Financial Accounting Sample Paper (Accounting Quiz - 6)

1. Amortization of unidentified intangible assets is in terms of
[A]Conservatism concept
[B]Going concern concept
[C]Matching concept
[D]Time period concept



2. Consider the following data pertaining to AB Ltd.:
Particulars Rs.
Cost of the machinery purchased on April 1, 2002 6,60,000
Installation charges 40,000
Market value as on March 31, 2003 8,00,000
While finalizing the annual accounts, if the company values the machinery at Rs.8,00,000, which of the following concepts is violated by the company?
[A]Cost
[B]Matching
[C]Realisation
[D]Periodicity



3. In double entry system of book-keeping, every business transaction affects
[A]Two accounts
[B]The same account on two different dates
[C]Two sides of the same account
[D]Two accounts on two different dates



4. Consider the following data pertaining to XL Ltd. for the month of March 2003:
Particulars Rs.
i. Balance as per Bank pass book (Overdraft) 5,100
ii. Bank charges for collection of up-country cheque 225
iii. Amount of interest on UTI deposits directly collected by the bank 425
Balance as per bank column of the cash book of XL Ltd. as on March 31, 2003 is
[A]Rs.4,670 (Debit)
[B]Rs.4,700 (Credit)
[C]Rs.5,030 (Debit)
[D]Rs.5,300 (Credit)



5. Which of the following errors will not cause a mismatch in the trial balance?
[A]Recording a transaction in the wrong subsidiary book
[B]Posting to an account on the wrong side
[C]Omitting to write the cash balance in the trial balance
[D]Wrong casting of a subsidiary book



6. Consider the following data with regard to plant and equipment pertaining to Mittal Ltd.:
Cost of the plant (Rs.) 5,00,000
Installation charges (Rs.) 30,000
Estimated useful life (years) 8
Scrap value (Rs.) 50,000
If the firm follows the straight line method of depreciation, the rate of depreciation is
[A]5.25%
[B]6.00%
[C]9.50%
[D]11.32%.



7. Consider the following data pertaining to Banjara Ltd. for the year 2002-2003:
Particulars Rs.
Provision for doubtful debts as on April 1, 2002 8,000
Sundry debtors as on March 31, 2003 3,00,000
Bad debts to be written off 20,000
If the company makes 5% provision on the debtors balances, the charge against profit and loss account for the year ended March 31, 2003 is
[A]Rs. 7,000
[B]Rs.14,000
[C]Rs.22,000
[D]Rs.26,000



8. Aslam Co. purchased furniture worth Rs.2,050 in exchange for its old furniture (book value of Rs.1,680), and a cash payment of Rs.600. Amount of loss recognized on this transaction is
[A]Rs. 230
[B]Rs. 370
[C]Rs. 600
[D]Rs. 970



9. Which of the following is not an item of revenue expenditure?
[A]Interest on deposits accepted
[B]Annual insurance premium on inventory
[C]Customs duty paid in connection with the import of equipment
[D]Repairs and maintenance on machinery



10. Which of the following is/are fixed asset(s)?
[A]Closing inventory
[B]Fixed Deposit in a bank
[C]Patent
[D]Prepaid expenses



11. Consider the following data pertaining to Moon Ltd. for the month of March 2003:
Particulars Rs.
Purchase of goods for resale 1,86,000
Freight in 14,000
Freight out 12,500
Returns outward 6,000
Cost of goods available for sale is
[A]Rs.1,88,000
[B]Rs.1,89,000
[C]Rs.1,94,000
[D]Rs.1,99,500



12. All non-cash transactions should be primarily recorded in
[A]Double column cash book
[B]Analytical petty cash book
[C]Journal
[D]Cash book



13. Which of the following is/are source(s) of funds?
[A]Disposal of an asset
[B]Payment to creditors
[C]Acceptance of bills payable
[D]Both (a) and (c) above



14. The expenses that have fallen due for payment but not paid are
[A]Outstanding expenses
[B]Prepaid expenses
[C]Deferred expenses
[D]Accrued revenues



15. Which of the following concepts assumes that a business will last indefinitely?
[A]Business entity
[B]Going concern
[C]Periodicity
[D]Duality