602 + Mcqs in Financial Accounting Page 12 McqOptions

551.	Income and Expenditure Account is prepared : Sol:
A.	By Business Organisation
B.	By Industrial Organisation
C.	By Not-for-Profit Organisation
D.	By All Organisations
Answer» D. By All Organisations

Discussion

552.	Income and Expenditure Account is prepared in non-trading concerns in lieu of
A.	Manufacturing Account
B.	Profit and Loss Account
C.	Trading Account
D.	Cash Book
Answer» C. Trading Account

Discussion

553.	____________ expenditure is increased to maintain the business or to keep the assets in good working condition
A.	Revenue
B.	Capital
C.	Both of ther
Answer» B. Capital

Discussion

554.	In single entry two-fold aspect of transaction are not recorded, so it is:
A.	Complete and Scientific
B.	Incomplete and Unscientific
C.	Complete and Unscientific
D.	Incomplete and Scientific
Answer» C. Complete and Unscientific

Discussion

555.	The excess of assets over liabilities in non-trading concerns is treated as
A.	Capital Fund
B.	Capital
C.	Profit
D.	Net Profit
Answer» B. Capital

Discussion

556.	Which of the following is not a cause of difference in balance as per cash book and balance as per bank pass book
A.	Errors in cash book ;
B.	Errors in pass book ;
C.	Cheques deposited and cleared;
D.	Cheques issued but not presented for payment
Answer» D. Cheques issued but not presented for payment

Discussion

557.	If any transaction is not recorded in the primary books the same is recorded in _______
A.	Journal Proper
B.	Sales Day Book
C.	Cash Book
D.	None of the above
Answer» B. Sales Day Book

Discussion

558.	If two or more company come together and form anew company which takes over the assets and liabilities of the vendor companies it is called as
A.	(a) external reconstruction
B.	(b) Internal Reconstruction
C.	(c) absorption
D.	(d) Amalgamation
Answer» E.

Discussion

559.	Life membership fee received by a club is: Sol:
A.	Revenue Receipt
B.	Capital Receipt
C.	(a) and (b)
D.	None of these
Answer» C. (a) and (b)

Discussion

560.	Buy back of equity shares should be recorded in the final cash flow statement under:
A.	Investing activities
B.	Financing activities
C.	Operation activities
D.	Any of the above
Answer» C. Operation activities

Discussion

561.	The beginnings inventory of the current year is overstated by ` 5,000 and closing inventory is overstated by ` 12,000. These errors will cause the net income for the current year by
A.	17,000 (overstated)
B.	12,000 (understated)
C.	7,000 (overstated)
D.	7,000 (understated)
Answer» D. 7,000 (understated)

Discussion

562.	Which item comes under financing activities in cash flow statement?
A.	Redemption of Preference Share
B.	Issue of Preference Share
C.	Dividend Paid
D.	All the above
Answer» E.

Discussion

563.	When different accounts are clubbed on the basis of some common characteristics that are shared by them, the concept is known as_______.
A.	Asset
B.	Liability
C.	Income
D.	Grouping
Answer» E.

Discussion

564.	The amount of Entrance Fees received regularly by a Not-for Profit Organisation is shown in which of the following:
A.	Liability side of Balance Sheet
B.	Assets side of Balance Sheet
C.	Debit side of Income and Expenditure Account
D.	Credit side of Income and Expenditure Account
Answer» E.

Discussion

565.	In the funds flow statement, item of preliminary expenses written off during the year is:
A.	Added to net profit
B.	Subtracted from net profit
C.	An application of working capital
D.	None of the above
Answer» B. Subtracted from net profit

Discussion

566.	Subscriptions received in advance by a Club are shown on .......... side of the Balance Sheet
A.	Assets Side
B.	Liabilities Side
C.	Debit Side
D.	Credit Side
Answer» C. Debit Side

Discussion

567.	Subscription received in advance during the current year is: Sol:
A.	An income
B.	An Asset
C.	A liability
D.	None of these
Answer» D. None of these

Discussion

568.	The amount of Subscription received from members by a Not-for Profit Organisation is shown in which of the following:
A.	Debit side of Income and Expenditure Account
B.	Credit side of Income and Expenditure Account
C.	Liability side of Balance Sheet
D.	Assets side of Balance Sheet
Answer» C. Liability side of Balance Sheet

Discussion

569.	Subscription received in advance is
A.	An income
B.	An asset
C.	Liability
D.	None of the above
Answer» D. None of the above

Discussion

570.	Subscription received in advance by a club are shown in
A.	Credit side of Income and Expenditure A/c
B.	Asset side of Balance Sheet
C.	Liabilities side of Balance Sheet
D.	Debit side of Income and Expenditure A/c
Answer» D. Debit side of Income and Expenditure A/c

Discussion

571.	Match List I (Financial Statements and Accounts) with List II (special matters associated with statements and accounts) and select the correct answer using the codes given below the lists:List I List IIi) Receipts and Payments Account I. Revenueii) Income and Expenditure Account II. Cashiii) Club subscription received in III. LiabilityAdvance AccountCodes:(i) (ii) (iii)
A.	II I III
B.	I II III
C.	III I II
D.	II III I
Answer» B. I II III

Discussion

572.	In the balance sheet of a company, the discount on issue of debentures is shown under which heading
A.	Fixed asset
B.	Current asset
C.	Investment
D.	Miscellaneous expenditure
Answer» E.

Discussion

573.	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:
A.	Adding ` 2,200 to closing stock
B.	Deducting ` 1,800 from closing stock and deducting ` 2,200 each from debtors and sales
C.	Adding ` 1,800 to closing stock and deducting ` 2,200 each from debtors and sales
D.	Deducting ` 1,800 from debtors
Answer» D. Deducting ` 1,800 from debtors

Discussion

574.	Which of the following statements is/are true?(i) Cash Book records all cash receipts and cash payments(ii) Cash Book records all sale and purchase transactions of goods both in cash and on credit(iii) Cash Book records discount on Cash Payments
A.	Only (i) above
B.	Only (ii) above
C.	Only (iii) above
D.	Both (i) and (iii) above
Answer» E.

Discussion

575.	Provision for bad and doubtful debts is created in anticipation of actual bad debts on the basis of:
A.	Business Entity Concept;
B.	Conservatism Concept;
C.	Accrual Concept;
D.	Full Disclosure Concept.
Answer» C. Accrual Concept;

Discussion

576.	In the books of the drawer, the accounting treatment involved on receipt of a bill of exchange duly accepted by the drawee is i. Debit Bills Receivable Account ii. Debit Drawee s Account iii. Credit Drawee s Account iv. Credit Sales Account
A.	Only (i) above
B.	Both (ii) and (iv) above
C.	Both (i) and (iii) above
D.	Both (i) and (iv) above
Answer» D. Both (i) and (iv) above

Discussion

577.	S issued cheque worth ` 35,000 in March 2013 out of which cheques worth ` 15,000 were presented for payment after by 31st march, 2013. What amount should be added to balance as per pass book
A.	15,000 ;
B.	10,000 ;
C.	25,000 ;
D.	None of the above
Answer» B. 10,000 ;

Discussion

578.	From the following details estimate the capital as on 31.03.2017. Capital as on 01.04.2016 - `4,10,000. Drawings `40,000, Profit during the year ` 50,000
A.	4,10,000
B.	4,50,000
C.	4,20,000
D.	4,00,000
Answer» D. 4,00,000

Discussion

579.	The entry to record the collection of cash from Sundry Debtors would involve a(i) Debit to Sundry Debtors(ii) Debit to Cash Account(iii) Credit to Sundry Debtors(iv) Credit to Cash Account
A.	Only (i) above
B.	Only (iii) above
C.	Both (ii) and (iii) above
D.	Both (i) and (iv) above
Answer» D. Both (i) and (iv) above

Discussion

580.	If vendors are issued fully paid shares of 1,25,000 in consideration of net assets of ?1,50,000, the balance of 25,000 will be credited to :
A.	Statement of Profit & Loss
B.	Goodwill Account
C.	Security Premium Reserve Account
D.	Capital Reserve Account
Answer» D. Capital Reserve Account

Discussion

581.	The profits of the last three years is 42000, 39000,45000. Value of goodwill of 2 years purchase of average profit is
A.	84000
B.	42000
C.	126000
D.	None
Answer» B. 42000

Discussion

582.	From the profits of previous three years, Rs 150000, Rs 200000, and Rs250000/- the valueof goodwill at five years of purchase is -----------Sol:
A.	Rs12,50,000/-
B.	Rs 7,50,000/-
C.	Rs10,00,000/-
D.	all
Answer» D. all

Discussion

583.	The profits of the last three years is55000,50000,45000. Value of goodwill of 2 yearspurchase of average profit isSol:
A.	100000
B.	42000
C.	126000
D.	None
Answer» B. 42000

Discussion

584.	If the Assets of A ltd having Book Value of Rs 10,00,000 are taken over at Rs 15,00,000 and Liabilities having a book value of Rs 5,00,000 are taken over at Rs 4,00,000 than Purchase Consideration payable would be
A.	(a) Rs 5,00,000
B.	(b) Rs 11,00,000
C.	(c ) 6,00,000
D.	(d) Rs 10,00,000
Answer» C. (c ) 6,00,000

Discussion

585.	From the following details estimate the capital as on 31.03.2013, Capital as on 01.04.2012 ` 2,05,000. Drawing ` 20,000, Profit during the year ` 25,000
A.	2,05,000 ;
B.	2,25,000 ;
C.	2,10,000 ;
D.	2,00,000
Answer» D. 2,00,000

Discussion

586.	If Building (closing) Rs.100,000, Land (opening) Rs. 100,000, Creditors (opening) Rs.10,000 then opening capital:
A.	Rs. 190,000
B.	Rs. 210,000
C.	Rs. 90,000
D.	None of these
Answer» D. None of these

Discussion

587.	Find the closing stock from the following details. Opening Stock ` 80,000, Purchases ` 1,40,000, Wages ` 60,000, Sales ` 3,20,000, GP on sales 25%
A.	60,000 ;
B.	40,000 ;
C.	45,000 ;
D.	30,000
Answer» C. 45,000 ;

Discussion

588.	A few errors committed in Ahhiwalia's books of account are given below. State which errors would affect the Trial Balance. (a) Sales of `950 to Ram completely omitted from books of account (b) Purchases of `720 from Shyam entered in the purchases journal as `700 (c) Purchases Journal is overcast by `1,000 (d) Sales returns journal is undercast by `200 (e) Amount paid to Agarwal wrongly posted to the debit to Mittal's account (f) Bank overdraft shown under debit column in the Trial Balance (g) Sales of `500 to Sadiq entered in sales journal as sales to Mushtaq (h) Wages paid for installation of machinery debited to wages account
A.	a, c and g
B.	c, d and f
C.	c, d, e and h
D.	c, d, f and h
Answer» C. c, d, e and h

Discussion

589.	If Average Profit of a certain firm for last five years is Rs5,00,000 , Normal profit is Rs 3,50,000/-. What would be the Value of Goodwill at 3years purchase of super profit
A.	Rs 8,00,000
B.	Rs 6,00,000
C.	Rs 4,50,000
D.	all
Answer» D. all

Discussion

590.	Opening stock Rs.10,000 Sales Rs.40,000 Purchases Rs.30,000 Gross profit on sales 20% From the above figures, the amount of closing stock can be valued at
A.	Rs.8,000
B.	Rs.28,000
C.	Rs.12,000
D.	Rs.20,000
Answer» B. Rs.28,000

Discussion

591.	Find the value of opening stock from the following data. Purchases ` 1,50,000, Closing stock ` 30,000 , Sales `2,20,000, Gross profit ` 40,000.
A.	50,000 ;
B.	55,000 ;
C.	60,000 ;
D.	65,000
Answer» D. 65,000

Discussion

592.	How many individuals or institutions companies can appoint to manage the issue of its shares
A.	One or more
B.	Only one
C.	Only five
D.	Can not appoint
Answer» B. Only one

Discussion

593.	The opening stock of a company is `60,000 and the closing stock is `70,000. If the purchases during the year are `2,00,000 the cost of goods sold will be
A.	2,10,000 ;
B.	2,00,000 ;
C.	1,90,000 ;
D.	) `1,80,000
Answer» D. ) `1,80,000

Discussion

594.	The total capital employed in the company is 8,00,000 a reasonable rate of return is 15%and the profit of the year is 12,00,000. The value of goodwill of the company as per thecapitalisation method will be
A.	RS 82,00,000
B.	RS 1200000
C.	RS 7200000
D.	RS 4200000
Answer» D. RS 4200000

Discussion

595.	The total capital employed in the company is 8,00,000 a reasonable rate of return is 15%and the profit of the year is 412,00,000. The value of goodwill of the company as per thecapitalization method will be
A.	82,00,000
B.	1200000
C.	7200000
D.	4200000
Answer» D. 4200000

Discussion

596.	Opening Stock ` 15,000, Closing Stock ` 6,000, Total Purchase during the year ` 30,000. Given that Opening Stock inadvertently includes postage stamps of ` 1,500. Find the cost of goods sold
A.	40,000 ;
B.	39,000 ;
C.	37,500 ;
D.	36,000
Answer» D. 36,000

Discussion

597.	P and Q are partners sharing profit and loss in the proportion 2:1 in the Joint Venture. P keeps accounts of joint venture. Q gave Rs. 5,000 to P for joint venture business. P prepared accounts and showed profit of Rs. 2,250. P settled Q s account. In the books of Q, Rs. _______ profit is credited.
A.	Rs. 2,250
B.	Rs. 750
C.	Rs. 1,500
D.	Rs. 5,750
Answer» C. Rs. 1,500

Discussion

598.	A is entitled to 10% partner s commission before charging such commission. Find the commission payable to A if the net profit before charging such commission amounted to ` 60,000
A.	5,900 ;
B.	6,000 ;
C.	5,000 ;
D.	5,050
Answer» C. 5,000 ;

Discussion

599.	When the entire issue is underwritten by only one persone, it is called
A.	Firm underwriting
B.	Partial underwriting
C.	Sole or Single Underwriting
D.	None of the above
Answer» D. None of the above

Discussion

600.	The Principal amount of debentures will be repaid by the company either at the end of a specified period or by instalments during the life time of the company. Such types of debentures are called :
A.	Redeemable Debentures
B.	Irredeemable Debentures
C.	Convertible Debentures
D.	Bearer Debentures
Answer» B. Irredeemable Debentures

Discussion

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

Income and Expenditure Account is prepared : Sol:

Income and Expenditure Account is prepared in non-trading concerns in lieu of

____________ expenditure is increased to maintain the business or to keep the assets in good working condition

In single entry two-fold aspect of transaction are not recorded, so it is:

The excess of assets over liabilities in non-trading concerns is treated as

Which of the following is not a cause of difference in balance as per cash book and balance as per bank pass book

If any transaction is not recorded in the primary books the same is recorded in _______

If two or more company come together and form anew company which takes over the assets and liabilities of the vendor companies it is called as

Life membership fee received by a club is: Sol:

Buy back of equity shares should be recorded in the final cash flow statement under:

The beginnings inventory of the current year is overstated by ` 5,000 and closing inventory is overstated by ` 12,000. These errors will cause the net income for the current year by

Which item comes under financing activities in cash flow statement?

When different accounts are clubbed on the basis of some common characteristics that are shared by them, the concept is known as_______.

The amount of Entrance Fees received regularly by a Not-for Profit Organisation is shown in which of the following:

In the funds flow statement, item of preliminary expenses written off during the year is:

Subscriptions received in advance by a Club are shown on .......... side of the Balance Sheet

Subscription received in advance during the current year is: Sol:

The amount of Subscription received from members by a Not-for Profit Organisation is shown in which of the following:

Subscription received in advance is

Subscription received in advance by a club are shown in

In the balance sheet of a company, the discount on issue of debentures is shown under which heading

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:

Which of the following statements is/are true?(i) Cash Book records all cash receipts and cash payments(ii) Cash Book records all sale and purchase transactions of goods both in cash and on credit(iii) Cash Book records discount on Cash Payments

Provision for bad and doubtful debts is created in anticipation of actual bad debts on the basis of:

In the books of the drawer, the accounting treatment involved on receipt of a bill of exchange duly accepted by the drawee is i. Debit Bills Receivable Account ii. Debit Drawee s Account iii. Credit Drawee s Account iv. Credit Sales Account

S issued cheque worth ` 35,000 in March 2013 out of which cheques worth ` 15,000 were presented for payment after by 31st march, 2013. What amount should be added to balance as per pass book

From the following details estimate the capital as on 31.03.2017. Capital as on 01.04.2016 - `4,10,000. Drawings `40,000, Profit during the year ` 50,000

The entry to record the collection of cash from Sundry Debtors would involve a(i) Debit to Sundry Debtors(ii) Debit to Cash Account(iii) Credit to Sundry Debtors(iv) Credit to Cash Account

If vendors are issued fully paid shares of 1,25,000 in consideration of net assets of ?1,50,000, the balance of 25,000 will be credited to :

The profits of the last three years is 42000, 39000,45000. Value of goodwill of 2 years purchase of average profit is

From the profits of previous three years, Rs 150000, Rs 200000, and Rs250000/- the valueof goodwill at five years of purchase is -----------Sol:

The profits of the last three years is55000,50000,45000. Value of goodwill of 2 yearspurchase of average profit isSol:

If the Assets of A ltd having Book Value of Rs 10,00,000 are taken over at Rs 15,00,000 and Liabilities having a book value of Rs 5,00,000 are taken over at Rs 4,00,000 than Purchase Consideration payable would be

From the following details estimate the capital as on 31.03.2013, Capital as on 01.04.2012 ` 2,05,000. Drawing ` 20,000, Profit during the year ` 25,000

If Building (closing) Rs.100,000, Land (opening) Rs. 100,000, Creditors (opening) Rs.10,000 then opening capital:

Find the closing stock from the following details. Opening Stock ` 80,000, Purchases ` 1,40,000, Wages ` 60,000, Sales ` 3,20,000, GP on sales 25%

If Average Profit of a certain firm for last five years is Rs5,00,000 , Normal profit is Rs 3,50,000/-. What would be the Value of Goodwill at 3years purchase of super profit

Opening stock Rs.10,000 Sales Rs.40,000 Purchases Rs.30,000 Gross profit on sales 20% From the above figures, the amount of closing stock can be valued at

Find the value of opening stock from the following data. Purchases ` 1,50,000, Closing stock ` 30,000 , Sales `2,20,000, Gross profit ` 40,000.

How many individuals or institutions companies can appoint to manage the issue of its shares

The opening stock of a company is `60,000 and the closing stock is `70,000. If the purchases during the year are `2,00,000 the cost of goods sold will be

The total capital employed in the company is 8,00,000 a reasonable rate of return is 15%and the profit of the year is 12,00,000. The value of goodwill of the company as per thecapitalisation method will be

The total capital employed in the company is 8,00,000 a reasonable rate of return is 15%and the profit of the year is 412,00,000. The value of goodwill of the company as per thecapitalization method will be

Opening Stock ` 15,000, Closing Stock ` 6,000, Total Purchase during the year ` 30,000. Given that Opening Stock inadvertently includes postage stamps of ` 1,500. Find the cost of goods sold

P and Q are partners sharing profit and loss in the proportion 2:1 in the Joint Venture. P keeps accounts of joint venture. Q gave Rs. 5,000 to P for joint venture business. P prepared accounts and showed profit of Rs. 2,250. P settled Q s account. In the books of Q, Rs. _______ profit is credited.

A is entitled to 10% partner s commission before charging such commission. Find the commission payable to A if the net profit before charging such commission amounted to ` 60,000

When the entire issue is underwritten by only one persone, it is called

The Principal amount of debentures will be repaid by the company either at the end of a specified period or by instalments during the life time of the company. Such types of debentures are called :