1870+ Financial Accounting Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration in Computer Applications (BBA [CA]) , Bachelor of Business Administration (BBA) , Bachelor of Accounting and Finance (BAF) , Bachelor of Commerce (B Com) , Cost Accounting .

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251.	If the remuneration to liquidator is payable as a percentage of collection_______________
A.	exclude opening cash & bank balance
B.	exclude opening cash & bank balance
C.	includes opening cash & bank balance
D.	exclude both opening & closing cash & bank balance
Answer» A. exclude opening cash & bank balance

252.	If a part of the issue of share or debenrues is underwritten, it is termed as__________________-
A.	firm underwriting
B.	complete underwriting
C.	sole underwriting
D.	partial underwriting
Answer» D. partial underwriting

253.	The Balance in exchange difference on transaction of export sale is transferred to _________________
A.	trading a/c
B.	debtors
C.	sales a/c
D.	profit & loss a/c
Answer» D. profit & loss a/c

254.	'Pooling of interest' is a method of_____________________
A.	accounting of amalgamtion
B.	charging depreciation
C.	account of absorption
D.	calculation of purchase consideration
Answer» A. accounting of amalgamtion

255.	rights/ Duties of partners are governed by_______________
A.	article of association
B.	llp agreement
C.	partnership deed
D.	byelaws
Answer» B. llp agreement

256.	The proceeds of assets not specifically pledged & nthe surplus of the assets specifically pledged is first available for_________________
A.	legal charges, liquidators remuneration & expenses
B.	unsecured creditors
C.	preferential creditors
D.	preferential shareholders
Answer» A. legal charges, liquidators remuneration & expenses

257.	Out Of The following, Direct Expense Is
A.	Salaries
B.	carriage outward
C.	rent of office building
D.	carriage inward
Answer» D. carriage inward

258.	Goodwill is a
A.	Fixed asset
B.	current asset
C.	intangible asset
D.	fictitious asset
Answer» C. intangible asset

259.	Income received in advance is
A.	An income
B.	a liability
C.	an asset
D.	a loss
Answer» B. a liability

260.	Sales are equal to
A.	Cost of goods sold plus profit
B.	cost of goods sold minus gross profit
C.	gross profit minus cost of goods sold
D.	none of these
Answer» A. Cost of goods sold plus profit

261.	Interest on drawings is
A.	An expenditure for the business
B.	an expense for the business
C.	a gain for the business
D.	a loss for the business
Answer» C. a gain for the business

262.	Which of the following is not a fixed asset
A.	Motor cycles
B.	furniture
C.	inventory
D.	free hold property
Answer» C. inventory

263.	Which of the following is a current liability
A.	A five year bank loan
B.	workmen compensation fund
C.	bank overdraft
D.	dividend equalization
Answer» C. bank overdraft

264.	Which of the following is not an intangible asset
A.	Stock
B.	goodwill
C.	trade mark
D.	patents.
Answer» A. Stock

266.	Capital at the beginning of the year is ascertained by preparing
A.	Cash account
B.	opening statement of affairs
C.	total creditors account
D.	total debtors account.
Answer» B. opening statement of affairs

265.	In the case of net worth method of single entry system, the net profit is ascertained by
A.	Preparing trading and profit and loss account
B.	comparing opening and closing capital
C.	preparing
D.	none of these
Answer» C. preparing

267.	The amount of opening stock can be ascertained by preparing
A.	Memorandum trading account
B.	total creditors account
C.	total debtors account
D.	opening statement of affairs.
Answer» A. Memorandum trading account

268.	The closing balance in the creditors account can be ascertained from the
A.	Cash account
B.	total creditors account
C.	closing statement of affairs
D.	none of these.
Answer» B. total creditors account

269.	the depreciation charged on an asset is debited to
A.	asset account
B.	depreciation account
C.	cash account
D.	none of these
Answer» B. depreciation account

270.	in case of straight line method, the amount of deprecation
A.	fluctuate every year,
B.	decreases every year
C.	increases every year
D.	remains same every year
Answer» D. remains same every year

271.	amortization is related to
A.	Tangible fixed asset
B.	intangible assets
C.	any fixed asset
D.	none of these.
Answer» B. intangible assets

272.	Depletion method is more suitable for
A.	Service industry
B.	mining industry
C.	intangible assets
D.	all of these
Answer» B. mining industry

273.	Depletion is a process of
A.	Valuation
B.	allocation
C.	both valuation and allocation
D.	none of these.
Answer» B. allocation

274.	The main objective of providing depreciation is
A.	To calculate true profit
B.	to show the true financial position
C.	to reduce tax burden
D.	to provide fund for replacement of assets.
Answer» A. To calculate true profit

275.	Under diminishing balance method, depreciation is calculated on
A.	Original cost
B.	written down value
C.	scrap value
D.	market value
Answer» B. written down value

1870+ Financial Accounting Solved MCQs

If the remuneration to liquidator is payable as a percentage of collection_______________

If a part of the issue of share or debenrues is underwritten, it is termed as__________________-

The Balance in exchange difference on transaction of export sale is transferred to _________________

'Pooling of interest' is a method of_____________________

rights/ Duties of partners are governed by_______________

The proceeds of assets not specifically pledged & nthe surplus of the assets specifically pledged is first available for_________________

Out Of The following, Direct Expense Is

Goodwill is a

Income received in advance is

Sales are equal to

Interest on drawings is

Which of the following is not a fixed asset

Which of the following is a current liability

Which of the following is not an intangible asset

In the case of net worth method of single entry system, the net profit is ascertained by

Capital at the beginning of the year is ascertained by preparing

The amount of opening stock can be ascertained by preparing

The closing balance in the creditors account can be ascertained from the

the depreciation charged on an asset is debited to

in case of straight line method, the amount of deprecation

amortization is related to

Depletion method is more suitable for

Depletion is a process of

The main objective of providing depreciation is

Under diminishing balance method, depreciation is calculated on

Loss on sale of machinery should be written off against

Depreciation arises because of

When provision for depreciation account is maintained, the amount of depreciation is debited to

If original cost of an asset is rs. 60000 and its scrap value is Rs. 10000, its depreciable cost is

Under diminishing balance method,

The term ‘depletion’ applies to decrease in value of

The term amortization applies to decrease in book value of

For providing depreciation on lease hold property, the appropriate method is

Accumulated depreciation is an example of

Share application is classified as

A newly established company cannot issue shares at par

The minimum share application is

The difference between subscribed capital and called up capital

The number of days required from the time of issue of the prospectus to the complete allotment should not exceed

The excess price received on the par value of shares should be credited to

The security premium will be shown under the heading

As per Table A of the companies act, the interest on calls in advance is

The rate of interest a company can charge on calls in arrears according to Table A of the companies act is

The rate of discount on shares cannot exceed.

Premium on issue of shares can be used for

When shares are forfeited the share capital account is debited by

When forfeited shares (which were originally issued at a discount ) are reused at a premium, the amount of such premium will be credited to

When an existing company offers its shares for sale to the existing shareholders, it is known as

Dividends are usually paid on

Which of the following should be deducted from the shares capital to find out paid up capital

276.	Loss on sale of machinery should be written off against
A.	Security premium
B.	sales account
C.	depreciation fund account
D.	none of these
Answer» C. depreciation fund account

277.	Depreciation arises because of
A.	Fall in market value of asset
B.	wear and tear
C.	recession
D.	none of these.
Answer» B. wear and tear

278.	When provision for depreciation account is maintained, the amount of depreciation is debited to
A.	Asset account
B.	depreciation account
C.	provision for depreciation account
D.	none of these.
Answer» B. depreciation account

279.	If original cost of an asset is rs. 60000 and its scrap value is Rs. 10000, its depreciable cost is
A.	70000
B.	50000
C.	60000
D.	none of these.
Answer» B. 50000

280.	Under diminishing balance method,
A.	The rate of depreciation falls every year
B.	the amount on which deprecation is calculated falls every year
C.	the rate as well as amount of depreciation falls every year.
D.	the rate as well as amount of depreciation remains constant.
Answer» B. the amount on which deprecation is calculated falls every year

281.	The term ‘depletion’ applies to decrease in value of
A.	Tangible asset
B.	intangible asset
C.	wasting asset
D.	current asset.
Answer» C. wasting asset

282.	The term amortization applies to decrease in book value of
A.	Intangible fixed asset
B.	wasting assets
C.	tangible fixed assets
D.	current assets
Answer» A. Intangible fixed asset

283.	For providing depreciation on lease hold property, the appropriate method is
A.	Revaluation method
B.	fixed installment method
C.	replacement method
D.	written down value method.
Answer» B. fixed installment method

284.	Accumulated depreciation is an example of
A.	An expense
B.	an unrecorded revenue
C.	a liability
D.	a contra account.
Answer» D. a contra account.

285.	Share application is classified as
A.	Real account
B.	personal account
C.	impersonal account
D.	nominal account
Answer» A. Real account