1. _________ suggests that incomes should be recognized as and when they are earned and incurred,
irrespective of whether money is received or paid.
a. Cost concept
b. Accrual concept
c. Money Measurement concept
d. Concept of prudence
4. ___________ accounting demands that each debit should have an equal and opposite credit
a. Double entry
b. Single entry
c. Management
d. Cost
5. True or false
1. Decrease in assets and increase in liability is debited
2. Sales Day Book records credit sale of goods
a. 1-true, 2-true
b. 1-false, 2-false
c. 1-false, 2-false
d. 1-true, 2-false
6. ____________ serves the purpose of both a book of prime entry and a book of secondary entry.
a. Purchase Day book
b. Cash book
c. Bills Receivable book
d. Return Outward Book
8. ___________ ledger is a self-sufficient secondary book in the sense that all entries in the primary book will
posted, directly or indirectly in this ledger
a. Main
b. Debtors
c. Creditors
d. General
12. __________ is arrived at by deducting the direct cost of goods sold from sales proceeds
a. Net profit
b. Operating profit
c. Operating net profit
d. Gross profit
13. __________ is concerned with generation of data, processing data element for managerial decision-
making and communication thereof
a. Management accounting
b. Financial accounting
c. Cost accounting
d. Taxation accounting
19. This ratio shows how many times Interest charges are covered by EBIT.
a. Dividend coverage
b. Interest coverage
c. Earning yield
d. Price earning ratio
21. Total of operating ratio and operating profit ratio will be equal to
a. 75%
b. 50%
c. 100%
d. 80%
22. __________ costs are either difficult or impossible to trace a single product
a. Direct
b. Indirect
c. Step
d. Variable
23.
Cost
Output
This graph is of
a. Total fixed cost
b. Variable cost
c. Step cost
d. Unit fixed cost
24. __________ refers to the cost of selection of one alternative course of action in terms of other alternatives
given up to carry out that course of action
a. Relevant costs
b. Opportunity costs
c. Incremental costs
d. Imputed costs
26. "Hire of special plant or machinery or total for a particular job" is an example of
a. Production Overhead
b. Indirect expenses
c. Direct expenses
d. Indirect expenses
28. The difference between selling price and marginal cost is called ___________
a. Cost of goods sold
b. Profit
c. Contribution
d. Break-even point
29. Under marginal costing only __________are charged to operations, processes or products
a. Variable cost
b. Fixed cost
c. Period cost
d. None of the above
33. __________ is the difference between standard cost of direct materials specified for actual output and the
actual cost of direct materials
a. Material Usage Variance
b. Material Price Variance
c. Material Cost Variance
d. Material Mix Variance
39. A typical cost sheet shows the total cost of _________ only
a. Production
b. Sales
c. Administration
d. None
40. If the total of the debit side of an account is greater than credit side, the difference is put on the credit side
and the same is called ___________
a. Credit balance
b. Debit balance
c. Contra entry
d. None of the above
43. Sold goods on credit Rs 1, 20, 000. What should be the correct journal entry?
a. Cash a/c Dr. 1, 20, 000
To Sales a/c 1, 20, 000
b. Sales a/c Dr. 1, 20, 000
To creditors a/c 1, 20, 000
c. Debtors a/c Dr. 1, 20, 000
To Sales a/c 1, 20, 000
d. Sales a/c Dr 1, 20, 000
To Debtors a/c 1, 20, 000
44. The highest form of Cash book is a triple column cash book
a. One for cash
b. One for debtors
c. One for bank
d. One for discount
A. Only a and c
B. Only b and d
C. Only a, b, and c
D. a, c, and d
49.
To Stock - in - hand 76, 250 By sales 5, 00, 000
To Purchases 3, 15, 250 By Closing stock 98, 500
To Carriage 2, 000
To wages 5, 000
To Gross profit 2, 00, 000
51. The following figures are available from the records of Venus Enterprises as at 31st March
56. Decrease in working capital appears on _____ side of fund flow statement and sale of fixed assets appears on
_______ side
a. Sources, sources
b. Sources, applications
c. Application, Source
d. Application, application
Following are the ratios relating to the trading activities of National Traders Ltd
Debtors Velocity 3 months
Stock Velocity 8 months
Creditors Velocity 2 months
Gross Profit ratio 25%
Gross Profit for the year ended 31st Dec. 2006 amounts to Rs 4, 00, 000. Closing stock of the year is Rs 10,
000 above opening stock. Bills receivable amount of Rs.25, 000 and bills payable to Rs.10, 000
67. Find out sales
a. Rs.6, 00, 000
b. Rs.16, 00, 000
c. Rs.26, 00, 000
d. Rs.10, 000
70. Which among the following is not true about cash flow statements?
1. CFS reveals the inflow and outflow of cash during a particular period
2. CFS helps in long term financial decisions relating to liquidity
3. CFS shows the effects of changes in cash balance between the balance sheet dates
4. CFS explains reasons for low cash balance
a. All are true
b. Only 2 is false
c. 2 and 3 are false
d. Only 1 and 4 are false
SECTION A 31 B SECTION C
1 B 32 C 61 C
2 D 33 C 62 B
3 B 34 C 63 B
4 A 35 A 64 B
5 C 36 C 65 B
6 B 37 A 66 C
7 C 38 B 67 B
8 D 39 A 68 B
9 A 40 B 69 B
10 B SECTION B 70 C
11 C 41 C 71 A
12 D 42 B 72 A
13 A 43 C 73 C
14 B 44 D 74 A
15 C 45 D 75 C
16 A 46 C
17 A 47 D
18 A 48 B
19 B 49 B
20 B 50 D
21 C 51 A
22 B 52 D
23 D 53 B
24 B 54 C
25 B 55 B
26 C 56 A
27 A 57 A
28 C 58 D
29 A 59 A
30 D 60 D