Basic Accounting 11

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Objective Questions and Answers of MBA: Basic Accounting 11

Subject: Objective Questions and Answers of MBA: Basic Accounting 11

Part 11: Objective questions and answers of Basic Accounting


Q1. Bookkeeping is an ______________ of correctly recording of business transition.

a) Art and Science

b) Art

c) Science

d) Art or Science


Q2. Fixed assets and current assets are categorized as per concept of:

a) Separate entity

b) Going concern

c) Consistency

d) Time period


Q3. Profit from sale of assets is example for–

a) Revenue Profit

b) Capital Profit

c) Loss

d) None of these


Q4. The convention of conservatism when applied to the balance sheet result in.

a) Understand the asset

b) Understand the liabilities

c) Overstatement of capital

d) None of these


Q5. The return of goods by the customer should be debited to

a) Customer a/c

b) Sales return a/c

c) Goods a/c

d) Purchase return a/c


Q6. The rent paid to land lord to be credited to

a) Land lord a/c

b) Rent a/c

c) Cash a/c

d) Tenant a/c


Q7. A business has the following items in it:

Land Rs.1,000,000

Machinery Rs.20,000

Cash Rs.10,000

Debt Rs.0

What is the valve of owner’s equity?

a) Rs.1020000

b) Rs.1010000

c) Rs.1030000

d) None of the above


Q8. A business has the following items in it:

Land Rs.1, 500,000

Machinery Rs.80, 000

Cash Rs.20, 000 

Owner equity Rs.900, 000

Loan Rs.500, 000


a) Rs.200, 000

b) Rs.700, 000

c) Rs.800, 000

d) Rs1, 100,000


Q9. XYZ ltd. has provided the following information about its balance sheet:

Cash Rs.100

Accounts Receivable Rs.500

Stock holder equity Rs.700

Accounts Payable Rs.200

Bank Loan Rs.1,000

Based on the information provided, how much are XYZ ltd. Total liabilities?

a) Rs.200

b) Rs.1900

c) Rs.1200

d) Rs.1700


Q10. Accounting concepts are based on

a) Certain assumptions

b) Certain facts and figures

c) Certain accounting records

d) Practice experience


Q11. Financial accounting deals with:

a) Determination of cost

b) Determination of profit

c) Determination of price

d) Determination of selling price


Q12. Content of income statement

a) Trading account

b) Profit and loss account

c) Balance sheet

d) All of the above


Q13. Outstanding salary account is a ______________ account

a) Nominal account

b) Real Account

c) Artificial person’s account

d) Representative personal account


Q14. Conversion cost includes cost of converting ______________ into ______________

a) Raw material, WIP

b) Raw material, Finished goods

c) WIP, Finished goods

d) Finished goods, Saleable goods


Q15. ______________ is a summary of all transactions relating to particular account.

a) Balance sheet

b) Trial Balance

c) Ledger

d) Journal


Q16. Modern Method of Accounting was introduced by

a) M. S. Gosav

b) Wheldon

c) LucoPacioli

d) R. N. Carter


Q17. The use of management accounting is

a) Compulsory

b) Optional

c) Obligation

d) Statutory requirement


Q18. Which group of ratios relates profits to sales and investment?

a) Liquidity ratios

b) Debt ratios

c) Coverage ratios

d) Profitability ratios


Q19. When a Bond's Yield to Maturity is greater than the Bond's Coupon Rate, the Bond

a) Is selling at a Premium

b) Has reached its Maturity Date

c) Is priced at Par

d) Is selling at a Discount


Q20. Current ratio is 2:5. Current Liability is Rs.30,000. The Net working Capital is

a) Rs. 18,000

b) Rs. 45,000

c) Rs. (45,000)

d) Rs. (18000)


Part 11: Objective questions and answers of Basic Accounting


Q1. Answer b


Q2. Answer b


Q3. Answer b


Q4. Answer a


Q5. Answer b


Q6. Answer c


Q7. Answer c


Q8. Answer a


Q9. Answer b


Q10. Answer b


Q11. Answer b


Q12. Answer d


Q13. Answer d


Q14. Answer b


Q15. Answer c


Q16. Answer c


Q17. Answer b


Q18. Answer d


Q19. Answer d


Q20. Answer d

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