McqMate
Chapters
| 501. |
Debentures represent the : |
| A. | Long-term Borrowings of a Company |
| B. | The Investment of Equity-Shareholders |
| C. | Directors’ shares in a company |
| D. | Short-term Borrowings of a Company |
| Answer» A. Long-term Borrowings of a Company | |
| 502. |
Zero Coupon Bonds are issued : |
| A. | At Zero Interest Rate |
| B. | With Specified Rate of Interest |
| C. | Without Specified Rate of Interest |
| D. | None of These |
| Answer» C. Without Specified Rate of Interest | |
| 503. |
Interest payable on debentures is : |
| A. | an appropriation of profits of the company |
| B. | a charge against profits of the company |
| C. | transferred to sinking fund investment account |
| D. | transferred to general reserve |
| Answer» B. a charge against profits of the company | |
| 504. |
A debenture holder is entitled to : |
| A. | Fixed dividend |
| B. | Share in profits |
| C. | Voting rights in the company |
| D. | Interest at the fixed rate |
| Answer» D. Interest at the fixed rate | |
| 505. |
On liquidation of company, principal amount of debentures is returned : |
| A. | First of All |
| B. | Last of All |
| C. | Before Equity Capital |
| D. | After Equity Capital |
| Answer» C. Before Equity Capital | |
| 506. |
Which of the following statements is false? |
| A. | Debenture is a form of public borrowing. |
| B. | It is customary to prefix debentures with the agreed rate of interest. |
| C. | Debenture interest is a charge against profits. |
| D. | The issue price and redemption value of debentures cannot differ. |
| Answer» D. The issue price and redemption value of debentures cannot differ. | |
| 507. |
Which of the following is not a characteristic of Bearer Debentures? |
| A. | They are treated as negotiable instruments. |
| B. | Their transfer requires a deed of transfer. |
| C. | They are transferable by mere delivery. |
| D. | The interest on it is paid to the holder irrespective of identity. |
| Answer» B. Their transfer requires a deed of transfer. | |
| 508. |
Which of the following statements is false? |
| A. | At maturity, debenture holders get back their money. |
| B. | Debentures can be forfeited for non-payment of call money. |
| C. | In company’s balance sheet, debentures are shown under the head Long term Borrowings. |
| D. | Interest on debentures is a charge against profits |
| Answer» B. Debentures can be forfeited for non-payment of call money. | |
| 509. |
Which of the following statements is false : |
| A. | A Company can issue redeemable debentures. |
| B. | A Company can issue debentures with voting rights. |
| C. | A Company can issue convertible debentures. |
| D. | A Company can buy its own debentures and shares. |
| Answer» B. A Company can issue debentures with voting rights. | |
| 510. |
The Principal amount of debentures will be repaid by the company either at the end of a specified period or by instalments during the life time of the company. Such types of debentures are called : |
| A. | Redeemable Debentures |
| B. | Irredeemable Debentures |
| C. | Convertible Debentures |
| D. | Bearer Debentures |
| Answer» A. Redeemable Debentures | |
| 511. |
The debentures whose principal amount is not repayable by the company during its life time, but the payment is made only at the time of Liquidation of the company, such debentures are called : |
| A. | Bearer Debentures |
| B. | Redeemable Debentures |
| C. | Irredeemable Debentures |
| D. | Non-Convertible Debentures |
| Answer» C. Irredeemable Debentures | |
| 512. |
Debenture Application Account is in the nature of |
| A. | Real Account |
| B. | Personal Account |
| C. | Nominal Account |
| D. | None of the above |
| Answer» B. Personal Account | |
| 513. |
Discount on issue of Debentures is in the nature of |
| A. | Revenue loss |
| B. | Capital loss |
| C. | Deferred Revenue Expenditure |
| D. | None of the above |
| Answer» B. Capital loss | |
| 514. |
Premium received on issue of debentures may be utilised for |
| A. | For writing off discount allowed on issue of shares |
| B. | For writing off premium allowed on redemption of debentures |
| C. | For writing off preliminary expenses |
| D. | For All of the Above |
| Answer» D. For All of the Above | |
| 515. |
If the rate of G/P is 25% of sales and the cost of goods sold is ` 150000, the amount of G/P will be |
| A. | `30000 |
| B. | `25000 |
| C. | `40000 |
| D. | `50000 |
| Answer» D. `50000 | |
| 516. |
Share application account is classified as |
| A. | Real account |
| B. | Personal account |
| C. | Impersonal account |
| D. | Nominal account |
| Answer» A. Real account | |
| 517. |
The minimum share application is |
| A. | 1% of the face value |
| B. | 5% of the face value |
| C. | 10% of the face value |
| D. | 25% of the face value |
| Answer» B. 5% of the face value | |
| 518. |
The excess price received on the par value of the shares should be credited to |
| A. | Calls in advance |
| B. | Reserve capital account |
| C. | Security premium reserve account |
| D. | None of these |
| Answer» C. Security premium reserve account | |
| 519. |
Which of the following should be deducted from the share capital to determine the paid up share capital. |
| A. | Calls in advance |
| B. | Calls in arrears |
| C. | Security premium reserve |
| D. | Discount on issue of shares. |
| Answer» B. Calls in arrears | |
| 520. |
The security premium will be shown under the heading |
| A. | Share capital |
| B. | Current liability |
| C. | Current assets |
| D. | None of these |
| Answer» D. None of these | |
| 521. |
The rate of discount on shares cannot exceed |
| A. | 5% |
| B. | 10% |
| C. | 6% |
| D. | None of these |
| Answer» B. 10% | |
| 522. |
Premium on issue of shares can be used for |
| A. | Issue of bonus shares |
| B. | Distribution of profit |
| C. | Transferring to general reserve. |
| D. | None of these |
| Answer» A. Issue of bonus shares | |
| 523. |
When shares are forfeited the share capital account is debited by |
| A. | Paid up amount |
| B. | Called up amount, |
| C. | Calls in arrear |
| D. | Nominal value of such share. |
| Answer» B. Called up amount, | |
| 524. |
The profit on reissue of forfeited shares is transferred to |
| A. | General reserve |
| B. | Capital reserve |
| C. | Capital redemption reserve |
| D. | None of these |
| Answer» B. Capital reserve | |
| 525. |
When an existing company offers it shares for sale to the existing shareholders, it is known as |
| A. | Private placement |
| B. | Bonus issue. |
| C. | Right issue |
| D. | Offer for sale |
| Answer» C. Right issue | |
| 526. |
Which of the following should be deducted from the share capital to find out paid up capital |
| A. | Calls in advance |
| B. | Calls in arrear |
| C. | Shares forfeited account |
| D. | Discount on issue of shares. |
| Answer» B. Calls in arrear | |
| 527. |
In the balance sheet of a company, the discount on issue of debentures is shown under which heading |
| A. | Fixed asset |
| B. | Current asset |
| C. | Investment |
| D. | Miscellaneous expenditure |
| Answer» D. Miscellaneous expenditure | |
| 528. |
The original cost at which an asset or liability is acquired is known as -------- |
| A. | Amortization |
| B. | Replacement cost |
| C. | Historical cost |
| D. | Carrying cost |
| Answer» C. Historical cost | |
| 529. |
The international accounting standard Committee was set up in -------- |
| A. | 1982 |
| B. | 1976 |
| C. | 1967 |
| D. | 2009 |
| Answer» C. 1967 | |
| 530. |
The process of converting foreign subsidiary financial statements into the home currency is known as ------- |
| A. | Transmission |
| B. | Translation |
| C. | Consolidation |
| D. | Reconstruction |
| Answer» B. Translation | |
| 531. |
Accounting in india is governed by the ----- |
| A. | Income tax department |
| B. | Company law board |
| C. | Institute of chartered accountants of india |
| D. | Reserve bank of india |
| Answer» C. Institute of chartered accountants of india | |
| 532. |
Interim dividend paid is always shown |
| A. | In P/L Appropriation A/c |
| B. | On the asset side of the B/S |
| C. | On the liability side of the B/S |
| D. | None of these. |
| Answer» A. In P/L Appropriation A/c | |
| 533. |
Unclaimed dividend is shown in the B/S under the head |
| A. | Current liability |
| B. | Unsecured loan |
| C. | Reserve and surplus |
| D. | Provisions |
| Answer» A. Current liability | |
| 534. |
Debentures are shown in the B/S under head. |
| A. | Current assets, loans and advances |
| B. | Investment |
| C. | Non current liabilities |
| D. | Unsecured loan |
| Answer» C. Non current liabilities | |
| 535. |
Preliminary expenses is an example of |
| A. | Fixed asset |
| B. | Current asset |
| C. | Investment |
| D. | Fictitious asset |
| Answer» D. Fictitious asset | |
| 536. |
Divisible profit do not include |
| A. | Insurance fund |
| B. | Reserve fund, |
| C. | profit and loss account balance |
| D. | revaluation reserve |
| Answer» D. revaluation reserve | |
| 537. |
loose tools are shown in the B/S under the head. |
| A. | Fixed asset |
| B. | Investment |
| C. | Current asset |
| D. | Miscellaneous expenditure |
| Answer» C. Current asset | |
| 538. |
Discount on shares and debentures are shown in |
| A. | Profit and loss appropriation account |
| B. | Asset side of the balance sheet |
| C. | Liability side of the balance sheet |
| D. | None of these |
| Answer» B. Asset side of the balance sheet | |
| 539. |
In the case of joint stock company, goodwill is shown on the asset side under the head. |
| A. | Non current asset |
| B. | Investment |
| C. | Current asset |
| D. | Miscellanious expenditure |
| Answer» A. Non current asset | |
| 540. |
Which of the following item will be taken in the surplus statement |
| A. | Provision for taxation |
| B. | Transfer to sinking fund |
| C. | Contribution to PF |
| D. | Preliminary expenses written off |
| Answer» D. Preliminary expenses written off | |
| 541. |
Which of the following would not appear in a limited company’s surplus/Deficit statement |
| A. | Transfer to revaluation reserve |
| B. | Provision for taxation |
| C. | Interim dividends |
| D. | Transfer to general reserve |
| Answer» B. Provision for taxation | |
| 542. |
Outstanding expenditure is a __________ account. |
| A. | Nominal |
| B. | Personnel |
| C. | Real |
| D. | Current |
| Answer» B. Personnel | |
| 543. |
_________ deals with the depreciation account. |
| A. | AS4 |
| B. | AS6 |
| C. | AS10 |
| D. | AS13 |
| Answer» B. AS6 | |
| 544. |
According to which concept, proprietor of a business is treated as a creditors to the extent of his capital |
| A. | Money measurement |
| B. | Cost |
| C. | Dual aspect |
| D. | Business entity |
| Answer» D. Business entity | |
| 545. |
Net worth of business means |
| A. | Total assets |
| B. | Fixed assets – current assets. |
| C. | Equity capital |
| D. | Total assets – total liabilities |
| Answer» D. Total assets – total liabilities | |
| 546. |
The policy of anticipate no profit and provide for all possible losses arises due to |
| A. | Convention of consistency |
| B. | Convention of conservatism |
| C. | Convention of materiality |
| D. | Convention of full disclosure |
| Answer» B. Convention of conservatism | |
| 547. |
Capital account is a |
| A. | Fictitious account |
| B. | Personal account |
| C. | Liability account |
| D. | Nominal account |
| Answer» B. Personal account | |
| 548. |
Revenue is generally recognized as being earned at the point of time |
| A. | Sale is effected |
| B. | Cash is effected |
| C. | Production is completed |
| D. | All of the above |
| Answer» A. Sale is effected | |
| 549. |
The fundamental accounting equation Assets = liabilities is the formal expression of |
| A. | Matching concept |
| B. | Entity concept |
| C. | Going concern concept |
| D. | Dual aspect concept |
| Answer» D. Dual aspect concept | |
| 550. |
Depreciation is |
| A. | An accounting necessity only |
| B. | Tax necessity only |
| C. | Tax and accounting necessity |
| D. | Tax, account and audit necessity |
| Answer» D. Tax, account and audit necessity | |
| 551. |
‘Every debit has a corresponding credit’ it is the concept of |
| A. | Incomplete records |
| B. | Cost sheets |
| C. | Single entry system |
| D. | Double entry system |
| Answer» D. Double entry system | |
| 552. |
Bank loan account is a ______ |
| A. | Real account |
| B. | Nominal account |
| C. | Personal account |
| D. | Current account |
| Answer» C. Personal account | |
| 553. |
The process of recording transactions in a journal is known as _______ |
| A. | Journalizing |
| B. | Journal |
| C. | Posting |
| D. | Journal entry |
| Answer» A. Journalizing | |
| 554. |
Accounting records transactions in term of |
| A. | Commodity units |
| B. | Production units |
| C. | Monetary units |
| D. | Expense units |
| Answer» C. Monetary units | |
| 555. |
Income received in advance by a business units is |
| A. | A liability |
| B. | An assets |
| C. | A loss |
| D. | Gain |
| Answer» A. A liability | |
| 556. |
Expenditure incurred by a publisher for acquiring copyright is a. |
| A. | Deferred revenue expenditure |
| B. | Capital expenditure |
| C. | Revenue expenditure |
| D. | Assets |
| Answer» B. Capital expenditure | |
| 557. |
Loss of cash by theft committed by cashier after business hours is a |
| A. | Revenue loss |
| B. | Deferred revenue loss |
| C. | Capital loss |
| D. | Business loss |
| Answer» C. Capital loss | |
| 558. |
An expenditure incurred to derive long term advantage is |
| A. | Revenue expenditure |
| B. | Expense |
| C. | Capital expenditure |
| D. | Deferred capital expenditure |
| Answer» C. Capital expenditure | |
| 559. |
In accounting only ________ discount is recorded |
| A. | Trade |
| B. | Cash |
| C. | Real |
| D. | None of these |
| Answer» B. Cash | |
| 560. |
Debit balance of all personal accounts are collectively called |
| A. | Sundry creditors |
| B. | Sundry debtors |
| C. | Personal account balance |
| D. | Total of personal accounts |
| Answer» B. Sundry debtors | |
| 561. |
Discount on issue of share is |
| A. | Capital loss |
| B. | Revenue loss |
| C. | Capital expenditure |
| D. | Revenue expenditure |
| Answer» A. Capital loss | |
| 562. |
Trial balance will detect |
| A. | Errors of commission |
| B. | Errors of omission |
| C. | Errors of principle |
| D. | Compensating errors |
| Answer» A. Errors of commission | |
| 563. |
Machinery purchased on account is recorded in |
| A. | Journal |
| B. | Ledger |
| C. | Purchase book |
| D. | Cash book |
| Answer» A. Journal | |
| 564. |
The error disclosed by Trial Balance is |
| A. | Wrong amount posted in ledger account |
| B. | Error of principle |
| C. | Non‐ recording of a transaction in the books of original entry |
| D. | Errors of omission |
| Answer» A. Wrong amount posted in ledger account | |
| 565. |
Cash discount is allowed by |
| A. | Wholesaler |
| B. | Debtor |
| C. | Creditor |
| D. | Retailer |
| Answer» C. Creditor | |
| 566. |
Rent prepaid is |
| A. | Assets |
| B. | Liability |
| C. | Income |
| D. | Expense |
| Answer» A. Assets | |
| 567. |
Closing stock given in the trial balance will be taken to |
| A. | P&L account only |
| B. | Income and expenditure account only |
| C. | Trading account only |
| D. | Balance sheet only |
| Answer» D. Balance sheet only | |
| 568. |
Sale of grass in the case of a sports club is |
| A. | An assets |
| B. | Revenue receipt |
| C. | Capital receipt |
| D. | Income |
| Answer» B. Revenue receipt | |
| 569. |
In income & Expenditure accounts, we record |
| A. | Items of capital nature alone |
| B. | Items of revenue nature alone |
| C. | Both |
| D. | Items of expenditure |
| Answer» B. Items of revenue nature alone | |
| 570. |
Double entry system was propounded by |
| A. | Chanakya |
| B. | Lee |
| C. | Confucius |
| D. | Luca Pacioli |
| Answer» D. Luca Pacioli | |
| 571. |
Fixed assets purchased on hire purchased on hire purchase terms are recorded at |
| A. | Net realization value |
| B. | Cash value |
| C. | Hire purchase price |
| D. | Cost price |
| Answer» B. Cash value | |
| 572. |
Treatment of capital expenditure as revenue expenditure is |
| A. | Errors of principle |
| B. | Compensating errors |
| C. | Errors of commission |
| D. | Errors of omission |
| Answer» A. Errors of principle | |
| 573. |
In non – profit organizations excess of assets over liabilities is called |
| A. | Capital block |
| B. | General fund |
| C. | Shareholders fund |
| D. | Capital |
| Answer» B. General fund | |
| 574. |
Collection of all accounts us called |
| A. | Trial balance |
| B. | Journal |
| C. | Ledger |
| D. | Cash book |
| Answer» C. Ledger | |
| 575. |
Source document for sales returns |
| A. | Debit note |
| B. | Credit note |
| C. | Source note |
| D. | Journal |
| Answer» B. Credit note | |
| 576. |
Petty cash book is prepaid under ______ system |
| A. | Cash |
| B. | Imprest |
| C. | Credit |
| D. | Mercantile |
| Answer» B. Imprest | |
| 577. |
Special journal is also called |
| A. | Journal proper |
| B. | Subsidiary books |
| C. | Original books |
| D. | Ledger |
| Answer» B. Subsidiary books | |
| 578. |
Gross assets – liabilities will be equal to |
| A. | Net assets |
| B. | Total assets |
| C. | Capital |
| D. | Net liabilities |
| Answer» C. Capital | |
| 579. |
Purchase ledger contains the accounts of |
| A. | Debtors |
| B. | Creditors |
| C. | Total purchase |
| D. | All the above |
| Answer» B. Creditors | |
| 580. |
Allowance made for prompt payment is called |
| A. | Cash allowance |
| B. | Cash discount |
| C. | Trade discount |
| D. | Discount |
| Answer» B. Cash discount | |
| 581. |
Sales ledger contains accounts of |
| A. | Suppliers |
| B. | Customers |
| C. | Total sales |
| D. | All the above |
| Answer» A. Suppliers | |
| 582. |
Credit note is sent by |
| A. | Seller |
| B. | Customer |
| C. | Buyer |
| D. | Borrower |
| Answer» A. Seller | |
| 583. |
Total sales book indicates |
| A. | Total credit sales |
| B. | Total cash sales |
| C. | Total sales |
| D. | All the above |
| Answer» A. Total credit sales | |
| 584. |
Total sales made during a year is found out from the |
| A. | Sales book |
| B. | Sales account |
| C. | Total sales book |
| D. | All the above |
| Answer» B. Sales account | |
| 585. |
Sales return account is a _______ account |
| A. | Personal |
| B. | Nominal |
| C. | Real |
| D. | Current |
| Answer» B. Nominal | |
| 586. |
Debit note is prepared in connection with |
| A. | Sales return |
| B. | Purchase return |
| C. | Sales |
| D. | Purchase |
| Answer» D. Purchase | |
| 587. |
Goods sold on credit will be entered in the |
| A. | Sales account |
| B. | Sales book |
| C. | Customers account |
| D. | Creditors account |
| Answer» B. Sales book | |
| 588. |
Cash purchase of fixed asset is entered in the |
| A. | Purchase book |
| B. | General ledger |
| C. | Cashbook |
| D. | Purchase account |
| Answer» C. Cashbook | |
| 589. |
Normally value of closing stock ________ in the trial balance |
| A. | Appears |
| B. | Does not appear |
| C. | May or may not appear |
| D. | Sometime appear |
| Answer» B. Does not appear | |
| 590. |
Cost of goods sold plus selling expenses equals |
| A. | Cost of production |
| B. | Gross profit |
| C. | Sales |
| D. | Cost of sales |
| Answer» B. Gross profit | |
| 591. |
Trading account is a _______ account |
| A. | Personal |
| B. | Real |
| C. | Nominal |
| D. | Expenses |
| Answer» C. Nominal | |
| 592. |
1/6 profit on sales means ________ on cost |
| A. | 1/6 |
| B. | 1/5 |
| C. | ¼ |
| D. | 1/3 |
| Answer» B. 1/5 | |
| 593. |
In sole trader balance sheet asset are arranged in the order of |
| A. | Liquidity |
| B. | Permanence |
| C. | Transferability |
| D. | All the above |
| Answer» A. Liquidity | |
| 594. |
________ is an expenditure which does not bring any benefit to the concern |
| A. | Revenue expenditure |
| B. | Capital expenditure |
| C. | Deferred revenue expenditure |
| D. | Loss |
| Answer» D. Loss | |
| 595. |
Asset which reduce is value, on use, but are not replaced is called |
| A. | Contingent assets |
| B. | Fictitious assets |
| C. | Intangible assets |
| D. | Wasting assets |
| Answer» D. Wasting assets | |
| 596. |
Unearned income is a |
| A. | Liability |
| B. | Asset |
| C. | Expense |
| D. | Income |
| Answer» A. Liability | |
| 597. |
Prepaid expenses are ______ account |
| A. | Nominal |
| B. | Personal |
| C. | Personal account without name |
| D. | Real |
| Answer» C. Personal account without name | |
| 598. |
Unexpired expenses is a _______ |
| A. | Liability |
| B. | Asset |
| C. | Income |
| D. | Expenditure |
| Answer» B. Asset | |
| 599. |
Transactions of a general nature which occur frequently are first recorded in the |
| A. | General ledger |
| B. | Special journal |
| C. | Cashbook |
| D. | Subsidiary book |
| Answer» B. Special journal | |
| 600. |
Income and expenditure account is the ______ account of a non trading concern |
| A. | Balance sheet |
| B. | P & L account |
| C. | Ledger |
| D. | General |
| Answer» B. P & L account | |
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