Practice Test

Q1) Which of the following is/are advantage of audit working papers?
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Q2) Inclusion of personal expenses of using car in the business expenses would violate the concept of : Show Answer

Q3) "Assets should be valued at the price paid to acquire them" is based on - Show Answer

Q4) A businessman purchases goods worth Rs. 25,00,000 and sold 80% of such goods during the accounting year ending on 31st March, 2011. The market value of the remaining goods was Rs. 7,50,000. He valued the closing stock @ Rs. 5,00,000 and not at Rs. 7,50,000 due to - Show Answer

Q5) Revenue from sale of products is generally accounted in the period in which - Show Answer

Q6) Which of the following is not the purpose of accounting? Show Answer

Q7) Which accounting concept is applicable to record a transaction entered between owner and business? Show Answer

Q8) Ashok a cloth merchant buys cloth for Rs. 50,000 paying cash Rs. 20,000. What is the amount of expenses as per accrual concept? Show Answer

Q9) Which of the following is an accepted method of accounting? Show Answer

Q10) Accounting transactions are recorded in terms of : Show Answer

Q11) The expired portion of capital expenditure is shown in the financial statement is Show Answer

Q12) Maintaining petty cash book is Show Answer

Q13) Purchase book records Show Answer

Q14) Sales Book is prepared Show Answer

Q15) Expenses paid in cash and recorded as assets before they are used are called Show Answer

Q16) In which book does the cash sales will be recorded Show Answer

Q17) Which of the following transactions would have no impact on owner's capital? Show Answer

Q18) Which of the following accounts will be credited, when the goods are purchased for cash? Show Answer

Q19) Which of the following would not be regarded as an asset? Show Answer

Q20) Withdrawal of cash from bank for official use will result into Show Answer

Q21) Franchise rights, goodwill and patents are the examples of Show Answer

Q22) Which of the following is not an example of current assets? Show Answer

Q23) Which of the following errors will affect agreement of trial balance? Show Answer

Q24) After preparing the Trial Balance the accountant finds that the total of the debit side of Trial Balance is short by Rs. 1,000. This difference will be Show Answer

Q25) Overcasting of sales book by Rs. 1,000 is a type of Show Answer

Q26) Which one of the following is correct about errors? Show Answer

Q27) Whitewash charges of building Rs. 500 have been wrongly debited to building account. It is an example of Show Answer

Q28) If the effect of an error is cancelled by the effect of some other errors, the errors are known as Show Answer

Q29) Which of the following expenditures is of capital nature? Show Answer

Q30) A liability which arises only on the happening of some event is called Show Answer

Q31) Heavy amounts were spent by Saroj for addition to machinery in order to increases the production capacity. The amount is Show Answer

Q32) What is the nature of expenses incurred on the issue of shares? Show Answer

Q33) Who prepares Bank Reconciliation Statement? Show Answer

Q34) For the purpose of bank reconciliation statement, only the _______ column of the cash book is to be considered. Show Answer

Q35) The value of an asset is Rs. 50,000. Its working life is 10 years/ Firm uses sum of years digits method for providing depreciation. What will be the amount of depreciation for second year? Show Answer

Q36) Decrease in value of a fixed asset due to normal wear and tear is known as Show Answer

Q37) Dinesh Garments purchased a machine for Rs. 50,000 and spent Rs. 6,000 on its erection. On the date of purchase, it was estimated that effective life of the machine will be ten years and after ten years its scrap value will be Rs. 6,000. The amount of depreciation for second year on straight line basis is Show Answer

Q38) A firm charges depreciation on straight line method. The rate of depreciation is reduced from 25% to 10%. What will be the impact of this change on profits? Show Answer

Q39) Under straight line method, depreciation is calculated on Show Answer

Q40) Which of the following assets are shown at written down value in Balance Sheet? Show Answer

Q41) Which of the following statement is true? Show Answer

Q42) Prakash sells goods at 20% on sales. His sales were Rs. 10,00,000. The amount of gross profit is Show Answer

Q43) Given the following data : Gross profit Rs. 6,700; Carriage Inwards Rs. 250; Rent received Rs. 575 and other expenses Rs. 3,600. The net profit of the firm would be Show Answer

Q44) Ram has been running business from the year 2002. He has paid Rs. 1,650 as rent upto Febuary, 2012 (for financial year 2011-12). Total rent to be debited to profit and loss A/c of financial year 2011-12 will be Show Answer

Q45) Income tax paid by the sole-proprietor from the business bank account is debited to Show Answer

Q46) Debtors as appearing in Trial Balance are Rs. 25,000. Provison for doubtful debts is to be provided @ 5% and 2% of amount is to be provided for discount. What is the amount of debtors to be shown in balance sheet? Show Answer

Q47) The net profit of a sole proprietorship firm is Rs. 1,320 (before commission). The manager of the firm gets 10% commission on the net profit after charging such commission. Manager's commission would be Show Answer

Q48) Which of the following is correct about trade discount? Show Answer

Q49) Which of the following items would fall under the category of a liability? Show Answer

Q50) If a piece of furniture's list price is Rs. 28,000 and it is sold at 10% trade discount and 2% cash discount. The cash sale price of furniture would be Show Answer

Q51) What is shown in a balance sheet? Show Answer

Q52) In a partnership firm, a partner withdraws Rs. 5,000 per month in the beginning of month for personal use. The rate of interest on drawings is 6% p.a. What is the amount of interest on drawings for the year? Show Answer

Q53) Interest on capital will be paid to the partners if provided for in the partnership deed but only out of Show Answer

Q54) In case of partnership the act of any partner is Show Answer

Q55) Capital employed by a partnership firm is Rs. 5,00,000. Its average profit is Rs. 60,000. The normal rate of return is similar type of business is 10%. What is the amount of super profits? Show Answer

Q56) A and B are partners in a firm having capital balances of Rs. 54,000 and Rs. 36,000 respectively. They admit C in partnership for 1/3rd share and C is to bring proportionate amount of capital. The capital amount of C would be Show Answer

Q57) If the new partner brings any additional amount in cash other than his capital contribution them, it is termed as Show Answer

Q58) A firm earns profit of Rs. 1,10,000. The normal rate of return in a similar type of business is 10%. The total assets (excluding goodwill) and total outside liabilities are Rs. 11,00,000 and Rs. 1,00,000 respectively. The value of goodwill as per capitalization method will be Show Answer

Q59) A and B are partners sharing profits in the ratio of 3 : 2 respectively. C is admitted in the firm for 1/3rd share in profits. The new profit sharing ratio amongst A, B and C will be Show Answer

Q60) A's capital in a business is Rs. 20,000 and B's capital is Rs. 25,000. Their profit sharing ratio is 4 : 5. They admit C in the firm as a new partner and ask him to contribute Rs. 40,000 for 1/3rd share of profit. Find the premium paid by C on account of goodwill Show Answer

Q61) Retiring partner is compensated for parting with the firm's future profits in favour of remaining partners. The remaining partner's contribute to such compensation amount in Show Answer

Q62) A, B and C share profits and losses of the firm equally. B retires from business and his share is purchased by A and C in the ratio of 2 : 3. New profit sharing ratio between A and C respectively would be Show Answer

Q63) If a partner goes insolvent and is not able to bring his share of deficiency in cash, then his deficiency should be borne by the remaining solvent partners Show Answer

Q64) Which of the following statement is true? Show Answer

Q65) Which one of the following will define, when appropriation of a certain number of shares is made to an applicant in response to his application? Show Answer

Q66) P Ltd. forfeited 150 shares of Rs. 10 each, issued at a premium of Rs. 2, for non-payment of the final call of Rs. 3. Out of these, 100 shares were re-issued @ Rs. 11 per share. How much amount would be transferred to capital reserve? Show Answer

Q67) If the number of shares offered to public for subscription is less than the number of applications received, it is termed as Show Answer

Q68) Share may be issued Show Answer

Q69) Which of the following will be the journal entry for recording the issue of shares at par against purchase of Machinery? Show Answer

Q70) Debentures of a company can be issued Show Answer

Q71) On issue of debentures as a collateral security, which account is credited? Show Answer

Q72) ________ are not legally required to get their financial statements audited Show Answer

Q73) In audit, investigation exercise is Show Answer

Q74) The format of investigation report is Show Answer

Q75) Which of the following is true about audit? Show Answer

Q76) Which of the following is a type of persuasive audit evidence for the auditor? Show Answer

Q77) For an auditor, to check arithmetical accuracy is Show Answer

Q78) Statutory audit is to be done by Show Answer

Q79) Balance Sheet audit includes verification of Show Answer

Q80) If a company is having internal audit system in place, statutory audit is Show Answer

Q81) _______ is useful for the purpose of cost control, cost reduction and proper utilization of scarce resources Show Answer

Q82) The format of Cost Audit Report is Show Answer

Q83) Cost Audit is Show Answer

Q84) Statutory audit of a company is Show Answer

Q85) Who appoints an internal auditor? Show Answer

Q86) Who can oder management audit? Show Answer

Q87) The audit conducted by Comptroller and Auditor General of India is a form of Show Answer

Q88) Primary responsibility for the adequacy of financial statements disclosures rests with Show Answer

Q89) Which one shall be kept in mind while carrying out audit? Show Answer

Q90) Which of the following is not a method of obtaining evidence Show Answer

Q91) Articles of Association of a company should be stored in a _______ Show Answer

Q92) Who appoints the auditors of a company Show Answer

Q93) Board meeting is the meeting of Show Answer

Q94) A statutory auditor reports to Show Answer

Q95) When an auditor does not have any reservation/objection regarding the information under audit, which type of audit report is issued to him? Show Answer

Q96) The first auditor of a company is appointed Show Answer

Q97) The duties of a company auditor are defined under/in Show Answer

Q98) Under which meeting is an auditor usually appointed? Show Answer

Q99) Casual vacancy arising due to resignation of an auditor may be filled by Show Answer

Q100) Due to lack of audit evidences, auditor issues a Show Answer