Competitive Exams: Commerce MCQs (Practice-Test 27 of 99)

  1. M/s. ABC Ltd. Forfeited 20 shares of Rs. 10 each, Rs. 8 called up, on which X had paid application and allotment money of Rs. 2 and Rs. 3 respectively. These shares were re-issued to Y at Rs. 6 each fully paid. What was the balance in share forfeiture account before the shares were re-issued?

    1. Rs. 40

    2. Rs. 60

    3. Rs. 100

    4. Rs. 160

  2. X Ltd. Issued 1, 000 9% preference shares of Rs. 100 each at a premium of 10%, redeemable at par after 5 years. What is the cost of preference capital of the company?

    1. 3.5%

    2. 6.7%

    3. 5.3%

    4. 7.6%

  3. A firm employs Rs. 10, 00, 000 as capital. Investors expect an income of 15%. The actual profits (likely to be continued) is Rs. 2, 00, 000. What will be the value of Goodwill of the firm according to Super Profit method if it is to be valued at 3 years purchase?

    1. Rs. 50, 000

    2. Rs. 1, 50, 000

    3. Rs. 2, 00, 000

    4. Rs. 2, 15, 000

  4. Income and Expenditure account of a college is credited with which of the following?

    1. Tuition fees paid by the students

    2. Cost of science laboratory equipments

    3. Fines realized by the authority from students

    4. Price of prizes

    Select the correct answer using the codes given below

    1. 1 and 2

    2. 2 and 3

    3. 1 and 3

    4. 2 and 4

  5. The following information is available regarding subscription from the members of X Club during the year 2003 − 04 Subscription Income: Rs. 28, 000 Outstanding subscription at the end of the year: Rs. 1, 160 Outstanding subscription at the beginning of the year: Rs. 360 Subscription received in advance: Rs. 640 What is the amount of receipt of the club from subscription during the year 200.3 − 04?

    1. Rs. 28, 160

    2. Rs. 29, 000

    3. Rs. 27, 840

    4. Rs. 29, 520

  6. Consider the following adjusting entries:

    1. Outstanding expenses: Expense A/c Dr To outstanding expense A/c

    2. Prepaid expenses: Expense A/c Dr To prepaid expenses A/c

    3. Income earned and not received: Income A/c Dr To outstanding income A/c

    4. Income received in advance: Income

    A/c Dr To prepaid income A/c

    Which of the adjusting entries given above is/are correct?

    1. 1 and 4

    2. 2 and 3

    3. 1 only

    4. 1, 2, 3 and. 4

  7. A steel fabrication firm receives an income for service rendered by its design engineer to a friendly party. How should this be treated in the profit and loss account of the firm?

    1. Should be shown as sales income

    2. Should be shown as miscellaneous income

    3. Should be shown as non-operating income

    4. Not an income of the firm

  8. The balances in the books of X, a sole proprietor were: Opening stock Rs. 17, 000; Purchases Rs. 52, 000; Wages Rs. 46, 500; Fuel Rs. 15, 000; Sales Rs. 1, 45, 000 and Closing stock on hand Rs. 25, 000 whose net realizable value was Rs. 28, 000. The Gross Profit calculated would be:

    1. Rs. 39, 500

    2. Rs. 42, 500

    3. Rs. 54, 500

    4. Rs. 57, 000

  9. Which one of the following Accounting Standard is not having the correct title?

    1. AS. 22 Accounting for taxes on income

    2. AS-20 Earning per share

    3. AS. 24 Accounting for borrowings

    4. AS-18 Related party disclosures

  10. A sum of Rs. 50, 000 was spent by a factory in overhauling its existing plant and machinery and it enhanced its working life by five years. The aforesaid expenditure is

    1. Revenue expenditure

    2. Deferred revenue expenditure

    3. Capital expenditure

    4. Partly capital and partly revenue expenditure

  11. If a radio seller-proprietor buys a radio for his personal use from out of business funds, the amount paid for the radio will be treated as ‘drawings’ of the proprietor because of the

    1. Dual Aspect Concept

    2. Going Concern Concept

    3. Business Entity Concept

    4. Matching Concept

  12. Which of the following is not the correct symptom of over-capitalization?

    1. When a company earns less than what it should have earned as a fair rate of return on its total capital.

    2. When book value of shares is lower than their real value.

    3. When earnings do not justify the amount of capital invested.

    Select the correct answer using the codes given below

    1. 1 only

    2. 2 only

    3. 1 and 2

    4. 2 and 3

  13. Consider the following statements As per section 46AA of the Companies (Second Amendment) Act; 2002, sick industrial company means an industrial company which has

    1. the accumulated losses in any financial year equal to fifty percent or more of its average net worth during four years immediately preceding such financial year

    2. failed to repay its debts within any three consecutive quarters on demand made in writing for its repayments. By a creditor or creditors of such company.

    Which of the statements given above is/are correct?

    1. 1 only

    2. 2 only

    3. Both 1 and 2

    4. Neither 1 nor 2

  14. Match List I (Accounting Concept) with List II (Principle involved) and select the correct answer using the codes given below:

    List-I List-II
    1. Consistency

    2. Comparability

    3. Conservatism

    4. Disclosure

    1. Losses are anticipated and accounted for in advance but profits are not accounted for until realized

    2. All the relevant financial information should be summarized and presented in the accounting statements

    3. Accounting procedures in an entity should be followed uniformly from period to period

    4. Accounting statements of different periods of an entity and those of different entities of a period should be based on the same accounting principles and procedures

    5. Personal judgment of accountants should not influence accounting statements

    • A
    • B
    • C
    • D
      • 4
      • 5
      • 1
      • 3
      • 1
      • 3
      • 2
      • 5
      • 4
      • 3
      • 1
      • 5
      • 1
      • 5
      • 2
      • 3
  15. Consider the following statements about balance sheet of a company

    1. It is always prepared from the point of view of the firm, company or business, and not from that of its owners, creditors, directors or employees.

    2. The financial relationship of the business to its owners is shown in the amount of capital, reserves and undistributed profits.

    3. It always relates to a particular period of time. Which of the statements given above is/are correct?

      1. 1, 2 and 3

      2. 1 and 2

      3. 1 only

      4. 2 only