BCOM-AFM-1 MCQ

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Question 1 : Cost of Goods sold is equal to

  1. Opening stock + Purchases - Direct expenses - Closing stock
  2. Opening stock - Purchases - Direct expenses - Closing stock
  3. Opening stock + Purchases + Direct expenses + Closing stock
  4. Opening stock + Purchases + Direct expenses - Closing stock
  

Question 2 : The initial amount payable at the time of signing the hire purchase agreement is _________

  1. the cash price
  2. the down payment
  3. the hire purchase price
  4. the interest
  

Question 3 : The cost of re-painting the exterior of office premises.

  1. Trading expenses
  2. Deferred revenue expenditure
  3. Capital expenditure
  4. Revenue expenditure
  

Question 4 : Under this method, the cost of goods sold is equal to the costs of the earliest purchases on hand at the time of the sale

  1. LIFO
  2. FIFO
  3. Specific Identification
  4. Weighted Average
  

Question 5 : No. of workers in each in each department is not used as a basis of allocation of _______

  1. Staff welfare
  2. Cost of canteen
  3. Carriage outward
  4. Cost of personnel department
  

Question 6 : ___________ is the total amount payable by the hirer which is made up to cash price of the asset plus interest.

  1. Hire Purchase price
  2. Down Payment
  3. Instalments paid
  4. Cash price paid
  

Question 7 : Which of the follwing is not debited to Departmental Profit & loss A/c

  1. Commission received
  2. Salaries
  3. Rent & Rates
  4. Advertising
  

Question 8 : Trade discounts and volume rebates should

  1. Be deducted from revenue
  2. Be ignored
  3. Be added to revenue
  4. No impact on anything
  

Question 9 : Income received in advance is shown in the ________

  1. Balance sheet
  2. Profit & loss A/c
  3. Trading A/c
  4. Manufacturing A/c
  

Question 10 : In Departmental Accounts, Loss on sale of Assets is recorded in _________

  1. Debit side of trading A/c
  2. Debit side of Profit & loss A/c
  3. Debit side of General Profit & loss A/c
  4. No entry for such loss
  

Question 11 : Discount allowed on sales appearing in the Trial Balance are shown

  1. on the debit side of Trading A/c
  2. on the debit side of Profit & loss A/c
  3. on the liabilities side of Balance sheet
  4. on the Asset side of Balance sheet
  

Question 12 : As per AS 1 significant accounting policies

  1. Need not be disclosed at one place
  2. May be disclosed as per the choice of the management
  3. Should be disclosed at one place
  4. Should not be disclosed in public accounts
  

Question 13 : Manufacturing Account will always have

  1. will always have a debit balance
  2. will always credit balance
  3. may sometimes have credit balance
  4. always tally
  

Question 14 : In Departmental Accounts, Rent and rates are approtioned on the basis of

  1. Floor area occupied
  2. No. of workers
  3. Sales of each department
  4. Value of the assets kept
  

Question 15 : The standard which governs inventory valuation is _____

  1. AS 2
  2. AS 1
  3. AS 9
  4. AS 10
  

Question 16 : The Turnover Ratio is used in the Departmental Accounts for the alloacation of ______

  1. Income-tax
  2. Depreciation
  3. Carriage Inward
  4. Bad debts
  

Question 17 : Interest received under the Hire Purchase system by the hire vendor is his ________.

  1. Expenses
  2. Income
  3. Loss
  4. No gain, no loss
  

Question 18 : Accounting Standards in India are issued by

  1. Institute of Standards of India (ISI)
  2. Accounting Standard Board of ICAI
  3. The Central Government
  4. The International Accounting Standards board
  

Question 19 : Total instalments in which the balance amount is payable is equal to _____

  1. The cash price of article & interest
  2. Hire purchase price and Down payment
  3. Hire purchase price less down payment
  4. The down payment
  

Question 20 : Which of the following is not feature of Hire purchase system ?

  1. It is an agreement of hiring
  2. It is an agreement between hirer & hire vendor
  3. The title of goods passes on last payment
  4. Cash price is paid at the time of delivery of goods
  

Question 21 : Electricity expenses are allocated among different departments on the basis of

  1. Sales
  2. Purchase
  3. No. of employees
  4. Floor space area
  

Question 22 : Which of the following statement is False regarding departmental accounting?

  1. A departmentwise balance sheet always prepared
  2. Direct expenses are the expenses which can be directly identified with a particular department
  3. Each department may keep its own day-books
  4. Abnormal losses are not charged to Departmental Profit & loss A/c
  

Question 23 : Expenditure on research is _________

  1. treated as intangible asset
  2. treated as deferred revenue expenditure
  3. treated as expenses if unsuccessful
  4. Always treated as expenses when incurred
  

Question 24 : Under Hire-purchase system, the buyer agrees to pay

  1. Cash price
  2. Interest
  3. Cash price + Interest
  4. Cash Price - Interest
  

Question 25 : In hire purchase system, Depreciation on the asset taken is calculated on

  1. Down payment
  2. Full cash price
  3. Instalments paid
  4. Hire Purchase price
  

Question 26 : Direct expenses are assigned to departments on the basis of

  1. the % of gross sales by each department
  2. the % of total net sales by each department
  3. Estimated expenses
  4. Actual expenses
  

Question 27 : Under perpetual inventory system, inventory is valued __________

  1. Yearly
  2. Half-yearly
  3. Quarterly
  4. Continuously
  

Question 28 : Under this method, the cost of goods sold is equal to the costs of the earliest purchases; while the value of inventory is equal to the costs of the most recently purchased units

  1. FIFO
  2. LIFO
  3. Specific Identification
  4. Weighted Average
  

Question 29 : Which of the following is Capital Expenditure ?

  1. Wages paid for installation of machinery
  2. Purchase of goods
  3. Cost of repair
  4. Rent of a factory
  

Question 30 : In Departmental Accounts, Lighting is allocated on the basis of ________ of each department.

  1. No. of employees
  2. No. of points
  3. Floor area
  4. Wages
  

Question 31 : Which of the following is not debited to General Profit & loss A/c?

  1. Audit fees
  2. Interest on loan
  3. Power & fuel
  4. Dividend paid
  

Question 32 : Which of the following statement is True ?

  1. Expenses incurred to keep the machine in working condition is a capital expenses.
  2. Heavy expenses incurred on advertising at the time of introducing a new product is a deferred revenue expenditure.
  3. Amount written off from cost of the fixed asset is capital expenditure.
  4. Deferred revenue expenditure is current years revenue expenditure to be paid in the last year.
  

Question 33 : Lower of cost and market value' is an example of which concept?

  1. Consistency
  2. Realisation
  3. Convertism
  4. Matching
  

Question 34 : Which of the following expenses is an indirect expense in departmental accounting ?

  1. Purchases
  2. Sales
  3. Carriage Inward
  4. Rent
  

Question 35 : Salaries and wages appearing in the Trial balance are shown

  1. on the debit side of Trading A/c
  2. on the debit side of Profit & loss A/c
  3. on the liabilities side of Balance sheet
  4. on the Asset side of Balance sheet
  

Question 36 : Retail method of Inventory Valuation is ______

  1. Sale Price + Gross Profit
  2. Sale Price - Gross profit
  3. Sale Price - Net Profit
  4. Cost + Net Profit
  

Question 37 : 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. Manufacturing Expenditure
  

Question 38 : The unexpired portion of Capital expenditure is shown as ______

  1. Liability in the balance sheet
  2. Assets in the balance sheet
  3. Income in Profit & loss A/c
  4. Expenses in Profit & loss A/c
  

Question 39 : If Cost receipts are shown as revenue receipts, then ________

  1. Accounts show lower profits but higher liabilities
  2. Accounts show lower profits and liabilities
  3. Accounts show higher profits and liabilities
  4. Accounts show higher profits but lower liabilities
  

Question 40 : __________ is the purchase price payable in full payment is made immediately.

  1. Market Price
  2. Cash Price
  3. Hire purchase price
  4. Down Payment
  

Question 41 : According to AS1, a change of Accounting policies likely to have an effect not in current but in later years, should be

  1. Disclosed in such later years
  2. Disclosed in the Auditor's report
  3. Ignored
  4. Disclosed in the year in which the change is made
  

Question 42 : The difference between a department's Net sales and cost of goods sold is

  1. Departmental Gross Profit
  2. Departmental Net Profit
  3. Departmental Closing stock
  4. Net profit taken to Balance sheet
  

Question 43 : Indirect expenses are normally ________

  1. Allocated to each department by arbitrary methods
  2. ignored when preparing departmental profit & loss
  3. Allocated to each department on some reasonable basis
  4. Actual expenses determined from departmental day books
  

Question 44 : Buying an asset without having to make full payment immediately is known as

  1. Gift
  2. Online Purchase
  3. Cash Purchase
  4. Hire Purchase
  

Question 45 : Which of the following items are not part of Credit side of General Profit & loss A/c ?

  1. Interest on loans given
  2. Sale of scrap
  3. Profit on sale of asset
  4. Income from investments
  

Question 46 : Drawings are deducted from ______

  1. Sales
  2. Purchases
  3. Return Outward
  4. Capital
  

Question 47 : Hire purchase system is governed by __________.

  1. Hire Purchase Act, 1972
  2. Hire Purchase Act, 1973
  3. Hire Purchase Act, 1982
  4. Hire Purchase Act, 1970
  

Question 48 : Capital expenditure is a __________ expenditure

  1. Abnormal
  2. Normal
  3. Non-recurring
  4. Recurring
  

Question 49 : Under Credit purchase method of hire purchase system, Depreciation on asset purchased is charged for the first year on _________.

  1. Instalment
  2. Hire Purchase price
  3. Full cash price
  4. Cash price paid
  

Question 50 : The estimated selling price in the ordinary course of business less estimated cost of completion and estimated selling costs is termed as ___

  1. Sale Value
  2. Net Realiable Value
  3. Fair Value
  4. Retail Value
  

Question 51 : Cash Discount on purchase of machinery received appearing in the Trial balance are shown

  1. On the Credit side of Manufacturing A/c
  2. On the Credit side of Trading A/c
  3. On the Credit side of Profit & Loss A/c
  4. On the Debit side of Profit & loss A/c
  

Question 52 : Trade-mark is _________

  1. Current Asset
  2. Investment
  3. Tangible Asset
  4. Intangible Asset
  

Question 53 : Expenditure on training activities is _________

  1. treated as expenses when incurred
  2. treated as intangible asset
  3. treated as deferred revenue expenditure
  4. treated as capital
  

Question 54 : Trade-mark is _________

  1. Current Asset
  2. Investment
  3. Tangible Asset
  4. Intangible Asset
  

Question 55 : The title of the goods sold on hire purchase passes on payment of _______.

  1. Down payment
  2. First instalment
  3. Last instalment
  4. When the agreement is signed
  

Question 56 : Each Hire purchase Instalment amount is made up of

  1. part payment towards cash price only
  2. part payment towards interest only
  3. part payments towards cash price plus interesr
  4. part payment towards down payment
  

Question 57 : In case of Manufacturer, Sale of scrap appears on the credit side of _____

  1. Manufacturing A/c
  2. Trading A/c
  3. Profit & loss A/c
  4. Personal A/c of Manufacturer
  

Question 58 : As per AS 1 significant accounting policies

  1. Need not be disclosed at one place
  2. May be disclosed as per the choice of the management
  3. Should be disclosed at one place
  4. Should not be disclosed in public accounts
  

Question 59 : The concept applicable for stock valuation is _________

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

Question 60 : Freight Inward appearing in Trial balance are shown

  1. On the debit side of Manufacturing A/c
  2. On the debit side of Trading A/c
  3. On the debit side of Profit & loss A/c
  4. on the Asset side of Balance sheet
  

Question 61 : Which of the following would not be used as the basis for allocating expenses to Departments ?

  1. Sales
  2. E-mail message
  3. Cost of goods sold
  4. Cost of Purchase
  

Question 62 : Which of the following is Capital Receipts ?

  1. Purchase of scrap
  2. Purchase of Raw material
  3. Purchase of Machinery
  4. Trade discount
  

Question 63 : ________ expenditure means an expenditure carrying probable future benefits

  1. Capital
  2. Revenue
  3. Deferred
  4. Outstanding
  

Question 64 : In Department Accounts, Office rent is allocated on the basis of _______ of each department

  1. Sales
  2. Area occupied
  3. Purchases
  4. No. of employees
  

Question 65 : As soon as the _______ payment is made, the hirer gets possession of the article and can start using it immediately.

  1. Full
  2. Last
  3. Cash
  4. Down
  

Question 66 : Which of the following is not divided in the ratio of no. of employees ?

  1. Salaries
  2. Bonus
  3. Rent & Rates
  4. Wages
  

Question 67 : The total space for a building, which serves as the headquarters for a company, is 40,000 sq. feet. There are 2 departments within the company. Department A occupies 12,500 square feet, while Department B uses 27,500 square feet. The total of building expenses for the year is Rs.24,000. What is the Department A's allocation for Building expenses for the year?

  1. Rs.4,000
  2. Rs.16,500
  3. Rs.18,000
  4. Rs.6,000
  

Question 68 : Items of incomes not pertaining to any departments are

  1. Charged to general Profit & loss A/c
  2. Departmental Profit & loss A/c
  3. Allocated to each department on the basis of purchase
  4. Shown in Balance sheet as
  

Question 69 : The person who sells the goods on hire purchase basis, is called a _______.

  1. Dealer
  2. Hire Purchaser
  3. Consignor
  4. Hire Vendor
  

Question 70 : In a Hire Purchase transaction, Interest paid by the purchaser is credited to the _______

  1. No entry
  2. Interest A/c
  3. Asset A/c
  4. hire vendor A/c
  

Question 71 : In Departmental Accounts, _______ debited to General Profit & loss A/c.

  1. Salaries
  2. Rent
  3. Advertising
  4. Interest on Loan
  

Question 72 : In Departmental Accounting, Contribution to PF is approtioned on the basis of ___________

  1. No. of employees
  2. Area occupied
  3. Sales
  4. Purchases
  

Question 73 : AS 9 does not deal with revenue arising out of

  1. Sale of goods
  2. Interest
  3. Service contracts
  4. Construction contracts
  

Question 74 : AS 2 states that, the costs of inventories should be assigned by using preferably

  1. Retail price or standard cost
  2. Last-in-first-out (LIFO) or Simple average cost formula
  3. First-in-first-out (FIFO) or weighted average cost formula
  4. Adjusted selling price or current replacement cost
  

Question 75 : For each period interest is to be calculated on the balance of

  1. Cash price less instalment amount
  2. Cash price remaining unpaid
  3. Cash price plus instalment amount
  4. Instalment price remaining unpaid
  

Question 76 : _________ shows the financial position of the company at the end of the year

  1. Manufacturing A/c
  2. Trading A/c
  3. Profit & loss A/c
  4. Balance sheet
  

Question 77 : If Accounting Standards differ from any law,

  1. Accounts must be prepared as per the Law
  2. Accounts must be prepared as per the Accounting standard
  3. Management has the option to follow either the Law or the Accounting standard
  4. two accounts must be prepared - one as per law and the another as per the accounting standard
  

Question 78 : The hire purchase price means the total amount payable by the hirer, made up of ____.

  1. The cash price of article & interest
  2. The cash price of article less interest
  3. The cash price of the article and the down payment
  4. The instalments and down payment
  

Question 79 : Which of the following is Revenue Receipts ?

  1. Bank Loan
  2. Discount Received
  3. Issue of Shares
  4. Issue of Debentures
  

Question 80 : In Departmental Accounts, Comprehensive Insurance (If ratio is not given) is taken in ________

  1. Departmental Trading A/c
  2. Departmental Profit & loss A/c
  3. General Profit & loss A/c
  4. Departmental Manufacturing A/c
  
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