McqMate
Chapters
| 1. |
The global key professional accounting body is |
| A. | The International Accounting Standards Board |
| B. | The Institute of Chartered Accountants of India |
| C. | The Financial accounting standard boa |
| Answer» A. The International Accounting Standards Board | |
| 2. |
International Public Sector Accounting Standards were issued by |
| A. | International Accounting Standards Board. |
| B. | International Auditing Practices Committee. |
| C. | International Federation of Accountants. |
| D. | None of the above |
| Answer» C. International Federation of Accountants. | |
| 3. |
The process of recording financial data up to trial balance is |
| A. | Book keeping |
| B. | Classifying |
| C. | Summarizing |
| D. | Analyzing |
| Answer» A. Book keeping | |
| 4. |
In which of the following cases, accounting estimates are needed? |
| A. | Employs benefit schemes |
| B. | Impairment of losses |
| C. | Inventory obsolescence |
| D. | All of the above |
| Answer» D. All of the above | |
| 5. |
The long term assets that have no physical existence but, possess a value is known as, |
| A. | Current assets |
| B. | Fixed assets |
| C. | Intangible assets |
| D. | Investments |
| Answer» C. Intangible assets | |
| 6. |
Which of these best explains fixed assets? |
| A. | Are bought to be used in the business. |
| B. | Are expensive items bought for the business |
| C. | Are items which will not wear out quickly |
| D. | Are of long life and are not purchased specifically for resale |
| Answer» A. Are bought to be used in the business. | |
| 7. |
The assets that can be easily converted into cash within a short period (i.e., 1 year or less is known as, |
| A. | Current assets |
| B. | Fixed assets |
| C. | Intangible assets |
| D. | Investments |
| Answer» A. Current assets | |
| 8. |
Which of the following statement is correct? |
| A. | The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only |
| B. | The amount of Goodwill or Capital Reserve is found out in the books of vendor company only. |
| C. | Goodwill = Net Assets – Purchase price |
| D. | The face value of shares of purchasing company will be taken in to account while calculating purchase consideration. |
| Answer» C. Goodwill = Net Assets – Purchase price | |
| 9. |
Hitesh Ltd.’s purchase consideration is Rs.12,345 and Net Assets Rs.3,568, then........... |
| A. | Goodwill Rs. 8,777 |
| B. | Capital Reserve Rs. 8,777 |
| C. | Goodwill Rs. 15,913 |
| D. | Capital Reserve Rs. 15,913 |
| Answer» A. Goodwill Rs. 8,777 | |
| 10. |
If the two companies have different accounting policies in respect of the same item, then they make necessary changes to adopt .............. accounting policies. |
| A. | Same |
| B. | Different |
| C. | Important |
| D. | Some |
| Answer» A. Same | |
| 11. |
When two or more companies carrying on similar business decide to combine, a new company is formed, it is known as………………………… |
| A. | Merger |
| B. | Amalgamation |
| C. | Absorption |
| D. | Demerger |
| Answer» B. Amalgamation | |
| 12. |
When one of the existing companies take over business of another company or companies, it is known as………………………………… |
| A. | Merger |
| B. | Amalgamation |
| C. | Absorption |
| D. | Demerger |
| Answer» C. Absorption | |
| 13. |
In case of .............., one existing company takes over the business of another company and no new company is formed |
| A. | Merger |
| B. | Amalgamation |
| C. | Absorption |
| D. | Demerger |
| Answer» C. Absorption | |
| 14. |
While calculating purchase consideration ............... values of assets is to be considered. |
| A. | Total |
| B. | Half |
| C. | Net |
| D. | 25% |
| Answer» C. Net | |
| 15. |
Net Assets minus Capital Reserve is……………………… |
| A. | Purchase consideration |
| B. | Goodwill |
| C. | Liabilities |
| D. | Total Assets |
| Answer» A. Purchase consideration | |
| 16. |
The original amount of preference share capital should be transferred to ............ account in the time of amalgamation in the books of vendor co. |
| A. | Equity shareholders |
| B. | Preference share holders |
| C. | Debenture holders |
| D. | vendors |
| Answer» B. Preference share holders | |
| 17. |
………………………………………………..method the amount of depreciation expenses remains same throughout the useful life of a fixed assets |
| A. | Straight line method |
| B. | Annuity methods |
| C. | Purchase value method |
| D. | Written down value methods |
| Answer» A. Straight line method | |
| 18. |
Depreciation arise because of……………………….. |
| A. | Abnormal quality |
| B. | Normal wear and tear |
| C. | Excessive use of a product |
| D. | Low quality product |
| Answer» B. Normal wear and tear | |
| 19. |
Loss Prior to incorporation is treated as ........... Loss, and Vendor’s Salaries are chargeable to ................ incorporation period. |
| A. | Pre |
| B. | During |
| C. | Post |
| D. | In between |
| Answer» C. Post | |
| 20. |
Which type of asset class includes those assets which have only definite use and become valueless when the yield is over? |
| A. | Fixed asset |
| B. | Current asset |
| C. | Fictitious asset |
| D. | Wasting asset |
| Answer» D. Wasting asset | |
| 21. |
Financial accounting is concerned with – |
| A. | Recording of business expenses and revenue |
| B. | Recording of costs of products and services |
| C. | Recording of day to day business transactions |
| D. | None of the above |
| Answer» C. Recording of day to day business transactions | |
| 22. |
Accounting principles are generally based upon: |
| A. | Practicability |
| B. | Subjectivity |
| C. | Convenience in recording |
| D. | None of the above |
| Answer» A. Practicability | |
| 23. |
The system of recording based on dual aspect concept is called: |
| A. | Double account system |
| B. | Double entry system |
| C. | Single entry system |
| D. | All the above |
| Answer» B. Double entry system | |
| 24. |
Fixed assets and current assets are categorized as per concept of: |
| A. | Separate entity |
| B. | Going concern |
| C. | Consistency |
| D. | Time period |
| Answer» B. Going concern | |
| 25. |
Accounting standards and Standards on Auditing establish standards which have to be complied with to ensure that financial statements are prepared in accordance with ______. |
| A. | Generally acceptable Audit Procedure |
| B. | Accounting Principles |
| C. | Ind AS |
| D. | Accounting Standards |
| Answer» A. Generally acceptable Audit Procedure | |
| 26. |
Change in accounting estimate is __________ |
| A. | Prior Period Item |
| B. | Change in accounting policy |
| C. | Extra-ordinary item |
| D. | Ordinary item |
| Answer» B. Change in accounting policy | |
| 27. |
Indian accounting standards are the International financial reporting standards converged standards issued by the central government of India under the supervision and control of accounting standards board of ICAI and in consultation with __________. |
| A. | Ministry of corporate affairs |
| B. | NFRA |
| C. | Accounting Standards Board |
| D. | All of the above |
| Answer» B. NFRA | |
| 28. |
Preparation of consolidated Balance Sheet of Holding Co. and its subsidiary company as per |
| A. | As 11 |
| B. | AS – 22 |
| C. | AS 21 |
| D. | AS – 23 |
| Answer» C. AS 21 | |
| 29. |
The share of outsiders in the Net Assets in subsidiary company is known as under : |
| A. | Assets |
| B. | subsidiary company's liability |
| C. | Minority Interest |
| D. | outsiders liability |
| Answer» C. Minority Interest | |
| 30. |
Pre-acquisition profit in subsidiary company is considered as: |
| A. | Revenue profit |
| B. | Capital profit |
| C. | Goodwill |
| D. | Non of the above |
| Answer» B. Capital profit | |
| 31. |
Excess of paid up value of the shares over cost of investment is considered as: |
| A. | Goodwill |
| B. | Capital Reserve |
| C. | Minority Interest |
| D. | Non of above |
| Answer» A. Goodwill | |
| 32. |
Profit earned after acquisition of share is treated as |
| A. | Capital profit |
| B. | Revenue profit |
| C. | General Reserve |
| D. | Revaluation Loss |
| Answer» A. Capital profit | |
| 33. |
Preparation of consolidated statement as per AS 21 is |
| A. | Optional |
| B. | Mandatory for listed Companies |
| C. | Mandatory for Pvt. L |
| Answer» B. Mandatory for listed Companies | |
| 34. |
Holding Co. share in revenue profits of subsidiary company is adjusted in : |
| A. | Cost of control |
| B. | Shown on Assets side of Balance sheet |
| C. | Profit and loss account |
| D. | None of above |
| Answer» C. Profit and loss account | |
| 35. |
Unrealised profit on goods sold and included in stock is deducted from : |
| A. | Capital Profit |
| B. | Revenue Profit |
| C. | Fixed Assets |
| D. | Minority interest |
| Answer» B. Revenue Profit | |
| 36. |
Face value debentures of subsidiary co. held by Holding Company is deducted from |
| A. | Debentures |
| B. | Cost of control |
| C. | Minority interest |
| D. | Debentures in consolidated balance sheet |
| Answer» B. Cost of control | |
| 37. |
Which of the following statement is true: |
| A. | There is no change in the amount of capital reserve before and after issue of bonus share of the issue is made from out of pre-acquisition profit. |
| B. | There is change in the amount of capital reserve before and after issue of bonus share of the issue is made from out of post-acquisition profit. |
| C. | There is change in the amount of capital reserve before and after issue of bonus share of the issue is made from out of pre-acquisition profit. |
| D. | There is no connection between the issue of bonus shares and the calculation of capital reserve. |
| Answer» A. There is no change in the amount of capital reserve before and after issue of bonus share of the issue is made from out of pre-acquisition profit. | |
| 38. |
Minority Interest includes : |
| A. | Share in share capital |
| B. | Share in Capital profit |
| C. | Share in Revenue profit |
| D. | All of the above |
| Answer» D. All of the above | |
| 39. |
The Time interval between the date of acquisition of shares in subsidiary company and date of Balance Sheet of Holding Company is known as : |
| A. | Pre-acquisition period |
| B. | Post-acquisition period |
| C. | Pre-commencement period |
| D. | Pre-incorporation period |
| Answer» B. Post-acquisition period | |
| 40. |
Pre-acquisition dividend received by Holding company is credited to |
| A. | Profit & loss A/c |
| B. | Capital profit |
| C. | Investment A/c |
| D. | Non of the above |
| Answer» C. Investment A/c | |
| 41. |
Post Acquisition dividend received by Holding Company is debited to : |
| A. | Bank A/c |
| B. | profit & loss A/c |
| C. | Dividend A/c |
| D. | Investment A/c |
| Answer» B. profit & loss A/c | |
| 42. |
Which Exchange rate will be considered for conversion of share capital of subsidiary company. |
| A. | Opening Rate |
| B. | Closing rate |
| C. | Average Rate |
| D. | Rate of which date share acquired (actual) |
| Answer» D. Rate of which date share acquired (actual) | |
| 43. |
A subsidiary company shall be excluded from consolidation when: |
| A. | Control is intended to be temporary |
| B. | It operates under severe long-term restrictions which significantly impair its ability to transfer funds to the parent |
| C. | Always included for consolidation |
| D. | Both a and b. |
| Answer» D. Both a and b. | |
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