FA MCQ & NOTES

Q. Goodwill is --------- Asset

1)Tangible
2)intangible
3)personal
Q.1 The Cost of the Machine Purchasedis9L.
Transportation charges 1l. Custom Duty 1L. installation and training1L
Estimated Annual Depri.1L. What will be the Value of the Asset under
Historical Cost Concept.
a)9 Lakh
b)10 Lakh
c)11 Lakh
d)12 Lakh
Q.2 The Cost of the Machine Purchased is9L.
Transportation chrgs 1l. Custom Duty1L. installation and training1L
Estimated Annual Depri.1L. What will be the Value of the Assest under
On going concern Concept.
a)9Lakhh
b)10Lakh
c)11Lakh
d)12Lakh
Q3.The closing stock is 40cr, mkt value is 38cr, as per
conservatism convention the value of stk will be
A 40
B 38
C None of the above
Q4. Contingent liability not matured and not part of balance
Sheet but shown as footnote below balance sheet for information because
Of ___________ convention
a)materiality
b)consistency
c)conservatism
d)disclosure
Q5) Goodwill is --------- account
1)Tangible
2)intangible
3)personal
4)real
Q6 out of the given current asset which Asset is non Quick current Asset
A-Investment
b-machinery
c-Goodwill
D-Inventory

Q7 company's ordering period of stock is 2 months, production phase

Period is 4months, finished goods and delivery phase is 2month, find the
Inventory cycle in months ?
A 8mth
B. 4
C. 6
D. 7

Q8 The cost of goods sold is Rs. 400 Cr. Average inventory is Rs.80Cr.
What is the inventory holding period? Assuming that a year has 360days?
a.100days
b 60days
c 72day
d none of the above

Q 9. the following is the list of asset of the company P&M 8Lakhh

Furniture 6Lakhh motorcar 10Lakhh stock 9Lakhh receivable 12Lakhhs
Cash bank 11Lakhs, prepaid exp 4Lakhs, goodwill 8Lakhh, find the value of
Fixed Asset:-
A. 20 Lakh
B. 24 Lakh
C. 32 Lakh
D. 36 Lakh (stock + receivable + prepaid exp + cash bank)
Q10 a. the following is the list of asset of the company P&M 8Lakhh
Furniture 6Lakhh motorcar 10Lakhh stock 9Lakhh receivable 12Lakhhs
Cash bank 11Lakhhs, prepaid exp 4 Lakhs, goodwill 8 Lakh, find the value of
Fixed Asset:-
A. 20 Lakh
B. 24 Lakh
C. 32 Lakh
D. 36 Lakh
Q10.The selling priceisRs.400/-of an product Cost price isRs.300/-find
Out the Gross profit%
A-20%
B-30%
C-25%
D-33.33%
GP%=(GP/SP)*100 (Soln-100/400*100=25%)
where, GP=SP-CP
Q11 If the cost of Product is 100RS and sold at 125RS. Find the gross profit
percentage?
A-20% (%GP=(25/125)x100=20%)
B-30%
C-25%
D-33.33%
Q12 Manish sold some product at 20,000RS. The cost price of those
Product is 12,000RS.Find the gross profit percentage?
A-20%
B-30%
C-25%
D 40 %
Q13.Thecost of goods sold is 48,00,000 opeining inventory is Rs3,00,000/-
Net purchase 50,00,000/-find the value of Closing stock
A-53lak
B-48lak
C-5lak
D-6lak
Sol:- COGS : (Opening stock + Net Purchase + All Factory expenses) - Closing
Stock
= 48L= 3L+ 50L - cl stock

Q14.] Cash sales is Rs.3L. Credit sale is Rs.18L. Sales return (return inward) is
Rs.1L, cost of goods sold is Rs.16L. Find the gross profit percentage
A-20%
B-40%
C-25%
D-33.33%
Sol:- (Sales= Cash sales + credit sales-Sales returns
GP=SP-CP
GP%=(GP/SP)*100
Sol=4/20 x 100=20%(3+18-1=20-16=4/20*100)
Where, CP=COGS
GP%=(GP/SP)*100
4,00,000/20,00,000*100=20%)
Q15 Gross profit is Rs.12L, operating income is Rs.2L, office expense is Rs.3L.
Selling & distributing expense Rs.4L. Finance expense is Rs.2L. Loss by fire is
Rs.1L, profit of sale of asset is Rs.5L. Find net operating profit.
A. 3L
B. 5L
C. 9L
D. None of the above
Net operating profit = GP +Op Inc.- Op Exp (Adm +SD+FIN)
Sol = 12 + 2 - 9 (3+4+2)
Q16. Gross profit is Rs.12L, operating income is Rs.2L, office expense is
Rs.3L. Selling & distributing expense Rs.4L. Finance expense is Rs.2L.
Loss by fire is Rs.1L, profit of sale of asset is Rs.5L .NET Profit Before
Tax.
a:3L
b:5L
c:9L
d:None of the above
Sol:- NPBT=Net operating profit + Non op Inc – Non op Exp
=5+5-1=9L
Q17 Net profit before tax is 20crores. Tax percent is 30 percent. Calculate
The tax amount
A.9crores
B.14crores
C.6crores (20*30%=6)
D.20crores
Q17 B Net profit before tax is 40crores. Tax percent is 30 percent. Calculate
The Net Profit after tax amount
A.9crores
B.14crores
C.6crores
D.28crores
Sol: 40 - (40*30%)= 40-12= 28 Cr
Q18) Net profit before tax is 80L.Tax is 30%. Number of Equity shares is 8L.
Find earning per share
A.10rs
B.8rs
C.7rs
D.12rs
Sol:- EPS=NPAT/No of Equity shares
EPS=56/8=7(80L-24L56L/8L)

Q19.Purchase of M/C =2L, Written down value of m/c after 3Years is

=1.4L, Find the % of depreciation per year
a.30%
b.40%
C.20%
D.10%
SOLUTION :formula=depreciation/cost*100
Depreciation figure 2lac - 1.4lac = 0.6
Depreciation for 3yr 60000/3 = 20000 (amtfor1yr)
Dep = 20000/2000000*100=10
Q20: Following are the list of Assets and liabilities, Equity share capital 5L,
Reserve and surplus 2L, Plant and Machinery 9L, Furniture and Fix.5L, Stock 4L,
Creditors 6L, Bills payable 2L, Bank loan 5L, Outstanding expense 1L, Debtors 4L.
From the following calculate the total owners fund/Shareholders fund?
a) 5L
b) 3L
c) 11L
d) 7L
Sol:- Shareholders /net worth = Share capital + Reserves and Surplus
(5 + 2 = 7)
Q21 Following are the list of Assets and liabilities, Equity share capital 5L, Reserve
and surplus 2L, Plant and Machinery 9L, Furniture and Fix.5L, Stock 4L,Creditors
6L, Bills payable 2L, Bank loan 5L, Outstanding expense 1L,Debtors 4L. Adv Tax
4l stock 5l Bills receivable 2L. From the following calculate the total current
liability
a) 5L
b) 3L
c) 9L
d) 17L

sol:- current liability = creditors + bills payable + outstanding expense

=6lacs+2lacs+1lacs
=9lacs
Q22. Following are the list of Assets and liabilities, Equity share capital 5L,Reserve
and surplus 2L, Plant and Machinery 9L, Furniture and Fix.5L, Stock 5L ,Creditors
6L, Bills payable 2L, Bank loan 5L, Outstanding expense 1L, Debtors 4L. Adv Tax
4l , Bills receivable 2L. From the following calculate the total Current Asset
a) 15L Sol:- ( Stk 5L + Debtor4L + Adv Tax 4L + Bill Receivable 2L) = 15 L
b) 3L
c) 9L
d) 17L
List of current assets:-
1. Bill receivable
2. Debtors
3. Cash and bank balance
4. Prepaid expense
5. Inventory/ stock
6. Short term investment
Current liabilities list:
1. Creditors
2. Bills payable
3. Provision for tax
4. Proposed dividend
5. Bank overdraft
6. O/S exp
7. Income received in advance
8. Advance from customers

FORMULAE:
1. Shareholders /net worth = Share capital + Reserves and Surplus
2. Holding inventory period =( Avg inventory * 360days )/ cost of goods
sold
3. Holding inventory period =( Avg inventory * 360days )/ cost of goods
sold
4. Inventory Cycle In month = Ordering Phase in month + Production Phase
in Month + Finished Goods and Delivery Phase in month

1 Net Sales = (Cash Sales + Credit Sales) – Sales Return

2 Cost Of Goods Sold (COGS I.E. Total Of All Factory Expense) = (Opening
Stock Of Goods + Net Purchase + All Factory Expense) – Closing Stock
3. Gross Profit (GP) = Net Sales – COGS
4. Net Operating Profit = (Gross Profit + Operating Income) – Operating Expense
5. Net Profit Before Tax (NPBT) = (Net Operating Profit + Non-Operating Income)
- Non-Operating Expense
6. Net Profit After Tax (NPAT) = Net Profit Before Tax – Tax
7. Earnings Per Share (EPS) = NPAT/No. Of Equity Shares
8. % Gross Profit = (GP/Net Sales) *100
 Fixed Assets are those assets that are long term investments which enable
the business to carry on its operations. Fixed assets represent the use of
cash to purchase physical assets whose life exceeds one year. All tangible
assets are fixed assets. E.g. Land, Building, Machinery and Equipment,
Furniture and Fixtures, Leasehold, Land, Vehicles etc. and intangible
assets like goodwill. Copyright, patent, trademark, etc.

 Non operating expense is that expense which is not a regular expense .

Non operating expenses list
Loss of theft, fire, loss due to exchange rate, preliminary exp written off,
,goodwill written off, war risk insurance premium, etc (happens mostly
once and not regularly in year) Non operating income list
Profit on sale of assets/investment, interest received ,dividend received,