BCOM-AFM-1 MCQ

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Question 201 : Under _____ stock taking stock is valued periodically.

  1. Periodic
  2. Perpetual
  3. Physical
  4. All of the above
  

Question 202 : Market Value is

  1. Net realisable value
  2. Net realisable value less profit
  3. Discounted present value
  4. None of the above
  

Question 203 : Weighted Average Method is suitable when the lots of inventory are not identifiable.

  1. True
  2. False
  

Question 204 : In _____ method, Balance Sheet shows current cost of stock.

  1. LIFO
  2. FIFO
  3. None of the above
  4. Weighted Average
  

Question 205 : Under this method it is assumed that units are issued at random

  1. Average
  2. FIFO
  3. LIFO
  4. None of the above
  

Question 206 : Under _____ method closing inventory is valued at latest rate.

  1. LIFO
  2. FIFO
  3. Weighted Average
  4. All of the above
  

Question 207 : In _____ method, stock is over valued when the prices are rising.

  1. Weighted Average
  2. All of the above
  3. LIFO
  4. FIFO
  

Question 208 : In valuation of inventory _____ concept is followed.

  1. Consistency
  2. Realisation
  3. Conservatism
  4. None of the above
  

Question 209 : Inventory valuation affects the income statement.

  1. True
  2. False
  

Question 210 : Under _____ method stock is valued after every transaction.

  1. LIFO
  2. Weighted Average
  3. FIFO
  4. None of the above
  

Question 211 : When closing stock is undervalued

  1. Profit is understated
  2. Profit is overstated
  3. No effect on profit
  4. None of the above
  

Question 212 : Under this method it is assumed that goods sold are the units that were purchased last

  1. LIFO
  2. FIFO
  3. Weighted Average
  4. None of the above
  

Question 213 : Under perpetual inventory system, inventory is valued

  1. Continuously
  2. Yearly
  3. Half yearly
  4. None of the above
  

Question 214 : Replacement cost is the cost of the asset on the date of replacement.

  1. True
  2. False
  

Question 215 : Under _____ method balance sheet does not show stock at current price.

  1. Physical
  2. Periodic
  3. Perpetual
  4. None of the above
  

Question 216 : Under _____ inventory system, stock is valued on the basis of stores ledger.

  1. both (b) & (d)
  2. Periodic
  3. None of the above
  4. Perpetual
  

Question 217 : _____ method assumes that stock received first is issued first.

  1. LIFO
  2. FIFO
  3. Weighted Average
  4. None of the above
  

Question 218 : Perpetual inventory system makes available stock at the end of the year only.

  1. True
  2. False
  

Question 219 : Periodic inventory system makes available continuous balance of stock.

  1. True
  2. False
  

Question 220 : _____ method is recognised by AS 2.

  1. LIFO
  2. FIFO
  3. Weighted Average
  4. None of the above
  

Question 221 : The concept applicable for stock valuation is

  1. Consistency
  2. Realisation
  3. Conservatism
  4. Cost
  

Question 222 : Under this method it is assumed that goods sold are the first units that were purchased

  1. FIFO
  2. LIFO
  3. Weighted Average method
  4. None of the above
  

Question 223 : _____ method is not recognised by AS 2.

  1. FIFO
  2. Weighted Average
  3. LIFO
  4. All of the above
  

Question 224 : Finished goods are valued at cost or market price whichever is higher.

  1. True
  2. False
  

Question 225 : Amount written off from cost of the fixed asset is capital expenditure.

  1. True
  2. False
  

Question 226 : Demolition cost of old building is a _____ _____ _____ .

  1. Capital expenditure
  2. Revenue expenditure
  3. None of the above
  4. deferred revenue expenditure
  

Question 227 : Bad debt recovery is a _____ receipt.

  1. capital
  2. deferred revenue expenditure
  3. None of the above
  4. revenue
  

Question 228 : Carriage on purchase of machinery charged to carriage. The profit will

  1. Increase
  2. Decrease
  3. Remain constant
  4. All of the above
  

Question 229 : Fictitious assets are tangible.

  1. True
  2. False
  

Question 230 : _____ expenditure is recurring.

  1. Revenue
  2. Capital
  3. None of the above
  4. deferred revenue expenditure
  

Question 231 : Depreciation is _____ in nature.

  1. capital
  2. None of the above
  3. deferred revenue expenditure
  4. revenue
  

Question 232 : Overhaul expenses of a second hand machinery purchased are revenue expenditure.

  1. True
  2. False
  

Question 233 : Took loan from SBI ` 5,00,000

  1. Revenue receipt
  2. Capital receipt
  3. Deferred revenue expenditure
  4. None of the above
  

Question 234 : Cost of repairing the building

  1. Revenue
  2. Capital
  3. D.R. Expenses
  4. None of the above
  

Question 235 : Purchase of tools for servicing.

  1. Capital
  2. Revenue
  3. D.R. Expenses
  4. None of the above
  

Question 236 : An expenditure is treated as capital when it

  1. Increases cost of fixed assets
  2. Increases life of fixed assets
  3. Increases profit earning capacity of the organisation
  4. All of the above
  

Question 237 : Expenditure intended to benefit current period is a revenue expenditure.

  1. True
  2. False
  

Question 238 : Revenue expenditure increases the profit earning capacity of an organisation.

  1. True
  2. False
  

Question 239 : Expenses incurred to keep the machine in working condition is a capital expenses.

  1. True
  2. False
  

Question 240 : Capital receipt is recurring in nature.

  1. True
  2. False
  

Question 241 : Paid to an advocate to defend a suit claiming that the factory site belongs to the firm, the suit was unsuccessful

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 242 : Spent on umbrellas to employees ` 5,000

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 243 : Expenses on extension of a gallery to the building is a revenue expenditure.

  1. True
  2. False
  

Question 244 : Revenue expenditure is recurring in nature.

  1. True
  2. False
  

Question 245 : Hire charges of a machine is a

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 246 : Recovery of bad debts during the year ` 3,500

  1. Revenue receipt
  2. Capital receipt
  3. Deferred revenue expenditure
  4. None of the above
  

Question 247 : Payment of penalty is a _____ expenditure.

  1. deferred revenue expenditure
  2. None of the above
  3. revenue
  4. capital
  

Question 248 : Legal expenses incurred in raising debenture loans

  1. Capital
  2. Revenue
  3. D.R. Expenses
  4. None of the above
  

Question 249 : Expenditure on documentation regarding purchase of building is a revenue expenditure.

  1. True
  2. False
  

Question 250 : Expenses for registration of the purchase of building is a revenue expenditure.

  1. True
  2. False
  

Question 251 : ` 10,000 spent on replacement of worn out part of machine is

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 252 : Legal expenses in connection with purchase of land ` 50,000

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 253 : Brokerage paid on purchase of land ` 10,000

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 254 : Share issue expenses may be treated as

  1. Deferred revenue expenditure
  2. Revenue expenses
  3. Added to face value of a share
  4. Deducted from face value of a share
  

Question 255 : Installed a gas boiler ` 1,25,000

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 256 : Discount on issue of debentures is treated as

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 257 : Advertising is a _____ expenditure.

  1. deferred revenue expenditure
  2. capital
  3. None of the above
  4. revenue
  

Question 258 : Spent on making an entrance for a cinema house ` 1,50,000

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 259 : Recovery of bad debts is a

  1. Capital receipt
  2. Revenue receipt
  3. Capital profit
  4. None of the above
  

Question 260 : Sold Government Bonds ` 30,000

  1. Revenue receipt
  2. Capital receipt
  3. Deferred revenue expenditure
  4. None of the above
  

Question 261 : _____ expenditure is shown in the Balance Sheet on asset side.

  1. deferred revenue expenditure
  2. Capital
  3. None of the above
  4. Revenue
  

Question 262 : Revenue expenditure shown as capital expenditure

  1. Increases profit
  2. Increases assets
  3. Increases profit and assets
  4. None of the above
  

Question 263 : _____ receipts are shown as income in Profit & Loss Account.

  1. deferred revenue expenditure
  2. Capital
  3. Revenue
  4. None of the above
  

Question 264 : Expenses incurred for purchase of livestock is a capital expenditure.

  1. True
  2. False
  

Question 265 : Heavy legal expenses are _____ _____ _____ .

  1. capital
  2. deferred revenue expenditure
  3. revenue
  4. None of the above
  

Question 266 : Paid underwriting commission on issue of shares ` 20,000

  1. Deferred revenue expenditure
  2. Revenue expenditure
  3. Capital expenditure
  4. None of the above
  

Question 267 : If capital expenditure is shown as revenue expenditure, Balance Sheet shows less assets.

  1. True
  2. False
  

Question 268 : Pre paid expenses are revenue expenses.

  1. True
  2. False
  

Question 269 : _____ expenditure is non-recurring.

  1. Capital
  2. deferred revenue expenditure
  3. Revenue
  4. None of the above
  

Question 270 : Repairs of furniture is a capital expenditure.

  1. True
  2. False
  

Question 271 : Wages paid for erection of machinery are debited to Profit & Loss Account.

  1. True
  2. False
  

Question 272 : Cost of goods purchased for resale is

  1. Capital expenditure
  2. Revenue expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 273 : Repairs incurred before using a second hand car purchased is

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 274 : Loan taken from bank is a

  1. Capital receipt
  2. Revenue receipt
  3. Revenue profit
  4. None of the above
  

Question 275 : Spent to get a licence to run the factory ` 60,000

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 276 : _____ expenditure does not give any future benefits.

  1. Capital
  2. Revenue
  3. deferred revenue expenditure
  4. None of the above
  

Question 277 : Wages paid for installation of machinery are debited to Profit & Loss Account.

  1. True
  2. False
  

Question 278 : Addition of a computer lab to the building ` 60,000

  1. Revenue
  2. Capital
  3. D.R. Expenses
  4. None
  

Question 279 : Capital expenditure is non-recurring in nature.

  1. True
  2. False
  

Question 280 : Amount spent for replacement of worn out part of machine is a capital expenditure.

  1. True
  2. False
  

Question 281 : Heavy expenses incurred on advertising at the time of introducing a new product is a deferred revenue expenditure.

  1. True
  2. False
  

Question 282 : Commission received is a _____ receipt.

  1. capital
  2. revenue
  3. deferred revenue expenditure
  4. None of the above
  

Question 283 : Temporary shed constructed to store material at project site is a capital expenditure.

  1. True
  2. False
  

Question 284 : Paid penalty of ` 1,000 for violation of municipal rules

  1. Revenue expenditure
  2. Capital expenditure
  3. Deferred revenue expenditure
  4. None of the above
  

Question 285 : _____ is expenditure on asset held for generation of interest / dividend.

  1. Dividend
  2. Revenue
  3. None of the above
  4. Investment
  

Question 286 : Received on account of issue of debentures 4,00,000

  1. Revenue receipt
  2. Capital receipt
  3. Deferred revenue expenditure
  4. None of the above
  

Question 287 : Amount received on sale of goods is a _____ receipt.

  1. deferred revenue expenditure
  2. revenue
  3. capital
  4. None of the above
  

Question 288 : R & D expenditure is always

  1. Treated as intangible assets
  2. Treated as expenses
  3. Treated as deferred revenue expenditure
  4. None of the above
  

Question 289 : Revenue earned in the current year but not received is an asset.

  1. True
  2. False
  

Question 290 : Capital expenditure shown as revenue expenditure

  1. Increases profit
  2. Decreases profits
  3. Decreases Net worth
  4. (b) and (c)
  

Question 291 : Expenses incurred for obtaining a licence to start the factory ` 10,000

  1. Capital
  2. Revenue
  3. D.R. Expenses
  4. None of the above
  

Question 292 : Invested in government securities

  1. Revenue expenditure
  2. Capital expenditure
  3. Capital loss
  4. None of the above
  

Question 293 : Received on issue of debentures

  1. Revenue receipt
  2. Capital receipt
  3. Capital profit
  4. All of the above
  

Question 294 : Capital work in progress is a capital expenditure.

  1. True
  2. False
  

Question 295 : Amount paid for acquiring goodwill is deferred revenue expenditure.

  1. True
  2. False
  

Question 296 : Revenue expenditure is transfered to

  1. P & L A/c
  2. Balance Sheet
  3. P & L Appropriaton A/c
  4. None of the above
  

Question 297 : Major repairs charges including replacement of certain worn out parts incurred before using a second hand car purchased recently is a capital expenditure.

  1. True
  2. False
  

Question 298 : Amount paid for acquisition of patents is a capital expenditure.

  1. True
  2. False
  

Question 299 : Expenditure incurred on renovation of a shop, which increased the capacity, is a capital expenditure.

  1. True
  2. False
  

Question 300 : New tyres to replace old tyres of a car is a capital expenditure.

  1. True
  2. False
  
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