MCQs

Fatima Saleem · #1 Thursday, January 15, 2015

PLEASE SENIORS SOLVE THESE
1. Break-up value of a share can be determined by:
(a) Net assets method (b) Yield method (c) Stock exchange quotation (d) None of these
2. In case a company is solvent, the interest on debentures is paid up to the date of:
(a) The balance sheet (b) the commencement of winding up (c) Payment (d) None of these
3. Which of the following is not concerned with the valuation of goodwill?
(a) Earning capacity method (b) Super profit method (c) Average profit method (d) None of these
4. Debenture holders having a floating charges have priority in payment over:
(a) Preferential creditors (b) Secured creditors (c) Unsecured creditors (d) None of these
5. Two companies, X Co. and Y Co., go into liquidation and a new Co., Z Ltd, is formed. It is case of:
(a) Absorption (b) External Reconstruction (c) Amalgamation (d) None of these
6. Expenses of liquidation met by vendor Company are debited to (by the Vendor company):
(a) Realization account (b) Bank account (c) Goodwill account (d) None of these
7. In the books of consignee the expenses incurred by him on consignment are debited to:
(a) Consignment account (b) Sales account (c) Consignor’s account (d) None of these
8. Bonus in reduction of premium appears in the revenue account:
(a) As a expense (b) As an income (c) As a profit (d) None of these
9. A contributory is:
(a) A creditor (b) Shareholder (c) Debenture holder (d) None of these
10. Appropriations out of profits in case of a banking company are made in:
(a) Profit & loss app. A/c (b) Profit & loss A/c (c) Balance sheet (d) None of these
11. Rebate on bills discounted is:
(a) An expense (b) An income (c) A liability (d) None of these
12. Increase in amount of bills payable results in:
(a) Increase the cash (b) Decrease the cash (c) Has not effect on cash (d) None of these
13. Which of the followings is a non-operating income?
(a) Profit on the sale of used plant in manufacturing company
(b) Revenue from sales in trading concern (c) Dividends received by an investment company
(d) Premiums received from an insurance company
14. Which of the following is not a capital reserve?
(a) Premium on the issue of shares (b) Profit prior to Incorporation
(c) Dividend equalization reserve (d) Profit on the sales of fixed assets
15. Depreciation as the term is used in accounting means:
(a) Physical deterioration of a fixed asset (b) Decline in the market value of the asset
(c) Allocation of the cost of fixed asset, over its useful life
(d) Making a provision for the replacement of the fixed asset
16. Posting a wrong amount in ledger causes:
(a) The trial balance is out of balance (b) Dose not cause the trial balance to the out of balance
(c) Cause the ledger account to be out of balance (d) None of these
17. Bank over draft should be classified as:
(a) Current asset (b) Current liability (c) Fixed asset (d) None of these
18. The most important test of solvency of a business is calculated with the help of the following ratio:
(a) Net profit after taxes (b) Total assets (c) Total fixed assets (d) Total fixed assets
Total assets Total outside liabilities Capital employed Total equity

19. Sales on account for company for the year ended December 31, 2012 amounted Rs. 50000, if the
opening balance receivable was Rs. 10000 and the closing balance was Rs. 20000, the cash collected
from customers must have been:-
(a) 40000 (b) 50000 (c) 60000 (d) 70000
20. Financial accounting reports are prepared primarily:
(a) To value the property of the company (b) To show managers the results of their departments
(c) To help people make decisions about resource allocation(d) To show the value of shares in the compan

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