Topics: Generally Accepted Accounting Principles, Balance sheet, Asset Pages: 8 (1576 words) Published: January 31, 2013
Financial Accounting 1) Purpose of Financial Accounting is to provide financial information to a) Shareholders b) Board Of Directors c) Tax Authorities d) All Of these. 2) According to the Money Measurement concept,the following will be recorded in the books of accounts a) Quality Control in Business b) Commission Payable to salesmen c) Extra profits made due to introduction of Budgetory Control System d) All of these. 3) A provision is a a) General Reserve b) pecific Reserve c) Capital Reserve d) None of these. 4) Market value of Investments is shown as a Footnote to Balancesheet as per a) Consistency concept b) Disclosure concept c) Materiality concept d) Going Concern 5) Which of the followings is Operating Expense? a) Bad debts b) Salary of General Manager c )Expired Insurance d) All of the above. 6) A business has assets Rs.55826/-&Owner’s Equity Rs.14150/-What is the amt.of Liabilities? a) Rs.41676/b) Rs.57522/c ) Rs.44312/d) None of these.


Liabilities of business are Rs.11220/-&Owner’s Equity Rs.15000/-What will be the assets of the business? a) Rs.11220 b )Rs.3780 c) Rs.15000 d) Rs.26220


Contengent Liability is shown due to a) Convention of full Disclosure b) Convention of Convertism c )Convention of Materiality d) Dual aspect Concept.


Cartage paid on purchase of a new machine is debited to a) Cartage a/c b) P& L a/c c) Machine a/c d) Trading a/c


Rs.15000/-Custom duty paid on import of a machinery for modernization of a factory production during the current year & Rs.5000/- paid as import duty on purchase of raw material.What is the amt. Of capital expenditure? a) Rs.15000/b) Rs.5000/c) NIL d) Rs.20000/-


Amt.received from subletting a part of the office building is a revenue receipt,What is the receipt of Govt.Grant for construction? a) Misc.Receipt b) Trade Receipt c) Cash Receipt d) Capital Receipt


Huge Sales promotion expenditure is a Deffered Revenue Expenditure,What can be the realization from the sale of Govt.Securities? a) Misc.Receipt b) Trade Receipt c) Cash Receipt d) Capital Receipt


Revenue arising from the use by others of enterprise resources yielding interest should be recognized on a) Time proportion basis b) Accrual basis c) Actual Receipt basis d)When the right to revenue payment is established.


In the case of sale on the consignment basis,revenue should be recognized on a) When goods are received by the consignee b )When advance payment is received against the consignment c) When goods are sold by consignee to third party d) When consignee has settled full & final payment relating to consignment.


In the case of service transactions,When performance consists of the execution of a 44single act, Revenue recognition takes place by A )Accrual B) Proportionate Completion c) Consistency d) Completed Service Contract Method.


Total of the Sales Book for March indicates a) Total sales for the month b) Total credit sales for the month c) Total cash sales for the month d)Total sales less sales returns. The debts W/off as Bad,if subsequently recovered are credited to a) Debtors a/c b) Sales a/c c) P&L a/c d) Bad Debts a/c



Ramlal a Debtor of Rs.2000 became insolvent &a dividend of 50%is declared by the official receiver for which accunting entry can be a) Bad Debts a/c Dr.Rs.1000 b) Cash a/c Dr.Rs.1000 To Debtors a/cRs.1000 To Debtors a/cRs.1000 c) Cash a/c Dr.Rs.1000 d) Bad Debts a/c Dr.Rs.1000 To BadDebts a/c Rs.1000 To P&L a/c Rs.1000


Bank Reconciliation Statement is prepared by a) Customers of the Bank b) Bank c) Proprietors of the business d) Tax Authorities.


An Entry of Rs.500/-was wrongly posted to wages a/c instead of Machinery a/c which is an error of a) Error of Ommission b) Commission Error c) Error of Principle d) Compensating


Purchase of Office Furniture on a/c is to be recorded in a) Purchase Book b) Journal Proper c) Cash Book d) Bills Payable Book...
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