1706 + Mcqs in Financial Accounting Page 24 McqOptions

1151.	Choose the correct pairSol:
A.	Cash and Bank sub system – Deals with receipts and payments of cash
B.	Inventory subsystem – deals with recording of sales
C.	Payroll Accounting sub system – deals with the preparation of final accounts
D.	Accounts receivable sub system – deals with expenses
Answer» B. Inventory subsystem – deals with recording of sales

Discussion

1152.	What are the features of computerized accounting software?Sol:
A.	storage of accounting data and on-line input
B.	instantly produces different reports
C.	group different account
D.	All of the above
Answer» E.

Discussion

1153.	A bundle of rights given by law to the creators of literary, artistic, dramatic, musical workis known asSol:
A.	Patent Rights
B.	Trade Rights
C.	Copyrights
D.	all
Answer» D. all

Discussion

1154.	Which of the following is not a characteristic of Bearer Debentures?
A.	They are treated as negotiable instruments.
B.	Their transfer requires a deed of transfer.
C.	They are transferable by mere delivery.
D.	The interest on it is paid to the holder irrespective of identity.
Answer» C. They are transferable by mere delivery.

Discussion

1155.	Journal is also known by —
A.	Memorandum A/c ;
B.	Kaccha books ;
C.	Books of original entry ;
D.	Proper books
Answer» D. Proper books

Discussion

1156.	An error which violates the fundamentals of book keeping is called
A.	Errors of omission
B.	Errors of amount in original book
C.	Compensating error
D.	Error of principle
Answer» E.

Discussion

1157.	Which one of is most likely to have the lowest rate of stock turn:
A.	Jeweler
B.	Green grocer
C.	Super market
D.	News agent
Answer» B. Green grocer

Discussion

1158.	The debentures whose principal amount is not repayable by the company during its life time,but the payment is made only at the time of Liquidation of the company, such debentures are called :
A.	Bearer Debentures
B.	Redeemable Debentures
C.	Irredeemable Debentures
D.	Non-Convertible Debentures
Answer» D. Non-Convertible Debentures

Discussion

1159.	The concept of conservatism ensures that the reported profit is not:
A.	Under stated
B.	Overstated
C.	Neutral
D.	Negative
Answer» C. Neutral

Discussion

1160.	Which of the following is not the objective of accounting?
A.	To maintain records of business
B.	To ascertain profit or loss of the business
C.	To depict capital, liabilities and assets of the business.
D.	To provide information about the personal assets and personal liabilities of the owners of the business.
Answer» E.

Discussion

1161.	The Income and Expenditure Account is always accompanied with a cash flow statementSol:
A.	True
B.	False
C.	none
D.	all
Answer» C. none

Discussion

1162.	The periodic total of purchase day book is posted to —
A.	Purchase register ;
B.	Purchase A/c ;
C.	Cash purchase A/c ;
D.	Credit purchase A/c
Answer» C. Cash purchase A/c ;

Discussion

1163.	Bills payable honored during the year will be debited to ______
A.	cash account
B.	bills payable
C.	bills receivable
D.	creditors
Answer» C. bills receivable

Discussion

1164.	Unexpired expenses is a _______
A.	Liability
B.	Asset
C.	Income
D.	Expenditure
Answer» C. Income

Discussion

1165.	Which one of the following should be considered a revenue expenditure?
A.	1000 paid for the execution of a new plant
B.	Loss of `10,000 incurred in increasing the sitting accommodation of a hotel
C.	Damage paid on account of breach of a contract to supply certain goods
D.	Repair to machinery purchased, second hand.
Answer» D. Repair to machinery purchased, second hand.

Discussion

1166.	If the Going Concern concept is no longer valid, which of the following is true?
A.	All prepaid assets would be completely written-off immediately
B.	Total contributed Capital and Retained Earnings would remain unchanged
C.	Intangible Assets would continue to be carried at net Amortized historical cost
D.	Land held as an Investment would be valued at its realizable value
Answer» E.

Discussion

1167.	Which account is prepared to find out the amount of closing stock
A.	head office account
B.	branch account
C.	memorandum stock account
D.	none of these
Answer» D. none of these

Discussion

1168.	Which of the following book is both a journal and a ledger?
A.	Cash Book
B.	Sales Day Book
C.	Bills Receivable Book
D.	Journal Proper
Answer» B. Sales Day Book

Discussion

1169.	If a fixed amount is withdrawn on the first day of every month of calendar year by a partner in partnership firm, then for what period the interest on the total amount of drawings will be calculated?
A.	4.5 months
B.	5.5 months
C.	6.5 months
D.	7.5 months
Answer» D. 7.5 months

Discussion

1170.	__________________ balance in cash book indicate deposit balance
A.	Credit
B.	Debit
C.	Any balanc
Answer» C. Any balanc

Discussion

1171.	If 500 shares of 10 issued at a premium of 1 on which 9 (including premium) have beencalled and 7 including premium have been paid are forfeited, the forfeiture account should be credited by :
A.	3,000
B.	3,500
C.	4,000
D.	4,500
Answer» B. 3,500

Discussion

1172.	Income received in advance is an ___________
A.	Asset
B.	Liability
C.	Expense
Answer» C. Expense

Discussion

1173.	The individual field in the sheet is known as a _________.Sol:
A.	Row
B.	Cell
C.	Column
D.	Group
Answer» C. Column

Discussion

1174.	Which of the following errors is an error of omission?
A.	Purchase of ` 2,000 has been recorded in the Sales Return Book
B.	Repairs to machinery has been debited to Machinery Accounts
C.	The total of purchase journal has not been posted to the Purchase Account
D.	Legal charges paid to Mr. Lawyer have been debited to his account
Answer» D. Legal charges paid to Mr. Lawyer have been debited to his account

Discussion

1175.	The global key professional accounting body is —
A.	The International Accounting Standards Committee
B.	The International Accounting Standards Board
C.	The Institute of Chartered Accountants of India
D.	The Financial Accounting Standards Board
Answer» C. The Institute of Chartered Accountants of India

Discussion

1176.	Charitable Organizations promote welfare of the common man, in generalSol:
A.	True
B.	False
C.	none
D.	all
Answer» B. False

Discussion

1177.	A Company is created by :
A.	Special act of the Parliament
B.	Companies Act
C.	Investors
D.	Members
Answer» C. Investors

Discussion

1178.	Money spent on heavy advertising, whose benefit is continuing for three years to come, isa __________.
A.	Capital Expenditure
B.	Revenue expenditure
C.	Deferred Revenue Expenditure
D.	none
Answer» D. none

Discussion

1179.	A Bill of Exchange is drawn on 1st April, 2012 payable after 3 months. The due date of the bill is
A.	30th June,2012
B.	1st July,2012
C.	4th July,2012
D.	4th August,2012
Answer» D. 4th August,2012

Discussion

1180.	Shares issued by a company to its employees or directors in consideration of ‘IntellectualProperty Rights’ are called :
A.	Right Equity Shares
B.	Private Equity Shares
C.	Sweat Equity Shares
D.	Bonus Equity Shares
Answer» D. Bonus Equity Shares

Discussion

1181.	Which of the following item does not match with receipts and payments account?
A.	It is a summarized cash book
B.	Transactions are recorded in it on cash basis
C.	It records revenue transactions only
D.	It serves the purpose of a real account
Answer» D. It serves the purpose of a real account

Discussion

1182.	Control unit works as ___________ of the computer.Sol:
A.	Monitor
B.	Brain
C.	Component
D.	Part
Answer» C. Component

Discussion

1183.	The closing balance of a petty cash book is a / an —
A.	Liability ;
B.	Gain ;
C.	Assets ;
D.	Loss
Answer» D. Loss

Discussion

1184.	Purchases made on credit not recorded at all would affect
A.	Purchases account ;
B.	Supplier's account ;
C.	Purchases account and supplier's account
D.	None of these
Answer» D. None of these

Discussion

1185.	Errors cancelled by themselves are called
A.	Compensating errors
B.	Errors of principle
C.	Errors of omission
D.	Errors of commission
Answer» B. Errors of principle

Discussion

1186.	The closing stock will appear in trial balance at the
A.	Debit side
B.	Asset side
C.	Credit side
D.	None of these
Answer» E.

Discussion

1187.	Income & Expenditure A/c shows subscriptions `10,000; Subscriptions accrued in the beginning of the year and at the end of the year were `1,000 and `1,500 respectively. The figure of subscription received appear in receipts and payments account will be:
A.	9,500
B.	10,000
C.	10,500
D.	12,000
Answer» B. 10,000

Discussion

1188.	Excess of hire purchase price over cash price is known as
A.	Installment
B.	Cash down payment
C.	Interest
D.	Capital value of asset
Answer» D. Capital value of asset

Discussion

1189.	Which of the following statements is true? (C.S. Foundation, Dec. 2012)
A.	Authorised Capital = Issued Capital
B.	Authorised Capital > Issued Capital
C.	Paid up Capital > Issued Capital
D.	None of the above
Answer» C. Paid up Capital > Issued Capital

Discussion

1190.	Treatment of capital expenditure as revenue expenditure is
A.	Errors of principle
B.	Compensating errors
C.	Errors of commission
D.	Errors of omission
Answer» B. Compensating errors

Discussion

1191.	Provision for bad and doubtful debts is created in anticipation of actual bad debts onthe basis of:
A.	Business Entity Concept;
B.	Conservatism Concept;
C.	Accrual Concept;
D.	Full Disclosure Concept.
Answer» C. Accrual Concept;

Discussion

1192.	The assets that can be converted into cash within a short period (i.e. 1 year or less) areknown as
A.	Current assets
B.	Fixed assets
C.	Intangible assets
D.	Investments
Answer» B. Fixed assets

Discussion

1193.	A second hand car is purchased for ` 2,00,000 and sold at ` 1,40,000 after two years. If depreciation ischarged @ 10% on SLM method, find the profit or loss on sale of the car.
A.	20,000 Loss ;
B.	20,000 Profit ;
C.	10,000 Loss ;
D.	10,000 Profit
Answer» B. 20,000 Profit ;

Discussion

1194.	In every business transaction at least ______parties are involved
A.	Two
B.	Three
C.	Fou
Answer» B. Three

Discussion

1195.	Depreciation of loose tools is provided by
A.	Replacement method
B.	Revaluation method
C.	Diminishing value method
D.	Provisions for depreciation process
Answer» C. Diminishing value method

Discussion

1196.	The public hospitals do not carry the activities with an intention of earning profits.Sol:
A.	True
B.	False
C.	none
D.	all
Answer» B. False

Discussion

1197.	Income and Expenditure Account is:Sol:
A.	Personal Account
B.	Real Account
C.	Nominal Account
D.	None of these
Answer» D. None of these

Discussion

1198.	If a store’s mark up is 25% the margin must be:
A.	5%
B.	15%
C.	10%
D.	20%
Answer» E.

Discussion

1199.	Direct expenses are debited in the
A.	Balance sheet
B.	Trial balance
C.	Profit and loss account
D.	Trading account
Answer» C. Profit and loss account

Discussion

1200.	Accommodation bills are generally for —
A.	Genuine trade reasons ;
B.	For mutual financial accommodation;
C.	To help augment money supply ;
D.	All the three
Answer» C. To help augment money supply ;

Discussion

Explore topic-wise MCQs in Finance & Accounting.

Choose the correct pairSol:

What are the features of computerized accounting software?Sol:

A bundle of rights given by law to the creators of literary, artistic, dramatic, musical workis known asSol:

Which of the following is not a characteristic of Bearer Debentures?

Journal is also known by —

An error which violates the fundamentals of book keeping is called

Which one of is most likely to have the lowest rate of stock turn:

The debentures whose principal amount is not repayable by the company during its life time,but the payment is made only at the time of Liquidation of the company, such debentures are called :

The concept of conservatism ensures that the reported profit is not:

Which of the following is not the objective of accounting?

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

The periodic total of purchase day book is posted to —

Bills payable honored during the year will be debited to ______

Unexpired expenses is a _______

Which one of the following should be considered a revenue expenditure?

If the Going Concern concept is no longer valid, which of the following is true?

Which account is prepared to find out the amount of closing stock

Which of the following book is both a journal and a ledger?

If a fixed amount is withdrawn on the first day of every month of calendar year by a partner in partnership firm, then for what period the interest on the total amount of drawings will be calculated?

__________________ balance in cash book indicate deposit balance

If 500 shares of 10 issued at a premium of 1 on which 9 (including premium) have beencalled and 7 including premium have been paid are forfeited, the forfeiture account should be credited by :

Income received in advance is an ___________

The individual field in the sheet is known as a _________.Sol:

Which of the following errors is an error of omission?

The global key professional accounting body is —

Charitable Organizations promote welfare of the common man, in generalSol:

A Company is created by :

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

A Bill of Exchange is drawn on 1st April, 2012 payable after 3 months. The due date of the bill is

Shares issued by a company to its employees or directors in consideration of ‘IntellectualProperty Rights’ are called :

Which of the following item does not match with receipts and payments account?

Control unit works as ___________ of the computer.Sol:

The closing balance of a petty cash book is a / an —

Purchases made on credit not recorded at all would affect

Errors cancelled by themselves are called

The closing stock will appear in trial balance at the

Income & Expenditure A/c shows subscriptions `10,000; Subscriptions accrued in the beginning of the year and at the end of the year were `1,000 and `1,500 respectively. The figure of subscription received appear in receipts and payments account will be:

Excess of hire purchase price over cash price is known as

Which of the following statements is true? (C.S. Foundation, Dec. 2012)

Treatment of capital expenditure as revenue expenditure is

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

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

A second hand car is purchased for ` 2,00,000 and sold at ` 1,40,000 after two years. If depreciation ischarged @ 10% on SLM method, find the profit or loss on sale of the car.

In every business transaction at least ______parties are involved

Depreciation of loose tools is provided by

The public hospitals do not carry the activities with an intention of earning profits.Sol:

Income and Expenditure Account is:Sol:

If a store’s mark up is 25% the margin must be:

Direct expenses are debited in the

Accommodation bills are generally for —