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  #11  
Old Saturday, June 22, 2013
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Quote:
Originally Posted by Saba Yasmin View Post

Work Sheet is:
(a) Balance Sheet
(b) Fund Flows Statement
(c) A combination of Profit and Loss Account and Balance Sheet items
(d) None of these

answer should b none of these
A worksheet in accounting comprises of P&L and Balance Sheet balances both adjusted and un-adjusted.Option (c) is correctly marked in original post. Option (d) is wrong answer.
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Hi Can anyone please recheck answer of question 7 ?

Quote:
Originally Posted by xaara~hussain View Post
Accounting & Auditing Paper -I (2000)

(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 Fire, Marine, and Accidents etc.(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.




Accounting & Auditing Paper -II (2000)


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 increased by:
a. Describing selling prices
b. Increasing expenditure
c. None of above
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(19) Economics resources of a business that are expected to be of benefit in the future are referred to as:
(a) Liabilities
(b) Owner’s equity
(c) Withdrawals
(d) Assets
(e) None of these


Xara Hussain to me they are Assets the answer is D. what u say?
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Old Sunday, September 15, 2013
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Default MCQ's Accounting & Auditing Paper -I (2013)

Accounting & Auditing Paper -I (2013)

PART-I ((MCQs) (COMPULSORY)

Q.1. (i) Select the best option/answer and fill in the appropriate Circle on the OMR Answer Sheet. (20x1=20)
(ii) Answers given anywhere, other than OMR Answer Sheet, shall not be considered.


1. Double Entry Book Keeping was fathered by:
(a) Luca Paioli
(b) Yoyji Ijiri (c) Micheal Hammer (d) Ishikawa

http://en.wikipedia.org/wiki/Double-entry_bookkeeping_system
It was first codified in the 15th century by the Franciscan friar Luca Pacioli.


2. Accumulated loss of a company is shown in the balance sheet as:
(a) Liability (b) As an asset (c) As foot note to balance sheet (d) None of these

Profit is recognized on Credit side while Losses on Debit side.
http://www.indiastudychannel.com/exp...an-Assets.aspx


3. Under the Companies Ordinance 1984, disclosure of financial information is legally required for listed companies
under:
(a) Schedule 6 (b) Schedule 5 (c) Schedule 4 (d) Schedule 8

http://www.secp.gov.pk/corporatelaws...mp_Ord1984.pdf


4. A company is considered sick under the Companies Ordinance 1984 where current ratio is:
(a) Below 0.5 : 1 (b) Below 3 : 1 (c) Above 2.5 : 1 (d) None of these

Section 295 (d)(iii) CO1984
http://www.secp.gov.pk/corporatelaws...mp_Ord1984.pdf
(iii) current ratio has deteriorated beyond 0.5 :1


5. Banks are required to prepare their financial statements as per following legislation:
(a) Free to prepare with no legislative requirements (b) Under Companies Ordinance 1984
(c) Banking Ordinance 1962 (d) State Bank Laws

http://www.sbp.org.pk/bsd/2001/C36.htm
In terms of Section 34 of the Banking Companies Ordinance, 1962 the banks are required to prepare their annual accounts in the forms set out in the Second Schedule to the said Ordinance.


6. Preparation of financial statement of listed insurance companies in Pakistan is governed by:
(a) Insurance Act 1938 (b) Insurance Ordinance 2000 (c) Companies Act 1913 (d) Companies Ordinance 1984

http://www.pgi.com.pk/pdfs/annual2012_PGI%20annual%202012.pdf
http://www.pgi.com.pk/pdfs/halfyearly2006.pdf

BASIS OF PRESENTATION
The financial statements have been prepared in accordance with the requirements of accounting regulations laid down by the SECP (Insurance Rules, 2002) of the Insurance Ordinance, 2000.
Insurance Ordinance, 2000 (Primarily), CO1984 (secondary).


7. Trading loss occurs when:
(a) Revenues exceed the matching relevant costs. (b) Revenue and matching costs are equal to each other.
(c) When relevant matching cost exceeds revenues (d) None of these

Simple, when cost (e.g. Rs. 100) is greater than Revenue (e.g. Rs. 80), then loss (of Rs. 20) will occur.
Furthermore, See matching concept also.
Generally, while making financial statements only those costs are undertaken which MATCHES to the accounting period in which the Matched Revenue was generated.


8. Accounting requirements governing NGOs are prescribed in:
(a) Partnership Act 1932 (b) Cooperative societies legislation (c) Companies Ordinance 1984 (d) None of these

http://www.asp.org.pk/indepth/csos_covernance_resources/2.pdf
There are between 10 to 18 different laws in Pakistan that may govern an NGO.


THE CO-OPERATIVE SOCIETIES ACT, 1925

71. Rules.– (2) (h)
prescribe the accounts and the books to be kept by a society and provide for the audit of such accounts,.......

CO1984 does not apply as per sec 4(i) of CO1984
PA 1932 Sec 4 defines partnership, while NGO's are not businesses for sharing profit/losses.


9. Work sheet is equivalent to:
(a) Balance sheet (b) Income statement (c) Trial Balance (d) None of these

Basically, Work Sheet is the SUM of Balance sheet,Income statement andTrial Balance. BUT nature of worksheet is of Trial Balance.


http://www.wisegeek.com/what-is-a-trial-balance.htm
The trial balance is an accounting listing that shows the beginning and ending balances for all accounts included in the set of books. This worksheet format makes it possible to evaluate whether or not the total debits for the period cited are in balance with the total number of credits generated for the same period. When a true trial balance exists, the total credits and total debits will be equal.


10. Work sheet does include:
(a) Fund flows statement (b) Cash gensation statement (c) Cash flow statement (d) None of these

Work Sheet is the SUM of Balance sheet,Income statement andTrial Balance formats.


11. Deffered tax is shown in the balance sheet as:
(a) Liability (b) Asset (c) An expenditure in income statement (d) None of these

No Doubt, its controversial. ****Deferred**** not "Deffered"

Can be asset or liability.

Para 58 IAS 12
Current and deferred tax shall be recognised as income or an expense and included in profit or loss for the period.....

Whatever the amount of Deferred tax is shown in the balance sheet, it is shown as in the Expenditure section of Income statement under the head Taxation, along with the current tax.


12. The following represent tangible assets and are shown in the balance sheet as:
(a) People (b) Expenses (c) Revenue (d) Goodwill


It should be INtangible.
option a,b,c are irrelevant as they cannot be shown on Balance Sheet.


13. Under the Rule of thumb a good current ratio is:
(a) 6 : 1 (b) 10 : 1 (c) .05 : 1 (d) 2 : 1

http://www.encyclopediaofcredit.com/Working-Capital

Current Ratio: The current ratio gauges how capable a business is in paying current liabilities by using current assets only. Current ratio is also called the working capital ratio. A general rule of thumb for the current ratio is 2 to 1 (or 2:1 or 2/1).


14. Financial analysis is a legislative requirement under:
(a) Companies Ordinance 1984 (b) Partnership Act 1932 (c) Voluntary act (d) None of these

CO84 & PA32 does not contain the word "analysis".
No Voluntary Act exists in Pakistan.

Generally financial statements in Pakistan does not contain any sort of analysis.


15. Pakistan follows the following budgeting system at Federal level:
(a) Zero-Based Budgeting (b) Program Budgeting
(c) Responsibility Budgeting (d) Incremental / decremental budgeting

http://www.grbi.gov.pk/Documents/BudgetaryReform.pdf
pg 31
The recurrent budget estimates are prepared on incremental basis.


16. Preparation of budget by a company is compulsory under:
(a) No Law (b) Several laws (c) Securities & Exchange Ordinance 1969 (d) Companies Ordinance 1984

CO84 & SEO69 does not require any budget preparation.


17. Depreciation must be accounted for:
(a) Revenues (b) Fixed Assets (c) Share Capital (d) None of these

Revenue and Share capital are not tangible items for which depreciation is calculated.


18. Accelerated depreciation is allowed under:
(a) Income Tax Ordinance 2001 (b) Voluntary principals (c) Prudential Regulations (d) None of these

Section [23B. Accelerated depreciation to alternate energy projects.


19. Partnerships are legally required to prepare their financial statements for distribution on wide basis under:
(a) Partnerships Act 1932 (b) Securities & Exchange Rules 2000
(c) Voluntary Act for Compliance (d) None of these

Partnerships are not legally required for FS especially to be distributed on wide basis.

20. A company is considered sick if the market value compared to its par value is:
(a) 1 : 1 (b) 2 : 1 (c) 0.25 : 1 (d) None of these


Section 295 (d)(i) CO1984
http://www.secp.gov.pk/corporatelaws...mp_Ord1984.pdf

the market value of its shares as quoted on the stock exchange or the net worth of its share has fallen by more than seventy-five per cent of its par value
if 75% fall in par then value will remain 25% i.e. 0.25 to 1
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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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paper 1 Answer
Q2 (A) ,3(C) 6(C) 7(C) 8(D) 10 (D) 11(C) 12 (B) 13(A) 14 (D) 15(A) 16(C) 17(C) 18(D) 19(C) 20 (A) If any mistake in my answer tell me we discuss Kindly answer these

Un answered Question 1,4,5,9
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paper Q1 (a) , Q 4 (A) Q 5 (A)
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Quote:
Originally Posted by KHANSHAHRUKH View Post
Hi Can anyone please recheck answer of question 7 ?
Dear Khan sb...Question No: 7 is correct in both the papers.
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Quote:
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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)these 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
I have tried to solve the questions as per my knowledge...All the seniors are requested to correct my errors...Please
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Old Thursday, February 19, 2015
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in my opinion
(4) At break-even point of 400 units sold the variable costs were Rs. 400 and the fixed costs were Rs.200. What will be the 401 units sold contributing to profit before income tax?
(a) Rs. 0.00
(b) Rs. 0.50
(c) Rs. 1.00
(d) Rs. 1.50
(e) None of these

the ans should be (c) re. 1
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