Sir
Plz help me solving the Accounting & Auditing MCQs

(1) The latest computation of variances of manufacturing overheads is in one the following ways:
(a) Two variance approaches
(b) Three variance approaches
(c) Four variance approaches
(d) None of these

(2) Expenditure incurred in procuring machinery is:
(a) An admissible expenditure for tax purposes
(b) No admissible for tax purposes
(c) None of these.

(3) Audit and special audit are the same:
(a) In Insurance Company
(b) In Banking Company
(c) None of these

(1) Double entry book-keeping was fathered by:
(a) F.W.Taylor
(b) Henry Fayol
(c) Lucas Pacioli.

(2) Funds Flow Statement and sources and application statement are:’
(a) Synonymous
(b) Antagonistic
(c) None of these.

(3) Depreciation in spirit is similar to:
(a) Depletion
(b) Amortization
(c) Depression.

4) Balance Sheet is always prepared:
(a) for the year ended.
(b) As on a specified date.
(c) None of these.

(5) In Insurance, the following Profit and Loss Accounts are prepared:
(a) Separate for Fire, Marine, and Accidents etc.
(b) Consolidated for (a) above.
(c) None of these.

(6) Partners in Pakistan can today be fixed at the following numbers:
(a) 20
(b) 50
(c) 75.

(7) Flexible budget is a budget with the following features:
(a) Changes with volume of production.
(b) Changes with variable expenses
(c) Changes in Direct material.

(8) Break Even can be calculated as under:
(a) ______VC_______
FC- TR TC
(b) FC
I- VC TR
(c) None of these.

(9) Quick Ratio can be computed as under:
(a) Quick . Assets/Quick Liabilities
(b) Quick . Liabilities Current Assets
(c) Current Assets/ Current Liabilities

(10) In straight line method of depreciation, the written down value of a fixed asset will be at the end of the life of the asset as under:
(a) Rupee one
(b) Rupee zero
(c) None of these.

(11) Sales budget must be prepared:
(a) Independently
(b) Depending on production capacity
(c) Based on Sales forecasts of market.

(12) Consolidation of subsidiary accounts in the balance sheet of a unlisted Holding company is at present in Pakistan:
(a) Compulsory
(b) Voluntary
(c) Required.

(13) Retained earning is synonymous to:
(a) Accumulated profit and loss account
(b) Profit for the year
(c) None of these.

(14) The requirements of an audit report for a Banking Company in Pakistan is under:
(a) Under the Banking Companies Ordinance, 1962.
(b) Under the Companies Ordinance, 1984.
(c) Under (a) and (b) above.

(15) Deferred Taxation is:
(a) Fixed asset
(b) Fixed liabilities
(c) Part of Owners Equity.

(16) Investment Corporation of Pakistan follows:
(a) Open-end mutual funds
(b) Closed-end mutual funds
(c) None of these.

(17) Directors Report is ---- in respect of financial report constituent.
(a) Mandatory for a limited Company
(b) Voluntary for a limited Company
(c) None of these.

(18) Every limited Company in Pakistan is required by law to include the following along with financial reports:
(a) Ratio Analysis
(b) Chairman’s Review
(c) None of these.

(19) Cash budget excludes the following:
(a) Non-Cash items
(b) Cash items
(c) Purchase on Credit items.

(20) NGOs are legally required to:
(a) Prepare accounts in a prescribed manner under the law.
(b) Prepare accounts as desired by donors.
(c) None of these.

1. Fixed Cost:
a. Changes with production
b. Never changes even if production capacity is doubled
c. None of the above

2. Conversion cost is:
a. Material Cost + Overhead Cost
b. Direct Labour + Material Cost
c. Labour Cost + Overhead Cost

3. Process Costing is relevant to:
a. Cement industry
b. Job Order cost oriented Projects
c. None of the above

4. Operating Profit is:
a. Profit after deducting financial costs
b. Profit after deducting taxes
c. Profit after deducting normal operating expenses including depreciation

5. A good Cost Accounting System is:
a. If it computes estimated cost only
b. If it cannot be reconciled with financial accounts
c. If it enables management to increase productivity and rationalize cost structure

6. Verification includes:
a. Checking Vouchers
b. Examining audit report
c. None of the above

7. Stratified audit sample means:
a. Randomly selected items for audit
b. Purposively selected items for audit
c. Items carefully selected from each group

8. Internal Control is totally synonymous with:
a. Internal check
b. Internal audit
c. None of above

9. Audit of a bank is generally conducted through:
a. Routine checking
b. Couching
c. Balance sheet audit

10. An auditor is liable for his annual audit of accounts o:
a. Creditors
b. Bankers
c. Owners

11. Income Tax is levied on:
a. Agricultural Income
b. Presumptive Income
c. None of above

12. If a firm has paid super-tax, its partners may follow any one of the following behaviours:
a. No need to pay income tax, even if the income exceeds the taxable limit.
b. Pay income tax, even if the income does not exceed the taxable income.
c. Pay income tax as required under the law.

13. A resident multinational company need not:
a. Pay income tax, if it s caused under Double Taxation agreement.
b. If it is not enjoying tax exemption under the Income Tax Ordinance, 1979 (Second Schedule).
c. None of above

14. Income Tax rates are the same for:
a. Limited Companies
b. Banking Companies
c. None of above

15. Super Tax on companies is:
a. In vogue in Pakistan
b. Not in vogue in Pakistan
c. None of above

16. Current Ratio is calculated as:
a. Fixed Assets/Current Liabilities
b. Current Liabilities/Current Assets
c. Current Assets/Current Liabilities

17. Short-term loan can be described as:
a. If the period is three years
b. If the period is less than one year
c. If the period is over one year

18. A partnership, in today’s Pakistan, under the current law can have the following number of partners:
a. 50
b. 20
c. 100

19. Combination can be best described as:
a. Restructuring of Capital of a Company
b. Reduction of Capital of a Company
c. Amalgamation of two different types of businesses

20. Sources of funds can be I creased by:
a. Describing selling prices
b. Increasing expenditure
c. None of above
(1) The purchase of machinery on account would
(a) Increase an asset and decrease another asset
(b) Increase an asset and decrease liability
(c) Increase an asset and increase liability
(d) Decrease an asset and increase liability

(2) In general, the accounts in the income statement are known as:
(a) Real account
(b) Contra asset
(c) Nominal account
(d) Unrecorded revenue account

(3) In general terms, financial assets appear in the balance sheet at:
(a) Face value
(b) Current cash value
(c) Cash
(d) Estimated future sales value

(4) A limited Co. sold marketable securities cost Rs. 80,000 for Rs. 92,000 cash. In Co.’s income statement and statement of cash flows respectively, this will appear as:
(a) A Rs. 12,000 gain and Rs. 92,000 cash receive
(b) A Rs. 92,000 gain and Rs. 8,000 cash receive
(c) A Rs. 12,000 gain and Rs. 80,000 cash receive
(d) A Rs. 92,000 sales and Rs. 92,000 cash receive

(5) Which of the following is least important as a measure of short term liquidity?
(a) Debtor ratio
(b) Current ratio
(c) Cash flow from operating activities
(d) Quick ratio

(6) Uzma Ltd. Net income was Rs. 4,00,000 in 2003 and Rs. 1,60,000,in 2004. What percentage increase in net income must achieve in 2005 to off set the decline in profits in 2004?
(a) 60%
(b) 150%
(c) 200%
(d) 70%

(7) Which of the following does not describe accounting?
(a) Language of Business
(b) Is an end rather than a mean to an end
(c) Useful for decision making
(d) Used by business government, nonprofit organizations and individuals.

(8) External uses of financial accounting information include all of the following except:
(a) Investors
(b) Labour unions
(c) Line manager
(d) General public

(9) A fixed budget is:
(a) A budget for single level of activity
(b) A budget which ignored inflation
(c) Used only for fixed cost
(d) An overhead cost budget

(10) Heavy expenditure on advertisement of a new product is a:
(a) Capital expenditure
(b) Revenue expenditure
(c) Deferred revenue expenditure
(d) None of these

(11) Subscriptions received in advance is:
(a) An income
(b) An asset
(c) A liability
(d) A loss

(12) At the time of admission of a new partner, goodwill raised should be written off in:
(a) New profit sharing ratio
(b) Old profit sharing ratio
(c) Sacrificing ratio
(d) Gaining ratio

(13) A and B are partners in the ratio of 2:1. They admit C for ¼ shares who contributes Rs. 3000 for his share of goodwill. The total value of the goodwill of the firm is:
(a) Rs. 3,000
(b) Rs. 9,000
(c) Rs. 12,000
(d) Rs. 15,000

(14) Sales to Mustafa of Rs. 10,000 not recorded in the books would affect:
(a) Sales account
(b) Mustafa account
(c) Sales account and Mustafa Account
(d) None of these

(15) Depreciation is a process of:
(a) Valuation
(b) Allocation
(c) Both a & b
(d) None of these

(16) Loss on sale of an asset should be written off against:
(a) Share premium account
(b) Sales account
(c) Depreciation fund account
(d) None of these

(17) Income and expenditure account reveals
(a) Cash in hand
(b) Surplus or deficiency
(c) Capital account
(d) None of these

(18) Which of the following is true regarding the work sheet.
(a) It is the form, which an accountant uses for his own aid and convenience.
(b) It assists in the orderly preparation of the adjustments and financial statements at the end of the account period.
(c) It can substitute for Journal and ledger
(d) Only a & b are true

(19) The post closing trial balance will:
(a) Contain only income statement accounts
(b) Contain only balance sheet accounts
(c) Contain both income statement and balance sheet accounts
(d) Be prepared before closing entries are posted to the ledger

(20) The cost of goods and services used up in the process of obtaining revenue are called:
(a) Net income
(b) Revenue
(c) Expenses
(d) Liabilities

plz plz help me sir

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