Asked/Added Questions From NCERT: Accountancy

  Per unit fixed overheads would ______ as the production

a) Increase, increases c) Decrease, remains constant

b) Increase, Decreases d) Decrease, decreases.

  Total fixed overheads would ________ as the production increases.

a) Decrease c) Remain fixed

b) Increase d) None of the above.

  Per unit _______ overheads remain fixed.

a) Fixed c) Selling

b) Factory d) Variable.

  Cost of fancy packing necessary to attract customers would form part of :

a) Selling overheads

b) Distribution overheads

c) Development overheads

d) Both a) and b)

  Primary packing necessary to protect a product should form part of

a) Selling overheads

b) Distribution overheads

c) Prime cost

d) None of the above.

 Inspection charges which cannot be identified with a particular product should be

treated as

a) Research and development overheads

b) Selling overheads

 Secondary packing expenses is an example of :

a) Selling overheads c) Both of the above

b) Distribution overheads d) None of the above.

  Secondary packing expenses is an example of :

a) Selling overheads c) Both of the above

b) Distribution overheads d) None of the above.

  Advertising expenses, commission to salesman, depreciation on delivery van are

examples of :

a) Selling overheads

b) Distribution overheads

c) Both of the above.

d) None of the above.

 The costing method in which fixed expenses are charged to product along with variable

expenses is known as –

a) Direct costing, c) Absorption costing

b) Marginal costing d) ABC.

  In element wise classification of overheads, which of the following is not included-

a) Factory overheads c) Material

b) Indirect labour d) Indirect expenditure.

  Fixed cost per unit increases when –

a) Production volume increases

b) Production volume decreases

c) Variable cost / unit decreases

d) Variable cost / unit increases.

  In ______ stock is valued only at cost :

a) Financial accounting

b) Cost accounting

c) Human resource accounting

d) None of these.

b) Loss Centre d) Both a) & c)

  A responsibility center in which a manager is accountable for costs only is called

___________.

a) Profit center c) Cost center

  Management accounting is an extension of :

a) Financial accounting

b) Responsibility accounting,

c) Cost accounting

d) All of the above.

  All costs are _______ in long run,

a) Variable c) Fixed

b) Controllable d) Both a) & b)

  Per unit ______ costs remains same.

a) Fixed c) Both a) and b)

b) Variable d) None of these.

  Out of pocket costs have no relevance in decision making :

a) True b) False.

  _____ costs are non-inventorable costs, as they are not included in the value of finished

stock.

a) Semi fixed costs c) Shut down costs

b) Variable costs d) Period costs.

  Haulage is an item of _____ overheads.

a) Research & Development

b) Selling & distribution

c) Works

d) Office.

  Match the pairs.

1. Fabrication a) Batch costing

2. Dams b) Job costing

3. Medicines c) Contract costing

4. Chemicals d) Process costing.

a) (1-b)(2-c)(3-a)(4-d)

b) (1-a)(2-b)(3-c)(4-d)

c) (1-c)(2-a)(3-d)(4-b)

d) (1-d)(2-c)(3-a)(4-b)

 Abnormal costs are ultimately charged to __________

a) P & L A/c c) Note recorded at all

b) Costing P & L d) Suspense A/c.

 28. Which of the following is not an example of shut down cost ?

a) Factory rent c) Direct material

b) Insurance d) Property tax.

 A cost which does not involve any cash flow is known as :

a) Notional cost c) Implicit cost

b) Imputed cost d) All of the above.

  __________ costs are the costs incurred upto the point of separation.

a) Joint costs c) Decremental costs

b) Shut down costs d) Disjoint costs.

 Differential cost denotes both increase or decrease, but ______ cost applies only to

increase in production & is restricted to cost only.

a) Decremental cost c) Sunk cost

b) Step cost d) Incremental cost

  Differential cost is the increase or decrease in total cost resulting out of :

a) Selection of additional sales channel

b) Change in method of production

c) Addition or deletion of territory.

d) All of the above.

 __________ cot is the one that has already been incurred & cannot be avoided by

decisions taken in future. It has no economic relevance to the present decision making

process. :

a) Differential cost c) Opportunity cost

b) Sunk cost d) Joint cost.

  __________ cot is the one that has already been incurred & cannot be avoided by

decisions taken in future. It has no economic relevance to the present decision making

process. :

a) Differential cost c) Opportunity cost

b) Sunk cost d) Joint cost.

  All indirect costs are controllable but, direct costs are not controllable.

a) True b) False

  Costs which can be influenced by its budget holder are known as :

a) Fixed costs c) Uncontrollable costs

b) Step costs d) Controllable costs

  ________ costs are constant at a given level of output & then increase by a fixed amount

at higher level of production.

a) Discretionary cost c) Committed cost

b) Step cost d) Sunk Cost

  ___________ costs result from special policy decision, new research & are not related to

operations.

a) Discretionary cost c) Committed cost

b) Step cost d) Sunk cost.

  Direct material include all of the following except :

a) Primary packing, c) Royalty

b) Secondary packing d) Cost of layout.

 Match the pairs :

1. Degree of traceability to product a) Material Labour, overheads

2. Time b) Admin, selling & distribution

3. Functions c) Direct, Indirect

4. Elements d) Historical, Pre-determinted. 

a) (1-a) (2-b) (3-c) (4-d)

b) (1-c) (2-d), 3-a) (4-b)

c) (1-b) (2-a) (3-d) (4-c)

d) (1-c) (2-d) (3-b) (4-a)

 Match the pairs :

1. Degree of traceability to product a) Material Labour, overheads

2. Time b) Admin, selling & distribution

3. Functions c) Direct, Indirect

4. Elements d) Historical, Pre-determined.

  Expenditure can be classified as capital or revenue in relation to its :

a) Function c) Accounting period

b) Changes in activity d) Both b) & c)

  Costing acts as an aid to

a) Creditors c) National economy

b) Employees d) All of the above.

 14. Cost accounting does not help in making estimates :

a) True b) False.

  _______ is specialized branch of accounting which involves classification, accumulation,

assignment & control of costs :

a) Financial accounting c) Costing

b) Cost accounting d) Cost accountancy.

 11. Which of the following are cost as per activity

a) Material, Labour, expense

b) Fined, Variable & Semi-variable

c) Production cost, Office cost

d) All of these.

  Which of the following are cost as per activity

a) Material, Labour, expense

b) Fined, Variable & Semi-variable

c) Production cost, Office cost

d) All of these.

 10. Which of the following is not correct cause for treatment of selling & Distribution Cost as

Period Cost

a) They are fixed in nature

b) It is difficult to apportion them equally

c) Benefits received from these cost can not be established easily.

d) None

 Match the pairs

a) Direct Material (p) Salary of Supervisor

b) Indirect Material (q) Material passing from one process to other

c) Direct Labour (r) wages to worker

d) Indirect expense (s) Grease

 Which of the following cost are pre-determined cost

a) Standard cost

b) Estimated cost

c) Historical cost

d) a & b

 Statement I:- Costing is aid to management

Statement II:- Cost Accounting helps in Price fixation, in periods of depression & trade

competition

a) Both statement are true & statement I is explanation of II

b) Both statement are True & statement II is explanation for I

c) Only statement I is true

d) Only statement II is true

 Which of the following are objectives of cost Accounting

a) Classification of expenses to all product

b) To indicate inefficiency of management

c) To provide data for decision making

d) All of these

  ________is specialized branch of accounting which involves classification, Accumulation

assignment & Control of Cost

a) Costing

b) Cost Accounting

c) Management Accounting

d) Financial Accounting

 . ___________ is technique of ascertaining cost a) Costing b) Cost Accounting c) Financial Accounting d) None

 Which of the following is technique of costing a) Standard Costing b) Uniform Costing c) Absorption Costing d) Process Costing

 Which of the following is not method of costing? a) Operating costing b) Unit Costing c) Composite Costing d) Marginal Costing

 Which of the following is method of costing

Indirect costs are also known as _________.

a) Common Costs 

b) Traceable Costs 

c) Implicit Costs

d) Sunk Costs.

Describe the cost unit applicable to the Bicycle industry _______.

a) Per part of bicycle 

b) Per bicycle 

c) Per tone

d) Per day.

Warehouse expenses is an example of:

a) Selling overheads

b) Admin overheads

c) Distribution overheads

d) Selling and distribution overheads

Factory overheads are also known as : 

a) Works overheads 

b) Manufacturing overheads

c) Production overheads

d) All of the above.

Research and Development overheads is an example of classification based on:

a) Function 

b) Element 

c) Behaviour

d) Control

Per unit fixed overheads would ______ as the production

a) Increase, increases 

b) Increase, Decreases 

c) Decrease, remains constant

d) Decrease, decreases.

Total fixed overheads would ________ as the production increases.

a) Decrease 

b) Increase 

c) Remain fixed

d) None of the above.

Per unit _______ overheads remain fixed.

a) Fixed 

b) Factory 

c) Selling

d) Variable.

Cost of fancy packing necessary to attract customers would form part of :

a) Selling overheads

b) Distribution overheads

c) Development overheads

d) Both a) and b)

Primary packing necessary to protect a product should form part of

a) Selling overheads

b) Distribution overheads

c) Prime cost

d) None of the above.

Inspection charges which cannot be identified with a particular product should be treated as

a) Research and development overheads

b) Selling overheads

c) Office and administrative overheads

d) Factory overheads.

Secondary packing expenses is an example of :

a) Selling overheads 

b) Distribution overheads 

c) Both of the above

d) None of the above.

Advertising expenses, commission to salesman, depreciation on delivery van are examples of :

a) Selling overheads

b) Distribution overheads

c) Both of the above.

d) None of the above.

The costing method in which fixed expenses are charged to product along with variable expenses is known as –

a) Direct costing 

b) Marginal costing 

c) Absorption costing

d) ABC.

In element wise classification of overheads, which of the following is not included-

a) Factory overheads 

b) Indirect labour 

c) Material

d) Indirect expenditure.

Fixed cost per unit increases when –

a) Production volume increases

b) Production volume decreases

c) Variable cost / unit decreases

d) Variable cost / unit increases.

In ______ stock is valued only at cost.

a) Financial accounting

b) Cost accounting

c) Human resource accounting

d) None of these

Management accounting is an extension of :

a) Financial accounting

b) Responsibility accounting,

c) Cost accounting

d) All of the above.

All costs are _______ in long run.

a) Variable 

b) Controllable 

c) Fixed

d) Both (a) & (b)

Per unit ______ costs remains same.

a) Fixed 

b) Variable 

c) Both (a) and (b)

d) None of these.

 _____ costs are non-inventorable costs, as they are not included in the value of finished stock.

a) Semi fixed costs 

b) Variable costs 

c) Shut down costs

d) Period costs.

Haulage is an item of _____ overheads.

a) Research & Development

b) Selling & distribution

c) Works

d) Office.

Abnormal costs are ultimately charged to __________

a) P & L A/c 

b) Costing P & L 

c) Note recorded at all

d) Suspense A/c.

Which of the following is not an example of shut down cost ?

a) Factory rent 

b) Insurance 

c) Direct material

d) Property tax.

A cost which does not involve any cash flow is known as :

a) Notional cost 

b) Imputed cost 

c) Implicit cost

d) All of the above.

 __________ costs are the costs incurred upto the point of separation.

a) Joint costs 

b) Shut down costs 

c) Decremental costs

d) Disjoint costs.

Differential cost denotes both increase or decrease, but ______ cost applies only to increase in production & is restricted to cost only.

a) Decremental cost 

b) Step cost 

c) Sunk cost

d) Incremental cost

Differential cost is the increase or decrease in total cost resulting out of :

a) Selection of additional sales channel

b) Change in method of production

c) Addition or deletion of territory.

d) All of the above.

__________ cost is the one that has already been incurred & cannot be avoided by decisions taken in future. It has no economic relevance to the present decision making process. :

a) Differential cost 

b) Sunk cost 

c) Opportunity cost

d) Joint cost.

Costs which can be influenced by its budget holder are known as :

a) Fixed costs 

b) Step costs 

c) Uncontrollable costs

d) Controllable costs

________ costs are constant at a given level of output & then increase by a fixed amount at higher level of production.

a) Discretionary cost 

b) Step cost

c) Committed cost 

d) Sunk Cost

___________ costs result from special policy decision, new research & are not related to operations.

a) Discretionary cost 

b) Step cost 

c) Committed cost

d) Sunk cost

Direct material include all of the following except :

a) Primary packing, 

b) Secondary packing

c) Royalty 

d) Cost of layout

Expenditure can be classified as capital or revenue in relation to its :

a) Function 

b) Changes in activity 

c) Accounting period

d) Both b) & c)

Costing acts as an aid to:

a) Creditors 

b) Employees 

c) National economy

d) All of the above.

_______ is specialized branch of accounting which involves classification, accumulation, assignment & control of costs :

a) Financial accounting 

b) Cost accounting

c) Costing 

d) Cost accountancy

Where _________ product/s is/are produced, ascertaining the cost/unit becomes complicated.

a) Single 

b) Multiple

c) Both (a) and (b)

 d) None of these

Which of the following are cost as per activity

a) Material, Labour, expense

b) Fined, Variable & Semi-variable

c) Production cost, Office cost

d) All of these.

Which of the following is not correct cause for treatment of selling & Distribution Cost as Period Cost:

a) They are fixed in nature

b) It is difficult to apportion them equally

c) Benefits received from these cost can not be established easily.

d) None

Which of the following cost are pre-determined cost:

a) Standard cost

b) Estimated cost

c) Historical cost

d) a & b

Statement I:- Costing is aid to management

Statement II:- Cost Accounting helps in Price fixation, in periods of depression & trade competition

a) Both statement are true & statement I is explanation of II

b) Both statement are True & statement II is explanation for I

c) Only statement I is true

d) Only statement II is true

Which of the following are objectives of cost Accounting

a) Classification of expenses to all product

b) To indicate inefficiency of management

c) To provide data for decision making

d) All of these

________is specialized branch of accounting which involves classification, Accumulation assignment & Control of Cost

a) Costing

b) Cost Accounting

c) Management Accounting

d) Financial Accounting

___________ is technique of ascertaining cost

a) Costing

b) Cost Accounting

c) Financial Accounting

d) None

Which of the following is technique of costing

a) Standard Costing

b) Uniform Costing

c) Absorption Costing

d) Process Costing

Which of the following is not method of costing?

a) Operating costing

b) Unit Costing

c) Composite Costing

d) Marginal Costing

Which of the following is method of costing:

a) Job Costing

b) Terminal Costing

c) Operation Costing

d) All of these

If the stock turnover = 6, cost of goods sold = Rs.54,000 & opening stock = Rs.8,000 , then calculate the value of closing stock.

a) Rs. 5,000 

b) Rs. 15,000

c) Rs. 20,000 

d) Rs. 10,000

The average collection period of a company is 40 days. If the receivable balance is Rs.20 lakhs then calculate the amount of sales.

a) Rs. 182.00 Lakhs 

b) Rs.182.52 Lakhs

c) Rs182.50 Lakhs 

d) Rs. 181.00 Lakhs

If the dividend payout ratio is 0.40 and the P/E Ratio is 8, then calculate the dividend yield.

a) 8% 

b) 5%

c) 7% 

d) 6%

If a company declares 20% dividend on its shares of Rs.20 each having a market value Rs.40 each, then the dividend yield ratio is:

a) 20% 

b) 5%

c) 10% 

d) 40%

The market value of a share to be Rs.40 and EPS is Rs.6.66 per share . Calculate price earning ratio:

a) 6 Times 

b) 8 Times

c) 3 Times 

d) 4 Times

The net income of company after preference dividend is Rs.40,000 and the number of equity shares is 6,000 the EPS =

a) Rs. 0.15 Per Share 

b) Rs.6.66 Per Share

c) Rs.1.5 Per Share 

d) Rs.15 Per Share

A current ratio of less than one implies that the working capital is:

a) Positive 

b) Lesser

c) Negative 

d) More

The ideal quick ratio is:

a) 2:1 

b) 1:1

c) 5:1 

d) 5:1

If a company issue bonus shares the debt-equity will ________.

a) Remain Unaffected 

b) Will Not Affected

c) Will Improve 

d) None of the above

Ideal debt-equity ratio is:

a) 1:1

b) 1:3

c) 2:1

d) 3:1

_________ ratio express the relationship between what is available as earnings per share and what is actually paid in the form of dividends out of available earnings.

a) Price Earnings 

b) Pay-Out

c) Dividend Yield 

d) Debt-Equity.

The proportion between fixed interest or dividend bearing funds and non-fixed interest or dividend bearing fund in the total capital employed in the business is termed as _______ ratio.

a) Debt Service 

b) Capital Gearing

c) Market Test 

d) Earning Per Share

__________ ratio is also known fixed charges cover or interest cover.

a) Debt Service 

b) Capital Gearing

c) Market Test 

d) Earning Per Share

Proprietary Ratio = Shareholders funds / ?

a) Long-Term Funds 

b) Fixed Assets

c) Total Assets 

d) Interest Charges

___________ ratio is the relation between borrowed funds and owners’ capital in a firm.

a) Liquid 

b) Long-term solvency

c) Debt-Equity 

d) Proprietary

The term’ creditors’ includes:

a)Trade Creditors 

b) Bills payable

c) Both (a) and (b) 

d) None of the above

Creditors Turnover Ratio =

a) Credit Purchase + Average Creditors 

b) Average Creditors ÷ Credit Purchase

c) Credit Purchase x Average Creditors 

d) Credit Purchase ÷ Average Creditors

________ ratio indicates the extent to which the debt have been selected in time.

a) Debt collection Period 

b) Debt-Equity Ratio

c) Financial 

d) Liquidity

___________ ratio is an indicator of the efficiency of the use of investment in stock.

a) Fixed assets turnover 

b) Working Capital Turnover

c) Stock Turnover 

d) Debtors Turnover

Capital Turnover Ratio =

a) Net Sales + Capital Employed

b) Capital Employed ÷ Net Sales

c) Net Sales × Capital Employed 

d) Net Sales ÷ Capital Employed

The ratio of all operating expenses (i.e. materials used, labour, factory overheads, office and selling expenses) to sales is the __________ ratio.

a) Gross Profit

b) Net Profit

c) Operating

d) Activity

__________ is also refer to as return on net worth.

a) Profitability 

b) Return on investment

c) Return on shareholders fund 

d) Return on assets

Capital Employed =

a) Net fixed assets + Working Capital

b) Net fixed assets - Working Capital

c) Net fixed assets x Working Capital

d) Net fixed assets ÷Working Capital

Capital employed comprise –

a) Share Capital+Reserve and Surplus+Long-term Loans+non operating assets + Fictitious Assets

b) Share Capital+Reserve and Surplus+Long-term Loans-non operating assets- Fictitious Assets

c) Share Capital+Reserve and Surplus-Long-term Loans+ non operating assets + Fictitious Assets

d) Share Capital-Reserve and Surplus-Long-term Loans+ non operating assets + Fictitious Assets

__________ ratio is also known as overall profitability ratio or return on capital employed.

a) Profitability 

b) Return on investment

c) Return on shareholders fund 

d) Return on assets

___________are calculated to judge the financial position of the organization from short-term as well as long-term. Solvency point of view.

a) Profitability Ratio

b) Turnover Ratio

c) Financial Ratio

d) Market Test Ratio

____________ gives some yardstick to measure the profit in relative items with reference to sales, assets or capital employed.

a) Profitability Ratio 

b) Turnover Ratio

c) Financial Ratio 

d) Market Test Ratio

The computation of __________ is simply a clerical work but interpretation is a test requiring act and skill.

a) Trend 

b) Ratio

c) Cash 

d) Fund

___________ is used to evaluate relationship among financial items.

a) Ratio Analysis 

b) Trends Ratios

c) Accounting Ratio 

d) None of the above

The shares which are redeemed after a particular period are called:

(a) Ordinary Shares 

(b) Redeemable Preference Shares

(c) Cumulative Preference Shares

(d) None of the above 

 The excess price received over the par value of shares, should be ___________ Account.

(a) Debited 

(b) Credited

(c) Adjusted 

(d) None of these

When shares are forfeited, share capital account is:

(a) Debited 

(b) Credited

(c) Adjusted 

(d) None of these

Interest on Calls –in–arrears is ________for the company.

(a) Income 

(b) Expenditure

(c) Gain 

(d) Loss

__________ is deducted from the share capital to know the paid up value of shares.

(a) Calls in Advance 

(b) Calls in Arrears

(c) Forfeited Shares 

(d) Discount on Issue

If shares are issued at it’s face value, it is called as issue at:

(a) Premium 

(b) Discount

(c) Par 

(d) None of these

Nominal value of shares allotted to the public is called:

(a) Authorized Capital

(b) Reserve Capital

(c) Paid up Capital

(d) Nominal Capital

The Securities Premium amount may be utilized by a company for:

a) Writing off any loss on sale of fixed asset

b) Writing off any loss of revenue nature

c) Payment of dividends.

d) Writing off the expenses / discount on the issue of debentures.

The following statements apply to equity / preference shareholders. Which one of them applies only to Preference Shareholders?

a) Shareholders risk the loss of investment.

b) Shareholders bear the risk of no dividends in the event of losses.

c) Shareholders usually have the right to vote.

d) Dividends are usually a fixed amount in every financial year.

The discount allowed on re-issue of forfeited shares is debited to:

a) General reserve account.

b) Capital reserve account.

c) Revaluation reserve account.

d) None of these.

If a shareholder does not pay his dues on allotment, for the amount due, there will be a _______.

a) Credit balance in the share allotment account.

b) Debit balance in the share forfeiture account.

c) Credit balance in the share forfeiture account.

d) Debit balance in the share allotment account.

Which of the following should be deducted from the called-up share capital to find out paid-up capital?

a) Calls-in-advance

b) Calls-in-arrears

c) Share forfeiture

d) Discount on issue of shares

Which of the following is not true?

a) Loss on reissue of shares cannot be more than the gain on forfeiture of those shares

b) Where all the forfeited shares are not reissued the share forfeited account will show a credit balance equal to gain on forfeiture of shares not yet re-issued.

c) When the shares are forfeited, securities premium is debited along with share capital where premium has not been received.

d) Where forfeited shares are re-issued at premium, the amount of such premium is credited to capital reserve account.

As per the Companies Act, shall be redeemed within _____ Years.

a) 24 years 

b) 22 years 

c) 30 years

d) 20 years.

At the time of forfeiture of shares which were originally issued at a discount, the accounting entry involves:

I. A debit to Share capital account with the called-up value of shares forfeited.

II. A credit to Share forfeiture account with the amount received on forfeited shares.

III. A credit to Discount on issue of shares with the amount of discount allowed on forfeited shares.

IV. A credit to Calls-in-arrears with the amount due but not paid on forfeited shares.

a) Both (I) and (IV) above.

b) Both (IV) and (III) above.

c) Both (I) and (II) above.

d) (I), (II), (III) and (IV) above.

The document inviting offers from public to subscribe for the debentures or shares or deposit of a body corporate is known as:

a) Share certificate 

b) Stock invest

c) Fixed deposit receipt 

d) Prospectus

If the forfeited shares are issued at a premium, the amount of the premium shall be credited to_______.

a) Profit and loss account

b) Capital reserve account

c) Share forfeiture account

d) Securities premium account

The Securities Premium Account should be shown under:

a) Share Capital

b) Current Liabilities

c) Current Assets

d) Reserves and Surplus

The excess price received over the par value of shares, should be credited to___________.

a) Calls-in-advance account

b) Share capital account

c) Reserve capital account

d) Securities premium account

Which of the following signifies the difference between par value and an issue price below par?

a) Securities premium

b) Discount on issue of shares

c) Calls in arrear

d) Calls in advance

Declared dividend should be classified in the Balance Sheet as a_________.

a) Provision 

b) Current liability 

c) Reserve

d) Current asset

The maximum capital beyond which a company is not allowed to raise funds, by issue of shares is its:

a) Issued share capital

b) Reserve share capital

c) Authorized share capital

d) Subscribed share capital

If forfeited shares (which were originally issued at a discount) are reissued at a premium, the amount of such premium will be credited to__________.

a) Share forfeiture account.

b) Securities premium account.

c) Capital reserve account.

d) Discount on issue of shares account.

Dividends are usually paid as a percentage of ________.

a) Authorized share capital.

b) Net profit.

c) Paid-up capital.

d) Called-up capital.

Which type of the following shares have the right to receive dividends unpaid in prior years, whenever earnings become adequate?

a) Interest on calls-in-advance is paid from the date of receipt of advance to the date of relevant call.

b) Calls-in-advance are not entitled for any dividend

c) According to Table A, interest on calls-in-advance is paid at the rate of 6% p.a.

d) Payment of interest on calls-in-advance is at the discretion of the company.

When shares are forfeited, the share capital account is debited with ___________ and the share forfeiture account is credited with ___________.

a) Paid-up capital of shares forfeited; Called up capital of shares forfeited.

b) Called up capital of shares forfeited; Calls in arrear of shares forfeited.

c) Called up capital of shares forfeited; Amount received on shares forfeited

d) Calls in arrears of shares forfeited; Amount received on shares forfeited.

When shares are issued to promoters for the services offered by them, the account that will be debited with the nominal value of share is ____________.

a) Preliminary expenses account.

b) Goodwill account.

c) Asset account.

d) Share capital account.

Which of the following statements is false?

a) The forfeited shares should not be issued at a premium.

b) At the time of forfeiture of shares, securities premium should not be debited with the amount of premium already received.

c) Shares can be issued at a discount only after one year from the commencement of business.

d) Securities premium account cannot be utilized to redeem preference shares.

The excess price received over the par value of shares, should be credited to__________.

a) Calls-in-advance account.

b) Share capital account.

c) Reserve capital account.

d) Securities premium account.

When debentures are redeemed by sinking fund method, after redemption of debentures, the balance of debenture redemption fund A/c should be transferred to:

(a) Debenture Redemption Fund Investment A/c 

(b) General Reserve

(c) Debentures A/c 

(d) None of these

Following is not a characteristic of debentures:

(a) It is like a certificate.

(b) It is an acknowledgement of loan taken by company.

(c) It can be transferred.

(d) Debenture holder possess voting right in the meetings.

The journal entry for debentures issued at par and are also redeemable at par:

(a) Dr. Bank, Cr. Debentures A/c 

(b) Dr. Debentures A/c, Cr. Bank A/c

(c) Dr. Capital A/c, Bank A/c 

(d) None of these

The discount on debentures which is not written off is shown in final account of company:

(a) On liabilities side of balance sheet 

(b) On assets side of balance sheet

(c) On debit side of profit and loss A/c 

(d) On credit side of profit and loss A/c

Sinking Fund investment always shows:

(a) Debit Balance 

(b) Credit Balance

(c) Both 

(d) None of these

The consideration of Debentures is:

(a) Profit 

(b) Dividend

(c) Capital Receipts 

(d) Interest

Debenture is the part of:

(a) Share capital 

(b) Loan

(c) Owner Capital 

(d) All the above

Debentures which are transferable by mere delivery are:

(a) Registered Debentures 

(b) First Debentures

(c) Second Debentures 

(d) Bearer Debentures

The balance of debenture sinking fund is finally transferred to:

(a) Profit and Loss A/c 

(b) DRF Investment A/c

(c) General Reserve 

(d) Capital Reserve

The interest on Debenture Redemption Fund Investments is credited to:

(a) Debenture A/c 

(b) Debenture Redemption Found A/c

(c) Debenture Redemption Found Investment A/c 

(d) None of the above

 Debenture Redemption Premium A/c is:

(a) Assets 

(b) Liability

(c) Expenses 

(d) Revenue

On redemption of Debentures, the amount lying in Debenture Redemption Reserve, which is no longer necessary to be retained, should be transferred to:

(a) Revaluation Reserve 

(b) Securities Premium Reserve

(b) Capital Reserve 

(d) General Reserve

If shares are reissued then they are issued at:

(a) Par 

(b) Premium

(c) Discount 

(d)All of the above

Debentures is issued as a collateral security to a loan, interest will be given on:

(a) On debentures only 

(b) Both loan & debentures

(c) On loan but not on debentures 

(d) None of the following

On issue of debentures as a collateral security, which account is credited?

(a) Debentures Account 

(b) Bank Loan Account

(c) Debenture holding Account 

(d) Debenture Suspense Account

Which of the following will be the journal entry for recording the issue of shares at par against purchase of Machinery?

(a) Debit Machinery A/c , Credit Share Capital A/c

(b) Debit Share Capital A/c , Credit Machinery A/c

(c) Debit Bank A/c , Credit Share Capital A/c

(d) Debit Machinery A/c , Credit Cash A/c

Shares may be issued:

(a) For cash 

(b) For consideration other than cash

(c) For both (a) and (b) 

(d) None of the above

If the debentures allotted for consideration other than cash are less than the agreed purchase price, the difference is credited to:

(a) Goodwill A/c 

(b) Capital Reserve A/c

(c) P & L A/c 

(d) None of these

If the debentures allotted for consideration other than cash are more than the agreed purchase price, the difference shall be debited to:

(a) Goodwill Account 

(b) P & L A/c

(c) Securities Premium A/c 

(d) Debentures A/c

A debenture holder is entitled to:

(a) Fixed dividend 

(b) Share in profits

(c) Voting rights in the company 

(d) Interest at the fixed rates

Interest on debentures issued as a collateral security is paid on:

(a) Nominal value of debentures

(b) No interest is paid

(c) Face value of debentures

(d) Paid up value of debentures

Which of the following statement is NOT true?

(a) On maturity the debenture holders get back their money.

(b) Debentures can be forfeited for non-payment of call money.

(c) In the balance sheet, debentures are shown under secured loan.

(d) Interest on debentures is payable even in case of loss.

When the debentures are issued as a collateral security then what entry will be passed?

(a) No entry

(b) Debit Debenture Suspense A/c and Credit Debentures A/c

(c) Both (a) & (b)

(d) Neither (a) nor (b)

Debenture holders are called the …… of a company.

(a) Banker 

(b) Owner

(c) Creditor 

(d) Debtor

“Non-convertible” debenture is inferred as:

(a) Owner‟s capital 

(b) Loan capital

(c) Short term debts 

(d) None of these

Interest received on debenture redemption fund investment is:

(a) Capital reserve A/c 

(b) General reserve A/c

(c) Debenture redemption fund A/c 

(d) None of the above

When debentures are issued at a discount, it is prudent to write off the discount:

(a) In the year of the issue of debentures

(b) During the life of the debentures if it is treated as deferred revenue expenditure.

(c) Within 3 years of the issue of debentures.

(d) In the year of redemption of debentures.

When debentures are issued at par and are redeemable at premium, the credit given to premium on redemption of debentures account is in nature of:

(a) Personal A/c 

(b) Real A/c

(c) Nominal A/c 

(d) None of these

When debentures are to be redeemed at premium an extra entry has to be made at the time of issue of debentures, which A/c should be credited in this entry?

(a) Loss on issue of debentures A/c 

(b) Debenture redemption premium A/c

(c) Bank A/c 

(d) Debenture holder‟s A/c

The debentures which are secured by a charge upon some or all assets of the company are known as:

(a) First mortgage debenture 

(b) Second mortgage debenture

(c) Bearer debenture 

(d) Secured debenture

Which of the following is not a characteristic of Bearer Debentures?

(a) They are treated as negotiable instruments.

(b) Their transfer requires a deed of transfer.

(c) They are transferable by mere delivery.

(d) The interest on it is paid to the holder irrespective of identity.

Which of the following statements is false?

(a) Debenture is a form of public borrowing.

(b) It is customary to prefix debentures with the agreed rate of interest.

(c) Debenture interest is a charge against profits.

(d) The issue price and redemption value of debentures cannot differ.

Which of the following is false?

(a) A company can issue redeemable debentures.

(b) A company can issue debentures with voting rights.

(c) A company can issue convertible debentures.

(d) A company can buy its own debentures and shares.

Loss on issue of debentures is treated as:

(a) Intangible Asset 

(b) Non-current Asset

(b) Non-current Liability 

(d) Miscellaneous Expenditure

When debentures are issued at par and are redeemable at premium, the credit given to Premium of Redemption of Debenture Account is in the nature of:

(a) Personal Account 

(b) Real Account

(c) Nominal Account - Expenses 

(d) Nominal Account – Income

Discount on issue of debentures is a:

(a) Revenue loss to be charged in the year of issue.

(b) Capital loss to be written off from capital reserve.

(c) Capital loss to be written off over the period of the debentures.

(d) Capital loss to be shown as goodwill.

Which of the following statements is false?

(a) At maturity, debenture holders get back their money.

(b) Debentures can be forfeited for non-payment of call money.

(c) In company's balance sheet, debentures are shown under the head Secured Loans.

(d) Interest on debentures is charged against profits

A company issue 10%, debentures of Rs. 10,00,000 at a discount of 10%. The discount allowed will be treated in the account book as:

(a) Capital Expenditure 

(b) Revenue Expenditure

(c) Deferred Revenue Expenditure 

(d) Capital Loss

Interest payable on debentures is:

(a) An appropriation of profits of the company.

(b) A charge against profit of the company.

(c) Transferred to sinking fund investment account.

(d) Transferred to general reserve.

When debentures are issued as collateral security, the final entry for recording the transaction in the book is:

(a) Credit Debentures A/c and Debit Cash A/c

(b) Debit Debenture Suspense A/c and Credit Cash A/c

(c) Debit Debentures Suspense A/c and Credit Debenture A/c

(d) Debit Cash A/c and Credit the Loan A/c for which security is given.

If debentures are issued as consideration for purchase of any fixed asset, the entry is:

(a) Debit Asset A/c ; Credit Vendor A/c

(b) Debit Asset A/c ; Credit Bank A/c

(c) Debit Asset A/c ; Credit Debentures A/c

(d) Debit Debenture A/c; Credit Asset A/c

Unless written off, the loss issue of debentures is shown:

(a) On the assets side of Balance Sheet.

(b) On the debit side of Profit and Loss Account.

(c) By way of deduction from the amount of debentures.

(d) On the liabilities side of Balance Sheet.

Write the journal entries for conversion of Debentures into Shares?

Accounting Entries for Creation of Sinking Fund?

Which accounting principle states that the same amount of time must be used for each accounting period?

 What is the amount collected from the sale of goods and services called?

What do you mean by Tangible Real Accounts and Intangible Real Accounts?

 What is section 209 (4A) in the Companies Act, 1956?

What do you mean by Tangible Real Accounts and Intangible Accounts?

What is the Accounting Information System (AIS)?

What do you mean by DPO (Days Payable Outstanding)?

Write the difference between Drawings against Capital and Drawings against Profit?

What is the meaning of Drawings against Capital?

Define Drawings?

By Which Methods Partner's capital Accounts may be maintained?

 Write the difference between Profit and Loss Account and Profit and Loss Appropriation Account?

Write the features of Profit and Loss Appropriation Account?

 What is the nature of Interest on Partner's Loan?

 Write the Disadvantages of LLP?

 Write the beneits of LLP?

 Write the characteristics of a LLP?

Write the full form of LLP?

Write some other Important Provisions of the Indian Partnership Act, 1932?

 Is it essential to have a Partnerhip Deed?

 Write the importance of Partnership Deed?

 Write any five Rights of Partners?

 Define Firms?

 Define Partners?

 What do you mean by Amortization?

Are you in favour of having Accounting Standards?

 What are the various stages of project implementation?

 What is Project Implementation?

 Write the name of some common errors in accounting?

 What is GST ?

 Explain Contingent Liabilities?

 What is a Credit Note?

 What is Debit Note?

 What is owner's equity?

Write the name of different accounting concepts?

 What are Revenue Recognition and Matching Principle?s

 When does Goodwill Increase?

 Write the name of some intangible assets?

 What is reversing journal entries?

 Differentiate between Provision and Reserve?

 Define Partitioning?

 What is the difference between consignor and consignee?

 Define Depreciation?

 What is the dual aspect term?

 What is Compound Journal Entry?

 Where should you record a cash discount in journal entry?

What is the Difference Between Accounts Receivable and Deffered Revenue?

 Write the some examples of Liability Account?

 What is GAAP?

 What is Assets minus Liabilities?

 What are the disadvantages of Double Entry System?

 What are the different stages of Double Entry System?

 Define the term Material facts?