Description : Which among the following is the societal obligation of accounting ? (A) To ascertain profit correctly (B) To maintain the records of the assets and liabilities of organisation (C) To establish effective organizational control (D) To be helpful in correct tax assessment
Last Answer : Answer: To be helpful in correct tax assessment
Description : Which of the following is the Accounting equation ? (A) Capital = Assets – Liabilities (B) Capital = Assets + Liabilities (C) Assets = Liabilities – Capital (D) Liabilities = Assets – Capital
Last Answer : Answer: Capital = Assets – Liabilities
Description : Donations received for the special purpose will be taken to the– (A) Income and Expenditure Account (B) Assets side of the Balance Sheet (C) Liabilities side of the Balance Sheet (D) Receipts and Payments Account
Last Answer : Answer: Liabilities side of the Balance Sheet
Description : In financial accounting of a chemical plant, which of the following relationship is invalid? (A) Assets = equities (B) Assets = liabilities + net worth (C) Total income = costs + profits (D) Assets = capital
Last Answer : (D) Assets = capital
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 : Government grants related to income as per the Accounting Standard (AS)-12 should be- (A) Presented as a credit in the statement of Profit and Loss (B) Presented as a deferred income on the asset ... of balance sheet (D) Presented both in the Profit and Loss statement and in the balance sheet
Last Answer : Answer: Presented both in the Profit and Loss statement and in the balance sheet
Description : While auditing the financial statements of non-corporate enterprises, the auditor's duties and scope of work would be governed by- (A) the statute passed by the Parliament (B) the Companies Act, 1956, and ... (C) the agreement with his client. (D) the provisions of the Income Tax Act, 1961
Last Answer : Answer: the agreement with his client.
Description : Accounting for Intangible Assets are related to– (A) AS - 10 (B) AS - 12 (C) AS - 24 (D) AS - 26
Last Answer : Answer: AS - 26
Description : The current ratio is 3 : 2 and the amount of current liabilities is Rs. 40,000. What is the amount of current assets ? (A) Rs. 60,000 (B) Rs. 70,000 (C) Rs. 80,000 (D) Rs. 1,00,000
Last Answer : Answer: Rs. 60,000
Description : In common size Balance Sheet analysis we evaluate– (A) Increase or decrease over two years is analysed (B) Only increase over two years is analysed (C) Only decrease over two years is analysed (D) All assets and liabilities are expressed in terms of percentage of total
Last Answer : Answer: All assets and liabilities are expressed in terms of percentage of total
Description : According to Balance Sheet equation concept, the capital will be– (A) Capital = Liabilities – Assets (B) Capital = Fixed Assets – Current Assests (C) Capital = Assets – Liabilities (D) Capital = Assets + Liabilities
Description : What is outsourcing of production and concentrating on marketing operations in international business, known as ? (A) Licensing (B) Franchising (C) Contract manufacturing (D) Joint venture
Last Answer : Answer: Franchising
Description : This standard-setting body replaces the Auditing Standards and Practices Council (ASPC) and is tasked to develop and issue Philippine Standards on Auditing and related Interpretations: a. ... Committee. c. Financial Reporting Standards Council. d. Auditing and Assurance Standards Council.
Last Answer : Auditing and Assurance Standards Council.
Description : Which of the following is defined as the difference between current assets and current liabilities? A. Venture Capital B. Working Capital C. Equitable Mortgage D. None of the Above
Last Answer : B. Working Capital Explanation: The capital of a business which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.
Description : Which of the following factors most likely would heighten an auditor's concern about the risk of fraudulent financial reporting? a. Large amounts of liquid assets that are easily ... of accounting principles. d. An overly complex organizational structure involving unusual lines of authority.
Last Answer : An overly complex organizational structure involving unusual lines of authority.
Description : Which one of the following statements about preparation of financial statements of a limited liability company is correct ? (A) Financial statements should be prepared according to the cash basis ... Financial statements should be prepared according to both the accrual and cash basis of accounting
Last Answer : Answer: Financial statements should be prepared according to the accrual basis of accounting only
Description : According to the Accounting Standard (AS)-2, the inventory is to be valued at which one of the following ? (A) Actual cost or sales value, whichever is lower (B) Historical cost (C) Net realizable value (D) Historical cost or net realizable value, whichever is lower
Last Answer : Answer: Historical cost or net realizable value, whichever is lower
Description : This is the standard-setting body that replaces the Accounting Standards Council (ASC) and is tasked to develop and issue standards which will represent generally accepted accounting principles in ... Committee. c. Financial Reporting Standards Council. d. Auditing and Assurance Standards Council.
Last Answer : Financial Reporting Standards Council.
Description : Few items of P/L A/c of a company are– Sales – Rs.1,60,000 Closing stock – Rs.38,000 Non-operating Expenses – Rs.800 Non-operating Income – Rs.4,800 Net Profit – Rs.28,000 What is the Operating Profit Ratio ? (A) 18% (B) 20% (C) 15% (D) 57%
Last Answer : Answer: 15%
Description : The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.
Last Answer : b. liquidity.
Description : The fundamental accounting equation' Assets = Liabilities + Capital' is the formal expression of A. Dual aspect concept B. Matching concept C. Going concern concept D. Money measurement concept
Last Answer : A. Dual aspect concept
Description : Which of the following accounting equation is correct? A. Capital + Liabilities= Assets B. Capital = Assets + Liabilities C. Capital- Liabilities = Assets D. Capital + Assets = Liabilities
Last Answer : A. Capital + Liabilities= Assets
Description : Which of the following statement is correct? A. Fixed assets must always be shown at market value B. Book-keeping and accounting are different terms C. Owner's Equity = Assets + Liabilities D. Patents is an example of current asset
Last Answer : A. Fixed assets must always be shown at market value
Description : Which statement is true? 1) The balance of payments depends on the principle of double-entry accounting. 2) Decrease in assets and increase in liabilities of net worth represent credits or sources of funds. 3) The balance of ... period of time. A. Only 1 B. Only 2 C. Only 3 D. 1, 2 and 3
Last Answer : D. 1, 2 and 3
Description : Which of the following methods are used in creative accounting? (a) Off balance sheet financing (b) Abuses of accounting concepts and conventions (c) Manipulating assets and liabilities (d) Over and under valuation of inventories
Last Answer : A. OFF BALANCE SHEET FINANCING
Description : The auditor's understanding of the entity and its environment consists an understanding of the following aspects: a. Industry, regulatory and other external factors, including the applicable financial reporting ... may result in a material misstatement of the financial statements d. All of these.
Last Answer : All of these.
Description : “The position of a Company Secretary is like that of a hub in a bicycle wheel.” This statement shows the– (A) Importance of Company Secretary (B) Rights of Company Secretary (C) Duties of Company Secretary (D) Liabilities of Company Secretary
Last Answer : Answer: Importance of Company Secretary
Description : Which of the following methods may be used to commit fraudulent financial reporting? a. Understate liabilities b. Fail to provide adequate disclosure c. Overstate revenues d. Each of the above can be used to commit fraudulent financial reporting
Last Answer : Each of the above can be used to commit fraudulent financial reporting
Description : Which of the following is true? a. Auditors are responsible for detecting all fraudulent financial reporting. b. Auditors must specifically consider fraud risk from overstating liabilities. c. Auditors must ... consider fraud risk from management override of controls. d. All of the above are true
Last Answer : Auditors must specifically consider fraud risk from management override of controls.
Description : What A financial statement that lists a company's assets liabilities and owner's equity as of a specific date is called?
Last Answer : A Balance Sheet, also sometimes referred to as a Statement of Financial Position.
Description : Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account ... the financial manager to make a decision and not address the issue again for several months.
Last Answer : B. Current assets of the typical manufacturing firm account for over half of its total assets.
Description : To financial analysts, "working capital" means the same thing as . A. Total assets B. fixed assets C. current assets D. current assets minus current liabilities.
Last Answer : C. current assets
Description : Financial Statements provide a summary of -------------------------- a) Accounts b) Assets c) Liabilities d) Expenses
Last Answer : a) Accounts
Description : Paperless office calls for– (A) Minimum record keeping (B) Maximum use of telephone (C) Maximum use of computers (D) Elimination of reporting
Last Answer : Answer: Maximum use of computers
Description : Contingent liabilities can also be called doubtful liabilities.
Last Answer : State whether the following statement are true or false with reason : Contingent liabilities can also be called doubtful liabilities.
Description : The debts which are to be repaid within a short period (a year or less) are referred to as, A) Current Liabilities B) Fixed liabilities C) Contingent liabilities D) All the above
Last Answer : Answer: A
Description : The most important information needed to determine if companies can pay their current obligations is the a. net income for this year. b. projected net income for next year. c. ... between current assets and current liabilities. d. relationship between short-term and long-term liabilities.
Last Answer : c. relationship between current assets and current liabilities.
Description : In income measurement & recognisation of assets & liabilities which of the following concepts goes together ? (a) Periodicity, Accural, Matching (b) Cost, Accural, matching (c) Going concern, cost, Realization (d) Going concern, Periodicity, Reliability
Last Answer : (a) Periodicity, Accural, Matching
Description : Which, institution is known as the ‘Soft Loan Window’ of World Bank ? (A) I.F.C. (International Financial Corporation) (B) I.D.A. (International Development Association) (C) I.M.F. (International Monetary Fund) (D) Indian Development Forum
Last Answer : Answer: I.D.A. (International Development Association)
Description : When an incoming partner purchases his share from any one of the existing partners, then- (A) total assets of the firm do not change (B) total assets of the firm will be augmented to the extent ... ) change in total assets of the firm will depend upon the new profit sharing ratio of the partners
Last Answer : Answer: total assets of the firm do not change
Description : Which one of the following ratios is likely to be affected the most on account of price level changes ? (A) Current Ratio (B) Inventory Turnover Ratio (C) Debtors’ Turnover Ratio (D) Fixed Assets Turnover Ratio
Last Answer : Answer: Debtors’ Turnover Ratio
Description : A limited company makes a net profit of Rs. 2,00,000 after writing off preliminary expenses amounting to Rs. 20,000 and providing for depreciation on assets amounting to Rs. 40,000 and gain of Rs. 10,000 on sale of a piece of ... 2,00,000 (B) Rs. 2,40,000 (C) Rs. 2,50,000 (D) Rs. 2,60,000
Last Answer : Answer: Rs. 2,50,000
Description : The primary function of an office is– (A) Making, using and preserving records (B) Remunerating personnel (C) Carrying out management policies (D) Safeguarding organization’s assets
Last Answer : Answer: Making, using and preserving records
Description : On the admission of a partner, fictitious assets are– (A) Transferred to Revaluation Account (B) Transferred to Capital Account (C) Transferred to Reserves (D) Shown in the new Balance Sheet
Last Answer : Answer: Transferred to Revaluation Account
Description : Goodwill, Copyright and Trademarks should be classified as– (A) Tangible assets (B) Intangible assets (C) Current assets (D) Fictitious assets
Last Answer : Answer: Intangible assets
Description : The following data, relates to manufacturing company for the year 2006-07- Net Profit as per P & L A/c-Rs. 2,40,000; Depreciation-Rs. 80,000; Goodwill written-off- Rs. 40,000, Profit on Sale of Fixed Assets-Rs. 16,000, ... ) Rs. 4,40,000 (B) Rs. 4,00,000 (C) Rs. 6,40,000 (D) None of the above
Last Answer : Answer: None of the above
Description : For the purpose of preparation of fund flow statement, fund means– (A) Total resources (B) Cash/bank balances (C) Current Assets (D) Working capital
Last Answer : Answer: Working capital
Description : Pick out the wrong statement. (A) Gross revenue is that total amount of capital received as a result of the sale of goods or service (B) Net revenue is the total profit remaining ... indicates surplus capital and shows the relationship among total income, costs & profit over the time interval
Last Answer : (C) Working capital turnover ratio = sales/net working capital
Description : Fraudulent financial reporting is often called: a. Theft of assets b. Employee fraud c. Management fraud d. Defalcation
Last Answer : Management fraud
Description : Fraudulent financial reporting is often called a. Misappropriation or theft of assets b. Management fraud c. Defalcation d. Employee fraud