1706 + Mcqs in Financial Accounting Page 27 McqOptions

1301.	The balance of the forfeited shares account after reissue of forfeited shares account is transferred to:
A.	Capital Reserve Account
B.	Share Capital Account
C.	Profit and Loss Account
D.	Suspense Account
Answer» B. Share Capital Account

Discussion

1302.	Huge expenditure incurred at the time of launching of a new product in market is a/an —
A.	Revenue Expenditure ;
B.	Capital Expenditure ;
C.	Loss ;
D.	Deferred Revenue Expenditure
Answer» E.

Discussion

1303.	Which of these is not a Business expense-
A.	Fire Insurance of other building ;
B.	LIC Premium of proprietor ;
C.	Interest on Capital
D.	Commission on sales
Answer» C. Interest on Capital

Discussion

1304.	The book which all accounts of the firm are maintained is known as
A.	Cash book ;
B.	Ledger ;
C.	Journal ;
D.	Daybook
Answer» C. Journal ;

Discussion

1305.	Issue of shares at a price lower than its face value is called :
A.	Issue at a Loss
B.	Issue at a Profit
C.	Issue at a Discount
D.	Issue at a Premium
Answer» D. Issue at a Premium

Discussion

1306.	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

1307.	Accounting standard in India are issued by
A.	Government of India
B.	Reserve Bank of India
C.	The Institute of Chartered Accountants of India
D.	The Institute of Accounting Standard of India
Answer» D. The Institute of Accounting Standard of India

Discussion

1308.	A profit on sale of furniture of a club will be taken to
A.	Cash Account;
B.	Receipts and Payment Account;
C.	Income and Expenditure Account;
D.	Profit and Loss Account.
Answer» D. Profit and Loss Account.

Discussion

1309.	Application softwaresSol:
A.	Can operate on its own
B.	Cannot operate without Operating Software
C.	Both a and b
D.	None of these
Answer» C. Both a and b

Discussion

1310.	Receipts and payment account is a ________ account
A.	Personal
B.	Real
C.	Nominal
D.	General
Answer» C. Nominal

Discussion

1311.	Income tax paid by a sole proprietor from his business income should be:
A.	Debited to the trading Account
B.	Debited to the Profit and Loss Account
C.	Deducted from the Capital account in the Balance Sheet
D.	none
Answer» D. none

Discussion

1312.	Discount on issue of Debentures is in the nature of
A.	Revenue loss
B.	Capital loss
C.	Deferred Revenue Expenditure
D.	None of the above
Answer» C. Deferred Revenue Expenditure

Discussion

1313.	If a share of Rs.10, on which Rs. 6 has been paid, is forfeited, it can be reissued at the minimum price of:
A.	Rs. 6 per share
B.	Rs. 4 per share
C.	Rs. 10 per share
D.	Rs. 16 per share
Answer» C. Rs. 10 per share

Discussion

1314.	The term ― Reserve‖ has been defined in ------ of the Companies Act, 1956
A.	Part III Schedule VI ;
B.	Part III Schedule V ;
C.	Part II Schedule VI ;
D.	Part I Schedule I
Answer» B. Part III Schedule V ;

Discussion

1315.	The security premium will be shown under the heading
A.	Share capital
B.	Current liability
C.	Current assets
D.	None of these
Answer» E.

Discussion

1316.	Outstanding subscription is a:Sol:
A.	Income
B.	Assets
C.	(a) and (b) Both
D.	None of these
Answer» D. None of these

Discussion

1317.	Expenses of the following nature are treated as a Revenue expenses except —
A.	Expenses for day to day running of the business ;
B.	Putting the new asset in working condition ;
C.	Depreciation ;
D.	Purchase of raw material
Answer» C. Depreciation ;

Discussion

1318.	Which of the following are current assets of a business? i. Income received in advance ii. Stock iii. Debtors iv. Pre-paid expenses v. Accrued income
A.	Both (i) and (iv) above
B.	Both (ii) and (iii) above
C.	(i),(ii) and (iii) above
D.	(ii),(iii),(iv) and (v) above
Answer» E.

Discussion

1319.	These reserves are not shown in the balance sheet:
A.	Specific Reserves
B.	Capital Reserves
C.	Secret reserves
D.	none
Answer» D. none

Discussion

1320.	So far ———— AS have been issued by IASB
A.	40 ;
B.	42 ;
C.	39 ;
D.	41
Answer» E.

Discussion

1321.	KCS purchased a machine from JPS on hire purchase system, whose cash price was `8,64,000. ` 2,16,000 being paid on delivery and balance in three annual instalments of `2,88,000 each. The amount of interest included in first installment would be
A.	72,000
B.	57,600
C.	1,08,000
D.	36,000
Answer» D. 36,000

Discussion

1322.	Which of the following statements are / is true? ―Events after Balance Sheet‖ are
A.	All the significant events after the Balance Sheet date
B.	The events after Balance Sheet date but before submitting it to the Registrar of Companies
C.	The events after Balance Sheet date but before its approval by the board
D.	All changes after Balance Sheet date before its approval
Answer» D. All changes after Balance Sheet date before its approval

Discussion

1323.	A transaction without immediate cash settlement is known as
A.	Cash Transaction;
B.	Credit Transaction;
C.	Deferred Transaction;
D.	None of the above.
Answer» C. Deferred Transaction;

Discussion

1324.	________ expenses are shown in the profit and loss account
A.	Indirect
B.	Direct
C.	Direct and indirect
D.	None of these
Answer» B. Direct

Discussion

1325.	Discount allowed on reissue of forfeited shares is debited to:
A.	Discount on issue of shares account
B.	Forfeited Shares account
C.	Profit & Loss Account
D.	Suspense Account
Answer» C. Profit & Loss Account

Discussion

1326.	——— Principle specifies that cost or expenses should be recorded at the same time as the revenue towhich they correspond
A.	Going run concern ;
B.	Matching ;
C.	Historical Cost ;
D.	Prudence
Answer» C. Historical Cost ;

Discussion

1327.	Single Entry system is must suited where:
A.	Cash transactions are many
B.	Credit transactions are many.
C.	Cash & credit transactions are more
D.	None of the above
Answer» B. Credit transactions are many.

Discussion

1328.	__________ is similar to the Profit and loss A/c
A.	Income and Expenditure A/c
B.	Receipts and Payments A/c
C.	Balance Sheet
D.	None of the Above
Answer» B. Receipts and Payments A/c

Discussion

1329.	The periodical total of discount column on receipts side of a Triple Column Cash Book is recorded tothe
A.	Credit side of Discount Account
B.	Credit side of provision for Discount Account
C.	Debit side of Discount Account
D.	Credit side of Debtor‘s Account
Answer» D. Credit side of Debtor‘s Account

Discussion

1330.	Professional bodies of which of these countries are founding member of IASC —
A.	UK ;
B.	Canada ;
C.	Germany ;
D.	All the three
Answer» E.

Discussion

1331.	Posting is the process of —
A.	Posting the letters in drop box ;
B.	Posting suitable person to a suitable job;
C.	Entering in the ledger the information contained in the ledger ;
D.	All the three
Answer» D. All the three

Discussion

1332.	When salary paid by cheque ,____________account is credited
A.	Salary
B.	Personal
C.	Ban
Answer» D.

Discussion

1333.	In India, a company can keep its books of accounts on?
A.	Mercantile Basis
B.	Accrual Basis
C.	Cash Basis
D.	No Basis
Answer» D. No Basis

Discussion

1334.	A merchant sends out his goods casually to his dealers on approval basis. All such transactions are, however, recorded as actual sales and are passed through the sales book. On 31st March, it was found that 100 articles at a sale price of ` 200 each sent on approval basis were recorded as actual sales at that price. The sale price was made at cost plus 25%. The amount of stock on approval will be amounting
A.	16,000.
B.	20,000.
C.	15,000.
D.	None of the above.
Answer» B. 20,000.

Discussion

1335.	Most organisations use __________ for coding their accounts.Sol:
A.	Block code
B.	Block number
C.	Block group
D.	Block section
Answer» B. Block number

Discussion

1336.	Long term assets being `3,00,000, current Assets `80,000, outside liabilities `1,20,000. Find ownersequity-
A.	3,50,000 ;
B.	2,60,000 ;
C.	2,00,000 ;
D.	None
Answer» C. 2,00,000 ;

Discussion

1337.	Accounting in india is governed by the -----
A.	Income tax department
B.	Company law board
C.	Institute of chartered accountants of india
D.	Reserve bank of india
Answer» D. Reserve bank of india

Discussion

1338.	The not for profit concerns prohibit the payment of any ………………………to theirmembersSol:
A.	Dividend
B.	Loss
C.	Assets
D.	Expenditure
Answer» B. Loss

Discussion

1339.	Royalty accounting is covered under Companies Act 1956Sol:
A.	True
B.	False
C.	none
D.	all
Answer» C. none

Discussion

1340.	Goods worth ` 5,000 purchased from A on credit will be recorded on-
A.	Debit side of Cash Book ;
B.	Credit side of Cash Book ;
C.	Nowhere in the Cash Book ;
D.	Either (a) or (b)
Answer» D. Either (a) or (b)

Discussion

1341.	Sales return appearing in the trail balance are deducted from
A.	Capital
B.	Sales
C.	Purchas
Answer» C. Purchas

Discussion

1342.	Bank loan account is a ______
A.	Real account
B.	Nominal account
C.	Personal account
D.	Current account
Answer» D. Current account

Discussion

1343.	Depreciation of fixed assets is an example of:
A.	Revenue Expenditure
B.	Capital Expenditure
C.	Deferred Revenue Expenditure
D.	none
Answer» B. Capital Expenditure

Discussion

1344.	Expenditure incurred by a publisher for acquiring copyright is a.
A.	Deferred revenue expenditure
B.	Capital expenditure
C.	Revenue expenditure
D.	Assets
Answer» C. Revenue expenditure

Discussion

1345.	Depreciable amount plus residual value of a fixed asset:
A.	Depreciation expenses
B.	Accumulated depreciation
C.	Cost of the fixed asset
D.	Future economic benefits of a fixed asset
Answer» D. Future economic benefits of a fixed asset

Discussion

1346.	Which of the following is a Personal A/c
A.	Outstanding Salary A/c ;
B.	Rent A/c ;
C.	SBI A/c ;
D.	Bad debts A/c
Answer» D. Bad debts A/c

Discussion

1347.	Royalties are connected with the following types of businessSol:
A.	Mining
B.	Construction
C.	Textile
D.	All of the above
Answer» B. Construction

Discussion

1348.	Which of the following statements is/are true? (i) An error in casting the subsidiary books is an error of commission (ii) An error in wrong casting of the sales day book will not affect the personal accounts of debtors (iii) Mistake in transferring the balance of an account to the Trial Balance will not affect the agreement of the Trial Balance (iv) The mistake of treating a liability as an income or vice versa will not affect the agreement of a Trial Balance
A.	Only (i) above
B.	Only (ii) above
C.	Both (i) and (ii) above
D.	(i),(ii) and (iv) above
Answer» E.

Discussion

1349.	AS 6 revised is an accounting standard for:
A.	Inventory Valuation
B.	Depreciation Accounting
C.	Revenue recognition
D.	None of the above
Answer» C. Revenue recognition

Discussion

1350.	Bank account is a _________
A.	Personal accounting
B.	Real account
C.	Nominal accoun
Answer» B. Real account

Discussion

Explore topic-wise MCQs in Finance & Accounting.

The balance of the forfeited shares account after reissue of forfeited shares account is transferred to:

Huge expenditure incurred at the time of launching of a new product in market is a/an —

Which of these is not a Business expense-

The book which all accounts of the firm are maintained is known as

Issue of shares at a price lower than its face value is called :

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

Accounting standard in India are issued by

A profit on sale of furniture of a club will be taken to

Application softwaresSol:

Receipts and payment account is a ________ account

Income tax paid by a sole proprietor from his business income should be:

Discount on issue of Debentures is in the nature of

If a share of Rs.10, on which Rs. 6 has been paid, is forfeited, it can be reissued at the minimum price of:

The term ― Reserve‖ has been defined in ------ of the Companies Act, 1956

The security premium will be shown under the heading

Outstanding subscription is a:Sol:

Expenses of the following nature are treated as a Revenue expenses except —

Which of the following are current assets of a business? i. Income received in advance ii. Stock iii. Debtors iv. Pre-paid expenses v. Accrued income

These reserves are not shown in the balance sheet:

So far ———— AS have been issued by IASB

KCS purchased a machine from JPS on hire purchase system, whose cash price was `8,64,000. ` 2,16,000 being paid on delivery and balance in three annual instalments of `2,88,000 each. The amount of interest included in first installment would be

Which of the following statements are / is true? ―Events after Balance Sheet‖ are

A transaction without immediate cash settlement is known as

________ expenses are shown in the profit and loss account

Discount allowed on reissue of forfeited shares is debited to:

——— Principle specifies that cost or expenses should be recorded at the same time as the revenue towhich they correspond

Single Entry system is must suited where:

__________ is similar to the Profit and loss A/c

The periodical total of discount column on receipts side of a Triple Column Cash Book is recorded tothe

Professional bodies of which of these countries are founding member of IASC —

Posting is the process of —

When salary paid by cheque ,____________account is credited

In India, a company can keep its books of accounts on?

Most organisations use __________ for coding their accounts.Sol:

Long term assets being `3,00,000, current Assets `80,000, outside liabilities `1,20,000. Find ownersequity-

Accounting in india is governed by the -----

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

Royalty accounting is covered under Companies Act 1956Sol:

Goods worth ` 5,000 purchased from A on credit will be recorded on-

Sales return appearing in the trail balance are deducted from

Bank loan account is a ______

Depreciation of fixed assets is an example of:

Expenditure incurred by a publisher for acquiring copyright is a.

Depreciable amount plus residual value of a fixed asset:

Which of the following is a Personal A/c

Royalties are connected with the following types of businessSol:

AS 6 revised is an accounting standard for:

Bank account is a _________