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

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  
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Answer: Historical cost or net realizable value, whichever is lower
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Description : At what price the stock is valued under conventional method ? (A) At cost price (B) At market price (C) At cost price or market price whichever is lower (D) At cost price or market price whichever is higher

Last Answer : Answer: At cost price or market price whichever is lower

Valuation of stock in accounting follows the principle of cost price or ____ which ever is lower. a) Market Price b) Average Price c) Net realizable Value d) None of these.

Description : Valuation of stock in accounting follows the principle of cost price or ____ which ever is lower. a) Market Price b) Average Price c) Net realizable Value d) None of these.

Last Answer : c) Net realizable Value

Historical cost concept requires the valuation of an asset at A] Original cost B] Replacement value C] Net realizable value D] Market value

Description : Historical cost concept requires the valuation of an asset at A] Original cost B] Replacement value C] Net realizable value D] Market value

Last Answer : A] Original cost

Closing stock is valued at A. Cost B. Market value C. Cost or market price whichever is lower D. None of the above

Description : Closing stock is valued at A. Cost B. Market value C. Cost or market price whichever is lower D. None of the above

Last Answer : C. Cost or market price whichever is lower

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

Closing Stock is valued at cost or market price whichever is more.

Description : Closing Stock is valued at cost or market price whichever is more.

Last Answer : State True or False with reason : Closing Stock is valued at cost or market price whichever is more.

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 side of the balance sheet (C) Presented as a capital grant on the liability side of balance sheet (D) Presented both in the Profit and Loss statement and in the balance sheet

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

Indian Accounting Standard – 28 is related to– (A) Accounting for taxes on income (B) Financial Reporting of Interests in Joint Venture (C) Impairment of Assets (D) Provisions, Contingent Liabilities and Contingent Assets

Description : Indian Accounting Standard – 28 is related to– (A) Accounting for taxes on income (B) Financial Reporting of Interests in Joint Venture (C) Impairment of Assets (D) Provisions, Contingent Liabilities and Contingent Assets

Last Answer : Answer: Impairment of Assets

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 of accounting only (B) Financial statements should be prepared according to the accrual basis of accounting only (C) Financial statements should be prepared according to either the cash basis or accrual basis of accounting (D) Financial statements should be prepared according to both the accrual and cash basis of accounting

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Last Answer : Answer: Financial statements should be prepared according to the accrual basis of accounting only

If Opening Stock – Rs.15,000 Purchases – Rs.37,500 Direct Expenses – Rs.1,500 Closing Stock – Rs.7,500 Operating Expenses – Rs.3,000 Sales are Rs. 60,000 during the year, what is the net profit ? (A) Rs. 12,000 (B) Rs. 10,500 (C) Rs. 7,500 (D) Rs. 3,000

Description : If Opening Stock – Rs.15,000 Purchases – Rs.37,500 Direct Expenses – Rs.1,500 Closing Stock – Rs.7,500 Operating Expenses – Rs.3,000 Sales are Rs. 60,000 during the year, what is the net profit ? (A) Rs. 12,000 (B) Rs. 10,500 (C) Rs. 7,500 (D) Rs. 3,000

Last Answer : Answer: Rs. 10,500

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%

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%

Expenses need to be recorded in the period in which the associated revenues are recognised. This is to be ensured as per which one of the following accounting principles ? (A) Revenue recognition (B) Cost benefit (C) Matching (D) Periodicity

Description : Expenses need to be recorded in the period in which the associated revenues are recognised. This is to be ensured as per which one of the following accounting principles ? (A) Revenue recognition (B) Cost benefit (C) Matching (D) Periodicity

Last Answer : Answer: Revenue recognition

The Branch of Accounting which is concerned with the processing and presenting data for decision making is known as– (A) Common Dollar Accounting (B) Social Accounting (C) Cost Accounting (D) Management Accounting

Description : The Branch of Accounting which is concerned with the processing and presenting data for decision making is known as– (A) Common Dollar Accounting (B) Social Accounting (C) Cost Accounting (D) Management Accounting

Last Answer : Answer: Management Accounting

Inventory of services rendered is recognized at a) Cost b) NVR c) Cost or NVR whichever is less d) Cost less cost to sell

Description : Inventory of services rendered is recognized at a) Cost b) NVR c) Cost or NVR whichever is less d) Cost less cost to sell

Last Answer : a) Cost

The Open Market Operations [OMOs] is an important tool of– (A) Forex management (B) Liquidity management (C) Inventory management (D) Marketing management

Description : The Open Market Operations [OMOs] is an important tool of– (A) Forex management (B) Liquidity management (C) Inventory management (D) Marketing management

Last Answer : Answer: Liquidity management

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

Measurement and disclosure do not apply to which of the following? a) Leasing based transactions b) Net realizable values/Impairment of Assets c) Share based payments d) Price received to sell or buy an asset

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Last Answer : d) Price received to sell or buy an asset

Gross profit is calculated by subtracting ________ from _________, a. operating expenses, net income b. sales discounts from sales revenue c. cost of goods sold, net sales revenue d. merchandise inventory, cost of goods sold

Description : Gross profit is calculated by subtracting ________ from _________, a. operating expenses, net income b. sales discounts from sales revenue c. cost of goods sold, net sales revenue d. merchandise inventory, cost of goods sold

Last Answer : c. cost of goods sold, net sales revenue

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

Rate of Gross Profit on cost is 25%. Total sales is Rs. 1,00,000 and Average Stock is Rs. 1,60,000. Stock Turnover Ratio will be– (A) 0•5 times (B) 0•8 times (C) 0•10 times (D) 0•4 times

Description : Rate of Gross Profit on cost is 25%. Total sales is Rs. 1,00,000 and Average Stock is Rs. 1,60,000. Stock Turnover Ratio will be– (A) 0•5 times (B) 0•8 times (C) 0•10 times (D) 0•4 times

Last Answer : Answer: 0•5 times

Which audit is carried out during the accounting period with some interval, it is called– (A) periodic audit (B) partial audit (C) continuous audit (D) interim audit

Description : Which audit is carried out during the accounting period with some interval, it is called– (A) periodic audit (B) partial audit (C) continuous audit (D) interim audit

Last Answer : Answer: continuous audit

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

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

In an office, Franking machine is used for– (A) Punching card (B) Accounting work (C) Duplicating (D) Postal stamp fixing

Description : In an office, Franking machine is used for– (A) Punching card (B) Accounting work (C) Duplicating (D) Postal stamp fixing

Last Answer : Answer: Postal stamp fixing

Which of the following is the Accounting equation ? (A) Capital = Assets – Liabilities (B) Capital = Assets + Liabilities (C) Assets = Liabilities – Capital (D) Liabilities = Assets – Capital

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

Which of the following is affected by treatment of an accrued item in accounting ? (A) Profit and Loss A/c only (B) Profit and Loss Appropriation A/c (C) Balance Sheet only (D) Profit and Loss A/c and Balance Sheet

Description : Which of the following is affected by treatment of an accrued item in accounting ? (A) Profit and Loss A/c only (B) Profit and Loss Appropriation A/c (C) Balance Sheet only (D) Profit and Loss A/c and Balance Sheet

Last Answer : Answer: Profit and Loss A/c and Balance Sheet

What is a systematic evaluation of a company's activities in a given area of social interest such as environmental protection, workplace safety or community involvement, called ? (A) Social responsibility (B) Social accounting (C) Social audit (D) Social forecasting

Description : What is a systematic evaluation of a company's activities in a given area of social interest such as environmental protection, workplace safety or community involvement, called ? (A) Social responsibility (B) Social accounting (C) Social audit (D) Social forecasting

Last Answer : Answer: Social audit

Accounting for Intangible Assets are related to– (A) AS - 10 (B) AS - 12 (C) AS - 24 (D) AS - 26

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

A company limited by shares has to call the statutory meeting within a period of not less than one month and not more than six months. This period is counted with reference to which one of the following ? (A) The date of incorporation (B) The date at which the company is entitled to commence business (C) The date of actual receipt of certificate of incorporation (D) The date of actual commencement of business

Description : A company limited by shares has to call the statutory meeting within a period of not less than one month and not more than six months. This period is counted with reference to which one of ... date of actual receipt of certificate of incorporation (D) The date of actual commencement of business

Last Answer : Answer: The date at which the company is entitled to commence business

Suppose the inventory manager at Hotpoint intends to lower stockout costs. Which of the following is considered a stockout cost that the manager at Hotpoint might address? A)Price of washing machines B)Sales lost due to short supply of dishwashers C)Order -processing expenses D)Expenses of backordering small appliances

Description : Suppose the inventory manager at Hotpoint intends to lower stockout costs. Which of the following is considered a stockout cost that the manager at Hotpoint might address? A)Price of washing ... to short supply of dishwashers C)Order -processing expenses D)Expenses of backordering small appliances

Last Answer : B)Sales lost due to short supply of dishwashers

The inventory of raw materials included in the working capital is usually about __________ month’s supply of raw materials valued at delivery prices. (A) One (B) Three (C) Six (D) Twelve

Description : The inventory of raw materials included in the working capital is usually about __________ month’s supply of raw materials valued at delivery prices. (A) One (B) Three (C) Six (D) Twelve

Last Answer : (A) One

The result of a stockout is usually an: A)increase in inventory costs. B)increase in lost sales. C)increase in net profit. D)increase in customers.

Description : The result of a stockout is usually an: A)increase in inventory costs. B)increase in lost sales. C)increase in net profit. D)increase in customers.

Last Answer : B)increase in lost sales.

If the purchases made during the year were Rs. 60,000, the balance of stock in trade at the beginning and at the end of the year were Rs. 12,000 and Rs. 9,000 respectively and the gross profit on sales was 1/5th, when which one of the following represents the figure of gross profit for the year ? (A) Rs. 15,750 (B) Rs. 14,000 (C) Rs. 12,500 (D) Rs. 17,250

Description : If the purchases made during the year were Rs. 60,000, the balance of stock in trade at the beginning and at the end of the year were Rs. 12,000 and Rs. 9,000 respectively and the gross profit on sales was 1/5th, when which ... year ? (A) Rs. 15,750 (B) Rs. 14,000 (C) Rs. 12,500 (D) Rs. 17,250

Last Answer : Answer: Rs. 12,500

Total sales is Rs. 7,60,000, cash sales Rs. 30,000 collection period is 25 days, debtors at Balance Sheet date will be– (A) Rs. 80,000 (B) Rs. 70,000 (C) Rs. 60,000 (D) Rs. 50,000

Description : Total sales is Rs. 7,60,000, cash sales Rs. 30,000 collection period is 25 days, debtors at Balance Sheet date will be– (A) Rs. 80,000 (B) Rs. 70,000 (C) Rs. 60,000 (D) Rs. 50,000

Last Answer : Answer: Rs. 50,000

Sundry Debtors – Rs.15,000 Bills Receivable (B/R) – Rs.12,500 Cash at Bank – Rs.17,500 Stock – Rs.15,000 Profit – Rs.20,000 Creditors – Rs.25,000 Bills Payable (B/P) – Rs.15,000 Sales – Rs.1,00,000 What is the Acid Test Ratio ? (A) 1•5 : 1 (B) 1•125 : 1 (C) 16 2/3% (D) 50%

Description : Sundry Debtors – Rs.15,000 Bills Receivable (B/R) – Rs.12,500 Cash at Bank – Rs.17,500 Stock – Rs.15,000 Profit – Rs.20,000 Creditors – Rs.25,000 Bills Payable (B/P) – Rs.15,000 Sales – Rs.1,00,000 What is the Acid Test Ratio ? (A) 1•5 : 1 (B) 1•125 : 1 (C) 16 2/3% (D) 50%

Last Answer : Answer: 1•125 : 1

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 machinery. What are the funds from operation ? (A) Rs. 2,00,000 (B) Rs. 2,40,000 (C) Rs. 2,50,000 (D) Rs. 2,60,000

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

What is the maximum limit of remuneration for a whole time manager in a company ? (A) 3% of net annual profit (B) 5% of net annual profit (C) 7% of net annual profit (D) None of the above

Description : What is the maximum limit of remuneration for a whole time manager in a company ? (A) 3% of net annual profit (B) 5% of net annual profit (C) 7% of net annual profit (D) None of the above

Last Answer : Answer: 5% of net annual profit

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, Proposed Dividend–Rs. 96,000. The fund from operation would be– (A) Rs. 4,40,000 (B) Rs. 4,00,000 (C) Rs. 6,40,000 (D) None of the above

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

From the information given below, calculate Debt service coverage Ratio– Net profit after interest and Tax Rs. 40,000, Depreciation Rs. 5,000, Rate of Income Tax 50%, 10% Mortgage Debentures Rs. 60,000. Fixed Interest Charges Rs. 6,000, Debenture Redemption Fund Appropriation of Outstanding Debentures 10%. (A) 4•06 times (B) 5•06 times (C) 6•06 times (D) 7•06 times

Description : From the information given below, calculate Debt service coverage Ratio- Net profit after interest and Tax Rs. 40,000, Depreciation Rs. 5,000, Rate of Income Tax 50%, 10% Mortgage Debentures Rs. 60,000. Fixed Interest Charges Rs. 6 ... . (A) 4 06 times (B) 5 06 times (C) 6 06 times (D) 7 06 times

Last Answer : Answer: 4•06 times

Net profit after tax of Rs. 2,00,000 is Rs. 4,00,000. Share capital is Rs. 8,00,000 and revenue reserve is Rs. 2,00,000. What is rate of return on equity ? (A) 40% (B) 50% (C) 60% (D) 75%

Description : Net profit after tax of Rs. 2,00,000 is Rs. 4,00,000. Share capital is Rs. 8,00,000 and revenue reserve is Rs. 2,00,000. What is rate of return on equity ? (A) 40% (B) 50% (C) 60% (D) 75%

Last Answer : Answer: 40%

Standard costing is a technique of– (A) Planning (B) Organising (C) Coordination (D) Control

Description : Standard costing is a technique of– (A) Planning (B) Organising (C) Coordination (D) Control

Last Answer : Answer: Control

Internal activity of a company is going to be performed according to established regulations. This assumption is provided as a right by– (A) Doctrine of Indoor Management (B) Doctrine of Constructive Notice (C) Doctrine of Ultravires (D) Doctrine of Intravires

Description : Internal activity of a company is going to be performed according to established regulations. This assumption is provided as a right by– (A) Doctrine of Indoor Management (B) Doctrine of Constructive Notice (C) Doctrine of Ultravires (D) Doctrine of Intravires

Last Answer : Answer: Doctrine of Indoor Management

Which one of the following is not correct in respect of the Theory X? (A) It emphasizes that most average human beings avoid to be led, want to lead (B) According to the theory X, the Managers tend to be autocratic (C) The theory X assumes that most human beings must be directly controlled in order to achieve organizational goals (D) The theory X assumes that most individuals have little ambition and want security

Description : Which one of the following is not correct in respect of the Theory X? (A) It emphasizes that most average human beings avoid to be led, want to lead (B) According to the theory X ... achieve organizational goals (D) The theory X assumes that most individuals have little ambition and want security

Last Answer : Answer: It emphasizes that most average human beings avoid to be led, want to lead

According to force-field theory, every behaviour is the result of equilibrium between which of the following ? (A) Push and pull effect (B) Strong and weak forces (C) Positive and negative forces (D) Driving and restraining forces

Description : According to force-field theory, every behaviour is the result of equilibrium between which of the following ? (A) Push and pull effect (B) Strong and weak forces (C) Positive and negative forces (D) Driving and restraining forces

Last Answer : Answer: Driving and restraining forces

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 : 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

Last Answer : Answer: Capital = Assets – Liabilities

According to the Partnership Act, the maximum number of partners in a banking firm may be– (A) 10 (B) 12 (C) 4 (D) 20

Description : According to the Partnership Act, the maximum number of partners in a banking firm may be– (A) 10 (B) 12 (C) 4 (D) 20

Last Answer : Answer: 10

According to going concern concept a business entity is assumed to have– (A) A long life (B) A small life (C) A very short life (D) A definite life

Description : According to going concern concept a business entity is assumed to have– (A) A long life (B) A small life (C) A very short life (D) A definite life

Last Answer : Answer: A long life

Managerial Planning is a– (A) Middle Level Function (B) Lower Level Function (C) Top Level Function (D) All Level Function

Description : Managerial Planning is a– (A) Middle Level Function (B) Lower Level Function (C) Top Level Function (D) All Level Function

Last Answer : Answer: All Level Function

Planning function of management is performed by– (A) Top management (B) Middle management (C) Lower management (D) All of the above

Description : Planning function of management is performed by– (A) Top management (B) Middle management (C) Lower management (D) All of the above

Last Answer : Answer: All of the above

In Need Hierarchy Theory of Abraham H. Maslow, Self Actualisation needs are at level– (A) Lower level needs (B) Middle level needs (C) Higher level needs (D) Highest level needs

Description : In Need Hierarchy Theory of Abraham H. Maslow, Self Actualisation needs are at level– (A) Lower level needs (B) Middle level needs (C) Higher level needs (D) Highest level needs

Last Answer : Answer: Lower level needs

The accounting report indicates that Alton's sales increased by £2 millions last year. While the Chairman is pleased, the marketing vice president feels that inflation had a great deal to do with this result. She proposes that __________ may be a better gauge of the firm's performance last year. A)net sales B)gross profits C)market share D)cash flow

Description : The accounting report indicates that Alton's sales increased by £2 millions last year. While the Chairman is pleased, the marketing vice president feels that inflation had a great deal to do with this result ... the firm's performance last year. A)net sales B)gross profits C)market share D)cash flow

Last Answer : C)market share