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1. A firm has omitted to record provision for bad and doubtful debts. How will it impact the financial statement?

A

Net profit would decrease

B

Net profit would increase

C

Gross profit would be overstated

D

Gross profit would be understated

2. Which of the following is excluded from the cost of stock?

A

Carriage Inward

B

Import duties

C

Purchases of Raw Material

D

Salary of purchasing staff

3. What is the basis of allocation of Carriage inward cost among pre and post incorporation period?

A

Time

B

Sales

C

Purchases

D

Credit Sales

4. How do we adjust direct deposits by the customers to ascertain the balance as per pass book, if the starting point of BRS is Balance as per Cash book?

A

Added

B

Subjtracted

C

Adjusted

D

Not Adjusted

5. Cash is an example of

A

Personal Account

B

Real Account

C

Nominal Account

D

Both (a) and (b)

6. Which qualitative characteristics of accounting information is reflected when accounting information is clearly presented?

A

Understandability

B

Relevance

C

Comparability

D

Reliability

7. We can say that the business is in profit, when

A

Assets exceed Expenditure

B

Assets exceeds Liabilities

C

Income exceeds Expenditure

D

Income exceeds Liabilities

8. Which of the following shows summary of a company`s financial position at a specific date?

A

Profit & Loss Account

B

Cash Flow Statement

C

Balance sheet

D

Income & Expenditure Account

9. Who invented the double entry system?

A

Marshall

B

Karl Pearson

C

J.R. Batliboi

D

Lucas Pacioli

10. A concept that a business enterprise will not be sold or liquidated in the near future is known as:

A

Going concern

B

Economic entity

C

Monetary unit

D

None of the above

11. According to the money measurement concept, the following would be recorded in the books of accounts of the business

A

Health of director of the company

B

Quality of company`s goods

C

Value of plant machinery

D

All of the above

12. According to this concept, it is assumed that business will exist for indefinite time period

A

Realization concepts

B

Going Concern Concept

C

Business entity concept

D

None of the above

13. According to this concept, business and owner both have separate identity

A

Realization concepts

B

Going Concern Concept

C

Business entity concept

D

Cost Concept

14. The amount brought in by owner of the business should be credited to?

A

Capital Account

B

Cash Account

C

Drawing Account

D

Bank Account

15. Every business transaction affects at least ____ accounts

A

One

B

Two

C

Three

D

Infinite

16. When a Liability is reduced or decreased, it is recorded on the

A

Left or credit side of the account

B

Right or debit side of the account

C

Right or credit side of the account

D

Left or debit side of the account

17. When Capital is increased by an amount, it is recorded on the

A

Right or debit side of the account

B

Left or credit side of the account

C

Left or debit side of the account

D

Right or credit side of the account

18. Which of the following shows summary of business`s financial position at a specific date?

A

Profit & Loss Account

B

Cash Flow Statement

C

Balance Sheet

D

Income & Expenditure Account

19. Which of the following account will be credited when a Computer is sold that has been used in the office?

A

Computer Account

B

Cash Account

C

Sales Account

D

Purchase Account

20. Commercial Accounting is based on

A

Single entry book keeping

B

Double entry book keeping

C

Both single and double entry book keeping

D

Cash basis of book keeping