FINANCIAL ACCOUNTING MCQ WITH ANSWERS

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FINANCIAL ACCOUNTING MCQ WITH ANSWERS – MULTIPLE CHOICE QUESTION FOR CMA INTERMEDIATE GROUP FIRST (FINANCIAL ACCOUNTING MCQ WITH ANSWERS PDF)

  • Which of the following commission is allowed by the consignor to the consignee to encourage the consignee for putting-up hard work in introducing new product in the market?
    • Del-credere Commission
    • Over-riding Commission
    • Hard work Commission
    • Ordinary Commission
  • If Ram’s acceptance which was endorsed by us in favour of Saleem is dishonoured, then the amount will be debited in our books to
    • Saleem
    • Ram
    • Bills Receivable Account
    • None of the above
  • In case of a Club, the excess of expenditure over income is called as
    • Surplus
    • Deficit
    • Capital Fund
    • Investment in Fixed Assets
  • A Charitable Institution has 250 members with a annual subscription of `5,000 each. The subscription received during 2018-19 were $11,25,000, which include $ 65,000 and $25,000 for the years of 2017-18 and 2019-20 respectively. Amount of outstanding subscription for the 2018-19 will be
    • (a) $90,000
    • (b) $1,25,000
    • (c) $2,15,000
    • (d) $1,90,000
  • When stock is valued at cost in one accounting period and at lower of cost and Net realizable value in another accounting period
    • Prudence Principle conflicts with Consistency Principle.
    • Matching Principle conflicts with Consistency principle.
    • Consistency Principle conflicts with Accounting Period Assumption.
    • None of the above
  • Materiality Principle is an exception to the
    • Consistency principle
    • Full disclosure Principle
    • Accounting Period Assumption
    • Prudence Principle
  • In a Cash Book Debit balance of $112 brought forward as credit balance of $ 121, while preparing a Bank Reconciliation Statement taking the balance as per Cash Book as the starting point:
    • $112 to be added
    • $121 to be added
    • $ 233 to be added
    • $112 to be subtracted
  •   represents a potential obligation that could be created depending on the outcome of an event.
    • Internal Liability
    • Current Liability
    • Contingent Liability
    • Non-current Liability
  • Opening Debtors, Collection from Debtors and Discount Allowed were $3,15,000; $18,30,000 and $35,000 respectively. If the closing debtors were 20% of credit sales of the period then closing debtors and credit sales would be
    • (a) $ 3,51,667 and $17,58,333
    • (b) $3,63,333 and $18,16,667
    • (c) $3,87,500 and $19,37,500
    • (d) $3,10,000 and $15,50,000
  • Provision for Doubtful Debt on 1st April, 2018 was `21,500. During the year 2018 – 19  the Bad-debt and Recovery of Bad-debt were ` 10,500 and ` 2,100 respectively. The Sundry Debtors on 31st March, 2019 were `2,25,000. Provision is to be made @ 5% on Debtors. If on 31st March, 2019, there was additional Bad-debt of ` 2,500 then Provision for doubtful-debt will be
    • debited to Profit & Loss Account by `11,250.
    • debited to Profit & Loss Account by `2,625.
    • debited to Profit & Loss Account by `3,000.
    • debited to Profit & Loss Account by `900.
  • A and B enter into a joint venture sharing profit and losses in the ratio of 3:2. A purchased goods costing $2,00,000. B sold 95% goods for $ 2,50,000. A is entitled to get 1% commission on purchase and B is entitled to get 5% commission on sales. A drew a bill on B for an amount equivalent to 80% of original cost of goods. A got it discounted at $1,50,000. What is A’s share of profit?
    • (a) $15,300
    • (b) $ 21,300
    • (c) $18,900
    • (d) None of the above
  • X and Y are partners with the capital of $50,000 and $ 30,000 respectively. Interest Payable on Capital is 10% p.a. If the profits earned by the firm is $ 4,800, what will be the Interest on Capital for X and Y?
    • (a) $5,000 and $3,000
    • (b) $3,000 and $1,800
    • (c) No interest will be paid to the partners
    • (d) None of the
  • Canteen expenses are apportioned among departments in the proportion of
    • Departmental floor space
    • Departmental direct wages
    • Departmental sales
    • Departmental No. of employees
  • Both cash and credit transactions are recorded, on the basis of
    • Accounting Period Concept
    • Going Concern Concept
    • Business Entity Concept
    • Accrual Concept
  • Which of the following book is both a journal and a ledger?
    • Cash Book
    • Sales Day Book
    • Bills Receivable Book
    • Journal Proper
  • Interest received in advance account is a
    • Nominal Account
    • Real Account
    • Artificial Personal Account
    • Representative Personal Account
  • Shiva draws a bill on Sanat on 25th October, 2018 for 90 days, the maturity date of the bill will be
    • 27th January, 2019
    • 26th January, 2019
    • 25th January, 2019
    • 28th January, 2019
  • Peeru and Simu entered in the business of buy and sale of food grain for a period of one year and sharing the profit in the ratio of 3:2, this agreement is a
    • Partnership
    • Consignment
    • Joint-venture
    • Lease
  • At the end of the year 2017-18, Prepaid Insurance Premium `7,500 appeared in the Trial Balance, it will be shown
    • only in Profit & Loss Account.
    • only in Balance Sheet.
    • both in Profit & Loss Account and in Balance Sheet.
    • not in Both in Profit & Loss Account and in Balance Sheet.

FINANCIAL ACCOUNTING MCQ WITH ANSWERS

  • Contingent Liability would appear
    • on the liabilities side of the Balance Sheet.
    • on the assets side of the Balance Sheet.
    • as a note in the Balance Sheet.
    • None of the above
  • Debtors Ledger Adjustment Account is opened in the
    • Debtors Ledger
    • Creditors Ledger
    • General Ledger
    • Both Creditors Ledger and General Ledger
  • Generally sacrifice ratio is concerned with the situation of
    • Admission of a new partner
    • Retirement of a partner
    • Dissolution of firm
    • Conversion of firm into company
  • Which of the following is a resource owned by the business with the purpose of using it for generating future profits?
    • Loan from Bank
    • Owner’s Capital
    • Trade Mark
    • All of the above
  • Chandu & Co.’s Account is a
    • Real Account
    • Nominal Account
    • Representative Personal Account
    • Artificial Personal Accounts
  • Purchase of a laptop for office use wrongly debited to Purchase Account. It is an error of
    • Omission
    • Commission
    • Principle
    • Misposting
  • Which of the following term is most suitable for writing off Patent?
    • Depletion
    • Amortization
    • Depreciation
    • All of the above
  • Memorandum Joint Venture Account is prepared when
    • the separate set of books is maintained for Joint Venture.
    • each Co-venturer keeps records of all transactions.
    • each Co-venturer keeps records of their own transactions only.
    • All of the above cases
  • Survey expenses for marine insurance claim must be
    • Added to claim;
    • Added to legal charges;
    • Added to administrative charges;
    • None of the above.
  • A profit on sale of furniture of a club will be taken to
    • Cash Account;
    • Receipts and Payment Account;
    • Income and Expenditure Account;
    • Profit and Loss Account.
  • Realization Account is a:
    • Representative Personal Account;
    • Artificial Personal Account;
    • Real Account;
    • Nominal Account.
  • Bank shows the provision for income tax under the head
    • Contingency Accounts;
    • Other liabilities and provisions;
    • Contingent liabilities;
    • Borrowings.
  • Bank Reconciliation Statement is:
    • Ledger Account
    • Part of cash book
    • A separate statement
    • A subsidiary of Journal
  • Income & Expenditure A/c shows subscriptions $10,000; Subscriptions accrued in the beginning of the year and at the end of the year were $1,000 and $1,500 respectively. The figure of subscription received appear in receipts and payments account will be:
    • (a) $9,500
    • (b) $10,000
    • (c) $10,500
    • (d) $12,000
  • A non-performing asset is:
    • Money at call and short notice.
    • Cash balance with bank
    • An asset that ceases to generate income
    • None of the above
  • Which of the following is not a Qualitative characteristicof Financial Statement?
    • Cost Principle
    • Understandability
    • Relevance
    • Reliability
  • Name the book in which, entries are recorded on the basis of credit notes issued.
    • Sales Book
    • Purchase Book
    • Sales Return Book
    • Purchase Return Book
  • Exception to consistency principle is
    • Cost Principle
    • Going Concern Principle
    • Matching Principle
    • Prudence Principle
  • The balance in consignment account shows
    • Amount receivable from consignee
    • Amount payable to consignee
    • Profit/ loss on consignment
    • Closing stock with consignee
  • Provision for bad debts is
    • Real Account
    • Nominal account
    • Personal account
    • None of the above
  • Due to retrospective effect on revision of salary of employees, the arrears of salary relating to past years, payable in current year is
    • Prior – period item
    • Extra – ordinary item
    • Ordinary item requiring separate disclosure
    • Contingent item
  • Discount given in the Sales – Invoice itself is
    • Cash discount
    • Trade discount
    • Rebate
    • Allowance
  • Del credere commission is allowed to consignee
    • for making cash sales
    • for making credit sales
    • for making extra sales
    • for undertaking risk of bad debts
  • Which of the following is a function of journal:
    • Analytical Function
    • Recording Function
    • Historical Function
    • All of the above
  • Any change in the accounting policy relating to inventories which has a material effect in the current or later periods should be disclosed. This is in accordance with the accounting principle of:
    • Going Concern
    • Conservatism
    • Consistency
    • Disclosure

OPERATIONS MANAGEMENT MCQ JUNE 2021

  • Depreciation is a process of
    • Apportionment
    • Valuation
    • Allocation
    • None of the above
  • AS-9 is related to
    • Revenue Recognition
    • Cash Flow Statement
    • Accounting for Fixed Assets
    • Disclosure of Accounting policies
  • An amount spent in connection with obtaining a License for starting the factory is
    • Revenue Expenditure
    • Capital Expenditure
    • Pre-paid Expenditure
    • None of the above
  • According to AS-15 (Revised) superannuation scheme which has relevance only to the final salary and number of years of service is
    • Defined Benefit Scheme
    • Defined Contribution Scheme
    • Non-Contributory Scheme
    • Both (a) and (b)
  • Expenditures in respect of certain types of assets whose usefulness does not expires in the year of their occurrence but generally expires in the near future are called
    • Revenue Expenditure
    • Capital Expenditure
    • Deferred Revenue Expenditure
    • None of the above
  • The main objective of average clause contained in a fire insurance policy is to
    • Encourage full Insurance
    • Discourage full Insurance
    • Encourage under Insurance
    • Encourage full Insurance and Discourage under Insurance
  • Short working can be recouped out of
    • Minimum Rent
    • Excess of Actual Royalty over Minimum Rent
    • Excess of Minimum Rent over Actual Royalty
    • Profit and Loss Account
  • AS-6 (revised) is applicable to which one of the following assets?
    • Goodwill
    • Live stock
    • Plantation
    • Plant and Machinery
  • According to AS-3 (Revised) interest and dividends received in the case of a manufacturing enterprise should be classified as cash flow from
    • Operating Activities
    • Financing Activities
    • Investing Activities
    • Both (b) and (c)
  • Provision for bad and doubtful debts is created in anticipation of actual bad debts on the basis of:
    • Business Entity Concept;
    • Conservatism Concept;
    • Accrual Concept;
    • Full Disclosure Concept.
  • The out flow of funds to acquire an asset that will benefit the business for more than one accounting period is referred to as:
    • Miscellaneous Expenditure;
    • Revenue Expenditure;
    • Capital Expenditure;
    • Deferred Revenue Expenditure.
  • Goods are sent to the Branch at cost plus 25%. The loading on invoice price is:
    • (a) 20%;
    • (b) 25%;
    • (c) 30%;
    • (d) None of the above.
  • Actuarial valuation relates to:
    • Banking company;
    • Electric Supply Company;
    • Insurance Company;
    • None of the above.
  • The cost of a Fixed Assets of a business has to be written off over its
    • Natural Life
    • Accounting Life
    • Physical Life
    • Estimated Economic Life
  • Receipts and Payments Account records
    • Only revenue nature receipts
    • Only capital nature receipts and payment
    • Only revenue nature receipts and payments
    • Both the revenue and capital nature receipts and payments
  • Excess of minimum rent over royalty is known as
    • Maximum rent
    • Excess workings
    • Short workings
    • Deficiency of actual royalty
  • If any transaction is not recorded in the primary books the same is recorded in
    • Journal Proper
    • Sales Day Book
    • Cash Book
    • None of the above
  • Which of the following is not a feature of Trial Balance
    • It is a list of debit and credit balances which are extracted from various ledger accounts;
    • It does not prove arithmetical accuracy which can be determined by audit;
    • It is not an account. It is only a statement of account;
    • All the transactions are primarily recorded in this book, hence it is the primary book of entry.
  • The person in whose favour the bill is endorsed is known as                   .
    • Endorsee
    • Drawee
    • Drawer
    • None of the above
  • Which of the following is/ are the basic features of a Joint Venture
    • The profit or loss on joint venture is shared between the co-venturers in the agreed ratio;
    • The co-venturers may or may not contribute initial capital;
    • The JV is dissolved once the purpose of the business is over;
    • All of the above.
  • The following account has a credit balance
    • Plant and Equipment A/c
    • Purchase Returns A/c
    • Purchase A/c
    • None of the above
  • When Sales = $3,60,000, Purchase = $ 3,20,000, Opening Stock = $68,000 and rate of the Gross Profit is 20% on cost, the Closing Stock would be
    • (a) $1,00,000
    • (b) $44,000
    • (c) $46,000
    • (d) None of the above
  • As per AS – 1, which of the following is not a Fundamental Accounting Assumptions?
    • Conservatism
    • Going Concern
    • Consistency
    • Accrual
  • Name the book in which, entries are recorded on the basis of debit notes issued.
    • Sales book
    • Purchase Book
    • Sales Return Book
    • Purchase Return Book
  • Name the principle involved in the classification of Assets as Fixed and Current
    • Cost Principle
    • Going Concern Principle
    • Matching Principle
    • Prudence Principle
  • If a fixed amount is withdrawn on the first day of every month of calendar year by a partner in partnership firm, then for what period the interest on the total amount of drawings will be calculated?
    • 4.5 months
    • 5.5 months
    • 6.5 months
    • 7.5 months

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