3123 Advanced-Accounitng

Dnyansagar Arts And Commerce College, Balewadi,Pune – 45
Subject- Advanced Accounting 2013 pattern Sub.code- 3123 Class: T. Y.Bcom
MULTIPLE CHOICE QUESTIONS
UNIT I- ACCOUNTING STANDARDS
Q 1. Fill in the blanks with correct options.
1.The accounting standards Board (India) was formed by the Institute of

Chartered Accountants of India in April---------------
a. 1977
b. 1978
c. 2001
d. 2009
2. Accounting Standards in India are Issued by the …………..

a. ICAI
b. BMCC
c. IT
d. IMA
3. Accounting Standards are beneficial not only to the business enterprises but
also to the………….. as well.
a. accountants & auditor
b. Customers
c. Family and Country
d. Traders
4. The important objective of Accounting standards is to the …………..diverse

accounting policies and practices at present in use in India.
a. harmonies
b. incomplete
PROF. Shinde.P.S. www.dacc.edu.in

c. complex
d. compact
5. AS-7 deals with accounting for construction contracts in financial statements of

a. contractors
b. Accountants
c. Agents
d. Dealers
6.AS -26 deals with the treatment of costs of……………in financial statements.
a. Research & development
b. Construction contract
c. Assets
d. Risk & Rewards
7. Investment made by government as equity in the ownership of an enterprise is

known as ------------
a. participation
b. interested
c. refundable
d. not interested
8. Govt. grants become -----------because of non fulfillment of the conditions

attached to that grant.
a. Refundable
b. non refundable
c. overdraft
d. income

9.AS 15 deals with the accounting for retirement benefits in the financial
statements of --------------
a. employers
b. employees
c. top manager
d. none of these
10. Revised AS 15 – Employees benefits is applicable in respect of accounting

periods commencing on or after 1st April ----------
a. 2006
b. 1978
c. 2001
d. 2009
11. AS …………….also focuses on profit sharing and bonus plan.

a. AS- 15
b. AS-21
c. AS- 28
d. AS- 7
12. AS-17 segment reporting applies to those companies which have an annual
turnover of Rs……….crores or more.
a. 50
b. 80
c. 21
d. 20

13…………….reporting helps uses of financial statements to better assess the risk

and t returns of the enterprise.
a. segment
b. Account
c. statement
d. management
14. As per AS-19 …………n lease risk and reward is not transferred to the lessee.
a. operating
b. non operating
c. manageable
d. refundable
15. In financial lease as per As-19 leased assets is shown in the Balanced sheet of--
a. lessee
b. income
c. loss
d. refund
16. AS -20 deals with presentation and Computation of---------------

a. earnings per share
b. profit sharing ratio
c. rate of interest
d. solvency
17. Earning per share is very important financial ratio is computed for assessing
the state of --------------price of shares.

a. Market
b. area
c. shops
d. none of these
18. Right issue generally made at a price lower that…………….value of shares.

a. Fair
b. fixed
c. computing
d. fluctuating
19.Impairment assets is nothing but………………….in the value of assets

a. decrease
b. increase
c. fixed
d. none of these
20. Recoverable amount of an asset is of selling price and value of an assets in use.
a. higher
b. lower
c. a and d only
d. fixed
21. AS 7 does not apply to Contractors

a. false
b. true
c. none of the above
d. may be false

22. As per AS architects services are not included in construction contract.

a. false
b. true
c. may be true
d. both a and b
23. As per AS 7 Research and Development cost is to be excluded from contract

cost .
a. true
b. false
c. may be false
d. neither a nor b
24. AS – 7 deals with accounting for Government grants.

a. false
b. true
c. may be true
d. neither true nor false
25. As per AS 15 accumulated compensated absences can be carried forward if

the current period entitlement is not used in full.
a. true
b. false
c. may be false
d. may be true

26. A parent co. should account for the investment in subsidiaries in accordance
with AS -13
a. true
b. false
c. May be true
d. only b
27. A-5 does not indicate the frequency of interim financial report.
a. true
b. either true or false
c. both a and b
d. only false
28.A 25 focuses on change in accounting policies also.

a. true
b. only false
c. may be true
d. may be false
29. As per As- 28 impairment of asset means decrease in the value of asset.
a. true
b. false
c. only true
d. May be true

30.As per AS -30 prepaid expenses are not financial instruments.

a. true
b. false
c. neither true nor false
d. may be false.
ANSWERS –
1.a 2.a 3.a 4.a 5.a 6. a

7. a 8.a 9.a 10.a 11.a 12.a
13.a 14.a 15.a 16.a 17.a 18.a
19.a 20.a 21. a 22.a 23.a 24.a
25.a 26.a 27.a 28.a 29.a 30.a

UNIT II – FINAL ACCOUNTS AND BANKING COMPANIES
Q 1. Fill in the blank with correct option.
1.The banking regulation Act --.

a. 1949
b.1947
c. 1932
d. 1956
2. Banking companies in India are governed by …………………..

a. As per act 1932
b. Income Tax act
c. AS-23
d. Banking Regulation Act 1949
3.An assets becomes non performing when it to generate income for bank.
a. lease
b. ceases
c. computerized
d. easy.
4. Banks are to recognize their income on……………. basis in respect of

income on performing asset.
a. Accrual
b. cash
c. credit
d. none.

5. Banks are to recognize their income on……………… basis in respect of

income on non performing asset.
a. Accrual
b. cash
c. credit
d. none.
6. Sub standard asset are certain loan asset of a bank which are classified as
………….assets for a period not exceeding two year.
a. non –performing
b. performing
c. Current
d. Fluctuating.
7. The main function of………………company are accepts deposits money

a. Private
b. Public
c. Banking
d. Capital marketing
8…………….asset is one which has been classified as non-performing asset for

period not exceeding than………….years
a. Fixed – 13
b. Fluctuating – 11
c. Intangible – 1
d. Substandard – 2

9. Core banking system…………. system.

a. Bank end
b. work flow
c. open end
d. internal
10. Every banking company should prepare a balance sheet and profit and loss
accounts as on……………..each year.
a.31st March
b. 31st July
C. 31st December
d. None
11. Banking Companies in India are governed by Banking Regulation act 1952.
a. true
b. false
c. may be true
d. ma be false
12. The main function of a banking company are to accept deposits of money
from the public and to lend or invest these deposits.
a. true
b. false
c. only true
d. ma be false

13. Non-Banking Assets must be shown in the Balance Sheet in scheduled 8.

a. true
b. may be false
c. may be true
d. false
14. Acceptance, Endorsements and other obligations are a contingent liability of

bank.
a. True
b. False
c. May be false
d. May be true
15. Rebate of Bills discounted is an income received in advanced which is carried

forward as other liability.
a. true
b. false
c. may be true
d. only true
16. Transfer of money from one place to another i.e. mail transfer is an item to be
excluded from bills payable.
a. True
b. False
c. May be false
d. May be true

17. An assets become non-performing when it ceases to generate income for a

Bank.
a. True
b. False
c. May be false
d. May be true
18. Banks are to recognize their income on cash basis in respect of income on
performing assets.
a. true
b. false
c. may be true
d. may be false
19. Sub-standard assets is one which has been classified as non performing asset
for a period not exceeding three years.
a. true
b. false
c. may be true
d. only true
20. Every banking company incorporated in India must transfer to the Reserve
fund a sum equivalent to not less than 25% of profit of each year before
declaration of dividend.
a. true
b. false
c. only a
d. a or b

Answers -
1. a 2.d 3.b 4.a 5.b
6.a 7.b 8.a 9.a 10.a
11.b 12.a 13.b 14.b 15.a
16.b 17. a 18.b 19.b 20.a

UNIT –III INSURANCE CLAIM ACCOUNTS
Q: 1 Fill in the blank with correct option

1. A business takes a……………insurance policy to cover the claims for loss of
stocks and loss of profit.
a. Fire
b. Life insurance
c. Car insurance
d. health insurance
2. The computation of loss by fire is very simple taken when a --------------

asset is destroyed
a. current
b. long-term
c. fire
d. intangible
3. The value of stock on the date of fire can be ascertained more precisely by
preparation of a…………… Account
a. Trading A/c
b. memorandum transaction A/c
c. Balance sheet
d. P & L A/c
4. ……………..clause is applicable in case of under insurance

a. average
b. Normal
c. short sales

d. indemnity period
5…………………policy cover loss of gross profit sustained as a consequence

of business interruption.
a. loss of profit
b. loss of stocks
c. average clause
d. loss of fixed assets
6. The period for which a policy is taken known ……………….as period

a. indemnity
b. short sales
c. long
d. fixed
7. A ---------- policy covers loss of stock, fixed asset, profit, expenses etc.
a. compact
b. comprehensive
c. horizontal
d. operating
8. Insured standing charges are the --------------

a. fixed charges
b. horizontal charges
c. fluctuating
d. current charges

9……………… ratio indicates the relationship of gross profit to net sales in

terms of percentage.
a. Gross profit
b. Net profit
c. debtors turnover
d. capital employed
10. Due to the inclusion of average clause in the fire insurance policy , an insured
becomes a……………….in the event of under insurance.
a. co-insurer
b. provision
c. profit
d. loss
11. The Insurance Company cannot prevent the happening of risk but provide for
losses at the happening of risk.
a. true
b. false
c. only a
d a and b
12. Insurance is a financial service for collecting the saving of the public and
providing them with a risk of a coverage.
a. true
b. false
c. may be true
d. a and b

13. A marine insurance policy is taken to cover the claims for loss of stock.
a. true
b. false
c. may be true
d. both a and b
14. The amount paid by insured to insurer as a consideration is known as

premium.
a. true
b. false
c. may be true
d. may be false
15.General insurance business in India is transacted by Life Insurance Corporation

of India.
a. true
b. false
c. may be true
d. may be false
16. A memorandum trading account is to be prepared to ascertained the value of

stock on the date of fire.
a. true
b. false
c. may be true
d. may be false

17. A policy of fire insurance is intended to protect the assured against the loss
caused by fire.
a. true
b. false
d. may be false
18.Gross profit must always be calculated as a percentage on purchase .

a. true
b. false
c. either true or false
d. may be false
19. Average clause is applicable in case of under insurance.

a. true
b. false
c. only true
d. may be false
20.A fire policy covers loss of or damaged to insured property.

a. true
b. false
c. may be true
d. only false
21. If value of stock on date of fire is 429000, salvage is 1570000 then stock
destroyed by fire will ………………
a. 271500

b. 270000
c. 275000
d. none of the above
a. 250000
b. 255000
c. 253000
d. 251000
a. 410000
b. 400000
c. 450000
d. 430000
24. If Gross profit is 600000, sales is Rs. 15,00,000 then gross profit ratio will be
…………..
a. 40%
b. 50%
c. -40%
d. – 50%
25. If Gross profit is 54000 and sales is Rs. 180000 then gross profit ratio will be ….
a. 30%
b. 45%

c.15%
d. 25%
26. If Gross profit is Rs. 27000 and Sales Rs. 90000 then gross profit will be ……..
a.30%
b.25%
c. 30%
d. 30%
27. If Stock is 13500 for 90% then for 100% how much……….
a. 15000
b. 14000
c. 13500
d. 15500
30. If stock is for 90----------15300

100 -------------?
a.. 17000
b. 18000
c. 29000
d. 15500
31. If stock is for 110----------------- 44000

100-------------------?
a.. 40000
b. 50000
c. 55000
d. 45000

32. If value of Insurance Policy is 21000, Stock on date of Fire is 24000 and Loss of
stock is 20000 then Amount of Claim for stock will be ……………
a.. 17500
b. 18000
c. 19000
d. 25000
a..23625
b. 24625
c. 25625
d. 23525
a. 47250
b. 48250
c. 26000
d. 25000
35. If Sales of last year is Rs. 600000 and sales of corresponding current year is
Rs.200000 then Short sales will be ……………
a. 400000
b. 500000
c. 250000
d. 256000

36. If Net Profit is Rs. 200000

Insured Standing Charges is Rs. 160000
Sales of The Previous year is Rs. 1800000
Then Gross Profit Rate will be…………
a.. 20%
b. 30%
c. 40%
d. 45%
37. If Net Profit is Rs. 400000

Insured Standing Charges is Rs. 320000
Sales of The Previous year is Rs. 3600000
Then Gross Profit Rate will be…………
a.. 20%
b. 30%
c. 50%
d. 65%
38. IF Gross profit rate is 20% and Short Sales is Rs. 400000, then Loss of Profit on
Sales will be ………..
a. Rs. 80000
b. Rs. 50000
c. Rs. 85000
d. None of the above
39. IF Gross profit rate is 40% and Short Sales is Rs. 250000, then Loss of Profit on
Sales will be ………..
a. Rs. 100000

b. Rs. 50000
c. Rs. 85000
d. None of the above
40. If Sales of last year is Rs. 450000 and sales of corresponding current year is
Rs.200000 then Short sales will be ……………
a. 250000
b. 500000
c. 250000
d. 256000
ANSWERS -
1. a 2. a 3. b 4. a 5. a
6. a 7. b 8. a 9.a 10. a
11. a 12. a 13. b 14. a 15. b
16. a 17. a 18. b 19. a 20.a
21. a 22.a 23.a 24.a 25.a
26.a 27.a 28.a 29.a 30.a
31.a 32.a 33.a 34.a 35.a
36.a 37.a 38.a 39.a 40.a

UNIT -4- FINAL ACCOUNTS OF COOPERATIVE SOCIETIES.
Q:1. Fill in the blanks with correct option.
1. The employment of achieving additional income is termed as……..

a. Investment
b. Profit
c. Interest
d. loss
2. A society which as proclaimed as its objective the………….of economic interest

of its member
a. Promotion
b. Demotion
c. Recession
d. none of these
3. Maharashtra co-operative Society Act……..

a. 1960
b. 1949
c. 1986
d. 1932
4.The word………..Is working together for common purpose.

a. Co-operation
b. co-education
c. Interest
d. enactment

5. The Maharashtra co-operative Society Rules Act ……….

a. 1960
b. 1961
c. 1932
d. 1962
6. All sums of…………….received and expended by the Society and the matters in
respect of which receipts and expenditure take place.
a. Money
b. Profit
c. Interest
d. Income
7. Managing committee of every Society shall prepare annual statement of

accounts within…………… days.
a. 42
b.45
c. 2 yrs.
d. 48
8. Transactions involving receipt in……………..are recorded on receipt side of cash

book.
a. Cash
b. Profit
c. Interest
d. loss

9. Rule number 61 of the Maharashtra Co-operative Society Rule 1961- the

society has to prepare final statement within……….days.
a.45
b. 48
c. 21
d. 2 yrs
10. Interest paid and payable comes to the……………side of the profit and loss
account.
a. Expenditure
b. Receipt
c. Interest
d. income
11.Dividend received on shares is comes to the……………. side of profit and loss

account.
a. Income
b. Profit
c. Interest
d. loss
12. The investment on hand at the end of the period are valued at cost price or
market whichever is …………
a. Less
b. included
c. Add d
d. excluded

13…………….is mentioned in the balance sheet as foot note.

a. Contingent liability
b. preliminary expenses
c. debtors
d. closing stock
14…………….fund is for the purpose of construction of building for the business of

the Society.
a.building fund
b. Reserve fund
c. Education Fund
d. Loans and advances
15.The………………Fund cannot be utilized for payment of dividend as bonus.

a. building fund
b. Reserve fund
c. Education Fund
16. A co-operative Society may create out of its net profit for payment of bonus to
person who are not its members.
a. bonus equalization fund
b. Reserve fund
c. Education Fund
17.Reserve for doubtful debts is stands for …………

a.RDD

b. Reserve fund
c. Bad debts
18…………….are not formed for earning profit.

a. co-operative society
b. Public Company
c. HUF
d. Private Company
19. Deposits from Society and individuals should be shown separately to the ……..
side of balance sheet.
a. Liabilities
b. Current Assets
c. Education Fund
d. Fixed Assets
20.The primary objective in the formation of Co-operative credit Society is ………

a. promoting of saving
b. To Maintain Stock Register
c. A and C only
d. to get maximum profit
ANSWERS –
1.. a 2.a 3. a 4.a 5. b
6. a 7. a 8. a 9. a 10. a
11.a 12.a 13.a 14.a 15. b
16. a 17. a 18. a 19. a 20.a

UNIT 5- COMPUTERISED ACCOUNTING PRACTICES
Q 1. Fill in the blanks with correct option

1…………..is the source of Government to increase their revenue.
A Tax
B. Profit
C. memorandum
D Expenses
2. GST stands for………….

A Goods and service tax.
B. Government Service tax
C. God down Surcharge
D. B and C
3……………is the motive given to the parliament and legislation of every state
A . one nation one tax
B. Live and let live
C. Health is Wealth
D. learn and earn
4…………….collected by central government on an Intra state sale.

A.CGST
B. SGST
C. IGST
D GST

5………….Collected by the State Government on an Intra state sale.

A.CGST
B. SGST
C. IGST
D GST
6………….Collected by the Central Maharashtra for Inter state sale.

A. CGST
B. SGST
C. IGST
D GST
7.……….and will share revenue equally between the central and State.
A. CGST & SGST
B. SGST &IGST
C. IGST & CGST
D GST & IGST
8. on…………………..the GST law came into the force.

A. 1st July 2017
B. 2nd June 2018
C. 1st June 2017
D. 18th July 2019
9…………..is an Indirect Tax which has replaced many indirect taxes in India.
A. GST
B. Income Tax
C. IGST

D Service Tax
10. The online version of collecting tax was introduced in the year…………
A. 2004
B. 2006
C. 2005
D 2015
ANSWERS –
1.a 2.a 3.a 4.a 5.a

6.a 7.a 8.a 9.a 10.a

UNIT : 6 BRANCH ACCOUNT
Q.1 Fill the blanks with correct option
1………….method of branch accounting is usually adopted when the branch is of

the small size.
A Treading.
B. Balance sheet
C. memorandum
D. debtors
2 The normal and abnormal stock of goods doesn’t appear in branch account as
the closing stock is at the…………….figure.
A. Adjusted
B profit.
C balance.
D loss
3. Stock and Debtors method of branch accounting is generally used where

branch turnover is substantially
A loss
B lower
C High.
D Profit
4.Under analytical method of branch accounting a branch stock account is

generally to ascertain any………………in stock.
A. shortage or surplus

B advance
C. debit
D credit
5. Loading on surplus in stock is………….to Branch Adjustment Account.

A debit.
B credit.
C liability.
D treading
6.Under Stock and Debtors System general income is credited to ………..account

A .balance sheet
B. branch stock account
C. stock and Debtor System
D. branch profit and loss
7. In Branch Accounting the balance on stock reserved Account at the end of the
period is shown in the balance sheet by the way of deduction from
A. opening stock.
B. reserved stock.
C closing stock.
D. profit or loss
8. Goods sent by the head office at the end of the year but not received by Branch
before the year ended is known as
A. goods in transit
B. loss by fire
C shortage.

D. loss
9. The closing balance of book debts account is ascertained by preparing branch

………………Account.
A. stock
B. trading.
C. Debtors
D. adjustment
10. The removal of loading from the items of branch stock is adjusted through
branch……………..Account
A. adjustment
B. debtor.
C. Stock
D. profit and loss
11. A ………………is generally a physical part of the business established under the
same roof.
A. Surplus.
B. Depreciation
C. Department
D. Surplus
12. A……………..system of departmental account is more convenient where the

number of department are very small
A. Mutual.
B. Branch.
C. Debtor’s.

D. Profit and loss
13. All items of stock in Trading and Profit and loss Account are to be converted
into cost price if these are given at an _
A. Profit ratio.
B. market price
C. Balance.
D. Invoice price
14. Foreign Branch almost invariably trade independently and records their
transaction in
A. cost price
B. Market value
C. Foreign currency
D invoice price
15. To fulfill the audit requirements under section of the company act 1956
A. (B) 156
B. 228
C. (a) i 30.
D . 200
16. The branches which are totally dependent on head office are also termed as
Agency Branches.
a. True
b. False
c. may be false
d. may be a

17. The independent branches are autonomous as they are allowed to make their
own purchases from open markers and pay for their expenses.
a. true
b. false
c. may be false
d. both a and b
18. Actual petty expenses paid by branch from petty cash are to br shown
separately in Branch Account.
a. true
b. false
c. both a and b
19. The method of Branch Accounting varies with the nature and the status of
branch.
a. true
b. false
20. Dependent branch doesn’t keep any book of account as their entire
Accounting work is performed by the head office.
a. true
b. may be false
d. may be true

1. d 2. a 3.c 4.a 5. b 6. d
7. c 8. a 9. c 10.a 11. c 12. a
13.d 14. c 15. b 16.a 17.a 18.a
19.a 20.a

UNIT : 7 SINGLE ENTRY SYSTEM
Q.1 Fill the blanks with correct option
1……………system of book keeping is the only scientific method to record farming

transaction.
A. Single entry
B. Double entry
C. Balance sheet
D. Adjustment A/c
2 In single entry system it’s difficult to detect

A. Account
B. Fraud.
C. Profit.
D. Gross profit
3. Single entry constitutes incomplete records rather than single entry

A. credit.
B. Profit.
C. Accounting.
D. Net profit
4. Under pure single entry system only……………..Account are kept.

A. Personal
B. double entry
C. Assets
D. None of these

5. Under the………………… entry system personal accounts, cashbook and other

subsidiary books are kept separately.
A. Pure single
B. Quasi single
C. Simple single
D. Double entry
6. Accounting is mainly concerned with the future management planning.

A. Personal.
B. Quasi single entry
C. Pure single entry
D. Management
7. In…………………entry system no records are kept for real or nominal Account.

A. Quasi single
B. pure single
C. Simple single
D. Double entry
8. Most of the farming transactions are transacted on ……………..basis.

A. Double entry
B. Creditors.
C. Surplus.
D. Cash
9. In single entry system it’s difficult to operate ……………. system

A. Pure single
B. Single entry

C. Internal control
D. Quasi single
10. In single entry system it’s difficult to exercise control over .

A. Asset
B. Management
C. Single entry
D. Pure single entry
11.Under…………… entry system, Personal Accounts and Cash Book are kept
separately.
A. Simple single
B. Pure s ingle.
C. Quasi single.
D. Double entry
12. Under statement of affairs method which is also termed as .

A. Single entry system
B. Quasi single entry system
C. Capital comparison method
D. Double entry system
13. If the closing capital is more than the opening capital it’s shows an increase in
capital which means a ……………
A. Profit.
B. Shares.
C. Account.
D. Operating capital

14. Under single entry system arithmetical accuracy of the Accounting records can
be checked.
a. true
b. false
c. may be false
d. both a and b
15. Single entry system is mixture of single entry, double entry and no entry.
a. true
b. may be false
c. only true
16. They record a few translation completely just like the double entry system but
a majority of the transactions are recorded only partially is known as incomplete
records.
a. true
b. false
c. both a and b
17. Under single entry system the profit and loss can be found out and also it’s
comparison will be available.
a. true
b. false
c. both and b
d. only false

18. Profit and losses can’t be ascertained because Trading and Profit and loss
account can’t be prepared.
a. true
b. false
c. may be true
d. may be false
1. b 2. b 3.c
4.a 5.b 6. d
7. b 8. d 9. c
10.a 11. c 12. c
13. a 14. b 15. a
16. a 17. b 18. b

UNIT -8 ANALYSIS OF FINANCIAL STATEMENTS
Q1. Select correct option and write the answer.
1. When the concept of ratio is defined in respect to the item shown in the
financial statements, it is termed as
A. Accounting ratio
B. Financial ratio
C. costing ratio
D. none of the above
2. The relationship between two financial variables can be expressed in:

A Pure ratio
B. Percentage
C. Rate or time
D. all the above
3. Stock is considered as a liquid asset as anytime it can be converted into cash

immediately.
A. Yes
B. No
C. Only YES
D. None of the above
4 . Return on properties funds is also known as.

A. Return on net worth
B. Return on shareholders fun
C. Return on the shareholders investment

D. All the above
5. What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold
is Rs 2,00,000 & sales return is Rs10,000 ?
A. 13 %
B. 28%
C. 26%
D. 20%
6.Liquid asset is determined by

A. Current asset - stock - prepaid expense
B. Current asset + Stock +prepaid expense
C. Current asset + prepaid expense
D .None of the above
7.Which of the following is not included in current assets.

A. Debtors
B. Stock
C. Cash at bank
D. Cash in hand
8. Liquidity ratios are expressed in

A. Pure ratio form
B. Percentage
C. Rate or time

9. Working capital turnover ratio can be determined by :

A. ( Gross profit / Working capital )
B. ( Cost of goods sold / Net sales )
C. ( Cost of goods sold / Working capital)
10. Determine Working capital turnover ratio if, Current asset is Rs 1,50,000,
current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000.
A. 5 times
B. 6 times
C. 3 times
D. 1.5 times
11. The ratio analysis is helpful to management in taking several decisions, but as
a mechanical substitute for judgement and thinking, it is worse than useless.
A. True
B. False
C. may be false
D. both a and b
12. Profit for the objective of calculating a ratio may be taken as

A. Profit before tax but after interest
B. Profit before interest &tax
C. Profit after interest & tax
D. All the above

13. If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is
A. 24%
B. 416%
C. 60%
14. General profitability ratios are based on

A. Investment
B. Sales
C. A & B
15. Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is
Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales.
A. 31 times
B. 11 times
C. 8 times
D. 32 times
16. Financial Statement Analysis can be used for assessment of past performance
only.
a. false
b. true
d. only true

17. Ratio analysis is an important means of expressing the relationship between

two numbers.
a. true
b. false
c. may be false
d. a and b both
18. Ratio analysis helps in investment decision.

a. true
b. false
c. may be true
d. a & b both
19. Liquid Ratio is also known as 2:1 ratio.

a. false
a. true
20. Current ratio indicates the solvency position of the business.

a. true
b. false
c. may be false
d. a and b
21. An ideal Liquid ratio is considered as 1:1

a. true
b. false

c. a and b both
22. The gross profit represents the net margin.

a. false
b. true
c. both a and b
d. may be false
23. Reliability of ratios depend upon the reliability of financial data.

a. true
b. false
c. only a
d. both a and b.
24. Ratio analysis ensures effective cost control.

a. true
b. false
c. none of the above
d. may be both
25. An ideal current ratio is considered as 1:2

a. false
b. true
c. may be true
d. both a and b

26.The ratios which reveal the final result of the managerial policies and
performance is…………..
a. turnover ratios.
b. profitability ratios.
c. short term solvency ratio.
d. long term solvency ratio.
27. Return on investment is a .

a. turnover ratios.
b. short term solvency ratio.
c. profitability ratios.
28. Net profit ratio is a .

a. turnover ratio.
b. long term solvency ratio.
c. short term solvency ratio
d. profitability ratio.
29. Stock turnover ratio is a .

a. turnover ratio.
b. profitability ratio.
c. short term solvency ratio.
30. Current ratio is a

a. short-term solvency ratio.
b. long-term solvency ratio.

c. profitability ratio.
d. turnover ratio.
31.Proprietary ratio is a .
d. turnover ratio.
32. Fixed assets ratio is a

d. turnover ratio.
33. Fixed assets turnover ratio is a

d. turnover ratio.
34.The ratio which measures the profit in relation to capital employed is known as
a. return on investment.
b. gross profit ratio.
c. operating ratio.
d. operating profit ratio.

35. The ratio which determines the profitability from the shareholder’s point of
view is .
c. return on shareholders funds.
d. operating profit ratio.
36.Return on equity is also called

c. return on shareholders funds.
d. return on net worth.
37. Preliminary expenses is an example of

a. fixed assets.
b. current assets.
c. fictitious assets.
d. current liabilities.
38. Prepaid expenses is an example of .

a. fixed assets.
b. current assets.
c. fictitious assets.
d. current liabilities.
39. The ratio which is calculated to measure the productivity of total assets is
a. return on equity.
b. return on share holders funds.

c. return on total assets.

d. return on equity share holders’ funds.
40. The ratio which shows the proportion of profits retained in the business out of
the current year’s profits is
a. retained earnings ratio.
b. pay out ratio
c. earnings per share.
d. price earnings ratio.
41. The ratio which indicates earnings per share reflected by the market price is .
a. retained earnings ratio.
b. pay out ratio.
c. earnings per share.
d. price earnings ratio.
42.The ratio establishes the relationship between profit before interest and tax
and fixed interest charges is .
a. interest cover ratio.
b. fixed dividend cover ratio.
c. debt service coverage ratio.
d. dividend yield ratio.
43.The ratio shows the preference dividend as a proportion of profit available for
shareholders is

44.The dividend is related to the market value of shares in .

45. Turnover ratio is also known as .

a. activity ratios.
b. solvency ratios.
c. liquidity ratios.
d. profitability ratios.
46. Inventory or stock turnover ratio is also called .

a. stock velocity ratio.
b. debtors velocity ratio.
c. creditors velocity ratio.
c. working capital turnover ratio.
47. Which ratio is calculated to ascertain the efficiency of inventory management

in terms of capital investment?
a. stock velocity ratio.
d. working capital turnover ratio.

48. The ratio which measures the relationship between the cost of goods sold and
the amount of average inventory is
a. stock turnover ratio.
c. working capital turnover ratio.
49. Sales – Gross Profit = .

a. net profit.
b. administrative expenses.
c. cost of production.
d. cost of goods sold.
50. Opening stock + purchases + direct expenses – closing stock =

a. net profit.
b. cost of production
c. administrative expenses.
d. cost of goods sold
51. Which ratio measures the number of times the receivables are rotated in a
year in terms of sales?
b. debtors turnover ratio.

52. Debtors turnover ratio is also called .

d. working capital turnover ratio
53.Creditors turnover ratio is also called .

c. accounts payables ratio.
ANSWERS -
1. b 2. d 3. b 4. d 5. d 6. a 7. b 8. a
9. a 10. b 11. a 12.d 13.a 14.b 15.8. 16.a
17.a 18.a 19.a 19.a 20. a 21. a 22. a 23. a
24. a 25. a 26. b 27. c 28. d 29. a 30. a 31. b
32. b 33. d 34. a 35. c 36. d 37. c 38. b 39. c
40. a 41. d 42. a 43. b 44. d 45. a 46. a 47. a
48. a 49. d 50. d 51. b 52.b 53.c

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Dnyansagar Arts And Commerce College, Balewadi,Pune – 45

Subject- Advanced Accounting 2013 pattern Sub.code- 3123 Class: T. Y.Bcom

MULTIPLE CHOICE QUESTIONS

UNIT I- ACCOUNTING STANDARDS

Q 1. Fill in the blanks with correct options.

1.The accounting standards Board (India) was formed by the Institute of

2. Accounting Standards in India are Issued by the …………..

4. The important objective of Accounting standards is to the …………..diverse

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

5. AS-7 deals with accounting for construction contracts in financial statements of

7. Investment made by government as equity in the ownership of an enterprise is

8. Govt. grants become -----------because of non fulfillment of the conditions

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

10. Revised AS 15 – Employees benefits is applicable in respect of accounting

11. AS …………….also focuses on profit sharing and bonus plan.

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

13…………….reporting helps uses of financial statements to better assess the risk

16. AS -20 deals with presentation and Computation of---------------

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

18. Right issue generally made at a price lower that…………….value of shares.

19.Impairment assets is nothing but………………….in the value of assets

21. AS 7 does not apply to Contractors

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

22. As per AS architects services are not included in construction contract.

23. As per AS 7 Research and Development cost is to be excluded from contract

24. AS – 7 deals with accounting for Government grants.

25. As per AS 15 accumulated compensated absences can be carried forward if

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

28.A 25 focuses on change in accounting policies also.

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

30.As per AS -30 prepaid expenses are not financial instruments.

1.a 2.a 3.a 4.a 5.a 6. a

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

UNIT II – FINAL ACCOUNTS AND BANKING COMPANIES

Q 1. Fill in the blank with correct option.

1.The banking regulation Act --.

2. Banking companies in India are governed by …………………..

4. Banks are to recognize their income on……………. basis in respect of

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

5. Banks are to recognize their income on……………… basis in respect of

7. The main function of………………company are accepts deposits money

8…………….asset is one which has been classified as non-performing asset for

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

9. Core banking system…………. system.

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

13. Non-Banking Assets must be shown in the Balance Sheet in scheduled 8.

14. Acceptance, Endorsements and other obligations are a contingent liability of

15. Rebate of Bills discounted is an income received in advanced which is carried

PROF. Shinde.P.S. www.dacc.edu.in

MULTIPLE CHOICE QUESTIONS

17. An assets become non-performing when it ceases to generate income for a

PROF. Shinde.P.S. www.dacc.edu.in