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An ISO 9001:2008 Certified Institution A Govt. Regd. An Autonomous Institution of Information Technology Education & Skill Development |
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VMACE Students Corner
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Q1. Which of the following is not a business transaction? a. Bought furniture of Rs. 10,000 for business b. Paid for salaries of employees Rs.5,000 c. Paid sons fees from her personal bank account Rs.20,000 d. Paid sons fees from the business Rs.2,000 Q2. Deepti wants to buy a building for her business today. Which of the following is the relevant data for his decision? a. Similar business acquired the required building in 2000 for Rs. 10,00,000 b. Building cost details of 2003 c. Building cost details of 1998 d. Similar building cost in August, 2005 Rs. 25,00,000 Q3. Which is the last step of accounting as a process of information? a. Recording of data in the books of account b. Preparation of summaries in the form of financial statements c. Communication of information d. Analysis and interpretation is clearly presented?
Q.4 Which qualitative characteristics of accounting information is reflected when accounting information is clearly presented? a. Understandability b. Relevance c. Comparability d. Reliability
Q5. Use of common unit of measurement and common format of reprting promotes; a. Comparability b. Understandability c. Relevance d. Reliability
Q6. During the life-time of and entity accounting produce financial statements in accordance with which basic accounting concept: a. Conservation b. Matching c. Accounting period d. None of the above
Q7. When information about two different enterprises have been prepared presented in a similar manner the information exhibits the charateristic of: a. Verifiability b. Relevance c. Reliability d. None of the above Q8. A concept that a business enterprise will not be sold or liquidated in the near future is known as: a. Going concern b. Economic entity c. Monetary unit d. None of the above
Q9. The primary qualities that make accounting information useful for decision-making are: a. Relevance and freedom form bias b. Reliability and comparability c. Comparability and consistency d. None of the above
Q10. .......... concept states that accounting should focus on material facts. a. stock b. inventory c. Materiality d. none
Q11. Voucher is prepared for: a. Cash received and paid b. Cash/Credit sales c. Cash/Credit purchase d. All of the above
Q12. Voucher is prepared form: a. Documentary evidence b. Journal entry c. Ledger account d. All of the above
Q13. How many sides does an account have? a. Two b. Three c. One d. None of These
Q14. A purchase of machine for cash should be debited to: a. Cash account b. Machine account c. Purchase account d. None of these
Q15. Which of the following is correct? a. Liabilities = Assets+Capital. b. Assets = Liabilities - Capital. c. Capital = Assets - Liabilities. d. Capital = Assets - Liabilities.
Q.16 The ledger folio column of journal is used to:? a. Record the date on which amount posted to a ledger account. b. Record the number of ledger account to which information is posted. c. Record the number of amounts posted to the ledger account. d. Record the page number of the ledger account.
Q17. The journal entry to record the sale of services on credit should include.? a. Debit to debtors and credit to capital. b. Debit to cash and Credit to debtors.. c. Debit to fees income and Credit to fees income. d. Debit to debtors and Credit to fees income.
Q18. The journal entry to record purchase of equipment for Rs.2,00,000 cash and a balance of Rs. 8,00,000 due in 30 days include:? a. Debit equipment for Rs. 2,00,000 and Credit Cash 2,00,000 b. Debit equipment for Rs.10,00,000 and Credit cash 2,00,000 and creditors Rs. 8,00,000. c. Debit equipment Rs. 2,00,000 and Credit debtors Rs. 8,00,000. d. Debit equipment Rs.10,00,000 and Credit cash Rs. 10,00,000.
Q19. When a entry is made in journal:? a. Assets are listed first. b. Accounts to be debited listed first. c. Accounts to be credited listed first. d. Accounts may be listed in any order.
Q20. If a transaction is properly analysed and recorded:? a. Only two accounts will be used to record transaciton. b. One account will be used to record transaction.. c. One account balance will increase and another will decrease. d. Total amount debited will equals total amount credited.
Q21. The journal entry to record payment of monthly bill will include: a. Debit monthly bill and Credit capital. b. Debit capital and Credit cash. c. Debit monthly bill and Credit cash. d. Debit monthly bill and Credit creditor.
Q22. Journal entry to record salaries will include: a. Debit salaries Credit cash. b. Debit capital and Credit cash. c. Debit cash Credit salary. d. Debit salary Credit creditors.
Q23. Cash with drawn by the proprietor should be credited to: a. Drawings account. b. Capital account. c. Profit and loss account. d. Cash account.
Q24. Find the correct statement: a. Credit a decrease in assets b. Credit the increase in expenses. c. Debit the increase in revenue. d. Credit the increase in capital.
Q25. The book in which all accounts are maintained is known as: a. Cash book. b. Journal. c. Purchases Book. d. Ledger.
Q26. Recording of transaction in the Journal is called: a. Casting. b. Posting. c. Journalizing. d. Recording.
Q27. A bank reconciliation statement is prepared by: a. Creditors b. Bank. c. Account holder in bank. d. Debtors.
Q28. A bank reconciliation statement is prepared with the balance: a. Passbook. b. Cash book. c. Both passbook and cash book. d. None of these.
Q29. Passbook is a copy of: a. Copy of customer account. b. Bank column of cash book. c. Cash column of cash book. d. Copy of receipts and payments.
Q30. Unfavorable bank balan ce means: a. Credit balance in passbook. b. Credit balance in cash book. c. Debit balance in cash book. d. None of these.
Q31. Favorable bank balance means: a. Credit balance in the cash book. b. Credit balance in the passbook. c. Debit balance in the cash book. d. Both B&C.
Q32. A bank reconciliation statement is mainly prepared for: a. Reconcile the cash balance of the cash book. b. Reconcile the difference between the bank balance shown by the cash book and bank passbook. c. Both a and b. d. None of these.
Q33. Agreement of trial balance is affected by: a. One sided errors only. b. Two sided errors only. c. Both a and b. d. None of the above.
Q34. Which of the following is not and error of principle: a. Purchase of furniture debited to purchases account. b. Repairs on the overhauling of second hand machinery purchased debited to repairs account. c. Cash received from Manoj posted to Saroj. d. Sale of old car credited to sales account.
Q35. Which of the following is not an error of commission: a. Overcastting of sales book. b. Credit sales to Ramesh Rs. 5,000 credited to his account. c. Wrong balancing of machinery account. d. Cash sales not recorded in cash book.
Q36. Which of following errors will be rectified through suspense account: a. Sales return book undercast by Rs. 1,000. b. Sales return by Madhu Rs. 1,000 not recorded. c. Sales return by Madhu Rs. 1,000 recorded as Rs. 100. d. Sales return by Madhu Rs. 1,000 recorded through purchases returns book.
Q37. If the trial balance agrees, it implies that: a. There is no error in the books. b. There may be two sided errors in the book. c. There may be one sided error in the books. d. There may be both two sided and one sided error in the books.
Q38. If suspense account does not balance off even after rectification of errors it implies that: a. There are some one sided errors only in the books yet to located. b. There are no more errors yet to be located. c. There are some two sided errors and two sided errors yet to be located. d. There may be both one sided errors and two sided errors yet to be located.
Q39. If wages paid for installation of new machinery is debited ot wages Account, it is: a. An error of commission. b. An error of principle. c. A compensating error. d. An error of omission.
Q40. Trial balance is: a. An account. b. A statement. c. A subsidiary book. d. A principal book.
Q41. A Trial balance is prepared: a. After preparation financial statement. b. After recording transactions in subsidiary books. c. After posting to ledger is complete. d. After posting to ledger is complete and accounts have been balanced.
Q42. Which of the following items should be expensed as incurred? a. Broker's fees on the purchase of a long-lived asset. b. Repair of damage occurring during installation of new equipment. c. Freight charges on the purchase of equipment.. d. Normal installation fees on the purchase of equipment.
Q43. Lancer Corporation purchased a parcel of land as a factory site for Rs. 150,000. Construction began immediately on a new building. Costs incurred are as follows: Architect's fees 25000 Legal fees for land purchase contract 2000 Construction costs 250000 Lancer should record the cost of the new land and building, respectively, at: a. Rs.150,000 and Rs.275,000. b. Rs.152,000 and Rs.275,000 c. Rs.150,000 and Rs.250,000. d. Rs.152,000 and Rs.250,000.
Q44. Reno Acquisitions Company recently bought a furnished hotel for a lump-sum purchase price of Rs.15,000,000. Separately, the land was valued at Rs.6,000,000,the building at Rs.12,000,000, and the furniture and equipment at Rs.2,000,000. How much cost should Reno assign to the land? a. Rs.1,000,000. b. Rs.4,500,000. c. Rs.6,000,000. d. Rs.8,000,000.
Q45. Omni Corporation purchased a new vehicle on January 1,2011. The vehicle on January 100,000 has a five-year life, and a Rs.20,000 residual value. The company has a December 31 year-end. If Realistic Company depreciates the truck by the sum-of-the-years'-digits method, how much should realistic report as the book value of the truck at the end of 2013? a. Rs.7,855. b. Rs.8,291. c. Rs.8,636. d. Rs.8,727.
Q46. Realistic Company purchased a new truck on January1, 2011. The cost Rs.20,000, has a four-year life, and a Rs.4,000 residual value. The company has a December 31 year-end. If Realistic Company depreciates the truck by the sum-of-the-years'-digits method, how much should Realistic report as the book value of the truck at the end of 2013. a. Rs.1,600. b. Rs.2,000. c. Rs.5,600. d. Rs.14,400.
Q47. On July1, 2011, Clem Company purchased factory equipment for Rs.50,000. Residual value was estimated to be Rs.2,000. The equipment will be depreciated over ten years using the sum-of-the-years'-digits depreciation expense was recorded. How much depreciation expense should be recorded for 2012?(round computations to the nearest dollar) a. Rs.7,855. b. Rs.8,291. c. Rs.8636. d. Rs.8,727.
Q48. A graph is set up with "depreciation expense" on the vertical axis and "time" on the horizontal axis. Assuming linear relationships, how would the lines for straight-line and sum-of-the-years'-digits depreciation expense, respectively, be drawn on this graph? a. Vertically and slopping down to the right. b. Vertically and slopping up to the right. c. Horizontally and sloping down to the right.. d. Horizontally and sloping up to the right.
Q49. On July 1, 2011, Robinson Company purchased a new machine for Rs.200,000. The machine is estimated to have a service-life of 10 years with an estimated residual value of Rs.5,000. Robinson uses straight-line depreciation. During 2015, it became apparent that the machine would not be efficient to operate after December 31, 2017. Furthermore, the machine would have no scrap value. How much should be charged to depreciation exp-ense in 2015 under generally accepted accounting principles? (round computations to the nearest dollar) a. Rs. 19,500. b. Rs. 42,250. c. Rs. 43,917. d. Rs. 65,000.
Q50. Assume that the modified accelerated cost recovery system is used to account for a depreciable asset for tax purposes. In general, which of the following observations is correct? a. Depreciation amounts will be the same for financial reporting purposes. b. In the early years of an asset's life, depreciation will be greater for tax than for financial reporting purposes. c. In the early years of an asset's life, depreciation will be less for tax than for financial reporting purposes. d. The tax life life will exceed the financial reporting life.
Q51. The financial statements consist of: a. Trial balance. b. Profit and loss account. c. Balance sheet. d. (b)&(c).
Q52. Choose the correct chronological order of ascertainment of the following profits from the profit and loss account: a. Operating Profit, Net Profit, Gross Profit. b. Operating Profit, Gross Profit, Net Profit. c. Gross Profit, Operating Profit,Net Profit. d. Gross Profit, Net Profit, Operating Profit.
Q52. While calculating operating profit, the following are not taken into account. a. Normal transactions. b. Abnormal items. c. Expenses of a purely financial nature. d. (b)&(c).
Q53. Which of the following is correct: a. Operating Profit = Operating profit - Non-operating expenses - Non-operating incomes. b. Operating profit = Net profit + Non-operating Expenses + Non-operating incomes. c. Operating profit = Net profit + Non-operating Expenses - Non- operating incomes. d. Operating profit = Net profit - Non-operating Expenses+Non-Operating incomes.
Q54. Rahul's trial balance provide you the following information: Debtors Rs. 80,000 Bad debts Rs. 2,000 Provision for doubtful debts Rs. 4,000 It is desired to maintain a provision for bad debts of Rs.1,000 State the amount to be debited/credited in profit and loss account: a. Rs. 5,000(Debit). b. Rs.3,000(Debit). c. Rs.1,000(Credit). d. None of these.
Q55. If the rent of one month is still to be paid the adjustment entry will be: a. Debit outstanding rent account and Credit rent account. b. Debit profit and loss account and Credit rent account. c. Debit rent account and Credit profit and loss account. d. Debit rent account and Credit outstanding rent account.
Q56. If the rent received in advance Rs. 2,000. The adjustment entry will be: a. Debit and profit loss account and Credit rent account. b. Debit rent account Credit rent received in advance account. c. Debit rent received in advance account rent account. d. None of these.
Q57. If the opening capital is Rs. 50,000 as on April 01,2005 and additional capital introduced Rs. 10,000 on January 01,2006. Interest charge on capital 10% p.a. The amount of interest charge on March 31,2005 will be: a. Rs. 5,250. b. Rs.6,000. c. Rs,4,000. d. Rs.3,000.
Q58. If the insurance premium paid Rs. 1,000 and pre-paid insurance Rs.300. The amount of insurance premium shown in profit and loss account will be: a. Rs. 1,300. b. Rs. 1,000. c. Rs. 300. d. Rs. 700.
Q59. A semi variable cost would: a. Be zero if output were zero and would change erratically as output increased. b. Be a fixed amount when output was zero and would not increase in direct proportion to output. c. Be zero when output is zero and would increase in direct proportion to output. d. Be more than zero if no products were made and would then increase in direct proportion to output.
Q60. An example of a semi variable cost would be: a. The costs of insuring assets. b. The salaries of supervisors in a department. c. The costs of material to be used for production. d. Electricity costs.
Q61. If actual units produced are lower than the budgeted level of production which of the following types of cost would you expect to be lower than the budget?. a. Fixed costs per unit. b. Variable costs per unit. c. Total variable costs. d. Total fixed costs.
Q62. In the long run a business must: a. Charge a price that covers its fixed costs only. b. Charge a price that leads to positive contribution. c. Charge a price that cover both and variable costs. d. Charge a price that covers its variable costs only.
Q63. The break even point in units is represented by the equation: a. (Sales revenue - Fixed costs) / Contribution per unit. b. Fixed costs / selling price per unit. c. Fixed costs / Variable costs. d. Fixed costs / Contribution per unit.
Q64. The break even point can be defined as: a. The level of activity at which there is neither profit or loss. b. The level of activity where variable costs are covered by sales revenue. c. The level of activity where profits equal fixed costs. d. The level of activity where cash flow is zero. |
