Accounting Principles Mcq

8/18/2019 Accounting Principles Mcq

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(1) Accounting principles are generally based on

(a) Practicability (b) Subjectivity (c) Convenience in recording

(2) Real accounts are related to

(a) Assets (b) Expense and incomes (c) Customers and creditor etc

() Rent paid to t!e land lord s!ould be credited to

(a) Landlord Account (b) Rent account (c) Cas! Account

") #n t!e event o$ dissolution o$ a partners!ip $irm t!e provision $or doubt$ul debts is

trans$erred to

(a) Realization Account (b) Partner capital accounts (c) sundry debtors Accounts

(%) A prospectus $or s!are can be issued only by

(a) A public company (b) A private company (c) &one o$ t!ese'

() Preliminary expense is

(a) Current asset (b) Current iability (c) *ictitious asset

(+) ,!e valuation o$ closing stoc- is at

(a) Cost price (b) .ar-et price

(c) Cost or Market price whichever is lower

(/) ,!e master budget includes

(a) as income statement (b) a balance s!eet (c) a cas! budget (d) all of these


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(0) Cost volume pro$it analysis is t!e met!od used to estimate t!e impact on pro$it is

o$ c!anges in

(a) nit variable cost (b) unit sales price (c) Sale volume (d) All of these

(1) #n a manu$acturing company product cost include

(a) .aterial cost only (b) .aterial and labour (c) abour cost only (d) material labour

and over!ead cost

(11) A liability in t!e amount o$ Rs % is paid in cas! 3!ic! o$ t!e $allo3ing is true

(a) Asset is increased and liability is decreased (b) Asset is increased and liability is

increased

(b) Asset is decreased and liability is decreased (b) iability is decreased and o3ner4s

e5uity is increased

(12) 6!ic! one o$ t!e $ollo3ing account 3ould usually !ave credit balance7

(a) Cash (b) Account payable (c) E5uipment (d) Salaries expense

(1) A company collected one year4s rent in advance on 8ctober 1st 9100+ t!e

entries Rs 12 3as credited to unearned revenue account t!e adjusting entry at t!e

:ecember 19100+ year ended 3ould include

(a) A debit to unearned revenue $or Rs (b) A debit to unearned revenue $or Rs

0 (c) A credit to unearned revenue $or Rs (d) A debit to rent earned $or Rs


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0

(1") &et income plus operating expense is e5ual to

(a) &et sale (b) Cost o$ good available $or sales (c) Cost o$ good sold (d) ;ross pro$it

(1%) 6!en purc!ase merc!andise is returned under a perpetual inventory system a

credit 3ould be made to

(a) #nventory (b) *reig!t in (c) Purc!ases (d) Purc!ase return

(1) 6!ic! o$ t!e $allo3ing accounts 3ould not be included in t!e computation o$ t!e

cost o$ goods sold

(a) Purc!ase returns (b) Freight in (c) Purc!ase discount lost (d) Purc!ase

discounts

(1+) ,otal manu$acturing cost $or a period includes all o$ t!e $allo3ing except

(a) Ra3 material used (b) :irect labour cost

(c) Cost o$ good completed (d) Factory overhead cost

(1/)


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(d)Retained Earnings

(2) An advantages o$ t!e partners!ip $rom o$ business organi>ation is its

(a) nlimited liability (b) Mutual agency (c) Ease o$ t!e $ormation (d) imited li$e

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(1) The table “ A “of the Companies Ordinance 1984

(a) Balance sheet format (b) Profit & oss format (c) Model “ Articles of Association! (d)

"odel “"emorand#m of Association!

($) The statement of assets liabilities and o%ners capital is called the

(a) 'inancial statement (b) Profit & loss Ac (c) Balance sheet (d) statement of o%ners capital

() *hen b#siness acti+it, increases the fi-ed cost per #nit

(a) .ecreased (b) Remain the same (c) /ncreases (d) 0one of these

4) tandard cost are not #sed to


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(a) "eas#rin2 the performance (b) Prepare B#d2ets (c) Aid in planning (d) A+oid trac3in2

act#al costs

() 5et#rn on in+estment co#ld be impro+ed b,

(a) Increasing assets turnover (b) .ecreasin2 ret#rn on sales (c) .ecreasin2 contrib#tion

mar2in (d) /ncreasin2 control e-pense

(6) The form#la a f#t#re +al#e of dollar is

(a) P (1 + r )n (b) P (1 7 r )n (c) P (1 n)r (d) P (r 71 )n

() The anal,sis of financial statement helps identif, a compan,s stren2ths and %ea3nesses it

indicate if compan,

(a) is mana2in2 its in+entor, efficientl, (b) :as s#fficient plant assets

(c) is collectin2 acco#nts recei+able ;#ic3l, (d) All of the above

(8) Compan,s earnin2 po%er ratios are of a 2reat interest to

(a) Preferred shareholders (b) on2 terms lenders (c) ommon share holders (

(9) .epreciation


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(1=) An increase in income ta- pa,able mean that the compan,

(a) Paid less than the income ta! e!pense repotted (b) Paid more than the income ta- e-pense

reported (c) Paid the same as the income ta- e-pense reported (d) /s not pa,in2 an, income ta-es

(11) A Cash sale of merchandise sho#ld be recorded in the

(a) ales >o#rnal (b) ?eneral @o#rnal (c) ash receipt "ournal (b) Cash pa,ment >o#rnal

(1$) *hich of the fallo%in2 sho#ld not be considered cash b, an acco#ntant

(a) "one, Order (b) Ban3 sa+in2 acco#nt balance (c) Postage stamps (d) Tra+elers che;#es

(1) The in+entor, method that assi2ns the most recent costs to the cost of 2oods sold is

(a) '/'O (b) #I$% (c) *ei2ht a+era2e (d) pecific /dentification

(14) /n finance *or3in2 capital means the same thin2s as

(a) Total assets (b) 'i-ed assets (c) C#rrent assets (d) urrent assets minus current liabilities

(1) The more basic re;#irement for a firms mar3etable sec#rities

(a) afet, (b) &ield (c) "ar3etabilit,

(16) Partnership forms of or2aniation

(a) Avoids the double ta!ation of earnings and dividends found in the corporate form of a

organi'ation (b) s#all, pro+ides limited liabilit, to the partners (c) :as #nlimited life


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(1) A corporate b#, bac3 or the rep#rchasin2 of share is

(a) An e-ample of balance sheet restr#ct#rin2 (b) An e-cellent so#rce of profit %hen the firm

stoc3 is o+erpriced

(c) A method of reducing the debt to euit& ratio (d) All of the abo+e

(18) A statement of cash flo%s can be prepaid #sin2 a f#l T acco#nt anal,sis This approch

(a) ser a detail * accounts for each balance sheet account (b) .i+idend the cash T acco#nt

into cash inflo% and cash o#tflo%s (c) Classifies item into operatin2D in+estin2 Dfinancin2 (d) All

the abo+e are tr#e

(19) /f the be2innin2 in+entor, of the finished 2ood is === #nitsD planned sales are $=== #nits

and planned prod#ctions is $=== #nits the in+entor, of finished 2oods on the b#d2eted balance

sheet %o#ld be

(a) === (b) 1=== (c) === (d) 0one of these

($=) /f %or3in2 capital increased d#rin2 the period

(a) urrent assets must be increased (b) C#rrent liabilities m#st be decreased (c) o#rce of

%or3in2 capital m#st ha+e been 2reater than #ses of %or3in2 capital (d) ser of %or3in2 capital

m#st ha+e been 2reater than so#rces of %or3in2 capital


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Accounting Principles Mcq