Competitive Exams: Commerce MCQs (Practice-Test 1 of 99)

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  1. Which one of the following is an ingredient of the entity convention of accounting?

    1. The owner of a unit and the unit itself is one and the same

    2. The owner and the unit are treated separately

    3. No separate accounts for the unit is required

    4. The unit is a private affair of the owner, hence no accounting is required

  2. Which one of the following accounting equations is correct?

    1. Assets = Owner's Equity

    2. Assets = Liabilities + Owner's Equity

    3. Assets = Liabilities-Owner's Equity

    4. Assets + Liabilities = Owner's Equity

  3. Which one of the following accounting conventions stipulates that contingent assets appear as a footnote in the balance sheet?

    1. Materiality

    2. Consistency

    3. Disclosure

    4. Conservatism

  4. Which one of the following is NOT related to the convention of conservatism?

    1. Making provision for doubtful debts and discount on debtors in anticipation of actual bad debts and discount

    2. Valuation of stock at Market Price or Cost Price which ever is higher

    3. Charging of small capital items as Revenue

    4. Adopting Written-down Value

    Method of depreciation as against

    Straight-line Method

  5. Match List I (Standards issued by ICAI) with List II (Objects/areas covered) and select the correct answer:

    List-I List-II
    1. AS-1

    2. AS-2

    3. AS-3

    4. AS-9

    1. Valuation of Inventories

    2. Cash Flow Statement

    3. Revenue Recognition

    4. Disclosure of Accounting Policies

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    • B
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    • D
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  6. On 31st March 2001, the closing stock of X Ltd. Was Rs. 3, 45, 000. On April 1, 2001, stock of Rs. 2, 25, 000 was destroyed by fire. The company closes its account on 31st March. If the balance sheet of the company on 31st March 2001 was finalized on 25th April 2001, then the balance sheet will show the closing stock at

    1. Rs. 3, 45, 000 with no mention of fire

    2. Rs. 1, 20, 000 with no mention of fire

    3. Rs. 3, 45, 000 showing loss by fire in footnote

    4. Rs. 1, 20, 000 showing loss by fire in footnote

  7. Consider the following The investment portfolio of a business as on 31 − 12 − 2000 stood as follows

    1. 8% Debentures of X Co. Ltd (Rs. 6, 000). Interest payable on 31st March and 30th September.

    2. 7% Debentures of Y Co. Ltd (Rs. 4, 000). Interest payable on 30th June and 31st December.

    3. 10% Debentures of Z Co. Ltd (Rs. 9, 000). Interest payable on 1st June and 1st December.

    Amount of interest accrued on the closing date will be.

    1. Rs. 335

    2. Rs. 1, 025

    3. Rs. 195

    4. Rs. 830

  8. Which one of the following is correct with respect to going concern convention?

    1. The enterprise is not going to terminate its operations in the period ahead

    2. The enterprise may go out of business in the next accounting period

    3. The enterprise may not divest or diversify its operational spheres

    4. The enterprise may not revalue its assets during the current accounting

    Period

  9. Consider the following statements: Continuous evaluation of the relevance of generally accepted accounting principles is required, because

    1. They are the everlasting operating realities.

    2. The environment, in which business operates, undergoes constant change.

    3. The business enterprises can develop financial statements of value to the end-users.

    4. Realities of social, economic and legal framework have to be considered by professional accountants. Which of the above statements are correct?

      1. 1, 2 and 3

      2. 2, 3 and 4

      3. 3 and 4

      4. 1 and 4

  10. Which one of the following will lead to understate merit of net profit?

    1. Amortization of Fictitious Assets

    2. Treating capital expenditure as revenue expenditure

    3. Treating revenue expenditure as capital expenditure

    4. Creation of general reserve

  11. Which one of the following items is considered revenue expenditure?

    1. Expenditure by way of maintenance that has increased productivity

    2. Repair of gearbox in a car that has enhanced its operational life

    3. Complete overhaul of a machine, spending around 20% of its value

    4. Changing a small component of a machine to maintain its operating efficiency

  12. After the construction of their new factory building M/s XYZ Co. Shifted to it. During this process Rs. 20, 000 were s1d on pulling down the old structure and Rs. 2, 000 were spent on shifting the stocks to new building. These expenditures are to be classified as

    1. Capital expenditure

    2. Revenue expenditure

    3. Capital and Revenue expenditure respectively

    4. Deferred Revenue expenditure

  13. Match List I with List II and select the correct answer

    List-I List-II
    1. Reducing capital

    2. Sales greater than Variable cost

    3. Sales greater than Break-even sales

    4. Take-over of firm

    1. Contribution margin

    2. Reorganization

    3. Absorption

    4. Margin of safety

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  14. Preparation of Trial Balance helps, mainly, in

    1. summarizing business transactions

    2. verifying that ‘generally accepted accounting principles’ have been observed

    3. finalizing the ‘sources and uses of funds’ statement

    4. locating errors, if any, in books of accounts

  15. Match List I with List II and select the correct answer:

    List-I List-II
    1. Goodwill

    2. Overdraft

    3. Preliminary expenses

    4. Premium on issue of Shares

    1. Current liability

    2. Fixed assets

    3. Reserves and surpluses

    4. Fictitious assets

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  16. If opening stock = Rs. 2, 45, 000; purchases = Rs. 15, 00, 000; sales = Rs. 17, 40, 000 and rate of gross profit = 20% on cost of goods sold, then the closing stock would be at

    1. Rs. 3, 53, 000

    2. Rs. 2, 95, 000

    3. Rs. 2, 45, 000

    4. Rs. 1, 95, 000

Discussions & Questions

  • How Can I get answers of the mcq (practise set 1-99) in commerce section ( - on ))

    1 Answer

    We are currently not providing answer key for commerce. However, solved commerce questions are available at - https://www.doorsteptutor.com/Exams/UGC/

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  • Objective question set with answer for prepare JAO exam 2015 ( - on ))

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    We are not dealing with BSNL JAO exam presently, we will be including this exam ASAP.

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