Advanced Accounting

Topic 01: - Debentures Bonds & TFCs

1. Irredeemable debentures would be paid to issuer?

a)
b)
c)
d)

After 1 year of issuance

After 5 years of issuance
After a specific time
None of above

2. The loss on issue of debenture at discount shown in

a
b
c
d

Trading account
Profit & loss account
Balance sheet
Profit & loss appropriation account

3. When debentures are converted in to share account the discount on issue of

share account is debited with.
a
b
c
d

Face value
Amount of discount
Market and face value difference
None of these

4. The date on which the interest due is called?

a
b
c
d

Due date
Interest date
Payment date
Maturity date

5. Debenture issued cost with debenture discount or premium.

a
b
c
d

Should not be adjusted

Should be adjusted
Always in same ratio
B&c

6. When sinking fund investment are sold at profit the sinking fund investment
account is credited with.
a
b
c
d

Face value
Book value of investment
Amount of profit
Amount realized

7. Stages of debenture regarding to their accounting procedure are?

a
b
c
d

5
4
3
2

8. Debenture account always credited with?

a Par Value

b Face Value
c Discount / Premium value
d Difference of issue and face value
9. Extra and over payment made to a vendor on purchase of assets treated
as

a
b
c
d

Profit on purchase
Good will
Premium on purchase
All of above

10.When debentures are given as collateral security the debenture suspense

account is debited with..

a
e)
f)
g)

Par Value of debenture

Face Value of debenture
Discount / Premium value
Difference of issue and face value

11.Discount on issue of debenture is ..

a
b
c
d

Suspense account
Asset account
Fictitious asset account
Loss account

12.In cum & ex- interest quotation when own debenture are cancelled the own
debenture account is credited with
a
b
c
d

Cum-interest price
Ex-interest price
Difference of cum & ex interest price
Face value

13.Interest on debenture is payable ..

a
h)
i)
j)

If a company earn profit

If a company purchase back debenture
Only at maturity
Even company suffer loss or earn profit

14.Those sinking funds in which the amount of sinking fund do not accumulate
but transferred to profit and loss account called..

a
b
c
d

Invested sinking fund

Cumulative sinking fund
Non invested sinking fund
Investment in own capital sinking fund

15.Interest on own debentures transferred to.

a
b
c
d

Profit & loss account

Debenture sinking fund account
Debenture interest account
a & c both

16.If the investment made in own debenture made then at the time of interest
payment the interest on own debenture is

a Debited
k) Credited
l) Deducted from bank
m) B & c both

Topic 02: - Company Final Accounts

17.Is there any prescribed format for profit & loss account is given in companies
ordinance?
a
b
c
d

Yes there is
No up till now
Under consideration
None of above

18.For manufacturing concern the trading account is debited with expense on

..?
a
b
c
d

Opening stock
Expenditures incurred on brings the purchased/sale of goods
All expense incurred up to goods ready for sale
A & b both

19.Difference b/w trading & manufacturing concern is due to the..?

a
b
c
d

Purchase and sale policy difference

Raw material and ready to sale goods purchase policy
Semi finished goods sale and not to sale
All of above

20.The opening stock of manufacturing concern consist in how many types of

goods/material
a
b
c
d

Three
Four
Two
Five

21.Extra provision which is no more required is written on.

a
b
c
d

Debit side of profit & loss account

Debit side of Profit & loss appropriation account
Credit side of profit & loss appropriation account
None of these

22.Which of the following is direct expense .

a
n)
o)
p)

Octori Duty
Salaries & wages
Carriage inward
A & c both

23.Wages & salaries is a .expense.

a
q)
r)
s)

Direct
Indirect
Fixed
None of these

24.Participation term certificate (PTC) is refined form of .

a

Debenture

b
c
d

Redeemable debenture
Irredeemable debenture
None of these

25.Which one of the following is nominal account?

a
b
c
d

Prepaid expense
Profit & loss
Current liabilities
Long term liabilities

26.Freight, octori,custom duty on purchase of assets is

a
t)
u)
v)

Debited to trading account

Capital Expenditure
Debited to Profit & loss appropriation account
A & b both

27.If the closing stock value is written in adjustment then it appears in

a Trading account
b Balance sheet
c Profit & loss account
d A & b both
28.Return of credit sale deducted from ..
a
w)
x)
y)

Debtors
Credit sale
A & b both
None of above

29.The most common. types of dividends.

a Two
z) Three
aa)Four
ab)
Five
30.Any amount set aside from any known liability is known as .
a
b
c
d

Fixation
Provision
Reserve
Commitment

31.Any amount set aside for unspecific purpose is known as .

a Fixation
ac)Provision
ad)
Reserve
ae)Commitment
32.Possession of land for a defined time period with the payment of rent of lease
is known as
a
b
c
d

Free hold land

Lease hold land
Rent hold land
A & c both

33.Which of the following is an intangible asset.

a Trademark
af) Copyright

ag)
ah)

Goodwill
All of above

34.Decrease in the value of any intangible asset is known by term as..

a
b
c
d

Depreciation
Amortization
Devaluation
All of above

35.When a holding company pays for its interest an amount less than the net
asset value of subsidiary company then reserve arise from it known as
a Revenue reserve
ai) Capital reserve
aj) Consolidated reserve
ak)Capital redemption reserve
36.Amount of dividend presented in AGM for approval to be paid to existing
shareholders is called..
a
b
c
d

Prescribed dividend
Proposed dividend
Presented divided
A & c both

37.Deferred liabilities includes which one of the following.

a
b
c
d

Accrued interest on loans

Liability for gratuity
Liability for pension
B & c both

38.Transfer to general reserve written down on the .

a
b
c
d

Debit Side of profit and loss account

Debit Side of profit and loss appropriation account
Assets side of Balance sheet
A & c both

39.What is the difference b/w salaries & wages and of Wages & Salaries?
a First is direct and second is indirect expense
al) Both are indirect expenses
am)
Both are direct expense
an)
None of these
40.Preliminary expense is an .
a
b
c
d

Direct expense
Indirect expense
Fictitious asset
Both b & c

41.If the market value of an investment is greater than value in books of

accounts then.
a
b
c
d

Profit is reported in profit and loss account

Book value written in books of accounts instead of market value
No profit is shown in books of accounts
A & b both

42.An asset having book value (accumulated depreciation Rs.150, 000) is Rs.
450,000, now @ 10% depreciation the amount of depreciation in written
down method should be
Rs. ..
a
b
c
d

45,000
35,000
30,000
25,000

Topic 3 :- Analysis of Accounting Ratios

43.Ratios are useful for
a
b
c
d

Decision making
Financial forecasting and planning
Both a & b
None of above

44.Solvency ratio are also known as .

a Efficiency ratio
ao)Activity ratio
ap)
Leverage ratio
aq)
All of above
45.Efficiency ratio also known as ..
a Efficiency ratio
ar)Activity ratio
as)
Leverage ratio
at) None of above
46.Acid test ratio is equal to
a
b
c
d

Liquid assets / Current liabilities

Current assets / current liabilities
A & b both
All of these

47.If we have Current assets, stock & prepaid expense the liquid Assets are
equal to
a
b
c
d

Current assets + (Stock Prepaid Expenses)

Current assets - (Stock + Prepaid Expenses)
Current assets + (Stock + Prepaid Expenses)
Current assets - (Stock - Prepaid Expenses)

48.For in ratios, we use average value instead of a single value.

a
b
c
d

Consistency
Accuracy
Quick calculation
All of above

49.What the Gross profit ratio when the Opening stock is Rs.80,000, Sales Rs.
120,000, Closing stock Rs. 20,000 ?
a
b
c
d

33.33 %
66.66 %
22.22 %
None of above

50.Operating profit is obtained by deducting from gross profit.

a
b
c
d

All expenses
Only selling expenses
Only admin. expenses
Both b & c

51.Formula for the calculation of operating ratio is..

a
b
c
d

Cost of goods sold

Cost of goods sold Cost of goods sold +
Cost of goods sold -

+ Operating expenses / Net sales * 100

Operating expenses / Net sales * 100
Operating expenses / Net profit * 100
Operating expenses / Net Profit * 100

52.What the Debt to equity ratio when the Debentures Rs.75, 000, equity share
capital Rs. 120,000, General reserve Rs. 40,000 & Accumulated profit Rs.
40,000 ?
a
b
c
d

0.355
0.375
0.395
0.595

53.EBIT converted to EBT after ..

a
b
c
d

Interest addition
Interest deduction
Tax addition
Tax deduction

54.ROI Stands for (in accounting).

a
b
c
d

Return on Income
Return on Investment
Region of Interest
Return on Interest

55.Proprietary Ratio is equal to, Proprietors fund / ..

a
b
c
d

Capital
Total assets
Fixed assets
Net worth

56..b/w quick assets ratio and asset test ratio.

a
b
c
d

Closing Stok amount difference

Investment amount difference
No difference
a & b both

57.What the Operating cost ratio when the Operating profit Rs.22, 000, Net
Sales Rs. 10,000, Gross profit Rs. 40,000 & Operating cost Rs. 30,000 ?
a
b
c
d

20 %
22 %
30 %
40 %

58.There is..b/w operating profit and profit before interest & tax.
a
b

Tax amount difference

Interest amount difference

c Admin expenses difference

d None of these
59.What the interest coverage ratio when the EBIT Rs.2,124, 000, Net income Rs.
1,000,000, Interest Rs. 180,000 & Total Debts Rs. 300,000 ?
a
b
c
d

11.8 times
21.24 times
1.80 times
3.0 times

60.If the Working Capital Rs. 21,000 and the Current assets are three times of
Working Capital then current liabilities
a
b
c
d

Rs.21,000
Rs.41,000
Rs.42,000
None of these

61.What the Creditors turnover ratio when the Accounts receivable (Closing)
Rs.90, 000, Creditors (Closing) Rs. 54,200, Total Purchases Rs. 300,000 & Bills
Payable (Closing) Rs. 58,00 ?
a
b
c
d

3. 34 times
5. 00 times
5.33 times
8.00 times

62.Trade creditors, bills payable, creditors for expense are..

a
b
c
d

Short term creditors

Long term creditors
Controllable creditors
Convertible Creditors

Topic 04:- Branch Account

63.Branch is .entity.
a
b
c
d

Separate legal
Not a separate legal
Sole trading
a & c both

64.When the policies and administration of branch are totally controlled by the
head office is called.
a
b
c
d

Controlled branch
Dependent branch
Independent branch
a & c both

65.In case of pilferage the retail trade ...

a
b
c
d

An entry of loss to CGS is passed

N entry of capital loss to CGS is passed
No entry is passed
None of these

66.The Branch account is.with the amount of goods sent to branch.

a
b
c
d

Debited
Credited
Controlled
None of these

67.Which of the following loss is ignored in branch account?

a
b
c
d

Loss by fire
Loss by theft
Pilferage by employees
a & b both

68.The Branch account is.with the amount of Cash Sales.

a
e
f
g

Debited
Credited
Controlled
None of these

69.Important features of branch stock account .

a
b
c
d

It
It
It
a

controls branch stock account

is maintained at invoice price
is reconcile with the head office
& b both

70.In the journal entry of branch account for the loss by fire/ loss in transit, the
accidental loss account is debited with..
a
b
c
d

Cost price
Invoice price
Fixed price
a & c both

71.Loading on surplus in stock is credited to .

a
b
c
d

Branch inventory account

Branch adjustment account
Branch surplus account
None of these

72.In branch account the item of trading profit & loss account ..
a
b
c
d

Written on invoice price

Written on sale price
Written on cost price
Converted to invoice price

73.The branch account is . account in nature.

a
b
c
d

Trading
Personal
Trader
All of these

74.In the balance sheet, branch stock reserve account is shown after deducting
.
a
b
c
d

Interest of branch
Stock reserve
Capital stock
Revenues of branch

75.When the goods in transit at the end of year then the adjustment entry
passed
a
b
c
d

Head office books accounts only

Branch books of accounts only
Only in one either head office or branch
In both a & b

76.The Incorporation of branch trial balance can be divided in to..parts.

a
b
c
d

Two
Three
Four
Five

77..is a method in which the memorandum trading and profit & loss
account is prepared for asserting branch profit.
a
b
c
d

Detailed incorporation
Abridged incorporation
Fixed incorporation
None of These

Topic 05:- Consignment Account

78.The relationship b/w consigner & consignee is..
a
b
c
d

Owner & tenant

Principal & agent
Principal & Manager
All of these

79.In consignment the ownership .to the buyer.

a
b
c
d

Not transferred
Transfer
On mutual consent
b & c both

80.The Consignment account is.with the amount of godown rent &

insurance.
a
h
i
j

Debited
Credited
First debited then credited
None of these

81.Expenses incurred in storage & selling the goods after the goods reach
consignees godown are in cost of unsold stock.
a
b
c
d

Considered
Not Considered
Shown separate
a & c both

82... formula is equal to, adjusted per unit cost x Unsold units .
a
b
c
d

Value of sold stock

Value of unsold stock
Value of adjusted units cost
Predetermined cost

83.Loss in consignment account is written in consignment account.

a
b
c
d

Debit side
Credit side
Profit & loss portion
a & c both

84.Closing stock with consignee is valued at cost or market price .

a
b
c
d

Whichever is high
Whichever is less
Whichever greater than invoice price
On LCM rule based

85.The commission which is paid to consignee, if loss on account of bad debts is

born by him is called..
a
b
c
d

Decided commission
Declared commission
Overriding commission
Agreed Commission

86.When goods are dispatched by the consignors to the consignee, it is

consignment ..from consignors point of view.
a
b
c
d

Inward
Outward
Transferred
Received

87.A commission which is normally granted by consignor when he desires his

agent to work hard to push a new line of product in the market is known
as.
a Decided commission
au)
Declared commission
av)
Overriding commission
aw)
Agreed Commission

Topic 06:- Contract Account

88.A person who agrees to do certain work for someone is called..
a
b
c
d

Contractor
Supplier
Contractee
Order Contractor

89.The transfer of some portion of work to be done under a contract to a

subcontractor is known as ..
a
b
c
d

Under contract
Subcontract
Partial contract
a & c both

90.The work approved by Contractee is called

a Work registered
b Work Certified

c
d

Work Uncertified
Work undersigned

91.The difference b/w the amount work certified and the amount actually paid on
the basis of work certified to the contractor is known as..
a
b
c
d

Forfeited money
Retaining money
Retention money
Contention money

92.In cost plus contracts there to the contractor to eliminate waste and
economies the cost completing the contract.
a
b
c
d

Countless incentives
Limited incentives
No incentive
None of these

93.Material & labour variation clause in contract also known as .

a
b
c
d

Intensive clause
Escalation clause
Exclamatory clause
Exhaustive clause

94.The unused material on the closing of contract is.to contract account.

a
b
c
d

Debit side
Credit side
Not shown
None of These

95.Work in progress valuation in contract account is made through.

processes.
a
b
c
d

Two
Three
Four
Six

Topic 07:- Hire Purchase and Installment

Method
96.The person who acquires or obtains the possession of goods (assets) from
seller under a hire purchase agreement known as
a
b
c
d

Hirer
Hire purchaser
Hire vendor
Both a & b

97.Types of repossession in the hire purchase

a
b
c
d

Two
Three
Four
Seven

98.Total cash price less any deposit of initial payment made by the hire
purchaser is known as..
a
b
c
d

Hire price
Net hire purchase price
Price excluded of prepayment
Net closing price

99.When the asset is purchase then..passed in the books of hire

purchaser books of accounts.
a
b
c
d

Asset to hire vendor

Asset to hirer
Asset to wholesaler
No entry

100. In hire purchase for repossession of goods ..is passed in the books of
hire vendor.
a
b
c
d

Goods repossessed account to cash account entry

Goods repossessed account to hire purchase account entry
Goods repossessed account to hire bank account entry
No entry

The End