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Default Lets Solve MCQ'S paper Accounting and Auditing 1999

Paper 1

(1) Accounting principles are generally based on
(a) Practicability (b) Subjectivity (c) Convenience in recording
(2) Real accounts are related to
(a) Assets (b) Expense and incomes (c) Customers and creditor etc
(3) Rent paid to the land lord should be credited to
(a) Landlord Account (b) Rent account (c) Cash Account
4) In the event of dissolution of a partnership firm the provision for doubtful debts is transferred to
(a) Realization Account (b) Partner capital accounts (c) sundry debtors Accounts
(5) A prospectus for share can be issued only by
(a) A public company (b) A private company (c) None of these.
(6) Preliminary expense is
(a) Current asset (b) Current Liability (c) Fictitious asset
(7) The valuation of closing stock is at
(a) Cost price (b) Market price
(c) Cost or Market price whichever is lower
(8) The master budget includes
(a) as income statement (b) a balance sheet (c) a cash budget (d) all of these
(9) Cost volume profit analysis is the method used to estimate the impact on profit is of changes in
(a) Unit variable cost (b) unit sales price (c) Sale volume (d) All of these
(10) In a manufacturing company product cost include
(a) Material cost only (b) Material and labour (c) Labour cost only (d) material labour and overhead cost
(11) A liability in the amount of Rs 500 is paid in cash which of the fallowing is true
(a) Asset is increased and liability is decreased (b) Asset is increased and liability is increased
(b) Asset is decreased and liability is decreased (b) Liability is decreased and owner’s equity is increased
(12) Which one of the following account would usually have credit balance?
(a) Cash (b) Account payable (c) Equipment (d) Salaries expense
(13) A company collected one year’s rent in advance on October 1st ,1997 the entries Rs 1200 was credited to unearned revenue account the adjusting entry at the December 31,1997 year ended would include
(a) A debit to unearned revenue for Rs 300 (b) A debit to unearned revenue for Rs 900 (c) A credit to unearned revenue for Rs 300 (d) A debit to rent earned for Rs 900
(14) Net income plus operating expense is equal to
(a) Net sale (b) Cost of good available for sales (c) Cost of good sold (d) Gross profit
(15) When purchase merchandise is returned under a perpetual inventory system a credit would be made to
(a) Inventory (b) Freight in (c) Purchases (d) Purchase return
(16) Which of the fallowing accounts would not be included in the computation of the cost of goods sold
(a) Purchase returns (b) Freight in (c) Purchase discount lost (d) Purchase discounts
(17) Total manufacturing cost for a period includes all of the fallowing except
(a) Raw material used (b) Direct labour cost
(c) Cost of good completed (d) Factory overhead cost
(18) Quick Asset includes which of the fallowing
(a) Cash (b) Account receivable (c) Marketable securities (d) All of these (e) a &b
(19) When a small stock dividend is declared which of the fallowing accounts is credited
(a) Common stock (b) Dividend payable (c) Common stock dividend distributable (d)Retained Earnings
(20) An advantages of the partnership from of business organization is its
(a) Unlimited liability (b) Mutual agency (c) Ease of the formation (d) Limited life
CSS 1999 PAER 2nd

(1) The table “ A “of the Companies Ordinance 1984
(a) Balance sheet format (b) Profit & Loss format (c) Model “ Articles of Association” (d) Model “Memorandum of Association”
(2) The statement of assets liabilities and owner’s capital is called the
(a) Financial statement (b) Profit & loss A/c (c) Balance sheet (d) statement of owners capital
(3) When business activity increases the fixed cost per unit
(a) Decreased (b) Remain the same (c) Increases (d) None of these
4) Standard cost are not used to
(a) Measuring the performance (b) Prepare Budgets (c) Aid in planning (d) Avoid tracking actual costs
(5) Return on investment could be improved by
(a) Increasing assets turnover (b) Decreasing return on sales (c) Decreasing contribution margin (d) Increasing control expense
(6) The formula a future value of dollar is
(a) P (1 + r )n (b) P (1 - r )n (c) P (1 + n)r (d) P (r -1 )n
(7) The analysis of financial statement helps identify a company’s strengths and weaknesses it indicate if company
(a) is managing its inventory efficiently (b) Has sufficient plant assets
(c) is collecting accounts receivable quickly (d) All of the above
(8) Company’s earning power ratios are of a great interest to
(a) Preferred shareholders (b) Long terms lenders (c) Common share holders (d) all of these
(9) Depreciation Expense is
(a) a cash inflow (b) a cash outflow (c) Ignored when proper cash flow statements (d) Added to the accumulated depreciation account
(10) An increase in income tax payable mean that the company
(a) Paid less than the income tax expense repotted (b) Paid more than the income tax expense reported (c) Paid the same as the income tax expense reported (d) Is not paying any income taxes
(11) A Cash sale of merchandise should be recorded in the
(a) Sales journal (b) General Journal (c) Cash receipt journal (b) Cash payment journal
(12) Which of the fallowing should not be considered cash by an accountant?
(a) Money Order (b) Bank saving account balance (c) Postage stamps (d) Travelers’ cheques
(13) The inventory method that assigns the most recent costs to the cost of goods sold is
(a) FIFO (b) LIFO (c) Weight average (d) Specific Identification
(14) In finance Working capital means the same things as
(a) Total assets (b) Fixed assets (c) Current assets (d) Current assets minus current liabilities
(15) The more basic requirement for a firm’s marketable securities
(a) Safety (b) yield (c) Marketability
(16) Partnership forms of organization
(a) Avoids the double taxation of earnings and dividends found in the corporate form of a organization (b) Usually provides limited liability to the partners (c) Has unlimited life
(17) A corporate buy back or the repurchasing of share is
(a) An example of balance sheet restructuring (b) An excellent source of profit when the firm stock is overpriced
(c) A method of reducing the debt to equity ratio (d) All of the above
(18) A statement of cash flows can be prepaid using a ful T account analysis This approch
(a) User a detail T accounts for each balance sheet account (b) Dividend the cash T account into cash inflow and cash outflows (c) Classifies item into operating, investing ,financing (d) All the above are true
(19) If the beginning inventory of the finished good is 3000 units, planned sales are 25000 units and planned productions is 27000 units the inventory of finished goods on the budgeted balance sheet would be
(a) 3000 (b) 1000 (c) 5000 (d) None of these
(20) If working capital increased during the period
(a) Current assets must be increased (b) Current liabilities must be decreased (c) Source of working capital must have been greater than uses of working capital (d) User of working capital must have been greater than sources of working capital
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