Accounting Quiz PDF

Email – [email protected], M - 8146207241 1|Page http://www.edutap.co.in Q1. According to the 'American Institute of Certified Q5. Which among the following statements is incorrect Public Accountants', which among the following is not about Management Accounting? a fundamental...

Email – [email protected], M - 8146207241 1|Page http://www.edutap.co.in Q1. According to the 'American Institute of Certified Q5. Which among the following statements is incorrect Public Accountants', which among the following is not about Management Accounting? a fundamental part of the accounting process? a) It is forward looking and generally follows more a) Recording stringent accounting standards. b) Analysing c) Summarising b) It generally includes cost accounting and budgeting. d) Classifying c) It assists management in the formulation of policies and in decision making. d) All the statements given above are true. Q2. Which among the following is not a primary objective of accounting? a) To record, classify and summarise the data related Q6. Who made the first attempt to include figures on to economic transactions. human capital in the company balance sheets? b) To provide financial information to help decision a) Hermansson making about deployment of resources. b) Morisson c) To decide on the personal choices made by the c) Johansson promoters in a company. d) Alfredson d) To communicate the information about economic activities of a firm to all concerned stakeholders. Q7. Presently, 'Fair Value Accounting' does not enjoy wide degree of acceptance due to Q3. During fifteenth century, wealthy people employed a) increased cost and delays. trained officers to keep records of their transactions, b) non availability of reliable information. property, debts they owed, and the debts others owed c) fast changes in the market prices. them. This system developed in Italy and was later d) All of the above adopted by the other European nations. It also came to be known as 'Double Entry Bookkeeping'. What is the type of accounting system described Q8. Which among the following statements is incorrect above? about the definition of accounting given by AICPA? a) Stewardship Accounting 1. Accounting is a service activity which provides b) Financial Accounting quantitative financial information. c) Cost Accounting 2. Accounting is an analytical discipline which d) Management Accounting defines, classifies and summarises data relating to economic transactions. 3. Accounting is an information system which Q4. What is the most important social purpose of collects and communicates economics financial accounting? information to concerned people. a) To manage the debt owed by the company to a) 1 and 3 only maintain fiscal prudence. b) 1 and 2 only b) To relay reliable information to investors to enable c) 2 and 3 only them to take efficient investment decisions. d) None of the above c) To limit the liability of the members to the nominal values of their shares. d) To give a legal form to the doctrine of stewardship. Q9. Which section of the Companies Act 2013 casts a responsibility on the Board of Directors to comply with mandatory accounting standards? a) Section 134 (5) Email – [email protected], M - 8146207241 2|Page http://www.edutap.co.in b) Section 120 (1) c) 1-b; 2-a; 3-d; 4-c c) Section 137 (4) d) 1-b; 2-d; 3-c; 4-a d) Section 141 (1) Q14. Match the following: Q10. The 'Accounting Standards Board (ASB)' was 1. AS 16 a. Related party disclosure constituted by 'Institute of Chartered Accountants of 2. AS 17 b. Segment Reporting India (ICAI)' in 3. AS 18 c. Borrowing Cost a) 1967 a) 1-a; 2-c; 3-b b) 1977 b) 1-c; 2-b; 3-a c) 1987 c) 1-a; 2-b; 3-c d) 1997 d) 1-b; 2-a; 3-c Q11. Which among the following Accounting Standards Q15. Which Accounting Standard deals with effects of is incorrectly matched? changes in Foreign Exchange Rates? a) AS 3 – Cash Flow Statements a) AS 3 b) AS 4 – Contingencies b) AS 10 c) AS 5 – Revenue Recognition c) AS 7 d) AS 7 – Construction Contracts d) AS 11 Q12. Which of the following statements is/are incorrect? Q16. Match the following: 1. Additional guidance given in Ind AS over and 1. Ind AS 101 a. Business Combinations above what is given in IFRS, is termed as ‘Carve 2. Ind AS 103 b. First Time Adoption in’. 3. Ind AS 105 c. Non-Current Assets Held for Sale 2. Differences that are in deviation to the a) 1-a; 2-b; 3-c accounting principles and practices stated in b) 1-b; 2-a; 3-c IFRS, are commonly known as ‘Carve-outs’. c) 1-c; 2-b; 3-a 3. The Government of India in consultation with the d) 1-c; 2-a; 3-b ICAI decided to converge and not to adopt IFRS issued by the IASB. Q17. Which among the following Ind AS deals with a) 1 and 2 Statement of Cash Flows? b) 2 and 3 a) Ind AS 107 c) 1 and 3 b) Ind AS 108 d) None of the above c) Ind AS 7 d) Ind AS 8 Q13. Match the following: 1. AS 9 a. Revenue Recognition Q18. Match the following: 2. AS 10 b. Property Plant and Equipment 1. Ind AS 21 a. Property, Plant & Equipment 3. AS 12 c. Accounting for government grants 2. Ind AS 33 b. Change in Foreign Exchange 4. AS 13 d. Accounting for Investments Rates a) 1-a; 2-b; 3-c; 4-d 3. Ind AS 12 c. Income Taxes b) 1-b; 2-a; 3-c; 4-d 4. Ind AS 16 d. Earnings per share Email – [email protected], M - 8146207241 3|Page http://www.edutap.co.in a) 1-a; 2-b; 3-c; 4-d b) Tangible Real Accounts b) 1-b; 2-a; 3-c; 4-d c) Intangible Real Accounts c) 1-b; 2-a; 3-d; 4-c d) Artificial Personal Accounts d) 1-b; 2-d; 3-c; 4-a Q22. Which among the following is not an essential Q19. Which of the following given statements is/are item that must be recorded in an accounting voucher? correct? a) Date of transaction. 1. Quantitative Characteristics are the attributes b) Name of the accounts to be credited and debited. of accounting information that tend to enhance c) The page number of the journal where the voucher its understandability and usefulness. is recorded. 2. Relevance means information should be free d) Name of person who prepared the voucher. from error and bias. 3. Relevance, Understandability, Reliability, and Comparability are the Qualitative Q23. Arrange the following processes in the correct Characteristics of accounting information. order from first to last according to the accounting Choose the correct answer using the codes given below: cycle: a) 1 and 2 1. Entries are posted to appropriate ledger account. b) 2 only 2. All transactions are entered into journal or c) 1 and 3 subsidiary books. d) 3 only 3. Preparation of trial balance and income statement. a) 1 - 2 - 3 Q20. Which of the following given statements is/are b) 2 - 1 - 3 incorrect? c) 1 - 3 – 2 1. Balance Sheet is a financial statement that d) 2 - 3 - 1 provides aggregate data regarding all cash inflows and outflows of a company. 2. A trial balance is a financial statement that Q24. The owner withdraws Cash and Goods from the reports a company's assets, liabilities, and office for personal use. shareholder equity at a specific point in time. Journalise the above transaction. 3. The Cash Flow Statement only shows the a) The Cash and Sales account will be debited and the company's outflows. Drawings account will be credited. 4. Income Statement that shows the company's b) The Cash and Purchases account will be debited and income and expenditures. the Drawings account will be credited. Choose the correct answer using the codes given below: c) The Drawings account will be debited and the Cash a) 1,2 and 4 and Purchases account will be credited. b) 2 and 3 d) The Drawings account will be debited and the Cash c) 1 and 3 and Purchases account will be credited. d) 1, 2 and 3 Q25. Which of the following given statements is/are Q21. Which among the following is not a type of incorrect? account that is commonly used in accountancy? 1. As per the modern approach of rules of a) Tangible Personal Accounts journalizing accounts are divided into 3 categories. Email – [email protected], M - 8146207241 4|Page http://www.edutap.co.in  2. In the journal, in each transaction, a brief Choose the correct answer using the codes given below: description of the transaction is given which is a) 1 and 2 known as narration. b) 2 and 3 3. Wages paid for the erection of machinery are c) 1 and 3 debited to the profit and loss account. d) 2 only a) 1 and 2 b) 2 and 3 c) 1 and 3 Q29. A trader has made a sale of Rs 50,000 out of which d) Only 1 cash sales amounted to Rs 15,000. He showed trade receivables on 31st March at Rs 35,000. Which concept is followed by him? Q26. Which of the following given statements is/are a) Revenue Recognition Concept correct? b) Accrual Basis 1. An Account is in the form of L shape. c) Money Measurement Concept 2. Trial Balance is prepared from Ledger. d) Matching Concept 3. When an entry is made in journal accounts to be debited are listed first. 4. Balancing of Accounts means the difference in the Q30. When a person invests money in his business as total of debit and credit. capital, it is recorded in the accounting records as a) 1, 2 and 3 ________ of the business to the owner. b) 2, 3 and 4 a) Asset c) 1, 3 and 4 b) Liability d) Only 1 c) Income d) Loss Q27. Which among the following statements is Q31. A company purchases a new computer for Rs incorrect? 10,000 in 2019. The computer is expected to last 10 a) The process of recording a transaction in a journal is years, meaning it will produce projects for the known as Journalising. projected decade. The company should charge the b) The transfer of Journal Entry to a Ledger account is computer's price tag to the depreciation expense of Rs called Posting. 1,000 per year, adding up to 10 years. c) Journal reduces the possibility of an error. Which accounting concept is highlighted above? d) In Journal, all entries are recorded in random order. a) Business Entity Concept b) Materiality Concept c) Going Concern Concept Q28. Which of the following given statement is/are d) Matching Concept incorrect? 1. The Objectivity concept requires that the same accounting method should be used from one Q32. Which of the following statement is incorrect? accounting period to the next. a) It is assumed that a business follows Going Concern 2. The Full Disclosure Principle states that Concept. financial statements should disclose all b) Personal Transactions and Business transactions are significant information. distinguished according to Business Entity Concept. 3. The Prudence concept is also known as Consistency Concept. Email – [email protected], M - 8146207241 5|Page http://www.edutap.co.in c) Materiality Concept states that expenses incurred in b) 1-b; 2-a; 3-c an accounting period should be matched with c) 1-c; 2-b; 3-a revenues during that period. d) 1-c; 2-a; 3-b d) The Cost concept requires that all assets are recorded in the book of accounts at their purchase Q37. Which of the following given statements is/are price. incorrect? 1. Salary is a liability. 2. Bank Overdraft is a liability. Q33. With reference to the 'Cost Concept', which of the 3. Furniture is an asset. following statements is incorrect? 4. Cash and Cash equivalents are assets. a) Fixed assets are kept at the historical cost of a) 1 only purchase. b) 1, 2 and 3 b) Every transaction is recorded with present value. c) 2, 3 and 4 c) Unrealised gains are recorded with the value of d) 1 and 4 estimated realisation. d) An item which has no cost, is not recorded in books. Q38. Things that cannot be touched but can be measured in monetary terms, like goodwill, patent Q34. Which of the following statement is incorrect? rights, trademarks etc., are recorded in which type of a) As per the money measurement concept, non- account? monetary transactions are recorded in the books of a) Real Account accounts. b) Personal Account b) Going Concern assumes that business would not be c) Nominal Account liquidated in the foreseeable future. d) None of the above c) The Business Entity Principle is also known as the Separate Entity Principle. d) The Cash Basis of accounting violates GAAP. Q39. The Journal Entry to record the purchase of equipment (asset) for Rs 2,00,000 cash and a balance of Rs 8,00,000 due in 30 days include Q35. Which of the given above following statement is a) Equipment A/c Dr. 2,00,000 correct in respect of Double entry accounting? To Cash A/c 2,00,000 a) All transactions that create debits to asset accounts b) Equipment A/c Dr. 10,00,000 must create credits to liability or capital accounts. To Cash A/c 2,00,000 b) A transaction that requires a debit to a liability To Creditors A/c 8,00,000 account require a credit to an asset account. c) Equipment A/c Dr. 10,00,000 c) Every transaction must be recorded with equal To Cash A/c 2,00,000 debits equal total credits. To Debtors A/c 8,00,000 d) All of the statements are correct. d) Equipment A/c Dr. 10,00,000 To Cash A/c 10,00,000 Q36. Match the following: 1. Rent Paid Account a. Real Account Q40. The business started with Cash of Rs 10,000, 2. Rent Receivable Account b. Personal Account Furniture worth Rs 4,000 and Goods worth Rs 6,000. 3. Cash Account c. Nominal Account Journalise the above transaction. a) 1-a; 2-b; 3-c Email – [email protected], M - 8146207241 6|Page http://www.edutap.co.in a) The cash account, furniture account, and purchases What is the status of his capital as on 31st March 2017? account will be debited and the Funds account will a) 25000 be credited. b) 20000 b) The cash account, and furniture account, will be c) 27500 debited and the Purchases account will be credited. d) 30000 c) The cash account will be debited and the furniture account and purchases account will be credited. d) None of the above is the correct journalisation. Q45. On 31st March 2017, the total assets and external liabilities were Rs 2,00,000 and Rs 6,000 respectively. During the year, the proprietor introduced additional Q41. ‘Rent Receivable Account’ is a type of capital of Rs 20,000 and he withdrew Rs 12,000 for a) Intangible Real Account personal use. He made a profit of Rs 20,000 during the b) Representative Personal Account year. Calculate the capital as on 1st April 2016. c) Nominal Account a) 1,66,000 d) None of the above b) 1,76,000 c) 1,56,000 d) 2,16,000 Q42. Profit and loss account contains various items related to Expenses and Income. The nature of which is a) Nominal Account Q46. Which of the following given statements is/are b) Real Account correct? c) Personal Account A bill of exchange is drawn by the drawer upon his d) None of these debtor. Transfer of a negotiable instrument to another person by signing on it is known as Endorsement. Q43. Which of the following given statements is/are Bill of exchange cannot be enchased from the bank. incorrect? a) 1 and 2 1. Accounts related to an individual, firm, company, or b) 2 and 3 institution are called real accounts. c) 1 and 3 2. Accounts that relate to both tangible and intangible d) Only 2 assets to the firm are called personal accounts. 3. Accounts that relate to expenses, losses, revenue, and gain are called nominal accounts. Q47. Which of the following given statements is/are a) 1 and 2 incorrect? b) 2 and 3 1. 5 days of grace are added in terms of the bill to c) 1 and 3 calculate the date of its maturity. d) Only 1 2. A person who endorses the promissory note in favour of another is known as an Endorser. 3. A bill that is accepted by a party and for which Q44. Kashyap started a business on 1st April 2015 with he has to pay the money is called a Bills a capital of Rs 10,000 and a loan of Rs 5,000 borrowed Receivable. from Ramesh. a) 1 and 2 During 2016 - 17, he introduced additional capital of Rs b) 2 and 3 7,500 and had withdrawn Rs 2,500 for personal use. c) 1 and 3 On 31st March 2017, his assets were Rs 30,000. d) Only 2 Email – [email protected], M - 8146207241 7|Page http://www.edutap.co.in  a) Suspense A/c Dr 1600 To Megha 1600 Q48. Which of the following given statements is/are b) Megha Dr 1600 incorrect? To Suspense A/c 1600 1. A trial balance is normally prepared at end of the c) Suspense A/c Dr 600 year. To Megha 600 2. In Trial Balance, the debit balance must be equal to d) Suspense A/c Dr 1000 the credit balance. To Megha 1000 3. Trial Balance helps in identifying all the errors. a) 3 only b) 1 and 2 Q52. What will be debited in the rectification entry if c) 1 and 3 the Rent paid Rs. 2,000 was wrongly shown as payment d) 1 only to the landlord in the cashbook? a) Rent A/c b) Expenses A/c Q49. Which among the following statements is c) Payment A/c incorrect? d) Landlord A/c a) Trial Balance can be prepared in two ways. b) Under totals method, the total of each side in the ledger (debit and credit) is ascertained separately Q53. Sale of old machinery recorded as sales. This is an and shown in the trial balance in the respective example of columns. a) Error of Principle c) Under the balances method, a trial balance is b) Error of Commission prepared by showing the balances of all ledger c) Error of Omission accounts and totaling up debit and credit columns. d) Compensating Error d) Totals-cum Balances method is a combination of the totals method and the balances method. Q54. Which among the following statements is incorrect? Q50. Which among the following statements is correct? a) Compensating Error is not disclosed by a trial a) Errors of Commission are the errors that are balance. committed due to the wrong posting of b) Rectifying entries are passed in Journal proper. transactions. c) A suspense account is used to balance the trial b) Errors of Commission are the errors that are balance. committed due to the wrong totaling or wrong d) The wrong casting of subsidiary books does not balancing of the accounts. affect the trial balance. c) Errors of Commission are the errors that are committed due to the wrong casting of the subsidiary books. Q55. Which of the following items is/are correct in d) All of the above regard to property, plant, and equipment? a) Computer software bought for use during a single accounting period Q51. What will be a rectified journal entry if sales b) A machine bought for use in more than one returns from Megha Rs 1,600 were posted to her accounting period account as Rs 1,000? Email – [email protected], M - 8146207241 8|Page http://www.edutap.co.in c) A machine bought for use during a single accounting b) Capital Expenditure is shown in the balance sheet. period c) Revenue Expenditure gives benefit of enduring d) A machine bought for resale to a customer nature. d) Capital expenditure increases the earning capacity of a business. Q56. Entity A purchased an asset on 1st April 2015 for 1,00,000 and the asset had an estimated useful life of 10 years and a residual value of nil. On 1st January Q60. Which among the following statements is correct? 2019, the directors review the estimated life and decide a) The benefit of Revenue Expenditure extends to that the asset will probably be useful for a further 4 periods beyond the accounting period. years. b) Payment of Rent, Salaries, are examples of Revenue Calculate the amount of depreciation for each year Expenditure. starting from the 5th year, if the company charges c) Revenue Expenditure is shown in Balance Sheet. depreciation on Straight Line basis. d) Revenue Expenditure is shown in the credit side of a) Rs 10,000 the profit and loss account. b) Rs 15,000 c) Rs 60,000 d) Rs 40,000 Q61. Which of the following is incorrect about financial statements? 1. Profit and loss account shows the profit or loss of a Q57. Which of the following statements is incorrect? business as on a given date. 1. Conversion of loan into equity results in change in 2. Balance sheet shows the position of assets and liabilities but total liabilities remain the same. liabilities of a business as on a particular date. 2. Purchase of fixed assets on credit results in change 3. Trading account shows a net profit or a net loss. in total liabilities only. a) 1 and 2 3. Repayment of loan results in change in both assets b) 2 and 3 and liabilities. c) 1 and 3 a) 1 only d) Only 2 b) 2 only c) 3 only d) None of the above Q62. Which of the following is not a contingent liability? 1. Uncalled liability on investments in partly paid shares. Q58. Which of the following statements is incorrect? 2. Cost of issue of debenture a) In case of a business entity, an asset is created by 3. Preliminary expenses incurred taking a lability of an equal amount. 4. Statutory liability under dispute b) The liabilities consist of claims of owners and claims a) 1 and 2 of outsiders. b) 2 and 3 c) If assets increase and liabilities do not, Capital will c) 1 and 3 decrease. d) Only 1 d) None of the above. Q63. Rectify the following errors by making suitable Q59. Which of the following statements is incorrect? rectification entry: a) Legal expenses are capital expenditures. Rent paid ₹200 is posted in the ledger account as ₹2000. Email – [email protected], M - 8146207241 9|Page http://www.edutap.co.in a) Rent A/c Dr. 200 3. Debit balance in Suspense account is shown in To Cash A/c 200 balance sheet on Asset side. b) Cash A/c Dr. 1800 a) 1 and 2 To Rent A/c 1800 b) 2 and 3 c) Rent A/c Dr. 1800 c) 1 and 3 To Cash A/c 1800 d) Only 2 d) Cash A/c Dr. 200 To Rent A/c 200 Q67. Which of the following given statements is/are incorrect? Q64. Which of the following given statement is/are 1. Personal account balances at closing are correct? transferred to next account period. 1. Net Profit = Gross Profit + Other Income - Indirect 2. Nominal accounts balances at closing are Expenses. transferred to the asset side of the balance 2. Earning Before Interest and Tax is also known as sheet. Operating Profit a) 1 only 3. Operating Profit = Net Sales- Operating Cost b) 2 only a) 1 and 2 c) Both 1 and 2 b) 2 and 3 d) Neither 1 nor 2 c) 1 and 3 d) All of the above Q68. What is the objective to form a ‘Profit & Loss Adjustment Account’? Q65. Rectify the following errors by making suitable a) To rectify errors in nominal accounts of the rectification entry: preceding accounting period. Goods purchased from Sohanlal wrongly recorded in b) To rectify the compensating errors in the trial sales register with amount ₹500. balance of current accounting period. a) Sales A/c Dr. 500 c) To rectify errors in the profit & loss account in the Purchase A/c Dr. 500 current accounting period. To Sohanlal A/c 1000 d) To assimilate entries in Suspense account in the b) Sales A/c Dr. 500 Journal proper. To Sohanlal A/c 500 c) Purchase A/c Dr. 500 To Sales A/c 500 Q69. Which among the following reasons for d) Sohanlal A/c Dr. 1000 differences in Cashbook and passbook do not require a To Purchases A/c 500 change in the cashbook? To Sales A/c 500 a) Interests earned in savings account. b) Amount paid by banks on standing instructions. c) Cheques issued but not presented for payment. Q66. Which of the following given statements is/are d) Dishonour of cheques. correct? 1. Suspense account is used to rectify one sided errors in ledgers. Q70. Reconciliation of overcasting on receipts side of 2. If the trial balance debit total is more, it is shifted cash book ____________. to the debit side of suspense account. a) increases the balance in cash book Email – [email protected], M - 8146207241 10 | P a g e http://www.edutap.co.in b) increases the balance in passbook What is the overdraft value as per the bank passbook? c) decreases the balance in cash book a) Rs. 8,220 d) decreases the balance in passbook b) Rs. 7,390 c) Rs. 7,320 d) Rs. 13,320 Q71. A machine costing Rs 10,00,000 is purchased; Rs 2,00,000 is paid in cash and for the rest Rs 8,00,000, a credit arrangement is made which would be paid after Q74. Aman Brothers has an overdraft of Rs. 40,000 as 6 months. How this transaction would impact the per the Cash Book on 31 March. On 22 March, a cheque balance sheet? for Rs. 5,000 was issued to a supplier, but not presented a) Total assets would increase by Rs 10,00,000 and for payment till 31 March. Dividend of Rs. 2,500 was total Liabilities by 10,00,000 directly credited to the bank on 27 March but was b) Total assets would increase by Rs 8,00,000 and total informed to Aman Brothers on 2 April. A cheque for Rs. Liabilities by 8,00,000 3,600 was deposited in the bank on 29 March, but c) Total assets would increase by 2,00,000 payment was realised on 4 April. The overdraft as per d) Total Liabilities would increase by 10,00,000 passbook is: a) 36,100 b) 46,100 Q72. When assets are listed in order of liquidity in a c) 38,900 balance sheet, in which order the following shall d) 43,900 appear? 1. Goodwill 2. Cash in Hand Q75. Repairs of second hand machinery purchased is 3. Machinery debited to repairs account. It is an error of 4. Bills Receivables a) Compensating a) Cash in Hand, Bills Receivables, Machinery, b) Omission Goodwill. c) Commission b) Cash in Hand, Bills Receivables, Goodwill, d) Principle Machinery. c) Goodwill, Machinery, Bills Receivables, Cash in Hand. Q76. Which of the following is an error of commission ? d) Machinery, Goodwill, Bills Receivables, Cash in a) Sales book was overcast by Rs. 600 and purchase Hand. book was undercast by the same amount b) Treating charges as addition to asset c) A sale of Rs. 6,000 omitted to be recorded Q73. The following is the information available of X d) A purchase of Rs. 7,400 was wrongly posted Limited as on 31st March 2018. 1. Overdraft as per the cash book Rs. 7,300 2. Cheques paid into the bank account but not credited Q77. Which of the following is the correct treatment for Rs. 3,400 the adjustment of unpaid salaries as on 31 March 2021? 3. Cheques issued but not presented for payment Rs. a) Debit Outstanding salaries A/c, credit Salaries A/c 450 and show as Current assets in the balance sheet. 4, Bank charges debited in the passbook Rs. 70 b) Debit Salaries A/c, credit Outstanding salaries A/c 5. Cheques directly deposited by the customer into the and show as Current liabilities in the balance sheet. bank account Rs. 3,000. Email – [email protected], M - 8146207241 11 | P a g e http://www.edutap.co.in c) Debit Outstanding salaries A/c, credit Salaries A/c 2. Update and renovation and show as Current liabilities in the balance sheet. 3. Accidents d) Debit Salaries A/c, credit Outstanding salaries A/c 4. Inflation and show as Current assets in the balance sheet. a) Only 4 b) Only 1 c) Only 3 Q78. It is given in adjustment that during the d) Only 2 accounting year, the trader distributed goods worth ₹5,000 as free samples. While preparing Final Accounts, this will be shown in Q83. Which of the following is a need for accounting for a) Profit and Loss Account depreciation of assets? b) Both in Trading and Profit and Loss Account a) To correctly ascertain the profits or losses of the c) Trading Account firm. d) Balance Sheet b) To correctly determine the value of assets to depict them in the balance sheet. c) To make provision for replacement of assets. Q79. Freight expenses for carrying Machinery is carried d) All of the above. to Travel A/c, then rectification in trial balance is _________. a) Debit Machinery a/c and credit travel a/c Q84. Which of the following is a factor of depreciation? b) Credit Machinery a/c and debit travel a/c 1. Cost of the assets c) Credit Profit & Loss a/c and debit travel a/c 2. Residual cost of assets d) Debit Profit and Loss a/c and credit travel a/c 3. Estimated years of useful life a) 1 and 2 b) 2 and 3 Q80. Which of the following will not affect Trial c) 1 and 3 Balance? d) All of the above a) Goods sold on credit not recorded in the books. b) Overstating of sales register c) Rent account credited instead on debit Q85. In which one of the following methods of d) Salary debited to the extent of half the amount paid. calculating depreciation, the amount of depreciation depends on the volume of production? a) Sum of digits of years Q81. Which of the following is an incorrect statement b) Units of production about Depreciation? c) Written down value a) Depreciation is a part of operating cost. d) Straight line b) It is a reduction in the value of asset. c) Depreciation occurs due to change in market values due to inflation. Q86. A fixed percentage is charged as depreciation on d) All assets depreciate in value with time. the diminishing value of the asset each year during the useful life of the asset under _________. a) Straight line method Q82. Which of the following is not a cause for b) Annuity method depreciation? c) Written down method 1. Wear & tear d) Sinking fund method Email – [email protected], M - 8146207241 12 | P a g e http://www.edutap.co.in Q87. Which one of the following is not true? d) Debit the cost to the property, plant, and a) Depreciation is an expense charged to the Profit & equipment account. Loss account. b) Depreciation is not a part of the operating costs. c) All assets are not depreciated necessarily at the Q92. An asset has a useful life of 3 years. same rate. Cost of the asset is Rs 3,000. d) Depreciation is like an insurance expense. Residual Value is Rs 600. Rate of depreciation is 50%. Using Diminishing Balance Method, Depreciation Q88. Depreciation shrinks the __________. expense for the 3rd year will be ______. a) Scrap value of asset a) Rs 800 b) Market value of asset b) Rs 300 c) Residual value of asset c) Rs 600 d) Book value of asset d) Rs 900 Q89. Accounting Standards in India (AS10 and Ind AS Q93. Which one of the following statements best 16) recognize which of the following methods of describes the 'carrying value' of an asset? calculating depreciation? a) The amount at which the asset is recognised in the a) Straight line method balance sheet after deducting any accumulated b) Diminishing balance method depreciation and accumulated impairment losses. c) Units of production method b) The higher of the asset's value in use and its d) All of the above recoverable amount. c) The cost of the asset less its residual value. d) The higher of the asset's NRV and its value in use. Q90. Company A buys a piece of equipment for Rs 10,700. The equipment has an expected life of 10 years and a salvage value of Rs 1400. Calculate the Q94. The objective of this Standard is to prescribe the depreciation amount per year under straight line basis. accounting treatment for property, plant and a) Rs 1,210 equipment so that users of the financial statements can b) Rs 1,070 discern information about an entity’s investment in its c) Rs 930 property, plant and equipment and the changes in such d) Rs 1,033.33 investment. Which of the following Ind AS constitutes the above objective ? Q91. An entity installed an assembly line in Year 1. Four a) Ind AS 10 years later, Rs 1,00,000 was invested to automate the b) Ind AS 107 line. The automation increased the market value and c) Ind AS 16 productive capacity of the assembly line but did not d) Ind AS 113 affect its useful life. Proper accounting for the cost of the automation should be to ____________. a) Report it as an expense in Year 5 Q95. The H&W Co. acquired a new industrial washing b) Establish a separate account for the Rs 1,00,000. machine, the list price of which was Rs 52,000. The c) Allocate the cost of automation between the asset supplier allowed a trade discount of Rs 4,000 off the list and accumulated depreciation accounts. Email – [email protected], M - 8146207241 13 | P a g e http://www.edutap.co.in price. On delivery, the cost of installing the machine in b) the number of production or similar units expected its desired location was Rs 950. to be obtained from the asset by an enterprise According to AS - 10 - 'Property, Plant and Equipment', c) It is the higher of an asset’s net selling price and its what is the cost of the machine to be capitalised? value in use. a) Rs 48,000 d) Both A and B b) Rs 52,950 c) Rs 48,950 d) Rs 56,950 Q100. Which of the following is the correct formula for straight-line depreciation? a) Straight-Line Depreciation = (Purchase Price + Q96. An ___________ is the amount by which the Salvage Value) / Useful Life carrying amount of an asset exceeds its recoverable b) Straight-Line Depreciation = (Purchase Price – amount. Salvage Value) / Useful Life a) impairment profit c) Straight-Line Depreciation = Purchase Price – b) impairment loss Salvage Value c) impairment income d) Straight-Line Depreciation = Purchase Price/ Useful d) impairment gain Life Q97. Which of the following statements is/are Q101. An expenditure is decided to be ‘capital’ or incorrect? ‘revenue’ depending upon which of the following 1. AS 10 is also known as Accounting Standard for factors? Fixed Assets. 1. Nature of expense 2. AS 6 was withdrawn after the issuance of AS 10 2. Effect of revenue earning capacity Property Plant and Equipment. 3. Benefit from expenditure 3. Ind AS 16 deals with Property Plant and a) 1 and 2 only Equipment. b) 2 and 3 only a) 1 and 2 c) 1 and 3 only b) 2 and 3 d) 1, 2 and 3 c) 1 and 3 d) Only 1 Q102. Which of the following statement is incorrect? 1. Non – recurring expenditure is capital expenditure Q98. ____________ is the estimated book value of an in nature. asset after depreciation is complete. 2. Purchase of motor cars or buildings is capital a) Premium Value expenditure. b) Salvage Value 3. Expenses which help to generate income in the c) Par Value current year are capital in nature. d) Final Value a) Only 1 b) Only 3 c) Only 2 Q99. What is the useful life of an asset? d) 1, 2 and 3 a) the period over which an asset is expected to be available for use by an enterprise. Email – [email protected], M - 8146207241 14 | P a g e http://www.edutap.co.in Q103. A wall clock is purchased for ₹500 for use in office Q108. If the bill is drawn on 28th April 2023 Payable for 10 years. But it may be treated as a revenue after 30 days, what is the final maturity date of the bill? expenditure based on the provisions of which of the a) 31st May 2023 following concept? b) 30th May 2019 a) Going concern concept c) 29th May 2019 b) Materiality concept d) 31st March 2019 c) Matching concept d) Consistency concept Q109. What is the accounting entry in the books of the creditor on the date of final maturity of the bill, in case Q104. Freight expenses for moving machinery to the Creditor Retains the Bill till Maturity? factory is ________. a) Cash/Bank A/c Dr. to Bills Receivable A/c a) Revenue expenses b) Bills Receivable A/c Dr. to Debtors A/c b) Deferred revenue expenditure c) Debtors A/c Dr. to Creditors A/c c) Capital expenditure d) Creditors A/c Dr. to Debtors A/c d) None of the above Q110. What is the accounting entry when the creditor Q105. Which one of the following is incorrect? discounts the bill in a bank? a) Replacement of defective part of machinery is a) Bank A/c Dr. To Discount A/c To Bills Receivable A/c revenue expenditure. b) Bills Receivable A/c Dr. To Discount A/c To Bank A/c b) Daily wages paid for erection/installing of c) Bank A/c Dr. Discount A/c Dr. To Bills Receivable A/c machinery is capital expenditure. d) Bank A/c Dr. Bills Receivable A/c Dr. To Discount A/c c) Underwriting commission for issue of shares is revenue expenditure. d) Excess of sale price of Machinery over is written – Q111. When a bill is drawn and accepted, which of the value but less than cost price is treated as revenue following journal entry is passed in the books of the receipt. drawer? a) Debtors A/c Dr. to Bills Receivable A/c b) Creditors A/c Dr. to Debtors A/c Q106. For an expense to be classified as revenue or c) Bills Receivable A/c Dr. to Acceptor's A/c capital depends on _________. d) Acceptor's A/c Dr. to Creditor's A/c a) Kind of expense b) Duration of benefit of expenditure c) Effect on revenue earning capacity Q112. Which of the following given statements is/are d) All of the above incorrect? 1. There are three parties in a bill of exchange. 2. Drawer is the person upon whom the bill of Q107. Which among the following statements is/are exchange is drawn. correct? 3. Drawee is the maker of the bill of exchange. a) Acceptance by other person is must, otherwise, it a) 1 and 2 would not be a valid bill of Exchange b) 2 and 3 b) A bill of exchange must be in writing. c) 1 and 3 a) The order to make payment is unconditional. d) Only 2 b) All of the above. Email – [email protected], M - 8146207241 15 | P a g e http://www.edutap.co.in Q113. Which among the following statements is/are Q117. Mahesh draws a bill on Sanjay for Rs.3000. incorrect? Mahesh endorsed it to Suresh. Suresh endorsed it to a) Normally, the drawer and the payee are the same Ramesh. The payee of the bill will be person. a) Suresh b) Drawer and Drawee cannot be the same parties in a b) Ramesh bill of exchange. c) Mahesh c) According to the Reserve Bank of India Act, a d) Sanjay promissory note payable to the bearer is legal. d) A promissory note does not require any acceptance. Q118. Which of the following options are available to the receiver of a Bill of Exchange? Q114. Which among the following statements is/are a) Retain the bill till maturity incorrect? b) Discounting the bill with the bank a) There are two parties to a promissory note. c) Endorse the bill in favour of a creditor b) Drawee is the person who makes or draws the d) All of the above promissory note. c) Payee is the person in whose favour the promissory note is drawn. Q119. Which of the following given statements is/are d) Generally, the drawee is also the payee. incorrect? 1. Bills Receivable is a liability. 2. Bills Payable is an asset. Q115. Which among the following statements is/are 3. From an Accounting point of view, Bills of incorrect? Exchange are of two types. a) Noting authenticates the fact of dishonour. a) 1 and 2 b) A fees is charged by the Notary Public which is called b) 2 and 3 Noting Charges. c) 1 and 3 c) When a bill is dishonored, it is customary to get it d) 1, 2 and 3 Noted by Notary Public. d) Noting charges are ultimately borne by the drawer. Q120. Which act governs the Bills of Exchange in India? a) Companies Act 2013 Q116. Which of the following given statements is/are b) Indian Negotiable Instruments Act, 1881 incorrect? c) Foreign Exchange Management Act, 1999 1. Kite Bill is an informal name for Accomodation d) Consumer Protection Act, 1986 Bill. 2. Accommodation Bill is a bill drawn and accepted for mutual help. Q121. A bill of exchange was drawn on 11th July 2013; 3. Due date is the period between the dates of its term was 1 month. What will be the date of drawing the bill and when it becomes due for maturity? payment. a) 14th August a) 1 and 2 b) 15th August b) 2 and 3 c) 11th August c) 1 and 3 d) 16th August d) Only 3 Email – [email protected], M - 8146207241 16 | P a g e http://www.edutap.co.in Q122. If the due date is a public holiday what will be the Q127. Goods sold for cash Rs 30,000. Plus 5% GST. Sales due date of the bill? account will be credited by: a) The same day a) 30,000 b) Preceding day b) 31,500 c) Following day c) 33,000 d) After 3 days d) 28,000 Q123. Ramesh drew on Suresh three Bills of Exchange Q128. Match the following: respectively on 29th, 30th, and 31st January, 2013. The 1. Defective goods returned by Raja a. Journal term in each case is 1 month. What will be the due date Proper of payment in each case? 2. Providing interest on capital b. a) 1st March Purchase Book b) 2nd March 3. Sold goods to Ravi c. c) 3rd March Sales Return Book d) 4th March 4. Purchased goods from Asha Traders d. Sales Book a) 1-c, 2-a, 3-d, 4-b Q124. Which of the following will be the journal entry b) 1-b, 2-a, 3-d, 4-c for the cancellation of the old bill in the books of c) 1-c, 2-d, 3-a, 4-b Drawee? d) 1-a, 2-c, 3-d, 4-b a) Bills Payable A/c Dr To Drawer's A/c b) Bills Payable A/c Dr To Drawee's A/c c) Bills Receivable A/c Dr To Drawer's A/c Q129. M/s Randeep & Sons sold 40 ink pads @ Rs 8 d) Bills Receivable A/c Dr To Drawee's A/c each, 50 files @ Rs 10 each, 20 colour books @ Rs 20 each to Ishan Stationary and provided 5% trade discount. Q125. The act of signing and transferring the bill is How this transaction will be recorded in the Ishan called an _________. Stationary Ledger Account? a) Honoured a) To Sales A/c 1,159 b) Dishonoured b) By Sales A/c 1,220 c) Endorsement c) To Sales A/c 1,161 d) Discounted d) By Sales A/c 1,227 Q126. In which book of original entry, will you record a Q130. In which, books of original entry the following bill receivable of Rs 10,000, which was received from a transactions will be recorded: debtor in full settlement for a claim of Rs 10,100, is 1. Goods purchased from Suyash for Rs 50,000 on dishonored? credit. a) Purchases Return Book 2. Provisions for doubtful debts created @10% on b) Bills Receivable Book debtors. c) Journal Proper a) Journal Proper, Bills Receivable Book d) Purchases Book b) Sales Book, Journal Proper c) Purchases Book, Journal Proper d) Purchases Return Book, Sales Book Email – [email protected], M - 8146207241 17 | P a g e http://www.edutap.co.in Q131. Which of the following given statement is/are d) None of the above. incorrect? 1. A cash book is both a subsidiary book and a principal book. Q135. Which one of the following is not a debit 2. The debit Side of the cash book shows payments voucher? made in cash. a) Challans for deposits into Government accounts. 3. The credit side of the cash book shows the receipts b) Cheques issued by customers. of the cash. c) Drafts issued by other branches of bank payable at a) 1 and 2 the branch. b) 2 and 3 d) Term deposit receipts presented for payment. c) 1 and 3 d) 1, 2 and 3 Q136. Which one of the following is not a credit voucher? Q132. In which, books of original entry the following a) Pay in slip filled by customers for deposit in their transactions will be recorded: accounts. 1. Defective goods sold to Parul on credit worth Rs b) Application for issue of term deposits. 40,000 were returned by her. c) Letter of authority signed by the customer 2. Purchased furniture on credit from Mr. Ratan for Rs containing standing instructions. 15,000. d) None of the above. a) Sales Return Book, Journal Proper b) Journal Proper, Purchases Book c) Purchase Return Book, Purchases Book Q137. Which of the following statements is/are not d) Sales Book, Journal Proper correct about accounting systems in the banks? a) Accounting systems in different banks vary in terms of nature of transactions processed. Q133. Which one of the following is true? b) The software used in accounting systems do not a) An insolvent is a person from whom some portion differ amongst different banks. of the debt is recoverable. c) Accounting system in a bank is designed considering b) Drawer drags the drawee to court in case of the nature and volume of operations. dishonour of accommodation bill. d) All the above statement are correct. c) When the due date of a bill falls on a public holiday, it is payable on the preceding day. d) Drawee is a person to whom bill is endorsed. Q138. Which one of the following functions in a bank is normally not performed by the Back office? a) Reminders for renewals of term deposits. Q134. Banks follow the accounting procedure of b) Deposit of cash by the customers at the counter. ‘voucher posting’ under which the vouchers are c) Calculation and posting of interest in loan accounts. _______. d) Maintenance of General Ledger and other books of a) First posted in General Ledger and then to the account. individual accounts in subsidiary ledgers. b) Straightway posted to the individual accounts in subsidiary ledgers. Q139. Which one of the following transactions does not c) First posted in the Day – book and then to the result in Inter-Office debit or credit entry? accounts in the subsidiary ledgers. Email – [email protected], M - 8146207241 18 | P a g e http://www.edutap.co.in a) Advance to a staff member by debit to suspense a) Ensure that the financial statements give a true and account. fair view. b) Payment of travellers’ cheques issued by other b) Detect of errors. branches. c) Detect and prevent frauds. c) Receipts from other branches of the proceeds of the d) Enhance the shareholder value. instruments sent for collection. d) Issue of drafts. Q145. Internal audit is aimed at __________. a) Improving profitability Q140. The problem about reconciliation at the branch b) Tax planning level, which has not been resolved by computerization, c) Ensuring accuracy of books of accounts is that of d) Ensuring equitable distribution of loans to weaker a) Savings Bank accounts sections of society. b) Current accounts c) Drafts issued accounts d) Suspense and Sundry deposit accounts Q146. Which one of the following statements is not correct? a) Forensic audit is an examination and evaluation of Q141. Which of the following is/are the typical and financial information for use of evidence in court. most common types of errors observed in Inter – office b) Tax audit is an analysis of tax returns submitted. accounts? c) Only large borrower accounts are normally a) Recording of particulars in incorrect fields. subjected to stock and receivables audit. b) Double recording of the same transaction. d) Management audit is conducted by the c) Posting of transactions in incorrect office accounts. management of bank. d) All of the above Q147. The book ‘An Introduction to Indian Government Q142. Which of the following are the common errors in Accounts and Audit’ is issued by the branch daily statements? a) Reserve Bank of India a) Wrong identification of the type of transaction b) Comptroller and Auditor General of India b) Recording of particulars in incorrect fields c) Controller of Accounts c) Difference between the closing and opening d) Statistical Institute of India balances in success d) After 3 days Q148. Which chapter of the Companies Act 2013 deals with appointment of auditors, their removal, Q143. Long Form Audit Report is issued by ________. resignation, powers etc.? a) Concurrent Auditor a) Chapter IX b) Statutory Auditor b) Chapter X c) Internal Auditor c) Chapter XI d) Tax Auditor d) Chapter XII Q144. Primary objective of financial audit is to Q149. Which among the following statements is _________. incorrect? Email – [email protected], M - 8146207241 19 | P a g e http://www.edutap.co.in a) Auditor must exercise judgement and only express Q154. Internal audit is generally undertaken by an opinion. _________. b) Auditor has to depend on explanation by others. a) Tax experts c) Auditors must check each and every transaction to b) Auditors approved by RBI determine their accuracy. c) Company secretary d) All of the above statements are correct. d) Bank’s own staff Q150. Which among the following statements is Q155. When the balance as per the cash book is staring incorrect regarding Ind AS 16? point, in the reconciliation, the amount of cheques a) Each part of PPE with a cost significant in relation to issued and not presented are the total cost of the item shall be depreciated a) Subtracted separately. b) Added b) Depreciation charge for each period shall be c) Ignored mentioned in the Balance sheet. d) Either added or subtracted c) Depreciation methods used should be disclosed in the financial statements. d) Depreciation rates and useful life of assets should Q156. Which of the following is true when a debtor be disclosed in the financial statements. pays his dues? a) Assets side of balance sheet will decrease. b) Asset side of the balance sheet will increase. Q151. According to AS 10, an item of PPE that qualifies a) Liability side of balance sheet will increase. as an asset should be measured at cost which includes b) There is no change in total assets or total liabilities. a) Purchase cost including import duties b) Non refundable taxes c) Cost of dismantling Q157. Based on which of the following concepts, is d) All of the above share capital account shown on the liability side of a balance sheet? a) Business entity concept Q152. Banks are encouraged to adopt International b) Money measurement concept Internal Audit Standards, like those issued by c) Cost concept a) Basel Committee on Banking Supervision d) Going concern concept b) Institute of Internal Auditors c) Both a & B d) None of the above Q158. Which one of the following is not considered as Research & Development costs? a) Testing in search for product alternatives Q153. Which one of the following is not true? b) Legal work on patent application a) Head of Internal Audit shall be an outside person c) Modification of design of a process approved by RBI. d) Searching for application of new research findings b) Head of Internal Audit has access to all records or files. c) Head of Internal Audit has authority to Q159. Which among the following is not a type of bank communicate with any staff member. audit? d) All of the above mentioned statements are true. a) Concurrent audit Email – [email protected], M - 8146207241 20 | P a g e http://www.edutap.co.in b) Legal audit 4. Foreign Exchange transactions c) Internal audit a) 1, 2 and 3 d) Statutory audit b) 2, 3 and 4 c) 1, 2 and 4 d) 1, 3 and 4 Q160. Which among the following is not a regular stage of statutory audit? a) Detection of revenue leakages Q164. The scope of work to be entrusted to concurrent b) Understanding Risk Management Processes auditors, coverage of business/branches, etc. is left to c) Determining Audit Materiality the discretion of the d) Assessing risks associated with outsourcing of a) Head of Internal Audit activities. b) Chief Executive Officer c) Chairman of Board of Directors d) Banking Ombudsman Q161. Which among the following statements is incorrect about the internal audit in banks? a) The internal audit function should not be Q165. Which among the following system is incorrect? outsourced. a) Banks’ Internal Audit Department should develop a b) Experts, including former employees, can be hired reporting system for concurrent auditors. on contractual basis for internal audit. b) Minor irregularities pointed out by the concurrent c) The Head of Internal Audit should be appointed for auditors shall be brought to the notice of Head a long period, preferably for a minimum of three Office/Controlling Office. years. c) The zone-wise findings of concurrent audit may be d) Remuneration of internal audit staff should be reported to ACB/LMC on a quarterly basis. linked to financial performance of business lines. d) Whenever fraudulent transactions are detected, they should immediately be reported to Internal Audit Department and also to the Chief Vigilance Q162. Which of the following statements are incorrect Officer. about ‘Concurrent Audit’? a) It shortens the interval between a transaction and its examination. Q166. Risk-Based Internal Audit (RBIA) system has been b) There is emphasis on test checking rather than mandated by RBI for which of the following? substantive checking in key areas. 1. All Scheduled Commercial Banks c) It is a continuous audit which goes on all the year 2. All Regional Rural Banks around. 3. All Non-Deposit Taking NBFCs d) Any exceptions found are recorded in the 4. All Urban Cooperative Banks with asset size of Concurrent Audit Report. ₹500 crore and above a) 1, 3 and 4 b) 1, 2 and 3 Q163. Which among the following are included in the c) 2, 3 and 4 Minimum areas of coverage under Concurrent Audit, d) 1, 2 and 4 according to RBI guidelines? 1. Cash transactions 2. Treasury operations Q167. A firm has deposited with the bank ₹50000 cash 3. Outsourcing of operations but bank credited this amount to another account. A Email – [email protected], M - 8146207241 21 | P a g e http://www.edutap.co.in cheque issued by the firm for ₹43000 has been dishonoured due to the above reason. The balance as per cash book is ₹9745. What is the balance as per pass Q172. On 1st January 2018, Abhinav & Co purchased a book? machinery by cheque for ₹4 lakhs. The estimated scrap a) ₹8765 value of the machinery is ₹60000. Depreciation is b) ₹2755 provided @15% p.a. by diminishing balance method. c) ₹6577 Calculate the value of machinery at the beginning of 3rd d) ₹2745 year. a) ₹360000 b) ₹340000 Q168. The depreciation method in which the c) ₹245650 depreciation is calculated on the principle value and d) ₹289000 assets lose equal value every year is called as ______. a) Straight line method b) Written down value method Q173. A machine is purchased for ₹10 lakhs. Installation c) Sum of years’ digits method charges of ₹100000 were incurred. Depreciation @10% d) Double declining method was provided on Straight line basis. The machine was sold for ₹600000 after 5 years. Calculate the profit or loss on sale of machine? Q169. The __________ is the scrap value of the asset a) ₹ 50000 loss after end of the useful life of that asset. b) ₹100000 loss a) Book Value c) ₹50000 profit b) Residual value d) ₹60000 profit c) Market value d) None of these Q174. An equipment purchased is to be depreciated on fixed instalment system. The journal entry for charging Q170. A machinery costs ₹5 lakh and its life is 15 years depreciation is ________? & scrap value is ₹50000. What is the depreciated value a) Depreciation a/c Dr. To P&L a/c of the machinery at the end of 4th year as per straight b) P&L a/c Dr. To Depreciation a/c line method? c) P&L a/c Dr. To Equipment a/c a) ₹410000 d) Depreciation a/c Dr. To Equipment a/c b) ₹380000 c) ₹350000 d) ₹320000 Q175. The rule ‘Credit the Giver’ would be applicable in which of the following transactions? a) Purchase of goods on credit from Mr. X Q171. A new machine is purchased for ₹5 lakh. b) Introduction of capital by the promoter Depreciation is provided @10% by diminishing balance c) Taking a loan from bank method. If machine is sold for ₹450000 at the end of 3rd d) All of the above year then what will be the profit or loss? a) 45000 loss b) 45000 profit Q176. Ram sold goods to Shyam on credit worth c) 85500 loss ₹50000. Which among the following is correct Journal d) 85500 profit entry made by Ram? Email – [email protected], M - 8146207241 22 | P a g e http://www.edutap.co.in a) Shyam a/c Dr. To Sales a/c Q182. Which among the following statements is b) Shyam a/c Dr. To Goods a/c incorrect? c) Sales a/c Dr. To Shyam a/c a) Recording is the process of entering business d) None of the above transactions in the books of original entry. b) Communication involves communicating the financial statements to various users. Q177. Which of the following is a nominal account? c) Identifying involves analyzing and interpreting a) Rent payable financial data. b) Salary receivable d) Measuring means quantification of business c) Commission outstanding transactions into financial terms. d) None of the above Q183. A Which of the following statement will be Q178. What type of account is “Goodwill Account”? recorded in the books of Accounts? a) Real Account a) A new communication channel was implemented b) Personal Account by the company. c) Nominal Account b) Rajlaxmi was appointed as the Manager of the d) None of the above company. c) Company paid salary to Ratan. d) Rohit was shifted from Manufacturing Department Q179. Credit means to Sales Department. a) Increase in asset account b) Decrease in liability account c) Decrease in capital account Q184. The increasing awareness on the part of d) None of these entrepreneurs and industrial managers for using scientific principles of management led to the development of Q180. A firm allows discount of 5% to its customer a) Cost Accounting whenever they make payment before the due date. It b) Financial Accounting is called c) Scientific Accounting a) Trade discount d) Value Accounting b) Commission on sales c) Cash discount d) Discount on sales Q185. Which of the following given statements is/are correct? 1. Measurement means the quantification of Q181. Which among the following is not a feature of business transactions into financial terms by using Bank Reconciliation Statement? monetary units. a) It helps in arriving at the actual position of the bank 2. Communication means determining what balance. transactions to record. b) It is prepared by the bank. 3. Recording is the process of entering business c) It will record any delays in clearing. transactions in the books of accounts. d) BRS helps in fraud detection of cheques. Choose the correct answer using the codes given below: a) 1 and 2 b) 2 and 3 Email – [email protected], M - 8146207241 23 | P a g e http://www.edutap.co.in c) 1 and 3 a) Banks may adopt appropriate system and practices d) Only 1 for conducting IS audit on annual basis. b) The banks may adopt an IS audit policy (if not done already) appropriate to its level of computerization. Q186. Inflation accounting is concerned with the c) Information systems audits should be preferably overcoming of limitations arising in financial undertaken after the statutory audit. statements because of d) The IS audit reports should be placed before the top a) changes in interest rates. management and the compliance should be b) changes in labour turnover. ensured within the time frame as outlined in the c) assumption of stable monetary unit. audit policy d) losses because of depreciation. Q191. Which of the following systems is incorrect? Q187. Which of the following statement is/are a) An institution’s board of directors establishes an incorrect? “Audit Committee” to oversee audit functions. a) Financial Accounting is concerned with generating b) A designated member of an Audit Committee needs accounting information. to possess the knowledge of Information Systems, b) Cost Accounting helps in price-fixation decisions. related controls and audit issues. c) Management Accounting addresses the needs of c) Internal Audit is a part of the Board’s assurance the management. process with regard to the integrity and d) All of the statements above are correct. effectiveness of systems and controls. d) None of the above Q188. Fair Value Accounting is also known as a) Fixed Value Accounting Q192. Which among the following is a critical b) Nominal Value Accounting component or process related to Information Systems c) Real Value Accounting Audit? d) Current Value Accounting a) System Characterisation b) Vulnerability Identification c) Impact Analysis Q189. Which of the following statements is/are d) All of the above correct? 1. The traditional method of 'double entry bookkeeping originated in Greece. Q193. Which among the following is not a benefit of 2. Kautilya wrote a book on accountancy which was doing a Computer Assisted Audit? named ‘Arthashastra’. a) Reduces the time to complete the audit. Choose the correct answer using the codes given below: b) Less need of professional skills on part of auditors. a) 1 only c) Increases accuracy of the audit. b) 2 only d) Improves compliance and lessens chance of making c) Both 1 and 2 errors. d) Neither 1 nor 2 Q194. Which among the following is not among the Q190. Which among the following statements is Computer assisted audit techniques? incorrect about Information Systems Audit? a) Stratification Email – [email protected], M - 8146207241 24 | P a g e http://www.edutap.co.in b) Duplicate Record Checks Q199. For the bank as a whole, the transactions which c) Sampling remained unmatched/unreconciled appears as inter d) Ranging office adjustments balance in “Branch Adjustment Account” in the balance sheet of the bank – under the head ‘Other Assets’ if it is debit and under ‘Other Q195. ________ represents the difference on account Liabilities and Provisions’ if it is credit. of incomplete recording of transactions between one a) Other Assets ; Other Liabilities and Provisions branch and another branch or between one branch and b) Other Incomes ; Other Expenses head office. c) Other Liabilities and Provisions ; Other Assets a) Incomplete Transactions A/c d) Deferred Assets ; Deferred Liabilities and Provisions b) Inter Office Adjustment (Net) A/c c) Pending Adjustments A/c d) None of the above Q200. Which among the following statements is incorrect? a) A company has separate legal entity. Q196. Which of the following is not a transaction that b) Shareholders are the owners of the company. will result in Inter Office debit or credit entry? c) Liability of a shareholder is limited to paid-up value of a) Transactions through NEFT,ECS and RTGS the shares allotted to him. b) Payment of instruments like gift cheques/bankers’ d) Maximum number of members in a private company cheque is 200. c) Deposit made by customers at home branches. d) Head Office interest receivable and payable by branches Q201. Which among the following statements is not correct? a) An asset is created by taking a liability of an equal Q197. RBI had instructed the banks to reconcile the amount. entries outstanding in their inter branch accounts b) Net worth of a business is the liability of the within a period of business towards its owners. a) Three months c) The claim of owners do not include the balance of b) Six months reserves and surplus. c) Nine months d) The liabilities consist of claims of owners and claims d) Twelve months of outsiders. Q198. Banks have been advised by RBI to segregate the Q202. Which among the following is an incorrect credit entries outstanding for more than 5 year in inter representation of Balance sheet equation? branch accounts and transfer them to a separate a) Assets = Total Claims on the Company __________. b) Outside Liabilities = Assets – Capital a) Open account c) Claims of owners = Assets + Claims of Creditors b) Blocked account d) Net worth = Assets - Creditors c) Pending Transactions account d) None of these Q203. If assets increase and liabilities do not, the capital will _________. a) increase Email – [email protected], M - 8146207241 25 | P a g e http://www.edutap.co.in b) decrease Q209. At the end of an accounting period, the balances c) do not change of _______ are transferred to the Profit & Loss Account. d) change depending upon the change in revenues. a) All the ledger accounts b) All the income and expense accounts c) Only the tangible real accounts and some income Q204. Conversion of loan into equity results in and expense accounts _________. d) Some intangible real accounts and some income a) Change in both assets and liabilities and expense accounts b) Change in total assets only c) Change in total liabilities only d) Change in liabilities but total liabilities remain the Q210. Which one of the following accounts is used for same providing dividend? a) Profit & Loss Appropriation account b) Profit & Loss Account Q205. Purchase of fixed assets on credit results in c) Profit & Loss Adjustment account _______. d) Reserves and surplus account a) Change in total assets only b) Change in both assets and liabilities c) Change in total liabilities only Q211. Which one of the following is correct about d) Change in liabilities but total liabilities remain the methods of valuation of closing stocks, permitted by same Ind AS 2? a) It permits use of only LIFO method for inventory valuation. Q206. Repayment of loan results in _________. b) It permits use of only FIFO method for inventory a) Change in both assets and liabilities valuation. b) Change in total assets only c) It permits use of FIFO or Weighted Average method c) Change in total liabilities only also for inventory valuation. d) Change in liabilities but total liabilities remain the d) It is silent about the methods of valuation of closing same stocks. Q207. Sale of goods on credit results in _______. Q212. Which one of the following entries in the ledger a) Change in both assets and liabilities is made without any financial transaction? b) Change in total assets only a) Purchase of raw material during the year. c) Change in total liabilities only