Basic Accounting 6

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Objective Questions and Answers of MBA: Basic Accounting 6

Subject: Objective Questions and Answers of MBA: Basic Accounting 6

Part 6: Objective questions and answers of Basic Accounting

 

Q1. If the total assets of the company amount to Rs 1,50,000 and owners’ equity is Rs 70,000, the amount of liabilities will be

a) Rs 70,000

b) Rs 80,000

c) Rs 90,000

d) Rs 1,00,000

 

Q2. The convention of conservatism is applicable

a) In providing for discount on creditors

b) In making provision for bad doubtful debts

c) Providing depreciation

d) None of these

 

Q3. Which of the following items would not fall under the definition of an asset?

a) Land

b) Machine

c) Cash

d) Milk

 

Q4. Which of the following is time span into which the total life of a business is divided for the purpose of preparing financial statements?

a) Fiscal year

b) Calendar year

c) Accounting period

d) Accrual period

 

Q5. Preliminary expenses are recorded in ______________

a) Equity and liabilities-Liability side of B/S

b) Current liabilities- Liability side of B/S

c) Fixed assets- Asset side of B/S

d) Asset side of B/S

 

Q6. Which of the following is not a fixed asset?

a) Building

b) Bank Balance

c) Plant Patents

d) Goodwill

 

Q7. The reduction in the value of the fixed assets which can arise due to time factor is

a) Discount

b) Depreciation

c) Reduction

d) None of the above

 

Q8. Which of the following is not regarded as the fundamental accounting concept?

a) The going concern concept

b) The separate entity concept

c) The prudence (conservatism) concept

d) Correction concept

 

Q9. Marginal costing is concerned with:

a) Fixed cost

b) Variable cost

c) Semi variable cost

d) None of the above

 

Q10. Cash Purchases:

a) Increases assets

b) Results in no change in the total assets

c) Decreases assets

d) Increases liability

 

Q11. Sales are equal to:

a) Cost of goods sold + gross profit

b) Cost of goods sold – gross profit

c) Gross profit- Cost of goods sold

d) None of the above

 

Q12. The work of factory employees that can be physically associated with converting raw material into finished goods is classified as) Manufacturing overhead

b) Indirect materials

c) Indirect labour

d) Direct labour

 

Q13. According to which concept business is treated as a unit apart from owner

a) Dual concept

b) Divider concept

c) Entity concept

d) Landlord concept

 

Q14. Making the provision for doubtful debts and discount on debtors in anticipation of actual bad debts and discount is an example for which concept

a) Conservatism concept

b) Continuity concept

c) Realization concept

d) All of these

 

Q15. Net profit is calculated in

a) Trading a/c

b) Balance sheet

c) Profit & loss a/c

d) Trial balance.

 

Q16. Accounting principles are divided into two types. These are ______________

a) Accounting Concepts

b) Accounting Conventions

c) Accounting Standards

d) Accounting Concepts &Accounting Conventions

 

Q17. The basic function of financial accounting is to

a) Record all business transaction

b) Interpret financial data

c) Assist the management in performing function effectively

 

Q18. Accountant should follow the same principles of accounting continuously is as per which accounting convention

a) Convention of conservatism

b) Convention of full disclosure

c) Convention of consistency

d) None of these

 

Q19. Debit all expenses and losses Credit all gains and income.

a) Real a/c

b) Personal a/c

c) Nominal a/c

d) None of these

 

Q20. According to the money measurement concept the following will be recorded in the books of accounts of the business

a) Health of the managing director of the company

b) Quality of company goods

c) Value of plant and machinery

d) Health of labour in factory

 

Part 6: Objective questions and answers of Basic Accounting

 

Q1. Answer b

 

Q2. Answer b

 

Q3. Answer d

 

Q4. Answer c

 

Q5. Answer d

 

Q6. Answer b

 

Q7. Answer b

 

Q8. Answer d

 

Q9. Answer b

 

Q10. Answer c

 

Q11. Answer b

 

Q12. Answer d

 

Q13. Answer c

 

Q14. Answer a

 

Q15. Answer c

 

Q16. Answer d

 

Q17. Answer b

 

Q18. Answer c

 

Q19. Answer c

 

Q20. Answer c

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