Practice Test

Q1) Money spent Rs.10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets is Show Answer

Q2) Amount of Rs.5,000 spent as lawyers' fees to defend a suit claiming that the firm's factory site belonged to the plaintiff's land Show Answer

Q3) Entrance fee of Rs. 2,000 received by Ram and Shyam Social Club Show Answer

Q4) Subsidy of Rs.40,000 received from the govt by a manufacturing concern Show Answer

Q5) Insurance claim received on account of machinery damaged completely by fire Show Answer

Q6) Interest on investments received from UTI Show Answer

Q7) Amount received from IDBI as a medium term loan for augmenting working capital Show Answer

Q8) A bad debt recovered during the year Show Answer

Q9) A second hand motor car was purchased for Rs.10,000, the amount of Rs. 1,000 is spent on its repairs , Rs.500 is incurred to get the car registered in owner's name and Rs.1,200 is paid as dealer's commission . The amount debited to car account will be Show Answer

Q10) Revenue from Sale of products ordinarily is reported as part of the earning in the period Show Answer

Q11) If repair cost is Rs.25,000, whitewash expenses are Rs.5,000,cost of extension of building is Rs.2,50,000 and cost of improvement in electrical wiring system is Rs.19,000;the amount to be expensed is Show Answer

Q12) Rs.1,200 spent on the repairs of machine Show Answer

Q13) Rs.2,500 spent on the overhaul of machines purchased second-hand Show Answer

Q14) White washing expenses Show Answer

Q15) Paper purchased for use as stationery Show Answer

Q16) Advertising camping to launch a new to products Show Answer

Q17) expenses on a foreign tour to purchase a machinery is Show Answer

Q18) cost of machinery purchased is Show Answer

Q19) insurance & freight on machinery purchased is Show Answer

Q20) custom duty on imported machinery is Show Answer

Q21) wages for erection of machinery is Show Answer

Q22) installation charges of a machinery purchased is Show Answer

Q23) expenses incurred on trial run is Show Answer

Q24) cost of a second hand machinery purchased is Show Answer

Q25) repair of a second hand machinery before put to use Show Answer

Q26) interest on a term loan for the purchase of machinery where the commercial production has not begun till the last day of the accounting year is Show Answer

Q27) money spent to reduce working expenses is Show Answer

Q28) amount spent for replacement of a petrol driven engine by CNG Kits is Show Answer

Q29) cost of rings & pistons of the engine of a motor car to get fuel efficiency is Show Answer

Q30) overhauling expenses for engine of a motor car to get better fuel efficiency is Show Answer

Q31) legal expenses to acquire better fuel efficiency is Show Answer

Q32) legal expenses to defend a suit claiming that firm's factory site belong to plaintiff is Show Answer

Q33) amount spent on a repainting an old building for the first time on purchase is Show Answer

Q34) expenses to obtain a license for starting a factory is Show Answer

Q35) amount spent for the construction of temporary huts for storing building material while constructing a building Show Answer

Q36) deposit with Mahanagar Telephone Nigam Ltd.for installing telephone is Show Answer

Q37) inauguration expenses on opening of a new branch of an existing business Show Answer

Q38) legal expenses to recover dues from customers Show Answer

Q39) amount spent on demolition of an old building to construct a bigger building on the same site is Show Answer

Q40) cost of improvement in electric wiring system is Show Answer

Q41) purchase of patents rights Show Answer

Q42) purchase of goodwill is Show Answer

Q43) purchase of technical know-how is Show Answer

Q44) purchase of live stock by a farmer is Show Answer

Q45) Amount spent on new sign board at airport Show Answer

Q46) advance to supplier of goods is Show Answer

Q47) festival advance to employees is Show Answer

Q48) annual renewal fee of license for next year is Show Answer

Q49) Interest on a term-loan for the purchase of machinery where the commercial production has already begun is Show Answer

Q50) repair of a second hand machinery after put to use Show Answer

Q51) amount spent for replacement of worn out part of machine is Show Answer

Q52) annual maintenance fees of a machine is Show Answer

Q53) amount spent on annual repainting of building is Show Answer

Q54) expenses for removal of stock to a new site is Show Answer

Q55) annual fire insurance (of building) Rs.12,000 paid on 01.01.2006 during accounting year ending on 31..3.2006 is Show Answer

Q56) compensation for breach of stock to a new site is Show Answer

Q57) compensation paid to employee who were retired is Show Answer

Q58) compensation paid to worker under VRS scheme Show Answer

Q59) import duty on purchase of material is Show Answer

Q60) fines imposed is Show Answer

Q61) imported goods confiscated by custom authorities is Show Answer

Q62) loss on sale of machinery is Show Answer

Q63) second hand machine was purchased for Rs.1,00,000 through a broker who charged 1 % .It was brought to factory after incurring transportation cost of Rs.2,000 & then was represented at a cost of Rs.3,000 & then installed at a cost of Rs.4,000 to take trial run production which cost Rs.5,000.The commercial production begun & continued upto 11 months at the end of which ,this machine was again repaired at a cost of Rs.6,000 . the amount debited to machinery account will be Show Answer

Q64) A second hand car is purchased for Rs.20,000 ,the amount of Rs.3,000 is spent to its repairs , Rs.1,000 is incurred to get the car registered in owner's name & Rs.2,000 is paid as dealer commission.The amount debited to car account will be Show Answer

Q65) if repair cost is Rs.50,000, whitewash expenses are Rs.10,000,cost of extension of building is Rs.5,00,000 and cost of improvement in electrical wiring system is Rs.40,000;the amount to be expensed is Show Answer

Q66) Cost of Rs.1,80,000 for dismantling, removing & reinstalling plant by a cotton mill incurred in connection with removal of works to a more suitable locality is Show Answer

Q67) sale of plant & machinery is Show Answer

Q68) sale of investments is Show Answer

Q69) loans raised is Show Answer

Q70) insurance claim for machinery damaged by fire is Show Answer

Q71) subsidy received from the govt for plot of land is Show Answer

Q72) general subsidy received from govt is Show Answer

Q73) bad debts recovered is Show Answer

Q74) scrap value of machinery is Show Answer

Q75) premium received on issue of shares Show Answer

Q76) capital introduced is Show Answer

Q77) interest received on investment is Show Answer

Q78) interest accrued on investment is Show Answer

Q79) cash received from debtor is Show Answer

Q80) B/R collected is Show Answer

Q81) sale of goods for cash is Show Answer

Q82) sale of goods for credit is Show Answer

Q83) insurance claim for stock damaged by fire is Show Answer

Q84) Contingent asset usually arises from unplanned or unexpected event that give rise to Show Answer

Q85) If an inflow of economics benefits is probable then a contingent asset is disclosed Show Answer

Q86) In case of ____either outflow of resources to settle the obligations is not probable or the amount expected to be paid to settle the Liability cannot be measured with sufficient reliability Show Answer

Q87) Present Liability of uncertain amount , which can be measured reliably by using a substantial degree of estimation is termed as Show Answer

Q88) In the financial statement , contingent Liability is Show Answer

Q89) Contingent Liability usually arises from unplanned or unexpected event that give rise to Show Answer

Q90) In the financial statement , contingent asset is Show Answer

Q91) In the financial statement , provision is Show Answer

Q92) if a reliable estimates of probable outflow of resources to settle a present obligation can be made ,it is Show Answer

Q93) If a reliable estimates of probable outflow of resources to settle a possible obligation can be made ,it is Show Answer

Q94) If a reliable estimates of probable outflow of resources to settle a possible obligation cannot be made ,it is Show Answer

Q95) When obligation is not problem or the amount expected to be paid to settle the liability cannot to be measured with sufficient reliability, it is called Show Answer

Q96) Contingent asset, usually arise from unexpected events which give rise to Show Answer

Q97) Equipment can be classified as________ Show Answer

Q98) Accounts payable/creditors can be classified as________ Show Answer

Q99) Stock can be classified as_______ Show Answer

Q100) Profit can be classified as__________ Show Answer

Q101) Building can be classified as_______ Show Answer

Q102) Accounts receivable/debtors can be classified as________ Show Answer

Q103) Capital can be classified as______ Show Answer

Q104) ________is that expenditure which result in acquisition of an asset or which result in an increase in the earning capacity of a business Show Answer

Q105) Expenses whose benefit expires within the year of expenditure and which are incurred to maintain the earning capacity of existing assets are termed as________. Show Answer

Q106) There are certain expenses which may be in the nature of revenue but their benefit may not be consumed in the year in which such expenditure has been incurred,rather the benefit may extend over a number of year are termed as______ Show Answer

Q107) The benefit of capital expenditure lasts for a________of time Show Answer

Q108) Which of the following is/are example of capital expenditure ? Show Answer

Q109) Amount paid for wages,salary,carriage of goods,repairs,rent and interest,etc, are items of_______ Show Answer

Q110) Cost incurred to acquire an asset are_______but costs incurred to keep them in working condition or to defend their ownership are______ Show Answer

Q111) Which of the following is/are not example of capital expenditure Show Answer

Q112) Which of the following is/are not example of capital expenditure Show Answer

Q113) Depreciation on fixed assets is______ Show Answer

Q114) All sums spent up to the point an asset is ready for use should also be treated as_____ Show Answer

Q115) Fees paid to lawyer for drawings a purchase deed of land is_____ Show Answer

Q116) Interest on loans taken to acquire fixed assets only for the period before the asset become operational is______ Show Answer

Q117) Amount paid for wages,salary,carriage of goods,repairs,rent and interest,etc,are items of_______ Show Answer

Q118) Fee paid to lawyer for checking whether all the papers are in order before land is purchased is_______but if later a suit is filed against the purchaser,the legal costs will be______ Show Answer

Q119) Which of the following is/are deferred revenue expenditure ? Show Answer

Q120) Expenditure incurred for reconditioning to restore the operating efficiency of the used property acquired for the business are_____ Show Answer

Q121) Expenses incurred to maintain the business,cost of store consumed in the course of manufacturing e.g.oil ,cotton-waste are___ Show Answer

Q122) Expenditures incurred in normal course of business and whose benefit expires within the year is known as_______while_____is that expenditure which result in acquisition of an asset or which result in an increase in earning capacity of business. Show Answer

Q123) The main purpose of the incurring capital expenditure is to____of the business.The main purpose of incurring revenue expenditures is to_____of the business. Show Answer

Q124) Capital expenditure normally appears on______ Show Answer

Q125) Revenue expenditure are balanced and is transferred to____ Show Answer

Q126) Deferred revenue expenditure appears in balance sheet at assets side under the heading_____ Show Answer

Q127) Which of the following is/are recurring in nature ? Show Answer

Q128) Which of the following is/are non-recurring in nature ? Show Answer

Q129) The main feature of capital expenditure is that it result in a benefit which will accrue to the business enterprise for a long time say______ Show Answer

Q130) Deferred revenue expenditure also results in a benefit which will accrue in future period but generally for____ Show Answer

Q131) Which of the following is/are not usually capable of being reconverted into cash ? Show Answer

Q132) Heavy loss such as loss due to earthquake is treated as_____in the sense that they are write off over a period of 3 to 5 years. Show Answer

Q133) which of the following are of capital nature ? Show Answer

Q134) Select the false statement. Show Answer

Q135) Amount received from sale of capital asset per contribution made by proprietor towards the capital of the business are knows as_____ Show Answer

Q136) ______is the outcome of a firm's activity in the accounting period,part of its rewards for offering goods or services to the public Show Answer

Q137) Which of the following is/are revenue receipt ? Show Answer

Q138) Which of the following is/are capital receipt ? Show Answer

Q139) Which of the following is/are not capital receipt ? Show Answer

Q140) Which of the following is/are not revenue receipt ? Show Answer

Q141) _______and______have no bearing on the profit or loss for the accounting period. Show Answer

Q142) Amount realized by the sale of fixed assets or by issue of share or debentures is a _____while amount realized by sale of goods or rendering services is always______ Show Answer

Q143) Payment in to the business by proprietor is_____receipt Show Answer

Q144) A receipt in substitution of a source of income is a_______ Show Answer

Q145) A receipt in substitution of an income is a______ Show Answer

Q146) Amount received for surrender of certain rights under an agreement is a_______when a capital asset is being given up in the form of these rights. Show Answer

Q147) Amount received as compensation under an agreement for the loss of future profits is a_____ Show Answer

Q148) Amount realized from the sale of a capital asset or investment is______however amount realized from the sale of an asset kept for sale is______ Show Answer

Q149) _______are earned in the ordinary course of business Show Answer

Q150) _____are those which are earned as a result of selling some fixed assets, or in connection with raising capital for the firm Show Answer

Q151) ______appear in the profit and loss account and are available for distribution as profit,or for creating reserve and funds,or for being used in the business Show Answer

Q152) Capital profits are_____ Show Answer

Q153) Capital losses are shown in the_____ Show Answer

Q154) Discount on issue of debentures is a______ Show Answer

Q155) If capital losses are negligible,they are_______of the year in which they occur. Show Answer

Q156) A contingent asset is a possible asset that arises from_____the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise. Show Answer

Q157) A contingent asset is a possible asset that arises from past events the existence of which will be confirmed only by the _____ or ______ of one or more uncertain future events not wholly within the control of the enterprise. Show Answer

Q158) A contingent liability is a possible obligation that arises from_______ and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise.It is a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefit will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be determined" Show Answer

Q159) Which of the following expenditures is/are capital expenditure Show Answer

Q160) Which of the following expenditures is/are not capital expenditure Show Answer

Q161) Which of the following expenditure is deferred revenue expenditure ? Show Answer

Q162) Which of the following expenditure is/are not revenue expenditure ? Show Answer

Q163) Which of the following expenditure is/are revenue expenditure ? Show Answer

Q164) Which of the following expenditure is/are revenue expenditure ? Show Answer

Q165) A building purchase for Rs.1,50,000 was subsequently sold for Rs.1,75,000,difference Rs.25,000 will be______ Show Answer

Q166) When a company issues its shares of the face value Rs.100 for Rs.105 each, it is said that shares have been issued at a premium,which is_____ Show Answer

Q167) Which of the following expenditure is/are capital expenditure ? Show Answer

Q168) Which of the following expenditure is/are capital expenditure ? Show Answer

Q169) Which of the following expenditure is/are revenue expenditure ? Show Answer

Q170) Rs. 15,000 customs duty was paid on import of a machinery for modernization of factory in the current year & Rs.5,000 paid as import duty on raw materials - Show Answer

Q171) A Machine with a written down value of Rs. 10,000 has been sold for Rs. 13,000. The amount realized is a - Show Answer

Q172) Which of the following is not a difference between provision & contingent liability Show Answer

Q173) A contingent asset is _____ Show Answer

Q174) If a reliable estimates of probable outflow of resources to settle a possible obligation cannot be made ,it is Show Answer