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Finance MCQ Practice 8th Set
Q1. Goods sent by HO but not received by branch before the end of the year, by debiting it to goods in transit, which account should be credited?
A. Cash a/c
B. H.O. a/c
C. Trading a/c
D. Branch a/c
Answer
D. Branch a/c
Q2. If the opening and closing balance of debtors a/c is Rs 50,000 and Rs 40,000 respectively, cash received from debtors Rs 1,10,000 and bad debts are Rs 4,000 then what will be the amount of credit sales?
A. Rs 110000
B. Rs 100000
C. Rs 102000
D. Rs 104000
Answer
D. Rs 104000
Q3. The adjusting entry for difference between the invoice price and cost price of goods are shown in —–
A. Balance sheet
B. P & L a/c
C. Branch adjustment a/c
D. None of above
Answer
C. Branch adjustment a/c
Q4. Stock and debtors system is generally used when goods are sent to the branch at —–
A. Cost price
B. Invoice price
C. Both
D. None
Answer
B. Invoice price
Q5. H.O. sent goods to branch at invoice price 50% plus on original price. How many percentage of profit will be on Invoice price?
A. 20%
B. 25%
C. 33.33%
D. 16.67%
Answer
C. 33.33%
Q6. If the opening balance of debtors is Rs 16,000 and closing balance is Rs 80,000, cash received from debtors is Rs 35,000 and bad debts is Rs 1,000, then what will be the amount of credit sales?
A. Rs 95000
B. Rs 105000
C. Rs 100000
D. Rs 110000
Answer
C. Rs 100000
Q7. The system of keeping accounts generally adopted by small size branches are:
A. Debtors system
B. Stock & Debtors system
C. Wholesale branch system
D. Final account system
Answer
A. Debtors system
Q8. Goods are supplied by the head office to dependent branches are at:
A. Cost price
B. Invoice price
C. Market price
D. Cost or invoice price
Answer
D. Cost or invoice price
Q9. Under debtors system which account is prepared by head office to calculate profit or loss of each branch:
A. capital account
B. debtors account
C. branch account
D. branch adjustment account
Answer
C. branch account
Q10. Under debtors system depreciation on fixed asset is —–
A. credited to branch A/c
B. debited to branch A/c
C. not shown in branch A/c
D. shown in debtors A/c
Answer
C. not shown in branch A/c
Q11. Branch Trading &Profit & Loss A/c is only a —– account not forming part of the full accounting system.
A. Single
B. Memorandum
C. Capital
D. Double
Answer
B. Memorandum
Q12. In final account system, Branch Trading and Profit & Loss A/c is prepared at —–
A. invoice price
B. cost price
C. cost & invoice price
D. market price
Answer
C. cost & invoice price
Q13. Under Final A/c system, the profit or loss made by the branch is determined by preparing
A. Branch stock A/c
B. Branch Debtors A/c
C. Branch Adjustment A/c
D. Branch Trading & Profit &Loss A/c
Answer
D. Branch Trading & Profit &Loss A/c
Q14. The Branch Account prepared under Final Account System is the nature of:
A. Nominal Account
B. Real Account
C. Personal Account
D. General Account
Answer
A. Nominal Account
Q15. Dependent branch makes:
A. Cash sales only
B. Credit sales only
C. Cash & Credit sales
D. Instalment sales
Answer
C. Cash & Credit sales
Q16. All branch expenses such as rent, salary are paid by H.O in case of:
A. independent branch
B. local branch
C. dependent branch
D. foreign branch
Answer
C. dependent branch
Q17. Branch Trading & Profit & Loss A/c is prepared to incorporate all —–
A. Revenue items
B. Capital items
C. Asset items
D. Past items
Answer
A. Revenue items
Q18. The difference between goods sent by H.O. and received by branch is known as —–
A. Goods in transit
B. Goods in warehouse
C. Goods in production
D. Goods in godown
Answer
A. Goods in transit
Q19. The stock reserve for unrealised profit will be —– to the H.O profit & Loss A/C
A. Debited
B. Credited
C. First credited then debited
D. Not shown
Answer
D. Not shown
Q20. —– —– account is prepared to adjust the loads included in the value of opening stock and closing stock.
A. Branch stock
B. Branch adjustment
C. Stock reserve
D. Branch P&L
Answer
B. Branch adjustment
Q21. —– —– account shows the shortage or surplus of stock.
A. Branch adjustment
B. Branch stock
C. Goods sent to branch
D. Branch P&L
Answer
B. Branch stock
Q22. The profit included in surplus or shortage of stock is transferred to —– account
A. Branch stock
B. Branch expenses
C. Branch adjustment
D. Branch P&L
Answer
C. Branch adjustment
Q23. The balance of branch adjustment account is transferred to —– account
A. Branch stock
B. Branch P&L
C. Branch Debtors
D. Branch expenses
Answer
B. Branch P&L
Q24. An ordinary partnership business can have:
A. Not more than 50 partners
B. Not more than 20 partners.
C. Any number of partners.
D. Any number than 2 partners.
Answer
B. Not more than 20 partners.
Q25. In the absence of an agreement profit and loss are divided by partners in the ratio of:
A. Capital
B. Equally
C. Time devoted by each partners
D. None of these.
Answer
B. Equally
Q26. In the absence of an agreement, Interest on loan advanced by the partner to the firm is allowed at the rate of:
A. 6%
B. 5%
C. 12%
D. 9%
Answer
A. 6%
Q27. Current accounts of the partners should be opened when the capitals are:
A. Fluctuating
B. Fixed
C. Either fixed or fluctuating
D. None of these
Answer
B. Fixed
Q28. Investment in partnership is made by introducing:
A. Cash
B. None – cash assets
C. Cash or non – cash assets
D. None of these.
Answer
C. Cash or non – cash assets
Q29. Partnership is formed by the partners by:
A. Written agreement
B. Oral agreement
C. Written or oral
D. None of these
Answer
C. Written or oral
Q30. Any partner who investments in the business but does not take active part in the business is:
A. Secret partner
B. Sleeping partner
C. Active partner
D. Nominal partner
Answer
B. Sleeping partner
Q31. The written agreement of partnership is called:
A. Partnership deed
B. Articles of association
C. Memorandum of association
D. Certificate of incorporation
Answer
A. Partnership deed
Q32. Under fixed capital methods, profit will be credited to:
A. Capital Account
B. Drawings
C. Current A/c
D. Profit & Loss
Answer
C. Current A/c
Q33. The members of partnership firm are individually called as:
A. Director
B. Investor
C. Partner
D. Manager
Answer
C. Partner
Q34. Liability of partners in a partnership business is:
A. Limited
B. Un-limited
C. Limited & unlimited
D. None of these
Answer
B. Un-limited
Q35. Capital of the partners are maintained by:
A. Fixed capital method
B. Fluctuating capital methods
C. By any two above methods
D. None of them.
Answer
C. By any two above methods
Q36. Drawings of the partners are:
A. Debited to profit & loss A/c
B. Credited to profit & loss A/c
C. Credited to capital A/c
D. Debited to capital A/c
Answer
D. Debited to capital A/c
Q37. A partners has to pay interest on drawings what is the entry in the personal A/c of the partner?
A. Credit partners capital A/c
B. Credit partners current A/c
C. Debit the partners current A/c
D. Debit partners current A/c
Answer
D. Debit partners current A/c
Q38. Salary paid to partner should be:
A. Debited to his current A/c
B. Credited to his current A/c
C. Credited to profit & loss appropriation A/c
D. None of above
Answer
D. None of above
Q39. Interest on capital Account:
A. Debited to profit & loss A/c
B. Credit to profit & loss A/c
C. Debit to profit & loss and credited to partners capital A/c
D. Only credited to partners capital A/c
Answer
C. Debit to profit & loss and credited to partners capital A/c
Q40. At the time of admission of a new partner the firm is:
A. Dissolved
B. Continued
C. Not effected
D. Re-organized
Answer
A. Dissolved
Q41. To issue shares on Discount mean
A. Issue on face value of shares
B. Issue on more than face value of shares
C. Issue on less than face value of shares
D. Initial public offer
Answer
C. Issue on less than face value of shares
Q42. Forfeited shares to become —–
A. property of the government
B. property of the company
C. property of the shareholders
D. property of all the shareholders
Answer
B. property of the company
Q43. Debentures represent the —–
A. manager’s share in a business
B. investment by shareholders in a business
C. long term borrowing of a business
D. none of the above
Answer
C. long term borrowing of a business
Q44. Discount on issue of debentures is shown under the heading in a company’s Balance Sheet
A. Fixed assets
B. Loans and advances
C. Investment
D. Miscellaneous expenditure
Answer
D. Miscellaneous expenditure
Q45. The excess price received over the par value of shares, should be credited —– —–.
A. Calls-in-advance account
B. Share capital account
C. Securities premium account
D. Discount on issue of shares account
Answer
C. Securities premium account
Q46. The Securities Premium amount may be utilized by a company for —– —–.
A. Writing off any loss on sale of fixed asset
B. Writing off any loss of revenue nature
C. Writing off the expenses/discount on the issue of debentures
D. None of these
Answer
C. Writing off the expenses/discount on the issue of debentures
Q47. When shares are forfeited, the share capital account is debited with —– and the share forfeiture account is credited with —– —–.
A. Paid-up capital of shares forfeited; Called up capital of shares forfeited
B. Called up capital of shares forfeited; Calls in arrear of shares forfeited
C. Called up capital of shares forfeited; Amount received on shares forfeited
D. None of these
Answer
C. Called up capital of shares forfeited; Amount received on shares forfeited
Q48. As per the SEBI guidelines, on issue of shares, the application money should not be less than
A. 2.5% of the nominal value of shares
B. 2.5% of the issue price of shares
C. 25% of the issue price of shares
D. 25% of the nominal value of shares
Answer
C. 25% of the issue price of shares
Q49. The group of users of accounting information charged with achieving the goals of the business is its —–
a. Auditors
b. Investors
c. Managers
d. Creditors
Answer
c. Managers
Q50. Salary paid, Interest paid, Commission received, Advertisement exp. etc fall in which category
a. Real accounts
b. Personal accounts
c. Nominal accounts
d. None of these
Answer
c. Nominal accounts
Q51. The assets that can be easily converted into cash within a short period, i.e., 1 year or less are known as
a. Fixed assets
b. Investments
c. Current assets
d. Intangible assets
Answer
c. Current assets
Q52. Short term solvency focuses on the —– Of the business:
a. Profit.
b. Shares.
c. Inventory.
d. liquidity position.
Answer
d. liquidity position.
Q53. Which of the following ratio is considered to assess the likely growth prospectus of the company and whether the company is a low risk investment?
a. Earnings per share.
b. diluted earnings per share.
c. Price earnings ratio.
d. dividend yield.
Answer
. Price earnings ratio
Q54. The difference between hire purchase price and the cash price is called —–
A. Hire charges
B. Cost of the asset
C. Installment price
D. Cash price
Answer
A. Hire charges
Q55. In order to deal with the re possession the hire vendor operates an account called —–
A. Asset account
B. Goods account
C. Goods repossessed account
D. None of these
Answer
C. Goods repossessed account
Q56. Hire Purchase price =
A. Cash price + Down payment
B. Cash price + Total interest
C. Cash price
D. Sum of total instalments
Answer
B. Cash price + Total interest
Q57. Cash Price =
A. Hire purchase price – total interest
B. Down payment in cash
C. Down payment + Interest
D. None of the above
Answer
A. Hire purchase price – total interest
Q58. If no provision is made in agreement regarding the duration of the partnership:
A. Limited partnership
B. Partnership at will
C. None
D. Particular partnership
Answer
B. Partnership at will
Q59. A person who declares by word of mouth as partner of the firm is called:
A. Active partner
B. Estople partner
C. Dormant partner
D. Nominal partner
Answer
B. Estople partner
Q60. A person who receives a share of profits from one of the regular partner is called:
A. Secret partner
B. Quasi
C. Partner in profit only
D. Sub – partner
Answer
D. Sub – partner
Q61. The agreement among partners which set out the terms on which they had agreed to form a partnership is called:
A. Partnership deed
B. Partnership at will
C. None of these
D. Arbitration clause
Answer
A. Partnership deed
Q62. 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
Q63. Which of the following statement is false:
A. A company is a legal entity quite distinct from its members
B. A company can buy its own share
C. A shareholder is the agent of the company
D. Same person can agent and creditor of the company
Answer
C. A shareholder is the agent of the company
Q64. Which of the following are the characteristics of a company
A. Liability of the members is limited up to the face value of shares held by them
B. It is a voluntary association of persons
C. A company is a separate body can sue and be sued in its own name
D. Perpetual succession
Answer
C. A company is a separate body can sue and be sued in its own name
