Financial Accounting

Question No.: 1
Which of the following are without maturity dates?
Zero coupon bonds
Coupon securities
Consols
Preferred onds
!eference:"
Consols:" # consol offers only periodic interest payments$ the borrower ne%er repays the principal &here are no
pri%ately issued consols because only go%ernments can credibly promise to ma'e payments fore%er &he price of a
consol is the present %alue of all the future interest payments( which is a bit complicated because there are an infinite
number of payments
)a'e periodic interest payments fore%er( ne%er repaying the principal that was borrowed. Which of the following
institution ta'es direct deposit from customer and gi%es loan to customer directly?
Zarai &ar'aytee an' *&+
,oneri an'
-hushali an'
Credit union
)r. .ha/anfar obtains a home impro%ement loan from #llied an'.&his loan is:
)r. .ha/anfar0s asset and the ban'1s liability
)r. .ha/anfar 1s asset( but the liability belongs to the ban'1s depositors
Mr. Ghazanfar 's liability and an asset for the bank
oth )r. .ha/anfar1s and ban'1s liability
MGT101 Quiz o. ! "ated #$%0&%#01#
Consider the following data: Particulars !s. #ssets ? 2wner1s e3uity 45(666 *iabilities 76(666
!s. 45(666
!s. 55(666
!s. 1( 85(666
's. 1( 0)(000 *'ight Ans+er,
&he totals of return inwards 9ournal :day boo'; are
credited to the trade recei%ables control account
debited to the trade -ayables control account *'ight Ans+er,
debited to the trade recei%able control account
credited to the trade payables control account
#C co. has a capital of !s. 166(666( *ong &erm *iabilities !s. 56(666( net profit during the year !s. 15(666 and the
amount of total liabilities is !s 1<5(666. What will be the amount of Current *iabilities?
!s. 86(666
!s. 156(666
's. 10(000 *'ight Ans+er,
!s. 85(666
&he third party who owes money to the business is called:
+ebtor
Creditor
.takeholder *'ight Ans+er,
stoc'holder
Which of the following %oucher is used to record receipt of cash?
9ournal =oucher
'ecei-t /oucher *'ight Ans+er,
Payment =oucher
Nominal =oucher
&he allocation of the cost of a tangible plant asset to e>pense in the periods( in which ser%ices are recei%ed from the
asset( is termed as:
#ppreciation
"e-reciation *'ight Ans+er,
?luctuation
None of the gi%en options
&he minimum number of members that can form a public limited company are:
1
#*ot .ure, *'ight Ans+er,
4
<
udget is a plan of income( e>penses @ other financial operations for:
Current period
Future -eriod *'ight Ans+er,
Past period
?ind out the missing %alue of an #ccounting A3uation with the help of gi%en data: ?urniture !s. 76(666 Cash !s.166(
666 +ebtors !s.16( 666 2ther #ssets !s. 1(666 2wner0s e3uity !s. 76( 666 *iaibilities ?
!s. 861(666
!s. 111( 666 *'ight Ans+er,
!s. 876( 666
!s. 871( 666
?rom the gi%en particulars( calculate the rate of depreciation under the fi>ed installment method of depreciation:
Cost of #sset B !s. 8(666
!esidual =alue B !s. C66
Dseful *ife B C years
#0 0 *'ight Ans+er, 46E 85E 44E
Which of the following formula is used to calculate the cost of goods sold?
Cost of goods a%ailable for sale minus net purchases plus ending in%entory
1eginning in2entory -lus net -urchases -lus freight in 3inus ending in2entory *'ight Ans+er,
eginning in%entory minus net purchases minus ending in%entory
eginning in%entory minus ending in%entory
&he in%estment of !s. 16(666 made by the owner in business will ha%e an effect on which of the following accounts?
Cash Account 4 Ca-ital Account *'ight Ans+er,
Cash #ccount @ A>pense #ccount
Capital #ccount @ !e%enue #ccount
Capital #ccount @ A>pense #ccount
.oods sold to )r. Naeem for !s. 5(666 are wrongly recorded in sales Fournal at !s. 566 and same amount is posted
in )r. Naeem0s account( this is an e>ample of:
Compensating errors
Arror of Commission
Arror of Principle
5rror of 6riginal entry *'ight Ans+er,
Which of the following is the first boo' to record a transaction?
&rial alance
7ournal *'ight Ans+er,
&rial alance
alance ,heet
Which of the following would N2& be considered as a component of 1cost1 of stoc'?
.alaries of selling staff *'ight Ans+er,
&ransportation inward costs
Gmport duties
Purchase price
Which of the following is :are; characteristic:s; of ad +ebt?
Gt is a definite loss to the business
Gt must be shown in Profit @ loss account
No pro%ision is necessary for it
All of the gi2en o-tions *'ight Ans+er,
&he difference between )anagement #ccounting and ?inancial #ccounting is that:
?inancial accounting is used by managers to plan strategies in the area of company growth
?inancial accounting is used by e>ternal in%estors to gain information about the company
)anagerial accounting is used by the internal managers to plan for daily business acti%ities
oth 8 and 4 *'ight Ans+er,
Gf Current #ssets !s. 166(666( Current *iability !s. 56(666 and ?i>ed #ssets !s. 8( 66(666. Calculate wor'ing
capital.
's. )0(000 *'ight Ans+er,
!s. 1( 66(666
!s. 1( 56(666
!s. 4( 66(666
Which of the following is N2& a re%enue e>penditure?
Petrol consumed in motor %ehicles *'ight Ans+er,
Cost of saleable goods
ad debts
Premium gi%en on lease
&he #mount changed to deprecation goes on declining in:
+epreciation fi>ed method
#nnuity method
8ritten%do+n 2alue 3ethod *'ight Ans+er,
,traight line depreciation method
Gf Cost of sales in !s. 76(666( income from sales !s. 866(666 and operating e>penses !s.166(666(. What will be net
results?
!s. 5(666 *osses
's. 10(000 9rofits *'ight Ans+er,
!s. 1(75(666 Profits
!s. 1(75(666 *osses
&he main purpose of HHHHHHHHHHHHHH is to as certain true result of the business operation during particular period of
time.
Cost #ccounting
Financial Accounting *'ight Ans+er,
)anagerial #ccounting
&a> #ccounting
&he ban' loan or the ban' charges are called:
Cost of good e>penses
,elling e>penses
?inancial e>penses *'ight Ans+er,
#dministrati%e e>penses
Question No. 1 of 86
Which of the following item is found in a 9ournal entry? :1; +ate of each transaction :8; !upee amount of each debit
and credit :4; A>planation of each transaction
1 only
1 @ 8 only
8 @ 4 only
1( # 4 : *'ight Ans+er,
Question No. 8 of 86
Gf Purchase price of machine B C66(666 Profit on disposal B !s. 5(666 !esidual %alue B !s. 16(666 Dseful life of
machine B 5 years ?ind ,ale price at the time of disposal B?
's. 1)(000 *'ight Ans+er,
!s. 16(666
!s. 86(666
!s. 5(666
Question No. 4 of 86
Which of the following is the main cause of depreciation?
?all in the mar'et %alue of money
Fall in the 3arket 2alue of an asset *'ight Ans+er,
Physical wear and tear
Question No. C of 86
&he estimated %alue of an asset after the e>piry of its useful life is called as:
Written +own %alue
'esidual /alue *'ight Ans+er,
#ccumulated depreciation
,ales %alue
Question No. 5 of 86
Gn the creditors control account( all of the below e>ist e>ecept:
credit purchases
purchase returns
cash -urchases *'ight Ans+er,
cashIche3ues paid
Question No. J of 86
?ranchise rights( goodwill and patents are the e>amples of:
*i3uid assets
&angible assets
;ntangible assets *'ight Ans+er,
Current assets
Question No. < of 86
Gn which of the following statement opening stoc' is shown?
9rofit and loss account *'ight Ans+er,
alance sheet
Cash flow statement
2wner0s e3uity
Question No. K of 86
2n the receipts side of the cash and ban' boo'( a column is added in which the receipts from debtors are seperately
noted( this type of cashIban' boo' is also called:
single column cashIban' boo'
cashIban' boo'
multi column cashIban' boo' *'ight Ans+er,
none of the abo%e
Question No. 7 of 86
Gf you start with cash boo' fa%orable balance in an' !econciliation ,tatement( which item will be added?
Che3ue deposited but not credited by the ban'
Che3ues omitted to be deposited into ban'
Any a3ount directly collected by bank on behalf of custo3er but not recorded in cash book *'ight Ans+er,
+ebit side of cash boo' was o%ercast
Question No. 16 of 86
Which of the following is N2& a characteristic of Cash oo'?
Gt has two identical sidesLleft hand side( the debit side and right hand side( the credit side
Gt %erifies the arithmetic accuracy of posting of entries from the 9ournal to the *edger
&he difference between the total of two sides of cash boo' shows cash in hand
;t al+ays sho+s debit balance. ;t can ne2er sho+ credit balance *'ight Ans+er,
Question No. 18 of 86
Which of the following is N2& a rule for re%aluation of fi>ed assets?
&he change in the %alue should be permanent
!e%aluation has to be carried out at regular inter%als
Whole class of asset has to be re%alued
The -rofit on re2aluation should be credited to re2aluation reser2e account *'ight Ans+er,
Question No. 14 of 86
# transaction in which Cash #Ic and an' #Ic are in%ol%ed( is recorded on both the sides of +ouble Column Cash
oo'( it is called ______________.
!ectifying Antry
#dFusting Antry
Contra 5ntry *'ight Ans+er,
Closing Antry
Question No. 1C of 86
What would con%ersion costs if costs of raw materials( direct labor costs( and manufacturing o%erhead costs
!s.K6(666( !s.56(666( and !s.J6(666( respecti%ely?
!s.146( 666
's.110( 000 *'ight Ans+er,
!s.1C6( 666
!s.176( 666
Question No. 15 of 86
&he ,ales !eturns +ay oo' would include:
.oods bought on credit
?i>ed #ssets bought that are inappropriate for business
.tock that custo3ers ha2e returned *'ight Ans+er,
.oods bought on credit that are returned to the original supplier
Question No. 1J of 86
*oss on the sale of plant and machinery should be written off against:
,ales premium account
+epreciation fund account
,ales account
9lant and 3achinery *'ight Ans+er,
Question No. 1< of 86
Gn an account if debit side M credit side( the balance is 'nown as the:
Negati%e alance
"ebit balance *'ight Ans+er,
Positi%e alance
Credit balance
Question No. 1K of 86
#ny e>pense that becomes a source of income generation for a long time period is called HHHHHHHHHH
Ca-ital 5<-ense *'ight Ans+er,
!e%enue A>pense
!e%enue !eceipt
Capital !eceipt
Question No. 17 of 86
Which one of the following is N2& a feature of sole proprietorship business.
Aasy ?ormation
Aasy +issolution
Dnlimited *iability
.e-arate =egal 5ntity *'ight Ans+er,
Question No. 86 of 86
Carriage paid !s. 56 for the newly purchased machinery if debited to carriage account will effect:
2nly carriage account
2nly machinery account
oth carriage and machinery account
None of the gi%en options
Which of the following is:are; &!DA about the sole trader form of business?
# sole trader is liable to pay income ta> on hisIher earnings
,ole traders must ha%e to prepare boo's of accounts by law
,ole traders must register the name of their business with the !egistrar of Companies
All of the gi2en o-tions *'ight Ans+er,
Gn which depreciation method +epreciation remains constant?
'educing balance 3ethod *'ight Ans+er,
!educing balance method
!educing balance method
!educing balance method
.oods returned by )r. amount to !s. C(666. &he entry in the boo's will be:
Mr. 1 is "ebit *'ight Ans+er,
,ales !eturns is Credit111
,ales !eturns is +ebit )r. is Credit
)r. is +ebit #ccounts !ecei%able Credit
Which of the following 2rgani/ation con%erts raw material into finished goods?
&rading concern
Manufacturing concern *'ight Ans+er,
)erchandising concern
,er%ice concern
?ind out the missing %alue of an #ccounting A3uation with the help of gi%en data: Cash !s.166( 666 +ebtors !s.16(
666 2ther #ssets !s. 1(666 2wner0s e3uity !s. 1( 666 *iabilities ?
!s. 18(666
!s. 11(666 *'ight Ans+er,
!s. 116(666
!s. 111(666
Question No. < of 86
HHHHHHHH is the art of recording monetary transactions in the boo's of #ccounts in a proper manner:
#ccounting
1ook >ee-ing *'ight Ans+er,
Posting
=ouching
Question No. K of 86
Which of the following 9ournal entry will be recorded when the bad debts are reco%ered?
Cash account *"r., 4 1ad "ebts reco2ered account *Cr., *'ight Ans+er,
#ccounts !ecei%able :+r.; @ ad +ebts reco%ered account :Cr.;
ad debts reco%ered account :+r.; and profit @ loss account :Cr.;
Pro%ision for doubtful debts account :+r.; @ cash account :Cr.;
Which of the following isIare the e>ampleIs of Gntangible #sset?
Copy rights
.ood will
Patent rights
All of the gi2en o-tions *'ight Ans+er,
Question No. 16 of 86
Dnder the straight line method of depreciation:
A3ount of de-reciation increases e2ery year *'ight Ans+er,
#mount of depreciation remains constant for e%ery year
#mount of depreciation decreases e%ery year
None of the gi%en options
Question No. 11 of 86
Gf( Cost of machine B !s.C66( 666 Dseful life B 5 years !esidual %alue B !s.85( 666,aleprice B !s.C6( 666 !ate of
depreciation B C6E What will be the amount of depreciation charged on 4rd year using straight line method?
!s. 45(666
!s. 5<(J66
's. ?)(000 *'ight Ans+er,
!s. 7J(666
*oss on re%aluation of fi>ed asset should be charged to:
9rofit and loss account *'ight Ans+er,
alance sheet
!e%aluation !eser%e account
#ccumulated depreciation account
Question No. 14 of 86
+ebts that are not collectible and worthless to the creditor are 'nown as:
1ad debts *'ight Ans+er,
.ood debts
+oubtful debts
Pro%ision for doubtful debts
Question No. 1C of 86
Which of the following would N2& be considered as a component of 1cost1 of stoc'?
.alaries of selling staff *'ight Ans+er,
&ransportation inward costs
Gmport duties
Purchase price
&otal depreciation of an asset can not e>ceed its:
.cra- 2alue *'ight Ans+er,
!esidual %alue
)ar'et %alue
+epreciable %alue
Question No. 1J of 86
# company uses straight line method of depreciation for an item of e3uipment that cost !s. 8K(666( has sal%age
%alue of !s. 4(666( and has a fi%e year useful life. What will be the boo' %alue of asset at the end of third year?
!s. 15(666
!s. 16(666
!s. 1K(666
's. 1:(000 *'ight Ans+er,
Question No. 1< of 86
Which of the following is I are the particularIs of a cash boo'? :1; +ate of transaction :8; #ccount title :4; #mount
1 only
1 @ 8 only
1 @ 4 only
1( # 4 : *'ight Ans+er,
Question No. 1K of 86
#t the end of the accounting period( the balance which is showing on the debit side of ledger account is called as:
Credit alance
"ebit 1alance *'ight Ans+er,
Contra account
None of the abo%e
Question No. 17 of 86
&he amount charged to depreciation goes on declining in:
+epreciation fi>ed method
#nnuity method
8ritten%do+n 2alue 3ethod *'ight Ans+er,
,traight line depreciation method
Question No. 86 of 86
Which of the following is N2& a re%enue e>penditure?
9etrol consu3ed in 3otor 2ehicles *'ight Ans+er,
Cost of saleable goods
ad debts
Premium gi%en on lease