OBJECTIVE QUESTIONS [UNIT-1] Multiple Choice Questions 1.

A profit making business that is a separate legal entity and in which ownership is in the form of shares is known as : (a) (c) 2. (a) (c) 3. Sale proprietorship Partnership (b) (d) Trust Company

The properties owned by a business enterprise are called : Assets Capital (b) (d) Liabilities Owner's equity

A list of assets, liabilities and owner's equity of a business enterprise as of a specific date is :

(a) (c) 4. (a) (b) (c) (d) 5.

Balance Sheet Cash flow Statement

(b) (d)

Income Statement None of the above

Which of the following is an important is reason for studying accounting? The information provided by accounting is useful in making many economic decisions. Accounting plays an important role in society. The study of accounting could lead to a challenging career All of the above are important reasons Which of the following groups uses accounting information for planning a company's profitability?

(a) (c) 6. (a) (c) 7.

Investors Management

(b) (d)

Creditors Regulatory agencies

Economic events that effect the financial position of a business are called: Separate entities Money measures (b) (d) Business transactions Financial actions

Which of the following forms of organization is not treated as a separate economic unit in accounting?

(a) (c)

Sale proprietorship Partnership

(b) (d)

Committee Company

8.

If a company has liabilities of Rs. 19,000 and owner's equity of Rs. 57,000, the assets of the company are :

(a) (c) 9. (a)

Rs. 38,000 Rs. 57,000 The payment of a liability will : Increase both assets and liabilities

(b) (d)

Rs. 76,000 Rs. 19,000

(b)

Increase assets and decrease

liabilities (c) Decrease assets and increase liabilities (d) Decrease assets and decrease

liabilities 9. (a) The payment of a liability will : Increase both assets and liabilities (b) Increase assets and decrease

liabilities (c) Decrease assets and increase liabilities (d) Decrease assets and decrease

liabilities 10. (a) (c) The purchase of an asset for cash will : Increase both assets at the same time Decrease assets and owner's equity (b) (d) Increase both assets and liabilities Increase assets and decrease

liabilities 11. (a) (b) (c) (d) 12. The balance sheet is related to the income statement is the same way that : A point in time is related to a period of time A period of time is related to a point in time. A point in time is related to another point in time. A period of time is related to another period of time. Expenses and withdrawals appear, respectively, on which of the following financial statements? (a) (c) (d) 13. Balance sheet and Income Statement (b) Income statement and Balance Sheet

Statement of owner's equity and balance sheet Income statements and Statement of owner's equity Which of the following types of accounts should be completely independent of the firm organization whose financial data is being exacted?

(a)

Controller

(b)

Chartered accountant

(c) 14. (a) (b) (c) (d) 15.

Internal auditor

(d)

Firm's budget direction

The accounting principle of matching is best demonstrated by: Not recognizing any expense unless some revenue is realized Associating effort with accomplishment Recognizing prepaid rest received as revenue. Establishing a reserve for possible future market decline in inventory account Which of the following cost items would be matched with correct revenues as a basis other other than association of cause and effect?

(a) (c) 16. (a) (c) 17. (a) (b) their

Goodwill Cost of goods sold

(b) (d)

Sales commission Purchases on credit.

The immediate recognition of loss is supported by the underlying principle of : Matching Judgement The entity posulate : Refers to the name of the company required in the heading of the balance sheet Refers to the owner's of the entity, who must account for their interest in the entity in (b) (d) Consistency Conservation

personal holdings. (c) is made up of many separate from its owners. (d) Holds that the business is made up of many separate components that are accounted for separately but reported collectively in the financial statements 18. (a) (b) The time period postulate: Refers to the limited life of a joint venture Suggests that companies need to prepare financial reports on a periodic basic, when all operating cycles are complete. (c) Suggestion that companies prepare financial reports on the basis of a systematic time Indicates that the accounting unit as which the financial reports are based is the business

internal, even though the operating cycles of the entity may be incomplete.

(d)

Refers to the fact that adjusting entries must be made before financial statements are

prepared periodically. 19. The valuation of a promise to receive cash in the future at present value on the financial statements of a business entity is valid by virtue of which accounting postulate on principle? (a) (c) 20. Entity Matching (b) (d) Materiality Going concern

The determination of the exposes for as accounting period is based largely on the application is which principle?

(a) (c) 21.

Cost Matching

(b) (d)

Consistency Time period

A sle proprietor decided to use the same book account for his personal affairs as for his business. Which of the following accounting principle is violated?

(a) (c)

Going concern Measuring

(b) (d)

Entity Objectivity

22. (a) (b) (c) operate 23.

Generally accepted accounting principles: Define accounting practice at a point in time Are similar in nature to the principles of chemistry or phyics. Are rarely charged. (d) Are not effected by charges in the way business

Assigning revenues to the accounting period in which the goods were delivered on the services performed and expresses to the accounting period in which they were used to produce revenues is known as the :

(a) (c) 24. (a) (c) 25.

Accounting period problem Matching rule The prime function of accounting is to : Record economic data (b)

(b) (d)

Continuity assumption Recognition

Provide the international basis for action (d) Attain non-economic goals

Classifying and recording business transaction The basis function of financial accounting is to :

(a) (c) 26. (a) (c) 27. (a) (b) (c) 28. (a) (c) 29. (a) (c) 30. (a) (c) 31.

Record all business transactions

(b)

Interpret the financial data

Assist the management in performing function effectively Management accounting provides invaluable services & management in performing: All management functions Contouring functions Book-keeping is mainly concerned with : Recording of financial data relative to business operation Designing the systems in recording classifying, summarizing the recorded data Interpreting the data for internal and external end users. Accounting principles are generally based on : Practicability Convenience in recording The system of recording transactions bases an dual aspect concept is called: Double account system Single entry system The practice of appending notes regarding contigent liasilies: Convention of consistency Convention of conservation (b) (d) Money measurement concept Convention of disclosure (b) Double entry system (b) Subjectinity (b) Interpret the financial data

According to the money measurement concept, the following will be recorded in the basis of account of the business :

(a) (b) (c) 32. (a) (b) (c) 33. (a) (c) 34.

Health of managing direction of the company Quality of company's goods Value of plant and Machinery The convention of conservatism is applicable In providing for discount an creditors In making provision for bad and doubtful debts. Providing for depreciations. The convention of conservatism, when applied to the balance sheet, results in : Understatement of assets Overstatement of capital Revenue is usually recognized as earned at the point of time (b) Understatement of liabilities

(a) (c) 35. (a) (c) 36. (a) (c) 37. (a) (c) 38. (a) (c) 39. (a) (c)

Production is done Cash is obtained

(b)

Sale is made

Contigent liability as shown in the balance sheet, arises out of : Consisting of convention Materiality convention The policy of 'Recognize all losses and anticipate no gains" arises outline to : Conservation convention Consistency convention. Bank is a : Real account Nominal A/c Cash Account is a : Real A/c Nominal A/c Baddebts is : Personal A/c Nominal A/c (b) Real A/c (b) Personal A/c (b) Personal A/c (b) Disclosure convention (b) Disclosure convention

40. (a) (b) (c) 41. (a) (c) (e) 42.

In Double entry system of book-keeping each business transaction affects : Two sides of the same A/c The same account on two separate dates Two account The primary qualities that make accounting intonation useful for decision making are : Comparability and consistency Relevance and freedom from bias None of these The assumption that a business enterprise will not be sold or liquidated in the near future is known as the : (b) (d) Materiality and timeliness Reliability and comparability

(a) (c)

Economic entity Conservation

(b) (d)

Monetary unit Periodicity

(e) 43.

None of these When information about two different enterprises has been prepared and presented in a similar manner, the information exhibits the characteristics of :

(a) (c) (e) 44. (a) (c) (e) 45.

Relevance Consistency None

(b) (d)

Releasing Variability

Revenue is generally recognized at the point of sale. Which principle is applied herein? Consistency Revenue reorganization None The accounting principles that conforms to the tendency of accountants. To resolve uncertainly and double in favour of understanding assets and revenues and overstating liabilities and expenses, is known as : (b) (d) Matching Cost Principle

(a) (c) (e) 46.

Conservation Industry practice None

(b) (d)

Materiality Consistency

During the life-time of an entity accountants produce financial statements at arbitrary points in time in accordance with which basic accounting principles?

(a) (c) 47. (a) (b) (c) (d) 48. (a) (b) (c) 49. (a)

Cost-benefit Conservation

(b) (d)

Periodicity Making

The basic function of accounting is to : To maintain records of business To provide, information on the performance of the enterprises To provide information about the owner's assets, liabilities and capital All of the above Book-keeping is concerned with : Recording of financial data Interpretation and analysis of the data Designing of the system in recording classifying and summarizing the recorded data. Which of the following is an essential feature of an asset> An asset is acquired at a cost (b) An asset is tangible

(c) 50. (a) (b) (c) 51. (a) (c) 52. (a) (b) (c) 53. (a) (c) 54. (a) (b) (c) 55. (a) (c) 56. (a) (c)

An asset provides future benefits The primary qualities that increase the utility of financial statement are : Comparability Consistency Reliability, relevance and understanfibility Which of the following is a liability? Creditors Bad debts recovered According to the concept of 'Revenue Recognization' revenues are recognized when: Cash is actually received Order is received Revenue becomes due i.e. the legal title of the goods is transferred Accounting principles are based on Convenience Practicability The accounting standard in India are issued by : ASB Council of Institute of Chartered Accountant of India IASC A transaction involving a very small amount does not need to be recorded because of : Dual concept Revenue recognition concept Lower of cost on market value should be used in costing for : Inventories only Current assets only (b) Assets (b) Materiality concept (b) Subjectivity (b) Debtors

57) Assets minus liabilities equal to A) Goodwill B) Working capital C) Net income D) Capital 58) Goodwill is classified as which one of the following assets?

A) Fixed B) Long term C) Current D) Intangible 59) An accounting year ending on a date other than December 31 is referred to as a ____________ year. 4) When a Liability is reduced or decreased, it is recorded on the: A) Left or credit side of the account B) Right or debit side of the account C) Right or credit side of the account D) Left or debit side of the account

Answer's List 1. (d) (b) 8. (b) (b) 15. (a) (b) 22. (c) (a) 29. (b) (b) 36 (a) (e) 37. (b) 38. (a) 39. (c) 40. (c) 41. (e) 42. 30. (d) 31. (c) 32. (b) 33. (a) 34. (b) 35. 23. (c) 24. (c) 25. (a) 26. (a) 27. (a) 28. 16. (d) 17. (c) 18. (c) 19. (d) 20 (c) 21. 9. (d) 10 (a) 11. (a) 12. (d) 13. (b) 14. 2. (a) 3 (a) 4 (d) 5 (c) 6 (b) 7

43.

(e) (c)

44.

(c)

45.

(a)

46.

(b)

47.

(a)

48.

(d)

49.

50. 58.

(c) (d)

51.
59

(a)

52.

(c)
(d)

53.

(b)

54.

(b)

56.

(a) 57

d)

. Fiscal 60.

UNIT-II Multiple choice questions 1. The three most useful general purpose financial statements for management are : (a) Income statement, statement of retained earning and balance sheet (b) Income statement, balance sheet and statement of charges in financial position (c) Income statements, statement of retained earnings and funds flow statement (d) Statement of retained earnings, balance sheet and funds flow statement 2. In case of a limited company, the term financial statement includes : (a) Profit and loss account and balance sheet (b) Profit and loss account, profit and loss appropriation account and balance sheet (c) Balance sheet 3. The term current assets does not included : (a) Payment in advance (c) Long term deferred charges 4. The following is a recorded fact : (a) Market value of investments (c) Replacement cost of machinery 5. The term fixed assets includes : (a) Stock in trade (c) Payments in advance
6) Goods of $1,000 purchased from Mr. A were recorded in sales book, the rectification of this error will:

(b) Bill receivable

(d) Debtors

(b) Furniture

A) Increase the gross profit

B) Reduce the gross profit

C) Have no effect on gross Profit

D) None of the given options

7) Which of the following account will be credited when a typewriter is sold that has been used in the office?

A) Purchase Account

B) Sales Account

C) Cash Account

D) Office Equipment Account

8) When one or both aspects of a transaction are recorded in the wrong class or category of account, this is called:

A) Error of principle

B) Error of omission

C) Error of commission

D) Error of original entry

9) Which of the following item must be recorded in the adjusted Cash Book in order to bring it in line with the entries in the Bank Statement?

A) Bank charges

B) An error on the Bank Statement

C) An uncredited deposit

D) An unpresented cheque

10) It is supposed that on 31st December, 2007, the sundry debtors are amounted to $40,000. On the basis of past experience, it is estimated that 10% of the sundry debtors are doubtful. Actual bad debts are $ 1600. What amount of new provision for doubtful debts will be credited in profit & loss account

A) 4599

B) 3400

C) 2400

D) 1500

11) Which of the following is an example of operating expense?

A) Purchasing operating equipment

B) Purchasing a vehicle

C) Purchasing cleaning services

D) buying a computer

12) Which of the following would NOT be considered as a component of 'cost' of stock?

A) Transportation inward costs

B) Import duties

C) Salaries of selling staff

D) Purchase price

13) Which of the following will be debited, if cash is drawn by Proprietor? A) Proprietors drawings B) Proprietors cash C) Proprietors capital

D) Out flows

14) Which of the following is TRUE about the treatment of insurance paid in advance $ 1200?

A) Current asset

B) Current liability

C) Short term liability

D) Fixed asset

15) When closing stock is given in trial balance, then it will effect:

A) Trading account only

B) Balance sheet only

C) Owner's equity only

D) Trading A/C and Balance sheet

16) Trial balance is prepared to check accuracy of

A) Ledger accounts balances

B) Balance sheet balances

C) Income statement balances

D) Cash flow statement balances

17) If a transaction is completely omitted from the books of accounts, will it affect the agreement of a trial balance?

A) Yes

B) No

C) Transactions can't be omitted

18) ________ is the common base for preparing a trial balance

A) Ledger accounts

B) General Journal

C) Specialized journals

D) Balance sheet

19) Which of the following is true about a trial balance?

A) It lists down the balances of accounts

B) It lists down the balances of a balance sheet

C) It is a kind of financial statement

D) It is not a part of accounting cycle

20.

Financial accounts provide a summary of (a) Assets (c) Accounts (b) Liabilities

21.

Financial statements are : (a) Estimates of facts (c) Recorded data (b) Anticipated facts

22.

Retained earnings statement depicts (a) Appropriation of profit (c) Estimates of costs (b) Estimates of profit

23.

Current assets includes (a) Trade investments (c) Sundry debtors. (b) Machinery

24.

Which of the following is a non-current assets ? (a) Goodwill (c) B/R (b) Cash

25.

State which of the following is a non - current liability ? (a) Mortgage loan (c) Outstanding salary (b) Bank

26.

Depreciation of machinery is (a) Same of funds (c) None (b) Source of funds

27.

Stock in the beginning results in (a) Application of funds (c) No flow of funds (b) Source of funds

28.

Which of the following are non-current items (a) Share premium (c) Payment of wages (e) Bank (b) P/L A/c (d) Sundry creditors

29.

Which of the following will result into application of funds ? (a) Sale of plant (c) Purchase of land (e) Payment of creditors (b) Payment of dividend (d) Issue of share capital

30) Debit balance = Credit balance in a trial balance indicates that

A) No error in recording transactions

B) No error in posting entries to ledger accounts

C) Account balances are correct

D) Mathematically Capital+Liabilities=Assets

31) Trial balance is commonly prepared

A) Frequently during the year

B) At the end of an accounting period

C) At the end of a month

D) At the end of a year

32) Which of the following will affect the agreement of a trial balance?

A) Complete omission of a transaction

B) Partial omission of a transaction

C) Error of principle

D) Compensating errors

33) If debit balances = credit balances, trial balance only shows or check the ____________ and it does not indicate that no errors were made during recording and posting

A) Arithmetic accuracy

B) Errors of commission

C) Omissions of economic events

D) Understatements of balances

34) Which of the following account with normal balance is shown at the debit side of a trial balance?

A) Rent income account

B) Creditors account

C) Unearned income account

D) Cash account

35) Which of the following account with normal balance is shown at the credit side of a trial balance?

A) Cash account

B) Bank account

C) Equipment account

D) Accrued expenses account

36) The closing balance of petty cash book is considered as

A) Liability

B) Asset

C) Expenses

D) Income

37) Payment of rent expenses is recorded on which side of cash book?

A) Receipts

B) Payments

C) Income

D) Expense

38) An entry which is made on both sides of a cash book is called

A) Cash entry

B) Contra entry

C) Payment entry

D) Compound entry

39) A cash book with cash, bank and discount column is commonly referred as

A) Cash book

B) Two columns cash book

C) Three columns cash book

D) Petty cash book

40) Cash book records

A) Cash payments

B) Cash receipts

C) Cash payments and cash receipts

D) Neither cash payments nor cash receipts

41) Cash discount is allowed on _______ repayment of debt

A) Lump sum

B) Prompt

C) Actual

D) None of them

42) Cash book is prepared by

A) Bank

B) Accountant of business

C) Manager of a company

D) Bank's cashier

43) The most common imprest system is the ________ system

A) petty cash

B) Cash book

C) Cash receipt

D) Discount

44) Discount received is recorded on which of the following side of a cash book?

A) Receipts

B) Payments

C) Incomes

D) Expenditures

45) Drawings by owner of business are generally recorded on which of the following side of a cash book?

A) Receipts

B) Payments

C) Incomes

D) Expenditures

46) Introduction capital by owner of business is recorded on which side of a cash book?

A) Receipts

B) Payments

C) Incomes

D) Expenditures

47) Cash book with cash and discount column is mostly referred as

A) Simple cash book

B) Two column cash book

C) Three column cash book

D) Petty cash book

48 A cash book that is used to record the small payments of cash is generally referred as

A) Simple cash book

B) Two column cash book

C) Three column cash book

D) Petty cash book

49) A simple or one column cash book usually has which of the following main columns?

A) Bank

B) Payments

C) Discount

D) Cash

50 Purchase of office equipment for cash will be recorded on which of the following sides of a cash book?

A) Receipts

B) Payments

C) Incomes

D) Expenditures

51) Postdated checks are considered as

A) Cash

B) Bank balance

C) Accounts receivable

D) Cash reserve

52) Postage stamps on hand are considered as

A) Bank

B) Prepaid expenses

C) Accounts receivable

D) Creditor

53) Petty cash fund is supposed to be replenished

A) Every day

B) Every half year

C) Every year

D) At the end of every accounting period

54) Which of the following is generally not the party to a check?

A) Payee

B) Payer

C) Bank

D) Seller

55) A credit balance in cash book indicates

A) Bank balance

B) Cash at bank

C) Bank overdraft

D) Bank underdraft

56) A schedule of balance drawn from the ledger is called a (a) Statement of accounts (c) Trail Balance 57) A trial balance highlights (a) The flow of funds (b) The status of investment (b) Balance sheet

(c) The arithmetical accuracy of postings (d) The honesty of the book-keeper 58) Rs. 500 paid to workmen as wages for correction of a machine should debited to : (a)Repair account (c) Capital account 59) The difference in the trial balance should be entered in : (a) Nominal account (c) Miscellaneous Capital (b) Suspense account (d) Capital account (b)Machinery account

60) The trial balance is prepared for locating (a) Clerical error (b) Errors of commission

(c) Errors of principle

61) Errors of principle occurs when : (a) (b) (c) A transaction is omitted completely or partially Capital and revenue items are not distinguished Castings and postings are wrong.

62) Rs. 300 received from Mr. X, whose account was written off as a bad debt, is to be credited to: (a) X's account (c) Bad debts recovered account 63) Provision for discount on debtors is : (a) A charge on the revenue (c) None of (a) and (b) (b) An appropriation of profits (b) Cash account

64) When had debt is within trial balance, the following account is debited: (a) (c) Profit & Loss account Sundry debtors account. (b) Provision for bad debts account

65) When provision for bad debts is out side the trial balance the following account is debited: (a) Bad debts account (c) None of (a) and (b) (b) Profit & loss account

ANSWERS
1. (b), 2.(b), 3.(c), 4.(b) 5. (b) 6. (b) 7. (d) 8. (a) 9. (a) 10. (c) 11. (c) 12. (c) 13. (a) 14. (a) 15. (d) 16. (a) 17 (b) 18. (a) 19. (a) 20(c), 21(c), 22(a), 23(c), 24(a), 25 (a), 26(b), 27(a), 28(a), 29(b) 30. (d) 31. (b) 32. (b) 33. (a) 34. (d) 35. (d) 36. (b) 37. (b) 38. (b) 39. (c) 40. (c) 41. (b) 42. (b) 43. (a) 44. (b) 45. (b) 46. (a) 47. (b) 48. (d) 49. (d) 50. (b) 51. (c) 52. (b) 53. (d) 54. (d) 55. (c) 56 (c), 57 (c), 58. (b) 59. (b) 60. (a) 61. (b) 62. (c) 63. (a) 64. (a) 65. (b)

Unit 3

1) Financial statements are prepared mainly for

A) Internal users of financial information

B) External users of financial informaiton

C) Creditors of the business

D) Managers of the busienss

2) Net profit is computed in which of the following?

A) Balance sheet

B) Income statement

C) Cash flow statement

D) Statement of changes in equity

3) Which of the following should be the most appropiate order of current asset in a balance sheet?

A) cash, debor, bank, stock

B) Bank, cash, stock, debtor

C) Stock, bank, cash, debtor

D) Cash, bank, debtor, stock

4) In income statement, gross profit is always equal to

A) Sales-expenses

B) Incomes-expenses

C) Sales-cost of goods sold

D) Sales-selling costs

5) Office equipment is a ________ asset for a computer manufacturer and the same office equipment is a _________ asset for a company that deals in these equipments

A) Current, Fixed

B) Fixed, intangible

C) Tangible, intangible

D) Fixed, current

6) Identify the external user of financial information or financial statements

A) Management of the business

B) CFO of the business

C) Employees of the business

D) Investors of the business

7) A statement or report that records the fluctuation in business's capital is referred as

A) Balance sheet

B) Income statement

C) Cash flow statement

D) Statement of changes in equity

8) Financial statements mainly help in

A) Assumption of economic events

B) Anticipation of economic events

C) Recording of economic events

D) Communication of economic events

9) Purchases+opening stock-closing stock=?

A) Amount of sales

B) Gross profit

C) Cost of goods sold

D) Net income

10) Which of the following financial statements shows the financial position of a business at a specific date?

A) Balance sheet

B) Income statement

C) Cash flow statement

D) Statement of changes in equity

1)

Financial statements are prepared mainly for

A) Internal users of financial information

B) External users of financial informaiton

C) Creditors of the business

D) Managers of the busienss

2)

Net profit is computed in which of the following?

A) Balance sheet

B) Income statement

C) Cash flow statement

D) Statement of changes in equity

3)

Which of the following should be the most appropiate order of current asset in a balance sheet?

A) cash, debor, bank, stock

B) Bank, cash, stock, debtor

C) Stock, bank, cash, debtor

D) Cash, bank, debtor, stock

4)

In income statement, gross profit is always equal to

A) Sales-expenses

B) Incomes-expenses

C) Sales-cost of goods sold

D) Sales-selling costs

5)

Office equipment is a ________ asset for a computer manufacturer and the same office equipment is a _________ asset for a company that deals in these equipments

A) Current, Fixed

B) Fixed, intangible

C) Tangible, intangible

D) Fixed, current

6)

Identify the external user of financial information or financial statements

A) Management of the business

B) CFO of the business

C) Employees of the business

D) Investors of the business

7)

A statement or report that records the fluctuation in business's capital is referred as

A) Balance sheet

B) Income statement

C) Cash flow statement

D) Statement of changes in equity

8)

Financial statements mainly help in

A) Assumption of economic events

B) Anticipation of economic events

C) Recording of economic events

D) Communication of economic events

9)

Purchases+opening stock-closing stock=?

A) Amount of sales

B) Gross profit

C) Cost of goods sold

D) Net income

10)

Which of the following financial statements shows the financial position of a business at a specific date?

A) Balance sheet

B) Income statement

C) Cash flow statement

D) Statement of changes in equity 11) Which of the following financial reports shows the profitable of a business?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

12) Assets minus liabilities equal to

A) Goodwill

B) Working capital

C) Net income

D) Capital

13) Which of the following financial statements shows the movement of cash and cash equivalents in during an accounting period?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

14) Goodwill is classified as which one of the following assets?

A) Fixed

B) Long term

C) Current

D) Intangible

15) Which of the following does not appear in Balance sheet?

A) Building

B) Cash

C) Goodwill

D) Rent expenses

16) Which of the following lists down the balances to asset accounts, liability accounts and capital account balances?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

17) Current assets are also known as

A) Working capital

B) Invested capital

C) Assets

D) Cash

18) The expenses related to the main operations of business are referred as

A) Administration expense

B) Non-administration expense

C) Selling expenses

D) Operating expenses

19) Cash receipt from the sales fixed assets is recorded under the heading of

A) Operating activities

B) Financing activities

C) Investing activities

D) Other activities

20) A current asset that is convertible to cash within 3 months can be referred to as

A) Cash asset

B) Operating asset

C) Intangible asset

D) Cash equivalent

21) The profit and loss account indicates (a) The honesty of accounting work. (b) The financial position of the enterprise (c) The capital invested in the enterprise (d) The profit earned or less suffered by the enterprise

22)Interest on capital should be treated as : (a) An asset (b) An expense

(c) An appropriation of profits

23) Cost price of goods which is taken out from the business by its owner for his personal use should be debited : to (a) Sales account (b) Capital account

(c) Drawings account

24) Cost of materials consumed plus direct expenses plus direct labour indicates: (a) Net works cost (c) Prime cost (b) Gross work cost

25) Good will is : (a)Tangible (c) Intangible (b) Currents assets

26) Fixed assets are : (a) For resale (b) Retained in the business for use over a long time for earning income (c) For conversion into cash as early as possible

27) Gross profit is represented by the difference between a) Sales and purchases (c) Sales and total expenses (b) Sales and cost of sales

28) A contingent liability: (a) Is usually associated with operating loss carry forwards (b) Definitely exists as a liabilities but its amount and/or due date is not definitely known (c) as almost probable value of zero but may need to be paid if a gives future even occurs 29) Which one is the Capital Expenditure? a] Capital invested by the owner b] Selling expense for machine c] Machine purchased d] Daily expenses to operate business 30) If capital expense is recorded as revenue expense then which calculation will be wrong? a] Bank balance b] Debtors c] Creditors d] Net profit

31) Capital expenditure a) Car purchased for sale b) Machine purchased for business use c) Road tax and insurance premium of delivery van 32) Sale of machine of machine merchandising business a] Capital receipt b] Capital income c] Revenue income d] Revenue receipt 33) Ramjan Mia import goods for his business. Import duty of goods is a] Capital expenditure b] Revenue expenditure c] Non-trading expenditure d] Revenue income 34) Shukomol Borua purchased a land for his business. He paid tk.5,000 for lands .This registration expenses is a] Revenue expenditure b] Capital expenditure c] It can be both capital and revenue expenditure d] Deferred revenue expenditure 35) In comprehensive income statement we record a)Revenue receipt b) Revenue income c) Capital expenditure 36) In statement of financial position we record a) Capital receipt b) Revenue expenditure c) Deferred Revenue expenditure 37) What type of transaction is Freight in word[a] Revenue [b] Capital [c] Deferred revenue [d] Operating 38) Deferred Revenue expenditure ---a) Paid tk.1,00,000 to Adv. Firm for publicity of goods for 3 years b) Paid rent in advance for 3 months tk.15,000 c) Cost of Business transfer cost tk.25,000 from Dhanmondi to Motijheel

39) Amount spent tk.45,000 of Plabon Voumik considered as a) Capital receipt b) Capital expenditure c) Deferred Revenue expenditure 40) What was the total amount of depreciation charged in 4 years? [a] tk. 15,000 [b] tk. 16,000 [c] tk. 20,000 [d] tk. 21,000 41) The difference between selling price and present book value of machinery is called. [a] Capital income [b] Revenue income [c] Revenue receipt [d] Capital receipt

Answer
1. (b) 2. (b) 3. (d) 4. (c) 5. (d) 6. (d) 7. (d) 8. (d) 9. (c) 10. (a) 11. (a) 12. (d) 13. (c) 14. (d) 15. (d) 16. (a) 17. (a) 18. (d) 19. (c) 20. (d) 21. (d) 22. (c) 23. (c) 24. (c) 25. (c) 26. (b) 27. (b) 28, (c) 29(c), 30(d), 31(b), 32(d), 33(b), 34(b), 35(b), 36(d), 37(a), 38(b), 39(b), 40(d), 41(a)

UNIT 4
1) Which of the following is generally considered as a non profit oriented organization?

A) Charitable organization

B) Corporation

C) Audit firms

D) Insurance companies

2) The receipts and payments account of a non-profit organization is a

A) Nominal account

B) Real account

C) Income statement account

D) Financial statement

3) Non-profit organizations prepare all of the following accounts except the

A) Receipts and payment accounts

B) Income and Expenditure accounts

C) Balance sheet

D) Income statement

4) Expenditures greater than incomes of a non-profit organization give rise to a

A) Loss

B) Profit

C) Surplus

D) Deficit

5) Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?

A) Expense

B) Liability

C) Equity

D) Asset

6) An advance receipt of subscription from a member of the non-profit organization is considered as a/an

A) Expense

B) Liability

C) Equity

D) Asset

7) Income and expenditure account is based on

A) Cash accounting

B) Accrual accounting

C) Government accounting

D) Management accounting

8) Which of the following is regarded as apt to show the purchase of a fixed asset?

A) Income and Expenditure account

B) Profit and loss account

C) Balance sheet

9) Which of the following is to be recorded in an income and expenditure account?

A) Purchase of a fixed asset

B) Capital expenditure incurred on a fixed asset

C) Profit on the sale of a fixed asset

D) Sale of a fixed asset

10) Honorarium is a kind of remuneration paid to a person who is not the employee of a nonprofit organization. Which of the following statements is true about the honorarium payment? A) Its a revenue expenditure B) Its a Capital expenditure

C) It is not recorded in the books of accounts

11) The capital of a non-profit organization is generally known as

A) Equity

B) Accumulated fund

C) Cash fund

D) Financial reserve

12) When cash is received for life membership, which one of the following double entries is passed?

A) Cash Debit and capital Credit

B) Life membership Debit and cash Credit

C) Investment Debit and cash Credit

D) Cash Debit and life membership fund Credit

13) XYZ club has a bar that maintains a separate trading account for its trading activities. Which of the following is the treatment of profit or loss on bar trading activities?

A) Profit or loss is directly shown in the balance sheet

B) Profit or loss is to be presented in income and expenditure account

C) Profit and loss is credit in income statement

D) Profit or loss is added to accumulated fund

14) Which of the following is the accounting equation for a non-profit organization?

A) Asset = Capital + Liabilities

B) Capital + Liabilities = Assets

C) Accumulated fund + Liabilities = Assets

D) Liabilities = Asset + Accumulated fund

15) Subscription received but not yet earned is considered as a/an

A) Asset

B) Liability

C) Income

D) Expenditure

16) A non-profit organization received $10,000 as the entrance fee of a new member. If 20% of the fee has to be capitalized, what is the amount of fee needs to be shown in the income and expenditure account?

A) 2000

B) 8000

C) 9000

D) 10,000

17) 10,000 received as the annual membership subscription. Out of this, $2000 is pertaining to

the previous accounting period whereas $1000 is receivable at the end of the current accounting period. Calculate the amount of subscription that will be shown in the income and expenditure account for this accounting

A) 10,000

B) 9000

C) 12,000

D) 8000

18) The balance sheet of a non-profit organization such as a charitable hospital doesnt contain the

A) Assets

B) Building

C) Debts D) Owners equity

19) Income and expenditure accounts show

A) Cash available to an organization

B) Closing capital of an organization

C) Cash available in the bank account

D) Surplus or deficit for the current accounting period

20) On what basis the receipts and payments account is prepared?

A) Cash basis

B) Accrual basis

C) Both accrual and cash basis

21) The amount or property received by a non- profit organization as stated by the will of a deceased person is commonly referred to as

A) Donation

B) Honorarium

C) Legacy

D) Endowment

22) Investment in sinking fund by a non-profit organization is a/an

A) Liability

B) Accumulated fund

C) Asset

D) Equity

23) In non-profit accounting, the sale of old newspapers is generally considered as a/an

A) Expenses

B) Expenditure

C) Income

D) Capital receipt

24) In single entry system of accounting

A) Dual aspects of a transaction is recorded

B) Single aspect of a transaction is recorded

C) Important transactions are recorded

D) All of them

25) Statement of financial position produced from incomplete accounting record is commonly known as

A) Balance sheet

B) Cash flow statement

C) Statement of affairs

D) Statement of financial operations

26) Which of the following businesses usually maintain incomplete accounting record of the business activities?

A) Large businesses

B) Companies

C) Big partnership firms

D) Small businesses

27) In which of the following systems of recording the financial statements reflect true and fair view of an entity and accounting records are considered to be more accurate?

A) Single entry system

B) Double entry system

C) Cash based system

28) Identify the correct formula used to ascertain the closing balance of capital A) Opening capital + Net income Drawing Assets = Closing capital

B) Closing capital = Opening Capital + Net loss - Drawings C) Closing Capital = Opening capital + Assets + Incomes Expenses D) Closing capital = Opening capital + Net income Drawings

29) Which of the following formulas is used to calculated the net income for an accounting period?

A) Net income = opening capital + Drawings + Ending capital B) Net income = - Opening capital + Drawings Ending capital

C) Net income = - Opening capital + Drawings + Ending capital D) Net income = Opening capital Total assets

30) If opening capital = $1000 and closing capital = $2000. Assuming no drawings during the accounting period, calculated the net income or loss for the period

A) 1000 net income

B) 1000 net loss

C) 2000 net income

D) 2000 net losss

31) Total opening balances of assets and liabilities are $10,000 and $5000 respectively. Find out the opening capital of the business

A) 10,000

B) 5000

C) 15000

D) 50,000,000

32) Which one of the following accounts is supposed to be used to get the figure of credit purchases made during the current accounting period?

A) Debtor account

B) Revenue account

C) Creditors account

D) Expenses account

33) To obtain the amount of credit sales made during an accounting period, which account is generally used in single entry and incomplete records?

A) A/c payable account

B) Total revenue account

C) Debtors account

D) Stock account

34) Which of the following is used to work out the balance of cash drawings for an accounting period?

A) Debtor account

B) Credit account

C) Cash payments journal

D) Cash book

35) Closing balance of cash can be obtained by drawing up a

A) Balance sheet

B) Statement of affairs

C) Income statement

D) Cash account

36) A method wherein omitted information is determined in the first place and by using this information net income or loss is ascertained is known as

A) nominal method

B) Cash method

C) Conversion method

D) Net profit method

37) If creditors balance was $1000 at 1 Jan 2012, ending balance of creditors was $2000 on 31 Dec 2012 and a payment of $500 was made to creditors, which of the following is the amount of purchases made during the year 2012?

A) 2500

B) 500

C) 1500

D) 2000

38) If debtors balance was $2000 at 1 Jan 2012, credit sales made during the year were $1000 and the total payments of $1500 were received from debtors, which of the following is the debtors account balance at 31 Dec 2012 ?

A) 1000

B) 2000

C) 1500

D) 500

39) Net profit + operating expenses = ?

A) Cost of goods sold

B) Amount of sales

C) Net sales

D) Gross profit

40) Calculate the amount of net income or loss if the capital has been increased by $1000 during this accounting period, drawing = $5000 and $1000 fresh capital was introduced in the business

A) 5000 net loss

B) 5000 net profit

C) 6000 net loss

D) 6000 net profit

Answer
1. (a) 2. (b) 3. (d) 4. (d) 5. (d) 6. (b) 7. (b) 8. (c) 9. (c) 10. (a) 11. (b) 12. (d) 13. (b) 14. (C) 15. (b) 16. (b) 17. (b) 18. (d) 19. (d) 20. (a) 21. (c) 22. (c) 23. (c) 24. (b) 25. (c) 26. (d) 27. (b) 28. (d) 29. (c) 30. (a) 31. (b) 32. (c) 33. (c) 34. (d) 35. (d) 36. (c) 37. (c) 38. (c) 39. (d) 40. (b)

Unit 5
MULTIPLE CHOICE QUESTIONS 1. CHAPTER 3

Which of the following is a nominal account?

a. b. c. d. 2.

Prepaid Insurance Unearned Revenue Insurance Expense Interest Receivable

Which of the following errors will cause an imbalance in the trial balance? a. Omission of a transaction in the journal b. Posting an entire journal entry twice to the ledger c. Posting a credit of $ 720 to Accounts Payable as a credit of $ 720 to Accounts Receivable. d. Listing the balance of an account with a debit balance in the credit column of the trial balance. Which of the following statements is associated with the accrual basis of accounting? a. The timing of cash receipts and disbursements is emphasized. b. A minimum amount of record keeping is required. c. This method is used less frequently by businesses than the cash method of accounting. d. Revenues are recognized in the period they are earned, regardless of the time period the cash is received. An accrued expense is an expense that: a. Has been incurred but has not been paid. b. Has been paid but has not been incurred. c. Has been incurred for which payment is to be made in installments. d. Will never be paid.

3.

4.

5.

In reviewing some adjusting entries, you observe an entry which contains a debit to Prepaid Insurance and a credit to Insurance Expense. The purpose of this journal entry is to record a(n): a. Accrued expense b. Deferred expense c. Expired Cost d. Prepaid Revenue An adjusting entry to record an accrued expense involves a debit to a (n): a. Expense account and a credit to a prepaid account b. Expense account and a credit to cash. c. Expense account and a credit to a liability account d. Liability account and a credit to an expense account. The failure to properly record an adjusting entry to accrue an expense will result in an: a. Understatement of expenses and an understatement of liabilities b. Understatement of expenses and an overstatement of liabilities

6.

7.

c. Understatement of expenses and an overstatement of assets d. Overstatement of expenses and an understatement of assets.

8.

Which of the following properly describes a deferral? a. Cash is received after revenue is earned. b. Cash is received before revenue is earned. c. Cash is paid after expense is incurred d. Cash is paid in the same period that an expense is incurred. An adjusting entry to allocate a previously recorded asset to expense involves a debit to an: a. Asset account and a credit to cash. b. Expense account and a credit to cash c. Expense account and a credit to an asset account. d. Asset account and a credit to an expense account. Which of the following adjusting entries will cause an increase in revenues and a decrease in liabilities? a. Entry to record an accrued expense b. Entry to record an accrued revenue c. Entry to record the consumed portion of an expense paid in advance and initially recorded as an asset. d. Entry to record the earned portion of revenue received in advance and initially recorded as unearned revenue. The failure to properly record an adjusting entry to accrue a revenue item will result in an: a. Understatement of revenues and an understatement of liabilities b. Overstatement of revenues and an overstatement of liabilities c. Overstatement of revenues and an overstatement of assets. d. Understatement of revenues and an understatement of assets. The failure to properly record an adjusting entry for the expiration of insurance coverage will result in an (assume the account Prepaid Insurance) was charged when the premiums were paid.): a. Overstatement of assets and an overstatement of owners equity. b. Understatement of assets and an understatement of ownersequity. c. Overstatement of assets and an overstatement of liabilities d. Overstatement of liabilities and an understatement of ownersequity. The omission of the adjusting entry to record depreciation expense will result in an: a. Overstatement of assets and an overstatement of owners equity. b. Understatement of assets and an understatement of owners equity. c. Overstatement of assets and an overstatement of liabilities d. Overstatement of liabilities and an understatement of owners equity.

9.

10.

11.

12.

13.

14.

An auditor is examining an adjusting entry that reduces liabilities and increases owners equity. Which of the following adjusting entries could that be? a. Entry to record an accrued revenue. b. Entry to record the earned portion of revenue received in advance and previously recorded as Unearned Rent Revenue. c. Entry to record an accrued expense. d. Entry to record the expired portion of expense paid in advance and previously recorded as Prepaid Expense. e. Entry to record bad debts expense.

15.

The Office Supplies on Hand account had a balance at the beginning of year 3 of $ 1,600. Payments for acquisitions of office supplies during year 3 amounted to $ 10,000 and were recorded by a debit to the asset account. A physical count at the end of year 3 revealed supplies costing $ 1,900 were on hand. The required adjusting entry at the end of year 3 will include a debit to: a. b. c. d. Office supplies expense for $ 300 Office supplies on hand for $ 300 Office supplies expense for $ 9,700 Office supplies on hand for $ 1,900

16.

The book value of a piece of equipment is the : a. Original cost of the equipment. b. Current replacement cost of the used equipment. c. Current market value of the used equipment. d. Difference between the original cost of the equipment and its related accumulated depreciation. The purpose of recording closing entries is to: a. Reduce the number of nominal accounts. b. Enable the accountant to prepare the financial statements at the end of an accounting period. c. Prepare revenue and expense accounts for recording the next periods revenues and expenses. d. Establish new balances in some asset and liability accounts. If ending accounts receivable exceeds beginning accounts receivable: a. Cash collections during the period exceed the amount of revenue earned. b. Net income for the period is less than the amount of cash basis income. c. No cash was collected during the period. d. Cash collections during the year are less than the amount of revenue earned.

17.

18.

19.

What is the purpose of making a provision for depreciation in the accounts?

A. To make a provision for repairs B. To make cash available to replace fixed assets C. To show the current market value of fixed asset D. To charge the cost of fixed assets against profits

20.

What is depreciation? A. The residual value of a fixed asset plus its original cost B. The cost of a replacement for a fixed asset C. The cost of an asset wearing away D. The part of the cost of the fixed asset consumed during the period of use by the business

21.

What is ignored in the computation of depreciation of a fixed asset? A. its length of expected useful economic life to the business B. its cost C. its cost of repairs D. its estimated residual value at the end of its useful life in the business

22.

What does it mean by the yearly method of depreciation A. No depreciation in the year of purchase and full year's depreciation in year of sale B. Full year's depreciation in year of purchase and no depreciation in y C. Full year's depreciation in year of purchase and sale

D. Monthly depreciation in year of purchase and sale

23.

In the accounting records, the fixed assets are normally recorded A. At cost B. At book value C. At scrap value

D. At replacement value

24.

Salvage value means A. cash to be paid when asset is disposed off B. estimated disposal value

C.

definite sale price of the asset

D. cash to be received when life of the asset ends

25.

Depreciation follows which accounting concept A. Historical cost concept B. Matching concept C. Money measurement concept D. Going concern concept

26.

Which of the following is not a method of depreciation? A. Revaluation B. Reducing balance C. Replacement method D. Straight line

27.

What method do we use for depreciating tools, crates A. Diminishing balance method B. Revaluation method

C. Straight line method D. Reducing balance method

28.

Which item may be included in a Balance Sheet at more than historical cost A. Work-in-progress B. Goodwill C. Research expenditure D. Land and Building

29.

In Straight line method of depreciation, which is excluded A. Useful life of the assets B. Cost of the assets C. Annual cost of repairs

D. Expected salvage value

30.

A motor van was bought for 20,000 on 1 September 2005 with a residual value of 2,000. Depreciation was charged at 20% by the reducing balance method on yearly basis. It was sold for 18,000 after three years of use on 30 September 2008. Compute the profit on sale of asset. A. 7,760 B. 505 C. 5,201 D. 990

31.

A fixed asset cost $100,000, had a book value of $40,000. It was sold for $10,000. What is the provision for depreciation sold? A. 30,000 B. 60,000 C. 10,000 D. 50,000

32.

A company is exploring the impact of the two method of depreciation. On 1 January, it bought machinery for $15,000. The methods are (i) straight line where useful life is 4 years and residual value is $2,000 and (ii) Reducing balance method -at the rate of 20% per annum. Show how the company's profit be affected if the straight line method is used rather than the reducing method? A. Profit increased by $250 B. C. Profit increased by $300 Profit decreased by $500

D. Profit decreased by $1,100

33.

The cost of the fixed asset is $100,000, provision for depreciaiton is $10,000, depreciating on charge for the year are $2,000. Show the net book value of the fixed asset in the Balance sheet

A. 74,000 B. 55,000 C. 24,000 D. 78,000

34.

A machine was bought for $100,000. Its estimated useful life is four years with a residual value of $10,000. Depreciation is charged on the straight line method. What is the percentage of depreciation rate on an annual basis? A. 15% B. 22.50% C. 35% D. 25%

35.

What is depreciation?

A) Cost of a fixed asset B) Cost of a fixed assets repair

C) The residual value of a fixed asset D) Portion of a fixed assets cost consumed during the current accounting period

36.

Under which depreciation method the amount of depreciation expenses remains same throughout the useful life of a fixed asset

A) Straight line method

B) Reducing balance method

C) Number of units produced method

D) Machine hours method

37. A company purchased a vehicle for 6000. I will be used for 5 years and its residual value is expected to

be 1000. What is the annual amount of deprecation using straight line method depreciation?

A) 1000

B) 2000

C) 3000

D) 3300

38. What is the accumulated deprecation?

A) Sum of all depreciation expenses of a fixed asset

B) Depreciation expenses

C) Cost of depletion of assets

D) Future value of fixed asset

39. Which of the following is the normal balance of an accumulated depreciation account?

A) Debit balance

B) Credit balance

C) Nil balance

40. How trial balance shows the accumulated depreciation?

A) as a debit item

B) as a credit item C) It doesnt show

41. Which of the following is a double entry for depreciation expenses?

A) Accumulated depreciation debit and depreciation expenses Credit

B) Depreciation expenses Debit and accumulated depreciation Credit

C) Cash Debit and depreciation expenses Credit

D) Depreciation expenses Debit and cash Credit

42. An alternative term used for accumulated depreciation expenses?

A) Provision for depreciation

B) Cumulative depreciation

C) Targeted depreciation

D) Depletion

43. Which of the following is/are a kind of depreciation expenses?

A) Amortization

B) Depletion

C) Both of them

44. A fixed asset was bought for $5000. Its accumulated depreciation is $3000 and rate of depreciation is 20%. Calculate its depreciation expenses for the current accounting period using reducing balance method?

A) 600

B) 2000

C) 300

D) 400

45. In depreciation calculation, the useful life of a fixed asset is:

A) a certain figure

B) an estimate

C) a predetermined figure for all fixed assets

46. Depreciable amount + Residual value of a fixed asset =?

A) Depreciation expenses

B) Accumulated depreciation

C) Cost of the fixed asset

D) Future economic benefits of a fixed asset

47. Cost of a fixed asset Accumulated depreciation expenses of the fixed asset=?

A) Book value of a fixed asset

B) Market value of a fixed asset

C) Historical cost of a fixed asset

D) Recoverable amount of a fixed asset

48. The estimate about useful life of a fixed asset:

A) Can never be changed

B) Can be changed

49. Which of the following is the correct formula for calculating depreciation using service hours method?

A) Depreciation=(Cost - Scrape value) / Total hours X Actual hours

B) Depreciation=(Cost - Accumulated depreciation) / Total hours X Actual hours

C) Depreciation=(Cost - Accumulated depreciation) / Total hours X Total hours

D) Depreciation=(Cost - Scrape value) / Actual hours X Total hours

50. The purchase price of a software that will be used for more than 12 months should be regarded as:

A) a revenue expenditure

B) a capital expenditure

C) a long term expense

D) an accounting period expense

51. XYZ firm has imported a machine from abroad. Which of the following is NOT the element of machines cost?

A) Purchase price of machine

B) Import duty

C) Demurrage charges

D) Refundable tax

52. Which of the following fixed assets is not depreciated in the ordinary circumstances?

A) Plant and machinery

B) Building

C) Land

D) Equipments

53. In the calculation of depreciation, all of the following items are actually estimates except:

A) Useful life

B) Residual value

C) Historical cost

D) Salvage value

54. Which of the following accounting concepts or principles require the calculation of depreciation of the fixed assets?

A) Prudence concept

B) Accrual concept

C) Consistency concept

D) Matching concept

55. A car was purchased for $5500. Its residual value was estimated to be $500 while its monthly depreciation expenses are $100 using straight line method. Which of the following is the annual rate of depreciation?

A) 20%

B) 24%

C) 2%

D) 25%

56. Under which method of depreciation the amount of depreciation expenses remains constant throughout the useful life of a fixed asset

A) Reducing balance method

B) Unit of activity method

C) Straight line method

D) None of these 57. An increase in the value of fixed asset is referred to as:

A) Depreciation

B) Appreciation

C) Market capitalization

D) Reverse depreciation

58. A fixed asset having book value of 2000 was sold for 1500. Which of the following is the gain or loss on the sale of fixed asset?

A) 500 gain

B) 1500 loss

C) 500 loss

D) 1000 gain

59. Book value of a fixed asset equals to market value or sale proceeds of a fixed asset if:

A) Gain on sale=0

B) Loss on sale=0

C) Gain or loss on sale=0

D) Gain > loss on sale

60. The term ______ is generally used for the depreciation of natural resources

A) Amortization

B) Depletion

C) Appreciation

D) Disposal value

61. Which of the following is a biological asset?

A) Land

B) Building

C) Environment

D) Living plants and animals

62. Items of property, plant and equipment can be recognized as assets when their cost can be measured reliably and it is likely that the future economic benefits associated with the assets:

A) Will increase gradually

B) Will diminish with the passage of time

C) will flow to the entity D) wont be available

63. Under the revaluation model of fixed assets provided by the international accounting standards, the revaluation of the fixed assets should be carried out:

A) After 10 years

B) on a regular basis

C) Once in 5 years

D) None of them

Answer
1. (c), 2. (d) 3. (d) 4. (a) 5. (b) 6. (c) 7. (a) 8. (b) 9. (c) 10. (d) 11. (d) 12. (a) 13. (a) 14. (b) 15. (c) 16. (d) 17. (c) 18. (d) 19. (d) 20. (d) 21. (c) 22. (b) 23. (a) 24. (b) 25. (b) 26. (c) 27. (b) 28. (d) 29. (c) 30. (a) 31. (b) 32. (a) 33. (d) 34. (b) 35. (d) 36. (a) 37. (a) 38. (a) 39. (b) 40. (b) 41. (b) 42. (a) 43. (d) 44. (d) 45. (b). 46. (c) 47. (a) 48. (b) 49. (b) 50. (b) 51. (d) 52. (c) 53. (c) 54. (d) 55. (b) 56. (c) 57. (a) 58. (c) 59. (c) 60. (b) 61. (d) 62. (c) 63. (b)