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Q1. At the time of dissolution all the assets of firm are transferred to the realization A/c:
A. Market value
B. Book value
C. Cost value
D. Bale value
Answer
B. Book value
Q2. Balance of realization A/c is transferred to the capital A/c of the partners in:
A. Capital ratio
B. Profit sharing ratio
C. Interest ratio
D. Equally
Answer
B. Profit sharing ratio
Q3. The decision is Garner Vs Murray was given in:
A. 1904
B. 1905
C. 1933
D. 1804
Answer
A. 1904
Q4. When an asset is acquired on hire purchase system, the asset account is debited with —– of the assets in the books of the hire purchaser.
A. Hire purchase price
B. Cash price
C. Instalment price
D. None of these
Answer
B. Cash price
Q5. If the firm stops making repayments and the goods or assets are taken away from them as a result, this is known as:
A. Cancellation
B. Forfeiture
C. Repossession
D. Annulment
Answer
C. Repossession
Q6. On the balance sheet of a company, the value of the asset bought through hire purchase will appear as:
A. Cost less depreciation to date less amount owing on hire purchase less interest owing
B. Cost less amounts owing on hire purchase
C. Cost less depreciation to date less amount owing on hire purchase
D. Cost less depreciation to date
Answer
D. Cost less depreciation to date
Q7. The depreciation on an asset purchased through hire purchase should be:
A. Should be straight line only
B. Based on the cost price of the asset only
C. Based on the total cost including interest
D. No depreciation should be provide until the final payment is made
Answer
B. Based on the cost price of the asset only
Q8. The interest charged on the hire purchase should appear in the profit and loss account in what manner?
A. The total interest levied should be divided equally over the total period the for purchase agreement
B. The interest charged in that period only should be included
C. Interest should instead be capitalised on the balance sheet
D. Interest should be apportioned in proportion to the repayment totals
Answer
B. The interest charged in that period only should be included
Q9. Ownership of goods under hire purchase agreement is transferred at the time of:
A. Payment of down payment
B. Payment of first instalment
C. Payment of last instalment
D. None of the above
Answer
C. Payment of last instalment
Q10. Which of the following does not give a difference between a hire purchase and a normal purchase?
A. Timing of payment for asset
B. Legal ownership of asset
C. Quality of asset purchased
D. Total cost of asset.
Answer
C. Quality of asset purchased
Q11. The act of buying an asset without having to make full payment in the immediate future is known as:
A. Hire purchase
B. Finance lease
C. Operating lease
D. Sale and leaseback
Answer
A. Hire purchase
Q12. The amount of interest is credited by the buyer to —–
A. Hire purchase Account
B. Hire Vendor Account
C. Interest Account
D. Cash Account
Answer
B. Hire Vendor Account
Q13. The depreciation in the books of buyer is charged on —–
A. Hire Purchase Price
B. Market price
C. Total Instalment amount
D. Cash Price
Answer
D. Cash Price
Q14. Hirer charges depreciation on:
A. Hire purchase price
B. Cash price
C. Lower of the two
D. None of these
Answer
B. Cash price
Q15. What is transferred to Hirer under hire purchase system:
A. Ownership of assets
B. Possession of asset
C. Ownership and possession of asset
D. None of these
Answer
B. Possession of asset
Q16. Hire Purchase Act is passed in the year
A. 1932
B. 1956
C. 1972
D. 1872
Answer
C. 1972
Q17. The Sale of Goods Act is applicable in:
A. Credit Purchases
B. Cash Purchases
C. Cash Sales
D. None of these
Answer
A. Credit Purchases
Q18. Under which system, ownership is transferred on payment of final installment
A. Installment system
B. Credit system
C. Hire purchase system
D. Cash system
Answer
A. Installment system
Q19. Under hire purchase system the buyer is called —–
A. Buyer
B. Hirer
C. Hire vendor
D. Debtor.
Answer
C. Hire vendor
Q20. Under hire purchase system who has the right of sell —– —–
A. Buyer
B. Hirer
C. Hire Vendor
D. Debtor
Answer
C. Hire Vendor
Q21. Under hire purchase system, the agreement can be —–
A. Renewed
B. Registered
C. Terminated
D. Endorsed.
Answer
C. Terminated
Q22. Installment system is governed by —–
A. Hire Purchase Act
B. Sale of Goods Act
C. Installment Act
D. Properties Registration Act
Answer
B. Sale of Goods Act
Q23. Under hire purchase system, the retail price of the articles is called —–
A. MRP
B. Wholesale Price
C. Retail Price
D. Cash Price
Answer
C. Retail Price
Q24. Cash price plus interest is —–
A. Installment Price
B. Hire Purchase Price
C. Maximum Retail Price
D. Retail Price
Answer
B. Hire Purchase Price
Q25. The advance amount under hire purchase system is called —– —–
A. Cash Price
B. Retail Price
C. Interest
D. Down Payment
Answer
D. Down Payment
Q26. Under hire purchase system, interest is calculated on —–
A. Cash Price
B. Hire Purchase Price
C. MRP
D. Outstanding Balance.
Answer
D. Outstanding Balance.
Q27. If the hire purchaser fails to make payment of any installment, it is called —–
A. Default
B. Repossession
C. Sale
D. Purchase
Answer
A. Default
Q28. If X = (current asset – stocks), (current liability), X is known as
a. Quick ratio.
b. acid test ratio.
c. current ratio.
d. both option A and B.
Answer
. both option A and B
Q29. —– measure the length of time between purchase of inventory and collection of cash from sales:
a. Cash to sales operating cycle.
b. Cash to cash operating cycle.
c. Cash to purchase operating cycle.
d. None of the above.
Answer
. Cash to cash operating cycle
Q30. If the hire vendor may take away all the goods on which there is default of installment it is called —– —–
A. Repossession
B. Partial Repossession
C. Complete Repossession
D. Purchase.
Answer
C. Complete Repossession
Q31. The hire vendor takes away only a portion of the goods on which there is default of Installments it is called —–
A. Repossession
B. Partial Repossession
C. Complete Repossession
D. Purchase
Answer
B. Partial Repossession
Q32. In the books of hirer, for payment of installment hire vendor account will be —–
A. Debited
B. Credited
C. Rectified
D. Reversed
Answer
A. Debited
Q33. In the books of hirer, for interest due at the end of the year hire vendor account will be
A. Debited
B. Credited
C. Rectified
D. Reversed
Answer
B. Credited
Q34. In the books of Hirer, the interest and depreciation account will be transferred to —–.
A. Trading account
B. P & L account
C. P & L appropriation account
D. Balance sheet
Answer
B. P & L account
Q35. Nature of hire purchase agreement is —– —–.
A. Agreement of sale
B. Option to transfer
C. Option to buy
D. Option to sell
Answer
C. Option to buy
Q36. In case of Hire-Purchase the total sum payable by the hire-purchaser as per terms in order to complete the transactions is
A. Net Cash Price
B. Net Hire-Purchase Charges
C. Hire-Purchase Price
D. Cash Price Instalment
Answer
C. Hire-Purchase Price
Q37. Under —– system the buyer does not get ownership of goods immediately
A. Installment
B. HP
C. Installment and HP
D. None of these
Answer
B. HP
Q38. —– means the price at which the goods can be purchased by the hirer for ready cash.
A. HP price
B. Installment price
C. Cash price
D. Down payment
Answer
C. Cash price
Q39. —– is the initial payment made at the time of signing the hire purchase agreement
A. HP price
B. Installment price
C. Cash price
D. Down payment
Answer
D. Down payment
Q40. The amount of capital with which the company intends to get registered is known as
A. issued capital
B. subscribed capital
C. authorized capital
D. called-up capital
Answer
C. authorized capital
Essentials of Financial Accounting BBA MCQs
- Essentials of Financial Accounting BBA MCQs Set 1
- Essentials of Financial Accounting BBA MCQs Set 2
- Essentials of Financial Accounting BBA MCQs Set 3
- Essentials of Financial Accounting BBA MCQs Set 4
- Essentials of Financial Accounting BBA MCQs Set 5
- Essentials of Financial Accounting BBA MCQs Set 6
- Essentials of Financial Accounting BBA MCQs Set 8
