Correct : B. a charge against profits of the company
4. A debenture holder is entitled to :
Correct : D. Interest at the fixed rate
5. On liquidation of company, principal amount of debentures is returned :
Correct : C. Before Equity Capital
6. Which of the following statements is false?
Correct : D. The issue price and redemption value of debentures cannot differ.
7. Which of the following is not a characteristic of Bearer Debentures?
Correct : B. Their transfer requires a deed of transfer.
8. Which of the following statements is false?
Correct : B. Debentures can be forfeited for non-payment of call money.
9. Which of the following statements is false :
Correct : B. A Company can issue debentures with voting rights.
10. The Principal amount of debentures will be repaid by the company either at the end of a
specified period or by instalments during the life time of the company. Such types of debentures are called :
Correct : A. Redeemable Debentures
11. The debentures whose principal amount is not repayable by the company during its life time,
but the payment is made only at the time of Liquidation of the company, such debentures are called :
Correct : C. Irredeemable Debentures
12. Debenture Application Account is in the nature of
Correct : B. Personal Account
13. Discount on issue of Debentures is in the nature of
Correct : B. Capital loss
14. Premium received on issue of debentures may be utilised for
Correct : D. For All of the Above
15. If the rate of G/P is 25% of sales and the cost of goods sold is ` 150000, the amount of G/P
will be
Correct : D. `50000
16. Share application account is classified as
Correct : A. Real account
17. The minimum share application is
Correct : B. 5% of the face value
18. The excess price received on the par value of the shares should be credited to
Correct : C. Security premium reserve account
19. Which of the following should be deducted from the share capital to determine the paid up
share capital.
Correct : B. Calls in arrears
20. The security premium will be shown under the heading
Correct : D. None of these
21. The rate of discount on shares cannot exceed
Correct : B. 10%
22. Premium on issue of shares can be used for
Correct : A. Issue of bonus shares
23. When shares are forfeited the share capital account is debited by
Correct : B. Called up amount,
24. The profit on reissue of forfeited shares is transferred to
Correct : B. Capital reserve
25. When an existing company offers it shares for sale to the existing shareholders, it is known
as
Correct : C. Right issue
26. Which of the following should be deducted from the share capital to find out paid up capital
Correct : B. Calls in arrear
27. In the balance sheet of a company, the discount on issue of debentures is shown under which
heading
Correct : D. Miscellaneous expenditure
28. The original cost at which an asset or liability is acquired is known as --------
Correct : C. Historical cost
29. The international accounting standard Committee was set up in --------
Correct : C. 1967
30. The process of converting foreign subsidiary financial statements into the home
currency is known as -------
Correct : B. Translation
31. Accounting in india is governed by the -----
Correct : C. Institute of chartered accountants of india
32. Interim dividend paid is always shown
Correct : A. In P/L Appropriation A/c
33. Unclaimed dividend is shown in the B/S under the head
Correct : A. Current liability
34. Debentures are shown in the B/S under head.
Correct : C. Non current liabilities
35. Preliminary expenses is an example of
Correct : D. Fictitious asset
36. Divisible profit do not include
Correct : D. revaluation reserve
37. loose tools are shown in the B/S under the head.
Correct : C. Current asset
38. Discount on shares and debentures are shown in
Correct : B. Asset side of the balance sheet
39. In the case of joint stock company, goodwill is shown on the asset side under the
head.
Correct : A. Non current asset
40. Which of the following item will be taken in the surplus statement
Correct : D. Preliminary expenses written off
41. Which of the following would not appear in a limited company’s surplus/Deficit
statement
Correct : B. Provision for taxation
42. Outstanding expenditure is a __________ account.
Correct : B. Personnel
43. _________ deals with the depreciation account.
Correct : B. AS6
44. According to which concept, proprietor of a business is treated as a creditors to the extent of his
capital
Correct : D. Business entity
45. Net worth of business means
Correct : D. Total assets – total liabilities
46. The policy of anticipate no profit and provide for all possible losses arises due to
Correct : B. Convention of conservatism
47. Capital account is a
Correct : B. Personal account
48. Revenue is generally recognized as being earned at the point of time
Correct : A. Sale is effected
49. The fundamental accounting equation Assets = liabilities is the formal expression of
Correct : D. Dual aspect concept
50. Depreciation is
Correct : D. Tax, account and audit necessity
51. ‘Every debit has a corresponding credit’ it is the concept of
Correct : D. Double entry system
52. Bank loan account is a ______
Correct : C. Personal account
53. The process of recording transactions in a journal is known as _______
Correct : A. Journalizing
54. Accounting records transactions in term of
Correct : C. Monetary units
55. Income received in advance by a business units is
Correct : A. A liability
56. Expenditure incurred by a publisher for acquiring copyright is a.
Correct : B. Capital expenditure
57. Loss of cash by theft committed by cashier after business hours is a
Correct : C. Capital loss
58. An expenditure incurred to derive long term advantage is
Correct : C. Capital expenditure
59. In accounting only ________ discount is recorded
Correct : B. Cash
60. Debit balance of all personal accounts are collectively called
Correct : B. Sundry debtors
61. Discount on issue of share is
Correct : A. Capital loss
62. Trial balance will detect
Correct : A. Errors of commission
63. Machinery purchased on account is recorded in
Correct : A. Journal
64. The error disclosed by Trial Balance is
Correct : A. Wrong amount posted in ledger account
65. Cash discount is allowed by
Correct : C. Creditor
66. Rent prepaid is
Correct : A. Assets
67. Closing stock given in the trial balance will be taken to
Correct : D. Balance sheet only
68. Sale of grass in the case of a sports club is
Correct : B. Revenue receipt
69. In income & Expenditure accounts, we record
Correct : B. Items of revenue nature alone
70. Double entry system was propounded by
Correct : D. Luca Pacioli
71. Fixed assets purchased on hire purchased on hire purchase terms are recorded at
Correct : B. Cash value
72. Treatment of capital expenditure as revenue expenditure is
Correct : A. Errors of principle
73. In non – profit organizations excess of assets over liabilities is called
Correct : B. General fund
74. Collection of all accounts us called
Correct : C. Ledger
75. Source document for sales returns
Correct : B. Credit note
76. Petty cash book is prepaid under ______ system
Correct : B. Imprest
77. Special journal is also called
Correct : B. Subsidiary books
78. Gross assets – liabilities will be equal to
Correct : C. Capital
79. Purchase ledger contains the accounts of
Correct : B. Creditors
80. Allowance made for prompt payment is called
Correct : B. Cash discount
81. Sales ledger contains accounts of
Correct : A. Suppliers
82. Credit note is sent by
Correct : A. Seller
83. Total sales book indicates
Correct : A. Total credit sales
84. Total sales made during a year is found out from the
Correct : B. Sales account
85. Sales return account is a _______ account
Correct : B. Nominal
86. Debit note is prepared in connection with
Correct : D. Purchase
87. Goods sold on credit will be entered in the
Correct : B. Sales book
88. Cash purchase of fixed asset is entered in the
Correct : C. Cashbook
89. Normally value of closing stock ________ in the trial balance
Correct : B. Does not appear
90. Cost of goods sold plus selling expenses equals
Correct : B. Gross profit
91. Trading account is a _______ account
Correct : C. Nominal
92. 1/6 profit on sales means ________ on cost
Correct : B. 1/5
93. In sole trader balance sheet asset are arranged in the order of
Correct : A. Liquidity
94. ________ is an expenditure which does not bring any benefit to the concern
Correct : D. Loss
95. Asset which reduce is value, on use, but are not replaced is called
Correct : D. Wasting assets
96. Unearned income is a
Correct : A. Liability
97. Prepaid expenses are ______ account
Correct : C. Personal account without name
98. Unexpired expenses is a _______
Correct : B. Asset
99. Transactions of a general nature which occur frequently are first recorded in the
Correct : B. Special journal
100. Income and expenditure account is the ______ account of a non trading concern