Practice Test

Q1) Which of these is not a function of Financial Accounting? Show Answer

Q2) Provisions of the Corporate Social Responsibility (CSR) are applicable to the company having net profit of - Show Answer

Q3) As per the provisions of the Companies Act, 2013, companies must maintain their accounts under - Show Answer

Q4) Purposes of financial statements include all the following except - Show Answer

Q5) Which of the following is characteristic of accounting information?
P. Relevance
Q. Reliability
R. Comparability
Select the correct answer from the options given below -
Show Answer

Q6) Accounting policies followed by organizations - Show Answer

Q7) Which of the following is statutory book? Show Answer

Q8) It is essential to standardize the accounting principles and policies in order to ensure - Show Answer

Q9) Keeping of statutory books is - Show Answer

Q10) The determination of the amount of bad debts is an accounting - Show Answer

Q11) CSR stands for _____ Show Answer

Q12) _____ shall mean any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets, or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy. Show Answer

Q13) If rights and beneficial interest in a property is transferred but documentation and legal formalities are pending then seller & purchaser should record in their accounts as sale & purchase. Which principle is applied here? Show Answer

Q14) Which of the following is capital reserve? Show Answer

Q15) Provisions for doubtful debts, provision for discount on debtors are based on - Show Answer

Q16) As per Schedule III of the Companies Act, 2013, long term provisions are shown - Show Answer

Q17) A possible future liability, which depends on the happenings of certain uncertain event, is called: Show Answer

Q18) Under statement of closing stock of work-in-progress in the period will - Show Answer

Q19) Provisions are - Show Answer

Q20) Which of the following is/are the essential features of accrual basis of accounting?
(I) Revenue is recognized only when cash is received.
(II) Costs are matched against revenues on the basis of relevant time period to determine periodic income.
(III) Costs which are not charged to in¬come are carried forward and are kept under continuous review.
(IV) Receipts or incomes are recorded as and when cash is received or becomes due on the other hand payments are recorded only when cash is actually paid.
The correct answer is -
Show Answer

Q21) Net profit for the purpose of managerial remuneration has to be calculated as per Show Answer

Q22) The correct sequence in preparation of periodical financial statement would be -
7. Preparation of balance sheet
2. Preparation of cash flow statement
3. Preparation of trial balance
4. Preparation of Profit & Loss A/c Select the correct answer from the options given below -
Show Answer

Q23) As per Section 198 of the Companies Act, 2013 while calculating net profit for managerial remuneration, if gross profit is starting point credit shall be given to: Show Answer

Q24) If the Effective Capital of company is less than Rs. 5 Crores it may, without approval of Central Government, pay remuneration to the managerial person not exceeding: Show Answer

Q25) Unearned income is classified as - Show Answer

Q26) As per Section 198 of the Companies Act, 2013 while calculating net profit for managerial remuneration, if gross profit is starting point then which of the following is allowed to deducted - Show Answer

Q27) If Net Profit is starting point for the purpose of calculation of managerial remuneration then which of the following you will add: Show Answer

Q28) Which of the following are current assets of a business?
(i) Income received in advance
(ii) Stock
(iii) Debtors
(iv) Pre-paid expenses
(v) Accrued income
Select the correct answer from the options given below -
Show Answer

Q29) As per Section 198 of the Companies Act, 2013 while calculating net profit for managerial remuneration, if gross profit is starting point then which of the following is allowed to deducted - Show Answer

Q30) The arrangement of assets and liabilities in accordance with a particular order is known as _____ of balance sheet. Show Answer

Q31) If Net Profit is starting point for the purpose of calculation of managerial remuneration then which of the following you will deduct: Show Answer

Q32) In _____, approach assets which are to be used for long term in the business and are not meant to be sold are presented first and assets which are most liquid Such as cash in hand, are presented at the bottom. Show Answer

Q33) If the Effective Capital of company is Rs. 5 Crores and above but less than Rs. 100 Crores it may, without approval of Central Government, pay remuneration to the managerial person not exceeding: Show Answer

Q34) In _____, approach the assets are stated in balance sheet in the order in which they can be easily converted into cash and the liabilities in the order in which they have to be paid off. Show Answer

Q35) If the Effective Capital of company is Rs. 100 Crores and above but less than Rs. 250 Crores it may, without approval of Central Government, pay remuneration to the managerial person not exceeding: Show Answer

Q36) Arrange the following assets as per liquidity order.
I. Cash & Bank
II. Building
III. Investment
IV. Stock
Select the correct answer from the options given below -
Show Answer

Q37) If the Effective Capital of company is Rs. 250 Crores and above it may, without approval of Central Government, pay remuneration to the managerial person not exceeding: Show Answer

Q38) Which of the following statement is true? Show Answer

Q39) The annual installment to depreciation fund for replacement of a fixed asset is - Show Answer

Q40) Arrange the following assets as per permanence order.
I. Cash & Bank
II. Building
III. Investment
IV. Stock
Select the correct answer from the options given below-
Show Answer

Q41) If the Effective Capital of company is negative and it passes special resolution then it may, without approval of Central Government, pay remuneration to the managerial person not exceeding: Show Answer

Q42) __________ are those fixed assets which have a fixed content, like coal in a coal mine; the value of the asset goes down as the contents are taken out. Show Answer

Q43) Depreciation is a process of - Show Answer

Q44) __________ which can be immediately be converted into cash, such as Government Securities. Show Answer

Q45) Amortization applies to ….. Show Answer

Q46) Which of the following statements is/ are NOT correct? Show Answer

Q47) Provisions of the Corporate Social Responsibility (CSR) are applicable to the company having turnover of - Show Answer

Q48) Which of the following is/are the important characteristic of depreciation?
P. Depreciation is permanent, continu¬ous and gradual increase in the value of a fixed asset.
Q. Depreciation is appropriation of profit.
R. Depreciation is always computed in a systematic and rational manner.
Select the correct answer from the options give below -
Show Answer

Q49) The balance sheet gives information regarding the - Show Answer

Q50) Obsolescence of a depreciable asset may be caused by -
(I) Technological changes.
(II) Improvement in production method.
(III) Change in market demand for the product or service output.
(IV) Legal or other restrictions.
The correct option is -
Show Answer

Q51) Computers taken on hire by a business for a period of twelve months should be classified as - Show Answer

Q52) In the case of downward revaluation of an asset which is for the first time, the account to be debited is ….. Show Answer

Q53) Which of the following expenses is NOT included in the acquisition cost of a plant and equipment? Show Answer

Q54) The most compelling reason for accounting for depreciation is: ….. Show Answer

Q55) Revenues affect net income - Show Answer

Q56) What do you understand when one refers to as “net book value” of a non- current asset? Show Answer

Q57) Choose the true statement. Show Answer

Q58) Depreciation fund method is also known as - Show Answer

Q59) According to AS-6 “Depreciation Accounting”, issued by the ICAI change in method is permitted - Show Answer

Q60) In case of companies depreciation on assets are provided on the basis of - Show Answer

Q61) Every company fulfilling specified criteria shall constitute Corporate Social Responsibility (CSR) Committee of the Board consisting of: Show Answer

Q62) Provisions of the Corporate Social Responsibility (CSR) are applicable to the company having net worth of - Show Answer

Q63) The Board of every company shall ensure that the company spends, in every financial year, at least _____ of the company made during the _____, in pursuance of its CSR Policy. Show Answer

Q64) Computation of net profit for Section 135 is as per Section 198 of the Companies Act, 2013 which is primarily: Show Answer

Q65) Net profit after tax of XYZ Ltd. is Rs. 1,00,000 after debiting provisions for tax Rs. 40,000 and Managing Director’s Salary 60,000. Maximum remuneration payable to Managing Director as per provisions of the Companies Act, 2013 without complying provisions of the Schedule V is - Show Answer

Q66) Net profit after tax of PQR Ltd. is Rs. 15,48,000. This net profit is arrived after debiting P & L A/c following items:
Income Tax: Rs. 3,20,000;
Ex-gratia payment to employee: Rs. 50,000
Following items are credited to P & L A/c before arriving above net profit:
Capital Profit: Rs. 75,000
Profit on forfeiture of shares: Rs. 4,300
Maximum remuneration payable to Managing Director as per provisions of the Companies Act, 2013 without complying provisions of the Schedule V is -
Show Answer

Q67) Net profits before charging the commission - Rs. 80,000. Following had been charged off against the profits as determined as above:
- Depreciation Rs. 31,900
- Provision for bad debts Rs. 920.
Other relevant information:
- Actual bad debts Rs. 800.
- Depreciation as per Schedule II Rs. 39,160.
Maximum remuneration payable to MD without complying provisions of the Schedule V is -
Show Answer

Q68) Manager of Z Ltd. is entitled to a commission @ 3% on net profit after charging such commission. Calculate the commission payable to the manager.
Net profit before tax and managerial remuneration = Rs. 8,80,000
Depreciation as provided in books of account = Rs. 1,10,000
Depreciation as per the Companies Act, 2013 = Rs. 1,32,000
Show Answer

Q69) Fixed assets details: Original cost Rs. 2,00,000;
WDVRs. 1,10,000
Expenditure on scientific research was made for setting-up a new laboratory.
Maximum remuneration payable to part time directors = ?
Show Answer

Q70) An external user of financial statement of a company is Show Answer

Q71) XYZ Co. Ltd. proposed a dividend of 20%. The net profit of the company isRs. 1,20,000. The called up equity share capital isRs. 5,00,000 and the amount of calls in arrears isRs. 30,000. What will be the amount of dividend payable ? Show Answer

Q72) As per Schedule III Current Maturities of Long Term Borrowings should be shown under Show Answer

Q73) Section 188 of Companies Act, 2013 provides that except with the consent of the Board of Directors given by a resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to sale, purchase or supply of goods or materials.
However, company cannot enter into such contracts or arrangements, except with the prior approval of the company by a resolution if sale, purchase or supply of goods, amounting to :
Show Answer

Q74) Section 188 of Companies Act, 2013 provides that except with the
consent of the Board of Directors given by a resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to selling or otherwise disposing of, or buying, property of any kind. However, company cannot enter into such contracts or arrangements, except with the prior approval of the company by a resolution if selling or otherwise disposing of, or buying, property of any kind, amounting to —
Show Answer

Q75) Section 188 of Companies Act, 2013 provides that except with the consent of the Board of Directors given by a resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to availing or' rendering of any services. However, company cannot enter into such contracts or arrangements, except with the prior approval of the company by a resolution if availing or rendering of any services, amounting to - Show Answer

Q76) Section 188 of Companies Act, 2013 provides that except with the consent of the Board of Directors given by a resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to such related party's appointment to any office or place of profit in the company, its subsidiary company or associate company. However, company shall not enter into a transaction or transactions, where the transaction or transactions to be entered into is for appointment to any office or place of profit in the company, its subsidiary company or associate company at a monthly remuneration ............. Show Answer

Q77) Where any contract or arrangement is entered into by a director or any other employee, without obtaining the consent of the Board or approval by a resolution in the general meeting u/s 188(1) and if it is not ratified by the Board or, as the case may be, by the shareholders at a meeting within ............. from the date on which such contract or arrangement was entered into, such contract or arrangement shall be ............. Show Answer

Q78) Reliable Casting Ltd., is a subsidiary of Unique Machinery Ltd. The board of directors of the respective companies have made the following appointments on a consolidated monthly salary ofRs. 2,52,000 with effect from 1st June 2018. Show Answer

Q79) To make payment in excess of 11% of net profit a1' managerial remuneration, which of the following authorisations.are is required? Show Answer

Q80) To pay remuneration to any one managing director; or whole-time director or manager in excess of 5% of the net profits of the company, which of the following approvals are required? Show Answer

Q81) ABC Ltd., a listed company having two managing directors, is considering to pay remuneration to both managing directors equivalent to 10.5% of net profits of the company. Company seeks your advise the , necessary approvals required. Show Answer

Q82) Mr. Financer, is a CEO in a public company. Company is considering a proposal to increase the remuneration payable to Mr. Financer. Which of the following is true in this regard? Show Answer

Q83) As per Sec. 197(3) of Companies Act, 2013, If, in any financial year, a
company has no profits or its profits are inadequate, the company shall not pay to its directors, including any managing or whole time director or manager, by way of remuneration .............
Show Answer

Q84) Which of the following is correct in relation to sitting fees of directors as per Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014? Show Answer

Q85) A director or manager in a company may be paid remuneration by way of ............. Show Answer

Q86) As per Sec. 197 of Companies Act, 2013, if any director draws or receives, directly or indirectly, by way of remuneration any sum in excess of the limit prescribed by this section or without approval required under this section, he ............. Show Answer

Q87) As per Sec. 197(10) of Companies Act, 2013, the company shall not
waive the recovery of any sum refundable to it u/s 197(9) unless
Show Answer

Q88) As per Sec. 197(16) of Companies Act, 2013, the ............. of the company shall, in his report under ............. , make a statement as to whether the remuneration paid by the company to its directors is in accordance with the provisions of this section, whether remuneration paid to any director is in excess of the limit laid down under this section and give such other details as may be prescribed. Show Answer

Q89) In making the computation of profit for the purpose of Sec. 197 of Companies Act, 2013, credit shall be given for which of the following sums: Show Answer

Q90) In making the computation of profit for the purpose of Sec. 197 of Companies Act, 2013, credit shall not be given for which of the following sums: Show Answer

Q91) As per Sec. 200 of Companies Act, 2013, may, while according
its approval u/s 196, to any appointment or to any remuneration u/s 197 in respect of cases where the company has inadequate or no profits, fix the remuneration within the limits specified in this Act, at such amount or percentage of profits of the company, as it may deem fit.
Show Answer

Q92) Which statement is true? Show Answer

Q93) Which is the section of Corporate Social Responsibility? Show Answer

Q94) An organization’s obligation to act to protect and improve society’s welfare as well as its own interests is referred to as Show Answer

Q95) The social demands and expectations of organizations can be assessed by all of the following except Show Answer

Q96) Corporate contributions for charitable and social responsibility purposes is called
Show Answer

Q97) Corporate social responsibility that extencjs beyond legal mandates can help meet societal expectations in the absence of Show Answer

Q98) Which statement is true? Show Answer

Q99) Balance of Provision for Taxation as on 1-4-2018 and 31-3-2019 were Rs 13,72,000 and Rs 14,55,000 respectively. During the year Rs 12,05,000 were paid towards income tax. The amount of provision made for taxation will be: Show Answer

Q100) Plant Original Costing Rs 1,35,500 (accumulated depreciation Rs 72,800) was sold at a profit of Rs 15,900 during the year 2018-19. The amount of cash flow from the transaction would be: Show Answer

Q101) The Corporate Social Responsibility Committee shall consist of _______ directors, out of which at least ________ director(s) shall be independent director(s). Show Answer

Q102) Written down value of a machine as on 31st March, 2019 is Rs 6,65,558. Rate of depreciation on the basis of written down value method is 15%. What will be the cost of this machine purchased on 1st April, 2014? Show Answer

Q103) In G Ltd., there is one whole-time director and three part-time directors. The maximum rate of remuneration payable to all directors will be: Show Answer

Q104) When the effective capital of a company is Rs 100 crore and above but less than Rs 250 crore, the maximum remuneration payable as per Part-II of Schedule V of the Companies Act, 2013, by the company to its managerial personnel when the company has no profits or inadequate profits, will be: Show Answer

Q105) Every company having turnover of rs ______ during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee. Show Answer

Q106) Which of the following is not a type of segment as per AS-17?
Show Answer

Q107) The figures appearing in the Financial Statements may be rounded off to the nearest crore, only if Turnover is _____ Show Answer

Q108) Financial statements are used by: Show Answer

Q109) Every Company having Net Worth of Rs ______
shall constitute a corporate social responsibility committee of the Board. Show Answer

Q110) The Board of Directors of the Company, who has to form Corporate Social Responsibility Committee, shall make sure that the company spends in every financial year, minimum ______ % of the average net profits made during the 3 immediately preceding financial years as per the CSR policy. Show Answer

Q111) As per Rule 8 of the Companies (Accounts) Rules, 2014, the Report of the Board shall contain the particulars of contracts or arrangements with related parties under Section 188 (1) in the.________ Show Answer

Q112) Manager of Malabar Ltd. is entitled to a commission @3% on net profit after charging such commission. Calculate the commission payable to the manager. Net profit before tax and managerial remuneration is Rs 8,80,000. Depreciation as provided in books of account is Rs 1,10,000 and Depreciation as per the Companies Act, 2013 is Rs 1,32,000. Show Answer

Q113) Provisions are_____ Show Answer

Q114) Which of the following is capital reserve? Show Answer

Q115) Provisions of Corporate Social Responsibility (CSR) are applicable to the company having net profit off____ Show Answer

Q116) _____shall mean any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets, or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy.
Show Answer

Q117) One Person Company (OPC) shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within _____ from the closure of the financial year.
Show Answer

Q118) Financial statements include: Show Answer

Q119) Corporate Social Responsibility Committee of the Board consisting of _______ Show Answer

Q120) A _____ is a business segment or a geographical segment identified on the basis of foregoing definitions for which segment information is required to be disclosed by this Standard? Show Answer

Q121) If any director contravenes the provision of this section 197 (i.e., Recovery of Remuneration received by director in contravention of section 197 of the Companies Act, 2013), shall be punishable with: Show Answer

Q122) As per section 149(1) of the Companies Act, 2013, at least one-woman director is to be appointed by: Show Answer

Q123) The managerial remuneration shall be payable to a person appointed within the meaning of ______ Show Answer

Q124) In case of issue of equity shares with differential rights as to dividend, voting or otherwise, the shares with differential rights shall........ of the total post-issue paid up equity share capital, including equity shares with differential rights issued at any point of time. Show Answer

Q125) Public companies are required to issue audited financial statements to the public at least ______ Show Answer

Q126) Financial statements are prepared with an objective to provide information about the_____ Show Answer

Q127) When the effective capital of a company is 5 crore and above but less than 100 crore, the maximum remuneration payable by the company to its managerial personnel when the company has inadequate profits or no profits, will be ____ Show Answer

Q128) Financial Statements Includes: Show Answer

Q129) Cash Flow Statement has to be prepared in accordance with: Show Answer

Q130) Financial Statements are mainly prepared for: Show Answer

Q131) Provisions of CSR are applicable to the Company having turnover of: Show Answer

Q132) Related party disclosure has to be prepared in accordance with: Show Answer

Q133) Board of every company shall ensure that the company spends in every financial year on account of CSR Policy at least:
Show Answer

Q134) While preparing Cash Flow Statement of XYZ Ltd., a finance company, interest received on loan should be shown as:
Show Answer

Q135) Section 197 of the Companies Act, 2013 deals with: Show Answer

Q136) AS-17 indicate: Show Answer

Q137) Keeping of Statutory books is: Show Answer

Q138) If the effective capital of XYZ Company is less than 5 crore it may, without consent of Central Government, pay remuneration to the managerial personnel shall not exceed: Show Answer

Q139) If the effective capital of XYZ Ltd. Company is 5 crore and above but less than 100 crores it may, without consent of Central Government, remuneration payable shall not exceed: Show Answer

Q140) If the effective capital of ABC Ltd. Company is 100 crore and above but less than 250 crore it may, without consent of Central Government, pay remuneration to the managerial personnel shall not exceed: Show Answer

Q141) If the effective capital of Karan Ltd. Company is Rs 250 crore and above it may, without consent, pay remuneration to managerial personnel shall not exceed (rupees):
Show Answer

Q142) Straight line method is also known as: Show Answer

Q143) Overall limit on managerial remuneration is: Show Answer

Q144) In a company with more than one managing director/whole time director/manager, the total managerial remuneration will not exceed: Show Answer

Q145) In a company, with one managing director/whole time director/manager the total managerial remuneration will not exceed: Show Answer

Q146) In a company, If there is a director who is neither a managing director/whole time director, remuneration to managerial person will not exceed:
Show Answer

Q147) Maximum amount of sitting fees of director in a company. Show Answer

Q148) Board report shall disclose: Show Answer

Q149) Corporate social responsibility that extends beyond legal mandates can help meet societal expectations in the absence of: Show Answer

Q150) AS 18 is on: Show Answer

Q151) Which types of transaction are deemed to be related party transaction between company and its related party:
Show Answer

Q152) Which types of transactions are deemed to be related party transaction between a company and its related party: Show Answer

Q153) Related Party define in sections: Show Answer

Q154) Related Party Includes: Show Answer

Q155) An external user of financial statement of a company is:
Show Answer

Q156) As per Schedule III Current Maturities of Long Term Borrowings should be shown under: Show Answer

Q157) Section 188 of Companies Act, 2013 provides that except with the consent of the Board of Directors given by a resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to sale, purchase or supply of goods or materials. However, company cannot enter into such contracts or arrangements, except with the prior approval of the company by a resolution if sale, purchase or supply of goods, amounting to: Show Answer

Q158) To make payment in excess of 11% of net profit as managerial remuneration, which of the following authorizations are is required? Show Answer

Q159) To pay remuneration to any one managing director; or whole-time director or manager in excess of 5% of the net profits of the company, which of the following approvals are required?
Show Answer

Q160) Mr. Ram, is a CEO in a public company. Company is considering a proposal to increase the remuneration payable to Mr. Ram. Which of the following is true in this regard? Show Answer

Q161) Which of the following is correct in relation to sitting fees of directors as per Companies Act, 2013? Show Answer

Q162) A director or manager in a company may be paid remuneration by way of _______. Show Answer

Q163) As per Sec. 200 of Companies Act, 2013, _______may, while according its approval u/s 196, to any appointment or to any remuneration u/s 197 in respect of cases where the company has inadequate or no profits, fix the remuneration within the limits specified in this Act, at such amount or percentage of profits of the company, as it may deem fit. Show Answer

Q164) Which statement is true? Show Answer

Q165) Which is the section of Corporate Social Responsibility? Show Answer

Q166) An organization's obligation to act to protect and improve society's welfare as well as its own interests is referred to as:
Show Answer

Q167) Corporate contributions for charitable and social responsibility purposes is called: Show Answer

Q168) Which statement is true? Show Answer