Competitive Exams: Commerce MCQs (Practice-Test 55 of 99)

  1. Consider the following statements:

    1. Closing stock is valued on the principle of cost price or market price whichever is lower

    2. The manufactured goods in a year are transferred from the manufacturing account to trading account at selling price

    3. The going concern concept assumes that a business will continue its operations indefinitely

    4. Revenue is not increased by taking loans although assets and liabilities are increased

    Which of the above statements are correct?

    1. 1, 3 and 4

    2. 1 and 2

    3. 2 and 3

    4. 2, 3 and 4

  2. In case of disclosure of accounting policies, the following fundamental accounting assumptions may NOT be required to be stated if they are followed in the preparation of final accounts of a company

    1. Materiality and accounting period

    2. Going concern and consistency

    3. Accrual basis of accounting

    4. Conservatism and accounting period

    Select the correct answer using the codes given below:

    1. 2 and 3

    2. 1 and 4

    3. 1, 2 and 3

    4. 1, 2, 3 and 4

  3. Match List I (Accounting Standards (AS) issued by the Institute of Chartered Accountants of India) with List II (Standard on) and select the correct answer

    List-I List-II
    1. AS-1

    2. AS-2

    3. AS-3

    4. AS-6

    1. Valuation of Inventories

    2. Disclosure of Accounting Policies

    3. Depreciation Accounting

    4. Cash Flow Statement

    • A
    • B
    • C
    • D
      • 2
      • 3
      • 4
      • 1
      • 4
      • 1
      • 2
      • 3
      • 4
      • 3
      • 2
      • 1
      • 2
      • 1
      • 4
      • 3
  4. Which one of the following pairs is not correctly matched?

      • Accounting equation
      • Assets-Liabilities-Capital
      • Accounting year
      • 1st April 31st March
      • Accrual concept
      • Recognizing revenue on receipt of cash
      • Cost concept
      • Recognizing transactions at historical cost
  5. Included in production overhead of hardware division of Rs. 3, 00, 000 is Rs. 50, 000 being the cost of prototype computers manufactured by the company itself. These are not to be sold but to be kept for demonstrating alive the medical imaging software programme. The cost of prototype computers of Rs. 50, 000 should be treated as

    1. fixed assets

    2. deferred revenue expenditure

    3. production overhead cost of hardware division

    4. advertising cost

  6. The loss on the sale of old furniture is debited to

    1. profit & loss account

    2. furniture account

    3. trading account

    4. depreciation account

  7. If the purchases made during the year were Rs. 60, 000, the balance of stock in trade at the beginning and at the end of the year were Rs. 12, 000 and Rs. 9, 000 respectively and the gross profiting sale was 1/5th then which one of the following represents the figure of gross profit for the year?

    1. Rs. 15.750

    2. Rs. 14, 000

    3. Rs. 12.500

    4. Rs. 17, 250

  8. Given: Opening stock: Rs. 5, 000 Closing stock: Rs. 7, 000 Purchase: Rs. 10, 000 Manufacturing expenses: Rs. 20, 000 Loss of materials due to fire: Rs. 1, 000 The cost of production would be

    1. Rs. 28, 000

    2. Rs. 29, 000

    3. Rs. 27, 000

    4. Rs. 30, 000

  9. A and B are sharing profits in the ratio of 2: 1. They admit C into the firm with 1/4th share in profits for which he brings Rs. 12.000 as his share of capital. Therefore, the adjusted capital of B will be

    1. Rs. 48, 000

    2. Rs. 12, 000

    3. Rs. 16, 000

    4. Rs. 24, 000

  10. While making an adjusting entry in respect of interest on capital, we credit

    1. capital account

    2. profit & loss account

    3. interest on capital account

    4. drawing account

  11. A and B are partners sharing profits \and losses, in proportion 2: 1. They admist new partner C whom they give 1/5th share in profits. The new profit-sharing ratio will be

    1. 8: 4: 3

    2. 3: 2: 1

    3. 2: 1: 1

    4. 4: 2: 1

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

    List-I List-II
    1. Revaluation Account

    2. Realization Account

    3. Piecemeal Distribution

    4. Gaining Ratio

    1. Retirement of a partner

    2. Maximum loss method

    3. Admission of a partner

    4. Dissolution of partnership firm

    • A
    • B
    • C
    • D
      • 2
      • 1
      • 3
      • 4
      • 3
      • 4
      • 2
      • 1
      • 2
      • 4
      • 3
      • 1
      • 3
      • 1
      • 2
      • 4
  13. Dividend can be paid generally out of

    1. share premium account

    2. capital redemption reserve account

    3. current years profits

    4. All of these

  14. The following four assets normally appear in the balance sheet:

    1. Advance salary

    2. Copyright

    3. Preliminary expenses

    4. Loose tools

    The correct order in which these are to appear in the balance sheet if drawn in order of permanency will be

    1. 4, 2, 1, 3

    2. 3, 2, 4, 1

    3. 1, 2, 3, 4

    4. 2, 4, 1, 3

  15. What is the correct sequence of the following items of current assets in the balance sheet of a company as per the Companies Act, 1956?

    1. Cash balance on hand

    2. Interest accrued on investments

    3. Stores and spare parts

    4. Loose tools

    5. Sundry debtrs

    6. Stock-in-trade

    7. Work-in-progress

    Select the correct answer using the codes given below:

    1. 2, 5, 4, 6, 7, 3, 1

    2. 1, 2, 4, 3, 5, 7, 6

    3. 7, 6, 4, 1, 2, 5, 3

    4. 2, 3, 4, 6, 7, 5, 1