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Transcript of Financial
Unit-1
ICAI INFOTECH SEC 33 D
Financial And Management Accounting
MB 0041
_ Unit-1Financial Accounting-An IntroductionQ1: To make a sound decision business decision business enterprise needs .
a) Books b) Accounting information c) Assets
d) All of these
Q2: Accounting is perhaps one of the oldest ..
a) Book keeping b) Method c) Structured management information system
d) None of these
Q3: Accounting as an information system is concerned with ..a) Identification b) Measurement c) Both a & b
d) None of these
Q4: Accounting as a discipline was introduced to have & record of business transactiona) Books, goods b) Permanent, systematic c) Both a & b
d) Keeping, business
Q5: are the terms used in science of financial accounting
a) Book keeping b) Accounting c) Accountancy
d) All of these
Q6: Accounting is termed as language of
a) Business b) Books c) Accounts d) None of these
Q7: . Refers to systematic knowledge of accounting
a) Business b) Accountancy c) Identification d) Measuring
Q8: .. Is first step of accounting process?
a) Identification b) Measuring c) Transaction d) None of these
Q9: .. Is transfer of money or goods or services from one person or account?a) Business b) Measuring c) Transaction d) IdentificationQ10: In accounting process, the value of business transactions and events should be expressed in terms of money
a) Measuring b) Recording c) Analyzing d) None of these
Q11: Recording deals with recording transaction and events in the a) Ledgers b) Books of original entry c) Trial balance
d) All of these
Q12: accounting process involves the preparation of financial statements
a) Summarizing b) Classification c) Recordingd) All of these
Q13: In the accounting information system, processing consist of
1) Accounting concepts, conventions and principle
2) Business transaction
3) Law and regulation
4) Classification and interpretation
a) 1, 2, 3 b) 1, 3, 4 c) 3, 4, 1 d) All of these
Q14: Which of the following statement are true?
1) Accounting measures the financial performance of business
2) Accounting is not a tool for effective planning
3) Accounting facilitates in reporting the results to internal user
a) 1, 2, 3 b) 1, 2, 3 c) only 1 d) 1 & 2 only
Q15: . Years financial performance becomes the bases for future predictions and estimation
a) Current b) Previous c) Base d) None of these
Q16: adopt principles of accounting for recording
a) Accounting b) Book keeping c) Business d) All of these
Q17: Certain restrictions imposed by user or lenders are known as a) Covenants b) Proprietor c) Both a & b d) None of these
Q18: are keen to know about the general health of organization in terms of stability and profitability
a) Management b) Regulations c) Employees d) Investor
Q19: . Are main lenders?a) Banks b) Financial institutions c) Debentures d) All of these
Q20: .. Follows book keeping
a) Accounting b) Business c) Organization d) All of theseQ21: In nature of job is non-routine but a) Book keeping, clerical b) Accounting, analytical
c) Accounting, analytical d) None of these
Q22: Book keeping is performed by and Accounting is performed by
a) Accounts-executive, accountant b) Accountant, accounts-executive
c) Both a & b d) None of theseQ23: .. Is one where there is no cash inflow or outflow but adjustment is made in records only?
a) Transaction b) Capital c) Paper transaction d) Cash transaction
Q24: In case of company. Capital is collected by .
a) People b) Issue of shares c) Sales d) All of theseQ25: Capital is for businessa) Liability b) Cash c) Income d) Asset
Q26: Cash and Marketable investments are
a) Fixed asset b) Current asset c) Liquid asset d) Both b & c
Q27: Match the following
1) Stock A) current liability
2) Marketable investment B) current asset
3) Plant and machinery C) liquid asset
4) Bills payable D) fixed asset
a) 1-B, 2-C, 3-D, 4-A b) 1-D, 2-B, 3-A, 4-C c) 1-C, 2-B, 3-A, 4-D
d) None of these
Q28: Goods account is divided into .. Heads
a) 5 b) 4 c) 6 d) 7
Q29: Match the correct one 1) Purchase returns A) Return inward
2) Sales return B) Return outward
a) 1-B, 2-A b) 1-A, 2-B c) 1-B, 2-B d) 1-A, 2-A
Q30: Inventory includes .
1) Raw material 2) Purchases 3) Stock of work in progress 4) Sales 5) Stock of finished goods
a) 1, 3, 4 b) 1, 2, 3 c) 1, 3, 5 d) All of these
Q31: . Is an account book
A) Ledger b) Journal c) Book keeping d) All of these
Q32: Is a record of a transaction made in any books of account?
a) Narration b) Entry c) Posting d) none of theseQ33: Match the following
1) Posting A) a worksheet listing all accounts
2) Voucher B) written document in support of a financial statement
3) Narration C) the process of entering in the ledger the information
Already recorded in journal
4) Trial balance D) a brief explanation of journal entry
a) 1-C, 2-B, 3-D, 4-A b) 1-B, 2-C, 3-D, 4-A c) 1-D, 2-B, 3-A,4-Cd) None of these
Q34: Balance sheet is also known as .
a) Statement of financial position b) Profit & loss a/c
c) Statement of financial condition d) Both a & b
Q35: .. Can be discounted with banks
a) Bills receivable b) Bills payable c) Both a & b
d) None of these
Answer (Unit-1)
1) b 2) c 3) c 4) b 5) d 6) a 7) b 8)a 9) c 10) a 11) b 12) a 13) b 14) c 15) a 16) b 17) a 18) c 19) d 20) a 21) b 22) a 23) c 24) b 25) a 26) c 27) a 28) c 29) a 30) d 31) a 32) b 33) a 34) d 35)a_ Unit-2
Accounting Concepts, Principles, Bases and Policies
Q36: Accounting is based on .
1) Books 2) Postulates 3) Concepts 4) Policies
a) 1, 2 b) 2, 3, 1 c) 2, 3, 4 d) All of these
Q37: Accounting are basically the rules of action adopted by accountants
a) Policies b) Principles c) Concepts d) Conventions Q38: The principles are doctrines associated with ..
a) Theory b) Procedure c) Current prices of accounting
d) All of these
Q39: The principles may be
1) Concepts 2) Policies 3) Convention 4) Accountsa) 1 & 3 b) 2 & 3 c) 3 & 4 d) 1 & 2
Q40: .. Is one which is adopted by management relevant to situation?
a) Convention b) Policy c) Concepts d) All of these
Q41: . Are those custom and tradition which guide the accountants?
a) Policies b) Principles c) Conventions d) None of these
Q42: Give the full form of GAAP
a) Generally Accepted Accounting Principles
b) Generally Accounting Accepted Principles
c) Generally Accounts Accountant Principles
d) None of these
Q43: ICAI established
a) SAB b) BAS c) ASB d) None of these
Q44: Accounting standard board was established in ..
a) 1977 b) 1956 c) 1877 d) 1856
Q45: There are accounting standards
a) 23 b) 30 c) 32 d) 20
Q46: .. Enables the business to segregate the transaction of the company from private transaction of the proprietor
a) Business Entity Concept b) Money Measurement Concept
c) Accrual Concept d) None of these
Q47: Which of the following are the cases which are not valid in going concern concept?1) When the govt. declares a company sick
2) When an enterprise was not set up for particular purpose
a) Only 1 b) Only 2 c) Both a & b d) None of these
Q48: Yes/ NoAn event or transaction that cannot be expressed in money terms can be accounted in the books of account.
Q49: The time interval of usually one year is called ..
a) Accounting year b) Calendar year c) None of these
Q50: There are .. Basic principles
a) 6 b) 3 c) 10 d) 7
Q51: Yes/ NoUnrealized revenue should not be taken into consideration for determining the profit.
Q52: Expenses are different from
a) Incomes b) Payments c) Revenue d) None of these
Q53: Revenue earned during a period is compared with . Incurred to earn that incomea) Cost b) Income c) Expenditure d) All of these
Q54: . Is called as cost principle
a) Principle of historical cost b) Principle of expense
c) Principle of full disclosure d) None of these
Q55: Total liabilities are equal to the
a) Obligations b) Total of assets c) Supplier d) Raw material
Q56: If the cost is more than the benefit than that principle should be modified, this is called ..
a) Modifying principle b) Double aspect principle
c) Principle of full disclosure d) None of these
Q57: .. Is required to help comparison of financial data from one period to another?
a) Accounts b) Consistency c) Both a & b d) None of these
Q58: adhere to certain laws, customs, usage and business environment in which it operates
a) Disclosure b) Considerations c) Standards d) All of these
Q59: . Facilitates more disclosure of financial information
a) Accounting standard b) Considerations c) Disclosured) None of these
Q60: IFRS was framed by ..
a) ASB b) SAB c) IASB d) None of these
Q61: The objective of financial statement is to provide information about the .
a) Financial position b) Performance c) Changes in the financial position
d) All of theseQ62: . Are a fact and it is inevitable
a) Uncertainties b) Materiality c) Consistency d) None of these
Q63: The basic purpose of accounting standard is to harmonize the ..
a) Accounting policies b) Practices c) All of these d) None of these
Q64: ASB was constituted on .
a) 21 April 1997 b) 22 May 1977 c) 21 May 1977 d) None of these
Answer (Unit-2)
36)c 37) b 38) d 39) a 40) b 41) c 42) a 43) c 44) a 45) c 46) a 47) a 48) No 49) a 50) c 51) yes 52) b 53) c 54) a 55) b 56) a 57) b 58)c 59) a 60) c 61) d 62) a 63) c 64) a _ Unit-3
Double Entry Accounting
Q65: There are . Processes in accounting trait
a) 7 b) 8 c) 6 d) 4
Q66: .. Is a business activity involving transfer of money or moneys worth?a) Accounts b) Transaction c) Unit d) All of these
Q67: Every liability is represented by .a) Asset b) Capital c) Both a & b d) None of these
Q68: Creditors, debtors, bank account relate to .a) Real a/c b) Personal a/c c) Nominal a/cd) None of these
Q69: a/cs relate to things that can be touched, felt, physically measurable
a) Tangible real b) Intangible real c) Tangible personal
d) Intangible personal
Q70: Goodwill, patent rights are assets
a) Intangible b) Tangible c) Real d) Nominal
Q71: .. Accounts are also known as impersonal accounts
a) Real accounts b) Nominal a/c c) Personal a/c d) All of these
Q72: . Consist of various types of expenses or losses & incomes or gain
a) Personal a/c b) Nominal a/c c) Real accounts d) All of these
Q73: Match the account with their appropriate example
1) Expense a/c A) Long term loan, debentures
2) Capital a/c
B) Sales a/c, Royalty received a/c
3) Revenue a/c
C) Purchases a/c, loss by fire a/c
4) Liabilities a/c
D) Drawings a/c
a) 1-C, 2-D, 3-B, 4-A b) 1-B, 2-C, 3-A, 4-D c) 1-a, 2-B, 3-C, 4-D
d) None of these
Q74: According to modern approach which of the following accounts are related ...1) Real a/c2) Asset A/c 3) Expenses a/c4) Revenue a/c
5) Nominal a/c
a)1, 2, 3 b) 2, 3,4 c) 1, 5, 4 d) None of these
Q75: Complete the following Owners equity =
a) Liabilities b) Capital c) Assets d) All of these
Q76: Asset-Liability-Proprietor equity = ..
a) Zero b) one c) -1 d) None of theseQ77: . Is a sequential order in which the accounting process flows?a) Accounts b) Accounting trial c) Books d) None of theseQ78: Every transaction has .a) Dual effect
b) Accounts c) Book keeping d) All of these
Answer (Unit-3)
65) b 66) b 67) a 68) b 69) a 70) a 71) b 72) b 73) a 74) b 75) c 76) a 77) b 78) a _ Unit-4
Secondary Books
Q79: If goods are returned than .. Will be sent
a) Debit note b) Credit note c) Both a & b d) Nome of these
Q80: A debit note is a document prepared by .
a) Seller b) Purchaser c) Business d) All of theseQ81: Credit notes are issued to the whole . Are issued by the customer
a) Customer, debit note b) Supplier, debit note c) All of these
d) None of these
Q82: Sales return book is also known as ..
a) Return outward book
b) Return inward bookc) Purchase bookd) None of these
Q83: is a document in writing and promising to pay a certain sum of money
a) Accounting
b) Journal c) Bills of exchange d) All of these
Q84: The businessman maintains a journal/subsidiary book containing the details of the .
a) B/R b) Books c) A/Cs d) All the above
Q85: The business person receives . The bill amount on discounting
a) 80% b) 90% c) 70% d) 50%
Q86: is an important subsidiary book?
a) Cash book b) Journal c) Ledger d) Trial balance
Q87: In the cash book on the left hand side .. Are recordeda) Payments b) Receipts c) Ledgers d) All of these
Q88: .. Is a book of original entry?
a) Ledgers b) Journal c) Trial balance d) None of these
Q89: when once the transactions are recorded in the journal, than posting is made to ..
a) Ledgers b) Journal c) Trial balance d) All of these
Q90: Purchase book is also called ..
a) Sales journal b) Purchases return book c) Purchases Journal
d) All of these
Q91: For prompt payment .. Is allowed
a) Cash discount b) Trade discount c) Discounting d) All of these
Q92: . Is a Quantity bought, trade practices?
a) Cash discount b) Trade discount c) Both a & b d) None of these
Q93: Cash purchases are recorded in ..
a) Purchase book b) Cash book c) Purchases a/c b) All of these
Q94: .. Is allowed to promote the sales while . Is allowed to encourage early or prompt paymenta) Trade discount, cash discount b) Cash discount, trade discount
c) Trade discount in both d) Cash discount in both
Q95: .. Discount varies with the period
a) Trade b) Cash c) Both a & b d) None of these
Q96: Cash book containing cash and bank columns is known as . Columns cash book
a) 2 b) 1 c) 3 d) None of these
Q97: In cash book discount column on Dr. Side represents .
a) Discount received b) Discount allowed c) Both d) None of these
Q98: To indicate contra entry . Is mentioned against the entry
a) L.F b) J.F c) C d) Heading
Q99: Stationary, postage, stamps, refreshments etc are .a) Asset b) Petty expenses c) liabilities d) All of these
,
Answer (Unit-4)
79) a 80) b 81) a 82) b 83) c 84) a 85) b 86) a 87) b 88) b 89) a 90) c 91) a 92) b 93) b 94) a 95) b 96) a 97) b 98) c 99) bUnit-5Trial Balance
Q100: Is a statement containing the various ledgers a/c balances?
a) Trial balance b) Ledgers c) A/cs d) All of these
Q101: Say yes/no
Is a trial balance a part of books of account
Q102: . Is drawn as a separate statement and this becomes the source document for preparing financial statementa) Journal b) Ledgers c) Trial balance d) All of these
Q103: in .. Method of trial balance, the total balance, the totals of debits and credits of every account are shown
a) Total b) Balancing c) WDV d) Straight line
Q104: If the debit side is greater than the credit side the difference is termed as
a) Credit balance b) Debit balance c) Both of these d) None of these
Q105: In opening journal entries the difference being credited to ..a) Asset a/c b) Liabilities a/c c) Capital a/c d) All of these
Q106: In opening journal entry all assets should be and liabilities should be.a) Dr, Cr b) Cr, Dr c) Dr, Dr d) Cr, Cr
Q107: State true or false
1) All expenses and income accounts are closed by transferring them to the respective revenue accounts
2) The accounts of assets and liabilities will not be closed
a) 1-F, 2-F b) 1-T, 2-F c) 1-T, 2-T d) 1-F, 2-T
Q108: Salaries paid during the year are closed by transferring entry, what will be the entry
a) P & L a/c Dr b) Salaries a/c Dr
To Salaries a/c To P & L a/c
c) Salaries a/c Dr d) None of these To Closing a/c
Q109: When the balance of one account is transferred to another account than .. Entry is made
a) Adjusting b) Transferring c) Compound d) Closing
Q110: A .. Entry is made when two or more accounts are involved in a transaction
a) Compound b) Journal c) Ledger d) compensatory
Q111: Paid Rs 980 to bharat in full settlement of his a/c of rs 1000A) What is journal entry
a) Cash a/c Dr b) Bharat a/c DrTo Bharat a/c To Discount received a/c
To Cash a/c
b) Bharat A/c Dr d) None of these
To Cash a/c
B) State which entry is this transaction involved
a) Compound Entry b) Adjusting entry c) Closing entry
d) Opening entry
Q112: The errors may be committed at various stages than choose which one is the stage
A
1) Journalizing 2) Balancing 3) Casting 4) Posting
a) 1, 2 b) 1, 3, 4 c) 1, 4, 2 d) All of these
B
From the above question, rearrange the various stages when errors can commit according to the trail
a) 1, 4, 3, 2 b) 2, 3, 4, 1 c) 3, 1, 2, 4 d) 4, 3, 2, 1
Q113: The total amount of difference in the trial balance is transferred to a a) Difference a/c b) Suspense a/c c) Ledger a/c d) All of these
Q114: Which of the following errors are not disclosed by trial balance except .a) Error of omission b) Error of commission c) Compensating errors
d) Posting a wrong amount
Answer (Unit-5)
100) a 101) No 102) c 103) a 104) b 105) c 106) a 107) c 108) a 109) b 110) a 111) (A) c (B) a
112) (A) d (B) a 113) b 114) d Unit-6
Final Accounts
Q115: The balance sheet of company should be presented in accordance with Part 1 of of companies act
a) Schedule 4 b) Schedule 6 c) Schedule 5 d) None of these
Q116: .. A/c shows the results of business operations during the given period
a) Journal b) Trading a/c c) P & L a/c d) Balance sheetQ117: What is the full form of GAAP?
a) Generally Accepted Accounting Principles
b) Generally Accounting Accepted Principles
c) Generally Accounts Accepted Principles
d) None of these
Q118: The extent to which the amount belongs to the current year but payable in the current year is called ..
a) Prepaid expenses b) Outstanding income c) O/s expense
d) None of these
Q119: Prepaid expenses form an ..
a) Asset b) Liability c) Equity d) All of these
Q120: Accrued income is also called as
a) O/s expense b) Prepaid expenses c) Outstanding income d) All of theseQ121: O/s income account is a . a/c and it represent ..
a) Personal a/c, asset b) Real a/c, asset c) Nominal a/c, Liabilityd) None of these
Q122: Depreciation is .. For the organization
a) Income b) Goodwill c) Loss d) Expense
Q123: Depreciation a/c should be . And the concerned asset a/c should be
a) Dr, Cr b) Cr, Dr c) Dr, Dr d) Cr, Cr
Q124: . Method of depreciation is most popular
a) Simple b) Reducing c) Both a & b d) None of these
Q125: Match the following with appropriate one:
1) Fixed installment method A) Written down value method
2) Reducing balance method B) Straight line method
a) 1-B, 2-A b) 1-A, 2-B c) 1-A, 2-A d) None of these
Q126: Bad debts form . To the business and reduce the amount of .
a) Expenses, creditors b) Loss, asset c) Loss, debtors
d) All of these
Q127: Bad debts a/c should be and debtors a/c should be .
a) Dr, Cr b) Cr, Dr c) Cr, Cr d) Dr, Dr
Q128: If bad debts are shown outside the trial balance than it means they were.
a) Not identified after the preparation of trial balance
b) Identified after the preparation of trial balance
c) Identified before the preparation of trial balance
d) None of these
Q129: Provision for bad debts is a .. To be incurred in futurea) Liability b) Expense c) Asset d) All of these
Q130: Provision for body debts is a running a/c. Is it true or false?Q131: Stock includes
1) Raw material 2) Production 3) Semi finished goods 4) Finished goodsa) 1, 3, 2 b) 1, 3, 4 c) 1, 4 d) All of theseQ132: In the balance sheet, closing stock appears as
a) Liability b) Equity c) Cash d) Asset
Q133: Discount on creditors is
a) Income b) Expense c) Revenue d) All of these
Q134: . Means buying and selling
a) Income b) Expense c) Trade d) All of these
Q135: Any capital receipts or capital payments are not considered while preparing P & L a/c. True/ FalseQ136: . Is that part of equity and preference share capital which has been actually issued by company for cash?a) Issued capital b) Subscribed capital c) Share capital
d) All of these
Q137: The companies act ..
a) 1957 b) 1856 c) 1956 d) 1857
Answer (Unit-6)
115) b 116) c 117) a 118) c 119) a
120) c 121) a 122) c
123) a
124) b
125) a
126) c
127) a
128) b
129) a
130) True131) b
132) d
133) a
134) c
135) True136) a
137) c
Unit-7
Introduction To Management Accounting
Q138: The origins of modern management accounting can be traced to a) 18th Century b) 19th Century c) 17th century d) None of these
Q139: A good management accounting system may not guarantee competitive success if the firm does not have good ..1) Efficient operating process 2) Effective market 3) Sales activities4) Productsa) 1, 2 b) 3, 4 c) 4, 1 d) All o f these
Q140: . Is the presentation of accounting information in such a way as to assist management in the creation of policy and in the day to day operations of an undertaking?
a) Managerial accounting b) Management accounting
c) Accountancy d) All of theseQ141: Firms use . To make important product features and product mix decisions
a) Cost information b) Accounts information c) Both
d) None of these
Q142: The accounting people are expected to do things that are much more .a) Strategic b) Forward looking c) Both a & b d) None of these
Q143: Management accounting framework must concentrated on .
1) getting rid of routine work
2) Reporting actual and planned performance
3) Fixing organizational responsibilities
a) 1, 2 b) 2 only c) 2 & 3 d) All of these
Q144: Management accounting functions said to include ..
1) Collecting 2) Processing 3) Interpreting 4) Presenting
a) 1, 2 b) 2, 3 c) 3, 4 d) All of theseQ145: .. Increases the efficiency of an organization
a) Coordination b) Controlling c) Planning d) All of these
Q146: . Means methodical classification of data given in the financial statement
a) Statement b) Analysis c) Finance d) All of these
Q147: .. Explains the meaning and significance of the data
a) Interpretation b) Analysis c) Methodical classification d) None of these
Q148: .. Identifies the source and application of cash
a) Fund flow statement b) Cash flow statement c) Balance sheet d) All of these
Q149: .. Is an important tool for management accountant?
a) Fund flow analysis b) Cash flow analysis c) Cash flow statement d) Fund flow statement
Q150: aims at assessing the cost of product, process or operation under standard operating conditions
a) Costing b) Standard costing c) Marginal costing d) All of these
Q151: . Is an organized method of providing each manager with all the data which he needs for decision?
a) Management reporting system b) Budgetary control
c) Standard costing d) All of these
Q152: . Is a framework for integrating measures derived from strategy?
a) Management reporting system b) Balanced score card
c) Budgetary control d) Standard costing
Q153: The real power of the balance score card is when it is transferred from a measurement system to a management system. Yes or NoQ154: What is the full form of CVBU?a) Central vehicles business unit
b) Commercial vehicles business unit
c) Commercial van business unit
d) None of theseQ155: . Is the one of worlds top truck manufacturers?a) CVBU b) CUBU c) ICAII d) None of these
Q156: Within 2 years of implementation, CVBU has begun to show improvement of .. Growth in Indiaa) 50% b) 40% c) 30% d) 20%
Q157: The scorecard incorporates..
a) CVBU b) CQDCM c) VMCDR d) Both b & c
Q158: State full form of:
A) SQDCMa) Safety, Quality, Delivery, Cost, Morale
b) Secure, Quantity, Debts, Cost, Management
c) Security, Quality, Delivery, Cost, Morale
d) None of these
B) VMCDR
a) Value, Margin, Cost, Delivery, Rate
b) Volume, market share, Customer satisfaction, Dealer Satisfaction and Receivables
c) None of these
d) Only a
Q159: is a performance measure
a) SQDCM b) VMCDR c) Value added concept d) All of these
Q160: Value added statement is based on
a) Enterprise theory b) Entity theory c) Business theory d) All of these
Q161: .. Is still in its evolutionary stage
a) Financial accounting b) Cost accounting c) Management accounting
d) None of these
Q162: focuses on historical data
a) Financial data b) Cost data c) Management data d) All of these
Answer (Unit-7)
138) b
139) d
140) b
141) a
142) c
143) d
144) d
145) a
146) b
147) a
148) b
149) a
150) b
151) a
152) b
153) yes154) b
155) a
156) b
157) d
158) (A) a (B) b 159) c
160) a
161) c
162) aUnit-8
Financial Statement Analysis
Q163: is separation or breaking up of anything into its elements or component parts?
a) Ratio analysis b) Financial analysis c) Management analysis
d) All of these
Q164: Comparing the ratios to industry averages to show how the company compares to firms of the same size in its industry. This process is known as
a) Trend analysis b) Cross sectional analysis c) Both a & b
d) None of these
Q165: Which of the following are types of ratios?
1) Liquidity 2) Integrated 3) Solvency 4) Super quick ratio
5) Current ratio
a) 1, 4, 5 b) 2, 3, 5 c) 1, 2, 3 d) All of these
Q166: Match the followingA) Current ratio 1) Cash & Marketable Securities
Current Liabilities
B) Quick ratio 2) Cash flow from operations
Current LiabilitiesC) Super quick ratio 3) Current assets-(stock & prepaid Exp)
Current Liabilities
D) Cash flow operating ratio 4) Current assets Current Liabilities
a) A-4, B-3, C-1, D-2 b) A-2, B-3, C-1, D-4 c) A-1, B-2, C-3, D-4d) None of these
\Q167: For public utility companies such as BSNL, MTNL current ratio is usually very low as they required fewer current assets. True/FalseQ168: Acid test ratio is also known as ..
1) Current ratio 2) Liquid ratio 3) Quick ratio
a) 1, 2 b) 2 only c) 3 only d) 2 & 3
Q169: Given
Current ratio is 2.5 and working capital is 1, 80,000
A) Calculate Current assets
a) Rs 2, 00,000 b) RS 1, 20.000 c) Rs 3, 00,000 d) 1, 00,000
B) Calculate Current Liabilities
a) Rs 3, 00,000 b) RS 1, 20.000 c) Rs 1, 80,000 d) None of these
Q170: GivenCurrent ratio 1.5:1; Quick ratio1:1; and current liabilities Rs 50,000. CalculateA) Current Assets
a) 55,000 b) 75,000 c) 50,000 d) 25,000
B) Quick Assets
a) 50,000 b) 75,000 c) 25,000 d) 55,000
C) Inventory
a) 50,000 b) 75,000 c) 25,000 d) 55,000
Q171: Which of the following are examples of capital structure ratio?
1) Debt- equity ratio 2) Debt- asset ratio 3) Interest coverage ratio
4) Equity- asset ratio
Q172: .. Ratio shows the relationship between borrowed funds and owners capital
a) Debt-equity ratio b) Debt- asset ratio c) Equity ratio d) None of theseQ173: The debt capital is .. To equity capital
a) Higher b) Lower c) Cheaper d) Expensive
Q174: In proprietary ratio % shows much dependence on external sourcesa) 60% b) 70% c) 50% d) 65%
Q175: Match the columnA) Equity > Loan capital = 1) under capitalizationB) Equity < Loan capital = 2) over capitalization
a) A-1, B-2 b) A-2, B-1 c) A-2, B-2 d) None of these
Q176: Which of the following are examples of coverage ratio?
1) Interest coverage 2) Dividend coverage 3) Debt-equity ratio
4) Total coverage
a) 1, 2 b) 3 only c) 1, 2, 4 d) All of these
Q177: Ranjandas Ltd provides the following informationCash sales Rs 8, 00,000; Credit sales Rs 10, 00,000; COGS Rs 15, 80,000; Return inward Rs 20,000; From this information calculateA) Net Sales
a) 15, 80,000 b) 17, 80,000 c) 10, 00,000 d) 20, 00,000
B) Gross Profita) 2, 00,000 b) 3, 00,000 c) 20,000 d) 8, 00,000
C) Gross Profit Ratioa) 10.2% b) 12.2% c) 11.2% d) None of these
D) Ratio of COGS
a) 88.8% b) 11.2% c) 10.2% d) 12.2%Q178: Total sales of a firm Rs 5, 00,000 of which the credit sales are Rs 3, 65,000; Sundry debtors and Bills receivable are Rs 50,000 and 2,000 respectively. From the above information CalculateA) Debtors Turnover Ratio
a) 6.02% b) 11.2% c) 7.02% d) None of these
B) Debtors Velocity
a) 52 days b) 20 days c) 25 days d) 35 days
Q179: Total purchases Rs 1,00,000; Cash Purchases Rs 20,000; Discount provision on creditors Rs 1,000; Purchases return Rs 2,000; Creditors at close Rs 30,000; Bills payable at close Rs 25,000. From the above information calculateA) Credit purchase
a) 58,000 b) 78,000 c) 38,000 d) 28,000
B) Creditors Turnover Ratio
a) 2042 b) 1.42 c) 3.42 d) .42
C) Creditors Velocity
a) 257 days b) 57 days c) 200 days d) None of these
Q180: The earning power of firm is portrayed in a) Ratio analysis b) Du Pont chart c) Financial analysis
d) None of these
Q181: Capital structure of M/S NDW and M/S GDF Ltd are as followsNDWGDF
Equity share capital19, 00,0006, 00,000
6% Preference share capital3, 00,0004, 00,000
7% Debentures2, 00,000
Reserve & Surplus2, 00,0002, 00,000
A) Calculate Capital Gearing Ratio of NDW
a) .25 b) .15 c) .75 d) .35
B) Calculate Capital Gearing Ratio Of GDF
a) .25 b) .15 c) .75 d) None of theseQ182: Ratios are only means to an end. True/ FalseQ183: Given
Cash in hand Rs 3,000; Cash at bank Rs 65,000; B/R Rs 10,000; Stock Rs 1, 20,000; Debtors Rs 80,000; Prepaid expenses Rs 2,000; Creditors Rs 1, 20,000; B/P Rs 20,000
From information Calculate
A) Current Ratio
a) 1:2 b) 2:1 c) 3:1 d) 1:1
B) Acid test ratio
a) 1:1 b) 2:1 c) 1.14:1 d) 1:2
Answer (Unit-8)
163) a
164) b
165) c
166) a
167) True168) d
169 (A) c (B) b 170) (A) b (B) a (C) c171) 3
172) a
173) c
174) a
175) b
176) c
177) (A) b (B) a (C) c (D) a 178) (A) c (B) a 179) (A) a (B) b (C) a
180) b
181) (A) a (B) b 182) True183) (A) b (B) c
Unit-9
Funds Flow Analysis
Q184: The term Fund refers to ..
a) Cash b) Cash equivalent c) Working capital d) All of these Q185: .. Statement does not form a part of financial statement?
a) Fund flow statement b) Cash flow statement c) Financial statement
d) All of these
Q186: An increase or decrease in working capital means ..
a) Funds b) Flow of funds c) Inflow of funds d) All of these
Q187: . Refers to the firms investment in current assets
a) Net Working capital b) Working capital c) Gross working capital
d) All of these
Q188: .. Is that obligation which has to satisfy within a year?
a) Current assets b) Current Liabilities c) Liquid liabilities d) All of these
Q189: . Refers to all those obligation other than current liabilities that are likely to mature after one year period
a) Non Current liabilities b) Current liabilities c) Current asset d) All of theseQ190: are those expenses which could be written off during the period of their incidencea) Current asset b) Fictitious asset c) Current liabilities d) None of these
Q191: when a transaction results in increase of funds it is terms as .
a) Source of fund b) Application of fund c) Assets d) LiabilitiesQ192: Provision for taxation can be treated as
a) Current liability b) Non current liability c) Current asset d) Both a & b
Q193: Which of the following are the items that are to be deducted from net profit?
1) Dividend received 2) Retransfer of excess provisions
3) Non trading charges 4) Appreciation in fixed assets
a) 1, 2 b) 1, 4 c) 1, 2, 4 d) All of these
Answer (Unit-9)
184) d
185) a
186) b
187) c
188) b
189) a
190) b 191) a 192) d
193) c
Unit-10
Cash Flow Analysis
Q194: statement shows the item resulting in cash inflows and cash outflowsa) Fund flow statement b) Cash flow statement c) Balance sheet
d) All of these
Q195: Cash flow statement is also known as
a) Statement accounting for variations in cash
b) Where got where gone statement
c) Both a & b
d) None of these
Q196: Cash flow statement is further divided into ..
a) Cash flow from operating activities
b) Cash flow from investing activities
c) Cash flow from financing activities
d) All of these
Q197: .. Is the principal revenue producing activities of the enterprise?a) Operating activities b) Investing activities c) Financing activities
d) All of these
Q198: is based on ledger principles
a) Cash flow statement b) Fund flow statement c) Balance sheet
d) All of these
Q199: .. Is based on accrual basis?
a) Fund flow statement b) Cash flow statement c) Balance sheet
d) All of these
Q200: An increase in current liability of decrease in a current asset will result in increased in.
a) Liability b) Asset c) Cash position d) All of these
Q201: In . Net effect of receipts and disbursement are recorded
a) Fund flow statement b) Cash flow statement c) Balance sheet
d) All of these
Answer (Unit-10)
194) a
195) c
196) d
197) a
198) b
199) a
200) c
201) aUnit-11
Understanding Cost
Q202: . Is the process of determining the cost of doing something?
a) CFS b) FFS c) Costing d) All of these
Q203: Costing includes Of ascertaining cost
a) Technique b) Processes c) Accounting d) Both a & b
Q204: is defined as reduction in firms equity other than from withdrawals of capital for which no compensating value has been received
a) Expenses b) Loss c) Expenses d) All of these
Q205: Costing helps to determine ..
a) Expenditure b) Product cost c) Deferred cost d) All of these
Q206: Costing refers to the technique and processes of determining costs of product .. Rendereda) Manufactured b) Service c) Alignment d) Both a & b
Q207: The method of costing depends on the nature of 1) Product 2) Production method 3) Specific business condition
4) Service
a) 1, 2 b) 1, 2, 3 c) 2, 4 d) All of these
Q208: In service industry . Technique is used
a) Job costing b) Batch costing c) Process costing d) Contract costing
Q209) is used in business concerns where production is carried out as per specific order or customer specification
a) Job costing b) Batch costing c) Contract costing d) All of these
Q210: Which of following are types of job costing?1) Batch costing 2) Unit costing 3) Contract costing 4) Composite costing
a) 1, 2 b) 1, 2, 3 c) 1, 3, 4 d) All of these
Q211: Match the columnA) Unit costing 1) Manufacture of aero planes
B) Operating costing 2) Sugar IndustryC) Operation costing 3) Passenger mile
D) Composite costing 4) the professional basket balls are covered with Genuine leather where as scholastic leathers are
Covered with imitation leather
a) A-2, B-3, C-4, D-1 b) A-1, B-2, C-3, D-4
c) A-3, B-2, C-1, D-4 d) None of theseQ212: . Refers to section of business to which costs can be charged?
a) Cost unit b) Cost centre c) Costing d) All of these
Q213: Which of the following are cost techniques ..
1) Historical costing 2) Standard costing 3) Direct expenses
4) Uniform costing
a) 1, 2 b) 2, 3 c) 1, 2, 4 d) All of theseQ214: Foremen, shop clerks, helpers etc are examples of ..
a) Indirect Labor b) Indirect expenses c) Indirect materials d) All of theseQ215: Heat, Light, maintenance etc are examples of a) Direct expenses b) Indirect expenses c) Indirect labour d) Indirect material
Q216: Which of following are others name of fixed cost?
1) Standby cost 2) Capacity cost 3) Period cost 4) All of these
Q217: Which of following is classification of fixed cost?
1) Committed cost 2) Step cost 3) Period cost 4) Managed cost
a) 1, 2, 4 b) 1, 4 c) 1, 3, 2 d) All of these
Q218: If the factory is shut down . Costs are eliminated
a) Fixed b) Variable c) Semi variable d) All of these
Q219: . Costs are made up of fixed and variable element?
a) Product cost b) Period cost c) Mixed cost d) Opportunity cost
Q220: cost is also refers to minimum fixed cost which is incurred in the event of closure
a) Shut down cost b) Imputed cost c) Relevant cost d) Period cost
Q221: . Is cost that has already been incurred?
a) Relevant cost b) Sunk cost c) Period cost d) Mixed cost Q222: . Is the benefit cost by rejecting the best competing alternative to the one chosen?
a) Shut down cost b) Mixed cost c) Opportunity cost d) Product cost
Q223: Which of the following are cost which are grouped into direct or indirect?
1) Prime cost 2) Labour overheads 3) Factory cost 4) Office cost
a) 1, 3, 4 b) 1, 2 c) 1, 4 d) All of these
Q224: By adding selling & distribution expenses to cost of production one can get ..
a) Prime cost b) Factory cost c) Total cost d) Office cost
Q225: Cost sheet is a statement prepared to show the different components of the a) Total cost b) Prime cost c) Factory cost d) All of these
Q226: From the following:Direct materials Rs 2, 00,000, Factory expenses Rs 1, 20,000, Office expenses Rs 90,000, Total sales Rs 6, 50,000, Prime cost Rs 4, 10,000, 10% of output is in stock
A) Calculate Prime costa) 4, 10,000 b) 1, 20,000 c) 6, 50,000 d) 2, 00,000
B) Calculate cost of production
a) 4, 10,000 b) 6, 50,000 c) 6, 20,000 d) None of these
C) Calculate closing stock of finished goods
a) 6, 20,000 b) 62,000 c) 2, 10,000 d) None of these
D) Calculate balancing figure
a) Profit Rs 92,000 b) Profit Rs 62,000 c) Loss Rs 92,000 d) Loss Rs 62,000Q227: Given
Opening stock of raw materials Rs 10,000, Closing stock of raw materials Rs 15,000
Expenses on purchases Rs 5000, Direct wages Rs 50,000, Prime cost Rs 1, 00,000
From this information Calculate cost of raw material purchased
a) 50,000 b) 20,000 c) 40,000 d) None of these
Answer (Unit-11)
202) c
203) d
204) b
205) b
206) d
207) b
208) c
209) a
210) b
211) a
212) b
213) c
214) a
215) b
216) 4
217)c
218) b
219) c
220) a
221) b
222) c
223) a
224) c
225) a
226) (A) a (B) c (C) c (D) a
227a
Unit-12Marginal Costing and Break Even Analysis
Q228: . Analysis show the relationship among unit sales price, variable cost, sales volume, sales mix and fixed cost
a) Marginal cost b) Cost volume profit c) Volume output d) None of these
Q229: Marginal costing is also known as ..
a) Marginal costing b) B.E.P. analysis c) b only d) None of these
Q230: The technique of marginal costing is based on the distinction between .
a) Product costs b) Period costs c) Both a & b d) None of these
Q231: costs are regarded as the cost of the product while .. Cost is treated as period costa) Semi-variable, variable b) Fixed cost, variable cost
c) Variable cost, fixed cost d) None of these
Q232: costing is known as full costing
a) Absorption costing b) Marginal costing c) Variable costing
d) None of these
Q233: Fixed costs are recovered from .
a) Variable cost b) Contribution c) Absorption costing d) All of these
Q234: Stock of wok in progress and finished goods are valued at .
a) Marginal cost b) Variable cost c) Fixed cost d) None of these
Q235: The marginal cost of producing a unit declines as output a) Decreases b) Increase c) Both a & b d) None of these
Q236: The activities that cause costs to be incurred are called
a) Marginal cost b) Cost drivers c) Both a & b d) None of these
Q237: Contribution is also termed as ..
a) Contribution margin b) Gross margin c) Both a & b d) a only
Q238: State the full form of ..
E) CVP a) Cost Volume Profit b) Cost Variable Profit c) Change in Variable Profit
d) None of these
F) BEPa) Big Enterprise Profit b) Break Even Profit c) Big Even Profit
d) None of these
Q239: . Is a graphic or visual presentation of the relationship between costs, volume and profit?
a) CVP b) MCSR c) BEP d) All of these
Q240: .. Expresses the relationship between contribution and sales
a) P/V ratio b) CVP ratio c) BEP ratio d) None of these
Q241: Given
Selling price per unit is Rs. 25, Variable cost per unit Rs 20, and fixed cost Rs 3, 05,000 for the output of 80,000units. From this information calculate:
A) Contribution per unit a) Rs 25 b) Rs 5 c) Rs 20 d) None of these
B) Profit
a) 85000 b) 95000 c) 305000 d) 80000
Q242: Calculate the profit earned for the data given:
Fixed cost 500000, variable cost Rs 10 per unit, selling price Rs 15 per unit, Output 150000 units
a) 2, 50,000 b) 1, 50,000 c) 3, 00,000 d) 1, 30,000
Q243: Find the fixed cost. If sales are 2, 00,000, Variable cost Rs 40,000 and profit Rs 30,000
a) 2, 50,000 b) 1, 50,000 c) 1, 30,000 d) None of these
Q244: If the marginal cost is 24,000 and sales is 60,000 than calculate:
A) MCSR
a) 50% b) 60% c) 40% d) 20%B) Contribution
a) 26,000 b) 16,000 c) 36,000 d) None of these
Q245: From the following calculate MCSRPeriod 1Period 2
Sales20,00030,000
Profit2,0004,000
a) 30% b) 20% c) 10% d) 15%
Q246: Calculate the sales if marginal cost is 24,000 & MCSR is 20%a) Rs 3,000 b) Rs 2,000 c) Rs 1000 d) Rs 5,000
Q247: Given
Sales 50,000 units per annum
Selling price Rs 6 per unit
Prime cost Rs 6 per unit
Variable overheads Rs 1 per unit
Fixed cost Rs 75,000 per annumFrom the above calculate
C) BEP
a) Rs 2, 25,000 b) Rs 1, 25,000 c) Rs 1, 00,000 d) Rs 50,000
B) MOS
a) Rs 25,000 b) Rs 75,000 c) Rs 35,000 d) Rs 65,000
NOTE: Try all illustrations and problemsAnswer (Unit-12)
228) b
229) a
230) c
231) c
232) a
233) b
234) a
235) b
236) b
237) c
238) (A) a (B) b
239) c
240) a
241) (A) b (B) b
242) a
243) c
244) (A) b (B) c
245) b
246) a
247) (A) a (B) b Unit-13
Decision Involving Alternative Choices
Q248: .. Is process of estimating the consequences of alternative actions that a decision maker may take?a) Different analysis b) Marginal analysis c) B.E.P. analysis
d) None of these
Q249: Fixing price for the product, selling a suitable product mix, diversification of the product relates to .a) Long term decision b) Short term decision c) Both a & b
d) None of these
Q250: Decision making is the process of evaluating two or more alternatives leading to a final choice known as ..
a) Alternative choice decision b) Short term decision
c) Long term decision d) None of these
Q251: .. Cost which would change as a result of decision
a) Decision cost b) Relevant costs c) Opportunity cost d) None of these
Q252: costs are irrelevant in decision making
a) Incremental cost b) Opportunity cost c) Relevant costs d) None of these
Q253: Avoidable costs are also known as .
a) Discretionary costs b) Relevant costs c) Sunk costs
d) Opportunity cost
Q254: When a company with unused production capacity consider the alternatives than . Decisions arise?
a) Alternative choice decision b) Make or buy decision
c) All of these
d) a only
NOTE: Try all illustrations and problemsAnswer (Unit-13)
248) a
249) b
250) a
251) b
252) c
253) a
254) bUnit-14
Budgetary Control
Q255: Budgeting requires a deeper understanding of the .. Of environment in which the business concern operates
a) Decision making b) Economic system c) Economic services d) None of these
Q256: Budgets are not actual but are estimated. True/FalseQ257: Budgeting is a . Planning
a) Backward b) Decision c) Forward d) All of these
Q258: Which of the following essential features of budgetary control?2) Business policies defined
3) Forecasting
4) Preparation of budgets
5) Fixed budget
a) 1, 2 b) 3, 4 c) 4, 1 d) 2, 4
Q259: .. Are foundations of budgets?
a) Business policies b) Business forecasts c) Budget committee
d) All of these
Q260: Rearrange the steps in budgetary control
1) Forecast combinations
2) Preparation of forecast3) Formulation of policies 4) Preparation of budgets
a) 3, 2, 4, 1 b) 1, 2, 3, 4 c) 4, 3, 2, 1 d) None of these
Q261: . Budget is also known as static budget
a) Flexible b) Fixed c) Functional d) None of these
Q262: Functional budgets are also known as
a) Subsidiary budgets b) Flexible Budgets c) Fixed budget d) None of theseQ263: budgets may very in number from business to business
a) Flexible b) Functional c) Fixed d) None of these
NOTE: Try all illustrationsAnswer (Unit-14)
255) b
256) True257) c
258) a
259) b
260) a
261) c
262) a
263) bUnit-15
Standard costing
Q264: .. Is a very important system of cost control?
a) Standard costing b) Marginal costing c) a only d) All of these
Q265: Standard costing is focused on the method of
a) Marginal costing b) Cost control c) Financial control d) None of these
Q266: Standard costing is mainly applied to
a) Products b) Processes c) Cost d) a & b
Q267: Budget is projection of .
a) Final accounts b) Cash book c) Subsidiary book d) None of these
Q268: are projections of only cost accounts
a) Cost accounts b) Final accounts c) Budget d) None of these
Q269: .. Are the aggregate of indirect materials, indirect labor and indirect expense?a) Labor b) Overhead c) Allowance d) All of these
Q270: . Means the deviation of the actual from the standard
a) Budgeting b) Labor c) Costing d) Variance
Q271: variances arises when the rate of output is known
a) Material yield b) Material price c) Labor yield d) Labor price
NOTE: Learn all formulas and try all illustrationsAnswer (Unit-15)
264) a
265) c
266) d
267) a
268) a
269) b
270) d
271) a