Accounting MCQ Questions and Solutions with Explanations

71

The following is the position of current assets and current liabilities:

	31^st December, 94	31^st December, 95
Debtors	Rs. 30,000	Rs. 24,000
Creditors	Rs. 20,000	Rs. 30,000
Stock	Rs. 16,000	Rs. 20,000
Prepaid expenses	Rs. 8,000	Rs. 12,000

Profit made during the year Rs. 5,00,000 after considering the following items:

Depreciation on plant	Rs. 20,000
Preliminary expenses written off	Rs. 10,000
Transfer to general reserve	Rs. 14,000
Profit on sale of land	Rs. 6,000

The cash from operations is:

A) Rs. 5,44,000 B) Rs. 5,38,000 C) Rs. 5,46,000 D) Rs. 5,54,000

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Answer & Solution

Answer: Option B

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72

The balance in share forfeiture account, after the reissue of all forfeited shares, should be

A) transferred to Goodwill A/c B) transferred to Capital Reserve A/c C) shown as Share Forfeiture A/c D) added to paid-up capital

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Answer & Solution

Answer: Option B

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73

Raj industires limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If the right issue price is Rs. 180 per share and the market value is Rs. 200 per share, then the value of a right is

A) Rs. 20 B) Rs. 180 C) Rs. 200 D) Rs. 40

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Answer & Solution

Answer: Option A

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74

Assertion (A): Inspite of a higher operating ratio the profitability tends to be lower.
Reason (R): Operating ratio shows a relationship between net operating profit and net sales.
Now, select the correct answer:

A) Both (A) and (R) are true and (R) is the correct explanation of (A) B) Both (A) and (R) are true, but (R) is not correct explanation of (A) C) (A) is true but (R) is false D) (A) is false but (R) is true

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Answer & Solution

Answer: Option A

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75

Ram and Shyam are sharing profits in the ratio 3 : 2. They admit Mohan in the partnership and their new profit sharing ratio becomes 2 : 2 : 1. If Mohan brings `1,000 as goodwill then Shyam will get.

A) Rs. 400 B) Rs. 500 C) None of the above D) Rs. 1,000

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Answer & Solution

Answer: Option C

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76

In which Head, dividend received by Financial Enterprise is shown in the Cash Flow Statement?

A) Operating Activities B) Investment Activities C) Financial Activities D) All of these

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Answer & Solution

Answer: Option A

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77

The basis of income Measurement is

A) Matching concept B) Accounting Period concept C) Money Measurement concept D) Cost concept

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Answer & Solution

Answer: Option A

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78

From the following statements related to insolvency account mark your answer according to the answer code given:
i. List A contains particulars relating to unsecured creditors.
ii. All taxes due are considered preferential creditors.
iii. Properties held by the insolvent in the fiduciary capacity can be distributed amongst his creditors.
iv. List D contains the particulars relating to assets and properties.

A) i and ii are correct B) i and iii are correct C) i and iv are correct D) ii and iv are correct

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Answer & Solution

Answer: Option A

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79

Given,

Net Profit after tax	Rs. 3,25,000
Rate of Income tax	50%
12.5% convertible debentures of Rs. 100 each	Rs. 4,00,000
Fixed assets (at cost)	Rs. 12,30,000
Depreciation up-to-date	Rs. 2,30,000
Current assets	Rs. 7,50,000
Current liabilities	Rs. 3,50,000

Return on Investment is

A) 25% B) 30% C) 40% D) 50%

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Answer & Solution

Answer: Option D

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80

A Trial Balance shows

A) The balance of Profit and Loss Account B) Complete accuracy of accounting done by the accountant C) Arithmetical accuracy of ledger balances D) Balance between assets and liabilities

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Answer & Solution

Answer: Option C

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Accounting MCQ Questions and Solutions with Explanations | Commerce