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MCQs 1: Depreciation is calculated on the____________?

Cost price of asset Market price Cost+ Transport+ Installation expenses Cost or market values whichever is less
Answer Explanation

MCQs 2: Which of the following is an external cause of depreciation?

Routine repair and maintenance Misuse Obsolescence Wear and tear
Answer Explanation

MCQs 3: Which of the following is not depreciated?

Building Land Plant and Machinery Office equipment
Answer Explanation

MCQs 4: ____________is also known as Appraisal system of depreciation?

Inventory system Survey system Annuity system Insurance
Answer Explanation

MCQs 5: Bad debts recovered account will be transferred to______________?

Debtor‘s Account Profit and Loss Account Provision for Doubtful Debt Account Either (b )or C. above
Answer Explanation

MCQs 6: The entry for creating a Provision for bad debts is_____________?

Debit Provision for Bad Debts A/c and credit Debtors A/c Debit Debtors A/c and credit Provision for Bad Debts A/c Debit Provision for Bad Debts A/c and credit Profit & Loss A/c Debit Profit and Loss A/c and credit Provision for Bad Debts A/c.
Answer Explanation

MCQs 7: When a person purchasing goods on credit he becomes a_________in the books of the seller?

Debtor Creditor Defaulter Offender
Answer Explanation

MCQs 8: Cost of goods sold excludes___________?

Opening Stock Carriage inward Wages & Salary Postage & Stamps
Answer Explanation

MCQs 9: Tax deducted at source A/c appears in___________?

Assets side Liability side Profit & Loss A/c Debited to Capital A/c
Answer Explanation

MCQs 10: Investment in own share A/c appears in____________?

Asset side Liability side Netted from Capital Profit & Loss A/c
Answer Explanation

MCQs 11: Payments received in advance from a customer for a contract can be__________?

Shown as a deduction from contract work-in-progress on asset side Shown as a liability Credited to P&L A/c Either A. or B. above
Answer Explanation

MCQs 12: If a company has contingent liabilities, they appear in the__________?

Balance Sheet Directors‘ report Notes on account to Balance Sheet Chairman‘s report
Answer Explanation

MCQs 13: Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be?

Written down to zero or its scrap value Shown in the Balance Sheet at its replacement cost Shown in the Balance Sheet at cost, but classified as a non-current asset Carried in the accounting records at cost until it is sold
Answer Explanation

MCQs 14: Which of the following is not classified as inventory in the financial statements?

Finished goods Work-in-process Stores and spares Advance payments made to suppliers for raw materials
Answer Explanation

MCQs 15: If actual bad debts are more than the provision for bad debts, then there will be a_____________?

Credit balance of Provision for Bad Debts Account Debit balance of Provision for Bad Debts Account Debit balance of Bad Debts Account Debit balance of Discount on Debtors Account
Answer Explanation

MCQs 16: The creation of provision for doubtful debts given as an adjustment requires____________?

Debit Profit and Loss Account and deduct the provision from debtors Credit Profit & Loss Account and deduct the provision from debtors Credit Profit and Loss Account and add the provision to debtors Debit Profit & Loss Account and add the provision to debtors
Answer Explanation

MCQs 17: Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?

The bad debt expense is not matched with the related sales Revenue is overstated in the year of sales It violates the matching principle of accounting All of the above
Answer Explanation

MCQs 18: At the time of preparation of financial accounts, bad debt recovered account will be transferred to?

Debtors A/c Profit & Loss A/c Profit & Loss Adjustment A/c Profit & Loss Appropriation A/c
Answer Explanation

MCQs 19: The balance of Revaluation Reserve pertaining to an asset that has been disposed off or retired can be transferred to?

General Reserve A/c Profit & Loss A/c Asset A/c Capital Reserve A/c
Answer Explanation

MCQs 20: Period cost include which of the following ?

selling Expense Direct labor factory overhead selling Expenses & administrative expenses
Answer Explanation

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