
Answer» C. Bank account

Discussion

3.	At the end of the year 2017-18, Prepaid Insurance Premium `7,500 appeared in the Trial Balance, it will be shown
A.	only in Profit & Loss Account.
B.	only in Balance Sheet.
C.	both in Profit & Loss Account and in Balance Sheet.
D.	not in Both in Profit & Loss Account and in Balance Sheet.
Answer» C. both in Profit & Loss Account and in Balance Sheet.

Discussion

4.	Which of the following accounting treatments is/are true in respect of accrued commission appearing on the debit side of a Trial Balance?
A.	It is shown on the debit side of the Profit and Loss Account
B.	It is shown on the credit side of the Profit and Loss Account
C.	It is shown on the liabilities side of the Balance Sheet
D.	It is shown on the assets side of the Balance Sheet
Answer» E.

Discussion

5.	In the books of consignee the sale of goods is credited to:
A.	Consignor s account
B.	Sales account
C.	Consignee s account
D.	Goods sent on consignment account
Answer» B. Sales account

Discussion

6.	The CAS should be Sol:
A.	Simple and integrated, transparent, accurate, scalability, reliability
B.	Complex, Accurate, Transparent, Faster to work
C.	Able to transform the manual accounting system to computerised accounting system
D.	None of the above.
Answer» B. Complex, Accurate, Transparent, Faster to work

Discussion

7.	The consignor is:
A.	Principal
B.	Agent
C.	Debtor
D.	None of the above
Answer» B. Agent

Discussion

8.	The consignor is
A.	Principal
B.	Agent
C.	Debtor
D.	None of them
Answer» B. Agent

Discussion

9.	Legacies should be treated as Sol:
A.	A Liability
B.	A Revenue Receipt
C.	An Income
D.	None of these
Answer» B. A Revenue Receipt

Discussion

10.	All receipts from sale of consumable items are treated as: Sol:
A.	Capital Receipts
B.	Revenue Receipts
C.	Both (a) and (b)
D.	None of these
Answer» C. Both (a) and (b)

Discussion

11.	The not for profit concerns prohibit the payment of any to theirmembersSol:
A.	Dividend
B.	Loss
C.	Assets
D.	Expenditure
Answer» B. Loss

Discussion

12.	Fixed payment made for the used of an assets is called Financial Lease Sol:
A.	True
B.	False
C.	none
D.	all
Answer» C. none

Discussion

13.	Income and Expenditure Account records
A.	Capital items
B.	Revenue items
C.	A and B both
D.	None of these
Answer» C. A and B both

Discussion

14.	Cash flow statement is based on past records, so it is______in nature.
A.	historical
B.	future item
C.	past
D.	none of these
Answer» B. future item

Discussion

15.	Prepaid expenses are shown under
A.	Loans and advances asset side
B.	Loans and advances liability side
C.	In the p and L account
D.	They are ignored
Answer» B. Loans and advances liability side

Discussion

16.	Consignee becomes a debtor of the consignor when
A.	The goods are despatched
B.	The goods are received
C.	The goods are sold
D.	All of the above
Answer» D. All of the above

Discussion

17.	In the books of consignee the expenses incurred by him on consignment are debite
A.	To consignment account
B.	To cash account
C.	To consignor s account
D.	None of the above
Answer» D. None of the above

Discussion

18.	Increase in the amount of creditors results in
A.	Decrease in cash
B.	Increase in cash
C.	No change in cash
D.	None of the above
Answer» C. No change in cash

Discussion

19.	The term used for consignee s remuneration is
A.	Commission
B.	Brokerage
C.	Discount
D.	Allowance
Answer» B. Brokerage

Discussion

20.	The relationship between the consignor and the consignee is that of
A.	Buyer and seller
B.	rincipal and agent
C.	Debtor and creditor
D.	All the above
Answer» C. Debtor and creditor

Discussion

21.	Accrued holiday remuneration becoming payable to any workman is treated as
A.	Secured creditor
B.	Over-riding preferential creditor
C.	Preferential creditor
D.	Unsecured creditor
Answer» C. Preferential creditor

Discussion

22.	Cash flow statement is based on _________ basis of accounting.
A.	cash
B.	accrual
C.	direct
D.	indirect
Answer» B. accrual

Discussion

23.	Remuneration to investigator upon investigation of the affairs of company is treated as
A.	Secured creditor
B.	Over-riding preferential creditor
C.	Preferential creditor
D.	Unsecured creditor
Answer» D. Unsecured creditor

Discussion

24.	Increase in the amount of prepaid expenses results in
A.	Increase in cash
B.	Decrease in cash
C.	No change in cash
D.	None of the above
Answer» C. No change in cash

Discussion

25.	When a complete set of books are maintained for the joint venture and in case where an amount is spent on account of expenses or for purchasing goods for the venture, the entry would be
A.	Joint Venture A/c Dr To Joint Bank A/C
B.	Joint Bank A/c Dr To Joint Venture A/c
C.	Joint Venture A/c Dr To Venturer s A/c
D.	Venturer s A/c Dr To Joint Venture A/c
Answer» B. Joint Bank A/c Dr To Joint Venture A/c

Discussion

26.	Which of these accounts are not opened in a joint venture:
A.	Stock reserve
B.	Joint bank A/c
C.	Joint venture A/c
D.	Co-venturers personal A/c
Answer» B. Joint bank A/c

Discussion

27.	Which of the following is not a feature of a Joint venture?
A.	Continuing business
B.	No firm name
C.	Partners called co-venturer
D.	Partnership for limited purpose
Answer» B. No firm name

Discussion

28.	Profit or loss on joint venture business is shared by the co-venturers:
A.	Equally
B.	In the ratio of capital contributed
C.	In the agreed upon ratio
D.	A per seniority
Answer» D. A per seniority

Discussion

29.	Depreciation is _________ from/to net profit in calculating funds from operation.
A.	added
B.	deducted
C.	divided
D.	all of the above
Answer» B. deducted

Discussion

30.	Which of the following shall not be deducted from net profit while calculating managerial remuneration?
A.	Loss on sale of undertaking
B.	Debts considered bad and written off
C.	Liability arising from a breach of contract
D.	Director s remuneration
Answer» E.

Discussion

31.	Based on the facts given in question no. 366 above find the total commission payable to the Consignee
A.	2,000 ;
B.	3,000 ;
C.	1,000 ;
D.	1,500
Answer» C. 1,000 ;

Discussion

32.	Memorandum Joint Venture Account is prepared to find out
A.	Amount due from the co-venturers
B.	Profit or loss on the joint venture
C.	Sale s account
D.	Purchases account
Answer» C. Sale s account

Discussion

33.	In Memorandum Joint Venture Account Method, the co-venturer records
A.	His transactions only
B.	Other co-venturer s transactions only
C.	All the transactions of Joint Venture
D.	All the above
Answer» B. Other co-venturer s transactions only

Discussion

34.	In case of Memorandum Method, when there are three co-ventures, each co-venturer opens in his books for the venture
A.	One account
B.	Two accounts
C.	Three accounts
D.	None
Answer» C. Three accounts

Discussion

35.	In case of memorandum method when there are three co-venturers, each co-venturer opens in its books for the venture
A.	One account
B.	Two accounts
C.	Three accounts.
D.	None of the above
Answer» B. Two accounts

Discussion

36.	The balance of royalty payable account is transferred to Sol:
A.	Profit and loss account
B.	Royalties suspense account
C.	Production account
D.	all
Answer» D. all

Discussion

37.	Goods in transit are shown in the balance sheet of
A.	Branch
B.	Head office
C.	Both a and b
D.	None of the above
Answer» C. Both a and b

Discussion

38.	In the above question if the depreciation is charged @10% on written down value method, find the profit or loss on sale of the Second hand car.
A.	Loss of ` 20,000 ;
B.	Loss of ` 22,000 ;
C.	Loss of ` 11,000 ;
D.	Profit of ` 11,000
Answer» C. Loss of ` 11,000 ;

Discussion

39.	The balance of royalty s receivable account is transferred to Sol:
A.	Profit and loss account
B.	Royalties suspense account
C.	Production account.
D.	all
Answer» B. Royalties suspense account

Discussion

40.	When goods are invoiced to Branch at selling price, the value of goods is adjusted by
A.	Debiting goods sent to Branch Account
B.	Crediting goods sent to Branch Account
C.	Debiting Stock to Reserve Account
D.	Crediting Stock to Reserve Account
Answer» B. Crediting goods sent to Branch Account

Discussion

41.	The share of profit of the co-venturer maintaining the records is credited to
A.	Profit and loss account
B.	His personal account
C.	Credit account
D.	Debtor s account
Answer» B. His personal account

Discussion

42.	The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A.	Current assets
B.	Fixed assets
C.	Intangible assets
D.	Investments
Answer» B. Fixed assets

Discussion

43.	In case of ..preference shares, the arrears of dividend are carried forward and paid out of the profits of the subsequent years.
A.	Participating
B.	Convertible
C.	Cumulative
D.	Redeemable
Answer» D. Redeemable

Discussion

44.	XYZ Ltd. follows the written down value method of depreciating machinery year after year due to
A.	Comparability
B.	Convenience
C.	Consistency
D.	All of the above
Answer» D. All of the above

Discussion

45.	Branch which donot maintain its own set of books is__________.
A.	Dependent branch
B.	Independent branch
C.	Foreign branch
D.	Local branch
Answer» B. Independent branch

Discussion

46.	Which method is used under single entry system to find out the profit or loss?
A.	Double entry system
B.	Statement of affairs method
C.	Cash book
D.	All of the above
Answer» C. Cash book

Discussion

47.	Branch which does not maintain its own set of books is:
A.	Dependent branch
B.	Independent branch
C.	Foreign branch
D.	Local branch
Answer» B. Independent branch

Discussion

48.	Money spent on heavy advertising, whose benefit is continuing for three years to come, is a __________.
A.	Capital Expenditure
B.	Revenue expenditure
C.	Deferred Revenue Expenditure
D.	none
Answer» D. none

Discussion

49.	______________ represents a potential obligation that could be created depending on the outcome of an event.
A.	Internal Liability
B.	Current Liability
C.	Contingent Liability
D.	Non-current Liability
Answer» D. Non-current Liability

Discussion

50.	Under single entry system details of
A.	Expenses will not be available
B.	Revenues will not be available
C.	Expenses and revenues will not be available
D.	None of the above
Answer» D. None of the above

Discussion

Explore topic-wise MCQs in Testing Subject.

In the books of consignor, the balance in the goods sent on consignment account is shown

The account to which the difference in the trial balance is temporarily placed , so that the trial balance is made totally, such an account is called

At the end of the year 2017-18, Prepaid Insurance Premium `7,500 appeared in the Trial Balance, it will be shown

Which of the following accounting treatments is/are true in respect of accrued commission appearing on the debit side of a Trial Balance?

In the books of consignee the sale of goods is credited to:

The CAS should be Sol:

The consignor is:

The consignor is

Legacies should be treated as Sol:

All receipts from sale of consumable items are treated as: Sol:

The not for profit concerns prohibit the payment of any to theirmembersSol:

Fixed payment made for the used of an assets is called Financial Lease Sol:

Income and Expenditure Account records

Cash flow statement is based on past records, so it is______in nature.

Prepaid expenses are shown under

Consignee becomes a debtor of the consignor when

In the books of consignee the expenses incurred by him on consignment are debite

Increase in the amount of creditors results in

The term used for consignee s remuneration is

The relationship between the consignor and the consignee is that of

Accrued holiday remuneration becoming payable to any workman is treated as

Cash flow statement is based on _________ basis of accounting.

Remuneration to investigator upon investigation of the affairs of company is treated as

Increase in the amount of prepaid expenses results in

When a complete set of books are maintained for the joint venture and in case where an amount is spent on account of expenses or for purchasing goods for the venture, the entry would be

Which of these accounts are not opened in a joint venture:

Which of the following is not a feature of a Joint venture?

Profit or loss on joint venture business is shared by the co-venturers:

Depreciation is _________ from/to net profit in calculating funds from operation.

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

Based on the facts given in question no. 366 above find the total commission payable to the Consignee

Memorandum Joint Venture Account is prepared to find out

In Memorandum Joint Venture Account Method, the co-venturer records

In case of Memorandum Method, when there are three co-ventures, each co-venturer opens in his books for the venture

In case of memorandum method when there are three co-venturers, each co-venturer opens in its books for the venture

The balance of royalty payable account is transferred to Sol:

Goods in transit are shown in the balance sheet of

In the above question if the depreciation is charged @10% on written down value method, find the profit or loss on sale of the Second hand car.

The balance of royalty s receivable account is transferred to Sol:

When goods are invoiced to Branch at selling price, the value of goods is adjusted by

The share of profit of the co-venturer maintaining the records is credited to

The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as

In case of ..preference shares, the arrears of dividend are carried forward and paid out of the profits of the subsequent years.

XYZ Ltd. follows the written down value method of depreciating machinery year after year due to

Branch which donot maintain its own set of books is__________.

Which method is used under single entry system to find out the profit or loss?

Branch which does not maintain its own set of books is:

Money spent on heavy advertising, whose benefit is continuing for three years to come, is a __________.

______________ represents a potential obligation that could be created depending on the outcome of an event.

Under single entry system details of