FINANCIAL ACCOUNTING MCQ WITH ANSWERS PDF

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

  • Which of the following is of capital nature?
    • Commission on purchases
    • Cost of repairs
    • Rent of factory
    • Wages paid for installation of machinery
  • Outward Invoice issued is a source document of
    • Purchase Book
    • Sales Book
    • Return Inward Book
    • Return Outward Book
  • A resource owned by the business with purpose of using it for generating future profit, is known as
    • Capital
    • Asset
    • Liability
    • Surplus
  • As on 31st March, 2017 debtors and additional bad debts are $ 8,00,000 and $ 10,000 respectively. If the provision for bad debts is made at 5% on debtors then amount of such provision will be
    (a) $40,000
    (b) $50,000
    (c) $39,500
    (d) $40,500
  • Income and Expenditure Account is a
    • Nominal Account
    • Real Account
    • Personal Account
    • Artificial Personal Account
  • Creditors ledger adjustment account is opened in
    • General Ledger
    • Debtors Ledger
    • Creditors Ledger
    • Either (b) or (c)
  • Receipts and Payments account is a
    • Nominal Account
    • Real Account
    • Personal Account
    • Artificial Personal Account
  • If an employee of the business files a legal suit on business, it is considered in the books as
    • Legal Expense
    • Liability
    • Contingent Asset
    • Contingent Liability
  • At the end of the accounting year the capital expenditures are shown in the
    • assets side of the Balance Sheet.
    • liabilities side of the Balance Sheet.
    • debit side of the Profit and Loss A/c.
    • credit side of the Profit and Loss A/c.
  • Which of the following is not a method of charging depreciation?
    • Sinking Fund Method
    • Sum of years Digit Method
    • Working hours Method
    • Asset’s Life-cycle Method
  • If average inventory is $1,25,000 and closing inventory is $10,000 less than opening inventory then the value of closing inventory will be
    (a) $1,35,000
    (b) $ 1,15,000
    (c) $ 1,30,000
    (d) $ 1,20,000
  • The Accommodation bill is drawn
    • to finance actual purchase or sale of goods.
    • to facilitate trade transmission.
    • when both parties are in need of funds.
    • None of the above
  • Balance of X’s account in creditors ledger is transferred to X’s account in debtors ledger, in this case
    • X’s account in debtors ledger will be debited.
    • X’s account in creditors ledger will be debited.
    • Suspense account will be debited.
    • None of the above

FINANCIAL ACCOUNTING MCQ WITH ANSWERS PDF

  • Ground rent or surface rent means
    • Minimum rent
    • Maximum royalty payable
    • Minimum royalty payable
    • Fixed rent payable in addition to minimum rent
  • Accounting standard in India are issued by
    • Government of India
    • Reserve Bank of India
    • The Institute of Chartered Accountants of India
    • The Institute of Accounting Standard of India
  • Which of the following is an example of Capital Expenditure?
    • Inventory of raw materials, work-in-progress and finished goods;
    • Insurance premium;
    • Taxes and legal expenses;
    • None of the above.
  • Which of the following errors is not disclosed by a Trial Balance?
    • Errors of Omission
    • Errors of Commission
    • Compensating Errors
    • All of the above
  •   ________________  is specially suited to mines, oil wells, quarries, sandpits and similar assets of a wasting character.
    • Depletion
    • Depreciation
    • Amortisation
    • Dilapidation
  • The following account has a credit balance
    • Plant and Equipment A/c
    • Loans A/c
    • Purchase A/c
    • None of the above
  • From the following details estimate the capital as on 31.03.2017. Capital as on 01.04.2016 – $4,10,000. Drawings $40,000, Profit during the year $50,000
    • (a) $4,10,000
    • (b) $4,50,000
    • (c) $4,20,000
    • (d) $4,00,000
  • A and B purchased a piece of land for $30,000 and sold it for $60,000 in 2016.Originally A had contributed $12,000 and B $8,000. The profit on venture will be
    • (a) $30,000
    • (b) $20,000
    • (c) $60,000
    • (d) Nil
  • AB Ltd. has signed at 31st December, 2017 the Balance Sheet date, a contract where the Total Revenue is estimated at ` 15 Crores and Total Cost is estimated at ` 20 Crores. No work began on the contract. Is the Contractor required to give any accounting effect for the year ended 31st December, 2017?
    • Recognize expected loss of `5 Crores
    • Recognize `15 Crores as Profit
    • No entry
    • None of the above
  • Which of the following item does not match with receipts and payments account?
    • It is a summarized cash book
    • Transactions are recorded in it on cash basis
    • It records revenue transactions only
    • It serves the purpose of a real account
  • 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
  • Excess of hire purchase price over cash price is known as
    • Installment
    • Cash down payment
    • Interest
    • Capital value of asset
  • Which of the following is/are revenue expenditure?
    • Consumable Stores
    • Taxes and legal expenses
    • Rent of factory building
    • All of Above
  • AS-9 is related to
    • Revenue Recognition
    • Cash Flow Statement
    • Accounting for Fixed Assets
    • Disclosure of Accounting policies
  • The person to whom bill is endorsed is known as _                .
    • Endorsee
    • Drawee
    • Drawer
    • None of the above
  • Which of the following is/are feature/features of Income and Expenditure Account?
    • It follows Nominal Account
    • All Capital incomes and expenditures are excluded
    • Profit on sale of asset is credited
    • All of the above
  • The debts which are not bad is known as
    • Good debt
    • Bad Debt
    • Doubtful Debt
    • None of the above
  • A transaction without immediate cash settlement is known as
    • Cash Transaction;
    • Credit Transaction;
    • Deferred Transaction;
    • None of the above.
  • _____________________liabilities represent proprietor’s equity, i.e. all those amount which are entitled to the proprietor
    • External;
    • Debenture;
    • Internal;
    • None of the above.
  • Goods are transferred from Department X to Department Y at a price so as  to include a profit of 33.33% on cost. If the value of closing stock of Department Y is $ 48,000, then the amount of stock reserve on closing stock will be
    • (a) $12,000
    • (b) $9,000
    • (c) $18,000
    • (d) None of the above
  • Bad debts Recovered $1,000. It will be
    • Credited to Bad debts A/c
    • Credited to debtor’s personal A/c
    • Debited to creditor’s personal A/c
    • Credited to bad debts recovered A/c
  • Which of the following purpose is served from the preparation of Trial Balance?
    • To check the arithmetical accuracy of the recorded transactions;
    • To ascertain the balance of any ledger account;
    • To facilitate the preparation of final accounts promptly;
    • All of the above.
  •  ________________ contains the transactions relating to goods that are returned by us to our creditors
    • Return Inward;
    • Return Outward;
    • Sales Day book;
    • None of the above.
  • The  basic principles of __________concept is that business is assumed to exist for an indefinite period
    • Going Concern;
    • Business Entity;
    • Money Measurement;
    • None of the above.
  • Capital Profit arises from which of the following?
    • Profit prior to incorporation;
    • Premium received on issue of shares;
    • Profit made on re-issue of forfeited shares;
    • All of the above.
  • Which of the following cannot be detected by Trial Balance?
    • Errors of Omission;
    • Errors of Principal;
    • Errors of Misposting;
    • All of the above.
  • The concept that business is assumed to exist for an indefinite period and is not established with the objective of closing down is referred to as
    • Money Measurement concept
    • Going Concern concept
    • Full Disclosure concept
    • Dual Aspect concept
  • In the hire purchase system interest charged by vendor is calculated on the basis of
    • Outstanding cash Price
    • Hire purchase Price
    • Installment amount
    • None of the above
  • Goods are transferred from Department A to Department B at a price so as to include a profit of 33.33% on cost. If the value of closing stock of Department Y is $36,000, then the amount of stock reserve on closing stock will be
    • (a) $12,000
    • (b) $9,000
    • (c) $18,000
    • (d) None of the above
  • Bad debts Recovered `750. It will be
    • Credited to Bad debts A/c
    • Credited to debtor‘s personal A/c
    • Debited to creditor‘s personal A/c
    • Credited to bad debts recovered A/c
  • Which of the following is a function of journal:
    • Analytical Function
    • Recording Function
    • Historical Function
    • All of the above
  • 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

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