11/19/21, 3:36 PM Check Your Answers :: ELearning System

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1 If the land is purchased for Rs 500000 and the present market value is 2500000Rs, so what
amount will get recorded in books of accounts as per the historical concept?
500000
2000000
2500000
3000000

2 Money measurement concept is also known as?

Monetary unit concept
Monetary expression concept
Both A and B
None of the above

3 The entity concept is applicable to which form of business?

Sole trader
Partnership
Joint stock company
All of the above

4 The preparation of profit and loss account for the year ended is the best example of?
Matching concept
Accounting period concept
Monetary expression concept
All of the above

5 According to dual concept every transaction has aspects, in double entry book keeping system;
every entry must have minimum_______ effects?
Nil
One
Two
Three

6 ____________ Concept is also known as cost merge concept?

Cost attach concept
Accounting period concept
Matching cost
All of the above

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7 The basic financial statement required by US GAAP is?

Income statement
Statement of retained earnings
Balance sheet
All of the above

8 An expert in financial accounting is called?

Chartered accountant
Certified public accountant
Both A and B
None of the above

9 Conservatism in short means the policy of playing safe, according to this convention while
preparing accounts we must not take into account any profits unless they are realized?
True
False

10 Financial statements have their use to several segments of the society who are called
stakeholders, who is a stakeholder out of the following?
Students of finance
Researchers
Government
All of the above

11 GAAP stands for?

Generally accepted accounting principles
Generally accepted accounting programme
Generally accounting accepted principle
None of the above

12 Financial accounting is governed by rules or guidelines collectively called?

SEBI
RBI
GAAP
None of the above

13 The basic financial statement required by Indian GAAP is?

Profit and loss account
Balance sheet
Statement of cash flows
All of the above

14 What is the maximum limit of shareholders for private companies?

2
3

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11/19/21, 3:36 PM Check Your Answers :: ELearning System

7
50

15 Banking companies are similar to joint stock companies, but the maintenance of books of
accounts are governed by?
ICAI
ICWAI
Banking regulation act
None of the above

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11/19/21, 3:37 PM Check Your Answers :: ELearning System

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1 A person to whom business owes or required to pay some money is called?

Debtor
Creditor
Owner
Buyer

2 The debts which are not recoverable from debtors are known as?
Reserve for doubtful debts
Bad debts
Both A and B
None of the above

3 Which is an example of Personal account?

Creditors account
India security press account
Mr. Ram’s loan account
All of the above

4 Which is an example of real account?

Discount account
Interest received account
Rates account
Equipment account

5 Which is an example of nominal account?

Loose tools account
Motor car account
Office furniture account
Wages account

6 The right of a writer of the books is known as?

Patents
Copyright
Goodwill
None of the above

7 Money value of business reputation earned by the business over number of years?
Goodwill
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11/19/21, 3:37 PM Check Your Answers :: ELearning System

Creditors
Debtors
Reputation

8 Reduction in the value of fixed assets due to wear and tear cause by its use is known as?
Loss
Profit
Depreciation
None of the above

9 Purchased machinery for Rs. 80000 and paid by cheque.

Machinery A/c 80000 debit and Bank Account 80000 credit
Bank A/c 80000 debit and Machinery A/c 80000 credit
Both A and B
None of them

10 What are the adjusting entries?

Deferral
Depreciation
Accrual
All of the above

11 Debit what comes in credit what goes out is a rule for which account?
Real accounts
Personal account
Nominal accounts
None of the above

12 Debit the receiver credit the giver is a rule for which account?
Real accounts
Personal accounts
Nominal accounts
None of the above

13 Debit all expenses and assets, credit income and liabilities?

Real accounts
Personal accounts
Nominal accounts
None of the above

14 Personal accounts are related to?

Persons
Creditors
Debtors
All of the above

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11/19/21, 3:37 PM Check Your Answers :: ELearning System

15 Trade discount is the normal reduction from the maximum retail price or market price given to
a trader?
True
False

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11/19/21, 3:39 PM Check Your Answers :: ELearning System

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1 _________ Cycle in which the business purchases inventory for cash, sells it to customers on
account, and eventually collects the cash so that additional inventory can be purchased?
Operating
Business
Both A and B
None of the above

2 Out of these what is an intangible asset?

Organizational expenses
Market research
Both A and B
None of the above

3 Amount owed by customers arising from credit sales is known as?

Debtors
Accounts receivables
Both A and B
None of them

4 The general reserve A/c shows________ balance?

Debit
Credit
Nil
Negative

5 A written promise to pay a definite sum at a future date is known as?

Notes receivables
Bills of exchange
Both A and B
None of them

6 ________ Liabilities listed in the footnotes are potential liabilities, which hopefully never become
due?
Current liability
Contingent liabilities
Non-current liabilities
All of the above

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11/19/21, 3:39 PM Check Your Answers :: ELearning System

7 The closing stock of the preceding year will be?

Closing stock
Opening stock
Purchases
Sales

8 The sale of equipment costing Rs. 8,000, with accumulated depreciation of Rs.6,700 and sale price
of Rs.3,000, would result in a?
Loss of 700
Loss of 600
Gain of 1700
Gain of 2,000

9 Contingent liabilities include?

Lawsuits
Warranties
Cross guarantees
All of the above

10 Earned equity represents profits earned by the company and retained in the business?
True
False

11 The operating cycle of business is also known as?

Cash to cash cycle
Inventory cycle
Assets to liability cycle
None of the above

12 Purchased equity consists of?

Paid up equity shares
Preference shares
Earned equity
All of the above

13 The cost price of a machine is Rs.1,20,000 and the depreciated value Of the machine after 3
years will be Rs.66, 000. If the company charges Depreciation under straight-line method, the rate
of depreciation will be
25%
20%
18%
15%

14 Outstanding expenses will be added to the concerned expenses and also shown on which side?
Asset
Liability
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11/19/21, 3:39 PM Check Your Answers :: ELearning System

Income
Expenses

15 Current liabilities consist of the following obligation accounts?

Stock
Bills receivables
Accrued expenses
None of the above

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11/19/21, 3:39 PM Check Your Answers :: ELearning System

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1 In US, the profit and loss statement is called?

Revenue statement
Income statement
Expenses statement
Profit and loss appropriation statement

2 If the cost of a fan is 100 RS and sold at 125 RS. Find the gross profit percentage?
22%
25%
35%
21%

3 _________ requires that expenses be recorded in the same period in which the revenues they
helped produce are recorded?
Matching principle
Dual concept
Accrual basis
All of the above

4 Earnings before income and tax are also known as?

Operating income
Non-operating income
Retained earnings
None of the above

5 Manish sold some particulars at 20,000 RS. The cost price of those particulars is 12,000RS. Find
the gross profit percentage?
27.71%
41.40%
33%
40%

6 If the net earnings of a company is 500000 and 25000 shares have been issued, the earnings per
share will be?
20 Rs
30 Rs
40 Rs
50 Rs

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11/19/21, 3:39 PM Check Your Answers :: ELearning System

7 PEPSI Company has sales revenue of Rs39, 000; cost of goods sold of Rs29, 000 and operating
expenses of Rs9, 000 for the year ended December 31. Cole's gross profit is?
Rs 30000
Rs 10000
Rs 6000
Rs 0

8 _________ Principle that dictates that revenue be recognized in the accounting period in which it
is earned?
Revenue recognition
Matching principle
Both A and B
None of the above

9 The creation of a provision for bad debts increases the net profit?
True
False

10 A company deducts cost of sales, cost of goods sold from its revenue, showing the resultant
Net profit
Gross profit
Retained earnings
None of the above

11 Profit after tax is also called as?

Retained earnings
Profit and loss appropriation
Net earnings
None of the above

12 The total amount of a company’s net earnings since its inception, minus any payments made to
shareholders by way of dividends, are called___________?
Net profit
Retained earnings
Gross profit
Operating income

13 ________ show how much money the shareholders would receive for each share of the company
if the company distributed all its net earnings to its shareholders?
Dividend per share
Earnings per share
Interest per share
None of the above

14 If Cost of sales in Rs. 90,000, income from sales Rs. 300,000 and operating expenses Rs.100,000,.
What will be net results?
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11/19/21, 3:39 PM Check Your Answers :: ELearning System

Rs 5000 loss
Rs 110000 profit
Rs 195000 profit
Rs 195000 loss

15 By which of the following ways companies can earn revenues?

By selling its products or services
By leasing or renting equipment or property
By receiving interest from loans made to other companies
All of the above

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