Classical

Financial and Management Accounting - Financial and Management Accounting Questions

26:  
Capital Redemption Reserve can be utilised by the company only for
A.

Redemption of shares

B.

Distribution of dividend

C.

Issue of fully paid bonus shares

D.

All of the above

 
 

Option: C

Explanation :


27:  
What are the ways of creating secret reserves?
1. By charging excessive depreciation
2. By overvaluing stock in trade and goodwill
3. By suppressing sales
4. By showing a contingent liability as a real liability
5. By grouping free reserves as creditors.
Select the correct answer using the codes given below: 
A.

1,2,4 and 5

B.

1,3,4 and 5

C.

2,3 and 5

D.

1,2 and 4

 
 

Option: D

Explanation :


28:  
Section ---- of the ----- restricts the maximum number of members in partnership to 10 in case of banking firms and 20 to carry on any other business in partnership.
A.

4 ,Indian Partnership Act, 1932

B.

11, Indian Partnership Act, 1932

C.

4, Indian Companies Act, 1956

D.

11, Indian Companies Act, 1956

 
 

Option: D

Explanation :


29:  
A very important component of management accounting is
A.

Financial accounting

B.

Contract accounting

C.

Cost accounting

D.

Management auditing

 
 

Option: C

Explanation :


30:  
Match List I with List II and select correct answer using the codes given below:
   List-l                            List-ll
a. Depreciation          I. Loss of usefulness arising from factors such as technological changes, improvement in
                                         production methods, change in market demand for the product etc.
b. Depletion               II. Process of writing down the longterm investments in intangibles such as lease
                                         holds, patents, copyrights, trade marks etc.
c. Amortization          Ill. Process of measuring and recording the exhaustion of natural resources such as ore                                                        deposits, oil wells, timber stands, quarries, etc.
d. Obsolescence      IV. Accounting process of converting the cost of fixed assets to expense
 
A.

  a    b    c    d

 IV   III     II    I

B.

  a    b    c    d

 III    IV     II    I

C.

  a    b    c    d

 IV   III     I    II

D.

  a    b    c    d

  I     II     III   IV

 
 

Option: A

Explanation :




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