Chapter 01: Introduction to Accounting
Q1.Every debit has corresponding credit. Which is this concept?
Dual Aspect Concept
Q2.The incomes and expenses during an accounting period should be matched. Which is this concept?
Matching concept
Q3.A system of collection and presentation of relevant information for planning, controlling and decision making _______ Accounting
Professional
Q4.A person starts the business as if the business will continue forever. Which is this concept?
Going concern concept
Q5.The accounts should be closed at periodical intervals to know the results. Which is this concept?
Accounting Period Concept
Q6.M/s Vishal Ltd. buys a plot of land for Rs. 25,000/-,It is recorded in the books at Rs. 25,000/- even if its market value happens to be Rs. 35,000/-. This concept of accounting is referred as
Cost Concept
Q7.Accounting practices and methods should be consistent from year to year. Which is this concept?
Consistency concept
Q8.The incomes and expenses should be recognised even if they are not received or paid. Which is this concept?
Accrual Concept
Q9.The expenditure, the benefits of which are to be enjoyed for a number of years, is called
Capital expenditure
Q10.The 'going concern concept' means
An entity is going to be in business for an indefinitely long period of time.
Q11.According to _____ , Expenses are considered to be expenses only when they are paid for, and the incomes are considered to be incomes only when they are actually received
Realisation concept
Q12.The assets and incomes should not be overstated. Liabilities and expenses should not be understated. Which is this concept?
Conservatism concept
Q13.Management Accounting is a system of collection and presentation of relevant information for planning, controlling and decision making. This definition is given by _____________
ICAI
Q14.The assets acquired by the organization are recorded at their cost of acquisition. Which is this concept?
Cost concept
Q15.A system of collection and presentation of relevant information for planning, controlling and decision making _______ Accounting
Professional
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Chapter 02: Process of Accounting
Q1.Mr.Vishal sold goods of Rs.10,000 with a Cash Discount of 5% to Shantilal by cheque. What is the correct Journal entry for this transaction?
Debit Bank Account Rs.9,500 Debit Discount Rs.500 Credit Sales Account Rs. 10,000
Q2.Mr.Vishal sold goods of Rs.10,000 to Shantilal on credit. What is the correct Journal entry for this transaction?
Debit Shantilal Account Credit Sales Account
Q3.Personal Accounts showing Credit balance means he is our
Creditor
Q4.Mr.Vishal received a cheque of Rs.10,000 from Shantilal. What is the correct Journal entry for this transaction?
Debit Bank Account Credit Shantilal Account
Q5.The recording of business transactions date wise is known as ________
Journalising
Q6.Mr.Vishal started business with Rs.10,000 What is the correct Journal entry for this transaction?
Debit Cash on Hand Account Credit Capital Account
Q7.Mr.Vishal withdrew Rs.10,000 from his Bank account. What is the correct Journal entry for this transaction?
Debit Cash on Hand Account Credit Bank Account
Q8.Mr.Vishal issued a chque of Rs.10,000 to Shantilal. What is the correct Journal entry for this transaction?
Debit Shantilal Account Credit Bank Account
Q9.Nominal Account Credit balance shows that it is an
Income Account
Q10.Mr.Vishal purchased goods of Rs.10,000 from Shantilal in cash. What is the correct Journal entry for this transaction?
Debit Purchases Account Credit Cash on Hand Account
Q11.Mr.Vishal took a loan of Rs.10,000 and deposited the same in his Bank account. What is the correct Journal entry for this transaction?
Debit Bank Account Credit Loans Account
Q12.Mr.Vishal sold goods of Rs.10,000 to Shantilal by cash. What is the correct Journal entry for this transaction?
Debit Cash on Hand Account Credit Sales Account
Q13.Debit Receiver and credit giver is the rule of _________
Personal Account
Q14.Nominal Account Debit balance shows that it is an
Expenses Account
Q15.A list of all such Ledger Accounts having either Debit or Credit balance at the end of a particular period is called _____
Q1.Current assets less Current liabilities is equal to
Trial balance
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Chapter 03: Closing Adjustment Enteries
Q1.On the basis of the following information calculate depreciation on Furniture and fixtures for the year 2015-16 at 10% by WDV method. Opening Cost as on 1-4-2015 Rs.8,000 Opening Depreciation Rs.800
720
Q2.
On the basis of the following information calculate Provision for Doubtful Debts after adjustment. Debtors as on 31-3-16 before adjustment 10,000 Provision for Doubtful Debts as on 31-3-16 before adjustment 200. Rate of Provision for Doubtful Debts required 3%
Rs.100
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Chapter 04: Preparation of financial Statement
Q1.Current assets are also referred to as
Gross Working Capital
Q2.The term "Bills receivables" is called as
Debtors
Q3.M/s Vivek Enterprises has paid rent relating to the residence of Mr. Vivek, proprietor of Vivek Enterprises. This payment should be treated as
Drawings
Q4.Advantage of term loan from the company's point of view is that
the banker does not have voting right
Q5.The term "secured Loans" includes
Term Loan from Bank
Q6.Carriage Inward is normally debited to
Manufacturing Account
Q7.Which of these is not a Types of debenture?
Fully Irredeemable
Q8.Current liabilities do not consist of
Term Loan from Bank
Q9.Unclaimed Dividends are shown in the balance sheet under the head
Current Liability
Q10.Current assets include
Cash on Hand
Q11.The term "unsecured Loans" includes
Public Deposits
Q12.The fixed assets are expressed at
cost less accumulated depreciation
Q13.The limitations of Financial statements are
Assets and Liabilities do not represent market prices or liquidation prices
Q14.Instrument to raise long term debt capital is
Term Loan from Bank
Q15.The liabilities does not include
Contingent Liability
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Chapter 05: Cost Accounting
Q1.In cost sheet, wages are included in
Labour Cost
Q2.The sum of total fixed costs and total variable costs is called as
Total cost
Q3.Variable cost are those costs which vary with the level of
Output
Q4.In cost sheet, bad debt is included in
Selling Cost
Q5.Interest on delay in payment to creditors is a
controllable cost.
Q6.In cost sheet, depreciation of office furnitures is included in
Other Direct Cost
Q7.The cost which varies in direct proportion to the sales revenue is termed as
Variable Cost
Q8.The cost which remains constant up to a stage irrespective of changes in the level of activity and varies afterwards is termed as
Semi variable cost
Q9.In cost sheet, salary of sales person is included in
Administrative Cost
Q10.No of units produced 5. Fixed cost Rs.10,000/- Total variable cost is Rs.5,000/-.Average fixed cost is
Rs.2,000.-
Q11.In cost sheet, primary packing material is included in
Material cost
Q12.The cost which enter the accounts book of the firm are referred as
Accounting cost
Q13.Interest on the capital of the proprietor is an example of
Opportunity costs
Q14.The costs which cover the cost of advertising is ________.
Selling cost
Q15.Cost Sheet does not include
Capital Expenditure
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Chapter 06: Cost, Volume and Profit Relationship
Q1.The formula for Break Even Point (Volume) is
Fixed cost/ Profit Volume Ratio
Q2.The cost of producing the marginal unit is called .
marginal cost
Q3.No of units produced 8. Fixed cost Rs.16,000/- Total variable cost is Rs.32,000/-. Total Sales 60,000. In this case
Margin of Safety is Rs.30,000/-
Q4.Fixed cost Rs.10,000/- Variable cost per unit is Rs.3/- Selling Price Per Unit is Rs.5/- Sales Rs. Rs.30,000.- What is contribution per unit?
Rs.2
Q5.Reduction in the selling price of a product results in
increase in the break even point.
Q6.Fixed cost Rs.10,000/- Variable cost per unit is Rs.3/- Selling Price Per Unit is Rs.5/- Sales Rs. Rs.30,000.- What is Percentage of Margin of Safety?
0.2
Q7.Fixed cost Rs.10,000/- Variable cost per unit is Rs.3/- Selling Price Per Unit is Rs.5/- What is Profit Volume Ratio?
0.2
Q8.No of units produced 5. Fixed cost Rs.10,000/- Total variable cost is Rs.5,000/- Total Revenue is Rs.20,000/-. Average revenue per unit is
Rs.4,000/-
Q9.Fixed cost Rs.10,000/- Variable cost per unit is Rs.3/- Selling Price Per Unit is Rs.5/- Sales Rs. Rs.30,000.- What is the total contribution t?
Rs.12,000
Q10.No of units produced 8. Fixed cost Rs.16,000/- Total variable cost is Rs.32,000/-. In this case
Average total cost is Rs.6,000/-
Q11.The formula forTotal cost is
Fixed cost + Variable cost.
Q12.Fixed cost Rs.10,000/- Variable cost per unit is Rs.3/- Selling Price Per Unit is Rs.5/- Sales Rs. Rs.30,000.- What is Profit?
Rs.2,000
Q13.Fixed cost Rs.10,000/- Variable cost per unit is Rs.3/- Selling Price Per Unit is Rs.5/- What is BEP in amount?
Rs.25,000
Q14.Total cost is ______ to total variable cost
parallel
Q15.The formula for Margin of Safety is
Actual Sales – BEP sales
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Chapter 07: Introduction to Financial Management
Q1.Objectives of finance function is
Profit Maximisation
Q2.According to ______ "Financing consists of the raising, providing, managing of all the money, capital or funds of any kind to be used in connection with the business'
Bonneville and Dewey
Q3.Procurement of funds means
Raising of finance
Q4.Financing decisions do not involve
Brand Management
Q5.Investment decisions involve
creation of fixed assets
Q6.Finance function is not concerned with
Production decisions
Q7.Dividend Policy decisions do not involve
the amount of funds to be raised
Q8.One of the recurring duties of a finance executive is
Evaluation of performance
Q9.Sources of funds may be in the form of
- issue of share
- borrowings from financial institutes
- issue of debentures
- all of these
Q10.Allocation of income includes
distribution of dividend
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Chapter 08: Capital Structure, Cost of Capital & Leverages
Q1.Sales of a company are Rs.5.00 lacs. Variable cost is 2.00 lacs. Fixed cost (Excluding interest on debt) is Rs.1.00 lacs. Interest on Debt Rs.1 lacs. The Degree of combined Leverage will be
3
Q2.A company raised preference share capital of Rs. 1,00,000 by issue of 10% preference shares of Rs. 10 each. The Company incurred an expenditure of Rs.10,000/- towards the issue. The cost of preference capital when they are issued at 10% premium will be
0.1
Q3.The formula for Combined leverage is
Financial Liverage X Operating Liverage
Q4.Market Price of a share is Rs.15/- Face Value is Rs.10/- Dividend paid is 20%. Cost of Equity as per Dividend/Price method is
0.1333
Q5.The hidden cost of capital which is not incurred directly is referred to as
Implicit Cost
Q6.Earning Before Interest and Tax (EBIT) is 15 crores. Weighted average cost is 15%. Value of the company is
Rs.100 crores
Q7.Operating leverage measures the effect of change in sales quantity on
earnings before interest and taxes
Q8.SBI has given a dividend of Rs.12 per share. Purchase price of the share is Rs.1,000/- Face Value is Rs.10/-. The cost of equity capital based on Dividend/Price Method will be
0.012
Q9.A company raised 1000 debentures of Rs. 100 each bearing interest at 10%. The Company incurred an expenditure of Rs.10,000/- towards debenture issue. The cost of debentures after income tax at the rate of 30% will be
0.07779999999999999
Q10.A company raised 1000 debentures of Rs. 100 each bearing interest at 10%. Company incurred an expenditure of Rs.10,000/- towards debenture issue. The cost of debentures before tax will be
0.1111
Q11.The contribution is computed as
Sales Revenue Less Variable Operating Cost
Q12.Cost of Capital is
the rate at which the charges are paid to the suppliers of capital
Q13.The formula for Operating leverage is
Contribution/Earning Before Interest & Tax
Q14.Sales of a company are Rs.6.00 lacs. Variable cost is 2.00 lacs. Fixed cost (Excluding interest on debt) is Rs.1.00 lacs. Degree of Operational Leverage will be
1.33
Q15.SBI has given a dividend of Rs.10 per share and the Shareholder expects a return of 10% on his investment. The Value of Share based on Dividend Price Method will be
Rs.100/-
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Chapter 09: Working Capital Assessment
Q1.Current assets less Current liabilities is equal to
Net Working Capital
Q2.The committee that recommended 25% of turnover as working capital was
Nayak Committee
Q3.Factor not affecting working Capital are
Age of the organisation
Q4.The minimum period of a commercial paper is
7 days
Q5.The recommendations of the Nayak committee does not include
Working capital requirement should be taken as 20% of their projected turn over
Q6.Projected Turnover of a company is Rs.400. The margin money for working capital requirement as pr Nayak committee recommendations will be ______
Rs.20
Q7.The maximum period of a commercial paper is
one year
Q8.Cycle in which the cash is converted back into cash is called as
Operating Cycle
Q9.Fixed Working Capital is
the minimum working capital
Q10.In case of Bills Purchased, the difference between the face value of the bill and the amount of assistance given by lender is in the form of
Interest
Q11.The working capital required over and above the permanent working capital is called as
Temporary working capital
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Chapter 10:Working Capital Management
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Chapter 10:Working Capital Management
Q1.Calculation of Economic Order Quantity is not based on
Operating Cycle
Q2.To monitor the receivables on macro basis _____ is calculated
Average Collection Period
Q3.The object of receivable management is to trade off between the risk and
Profitability
Q4.Yearly Credit Sales are Rs.36,500/- Sundry Debtors are Rs.10,000/-. The Average Collection Period will be ____
100 days
Q5.Factor which do not determine the required cash balance is
Depreciation
Q6.Economic Order quantity indicates the
Quantity which is fixed in such a way that the total variable cost of managing the inventory can be minimised.
Q7.Value of material consumed / Average inventory held is the formula of
Average Stock Period
Q8.Which is not an Objectives of Cash management?
Bank reconciliation
Q9.With Recourses factoring means
risk is assumed by selling company
Q10.Which is not an Operating Cash inflow?
Sale of fixed asset
Q11.Formula for Average Level is _____
( Minimum level + Maximum level ) / 2
Q12.Reference of the people who are currently dealing with a company is called as ______
Trade Reference
Q13.A very large number of a raw material which are less important are called as _ category items.
C
Q14.The quantity which is fixed in such a way that the total variable cost of managing the inventory can be minimised is called as
Economic Order Quantity
Q15.The objective of Working Capital management is to ensure
correct investment in current assets
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Chapter 11: Profit Management
Q1.Irregular Dividend Policy refers to
Dividend payout mode is not fixed
Q2.The Walter and Gordon's approach of Dividend policy is based on the assumption that there is a relationship between
Dividend Policy and Market Price of the Shares
Q3.
The payment of Dividend in the form of Bonus shares involves ____
Transfer of Retained Earnings to Share Capital
Q4.The Dividend in the form of cash is payable out of the current year's profit after transfering a minimum amount to
Reserves account
Q5.The internal factors affecting the dividend policy are
Age of the Company
Q6.The company which pays a fixed amount of dividend irrespective of the fluctuations in income is categorised under
Stable Dividend Policy
Q7.According to the Modigliani and Miller approach there is
no relation between dividend policy and the value of the firm
Q8.Profit after taxes can be distributed among the owners of the company by way of
Dividend
Q9.Which is not an advantage of Bonus shares?
EPS decreases
Q10.The external factors affecting the dividend policy are
Tax policy
Q11.Dividend declared in between two annual general body meetings is called as ______ dividend
Interim
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