Basic Accounting 8

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Objective Questions and Answers of MBA: Basic Accounting 8

Subject: Objective Questions and Answers of MBA: Basic Accounting 8

Part 8: Objective questions and answers of Basic Accounting

 

Q1. Transferring the debit and credit item from the journal to the respective accounts is called

a) Compound Journal

b) Ledger

c) Trial balance

d) None of these

 

Q2. Retained earnings will change over time because of several factors. Which of the following factors would explain an increase in retained earnings?

a) Net Loss

b) Net income

c) Dividend

d) Investment by share holder

 

Q3. The trial balance is ______________

a) Is a formal financial statement.

b) Is used to prove that there are no errors in the journal or ledger.

c) Provides a listing of every account in the chart of accounts.

d) Provides a listing of the balance of each account in active use.

 

Q4. Which of the following functions is managerial accounting intended to facilitate?

a) Planning

b) Decision making

c) Control

d) All of these

 

Q5. Business entity concept distinguishes between:

a) Individual and business

b) Business and business

c) Owners

d) Debtors and creditors

 

Q6. User of financial statement is:

a) Management

b) Creditors

c) Bankers

d) All of the above

 

Q7. The Cash account on the balance sheet should not include which of the following items?

a) Travel advances to employees

b) Currency

c) Money orders

d) Deposits in transit

 

Q8. Which of the following equations properly represents a derivation of the fundamental accounting equation?

(a). Assets + liabilities = Owner Equity

(b). Asset = Owner Equity

(c). Cash = Assets

(d). Assets – Liabilities = Owner Equity

a) Only (a)

b) Both (a) (b)

c) All (a)(b)(c)(d)

d) None of these

 

Q9. Contingent liabilities should be recorded in the accounts when:

a) It is probable that the future event will occur.

b) The amount of the liability can be reasonably estimated.

c) Both (a) and (b).

d) Either (a) or (b).

 

Q10. Financial statements are:

a) Estimates of facets

b) Anticipated facts

c) Recorded facts

 

Q11. Which does not comes under the head of asset:

a) Fixed asset

b) Investment

c) Current asset

d) Owners equity

 

Q12. The work of a bookkeeper is ______________ in nature.

a) Analytical

b) Clerical

c) Executive

d) Non executive

 

Q13. Salary is one of the ______________ expenses

a) Capital

b) Revenue

c) Direct

d) Non – cash

 

Q14. The practice of appending notes regarding contingent liabilities in accounting statement is pursuant of

a) Convention of consistency

b) Money measurement concept

c) Convention of conservatism

d) Convention of disclosure

 

Q15. Because of automation, which component of product cost is declining?

a) Direct labour

b) Direct materials

c) Manufacturing overhead

d) Advertising

 

Q16. Calculate the prime cost from the following information:

Direct material purchased: Rs. 1,00,000

Direct material consumed: Rs. 90,000

Direct labour: Rs. 60,000

Direct expenses: Rs. 20,000

Manufacturing overheads: Rs. 30,000

a) Rs. 1,80,000

b) Rs. 2,00,000

c) Rs. 1,70,000

d) Rs. 2,10,000

 

Q17. Cost accounting information can be used for:

a) Budget control and evaluation.

b) Determining standard costs and variances.

c) Pricing and inventory valuation decisions.

d) All of these

 

Q18. A manufacturing process requires small amounts of glue. The glue used in the process is classified as

a) A prime cost

b) An indirect material

c) A direct material

d) Miscellaneous expense

 

Q19. Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?

a) Direct materials, direct labor, and factory overhead.

b) Direct materials and direct labor only.

c) Direct materials, direct labor, factory overhead, and administrative overhead.

d) Direct labor and factory overhead.

 

Q20. Showing purchased office equipment’s in financial statements is the application of which accounting concept?

a) Historical cost convention

b) Materiality

c) Prudence

d) Matching concept

 

Part 8: Objective questions and answers of Basic Accounting

 

Q1. Answer b

 

Q2. Answer b

 

Q3. Answer d

 

Q4. Answer d

 

Q5. Answer a

 

Q6. Answer d

 

Q7. Answer a

 

Q8. Answer d

 

Q9. Answer c

 

Q10. Answer c

 

Q11. Answer d

 

Q12. Answer b

 

Q13. Answer b

 

Q14. Answer c

 

Q15. Answer a

 

Q16. Answer c

 

Q17. Answer d

 

Q18. Answer b

 

Q19. Answer c

 

Q20. Answer b

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