Classical

Financial and Management Accounting - Financial and Management Accounting Multiple Choice Questions

41:  
Match List-I with List-II and select the correct answer using the codes given below the lists:
    List-I                                                                                 List-II
a. Profit prior to incorporation                               I. Provisions
b. Proposed dividend                                            II. Miscellaneous expenditure
c. Interest paid out of capital                               Ill. Current liabilities
d. Unclaimed dividend                                         IV. Reserves and surplus
A.

a   b    c    d

IV   I    III    II

B.

a   b    c    d

IV   I    II    III

C.

a   b    c    d

I   IV    II    III

D.

a   b    c    d

I   IV    III    II

 
 

Option: B

Explanation :


42:  
Assercion (A). Securities premium amount can be refunded in cash to equity shareholders for issuing fully paid bonus shares to members.
Reason (R). Share premium is usually collected when the market price of the shares is higher than the face value of the share.
A.
Both A and R are true and R is the correct explanation of A.
B.
Both A and R are true and R is not the correct explanation of A.
C.

A is true but R is false

D.

A is false but R is true.

 
 

Option: C

Explanation :


43:  

Profit and Loss Account is also called.

A.

Funds Flow Statement

B.

Income Statement

C.

Cash Flow Statement

D.

None of the above

 
 

Option: B

Explanation :


44:  
Which one of the following ratio is the indicator of the long term solvency of the firm?
A.

Acid test ratio

B.

Debt equity ratio

C.

Time interest earned ratio

D.

None of these

 
 

Option: B

Explanation :


45:  

Interest coverage Ratio is given by

A.

Net profit / Interest on Debt

B.

Debt capital / Interest on Debt

C.
Earning Before Interest and Tax / lnterest on Debt
D.

Profit Before Tax / Interest on Debt

 
 

Option: C

Explanation :




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