Question Option-1 Option-2 Option-3 Option-4 Marks Right Answer

Users of the accounting information for decision making are called

Consumers Owners Stakeholders Management 0.5 3
__________________
Accounting information are used by managers in taking decisions relating to the Bonus Declaration to
Product Pricing Manipulate tax liability Product mix decisions 0.5 3
below, EXCEPT__________ Employees
Past Events and Future
Managerial accounting uses information related to ____________ Past Events only Future Estimates Only Current Values Only 1 4
Forecasts both
Identifying, measuring, Informed Decision Making
Which is NOT a key attribute to associate when defining the term "accounting"? Economic Information End of Period Activity 1 4
communicating by Users
ABC Limited prepares its accounts this year from April 2020 to March 2021. On
31 March 2021, it pays rent of around Rs. 100000 for one of its highway Expense for the financial year Asset as on 30 September Expense for the financial year
Asset as on 31 March 2021 2 2
advertisement hoarding in advance till September 2021. This Rs. 100000 2020-21 2021 2019-20
represents ____________ of the company.
For each item of assets, liabilities, equity, income and expenses ___________ are
Journal, Subsidiary Books Journal, Ledger Accounts, Ledger Journal, Journal Proper 0.5 3
prepared and the same are maintained in a ________________
Nullification compensating Income and Expenses are not
What is the key premise behind accounting equation? Cash Flow Dual Effect 0.5 2
transactions recorded
What is the effect of the below transaction on accounting equation? Increase in an asset; Decrease Increase in an asset; Increase Increase in an asset; Increase Decrease in an asset;
1 2
Company purchased raw materials worth Rs. 250000 on credit in another asset in a liability in capital Decrease in a liability
A company purchased stationary items on credit basis. What will be the effect on Increase in an asset; Decrease Increase in Liability; Increase in a Liability; Increase in Capital; Decrease
1 2
accounting equation? in another asset Decrease in Capital Increase in an Asset in a Liability
Consider the below transaction:
Credit Machinery A/c by Rs. Debit Machinery A/c by Rs. Debit Machinery A/c by Rs.
"Company purchased a machinery from BML Limited for Rs. 500000, 25% of Debit Machinery A/c by Rs.
500000; Debit Cash A/c Rs. 375000; Debit Cash A/c Rs. 500000; Credit Cash A/c Rs.
which was paid by cash immediately, and the remaining to be paid after 6 500000; Credit Cash A/c Rs. 2 4
125000; Debit BML Limited 125000; Credit BML Limited 125000; Credit BML Limited
months" 500000
A/c Rs. 375000 A/c Rs. 500000 A/c Rs. 375000
What will be the right journal entry for this?
Which of the below statements is a statement of financial position of a company? Income Statement Statement of Assets Balance Sheet Statement of Equity 0.5 3
Companies are required to prepare financial statements on a/an ___________ Any period with equal
Annual Quarterly Annual and quarterly 0.5 3
basis interval
Investments are called current investments, when they are invested For a period of more than one For a period of less than one Invested for earning quick Invested for long-term capital
1 2
________________ and generally used for ______________ needs year; Long-term year; Short-term profits; Short-term growth; Long-term
Some or all assets are Some assets serve as All assets of the firm are Loans are taken from secured
What is a key feature of a secured loan? 1 2
pledged as collaterals collaterals hypothecated institutions like bank
A company gives you the below information: Machinery Rs. 50000; Buildings
Assets Rs. 200000 = Assets Rs. 240000 = Assets Rs. 235000 = Assets Rs. 215000 =
Rs. 100000; Debtors Rs. 20000; Inventory Rs. 25000; Cash Rs. 5000; Creditors
Liabilities Rs. 75000 + Liabilities Rs. 35000 + Liabilities Rs. 40000 + Liabilities Rs. 60000 + 2 1
Rs. 35000; Bank Loan Rs. 40000. Write the accounting equation for this
Capital Rs. 125000 Capital Rs. 205000 Capital Rs. 195000 Capital Rs. 155000
company.
as a summary for an as a summary for an
A trial balance is prepared _________ as on a specific date without mention of any date 0.5 3
accounting year accounting period
A transaction of purchase of stationary was not recorded in the journal and
therefore is missing from the trial balance. Such errors are called Errors of Commission Errors of Omission Errors of Principle Compensating Errors 0.5 2
________________
Reduce from the respective Reduce from the respective Add to the respective expense Add to the respective expense
expense in Profit & Loss A/c; expense in Profit & Loss A/c; account in Profit & Loss A/c; in Profit & Loss A/c; Shown
How is the adjustment "Prepaid Expense" treated while preparing final accounts? 1 2
Shown as a liability in the Shown as an asset in the Shown as a liability in the as an asset in the Balance
Balance Sheet Balance Sheet Balance Sheet Sheet
Machinery A/c balance will be in ___________column of trial balance, whereas
Debit, Credit Credit, Debit Debit, Debit Credit, Credit 1 3
Depreciation A/c balance will be in ___________ column of trial balance

In a trial balance below balances are given:

Equipments A/c Rs. 500000; Furniture A/c Rs. 300000; Vehicles A/c Rs. 200000
Additional adjustments are required as below:
Rs. 115000 Rs. 140000 Rs. 145000 Rs. 105000 2 3
Depreciation on Equipments to be charged at 15%, on Furniture at 10% and on
vehicles at 20%.
What is the total amount of depreciation to be charged to Profit & Loss A/c?
Which of the below is NOT a member in the Accounting Standards Board of Representative from Tax
Nominated members by ICAI Representatives of RBI Representative from AICTE 0.5 3
India? Authority
In addition to the audit process, the compliance of accounting standards is also Provisions of the Companies
An Act of Law A Monitoring Authority Income Tax Department 0.5 4
implemented through ______________ Act, 2013
AS 11: Effect of Changes in AS 12: Accounting for AS 13: Accounting for AS 14: Accounting for
Below are the Indian GAAP notified, EXCEPT: 1 4
Foreign Exchange Rates Government Grants Investments Defined Benefit Plans
The goals of convergence of accountings standards are to establish Customisable set; by
Standardised set; Companies Single set; Internationally Multiple sets of; Globally 1 3
_____________ of standards to be used ______________ Companies
____________________ are a common set of principles, standards and practices Accounting Standards; Accounting Concepts; Accounting Conventions;
Accounting Concepts;
that define the basis of financial reporting, whereas __________________ is a GAAP; Accounting Accounting Standards; Accounting Standards; 2 1
GAAP; Accounting Concepts
collection of such ___________________________ Standards Accounting Concepts Accounting Conventions
Because they are set by
Because they are not
Because they are set by Because they are accepted by accounting bodies and widely
Why are GAAP "generally accepted"? specifically accepted by few 0.5 3
authorities accounting professionals accepted by accounting
entities
professionals
IFRS provides _________________ formats for presentation of financial
Mandatory Illustrative Detailed Simplified 0.5 2
statements
Summary of Accounting
Source of the information in Ratios related to the financial Summary of the previous
The purpose of notes to financial statements is to include ________________ Policies and other exploratory 1 4
the financial statements statement elements years' data
information
International Accounting International Financial Financial Accounting
Which of the below board would you associate with US GAAP? Accounting Standards Board 1 4
Standards Board Reporting Standards Board Standards Board
Under Indian GAAP requires that the entity identifies two segments, namely Operating; Non-operating; Business; Geographical; Ordinary; Extraordinary; Productwise; Servicewise;
2 2
_____________ and _________________ using ______________ approach Fundamental Risks and Rewards Value Unit
A company has invested in short term debt mutual funds (6 months holding
period). The same is categorised as ___________________ in their financial Non-Current Investments Current Investments Cash Equivalents Marketable Securities 0.5 2
statements
Stores, Spares and
Which of the below is an example for Other Current Assets in the Balance Sheet? Investments in Mutual Funds Loans given to related parties Prepaid Expenses 0.5 3
Consumables
In treating current assets and current liabilities, if there is no clarity on
Operating Cycle; 12 Cash Cycle; 1 Financial Year; 12 Calendar Year; 12 1 1
__________________, it is assumed to be ________________ months
Revenues and expenses
Revenues and expenses Revenues and expenses Revenues and expenses
usually not occurring in
What are Exceptional Items? occurring in ordinary course occurring in ordinary course usually not occurring in 1 1
ordinary course of business,
of business, but large in size of business ordinary course of business
but large in size
Depreciation/Amortisation is deducted from cash operating profit to arrive at
Net Profit Pre-tax Profit Gross Profit Operating Profit 2 4
____________________
Current Account balance with
In the term "Cash and Cash Equivalents", cash comprises of the below, EXCEPT: Cash on hand Bank Overdraft, if any Short-term investments 0.5 4
banks
A company receives interest on debentures it had invested few years ago. How is
Investing Cash Flow Financing Cash Flow Operating Cash Flow Non-cash Flow 0.5 1
this transaction treated in Cash Flow Statements?
Interest paid by a banking company is treated as _______________ and Interest Operating Activity; Also Financing Activity; Also Operating Activity; Financing Financing Activity; Operating
1 3
paid by a manufacturing company is treated as _______________ Operating Activity Financing Activity Activity Activity
A company shows a profit after taxes of Rs. 90 lacs. Below items are charged to
depreciation: Depreciation Rs. 10 lacs, Amortisation Rs. 3 lacs; Taxes paid Rs. Rs. 133 lacs Rs. 33 lacs Rs. 73 lacs Rs. 103 lacs 1 4
30 lacs. Determine the operating cash flow.
A company's beginning cash balance is Rs. 65 crores. The company generated
operating cash flows of Rs. 30 crores. It invested Rs. 10 crores in long term
Rs. 135 crores Rs. 155 crores Rs. 55 crores Rs. 5 crores 2 1
investments and issued shares worth Rs. 50 crores. What will be the closing cash
balance?
Which of the below NOT a profitability ratio? Return on Equity Return on Assets Price to Earnings Ratio Profitability Margin 0.5 3
Which of the below is a ratio used by an existing shareholder to assess the
effective cash return he is earnings on the current value of the company's share in Net Profit Ratio Earning per Share Dividend Payout Ratio Dividend Yield Ratio 0.5 4
the market?
A company reported a net loss of Rs. 25 millions for a year. If the total revenue is
0 Minus 33.33% 33.33% 66.67% 1 2
75 millions for the year, what is its net profit ratio?
The total sales of a firm are Rs. 500 crores. If the asset turnover is 6.5 times, what
Rs. 38.46 crores Rs. 76.92 crores Rs. 3900 crores Rs. 1750 crores 1 2
is company's capital employed?
To compute majority of the
Ratios can not analyse the Ratios are as good as the Ratios can be still be
ratios, information beyond
Which of the below is NOT one of the limitations of ratio analysis? company's strengths that are accounting policies used by computed on manipulated 2 2
financial statements are
not in monetary terms the company financial statements
required
Analysis of financial statements by a potential lender is an example of
Horizontal External Vertical Inter-firm 0.5 2
____________________ analysis
A company's factory building is damaged due to an unexpected earthquake in the
Loss from Discontinued
area. The loss is estimated to be almost Rs. 10 crores. This has to be reported as Comprehensive Income Other Comprehensive Income Extraordinary Items 0.5 3
Operations
_______________
A company's sales were Rs. 650 crores in current year. Their sales were Rs. 500
crores in the previous year. When preparing the comparative statement, what will Increase of Rs. 150 crores Decrease of Rs. 150 crores Increase of 25% Decrease of 23% 1 1
be the rupee change of this item?
The two key differences between common size income statement and a Number of years of
Expression as Index;
percentage change analysis statement are that Left to right; Top to bottom Qualitative; Quantitative comparison; Comparison 1 4
Expression as Percentage
_____________________________ and ______________________ base
The total value of non-current liabilities in two consecutive years for a company
are Rs. 56 lacs and 82 lacs, in a comparative statement what will be the increase Rs. 82 lacs; 82.00% Rs. 26 lacs; 46.43% Rs. 26 lacs; 31.71% Rs. 56 lacs; 56.00% 2 2
or decrease in rupee value and in percentage terms against this item?