Accounting Practice MCQs Competitive Exams Set 18

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(11) Both the accounts for depreciation expense and accumulated depreciation:

(a) Are closed at the end of the period

(b) Appear in the Adjusted Trial Balance Columns of the worksheet

(c) Appear in the Trial Balance Columns of the worksheet

(d) None of these

Answer. (c)

(12) When a partnership is liquidated:

(a) Any cash distribution to partners is allocated according to the profit and loss sharing ratio.

(b) Cash is distributed to each partner according to his or her capital account balance before the sale of partnership assets.

(c) Any gain or loss on disposal of partnership assets is divided among the partners according to their relative account balances.

(d) None of these

Answer. (c)

(13) In projecting the future profitability of a trading company, investors will be least concerned with changes in:

(a) The gross profit rate

(b) The quick ratio

(c) Sales volume

(d) None of these

Answer. (b)

(14) Revenue is most commonly recognized at the time when:

(a) Cash is collected

(b) The order is received from customers

(c) The sale is made

(d) None of these

Answer. (c)

(15) Which of the following list of accounts is used to compute the cost of goods sold?

(a) Purchases, inventory, and sales returns.

(b) Gross profit, purchase returns and carriage inward.

(c) Inventory, net sales and purchases

(d) none of these

Answer. (c)

(16) which of the following is ascertained by drawing up an income and expenditure account?

(a) Cash in hand

(b) Surplus or Deficiency

(c) Capital Fund

(d) none of these

Answer. (b)

(17) On April 1, Hassan & Company received and paid a ₹ 700 bill for the advertising done in March. In addition to this bill the company paid ₹ 6,100 during April for expenses incurred in that month. Hassan & Company paid ₹ 3,600 as salary to employees for work done in April. Based on these facts, total expenses for the month of April were:

(a) ₹ 6,100

(b) ₹ 6,800

(c) ₹ 10,700

(d) None of these (Bill of march ₹ 6100 + Salary exp ₹ 3600 = ₹ 9700)

Answer. (d)

(18) Which of the following categories of accounts are closed at the end of an accounting period?

(a) Temporary accounts

(b) Permanent accounts

(c) Personal accounts

(d) None of these

Answer. (a)

(19) A retail store had current assets of ₹ 72,000 and a current ratio of 2 to 1. The amount of working capital must have been:

(a) ₹ 144,000

(b) ₹ 108,000

(c) ₹ 72,000

(d) None of these

Answer. (b)