1. Up to the trial balance, the accounting arrangements for a foreign branch are exactly the same as for any
Correct : B. Independent branch
2. Under debtors system depreciation on fixed asset is________ _______
Correct : C. not shown in branch A/c
3. Dependent branch makes :
Correct : C. Cash & Credit sales
4. Branch which donot maintain its own set of books is__________.
Correct : A. Dependent branch
5. An independent branch
Correct : C. Receives goods from both head office and outside parties
6. The Head office account in the books of branch is debited with
Correct : A. Cash sent to the head office and goods returned to the head office
7. The adjustment entry for goods in transit is passed in the books of
Correct : A. Either the branch or the head office
8. For depreciation on fixed assets, whose accounts are maintained by the head office, the head office
Correct : B. Debit Branch account and credit Fixed assets account
9. In case of inter-branch transactions, each branch
Correct : C. May treat such transactions as the transactions with the Head office
10. The Head Office Account maintained by the branch is of the nature of
Correct : B. Personal Account
11. Branches are divided into
Correct : D. All the above
12. Debtors system of keeping branch accounts are generally
Correct : A. Branch fairly small in size
13. Branches may be classified into ________.
Correct : A. Inland branches and foreign branches
14. Capital investments for the branches are made by
Correct : C. Head office
15. Branches not keeping full system of accounting is called________.
Correct : C. Dependent branches
16. It is a system of finding out the profit made by a head office at a branch by preparing an account called_______.
Correct : C. Branch a/c
17. __________Account is prepared with a view to ascertain the gross profit of branch.
Correct : B. Branch adjustment a/c
18. Transaction between branches are called__________.
Correct : A. Inter‐ branch transactions
19. _________ represents goods sent by head office to the branch or by the branch to the head office but not received by other
Correct : A. Goods in transit
20. HO sends goods to branch at 20% profit on invoice price, therefore the percentage of profit on cost comes to –
Correct : B. 25%
21. Under stock and debtors system, which of the following accounts is prepared with a view to ascertain Gross Profit of the Branch?
Correct : A. Branch Adjustment Account
22. Under Debtors’ system, credit sales are
Correct : C. Debited to Branch Debtors Account
23. Branches may be classified into
Correct : C. Inland branches and foreign branches
24. Transaction between branches are called
Correct : B. Inter branch transaction
25. The main reasons of keeping branch accounts
Correct : D. All of these
26. Profit generated from the branch is transferred to
Correct : B. General profit and loss account
27. The price of goods sent by head office to branch at a price higher than cost price is called
Correct : C. Invoice price
28. Branches not keeping full system of accounting is called
Correct : C. Dependent branches
29. As per Accounting Standard-3, Cash Flow is classified into:
Correct : D. Operating activities, financing activities and investing activities.
30. Cash Flow Statement is also known as:
Correct : C. Both (i) and (ii).
31. Which of the following is source of cash?
Correct : C. Sale of Goods costing ₹10,000 for ₹8,000
32. Which of the following is not source of cash?
Correct : B. Purchase of Machinery
33. Which of the following is not application of cash?
Correct : C. Increase in Bills Payable
34. While calculating cash flow from operating activities which will be deducted:
Correct : C. Increase in Trade Receivables
35. An example of cash flow from investing activity is :
Correct : D. Sale of investment by non-financial enterprise.
36. An Example of cash flow from financing activity is :
Correct : A. Payment of dividend
37. Which of the following is not an activity listed in the statement of cash flows?
Correct : C. Funding activities
38. Which of the following is not a cash outflow?
Correct : A. Increase in creditors
39. Cash flow statement is prepared from
Correct : D. All of these
40. Depreciation on fixed assets implies
Correct : C. no flow of funds
41. Fund flow refers to changes in
Correct : D. working capital
42. Which one of the following concepts is used as fund in the preparation of funds flow statement?
Correct : D. All financial resources
43. In the course of preparing a company’s cash flow statement, the following figures are to be included in the calculation of net cash from operating activities:
Depreciation charges Rs.9,80,000 Profit on sale of non-current assets Rs.40,000
Increase in inventories Rs.1,30,000 Decrease in receivables Rs.1,00,000
Increase in payables Rs.80,000
What will be the net effect of these items in the cash flow statement?
Correct : C. addition to operating profit Rs.9,90,000
44. If the provision for income tax for 2013 is Rs.30,000 and for 2014 is Rs.40,000; and income tax of Rs.25,000 is paid during the year 2014 in respect of year 2013, the amount of to be debited to the Profit and Loss Adjustment Account as “Provision for Income Tax” to find out “Funds from Operation” will be
Correct : A. Rs.35,000
45. In the funds flow statement, item of preliminary expenses written off during the year is:
Correct : A. Added to net profit
46. Which of the following items will affect the flow of funds?
Correct : C. A transaction affecting current and non- current accounts
47. Cash from operations is equal to
Correct : A. Net profit plus decrease in current assets
48. Increase in the amount of prepaid expenses results in
Correct : B. Decrease in cash
49. Cash flow statement is based upon
Correct : B. Cash basis of accounting
50. Increase in the amount of creditors results in
Correct : B. Increase in cash
51. Which statement is prepared in the process of funds flow analysis?
Correct : A. Schedule of changes in working capital
52. Funds Flow Statement is also known as
Correct : D. All of the above
53. Which of the following transactions result in flow of funds?
Correct : C. Issue of shares
54. Which of the following transactions do not result in flow of funds?
Correct : A. Raising short term loans
55. Redemption of preference share capital is shown in
Correct : B. Application of funds
56. ncrease in debtors causes ______________ in working capital.
Correct : A. Increase
57. Cash flow statement is based on _________ basis of accounting.
Correct : A. cash
58. Purchase of new machinery is shown in
Correct : C. Cash flow from Investing Activities
59. Depreciation is _________ from/to net profit in calculating funds from operation.
Correct : A. added
60. Cash payment to suppliers for goods and services are classified as cash flow from ____________ activities.
Correct : A. operating
61. Cash from operating activities consists of:
Correct : D. All of the Above
62. Cash from Operating activities will decrease due to :
Correct : D. Both (a) and (b) above
63. How will you treat Bank Overdraft in a Cash Flow Statement?
Correct : C. Cash Flow from Financing Activities
64. Cash Flow Statement is also known as
Correct : C. Both (a) and (b)
65. Buy back of equity shares should be recorded in the final cash flow statement under:
Correct : B. Financing activities
66. Cash flow statement is based on past records, so it is______in nature.
Correct : A. historical
67. Funds Flow Statement is also known as_______.
Correct : D. All of the above
68. A statement prepared in the form of report;
Correct : B. Cash flow
69. Interest on fixed deposit received by enterprise is shown in the Cash Flow Statement under
Correct : B. Investing Activities
70. Interest on Debenture paid by enterprise is shown in the Cash Flow Statement under
Correct : C. Financing Activities
71. Which item comes under financing activities in cash flow statement?
Correct : D. All the above
72. In cash flows, when a firm invests in fixed assets and short-term financial investments
results in
Correct : C. Decreased Cash
73. Payment to creditors would result in
Correct : C. Neither source or application of funds
74. Which of the following resulted in flow of funds?
Correct : B. Redemption of Debentures
75. Collection from debtors would result in
Correct : C. Neither source or application of funds
76. Which of the following are applications of funds?