Description : All of the following are stockholders’ equity accounts except a. Common Stock. b. Capital Stock. c. Investment in Stock. d. Retained Earnings.
Last Answer : c. Investment in Stock.
Description : Closing entries are made a. in order to terminate the business as an operating entity. b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the ... ) and dividends to the retained earnings account. d. so that financial statements can be prepared.
Last Answer : c. in order to transfer net income (or loss) and dividends to the retained earnings account. unt.
Description : For dividend yield ratio -------------- price of the equity shares is taken into consideration a) Market b) Cash c) Cost d) None of the above
Last Answer : a) Market
Description : The ratio which shows the relationship b/w share holder’s fund and total assets a) Debit equity ratio b) Proprietary ratio c) Solvency ratio d) Fixed asset
Last Answer : b) Proprietary ratio
Description : Which of the following valuation methods would most likely not be used for business valuation? a) Discounted Cash Flow b) Net Assets Method c) Multi-period Excess Earning Method d) Industry Price Earnings Ratio
Last Answer : c) Rs.200 crore
Description : Cost Unit is defined as: (a) Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed (b) A location, person or an item ... the responsibility of generating and maximising profits (d) Centres concerned with earning an adequate return on investment
Last Answer : Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed
Description : Which of the following is/are true if a firm has a required rate of return equal to the ROE? I. The amount of earnings retained by the firm does not affect market price or the P/E. II. The firm can increase market ... (III) above D. Both (II) and (III) above E. All (I), (II) and (III) above
Last Answer : E. All (I), (II) and (III) above
Description : Stock price is a function of: a. Book value, Earnings per Share, and Net Profit. b. Book value, Dividend, and Retained Earnings. c. Earnings per Share, Dividend, and Retained Earnings. d. Earnings per Share, Dividend, and Net Profit. e. Book value, Earnings per Share, and Dividend.
Last Answer : e. Book value, Earnings per Share, and Dividend.
Description : Intrinsic value of each equity shares of the vendor company is Rs. 250 and that of the purchasing company is Rs. 400. The exchange ratio of shares on the basis of intrinsic value is - (A) 2:1 (B) 8:8 (C) 8:5 (D) None of the above
Last Answer : (C) 8:5
Description : If the market price of the shares to be given for Purchase Consideration at the time of absorption, ............ of the share is to be determined (A) Fair Value (B) Face Value (C) Intrinsic Value (D) Yield Value
Last Answer : (C) Intrinsic Value
Description : The original amount of preference share capital should be transferred to ............ account in the time of amalgamation in the books of vendor co. (A) Preference shareholders Account (B) Capital Reserve Account (C) Equity share capital Account (D) Equity share capital Account
Last Answer : (A) Preference shareholders Account
Description : Equity includes -------------- a) Equity share capital b) Equity share capital+Preference share capital+-fictitious asset c) Equity capital+Prefernce share capital+reserves snd surplus-fictious asset d) Equity capital+Preference share capital
Last Answer : c) Equity capital+Prefernce share capital+reserves snd surplus-fictious asset
Description : Which one of the following statements is correct concerning the weighted average cost of capital (WACC)? a) The WACC may decrease as a firm's debt-equity ratio increases. b) In the computation of ... of the WACC is based on the number of shares outstanding multiplied by the book value per share.
Last Answer : a) The WACC may decrease as a firm's debt-equity ratio increases.
Description : _________ is also known as working capital ratio. (a) Current ratio (b) Quick ratio ((c) Liquid ratio (d) Debt-equity ratio
Last Answer : (a) Current ratio
Description : Debt equity ratio is a-------------------------------------- a) Profitability ratio b) Turnover ratio c) Short term solvency ratio d) Long term solvency ratio
Last Answer : d) Long term solvency ratio
Description : he ratio which is used to ascertain the soundness of the long term financial position is------------ a) Debt equity ratio b) Liquidity ratio c) Activity ratio d) Gross profit ratio
Last Answer : a) Debt equity ratio
Description : Ratio to assess the short term debt paying capacity of a firm is---------- a) Debt equity ratio b) Propriety ratio c) Liquid ratio d) Solvency ratios
Last Answer : c) Liquid ratio
Description : Satisfactory level of debt equity ratio is -------------------- a) 1:1 b) 3:1 c) 2:1 d) 1:2
Last Answer : c) 2:1
Description : Debt equity ratio is an example of ---------------- ratios a) Balance sheet ratio b) Profit & loss account ratio c) Mixed ratio d) Liquidity ratio
Last Answer : a) Balance sheet ratio
Description : The ratio which shows the relationship between borrowed funds and owners capital is --------------- a) Proprietary ratio b) Debt equity ratio c) Capital gearing ratio d) Fixed asset ratio
Last Answer : b) Debt equity ratio
Description : Long term solvency of a firm can be measured by a) Current ratio b) Net profit ratio c) Gross profit ratio d) Debt equity ratio
Last Answer : d) Debt equity ratio
Description : The ratio which depicts the relationship between two items,one of which is drawn from the Balance Sheet and the other from the revenue account a) Current ratio b) Equity Ratio c) Net Profit ratio d) Debtors Turn over Ratio
Last Answer : d) Debtors Turn over Ratio
Description : The importance of ‘Trading on Equity’ lies in the fact that if the company is earning more profit, it can make use of borrowed capital and preference share capital and by doing so, it can increase the income of: a. Preference Shareholders b. Lenders c. Equity Shareholders d. Government
Last Answer : c. Equity Shareholders
Description : -------------------means transfer of economic value of firm from one asset or equity to another. a) Flow of funds b) Uses of fund c) Inflow of funds d) Application of funds
Last Answer : a) Flow of funds
Description : The post-closing trial balance contains only a. income statement accounts. b. balance sheet accounts. c. balance sheet and income statement accounts. d. income statement, balance sheet, and retained earnings statement account
Last Answer : b. balance sheet accounts.
Description : ncome Summary has a credit balance of $12,000 in J. Sawyer Co. after closing revenues and expenses. The entry to close Income Summary is a. credit Income Summary $12,000, debit Retained Earnings ... 000, credit Dividends $12,000. d. debit Income Summary $12,000, credit Retained Earnings $12,000.
Last Answer : d. debit Income Summary $12,000, credit Retained Earnings $12,000.
Description : Which account listed below would be double ruled in the ledger as part of the closing process? a. Cash b. Retained Earnings c. Dividends
Last Answer : c. Dividends
Description : After closing entries are posted, the balance in the retained earnings account in the ledger will be equal to a. the beginning retained earnings reported on the retained earnings statement. b. the amount of ... earnings reported on the balance sheet. c. zero. d. the net income for the period.
Last Answer : . b. the amount of retained earnings reported on the balance sheet.
Description : The balance in the income summary account before it is closed will be equal to a. the net income or loss on the income statement. b. the beginning balance in the retained earnings account. c. the ending balance in the retained earnings account. d. zero.
Last Answer : a. the net income or loss on the income statement.
Description : The final closing entry to be journalized is typically the entry that closes the a. revenue accounts. b. dividends account. c. retained earnings account. d. expense accounts.
Last Answer : b. dividends account.
Description : The closing entry process consists of closing a. all asset and liability accounts. b. out the retained earnings account. c. all permanent accounts. d. all temporary accounts.
Last Answer : d. all temporary accounts.
Description : In preparing closing entries a. each revenue account will be credited. b. each expense account will be credited. c. the retained earnings account will be debited if there is net income for the period. d. the dividends account will be debited.
Last Answer : b. each expense account will be credited.
Description : In order to close the dividends account, the a. income summary account should be debited. b. income summary account should be credited. c. retained earnings account should be credited. d. retained earnings account should be debited.
Last Answer : d. retained earnings account should be debited.
Description : If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a a. debit to the retained earnings account. b. debit ... . c. credit to the retained earnings account. d. credit to the owner's dividends account.
Last Answer : c. credit to the retained earnings account.
Description : The summarized balance sheet of Autolight Limited shows the balances of previous and current year of retained earnings Rs. 25,000 and Rs. 35,000. If dividend paid during the current year amounted to Rs. 5,000 then profit earned during ... (a) Rs. 5,000 (b) Rs. 55,000 (c) Rs. 15,000 (d) Rs. 65,000
Last Answer : (c) Rs. 15,000
Description : Pick out the wrong statement. (A) Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity) (B) Return on equity = profit after tax/net worth (C) Working ... /net working capital (D) Total cost of production is more than net sales realisation (NSR) at breakeven point
Last Answer : (D) Total cost of production is more than net sales realisation (NSR) at breakeven point
Description : Capital gearing ratio is ___________. (a) Market test ratio (b) Long-term solvency ratio (c) Liquid ratio (d) urnover ratio
Last Answer : (b) Long-term solvency ratio
Description : The shares received from the new company is recorded at________ (A) Face value (B) Market value (C) Average price (D) None of these
Last Answer : (B) Market value
Description : Shares received from the new company are recorded at - (A) Face value (B) Average price (C) Market value (D) None of the above
Last Answer : (C) Market value
Description : If a customer agrees to retain merchandise that is defective because the seller is willing to reduce the selling price, this transaction is known as a sales a. discount. b. return. c. contra asset. d. allowance.
Last Answer : b. return.
Description : What is the annual future earnings of the AZ Ltd. using ‘Capitalization of Earning Method’? a) Rs.150 crore b) Rs.180 crore c) Rs.200 crore d) Rs.190 crore
Description : If GDP exceeds GNP the possible reasons could be (a) Foreigners are earning more in India than Indians are earning in foreign countries (b) High incidence of plant and machinery wear out (c) Indian are earning more in foreign countries than foreigners earnings in India (d) None
Last Answer : (a) Foreigners are earning more in India than Indians are earning in foreign countries
Description : What is total liabilities and stockholders' equity at December 31, 2008? a. $176,000 b. $190,000 c. $218,000 d. $232,000
Last Answer : c. $218,000
Description : What is the total that would be reported for stockholders' equity at December 31, 2008? a. $102,000 b. $130,000 c. $144,000 d. $158,000
Last Answer : b. $130,000
Description : The heading for a post-closing trial balance has a date line that is similar to the one found on a. a balance sheet. b. an income statement. c. an stockholders' equity statement. d. the worksheet.
Last Answer : a balance sheet.
Description : Fixed assets, inventories and investments in Equity shares are examples of ____________ items.
Last Answer : Non-monetary,
Description : Net Assets of D.Co. for Purchase Consideration worth Rs. 4,00,000. At the time of absorption, the company has paid 32,000 equity shares each of Rs.10 each at 10% premium, then remaining cash will be - (A) Rs. 48,000 (B) Rs. 84,000 (C) Rs. 80,000 (D) Rs. 90,000
Last Answer : (A) Rs. 48,000
Description : 20,000 equity shares of Rs.10 each issued at 10% premium , cash is Rs------------------- a) Rs.2,00,000 b) Rs.2,10,000 c) Rs.2,15,000 d) Rs.2,20,000
Last Answer : d) Rs.2,20,000
Description : Net worth refers to owner’s-------------------------- a) Equity b) Solvency c) Liability d) None of these
Last Answer : a) Equity
Description : Coverage of fixed assets by shareholder’s equity is a good tests of---------------- a) solvency b) liquidity c) Activity d) profitability
Last Answer : a) solvency