Sunday, March 18, 2012

UGC Net Commerce Paper(Accounting Quiz - 4)

1. In a funds flow statement prepared on working capital basis, a short term loan repaid by the organization
[A]Is shown as a source of working capital
[B]Is shown as an increase in cash
[C]Is shown as a decrease in cash
[D]Does not affect the working capital

2. The Board of director of Prinston Ltd. forfeited 2,500 shares (par value of Rs.10 each) for non payment of final call of Rs.2 per share. All the shares were reissued at Rs.7 per share. How much amount should be transferred to capital reserve account?

3. On August 1, 2010, H Ltd. acquired 75% shares of S Ltd. If machinery of S Ltd. is revalued upwards by Rs.2,00,000 on the same day, the share of minority group of S Ltd. considered to be shown in the Consolidated Balance Sheet as on March 31, 2011 was

4. Revenue profits for consolidation of balance sheet of holding company and its subsidiary company are
[A]The post-acquisition profits of the holding company
[B]The post-acquisition profits of the subsidiary company
[C]The profits after the financial year but before the date of acquisition of the subsidiary company
[D]The profits earned by the holding company from regular transactions

5. On April 01, 2003, Parent Ltd. acquired 4000 shares of Ward Ltd at a price of Rs.4,50,000. The share capital of Ward Ltd. consists of 5,000 equity shares of Rs.100 each. During the consolidation of accounts, it is noticed that the sundry creditors of Parent Ltd. include Rs.20,000 for goods purchased from Ward Ltd. on which the subsidiary company made a profit of Rs.5,000. Half of the goods sold above were still in the stock of Parent Ltd. as on March 31, 20The unrealized profit shown in the Consolidated Balance Sheet of Parent Ltd. as on March 31, 2004 is
[D]Rs.Nil since the goods are purchased from subsidiary company

6. Which of the following items should not appear under the heading ‘unsecured loans’ in the Balance Sheet of a company?
[A]Sinking funds
[B]Loans and advances from subsidiaries
[C]Short term loans and advances from banks
[D]Loans and advances from others

7. Consider the following data pertaining to Premier Company as on April 01,2003:
Subscribed and paid-up Capital:
Equity Rs.80,00,000
6% Preference Rs.20,00,000
Profit and Loss account (cr.) Rs. 1,29,000
Dividend equalization reserve Rs.29,10,750
• During the year 2003-04, the company suffered a loss of Rs.12,71,733.
• Directors propose to pay preference dividend and equity dividend at the rate of 5% and in the event of inadequacy of profits, dividend equalization reserve should be made use of to the extent necessary to make good the deficiency in the proposed amount of dividend. The amount that is to be transferred from dividend equalization reserve to Profit and Loss Appropriation account, in lieu of the proposed dividend is
[C]Rs.nil as the company incurred losses during the current year and dividends cannot be declared
[D]Rs.1,20,000,only with regard to Preference dividend

8. Consider the following data pertaining to Ravera Ltd.
Authorized share capital Rs.20,00,000
Issued, called-up and paid -up capital Rs.12,00,000
Calls in advance Rs. 80,000
Securities Premium Rs. 1,20,000
Profit for the current year Rs. 2,55,600
The directors of the company proposed a dividend of 12%. The amount debited to Profit and Loss Appropriation account on account of the proposed dividend is

9. ‘Outstanding salaries’ represents
[A]A personal account
[B]A contingent liability
[C]A nominal account
[D]A deferred expense account

10. Which of the following is a capital reserve?
[A]A sum set aside to provide for repayment of debentures
[B]The surplus arising on a professional revaluation of fixed asset
[C]An amount set aside to provide for the increased cost of replacement of the fixed asset
[D]A sum set aside from profit towards a special publicity campaign which is to be started in the following year

11. A company’s system of maintaining books of accounts
[A]Must be the same as all the other companies which are in the similar line of business
[B]Can be different from the other companies which are in the similar line of business
[C]Must be disclosed, if it is different from the recognised system of accounting
[D]Must be on accrual basis and according to the double entry system of accounting

12. A prospective shareholder wants to analyse the profitability of a company. The financial statement the investor would consult is the
[A]Income statement
[B]Balance Sheet
[C]Funds flow statement
[D]Cash flow statement

13. If the opening balance of a corporation's retained earnings account is Rs.25,000, net income for the year is Rs.50,000 and the closing balance of the retained earnings account is Rs.55,000, the amount paid by the corporation in the form of dividends during the year is

14. Which of the following is false with regard to value added?
[A]Gross value added is derived by deducting depreciation from the net value added
[B]Value added is the most relevant concept of the social responsibility concept of the enterprise
[C]Value added equals pre-tax profit plus labour, plus depreciation and interest
[D]Value added measures the value of increase in resources

15. Consider the following balances pertaining to Pioneer Engineers Ltd. as on March 31, 2004:
Particulars Rs.
Land 2,00,000
Building 3,50,000
Plant and Machinery 5,25,000
Furniture 50,000
The above assets were purchased on April 01, 2003 at the cost stated below:
Particulars Rs.
Land 2,00,000
Building 4,00,000
Plant and Machinery 7,00,000
Furniture 62,500
The amount of depreciation on the above assets charged to profit and loss account for the year ended on March 31, 2004 is