FINANCIAL ACCOUNTING MCQ WITH ANSWERS PDF – MULTIPLE 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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