MODULE 1

Question-1: Annual report is a part of 

Select one:
a. summarizing
b. recording
c. Identifying
d. communicating 
Correct
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The correct answer is: communicating

Question-2: The prime function of accounting is

Select one:
a. Record economic data
b. Attain non economic goals
c. Provide the informational basis for action
d. Classify and record the business transactions 
Correct
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Your answer is correct.

The correct answer is: Classify and record the business transactions

Question-1: Customers are

Select one:
a. Neither internal nor external users
b. External users 
Correct

c. Internal users
d. Both internal and external users
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Your answer is correct.

The correct answer is: External users

Question-2: Value addition takes place in

Select one:
a. Manufacturing organization 
Correct

b. Trading and service organizations

c. Service organization

d. Trading organization
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Your answer is correct.

The correct answer is: Manufacturing organization

Question-1: Decision making is a primary objective of

Select one:
a. Cost Accounting
b. Financial Accounting
c. Management Accounting 
Correct

d. Non for profit accounting

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Your answer is correct.

The correct answer is: Management Accounting

Question-2: The user who is interested in the accounting data to check the repaying
capacity
Select one:
a. Lenders 
Correct

b. Owners
c. Customers

d. Employees
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Your answer is correct.

The correct answer is: Lenders

Question-1: Furniture for a cloth dealer is a

Select one:
a. Current asset
b. Fixed asset 
Correct

c. Current liability

d. Fictitious asset
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Your answer is correct.

The correct answer is: Fixed asset

Question-2: Cash is a
Select one:
a. Fixed asset
b. Fictitious asset
c. Current liability
d. Current asset 
Correct
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Your answer is correct.

The correct answer is: Current asset
Question-1: Liability of partners in a partnership firm is
Select one:
a. Unlimited liability
b. Limited liability
c. No liability
d. Joint and several 
Correct
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Your answer is correct.

The correct answer is: Joint and several

Question-2: Ownership can be traded outside is a very important feature of

Select one:
a. Partnership
b. Private limited company
c. Sole tradership
d. Public limited company 
Correct
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Your answer is correct.

The correct answer is: Public limited company

Question-1: Preliminary expenses are an example of

Select one:
a. Deferred revenue expenditure 
Correct

b. Revenue loss
c. Capital expenditure

d. Revenue expenditure
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Your answer is correct.

The correct answer is: Deferred revenue expenditure

Question-2: Cost of goods purchased for resale is an example of

Select one:
a. Revenue expenditure 
Correct

b. Deferred revenue expenditure

c. Capital expenditure

d. Revenue loss
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Your answer is correct.

The correct answer is: Revenue expenditure

Question-1: Generally accountants prepare books of accounts for businesses and not for
owners – this view is well brought out in
Select one:
a. Objective evidence concept
b. Separate entity concept 
Correct

c. Going concern concept

d. Dual aspect concept

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Your answer is correct.

The correct answer is: Separate entity concept

Question-2: There will be a give and take in every financial transaction – this view comes
from
Select one:
a. Dual aspect concept 
Correct

b. Objective evidence concept

c. Going concern concept

d. Separate entity concept

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Your answer is correct.

The correct answer is: Dual aspect concept

Question-1: The convention of conservatism when applied to the balance sheet, results in
Select one:
a. Overstatement of capital
b. Understatement of liabilities
c. Overstatement of assets
d. Understatement of assets 
Correct
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Your answer is correct.

The correct answer is: Understatement of assets

Question-2: According to money measurement concept, the following will be recorded in the
books of accounts
Select one:
a. Appointment of CEO
b. Goods purchased 
Correct

c. Health of the employees

d. Quality of products delivered

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Your answer is correct.

The correct answer is: Goods purchased
 Question-1: Which statement is false?
Select one:
a.
In US, Financial Accounting and Standards Board (FASB) issues Accounting Standards, the
principal source of US GAAP.
b. IFRS and US GAAP are competing with each other for international acceptance.
c.
IFRS and US GAAP are not working towards convergence of their standards.
Correct

d.
Many consider US GAAP to be rules based and IFRS to be principles based.
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Your answer is correct.

The correct answer is:
IFRS and US GAAP are not working towards convergence of their standards.

Question-2: The institution which is not part of influencing and shaping Indian accounting is
Select one:
a. SEBI
b. CFA 
Correct

c. MCA

d. RBI
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Your answer is correct.

The correct answer is: CFA

Question-1: The accounting cycle starts with

Select one:
a. Prepare trial balance
 b. Record transactions in journal
c. Carry forward balances to next period
d.
Analyze the transactions
Correct
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Your answer is correct.

The correct answer is:
Analyze the transactions

Question-2: The accounting cycle ends with

Select one:
a. Prepare trial balance
b. Record transactions in journal
c. Carry forward balances to next period 
Correct

d. Analyze the transactions

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Your answer is correct.

The correct answer is: Carry forward balances to next period

Question-1: Provided services for Cash. Show its effect on Accounting equation
Select one:
a. Cash goes up and Owner’s equity goes down
b. Cash goes down and owner’s equity goes up
c. Both cash and owner’s equity goes down
d. Cash goes up and Owner’s equity goes up 
Correct
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Your answer is correct.

The correct answer is: Cash goes up and Owner’s equity goes up
Question-2: Paid for electricity expenses. Show its effect on Accounting equation
Select one:
a. Cash goes down and owner’s equity goes down 
Correct

b. Cash goes up and owner’s equity goes down

c. Cash goes down and owner’s equity goes up

d. Both cash and owner’s equity goes up

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Your answer is correct.

The correct answer is: Cash goes down and owner’s equity goes down

Question-1: Received commission. Show its effect on accounting equation.

Select one:
a. Assets goes down and owner’s equity goes up
b. Assets and owner’s equity goes down
c. Assets and liabilities goes up
d. Assets and owner’s equity goes up 
Correct
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Your answer is correct.

The correct answer is: Assets and owner’s equity goes up

Question-2: Billed clients for services provided. Show its effect on accounting equation.
Select one:
a. Assets and owner’s equity goes up. 
Correct

b. Assets and liabilities goes up

c. Assets goes down and owner’s equity goes up

d. Assets and owner’s equity goes down

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Your answer is correct.
The correct answer is: Assets and owner’s equity goes up.

Question-1: Accounts receivable is a

Select one:
a. Fictitious account
b. Real account
c. Personal account 
Correct

d. Nominal account
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Your answer is correct.

The correct answer is: Personal account

Question-2: Bank account is a :

Select one:
a. Fictitious account
b. Personal account 
Correct

c. Real account

d. Nominal account
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Your answer is correct.

The correct answer is: Personal account

Question-1: Payment of salary is recorded by:

Select one:
a. Debit  Employee Account, Credit  Salary Account
b. Debit  Cash Account, Credit  Salary Account
c. Debit  Salary account, Credit Cash Account 
Correct

d. Debit  Employee Account, Credit  Cash Account

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Your answer is correct.

The correct answer is: Debit  Salary account, Credit Cash Account

Question-2: Purchase of furniture for cash is recorded by

Select one:
a. Debit furniture, credit cash 
Correct

b. Debit Goods, Credit Cash

c. Debit goods, credit creditors

d. Debit furniture, credit creditors

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Your answer is correct.

The correct answer is: Debit furniture, credit cash

Question-1: Loan taken from bank. Which account will be debited?

Select one:
a. Bank loan a/c
b. Cash a/c
c. Bank a/c 
Correct

d. Loan from bank a/c

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Your answer is correct.

The correct answer is: Bank a/c

Question-2: Cash sales deposited into bank account. As a net effect, which account will be
credited?
Select one:
a. Bank a/c
b. Cash a/c
c. Sales a/c 
Correct

d. Receivables a/c
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Your answer is correct.

The correct answer is: Sales a/c

Question-1: Capital account is increased by:

Select one:
a.
Debiting the account
b.
Crediting the account 
Correct

c. Debiting or crediting any other account

d.
Not doing anything
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Your answer is correct.

The correct answer is:
Crediting the account

Question-2: Accounts receivable is increased by:

Select one:
a. Debiting or crediting any other account
b. Not doing anything
c. Crediting the account
d. Debiting the account 
Correct
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Your answer is correct.
The correct answer is: Debiting the account

Question-1: Purchases book is used to record.

Select one:
a. All credit purchases of goods 
Correct

b. All credit purchase.

c. All purchases of goods

d. All credit purchases of assets other than goods

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Your answer is correct.

The correct answer is: All credit purchases of goods

Question-2: The source document or voucher used for recording entries in sales book is
received.
Select one:
a. debit notes .
b. invoice sent out 
Correct

c. invoice received

d. credit notes sent out

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Your answer is correct.

The correct answer is: invoice sent out

Question-1: The final list of balances, totaled and combined is called as

Select one:
a. Final accounts
b. Chart of accounts
c. Ledger accounts
d. Trial Balance 
Correct
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Your answer is correct.

The correct answer is: Trial Balance
Question-2: The respective debit and credit totals of the ledger accounts are transferred to
the respective sides of the trial balance in this method
Select one:
a. Subsidiary method
b. Total and balance method
c. Total method 
Correct

d. Balance method
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Your answer is correct.

The correct answer is: Total method

Question-1: Equipment account will normally show:

Select one:
a. Both debit and credit balances possible
b. It will close down and so no balance is shown in trial balance
c. Debit balance 
Correct

d. Credit balance
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Your answer is correct.

The correct answer is: Debit balance

Question-2: Cash account will normally show:

Select one:
a. Debit balance 
Correct
b. Credit balance
c. It will close down and so no balance is shown in trial balance

d. Both debit and credit balances possible

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Your answer is correct.

The correct answer is: Debit balance

MODULE 2
Questions 1: Following is not an advantage of financial statement:
Select one:
a. Gauge Profitability
b. Helps manage solvency
c. Prepared on Market Value 
Correct

d. Helps manage working capital requirement

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The correct answer is: Prepared on Market Value

Questions 2: Which of the following statements are true

Select one:
a. Financial Statements are always comparable across companies
b. Financial Statements are prepared on historical basis 
Correct

c. Financial Statements accounts for inflationary effects

d. Financial Statements helps take qualitative decisions

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Your answer is correct.

The correct answer is: Financial Statements are prepared on historical basis
Questions 1: Which of the following does not help determine solvency position?
Select one:
a. Current Assets 
Correct

b. Non-Current Assets
c. Owners Equity

d. Long Term Liabilities

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Your answer is correct.

The correct answer is: Current Assets

Questions 2: Which of the following statements are true

Select one:
a. Financial Statements accounts for inflationary effects
b. Financial Statements helps take qualitative decisions
c. Financial Statements are prepared on historical basis 
Correct

d. Financial Statements are always comparable across companies

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Your answer is correct.

The correct answer is: Financial Statements are prepared on historical basis

Questions 1: A  company which is in the business of manufacturing televisions, decides to

rent its warehouse for long term. This is an example of :
Select one:
a. Other Operating Income 
Correct

b. Other Income
c. None of the above

d. Operating Income
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Your answer is correct.
The correct answer is: Other Operating Income

Questions 2: Abhishek Bottlewala which has a bottle cap plant , sells the bottle cap plant as
the business is not profitable. It earns a loss of Rs. 5 cr. This is an example of
Select one:
a. Other Operating Income
b. None of the above
c. Operating Income
d. Other Income 
Correct
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Your answer is correct.

The correct answer is: Other Income

Questions 1: Cost of goods sold does not include:

Select one:
a. Rent Paid 
Correct

b. Cost of Raw Material

c. Transportation cost associated with raw material

d. B and C
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Your answer is correct.

The correct answer is: Rent Paid

Questions 2: Gross profit margin increases when

Select one:
a. Cost of Goods Sold Increases  and Revenue is constant
b. Cost of Goods Sold Increase  and Revenue Decreases
c. Revenue Decreases and Cost of Goods sold is constant
d. Cost of Goods Sold Decreases  and Revenue increases 
Correct
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Your answer is correct.

The correct answer is: Cost of Goods Sold Decreases  and Revenue increases

Questions 1: Increase in selling price followed by no change in demand for the product will :
Select one:
a. Lead to decline in operating profits
b. Lead to increase in operating profits 
Correct

c. Initially decrease in operating profit then lead to increase in operating profit

d. Initially increase in operating profit then lead to fall in operating profit

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Your answer is correct.

The correct answer is: Lead to increase in operating profits

Questions 2: Following is not an example of operating expenses:

Select one:
a. Salary Expenses
b. Training Expenses
c. Rent Paid
d. Transportation cost associated with transporting raw material 
Correct
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Your answer is correct.

The correct answer is: Transportation cost associated with transporting raw material

Questions 1: NOPAT is calculated as

Select one:
a. Operating Profit + Non-Cash Expense
b. Operating Profit * (1-T) 
Correct

c. Operating Profit - Interest

d. Operating Profit * (1+T)

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Your answer is correct.

The correct answer is: Operating Profit * (1-T)

Questions 2: EBITDA is calculated as

Select one:
a. Operating Profit - Interest
b. Operating Profit * (1-T)
c. Operating Profit * (1+T)
d. Operating Profit + Non-Cash Expense 
Correct
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Your answer is correct.

The correct answer is: Operating Profit + Non-Cash Expense

Questions 1: Dividend is
Select one:
a. Expense
b. Liability
c. Income
d. None of the Above 
Correct
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Your answer is correct.

The correct answer is: None of the Above

Questions 2: Dividend payout represents dividend as a

Select one:
a. % of profit distributed to shareholders 
Correct

b. % of profit distributed to debt holders

c. % of expenses distributed to shareholders

d. % of revenue distributed to shareholders

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Your answer is correct.

The correct answer is: % of profit distributed to shareholders

Questions 1: Which of the following is not the constituent of COGS

Select one:
a. Excise Duty 
Correct

b. Cost of materials consumed

c. Purchases of Stock-in-Trade

d. Changes in inventories of finished goods, Stock-in-Trade, work-in-progress and

intermediates
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Your answer is correct.

The correct answer is: Excise Duty

Questions 2: Which of the following statement is true

Select one:
a. Diluted EPS cannot be less than Basic EPS
b. Diluted EPS cannot be equal to Basic EPS
c. Diluted EPS cannot be more that Basic EPS 
Correct

d. None of These
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Your answer is correct.

The correct answer is: Diluted EPS cannot be more that Basic EPS
Questions 1: Which of the following is true about minority interest
Select one:
a. Minority interest is the share of non promoter in the profit of the company
b. Minority Interest is the stake of the company in its subsidiary
c. Minority interest refers to the % of share the company does not hold in its subsidiary 
Correct

d. Minority interest is the share of minorities in the profit of the subsidiary

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Your answer is correct.

The correct answer is: Minority interest refers to the % of share the company does not hold
in its subsidiary

Questions 2: Which of the following statement is true

Select one:
a. Dividend is an expense but interest is not an expense
b. Subordinated debt holders need to be paid before all the other debt holders
c. Dividend and interest both are expenses
d. Interest is an expense but not dividend. 
Correct
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Your answer is correct.

The correct answer is: Interest is an expense but not dividend.

Questions 1: Which of the following is true about non-current investment

Select one:
a. Non-Current Investment is operating in nature
b. Non-Current Investments have a benefit of one accounting period
c. Non-Current Investment can be both operating and non-operating in nature 
Correct

d. Non-Current Investment is non operating in nature

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Your answer is correct.

The correct answer is: Non-Current Investment can be both operating and non-operating in
nature

Questions 2: Which of the following statement is true

Select one:
a. Assets are expensed in one year
b. Impairment refers to adjusting the value of the asset at the time of impairment 
Correct

c. Amortization refers to adjusting the value of the asset at the time of impairment

d. Assets are expressed across the life of the asset

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Your answer is correct.

The correct answer is: Impairment refers to adjusting the value of the asset at the time of
impairment

Questions 1: Which of the following is true

Select one:
a. Non Current Assets – Long Term Liabilities = Working Capital
b. Non Current Assets – Current Liabilities  = Working Capital
c. None of These
d. Current Assets – Current Liabilities  = Working Capital 
Correct
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Your answer is correct.

The correct answer is: Current Assets – Current Liabilities  = Working Capital

Questions 2: Which of the following is a current asset

Select one:
a. Provision
b. Debtors 
Correct

c. Pre-received Income
d. Accounts Payable
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Your answer is correct.

The correct answer is: Debtors

Questions 1: Which of the following is true

Select one:
a. Dividend has no effect effect on equity capital
b. None of These
c. Dividend increase equity capital
d. Dividend decrease equity capital 
Correct
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Your answer is correct.

The correct answer is: Dividend decrease equity capital

Questions 2: Which of the following is true

Select one:
a. Retained Earnings has no effect effect on equity capital
b. None of These
c. Retained Earnings increase equity capital 
Correct

d. Retained Earnings decrease equity capital

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Your answer is correct.

The correct answer is: Retained Earnings increase equity capital

Questions 1: Non-Controlling Interest is a part of

Select one:
a. Owners Equity/ Shareholders Fund 
Correct
b. Non-Current Liability
c. Current Liability

d. None of These
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Your answer is correct.

The correct answer is: Owners Equity/ Shareholders Fund

Questions 2: Long term financial investment is a part of

Select one:
a. None of These
b. Current Asset
c. PP&E
d. Non-Current Asset 
Correct
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Your answer is correct.

The correct answer is: Non-Current Asset

Questions 1: Depreciation is charged

Select one:
a. None of These
b. Over the life of the asset 
Correct

c. Over the life of the company

d. Over the life of the project

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Your answer is correct.

The correct answer is: Over the life of the asset

Questions 2: Assets are recorded at

Select one:
a. Historical Cost 
Correct

b. Fair Value
c. None of These

d. Market Value
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Your answer is correct.

The correct answer is: Historical Cost

Questions 1: When the asset is sold

Select one:
a. Plant and Machinery a/c is credited 
Correct

b. Accumulated Depreciation a/c is credited

c. If there is a profit P&L a/c is debited

d. Plant and Machinery a/c is debited

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Your answer is correct.

The correct answer is: Plant and Machinery a/c is credited

Questions 2: In the straight-line method depreciation is charged at:

Select one:
a. Fixed Amount 
Correct

b. Fixed Rate
c. Both of These

d. None of These
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Your answer is correct.

The correct answer is: Fixed Amount

Questions 1: In Units of Production Method depreciation is charged at

Select one:
a. On the basis of Production 
Correct

b. None of these
c. Fixed Rate

d. Fixed Amount
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Your answer is correct.

The correct answer is: On the basis of Production

Questions 2: In the annuity method imputed interest income is included because:

Select one:
a. Interest Income is Sunk Cost
b. Interest income is opportunity cost 
Correct

c. None of These

d. Interest Income is implicit profit

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Your answer is correct.

The correct answer is: Interest income is opportunity cost

Questions 1: Sinking Fund Method is appropriate for machines

Select one:
a. None of these
b. With Predictable Life of the machine 
Correct

c. With high rate of production

d. Where replacement is not required in the long run

Feedback

Your answer is correct.

The correct answer is: With Predictable Life of the machine

Questions 2: Depletion method is appropriate for

Select one:
a. Assets with fixed life
b. None of These
c. Mining Industry 
Correct

d. Trade Marks and Patent

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Your answer is correct.

The correct answer is: Mining Industry

Questions 1: If the useful life the machinery is doubled in SLM method

Select one:
a. Depreciation will decrease 
Correct

b. None of these
c. Depreciation will increase and then decrease

d. Depreciation will increase

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Your answer is correct.

The correct answer is: Depreciation will decrease

Questions 2: If the rate of charging depreciation is increased then

Select one:
a. Depreciation will decrease
b. None of these
c. Depreciation will increase and then decrease
 d. Depreciation will increase 
Correct
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Your answer is correct.

The correct answer is: Depreciation will increase

MODULE 3
Question-1: Managers need to analyze financial reports to:
Select one:
a.
Assess control of operations
b. Assess the ability of customers to pay their b
c. Assess the viability of suppliers
d. All 
Correct
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Your answer is correct.

The correct answer is: All

Question-2: Which of the following is not a reason for managers to use financial
statements?
Select one:
a. To assess how their company appears to creditors.
b. To assess the ability of customers to meet their payment obligations.
c. To see what their competitors’ contribution margins are 
Correct

d. To assess the long term viability of key customers.

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Your answer is correct.

The correct answer is: To see what their competitors’ contribution margins are
Question-1: Horizontal analysis is:
Select one:
a. also called common size analysis.
b. consists of analyzing changes in financial statements across time. 
Correct

c. consists of analyzing financial statements in terms of a base amount.

d. restates the income statement line items as a percentage of sales.

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Your answer is correct.

The correct answer is: consists of analyzing changes in financial statements across time.

Question-2:  Comparison of financial statements highlights the trend of the _________ of

the business.
Select one:
a. Financial position
b. Performance
c. Profitability
d. All of the above 
Correct
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The correct answer is: All of the above
Question-1: Which of the following is the objective of comparative statements?
Select one:
a. To make the data simpler and understandable
b. To indicate the trend
c. To help in forecasting
d. All of the above 
Correct
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Your answer is correct.

The correct answer is: All of the above

Question-2: Comparative Balance Sheet :

Select one:
a. Provides a summarized view of the operations of the firm
b. Presents the financial position of the firm
c. Presents the change in various items of balance sheet 
Correct

d. None of the above

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Your answer is correct.

The correct answer is: Presents the change in various items of balance sheet

Question-1: Which type of analysis would highlight the percentage increase in sales from
one year to the next?
Select one:
a. Horizontal analysis 
Correct

b. Vertical analysis
c. Common size analysis

d. Comprehensive analysis
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Your answer is correct.

The correct answer is: Horizontal analysis

Question-2: Comparative Statement of Profit and Loss provides information about:

Select one:
a. Rate of increase or decrease in revenue from operations
b. Rate of increase or decrease in cost of revenue from operations
c. Rate of increase or decrease in net profit
d. All of the above 
Correct
Feedback

Your answer is correct.

The correct answer is: All of the above

Question-1: Vertical analysis is also known as

Select one:
a. Static analysis
b. Structural analysis
c. Cross-sectional analysis
d. All of the above 
Correct
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Your answer is correct.

The correct answer is: All of the above

Question-2: Where would you find an explanation as to why sales had increased by 25%?
Select one:
a. Common size financial statements
b. Management’s discussion and analysis 
Correct

c. Balance sheet

d. Income statement
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Your answer is correct.

The correct answer is: Management’s discussion and analysis

Question-1: Analysis of any financial Statement comprises

Select one:
a. Balance sheet
b. P&L Account
c. Trading account
d. All of the above 
Correct
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Your answer is correct.

The correct answer is: All of the above

Question-2: Which of the following are techniques, tools or methods of analysis and
interpretation of financial statements?
Select one:
a. Ratio Analysis
b. Average Analysis
c. Trend Analysis
d. All of the above 
Correct
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Your answer is correct.

The correct answer is: All of the above

Question-1: The higher the debt to equity ratio, the higher the level of
Select one:
a. risk. 
Correct

b. assets
c. earnings per share

d. net income
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Your answer is correct.

The correct answer is: risk.

Question-2: The process of comparing various financial factors of a company over a period
of time is known as …
Select one:
a. Inter‐firm comparison
b. Ratio Analysis
c. Intra‐firm comparison 
Correct

d. Inter‐industry comparison  
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Your answer is correct.

The correct answer is: Intra‐firm comparison

Question-1: If the rate of growth in sales is greater than the rate of growth in cost of goods
sold from one year to the next, you would expect that:
Select one:
a. the gross profit ratio would be increasing 
Correct

b. the gross profit ratio would be decreasing

c. net income would have to increase

d. the company is getting smaller

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Your answer is correct.

The correct answer is: the gross profit ratio would be increasing

Question-2: Gross profit in 2011 for a Company totaled Rs1,000,000. If cost of goods sold
was 60% of sales, sales must have been:
Select one:

a. Rs 400,000
b. Rs 600,000
c. Rs 1,666,667
d. Rs 2,500,000 
Correct
Feedback

Your answer is correct.

The correct answer is: Rs 2,500,000
Question-1: Working Capital =
Select one:
a. Current Assets – Quick Liabilities
b. Quick Assets – Quick Liabilities
c. Current Assets – Current Liabilities 
Correct

d. Quick Assets – Current Liabilities

Feedback

Your answer is correct.

The correct answer is: Current Assets – Current Liabilities

Question-2: Quick ratio is also known as –

Select one:
a. Absolute liquidity ratio
b. Acid Test Ratio 
Correct

c. Cash Ratio

d. None of the above

Feedback

Your answer is correct.

The correct answer is: Acid Test Ratio

Question-1: The ratio, which indicates the proportion of owner’s fund to total fund invested
in the business
Select one:
a. Debt Ratio
b. Debt Service Coverage Ratio
c. Debt-Equity Ratio
d. Equity Ratio 
Correct
Feedback

Your answer is correct.

The correct answer is: Equity Ratio

Question-2: Which ratio measures the rate earned on the total capital used by a firm?
Select one:
a. Price-earnings ratio.
b. Earnings per share
c. Return on total assets. 
Correct

d. Return on common stockholders’ equity

Feedback

Your answer is correct.

The correct answer is: Return on total assets.

Question-1: Activity Ratios are also called as –

Select one:
a. Coverage Ratios
b. Leverage Ratios
c. Liquidity Ratios
d. Turnover Ratios 
Correct
Feedback

Your answer is correct.

The correct answer is: Turnover Ratios

Question-2: The gross margin

Select one:
a. is the same as the contribution margin.
b. is the same as operating income
c. is sales less the cost of the inventory that generated those sales 
Correct

d. is found on the balance sheet

Feedback

Your answer is correct.

The correct answer is: is sales less the cost of the inventory that generated those sales

Question-1: Which ratio is a measure of the profit available to common shareholders on

each share of common stock outstanding?
Select one:
a. Price-earnings ratio.
b. Earnings per share 
Correct

c. Return on total assets

d. Return on common stockholders’ equity

Feedback

Your answer is correct.

The correct answer is: Earnings per share

Question-2: The ratio that measures how many multiples of the firm’s earning investors are
willing to pay for its stock is:
Select one:
a. the return on assets.
b. the earnings per share.
c. the price earnings ratio 
Correct

d. the dividend yield ratio

Feedback

Your answer is correct.

The correct answer is: the price earnings ratio

Question-1: Asset turnover is

Select one:
a. net income divided by sales.
b. net sales divided by average total assets. 
Correct
c. net sales divided by current assets

d. earnings per share divided by market price per share

Feedback

Your answer is correct.

The correct answer is: net sales divided by average total assets.

Question-2: Accounts receivable turnover

Select one:
a. is often difficult to calculate since credit sales are normally not disclosed. 
Correct

b. can be used to figure days sales in inventory.

c. gives an indication of how quickly suppliers are being paid by the company.

d. usually increases when credit terms are relaxed.

Feedback

Your answer is correct.

The correct answer is: is often difficult to calculate since credit sales are normally not
disclosed.

Question-1: Inventory turnover is

Select one:
a. sales divided by average cost of goods sold
b. sales divided by average inventory.
c. sales divided by average accounts receivable
d. cost of goods sold divided by average inventory 
Correct
Feedback

Your answer is correct.

The correct answer is: cost of goods sold divided by average inventory

Question-2: If a company has an inventory turnover of 12, that means that:

Select one:
a. it has about one month’s sales in inventory. 
Correct

b. it takes about 60 days from the time an item is sold until the cash is collected
c. it takes about one month from the time an item is purchased until the cash is collected.

d. each item in inventory is returned several times before it is sold.

Feedback

Your answer is correct.

The correct answer is: it has about one month’s sales in inventory.

Question-1: What primary information is provided in the statement of cash flows?

Select one:
a. The amount of profits earned during a period
b. Where a company’s money comes from and where it goes 
Correct

c. Estimates of future cash flows

d. Cash receipts and cash payments of an entity’s profitable activities during a period.
Feedback

Your answer is correct.

The correct answer is: Where a company’s money comes from and where it goes

Question-2: Which one of the following is an important reason to evaluate a company’s

cash flow?
Select one:
a. Without positive cash flows, a company earns no profit.
b. Minimum cash balances must be maintained by all companies
c. Stockholders want to know that the company can generate cash consistent with earning
a reasonable return on their investments. 
Correct

d. Creditors want to be sure that the company has significant cash inflows from financing
activities
Feedback

Your answer is correct.

The correct answer is: Stockholders want to know that the company can generate cash
consistent with earning a reasonable return on their investments.
Question-1: Which of the following would not be an operating activity on the statement of
cash flows?:
Select one:
a. Paying a dividend. 
Correct

b. Paying for inventory purchases

c. Collecting cash from sale of merchandise

d. Paying cash for income taxes.

Feedback

Your answer is correct.

The correct answer is: Paying a dividend.

Question-2: Which of the following is not a financing cash flow on the statement of cash
flows?:
Select one:
a. Paying dividends.
b. Buying stock of another company 
Correct

c. Issuing common stock.

d. Issuing bonds
Feedback

Your answer is correct.

The correct answer is: Buying stock of another company

Question-1: Which of the following is investing cash flow?

Select one:
a. Issuing stock
b. Paying dividends
c. Buying a building 
Correct

d. Collecting cash from sales

Feedback
Your answer is correct.
The correct answer is: Buying a building

Question-2: Cash from operations represents:

Select one:
a. net income converted to a cash basis.
b. the cash flows generated from core business activities.
c. capital expenditures.
d. Both net income converted to a cash basis and the cash flows generated from core
business activities. 
Correct
Feedback

Your answer is correct.

The correct answer is: Both net income converted to a cash basis and the cash flows
generated from core business activities.
Question-1: Paying cash for selling and administrative expense is a(n)
Select one:
a. financing activity.
b. investing activity.
c. operating activity. 
Correct

d. general activity
Feedback

Your answer is correct.

The correct answer is: operating activity.

Question-2: Selling an old piece of machinery is a(n)

Select one:
a. financing activity.
b. investing activity 
Correct

c. operating activity.
d. general activity
Feedback

Your answer is correct.

The correct answer is: investing activity

Question-1: Receiving cash from a bank loan is a(n):

Select one:
a. financing activity. 
Correct

b. investing activity
c. operating activity

d. general activity
Feedback

Your answer is correct.

The correct answer is: financing activity.

Question-2: A Company had the following results during 2012: Cash collected from
accounts receivable Rs 56,000 Cash paid to purchase office supplies Rs 2,500 Cash
collected from the issuance of equity shares Rs 50,000 Cash paid to purchase equipment
with a 5 year life Rs 80,000 How much is the company’s net cash provided/(used by)
operating activities prepared using the direct method?
Select one:
a. Rs 53,500 
Correct

b. Rs 103,500
c. Rs 23,500

d. (Rs 26,500)
Feedback

Your answer is correct.

The correct answer is: Rs 53,500

MODULE 4
Question-1: Which of the following is not an objective of Management Accounting
Select one:
a. Assisting in directing and controlling operations
b. Maximizing profits and minimizing costs. 
Correct

c. Motivating managers toward the organization's goals.

d. Measuring the performance of managers and subunits.

e. Providing information for decision making and planning

Feedback

Your answer is correct.

The correct answer is: Maximizing profits and minimizing costs.

Question-2: Management accounting:

Select one:
a. is governed by GAAP.
b. provides information for parties external to the organization.
c. focuses only on historical data.
d. focuses primarily on the needs of personnel within the organization. 
Correct

e. focuses on financial statements and other financial reports

Feedback

Your answer is correct.

The correct answer is: focuses primarily on the needs of personnel within the organization.

Question-1: Which of the following statements is true? 

Select one:
a. All organizations incur the same types of costs.
b. Different cost concepts and classifications are used for different purposes. 
Correct
c. Costs incurred in one year are always meaningful in the following year.
d. Cost data, once classified and recorded for a specific application, are appropriate for use
in any application.

e. The word "cost" has the same meaning in all situations in which it is used.
Feedback

Your answer is correct.

The correct answer is: Different cost concepts and classifications are used for different
purposes.

Question-2: Product costs are:

Select one:
a. treated in the same manner as advertising costs.
b. subtracted from cost of goods sold.
c. expenses when incurred.
d. treated in the same manner as period costs.
e. inventoried. 
Correct
Feedback

Your answer is correct.

The correct answer is: inventoried.

Question-1: A Company produces washers and dryers in an assembly-line process. Labor

costs incurred during a recent period were: corporate executives, Rs 500,000; assembly-
line workers, Rs 180,000; security guards, Rs 45,000; and plant supervisor, Rs 110,000.
The total of Company's direct labor cost was: 
Select one:
a. Rs 180,000 
Correct

b. Rs.155,000
c. Rs.235,000

d. Rs 110,000
Feedback

Your answer is correct.

The correct answer is: Rs 180,000

Question-2: A Company’s records shows the following details.

Factory Insurance Rs. 32,000
Raw materials used Rs. 256,000
Customer entertainment Rs 15,000
Indirect labor Rs. 45,000
Depreciation on sales departments cars Rs. 22,000
Production equipment rental costs Rs. 72,000
What is the manufacturing overhead?
Select one:
a. Rs 149,999 
Correct

b. Rs 186,000
c. Rs 442,000

d. Rs 171,000
Feedback

Your answer is correct.

The correct answer is: Rs 149,999

Question-1: Depreciation of factory equipment would be classified as:

Select one:
a. period cost.
b. operating cost.
c. manufacturing overhead. 
Correct

d. "other" cost.
Feedback

Your answer is correct.

The correct answer is: manufacturing overhead.

Question-2: Conversion costs are:

 Select one:
a. direct labor and manufacturing overhead. 
Correct

b. direct material and direct labor.

c. prime costs.

d. direct material, direct labor, and manufacturing overhead.

Feedback

Your answer is correct.

The correct answer is: direct labor and manufacturing overhead.

Question-1: Under marginal costing the cost of product includes

Select one:
a. Prime costs and fixed overheads
b. Prime costs and factory overheads
c. Prime costs and variable overheads 
Correct

d.
Prime costs only
Feedback

Your answer is correct.

The correct answer is: Prime costs and variable overheads

Question-2: The main difference between marginal costing and absorption costing is about
the treatment of
Select one:
a. Prime costs
b. Direct materials
c. Variable overheads
d. Fixed overheads 
Correct
Feedback

Your answer is correct.

The correct answer is: Fixed overheads

Question-1: The unit contribution margin is calculated as the difference between:

Select one:
a. selling price and fixed cost per unit
b. selling price and product cost per unit.
c. selling price and variable cost per unit 
Correct

d. fixed cost per unit and variable cost per unit.

Feedback

Your answer is correct.

The correct answer is: selling price and variable cost per unit

Question-2: Which of the following would produce the largest increase in the contribution
margin per unit? 
Select one:
a. 7% increase in selling price. 
Correct

b. 15% decrease in selling price.

c. 14% increase in variable cost.

d. 17% decrease in fixed cost.

Feedback

Your answer is correct.

The correct answer is: 7% increase in selling price.

Question-1: The break-even point is that level of activity where: 

Select one:
a. variable cost equals fixed cost.
b. total contribution margin equals the sum of variable cost plus fixed cost.
c. total revenue equals total cost. 
Correct
d. sales revenue equals total variable cost.
Feedback

Your answer is correct.

The correct answer is: total revenue equals total cost.

Question-2: Which of the following would take place if a company experienced an increase
in fixed costs?
Select one:
a. The contribution margin would increase.
b. The contribution margin would decrease.
c. Net income would increase.
d. The break-even point would increase. 
Correct
Feedback

Your answer is correct.

The correct answer is: The break-even point would increase.

Question-1: ABC Ltd. sells a single product for Rs.50. Variable costs are 60% of the selling
price, and the company has fixed costs that amount to Rs.400,000. Current sales total
16,000 units. If ABC Ltd. sells 24,000 units, its safety margin will be: 
Select one:
a. Rs.1,000,000.
b. Rs.1,200,000.
c. Rs.200,000. 
Correct

d. Rs.400,000.
Feedback

Your answer is correct.

The correct answer is: Rs.200,000.

Question-2: The difference between budgeted sales revenue and break-even sales revenue
is the: 
Select one:
a. contribution-margin ratio.
b. contribution margin.
c. Margin of safety. 
Correct

d. target net profit.

Feedback

Your answer is correct.

The correct answer is: Margin of safety.

Question-1: Which of the following costs can be ignored when making a decision?
Select one:
a. Sunk costs. 
Correct

b. Opportunity costs.
c. Differential costs.

d. Relevant costs
Feedback

Your answer is correct.

The correct answer is: Sunk costs.

Question-2: The City of Miami is about to replace an old fire truck with a new vehicle in an
effort to save maintenance and other operating costs. Which of the following items, all
related to the transaction, would not be considered in the decision? 
Select one:
a. Proceeds from disposal of the old vehicle.
b. Purchase price of the old vehicle. 
Correct

c. Purchase price of the new vehicle.

d. Savings in operating costs as a result of the new vehicle.

Feedback

Your answer is correct.

The correct answer is: Purchase price of the old vehicle.

Question-1: The system which gives calculates the value of inventory at the end of the
period is known as
Select one:
a. Periodic inventory 
Correct

b. Running inventory
c. Perpetual inventory

d. Continuous stock taking

Feedback

Your answer is correct.

The correct answer is: Periodic inventory

Question-2: In which of the following methods, costs lag behind the current economic
values?
Select one:
a. Weighted average price
b. LIFO
c. Replacement price
d. FIFO 
Correct
Feedback

Your answer is correct.

The correct answer is: FIFO

Question-1: During periods of rising prices, the profit will be inflated in this method
Select one:
a. FIFO method 
Correct

b. Any other method

c. LIFO method
d. Weighted Average method
Feedback

Your answer is correct.

The correct answer is: FIFO method

Question-2: During periods of rising prices, the profit will be deflated in this method
Select one:
a. Any other method
b. Weighted Average method
c. FIFO method
d. LIFO method 
Correct
Feedback

Your answer is correct.

The correct answer is: LIFO method

Question-1: A standard cost: 

Select one:
a. is the "true" cost of a unit of production.
b. is normally the average cost within an industry.
c. is a budget for the production of one unit of a product or service. 
Correct

d. can be useful in calculating equivalent units.

Feedback

Your answer is correct.

The correct answer is: is a budget for the production of one unit of a product or service.

Question-2: Which of the following is a predetermined estimated cost that can be used in
the calculation of a variance? 
Select one:
a. Standard cost. 
Correct

b. Differential cost.
c. Product cost.

d. Actual cost.
Feedback

Your answer is correct.

The correct answer is: Standard cost.

Question-1: Consider the following statements:

I. The standard cost per unit of materials is used to calculate a materials price variance.
II. The standard cost per unit of materials is used to calculate a materials quantity variance.
III. The standard cost per unit of materials cannot be determined until the end of the period.

Which of the above statements is (are) true? 

Select one:
a. II only
b. I only
c. III only
d. I and II 
Correct
Feedback

Your answer is correct.

The correct answer is: I and II

Question-2: Most companies base the calculation of the material price variance on the: 
Select one:
a. quantity of direct materials actually used.
b. quantity of direct materials that should have been used in achieving actual production.
c. quantity of direct materials purchased. 
Correct

d. quantity of direct materials spoiled.

Feedback
Your answer is correct.
The correct answer is: quantity of direct materials purchased.

Question-1: Which of the following variances cannot occur together during the same

accounting period? 
Select one:
a. None of the other answers are correct, because all of these variance combinations are
possible. 
Correct

b. Unfavorable labor efficiency variance and favorable material quantity variance.

c. Unfavorable labor rate variance and favorable labor efficiency variance.

d. Favorable labor rate variance and unfavorable total labor variance.

Feedback

Your answer is correct.

The correct answer is: None of the other answers are correct, because all of these variance
combinations are possible.

Question-2: Which of the following variances are most similar with respect to the manner in
which they are calculated?
Select one:
a. Material quantity variance and labor efficiency variance. 
Correct

b. Labor rate variance and labor efficiency variance.

c. Material price variance and material quantity variance.

d. Material price variance, material quantity variance, and total material variance.
Feedback

Your answer is correct.

The correct answer is: Material quantity variance and labor efficiency variance.

Question-1: Generally speaking, budgets are not used to: 

Select one:
a. create a plan of action.
b. evaluate performance.
c. identify a company's most profitable products. 
Correct

d. assist in the control of profit and operations.

Feedback

Your answer is correct.

The correct answer is: identify a company's most profitable products.

Question-2: A formal budget program will almost always result in: 

Select one:
a. decreased expenses.
b. a detailed plan against which actual results can be compared. 
Correct

c. more cash inflows than cash outflows.

d. higher sales.
Feedback

Your answer is correct.

The correct answer is: a detailed plan against which actual results can be compared.

Question-1: A manufacturing firm would begin preparation of its master budget by

constructing a:
Select one:
a. cash budget.
b. capital budget.
c. production budget.
d. sales budget. 
Correct
Feedback

Your answer is correct.

The correct answer is: sales budget.
Question-2: Which of the following would depict the logical order for preparing (1) a
production budget, (2) a cash budget, (3) a sales budget, and (4) a direct-labour budget? 
Select one:
a. 1-3-4-2.
b. 2-3-1-4.
c. 3-1-4-2. 
Correct

d. 2-1-3-4.
Feedback

Your answer is correct.

The correct answer is: 3-1-4-2.

Question-1: A static budget: 

Select one:
a. is based on one anticipated activity level. 
Correct

b. is based totally on prior year's costs.

c. is preferred over a flexible budget in the evaluation of performance.

d. is based on a range of activity.

Feedback

Your answer is correct.

The correct answer is: is based on one anticipated activity level.

Question-2: Flexible budgets reflect a company's anticipated costs based on variations in: 
Select one:
a. activity levels. 
Correct

b. anticipated capital acquisitions.

c. managers.

d. inflation rates.
Feedback
Your answer is correct.
The correct answer is: activity levels.

Question-1: Cost-volume-profit analysis is based on several assumptions. Which of the

following is not one of these assumptions?
Select one:
a. Inventory quantities change during the year 
Correct

b. Factor prices, for example, material prices and wage rates remain unchanged.
c. The sales-mix of the products is constant

d. The behaviour of both revenues and cost is linear throughout the relevant range
Feedback

Your answer is correct.

The correct answer is: Inventory quantities change during the year

Question-2: Which of the following should not be considered in a make or buy decision?
Select one:
a. Potential use of manufacturing capacity
b. Variable costs of production
c. Unchanged fixed cost. 
Correct

d. Potential rental income from space occupied by production area

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Your answer is correct.

The correct answer is: Unchanged fixed cost.

Question-1: A company uses several types of materials to manufacture its product. The
result of combining these materials in proportions different from standard proportions is the
Select one:
a. Material price variance
b. Material usage variance
c. Material mix variance 
 Correct

d. Material yield variance

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Your answer is correct.

The correct answer is: Material mix variance

Question-2: A chemical is manufactured by combining two standard item of input A

(standard price  Rs 60/kg.) and  B (Rs 45/kg.) in the ratio 60% : 40%. Ten per cent of input
is lost during processing. If during a month 1200 kg. of the chemical is produced incurring a
total cost of  Rs 69,600, the total material cost variance will be
Select one:
a. Rs 2,000 (Fav.)
b. Rs 2,400 (Fav.) 
Correct

c.
Rs 2,400 (Adv.)

d. Rs 3,000 (Adv.)

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Your answer is correct.

The correct answer is: Rs 2,400 (Fav.)

Question-1: Which of the following is normally included in the financial budget of a firm?
Select one:
a. Sales budget.
b. Budgeted balance sheet. 
Correct

c. Selling expense budget.

d. Direct materials budget.

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Your answer is correct.

The correct answer is: Budgeted balance sheet.
Question-2: Within a given capacity, fixed cost per unit is
Select one:
a. Both 
b. Neither variable  nor fixed
c. Variable 
Correct

d. Fixed 
Feedback

Your answer is correct.

The correct answer is: Variable

MODULE 5
Question-1 which of the following is not a financial modeling schedule?
Select one:
a. Cash flow statements
b. Suspense Accounts 
Correct

c. Working capital

d. Balance Sheet
Feedback

Your answer is correct.

The correct answer is: Suspense Accounts

Question-2 the process of comparing company results with other leading firms is known as
Select one:
a. Analysis
b. Comparison
c. Benchmarking 
Correct
d. Return Analysis
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Your answer is correct.

The correct answer is: Benchmarking

Question-1: The actual cost incurred on recruiting, selecting, placing & developing is used
under which method
Select one:
a. Historical Cost Method 
Correct

b. Replacement Cost Method

c. Opportunity Cost Method

d. None of These
Feedback

Your answer is correct.

The correct answer is: Historical Cost Method

Question-2: Determine the value of human resource on the basis of an employee’s value in
alternative use.
Select one:
a. Historical Cost Method.
b. Replacement Cost Method
c. Opportunity Cost Method 
Correct

d. None of These
Feedback

Your answer is correct.

The correct answer is: Opportunity Cost Method

Question-1: …………… reflect the value of the monetary unit over time.
Select one:
a. General Price Changes 
Correct

b. Specific Price Changes

c. Relative Price Changes

d. None of These
Feedback

Your answer is correct.

The correct answer is: General Price Changes

Question-2: Change in the particular value of commodity is accounted by

Select one:
a. General Price Changes
b. Specific Price Changes 
Correct

c. Relative Price Changes

d. None of These
Feedback

Your answer is correct.

The correct answer is: Specific Price Changes

Question-1: IFRS Comprises

Select one:
a. International Financial Reporting Standards
b. International Accounting Standards
c. Interpretations developed by the International Financial Reporting Interpretations
Committee (IFRIC)
d. All of These 
Correct
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Your answer is correct.

The correct answer is: All of These
Question-2: Fair Value is based on
Select one:
a. Book Value
b. Net Book Value
c. Market Value 
Correct

d. None of These
Feedback

Your answer is correct.

The correct answer is: Market Value

Question-1 Standards issued by the International Accounting Standards Board (IASB) are
known as:
Select one:
a. International Financial Reporting Standards (IFRSs) 
Correct

b. Financial Reporting Standards (FRSs)

c. International Accounting Standards (IASs)

d. International Financial Standards (IFSs)

Feedback

Your answer is correct.

The correct answer is: International Financial Reporting Standards (IFRSs)

Question-2 The body to which the International Accounting Standards Board is responsible
is:
Select one:
a. The IFRS Foundation 
Correct

b. The IFRS Interpretations Committee

c. The IFRS Advisory Council

d. The Monitoring Board

Feedback

Your answer is correct.

The correct answer is: The IFRS Foundation

5TH MODULE ONLY 5.1, 5.12-5.15 QUIZ WAS UPLOADED REST MISSING