Basic Accounting 16

Objective Questions and Answers of MBA: Basic Accounting 16

Subject: Objective Questions and Answers of MBA: Basic Accounting 16

Part 16: Objective questions and answers of Basic Accounting

Q1. If you want to deposit money into bank, what will be yours choice?

a) Compounding annually

b) Compounding Semi-annually

c) Compounding monthly

d) Compounding daily

Q2. Which of the following is the activity which finance people are involved?

a) Investing decisions

b) Marketing decisions

c) Promotion decisions

d) None of Above

Q3. When bonds are issued, under which of the following category the value of the bond appears?

a) Equity

b) Fixed assets

c) Short term loan

d) Long term loan

Q4. PV of lump sum is simply termed as current value of

a) Present payment

b) Future payment

c) Annuity payment

d) Discount payment

Q5. Creditors turnover ratios comes under the category of

a) Activity ratios

b) Asset management ratios

c) All of the above

d) None of the above

Q6. If bank giving 12% interest rate per year, then per month it will be

a) 1%

b) 12%

c) 5%

d) 6%

Q7. The Yield to Maturity on a bond is

a) Equal to the Coupon Rate divided by the Market Price

b) The Current Required Market Rate

c) Equal to the Annual Interest divided by the Face Value

d) Another name for the coupon rate.

Q8. A decrease in the firm's receivable turnover ratio means that ______________.

a) Inventories have gone up

b) It is collecting credit sales more slowly than before

c) Cash sales have gone down

d) None of above

Q9. The Coupon Rate for a Bond is best defined as the

a) Annual interest divided by the current market price

b) Annual interest divided by the face value

c) Annual interest divided by the clean market price

d) All of Above

Q10. Quick ratios are also called ______________

a) Super ratios

b) Acid-test ratios

c) Cash ratios

d) None of the above

Q11. Net present value _____________

a) Is equal to the initial investment in a project

b) Is equal to the present value of the project benefits

c) Is equal to zero when the discount rate used is equal to the IRR

d) Is simplified by the fact that future cash flows are easy to estimate

Q12. Which of the following is the variability of return on stocks or portfolios associated with changes in return on the market as a whole?

a) Systematic risk

b) Standard deviation

c) Unsystematic risk

d) Coefficient of variation

Q13. Bonds are hybrid of

a) Annuity due + Lumpsum amount

b) Ordinary annuity + Lumpsum amount

c) Annuity due + Ordinary annuity

d) Perpetuity + Lumpsum amount

Q14. A Bond that pays no interest payments and sells at a deep discount is called

a) Bond

b) Zero Coupon

c) Convertible

d) Tax-free

Q15. Given the following, what is the amount of Capital? Assets: Premises £20,000; Stock

£8,500; Cash £100. Liabilities: Creditors £3,000; Loan from A Adams £4,000

a) £21,100

b) £21,400

c) £21,600

d) £32,400

Q16. Given figures showing: Sales £8,200; Opening stock £1,300; Closing stock £900;

Purchases £6,400; Carriage inwards £200, the cost of goods sold figure is:

a) Another figure

b) £6,200

c) £6,800

d) £7,000

Q17. 'Posting' the transactions in bookkeeping means:

a) Making the second entry of a double entry transaction

b) Entering items in a cash book

c) Making the first entry of a double entry transaction

d) Something other than the above

Q18. We originally sold 25 items at £12 each, less 331/3 per cent trade discount. Our customer now returns 4 of them to us. What is the amount of credit note to be issued?

a) £36

b) £30

c) £32

d) £48

Q19. A credit balance brought down on a Rent Account means:

a) We have paid too little in rent

b) We have paid too much rent

c) We owe that rent at that date

d) We have paid that rent in advance at that date

Q20. Which of the following do not affect trial balance agreement?

(i) Sales £105 to A Henry entered in P Henry's account

(ii) Cheque payment of £134 for Motor expenses entered only in Cash Book

(iii) Purchases £440 from C Browne entered in both accounts as £404

(iv) Wages account added up incorrectly, being totaled £10 too much.

a) (i) and (iii)

b) (ii) and (iii)

c) (i) and (iv)

d) (iii) and (iv)

Part 16: Objective questions and answers of Basic Accounting