Class/Course - CA - CPC

Subject - Fundamentals of Accounting

Total Number of Question/s - 4416

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  • 1. Meaning and Scope of Accounting - Quiz

    1. Accounting has universal application for recording _______ and events and presenting suitable information for decision making
    a) Entries
    b) Transactions
    c) Data
    d) Figures.

    2. ________ of American Institute of Certified Public Accountants enumerated the functions of Accounting:
    a) Accounting Principles Board
    b) Accounting Standards Board
    c) Accounting Concepts Board
    d) None of these

  • 2. Accounting Concepts, Principles and Conventions - Quiz

    1. All the following items are classified as fundamental accounting assumption except
    a) Consistency.
    b) Business entity.
    c) Going concern.
    d) Accrual

    2. Recording of Fixed Asset at Cost ensures adherence of :
    a) Conservatism
    b) Cost Concept
    c) Going Concern Concept
    d) Accrual Concept

  • 3. Accounting as a Measurment Discipline - Quiz

    1. Mohan purchased a machinery amounting Rs. 10,00,000 on 1st April, 2001. On 31st March, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.

    The historical cost of machinery is:
    a) Rs. 10,00,000
    b) Rs. 20,00,000
    c) Rs. 15,00,000
    d) Rs. 12,00,000

    2. Measurement discipline deals with:
    a) Identification of objects and events.
    b) Selection of scale.
    c) Evaluation of dimension of measurement scale.
    d) All of the above.

  • 4. Accounting Policies - Quiz

    1. Accounting policy for inventories of Xeta Enterprises states that inventories are valued at the lower of cost determined on weighted average basis or not realizable value. Which accounting principle in followed in adopting the above policy?
    a) Materiality.
    b) Prudence.
    c) Substance over form.
    d) All of above.

    2. Which of the following is not an example of change in accounting policy?
    a) Change in method of providing depreciation on fixed assets.
    b) Change in the method of providing inventory valuation.
    c) Adopting double Entry system of accounting in place of Single Entry.
    d) Change in method of valuation of Investments.

  • 5. Accounting Standards - Quiz

    1. It is essential to standardize the accounting principles and policies in order to ensure
    a) Transparency.
    b) Consistency.
    c) Comparability.
    d) All of the above.

    2. AS – 8 on Accounting for Research and Development:
    a) Is replaced by AS – 26
    b) Is applicable only to listed companies
    c) Is mandatory for Research Institutions
    d) Is still in use.

  • 6. Journal Entries - Quiz

    1. A sale of goods to Ram for cash should be debited to:
    a) Ram
    b) Cash
    c) Sales
    d) Capital

    2. Capital Account is a _________.
    a) Real A/c
    b) Personal A/c
    c) Nominal A/c
    d) None of these

  • 7. Ledgers - Quiz

    1. Credit balance in ledger will be either:-
    a) A revenue or an asset
    b) An expense or an asset
    c) A revenue or a liability
    d) An expense or a liability

    2. Purchase Return Account always shows a _______ balance.
    a) Debit
    b) Credit
    c) Either (a) or (b)
    d) None

  • 8. Trial Balance - Quiz

    1. Trial Balance is a :
    a) Statement
    b) Account
    c) Summary
    d) Ledger

    2. Agreement of Trial Balance is not a _______ proof of accuracy.
    a) Submissive
    b) Inclusive
    c) Exhaustive
    d) Conclusive

  • 9. Subsidiary Books - Quiz

    1. The Sales Book
    a) Is a part of journal,
    b) Is a part of the ledger,
    c) Is a part of the balance sheet.
    d) None of the above

    2. Purchases day book records:
    a) All cash purchases.
    b) All credit purchases
    c) Credit purchases of goods in trade.
    d) None of the above

  • 10. Capital and Revenue Expenditures and Receipts - Quiz

    1. An amount of Rs. 30,000 spent on traveling expenses of the company’s director’s to a foreign trip for purchase of an asset to be used in the production process. This is a:
    a) Capital expenditure
    b) Revenue expenditure
    c) Deferred revenue expenditure
    d) None of the above

    2. A new machine was purchased in Delhi and brought to Jaipur factory site for installation. The machine was damaged during transit and repair expenses were incurred amounting to Rs. 20,000. Such repair will be treated as:
    a) Capital expenditure
    b) Revenue expenses
    c) Deferred revenue expenditure
    d) Reserve

  • 11. Cash Book - Quiz

    1. Rent due for the month of March will appear _________of the cash book.
    a) On the receipt side
    b) On the payment side
    c) As a Contra Entry
    d) Nowhere

    2. In petty cash Book, the system followed :
    a) Accrual System
    b) Imprest System
    c) Cash system
    d) None of these

  • 12. Contingent Assets and Contingent Liabilities - Quiz

    1. Which of the following is not a contingent liability?
    a) Uncalled liability on partly paid shares
    b) Claims against the company not acknowledged as debts
    c) Arrears of cumulative fixed dividends
    d) Debts included in debtors which are doubtful in nature

    2. Which of the following is not a contingent liability?
    a) Claims against enterprises not acknowledge as debts
    b) Guarantees given in respect of the third parties
    c) Liabilities in respect of bills dishonoured
    d) Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.

  • 13. Sale of Goods on Approval or Return Basis - Quiz

    1. Cash Sale of Rs. 50,000, Credit Sale of Rs. 3,50,000, Sales Return Rs. 25,000 out of Sales of Rs. 3,50,000, goods costing Rs. 40,000 were sent ton approval for Rs. 50,000 which has not been approved yet. Calculate the net sales:
    a) Rs. 3,35,000
    b) Rs. 3,75,000
    c) Rs. 3,40,000
    d) Rs. 3,25,000

    2. A trader sends out goods is customer on approval and credits them to sales amount. On 31st March, 2011, sundry debtors includes an amount of Rs. 5,000 for goods sent on approval basis for which no confirmation was received till year end. These goods were sent out at a cost +25%. Physical stock taken on 31st March, 2011 amounted to Rs. 50,000. The amount of stock appearing is Balance Sheet would be:
    a) Rs. 45,000
    b) Rs. 50,000
    c) Rs. 53,750
    d) Rs. 54,000

  • 14. Rectification of Errors - Quiz

    1. An amount of Rs. 8,765 paid to M was debited to N’s a/c. The rectification of the error will-
    a) Increase the net profit
    b) Decrease the net profit
    c) Increase the assets
    d) Have no erect on the net profit

    2. Goods destroyed by fire should be credited to
    a) Goods lost by fire account
    b) Sales account
    c) Purchase account
    d) Cash account

  • 15. Bank Recouncilation Statement - Quiz

    1. When the balance as per Pass Book is the starting point, direct payment by bank are:
    a) Added in the bank reconciliation statement
    b) Subtracted in the bank reconciliation statement
    c) Not required to be adjusted in the bank reconciliation statement.
    d) Neither of the above

    2. Favourable balance as per Cash Book Rs. 5,000. Debit side of Cash Book under cast by Rs. 2.000. Cheque deposited into bank Rs. 3,000 dishonoured but no entry for dishonour is made in cash book. Balance as per Pass Book is :
    a) Rs. 4,000
    b) Rs. 10,000
    c) Rs. 6,000
    d) None of the above

  • 16. Inventories - Quiz

    1. Consider the following for Q co. for the year 2010-11:
    Cost of goods available for sale    Rs.1,00,000
    Total sales                                Rs. 80,000
    Opening stock of goods             Rs. 20,000
    Gross profit margin 25%
    Closing inventory of goods for the year 2010-11 was
    a) Rs. 80,000
    b) Rs.60,000
    c) Rs. 40,000
    d) Rs. 36,000

    2. Calculate the amount of gross profit:
    Opening stock Rs. 24,000
    Closing stock Rs. 15,000
    Sales Rs. 6,00,000
    Cost of goods sold Rs. 4,55,000
    a) Rs. 1,30,000
    b) Rs. 1,45,000
    c) Rs. 1,54,000
    d) Rs. 1,06,000

  • 17. Depreciation Accounting - Quiz

    1. Consider the following information:
    I. Rate of depreciation under the written down method = 20%.
    II. Original cost of the asset = Rs. 1,00,000.
    III. Residual value of the asset at the end of useful life = Rs. 40,960.
    The estimated useful life of the asset, in years, is
    a) 4 years
    b) 5 years
    c) 6 years
    d) 7 years

    2. A machine purchased for Rs. 5, 00,000 has an estimated working life of 10,000 hours, scrap value estimated Rs. 1, 00,000. Their anticipated pattern of working hours is as follows:
    Year Hours (p.a)
    1-2 1500
    3-6 1000
    7-10 750
    Depreciation for the third year would be:
    a) Rs. 30,000
    b) Rs. 37,500
    c) Rs. 40,000
    d) Rs. 45,000

  • 18. Final Accounts - Quiz

    1. Goods in Transit but not taken in Closing Stock will be Credited to :
    a) Purchase A/c or Trading A/c
    b) Supplier A/c
    c) Goods in Transit A/c
    d) Cash A/c

    2. Bills payable is shown on the liability side of the Balance Sheet under the head:
    a) Provisions
    b) Current Liabilities
    c) Secured Loans
    d) Reserves and Surplus

  • 19. Consignment - Quiz

    1. In the books of consignor, the loss on consignment business will be charged to:
    a) Consignee A/c
    b) General Trading A/c
    c) General P/L A/c
    d) Bank A/c

    2. Periodical statement sent by consignee to consignor is known as________:
    a) Performa invoice
    b) Account sale
    c) Bill of exchange
    d) Hundi

  • 20. Joint Ventures - Quiz

    1. A and B enter into a joint venture sharing profit and losses in the ratio 3:2. A will purchase goods and B will affect the sale. A purchase goods costing Rs. 2,00,000. B sold it for Rs. 3,00,000. The venture is terminated after 3 months. A is entitled to get 10% interest on capital invested irrespective of utilization period. The amount of interest received by A will be:
    a) Rs.20,000
    b) Rs.10,000
    c) Rs.15,000
    d) Rs.25,000

    2. Which of the following is true?
    a) Co-ventures always shares profit equally
    b) Number of co-ventures can never be more than two
    c) The relationship between co-ventures is principal & agent
    d) Co-ventures may contribute funds for running the venture

  • 21. Bills of Exchange and Promissory Notes - Quiz

    1. A bill of exchange is drawn on 1st April 2003 Payable after 3 months. The due date of the bill is :
    a) 1st April 2003
    b) 30th June 2003
    c) 1st July 2003
    d) 4th July, 2003

    2. A draws a bill on B for Rs. 30,000. A wants to endorse it to C in settlement of Rs. 35,000 at 2% discount with the help of B’s acceptance and balance in cash. How much cash A will pay to C?
    a) Rs. 4,300
    b) Rs. 4,000
    c) Rs. 4,100
    d) Rs. 5,000

  • 22. Introduction to Partnership Accounts - Quiz

    1. In the absence of any deed of partnership---
    a) Only working partners are entitled to Salary.
    b) Partners are entitled for commission @ 6% of the net profits of the firm.
    c) Partners contributing highest capital is entitled for interest on capital @ 6% p.a.
    d) Interest at the rate of 6% is to be allowed on a partner’s loan to the firm.

    2. A partner has given a loan of Rs. 50,000 to the firm. He wants interest @ 15% per-annum on his loan. There was no agreement or partnership deed between them. The partner ____.
    a) Is entitled for interest @ 15%
    b) Is not entitled for any interest
    c) Will be given interest @ 6%
    d) Will be given interest @ 10%

  • 23. Treatment of Goodwill in Partnership Accounts - Quiz

    1. Under super profit basis goodwill is calculated by:
    a) No. of years purchased multiplied with average profits
    b) No. of years Purchased multiplied with super profits
    c) Summation of the discounted value of expected future benefits
    d) Super profit divided with expected rate of return

    2. The profits and losses for the last years are 2001-02 Losses Rs. 10,000; 2002-03 Losses Rs. 2,500; 2003-04 Profits Rs. 98,000 & 2004-05 Profits Rs. 76,000. The average capital employed in the business is Rs. 2,00,000. The rate of interest expected form capital invested is 12%. The remuneration of partners is estimated to be Rs. 1,000 per month. Calculate the value of goodwill on the basis of four years purchase of super profit based on the annuity of four years. Take discounting rate as 10%.
    a) Rs. 13,500
    b) Rs. 13568
    c) Rs. 13668
    d) Rs. 13,868.

  • 24. Admission of New Partner - Quiz

    1. A and B are partners C is admitted with 1/5th share C brings Rs. 1,20,000 as his share towards capital. The total net worth of the firm is :
    a) Rs. 1,00,000
    b) Rs. 4,00,000
    c) Rs. 1,20,000
    d) Rs. 6,00,000

    2. Adam, Brain and Chris were equal partners of a firm with goodwill Rs. 1,20,000 shown in the balance sheet and they agreed to take Daniel as an equal partner on the term that he should bring Rs. 1,60,000 as his capital and goodwill, his share of goodwill was evaluated at Rs. 60,000 and the goodwill account is to be written off before admission. What will be the treatment for goodwill?
    a) Write off the goodwill of Rs. 1,20,000 in old ratio
    b) Cash bought in by Daniel for goodwill will be distributed among old partners in sacrificing ratio
    c) Both
    d) None

  • 25. Retirement of a Partner - Quiz

    1. A, B and C are partners sharing profits in the ratio 2:2:1. On retirement of B, goodwill was valued as Rs. 30,000. Find the contribution of A and C to compensate B.
    a) Rs. 20,000 and Rs. 10,000
    b) Rs. 8,000 and Rs. 4,000
    c) They will not contribute any thing
    d) Information is insufficient for any comment

    2. If a partner dies, then JLP will be reckoned at ________.
    a) Surrender Value
    b) Maturity Value
    c) Policy Value
    d) None

  • 26. Death of a Partner - Quiz

    1. At the time of death of a partner, firm gets………...from the insurance company against the Joint Life Policy taken jointly for all the partners
    a) Policy Amount
    b) Surrender Value
    c) Policy Value for the dead partner and Surrender Value for the rest
    d) Surrender Value for all the partners

    2. To provide funds to pay to the retiring partner or to the representatives of a deceased partner, generally partners:
    a) Create a Sinking Fund
    b) Create Joint Life Policy
    c) Create Reserve Fund
    d) Create a separate Bank Account

  • 27. Issue, Forfeiture and Reissue of shares - Quiz

    1. J Ltd. reissued 2,000 shares which were forfeited by crediting share forfeiture account by Rs. 3,000. These shares were reissued at Rs. 9 Per share. The amount transferred to Capital Reserve will be:
    a) Rs. 3,000
    b) Rs. 2,000
    c) Rs. 1,000
    d) Nil

    2. Voluntary return of shares for cancellation by the shareholders is called:
    a) Surrender of shares
    b) Forfeiture of shares
    c) Cancellation of share
    d) Distribution of shares

  • 28. Issue of Debentures - Quiz

    1. Which of the following is false with respect to debentures?
    a) They can be issued for cash
    b) They can be issued as collateral security
    c) They can be issued for cash
    d) They can be issued in lieu of dividends

    2. In the balance sheet of a Company, Debentures are shown under the head:
    a) Secured Loans
    b) Unsecured Loans
    c) Reserves and Surplus
    d) Current liabilities

  • 29. Redemption of Preference Shares - Quiz

    1. r>
    The Board of Directors of the company decided to redeem the preference shares at a premium of 10%. In order to facilitate the redemption, the Board has taken the following decisions:
    ∗ To sell the investments for Rs. 4,00,000
    ∗ To issue sufficient equity shares at a premium of Rs. 2 per share to raise the balance of funds needed
    &lowest; To maintain minimum bank balance of Rs. 50,000
    The Board of Directors initiated the above course of action during the month of April, 2006 and redeemed all the preference shares.
    Premium on issue of fresh equity shares =?
    a) Rs. 55,000
    b) Rs. 60,000
    c) Rs. 65,000
    d) Rs. 66,000

    2. Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?
    a) Rs. 1,05,000
    b) Rs. 1,00,000
    c) Rs. 2,00,000
    d) Rs. 1,11,000