Basic Accounting 19

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Objective Questions and Answers of MBA: Basic Accounting 19

Subject: Objective Questions and Answers of MBA: Basic Accounting 19

Part 19: Objective questions and answers of Basic Accounting

 

Q1. Which of the following should be charged in the Profit and Loss Account?

a) Carriage on raw materials

b) Work in progress

c) Office rent

d) Direct materials

 

Q2. A company wishes to pay out all available profits as dividends. Net profit is £26,600.

There are 20,000 8% Preference shares of £1 each, and 50,000 Ordinary shares of £1 each.

£5,000 is to be transferred to General Reserve. What Ordinary dividends are to be paid, in percentage terms?

a) 40 per cent

b) 60 per cent

c) 10 per cent

d) 20 per cent

 

Q3. Which of the following best describes the meaning of 'Purchases'?

a) Goods bought on credit

b) Goods paid for

c) Goods bought for resale

d) Items bought

 

Q4. The descending order in which current assets should be shown in the balance sheet is:

a) Debtors, Stock, Bank, Cash

b) Cash, Bank, Debtors, Stock

c) Stock, Debtors, Cash, Bank

d) Stock, Debtors, Bank, Cash

 

Q5. A debit balance of £100 in a cash account shows that:

a) There was £100 cash in hand

b) The total of cash received was less than £100

c) £100 was the total of cash paid out

d) Cash has been overspent by £100

 

Q6. Credit notes issued by us will be entered in our:

a) Sales Account

b) Returns Outwards Journal

c) Returns Inwards Journal

d) Returns Inwards Account

 

Q7. If we take goods for own use we should:

a) Debit Drawings Account: Credit Purchases Account

b) Debit Drawings Account: Credit Stock Account

c) Debit Sales Account: Credit Stock Account

d) Debit Purchases Account: Credit Drawings Account

 

Q8. Given desired cash float of £200, if £146 is spent in the period, how much will be reimbursed at the end of the period?

a) £53

b) £146

c) £254

d) £200

 

Q9. MC83 If cost price is £90 and selling price is £120, then:

(i) Mark-up is 25 per cent

(ii) Margin is 331/3 per cent

(iii) Margin is 25 per cent

(iv) Mark-up is 331/3 per cent

a) (i) and (ii)

b) (i) and (iii)

c) (iii) and (iv)

d) (ii) and (iv)

 

Q10. Where there is no partnership agreement then profits and losses:

a) Must be shared equally

b) Must be shared in same proportion as capitals

c) Must be shared equally after adjusting for interest on capital

d) None of these

 

Q11. Which of the following is a liability?

a) Motor Vehicles

b) Machinery

c) Creditors for goods

d) Cash at Bank

 

Q12. Which of the following should not be called 'Sales'?

a) Goods sold for cash

b) Sale of item previously included in 'Purchases'

c) Office fixtures sold

d) Goods sold on credit

 

Q13. Which of these best describes fixed assets?

a) Are bought to be used in the business

b) Are expensive items bought for the business

c) Are items which will not wear out quickly

d) Are of long life and are not bought specifically for resale

 

Q14. Discounts received are:

a) Deducted by us when we pay our accounts

b) Deducted when we receive cash

c) Given by us when we sell goods on credit

d) None of these

 

Q15. A firm bought a machine for £3,200. It is to be depreciated at a rate of 25 per cent using the Reducing Balance Method. What would be the remaining book value after 2 years?

a) £2,400

b) £1,800

c) £1,600

d) Some other figure

 

Q16. In the business of C Songster, who owns a clothing store, which of the following is Capital Expenditure?

(i) Shop fixtures bought

(ii) Wages of assistants

(ii) New van bought

(vi) Petrol for van

a) (ii) and (iv)

b) (i) and (iii)

c) (i) and (ii)

d) (ii) and (iii)

 

Q17. Which of the following are not errors of principle?

(i) Motor expenses entered in Motor Vehicles account

(ii) Purchases of machinery entered in Purchases account

(iii) Sale of £250 to C Phillips completely omitted from books

(iv) Sale to A Henriques entered in A Henry's account.

a) (iii) and (iv)

b) (ii) and (iii)

c) (i) and (ii)

d) (i) and (iv)

 

Q18. If creditors at 1 January 20X3 were £2,500, creditors at 31 December 20X3 £4,200 and payments to creditors £32,000, then purchases for 20X3 are:

a) £31,600

b) £38,700

c) £33,700

d) £30,300

 

Q19. Any loss on revaluation is:

a) Debited to old partners in old profit-sharing ratios

b) Credited to old partners in old profit-sharing ratios

c) Credited to new partners in new profit-sharing ratios

d) Debited to new partners in new profit-sharing ratios

 

Q20. Which of the following is correct?

a) Profit reduces capital

b) Profit increases capital

c) Capital can only come from profit

d) Profit does not alter capital

 

Part 19: Objective questions and answers of Basic Accounting

 

Q1. Answer c

 

Q2. Answer a

 

Q3. Answer c

 

Q4. Answer d

 

Q5. Answer a

 

Q6. Answer c

 

Q7. Answer a

 

Q8. Answer b

 

Q9. Answer c

 

Q10. Answer a

 

Q11. Answer c

 

Q12. Answer c

 

Q13. Answer d

 

Q14. Answer a

 

Q15. Answer b

 

Q16. Answer b

 

Q17. Answer a

 

Q18. Answer c

 

Q19. Answer a

 

Q20. Answer b

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