D- if its operation or departments are not directly involved in revenue generating activities, but instead focus on elem

Ans. A

QUESTION # 13
In the business, debentures represent:
a) Investments in shares
b) Long term borrowing
c) Director shares
d) None of the above
Ans. B

QUESTION # 14
Differential piece rate system
a) Are Complicated
b) Are discriminatory
c) Pay workers in proportion to their efficiency
d) None of the above
Ans. C

QUESTION # 15
Showroom expenses is an example of :
a) Manufacturing overhead
b) Administrative overhead
c) Selling overhead
d) Distribution overhead
Ans. C

QUESTION # 16
The parent organization acquiring controlling interest in another company is called the ___ company
A- holding
B- subsidiary
C- minority
D- none of the above
Ans. A

QUESTION # 17
Unacceptable unit of production that is an inherent result of the production process is Known as………
a) Scrap
b) Normal Spoilage
c) Abnormal Spoilage
d) Rework
Ans. B
Question # 18
A share Application Account is Classified
Choose of the best option
a) Real Account
b) Personal Account
c) Impersonal Account
d) Nominal Account
Ans. B

Question # 19
XIL Ltd Manufactures goods in two processes – Process A and Process B.During the month of september 2003, Proc
a) 24000
b) 22400
c) 27200
d) 52800
Ans. C

QUESTION # 20
The excess price received on the part value of shares should be credited to:
a) Calls in advance A/c
b) Share capital A/c
c) Reserve capital A/c
d) Share premium A/.c
Ans. D

Question #21
Which of the following is/are true regarding job costing?
a) It is cheaper to operate
b) Efficiency of operation can be successfully controlled by
c) It is easy to identify the job of accurately
d) All of the above
Ans. D

Question #22
Debenture holder are the:-
a) Debtors of the company
b) Shareholder of the Company
c) Creditors of the Company
d) Owners of the Company
Ans. C
Question #23
For acquiring interest the holding company has to posses more than ----- of the equity share capital of another compan
a) 30%
b) 40%
c) 60%
d) 50%
Ans. D

Question #24
When an income statement is prepared by profit center, cost traceable directly to a cost center such as the personnel d
a) Omitted from the income statement
b) Classified as common Fixed costs
c) Allocated among the profit center based upon the new employee in each department
d) Classified as Committed fixed cost and allocated among center
Ans. D

Question #25
The operation of a responsibility accounting System usually involves each of the following steps except
a) Allocating common fixed costs among the responsibility centers that benefit from these costs
b) The preparation of budgets for each responsibility center
c) Separate measurement of the performance of each responsibility center
d) The preparation of performance reports comparing the actual performance of each responsibility center with the bu
Ans. A

Question # 26
As per table A of the companies Act, The interest on the calls in advance is determined as:-
a) 0.05
b) 0.1
c) 0.15
d) 0.06
Ans. D

Question #27
A process loss that does not affect the cost of per unit, is:-
a) Abnormal loss
b) Normal loss
c) Standard loss
d) All of the above
Ans. B

Question #28
Whenever there is an abnormal loss
a) Scrap value, any , Should be credited to process account
b) Scrap value, any , Should be credited abnormal loss account
c) Scrap value, any , Should be ignored
d) Scrap value, any , Should be credited to Costing P&L Account
Ans. A

Question #29
Which following can be taken as the basis of absorbing manufacturing overhead costs?
a) Units produced
b) Prime Cost
c) Direct labour hours
d) All of the above
Ans. A

Question #30
Which of the following industries does not use process costing
a) Oil Refineries
b) Distilleries
c) Sugar
d) Aircraft Manufacturing
Ans. D

Question #31
Interest on debenture is:-
A- application of profit
B- change on profit
C- adjusting of profit
D- none of the above
Ans. B

Question #32
To reduce disk Accesses while searching for a record,the free used is:-
a) Binary sorted tree
b) B- Tree
c) General Tree
d) AVL Tree
Ans. A

Question #33
If the work of specialized nature is perforated by a subcontractor, the cost of subcontracting is debited to
A- contract account
B- contractor's account
C- P&L A/c
D- process Account
Ans. B

Question #34
Which of the following methods of remuneration is most like to give stability of labour cost to the employer?
a) Group Bonus Scheme
b) Measured day work
c) Premium bonus scheme
d) Straight piece work
Ans.- D

Question #35
Which of the following Industries does not use job costing ?
a) Ship Building
b) Interior decoration and Advertising
c) Oil Refineries
d) Road building
Ans. C

Question #36
A newly established company can not issues share at:-
a) Per
b) Premium
c) Discount
d) None of the Above
Ans. C

Question #37
Management accounting analyses accounting data with the help of:-
a) Auditors
b) Statutory forms
c) Tools and Technique
d) None of these
Ans. C

Question #38
Under or over absorption occurs due to
a) Error in estimating Overheads Expenses
b) Error in estimating the level of production
c) Major unanticipated changes in method of production
d) All of above
Ans. D

Question #39
Redeemable preference share can be redeemed from:-
a) Divisible profits otherwise available for dividend
b) Proceeds of fresh issues of shares
c) Both A and B
d) None of the above
Ans. d

Question #40
Which of the following is true regarding Scrap value if Any,When there is an abnormal loss ?
Choose the best option
a) It Should be ignored
b) It Should be Credited to Abnormal loss account
c) It Should be Credited to process Account
d) It Should be Credited to normal loss account
Ans . C

Question #41
A company has to acquire ---- Shares of another company in order to become a holding Company
a) Preference
b) Equity
c) Bonus
d) Preference and Equity
Ans. B

Question #42
The capital clause of a company is included in the:-
a) Article of Association
b) Memorandum of Association
c) State of Affairs
d) Prospectus
Ans.- B

Question #43
In the balance sheet of a company,debentures are shown under the following heading :-
a) Secured Loan
b) Unsecured loan
c) Current liabilities and provisions
d) Reserves and surplus
Ans. B

Question #44
In the long Run,the contribution of a profit center to the overall profitability of the business is best measured by the ce
a) Contribution Margin.
b) Performance margin.
c) Responsibility Margin.
d) Taxable Income
Ans. C

Question #45
The group Share of Proposed dividends by the Subsidiary is added to----------------
a) Consolidated revenue
b) Consolidated profit
c) Consolidated revenue profit
d) profit
Ans. A

Question #46

Contribution margin is equal to:-

a) Revenue,less variable costs and traceable fixed
b) Revenue ,less variable costs and committed fixed
c) Revenue ,less variable costs and controllable fixed
d) Revenue ,less variable cost.
Ans. D

Question #47
Interest on debentures is calculated on the basis of the :-
a) Face value of debentures
b) Face value of debentures plus premium
c) Face value of debentures minus discount
d) None of the above
Ans. A
Question #48
An accounting system where in the operations are broken down into cost centers controllable by a foreman,sales man
Choose the best options
a) Control accounting
b) Budgetary accounting
c) Responsibility accounting
d) Allocated cost accounting
Ans. C

Question #49
As Per the Companies Act,Companies Can issues:-
a) Bearer preference share
b) Naked preference share
c) Redeemable preference share
d) Irredeemable preference share
Ans. C

Question #50
Under Cost Plus Method price of the product is determined by:-
a) Adding profit margin to selling price for the product
b) Adding and appropriate markup to the cost of the product
c) By subtracting an appropriate gross markup from the sale price to an unrelated third party
d) None of the above
Ans. B

Question # 51
The Deque in which is done at the end at one end and deletion from the both ends
a) Input-restricted deleted
b) Output-restricted deleted
c) Input output restricted deleted
d) Any input on the above
Ans. B

QUESTION # 52
Unacceptable units of production that is an inherent result of the production process is known as:
a) Scrap
b) Normal spoilage
c) Abnormal spoilage
d) Rework
Ans.
QUESTION # 53
Management Accounting is suitable for
A- large industrial & trading concerns
B- small business
C- Co-operative societies
D- Non-profit organizations
Ans. A

1. A "Debit" balance in Cash Book shows

(A): Cash Sales
(B): Cash paid to creditors
(C): Cash expenses made
(D): Cash paid for buying land
2. A company which uses the direct write-off method recognizes uncollectible accounts expense
(A): As a percentage of net sales during the period
(B): As a percentage of net credit sales during the period
(C): As indicated by aging the accounts receivable at the end of the period
(D): As specific accounts receivable are determined to be worthless
3. A complete set of financial statements for Hartman Company, at December 31, 1999, would include each of the fo
(A): Balance sheet as of December 31, 1999
(B): Income statement for the year ended December 31, 1999
(C): Statement of projected cash flows for 2000
(D): Notes containing additional information that is useful in interpreting the financial statements
4. A financial Statement is
(A): An event
(B): Measurable in non-monetary terms
(C): must effect the financial position of business entity
(D): expressed in terms of either loss or profit
5. A Trial Balance is prepared to locate
(A): Errors of principle
(B): Errors of omission
(C): Compensating Errors
(D): none of these
6. A triple column cash book records
(A): Cash, Bank, Discount
(B): Cash, Bank, Sales
(C): Cash, Discount, Sales
(D): Cash, Bank, Gains
7. All of the following are characteristics of managerial accounting, except
(A): Reports are used primarily by insiders rather than by persons outside of the business entity
(B): Its purpose is to assist managers in planning and controlling business operations
 (C): Information must be developed in conformity with generally accepted accounting principles or with income tax
(D): Information may be tailored to assist in specific managerial decisions
8. Although accounting information is used by a wide variety of external parties, financial reporting is primarily
information needs of
(A): Investors and creditors
(B): Government agencies such as the Internal Revenue Service
(C): Customers
(D): Trade associations and labor unions
9. An artificial account that appears in "trial balance" to account for undetected errors is called
(A): Trading Account
(B): Rectification Account
(C): Suspense Account
(D): Artificial Account

10. An income statement communicates information regarding revenues and expenses

(A): For a period of time
(B): At a given point in time
(C): For some point of time in the future
(D): At the beginning of the fiscal year
11. An ordinary share dividend is:
(A): Part of the company profits used to reward the shareholders for their investment
(B): Interest on money lent to the company by its shareholders
(C): An expense of running the company
(D): The directors’ remuneration
12. Bills Receivables is
(A): An Asset
(B): A Liability
(C): An Expense
(D): Part of Equity
13. Financial Year is also called as
(A): Accounting Year
(B): Accounts Year
(C): Accountability Year
(D): Accountable Year
14. If the 'Closing Stock' is appearing in trial balance, it is shown in the
(A): Trading Account
(B): Profit & Loss Account
(C): Balance Sheet
(D): Trading Account and Balance Sheet both
15. In an Accounting Equation, Where do you show the item "Advance to the Suppliers"?
(A): Assets
(B): Liabilities
(C): Equity
 (D): Vendors
16. Information is cost effective when
(A): The information aids management in controlling costs
(B): The information is based upon historical costs, rather than upon estimated market values
(C): The value of the information exceeds the cost of producing it
(D): The information is generated by a computer-based accounting system
17. Marshalling of "Balance Sheet" means
(A): The ordering of Assets and Liabilities
(B): The totaling of Assets and Liabilities
(C): Assets - Liabilities
(D): Separate heading of Fixed Assets and Long-term Liabilities

18. Outstanding Expense is an item of

(A): Assets
(B): Liabilities
(C): Debtors
(D): Investments
19. Sales are recognized as 'Income'
(A): At the point of Sale
(B): After the expiry of Credit period allowed to debtors
(C): At the end of Accounting Period
(D): after the money is collected from debtors
20. Stock can be classified as
(A): Fixed Asset
(B): Intangible Asset
(C): Current Asset
(D): Current Liability

21. The basic purpose of an accounting system is to

(A): Develop financial statements in conformity with generally accepted accounting principles.
(B): Provide as much useful information to decision makers as possible, regardless of cost
(C): Record changes in the financial position of an organization by applying the concepts of double-entry accounting
(D): Meet an organization's need for accounting information as efficiently as possible
22. The external events that involve transfer of value between two entities is known as
(A): Transactions
(B): Events
(C): Divisions
(D): Happenings
23. The financial statement which shows cash activity (receipts and disbursements) during the accounting period is ca
(A): Bank statement
(B): Income statement
(C): Statement of cash flows
(D): Bank reconciliation
24. The nature of an asset is best described as
(A): Something with physical form that is valued at cost in the accounting records
(B): An economic resource owned by a business and expected to benefit future operations
(C): An economic resource representing cash or the right to receive cash in the near future
(D): Something owned by a business that has a ready market value
25. The personal expense of Proprietor are known as
(A): Proprietary Expenses
(B): Personal Expense
(C): Drawings
(D): Business Expense
26. The profitability and solvency of a business should be measured
(A): After each transaction
(B): At the end of Accounting Period
(C): At the end of each month
(D): Every Day
27. The Term "Goodwill" comes under the heading of
(A): Liabilities
(B): Assets
(C): Debtors
(D): Equity
28. When an item appears in the trial balance, it appears in final accounts
(A): only once
(B): twice
(C): three times
(D): will not appear again in final accounts
29. Which "Book" records all residual transactions?
(A): Cash Book
(B): Journal proper
(C): Purchase Day Book
(D): Sales Day book
30. Which of the following denotes "Gross Block"?
(A): Depreciated costs of fixed Assets
(B): Historical cost of fixed assets
(C): Liabilities payable
(D): Gross Profits
31. Which of the following is a part of "Petty Expenses"?
(A): Postage Stamps purchased
(B): Purchased Truck
(C): Paid Carriage for goods purchased
(D): Tools purchased
32. Which of the following is a part of Fixed Assets?
(A): Debtors
 (B): Bills Receivables
(C): Capital
(D): Building
33. Which of the following is a type of "reserve"?
(A): Losses reserve
(B): Payment Reserves
(C): Non-free reserves
(D): Specific Reserves
34. Which of the following is NOT a type of Voucher
(A): Journal Voucher
(B): Receipt Voucher
(C): Asset Voucher
(D): Payment Voucher
35. Which of the following is recorded on "Credit" side of "trial Balance"?
(A): Trade Expenses
(B): Sales
(C): Carriage Inward
(D): Carriage Outward
36. Which of the following is TRUE?
(A): Assets=Liablities+Equity
(B): Assets=Liabilities-Equity
(C): Assets= Liabilities-Losses
(D): Assets=Liabilities+Profits

37. Which of the following should not be included as part of cash on the balance sheet
(A): The amount of petty cash at year-end
(B): Outstanding cheques at year-end
(C): Deposits in transit at year-end
(D): Cheques received from customers

38. Which of the following statements best describes the purpose of financial accounting in a limited liability compan
(A): To assist in the day-to-day management of the company
(B): To enable the business to pay the correct amount of tax.
(C): To ensure that the business pays the correct dividend
(D): To help the directors discharge their obligations to the shareholders

39. Which of the following statements is correct?

(A): Accounting profit is the difference between cash receipts and cash paid in a period
(B): Accounting profit is the total of cash sales in the year less the expenses for the period
(C): Accounting profit is the difference between revenue income and expenses for the period
(D): Accounting profit is the difference between revenue income and cash payments for the period

40. A Balance Sheet provides financial information

(A): For a period of time
(B): At a given point in time
(C): For some point of time in the future
(D): In the mid of the fiscal year

Q1. Which of the following financial statements is prepared as of a particular date? (a) Profit and loss account

1. Balance sheet

1. Cash flow statement

1. Income and expenditure statement

1. Profit and loss appropriation account.

Q2. Based on which of the following concepts, share capital account is shown on the liability side of balance sheet?

1. Business entity concept

2. Money measurement concept
3. Cost concept
4. Going concern concept

1. Conservatism concept.

Q3. Which of the following is not an accounting transaction? (a) Sale of goods for cash

1. Payment of salary of office staff

1. Agreement to sell

1. Purchase of office furniture

1. Repayment of bank loan.

Q 4. Which of the following is false?

1. Taking the favourable balance as per pass book as the starting point, the amount in respect of charges made by the
to the pass book balance

1. Taking the favourable balance as per pass book as the starting point, the amount in respect of dividends re
be deducted from the pass book balance

1. Bank charges recorded twice in cash book will be added to the overdraft as per cash book in the preparation of reco

1. Cheque issued but not presented for payment will be added when favourable balance as per cash book is the startin

1. The amount of the undercasting of the credit side of the bank column of the cash book will be deducted from the o
book.

Q5. From the books of Mr.Neelam, it was observed that cheques amounting to Rs.2,40,000 were deposited in the
cheques worth Rs.20,000 were dishonored and cheques worth Rs.40,000 are still in the process of collection. The tre
preparing Bank Reconciliation Statement is

1. Deduct Rs.60,000 from bank balance as per pass book

1. Add Rs.20,000 and deduct Rs.40,000 from overdraft balance as per cash book

1. Deduct Rs.60,000 from overdraft balance as per pass book

1. Add Rs.60,000 to overdraft balance as per pass book

1. Deduct Rs.40,000 and add Rs.20,000 from overdraft balance as per pass book.

Q6 . Which of the following is true?

1. Bank account is a personal account

1. Stock of stationery account is a nominal account

1. Returns inward account is a personal account

1. Outstanding rent account is a nominal account (e) Capital account is a real account.

Q7 . A sales day book is to record

1. all credit sales only

1. All cash sales only

1. all credit and cash sales

1. credit sales of goods and trade discount

1. all cash and credit sales and trade discount.

Q8. Which of the following is a liability of a firm?

1. Debit balance of discount column of cash book

1. Credit balance of bank pass book

1. Debit balance of bank column of cash book

2. Credit balance of bank column of cash book.
3.  

Q9. Which of the following accounts will invariably have a debit balance?

I. Accounts receivable.

II. Accounts payable.

III. Purchases account.

IV. Bank account.

V. Prepaid expenditure.
a. Only (I) and (III) above

b. Both (II) and (III) above

c. Both (I) and (III) above

d. All of the above

Q10. The following is not a book of original entry

1. Purchase book

1. Journal proper

1. Cash book

1. General ledger

1. sales book

Q11. The Accountant of a company is recording the transactions of the day in various Books of Original Entry. Wh
transactions is recorded in the wrong book? (a) Goods purchased on credit - Purchase Book

a. Goods purchased on credit - Purchase Book

b. Goods sold on credit - Sales Book

c. Wages paid in cash - Cash Book

d. None of the above

Q12. The impact on assets, profit and liabilities of a firm, on account of salary paid will be

a. Assets Profit Total Liabilities (a)

No effect Decreases Decreases

b. Assets Profit Total Liabilities (a)

Decreases No effect Decreases

c. Assets Profit Total Liabilities (a)

Decreases Decreases Decreases

d. None of the above

Q13. Which of the following is true?

1. Discount columns in cash book are totaled and not balanced

1. A petty cash book in which a separate column is provided to record payment under each head is called impress sys

1. The total of purchases book is posted periodically on the credit side of sundry creditors account

1. The total of sales book is posted periodically on the debit side of sundry debtors account

1. Petty cash book is used to record all cash transactions.

Q14. Total of sales day book at the end of the month indicates

1. The total sales for the month

1. The total credit sales for the month

1. Total cash sales of the month

1. Total amount due to suppliers

1. Total amount receivable from credit sales.

Q15. Which of the following is true?

1. Cash book may be defined as the record of transactions concerning cash receipts and payments

1. Discount account should be balanced in the cash book

1. The ledger is the book of original entry

1. Sales journal is used for recording cash sales

1. Purchase return book is used for recording the return of goods purchased from suppliers against cash.

Q16. Journal entry for receiving interest in cash from Mr. Prashant against the loan given to him

a. Interest on loan account Dr.

To Prashant account

b. Prashant account Dr.

To Interest account

c. Cash account Dr.

To Prashant account

d. None of the above

Q 17. Which of the following entries recorded in the books of the drawee of a bill is false?

1. When a bill is accepted, the account to be debited is drawer’s a/c

1. When a bill is discharged, the account to be debited is bills payable a/c

1. When a bill presented for payment by a bank is dishonored, the account to be debited is bills payable a/c

1. When noting charges of a dishonored bill is paid by the endorsee ,the account to be debited is noting charges a/c

1. At the time of retirement of a bill the account to be debited is the drawer’s a/c.

Q 18. Which of the following is true?

1. A bill sent for collection by bank when dishonored, the drawer will credit bank a/c
2. At the time of renewal of bill interest a/c is credited in the books of the drawee
3. Accommodation bills are drawn, accepted and endorsed for some consideration
4. None of the Above

Q19. Bills receivable account is a

1. Nominal account
2. Personal account
3. Intangible asset
4. None of the Above
Q20. Closing stock is generally valued at

1. Cost price
2. Replacement cost
3. Market price
4. None of the Above

Q21. The provision for discount on debtors is calculated on the amount of debtors

1. Before deducting the provision for doubtful debts

1. Left after deducting the provision for doubtful debts

1. Before deducting the actual bad debts

2. None of the Above

Q22. Consider the following information of Thumbs-up Company for the year 2006-2007:

Opening balance of provision for debtors account Rs. 20,000

Bad debts during the year Rs. 18,000
Closing balance of Sundry debtors Rs.2,65,000
Estimated provision for doubtful debts 4%

The amount to be debited to profit and loss account to make the estimated provision is

1. Rs. 8,600

1. Rs.10,400

1. Rs.10,520

1. None of the Above

Q23. At the time of preparation of final accounts, bad debts recovered account will be transferred to

1. Debtor’s account
1. Profit & loss account

1. Profit & loss adjustment account

2. None of the Above

Q24. Which of the following is false about diminishing balance method of depreciation?

1. Higher amount of depreciation is charged when the machine is more efficient

1. It recognizes the risk of obsolescence by higher amount of depreciation in the early years
2. The total amount of depreciation and repairs is almost uniformally distributed over the useful life
3. None of the Above

Q25. The following is not an example of fixed asset

1. Plant and machinery

1. Land and building

1. Patent
2. None of the Above

Q26. Under depletion method, depletion per unit is calculated as

1. Acquisition cost divided by average production units per annum

1. Acquisition cost divided by actual production units in the year

1. Acquisition cost minus residual value divided by average production units per annum
2. None of the Above

Q 27. Which one of the following is a capital expenditure?

1. Compensation paid to Directors on termination of their services

1. Expenditure for renewal of trade mark

1. Gratuity paid to employees

d. None of the Above
Q28. Entries passed for outstanding expenses, depreciation, interest on capital etc. are

1. Opening entries

1. Journal entries

1. Adjustment entries

1. None of the above

Q29. Which of following transactions does not change the total amount of liabilities in the balance sheet?

1. Purchase of office furniture on credit

1. Payment of bank loan

1. Issue of debentures
2. None of the above

Q30. Which of the following is false?

1. Capital plus liabilities will be equal to assets

1. The difference between assets and liabilities is bank borrowing

1. Capital account is a personal account

2. None of the above

Q31. The expenses and incomes pertaining to full trading period are taken to the Profit and Loss account of a busines
1. Time period concept

1. Business entity concept

1. Going concern concept

2. None of the above

Q32. Which of the following statements can be used to assess the liquidity of a company?

a. Balance sheet
1. Profit and loss account

1. Profit and loss appropriation account

2. None of the above

Q33. Which of the following state that “Anticipate no profit and provide for all possible losses”?

1. Convention of materiality

1. Convention of consistency

1. Convention of disclosure
2. None of the above

Q34. Which of the following statements is/are true?

I. Drawings account is a nominal account.

II. Capital account is a real account.

III. Sales account is a nominal account.

IV. Outstanding salaries account is a nominal account.

V. Patents account is a personal account.

a. Only (I) above

b. Only (III) above

c. Both (II) and (IV) above

d. None of the above

Q35. RS Ltd., makes purchases on credit. If the purchases are not as per the specifications, the company returns them

1. Returns inward book

1. Returns outward book

1. Cash book
2. None of the above

Q36. Which one of the following is not a reason for discrepancy in the balance as per cash book and bank pass book

1. Cheque issued to suppliers may not have been presented

1. Cheque deposited in the account may not have been realized

1. Bill discounted with bank is not due for payment

2. None of the above

Q37. The bank balance in the cash book of Mr.Avinash, a proprietor showed a credit balance of Rs.10,500 on March

i. Cheque No. 51 for Rs.540 in favour of Mr.Raman has not yet been presented.
ii. A bill of Rs.1,000 was retired by the bank under a rebate for Rs.15, but the full amount of the bill was credited to b

The balance as per pass book is

1. Rs.11,025 (Dr.)

1. Rs. 9,945 (Dr.)

1. Rs. 9,945 (Cr.)
2. None of the above

Q38. The total cost of goods available for sale with a company during the current year is Rs.12,00,000 and the to
period are Rs.13,00,000. If the gross profit margin of the company is 25% on sales, the closing inventory during the c

1. Rs.4,00,000

1. Rs.3,40,000

1. Rs. 225000
2. None of the above

Q39. Unearned income account is

1. A current asset

1. A current liability

1. An expense
2. None of the above

Q40. The essentials of double entry book-keeping in sequential order are

1. Passing journal entries, posting in ledger, appropriate adjusting entries, trial balance, Profit

1. & Loss a/c and Balance-sheet

1. Passing journal entries, posting ledger, trial balance, Profit & Loss a/c and Balance-sheet, passing adjusting
2. Passing journal entries, posting ledger, passing adjusting entries, Profit & Loss a/c and
3. Balance sheet, trial balance

1. Passing adjusting entries, passing journal entries, trial balance, posting in ledger, Profit & Loss a/c and Balance-she

1. Passing journal entries, posting in ledger, trial balance, passing adjusting entries, Profit & Loss a/c and Balance-she
Question No: 1

Which of the following statements is true concerning assets?

a) They are recorded at cost and adjusted for inflation.

b) They are recorded at market value for financial reporting because historical cost is arbitrary.

c) Accounting principles require that companies report assets on the income statement.

d) Assets are measured using the cost concept.

Question No: 2

When the concept of conservation is applied to the Balance Sheet, it results in

a) Overstatement of Capital

b) Understatement of Capital

c) Overstatement of Assets

d) Understatement of Assets.

Question No: 3

Which of the following is a correct expression of the accounting equation?

a) Assets - Liabilities + Owners’ Equity

b) Assets = Liabilities - Owners’ Equity

c) Assets + Owners’ Equity = Liabilities

d) Assets = Liabilities + Owners’ Equity

Question No: 4

How is the balance sheet linked to the other financial statements?

a) The beginning retained earnings balance on the statement of retained earnings becomes the amount of retained
the balance sheet.

b) Retained earnings is added to total assets and reported on the balance sheet.

c) Net income increases retained earnings on the statement of retained earnings, which ultimately increases re
the balance sheet.

d) There is no link between the balance sheet and the other statements.

Question No: 5

The process of recording the economic effects of business transactions in a book of original entry:

a) Double entry system

b) Debit

c) Credit

d) Journalizing

Question No: 6

If the sum of the debits and credits in a trial balance is not equal, then

a) There is no concern because the two amounts are not meant to be equal.

b) The chart of accounts also does not balance.

c) It is safe to proceed with the preparation of financial statements.

d) Most likely an error was made in posting journal entries to the general ledger or in preparing the trial balan

Question No: 7

Z Ltd had Rs1800 of supplies on hand at January 1, 2006. During 2006, supplies with a cost of Rs7, 000 were purc
31, 2006, the actual supplies on hand amounts to Rs2, 300. After the adjustments are recorded and posted at Dec
balances in the Supplies and Supplies Expense accounts will be:

a) Supplies, Rs7, 000; Supplies Expense, Rs2, 300.

b) Supplies, Rs1, 800; Supplies Expense, Rs7, 000.

c) Supplies, Rs2, 300; Supplies Expense, Rs6, 500.

d) Supplies, Rs2, 300; Supplies Expense, Rs3, 900.

Question No: 8

In the statement of changes in financial position, uses of resources are defined as:

a) Transaction debits

b) Fund increases

c) Transaction credits

d) Fund decreases

Question No: 9

Most firms elected to define funds in the statement of changes in financial position as:

a) Cash

b) Working capital

c) Current assets

d) Owners’ Equity

Question No: 10

The funds flow statement included:

a) All sources and uses of resources.

b) Only cash transactions.

c) Only transactions affecting current assets.

d) Only transactions affecting fund accounts.

Question No: 11
Which of the following is not an example of a non-fund adjustment to income required in preparing the statement of
position when funds were defined as working capital?

a) Depreciation expense

b) Gain from asset disposal

c) Interest expense

d) Amortization of premium on debt

Question No: 12

In the cash flow statement, cash is defined as:

a) Quick assets

b) Literal cash on hand or on demand deposit, plus cash equivalents.

c) Literal cash on hand or on demand deposit, plus marketable securities.

d) All of the above.

Question No: 13

Flexible budgets

a) Accommodate changes in the inflation rate.

b) Accommodate changes in activity levels.

c) Are used to evaluate capacity utilization.

d) Are static budgets that have been revised for changes in prices.

Question No: 14

Which of the following statements regarding changing inventory methods is true?

a) A change in inventory methods can be justified if the change is made to better match profits with revenue.

b) The effect of changing inventory method does not need to be disclosed.

c) Tax advantages are valid justification for changing inventory methods.

d) One place that the reader of an annual report would be able to identify that a company changed invent
footnotes to the financial statements.

Question No: 15

Use the information presented below to answer the questions that follow. Solid Co. received a non-interest-bearing
October 1, 2006. The amount of the note due at the maturity date is Rs6, 200. The note was accepted by Solid for
Bedrock with a selling price of Rs6, 000. The note is due in 3 months.

The difference of Rs200 between the amount of the note (Rs6, 200) and the sales price of the merchandise (Rs6, 000)

a) Is the interest explicitly included in the amount of the note.

b) Will be recorded in a contra account, Discount on Notes Receivable, by Co.

c) Will be recorded as interest revenue on October 1, 2006.

d) Is an error made in preparing the note.

Question No: 16

Use the information presented below to answer the questions that follow. Solid Co. received a non-interest-bearing
October 1, 2006. The amount of the note due at the maturity date is Rs6, 200. The note was accepted by Solid for
Bedrock with a selling price of Rs6, 000. The note is due in 3 months.

The difference of Rs200 between the amount of the note (Rs6, 200) and the sales price of the merchandise (Rs6, 000)

Which of the following combination of financial statements would provide the most in-depth information to help und
liquidity?

a) Income statement and statement of cash flows.

b) Balance sheet and statement of cash flows.

c) Balance sheet and income statement.

d) Statement of retained earnings and statement of cash flows.

Question No: 17
Use the information presented below to answer the questions that follow. Solid Co. received a non-interest-bearing
October 1, 2006. The amount of the note due at the maturity date is Rs6, 200. The note was accepted by Solid for
Bedrock with a selling price of Rs6, 000. The note is due in 3 months.

Y Ltd sold equipment for Rs4, 000. This resulted in a Rs1, 500 loss. What is the impact of this sale on the working ca

a) Reduces working capital.

b) Increases working capital.

c) Has no affect on working capital at all.

d) The increase offsets the decrease.

Question No: 18

Use the information presented below to answer the questions that follow. Solid Co. received a non-interest-bearing
October 1, 2006. The amount of the note due at the maturity date is Rs6, 200. The note was accepted by Solid for
Bedrock with a selling price of Rs6, 000. The note is due in 3 months.

If a company’s asset turnover rate increased from 2005 to 2006, which of the following conclusions can be made?

a) The company was less efficient during 2006 in using its assets to produce profits.

b) The company produced more sales in 2006 for each dollar invested in assets.

c) The company was more profitable in 2005.

d) The company is over-invested in assets in 2006.

Question No: 19

X Ltd’s master budget calls for the production of 6,000 units of product monthly. The master budget includes indirec
annually; X Ltd considers indirect labor to be a variable cost. During the month of September, 5,600 units of product
indirect labor costs of Rs30,970 were incurred. A performance report utilizing flexible budgeting would report a flex
for indirect labor of:-

a) Rs170 unfavorable.

b) Rs170 favorable

c) Rs2, 030 unfavorable.

d) Rs2, 030 favorable.

Question No: 20

Which of the following is not an advantage for using standard costs for variance analysis?

a) Standards simplify product costing.

b) Standards are developed using past costs and are available at a relatively low cost.

c) Standards are usually expressed on a per unit basis.

d) Standards can take into account expected changes planned to occur in the budgeted period.

Question No: 21

The main purpose of cost accounting is to-

a) Maximize profits

b) Provide information to management for decision making

c) help in fixing selling price

d) To watch cash flows

Question No: 22

Conversion cost is total of:

a) Direct material and direct wages

b) Direct material, direct wages, and production overheads

c) Direct wages and production overheads.

d) None of the above

Question No: 23

A cost, which does not involve cash outlay, is called:

a) Historical cost.
b) Imputed cost

c) Out of pocket cost.

d) Explicit cost.

Question No: 24

Committed fixed costs are those, which:

a) Arise from yearly budget appropriations

b) Are incurred because management can afford.

c) Arise from additional capacity.

d) All the above

Question No: 25

Cost of research undertaken at the request of the customer should be:

a) Charged to costing profit and loss account.

b) Charged to selling overheads.

c) Recovered from the customer.

d) All the above.

Question No: 26

Salaries due for the month of March will appear

a) On the Receipt side of the Cash Book

b) On the Payment side of the Cash Book

c) As a contra entry

d) Nowhere in the Cash Book.

Question No: 27

Liabilities of business are Rs. 11,220 and owner's equity is Rs. 15,000. The assets of the business will be.

a) Rs. 3,780

b) Rs. 26,220

c) Rs. 11,220.

d) Rs. 15,000.

Question No: 28

An entry of Rs. 320 has been debited to Eknath's account at Rs. 230. If is an error of

a) Principle.

b) Omission.

c) Commission.

d) Compensatory.

Question No: 29

Unearned revenues are:

a) Prepayments.

b) Liabilities.

c) Temporary accounts.

d) Both a and b above.

Question No: 30

The revenue recognition principle requires that sales revenues be recognized:

a) When cash is received.

b) When the merchandise is ordered.

c) When the goods are transferred from the seller to the buyer.

d) None of the above.

Question No: 31

All of the following are “other receivables” except:

a) Petty cash.

b) Interest receivable.

c) Income taxes refundable.

d) Advances to employees.

Question No: 32

Depreciation is dependent on a number of estimates. When a change in an estimate is required, the change is made:

a) in the current year

b) in the future year

c) to prior periods

d) both a and b above

Question No: 33

In order to pay a dividend:

a) The corporation must have adequate retained earnings.

b) The board of directors must declare a dividend.

c) The corporation must have adequate cash.

d) All of the above.

Question No: 34
Cash flow activities that include the cash effects of transactions that create revenues and expenses and thus enter into
net income are referred to as:

a) Investing activities.

b) Financing activities.

c) Operating activities.

d) All of the above.

Question No: 35

All of the following are used in preparing a statement of cash flows except:

a) A trial balance.

b) Comparative balance sheet.

c) Current income statement.

d) Additional information.

Question No: 36

Depreciation is result of

a) Usage

b) Time.

c) Obsolescence.

d) All of the above.

Question No: 37

Outstanding Expenses are the examples of

a) Personal Accounts.

b) Real Accounts.
c) Nominal Accounts.

d) None of the above.

Question No: 38

Liquid Assets are inclusive of all current assets except

a) Inventories.

b) Prepaid Expenses.

c) Cash.

d) Both (a) and (b) above.

Question No: 39

Management Accounting is mainly related to

a) Presentation of Figures from Financial Accounting.

b) Presentation of Figures from Cost Accounting.

c) Principles.

d) Both (a) and (b) above

Question No: 40

Variance Analysis is done with regards to actuals with-

a) Standards.

b) Budgeted Figures.

c) Benchmarks

d) All of the above.

Question No. 1
Which of the following is NOT an element of Balance Sheet?

Options
a) Assets
b) Equity
c) Expenses
d) Liabilities

Question No. 2
Financial statements are prepared

Options
a) Only for publicly owned business organizations
b) For corporations, but not for sole proprietorships or partnerships
c) Primarily for the benefit of persons outside of the business organization
d) In either monetary or nonmonetary terms, depending upon the need of the decision maker

Question No. 3
A Balance Sheet provides financial information

Options
a) For a period of time
b) At a given point in time
c) For some point of time in the future
d) In the mid of the fiscal year

Question No. 4
During a period of steadily rising prices, which of the following methods of measuring the cost of goods sold i
reporting the highest gross profit?

Options
a) LIFO
b) FIFO
c) Average Cost
d) Specific Identification

Question No. 5
Bills Payable is

Options
a) An Asset
b) A Liability
c) An Expense
d) A Loss

Question No. 6
An artificial account that appears in "trial balance" to account for undetected errors is called

Options
a) Trading Account
b) Rectification Account
c) Suspense Account
d) Artificial Account

Question No. 7
An income statement communicates information regarding revenues and expenses

Options
a) For a period of time
b) At a given point in time
c) For some point of time in the future
d) At the beginning of the fiscal year

Question No. 8
Which of the following is a part of Fixed Assets?

Options
a) Debtors
b) Bills Receivables
c) Capital
d) Building

Question No. 9
Although accounting information is used by a wide variety of external parties, financial reporting is primarily
information needs of

Options
a) Investors and creditors
b) Government agencies such as the Internal Revenue Service
c) Customers
d) Trade associations and labor unions

Question No. 10
The financial statement which shows cash activity (receipts and disbursements) during the accounting period is called

Options
a) Bank statement
b) Income statement
c) Statement of cash flows
d) Bank reconciliation

Question No. 11
A company which uses the direct write-off method recognizes uncollectible accounts expense

Options
a) As a percentage of net sales during the period
b) As a percentage of net credit sales during the period
c) As indicated by aging the accounts receivable at the end of the period
d) As specific accounts receivable are determined to be worthless

Question No. 12
A triple column cash book records

Options
a) Cash, Bank, Discount
b) Cash, Bank, Sales
c) Cash, Discount, Sales
d) Cash, Bank, Gains

Question No. 13
Which of the following denotes "Gross Block"?

Options
a) Depreciated costs of fixed Assets
b) Historical cost of fixed assets
c) Liabilities payable
d) Gross Profits

Question No. 14
All of the following are characteristics of managerial accounting, except

Options
a) Reports are used primarily by insiders rather than by persons outside of the business entity
b) Its purpose is to assist managers in planning and controlling business operations
c) Information must be developed in conformity with generally accepted accounting principles or with income tax
d) Information may be tailored to assist in specific managerial decisions

Question No. 15
Which of the following statements is correct?
Options
a) Accounting profit is the difference between cash receipts and cash paid in a period
b) Accounting profit is the total of cash sales in the year less the expenses for the period
c) Accounting profit is the difference between revenue income and expenses for the period
d) Accounting profit is the difference between revenue income and cash payments for the period

Question No. 16
Which of the following is NOT a type of Voucher

Options
a) Journal Voucher
b) Receipt Voucher
c) Asset Voucher
d) Payment Voucher

Question No. 17
An ordinary share dividend is:

Options
a) Part of the company profits used to reward the shareholders for their investment
b) Interest on money lent to the company by its shareholders
c) An expense of running the company
d) The directors’ remuneration

Question No. 18
When an item appears in the trial balance, it appears in final accounts

Options
a) only once
b) twice
c) three times
d) will not appear again in final accounts

Question No. 19
Outstanding Expense is an item of

Options
a) Assets
b) Liabilities
c) Debtors
d) Investments
Question No. 20
Marshalling of "Balance Sheet" means

Options
a) The ordering of Assets and Liabilities
b) The totaling of Assets and Liabilities
c) Assets - Liabilities
d) Separate heading of Fixed Assets and Long-term Liabilities

Question No. 21
The profitability and solvency of a business should be measured

Options
a) After each transaction
b) At the end of Accounting Period
c) At the end of each month
d) Every Day

Question No. 22
Sales are recognized as ‘Income'

Options
a) At the point of Sale
b) After the expiry of Credit period allowed to debtors
c) At the end of Accounting Period
d) after the money is collected from debtors

Question No. 23
The Term "Goodwill" comes under the heading of

Options
a) Liabilities
b) Assets
c) Debtors
d) Equity

Question No. 24
Financial Year is also called as

Options
a) Accounting Year
b) Accounts Year
c) Accountable Year
d) None of these

Question No. 25
The nature of an asset is best described as

Options
a) Something with physical form that is valued at cost in the accounting records
b) An economic resource owned by a business and expected to benefit future operations
c) An economic resource representing cash or the right to receive cash in the near future
d) Something owned by a business that has a ready market value

Question No. 26
The external events that involve transfer of value between two entities is known as

Options
a) Transactions
b) Events
c) Divisions
d) Happenings

Question No. 27
Which of the following is TRUE?

Options
a) Assets=Liablities+Equity
b) Assets=Liabilities-Equity
c) Assets= Liabilities-Losses
d) Assets=Liabilities+Profits

Question No. 28
The personal expense of Proprietor are known as

Options
a) Proprietary Expenses
b) Personal Expense
c) Drawings
d) Business Expense

Question No. 29
Which "Book" records all residual transactions?

Options
a) Cash Book
b) Journal proper
c) Purchase Day Book
d) Sales Day book

Question No. 30
A "Debit" balance in Cash Book shows

Options
a) Cash Sales
b) Cash paid to creditors
c) Cash expenses made
d) Cash paid for buying land

Question No. 31
Which of the following is a type of "reserve"?

Options
a) Losses reserve
b) Payment Reserves
c) Non-free reserves
d) Specific Reserves

Question No. 32
Which of the following is a part of "Petty Expenses"?

Options
a) Postage Stamps purchased
b) Purchased Truck
c) Paid Carriage for goods purchased
d) Tools purchased

Question No. 33
Which of the following is recorded on "Credit" side of "trial Balance"?

Options
a) Trade Expenses
b) Sales
c) Carriage Inward
d) Carriage Outward

Question No. 34
DRR refers to
Options
a) Debenture Rate Reserve
b) Debtors Rate Reserve
c) Dividend Rates Reserve
d) Debentive Redemption Reserve

Question No. 35
A Trial Balance is prepared to locate

Options
a) Errors of principle
b) Errors of omission
c) Compensating Errors
d) none of these

Question No. 36
Stock can be classified as

Options
a) Fixed Asset
b) Intangible Asset
c) Current Asset
d) Current Liability

Question No. 37
Bills Receivables is

Options
a) An Asset
b) A Liability
c) An Expense
d) Part of Equity

Question No. 38
The basic purpose of an accounting system is to

Options
a) Develop financial statements in conformity with generally accepted accounting principles.
b) Provide as much useful information to decision makers as possible, regardless of cost
c) Record changes in the financial position of an organization by applying the concepts of double-entry accounting
d) Meet an organization's need for accounting information as efficiently as possible

Question No. 39
Information is cost effective when

Options
a) The information aids management in controlling costs
b) The information is based upon historical costs, rather than upon estimated market values
c) The value of the information exceeds the cost of producing it
d) The information is generated by a computer-based accounting system

Question No. 40
A complete set of financial statements for Hartman Company, at December 31, 1999, would include each of the follo

Options
a) Balance sheet as of December 31, 1999
b) Income statement for the year ended December 31, 1999
c) Statement of projected cash flows for 2000
d) Notes containing additional information that is useful in interpreting the financial statements
st control (include choosing the source of supply).
no opening stack and 5,200 unit of raw materials were transferred to process B at Rs 18 per unit .In Process B the cost of Conve
pervisor, is Known as:-
tive of their actual payment or receipt. This is in recognition of
 pliers. The book, that is used to record such returns is

On comparing it with his pass book he discovered the following discrepancies.

unt in cash book.

rocess B the cost of Conversion
1. Which is the final stage of the accounting process ?
2. The type of accounting which reports on the performance of the firm to essential external users is called:
3. Which of the following is not generic and alternative legal form of organization with capital provider(s)?
4. In which orders does the journalist transactions ?
5. Which of the followings groups use in financial accounting?
6. Which of the following is not a long term liability ?
7. The recognition of intangible assets allow their amortization over the period during which economic benefits a
8. What is the process called, where cost of an intangible asset are allocated over its useful life?
9. Where does the debt account decrease?
10. Each of accounting transaction originates in a
11. Which of the following accounts is expect to present a debit balance ?
12. Where is decreasing liquidity approach company used ?
13 which of the following equations represents the balance sheets?
14. Which principle states that positive(debit) balances and negative(credit) balances in accounts receivable
15 which of the following equations is correct ?
16. Capital can be provided in the form(S) of:
17. What is the ratio between current assets and current liabilities called ?
18. Each accounting transaction originates in a:
19. Which of the following item is not an intangible assets ?
20. Which of the following is not a current assets ?
21. These are economic resources with the ability or potential to provide future benefits?
22. WHICH OF THE FOLLOWING ITEMS IS NOT A SUB CATEGORY OF SHAREHOLDERS EQUITY ?
23. Given the following data what is the depreciation expense of an asset for the first year?Acquisition cost 6000Est
24. A revenue __
25. What are the accounting standards issued by the IABS called?
26. Which of the following terms is not a specific monetary instrument used to settle sales?
27. How is the market to book ratio calculated?
28. Financially shareholders are rewarded by:
29. With which principle does the allowance method conform?
30. A service is sold for 250 CU on 10 march. The service is carried out in march, it is invoiced on 10 april and p
31. Which of the following is a financial asset?
32. Accruals are often reported as part of :
33. When revenue is greater than expenses, you have a ___?
34. Which measurement basis is most commonly used by enterprises to prepare the financials statements because
35. Interest revenue of a loan granted to an employee becomes due on the anniversary of the loan, 31 march.
36. How is the receivable turnover calculated?
37. In general, the asset side of the balance sheet is designed to summarize balance sheet accounts with:
38. The cash flow statement consists of the following sections:
39. Which of the following items is not a financial fixed asset?
40. When does an accountant record a transaction?
41. What is the result of recording the initial investment by shareholders ?
42. Which of the following describe a records of the transactions ?
43. Earing are result of the difference between :
44. Which principle specifies that cost or expenses should be recorded at the same time as the revenue to whi
45. How does we describe the process of adjusting the value of an asset be recognizing that it is consumed in a
46. What type of shares carry special rights?
47.the four principal qualitative characteristics of useful financial statements are:
48. Which financial statements is used to shows that the firm owns ?
49. The IASB specifies the element directly related to the measurement of financial position are:
50. Which mechanism is entirely based on the fundamental idea that each individual accounting transaction has

1 Redeemable preference shares can be redeemed by:-

2 While preparing a consolidated balance sheet investment of the holding company in the equity shares of the su
3 The extent divisible profits are used to redeem the face value of preference share , an equal amount should be
4 The share premium amount will be shown under the heading Choose the best option
5 The number of days required for the time of issue of the project of the prospectus to the complete allotment
6 The minimum share application is:
7 The rate of interest company can change on calls in arrears according to the table A of the company act is:
8 when preference shares are redeemed it amounts to:-
9 Direct Labour means:
10 In processing goods through a factory, materials are successively run through production A and production
11 The difference between subscribed capital and called up capital is know as:-
12 A business unit is know as a profit center.
13 In the business, debentures represent:
14 Differential piece rate system
15 Showroom expenses is an example of :
16 The parent organization acquiring controlling interest in another company is called the ___ company
17 Unacceptable unit of production that is an inherent result of the production process is Known as………
18 A share Application Account is Classified
19 XIL Ltd Manufactures goods in two processes – Process A and Process B.During the month of september 2003, P
20 The excess price received on the part value of shares should be credited to:
21 Which of the following is/are true regarding job costing?
22 Debenture holder are the:-
23 For acquiring interest the holding company has to posses more than ----- of the equity share capital of anot
24 When an income statement is prepared by profit center, cost traceable directly to a cost center such as the
25 The operation of a responsibility accounting System usually involves each of the following steps except
26 As per table A of the companies Act, The interest on the calls in advance is determined as:-
27 A process loss that does not affect the cost of per unit, is:-
28 Whenever there is an abnormal loss
29 Which following can be taken as the basis of absorbing manufacturing overhead costs?
30 Which of the following industries does not use process costing
31 Interest on debenture is:-
32 To reduce disk Accesses while searching for a record,the free used is:-
33 If the work of specialized nature is perforated by a subcontractor, the cost of subcontracting is debited to
34 Which of the following methods of remuneration is most like to give stability of labour cost to the employer?
35 Which of the following Industries does not use job costing ?
36 A newly established company can not issues share at:-
37 Management accounting analyses accounting data with the help of:-
38 Under or over absorption occurs due to
39 Redeemable preference share can be redeemed from:-
40 Which of the following is true regarding Scrap value if Any,When there is an abnormal loss ?
41 A company has to acquire ---- Shares of another company in order to become a holding Company
42 The capital clause of a company is included in the:-
43 In the balance sheet of a company,debentures are shown under the following heading :-
44 In the long Run,the contribution of a profit center to the overall profitability of the business is best measured
45 The group Share of Proposed dividends by the Subsidiary is added to----------------
46 Contribution margin is equal to:-
47 Interest on debentures is calculated on the basis of the :-
48 An accounting system where in the operations are broken down into cost centers controllable by a foreman,s
49 As Per the Companies Act,Companies Can issues:-
50 Under Cost Plus Method price of the product is determined by:-
51 The Deque in which is done at the end at one end and deletion from the both ends
52 Unacceptable units of production that is an inherent result of the production process is known as:
53 Management Accounting is suitable for

1. A "Debit" balance in Cash Book shows

2. A company which uses the direct write-off method recognizes uncollectible accounts expense
3. A complete set of financial statements for Hartman Company, at December 31, 1999, would include each of th
4. A financial Statement is
5. A Trial Balance is prepared to locate
6. A triple column cash book records
7. All of the following are characteristics of managerial accounting, except
8. Although accounting information is used by a wide variety of external parties, financial reporting is primaril
9. An artificial account that appears in "trial balance" to account for undetected errors is called
10. An income statement communicates information regarding revenues and expenses
11. An ordinary share dividend is:
12. Bills Receivables is
13. Financial Year is also called as
14. If the 'Closing Stock' is appearing in trial balance, it is shown in the
15. In an Accounting Equation, Where do you show the item "Advance to the Suppliers"?
16. Information is cost effective when
17. Marshalling of "Balance Sheet" means
18. Outstanding Expense is an item of
19. Sales are recognized as 'Income'
20. Stock can be classified as
21. The basic purpose of an accounting system is to
22. The external events that involve transfer of value between two entities is known as
23. The financial statement which shows cash activity (receipts and disbursements) during the accounting period
24. The nature of an asset is best described as
25. The personal expense of Proprietor are known as
26. The profitability and solvency of a business should be measured
27. The Term "Goodwill" comes under the heading of
28. When an item appears in the trial balance, it appears in final accounts
29. Which "Book" records all residual transactions?
30. Which of the following denotes "Gross Block"?
31. Which of the following is a part of "Petty Expenses"?
32. Which of the following is a part of Fixed Assets?
33. Which of the following is a type of "reserve"?
34. Which of the following is NOT a type of Voucher
35. Which of the following is recorded on "Credit" side of "trial Balance"?
36. Which of the following is TRUE?
37. Which of the following should not be included as part of cash on the balance sheet
38. Which of the following statements best describes the purpose of financial accounting in a limited liability
39. Which of the following statements is correct?
40. A Balance Sheet provides financial information

1. Which of the following financial statements is prepared as of a particular date? (a) Profit and loss account
2. Based on which of the following concepts, share capital account is shown on the liability side of balance shee
3. Which of the following is not an accounting transaction? (a) Sale of goods for cash
4. Which of the following is true?
5. From the books of Mr.Neelam, it was observed that cheques amounting to Rs.2,40,000 were deposited in the b
6 . Which of the following is true?
7 . A sales day book is to record
8. Which of the following is a liability of a firm?
9. Which of the following accounts will invariably have a debit balance?
10. The following is not a book of original entry
11. The Accountant of a company is recording the transactions of the day in various Books of Original Entry. Wh
12. The impact on assets, profit and liabilities of a firm, on account of salary paid will be
13. Which of the following is true?
14. Total of sales day book at the end of the month indicates
15. Which of the following is true?
16. Journal entry for receiving interest in cash from Mr. Prashant against the loan given to him
17. Which of the following entries recorded in the books of the drawee of a bill is false?
18. Which of the following is true?
19. Bills receivable account is a
20. Closing stock is generally valued at
21. The provision for discount on debtors is calculated on the amount of debtors
22. Consider the following information of Thumbs-up Company for the year 2006-2007: Opening balance of provis
23. At the time of preparation of final accounts, bad debts recovered account will be transferred to
24. Which of the following is false about diminishing balance method of depreciation?
25. The following is not an example of fixed asset
26. Under depletion method, depletion per unit is calculated as
27. Which one of the following is a capital expenditure?
28. Entries passed for outstanding expenses, depreciation, interest on capital etc. are
29. Which of following transactions does not change the total amount of liabilities in the balance sheet?
30. Which of the following is false?
31. The expenses and incomes pertaining to full trading period are taken to the Profit and Loss account of a busine
32. Which of the following statements can be used to assess the liquidity of a company?
33. Which of the following state that “Anticipate no profit and provide for all possible losses”?
34. Which of the following statements is/are true?
35. RS Ltd., makes purchases on credit. If the purchases are not as per the specifications, the company returns th
36. Which one of the following is not a reason for discrepancy in the balance as per cash book and bank pass b
37. The bank balance in the cash book of Mr.Avinash, a proprietor showed a credit balance of Rs.10,500 on March
38. The total cost of goods available for sale with a company during the current year is Rs.12,00,000 and the tota
39. Unearned income account is
40. The essentials of double entry book-keeping in sequential order are

1 Which of the following statements is true concerning assets?

2 When the concept of conservation is applied to the Balance Sheet, it results in
3 Which of the following is a correct expression of the accounting equation?
4 How is the balance sheet linked to the other financial statements?
5 The process of recording the economic effects of business transactions in a book of original entry:
6 If the sum of the debits and credits in a trial balance is not equal, then
7 Z Ltd had Rs1800 of supplies on hand at January 1, 2006. During 2006, supplies with a cost of Rs7, 000 were
8 In the statement of changes in financial position, uses of resources are defined as:
9 Most firms elected to define funds in the statement of changes in financial position as:
10 The funds flow statement included:
11 Which of the following is not an example of a non-fund adjustment to income required in preparing the state
12 In the cash flow statement, cash is defined as:
13 Flexible budgets
14 Which of the following statements regarding changing inventory methods is true?
15 Use the information presented below to answer the questions that follow. Solid Co. received a non-interest-b
16 Use the information presented below to answer the questions that follow. Solid Co. received a non-interest-b
17 Use the information presented below to answer the questions that follow. Solid Co. received a non-interest-b
18 Use the information presented below to answer the questions that follow. Solid Co. received a non-interest-b
19 X Ltd’s master budget calls for the production of 6,000 units of product monthly. The master budget includes i
20 Which of the following is not an advantage for using standard costs for variance analysis?
21 The main purpose of cost accounting is to-
22 Conversion cost is total of:
23 A cost, which does not involve cash outlay, is called:
24 Committed fixed costs are those, which:
25 Cost of research undertaken at the request of the customer should be:
26 Salaries due for the month of March will appear
27 Liabilities of business are Rs. 11,220 and owner's equity is Rs. 15,000. The assets of the business will be.
28 An entry of Rs. 320 has been debited to Eknath's account at Rs. 230. If is an error of
29 Unearned revenues are:
30 The revenue recognition principle requires that sales revenues be recognized:
31 All of the following are “other receivables” except:
32 Depreciation is dependent on a number of estimates. When a change in an estimate is required, the change
33 In order to pay a dividend:
34 Cash flow activities that include the cash effects of transactions that create revenues and expenses and thus
35 All of the following are used in preparing a statement of cash flows except:
36 Depreciation is result of
37 Outstanding Expenses are the examples of
38 Liquid Assets are inclusive of all current assets except
39 Management Accounting is mainly related to
40 Variance Analysis is done with regards to actuals with-

1 Which of the following is NOT an element of Balance Sheet?

2 Financial statements are prepared
3 A Balance Sheet provides financial information
4 During a period of steadily rising prices, which of the following methods of measuring the cost of goods sold is l
5 Bills Payable is
6 An artificial account that appears in "trial balance" to account for undetected errors is called
7 An income statement communicates information regarding revenues and expenses
8 Which of the following is a part of Fixed Assets?
9 Although accounting information is used by a wide variety of external parties, financial reporting is primarily
10 The financial statement which shows cash activity (receipts and disbursements) during the accounting period is
11 A company which uses the direct write-off method recognizes uncollectible accounts expense
12 A triple column cash book records
13 Which of the following denotes "Gross Block"?
14 All of the following are characteristics of managerial accounting, except
15 Which of the following statements is correct?
16 Which of the following is NOT a type of Voucher
17 An ordinary share dividend is:
18 When an item appears in the trial balance, it appears in final accounts
19 Outstanding Expense is an item of
20 Marshalling of "Balance Sheet" means
21 The profitability and solvency of a business should be measured
22 Sales are recognized as ‘Income'
23 The Term "Goodwill" comes under the heading of
24 Financial Year is also called as
25 The nature of an asset is best described as
26 The external events that involve transfer of value between two entities is known as
27 Which of the following is TRUE?
28 The personal expense of Proprietor are known as
29 Which "Book" records all residual transactions?
30 A "Debit" balance in Cash Book shows
31 Which of the following is a type of "reserve"?
32 Which of the following is a part of "Petty Expenses"?
33 Which of the following is recorded on "Credit" side of "trial Balance"?
34 DRR refers to
35 A Trial Balance is prepared to locate
36 Stock can be classified as
37 Bills Receivables is
38 The basic purpose of an accounting system is to
39 Information is cost effective when
40 A complete set of financial statements for Hartman Company, at December 31, 1999, would include each of the
B. Financial Statement
C. Financial Accounting
B. Association
Ans A alphabetical
C. Tax Authorities, Government and General
A. Accounts payable (for payables due in more than one year)
D. Accrual Principle
D. Amortization
A. On the debit side

C. Financial Interest
C. European countries
D. Assets = Liabilities + Shareholders’ Equity
B. Accrual Principle
A. Share Premium = Issue price + par value
A. Cash ContributionsB. Contributions of tangible or intangible assetsC. Contribution of intellectual PropertyD. All of the above
C. Current Ratio
C. Journal
B Land
D. Land
A. Assets
C. Dividends Payable
C. 1200
D. Is an increase in shareholders’ equity
A. Internationally Accepted Accounting Statement
C. A Draft
C. Market price per share / book value per share
C. Dividends
B. Matching Principle
A. On 10 March
C. Loan to an Associate
A. Provisions
B. Net Income
A. Historical Cost
C. 60
B. Net sales / Average accounts receivable
B. Debit Balances
C. Operating , Investing and Financing
B. Marketable Securities
D. None of the above
A. An equal increase in both assets and shareholders equity
D. Journal
D. Revenue and Expenses
B. Matching Principle
D. Waning
B. Right Shares
A. Understandability, relevance , reliability, comparability.
C. Statement of Retained Earnings
D. Assets, Liabilities and Equity
B. Double Entry Bookkeeping

D- issue fully paid bonus shares

A- assets, liabilities
d) Capital redemption reserve
c) Reserve and surplus
b) 60 days
b) 5 percent of the face value
c) 6%
b) Decrease in share capital
a) Labour which can be conveniently associated with a
C- raw material
A- paid up capital
A- if its management is held accountable for both revenues and expenses and has the authority to make decision regarding i
b) Long term borrowing
c) Pay workers in proportion to their efficiency
c) Selling overhead
A- holding
b) Normal Spoilage
b) Personal Account
c) 27200
d) Share premium A/.c
d) All of the above
c) Creditors of the Company
d) 50%
d) Classified as Committed fixed cost and allocated among center
a) Allocating common fixed costs among the responsibility centers that benefit from these costs
d) 0.06
b) Normal loss
a) Scrap value, any , Should be credited to process account
a) Units produced
d) Aircraft Manufacturing
B- change on profit
a) Binary sorted tree
B- contractor's account
d) Straight piece work
c) Oil Refineries
c) Discount
c) Tools and Technique
d) All of above
d) None of the above
c) It Should be Credited to process Account
b) Equity
b) Memorandum of Association
b) Unsecured loan
c) Responsibility Margin.
a) Consolidated revenue
d) Revenue ,less variable cost.
a) Face value of debentures
c) Responsibility accounting
c) Redeemable preference share
b) Adding and appropriate markup to the cost of the product
b) Output-restricted deleted

A- large industrial & trading concerns

(B): Cash paid to creditors

(D): As specific accounts receivable are determined to be worthless
(C): Statement of projected cash flows for 2000
(C): must effect the financial position of business entity
(D): none of these
(A): Cash, Bank, Discount
(A): Reports are used primarily by insiders rather than by persons outside of the business entity
(A): Investors and creditors
(D): Artificial Account
(C): For some point of time in the future
(A): Part of the company profits used to reward the shareholders for their investment
(B): A Liability
(A): Accounting Year
(A): Trading Account
(A): Assets
(C): The value of the information exceeds the cost of producing it
(A): The ordering of Assets and Liabilities
(B): Liabilities
(D): after the money is collected from debtors
(A): Fixed Asset
(D): Meet an organization's need for accounting information as efficiently as possible
(B): Events
(C): Statement of cash flows
(B): An economic resource owned by a business and expected to benefit future operations
(B): Personal Expense
(B): At the end of Accounting Period
(B): Assets
(A): only once
(B): Journal proper
(A): Depreciated costs of fixed Assets
(D): Tools purchased
(C): Capital
(D): Specific Reserves
(C): Asset Voucher
(C): Carriage Inward
(A): Assets=Liablities+Equity
(B): Outstanding cheques at year-end
(D): To help the directors discharge their obligations to the shareholders
(B): Accounting profit is the total of cash sales in the year less the expenses for the period
(A): For a period of time

1. Balance sheet
1. Business entity concept
1. Agreement to sell
1. Taking the favourable balance as per pass book as the starting point, the amount in respect of charges made by the bank wi
1. Deduct Rs.60,000 from bank balance as per pass book
1. Bank account is a personal account
1. all credit and cash sales
2. Credit balance of bank column of cash book.
I. Accounts receivable.*II. Accounts payable.*III. Purchases account.*IV. Bank account.*V. Prepaid expenditure.*d. Al
1. Journal proper
a. Goods purchased on credit - Purchase Book*b. Goods sold on credit - Sales Book*c. Wages paid in cash - Cash Boo
a. Assets Profit Total Liabilities (a) No effect Decreases Decreases*b. Assets Profit
1. Discount columns in cash book are totaled and not balanced
1. The total sales for the month
1. Cash book may be defined as the record of transactions concerning cash receipts and payments
a. Interest on loan account Dr. To Prashant account*b. Prashant account Dr. To Interest account*c. Cash account Dr
1. When a bill is accepted, the account to be debited is drawer’s a/c
1. A bill sent for collection by bank when dishonored, the drawer will credit bank a/c*2. At the time of renewal of bill interest a
1. Nominal account*2. Personal account*3. Intangible asset*4. None of the Above
1. Cost price*2. Replacement cost*3. Market price*4. None of the Above
1. Before deducting the provision for doubtful debts*1. Left after deducting the provision for doubtful debts*1. Before deducti
1. Rs.10,520
1. Profit & loss account
1. Higher amount of depreciation is charged when the machine is more efficient* *1. It recognizes the risk of obsolescence by
1. Plant and machinery*1. Land and building*1. Patent*2. None of the Above
1. Acquisition cost minus residual value divided by average production units per annum
1. Expenditure for renewal of trade mark
1. Opening entries*1. Journal entries*1. Adjustment entries*1. None of the above
1. Purchase of office furniture on credit*1. Payment of bank loan*1. Issue of debentures*2. None of the above
1. Capital plus liabilities will be equal to assets*1. The difference between assets and liabilities is bank borrowing*1. Capital ac
1. Time period concept*1. Business entity concept*1. Going concern concept*2. None of the above
a. Balance sheet*1. Profit and loss account*1. Profit and loss appropriation account*2. None of the above
1. Convention of materiality*1. Convention of consistency*1. Convention of disclosure*2. None of the above
I. Drawings account is a nominal account.*II. Capital account is a real account.*III. Sales account is a nominal account.*IV. Out
1. Returns outward book
1. Bill discounted with bank is not due for payment
1. Rs. 9,945 (Cr.)
1. Rs. 225000
1. A current asset
1. Passing journal entries, posting ledger, trial balance, Profit & Loss a/c and Balance-sheet, passing adjusting entries.

d) Assets are measured using the cost concept.

a) Overstatement of Capital
d) Assets = Liabilities + Owners’ Equity
c) Net income increases retained earnings on the statement of retained earnings, which ultimately increases retained earnings
d) Journalizing
d) Most likely an error was made in posting journal entries to the general ledger or in preparing the trial balance.
c) Supplies, Rs2, 300; Supplies Expense, Rs6, 500.
d) Fund decreases
a) Cash
a) All sources and uses of resources. b) Only cash transactions. c) Only transactions affecting current assets. d) Only tr
a) Depreciation expense b) Gain from asset disposal c) Interest expense d) Amortization of premium on debt
b) Literal cash on hand or on demand deposit, plus cash equivalents.
b) Accommodate changes in activity levels.
d) One place that the reader of an annual report would be able to identify that a company changed inventory methods is the f
a) Is the interest explicitly included in the amount of the note.
b) Balance sheet and statement of cash flows.
a) Reduces working capital.
If a company’s asset turnover rate increased from 2005 to 2006, which of the following conclusions can be made? a) The co
a) Rs170 unfavorable. b) Rs170 favorable c) Rs2, 030 unfavorable. d) Rs2, 030 favorable.
a) Standards simplify product costing. b) Standards are developed using past costs and are available at a relatively low cost.
a) Maximize profits b) Provide information to management for decision making c) help in fixing selling price d) To watc
a) Direct material and direct wages b) Direct material, direct wages, and production overheads c) Direct wages and prod
a) Historical cost. b) Imputed cost c) Out of pocket cost. d) Explicit cost.
a) Arise from yearly budget appropriations b) Are incurred because management can afford. c) Arise from additional cap
a) Charged to costing profit and loss account. b) Charged to selling overheads. c) Recovered from the customer. d) All
a) On the Receipt side of the Cash Book b) On the Payment side of the Cash Book c) As a contra entry d) Nowhere in th
a) Rs. 3,780 b) Rs. 26,220 c) Rs. 11,220. d) Rs. 15,000.
a) Principle. b) Omission. c) Commission. d) Compensatory.
a) Prepayments. b) Liabilities. c) Temporary accounts. d) Both a and b above.
a) When cash is received. b) When the merchandise is ordered. c) When the goods are transferred from the seller to the
a) Petty cash. b) Interest receivable. c) Income taxes refundable. d) Advances to employees.
a) in the current year b) in the future year c) to prior periods d) both a and b above
a) The corporation must have adequate retained earnings. b) The board of directors must declare a dividend. c) The c
a) Investing activities. b) Financing activities. c) Operating activities. d) All of the above.
a) A trial balance. b) Comparative balance sheet. c) Current income statement. d) Additional information.
a) Usage b) Time. c) Obsolescence. d) All of the above.
a) Personal Accounts. b) Real Accounts. c) Nominal Accounts. d) None of the above.
a) Inventories. b) Prepaid Expenses. c) Cash. d) Both (a) and (b) above.
a) Presentation of Figures from Financial Accounting. b) Presentation of Figures from Cost Accounting. c) Principles. d)
a) Standards. b) Budgeted Figures. c) Benchmarks d) All of the above.

Options a) Assets b) Equityc) Expenses d) Liabilities

Options a) Only for publicly owned business organizations b) For corporations, but not for sole proprietorships or pa
Options a) For a period of timeb) At a given point in time c) For some point of time in the future d) In the mid o
Options a) LIFO b) FIFO c) Average Cost d) Specific Identification
Options a) An Asset b) A Liability c) An Expense d) A Loss
Options a) Trading Account b) Rectification Accountc) Suspense Account d) Artificial Account
Options a) For a period of timeb) At a given point in time c) For some point of time in the future d) At the begin
Options a) Debtors b) Bills Receivables c) Capitald) Building
Options a) Investors and creditors b) Government agencies such as the Internal Revenue Service c) Customers
Options a) Bank statement b) Income statement c) Statement of cash flows d) Bank reconciliation
Options a) As a percentage of net sales during the period b) As a percentage of net credit sales during the periodc)
Options a) Cash, Bank, Discountb) Cash, Bank, Sales c) Cash, Discount, Salesd) Cash, Bank, Gains
Options a) Depreciated costs of fixed Assets b) Historical cost of fixed assetsc) Liabilities payable d) Gross Profit
Options a) Reports are used primarily by insiders rather than by persons outside of the business entity b) Its purp
Options a) Accounting profit is the difference between cash receipts and cash paid in a periodb) Accounting profit is the
Options a) Journal Voucher b) Receipt Voucher c) Asset Voucher d) Payment Voucher
Options a) Part of the company profits used to reward the shareholders for their investmentb) Interest on money lent t
Options a) only once b) twice c) three times d) will not appear again in final accounts
Options a) Assets b) Liabilities c) Debtors d) Investments
Options a) The ordering of Assets and Liabilities b) The totaling of Assets and Liabilitiesc) Assets - Liabilities d)
Options a) After each transactionb) At the end of Accounting Period c) At the end of each month d) Every Day
Options a) At the point of Sale b) After the expiry of Credit period allowed to debtors c) At the end of Accounti
Options a) Liabilities b) Assets c) Debtors d) Equity
Options a) Accounting Year b) Accounts Year c) Accountable Year d) None of these
Options a) Something with physical form that is valued at cost in the accounting records b) An economic resource ow
Options a) Transactionsb) Eventsc) Divisions d) Happenings
Options a) Assets=Liablities+Equity b) Assets=Liabilities-Equity c) Assets= Liabilities-Losses d) Assets=Liabiliti
Options a) Proprietary Expenses b) Personal Expense c) Drawings d) Business Expense
Options a) Cash Book b) Journal properc) Purchase Day Bookd) Sales Day book
Options a) Cash Sales b) Cash paid to creditorsc) Cash expenses made d) Cash paid for buying land
Options a) Losses reserveb) Payment Reserves c) Non-free reserves d) Specific Reserves
Options a) Postage Stamps purchased b) Purchased Truck c) Paid Carriage for goods purchased d) Tools purchas
Options a) Trade Expenses b) Salesc) Carriage Inward d) Carriage Outward
Options a) Debenture Rate Reserve b) Debtors Rate Reservec) Dividend Rates Reserve d) Debentive Redempti
Options a) Errors of principle b) Errors of omission c) Compensating Errors d) none of these
Options a) Fixed Asset b) Intangible Asset c) Current Asset d) Current Liability
Options a) An Asset b) A Liability c) An Expense d) Part of Equity
Options a) Develop financial statements in conformity with generally accepted accounting principles. b) Provide a
Options a) The information aids management in controlling costs b) The information is based upon historical costs
Options a) Balance sheet as of December 31, 1999 b) Income statement for the year ended December 31, 1999 c)
al PropertyD. All of the above
to make decision regarding its products, market, and sources of supply.
 charges made by the bank will be added to the pass book balance*1. Bank charges recorded twice in cash book will be added to the overd

Prepaid expenditure.*d. All of the above

Wages paid in cash - Cash Book*d. None of the above

ssets Profit Total Liabilities (a) Decreases No effect Decreases*c. Assets Profit Tot

ccount*c. Cash account Dr. To Prashant account*d. None of the above

me of renewal of bill interest a/c is credited in the books of the drawee*3. Accommodation bills are drawn, accepted and endorsed for som

ubtful debts*1. Before deducting the actual bad debts*2. None of the Above

es the risk of obsolescence by higher amount of depreciation in the early years*2. The total amount of depreciation and repairs is almost u

e of the above
bank borrowing*1. Capital account is a personal account*2. None of the above

of the above
of the above
is a nominal account.*IV. Outstanding salaries account is a nominal account.*V. Patents account is a personal account.*d. None o

ng adjusting entries.

ly increases retained earnings on the balance sheet.

he trial balance.

g current assets. d) Only transactions affecting fund accounts.

of premium on debt

ed inventory methods is the footnotes to the financial statements.

ns can be made? a) The company was less efficient during 2006 in using its assets to produce profits. b) The company produced more s

ailable at a relatively low cost. c) Standards are usually expressed on a per unit basis. d) Standards can take into account expected cha
xing selling price d) To watch cash flows
ads c) Direct wages and production overheads. d) None of the above

d. c) Arise from additional capacity. d) All the above

d from the customer. d) All the above.
contra entry d) Nowhere in the Cash Book.

nsferred from the seller to the buyer. d) None of the above.

eclare a dividend. c) The corporation must have adequate cash. d) All of the above.
onal information.

Accounting. c) Principles. d) Both (a) and (b) above

for sole proprietorships or partnerships c) Primarily for the benefit of persons outside of the business organization d) In either mon
in the future d) In the mid of the fiscal year

ficial Account
n the future d) At the beginning of the fiscal year

ue Service c) Customersd) Trade associations and labor unions

Bank reconciliation
dit sales during the periodc) As indicated by aging the accounts receivable at the end of the period d) As specific accounts receivable
h, Bank, Gains
ties payable d) Gross Profits
iness entity b) Its purpose is to assist managers in planning and controlling business operations c) Information must be develope
db) Accounting profit is the total of cash sales in the year less the expenses for the periodc) Accounting profit is the difference betwe
nt Voucher
b) Interest on money lent to the company by its shareholdersc) An expense of running the company d) The directors’ remuneration

esc) Assets - Liabilities d) Separate heading of Fixed Assets and Long-term Liabilities
each month d) Every Day
c) At the end of Accounting Period d) after the money is collected from debtors

b) An economic resource owned by a business and expected to benefit future operationsc) An economic resource representing cash or

s-Losses d) Assets=Liabilities+Profits

d for buying land

purchased d) Tools purchased

rve d) Debentive Redemption Reserve

 principles. b) Provide as much useful information to decision makers as possible, regardless of costc) Record changes in the finan
is based upon historical costs, rather than upon estimated market values c) The value of the information exceeds the cost of producing
ended December 31, 1999 c) Statement of projected cash flows for 2000 d) Notes containing additional information that is useful in int
ook will be added to the overdraft as per cash book in the preparation of reconciliation statement*1. Cheque issued but not presented for

Profit Total Liabilities (a) Decreases Decreases Decreases*d. None of the above

accepted and endorsed for some consideration*4. None of the Above

ciation and repairs is almost uniformally distributed over the useful life
a personal account.*d. None of the above

he company produced more sales in 2006 for each dollar invested in assets. c) The company was more profitable in 2005.

ake into account expected changes planned to occur in the budgeted period.
ganization d) In either monetary or nonmonetary terms, depending upon the need of the decision maker

As specific accounts receivable are determined to be worthless

nformation must be developed in conformity with generally accepted accounting principles or with income tax regulationsd) Informatio
profit is the difference between revenue income and expenses for the period d) Accounting profit is the difference between revenue in

The directors’ remuneration

resource representing cash or the right to receive cash in the near futured) Something owned by a business that has a ready market val
 Record changes in the financial position of an organization by applying the concepts of double-entry accounting d) Meet an organizatio
exceeds the cost of producing it d) The information is generated by a computer-based accounting system
nformation that is useful in interpreting the financial statements
e issued but not presented for payment will be added when favourable balance as per cash book is the starting point*1. The amount of th

the above
ofitable in 2005.
 ax regulationsd) Information may be tailored to assist in specific managerial decisions
difference between revenue income and cash payments for the period

ss that has a ready market value

unting d) Meet an organization's need for accounting information as efficiently as possible
ting point*1. The amount of the undercasting of the credit side of the bank column of the cash book will be deducted from the overdraft as
educted from the overdraft as per pass book.
Which is the final stage of the accounting process ? B. Financial Statement
The type of accounting which reports on the performance of the firm toC.e Financial Accounting
Which of the following is not generic and alternative legal form of orgaB. Association
In which orders does the journalist transactions ? Ans A alphabetical
Which of the followings groups use in financial accounting? C. Tax Authorities, Government and General
Which of the following is not a long term liability ? A. Accounts payable (for payables due in more than on
The recognition of intangible assets allow their amortization over the p D. Accrual Principle
What is the process called, where cost of an intangible asset are allocateD. Amortization
Where does the debt account decrease? A. On the debit side
Each of accounting transaction originates in a
Which of the following accounts is expect to present a debit balance ? C. Financial Interest
Where is decreasing liquidity approach company used ? C. European countries
which of the following equations represents the balance sheets? D. Assets = Liabilities + Shareholders’ Equity
Which principle states that positive(debit) balances and negative(cre B. Accrual Principle
which of the following equations is correct ? A. Share Premium = Issue price + par value
Capital can be provided in the form(S) of: A. Cash ContributionsB. Contributions of tangible or in
What is the ratio between current assets and current liabilities called ? C. Current Ratio
Each accounting transaction originates in a: C. Journal
Which of the following item is not an intangible assets ? B Land
Which of the following is not a current assets ? D. Land
These are economic resources with the ability or potential to provide f A. Assets
WHICH OF THE FOLLOWING ITEMS IS NOT A SUB CATEGORY OF SHARE C. Dividends Payable
Given the following data what is the depreciation expense of an asset for C. 1200
A revenue __ D. Is an increase in shareholders’ equity
What are the accounting standards issued by the IABS called? A. Internationally Accepted Accounting Statement
Which of the following terms is not a specific monetary instrument usedC. A Draft
How is the market to book ratio calculated? C. Market price per share / book value per share
Financially shareholders are rewarded by: C. Dividends
With which principle does the allowance method conform? B. Matching Principle
A service is sold for 250 CU on 10 march The service is carried out in maA. On 10 March
Which of the following is a financial asset? C. Loan to an Associate
Accruals are often reported as part of : A. Provisions
When revenue is greater than expenses, you have a ___? B. Net Income
Which measurement basis is most commonly used by enterprises to prepa A. Historical Cost
Interest revenue of a loan granted to an employee becomes due on theC. 60
How is the receivable turnover calculated? B. Net sales / Average accounts receivable
In general, the asset side of the balance sheet is designed to summariz B. Debit Balances
The cash flow statement consists of the following sections: C. Operating , Investing and Financing
Which of the following items is not a financial fixed asset? B. Marketable Securities
When does an accountant record a transaction? D. None of the above
What is the result of recording the initial investment by shareholders ? A. An equal increase in both assets and shareholders e
Which of the following describe a records of the transactions ? D. Journal
Earing are result of the difference between : D. Revenue and Expenses
Which principle specifies that cost or expenses should be recorded at B. Matching Principle
How does we describe the process of adjusting the value of an asset beD. Waning
 What type of shares carry special rights? B. Right Shares
the four principal qualitative characteristics of useful financial statemenA. Understandability, relevance , reliability, comparab
Which financial statements is used to shows that the firm owns ? C. Statement of Retained Earnings
The IASB specifies the element directly related to the measurement of D f . Assets, Liabilities and Equity
Which mechanism is entirely based on the fundamental idea that each iB. Double Entry Bookkeeping
Redeemable preference shares can be redeemed by:- D- issue fully paid bonus shares
While preparing a consolidated balance sheet investment of the holdingA- assets, liabilities
The extent divisible profits are used to redeem the face value of prefer d) Capital redemption reserve
The share premium amount will be shown under the heading Choose thec) Reserve and surplus
The number of days required for the time of issue of the project of the b) 60 days
The minimum share application is: b) 5 percent of the face value
The rate of interest company can change on calls in arrears according toc) 6%
when preference shares are redeemed it amounts to:- b) Decrease in share capital
Direct Labour means: a) Labour which can be conveniently associated with
In processing goods through a factory, materials are successively ru C- raw material
The difference between subscribed capital and called up capital is knowA- paid up capital
A business unit is know as a profit center A- if its management is held accountable for both reve
In the business, debentures represent: b) Long term borrowing
Differential piece rate system c) Pay workers in proportion to their efficiency
Showroom expenses is an example of : c) Selling overhead
The parent organization acquiring controlling interest in another comp A- holding
Unacceptable unit of production that is an inherent result of the pro b) Normal Spoilage
A share Application Account is Classified b) Personal Account
XIL Ltd Manufactures goods in two processes – Process A and Process BD c) 27200
The excess price received on the part value of shares should be creditedd) Share premium A/.c
Which of the following is/are true regarding job costing? d) All of the above
Debenture holder are the:- c) Creditors of the Company
For acquiring interest the holding company has to posses more than --- d) 50%
When an income statement is prepared by profit center, cost traceable d) Classified as Committed fixed cost and allocated am
The operation of a responsibility accounting System usually involves ea a) Allocating common fixed costs among the responsi
As per table A of the companies Act, The interest on the calls in advanc d) 0.06
A process loss that does not affect the cost of per unit, is:- b) Normal loss
Whenever there is an abnormal loss a) Scrap value, any , Should be credited to process ac
Which following can be taken as the basis of absorbing manufacturing a) Units produced
Which of the following industries does not use process costing d) Aircraft Manufacturing
Interest on debenture is:- B- change on profit
To reduce disk Accesses while searching for a record,the free used is:- a) Binary sorted tree
If the work of specialized nature is perforated by a subcontractor, the c B- contractor's account
Which of the following methods of remuneration is most like to give stad) Straight piece work
Which of the following Industries does not use job costing ? c) Oil Refineries
A newly established company can not issues share at:- c) Discount
Management accounting analyses accounting data with the help of:- c) Tools and Technique
Under or over absorption occurs due to d) All of above
Redeemable preference share can be redeemed from:- d) None of the above
Which of the following is true regarding Scrap value if Any,When there c) It Should be Credited to process Account
A company has to acquire ---- Shares of another company in order to b) Equity
The capital clause of a company is included in the:- b) Memorandum of Association
In the balance sheet of a company,debentures are shown under the follb) Unsecured loan
In the long Run,the contribution of a profit center to the overall profita c) Responsibility Margin.
The group Share of Proposed dividends by the Subsidiary is added to------ a) Consolidated revenue
Contribution margin is equal to:- d) Revenue ,less variable cost.
Interest on debentures is calculated on the basis of the :- a) Face value of debentures
An accounting system where in the operations are broken down into cosc) Responsibility accounting
As Per the Companies Act,Companies Can issues:- c) Redeemable preference share
Under Cost Plus Method price of the product is determined by:- b) Adding and appropriate markup to the cost of the p
The Deque in which is done at the end at one end and deletion from th b) Output-restricted deleted
Unacceptable units of production that is an inherent result of the prod Normal Spoilage
Management Accounting is suitable for A- large industrial & trading concerns
A Debit balance in Cash Book shows (B): Cash paid to creditors
A company which uses the direct write-off method recognizes uncollec (D): As specific accounts receivable are determined to
A complete set of financial statements for Hartman Company, at Decemb (C): Statement of projected cash flows for 2000
A financial Statement is (C): must effect the financial position of business enti
A Trial Balance is prepared to locate (D): none of these
A triple column cash book records (A): Cash, Bank, Discount
All of the following are characteristics of managerial accounting, except (A): Reports are used primarily by insiders rather than
Although accounting information is used by a wide variety of external pa(A): Investors and creditors
An artificial account that appears in trial balance to account for undetec (D): Artificial Account
An income statement communicates information regarding revenues a (C): For some point of time in the future
An ordinary share dividend is: (A): Part of the company profits used to reward the sh
Bills Receivables is (B): A Liability
Financial Year is also called as (A): Accounting Year
If the 'Closing Stock' is appearing in trial balance, it is shown in the (A): Trading Account
In an Accounting Equation, Where do you show the item Advance to the(A): Assets
Information is cost effective when (C): The value of the information exceeds the cost of
Marshalling of Balance Sheet means (A): The ordering of Assets and Liabilities
Outstanding Expense is an item of (B): Liabilities
Sales are recognized as 'Income' (D): after the money is collected from debtors
Stock can be classified as (A): Fixed Asset
The basic purpose of an accounting system is to (D): Meet an organization's need for accounting infor
The external events that involve transfer of value between two entities (B): Events
The financial statement which shows cash activity (receipts and disburs (C): Statement of cash flows
The nature of an asset is best described as (B): An economic resource owned by a business and e
The personal expense of Proprietor are known as (B): Personal Expense
The profitability and solvency of a business should be measured (B): At the end of Accounting Period
The Term Goodwill comes under the heading of (B): Assets
When an item appears in the trial balance, it appears in final accounts (A): only once
Which Book records all residual transactions? (B): Journal proper
Which of the following denotes Gross Block? (A): Depreciated costs of fixed Assets
Which of the following is a part of Petty Expenses? (D): Tools purchased
Which of the following is a part of Fixed Assets? (C): Capital
Which of the following is a type of reserve? (D): Specific Reserves
Which of the following is NOT a type of Voucher (C): Asset Voucher
Which of the following is recorded on Credit side of trial Balance? (C): Carriage Inward
Which of the following is TRUE? (A): Assets=Liablities+Equity
Which of the following should not be included as part of cash on the ba (B): Outstanding cheques at year-end
Which of the following statements best describes the purpose of financi(D): To help the directors discharge their obligations t
Which of the following statements is correct? (B): Accounting profit is the total of cash sales in the y
A Balance Sheet provides financial information (A): For a period of time
Which of the following financial statements is prepared as of a particula1. Balance sheet
Based on which of the following concepts, share capital account is shown 1. Business entity concept
Which of the following is not an accounting transaction? (a) Sale of goo1. Agreement to sell
Which of the following is true? 1. Taking the favourable balance as per pass book as t
From the books of MrNeelam, it was observed that cheques amounting1. toDeduct Rs.60,000 from bank balance as per pass bo
Which of the following is true? 1. Bank account is a personal account
A sales day book is to record 1. all credit and cash sales
Which of the following is a liability of a firm? 2. Credit balance of bank column of cash book.
Which of the following accounts will invariably have a debit balance? I. Accounts receivable.*II. Accounts payable.*III. Purch
The following is not a book of original entry 1. Journal proper
The Accountant of a company is recording the transactions of the day i a. Goods purchased on credit - Purchase Book*b.
The impact on assets, profit and liabilities of a firm, on account of salarya. Assets Profit Total Liabilities (a) No e
Which of the following is true? 1. Discount columns in cash book are totaled and not
Total of sales day book at the end of the month indicates 1. The total sales for the month
Which of the following is true? 1. Cash book may be defined as the record of transacti
Journal entry for receiving interest in cash from Mr Prashant against th a. Interest on loan account Dr. To Prashant accoun
Which of the following entries recorded in the books of the drawee of a1.b When a bill is accepted, the account to be debited i
Which of the following is true? 1. A bill sent for collection by bank when dishonored,
Bills receivable account is a 1. Nominal account*2. Personal account*3. Intangible
Closing stock is generally valued at 1. Cost price*2. Replacement cost*3. Market price*4.
The provision for discount on debtors is calculated on the amount of d 1. Before deducting the provision for doubtful debts*1
Consider the following information of Thumbs-up Company for the year1. Rs.10,520
At the time of preparation of final accounts, bad debts recovered accoun 1. Profit & loss account
Which of the following is false about diminishing balance method of de 1. Higher amount of depreciation is charged when the
The following is not an example of fixed asset 1. Plant and machinery*1. Land and building*1. Paten
Under depletion method, depletion per unit is calculated as 1. Acquisition cost minus residual value divided by ave
Which one of the following is a capital expenditure? 1. Expenditure for renewal of trade mark
Entries passed for outstanding expenses, depreciation, interest on capit1. Opening entries*1. Journal entries*1. Adjustment e
Which of following transactions does not change the total amount of liab 1. Purchase of office furniture on credit*1. Payment o
Which of the following is false? 1. Capital plus liabilities will be equal to assets*1. The
The expenses and incomes pertaining to full trading period are taken to1.t Time period concept*1. Business entity concept*1.
Which of the following statements can be used to assess the liquidity a. Balance sheet*1. Profit and loss account*1. Profi
Which of the following state that “Anticipate no profit and provide for a1. Convention of materiality*1. Convention of consiste
Which of the following statements is/are true? I. Drawings account is a nominal account.*II. Capital a
RS Ltd, makes purchases on credit If the purchases are not as per the sp1. Returns outward book
Which one of the following is not a reason for discrepancy in the bala 1. Bill discounted with bank is not due for payment
The bank balance in the cash book of MrAvinash, a proprietor showed a1. Rs. 9,945 (Cr.)
 The total cost of goods available for sale with a company during the cur1. Rs. 225000
Unearned income account is 1. A current asset
The essentials of double entry book-keeping in sequential order are 1. Passing journal entries, posting ledger, trial balance
Which of the following statements is true concerning assets? d) Assets are measured using the cost concept.
When the concept of conservation is applied to the Balance Sheet, it resu a) Overstatement of Capital
Which of the following is a correct expression of the accounting equatiod) Assets = Liabilities + Owners’ Equity
How is the balance sheet linked to the other financial statements? c) Net income increases retained earnings on the state
The process of recording the economic effects of business transactions ind) Journalizing
If the sum of the debits and credits in a trial balance is not equal, then d) Most likely an error was made in posting journal en
Z Ltd had Rs1800 of supplies on hand at January 1, 2006 During 2006, s c) Supplies, Rs2, 300; Supplies Expense, Rs6, 500.
In the statement of changes in financial position, uses of resources are dd) Fund decreases
Most firms elected to define funds in the statement of changes in financia) Cash
The funds flow statement included: a) All sources and uses of resources. b) Only cash t
Which of the following is not an example of a non-fund adjustment to i a) Depreciation expense b) Gain from asset dispo
In the cash flow statement, cash is defined as: b) Literal cash on hand or on demand deposit, plus cas
Flexible budgets b) Accommodate changes in activity levels.
Which of the following statements regarding changing inventory method d) One place that the reader of an annual report woul
Use the information presented below to answer the questions that folloa) Is the interest explicitly included in the amount of th
Use the information presented below to answer the questions that follob) Balance sheet and statement of cash flows.
Use the information presented below to answer the questions that folloa) Reduces working capital.
Use the information presented below to answer the questions that folloIf a company’s asset turnover rate increased from 200
X Ltd’s master budget calls for the production of 6,000 units of produc a) Rs170 unfavorable. b) Rs170 favorable c) Rs2
Which of the following is not an advantage for using standard costs for a) Standards simplify product costing. b) Standards
The main purpose of cost accounting is to- a) Maximize profits b) Provide information to ma
Conversion cost is total of: a) Direct material and direct wages b) Direct mat
A cost, which does not involve cash outlay, is called: a) Historical cost. b) Imputed cost c) Out of pock
Committed fixed costs are those, which: a) Arise from yearly budget appropriations b) Are
Cost of research undertaken at the request of the customer should be: a) Charged to costing profit and loss account. b)
Salaries due for the month of March will appear a) On the Receipt side of the Cash Book b) On th
Liabilities of business are Rs 11,220 and owner's equity is Rs 15,000 Thea) Rs. 3,780 b) Rs. 26,220 c) Rs. 11,220. d) Rs. 1
An entry of Rs 320 has been debited to Eknath's account at Rs 230 If is aa) Principle. b) Omission. c) Commission. d) Co
Unearned revenues are: a) Prepayments. b) Liabilities. c) Temporary acco
The revenue recognition principle requires that sales revenues be recoga) When cash is received. b) When the merchand
All of the following are “other receivables” except: a) Petty cash. b) Interest receivable. c) Income t
Depreciation is dependent on a number of estimates When a change in a) a in the current year b) in the future year c) t
In order to pay a dividend: a) The corporation must have adequate retained ea
Cash flow activities that include the cash effects of transactions that a) Investing activities. b) Financing activities. c) O
All of the following are used in preparing a statement of cash flows exc a) A trial balance. b) Comparative balance sheet.
Depreciation is result of a) Usage b) Time. c) Obsolescence. d) All of th
Outstanding Expenses are the examples of a) Personal Accounts. b) Real Accounts. c) Nomi
Liquid Assets are inclusive of all current assets except a) Inventories. b) Prepaid Expenses. c) Cash. d
Management Accounting is mainly related to a) Presentation of Figures from Financial Accountin
Variance Analysis is done with regards to actuals with- a) Standards. b) Budgeted Figures. c) Benchm
Which of the following is NOT an element of Balance Sheet? Options a) Assets b) Equityc) Expenses d
Financial statements are prepared Options a) Only for publicly owned business org
A Balance Sheet provides financial information Options a) For a period of timeb) At a given p
During a period of steadily rising prices, which of the following methods Options
o a) LIFO b) FIFO c) Average Cost d)
Bills Payable is Options a) An Asset b) A Liability c) An
An artificial account that appears in trial balance to account for undetecte
Options a) Trading Account b) Rectification
An income statement communicates information regarding revenues anOptions a) For a period of timeb) At a given poi
Which of the following is a part of Fixed Assets? Options a) Debtors b) Bills Receivables c
Although accounting information is used by a wide variety of external par Options a) Investors and creditors b) Gover
The financial statement which shows cash activity (receipts and disburseOptions a) Bank statement b) Income stat
A company which uses the direct write-off method recognizes uncollectOptions a) As a percentage of net sales during the
A triple column cash book records Options a) Cash, Bank, Discountb) Cash, Bank
Which of the following denotes Gross Block? Options a) Depreciated costs of fixed Assets b)
All of the following are characteristics of managerial accounting, exceptOptions a) Reports are used primarily by insider
Which of the following statements is correct? Options a) Accounting profit is the difference betw
Which of the following is NOT a type of Voucher Options a) Journal Voucher b) Receipt Vou
An ordinary share dividend is: Options a) Part of the company profits used to rew
When an item appears in the trial balance, it appears in final accounts Options a) only once b) twice c) three tim
Outstanding Expense is an item of Options a) Assets b) Liabilities c) Debtors
Marshalling of Balance Sheet means Options a) The ordering of Assets and Liabilities
The profitability and solvency of a business should be measured Options a) After each transactionb) At the en
Sales are recognized as ‘Income' Options a) At the point of Sale b) After the ex
The Term Goodwill comes under the heading of Options a) Liabilities b) Assets c) Debtors
Financial Year is also called as Options a) Accounting Year b) Accounts Ye
The nature of an asset is best described as Options a) Something with physical form that is
The external events that involve transfer of value between two entities Options
is a) Transactionsb) Eventsc) Division
Which of the following is TRUE? Options a) Assets=Liablities+Equity b) Asset
The personal expense of Proprietor are known as Options a) Proprietary Expenses b) Personal E
Which Book records all residual transactions? Options a) Cash Book b) Journal properc) Pu
A Debit balance in Cash Book shows Options a) Cash Sales b) Cash paid to credito
Which of the following is a type of reserve? Options a) Losses reserveb) Payment Reserve
Which of the following is a part of Petty Expenses? Options a) Postage Stamps purchased b) Pur
Which of the following is recorded on Credit side of trial Balance? Options a) Trade Expenses b) Salesc) Ca
DRR refers to Options a) Debenture Rate Reserve b) Deb
A Trial Balance is prepared to locate Options a) Errors of principle b) Errors of om
Stock can be classified as Options a) Fixed Asset b) Intangible Asset c
Bills Receivables is Options a) An Asset b) A Liability c) An
The basic purpose of an accounting system is to Options a) Develop financial statements in confo
Information is cost effective when Options a) The information aids management in
A complete set of financial statements for Hartman Company, at Decembe Options a) Balance sheet as of December 31, 19
overnment and General
(for payables due in more than one year)

+ Shareholders’ Equity

ssue price + par value

sB. Contributions of tangible or intangible assetsC. Contribution of intellectual PropertyD. All of the above

hareholders’ equity
epted Accounting Statement

hare / book value per share

e accounts receivable

ng and Financing

in both assets and shareholders equity

relevance , reliability, comparability.
ned Earnings

be conveniently associated with a

is held accountable for both revenues and expenses and has the authority to make decision regarding its products, market, and sources

oportion to their efficiency

mitted fixed cost and allocated among center

n fixed costs among the responsibility centers that benefit from these costs

Should be credited to process account

ed to process Account
erence share
priate markup to the cost of the product

rading concerns

unts receivable are determined to be worthless

ojected cash flows for 2000
financial position of business entity

d primarily by insiders rather than by persons outside of the business entity

of time in the future

pany profits used to reward the shareholders for their investment

information exceeds the cost of producing it

Assets and Liabilities

is collected from debtors

ation's need for accounting information as efficiently as possible

ource owned by a business and expected to benefit future operations

counting Period

ts of fixed Assets
ques at year-end
ctors discharge their obligations to the shareholders
t is the total of cash sales in the year less the expenses for the period

ble balance as per pass book as the starting point, the amount in respect of charges made by the bank will be added to the pass book bala
rom bank balance as per pass book
personal account

bank column of cash book.

e.*II. Accounts payable.*III. Purchases account.*IV. Bank account.*V. Prepaid expenditure.*d. All of the above

ed on credit - Purchase Book*b. Goods sold on credit - Sales Book*c. Wages paid in cash - Cash Book*d. None of the above
ofit Total Liabilities (a) No effect Decreases Decreases*b. Assets Profit Total Liabilities (a) Decreases
n cash book are totaled and not balanced

defined as the record of transactions concerning cash receipts and payments

n account Dr. To Prashant account*b. Prashant account Dr. To Interest account*c. Cash account Dr. To Prashant account*d. None
pted, the account to be debited is drawer’s a/c
ction by bank when dishonored, the drawer will credit bank a/c*2. At the time of renewal of bill interest a/c is credited in the books of the
2. Personal account*3. Intangible asset*4. None of the Above
acement cost*3. Market price*4. None of the Above
he provision for doubtful debts*1. Left after deducting the provision for doubtful debts*1. Before deducting the actual bad debts*2. None

depreciation is charged when the machine is more efficient* *1. It recognizes the risk of obsolescence by higher amount of depreciation in
ry*1. Land and building*1. Patent*2. None of the Above
nus residual value divided by average production units per annum
newal of trade mark
. Journal entries*1. Adjustment entries*1. None of the above
furniture on credit*1. Payment of bank loan*1. Issue of debentures*2. None of the above
es will be equal to assets*1. The difference between assets and liabilities is bank borrowing*1. Capital account is a personal account*2. No
pt*1. Business entity concept*1. Going concern concept*2. None of the above
1. Profit and loss account*1. Profit and loss appropriation account*2. None of the above
eriality*1. Convention of consistency*1. Convention of disclosure*2. None of the above
s a nominal account.*II. Capital account is a real account.*III. Sales account is a nominal account.*IV. Outstanding salaries account is a nom

h bank is not due for payment

ries, posting ledger, trial balance, Profit & Loss a/c and Balance-sheet, passing adjusting entries.
ed using the cost concept.

+ Owners’ Equity
ses retained earnings on the statement of retained earnings, which ultimately increases retained earnings on the balance sheet.

r was made in posting journal entries to the general ledger or in preparing the trial balance.
Supplies Expense, Rs6, 500.

es of resources. b) Only cash transactions. c) Only transactions affecting current assets. d) Only transactions affecting fund account
pense b) Gain from asset disposal c) Interest expense d) Amortization of premium on debt
d or on demand deposit, plus cash equivalents.
nges in activity levels.
reader of an annual report would be able to identify that a company changed inventory methods is the footnotes to the financial stateme
icitly included in the amount of the note.
statement of cash flows.

turnover rate increased from 2005 to 2006, which of the following conclusions can be made? a) The company was less efficient during 2
e. b) Rs170 favorable c) Rs2, 030 unfavorable. d) Rs2, 030 favorable.
ify product costing. b) Standards are developed using past costs and are available at a relatively low cost. c) Standards are usually expre
s b) Provide information to management for decision making c) help in fixing selling price d) To watch cash flows
and direct wages b) Direct material, direct wages, and production overheads c) Direct wages and production overheads. d) None of t
b) Imputed cost c) Out of pocket cost. d) Explicit cost.
y budget appropriations b) Are incurred because management can afford. c) Arise from additional capacity. d) All the above
ting profit and loss account. b) Charged to selling overheads. c) Recovered from the customer. d) All the above.
side of the Cash Book b) On the Payment side of the Cash Book c) As a contra entry d) Nowhere in the Cash Book.
26,220 c) Rs. 11,220. d) Rs. 15,000.
Omission. c) Commission. d) Compensatory.
) Liabilities. c) Temporary accounts. d) Both a and b above.
ceived. b) When the merchandise is ordered. c) When the goods are transferred from the seller to the buyer. d) None of the above.
nterest receivable. c) Income taxes refundable. d) Advances to employees.
ear b) in the future year c) to prior periods d) both a and b above
must have adequate retained earnings. b) The board of directors must declare a dividend. c) The corporation must have adequate c
ties. b) Financing activities. c) Operating activities. d) All of the above.
b) Comparative balance sheet. c) Current income statement. d) Additional information.
e. c) Obsolescence. d) All of the above.
nts. b) Real Accounts. c) Nominal Accounts. d) None of the above.
Prepaid Expenses. c) Cash. d) Both (a) and (b) above.
Figures from Financial Accounting. b) Presentation of Figures from Cost Accounting. c) Principles. d) Both (a) and (b) above
Budgeted Figures. c) Benchmarks d) All of the above.
ets b) Equityc) Expenses d) Liabilities
y for publicly owned business organizations b) For corporations, but not for sole proprietorships or partnerships c) Primarily for the
a period of timeb) At a given point in time c) For some point of time in the future d) In the mid of the fiscal year
b) FIFO c) Average Cost d) Specific Identification
Asset b) A Liability c) An Expense d) A Loss
ding Account b) Rectification Accountc) Suspense Account d) Artificial Account
a period of timeb) At a given point in time c) For some point of time in the future d) At the beginning of the fiscal year
tors b) Bills Receivables c) Capitald) Building
stors and creditors b) Government agencies such as the Internal Revenue Service c) Customersd) Trade associations and labor
k statement b) Income statement c) Statement of cash flows d) Bank reconciliation
ercentage of net sales during the period b) As a percentage of net credit sales during the periodc) As indicated by aging the accou
h, Bank, Discountb) Cash, Bank, Sales c) Cash, Discount, Salesd) Cash, Bank, Gains
reciated costs of fixed Assets b) Historical cost of fixed assetsc) Liabilities payable d) Gross Profits
orts are used primarily by insiders rather than by persons outside of the business entity b) Its purpose is to assist managers in plann
nting profit is the difference between cash receipts and cash paid in a periodb) Accounting profit is the total of cash sales in the year les
nal Voucher b) Receipt Voucher c) Asset Voucher d) Payment Voucher
f the company profits used to reward the shareholders for their investmentb) Interest on money lent to the company by its shareholder
nce b) twice c) three times d) will not appear again in final accounts
ets b) Liabilities c) Debtors d) Investments
ordering of Assets and Liabilities b) The totaling of Assets and Liabilitiesc) Assets - Liabilities d) Separate heading of Fixed Asse
r each transactionb) At the end of Accounting Period c) At the end of each month d) Every Day
he point of Sale b) After the expiry of Credit period allowed to debtors c) At the end of Accounting Period d) after the money is c
ilities b) Assets c) Debtors d) Equity
ounting Year b) Accounts Year c) Accountable Year d) None of these
ething with physical form that is valued at cost in the accounting records b) An economic resource owned by a business and expected t
nsactionsb) Eventsc) Divisions d) Happenings
ets=Liablities+Equity b) Assets=Liabilities-Equity c) Assets= Liabilities-Losses d) Assets=Liabilities+Profits
prietary Expenses b) Personal Expense c) Drawings d) Business Expense
h Book b) Journal properc) Purchase Day Bookd) Sales Day book
h Sales b) Cash paid to creditorsc) Cash expenses made d) Cash paid for buying land
es reserveb) Payment Reserves c) Non-free reserves d) Specific Reserves
age Stamps purchased b) Purchased Truck c) Paid Carriage for goods purchased d) Tools purchased
de Expenses b) Salesc) Carriage Inward d) Carriage Outward
enture Rate Reserve b) Debtors Rate Reservec) Dividend Rates Reserve d) Debentive Redemption Reserve
rs of principle b) Errors of omission c) Compensating Errors d) none of these
d Asset b) Intangible Asset c) Current Asset d) Current Liability
Asset b) A Liability c) An Expense d) Part of Equity
elop financial statements in conformity with generally accepted accounting principles. b) Provide as much useful information to dec
information aids management in controlling costs b) The information is based upon historical costs, rather than upon estimated mar
nce sheet as of December 31, 1999 b) Income statement for the year ended December 31, 1999 c) Statement of projected cash flow
products, market, and sources of supply.
e added to the pass book balance*1. Bank charges recorded twice in cash book will be added to the overdraft as per cash book in the prep

d. None of the above

tal Liabilities (a) Decreases No effect Decreases*c. Assets Profit Total Liabilities (a) Decreases

o Prashant account*d. None of the above

is credited in the books of the drawee*3. Accommodation bills are drawn, accepted and endorsed for some consideration*4. None of the

the actual bad debts*2. None of the Above

her amount of depreciation in the early years*2. The total amount of depreciation and repairs is almost uniformally distributed over the u

unt is a personal account*2. None of the above

nding salaries account is a nominal account.*V. Patents account is a personal account.*d. None of the above
n the balance sheet.

actions affecting fund accounts.

tnotes to the financial statements.

pany was less efficient during 2006 in using its assets to produce profits. b) The company produced more sales in 2006 for each dollar inves

Standards are usually expressed on a per unit basis. d) Standards can take into account expected changes planned to occur in the bud

tion overheads. d) None of the above

ty. d) All the above

uyer. d) None of the above.

oration must have adequate cash. d) All of the above.

th (a) and (b) above

nerships c) Primarily for the benefit of persons outside of the business organization d) In either monetary or nonmonetary terms, dep
 e fiscal year

g of the fiscal year

Trade associations and labor unions

s indicated by aging the accounts receivable at the end of the period d) As specific accounts receivable are determined to be worthles

is to assist managers in planning and controlling business operations c) Information must be developed in conformity with generally ac
tal of cash sales in the year less the expenses for the periodc) Accounting profit is the difference between revenue income and expense

he company by its shareholdersc) An expense of running the company d) The directors’ remuneration

Separate heading of Fixed Assets and Long-term Liabilities

Period d) after the money is collected from debtors

d by a business and expected to benefit future operationsc) An economic resource representing cash or the right to receive cash in the n

much useful information to decision makers as possible, regardless of costc) Record changes in the financial position of an organization b
ther than upon estimated market values c) The value of the information exceeds the cost of producing it d) The information is gen
tement of projected cash flows for 2000 d) Notes containing additional information that is useful in interpreting the financial statement
ft as per cash book in the preparation of reconciliation statement*1. Cheque issued but not presented for payment will be added when fa

Liabilities (a) Decreases Decreases Decreases*d. None of the above

consideration*4. None of the Above

ormally distributed over the useful life

es in 2006 for each dollar invested in assets. c) The company was more profitable in 2005.

es planned to occur in the budgeted period.

ary or nonmonetary terms, depending upon the need of the decision maker
re determined to be worthless

n conformity with generally accepted accounting principles or with income tax regulationsd) Information may be tailored to assist in spe
revenue income and expenses for the period d) Accounting profit is the difference between revenue income and cash payments for th

he right to receive cash in the near futured) Something owned by a business that has a ready market value

al position of an organization by applying the concepts of double-entry accounting d) Meet an organization's need for accounting informa
d) The information is generated by a computer-based accounting system
preting the financial statements
ayment will be added when favourable balance as per cash book is the starting point*1. The amount of the undercasting of the credit side
may be tailored to assist in specific managerial decisions
me and cash payments for the period

s need for accounting information as efficiently as possible

undercasting of the credit side of the bank column of the cash book will be deducted from the overdraft as per pass book.
Section A
1. What are final accounts. What purpose do they serve
2. Define accounting. State its functions. How does it differ from bookkeeping?
3. Discuss briefly the provisions of the indian companies act 1956 relating to forfeiture of shares and reissues of forfeited shar
4. What are accounting concepts and conventions. Name them and explain any two accounting concepts in detail
5. Explain what is bank Reconciliation statement? Draw a proforma of a Bank Reconciliation statement with balance as per cas

1. What is the need of accounting?

2. What is the difference between profit and loss account and Balance sheet?
3. Discuss the concept of cost.
4. Explain prudence convention.
5. Difference between journal and ledger.
6.Explain types of Subsidiary books.
7. Discuss the various formats of a balance sheet.
8. Elaborate the need of accounting standards.

Q 1. Define Accounting. How does it differ from book-keeping?

Q 2 What is basic accounting equation?
Q 3 What is Journalizing? Give a format of Journal & briefly explain its content.
Q 4. What are the advantages of special Journal & list them.
Q 5 State the reasons for the difference between the cash book balance & pass book balance.

Q1 Define depreciation. Differentiate, with suitable example, between Diminishing Balance Method & Straight Line Method of
Q2 Define Bills of Exchange and explain the parties involved in it.
Q3 Distinguish between capital expenditure & revenue expenditure

Q 1a): What do you understand by the concept of conservatism? Why it is also called the concept of prudence? Why it is not a
Q 1b): What is a Balance Sheet? How does a Funds Flow Statement differ from a Balance Sheet? Enumerate the items which a
Q 2a) Discuss the importance of ratio analysis for inter-firm and intra-firm comparisons including circumstances responsible fo
Q 2b) Why do you understand by the term 'pay-out ratio'? What factors are taken into consideration while determining pay-o
Q 3a) From the ratios and other data given below for Bharat Auto Accessories Ltd. indicate your interpretation of the company
Q 4 ) Bose has supplied the following information about his business to Summary of Cash book for the year ended 31st March
Q 5a) What procedure would you adopt to study the liquidity of a business firm?
Q5 b) Who are all the parties interested in knowing this accounting information?
QDividends
5c) Whatonratio or other
shares financial
Rs. 4,500 werestatement
collected analysis technique
by the bankers will you
directly, foradopt
whichfor this.
Priya & Co. did not have any information.

1. What is accounting cycle?

2. What is the difference between trading account and manufacturing account?
3. Discuss the concept of going concern concept.
4. Explain the P&L account.
5. Differentiate between manufacturing and trading account.
6. Explain prudence convention.
7. Explain the accounting errors.
8. Elaborate the concept of double entry system of book keeping.
d reissues of forfeited shares.
cepts in detail
ent with balance as per cash book.illustrate with the help of example

& Straight Line Method of charging depreciation.

f prudence? Why it is not applied as strongly today as it used to be in the Past?

umerate the items which are usually shown in a Balance Sheet and a Funds Flow Statement.
cumstances responsible for its limitations .If any
n while determining pay-out ratio? Should a company follow a fixed pay-out ratio policy? Discuss fully.
erpretation of the company's financial position, operating efficiency and profitability.
he year ended 31st March, 2004 is as follows:

have any information.

Section - B
941 364
100