The goods taken by the proprietor from the shop is debited to– (A) Shop account (B) Goods account (C) Capital account (D) Drawings accounts

The goods taken by the proprietor from the shop is debited to– (A) Shop account (B) Goods account (C) Capital account (D) Drawings accounts  
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Answer: Drawings accounts
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If the goodwill raised at the time of retirement of a partner is to be written-off, then the capital accounts of the remaining partners are debited in– (A) New profit sharing ratio (B) Capital ratio (C) Old profit sharing ratio (D) Sacrificing ratio

Description : If the goodwill raised at the time of retirement of a partner is to be written-off, then the capital accounts of the remaining partners are debited in– (A) New profit sharing ratio (B) Capital ratio (C) Old profit sharing ratio (D) Sacrificing ratio

Last Answer : Answer: Old profit sharing ratio

Goods worth Rs. 2,000 were distributed to employees free of charge. The account to be debited is– (A) Profit and Loss A/c (B) Advertisement A/c (C) Labour Welfare A/c (D) Goods A/c

Description : Goods worth Rs. 2,000 were distributed to employees free of charge. The account to be debited is– (A) Profit and Loss A/c (B) Advertisement A/c (C) Labour Welfare A/c (D) Goods A/c

Last Answer : Answer: Profit and Loss A/c

Value of goods withdrawn by the proprietor for his personal use should be credited to ____ a) Capital A/c b) Sales A/c c) Drawings A/c d) Purchases A/c

Description : Value of goods withdrawn by the proprietor for his personal use should be credited to ____ a) Capital A/c b) Sales A/c c) Drawings A/c d) Purchases A/c

Last Answer : d) Purchases A/c

The loss on the sale of old furniture is debited to– (A) profit & loss account (B) furniture account (C) trading account (D) depreciation account

Description : The loss on the sale of old furniture is debited to– (A) profit & loss account (B) furniture account (C) trading account (D) depreciation account

Last Answer : Answer: profit & loss account

Under a perpetual inventory system, acquisition of merchandise is debited to the a. Merchandise Inventory account. b. Cost of Goods Sold account. c. Purchases account. d. Accounts Payable account.

Description : Under a perpetual inventory system, acquisition of merchandise is debited to the a. Merchandise Inventory account. b. Cost of Goods Sold account. c. Purchases account. d. Accounts Payable account.

Last Answer : a. Merchandise Inventory account.

Which one of the following transactions changes the current ratio ? (A) Purchase of goods for cash (B) Plant acquired on account (C) Sold goods on credit (D) Debentures converted into equity capital

Description : Which one of the following transactions changes the current ratio ? (A) Purchase of goods for cash (B) Plant acquired on account (C) Sold goods on credit (D) Debentures converted into equity capital

Last Answer : Answer: Plant acquired on account

According to which concept, the proprietor pays interest on drawings a) Accrual concept b) Conservatism concept c) Entity concept d) Dual Aspect concept

Description : According to which concept, the proprietor pays interest on drawings a) Accrual concept b) Conservatism concept c) Entity concept d) Dual Aspect concept

Last Answer : c) Entity concept

If it is required to maintain fixed capitals then the partners’ shares of profits must be A) Credited to capital accounts B) Debited to capital accounts C) Debited to partners’ current accounts D) Credited to partners’ current accounts

Description : If it is required to maintain fixed capitals then the partners’ shares of profits must be A) Credited to capital accounts B) Debited to capital accounts C) Debited to partners’ current accounts D) Credited to partners’ current accounts

Last Answer : Answer: D

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

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

The profit of a company (whose capital is divided into 25‚000 shares of Rs. 10 each) for the last three years are : Rs. 50‚000; Rs. 60‚000 and Rs. 40‚000. The fair return on investment is taken at 10% p.a. The value of company’s share will be– (A) Rs. 10 (B) Rs. 20 (C) Rs. 30 (D) Rs. 40

Description : The profit of a company (whose capital is divided into 25‚000 shares of Rs. 10 each) for the last three years are : Rs. 50‚000; Rs. 60‚000 and Rs. 40‚000. The fair return on investment is taken at 10% p.a. The value of company’s share will be– (A) Rs. 10 (B) Rs. 20 (C) Rs. 30 (D) Rs. 40

Last Answer : Answer: Rs. 20

Dividend can be paid generally out of– (A) share premium account (B) capital redemption reserve account (C) current year’s profits (D) All of these

Description : Dividend can be paid generally out of– (A) share premium account (B) capital redemption reserve account (C) current year’s profits (D) All of these

Last Answer : Answer: current year’s profits

Balance of Debenture Redemption Fund Account is transferred to– (A) Capital Reserve A/c (B) Profit and Loss A/c (C) General Reserve A/c (D) None of these

Description : Balance of Debenture Redemption Fund Account is transferred to– (A) Capital Reserve A/c (B) Profit and Loss A/c (C) General Reserve A/c (D) None of these

Last Answer : Answer: General Reserve A/c

What is Capital Redemption Reserve Account available for ? (A) Redemption of redeemable preference shares (B) Redemption of redeemable debentures (C) Reorganization of share capital (D) Issue of fully paid bonus shares

Description : What is Capital Redemption Reserve Account available for ? (A) Redemption of redeemable preference shares (B) Redemption of redeemable debentures (C) Reorganization of share capital (D) Issue of fully paid bonus shares

Last Answer : Answer: Issue of fully paid bonus shares

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

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

Profit prior to incorporation is transferred to– (A) Capital reserve (B) General reserve (C) Profit and Loss Account (D) Trading Account

Description : Profit prior to incorporation is transferred to– (A) Capital reserve (B) General reserve (C) Profit and Loss Account (D) Trading Account

Last Answer : Answer: Capital reserve

X Limited forfeited Ram’s 20 shares of Rs. 10 each on which Rs. 7 is called up. Ram had paid application and allotment money of Rs. 5 per share. Of these forfeited shares 15 shares were reissued to Hari as fully paid up for Rs. 6 per share. What amount should be transferred to Capital Reserve account ? (A) Rs. 15 (B) Rs. 20 (C) Rs. 75 (D) Rs. 100

Description : X Limited forfeited Ram's 20 shares of Rs. 10 each on which Rs. 7 is called up. Ram had paid application and allotment money of Rs. 5 per share. Of these forfeited shares 15 shares were reissued to Hari as fully paid up ... to Capital Reserve account ? (A) Rs. 15 (B) Rs. 20 (C) Rs. 75 (D) Rs. 100

Last Answer : Answer: Rs. 15

As per Schedule VI of the Companies’ Act, 1956, Forfeited Share Account will be– (A) Added to paid up capital (B) Deducted from called up capital (C) Added to capital reserve (D) Shown as a revenue reserve

Description : As per Schedule VI of the Companies’ Act, 1956, Forfeited Share Account will be– (A) Added to paid up capital (B) Deducted from called up capital (C) Added to capital reserve (D) Shown as a revenue reserve

Last Answer : Answer: Deducted from called up capital

Which account is debited, when goods are destroyed by fire?

Description : Which account is debited, when goods are destroyed by fire?

Last Answer : Which account is debited, when goods are destroyed by fire?

Which account will be debited when goods are sold to Ram on credit?

Description : Which account will be debited when goods are sold to Ram on credit?

Last Answer : Which account will be debited when goods are sold to Ram on credit?

Under a perpetual inventory system, acquisition of merchandise for resale is debited to the a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold account.

Description : Under a perpetual inventory system, acquisition of merchandise for resale is debited to the a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold account.

Last Answer : d. Cost of Goods Sold account.

If we take goods for own use we should A) Debit Drawings Account, Credit Purchases Account B) Debit Drawings Account: Credit Stock Account C) Debit Sales Account: Credit Stock Account D) Debit Purchases Account: Credit Drawings Account

Description : If we take goods for own use we should A) Debit Drawings Account, Credit Purchases Account B) Debit Drawings Account: Credit Stock Account C) Debit Sales Account: Credit Stock Account D) Debit Purchases Account: Credit Drawings Account

Last Answer : Answer: A

Final accounts prepared in narrative style are in– (A) Horizontal form (B) Accounts form (C) Vertical form (D) None of the above

Description : Final accounts prepared in narrative style are in– (A) Horizontal form (B) Accounts form (C) Vertical form (D) None of the above

Last Answer : Answer: Vertical form

Auditing of accounts is compulsory for– (A) Sole proprietary business (B) Partnership firms (C) Joint Stock Companies (D) None of the above

Description : Auditing of accounts is compulsory for– (A) Sole proprietary business (B) Partnership firms (C) Joint Stock Companies (D) None of the above

Last Answer : Answer: Sole proprietory business

Which one of the following statements is correct ? (A) Audit of an educational institution is compulsory if it is run by a charitable trust (B) A club is treated as a commercial establishment (C) The accounts of a charitable trust can be audited by any person who belongs to accountancy profession (D) Audit of a charitable trust is not compulsory under law

Description : Which one of the following statements is correct ? (A) Audit of an educational institution is compulsory if it is run by a charitable trust (B) A club is treated as a commercial establishment ( ... who belongs to accountancy profession (D) Audit of a charitable trust is not compulsory under law

Last Answer : Answer: Audit of an educational institution is compulsory if it is run by a charitable trust Free

Which one of the following statements is correct ? (A) Internal audit and Management audit are the same (B) Internal audit and statutory audit are the same (C) Internal audit is compulsory in all cases (D) Statutory audit of company accounts is compulsory

Description : Which one of the following statements is correct ? (A) Internal audit and Management audit are the same (B) Internal audit and statutory audit are the same (C) Internal audit is compulsory in all cases (D) Statutory audit of company accounts is compulsory

Last Answer : Answer: Statutory audit of company accounts is compulsory

Which one of the following aims is achieved most through Office Record keeping ? (A) Efficiency of operations on shop floor (B) Business reputation (C) Storage of documents (D) Helping decision making

Description : Which one of the following aims is achieved most through Office Record keeping ? (A) Efficiency of operations on shop floor (B) Business reputation (C) Storage of documents (D) Helping decision making

Last Answer : Answer: Storage of documents

The product range is widest in case of– (A) Chain store (B) Departmental store (C) Speciality shop (D) One price shop

Description : The product range is widest in case of– (A) Chain store (B) Departmental store (C) Speciality shop (D) One price shop

Last Answer : Answer: Departmental store

Which one of the following is not included in the internal check as regards purchases ? (A) Assessment of requirements (B) Placing orders (C) Despatch of goods (D) Recording and making payments

Description : Which one of the following is not included in the internal check as regards purchases ? (A) Assessment of requirements (B) Placing orders (C) Despatch of goods (D) Recording and making payments

Last Answer : Answer: Despatch of goods

The rate of gross profit is 20% on sales and the cost of goods sold is Rs. 1‚00‚000, the amount of gross profit will be– (A) Rs. 30‚000 (B) Rs. 25‚000 (C) Rs. 20‚000 (D) Rs. 16‚667

Description : The rate of gross profit is 20% on sales and the cost of goods sold is Rs. 1‚00‚000, the amount of gross profit will be– (A) Rs. 30‚000 (B) Rs. 25‚000 (C) Rs. 20‚000 (D) Rs. 16‚667

Last Answer : Answer: Rs. 25‚000

Stock should include– (A) Goods held as security (B) Goods held as consignee (C) Goods with customers for approval on sale or return basis (D) Goods sold but not delivered

Description : Stock should include– (A) Goods held as security (B) Goods held as consignee (C) Goods with customers for approval on sale or return basis (D) Goods sold but not delivered

Last Answer : Answer: Goods held as consignee

The profit margin which a retailer of goods obtains form his supplier is called:

Description : The profit margin which a retailer of goods obtains form his supplier is called:

Last Answer : Trade discount

The bailment of goods as security for payment of a debt is called:

Description : The bailment of goods as security for payment of a debt is called:

Last Answer : Pledge

Goods withdrawn by the proprietor for his personal use are A. Shown as a deduction from the purchases B. Shown as a deduction from the sales C. Treated as sales at cost price D. Added to the purchases

Description : Goods withdrawn by the proprietor for his personal use are A. Shown as a deduction from the purchases B. Shown as a deduction from the sales C. Treated as sales at cost price D. Added to the purchases

Last Answer : A. Shown as a deduction from the purchases

If the balance on current and capital accounts of Balance of Payments (BoP) taken together is negative, then (a) It is a case of BoP surplus ; (b) It is a case of BoP surplus where the official reserve account is in surplus; (c) It is a case of BoP deficit ; (d) It is case of BoP disequilibrium

Description : If the balance on current and capital accounts of Balance of Payments (BoP) taken together is negative, then (a) It is a case of BoP surplus ; (b) It is a case of BoP surplus where the official reserve account is in surplus; (c) It is a case of BoP deficit ; (d) It is case of BoP disequilibrium

Last Answer : (c) It is a case of BoP deficit ;

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

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

Which term is used in the field of Banking? (A) Current Account (B) Plasma (C) Follow on (D) Cold chain

Description : Which term is used in the field of Banking? (A) Current Account (B) Plasma (C) Follow on (D) Cold chain

Last Answer : Answer: Current Account

Which one of the following statements is false ? (A) A ‘Demat Share’ is held by the depository on behalf of the investor whereas a ‘Physical Share’ is held by the investor himself (B) There is no stamp duty on the transfer of ‘Demat Shares’ from one account to another (C) The ‘Demat Share’ does not have a folio number, distinctive number or certificate number like a ‘Physical Share’ (D) The ‘Demat Share’ cannot be converted into a ‘Physical Share’

Description : Which one of the following statements is false ? (A) A Demat Share' is held by the depository on behalf of the investor whereas a Physical Share' is held by the investor himself (B) There is no ... number like a Physical Share' (D) The Demat Share' cannot be converted into a Physical Share'

Last Answer : Answer: The ‘Demat Share’ cannot be converted into a ‘Physical Share’

Closing stock appearing in the Trial Balance is shown in– (A) Balance Sheet only (B) Trading Account only (C) Trading Account and Balance Sheet both (D) None of the above

Description : Closing stock appearing in the Trial Balance is shown in– (A) Balance Sheet only (B) Trading Account only (C) Trading Account and Balance Sheet both (D) None of the above

Last Answer : Answer: Balance Sheet only

Which of the following is a personal account ? (A) Outstanding Expense (B) Investment (C) Share premium (D) Salary

Description : Which of the following is a personal account ? (A) Outstanding Expense (B) Investment (C) Share premium (D) Salary

Last Answer : Answer: Outstanding Expense

Receipts and Payments Account is an abbreviated form of– (A) Cash Book (B) Pass Book (C) Both Cash Book and Pass Book (D) None of the above

Description : Receipts and Payments Account is an abbreviated form of– (A) Cash Book (B) Pass Book (C) Both Cash Book and Pass Book (D) None of the above

Last Answer : Answer: Cash Book

The amount deposited in Securities Premium Account can be used for– (A) Distributing profits (B) Issue of Bonus Shares (C) Paying the amount to director (D) None of the above

Description : The amount deposited in Securities Premium Account can be used for– (A) Distributing profits (B) Issue of Bonus Shares (C) Paying the amount to director (D) None of the above

Last Answer : Answer: Issue of Bonus Shares

XYZ Ltd. issued 10,000 shares of Rs. 100 each at Rs. 120 per share with Rs. 25 on application, Rs. 45 on allotment including premium, Rs. 20 on first call and Rs. 30 on final call. Govind who held 200 shares did not pay any call money and his shares were forfeited. What is the amount to be credited to Share Forfeiture Account on forfeiture ? (A) Rs. 14,000 (B) Rs. 10,000 (C) Rs. 9,000 (D) Rs. 4,000

Description : XYZ Ltd. issued 10,000 shares of Rs. 100 each at Rs. 120 per share with Rs. 25 on application, Rs. 45 on allotment including premium, Rs. 20 on first call and Rs. 30 on final call. Govind who held 200 shares did not pay ... forfeiture ? (A) Rs. 14,000 (B) Rs. 10,000 (C) Rs. 9,000 (D) Rs. 4,000

Last Answer : Answer: Rs. 10,000

Under vouching, checking is done of– (A) Journal and Ledger (B) Profit and Loss Account (C) Balance Sheet (D) All of the above

Description : Under vouching, checking is done of– (A) Journal and Ledger (B) Profit and Loss Account (C) Balance Sheet (D) All of the above

Last Answer : Answer: All of the above

Share premium account can be used for– (A) Paying tax liability (B) Meeting the cost of issue of shares or debentures (C) Paying Dividend on shares (D) Meeting the loss on sale of old asset

Description : Share premium account can be used for– (A) Paying tax liability (B) Meeting the cost of issue of shares or debentures (C) Paying Dividend on shares (D) Meeting the loss on sale of old asset

Last Answer : Answer: Meeting the cost of issue of shares or debentures

Which statement is not true in respect of a Balance Sheet ? (A) It is an account (B) It is prepared every month (C) It is prepared to check the mathematical accuracy (D) All the above

Description : Which statement is not true in respect of a Balance Sheet ? (A) It is an account (B) It is prepared every month (C) It is prepared to check the mathematical accuracy (D) All the above

Last Answer : Answer: All the above

R. G. Ltd. purchased machinery from K.G. Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10%. Debenture of Rs. 100 each at a discount of 20%. The debenture account will be credited by– (A) Rs. 4,00,000 (B) Rs. 5,00,000 (C) Rs. 3,20,000 (D) Rs. 4,80,000

Description : R. G. Ltd. purchased machinery from K.G. Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10%. Debenture of Rs. 100 each at a discount of 20%. The debenture account will be credited by– (A) Rs. 4,00,000 (B) Rs. 5,00,000 (C) Rs. 3,20,000 (D) Rs. 4,80,000

Last Answer : Answer: Rs. 4,00,000

What is an account?

Description : What is an account?

Last Answer : An account is a book-keeping device used in summarizing the increases and decreases in each asset or equity item

A company forfeited 30 equity shares of Rs. 10 each fully called-up, for non-payment of allotment money of Rs. 3 and call-money of Rs. 4 per share. If these shares are reissued at Rs. 8 per share fully paid, the amount transferable to capital reserve will be– (A) Rs. 300 (B) Rs. 60 (C) Rs. 90 (D) Rs. 30

Description : A company forfeited 30 equity shares of Rs. 10 each fully called-up, for non-payment of allotment money of Rs. 3 and call-money of Rs. 4 per share. If these shares are reissued at Rs. 8 per share fully paid, the amount ... to capital reserve will be- (A) Rs. 300 (B) Rs. 60 (C) Rs. 90 (D) Rs. 30

Last Answer : Answer: Rs. 30

The return on capital employed shows the combined effect of– (A) net profit ratio and inventory turnover ratio (B) operating ratio and net profit ratio (C) net profit ratio and capital turnover ratio (D) gross profit ratio and capital turnover ratio

Description : The return on capital employed shows the combined effect of– (A) net profit ratio and inventory turnover ratio (B) operating ratio and net profit ratio (C) net profit ratio and capital turnover ratio (D) gross profit ratio and capital turnover ratio

Last Answer : Answer: operating ratio and net profit ratio