Financial Accounting Mcq

Topics: Balance sheet, Generally Accepted Accounting Principles, Accounts receivable Pages: 87 (18729 words) Published: June 22, 2013
IMT CDL GURGAON 01
MCQ FOR IMT 57 – FINANCIAL ACCOUNTING

Test : (Journal, Ledger, Trial Balance, Errors) Name: _________________

Fundamentals of Accounting Max. Marks: 30

1. RPC Ltd. follows the written down value method of depreciating machinery year after year by applying the principle of

(a) Comparability.(b) Convenience.
(c) Consistency.(d) All of the above.

2. A change in accounting policy is justified

(a) To comply with accounting standards
(b) To ensure more appropriate presentation of the financial statement of the enterprise. (c) To comply with the law.
(d) All of the above.

3. Purchases book records:

(a) All cash purchases (b) All credit purchases (c) Credit purchases of goods in trade. (d) None of the above

4. A Bank Reconciliation Statement is prepared to know the causes for the difference between:

(a) The balances as per cash column of Cash Book and the Pass Book (b) The balance as per bank column of Cash Book and the Pass Book (c) The balance as per bank column of Cash Book and balances as per cash column of Cash Book (d) None of the above

5. While finalizing the current year’s profit, the company realized that there was an error in the valuation of closing stock of the previous year. In the previous year, closing stock was valued more by Rs.50,000. As a result

(a) Previous year’s profit is overstated and current year’s profit is also overstated (b) Previous year’s profit is understated and current year’s profit is overstated (c) Previous year’s profit is understated and current year’s profit is also understated (d) Previous year’s profit is overstated and current year’s profit is understated

6. Fundamental accounting assumption is

(a) Materiality (b) Business entity (c) Going concern(d) Dual aspect

7. Balance of Suspense account is transferred to

(a) Profit & Loss account (b) Balance Sheet (c) Trading account(d) None

8. Which of the following errors are not revealed by the Trial Balance:

(a) Compensating errors (b) Errors of commission (c) Wrong balancing of an account (d)Wrong totalling of an account 9. Which of the following are of capital nature?

(a) Purchase of goods (b)Cost of repairs (c) Wages paid for installation of machinery (d)Rent of a factory

10. A second hand car is purchased for Rs.10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owner’s name and Rs. 1,200 is paid as dealer’s commission. The amount debited to car account will be

(a) Rs. 10,000 (b) Rs. 10,500 (c) Rs. 11,500 (d) Rs. 12,700

11. If a purchase return of Rs.84 has been wrongly posted to the debit of the sales return account, but had been correctly entered in the suppliers account, the total of the trial balance would show

(a) the credit side to be Rs.84 more than debit side
(b) the debit side to be Rs.84 more than credit side
(c) the credit side to be Rs.168 more than debit side
(d) the debit side to be Rs.168 more than credit side

12. The Accountant of the firm M/s ABC is unable to tally the following trial balance.

S. No.Account headsDebit (Rs.)Credit (Rs.)
1. Sales 15,000 2. Purchases 10,000 3. Miscellaneous expenses 2,500 4. Salaries 2,500 Total 12,50017,500

The above difference in trial balance...
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