While structuring the financials of a business, a proper balance is maintained between owners funds and borrowed funds.

Hence, to ascertain this critical factor of structuring, it is important to look at _________ ratio.

Options

1. 2. 3. 4.

Long Term Debt / Equity Sales / Working Capital Net Profit / Net Worth Current Assets / Current Liabilities

Correct Answer: -> 1

2 An auditor in his notes on account, states that the company does not have internal controls for physical verification of the inventory, but still has signed the balance sheet indicating the value of the inventory. Which of the following statements correctly describes the action of the auditor?

Options

1. 2.

The auditor should not have signed the balance sheet. The auditor should not have made such remarks when he has signed the balance sheet.

3. 4.

The auditor has submitted a qualified report. As he has signed the balance sheet, the comments in the notes to the account will be deleted.

Correct Answer: -> 3 3

nfoSolution investments have made changes in their accounting policy. The auditor will reveal this observation on which of the following financial statements of the company?

Options

1. 2. 3. 4.

Balance sheet under fixed assets Auditors' report Directors' report Notes on accounts

Correct Answer: -> 4 4 AutoInfo Ltd. holds an average inventory of finished goods worth Rs.100 lacs. The cost of Sales during the year was Rs.1800 lacs. What is the holding period of finished goods, assuming 360 days in a year, in terms of number of days?

Options

1. 2. 3. 4.

20 days 21 days 22 days 23 days

Correct Answer: -> 1 AutoInfo Ltd. holds an average inventory of finished goods worth Rs.100 lacs. The cost of Sales during the year was Rs.1800 lacs. What is the holding period of finished goods, assuming 360 days in a year, in terms of number of days?

Options

1. 2. 3. 4.

20 days 21 days 22 days 23 days

Correct Answer: -> 1 AutoInfo Ltd. holds an average inventory of finished goods worth Rs.100 lacs. The cost of Sales during the year was Rs.1800 lacs. What is the holding period of finished goods, assuming 360 days in a year, in terms of number of days?

Options

1. 2. 3. 4.

20 days 21 days 22 days 23 days

Correct Answer: -> 1 AutoInfo Ltd. holds an average inventory of finished goods worth Rs.100 lacs. The cost of Sales during the year was Rs.1800 lacs. What is the holding period of finished goods, assuming 360 days in a year, in terms of number of days?

Options

1. 2. 3. 4.

20 days 21 days 22 days 23 days

Correct Answer: -> 1 AutoInfo Ltd. holds an average inventory of finished goods worth Rs.100 lacs. The cost of Sales during the year was Rs.1800 lacs. What is the holding period of finished goods, assuming 360 days in a year, in terms of number of days?

Options

1. 2. 3. 4.

20 days 21 days 22 days 23 days

Correct Answer: -> 1 AutoInfo Ltd. holds an average inventory of finished goods worth Rs.100 lacs. The cost of Sales during the year was Rs.1800 lacs. What is the holding period of finished goods, assuming 360 days in a year, in terms of number of days?

Options

1. 2. 3. 4.

20 days 21 days 22 days 23 days

Correct Answer: -> 1 AutoInfo Ltd. holds an average inventory of finished goods worth Rs.100 lacs. The cost of Sales during the year was Rs.1800 lacs. What is the holding period of finished goods, assuming 360 days in a year, in terms of number of days?

Options

1. 2. 3. 4.

20 days 21 days 22 days 23 days

Correct Answer: -> 1 AutoInfo Ltd. holds an average inventory of finished goods worth Rs.100 lacs. The cost of Sales during the year was Rs.1800 lacs. What is the holding period of finished goods, assuming 360 days in a year, in terms of number of days?

Options

1. 2. 3. 4.

20 days 21 days 22 days 23 days

Correct Answer: -> 1 5 Which of the following factors is not taken into consideration while financing fixed assets?

Options

1. 2. 3. 4.

Track record of the promoters Marketability Credit period available for purchase of raw material Quality of Management

Correct Answer: -> 3 Which of the following factors is not taken into consideration while financing fixed assets?

Options

1. 2. 3. 4.

Track record of the promoters Marketability Credit period available for purchase of raw material Quality of Management

Correct Answer: -> 3 6 Consider the following statements:

Statement A : Working capital measures the available liquid assets of a company to build its business.

Statement B : Net Working Capital = Current Assets Current Liabilities (including bank borrowings)

Which of the following is correct in reference to the preceding statements?

Options

1. 2. 3. 4.

Both statements A and B are true. Statement A is true and statement B is false. Statement A is false and statement B is false. Both statements A and B are false.

Correct Answer: -> 1 7

In a situation where seller of the machines is prepared to accept instalment payment instead of lump sum payment, what are the possible modes of financing such fixed assets?

Options

1. 2. 3. 4.

Term loan financing Co-acceptance of bills Deferred payment guarantee Deferred payment guarantee or co-acceptance of bills

Correct Answer: -> 4 8 Under turn over method of working capital finance, on which component of financial statements the margin is calculated?

Options

1. 2. 3. 4.

Current liabilities Current assets Turnover Net working capital

Correct Answer: -> 3 9 An importer from India has banking relationships with Camara Bank Ltd.. He proposes to import a machinery worth Rs.150 lacs. His current account balance with Camara Bank Ltd. is Rs.400 lacs. He approaches Camara Bank for seeking assistance for the import of machinery. What kind of facilities the Camara Bank may extend, particularly when the importer and exporter are otherwise not known to each other?

Options

1. 2. 3. 4.

Term loan Cash credit Letter of credit Secured overdraft

Correct Answer: -> 3 An importer from India has banking relationships with Camara Bank Ltd.. He proposes to import a machinery worth Rs.150 lacs. His current account balance with Camara Bank Ltd. is Rs.400 lacs. He approaches Camara Bank for seeking assistance for the import of machinery. What kind of facilities the Camara Bank may extend, particularly when the importer and exporter are otherwise not known to each other?

Options

1. 2. 3. 4.

Term loan Cash credit Letter of credit Secured overdraft

Correct Answer: -> 3 An importer from India has banking relationships with Camara Bank Ltd.. He proposes to import a machinery worth Rs.150 lacs. His current account balance with Camara Bank Ltd. is Rs.400 lacs. He approaches Camara Bank for seeking assistance for the import of machinery. What kind of facilities the Camara Bank may extend, particularly when the importer and exporter are otherwise not known to each other?

Options

1. 2. 3. 4.

Term loan Cash credit Letter of credit Secured overdraft

Correct Answer: -> 3 An importer from India has banking relationships with Camara Bank Ltd.. He proposes to import a machinery worth Rs.150 lacs. His current account balance with Camara Bank Ltd. is Rs.400 lacs. He approaches Camara Bank for seeking assistance for the import of machinery. What kind of facilities the Camara Bank may extend, particularly when the importer and exporter are otherwise not known to each other?

Options

1. 2. 3. 4.

Term loan Cash credit Letter of credit Secured overdraft

Correct Answe-3 10 An importer from India has banking relationships with Camara Bank Ltd.. He proposes to import a machinery worth Rs.150 lacs. His current account balance with Camara Bank Ltd. is Rs.400 lacs. He approaches Camara Bank for seeking assistance for the import of machinery. What kind of facilities the Camara Bank may extend, particularly when the importer and exporter are otherwise not known to each other?

Options

1. 2. 3. 4.

Term loan Cash credit Letter of credit Secured overdraft

Correct Answer: -> 3 11 Consider the following statements in reference to Indian Accounting standards.

Statement A : Interest income is to be recognised on time proportion basis.

Statement B : Royalties are recognised based on the contract terms.

Which of the following options is correct in reference to the preceding statements?

Options

1. 2. 3. 4.

Both statements A and B are false. Statement A is true and statement B is false. Statement A is false and statement B is true. Both statements A and B are true.

Correct Answer: -> 4 12 nfoEdge Ltd. have availed term loans for Rs.6000 lacs and Rs. 8000 lacs. The repayment of the first loan has been made to the extent of Rs.4500 lacs in the past three years and the repayment to the second loan was made to the tune of Rs.2000 lacs in the last year. A third term loan for Rs.4000 lacs is

sanctioned repayable in four yearly instalments of Rs.1000 lacs and will be disbursed shortly. What amount should be treated as a current liability in the current year?

Options

1. 2. 3. 4.

Rs.4000 lacs Rs.2500 lacs Rs.4500 lacs Rs.3500 lacs

Correct Answer: -> 4 13 uestion Text

Which of the following standards makes allowances for normal wastages of materials such as idleness or breakdown of machinery?

Options

1. 2.

Ideal standard Basic standard

3. 4.

Normal standard Expected standard

Correct Answer: -> 3 14 Consider the following statements with reference to inventory valuation:

Statement A: Organisations that deal in commodities that undergo frequent changes follow FIFO method.

Statement B: Organisations that deal in homogeneous inventory items and large quantities follow average cost method of valuation.

Which of the following options is correct in reference to the preceding statements?

Options

1. 2. 3. 4.

Both statement A and statement B are true Statement A is false and statement B is true Statement A is true and statement B is false Both statement A and statement B are false

Correct Answer: -> 2 15 The total overhead expenses of a factory is. Rs.2,00,000. The labour hours spent per month is 500. For assembling a computer the time spent is 8 hours. Calculate the standard overhead rate for assembling activity.

Options

1. 2. 3. 4.

Rs.4000 Rs.3200 Rs.32,000 Rs.40,000

Correct Answer: -> 2 16 Which of the following factors is not considered while calculating break even point?

Options

1. 2.

Sales Fixed cost

3. 4.

Variable cost Level of production

Correct Answer: -> 1 17 MacInfo Ltd. is engaged in assembling of machines. For the purpose of assembling, the company purchases specific items which are homogeneous. The number of such parts needed are less in number. To obtain accurate level of value of inventory, which of the following methods of valuation would be appropriate?

Options

1. 2. 3. 4.

FIFO LIFO Specific identification method Average cost

Correct Answer: -> 3 18 Which of the following entities need not have an audit committee?

Options

1. 2. 3. 4.

Public sector undertakings Non listed public limited companies Private limited companies A limited company who has paid-up capital Rs.45 million

Correct Answer: -> 4 19 Consider the following statements with respect to documents to be provided for audit:

Statement A: The trial balance provided to the auditor should show the opening balance of each accounting head.

Statement B: All liability holders should provide a confirmatory statement of dues.

Which of the following options is correct in reference to the preceding statements?

Options

1. 2. 3.

Both statement A and statement B are true Statement A is false and statement B is true Statement A is true and statement B is false

4.

Both statement A and statement B are false

Correct Answer: -> 1 20 An internal auditor after his audit, has recommended that all cheques should be signed by two signatories, instead of single signatory. What could be the purpose of the internal auditor behind this recommendation?

Options

1. 2. 3. 4.

To ensure verification of the transactions To provide more power to various functionaries To improve the present system in the company To mitigate the risks

Correct Answer: -> 4 21 Daily report of auditors reveal the value of stock as Rs.25 lacs in the financial statements whereas, the inventory records indicated value of stock as Rs.24 lacs. Which of the following actions you would take in the preceding circumstances?

Options

1. 2.

The declaration of value of stock would be altered as per the valuation of the auditor. The auditor would be requested to ignore the difference, as the difference is less than 10%.

3. The stores department would be advised to reconcile the difference to the satisfaction of auditors and the declaration of value of stock would be as per the agreement arrived at. 4. The accounts would be recast as per valuation of the auditors.

Correct Answer: -> 3 22 Which of the following options does not represent a classification of bill of entry?

Options

1. 2. 3. 4.

Home consumption bill of entry Trade consumption bill of entry Bill of entry for warehouses Bill of entry for ex-bond clearance

Correct Answer: -> 2 23

Question Text

Consider the following statements referring to types of letter of credits:

Statement A: If the LC specifies negotiation by any bank, then it is known as unrestricted LC.

Statement B: An assignable LC is an LC that permits assignment as a part of the benefits of the LC to a third party.

Which of the following options is correct in reference to the preceding statements?

Options

1. 2. 3. 4.

Both statement A and statement B are false Statement A is true and statement B is false Statement A is false and statement B is true Both statement A and statement B are true

Correct Answer: -> 4 24 n the case of overseas trade, it is difficult to ascertain the credit worthiness of the purchaser. What type of risk is attached with the preceding statement?

Options

1. 2. 3. 4.

Trade risk Exchange risk Default risk Identity risk

Correct Answer: -> 3 25 Petrochemical resources has ambitious plans of importing petroleum products directly from middle east. During the last financial year, it has exported goods worth more than Rs.3 trillions. Will the company be in a position to import as planned?

Options

1. Petroleum products are canalised items and can be imported only by specific public sector undertakings. Hence, Reliance natural resources cannot import them. 2. Petroleum products can be imported only after obtaining requisite licenses. Reliance natural resources can import after obtaining requisite licenses. 3. Petroleum products come under OGL. Hence, the company can import them freely.

4. As an exporter, the company is eligible for incentives on imports and hence has to apply for licenses and then import the products.

Correct Answer: -> 1 26 Which of the following options refers to a list of all accounts used by an organisation?

Options

1. 2. 3. 4.

Trial Balance Balance sheet Day Book Chart of Accounts

Correct Answer: -> 4 27 Which of the following statements is correct in reference to the golden rules of accounting?

Options

1. Debit - What comes in (Real account) - The receiver (Personal Account - Expenses & Losses (Nominal Account)

2. Credit - What comes in (Real account) - The receiver (Personal Account - Expenses & Losses (Nominal Account) 3. Debit - What goes out (Real account) - The receiver (Personal Account - Expenses & Losses (Nominal Account) 4. Credit - What goes out (Real account) - The receiver (Personal Account - Expenses & Losses (Nominal Account)

Correct Answer: -> 1 28 Question Text

Sonia is working as an accountant in the InfoWays Ltd. She wants to view the cash summary for the current month in Tally.ERP 9. Identify the correct link that she should select in Tally.ERP 9 to accomplish the desired task.

Options

1. 2. 3. 4.

Gateway of Tally > F12:Configure > Cash Book Gateway of Tally > Accts/Inventory Info > Cash Book Gateway of Tally > Voucher Entry > Account books > Cash Book Gateway of Tally >Display >Account Books > Cash Book

Correct Answer: -> 4 29 Which of the following refers to is a book in which business transactions are entered in chronological order?

Options

1. 2. 3. 4.

Ledger Account Voucher Journal

Correct Answer: -> 4 30 Question Text

While working in Tally.ERP 9, you want to display trial balance to bring up opening balances, summary of transactions and the closing balances for a given period. Identify which of the following tasks you will perform to accomplish the desired task?

Options

1. 2. 3. 4.

Gateway of Tally > Display > Trial Balance > F3 Gateway of Tally > Display > Trial Balance > F4 Gateway of Tally > Display > Trial Balance > F5 Gateway of Tally > Display > Trial Balance > F12: Configure

Correct Answer: -> 4

3.