602 + Mcqs in Financial Accounting Page 11 McqOptions

501.	Under the net worth method, the profit can be ascertained by preparing
A.	Profit and loss account
B.	Cash account
C.	Statement of Affairs
D.	Statement of Profit
Answer» E.

Discussion

502.	In single entry system profit is calculated by:
A.	Opening capital + Drawing Fresh Capital Closing Capital
B.	Closing capital + Drawing + Fresh Capital Opening Capital
C.	Closing capital Drawing + Fresh Capital Opening Capital
D.	Closing capital + Drawing Fresh Capital Opening Capital
Answer» E.

Discussion

503.	Joint Venture is of the nature of:
A.	Personal Account
B.	Real Account
C.	Nominal Account
D.	Capital Account
Answer» D. Capital Account

Discussion

504.	The adjustment entry for goods in transit is passed in the books of
A.	Either the branch or the head office
B.	Branch as well as Head office
C.	Only Branch account
D.	Only Branch account
Answer» B. Branch as well as Head office

Discussion

505.	Net Profit under single entry system is equal to
A.	Capital+ Additional Capital - Drawings- Opening Capital
B.	Capital - Additional Capital -Drawings - Opening Capital
C.	Capital - Additional Capital + Drawings - Opening Capital
D.	Capital+ Additional Capital +Drawings + Opening Capital
Answer» D. Capital+ Additional Capital +Drawings + Opening Capital

Discussion

506.	Joint venture account is in the nature of
A.	Real account
B.	Personal account
C.	Nominal account
D.	None of the above
Answer» D. None of the above

Discussion

507.	Amalgamation adjustment reserve is opened in the books of transferee company to incorporate
A.	(a) The assets of the transferor company
B.	(b) The liabilities of the transferor company
C.	(c) The statutory reserves of the transferor company
D.	(d) Goodwill of Transferor company
Answer» D. (d) Goodwill of Transferor company

Discussion

508.	Expenses which have become due during the accounting period for which the final accounts have been prepared but have not yet been paid is called
A.	Accrued
B.	Outstanding
C.	Arrears
D.	Non over dues
Answer» C. Arrears

Discussion

509.	Minimum Rent in the first year Rs 1,00,000 and will be increased by Rs 10,000 p.a. for three years and then after by 10% per year. What is the amount at the end of 6th year?
A.	Rs 100000
B.	Rs 157300
C.	Rs 168000
D.	Rs 200000
Answer» C. Rs 168000

Discussion

510.	Loss or profit on realisation a/c is transferred by the transferor company, under amalgamation to
A.	(a) Preference shareholders a/c
B.	(b) Equity Shareholders Account
C.	(c) Profit & loss appropriation a/c
D.	(d) Debentureholders Account
Answer» C. (c) Profit & loss appropriation a/c

Discussion

511.	` 5,000 paid as local cartage on material purchased. However this amount was booked under Miscellaneous Expenses A/c instead of on Carriage Inward. Due to this error net profit and loss will
A.	Increase by ` 5,000 ;
B.	Decrease by ` 5,000 ;
C.	Increase by ` 10,000 ;
D.	not be affected at all
Answer» E.

Discussion

512.	The statement of profit or loss is prepared according to _______ method to calculate profit or loss under single entry system
A.	Conversion method
B.	Statement of affairs method
C.	Conversion and statement of affairs method
D.	None of these
Answer» C. Conversion and statement of affairs method

Discussion

513.	What are the two types of losses of goods in Joint venture Account.
A.	Normal and abnormal losses
B.	Simple loss and pure loss
C.	Executive and execute loss
D.	None of these
Answer» B. Simple loss and pure loss

Discussion

514.	On amalgamation, if the dissolution expenses are paid as well as borne by the purchasing company
A.	(a) Entries are passed in the books of the purchasing as well as the vendor company
B.	(b) no entry is passed in the books of the vendor company
C.	(c) no entry is passed in the books of the purchasing company
D.	(d) no entry is passed in the books of the purchasing as well as the vendor company
Answer» C. (c) no entry is passed in the books of the purchasing company

Discussion

515.	Due to retrospective effect on revision of salary of employees, the arrears of salary relating to past years, payable in current year is
A.	Prior - period item
B.	Extra - ordinary item
C.	Ordinary item requiring separate disclosure
D.	Contingent item
Answer» D. Contingent item

Discussion

516.	Profit or loss on a joint venture is shared by the co-venturers
A.	Equally
B.	In the capital ratio
C.	As per the agreement
D.	None of the above
Answer» D. None of the above

Discussion

517.	Bill dishonored is shown in
A.	Bills receivable account
B.	Bills receivable account and Debtor account.
C.	Debtor account.
D.	None of the Above
Answer» C. Debtor account.

Discussion

518.	Shiva draws a bill on Sanat on 25th October, 2018 for 90 days, the maturity date of the bill will be
A.	27th January, 2019
B.	26th January, 2019
C.	25th January, 2019
D.	28th January, 2019
Answer» D. 28th January, 2019

Discussion

519.	Kuntal draws a bill on shyam for ` 7,000.Kuntal endorsed it to Ram. Ram endorsed it to Rahim. The payee of the bill will be:
A.	Kuntal
B.	Ram
C.	Shyam
D.	Rahim
Answer» E.

Discussion

520.	________ is equal to estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.
A.	Net Realizable value
B.	Cost of Conversion
C.	Cost of Purchase
D.	None of the above
Answer» B. Cost of Conversion

Discussion

521.	If a bill is endorsed to a third party, the accounting entry in the books of the endorser, at the time of endorsement involves
A.	Credit Endorsee s Account
B.	Debit Endorsee s Account
C.	Debit Bills Receivable Account
D.	Credit Bills Payable Account
Answer» C. Debit Bills Receivable Account

Discussion

522.	If Machinery Account is debited with the amount of repairs incurred on the machine, this is an example of
A.	Compensating error
B.	Error of principle
C.	Error of commission
D.	Error of omission
Answer» C. Error of commission

Discussion

523.	When a separate set of books is kept for the joint Venture, the commonly accounts maintained are
A.	Joint Bank Account
B.	Co-Venturers Account
C.	Joint Venture Account
D.	All of the Above
Answer» E.

Discussion

524.	Any bad debt incurred on account of joint venture are debited to
A.	Bad Debts Account
B.	Debtor s Personal Account
C.	Joint Venture Account
D.	All the above
Answer» D. All the above

Discussion

525.	The following accounts should be opened in the case of separate set of books in Joint Venture Account.
A.	Joint Venture A/c
B.	Joint Bank A/c
C.	Co-venturer s A/c
D.	All of the above
Answer» E.

Discussion

526.	For providing depreciation on leasehold property, the appropriate method of depreciation is:
A.	Replacement Method
B.	Revaluation Method
C.	Fixed Installment Method
D.	none
Answer» D. none

Discussion

527.	The accounting process of gradually converting the unexpired cost of fixed assets into expenses over a series of accounting periods is
A.	Depreciation
B.	Physical deterioration of the asset
C.	Decrease in market value of the asset
D.	Valuation of an asset at a point of time
Answer» B. Physical deterioration of the asset

Discussion

528.	Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?
A.	The bad debt expense is not matched with the related sales
B.	Revenue is overstated in the year of sales
C.	It violates the matching principle of accounting
D.	All of the above
Answer» E.

Discussion

529.	The commission given by consignor to the consignee for taking additional risks of recovery of debts on account of sales made on credit is known as ________.
A.	Over riding commission
B.	Del-credre commission
C.	Normal commission
D.	None of these.
Answer» C. Normal commission

Discussion

530.	In the books of consignor the balance of the consignment stock account would be shown:
A.	As an asset in the balance sheet.
B.	As a liability in the Balance Sheet
C.	On the credit side of the Trading A/c
D.	On the debit side of Consignment A/c
Answer» B. As a liability in the Balance Sheet

Discussion

531.	The Capital of X Ltd. was ` 55,000 as on 01.04.2012 which fell to ` 25,000 by the end of 31.03.2013. Find the value of goods sent of consignment basis
A.	Drawings ;
B.	Business losses during the period ;
C.	Both ;
D.	Introduction of new capital
Answer» D. Introduction of new capital

Discussion

532.	In the books of consignor, the expenses incurred by consignee should be debited to
A.	Consignee A/c
B.	Consignment A/c
C.	Expenses A/c
D.	Consignor s A/c
Answer» C. Expenses A/c

Discussion

533.	The main source of income for non trading organization is
A.	Subscriptions
B.	Donations
C.	Entrance fee
D.	Interest on Deposit
Answer» B. Donations

Discussion

534.	Income and Expenditure Account records transactions of:
A.	Revenue nature only
B.	Capital nature only
C.	Both revenue and capital nature
D.	Income of only revenue nature and expenditure of revenue and capital nature
Answer» B. Capital nature only

Discussion

535.	Payment of honorarium to secretary is treated as : Sol:
A.	Capital expenditure
B.	Revenue expenditure
C.	An income
D.	None of these
Answer» C. An income

Discussion

536.	HO sends goods to branch at 20% profit on invoice price, therefore the percentage of profit on cost comes to
A.	15%
B.	25%
C.	33.33%
D.	20%
Answer» C. 33.33%

Discussion

537.	On 1st April 2013 Abhay of Patna consigned goods costing `7500 to Bhola of Ranchi at a proforma invoice price of 25% profit on sales. The Consignment A/c will be credited for stock loading by
A.	2500 ;
B.	1875 ;
C.	2000 ;
D.	1500
Answer» B. 1875 ;

Discussion

538.	Goods sent on consignment should be debited by consignor to:
A.	Consignment account
B.	Goods sent on consignment account
C.	Consignors account
D.	None of the above
Answer» B. Goods sent on consignment account

Discussion

539.	The Income and Expenditure Account is always accompanied with a cash flow statement Sol:
A.	True
B.	False
C.	none
D.	all
Answer» C. none

Discussion

540.	The Income and Expenditure Account is a summary of cash transactions. Sol:
A.	True
B.	False
C.	none
D.	all
Answer» C. none

Discussion

541.	Cash remitted by branch but not received by the head office is debited by the head office to _____
A.	goods in transit
B.	cash in transit
C.	branch account
D.	head office account
Answer» C. branch account

Discussion

542.	Balance of Income and Expenditure Account shows: Sol:
A.	Cash in hand
B.	Capital fund
C.	Net Profit
D.	Excess of Income over expenditure or vice versa
Answer» E.

Discussion

543.	For a non-trading concern, honorarium paid is: Sol:
A.	An Income
B.	An Assets
C.	An Expense
D.	None of these
Answer» D. None of these

Discussion

544.	Non-trading concern prepare
A.	Receipts and Payments A/c
B.	Balance Sheet
C.	Income and Expenditure A/c
D.	All of the above
Answer» E.

Discussion

545.	Income and Expenditure Account is preparedly : Sol:
A.	Trending Organisation
B.	Non-trading Organisation
C.	Both (a) and (b)
D.	None of these
Answer» C. Both (a) and (b)

Discussion

546.	Income and Expenditure Account generally indicates: Sol:
A.	Surplus/ deficit
B.	Cash balance
C.	Capital fund
D.	Net profit/Loss
Answer» B. Cash balance

Discussion

547.	Goods sent by the head office to the branch but not received by the branch before the close of financial year are credited by head office to
A.	branch account
B.	trading account
C.	goods sent to branch account
D.	goods in transit account
Answer» B. trading account

Discussion

548.	_________ represents goods sent by head office to the branch or by the branch to the head office but not received by other
A.	Goods in transit
B.	Cash in transit
C.	Barter transit
D.	None of these.
Answer» B. Cash in transit

Discussion

549.	Goods sent by the Head Office to the branch but not received by the branch are termed as
A.	Cash in transit
B.	Goods in transit
C.	Independent goods
D.	Abnormal loss
Answer» C. Independent goods

Discussion

550.	Goods are sent to branch at cost plus 20% .If closing stock of the branch is Rs 60,000 at invoice price, Rs____ will be credited to stock reserve a/c.
A.	Rs. 10,000
B.	Rs. 12,000
C.	Rs. 6,000
D.	Rs. 12,600
Answer» B. Rs. 12,000

Discussion

Explore topic-wise MCQs in Bachelor of Business Administration in Computer Applications (BBA [CA]).

Under the net worth method, the profit can be ascertained by preparing

In single entry system profit is calculated by:

Joint Venture is of the nature of:

The adjustment entry for goods in transit is passed in the books of

Net Profit under single entry system is equal to

Joint venture account is in the nature of

Amalgamation adjustment reserve is opened in the books of transferee company to incorporate

Expenses which have become due during the accounting period for which the final accounts have been prepared but have not yet been paid is called

Minimum Rent in the first year Rs 1,00,000 and will be increased by Rs 10,000 p.a. for three years and then after by 10% per year. What is the amount at the end of 6th year?

Loss or profit on realisation a/c is transferred by the transferor company, under amalgamation to

` 5,000 paid as local cartage on material purchased. However this amount was booked under Miscellaneous Expenses A/c instead of on Carriage Inward. Due to this error net profit and loss will

The statement of profit or loss is prepared according to _______ method to calculate profit or loss under single entry system

What are the two types of losses of goods in Joint venture Account.

On amalgamation, if the dissolution expenses are paid as well as borne by the purchasing company

Due to retrospective effect on revision of salary of employees, the arrears of salary relating to past years, payable in current year is

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

Bill dishonored is shown in

Shiva draws a bill on Sanat on 25th October, 2018 for 90 days, the maturity date of the bill will be

Kuntal draws a bill on shyam for ` 7,000.Kuntal endorsed it to Ram. Ram endorsed it to Rahim. The payee of the bill will be:

________ is equal to estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

If a bill is endorsed to a third party, the accounting entry in the books of the endorser, at the time of endorsement involves

If Machinery Account is debited with the amount of repairs incurred on the machine, this is an example of

When a separate set of books is kept for the joint Venture, the commonly accounts maintained are

Any bad debt incurred on account of joint venture are debited to

The following accounts should be opened in the case of separate set of books in Joint Venture Account.

For providing depreciation on leasehold property, the appropriate method of depreciation is:

The accounting process of gradually converting the unexpired cost of fixed assets into expenses over a series of accounting periods is

Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?

The commission given by consignor to the consignee for taking additional risks of recovery of debts on account of sales made on credit is known as ________.

In the books of consignor the balance of the consignment stock account would be shown:

The Capital of X Ltd. was ` 55,000 as on 01.04.2012 which fell to ` 25,000 by the end of 31.03.2013. Find the value of goods sent of consignment basis

In the books of consignor, the expenses incurred by consignee should be debited to

The main source of income for non trading organization is

Income and Expenditure Account records transactions of:

Payment of honorarium to secretary is treated as : Sol:

HO sends goods to branch at 20% profit on invoice price, therefore the percentage of profit on cost comes to

On 1st April 2013 Abhay of Patna consigned goods costing `7500 to Bhola of Ranchi at a proforma invoice price of 25% profit on sales. The Consignment A/c will be credited for stock loading by

Goods sent on consignment should be debited by consignor to:

The Income and Expenditure Account is always accompanied with a cash flow statement Sol:

The Income and Expenditure Account is a summary of cash transactions. Sol:

Cash remitted by branch but not received by the head office is debited by the head office to _____

Balance of Income and Expenditure Account shows: Sol:

For a non-trading concern, honorarium paid is: Sol:

Non-trading concern prepare

Income and Expenditure Account is preparedly : Sol:

Income and Expenditure Account generally indicates: Sol:

Goods sent by the head office to the branch but not received by the branch before the close of financial year are credited by head office to

_________ represents goods sent by head office to the branch or by the branch to the head office but not received by other

Goods sent by the Head Office to the branch but not received by the branch are termed as

Goods are sent to branch at cost plus 20% .If closing stock of the branch is Rs 60,000 at invoice price, Rs____ will be credited to stock reserve a/c.