Sr.

No Question Answer

The Company purchase plant & machinery for Rs. 550000. Installation cost Rs. 50000. Octroi
expenses Rs. 15000. It has also incurred administration expenses of Rs. 25000. Salary & Bonus done
expenses of Rs. 200000. Rent of Factory Rs. 84000. Purchase of raw material for Rs. 300000.
Electricity expense of Rs. 150000. What is the amount of revenue expenditure incurred -
1 759000
Fixed Assets were purchased on 31-03-10 at Rs. 850000. At that time the index of retail price
was 100. Index of retail price on 31-03-12 is 130. At which value it will be shown in CPP Rs. 1105000
2 Account as on 31-03-12 - 1105000 done
Fixed Assets were purchased on 31-03-10 at Rs. 1000000. At that time the index of retail Rs. 1200000
3 price was 100. Index of retail price on 31-03-12 is 120 - 1200000 done

The company purchase plant & machinery for Rs. 750000. It has also incurred advertisement
expenses of Rs. 74000. Salary & Bonus expense of Rs. 248000. Rent of Factory Rs. 96000.
4 What is the amount of capital Expenditure incurred by the company - 750000 done

The company is having opening stock of 100 units@ 10 per unit. It made purchases on 1-1-
2013 of 150 units @ 12 per unit and on 3-1-2013 125 units @11 per unit. It made issue for Rs.1675
production 225 units. What will be the value of closing stock of 150 units under FIFO method
5 - Rs 1675 done

The company is having opening stock of 100 units@ 10 per unit. It made purchases on 1-1- Rs. 2500
2013 of 150 units @ 12 per unit and on 3-1-2013 125 units @11 per unit. It made issue for
6 production 225 units. What will be the cost of production for 225 units under FIFO method? - done

Company paid Rs. 3000 on vehicle maintenance Rs. 10000 for conveyance Rs. 20000 for
travelling Rs. 45000 for advertising campaign for launching a new product. Rs. 200000 to Rs. 45000
purchase plant & machinery and Rs. 7000 for octroi for plant & machinery. What will be
7 amount of deferred revenue expenditure? - done

Company paid Rs. 3000 on vehicle maintenance Rs. 10000 for conveyance Rs. 20000 for
travelling Rs. 45000 for advertising campaign for launching a new product. Rs. 200000 to Rs. 78000
purchase plant & machinery and Rs. 7000 for octroi for plant & machinery. What will be
8 amount of revenue expenditure? - done
Assets are divided in which of the following categories in balance sheet - Current assets, Long
9 term assets and Fixed assets doubt
The company's gross sales is Rs. 4500000. It made purchase of Rs. 2000000 - Net sales of the Rs. 4239750
10 company - done
A fixed asset was bought for Rs 5000. Its accumulated depreciation is Rs. 3000 and rate of Rs. 400
11 depreciation is 20% done
The company purchases machine on 1-4-2010 for Rs. 5000000. Residual value is expected to Loss of Rs. 4,31,250
12 be Rs. 500000. - loss on sale of machine
The company purchases machine on 1-4-2010 for Rs. 5000000. Residual value is expected to Profit of Rs. 268750 done
13 be Rs. 500000. - loss on sale of machine
14 A cash flow statement is mandatory in India. - True done

There are certain transactions which will have the effect of reducing the profit but will not
affect the cash flow - Goodwill written off, refund of excess, profits transferred - All the
15 options
16 Under which depreciation method the amount of depreciation - Straight Line method
Formula = Starting Inventory
From the following details find " cost of goods sold". Opening stock 1000000 purchases Rs. 8500000 + Purchase - Closing
17 9500000 closing stock 2000000 inventory

Formula = Starting Inventory

From the following details find " cost of goods sold". Opening stock 1500000 purchases Rs. 9500000 + Purchase - Closing
18 8000000 carriage inward 1000000 inventory
19 The straight line method is the providing of depreciation where the amount of - False doubt
20 Goodwill is recorded only when it is purchased - 1
21 An increase in the balance in accounts payable comes under - Operating done
Company's net profit is Rs. 2500000. Decrease in inventory is Rs. 500000. Increase in creditors Rs. 3400000
22 is Rs 250000. - cash flow from operating activity - done
23 Liabilities are equal to - Capital + Liabilities done
24 Declaration and payment of dividends on company's stock - Financing
25 The loss on sale of equipments comes under which category - Operating done
26 Companies classify some cash flow relating to investing or financing - True done
27 In cash flow statement, cash equivalent is a balance in bank - True done
 The new India company has ending inventory of Rs. 20000 and cost of goods available for sale
28 of Rs. 82000 - True done
29 Sales - Cost of goods sold is equal to - Gross Profit
For determining cost of inventories certain costs are excluded and recognized as expense in
30 the period - Abnormal, Administration, selling - All the options done
Which of the following is/are a kind of depreciation expenses - Amortization, Depletion - Both
31 A&B done
32 " land " is not depreciable because land is considered indestructible - True done
When goodwill should be accounted in the books of accounts - When actual payment has
33 been made for it done
34 The amount changed to depreciation goes on declining - Written down value method
Inventory affects both the balance sheet and the income statement. - Closing stock of
35 inventory in current asset done
What is deferred revenue expenditure - Expenditure of revenue nature, but benefit of which
36 is available for over, say 3 to 5 subsequent years done
37 Insurance claim received towards theft of a car is - Capital Receipt
38 which of these is not a current liability - Inventory
39 Inflation means an upward change in the prices of - Goods and services done
40 The primary objective of financial statements is to give a - True & Fair pg ebook 192
41 Accounting software facilitates the utilities like - Ability, cost, interest - All the options done
42 CPP stands for - Current Purchasing Power
Company purchases machine on 1-8-2011 costing Rs. 2200000. It incurred expenditure on Rs. 240000
43 installation Rs. 200000 - 324000
Company purchases machine on 1-8-2011 costing Rs. 2200000. It incurred expenditure on Rs. 1836000
44 installation Rs. 200000 - written down value as at 31-03-2013 done
What is the prime and permanent concern of manual accounting process - Arithmeticl
45 accuracy done
A Company uses straight line method of depreciation for an item of equipment that cost rs. Rs. 13000
46 28000 - Rs. 10000
In normal course of business, company paid Rs. 5000 on advertising Rs. 3000 on vehicle Rs. 10000
47 repairs - done
Company has purchase new fixed assets of Rs. 2000000 and received rs. 200000 from sale of Rs. 1550000
48 old non usable fixed assets - 2000000
The company's gross sales is Rs. 8100000. It made purchases of rs. 6025000. Purchase returns
49 are of Rs. 175000 - Rs. 7325750 done
While preparing cash flow statement with the help of Indirect method to arrive "Net Cash
Flow from operating activities"- Increase in CL deducted from NI & Decrease in CL added
50 back to NI done
Now a days most of the companies use accrual accounting, than which is the only source
51 where the - Statement of cash flow done
The company's gross sales is Rs. 8000000, Sales return is Rs. 750000, Discount on sales is Rs. Rs. 6800000
52 450000 - What is net sales
The primary purpose of cash flow statement is to provide cash basis information about the 0
53 company - False
Company's net profit is Rs. 700000. Company has paid salary of Rs. 120000. Electricity Rs. 440000
54 charges Rs. 50000. Telephone charge Rs. 70000 - doubt
When current assets increase, there is a decrease in working capital in cash flow statement.
55 State whether the statement is true or false - False done
56 Retirement of long term bonds payable comes under which category - Financing
A decrease in the current liability income taxes payable comes under which category of cash
57 flow - Operating
Treasure bill is a short term financial instrument. State whether the statement is true or false
58 - True
The account inventory will appear on the balance sheet as a current asset at an amount that
59 often reflects the - Cost value

Accounts Receivable…Dr.
What is the journal entry to record sale of or expensed out of inventory in income statement to Inventory
60 - Cost of Goods sold A/c…Dr. to inventory doubt
Indian corp. has ending inventory of Rs. 35000 for the year ending December 31,2001.
61 Accordingly, its beginning - True
62 Cost of goods sold is - Opening stock + Purchases - Closing stock
Which of these is accounting principal in inventory accounting - Consistency, disclosure - Both done done
63 A&B
64 Higher depreciation will affect cash profit of the business. State whether the - True 1
Reducing balance method of depreciation is followed to have a uniform charge for
65 depreciation - True doubt
Under the straight line method of depreciation - Amount of depreciation remain constant for
66 every year done
67 Depreciation is an amortized expenditure - False
Which of the following is the correct formula for calculating depreciation using service -
68 Depreciation = (Cost- Scrape value)/Total hours x actual hours done
69 What is the accumulated depreciation - Sum of all depreciation expenses of a fixed asset
A company's liquidity is concerned with the relationship between long term investments - false
70 True doubt
Liabilities are generally classified on a balance sheet as - Current liabilities and long term
71 liabilities done
72 Which of the following is a liability - Creditors done
Inflation accounting seeks to address the inherent limitations of historical cost - Both A & B
73 above done
74 EOU stands for - Export oriented unit
At basic level, all accounting software would provide information like preparation of books of
75 prime entries - All the options
The value of Mould for making injection syringe is Rs. 550000. It can produce 1000000 Rs. 10000
76 inkection syringe -
A car was purchased for Rs. 5500. Its residual value was estimated to be Rs. 500 while its 0.2
77 monthly - 0.02 doubt
A company purchased a new machine for Rs. 100000 and machine's test reun was started to Rs. 103000
78 make sure - done
79 Which of these is an investing activity - Sale of long term investment done
Which of these is an investing activity - Long term loan obtained, Repayment of long term
80 loan, Both A & B DOUBT
What is the journal entry to book / record "Amortization Expense" in books - Amortization
81 A/c …. Dr. to Intangible Asset A/c done
What is the journal entry to book / record "Depletion Expense" in books of accounts -
82 Depletionn A/c….to Accumulated depletion account done
Asset should be shown in
When the govt grant amount is equal to the whole of the cost of the asset - at which cost balancesheet at nominal done
83 value
84 Two principal types of inventory system - Periodic System & Perpetual System

Machinery Spares which are specific to any particular type of fixed asset are of Capital nature At the time of use if
and should be capitalized. At which point of time such kind of machinery spares should be concern fixed asset
85 capitalized?

Machinery Spares which are not specific to any particular fixed asset and used as general
purpose machinery spares (normally termed as "Loose Tools") should be charged to - Profit
86 and Loss account as and when issue for consumption done
87 Bonds are proportional parts of loan - True done
If ABC Co. oversstated its ending inventory by Rs. 10000. As a result the cost of goods sold is
88 overstated by - False
if cost of goods sold is overstated by Rs. 8000, then gross profit is overstated by Rs. 8000 -
89 True doubt
Purchase of treasury stock (company's own stock) comes under which category of cash flow -
90 Financing
91 Depreciation accounting is a process of allocation and not of valuation - True done
92 ERP Stands for Enterprise resource planning
The company purchase 4 units each at Rs. 50, Rs. 52, Rs. 49 and Rs. 53. What will be average Rs. 51
93 cost per unit - 204
The company purchase factory building for Rs. 5000000. It has also incurred repairing
expenses of factory building of Rs. 250000 - What is the amount of revenue expenditure Rs. 100000
94 incurred - doubt
If Purchase price of machine = Rs. 400,000 Profit on disposal = Rs. 5,000 Residual value = Rs. Rs.15000
95 10,000 useful life of machine = 5 years. Find sale price at the time of disposal= done
What will be the end result of the following given transactions? Rn (1) Issue of shares for
96 Cashrn (2) Sold goods on Credit rn(3) Collection of cash from customers - Cash Inflow done
97 Which of these is not a financing activity - Sale of long term investment done
98 A depreciation expense comes under which category of cash flow statement - Operating
99 Cash flow and fund flow is same - False
100 Retailers have raw materials inventory - False
Out of following given options. Which is the advantage of LIFO Method - Reports lower net
101 income
Out of following given options. Which is the disadvantage of FIFO Method - Violates, Results,
102 does - All the options done
If a company's inventory is subject to increasing prices, FIFO will produce the least amount of
103 current assets - False done

104 According to which principle of accounting A company must perfrom - Materiality Concept
105 Depreciation is calculated generally on the market value of fixed assets - False done
106 Working Capital is equal to - Current asset - Current Liability done
Government grants relates to depreciable fixed assets should be allocated to income over the
107 period in the proportions of depreciation on those fixed assets - True done

Government grants relates to depreciable fixed assets should be allocated to income over the
108 period in the proportions of depreciation on those fixed assets - Deferred revenue income done
109 An Intangible asset - Does not have physical substance, yet often is very valuable done
Potential liabilities which depend upon future events arising out of past events are called -
110 Contingent liabilities done
How can a corporation raise funds to finance expansion - selling shares, incurring debt,
111 earning - all the options done
High Paper profit
112 The profit and loss account under historical cost accounting does not bear proper charges - done
Which items of balance sheet are by definition, already expressed in terms of purchasing
113 power at the beginning of the year - Monetary items done

Fixed deposit receipts for 5 lakhs deposited on long term basis with bankers after liquidating
deposits and transferring funds new fixed deposit receipt were forged and presented during
114 periodic audit, this act is known as - Manipulating records of the company

Most information suits available seek to span across the entire value chain of business. It is
called " Enterprise Resource Planning (ERP)" - To increase revenues and improve business
115 efficiencies
116 Economic value method can only be applied to the business as a - Whole done
117 CFO stands for - Chief Financial Officer
118 The objective of implementing ERP is to increase - Revenues done
119 Inventory includes office supplies and repair parts for a company's machinery - True doubt
Straight line depreciation method allocates and equal amount of expense each year. It can be
120 expressed in rupee or percentage term - Remain same for year to year done
Inventory costing is not much complicated by the fact that the unit cost of inventory remains
121 constant throughout the accounting period - False done

Revaluation if resorted should be of the class of assets as a whole and not for any individual
122 asset - decrease in value to the class of asset - Debited to profit and loss account done

Revaluation if resorted should be of the class of assets as a whole and not for any individual
123 asset - increase in value to the class of asset - credited to Revaluation Reserve account done
124 The expression-depreciation at 10% and 10% per annum carry the same meaning - False doubt
Any expenditure incurred for day-to-day running of the business is treated as Revenue
125 Expenditure done
126 The estimate about useful life of a fixed asset - It will be same Can be changed doubt
Ocean Freight and Transit Insurance paid for importation of a special kind of Plant and
127 Machinery can be considered as - Capital expenditure
128 In case of revalued asset, what is treatment of impairment loss - Both A & B
129 Bonds are issued in the marketplace only at Par - False done
Bonds are issued in the marketplace at par, at a discount, or at a premium. But on maturity /
130 redemption date what will be the market - Equal to Par value done
The interest rates interact to set the price of bond are of two types - 1) the contract interest
rate 2) the market interest rate - can be sold at "Discount" - market interest rate > contract
131 interest rate done
Bond investors normally pay/invest money now to purchase bonds in anticipation of interest
132 and principal payments to be received in the future - Time value of money doubt
133 Contingent liability is potential obligations - True done
 Under 'written down value' method of depreciation, the amount of depreciation will -
134 Decrease year to year done
When expenditure has been treated as capital expenditure then which portion of entire
135 expenditure - Current year's depreciation done
out of the following given expenditures, which can be considered as " Capita Expenditure" -
136 Stamp free, plant and machinery - All the options
A capital asset in the hands of one person may still be a trading asset in the hands of another,
and similarly a receipt may also vary according to the nature of trade in connection with
137 which it arises - True done
138 An increase in working capital indicates outflow of cash - True done
139 Fixed asset is shown in the balance sheet at their Historical cost done
The carrying amount of bond issued at a discount is calculated subtracted discounts on bonds
140 payable from bonds payable - True done
141 Periodic inventory system is used for inexpensive goods - True
A retailer's inventory cost should include freight in on the merchandise purchased with terms
142 FOB shipping point - False done
A Company purchased a vehicle for Rs. 6000. I will be used for 5 years and its residual value is
expected to be Rs. 1000. What is the annual amount of depreciation using straight line Rs. 1000
143 method of depreciation - done
short term notes payable? …………………………….Are shown on the balance sheet with current
144 liabilities
current replacement cost is used as a ___________base?
145 …………………………………..measurement done
146 Contingent liability is potential obligations…………………………………false
the Important contingent liabilities which cannot be probable and cannot be reasonably
estimated should be reported in financial as ………………………………………..footnote at the end of
147 financials done

the interest rates interact to set the price of bond are of two types - 1 the contract interest
rate 2. the market interest rate . Under which equation of these interest rates the bonds can
148 be sold at discount……………………market interest rate > contract interest rate done
present value of estimated future cash flows can be calculated from…………………………….all the
149 options done

Company purchases Machinery costing Rs. 30,00,000, Trade discount received by the
company was Rs. 30,000. Company has also incurred trail run expenses of Rs. 2,00,000 out of 3205000
which expenses of Rs. 25,000 relates to the period after commencement of commercial
production. Installation expenses were Rs. 35,000. Octroi and Duties paid for Rs. 25,000.
150 What will be Cost of the "Plant & Machinery" in the books of the company done
151
Long Term loan comes under Investing Activities in cash flow statement. State whether the
152 statement Is true or false. - False
At which cost the fixed asset should be booked in books which are acquired in exchange or in
153 part exchange - Either A OR B done

154 Loss on the sale of plant and machinery should be written off against - Plant and Machinery done
Which accounting concept necessitates the distinction between capital and revenue in
155 respect of receipts - Matching Concept done

The Company purchased a special purpose Plant & Machinery for Rs. 40,00,000 from Japan.
Import duty paid was Rs. 3,20,000. Installation expenses was Rs, 40,000. Octroi paid Rs. Rs. 4590000
20,000. Ocean Frieght and Transit Insurance was Rs. 2,10,000. What will be Cost of that
156 "Plant & Machinery" in the books of the company done
157 Investors and creditors use cash flow statement for recovery 1
158 Only cash in hand is considered as cash in cash flow statement - False

Contingent liabilities are potential obligations. Under which circumstance - financial

statement - When it is probable
159 and can be reasonably estimated done
160 Bonds are fixed income securities - True done
161 Secured bonds are also called - Mortgage Bond done
The primary objective of financial statements is to give a true and fair view of the profit or
loss for the accounting period, and true and fair value of assets and liabilities as at the end of
162 the accounting period done
163 Prices reflects the value of goods and services in the economy done
The computerized environment has ideally tackled the volume and repetitive transactions of
164 the accounting system - True done
 Company purchases Machinery costing Rs. 90,00,000. For the purpose of purchasing machine
company had taken a loan. Company has paid Rs. 90,00,000 as interest on the loan. Out of Rs. 9600000
which Rs. 3,00,000 is the interest for the period after machinery is ready to put to use. What
165 will be Cost of that "Plant & Machinery" in the books of the company done
The opening inventory on 1-4-2012 of A Ltd. Was 30 units valued at Rs. 1,00,000. It acquired
25 units during the month at the total cost of Rs. 93,500. The inventory as of 30-4-2012 is 19 Rs. 112750
166 units valued at Rs. 80,750. What will be Cost of Goods Sold? done
167 Machinery spares can be used with any machine - False
168 An alternative term used for accumulated depreciation expenses - All the options done
Goodwill is recorded only when it is purchased. Goodwill is calculated as the excess of
169 purchase price over the market values of the individual net assets done
An asset held with the intention of being used for the purpose of producing or providing
170 goods or services and is not held for sale in the normal course of business - Fixed Asset done
171 Which of the following statements is incorrect - Liabilities = Capital = Assets
The need for inflation accounting was therefore felt to formulate a superior accounting
172 system to reflect the effect of changing price levels - True done
If adjustment for inflation in cost of fixed assets has not been made while charging
depreciation to fixed assets, then it is surely possible that at the time of replacement of that
173 fixed assets, it will result into - Insufficient fund for replacement of assets done
174 Statutory Auditors are also managed by the Directors of the companies - True done
The software is programmed to accept an accounting entry for equal and opposite debits and
175 credits done
Once the operating activities section has been completed, the investing and financing
176 activities sections can be prepared - True done
The only difference between the two methods is how cash flows from operating activities are
177 calculated - True done
The only difference between the two methods is how cash flows from investing activities are
178 calculated - False done
Which type of inventory system provides a detailed record of inventory throughout the year -
179 Perpetual system done
180 What are the advantages of FIFO in a period of rising prices - Always, Reports - Both A & B done
The inventoy cost flow assumption where the oldest cost of inventory items is likely to
181 remain on the balance sheet is - LIFO done
The inventoy cost flow assumption where the most recent cost of inventory items is likely to
182 remain on the balance sheet is - LIFO doubt
183 What is the simple average cost of 5 units each at Rs. 40, Rs. 50, Rs. 60, Rs. 20 and Rs. 80? Rs. 50 done
If a company's inventory is subject to increasing prices, FIFO will produce a higher amount of
184 accounts payable than using the LIFO method……………………….. - True doubt

According to which principle of accounting - The business should disclose all important
information that would enable financial statement users to make informed decisions about
185 the company. - Disclosure Principle done

Under "written down value" method of depreciation, the depreciation is expressed in terms
of percentage. The following year’s depreciation will be calculated by applying the
depreciation percentage to the book value (after depreciation) at the beginning of the period.
186 - True done
187 Depreciable amount + Residual value of a fixed asset = Cost of fixed cost
188 The cost of repairs is included in the calculation of depreciation of a fixed asset - False done
189 When an asset is called impaired - when carrying amount exceeds recoverable amount done
How would affect to the amount of the working capital the purchase of a vehicle with liquid
190 assets - It decreases working capital done
There are two broad categories of liabilities: current and long term. Current liabilities are
191 obligations due - within 1 year done
192 Maintenance of capital means maintenance of - Financial, Physical - Both A & B done

The difference between the total equity interest in the converted balance sheets at the
beginning and end of the year (after allowing for dividends and introduction of new capital) is
the profit or loss for the year measured in current
193 purchasing power - True done
194 The issuing of bonds is a financing resource that we can call - Long term capitals done
present value of estimated future cash flows can be calculated from…………………………….all the pg 198 ebook
195 options
_______________ reflect the value of goods and services in the pg 190 ebook
196 economy…………………………..Prices
 ocean freight and transit insurance paid for importation of a special kind of plant and doubt
197 machinery can be considered as ………………………capital expenditure
the concept of depreciation does not occupy a significant place in the determination of doubt
198 income and in the measurement of service potential of assets……………………………False
The difference between the total equity interest in the converted balance sheets at the
beginning and end of the year (after allowing for dividends and introduction of new capital) is doubt
the profit or loss for the year measured in current purchasing power. This profit and loss will
199 be transferred to ................................Profit and Loss account
fixed assets are stated in the balance sheet at their written down value ……………………………… check in google
200 true
A liability can be defined as- …………………………. an obligation to transfer assets or to provide pg 182 ebook
201 services in the future.
the allocation of the cost of a tangible plant asset to expense in the periods, in which services
202 are received from the asset, is termed as ?.............................Depreciation
company can use profits of the company without giving dividend and bonus to
203 stakeholders…………………false done
204 The advantage of computerized accounting is its ability to handle bulky data processing in done
Current Purchasing Power and Current Value Systems are two major methods of accounting
real time…………..true
205 for price level changes..True pg ebook 192 done
General price changes reflect increases or decreases in the value of the monetary pg ebook 190
206 unit……………….true
An investor purchase bond between interest dates must pay accrued interest on
207 bonds………………………..true done
An increase in the value of fixed asset is referred to
208 as ?..............................................Appreciation done

Commissioning charges and trial run expenses for installation and testing of any fixed asset
can be even capitalized after commencement of commercial production form that
209 asset……………………………False done

The asset should be eliminated from the books of accounts on sale / disposal what is the
accounting treatment for the profit / loss arises on sale / disposal of fixed doubt
210 asset?.......................Charged to profit and loss account
The cost of repairs is included in the calculation of depreciation of a fixed asset ……………………
211 False
In historical cost accounts, although capital is maintained in nominal money terms, it may not
be maintained in real terms In an inflationary situation, mere maintenance of money capital doubt
has no meaning and it must be adjusted for inflamationary value otherwise will result into
212 misleading higher paper profits ................................true
Most information suits available seek to span across the entire value chain of business. It is
called " Enterprise Resource Planning (ERP)" They aim to integrate the order processing the
accounting inventory and the issue / consumption / production /dispatch system. It is also
213 used as management information system.(MIS).......................False
214 Current liabilities are obligations due within one year. pg ebook 182
Goodwill should be accounted in books of account only when actually paid for by the
215 entity……………….True done
Out of the following which method for depreciation is accepted by GAAP?...................Straight doubt
216 line method
Depreciable amount + Residual value of a fixed asset=? ……………………..………..Cost of fixed
217 asset
Under specific identification method of inventory costing the inventory is valued
218 at………………….. Actual cost of each unit of inventory identified done

Which of the following is a true statement about inventory

systems?........................................................Perpetual Inventory systems require more doubt
219 detailed inventory records
Which of the following is/are the example/s of intangible Asset?...(Copy rights Goodwill confirm ans
220 Patent rights) all the option

The related expense account for natural resources like oil wells and mine is called depletion
and depletion expense is calculated in the manner similar to units of production
221 depreciation. done

222 Franchise rights goodwill and patents are the examples of?.........................Intangible Asset
Disadvantages under LIFO method is …Report lower net income Reports is understated Can pg ebook 150
223 be used…..all the option

Which of these is accounting principal in inventory accounting………………………………

conservatism principle, Materiality concept, Consistency principle …………………..as per taran doubt
224 all the option..
 If cost of machine =Rs 400000 Useful life = 5 years Residual value = Rs 25000 Sale price = Rs
40000 Rate of depreciation = 40% what will be the amount of depreciation charged on 3rd done
225 year using straight line method? .75000
Company purchases Asset of Rs 1500000. Its Residual Value is Rs 150000 and useful life is 10 done
226 years . What will be Depreciation under Straight line method? 135000

The Company purchase Factory Building for Rs 5000000. It has also incurred Repairing
expenses of Factory building of Rs 250000 annual maintenance contract of that Factory
building of Rs 100000. What is the amount of Revenue Expenditure incurred by the
227 company?...350000

Company purchases Machinery costing Rs. 7000000 by taking a loan. Trade discount received
by the company was Rs 50000. Company has paid Rs 800000 interest on the loan. Out of
which Rs 300000 is the interest for the period after machinery is ready to put to use Company
has also incurred trial run expenses of Rs 500000 out of which expenses of Rs 100000 relates
to the period after commencement of commercial production. What will be cost of that
228 "Plant & Machinery" in the books of the company?.. 6950000
229
In preparing of statement of cash flow the definition of cash includes both cash and cash
230 equivalents - True
231 Mining companies value their stock at - net realizable value
232 A decrease in working capital indicates outflow of cash - False
The proceeds from issuing additional common stock comes under which category of cash
233 flow statement - Financing doubt
If a company's inventory is subject to increasing prices, LIFO will produce the least amount of
234 ending inventory - True doubt
235 Receipt toward sale of plant is a capital receipt done
236 Receipt toward sale of stock in trade is revenue receipt done

Company receives Rs. 55,00,000 from issue of share capital. It receives long-term loan from
financial institution Rs. 25,00,000. It repays long-term loan of Rs. 20,00,000. It pays dividend 5250000
of Rs. 5,00,000 and interest of Rs. 2,50,000. What will be Net Cash Flow from financing
237 activity doubt
Cash flows serves useful purpose when viewed with its Balance Sheet and its Income
238 Statement for a relevant period of time - True done
Which of the following is the normal balance of an accumulated depreciation account - Credit
239 Balance done
240 Which of the following is not revenue expenditure - Bad debts done
The value of die for screwdriver is Rs. 15,50,000. It can produce 15,00,000 screwdriver over
its lifetime and the residual value is expected to be Rs. 50,000. if company produces 50,000 50000
241 screwdrivers, what would be figure of depreciation? done
242 Total depreciation of an asset cannot exceed its - Depreciable value done
243
244
245
246
247 Issue of debentures comes under operating activities in cash flow statement - False doubt
248 Detailed records of goods held for resale are not maintained - Periodic inventory system

249 What is journal entry to record purchase of inventory - Inventory A/c… to Accounts Payable done
capitalising expenditure would mean that taxable income would be higher and to treat the
250 expenditure as revenue - False done
Company purchases Asset of Rs. 75,00,000. Company paid Rs. 5,00,000 for its installation. Its
Residual value is Rs. 10,00,000 and useful life is 25 years. What will be Depreciation under 280000
251 straight line method done

252 The increase or decrease in working capital indicates inflow or outflow of cash - Both A & B done
If current assets Rs. 100000 current liability Rs. 50000 and fixed assets rs 200000. calculate Rs. 50000
253 working capital - done
The only difference between direct method and indirect method of cash flows is how cash
254 flows from - True done
When numerous adjustment are necessary company often use cash flow work sheet instead
255 of preparing statement of cash flow - False done
Most companies use perpetual system because it provides a detailed record of inventory 1
256 throughout the year done
 The inventory cost flow assumption where the oldest cost of inventory items is likely to
257 remain on the balance sheet is - LIFO DONE
The person who purchases raw material and packaging material process them and creates
258 finish goods and sale - Manufacturer done
259 Closing stock of finished goods is valued at cost or market value, whichever is lower done
One of the primary goals of inventory management is to ensure sufficient quantities of
260 inventory are available to meet customer needs - True done

261 What are the basic reasons for general price changes for goods and services - All the options done
262 The statement of cash flow reports cash receipts and cash payments - True done
263 When current liability decreases working capital decreases - False vice versa is true done
264 When there is increase in current liability it results in decrease in working capital - True done
There are two types of current liabilities - known amounts and estimated amounts. - Which
265 can be - Short term, Sales, Current - All the options done
When a fixed asset is sold for a loss the amount is transferred to the profit and loss account
266 by a credit in disposal of fixed asset account - True doubt

267 Proceed from the sale of equipment in the business comes under which category - Investing done
The JK Company has ending inventory of Rs. 20000 and cost of goods available for sale of Rs. 80000
268 100000 its cost of - done

269 A decrease in the balance of accounts receivable, comes under which category - Operating done
270 when there is a decrease in current asset there is a decrease in working capital - True done
An increase in working capital indicates an outflow of cash. And a decrease in working capital
271 indicates inflow of cash done
272 A decrease in working capital indicates outflow of cash - False done
A company should use the MOST favorable figure when preparing its financial statements -
273 False done
The purchase of a new delivery truck to be used in the business comes under which category
274 - Investing done

275 An increase in Bonds Payable (a long term liability) comes under which category - Financing doubt
276 The related expenses for intangible assets is called Amortization done
What will be the treatment of capitalized machinery spares when the related / concerned
fixed asset has been sold or discarded - Spares will be written off at the value which is
277 written down value less disposal value done
Cost of goods sold is determined only at the end of the accounting period - A periodic
278 inventory system doubt
Interest and other borrowing costs are usually considered as not relating to bringing the
inventories to their present location and condition and are, therefore, usually not included in,
279 the cost of inventories - True done

280 How many process involved in units of production method of depreciation - Two step process done
Borrowing cost, for construction or acquisition of fixed asset - Added to the cost of fixed
281 asset doubt
282 An accrued expense is an expense incurred by the company but not yet paid - True done
283
284
present value of estimated future cash flows can be calculated from…………………………….all the pg 198 ebook
285 options
_______________ reflect the value of goods and services in the pg 190 ebook
286 economy…………………………..Prices
ocean freight and transit insurance paid for importation of a special kind of plant and doubt
287 machinery can be considered as ………………………capital expenditure
the concept of depreciation does not occupy a significant place in the determination of doubt
288 income and in the measurement of service potential of assets……………………………False
The difference between the total equity interest in the converted balance sheets at the
beginning and end of the year (after allowing for dividends and introduction of new capital) is
the profit or loss for the year measured in current purchasing power. This profit and loss will
be transferred to ................................General Reserve
doubt

289
 fixed assets are stated in the balance sheet at their written down value ……………………………… check in google
290 true
A liability can be defined as- …………………………. an obligation to transfer assets or to provide pg 182 ebook
291 services in the future.
the allocation of the cost of a tangible plant asset to expense in the periods, in which services
292 are received from the asset, is termed as ?.............................Depreciation
company can use profits of the company without giving dividend and bonus to if doubt plz check
293 stakeholders…………………false
The advantage of computerized accounting is its ability to handle bulky data processing in pg ebook 213
real time…………..true
294
Current Purchasing Power and Current Value Systems are two major methods of accounting pg ebook 192
295 for price level changes..True
General price changes reflect increases or decreases in the value of the monetary pg ebook 190
296 unit……………….true
An investor purchase bond between interest dates must pay accrued interest on doubt
297 bonds………………………..true
An increase in the value of fixed asset is referred to
298 as ?..............................................Appreciation
Commissioning charges and trial run expenses for installation and testing of any fixed asset
can be even capitalized after commencement of commercial production form that
299 asset……………………………False
The asset should be eliminated from the books of accounts on sale / disposal what is the
accounting treatment for the profit / loss arises on sale / disposal of fixed doubt
300 asset?.......................Charged to profit and loss account
The cost of repairs is included in the calculation of depreciation of a fixed asset ……………………
301 False
In historical cost accounts, although capital is maintained in nominal money terms, it may not
be maintained in real terms In an inflationary situation, mere maintenance of money capital
has no meaning and it must be adjusted for inflamationary value otherwise will result into
misleading higher paper profits ................................true doubt

302
Most information suits available seek to span across the entire value chain of business. It is
called " Enterprise Resource Planning (ERP)" They aim to integrate the order processing the
accounting inventory and the issue / consumption / production /dispatch system. It is also
used as management information system.(MIS).......................False
303
304 Current liabilities are obligations due within one year. pg ebook 182
Goodwill should be accounted in books of account only when actually paid for by the pg ebook 162
305 entity……………….True
Out of the following which method for depreciation is accepted by GAAP?...................Straight doubt
306 line method
Depreciable amount + Residual value of a fixed asset=? ……………………..………..Cost of fixed
307 asset
Under specfic identification method of inventory costing the inventory is valued doubt
308 at………………….. Actual cost of each unit of inventory identified
Which of the following is a true statement about inventory
systems?........................................................Perpetual Inventory systems require more doubt
309 detailed inventory records
Which of the following is/are the example/s of intangible Asset?...(Copy rights Goodwill confirm ans
310 Patent rights) all the option

The related expense account for natural resources like oil wells and mine is called depletion pg ebook 174
311 and depletion expense is calculated in the manner similar to units of production method.

312 Franchise rights goodwill and patents are the examples of?.........................Intangible Asset
Disadvantages under LIFO method is …Report lower net income Reports is understated Can pg ebook 150
313 be used…..all the option
Which of these is accounting principal in inventory accounting………………………………
conservatism principle, Materiality concept, Consistency principle …………………..as per taran doubt
314 all the option..

If cost of machine =Rs 400000 Useful life = 5 years Residual value = Rs 25000 Sale price = Rs
40000 Rate of depreciation = 40% what will be the amount of depreciation charged on 3rd done
315 year using straight line method? .75000
 Company purchases Asset of Rs 1500000. Its Residual Value is Rs 150000 and useful life is 10 done
316 years . What will be Depreciation under Straight line method? 135000

The Company purchase Factory Building for Rs 5000000. It has also incurred Repairing
expenses of Factory building of Rs 250000 annual maintenance contract of that Factory
building of Rs 100000. What is the amount of Revenue Expenditure incurred by the
317 company?...350000

Company purchases Machinery costing Rs. 7000000 by taking a loan. Trade discount received
by the company was Rs 50000. Company has paid Rs 800000 interest on the loan. Out of
which Rs 300000 is the interest for the period after machinery is ready to put to use Company
has also incurred trial run expenses of Rs 500000 out of which expenses of Rs 100000 relates
to the period after commencement of commercial production. What will be cost of that
318 "Plant & Machinery" in the books of the company?.. 6950000
If current assets rs 100000 current liability Rs 50000 and Fixed assets Rs 200000. Calculate
319 Working Capital 50000

Company receives Rs 5500000 from issue of share capital .It receives long term loan from
financial institution Rs 2500000 it repays long term loan of rs 2000000. It pays dividend of Rs
500000 and interest of Rs 250000. What will be Net Cash Flow from financing activity?
320 5250000
Interest and other borrowing costs are usually considered as not relating to bringing the
inventories to their present location and condition and are, therefore, usually not included in,
the cost of inventories. True

321
The balance of the provision for depreciation Account is shown on the trial balance as debit
322 False

323 How many process involved in units of production method of depreciation Two step process
Borrowing cost, for construction or acquisition of fixed asset, which relates to the period after
324 the asset, is ready to put to use, will be Added to the cost of Fixed Asset
325 Price changes can be classified as All the options
Which of the following would not be classified a long term liability? Utilities payable / Bonds
326 Payable confuse
327 To get maximum benefits companies indulge in inappropriate accounting practices True
328 The accounting software would give information such as- All the options
329 Economic value method can only be applied to the business as a whole
When the asset has been purchased in between of the financial year. What will be the
treatment of the depreciation on such kind of asset? Depreciation for the full year will be doubt
330 provided
331 CFO is responsible for all kind the fraud and inappropriate accounting function? Yes
Financial capital maintenance can be measured in either nominal monetary units or units of
332 constant purchasing power. …True
333 The excess of a bond issue price over its face value is known as Premium
334 Depreciation is a non-cash item True
335 Total depreciation of an asset cannot exceed its Depriciable value
If ending inventory is overstated by Rs 2000 then current assets are overstated by Rs 2000
336 True
Under Average cost method of inventory costing all the cost incurred to bring inventories to
337 their present True
338 which of these is a financing activity? Redemption of preference share capital
339 Which of these is not an investing activity? Equity dividend paid
The proceeds from issuing additional common Stock comes under which category of cash
340 flow statement ?

ABC Ltd has increase its paid up equity share capital by way of Right issue and paid dividend
to equity share folders- while preparing cash flow statement , these transactiona will fall
341 under which activity? Financing Activity
342 Estimated warranty payable is a current liability True
343 Which of the following is better accounting? Computerized
The JK Company has ending inventory of Rs 20000 and cost of goods available for sale of Rs
344 100000 its cost of goods sold is ………………..
According to which principle of accounting .. Once the entity opts for fifo method for one consistency principle
345 year
Depreciation should be calculated on market value if it is higher than the cost? false
The estimated value of an asset after the expiry of its useful life is called as s? residual
One of the important benefits of computerized accounting is arithmetical accuracy
google check

doubt

8500000 DONE

9500000 DONE

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