Classical

Financial and Management Accounting - Financial and Management Accounting MCQ

61:  
Match List I (Objectives of analysis) with List II (Ratios to be computed) and select correct answer using the codes given below the lists
    List I                                                         List II
a. Trading on Equity                             I. Earnings per share
b. Efficiency of Inventory Control       II. Liquidity ratio
c. Overall Efficiency                            III. Capital gearing
d. Immediate Solvency                      IV. Stock turnover ratio
A.

 a   b   c    d

 II    I    IV   III

B.

 a   b   c    d

 III  IV   I   II

C.

 a   b   c    d

III    I    IV   II

D.

 a   b   c    d

 II    IV   I   III

 
 

Option: B

Explanation :

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62:  

Which of the following statement is correct?

A.
Fixed assets must always be shown at market value
B.
Book-keeping and accounting are different terms
C.

Owner's Equity = Assets + Liabilities

D.

Patents is an example of current asset

 
 

Option: A

Explanation :

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Jasbir Singh said: (10:38am on Sunday 26th June 2016)
According to historical cost concept Fixed assets must always be shown at market value For example:The company built its ERP in 2008 at a cost of $40 million. In 2010 it is estimated that the present value of the future benefits attributable to the ERP is $1 billion. The ERP shall stand on balance sheet at its historical costs less accumulated depreciation.

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63:  
Which of the following statement is not correct in relation to cash discount?
A.
Cash discount is an allowance made by the person who receives cash to the payer for prompt payment
B.
Cash discount is an allowance in addition to the trade discount
C.
Cash discount is recorded in account books
D.
Cash discount is always allowed at a rate higher than the rate of trade discount
 
 

Option: D

Explanation :

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64:  

Bonus shares can be issued by a company

A.
Out of the Reserves created by revaluation of fixed assets
B.
Out of share premium not collected in cash
C.
Without any provision for it in the Articles of Association of the company
D.
Out of free reserves built out of genuine profit
 
 

Option: D

Explanation :

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65:  

Current assets include

A.

Stores & Spare parts

B.

Stock in trade

C.

Sundry Debtors

D.

All of the above

 
 

Option: D

Explanation :

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