BCOM-AFM-1 MCQ

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Question 301 : Addition of a Gallery to factory is a

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

Question 302 : Carriage on purchase of furniture is _____ expenditure.

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

Question 303 : Expenditure, which results in acquisition of a permanent asset, is a capital expenditure.

  1. True
  2. False
  

Question 304 : Profit increases

  1. Capital
  2. Drawings
  3. Expenditure
  4. None of the above
  

Question 305 : _____ expenditure is shown in Profit & Loss Account.

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

Question 306 : Expenditure on carriage of machinery is a capital expenditure.

  1. True
  2. False
  

Question 307 : Purchased a lathe machine ` 1.50 lakhs

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

Question 308 : Whitewashing of a factory building is a

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

Question 309 : An expenditure intended to benefit the current period is a revenue expenditure.

  1. True
  2. False
  

Question 310 : Wages paid to workers to produce a tool is a capital expenditure.

  1. True
  2. False
  

Question 311 : Received interest on investment ` 2,500

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

Question 312 : Cost of removal of stock from one place to another place.

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

Question 313 : Expenses incurred to bring the second hand machine in working condition is a capital expenditure.

  1. True
  2. False
  

Question 314 : The gain from sale of capital assets need not be added to revenue to ascertain the net profit of a business.

  1. True
  2. False
  

Question 315 : Pulling out old building and rebuilding it ` 2,50,000

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

Question 316 : If revenue expenditure is shown as capital expenditure, Profit & Loss Account shows more profit.

  1. True
  2. False
  

Question 317 : Repairs of machinery is a _____ expenditure.

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

Question 318 : Wages for installation of machinery charged to revenue. The profit will

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

Question 319 : Replacement of old tyres by new one

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

Question 320 : An error of principle results in incorrect allocation of expenditure between capital and receipt.

  1. True
  2. False
  

Question 321 : Received from X Ltd. an invoice for ` 3,500 for repairs of walls of the office premises

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

Question 322 : Preliminary expenses are

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

Question 323 : Documentation charges regarding purchase of building is a _____ expenditure.

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

Question 324 : Repairs to machinery charged to machinery A/c. The profit will

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

Question 325 : Erection of a gas boiler to replace the old

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

Question 326 : Hire charges of a special machine ` 20,500

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

Question 327 : Heavy expenditure on advertising at the time of opening of a new branch is a deferred revenue expenditure.

  1. True
  2. False
  

Question 328 : _____ receipts are shown in Balance Sheet.

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

Question 329 : Wages paid for installation of machinery is a _____ expenditure.

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

Question 330 : Overhauling of machinery is a _____ expenditure.

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

Question 331 : Deferred revenue expenditure is current years revenue expenditure to be paid in the last year.

  1. True
  2. False
  

Question 332 : Legal expenses incurred for abuse of trademark is a capital expenditure.

  1. True
  2. False
  

Question 333 : Furniture purchased charged to revenue. The profit will

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

Question 334 : Depreciation of fixed assets is

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

Question 335 : Amount spent on white washing of factory building done after every 6 months is a capital expenditure.

  1. True
  2. False
  

Question 336 : Discount allowed on issue of shares is

  1. Deferred revenue expenditure
  2. Capital expenditure
  3. Revenue expenditure
  4. All of the above
  

Question 337 : Interest acurued on investment is shown in balance sheet on _____ side.

  1. Current Liability
  2. ficitious libility
  3. Assets
  4. None of the above
  

Question 338 : Carriage outward does not appear in the Trading Account.

  1. True
  2. False
  

Question 339 : Productive wages are

  1. Debited to Trading Account
  2. Debited to Profit & Loss Account
  3. Shown as asset
  4. None of the above
  

Question 340 : Income tax paid by a sole trader on his business income should be

  1. Debited to trading A/c
  2. Debited to P & L A/c
  3. Deducted from capital A/c in the balance sheet
  4. All of the above
  

Question 341 : Manufacturing Account shows

  1. Cost of production
  2. Gross Profit
  3. Net Profit
  4. None of the above
  

Question 342 : Assets must be equal to liabilities.

  1. True
  2. False
  

Question 343 : Final accounts are prepared at the end of each year.

  1. True
  2. False
  

Question 344 : Opening stock of WIP is shown on

  1. Debit side of Trading Account
  2. Debit side of Manufacturing Account
  3. Credit side of Profit & Loss Account
  4. Balance Sheet asset side
  

Question 345 : Wages and salaries appear in

  1. Trading Account
  2. Profit & Loss Account
  3. Balance Sheet
  4. None of the above
  

Question 346 : Net profit is a liability of business.

  1. True
  2. False
  

Question 347 : Depreciation appears in the Profit & Loss Account.

  1. True
  2. False
  

Question 348 : Debit balance on Profit & Loss Account is a real asset.

  1. True
  2. False
  

Question 349 : Gross profit is transferred to _____ Account.

  1. Profit & Loss Account
  2. Balance Sheet
  3. Trading
  4. None of the above
  

Question 350 : Drawing reduces capital.

  1. True
  2. False
  

Question 351 : Plants means tree plants around the factory.

  1. True
  2. False
  

Question 352 : Goodwill is shown on

  1. Asset side of Balance Sheet
  2. Credit side of Trading Account
  3. Credit side of Profit & Loss Account
  4. Debit side of P & L A/c
  

Question 353 : Over valuation of opening stock shows less gross profit.

  1. True
  2. False
  

Question 354 : Profit & Loss Account is a statement of assets and liabilities.

  1. True
  2. False
  

Question 355 : Closing entry for sales discount is

  1. Sales Discount A/c Dr To Profit & Loss A/c.
  2. Sales Discount A/c Dr. To Sales A/c
  3. Profit & Loss A/c Dr To Sales Discount
  4. None of the above
  

Question 356 : For a sugar mill, sugarcane is a

  1. Raw material
  2. WIP
  3. Finished goods
  4. Asset
  

Question 357 : If closing stock is not considered, Profit & Loss Account will show less profit.

  1. True
  2. False
  

Question 358 : Drawings are debited to _____ Account.

  1. Interest
  2. Investment
  3. Capital
  4. None of the above
  

Question 359 : Salary payable is shown in the Balance Sheet on _____ side.

  1. asset
  2. Current assets
  3. None of the above
  4. liability
  

Question 360 : All indirect expenses are debited to _____ Account.

  1. Profit & Loss
  2. Trading
  3. Balance Sheet
  4. None of the above
  

Question 361 : Drawing reduces

  1. Capital
  2. Profit
  3. Income
  4. Purchases
  

Question 362 : Goods distributed as free sample are credited to _____ A/c.

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

Question 363 : Current assets are long-term assets.

  1. True
  2. False
  

Question 364 : Balance Sheet shows profitability of business.

  1. True
  2. False
  

Question 365 : Goods taken for personal use are reflected in drawings.

  1. True
  2. False
  

Question 366 : Closing stock is always valued at cost or at market value whichever is less.

  1. True
  2. False
  

Question 367 : Salaries and wages appear in

  1. Trading Account
  2. Profit & Loss Account
  3. Balance Sheet
  4. Trial Balance
  

Question 368 : Factory expenses are shown in _____ Account.

  1. Balance Sheet
  2. Profit & Loss Account
  3. Trading
  4. None of the above
  

Question 369 : Purchase of machinery is debited to Trading Account.

  1. True
  2. False
  

Question 370 : Which income statement format reports income from operations?

  1. Account format
  2. Single step format
  3. Multiple step format
  4. None of the above
  

Question 371 : Fixed assets are stated in the Balance Sheet at market value.

  1. True
  2. False
  

Question 372 : Profit & Loss Account is a statement.

  1. True
  2. False
  

Question 373 : Income received in advance is a gain.

  1. True
  2. False
  

Question 374 : Closing stock appearing in the Trial Balance is shown in _____.

  1. Balance Sheet
  2. Profit & Loss Account
  3. None of the above
  4. Trading
  

Question 375 : Income received in advance is shown on

  1. Liability side
  2. Asset side
  3. Debit side of Profit & Loss Account
  4. None of the above
  

Question 376 : Assets and liabilities for a particular period are shown in the Balance Sheet.

  1. True
  2. False
  

Question 377 : Interest on capital is debited to _____ Account.

  1. Trading
  2. Balance Sheet
  3. Profit & Loss
  4. All of the above
  

Question 378 : Net profit is _____ to capital.

  1. deducted
  2. Divided
  3. added
  4. None of the above
  

Question 379 : Prepaid insurance is shown on _____ side of the Balance Sheet.

  1. Liability
  2. asset
  3. Trading A/c debit
  4. Profit & Loss A/c credit
  

Question 380 : Outstanding wages in Trial Balance should be shown in

  1. Trading Account
  2. Profit & Loss Account
  3. Balance Sheet
  4. None of the above
  

Question 381 : Prepaid expenses is a liability.

  1. True
  2. False
  

Question 382 : Gross Margin is excess of sales over cost of goods sold.

  1. True
  2. False
  

Question 383 : Sale of scrap is shown on

  1. Credit side of Trading Account
  2. Credit side of Manufacturing Account
  3. Credit side of Profit & Loss Account
  4. Debit side of P & L
  

Question 384 : Carriage outwards appearing in Trial Balance should be shown in

  1. Trading Account
  2. Profit & Loss Account
  3. Balance Sheet
  4. None of the above
  

Question 385 : Patents and copyright is a

  1. Current asset
  2. Fixed asset
  3. Fictitious asset
  4. Intangible asset
  

Question 386 : Balance Sheet is a position statement.

  1. True
  2. False
  

Question 387 : Sales Return in Trial Balance is deducted from

  1. Purchases
  2. Sales
  3. Wages
  4. Salary
  

Question 388 : Return outwards in Trial Balance are deducted from

  1. Sales
  2. Purchases
  3. Stock
  4. Capital
  

Question 389 : Provision for discount on debtors is calculated after deducting provision for doubtful debts.

  1. True
  2. False
  

Question 390 : Interest on drawings is credited to Profit & Loss Account.

  1. True
  2. False
  

Question 391 : Prepaid insurance is

  1. Deducted from insurance
  2. Added to insurance
  3. Shown on asset side
  4. (a) and (b)
  

Question 392 : Profit & Loss Account is prepared before preparation of Trial Balance.

  1. True
  2. False
  

Question 393 : Amount due from customers are shown collectively in the Balance Sheet.

  1. True
  2. False
  

Question 394 : Closing stock is shown in the Balance Sheet under :

  1. Fixed assets
  2. Current assets
  3. Current liabilities
  4. Fictious assets
  

Question 395 : Profit decreases capital.

  1. True
  2. False
  

Question 396 : Drawings are deducted from

  1. Sales
  2. Purchases
  3. Capital
  4. None of the above
  

Question 397 : Closing stock appearing in the Trial Balance is shown on

  1. Asset side of Balance Sheet
  2. Liability side of Balance Sheet
  3. Credit side of Trading Account
  4. None of the above
  

Question 398 : Trading Account always shows debit balance.

  1. True
  2. False
  

Question 399 : For a plastic company plastic is a

  1. Raw material
  2. WIP
  3. Finished goods
  4. All of the above
  

Question 400 : Interest on drawings is

  1. Expenditure for the business
  2. Expense for the business
  3. Gain for the business
  4. None of the above
  
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