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chapter in
Financial Accounting

3 of 76 sets

201. If the whole of the issue of shares or debentures is underwritten it is known

as_______________________
A. frim underwriting
B. partial underwriting
C. sole underwriting
D. complete or fully underwriting
Answer:D

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202. The depreciation of Fixed Assets is converted at rate________________
te
A. date of purchase
a
B. balance sheet
C. average during year
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c
D. on the date of balance sheet
Answer:A M
203. On Amalgamation, Profit & Loss A/c (Dr.) balance of the vendor company is
closed by___________
A. debit to realisation
B. debit to profit & loss a/c
C. debit to equity shareholders a/c
D. credit to equity shareholders a/c
Answer:C

204. A Limited Liability Partnership has ________

A. no perpetual succession
B. perpetual succession
C. no specific period
D. specified period of life
Answer:B

205. 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

206. 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

207. 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

208. '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

209. rights/ Duties of partners are governed by_______________

A. article of association
B. llp agreement

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 C. partnership deed
D. byelaws
Answer:B

210. 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

211. Out Of The following, Direct Expense Is

A. Salaries
B. carriage outward
C. rent of office building
D. carriage inward
Answer:D

212. Goodwill is a
A. Fixed asset
B. current asset
C. intangible asset
D. fictitious asset
Answer:C

213. Income received in advance is

A. An income
B. a liability
C. an asset
D. a loss
Answer:B

214. Sales are equal to

A. Cost of goods sold plus profit
B. cost of goods sold minus gross profit

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 C. gross profit minus cost of goods sold
D. none of these
Answer:A

215. 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

216. Which of the following is not a fixed asset

A. Motor cycles
B. furniture
C. inventory
D. free hold property
Answer:C

217. 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

218. Which of the following is not an intangible asset

A. Stock
B. goodwill
C. trade mark
D. patents.
Answer:A

219. 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

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 C. preparing
D. none of these
Answer:C

220. 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

221. 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

222. 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

223. the depreciation charged on an asset is debited to

A. asset account
B. depreciation account
C. cash account
D. none of these
Answer:B

224. in case of straight line method, the amount of deprecation

A. fluctuate every year,
B. decreases every year

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 C. increases every year
D. remains same every year
Answer:D

225. amortization is related to

A. Tangible fixed asset
B. intangible assets
C. any fixed asset
D. none of these.
Answer:B

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