Consider the following statements.
A. Only 1
B. Both 2 and 3
C. All of the above
D. None of the above
Select an option to see the answer and solution.
Outstanding expenses are shown in balance sheet
A. In trading account
B. In profit and loss account
C. Liability side of balance sheet
D. Asset side of balance sheet
Select an option to see the answer and solution.
Which of the following statements is true?
A. Fixed capital account will always have a credit balance
B. Current account can have a positive or negative balance
C. Fluctuating capital account can have a positive or negative balance
D. All of the above
Select an option to see the answer and solution.
Security premium cannot be used for what purpose?
A. Giving bonus shares to members
B. Writing-off preliminary expenses of company
C. Writing-off discount on issue of debenture
D. Distribution of dividend to members
Select an option to see the answer and solution.
P/V ratio =
A. S S − V
B. S S − V × F c
C. S S − V × 100
D. Sales Profit × 100
Select an option to see the answer and solution.
A share of Rs. 10 is issue with Rs. 1 premium, on which Rs. 9 (including premium) is called-up and Rs. 7 (including premium) is paid up is forfeited. Share capital account will be debited by
A. Rs. 8
B. Rs. 9
C. Rs. 7
D. Rs. 10
Select an option to see the answer and solution.
The 'Debenture Redemption Fund' of a company stood at Rs. 16,000 represented by Rs. 20,000 (nominal) investment. The company in order to redeem debentures of Rs. 10,000 at 1% premium sold Rs. 12000 (nominal) investments of Rs. 100 each at Rs. 84 each for the purpose of redeeming Rs. 10,000 debentures at a premium of 1%. After the redemption of debentures, the balance in the Debenture Redemption Fund a/c will be:
A. Rs. 5,690
B. Rs. 6,270
C. Rs. 6,380
D. Rs. 7,220
Select an option to see the answer and solution.
If bonus shares are issued out of pre-acquisition profit, it will have
A. Direct effect on the consolidated balance sheet
B. No effect on the consolidated balance sheet
C. No effect on net profit
D. None of the above
Select an option to see the answer and solution.
What is interest on drawing to the business?
A. Preliminary expense
B. Capital profit
C. Profit
D. Loss
Select an option to see the answer and solution.
What is the meaning of outstanding rent?
A. Rent is paid in cash
B. Rent is received
C. Rent is due, but payment has not beent made
D. Rent has been paid in advance
Select an option to see the answer and solution.
Sale of an asset on credit at a price higher than written down value of the asset, would
A. leave owner's equity unaffected
B. increase owner's equity to the extent of less value
C. increase owner's equity by the amount of sale
D. increase owner's equity to the extent of profit on sale
Select an option to see the answer and solution.
Which of the following will not be disclosed by trial balance?
A. Error in entering an amount in the account
B. Wrong totaling of an account
C. Decrease in gross profit percentage
D. Compensating error
Select an option to see the answer and solution.
How many columns are there in ledger?
Select an option to see the answer and solution.
Ideal current ratio is:
A. 1 : 1
B. 2 : 1
C. 1 : 2
D. 1 : 3
Select an option to see the answer and solution.
The margin of safety can be increased by-
A. reducing the fixed cost
B. increasing the selling price
C. reducing variable cost
D. all the above ways
Select an option to see the answer and solution.
In the double entry system of book keeping a transaction affects:
A. one account twice
B. two accounts at the same time
C. one account in two ways
D. two accounts in two ways each
Select an option to see the answer and solution.
On retirement or death of a partner, the retired or deceased partner's capital account will be credited with
A. His share of goodwill
B. Goodwill of the firm
C. Share of the goodwill of remaining partners
D. None of the above
Select an option to see the answer and solution.
When a business is purchased, any amount paid in excess of the total of assets, minus the liabilities taken, is called:
A. Share Premium
B. Goodwill
C. Capital Employed
D. Working Capital
Select an option to see the answer and solution.
A firm which manufctures boats has a fixed cost of Rs. 2,60,000/- per month. The selling price of the boat is Rs. 35,000/- boat. Variable cost per boat is Rs. 15,000/-. The boat yard can manufacture 20 boats per month. The break even output of the firm will be
A. It is not possible to determine from the above information
B. 13 boats
C. 25 boats
D. 20 boats
Select an option to see the answer and solution.
The amount of short working is equal to:
A. Minimum rent + Royalty
B. Royalty - Minimum rent
C. Minimum rent - Royalty
D. Royalty - Amount paid to landlord
Select an option to see the answer and solution.
