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Solved MCQs of Accounting & Auditing Past Papers

Accounting & Auditing Paper -I (2000)


(1) Double entry book-keeping was fathered by:
(a) F.W.Taylor
(b) Henry Fayol
(c) Lucas Pacioli.
(2) Funds Flow Statement and sources and application statement are:
(a) Synonymous
(b) Antagonistic
(c) None of these.
(3) Depreciation in spirit is similar to:
(a) Depletion
(b) Amortization
(c) Depression.
4) Balance Sheet is always prepared:
(a) for the year ended.
(b) As on a specified date.
(c) None of these.
(5) In Insurance, the following Profit and Loss Accounts are prepared:
(a) Separate for Fire, Marine, and Accidents etc.
(b) Consolidated for Fire, Marine, and Accidents etc.(c) None of these.
(6) Partners in Pakistan can today be fixed at the following numbers:
(a) 20
(b) 50
(c) 75.
(7) Flexible budget is a budget with the following features:
(a) Changes with volume of production.
(b) Changes with variable expenses
(c) Changes in Direct material.
(8) Break Even can be calculated as under:
(a) ______VC_______
FC- TR TC
(b) FC
I- VC TR(c) None of these.
(9) Quick Ratio can be computed as under:

(a) Quick . Assets/Quick Liabilities


(b) Quick . Liabilities Current Assets
(c) Current Assets/ Current Liabilities
(10) In straight line method of depreciation, the written down value of a fixed asset will
be at the end of the life of the asset as under:
(a) Rupee one
(b) Rupee zero (c) None of these.
(11) Sales budget must be prepared:
(a) Independently
(b) Depending on production capacity
(c) Based on Sales forecasts of market.
(12) Consolidation of subsidiary accounts in the balance sheet of a unlisted Holding
company is at present in Pakistan:
(a) Compulsory
(b) Voluntary
(c) Required.
(13) Retained earning is synonymous to:
(a) Accumulated profit and loss account
(b) Profit for the year
(c) None of these.
(14) The requirements of an audit report for a Banking Company in Pakistan is under:
(a) Under the Banking Companies Ordinance, 1962.
(b) Under the Companies Ordinance, 1984.
(c) Under (a) and (b) above.
(15) Deferred Taxation is:
(a) Fixed asset
(b) Fixed liabilities
(c) Part of Owners Equity.
(16) Investment Corporation of Pakistan follows:
(a) Open-end mutual funds
(b) Closed-end mutual funds
(c) None of these.
(17) Directors Report is ---- in respect of financial report constituent.
(a) Mandatory for a limited Company
(b) Voluntary for a limited Company
(c) None of these.
(18) Every limited Company in Pakistan is required by law to include the following

along with financial reports:


(a) Ratio Analysis
(b) Chairmans Review
(c) None of these.
(19) Cash budget excludes the following:
(a) Non-Cash items
(b) Cash items
(c) Purchase on Credit items.
(20) NGOs are legally required to:
(a) Prepare accounts in a prescribed manner under the law.(b) Prepare accounts as
desired by donors.
(c) None of these.

Accounting & Auditing Paper -II (2000)


1. Fixed Cost:
a. Changes with production
b. Never changes even if production capacity is doubled
c. None of the above
2. Conversion cost is:
a. Material Cost + Overhead Cost
b. Direct Labour + Material Cost
c. Labour Cost + Overhead Cost
3. Process Costing is relevant to:
a. Cement industry
b. Job Order cost oriented Projects
c. None of the above
4. Operating Profit is:
a. Profit after deducting financial costs
b. Profit after deducting taxes
c. Profit after deducting normal operating expenses including depreciation
5. A good Cost Accounting System is:
a. If it computes estimated cost only
b. If it cannot be reconciled with financial accounts
c. If it enables management to increase productivity and rationalize cost structure

6. Verification includes:
a. Checking Vouchers
b. Examining audit report
c. None of the above
7. Stratified audit sample means:
a. Randomly selected items for audit
b. Purposively selected items for audit
c. Items carefully selected from each group
8. Internal Control is totally synonymous with:
a. Internal check
b. Internal audit
c. None of above
9. Audit of a bank is generally conducted through:
a. Routine checking
b. Couching
c. Balance sheet audit
10. An auditor is liable for his annual audit of accounts o:
a. Creditors
b. Bankers
c. Owners
11. Income Tax is levied on:
a. Agricultural Income
b. Presumptive Income
c. None of above
12. If a firm has paid super-tax, its partners may follow any one of the following
behaviours:
a. No need to pay income tax, even if the income exceeds the taxable limit.
b. Pay income tax, even if the income does not exceed the taxable income.
c. Pay income tax as required under the law.
13. A resident multinational company need not:
a. Pay income tax, if it s caused under Double Taxation agreement.
b. If it is not enjoying tax exemption under the Income Tax Ordinance, 1979 (Second
Schedule).
c. None of above
14. Income Tax rates are the same for:
a. Limited Companies
b. Banking Companies
c. None of above

15. Super Tax on companies is:


a. In vogue in Pakistan
b. Not in vogue in Pakistan
c. None of above
16. Current Ratio is calculated as:
a. Fixed Assets/Current Liabilities
b. Current Liabilities/Current Assets
c. Current Assets/Current Liabilities
17. Short-term loan can be described as:
a. If the period is three years
b. If the period is less than one year
c. If the period is over one year
18. A partnership, in todays Pakistan, under the current law can have the following
number of partners:
a. 50
b. 20
c. 100
19. Combination can be best described as:
a. Restructuring of Capital of a Company
b. Reduction of Capital of a Company
c. Amalgamation of two different types of businesses
20. Sources of funds can be increased by:
a. Describing selling prices
b. Increasing expenditure
c. None of above
Last edited by marwatone; Wednesday, January 04, 2012 at 11:02 AM. Reason:
Corrcetions.
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#2
Monday, January 02, 2012
xaara~hussain
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do correct the mistakes fellas, if any.

Accounting & Auditing paper-I (2001)


Write only the correct answer in the Answer Book. Do not reproduce the questions.
(1) Books of original entry are called:
(a) Ledger
(b) Work sheets
(c) Journal
(d) None of these
(2) For preparing balance sheets prepaid expenses are shown as part of:
(a) Liability
(b) Equities
(c) Assets
(d) None of these
(3) Unpaid and unrecorded expenses are called:
(a) Prepaid expenses
(b) Accrued expenses
(c) Additional expenses
(d) None of these
(4) Amount, cash, or other assets removed from business by owner is:
(a) Capital
(b) Drawings
(c) Assets
(d) None of these
(5) Under the diminishing balance method, depreciation amount is:
(a) Payment
(b) Receipt
(c) Expenditure
(d) None of these
(6) Users of accounting information include:
(a) The tax authorities
(b) Investors
(c) Creditors
(d) All of these
(7) The business form(s) in which the owner(s) is (are) personally liable is (are) the:

(a) Partnership only


(b) Proprietorship
(c) Corporation only
(d) Partnership and proprietorship
(e) None of these
(8) The investment of personal assets by the owner:
(a) Increases total assets and increases owners equity
(b) Increases total assets only
(c) Has no effect on assets but increases owners equity
(d) Increase assets and liabilities
(e) None of these
(9) All of the following are forms of organizations except:
(a) Proprietorship
(b) Corporation
(c) Retailer
(d) Partnership
(e) None of these
(10) Economic resources of a business that are expected to be of benefit in the future are
referred to as:
(a) Liabilities
(b) Owners equity
(c) Withdrawals
(d) Assets
(e) None of these
(11) An owner investment of land into the business would:
(a) Decrease withdrawals
(b) Increase liabilities
(c) Increase owners equity
(d) Decrease assets
(e) None of these
(12) A cash purchase of supplies would:
(a) Decrease owners equity
(b) Increase liabilities
(c) Have no effect on total assets
(d) None of these
(13) An owner investment of each into the business would:
(a) Increase assets
(b) Decrease liabilities
(c) Increase withdrawals
(d) Decrease owners equity

(e) None of these


(14) The payment of rent each month for office space would:
(a) Decrease total assets
(b) Increase liabilities
(c) Increase owners equity
(d) None of these
(15) Real accounts are related to:
(a) Assets
(b) Expenses and incomes
(c) Customers and Creditors etc.
(d) None of these
(16) Which one of the following accounts would usually have a debit balance?
(a) Cash
(b) Creditors
(c) Accounts payable
(d) Salaries Expenses
(e) None of these
(17) Quick assets include which of the following?
(a) Cash
(b) Accounts Receivable
(c) Inventories
(d) Only (a) and (b)
(e) None of these
(18) Net income plus operating expenses is equal to:
(a) Net sales
(b) Cost of goods available for sale
(c) Cost of goods sold
(d) Gross profit
(e) None of these
(19) The maximum number of partners in Pakistan can be fixed at the following:
(a) 20
(b) 50
(c) 75
(d) None of these
(20) Balance sheet is always prepared:
(a) For the year ended
(b) As on a specific date
(c) None of these

Accounting & Audting Paper-II (2001)


Write only the correct answer in the Answer Book. Do not reproduce the questions.
(1) The measureable value of an alternative use of resources is referred to as:
(a) An opportunity cost
(b) An imputed cost
(c) A different cost
(d) A sunk cost
(e) None of these
(2) A quantitative expression of management objectives is an:
(a) Organizational chart
(b)Management chart
(c) Budget
(d) Procedural chart
(e) None of these
(3) A cost center is:
(a) A unit of production in relation to which costs are ascertained
(b) A location which is responsible for controlling direct costs
(c) Part of the factory overhead system by which costs are gathered
(d) Any location or department which incurs cost
(e) None of these
(4) At break-even point of 400 units sold the variable costs were Rs. 400 and the fixed
costs were Rs.200. What will be the 401 units sold contributing to profit before income
tax?
(a) Rs. 0.00
(b) Rs. 0.50
(c) Rs. 1.00
(d) Rs. 1.50
(e) None of these
(5) In considering a special order situation that will enable a company to make use of
currently idle capacity, which of the following cost will be irrelevant:
(a) Materials
(b) Depreciation
(c) Direct labour
(d) Variable factory overhead
(e) None of these
(6) A fixed cost:
(a) May change in total when such change is not related to changes in production

(b) Will not change in total because it is not related to changes in production
(c) Is constant per unit for each unit of change in production
(d) May change in total, depending on production with the relevant range
(e) None of these
(7) Completion of a job is result in:
(a) DR finished goods .. CR WIP
(b) DR Cost of goods ... CR finished goods
(c) DR WIP ..... CR FOH control
(d) DR FOH control ... CR FOH applied
(e) None of these
(8) Operating cost in often named as:
(a) Manufacturing cost plus commercial expenses
(b) Prime cost plus factory overheads
(c) Direct material plus direct labour
(d) Selling plus administrative expenses
(e) None of these
(9) Expenses such as rent and depreciation of a building are shared by several
departments these are:
(a) Indirect expenses
(b) Direct expenses
(c) Joint expenses
(d) All of the above
(e) None of these
(10) If under applied FOH is closed to cost of goods sold, the journal entry is:
(a) DR Cost of goods sold .. CR FOH control
(b) DR FOH control .... CR Cost of goods sold
(c) DR FOH control .... CR Profit % loss account
(d) None of these
(11) Re-order quantity 3600 units
Maximum consumption ... 900 units per week
Minimum comsumption ....300 units per week
Re-order period ..5 weeks
Based on this data Re-order level is:
(a) 4500 units
(b) 3900 units
(c) 1200 units
(d) 400 units
(e) None of these
(12) The time lag between indenting and receiving material is called:
(a) Lead time

(b) Idle time


(c) Stock out time
(d) None of these
(13) A credit balance remaining in FOH Control account is called:
(a) Over-applied overhead
(b) Under-applied overhead
(c) Actual overhead
(d) None of these
(14) Direct material cost plus direct labour cost is called:
(a) Prime cost
(b) Conversion cost
(c) Product cost
(d) All of these
(e) None of these
(15) Productivity means:
(a) The ability to produce
(b) All units produced
(c) Good units produced
(d) None of these
(16) A segment of the business that generates both revenue and cost is called:
(a) Profit Center
(b) Cost Center
(c) Cost driver
(d) All of these
(e) None of these
(17) Verification includes:
(a) Checking vouchers
(b) Examining audit report
(c) None of these
(18) Audit of a bank is generally conducted through:
(a) Routine checking
(b) Vouching
(c) Balance sheet audit
(d) None of these
(19) Economics resources of a business that are expected to be of benefit in the future
are referred to as:
(a) Liabilities
(b) Owners equity
(c) Withdrawals

(d) Assets
(e) None of these
(20) Short term Loan can be best described as:
(a) If the period is three years
(b) If the period is less than one year
(c) If the period is over one year
(d) None of these
Last edited by marwatone; Wednesday, January 04, 2012 at 11:00 AM. Reason:
Corrections.
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#3
Tuesday, January 03, 2012
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Accounting & Auditing Paper-I (2002)


(1) Maximum number of partners in a partnership firm set up in Pakistan under
Partnership Act, 1932 is:
(a) 5
(b) 25
(c) 20
(d) None of these
(2) Preparation of final financial reports is governed in Pakistan under:
(a) No law
(b) Companies Ordinance 1984
(c) None of these
(3) Depreciation is based on:
(a) Economic life of asset
(b) Declared life of asset by supplier
(c) Normal life of asset

(d) None of these


(4) Inventory turnover is calculated as under:
(a) Cost of Goods sold/Closing Inventory
(b) Gross profit/Closing Inventory
(c) Sales/Opening Inventory
(d) None of these
(5) There is a difference between:
(a) Worksheet and Balance Sheet
(b) Worksheet and profit and loss account
(c) Worksheet as combination of results of profits and financial positions
(d) None of these
(6) Deferred Revenue is:
(a) Liability
(b) Asset
(c) None of these
(7) Preparation of annual report of a firm is governed under:
(a) Partnership Act 1932
(b) Under partnership Deed
(c) None of these
(8) Deferred Taxation amount be treated as:
(a) Foot note
(b) An item in the Balance Sheet on asset side
(c) None of these
(9) Return of Equity will be calculated as under:
(a) Operating Profit x 100/Equity
(b) Net profit x 100/Paid up Capital only
(c) None of these
(10) Current maturity of long term loan is:
(a) Current Liability
(b) Long Term Liability
(c) None of these

Accounting & Auditing Paper-II (2002)


Write only the correct answer in the Answer Book. Do not reproduce the questions.
(1) Prime cost is calculated as under:

(a) Manufacturing Cost/Cost of Goods Sold


(b) Direct Method plus factory overheads
(c) Direct labour + Direct Material
(d) None of these
(2) Process Cost is very much applicable in:
(a) Construction Industry
(b) Pharmaceutical Industry
(c) Air line company
(d) None of these
(3) The latest computation of variances of manufacturing overheads is in one the
following ways:
(a) Two variance approaches
(b) Three variance approaches
(c) Four variance approaches
(d) None of these
(4) Random sampling in auditing means:
(a) Selection through convenience sampling
(b) Selection through scientific sampling approach
(c) None of these
(5) Expenditure incurred in procuring machinery is:
(a) An admissible expenditure for tax purposes
(b) No admissible for tax purposes
(c) None of these
(6) Increase in income constitutes:
(a) Inflows
(b) Outflows
(c) None of these
(7) M & A stands for:
(a) Mergers & Analysis
(b) Mergers & Acquisitions
(c) Mergers & Allocation
(d) None of these
(8) An endowment insurance policy can be taken in respect of:
(a) Fire insurance
(b) Accident insurance
(c) Life insurance
(d) None of these
(9) Audit and special audit are the same:

(a) In Insurance Company


(b) In Banking Company
(c) None of these
(10) Acid test is the same as:
(a) Quick test
(b) Liquid test
(c) None of these
#4
Wednesday, January 04, 2012
omerkhan
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(8) Deferred Taxation amount be treated as:


(a) Foot note
(b) An item in the Balance Sheet on asset side
(c) None of these
None of these may be the answer because deferred taxation is what you have recognized
in your financial statement but not paid to tax authorities, so it should be a liability. But I
am not sure.
(9) Return of Equity will be calculated as under:
(a) Operating Profit x 100/Equity
(b) Net profit x 100/Paid up Capital only
(c) None of these
Return on Equity is calculated as Net Profit/Shareholders' Equity x 100
#5
Wednesday, January 04, 2012
xaara~hussain
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Accounting & Auditing Paper-I (2003)


(1) Acid Test Ratio is calculated as under:
(a) Current Assets/Current Liabilities
(b) Fixed Assets/Current Liabilities
(c) Liquid Assets/Current Liabilities
(d) None of these
(2) Deferred cost is a:
(a) Liability
(b)Asset
(c) None of these
(3) Work Sheet is:
(a) Balance Sheet
(b) Fund Flows Statement
(c) A combination of Profit and Loss Account and Balance Sheet items
(d) None of these
(4) Banks, for the preparation of financial statements, are governed under:
(a) Banking Companies Ordinance, 1962
(b) State Bank of Pakistan Act
(c) None of these
(5) Return on investment is computed:
(a) Investment/Profit x 100
(b) Profit x 100/Investment
(c) None of these

Accounting & Auditing Paper-II (2003)


Write only the correct answer in the Answer Book. Do not reproduce the questions.
(1) Rent of the premises constitutes variable expenses for cost allocation:
(a) True
(b) False
(2) Sugar used in a sugarcane company is:
(a) Variable cost
(b) Fixed cost
(c) None of these
(3) An auditor is liable under the following circumstances:
(a) Third Party Liabilities

(b) Fraud perpetrated in highly sophisticated circumstances


(c) None of these
(4) Agricultural income is taxable under the Income Tax Laws of Pakistan:
(a) True
(b) False
(5) Principal and markup payment within one year constitutes long term liability for
disclosure in the balance sheet of a company.
(a) True
(b) False
(6) Ordinarily one can have the following partners in a partnership in Pakistan under the
Partnership Act 1932.
(a) 10
(b) 20
(c) 30
(d) None of these
(7) Working Capital finance can be termed as Running Finance in a limited company.
(a) True
(b) False
(8) Income from Capital gains arising out of trading on a stock strange in Pakistan is
taxable these days:
(a) True
(b) False
(9) Conversion Cost is calculated as under:
(a) Labour Plus Materials
(b) Labour plus overheads
(c) None of these
(10) Current Ratio can be calculated as under:
(a) Current Liabilities/Current Assets
(b) Current Assets/Current Liabilities
(c) None of these

Quote:
Originally Posted by omerkhan
(8) Deferred Taxation amount be treated as:

(a) Foot note


(b) An item in the Balance Sheet on asset side
(c) None of these
None of these may be the answer because deferred taxation is what you have
recognized in your financial statement but not paid to tax authorities, so it should be a
liability. But I am not sure.
I differ with reason you mentioned because as far as I studied it, Deferred
Taxation arises due to difference of depreciation method used by the
companies,as in Pakistan Tax authorities recommend companies to use
Diminishing balance method and if company is using straight line method
then there will be some difference incurred in amount of tax to be paid in
starting the difference is Credit but as time passes the difference will
start getting Debit or its become receivable..
AS in given question it is not evident that at what point of time they are
asking this..but in my view in long run Deferred Tax will be given a Debit
Balance means put on asset side...but in starting this shows Credit balance
as well it can be liability or asset...so keeping in view these things I too go
with part C
Quote:
(9) Return of Equity will be calculated as under:
(a) Operating Profit x 100/Equity
(b) Net profit x 100/Paid up Capital only
(c) None of these
Return on Equity is calculated as Net Profit/Shareholders' Equity x 100
Yup you are right...!
Quote:
Originally Posted by xaara~hussain
(1) Rent of the premises constitutes variable expenses for cost allocation:
(a) True
(b) False
This is False because whether you use premises or not, you will have to pay
Rent..

__________________
Regards,
~ Riz ~
#7
Saturday, January 07, 2012

Quote:
Originally Posted by Rixwan
This is False because whether you use premises or not, you will have to
pay Rent..
hmm is it about the expense itself or its value? I mean the expense is fixed but not value.
#8
Saturday, January 07, 2012
Rixwan
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Quote:
Originally Posted by xaara~hussain
hmm is it about the expense itself or its value? I mean the expense is fixed but not
value.
its for both...when you acquire some premises on rent there have always
been fixed rent for certain period like in house rent case the agreement is
for 11 months and after 11 months the rent will be revised as per agreed
rate..and in accounting when you are considering rent you will take in to
account the value of rents..you always made entry in numeric terms..but in
nature Rent will be termed as Fixed expense with what ever value you paid...

I think you have been taking fixed and Variable expenses with wrong
perception..in real
Fixed Expenses are those which you will have to bear whether you do any
production or not. It does not mean that value which you pay remain Fixed.
e.g if you have acquired some building on rent you will have to pay rent
whether you use it or not.
On the contrary, Variable expenses are those expenses which directly
related to your production means if you do any production these expenses
are high and if you do not produce these expenses are either low or none.
e.g. your material Cost or Labour Cost, If you are going to do any production
these costs will incur or else not.
I hope it clears your concept and if not then feel free to ask.
__________________
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~ Riz ~
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#9
Monday, March 11, 2013

dawoodahmad
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Quote:
Originally Posted by xaara~hussain

Accounting & Auditing Paper -I (2000)


(9) Quick Ratio can be computed as under:
(a) Quick . Assets/Quick Liabilities
(b) Quick . Liabilities Current Assets
(c) Current Assets/ Current Liabilities

(18) Every limited Company in Pakistan is required by law to include the following
along with financial reports:
(a) Ratio Analysis
(b) Chairmans Review
(c) None of these.

Accounting & Auditing Paper -II (2000)


6. Verification includes:
a. Checking Vouchers
b. Examining audit report
c. None of the above
(9) Quick Ratio can be computed as under:
(a) Quick . Assets/Quick Liabilities
(b) Quick . Liabilities Current Assets
(c) Current Assets/ Current Liabilities
(18) Every limited Company in Pakistan is required by law to include the following
along with financial reports:
(a) Ratio Analysis
(b) Chairmans Review
(c) None of these.
6. Verification includes:
a. Checking Vouchers
b. Examining audit report
c. None of the above
__________________
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#10
Tuesday, June 11, 2013
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Quote:
Originally Posted by xaara~hussain

Accounting & Auditing Paper-I (2002)


(7) Preparation of annual report of a firm is governed under:
(a) Partnership Act 1932
(b) Under partnership Deed
(c) None of these
please share reasoning...
Quote:
Originally Posted by dawoodahmad
(9) Quick Ratio can be computed as under:
(a) Quick . Assets/Quick Liabilities
(b) Quick . Liabilities Current Assets
(c) Current Assets/ Current Liabilities
(18) Every limited Company in Pakistan is required by law to include the following
along with financial reports:
(a) Ratio Analysis
(b) Chairmans Review
(c) None of these.
6. Verification includes:
a. Checking Vouchers
b. Examining audit report
c. None of the above
quick ratio= quick assets/current liabilities
there is no such option so i second dawoodahmad that best possible answer should b
option (a)
[quote](3) Work Sheet is:
(a) Balance Sheet
(b) Fund Flows Statement
(c) A combination of Profit and Loss Account and Balance Sheet items
(d) None of these[quote]
answer should b none of these

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Past papers' MCQs

Solved MCQs of
International Law
Past Papers

Thread Starter

Farrah Zafar

Forum

Sociology

Maroof Hussain Chishty International Law

tell me a best book of


compulsory past
Noor_2009
papers as solved past
papers ((PCS/psc)

AJKPSC

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ACC311 Fundamentals of Auditing Solved


MCQS
Take this Quiz online and evaluate your performance Start
1. Standard format of Auditors Report as per the Companies Ordinance 1984 is described in
which one of the following Legal Forms?
A. Form31A
B. Form32A
C. Form30A

D. Form35A
Form35A.http://www.vuzs.net/
2. IFRS stands for which one of the following?
A. International Financial Reporting Standards
B. International Financial Recording Systems
C. International Financial Recording Statements
D. International Financial Reporting Systems
International Financial Reporting Standards.
3. Which of the following is NOT one of the five major components of internal control?
A. Risk assessment
B. Control activities
C. Information and communication system
D. Human resource background checks
Human resource background checks.
4. All of the following should be observed and inspected by the auditors during the risk
assessment process of an entity EXCEPT:
A. Observations of Activities and operations
B. Inspection of Documents and records
C. Reading Management reports
D. Visit to other companies in the industry
Visit to other companies in the industry.
5. Which one of the following audit techniques ordinarily provides an auditor with the least
assurance about the operating effectiveness of an internal control activity?
A. Inquiry of client personnel
B. Inspection of documents and reports
C. Observation of client personnel
D. Preparation of system flowcharts
Inspection of documents and reports.
6. Which one of the following opinions advocates that the auditor should form an opinion only
after obtaining sufficient audit evidence instead of blindly accepting any information given by
the management?
A. Auditors liability
B. Professional ethics
C. Professional Skepticism
D. Auditors opinion
Professional ethics.
7. Which one of the following is NOT required as part of the audit process?
A. Substantive procedures
B. Tests of control

C. Assessment of materiality
D. Procedures to obtain an understanding of the internal control structure
Procedures to obtain an understanding of the internal control structure.
8. SECP stands for which one of the following?
A. Securities and Exchange Collaboration of Pakistan
B. Securities and Exchange Consortium of Pakistan
C. Securities and Exchange Commission of Pakistan
D. Securities and Exchange Constitution of Pakistan
Securities and Exchange Commission of Pakistan.
9. One type of analytical procedure is the Trend Analysis. Which one of the following is the
best example of trend analysis?
A. Comparison of company financial ratios to that of its competitors
B. Comparison of accounting records to budgeted amounts
C. Comparison of inventory levels over the past 3 years
D. Comparison of interest expenses to outstanding loan balances
Comparison of inventory levels over the past 3 years.
10. While conducting operational audit, which one of the following auditing procedures does the
auditor primarily rely upon?
A. Inquiry and observation
B. Analytical procedures
C. Physical inspection
D. Tracing and vouching
Analytical procedures.
11. Which one of the following helps to achieve reasonable assurance about the fairness of
financial statements during an audit process?
A. Audit report
B. Audit evidence
C. Audit engagement
D. Audit program
Audit report.

MGT411 Money, Banking and Financial Markets Solved MCQs 30


Q#1 A central bank typically:
A) has a monopoly in issuing currency.
B) use monetary policy in attempts to stabilize economic growth and/or inflation.
C) serves as a "bankers' bank" that provides services to other banks.
D) All of the above are correct.
The Basics: How Central Banks Originated and Their Role Today.

Q#2 The primary reason for the existence of central banks today is to:
A) help finance wars.
B) serve as a bank for the government, accepting deposits and providing the government with
checkable deposits.
C) control the money supply.
D) stabilize the prices of specific commodities.
The Basics: How Central Banks Originated and Their Role Today.
Q#3 Monetary policy in the countries that are part of the European Monetary Union is
controlled by the:
A) European Central Bank.
B) central banks of each of the member countries.
C) Federal Reserve Board.
D) Bank ofEngland.
The Basics: How Central Banks Originated and Their Role Today.
Q#4 Which of the following tasks is NOT performed by a central bank as part of its role as
a "bankers' bank?"
A) providing loans to banks during periods of financial stress
B) managing the payments system
C) controlling stock prices
D) accepting deposits from banks
Q#5 Central banks can serve as a lender of last resort because:
A) they have the ability to create money.
B) they are the only financial institution that is legally allowed to make loans during a financial
panic.
C) the interest rates they charge are so high that banks are virtually never willing to borrow from
the Fed.
D) banks are more likely to borrow money from their depositors during a financial panic.
The Basics: How Central Banks Originated and Their Role Today.
Q#6 Fedwire:
A) is a financial news network developed by the Federal Reserve Board.
B) is used for interbank transfers.
C) was once heavily used by banks, but is rarely used today since there is little need for
interbank transfers now that the internet exists.
D) is used by the Fed solely to make loans to member banks.
The Basics: How Central Banks Originated and Their Role Today.

Q#7 Historical evidence indicates that theU.S. financial system is:


A) always very stable as long as the government does not imposed any regulations.
B) prone to periods of instability that have imposed substantial costs on society.
C) somewhat unstable, but this does not matter much since the social cost of the instability is
always low.
D) as unstable today as it was in the late 1800s.
Stability: The Primary Objective of All Central Banks.
Q#8 One of the main objectives of a central bank is to:
A) reduce idiosyncratic risk in financial markets.
B) reduce systematic risk in financial markets.
C) encourage a low and stable rate of economic growth.
D) achieve a high and stable inflation rate.
Stability: The Primary Objective of All Central Banks.
Q#9 Central banks generally place a great deal of emphasis on maintaining a low and
stable inflation rate because:
A) inflation lowers the information content of prices.
B) economic growth tends to decline as inflation rates rise.
C) inflation tends to be less predictable when inflation rates rise.
D) All of the above are correct.
Q#10 Central banks usually establish a positive inflation rate target rather than a zero
inflation rate target because:
A) economic growth is higher when the inflation rate rises.
B) a positive inflation rate makes it possible for firms to reduce real wages without
reducing nominal wages, leading to more efficient labor markets.
C) the Fed is a more profitable operation for the government when the inflation rate is positive.
D) a higher inflation rate results in a higher unemployment rate, and higher unemployment rates
are preferred by policymakers.
Stability: The Primary Objective of All Central Banks.
Q#11 Which of the following is not a primary objective of the Fed?
A) low and stable inflation
B) high and stable real growth
C) financial system stability
D) maintaining low interest rates
Q#12 Exchangerate stability is:
A) a more important goal for the Fed than it is for the central banks of smaller and more tradeoriented economies.

B) a less important goal for the Fed than it is for the central banks of smaller and more
trade-oriented economies.
C) equally important as a goal for the Fed as it is for the central banks of smaller and more tradeoriented economies.
D) a primary objective of the Fed.
Q#13 Which of the following is not generally a characteristic of a successful central bank?
A) Central bank policy must be controlled by the same authorities.
B) Central bank decisions must be made in private and policy should not be publicly announced.
C) Decision making should be made by an individual, not a committee, to ensure consistency of
goals.
D) The central bank should operate within a framework in which it has clear goals.
Q#14 Central bank independence is:
A) not very common in industrialized countries today.
B) a practice that was widely adopted by central banks for industrialized countries in the late
1800s.
C) a relatively recent historical phenomenon.
D) a policy that is practiced by the European Central Bank, but not the Fed.
Q#15 Empirical evidence suggests that a higher level of central bank independence results
in:
A) higher average inflation rates than occur in countries with less independent central banks.
B) lower average inflation rates than occur in countries with less independent central
banks.
C) the same average inflation rates that occur in countries with less independent central banks.
D) lower rates of economic growth than occurs in countries with less independent central banks.
Q#16 A source of conflict between monetary and fiscal policy decision makers is that:
A) fiscal policy decision makers place more emphasis on short-term objectives while monetary
policy makers focus on long-term objectives.
B) it is easier, from a political standpoint, to pay for increased government spending by a
monetary expansion than by raising taxes.
C) Both of the above are correct.
D) None of the above is correct.

Solution is provided by vuZs Solution Team.

You are free to distribute and use it. In case you wanted to host or re-distribute it. Please dont
remove the links of group and website

1. Which of the following correctly states the relationship regarding banks' balance sheets?
A.
B.
C.
D.

Total Bank Liabilities = Total Bank capital + Total Bank Assets.


Total Bank Assets = Total Bank Liabilities + Total Bank Capital.
Total Bank Assets = Total Bank Liabilities Total Bank Capital.
Total Bank Assets = Total Bank Capital Total Bank Liabilities.

2. A bank's reserves do not include:


A.
B.
C.
D.

U.S. Treasury bills.


Currency in the bank.
The bank's deposits at the Federal Reserve.
Currency in ATM machines.

3. Eurodollars are:
A.
B.
C.
D.

Dollar-denominated deposits in foreign banks.


Euro denominated deposits in U.S. Banks
The currency of the European Economic Union.
Dollars that are specially printed for use in the European Union countries to minimize
counterfeiting.

4. One of the unique problems that banks face is:


A.
B.
C.
D.

They hold illiquid assets to meet liquid liabilities.


They hold liquid assets to meet illiquid liabilities.
They hold liquid assets to meet liquid liabilities.
Both banks' assets and liabilities are illiquid.

5. Central banks perform each of the following EXCEPT:


A.
B.
C.
D.

Issue currency.
Operate a payments system.
Controls the availability of money and credit.
Manages fiscal policy.

6. The specific goals of central banks include each of the following EXCEPT:
A.
B.
C.
D.

High and stable real growth.


Low and stable inflation.
High levels of imports.
Low and stable unemployment rates.

7. Small and medium enterprise (SME) Bank is:


A.
B.
C.
D.

A Finance company
A Securities firm
A Government sponsored enterprise
An insurance company

8. ---------------is classified as a liability for a commercial bank:


A.
B.
C.
D.

Reserves
Commercial loans
Demand deposits
Deposits with the Federal Reserve

9. ------------------is a primary policy tool of the Central Bank:


A.
B.
C.
D.

Inflation rate
Open market operations
interest rate
money supply

10. -----------is a component of the liability side of the commercial banks balance sheet:
A.
B.
C.
D.

Deposits
Loans
Securities
All of the given options

1) Instruments that are not directly under the control of the Central Bank are referred to
as:
A.
B.
C.
D.

Operating instruments
Intermediate targets
Economic instruments
Social instruments
2) Every country with high inflation has ____________ money growth:

A.
B.
C.
D.

High
Low
Medium
Zero
3) Which of the following statement is true?

A.
B.
C.
D.

Nominal GDP = PY
Nominal GDP > PY
Nominal GDP < PY
Nominal GDP PY
4) According to Milton Friedman, Central Banks should set money
growth at a __________ rate:

A.
B.
C.
D.

Increasing rate
Decreasing rate
Constant rate
Zero rate
5) ____________ is one of the financial instruments that we can hold in our investment
portfolios:

A.
B.
C.
D.

Bonds
Shares
Money
Term finance certificates (TFC)
6) Increases in price level will ____________ the purchasing power of money:

A.
B.
C.
D.

Increase
Decrease
No change
Balance
7) At long run real interest rate:

A.
B.
C.
D.

AD = Potential Output
AD > Potential Output
AD < Potential Output
None of the given options
8) __________ curve is downward sloping because higher inflation reduces real money
balances:

A.
B.
C.
D.

Aggregate Demand Curve


Aggregate Supply Curve
IS Curve
LM Curve
9) Increases in government purchases will ________ the aggregate demand:

A.
B.
C.
D.

Increase
Decrease
No change
Balance
10) A change in cost of producing output causes the ________ curve to shift:

A.
B.
C.
D.

Aggregate Demand Curve


Aggregate Supply Curve
IS Curve
LM Curve
1. According to the liquidity premium theory of the term structure, when the yield curve
has its usual slope, the market expects:
a.
b.
c.
d.

Short-term interest rates to rise sharply.


Short-term interest rates to stay near their current levels.
Short-term interest rates to drop sharply.
None of the above.

2. When the yield curve slopes down,


a. The expectations theory suggests that short-term interest rates are expected to fall.
b. The segmented markets theory suggests that short-term interest rates are expected to rise.
c. The expectations theory suggests that short-term interest rates are expected to rise.
d. The liquidity premium theory suggests that short-term interest rates are expected to rise.
a.
b.
c.
d.

3. Which of the following patterns of term structure occur most frequently?


Ascending yield curve
Descending yield curve
Flat yield curve
Humped yield curve
4. Common stocks (or corporate stocks):
a. Represent an IOU on the part of the issuing firm
b. Entitle the holder to contractual payments
c. Were a poor investment over the period 1982-1996
d. Allows the holder to share in the earnings of the firm
5. Financial intermediaries:
a.
b.
c.
d.

Channel funds from savers to borrowers


Greatly enhance economic efficiency
Have been an source of many financial innovations
Have done all of the above

6. Which of the following cannot be described as indirect finance?

a. You take out a mortgage from your bank.


b. An insurance company lends money to General Motors Corporation.
a. You borrow $1000 from your best friend.
c. You buy shares in a mutual fund.
7. Which of the following is a depository institution?
a.
b.
c.
d.

Life insurance Company


Credit union
Pension fund
Finance company
8. Which of the following is traded in a money market?

a.
b.
c.
d.

U.S. Treasury bonds


Mortgages
Common stocks
Federal funds

a.
b.
c.
d.

9. The primary liabilities of a savings and loan association are:


Bonds.
Mortgages.
Deposits.
Commercial paper.
10. Financial intermediaries promote efficiency and thereby increase peoples wealth:
a. By reducing the transaction cost of linking together lender and borrowers.
b. To the extent that they help solve problems created by adverse selection and moral
hazard.
c. By providing additional jobs.
d. Because of only (a) and (b) of the above.
11. When an investment bank purchases a new issue of securities in the hopes of making a
profits, it is said to ________ the issue.
a. Pawn
b. Back stock
c. Syndicate
d. Underwrite
12. Which of the following is a use for commercial bank funds?
a.
b.
c.
d.

Loans
Securities
Reserves
All of the above

13. On the commercial bank balance sheet, which of the following is an asset?
a.
b.
c.
d.

Capital accounts
Deposits with Federal Reserve
transactions deposits
All of the above

14. If a bank has total assets of $100 million and capital accounts of $8 million, then:
a. Its total liabilities are $92 million
b. Its total liabilities are $108 million
c. It has an equity multiplier of 10
d. None of the above are true
15. A bank can increase its leverage by increasing its ratio of:
a. Earnings/total assets
b. Total assets/equity capital
c. Earnings/equity capital
d. Equity capital/total assets
16. When you deposit a $100 check in your bank account at the First National Bank of
Chicago and you withdraw $50 in cash, then:
a.
b.
c.
d.

The liabilities of First National Bank rise by $100.


The reserves of First National Bank rise by $100.
The assets of the First National Bank rise by $100.
The liabilities of the First National Bank rise by $50.

17. Commercial banks obtain funds by:


a. Issuing demand deposits
b. Borrowing from other banks
c. Issuing ownership claims (equity)
d. All of the above
18. A bank failure is more likely to occur when:
a.
b.
c.
d.

A bank holds more U.S. government securities


A bank suffers large deposit outflows.
A bank holds more excess reserves.
A bank has more bank capital.

19. ---------------measures how efficiently a bank uses its assets:


a. Return on assets

b. Return on equity
c. Bank capital
d. Bank Profitability
20. -----------refers to the risk assessment and loss reimbursement guarantee by the
individual risk experts of the relevant field:
a.
b.
c.
d.

Underwriting process
Research process
Insurance process
None of the given options

21. The euro is the name for:


a. A currency deposited outside its country of origin.
b. A bond sold internationally outside of the country in whose currency the bond is
denominated.
c. A common European currency.
d. A type of sandwich.
22. Banks can operate in other countries by:
a.
b.
c.
d.

Offering same services as in home country


Opening a foreign branch
Creating an international Banking Facility
All of the given options.

23. The theory of efficient markets:


a.
b.
c.
d.

Allows for higher than average returns if the investor takes higher than average risk
Says insider information makes markets less efficient
Rules out high returns due to chance
Assumes people have equal luck

24. If information in a financial market is asymmetric, this means:


a.
b.
c.
d.

Borrowers and lenders have perfect information


Borrowers would have more information than lenders
Borrowers and lenders have the same information
Lenders lack any information

25. Khushali Bank is:


a. A Finance company
b. A Securities firm
c. A Government sponsored enterprise

d. An insurance company
1- Which of the following appears as a liability in the balance sheet of the central bank?
A.
B.
C.
D.

Currency
The governments deposit account
The deposit accounts of the commercial banks
All of the given options
2- The transaction in which central bank buys or sells foreign currency reserves is known
as:

A.
B.
C.
D.

Foreign exchange intervention


Open market operation
Discount loans
Reserve requirement
3- Which of the following equations depicts equation of exchange?

A.
B.
C.
D.

MV= VY
MV=PY
MP=VY
V=PY
4- ---------------is determined by the central bank and the behavior of the banking system:

A.
B.
C.
D.

Money demand
Money supply
Aggregate demand
Aggregate supply
5- If the alternative assets become more risky then the demand for money:

A.
B.
C.
D.

Goes up
Goes down
Remains unchanged
None of the given options
6- The interest rate at which aggregate demand equals potential output is known as:

A. Discount rate
B. Short run real interest rate
C. Long run real interest rate

D. Inflation rate
7- An increase in the long run real interest rate shifts the monetary policy reaction curve to
the:
A.
B.
C.
D.

Right
Left
No change
None of the given options
8- An increase in oil prices causes the short run aggregate supply curve to shift:

A.
B.
C.
D.

Upward
Downward
No change
All of the given options
9- An increase in potential output shifts the long run aggregate supply curve to the:

A.
B.
C.
D.

Left
Right
No change
None of the given options
10- --------------policy works slowly and almost impossible to implement effectively:

A.
B.
C.
D.

Monetary policy
Fiscal policy
Trade policy
Foreign exchange policy

Quiz # 44

Q#1
Considering business cycles over the last fifty years in U.S. history, one would say that:
A)

the lower the growth, the more likely inflation is to fall.


B)

the lower the growth, the less likely inflation is to fall.

C)

the higher the growth, the more likely inflation is to fall.

D)

inflation does not change as much with growth as it used to.

Feedback:
LOD: 1
Understanding Business Cycle Fluctuations.

Q#2
Which of the following is correct?

D)

A)

A decrease in the price of oil would be a supply shock.

B)

A decrease in consumer confidence would be a demand shock.

C)

Shocks can cause shifts in either the demand or supply curve.

All of the above are correct.

Feedback:
LOD: 1
Sources of Fluctuations in Output and Inflation.

Q#3
If the central bank increases its inflation target:
A)

reaction curve.

the monetary policy reaction curve will shift to the right.


B)

the monetary policy reaction curve will shift to the left.

C)

there will be a movement up along the monetary policy

D)

there will be a movement down along the monetary policy

reaction curve.

Feedback:
LOD: 2
Sources of Fluctuations in Output and Inflation.

Q#4
If government purchases decrease and as a result push current output above potential output,
monetary policymakers are likely to:
A)
B)

raise the real interest rate.

lower the real interest rate.


C)

keep the real interest rate constant and focus on only changing

D)

purchase Treasury securities.

the nominal interest rate.

Feedback:
LOD: 2
Sources of Fluctuations in Output and Inflation.

Q#5
Suppose that an increase in consumer confidence shifts the dynamic aggregate demand curve to the
right. Which of the following is correct?
A)
In the absence of a monetary policy response, the short-run
aggregate supply curve will shift to the right.
B)
In the absence of a monetary policy response, the short-run
aggregate supply curve will shift to the left.

C)
If monetary policymakers react, the dynamic aggregate
demand curve will shift farther to the right.
D)
Even without a monetary policy response, the dynamic
aggregate demand curve will shift back to the left.

Feedback:
LOD: 3
Sources of Fluctuations in Output and Inflation.

http://groups.google.com/group/vuZs/web/mba

Q#6
Stagflation is associated with:
A)

higher inflation and lower growth.


B)

higher inflation and higher growth.

C)

lower inflation and lower growth.

D)

lower inflation and lower growth.

Feedback:
LOD: 2
Sources of Fluctuations in Output and Inflation.

Q#7
Which of the following statements is incorrect?
A)
effects of a supply shock.

Monetary policymakers find it more difficult to deal with the

B)

Monetary policymakers can shift the long-run aggregate supply

curve.
C)

Monetary policymakers can neutralize movements in aggregate

demand.
D)
dynamic aggregate demand curve.

Shifts in the monetary policy reaction function shift the

Feedback:
LOD: 2
Using the Aggregate Demand-Aggregate Supply Framework.

Q#8
A decrease in consumer confidence would like result in fiscal policymakers:
A)

cutting taxes or increasing spending.


B)

shifting the monetary policy reaction curve left.

C)

shifting the monetary policy reaction curve right.

D)

raising taxes or decreasing spending.

Feedback:
LOD: 2
Using the Aggregate Demand-Aggregate Supply Framework.

Q#9
A decrease in taxes would likely occur in response to some shock that:
A)

caused the dynamic aggregate demand curve to shift to the left.

B)

caused a movement down and along the existing dynamic

C)

caused a movement up and along the existing dynamic

D)

caused the dynamic aggregate demand curve to shift to the

aggregate demand curve.

aggregate demand curve.

right.

Feedback:
LOD: 2
Using the Aggregate Demand-Aggregate Supply Framework.

Q#10
To take advantage of the opportunity provided by positive supply shocks, monetary policymakers
should act to:
A)
B)

flatten the slope of the monetary policy reaction curve.

shift the monetary policy reaction curve left.


C)

raise the potential level of output.

D)

make the slope of the monetary policy reaction curve steeper.

Feedback:
LOD: 2
Using the Aggregate Demand-Aggregate Supply Framework.

http://groups.google.com/group/vuZs/web/mba

Q#11
The "great moderation" of the 1990s has been attributed to:

A)

luck.

B)

the increased ability of economies to absorb external economic

C)

more effective monetary policy.

disturbances.

D)

All of the above.

Feedback:
LOD: 1
Using the Aggregate Demand-Aggregate Supply Framework.

Q#12
In the long run an increase in potential output will mean that:
A)

in the long run inflation must fall.

B)

in the long run inflation must rise.

C)

in the long run inflation will not change from its previous level.

D)
None of the above; what happens to inflation in the long run
depends on the actions of monetary policymakers.

Feedback:
LOD: 1
Using the Aggregate Demand-Aggregate Supply Framework.

Q#13
For "opportunistic disinflation" to occur:

A)
potential output must increase and monetary policy makers
must respond by shifting the monetary policy reaction curve to the left.
B)
potential output must increase and monetary policy makers
must respond by shifting the monetary policy reaction curve to the right.
C)
potential output must increase and monetary policy makers
must respond by shifting the dynamic aggregate demand curve to the right.
D)

None of the above is correct.

Feedback:
LOD: 3
Using the Aggregate Demand-Aggregate Supply Framework.

Q#14
Which of the following is true about real-business-cycle theory?
A)
According to the theory, the short-run aggregate supply curve
shifts slowly in response to deviations of current output from potential output.
B)

It assumes the inflexibility of prices and wages.

C)
According to the theory, any shift in the dynamic aggregate
demand curve results in fluctuations in potential output with no effect on inflation.
D)

None of the above is correct.

Feedback:
LOD: 2
Using the Aggregate Demand-Aggregate Supply Framework.

Q#15
Which of the following represents a correct action by monetary policy makers?
A)
A drop in potential output occurs, and monetary policymakers
shift the monetary policy reaction curve to the left.
B)
A drop in potential output occurs, and monetary policymakers
shift the monetary policy reaction curve to the right.
C)
A recessionary gap occurs and monetary policymakers shift the
monetary policy reaction curve to the right.
D)
A recessionary gap occurs and monetary policymakers shift the
monetary policy reaction curve to the left.

MGT401 Financial Accounting ii MCQs Collection from Online Quizzes


BY PARISHY
www.vuzs.net

1. Which of the following is NOT the Classification of Current Assets with respect to
the Companies Ordinance 1984?
Select correct option:
Cash Balance
Bank Balance
Premises
Marketable Securities
2. Written down value of an asset = -------------Select correct option:
Original cost Accumulated depreciation
Original cost Appreciation
Book value Accumulated depreciation
Original cost Salvage value
3. Which of the following entities is not profit oriented entity?
Select correct option:
Sole - proprietorship
Partnership

Companies
Foundations
4. All of the following are Fixed assets EXCEPT:
Select correct option:
Machinery
Freehold land
Leasehold land
Marketable securities
5. A Partnership firm has a maximum ____ numbers of partners.
Select correct option:
20
15
10
02
6. Which of the following is NOT the Classification of Current Assets with respect to
the Companies Ordinance 1984?
Select correct option:
Stock
General Stores
Spare parts
Bank over draft
7. Which of the following IAS deals with Inventories?
Select correct option:
IAS 38
IAS 23
IAS 02
IAS 16
8. Which one of the following is related to IAS 32 & 39?
Select correct option:
Property, Plant & Equipment
Inventory
Financial Statements
Financial Instruments
9. IAS-16 deals with:
Select correct option:
Property, Plant and Equipment

Cash Flow Statement


Presentation of Financial Statements
Earning per share
10. Which of the following meeting is held once in the life of a company?
Select correct option:
Statutory Meeting
Annual General Meeting
Extraordinary Meeting
Board Meeting
11. Which of the following is NOT a Qualifying Asset?
Select correct option:
Power plan being in the process of manufacture
Inventories requiring a substantial period for manufacturing
Special order for a special inventory that will be manufactured in 5 months
Asset ready for use
12. Which of the following is original and planned investigation undertaken with the
prospect of gaining new scientific or technical knowledge and understanding?
Select correct option:
Research
Development
Audit
Accounting
13. Which of the following IAS deals with the Intangible Assets?
Select correct option:
IAS 38
IAS 23
IAS 01
IAS 16
14 .Which of the following is/are the type(s) of stock for manufacturing concerns?
Select correct option:
Raw Material
Work in Process
Finished Goods
All of the given options

15 .Which one of the following is a method of stock valuation?


Select correct option:
Diminishing Balance Method
Written Down Value Method
Specific Identification Method
Sum of Year Digit Method
Quiz 2 hazlezzzzzz
14. All of the following are Fixed assets EXCEPT:
Select correct option:
Machinery
Freehold land
Leasehold land
Marketable securities
15. Which of the following schedule provides disclosure requirements for Listed
Companies under Companies Ordinance 1984?
Select correct option:
4th schedule
5th schedule
6th schedule
2nd schedule
16. Which of the following investment are recorded using Cost Method?
Select correct option:
Investments made for longer period
Investments made for shorter period
Investments made for shorter and longer period
None of the given options
17. An enterprise would be the subsidiary of another enterprise if that investor
enterprise can control the subsidiary represents:
Select correct option:
Subsidiary Companies
Holding Companies
Public Limited Companies
Private Limited Companies
18. Which of the following is NOT the method of stock valuation?
Select correct option:
FIFO Method

Weighted Average Method


Specific Identification Method
Straight Line Method
19. Which of the following IAS is related to the Consolidated and Separate Financial
Statements?
Select correct option:
IAS 27
IAS 28
IAS 31
IAS 32
Which one of the following is a method of stock valuation?
Select correct option:
Diminishing Balance Method
Written Down Value Method
Specific Identification Method
Sum of Year Digit Method
20. Which of the following is the application of research findings or other knowledge
to a plan or design for the production of new or substantially improved materials,
devices, products, processes, systems or services before the start of commercial
production or use?
Select correct option:
Applied research
Development
Business research
Accounting
21. What is the treatment of Depreciation in accounting?
Select correct option:
Treated as a reserve
Treated as an expense
Treated as a surplus
Treated as a Liability
22. Which of the following is/are example(s) of development activities?
Select correct option:
The design of tools, jigs, moulds and dies involving new technology
The design, construction and testing of pre-production or pre-use prototypes and
models

The design, construction and operation of a pilot plant


All of the given options
23. Which of the following is/are the method(s) for calculating the cost of inventory?
Select correct option:
FIFO Method
Weighted Average Method
Specific Identification Method
All of the given options
24. Which of the following is (are) related with the IAS 23?
Select correct option:
Qualifying Assets
Amount to be capitalized related to the Borrowing cost
Capitalization period related to the Borrowing cost
All of the given options
25. Partnership firm has a maximum ____ numbers of partners.
Select correct option:
20
15
10
02
26. Which of the following sections of the Companies Ordinance 1984 is related to the
Annual General Meeting?
Select correct option:
Section 157
Section 158
Section 159
Section 160
27. Which of the following may consist of more than 20 persons in case of
partnership?
Select correct option:
Firms of Lawyers
Firms of Doctors
Firms of Associates
All of the given options

28. Which one of the following is related to the Allowed Alternative Treatment for an
investment in jointly controlled entities?
Proportionate Consolidation Method
Equity Method
Weighted Average Method
Sum of Year Digit Method
IAS-16 deals with:
Select correct option:
Property, Plant and Equipment
Cash Flow Statement
Presentation of Financial Statements
Earning per share
29. Companies are registered under:
Select correct option:
Partnership Act 1932
Companies Ordinance 1984
Partnership Agreement
Income Tax Ordinance 1979
30. Which of the following business is formed by the approval of Stock Exchange?
Select correct option:
Money Exchange Company
Non Banking Finance Corporation
Trade organization u/s 42 of the Companies ordinance 1984
Corporate Brockage House
31. to the Allowed Alternative Treatment, Which of the following method is used for
stock valuation?
Select correct option:
FIFO Method
LIFO Method
Weighted Average Method
Specific Identification Method
32. : Which of the following IAS deals with the Borrowing Costs?
Select correct option:
IAS 23
IAS 07

IAS 01
IAS 16
33. : Which one of the following is the type of stock for trading concerns?
Select correct option:
Raw Material
Work in Process
Finished Goods
Stock in Trade
34. : What is the meeting requirement for the directors of a Public Limited
Company?
Select correct option:
At least once in each quarter
At least once in each month
At least once in each year
At least once in each week
35. : of the following represent(s) the Prime Cost?
Select correct option:
Direct Material Cost + Direct Labour Cost
Total Factory Cost Factory Overheads
Conversion Cost Factory Overheads + Direct Material Costs
All of the given options
36. Which of the following is/are example(s) of development activities?
Select correct option:
The design of tools, jigs, moulds and dies involving new technology
The design, construction and testing of pre-production or pre-use prototypes and
models
The design, construction and operation of a pilot plant
All of the given options
37. Which of the following IAS deals with the Intangible Assets?
Select correct option:
IAS 38
IAS 23
IAS 01
IAS 16

38. : Which of the following is the Classification of Current Assets with


respect to the Companies Ordinance 1984?
Select correct option:
Building
Land
Premises
Marketable Securities
39. : Which of the following is/are example(s) of research activities?
Select correct option:
: Activities aimed at obtaining new knowledge
The search, evaluation, final selection and application of research findings
The search for alternatives
All of the given options
40. : Which one of the following type(s) of information is(are) available in 4th
and 5th schedule of the Companies Ordinance 1984?
Select correct option:
Definitions and general requirements for preparation and presentation of financial
statements
Requirements for Balance Sheet
Requirements for Profit and Loss Account
All of the given options
41. : Which one of the following IAS is related to the Interest in Joint
Venture?
Select correct option:
IAS 27
IAS 28
IAS 31
IAS 32
42. Which of the following fixed asset is shown at cost rather at book value?
Machinery
Furniture
Vehicles
Land
43. Which of the following is an example of Capital Expenditure
Wages paid on the purchases of goods
Carriage paid on the purchases of goods

Transportation paid on machinery purchased


Octori duty paid on goods
44. Which of the following methodology is adopted for the valuation of investments in
associated companies?
Equity Method
At cost orUnder IAS 39
At amortized cost
At fair value
:
45. In case an item of property, plant and equipment is exchanged for similar asset of
the enterprise, the cost of the new asset is measured at the -------------- of the old
asset.
Carrying value
Fair value
Future value
Salvage Value
46. Which of the following represent(s) the Prime Cost?
Direct Material Cost + Direct Labour Cost
Total Factory Cost Factory Overheads
Conversion Cost Factory Overheads + Direct Material Costs
All of the given options
47. Which of the following costs can be capitalized?
Purchases of assets financed through issue of debentures
Assets that are not currently in use because of excess capacity
Assets not currently undergoing activities necessary to prepare for intended use
Assets intended for sale or use that are produced as discrete projects
48. Which one of the following is(are) NOT recorded under Current Liabilities section
of the Balance Sheet?
Debentures
Deferred Taxation
Obligation Under Finance Lease
All of the given options
49. Which of the following is the deduction or allowance allowed by a creditor to a
debtor?
Trade Discount
Cash Discount

Purchases return
Sales return
50. The term Significant Influence refers to the:
Ability to participate but not to control financial and management affairs of the enterprise
Ability to participate and control financial and management affairs of the enterprise
Neither to control nor to participate in financial affairs of the enterprise
None of the given options

51. Which of the following is a rebate or allowance from the scheduled price granted
by the seller to the buyer?
Trade Discount
Cash Discount
Purchases return
Sales return
52. Which of the following entities is profit oriented entity?
NGOs
Trust
Societies
Sole - proprietorship
53. Which of the following is/are the Classification of Current Assets with respect to
the Companies Ordinance 1984?
Cash Balance
Loans and Advances
Bank Balance
All of the given
54. What is the treatment of Accumulated Depreciation in accounting?
Treated as a reserve
Treated as a contra asset
Treated as a surplus
Treated as an expense

55. Which of the following IAS deals with Inventories?


IAS 38
IAS 23
IAS 02

56. Which one of the following is NOT the component of cost?


Import duties
Installation costs
Cost of site preparation
Transportation outwards
57. What is the treatment of Depreciation in accounting?
Treated as a reserve
Treated as an expense
Treated as a surplus
Treated as a Liability
58. Which one of the following is related to the Benchmark Treatment for an
investment in jointly controlled entities?
Proportionate ConsolidationMethod
Equity Method
LIFO Method
Specific Identification Method
59. Which of the following is/are NOT the example(s) of Financial Asset?
Minority interest
Sale of goods
Purchases of goods
All of the given options
60. Which one of the following is a fixed asset?
Cash in hand
Advanced payment
Closing stock
Leasehold vehicle
61. Which of the following is an example of Capital Expenditure?
Wages paid on the purchases of goods
Carriage paid on the purchases of goods
Transportation paid on machinery purchased
Octori duty paid on goods
62. All of the following are Fixed assets EXCEPT:
Machinery
Freehold land

Leasehold land
Marketable securities
63. Which of the following IAS deals with the Borrowing Costs?
IAS 23
IAS 07
IAS 01
IAS 16
64. Which of the following IAS deals with the Borrowing Costs?
IAS 23
IAS 07
IAS 01
IAS 16
65. Which of the following is INCORRECT with respect to Perpetual Inventory
System?
Receipt of inventory is debited to Stock Account
Issuance of inventory is Credited to Stock Account and Debited to Material
Consumption Account
Receipt of inventory is debited to Purchase Account
Material Consumption Account becomes the part of Trading Account
66. Which of the following is/are the Classification of Current Assets with respect to
the Companies Ordinance 1984?
Stock
Cash Balance
Finished Goods
All of the given options
67. :Which of the following is an identifiable non-monetary asset without physical
substance?
Tangible Asset
Intangible Asset
Floating Asset
Circulating Asset
68. :Which of the following represent(s) the Cost of goods sold?
Sales Gross Profit
Opening Stock + Purchases Closing Stock
Cost of goods Manufactured + Opening Finished Goods Inventory Closing Finished

Goods Inventory
All of the given options
69. Which of the following is(are) example(s) of Borrowing costs?
Interest on bank overdrafts
Interest on short-term borrowings
Interest on long-term borrowings
All of the given options
70. Which of the following is the ability to govern the financial and operating policies
of an enterprise so as to obtain from its activities?
Control
Significant Influence
Direct Subsidiary
Indirect Subsidiary
71. Which of the following is INCORRECT with respect to Perpetual Inventory
System?
Receipt of inventory is debited to Stock Account
Issuance of inventory is Credited to Stock Account and Debited to Material Consumption
Account
Receipt of inventory is debited to Purchase Account
Material Consumption Account becomes the part of Trading Account
72. Which of the following IAS deals with the Associated Companies?
IAS 27
IAS 28
IAS 01
IAS 07
73. Which of the following fixed asset is shown at cost rather at book value?
Machinery
Furniture
Vehicles
Land
74. Which of the following is the deduction or allowance allowed by a creditor to a
debtor?
Trade Discount
Cash Discount

Purchases return
Sales return
75. Which of the following costs can be capitalized?
Purchases of assets financed through issue of debentures
Assets that are not currently in use because of excess capacity
Assets not currently undergoing activities necessary to prepare for intended use
Assets intended for sale or use that are produced as discrete projects
76. 8:52 PM Which of the following is an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale?
Qualifying Asset
Outstanding Asset
Tangible Asset
Intangible Asset
77. Which of the following investments are recorded using Equity Method?
Investments made for longer period
Investments made for shorter period
Investments made for shorter and longer period
None of the given options
78. Which of the following business is formed by the approval of State Bank of
Pakistan?
Money Exchange Company
Non Banking Finance Corporation
Trade organization u/s 42 of the Companies ordinance 1984
Corporate Brockage House
79. If Original cost is Rs. 100,000; Depreciation rate is 20% p.a. using straight line
method; what will be the value of accumulated depreciation at the end of 2nd
year?
Rs.20,000
Rs. 40,000
Rs. 80,000
Rs. 60,000
80. Concept of Related Parties is defined in:
Companies Ordinance 1984
IAS

Both Companies Ordinance 1984 and IAS


Neither in Companies Ordinance 1984 nor in IAS
81. Which one of the following is related to the IAS 39?
Consolidated and Separate Financial Statements
Interest in Joint Venture
Financial Instruments Disclosure and Presentation
Financial Instruments Recognition and Measurement
82. Which of the following IAS affect(s) the recognition, presentation and discourse of
fixed assets in financial statements?
IAS 01
IAS 16
IAS 23
All of the given options
83. Which of the following is TRUE with respect to the disclosure requirements of
Trade Debts?
Select correct option:
Doubtful debts is deducted from the Provision for doubtful debts
Doubtful debts and its Provision is shown separately as asset
Provision for doubtful debts is not taken into consideration
None of the given options
84. Which of the following IAS deals with the Borrowing Costs?
Select correct option:
IAS 23
IAS 07
IAS 01
IAS 16
85. If Manufacturing Cost is Rs. 30,000 Opening Work in Process Inventory is Rs.
5,000 Closing Work in Process Inventory is Rs. 10,000 Then:What is the amount
of Cost of Goods Manufactured?
Select correct option:
Rs. 35,000
Rs. 25,000
Rs. 15,000
Rs. 20,000

86. Which of the following is/are the physical asset(s)?


Select correct option:
Term Finance Certificates
Loan Agreements
Trade Receivables
All of the given options
87. Which of the following methodology is adopted for the valuation of investments
held to maturity?
Select correct option:
Proportionate Consolidation or Equity Method
At cost or Under IAS 39
At amortized cost
At fair value
88. In case an item of property, plant and equipment is exchanged for similar asset of
the enterprise, the cost of the new asset is measured at the -------------- of the old
asset.
Select correct option:
Carrying value
Fair value
Future value
Salvage Value
89. All of the following are Fixed assets EXCEPT:
Select correct option:
Machinery
Freehold land
Leasehold land
Marketable securities
90. If the holding company owns more then 50% but less then 100% shares of the
subsidiary company then the subsidiary type will be termed as:
Select correct option:
Partially owned subsidiary
Wholly owned subsidiary
Direct subsidiary
Indirect subsidiary
91. Which of the following is NOT related to the qualitative characteristics that make
financial information useful?

Select correct option:


Reliability only
Relevancy only
Both Reliability and Relevancy
Understandability
92. 5:57 PM Which of the following sections of the Companies Ordinance 1984 is
related to the Statutory Meeting?
Select correct option:
Section 157
Section 158
Section 159
Section 160
93. Which of the following sections of the Companies Ordinance 1984 is related to the
Statutory Meeting?
Select correct option:
Section 157
Section 158
Section 159
Section 160
94. Under which of the following assumptions, the Financial Statements are to be
prepared?
Select correct option:
Future assumption
Past assumption
Accrual basis and Going concern assumptions
Accrual basis assumption only
95. What will be the Book value of asset if its Original cost is Rs. 100,000;
Accumulated depreciation is Rs. 40,000; and Depreciation for the year is Rs.
20,000?
Select correct option:
Rs. 140,000
Rs. 160,000
Rs. 80,000
Rs. 60,000
96. Which one of the following type(s) of information is(are) available in 4th and 5th
schedule of the Companies Ordinance 1984?

Select correct option:


Definitions and general requirements for preparation and presentation of financial
statements
Requirements for Balance Sheet
Requirements for Profit and Loss Account
All of the given options
97. Which of the following is an example of Revenue Expenditure?
Select correct option:
Carriage paid on the purchases of goods
Transportation paid on machinery purchased
A second-hand car was purchases for Rs. 7,000 and Rs. 5,000 were spent for his repairs
and overhauling
An additional room was constructed at a cost of Rs. 15,000
98. Which of the following IAS deals with Revaluation of Assets?
Select correct option:
IAS 16
IAS 07
IAS 01
IAS 23
99. If the holding company owns marginally less than 100% shares of the subsidiary
company then the subsidiary type will be termed as:
Select correct option:
Partially Owned Subsidiary
Wholly Owned Subsidiary
Virtually Wholly Owned Subsidiary
Indirect Subsidiary
100. Which of the following is/are the Classification of Current Assets with
respect to the Companies Ordinance 1984?
Select correct option:
Cash Balance
Loans and Advances
Bank Balance
All of the given options
101.Which of the following is NOT a Qualifying Asset?
Select correct option:
Power plan being in the process of manufacture

Inventories requiring a substantial period for manufacturing


Special order for a special inventory that will be manufactured in 5 months
Asset ready for use
102. If the holding company owns more then 50% but less then 100% shares
of the subsidiary company then the subsidiary type will be termed as:
Select correct option:
Partially Owned Subsidiary
Wholly Owned Subsidiary
Direct Subsidiary
Indirect Subsidiary
103. Which one of the following is NOT recorded under Equity section of the
Balance Sheet?
Select correct option:
Share Premium
Share Capital
Accumulated Profit
Dividend Payable
104. Preparation and presentation of Financial Statements are governed by:
Select correct option:
Companies Ordinance 1984
International Accounting Standards
International Financial Reporting Standards
All of the given options
105. Which of the following is NOT the Classification of Current Assets with
respect to the Companies Ordinance 1984?
Select correct option:
Cash Balance
Bank Balance
Premises
Marketable Securities
106. Which one of the following methods for inventory valuation is NOT suitable
for homogeneous units?
Select correct option:
FIFO Method
LIFO Method

Weighted Average Method


Specific Identification Method
107. Which of the following is the application of research findings or other
knowledge to a plan or design for the production of new or substantially improved
materials, devices, products, processes, systems or services before the start of
commercial production or use?
Select correct option:
Applied research
Development
Business research
Accounting
108. Which of the following is NOT the type of Market Risk?
Select correct option:
Price Risk
Liquidity Risk
Interest Rate Risk
Currency Risk
109. Which of the following is original and planned investigation undertaken with
the prospect of gaining new scientific or technical knowledge and understanding?
Select correct option:
Research
Development
Audit
Accounting
110. Which one of the following is related to IAS 32 & 39?
Select correct option:
Property, Plant & Equipment
Inventory
Financial Statements
Financial Instruments
111. Which one of the following is NOT the component of cost?
Select correct option:
Import duties
Installation costs
Cost of site preparation
Transportation outwards

112. Which of the following is the type of business owned by one person?
Select correct option:
Sole-Proprietorship
Partnership
Public Limited Company
Unlimited Company
113. Which one of the following is(are) recorded under the Equity section of the
Balance Sheet?
Select correct option:
Share Premium
Reserves
Accumulated Profit
All of the given options
114. According to the Allowed Alternative Treatment, Which of the following
method is used for stock valuation?
Select correct option:
FIFO Method
LIFO Method
Weighted Average Method
Specific Identification Method
115. Which of the following asset is not an example of Intangible Fixed Assets?
Select correct option:
Vehicles
Good Will
Copyrights
Trade Marks and Designs
116. Which of the following represents the Qualifying Asset?
Select correct option:
Inventory routinely manufactured
Asset ready for use
Manufacturing plants
None of the given options
117. A Private limited company can be formed at least by:
Select correct option:
2 members
3 members

1 member
07 members
118. Which one of the following is an example of Financial Asset?
Select correct option:
Inventories
Patent rights
Goodwill
Accounts receivable
119. Which of the following option is/are TRUE with respect to the Disclosure
requirement for intangible assets acquired by the way of Government grants?
Select correct option:
The fair value initially recognized
Disclosure for carrying amount
Disclosure for the amount of commitments for acquisition of intangible assets
All of the given options
120. If stock valuation method is changed every year by the firm, which concept
the firm has violated?
Select correct option:
The materiality concept
The consistency concept
The prudence concept
The going concern concept
121. Which of the following is an example of Revenue Expenditure?
Select correct option:
Carriage paid on the purchases of goods
Transportation paid on machinery purchased
A second-hand car was purchases for Rs. 7,000 and Rs. 5,000 were spent for his repairs and
overhaulingAn additional room was constructed at a cost of Rs. 15,000
122. Question # 14 of 15 ( Start time: 01:51:03 PM ) Total M - 1
Which of the following sections of Companies Ordinance 1984 are related to the Non
Profit oriented entities?
Select correct option:
Section 42
Section 43
Section 44
Section 45

123. Which of the following may result for an inability to sell a financial asset
quickly at close to its fair value?
Select correct option:
Price Risk
Liquidity Risk
Interest Rate Risk
Currency Risk
124. Which of the following schedule of the Company Ordinance 1984 is related to
the classification of intangible assets?
Select correct option:
4th schedule
5th schedule
6th schedule
2nd schedule
125. The closing stock will be shown under the head of _______ in Balance Sheet.
Select correct option:
Non current Assets
Current Assets
Intangible Assets
Tangible Assets
126. Which of the following is another name for Authorized Capital of a
company?
Select correct option:
Nominal Capital
Issued Capital
Subscribed Capital
Paid up Capital
127. Which of the following is/are excluded from Financial Assets?
Select correct option:
Physical Assets
Inventories
Prepaid expenses
All of the given options
128. Which of the following IAS is related to the Consolidated and Separate
Financial Statements?
Select correct option:

IAS 27
IAS 28
IAS 31
IAS 32
129. Which of the following is the Classification of Current Assets with respect to
the Companies Ordinance 1984?
Select correct option:
Building
Land
Premises
Marketable Securities
130. Which of the following statement shows the financial position of the
business?
Select correct option:
Cash Flows Statement
Income Statement
Balance SheetStatement of Owner's equity
131. According to the Benchmark Treatment, Which of the following method is
used for stock valuation?
Select correct option:
FIFO Method or LIFO Method
LIFO Method
FIFO orWeighted Average Method
Specific Identification Method
132. If the holding company owns100% shares of the subsidiary company then
the subsidiary type will be termed as:
Select correct option:
Partially Owned Subsidiary
Wholly Owned Subsidiary
Direct Subsidiary
Indirect Subsidiary
133. Under which of the following methods for inventory valuation, costs of
earliest purchases assumed still to be in inventory?
Select correct option:
FIFO Method
LIFO Method

Weighted Average Method


Specific Identification Method
134. What is the maximum number of shareholders allowed for a Public Limited
Company?
Select correct option:
20
50
10
Unlimited
135. Which of the following is/are equal to Capital?
Net Assets
Assets Liabilities
Net worth of the firm
All of the given options
136. Which of the following is the amount for which an asset could be exchanged
between knowledgeable, willing parties in an arms length transaction?
Depreciable Amount
Fair Value
Cost
Carrying Amount
137. Which of the following asset is NOT an example of Tangible Fixed Assets?
Patent rights
Furniture
Vehicles
Machinery
138. Which of the following schedule provides disclosure requirements for Listed
Companies under Companies Ordinance 1984?
4th schedule
5th schedule
6th schedule
2nd schedule
139. Which one of the following schedule provides disclosure requirements for
Non-Listed Companies under Companies Ordinance 1984?
4th schedule
5th schedule

6th schedule
2nd schedule
140. in case an item of property, plant and equipment is exchanged for similar
asset of the enterprise, the cost of the new asset is measured at the -------------- of
the old asset.
Carrying value
Fair value
Future value
Salvage
value
141. Which of the following is NOT an accounting concept?
Prudence
Going concern
Depreciation
Matching
142. Depreciation is:
A systematic allocation of depreciable amount of an asset over its estimated useful life
The end life of an asset
The increase in value of asset
Another name of Impairment
143. Which of the following statement shows the financial position of the
business?
Cash Flows Statement
Income Statement
Balance Sheet
Statement of Owner's equity
144. Which of the following represents the interest and other costs incurred by an
entity in connection with the borrowing of funds?
Loan
Interest on borrowed money paid during the period
Outstanding interest on borrowed money
Borrowing Costs
145. When we see the capital with Production capacity or operating capability of
the enterprise then it called:
The financial concept of capital maintenance

The physical concept of capital maintenance


Both physical and financial concept of capital maintenance
Neither physical nor financial concept of capital maintenance
146. Which of the following is/are example(s) of research activities?
Activities aimed at obtaining new knowledge
The search, evaluation, final selection and application of research findings
The search for alternatives
All of the given options
147. which one of the following is(are) NOT recorded under Current Liabilities
section of the Balance Sheet?
Select correct option:
Debentures
Deferred Taxation
Obligation Under Finance Lease
All of the given options
148. Which of the following section of the Companies Ordinance 1984 deals with
Revaluation of Fixed Assets?
Select correct option:
Section 235
Section 236
Section 237
Section 238
149. Which of the following IAS affect(s) the recognition, presentation and
discourse of fixed assets in financial statements?
Select correct option:
IAS 01
IAS 16
IAS 23
All of the given options

MGT101 : FINANCIAL ACCOUNTING


PARISHY.PARIJAL@GMAIL.COM
Shared and solved by P@r!shy
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MGT101 Question # 1 of 15 ( 05:38:27 PM )
Which of the following is / are the particular/s of a cash book? (1) Date of transaction (2) Account title (3) Amount
Select correct option:
1 only
1 & 2 only
1 & 3 only
1, 2 & 3
MGT101 Question # 2 of 15 ( 05:38:51 PM )
The total of all costs incurred to convert raw material into finished goods is known as:
Select correct option:
Prime cost
Conversion cost
Sunk cost
Opportunity cost
MGT101 Question # 3 of 15 ( 05:39:09 PM )
Amount generated from sales in a business is called:
Select correct option:
Income
Net Income
Gross Profit
Operating profit
MGT101 Question # 4 of 15 ( 05:39:57 PM )
Cost of goods manufactured - opening work in process + ending work in process =?
Select correct option:
Cost of goods sold
Prime cost
Conversion cost
Total factory cost
MGT101 Question # 5 of 15 ( 05:41:10 PM )
Which of the following is the example of current liability?
Select correct option:
Notes payable
Notes receivable
Accounts receivable
Prepaid expenses

MGT101 Question # 6 of 15 ( 05:41:27 PM )


What will be debited, if business sold goods for Rs.10, 000 on credit?
Select correct option:
Cash account
Sales account
Accounts receivable account
Purchases account
MGT101 Question # 7 of 15 ( 05:42:01 PM )
Which of the following particular is NOT included in journal voucher?
Select correct option:
Name of organization
Bank receipt number
Debit amount
Credit amount

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MGT101 Question # 8 of 15 ( 05:42:25 PM )
Consider the following data: Particulars Rs. Assets ? Owner's equity 35,000 Liabilities 90,000
Select correct option:
Rs. 35,000
Rs. 55,000
Rs. 1, 25,000
Rs. 1, 05,000
MGT101 Question # 9 of 15 ( 05:43:03 PM )
What would conversion costs if costs of raw materials, direct labor costs, and manufacturing overhead costs
Rs.80,000, Rs.50,000, and Rs.60,000, respectively?
Select correct option:
Rs.130, 000
Rs.110, 000
Rs.140, 000
Rs.190, 000
MGT101 Question # 10 of 15 ( 05:43:40 PM )
The main purpose of _________ is to ascertain true result of the business operation during particular period of time.
Select correct option:
Cost Accounting
Financial Accounting
Managerial Accounting
Tax Accounting
MGT101 Question # 11 of 15 ( 05:44:26 PM )
If cost of sales is Rs. 90,000, income from sales Rs. 200,000 and operating expenses Rs. 100,000. What will be net
result?
Select correct option:
Rs. 5,000 Losses

Rs.10, 000 Profits


Rs 1, 95,000 Profits
Rs 1, 95,000 Losses
MGT101 Question # 12 of 15 ( 05:45:12 PM )
What is the next step to Journalizing in Accounting cycle?
Select correct option:
Recording
Posting
Balancing
Analyzing
MGT101 Question # 13 of 15 ( 05:45:32 PM )
Consider the following data: Particulars Rs. Assets 99,500 Owner's equity 50,500 Liabilities ?
Select correct option:
Rs. 49,000
Rs. 55,000
Rs. 125,000
Rs. 115,700
MGT101 Question # 14 of 15 ( 05:46:07 PM )
Net Profit = Income - _____________
Select correct option:
Liabilities
Assets
Expenses
Capital
MGT101 Question # 15 of 15 ( 05:46:39 PM )
Depreciation arises because of:
Select correct option:
Fall in the market value of an asset
Fall in the value of money
Physical wear and tear
All of the given options
MGT101 Question # 1 of 15 ( 05:53:02 PM )
Which of the following account balance/s is/are shown on credit side of Trial Balance? (It is assumed that all
account balances are shown on normal balance)
Select correct option:
Capital account
Sundry creditors account
Accounts payable account
All of the given options
MGT101 Question # 2 of 15 ( 05:53:47 PM )
In case of Income and Expenditure account, Excess of income over expenses in a specified accounting period is
called:

Select correct option:


Profit
Loss
Surplus
Deficit
MGT101 Question # 3 of 15 ( 05:54:58 PM )
Which of the following Organization converts raw material into finished goods?
Select correct option:
Trading concern
Manufacturing concern
Merchandising concern
Service concern
When total liabilities are subtracted from total assets the remaining amount is known as:
Select correct option:
Equity or net assets
Net income or net loss
Total expenses
Total revenue
MGT101 Question # 5 of 15 ( 05:56:21 PM )
Which one of the following is INCORRECT about closing Stock?
Select correct option:
It is added into current assets
It is deducted from Material available for use
It becomes opening stock of next year
It reduces the resources of business
MGT101 Question # 6 of 15 ( 05:56:55 PM )
Budget is a plan of income, expenses & other financial operations for:
Select correct option:
Current period
Future period
Past period
None of the given options
MGT101 Question # 7 of 15 ( 05:57:33 PM )
Find out the missing value of an Accounting Equation with the help of given data: Cash Rs.100, 000 Debtors Rs.10,
000 Other Assets Rs. 1,000 Owners equity Rs. 1, 000 Liabilities ?
Select correct option:
Rs. 12,000
Rs. 11,000
Rs. 110,000
Rs. 111,000
MGT101 Question # 8 of 15 ( 05:58:42 PM )
Which of the following account summarizes the profitability of business for a specific accounting period?

Select correct option:


Profit & Loss account
Cash flow statement
Receipt & Payment account
Balance Sheet
MGT101 Question # 9 of 15 ( 05:59:12 PM )
Which of the following asset is NOT depreciated?
Select correct option:
Factory Buildings
Office Equipment
Plant & Machinery
Land
What will be debited, if Mohsin commenced business with cash?
Select correct option:
Cash account
Capital account
Drawings account
Proprietor account
MGT101 Question # 11 of 15 ( 06:00:17 PM )
Which of the following is Not a part of General Ledger?
Select correct option:
Activity Book
Purchase Return Book
Purchase Book
Sales Book
MGT101 Question # 12 of 15 ( 06:00:53 PM )
Debit signifies:
Select correct option:
Increase in Asset account
Decrease in liability account
Decrease in capital account
All of the given options
MGT101 Question # 13 of 15 ( 06:01:24 PM )
Under the diminishing balance method, depreciation is calculated on:
Select correct option:
The original cost
The scrap value
Book value
Both original cost and Scrap value
MGT101 Question # 14 of 15 ( 06:01:57 PM )
The amount charged to depreciation goes on declining in:
Select correct option:

Depreciation fixed method


Annuity method
Written-down value method
Straight line depreciation method

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MGT101 Question # 15 of 15 ( 06:02:54 PM )
Which of the following is NOT correct?
Select correct option:
Decrease in Assets will be debit
Decrease in Liabilities will be debit
Decrease in Expenses will be credit
Decrease in Revenue will be debit
MGT101 Question # 1 of 15 ( 06:18:38 PM )
What will be the effect on accounting equation if cash is received from a tenant as office rent?
Select correct option:
Increase cash and decrease equity
Increase cash and increase equity
Decrease cash and increase equity
Decrease cash and increase dividends
MGT101 Question # 2 of 15 ( 06:19:35 PM )
Which one of the following is INCORRECT about closing Stock?
Select correct option:
It is added into current assets
It is deducted from Material available for use
It becomes opening stock of next year
It reduces the resources of business
MGT101 Question # 3 of 15 ( 06:20:07 PM )
Which of the following is a FIRST product of accounting cycle?
Select correct option:
Voucher
General Journal
General Ledger
Financial Statements
MGT101 Question # 4 of 15 ( 06:20:37 PM )
If cost of sales is Rs. 95,000, income from sales Rs. 200,000 and operating expenses Rs. 100,000. What will gross
profit?
Select correct option:
Rs. 5,000
Rs. 95,000
Rs. 1, 00,000
Rs.1, 05,000

MGT101 Question # 5 of 15 ( 06:21:21 PM )


Which of the following are recorded in Cash Book?
Select correct option:
Receipts and payments
Profits and losses
Assets and liabilities
Capital and Expenditures
MGT101 Question # 6 of 15 ( 06:21:52 PM )
Net Profit = Income - _____________
Select correct option:
Liabilities
Assets
Expenses
Capital
MGT101 Question # 7 of 15 ( 06:22:17 PM )
Which of the following particular/s is/are included in payment voucher?
Select correct option:
Name of organization
Cash payment
Date
All of the given options
MGT101 Question # 8 of 15 ( 06:22:54 PM )
Cost of goods manufactured + opening finished goods ending finished goods =?
Select correct option:
Total factory cost
Cost of goods sold
Prime cost
Conversion cost
MGT101 Question # 9 of 15 ( 06:24:08 PM )
Which of the following account is normally NOT exists in the balance sheet of the manufacturing concern?
Select correct option:
Work in Process Inventory
Raw Materials Inventory
Merchandise Inventory
Finished Goods Inventory
MGT101 Question # 10 of 15 ( 06:24:51 PM )
If cost of sales is Rs. 90,000, income from sales Rs. 200,000 and operating expenses Rs. 100,000. What will be net
result?
Select correct option:
Rs. 5,000 Losses
Rs.10, 000 Profits
Rs 1, 95,000 Profits
Rs 1, 95,000 Losses

MGT101 Question # 11 of 15 ( 06:25:32 PM )


All the statements are correct about Journal voucher EXCEPT:
Select correct option:
Financial data is picked only from journal vouchers to Journal
These are used to record all transaction other than cash & bank
These are used to make corrections or adjustments to previous Receipt
Format of journal voucher is different from other vouchers
MGT101 Question # 12 of 15 ( 06:26:35 PM )
In case of Income and Expenditure account, Excess of income over expenses in a specified accounting period is
called:
Select correct option:
Profit
Loss
Surplus
Deficit
MGT101 Question # 13 of 15 ( 06:27:08 PM )
The investment of Rs. 10,000 made by the owner in business will have an effect on which of the following
accounts?
Select correct option:
Cash Account & Capital Account
Cash Account & Expense Account
Capital Account & Revenue Account
Capital Account & Expense Account
MGT101 Question # 14 of 15 ( 06:27:41 PM )
Outsiders claim against the assets of the business is called:
Select correct option:
Capital
Liability
Expense
Income

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MGT101 Question # 15 of 15 ( 06:28:25 PM )
Consider the following data: Particulars Rs. Assets 75,500 Owner's equity ? Liabilities 40,200
Select correct option:
Rs. 35,300
Rs. 55,000
Rs. 125,000
Rs. 115,700
MGT101 Question # 1 of 15 ( 06:30:56 PM )
What will be debited, if business bought goods on credit from Mr. Ali?
Select correct option:
Purchases account

Mr. Ali account


Cash account
Sales account
MGT101 Question # 2 of 15 ( 06:31:56 PM )
In the cost of goods sold statement, the sum of labor cost and the factory over head is known as:
Select correct option:
Conversion cost
Prime cost
Total factory cost
Cost of goods manufactured
MGT101 Question # 3 of 15 ( 06:32:36 PM )
Consider the following data: Particulars Rs. Assets ? Owner's equity 35,000 Liabilities 90,000
Select correct option:
Rs. 35,000
Rs. 55,000
Rs. 1, 25,000
Rs. 1, 05,000
MGT101 Question # 4 of 15 ( 06:33:17 PM )
When total liabilities are subtracted from total assets the remaining amount is known as:
Select correct option:
Equity or net assets
Net income or net loss
Total expenses
Total revenue
MGT101 Question # 5 of 15 ( 06:33:50 PM )
Which of the following is fiscal Year of Government of Pakistan?
Select correct option:
1st January to 31st December
1st June to 31st May
1st July to 30th June
1st October to 30th September
MGT101 Question # 6 of 15 ( 06:34:32 PM )
Which of the following is/are inventory valuation method(s)?
Select correct option:
FIFO
LIFO
Weighted average
All of the given options
MGT101 Question # 7 of 15 ( 06:35:04 PM )
The investment of Rs. 10,000 made by the owner in business will have an effect on which of the following
accounts?
Select correct option:

Cash Account & Capital Account


Cash Account & Expense Account
Capital Account & Revenue Account
Capital Account & Expense Account
MGT101 Question # 8 of 15 ( 06:35:37 PM )
What will be debited, if business purchased Furniture on cash?
Select correct option:
Furniture account
Cash account
Business account
Bank account
MGT101 Question # 9 of 15 ( 06:36:09 PM )
Cost of goods manufactured + opening finished goods ending finished goods =?
Select correct option:
Total factory cost
Cost of goods sold
Prime cost
Conversion cost
MGT101 Question # 10 of 15 ( 06:36:51 PM )
Which of the following contents are included in the Cost of goods sold?
Select correct option:
Opening stock
Purchases
Freight in
All of the given options
MGT101 Question # 11 of 15 ( 06:37:32 PM )
Particulars Rs. Opening written down value of machine 1,00,000 Cost of new machine purchased during the year
50,000 Depreciation during the year 20,000 Closing written down value (WDV) ?
Select correct option:
Rs. 1,30,000
Rs. 1, 50,000
Rs. 1, 20,000
Rs. 70,000
MGT101 Question # 12 of 15 ( 06:38:28 PM )
What will be debited, If Mr. A started business with Rs. 2, 00,000.
Select correct option:
Capital account
Cash account
Mr. As account
Business account
MGT101 Question # 13 of 15 ( 06:39:03 PM )
In cost of goods sold statement the cost of goods manufactured is equal to:

Select correct option:


Total factory cost + Opening work in process + Ending work in process
Total factory cost + Opening work in process Ending work in process
Total factory cost - Opening work in process + Ending work in process
Ending work in process +Total factory cost Opening work in process
MGT101 Question # 14 of 15 ( 06:40:04 PM )
What is nature of Capital account?
Select correct option:
Debit
Credit
Expenses
Loss
MGT101 Question # 15 of 15 ( 06:40:34 PM )
The amount charged to depreciation goes on declining in:
Select correct option:
Depreciation fixed method
Annuity method
Written-down value method
Straight line depreciation method

Question Excerpt

1. What is the next step to Journalizing in Accounting cycle?


A.
Recording
B.
Posting
C.
Balancing
D.
Analyzing
2. Which of the following is an example of operating expense?
A.
Purchasing operating equipment
B.
Purchasing cleaning services
C.
Purchasing an investment in another company
D.
Purchasing a computer for the accounting office
3. (Amount of new provision + Amount of bad debts) < Amount of old provision then the
resulting figure will be shown at:
A.
Debit side of Profit & Loss account
B.
Credit side of Profit & Loss account
C.
Asset side of Balance Sheet
D.
Asset side of Balance Sheet
4. Sales to Mr. A of Rs. 336 have been debited to Mr. B account, this will be rectified by:
A.
Debiting Mr. As account and crediting Mr. Bs account
B.
Debiting Mr. Bs account and crediting Mr. As account
C.
Crediting both accounts

D.
Debiting both accounts
5. Under the straight line method of depreciation:
A.
Amount of depreciation increases every year
B.
Amount of depreciation remains constant for every year
C.
Amount of depreciation decreases every year
D.
None of the given options
6. Goods sold to Mr. Salman for RS. 6,000 have been forgotten to enter in books of accounts, this
is an example of
A.
Error of Omission
B.
Error of Commission
C.
Error of Principle
D.
Error of Original entry
7.
Which of the following is NOT correct?
A.
Decrease in Assets will be debit
B.
Decrease in Liabilities will be debit
C.
Decrease in Expenses will be credit
D.
Decrease in Revenue will be debit
8. What will be the entry of disposal of an asset at cost price?
A.
Debit Fixed Asset Disposal and Credit Fixed Asset Cost
B.
Debit Accumulated Dep. and Credit Fixed Asset Disposal
C.
Debit Cash / Bank and Credit Fixed Asset Disposal
D.
None of the given options
9. If salaries are Rs. 2500, purchases Rs. 18,000 and rent Rs. 400; what will be administrative
expenses?
A.
Rs.20, 900
B.
Rs. 2,900
C.
Rs. 2,500
D.
Rs. 400
10. In a single entry system, it is NOT possible to prepare:
A.
Trial balance
B.
Statement of affairs
C.
Balance Sheet
D.
Sales accounts
11.
Cash book is a part of _________ .
A.
Voucher
B.
General Journal
C.
General Ledger
D.
Trial Balance
12. The balance in drawings account is transferred to which of the following at the end of the
year.
A.
Capital account
B.
Shareholder account
C.
Cash account
D.
Expense account

13. Which of the following particular is NOT included in journal voucher?


A.
Name of organization
B.
Bank receipt number
C.
Debit amount
D.
Credit amount
14. Sale of goods to Amir is wrongly debited to Umair A/c instead ofAmir A/c. Both are debtors
of business, this is an example of:
A.
Error of Omission
B.
Error of Commission
C.
Error of Principle
D.
Error of Original entry
15. Which of the following is CORRECT if depreciation is given in trial balance?
A.
It means depreciation has already been deducted from concerned asset
B.
It will be shown as expense in income statement only
C.
It will not deduct from concerned asset in Balance Sheet
D.
All of the given options are correct
16.
Under the diminishing balance method, depreciation is calculated on:
A.
The original cost
B.
The scrap value
C.
Book value
D.
Both original cost and Scrap value
17. Office salaries, advertising and sales commissions are the examples of:
A.
Financial Expenses
B.
Operating Expenses
C.
Marketing Expenses
D.
Direct Expenses
18. Which of the following assets are shown at written down value in balance sheet?
A.
Current assets
B.
Liquid assets
C.
Floating assets
D.
Fixed assets
19. What will be debited, if business purchased Vehicle on cash?
A.
Vehicle account
B.
Business account
C.
Cash account
D.
Business account