Competitive Exams: Commerce MCQs (Practice-Test 74 of 99)

    • Assertion (A): External alignment of wage rates is possible only when internal alignment is achieved.
    • Reason (R): Internal alignment of wage rates is dependent on increase in profits.
    • Assertion (A): Job evaluation facilitates framing a suitable incentive system for workers.
    • Reason (R): Incentives can be rationally based on timesaving by workers on a particular job, which can rightly be known from job evaluation.
    • Assertion (A): For a company, every debt is not a loan, but every loan is a debt.
    • Reason (R): In the case of deposit of money with the company, it is the depositor who is the prime mover, whereas in the case of loan it is the company who is the prime mover.
  1. Consider the following activities connected with the accounting information system

    1. Preparation of the table of accounting

    2. Communication of accounting information

    3. Preparation of accounting information report

    4. Collection of accounting data

    The correct sequence of these activities is

    1. 4, 1, 3, 2

    2. 1, 4, 3, 2

    3. 4, 3, 1, 2

    4. 1, 2, 4, 3

  2. A cooperative store having a turnover of Rs. 10 lakhs and profit of Rs. 50, 000 purchase locks costing Rs. 300 for use in the shop. The accountant charged it in the P & L A/c of current year, but the auditor raised an objection saying that it should be capitalised. On which one of the following conventions could the accountant be defended?

    1. Disclosure

    2. Materiality

    3. Conservation

    4. Consistency

  3. Consider the following statements Notes forming part of accounts of companies invariably display significant Accounting Policies

    1. as per the requirement of SEBI guidelines for disclosure and investor protection

    2. because it is a mandatory requirement under the Companies Act, 1956

    3. as required by AS-1-disclosure of accounting policies, which is mandatory

    4. as it is required under the listing agreement with the stock exchanges

    Which of the above statements are correct?

    1. 1, 2 and 3

    2. 2 and 3

    3. 2, 3 and 4

    4. 1 and 4

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

    List-I List-II
    1. Showing joint life policy at

    2. Team spirit and dedication of

    3. Methods of depreciation

    4. Fixed assets are recorded

    1. Concept of consistency surrender value

    2. Concept of cost employees are not recorded in the books of accounts

    3. Concept of conservatism inventory valuation should not be changed frequently

    4. Concept of money measurement at ‘cost less depreciation’

    • A
    • B
    • C
    • D
      • 3
      • 4
      • 1
      • 2
      • 3
      • 4
      • 2
      • 1
      • 4
      • 3
      • 1
      • 2
      • 4
      • 3
      • 2
      • 1
  5. If depreciation is calculated on the basis of formula, n (n + 1) then which one of the following methods is adopted? 2

    1. Diminishing value method

    2. Annuity method

    3. Sum of years digits method

    4. Sinking fund method

  6. Consider the following methods of inventory valuation

    1. Simple average

    2. First in first out

    3. Last in first out

    4. Weighted average.

    Which of these methods DO NOT match current cost with current revenues?

    1. 1 and 3

    2. 1, 2 and 3

    3. 1.2 and 4

    4. 2, 3 and 4

  7. Consider the following fundamental assumptions

    1. Prudence

    2. Going concern

    3. Accrual

    4. Consistency

    As per Accounting Standard-1, which of these assumptions are taken into consideration while preparing financial statements?

    1. 1 and 4

    2. 2 and 3

    3. 1, 2, 3, and 4

    4. 2, 3 and 4

  8. Which one of the following statements is correct?

    1. Preliminary expenses are revenue expenses

    2. Cost of issuing shares and debentures and raising loans, such as legal expenses and underwriting commission are capital expenditure

    3. Interest on loan is a capital expenditure

    4. Cost of machinery purchased is a revenue expenditure

  9. The ending balance of owner's equity is Rs. 21, 000. During the year, the owner contributed Rs. 6, 000 and withdrew Rs. 4, 000. If the firm had Rs. 8, 000 net income for the year, what was the owners equity at the beginning?

    1. Rs. 23, 000

    2. Rs. 21, 000

    3. Rs. 19, 000

    4. Rs. 11, 000

  10. The ending balance of the accounts receivable account was Rs. 12, 000. Services billed to customers for the period were Rs. 21, 500 and collection on account from customers was Rs. 23, 600. The beginning balance of account receivable was

    1. Rs. 33, 500

    2. Rs. 14, 100

    3. Rs. 9, 800

    4. Rs. 33, 300

  11. Which one of the following is a capital expenditure?

    1. Compensation paid for breach of a contract of supply of goods

    2. Interest on borrowing during the period of construction of works

    3. Loss of stock by fire

    4. Loss due to embezzlement by the Manager

  12. A company issues 14% debentures of Rs. 10, 00, 000 at a discount of 10%. The discount allowed will be treated in the account books as

    1. Capital expenditure

    2. Revenue expenditure

    3. Deferred revenue expenditure

    4. Capital loss