BCOM-AFM-1 MCQ

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Question 501 : Following is not debited to departmental P & L A/c

  1. Carriage
  2. Rent
  3. Salaries
  4. Interest received
  

Question 502 : Depreciation on machinery is allocated on the basis of value of machinery in each department.

  1. True
  2. False
  

Question 503 : Direct expenses are assigned to departments on the basis of

  1. Actual expenses incurred
  2. Estimated expenses
  3. Percentage of purchases
  4. Percentage of sales
  

Question 504 : Cost of insurance is allocated on the basis of purchases of each department.

  1. True
  2. False
  

Question 505 : Non departmental items of expenses are

  1. Charged to general P & L A/c
  2. Charged to departments on the basis of sales
  3. Charged to departments on the basis of fixed assets
  4. None of the above
  

Question 506 : Employee welfare expenses are allocated on the basis of number of employees.

  1. True
  2. False
  

Question 507 : Cost of H.R. Department is allocated on the basis of _____ _____ _____ .

  1. Area of each Department
  2. Sale of each Department
  3. number of workers
  4. None of the above
  

Question 508 : Following is not allocated on the basis of turn over

  1. Carriage on purchases
  2. Carriage on sales
  3. Advertising
  4. Bad Debts
  

Question 509 : Depreciation is allocated on the basis of value of assets.

  1. True
  2. False
  

Question 510 : General management expenses are charged to general P & L A/c.

  1. True
  2. False
  

Question 511 : Repairs and maintenance charges relating to Plant & Machinery are apportioned over different departments according to :

  1. the number of machines in each department
  2. Book value of machines
  3. Area occupied by each machine
  4. None of the above
  

Question 512 : Expenses traceabel with the departments are called direct expenses.

  1. True
  2. False
  

Question 513 : Sales of each department is the basis of allocation of :

  1. Selling Expenses
  2. Advertising Expenses
  3. (a) and (b)
  4. None of the above
  

Question 514 : Expenses regarding purchases are allocated on the basis of turnover.

  1. True
  2. False
  

Question 515 : Staff welfare expenses are allocated on the basis of _____ _____ _____ of departments.

  1. Sale of each Department
  2. Area of each Department
  3. number of workers
  4. None of the above
  

Question 516 : Sales ratio is used for allocation of :

  1. Income tax
  2. Bad debts
  3. Depreciation
  4. None of the above
  

Question 517 : Depreciation is allocated to departments in equal proportion.

  1. True
  2. False
  

Question 518 : Following is not debited to Departmental P & L A/c

  1. Rent
  2. Salaries
  3. Lighting charges
  4. Carriage on purchases
  

Question 519 : Rent and rates are apportioned to different departments on the basis of :

  1. Area
  2. Number of employees
  3. Sales of each department
  4. None of the above
  

Question 520 : Depreciation is apportioned equally among all the departments.

  1. True
  2. False
  

Question 521 : Items of expenses not connected with any department are :

  1. Charged to departments on the basis of total sales
  2. Charged to the General Profit & Loss Account
  3. Charged to departments on the basis of fixed assets employed
  4. None of the above
  

Question 522 : Preparation of Departmental Trading Account is mandatory.

  1. True
  2. False
  

Question 523 : Following is a direct expense in departmental accounting

  1. Advertising
  2. Office expenses
  3. Depreciation
  4. Purchases
  

Question 524 : A separate balance sheet is prepared for each department.

  1. True
  2. False
  

Question 525 : Stock Reserve for unrealised profit for interdepartmental transfer of goods is charged to General Profit & Loss Account.

  1. True
  2. False
  

Question 526 : Rent is allocated on the basis of _____.

  1. Area
  2. Time
  3. Purchase
  4. Sales
  

Question 527 : Welfare expenses should be charged to departments on the basis of number of workers in each department.

  1. True
  2. False
  

Question 528 : Many organisations keep separate record of each department.

  1. True
  2. False
  

Question 529 : Departmental Net Profit is transferred to _____.

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

Question 530 : Loss of goods by fire in a department is considered loss of that respective department.

  1. True
  2. False
  

Question 531 : Freight inward is allocated on the basis of _____.

  1. Sale
  2. Advertising Expenses
  3. Income
  4. Purchases
  

Question 532 : Factory expenses are allocated on the basis of material purchased.

  1. True
  2. False
  

Question 533 : Departmental net profit is transferred to general P & L A/c.

  1. True
  2. False
  

Question 534 : Rent of premises is allocated on the basis of number of employees of each department.

  1. True
  2. False
  

Question 535 : Departmental expenses may be _____ or _____.

  1. Direct or Indirect
  2. Office or Factory
  3. fixed or flexible
  4. None of the above
  

Question 536 : Contribution to P.F. is allocated on the basis of number of employees.

  1. True
  2. False
  

Question 537 : Expenses regarding purchases are allocated on the basis of _____.

  1. Sales
  2. Area
  3. Purchases
  4. Time
  

Question 538 : Depreciation is allocated on the basis of _____ _____.

  1. Area of each Department
  2. light points
  3. No. of worker
  4. Asset Value
  

Question 539 : Advertising expenses are allocated on the basis of

  1. Purchases
  2. Sales
  3. H.P.
  4. Light Points
  

Question 540 : Depreciation on plant is divided equally over the different departments.

  1. True
  2. False
  

Question 541 : Provision for unrealised profit is charged to dept. P & L A/c.

  1. True
  2. False
  

Question 542 : Cost of electric power should be apportioned over different departments according to :

  1. H.P. of motors
  2. No. of light points
  3. Cost of machines
  4. None of the above
  

Question 543 : Following is not allocated in the ratio of number of employees

  1. Bonus
  2. Salaries
  3. Rent
  4. All of the above
  

Question 544 : Interest = Hire purchase price _____ _____.

  1. Down Payment
  2. Cash Price
  3. Advance payment
  4. None of the above
  

Question 545 : Under Hire purchase, instalment is treated as hire.

  1. True
  2. False
  

Question 546 : Hire purchase price = _____ _____.

  1. Down Payment, Interest
  2. Principal, Interest
  3. None of the above
  4. Cash Price, Interest
  

Question 547 : _____ _____ is the price at which goods are purchased today for full payment.

  1. Cash Price
  2. H. P. Price
  3. Outstanding price
  4. None of the above
  

Question 548 : The seller of goods on H.P. is _____ _____.

  1. Buyer
  2. None of the above
  3. Customer
  4. Hire vendor
  

Question 549 : Refer to Q. No. 20. The initial payment is

  1. ` 10,000
  2. ` 20,000
  3. ` 40,000
  4. None
  

Question 550 : Under hire purchase system purchaser becomes the owner of goods on payment of

  1. Down payment
  2. Last intalment
  3. Interest
  4. None of the above
  

Question 551 : Hire purchase price includes _____ and _____.

  1. Principal, Interest
  2. Down Payment, Interest
  3. Cash Price, Interest
  4. None of the above
  

Question 552 : _____ _____ _____ method is known as credit purchase method.

  1. Cash Price
  

Question 553 : Instalment is equal to

  1. Principal + Interest
  2. Principal Interest
  3. Cash Price + Interest
  4. None of the above
  

Question 554 : Buyer of goods under Hire purchase is called as a

  1. Hirer
  2. Buyer
  3. Customer
  4. None of the above
  

Question 555 : On Hire Purchase the ownership is transferred on payment of _____ instalment.

  1. First
  2. Last
  3. Down payment is made
  4. Agreement is signed
  

Question 556 : Fullcash price method is known as credit purchase method.

  1. True
  2. False
  

Question 557 : Cash price includes interest.

  1. True
  2. False
  

Question 558 : In hire purchase agreement vendor pays interest to buyer.

  1. True
  2. False
  

Question 559 : Refer to Q. No. 20. The cash price is

  1. ` 50,000
  2. ` 10,000
  3. ` 60,000
  4. None
  

Question 560 : Hire purchase price is higher than cash price.

  1. True
  2. False
  

Question 561 : In hire purchase buyer becomes the owner of asset on signing the agreement.

  1. True
  2. False
  

Question 562 : Under hire purchase agreement interest is charged on _____ cash price.

  1. Prepaid
  2. Actual
  3. Outstanding
  4. All of the above
  

Question 563 : Down payment is payment made down the table.

  1. True
  2. False
  

Question 564 : Initial payment made on signing the agreement is

  1. Down payment
  2. Cash price
  3. Hire purchase price
  4. Interest
  

Question 565 : Cash price must be mentioned in the hire purchase agreement.

  1. True
  2. False
  

Question 566 : Interest is always calculated on outstanding Cash Price.

  1. True
  2. False
  

Question 567 : Amount paid at the time of taking delivery of goods is

  1. Cash payment
  2. Down payment
  3. Advance payment
  4. None of the above
  

Question 568 : Hire purchase agreement must have minimum duration of 5 years.

  1. True
  2. False
  

Question 569 : Excess of H.P. price over cash price is _____.

  1. Interest
  2. Down Payment
  3. Cash Payment
  4. None of the above
  

Question 570 : Cash price method is known as _____ _____ method.

  1. Asset Accrual Method
  2. None of the above
  

Question 571 : Under hire purchase system interest is charged on outstanding cash price.

  1. True
  2. False
  

Question 572 : Depreciation is charged on cash price.

  1. True
  2. False
  

Question 573 : Cash price is the purchase price payable if full payment is made immediately.

  1. True
  2. False
  

Question 574 : Possession of goods is transferred on _____ the agreement.

  1. Cancelling
  2. Making
  3. Signing
  4. All of the above
  

Question 575 : Hire purchase instalment consists of

  1. Cash price
  2. Interest
  3. Part payment of cash price plus interest
  4. All of the above
  

Question 576 : Actual cash price method is known as Asset Accrual method.

  1. True
  2. False
  

Question 577 : Under hire purchase system depreciation is provided on hire purchase price.

  1. True
  2. False
  

Question 578 : Under Full Cash Price method the asset is recorded at

  1. Hire purchase price
  2. Cash price
  3. Down payment
  4. None of the above
  

Question 579 : Hire purchase price is known as cash price.

  1. True
  2. False
  

Question 580 : X Ltd. purchased a car from Y Ltd. on hire purchase basis. Cash price is ` 50,000 Initial payment ` 10,000, balance in four instalments with 10% interest. The hirer is

  1. X Ltd.
  2. Y Ltd.
  3. X and Y Ltd.
  4. None
  

Question 581 : Refer to Q. No. 20. The hire vendor is

  1. X Ltd
  2. Y Ltd.
  3. Either X Ltd. or Y Ltd.
  4. None of them
  

Question 582 : Under the purchase system depreciation is provided on cash price.

  1. True
  2. False
  

Question 583 : Down payment is the initial payment made on signing the agreement.

  1. True
  2. False
  

Question 584 : There is no difference between hire purchase price and cash price.

  1. True
  2. False
  

Question 585 : In hire purchase ownership is never transferred to the buyer

  1. True
  2. False
  

Question 586 : Hire purchase price is _____ than cash price.

  1. Lower
  2. Higher
  3. None of the above
  4. Flexible
  

Question 587 : Depreciation is charged on asset at a certain rate on

  1. Down Payment
  2. Cash price
  3. Principal
  4. None of the above
  

Question 588 : Under hire purchase agreement the purchaser agrees to pay to the vendor

  1. Interest only
  2. Cash price only
  3. Cash price and interest
  4. None of the above
  

Question 589 : Under hire purchase system, depreciation is provided by hire purchaser on

  1. Cash price
  2. H.P. price
  3. Down payment
  4. None of the above
  

Question 590 : Purchase of a machinery without making full payment immediately is called as

  1. Cash purchase
  2. On line purchase
  3. Hire purchase
  4. None of the above
  

Question 591 : In Instalment sale buyer becomes the owner of asset after payment of last payment.

  1. True
  2. False
  

Question 592 : Hire purchase price excludes interest.

  1. True
  2. False
  

Question 593 : Under hire purchase agreement right of ownership is not passed on to the purchaser unless.

  1. Agreement is signed
  2. Last instalment is paid
  3. Down payment is made
  4. None of the above
  

Question 594 : Generally costly items are sold on hire purchase basis.

  1. True
  2. False
  

Question 595 : Cash price is included in hire purchase price.

  1. True
  2. False
  

Question 596 : Hire purchase price is the purchase price if full payment is made immediately.

  1. True
  2. False
  

Question 597 : In hire purchase ownership is transferred on payment of _____ _____.

  1. Last Instalment
  2. first Instalment
  3. Agreement is signed
  4. Downpayment is made
  

Question 598 : Interest in hire purchase transation is charged on cash price which is

  1. Full cash price
  2. Outstanding cash price
  3. Down payment
  4. None of the above
  

Question 599 : Cheaper items are not purchased on hire purchase basis.

  1. True
  2. False
  

Question 600 : Hire purchase price is equal to

  1. Cash price
  2. Cash Price Interest
  3. Cash price + Interest
  4. None of the above
  

Question 601 : _____ _____ is initial payment.

  1. Cash Price
  2. Down Payment
  3. Interest
  4. H. P. Price
  

Question 602 : The feature of hire purchase is

  1. User ultimately become the owner
  2. Instalment includea principal only
  3. User does not pay any interest
  4. None of the above
  

Question 603 : In case of default in payment the seller under hire purchase can

  1. Take back possession of goods
  2. Take legal action against the buyer
  3. Charge penalty to the buyer
  4. None of the above
  

Question 604 : Initial amount paid on signing the agreement is called _____ _____.

  1. Cash Price
  2. H. P. Price
  3. Down Payment
  4. None of the above
  

Question 605 : The person who sells the goods on hire purchase is a hire buyer.

  1. True
  2. False
  

Question 606 : Refer to Q. No. 20. The interest for 1st instalment is

  1. ` 4,000
  2. ` 5,000
  3. ` 9,000
  4. None of the above
  

Question 607 : The seller gets the right to take back _____ of goods in case of default in payment.

  1. Replacement
  2. Possession
  3. None of the above
  4. Amount
  

Question 608 : Under Instalment system purchaser becomes the owner of goods on

  1. Signing the agreement
  2. Payment of last instalment
  3. Payment of cash price
  4. None of the above
  

Question 609 : In instalment sale ownership is transferred on signing the agreement.

  1. True
  2. False
  

Question 610 : Difference between hire purchase price and cash price is interest.

  1. True
  2. False
  

Question 611 : Initial payment on signing the agreement is called Down Payment.

  1. True
  2. False
  

Question 612 : Right of ownership is transferred to the buyer on payment of first instalment under Hire Purchase system.

  1. True
  2. False
  

Question 613 : The buyer of goods on H.P. basis is _____.

  1. Customer
  2. Buyer
  3. None of the above
  4. Hirer
  

Question 614 : The last instalment in hire purchase includes

  1. Cash price only
  2. Interest only
  3. Cash price and interest
  4. None of the above
  

Question 615 : Generally _____ items are sold on hire purchase basis.

  1. Costly
  2. Factory
  3. Office
  4. None of the above
  

Question 616 : Buyer does not provide depreciation on asset till he becomes the owner of asset.

  1. True
  2. False
  

Question 617 : The seller can take back possession of the goods in case of default in payment.

  1. True
  2. False
  

Question 618 : Depreciation is charged at a certain rate on _____ _____ of the asset.

  1. Down Payment
  2. Cash Price
  3. Principal
  4. None of the above
  

Question 619 : Hire purchase price is equal to cash price plus interest.

  1. True
  2. False
  

Question 620 : Depreciation is provided on _____ _____.

  1. Principal
  2. Down Payment
  3. Cash Price
  4. None of the above
  

Question 621 : Hire purchase price means amount payable by the hirer which consists of

  1. Cash Price + Interest
  2. Cash Price Interest
  3. Cash Price + Down Payment
  4. Interest + Principal
  
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