MGT101 Quiz No.4 Shared by Saifi, Spring 2014

Assets are normally listed on the balance sheet in the order of:

Purchase date

Maturity

Liquidity

Cost of asset

5% Debentures Account Rs. 3, 00,000. What amount of interest on debentures should be shown in profit and loss account?

Rs. 6,000

Rs. 3, 00,000

Rs. 15,000

Rs. 3, 15,000

General reserves are shown in:

Profit & loss account

Balance sheet

Cash flow statement

Bank Statement

Debit signifies:

Increase in Asset account

Decrease in liability account

Decrease in capital account

All of the given options

The amount by which the seller agrees to reduce his or her price to the customer is called:

Income

Discount Allowed

Discount Received

Liability

Mr. B is Debit Sales Returns is Credit

Sales Returns is Debit Mr. B is Credit

Mr. B is Debit Accounts Receivable Credit

Purchases Return Debit Mr. B is Credit

Which one of the following will result in increase in revenues?

Purchased fixed asset

Received discount

Payment to creditors

Return of goods, sold on credit

If Salaries Rs. 12, 000, Rent Rs. 5,000, Gross profit Rs. 58,000 and Discount received Rs. 10, 000. What will be the amount of Net Profit?

Rs. 41,000

Rs. 51,000

Rs. 61,000

Rs. 65,000

All the preliminary expenses incurred by which of the following:

shareholders of the company

members of the company

directors of the company

subscribers to the memorandum

Statement of changes in equity shows what type of movement(s)?

Issued share capital

Share premium

Nature of reserves created

All of the given options

If cost of sales is Rs. 90,000, income from sales Rs. 200,000 and operating expenses Rs. 100,000. What will be net result?

Rs. 5,000 Losses

Rs.10, 000 Profits

Rs 1, 95,000 Profits

Rs 1, 95,000 Losses

The amount of depreciation charged under straight line method:

Decreases every year

Remains constant every year

Increases every year

First increases than decreases

If Gross profit Rs.16,500 and Cost of goods sold Rs.183,500, what will be the amount of Net Sales?

Rs. 183, 500

Rs. 167, 000

Rs. 200, 000

Rs. 230, 000

In manufacturing concern, cost of good manufactured is equal to which of the following:

total factory cost plus opening finished goods less ending finished goods

total factory cost plus opening work in process less ending work in process

cost of goods manufactured plus opening finished goods less ending finished goods

cost of goods sold plus opening work in process less ending work in process

Which of the following document(s) define the scope of the company’s activities?

Memorandum of Association

Articles of Association

Prospectus

Statutory Declaration

The proceeds from sale of an automobile for ABC company are which of the following activity?

investing activity

operating activity

financing activity

none of the above

which of the following statement is TRUE about the positive working capital of company.

It shows sound position of company

It shows that company has current asset to meet current liability

It shows that current assets are greater than current liability

All of the given options

What is the next step to Journalizing in Accounting cycle?

Recording

Posting

Balancing

Analyzing

If capital expenditure is treated as revenue expenditure, it will result in:

Overstated net profit and net assets

Understated net profit and net assets

Net profit being understated

No effect on net profit and net assets

Purchases Account & Accounts Payable Account

Machinery Account & Cash Account

Purchases Account & Cash Account

Machinery Account & Accounts Payable Account