BCOM Financial Accounting 1 MCQ



Question 101: Inventories are defined as _____ (AS–2 (Revise)).

  1. Current Liability
  2. Assets held for sale in the ordiniary course of business
  3. asset
  4. Non of the above
  

Question 102: Depreciation is allocated on the basis of _____ _____.

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

Question 103: Drawings are debited to _____ Account.

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

Question 104: AS–2 states that, inventory should be valued at

  1. FIFO or weighted average basis
  2. Retail price of standard cost
  3. LIFO
  4. Current replacement cost
  

Question 105: Following is an example of an accounting policy

  1. Consistency
  2. Depreciation
  3. Accrual
  4. Going concern
  

Question 106: Pulling out old building and rebuilding it ` 2,50,000

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

Question 107: Payment of penalty is a _____ expenditure.

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

Question 108: _____ receipts are shown as income in Profit & Loss Account.

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

Question 109: Valuation of Inventory should be done at

  1. Net realisable value
  2. Fair market value
  3. Present value
  4. Replacement value
  

Question 110: As per AS–1, disclosure of accounting policies should form part of

  1. Financial statements
  2. Director’s Report
  3. Auditor’s Report
  4. Books of accounts
  

Question 111: Replacement of old tyres by new one

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

Question 112: Carriage on purchase of furniture is _____ expenditure.

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

Question 113: Sales ratio is used for allocation of :

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

Question 114: Following factors should be considered in selection of accounting policies

  1. Liquidity
  2. Cost
  3. Materiality
  4. Morale of employees
  

Question 115: _____ is expenditure on asset held for generation of interest / dividend.

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

Question 116: Cost of inventory does not include

  1. Selling cost
  2. Office overheads
  3. Exceptional waste of material
  4. All of the above
  

Question 117: Under _____ stock taking stock is valued periodically.

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

Question 118: Revenue from Advertising Agency Commission is recognised when

  1. Advertisement appears before the public
  2. Advertisement agreement is signed
  3. Advertisement copy is drafted
  4. None of the above
  

Question 119: Under _____ method lots of stock should be identified.

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

Question 120: There is need to _____ change in accounting policies

  1. Accural
  2. Realisation
  3. disclose
  4. All of the above
  

Question 121: Following is the example of accounting policy

  1. Consistency
  2. Goodwill treatment
  3. Cost
  4. Conservatism
  

Question 122: Brokerage paid on purchase of land ` 10,000

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

Question 123: All indirect expenses are debited to _____ Account.

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

Question 124: Following is not debited to departmental P & L A/c

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

Question 125: _____ expenditure is shown in the Balance Sheet on asset side.

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

Question 126: Retail method of inventory valution is

  1. Sales less gross profit
  2. Cost plus net profit
  3. Sales plus gross profit
  4. Sales less net profit
  

Question 127: Revenue from sale of goods arises when

  1. Goods are sold out
  2. Goods are delivered
  3. Goods are depatched
  4. None of the above
  

Question 128: 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 129: 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 130: AS _____ deals with disclosure of accounting policies.

  1. GAAP
  2. AS 1
  3. ASB
  4. None of the above
  

Question 131: Interest on drawings is credited to _____ Account.

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

Question 132: Following is the example of accounting policy

  1. Realisation
  2. Accrual
  3. Accounting period
  4. Recognition of profit on contract
  

Question 133: As per AS, goods and services produced and kept aside for specific projects should be valued at

  1. Contract price
  2. Net realisable value
  3. Identified individual cost
  4. Pre-placement cost
  

Question 134: In _____ method, stock is valued at current rate.

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

Question 135: Different firms follow _____ policies.

  1. Same
  2. leagal
  3. None of the above
  4. Different
  

Question 136: Depreciation is _____ in nature.

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

Question 137: The factors to be considered while selecting accounting policies include “

  1. Morale of staff
  2. Materiality
  3. Liquidity
  4. Inflation
  

Question 138: Revenue from sale of goods is recognised when

  1. Sale is made
  2. Collection is made from debtors
  3. Goods are produced
  4. None of the above
  

Question 139: Revenue from interest is recognised when

  1. Interest is received
  2. Loan is repaid
  3. Interest accrues on time basis
  4. When loan is taken
  

Question 140: Spent on umbrellas to employees ` 5,000

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

Question 141: 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 142: As per AS–1, any change in accounting policy

  1. Should be disclosed
  2. Should not be disclosed
  3. Requires permission from ICAI
  4. Requires permission from the Government
  

Question 143: Accounting policies are

  1. Prescribed by AS–1
  2. Same for all the organisations
  3. Change from concern to concern
  4. Laid down by law
  

Question 144: 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 145: _____ method assumes that stock received last is issued first.

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

Question 146: Accounting policies are not _____ for all organisations.

  1. Compulsory
  2. Different
  3. None of the above
  4. Same
  

Question 147: Cost of Inventory should include

  1. Import duties
  2. Taxes
  3. Canriage
  4. All of the above
  

Question 148: Documentation charges regarding purchase of building is a _____ expenditure.

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

Question 149: There is need of _____ to accounts.

  1. Report
  2. Data
  3. notes
  4. None ot the above
  

Question 150: Goodwill is not a _____ asset.

  1. fictitious
  2. fixed
  3. current
  4. None of the above
  

Question 151: Under perpetual inventory system inventory is valued

  1. Continuously
  2. Periodically
  3. Annually
  4. Quarterly
  

Question 152: Commission received is a _____ receipt.

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

Question 153: _____ expenditure is recurring.

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

Question 154: As per AS 1 the effect of any change in accounting policy on the value of any item in the final accounts should

  1. Be reported to directors
  2. Be reported to CEO
  3. Be disclosed
  4. Be ignored
  

Question 155: Advertising is a _____ expenditure.

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

Question 156: Carriage inward is allocated on the basis of _____ of each department.

  1. sales
  2. purchases
  3. Expenses
  4. Income
  

Question 157: It is difficult to follow a _____ accounting policy in all the circumstances.

  1. uniform
  2. Transperancy
  3. None of the above
  

Question 158: Inventories do _____ include machinery.

  1. Partialy
  2. not
  3. Mostly
  4. None of the above
  

Question 159: Weighted Average method can be used under

  1. Only periodic inventory system
  2. Periodic and perpetual inventory systems
  3. Only perpetual inventory system
  4. None of the above
  

Question 160: AS–2 is not applicable to _____ _____.

  1. Mineral Oils
  2. Machinery Spares
  3. Live stock
  4. None of the above
  

Question 161: Wages paid for installation of machinery is a _____ expenditure.

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

Question 162: Following factors should be considered in selection of accounting policies

  1. Consistency
  2. Prudence
  3. Dual aspect
  4. Cost
  

Question 163: Supervision charges should be apportioned over the different departments on the basis of :

  1. Time devoted for supervision
  2. Area occupied by each department
  3. Sales of each department
  4. None of the above
  

Question 164: _____ method is not recognised by AS 2.

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

Question 165: Overhauling of machinery is a _____ expenditure.

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

Question 166: 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 167: AS per AS 2 cost of inventory should not include

  1. Interest on loan
  2. Direct Material
  3. Direct Labour
  4. Overheads
  

Question 168: In _____ method, stock is valued at oldest rate.

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

Question 169: 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 170: Revenue from dividend is recognised when

  1. Dividend is received
  2. Right to receive dividend is established
  3. Amount is credited to Bank Account
  4. Dividend warrant is despatched by the company
  

Question 171: Welfare expenses are allocated on the basis of _____ _____.

  1. Employees
  2. purchases
  3. Sales
  4. Rent
  

Question 172: Heavy legal expenses are _____ _____ _____ .

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

Question 173: Cost of inventory should include

  1. Purchase price and cost incurred to bring the inventory to present location
  2. Purchase price only
  3. Freight only
  4. Cost of conversion only
  

Question 174: Trade discount should be

  1. Deducted from revenue
  2. Added to revenue
  3. Ignored
  4. None of the above
  

Question 175: Bad debt recovery is a _____ receipt.

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

Question 176: As per AS–2, inventory covers

  1. Machinery spares
  2. WIP in case of service providers
  3. Materials or suppliers used in production
  4. Stock of mineral oil
  

Question 177: _____ _____ are laid down by law.

  1. Auditor's report
  2. Directors report
  3. Accounting Standards
  4. None of the above
  

Question 178: Departmental expenses may be _____ or _____.

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

Question 179: 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 180: The _____ statements are prepared from the books of accounts and other records maintained by the enterprise.

  1. Leagal
  2. Non–Leagal
  3. None of the above
  4. financial
  

Question 181: 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 182: Rent is allocated on the basis of _____.

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

Question 183: _____ _____ _____ is followed when there are fluctuations in prices.

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

Question 184: Demolition cost of old building is a _____ _____ _____ .

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

Question 185: In _____ method, Balance Sheet shows current cost of stock.

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

Question 186: 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 187: Under periodic inventory system, closing stock is valued

  1. By actually counting the stock on a particular date
  2. From the stores ledger
  3. By deducting value of sales from value of purchases
  4. On estimate basis
  

Question 188: Purchase of tools for servicing.

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

Question 189: In consignment revenue is recognised when

  1. Goods are sent on consignment
  2. Goods are received by the consignee
  3. Goods are sold out by the consignee
  4. All of the above
  

Question 190: Overvaluation of stock _____ profits.

  1. Minimise
  2. Inflates
  3. None of the above
  4. Deflates
  

Question 191: 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 192: _____ expenditure is non-recurring.

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

Question 193: Cost of transport of material

  1. Increases landing cost of material
  2. Increases conversin cost
  3. Decreases variable cost
  4. None of the above
  

Question 194: In _____ method, stock is over valued when the prices are rising.

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

Question 195: Cost of repairing the building

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

Question 196: Expenses traceable with the departments are called _____.

  1. Direct Income
  2. Welfare Expenses
  3. Direct Expenses
  4. None of the above
  

Question 197: AS–2 defines inventory as

  1. Current assets
  2. Current liabilities
  3. Fixed assets
  4. Assets held for sale in the ordinary course of business
  

Question 198: Inventory consists of finished goods held for sale in the _____ course of business.

  1. ordinary
  2. Legal
  3. None of the above
  4. Compulsory
  

Question 199: Under _____ inventory system, stock is valued by physical stock taking.

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

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