PAPER 2 Pages

1. When a person borrows money, he pays in return some extra money to the lender .
This
extra money is called- Marks: 2+ 0.5-
Principal Amount
Dividend
Interest
Bonus
None of the above.
The Correct Answer is : Interest
Module : Module A
Chapter : Chapter1
2. The rate of interest on a sum of money is 4% p.a .for the first 2 years, 6% p.a. for The
next 4 years and 8% p.a. for the period beyond 6 years. If the simple interest accrued by
the sum for a total period of 9 years is Rs, 1,120, what is the sum? Marks: 2+ 0.5-
Rs. 1,000
Rs. 1,500
Rs. 2,000
Rs. 2,500
Rs, 3,000
The Correct Answer is : Rs. 2,000
Module : Module A
Chapter : Chapter1
3. 25. A money-lender finds that due to a fail in the rate of interest from 13% to 12.5%,
His yearly income from interest falls by Rs. 208. His principal amount is- Marks: 2+ 0.5-
Rs. 42,800
Rs. 41,600
Rs. 44,600
Rs. 48,000
Rs. 50,000
Module : Module A
Chapter : Chapter1
4. A sum of Rs. 25,400 is lent out into two parts, one at 12% p.a. and the other at 12.5%
p.a. If the total annual income from interest is Rs. 3,1160. the money lent at 12% is-
Marks: 2+ 0.5-
Rs. 10,000
Rs. 11,800
Rs. 12,400
Rs. 13,400
Rs. 13,600
Module : Module A
Chapter : Chapter1
5. 27. A sum of Rs. 26,000 is lent out in two parts in such a way that the interest on one
Part @ 10% for 5 years is equal to the on another part @ 9% for 6 years. The sum lent out
at 10% is- Marks: 2+ 0.5-
Rs. 10,500
Rs. 11,500
Rs. 12,500
Rs. 13,500
Rs. 14,500
Module : Module A
Chapter : Chapter1
6. 28. At a certain rate of simple interest, a sum doubles itself in 10 years. It will treble
Itself in- Marks: 2+ 0.5-
12 Years
15 Years
18 Years
20 years
25 Years
The Correct Answer is : 20 years
Module : Module A
Chapter : Chapter1
7. In how many years will a sum of money double itself at 12% per annum simple
Interest? Marks: 2+ 0.5-
6 Years
6 Years 6 months.
7 Years
8 Years
8 Years 6 months
The Correct Answer is : 8 Years 6 months
Module : Module A
Chapter : Chapter1
8. The simple interest at x % for x years will be Rs. X on a sum of- Marks: 2+ 0.5-
Rs. X
Rs. 100 x
100
100
x
The Correct Answer is : 100/x
Module : Module A
Chapter : Chapter1
9. 1. When a person borrows money, he pays in return some extra money to the lender .
This extra money is called- Marks: 2+ 0.5-
Principal Amount
Dividend
Interest
Bonus
None of the above
Module : Module A
Chapter : Chapter1
10. The money borrowed from bank or any person is called- Marks: 2+ 0.5-
Principal Amount
Interest
Capital
Financial Assistance
None of the above.
The Correct Answer is : Principal Amount
Module : Module A
Chapter : Chapter1
11. The formula for finding simple interest is- Marks: 2+ 0.5-
I * 100
100
RT
(iv) Interest = A * R * T
P*R*T
The Correct Answer is : P*R*T
Module : Module A
Chapter : Chapter1
12. The simple interest on Rs. 10,000 at 6% p.a. for 3 years would be- Marks: 2+ 0.5-
Rs. 600
Rs. 1,200
Rs. 1,800
Rs. 2,000
None of the above.
Module : Module A
Chapter : Chapter1
13. What is the simple interest on Rs.1,200 at 5.5% p.a. for 5 years ? Find the amount
also. Marks: 2+ 0.5-
320 + 1,200 = Rs. 1,520

325 + 1,200 = Rs. 1,525
340 + 1,200 = Rs. 1,540
350 + 1,200 = Rs. 1,550
None of the above.
The Correct Answer is : None of the above.
Module : Module A
Chapter : Chapter1
14. A money lender lent some amount to a trader @ 8% p.a. After 18 months, the trader
paid him Rs. 700 in full payment of interest and principal amount. Find out the sum lent by
the money-lender. Marks: 2+ 0.5-
Rs. 600
Rs. 610
Rs. 625
Rs. 650
Rs. 700
The Correct Answer is : Rs. 625
Module : Module A
Chapter : Chapter1
15. In how may years will the interest be Rs.150 on Rs. 1,250 @4% per annum? Marks: 2+
0.5-
1 Year
2 Years
3 Years
4 Years
None of the above.
The Correct Answer is : 3 Years
Module : Module A
Chapter : Chapter1
16. What annual rate of simple interest was paid if Rs. 500 earned Rs. 55 as interest in 2
Years and 9 months? Marks: 2+ 0.5-
2%
3%
3.5%
4%
4.5%
The Correct Answer is : 4%
Module : Module A
Chapter : Chapter1
17. A sum of money at simple interest amounts to Rs. 2,800 in 2 years and to Rs. 3,250 in
5 years. Find the sum and the rate of interest. Marks: 2+ 0.5-
Rs. 2,500 ; 4%
Rs. 2,500; 5%
Rs. 3,000 ; 4%
Rs. 3,000 ; 5%
Rs. 2,500 ; 6%
The Correct Answer is : Rs. 2,500 ; 6%
Module : Module A
Chapter : Chapter1
18. Certain principal amount plus its 5 Year's simple interest makes an amount of Rs.500.
If the interest is 1/4th of its principal, find out the rate of interest and the principal
amount. Marks: 2+ 0.5-
4% ; Rs. 400
5% ; Rs. 400
5.5% : Rs. 300
6% : Rs. 250
8% ; 200
The Correct Answer is : 5% ; Rs. 400
Module : Module A
Chapter : Chapter1
19. A sum of money amount to Rs.2,240 @ 4% simple interest in 3 years. Find the interest
on the same sum for 6 months @ 3.5% p.a. Marks: 2+ 0.5-
Rs. 35
Rs. 40
Rs. 45
Rs.50
None of the above.
Module : Module A
Chapter : Chapter1
20. The simple interest on a sum of money is 1/9th of the principal and the number of the
years is equal to the rate per cent per annum. The rate percent per annum is - Marks: 2+
0.5-
2%
1
3%
1
1
The Correct Answer is : 3%=3.33%
Module : Module A
Chapter : Chapter1
21. What is the amount of Rs. 4,000 @ 4% simple interest p.a from 10th January 2004 to
11th April 2005, on the basis of number of days? Marks: 2+ 0.5-
Rs. 4,200
Rs. 4,300
Rs. 4,300.17
Rs. 4,200.17
Rs. 4,200.87
The Correct Answer is : Rs. 4,200.17
Module : Module A
Chapter : Chapter1
22. The basis salary of a teacher is Rs. 7,000 p.m. He contributes 10% of his basic salary
to his provident fund account. His employer also contributes the similar amount. If the
interest credited to the provident fund account is 6% p.a., find the amount of interest
after one year. Marks: 2+ 0.5-
Rs. 5,040
Rs. 420
Rs. 840
Rs. 546
Rs. 273.
Module : Module A
Chapter : Chapter1
23. A person deposited a sum of money in a bank on 12th January 2005And received back
his full principal with interest on 24th September 2005. If he got Rs. 1,570, what was his
principal amount while the rate of interest is 5% per annum? Marks: 2+ 0.5-
Rs. 4,509 approx.

Rs. 45,088 approx
Rs. 50,000
Rs. 30,000
None of the above
The Correct Answer is : Rs. 45,088 approx
Module : Module A
Chapter : Chapter1
24. A sum of money doubles itself in 16 years at simple interest with yearly rate of-
Marks: 2+ 0.5-
6.25%
8%
10%
16%
20%
The Correct Answer is : 6.25%
Module : Module A
Chapter : Chapter1
25. Rs. 800 amounts to Rs. 920 in 3 years at simple interest. If the interest rate is
increased by 3%, it would amount to- Marks: 2+ 0.5-
Rs.992
Rs.1,056
Rs.1,112
Rs.1,182
Rs.1,200
The Correct Answer is : Rs.992
Module : Module A
Chapter : Chapter1
26. A certain sum of money at simple interest amounts to Rs. 1,260 in 2 years and toYears
and to Rs. 1,350 in 5 years. The rate per cent per annum is- Marks: 2+ 0.5-
2%
2.5%
3.75%
5%
7.5%
Module : Module A
Chapter : Chapter1
27. A lent Rs. 6,000to B for 2 years and Rs. 1,500 to C for 4 years and received Altogether
from both Rs.900 as simple interest. The rate of interest is- Marks: 2+ 0.5-
4%
5%
8%
10%
12%
Module : Module A
Chapter : Chapter1
28. The simple interest on a sum will be Rs. 60,000 after 10 years. If the principal is
Trebled after 5 years, the total interest at the end of the tenth year will be- Marks: 2+ 0.5-
Rs. 60,000
Rs. 90,000
Rs. 1,20,000
Rs. 1,50,000
None of the above.
The Correct Answer is : Rs. 1,20,000
Module : Module A
Chapter : Chapter1
29. A person lends Rs. 10,000 in four parts. If he gets 8% on Rs. 2,000; 705% on Rs.
4,000 and 8.5% on Rs. 1,400; what per cent must he get for the remainder, if the average
rate of interest is 8.13%? Marks: 2+ 0.5-
6%
7%
9%
10%
12%
Module : Module A
Chapter : Chapter1
30. The simple interest on a sum of money @ 8% per annum for 6 years is half the sum.
The sum is- Marks: 2+ 0.5-
Rs. 4,000
Rs. 4,800
Rs. 6,000
Rs. 8,000
Date inadequate
The Correct Answer is : Date inadequate
Module : Module A
Chapter : Chapter1
31. 1 23. A certain sum of money at simple interest amount to Rs. 1,012 in 2--- 2 years
and to Rs. 1,067.20 in 4 years. The rate of interest per annum is- Marks: 2+ 0.5-
2%
2.5%
3%
4%
5%
Module : Module A
Chapter : Chapter1
32. The money which amounts to Rs. 9,261 in 3 years @ 5%p.a. compound interest is
Marks: 2+ 0.5-
Rs. 4,000
Rs. 6,000
Rs. 7,000
Rs. 8,000
Rs. 10,000
Module : Module A
Chapter : Chapter2
33. The compound interest for 3 years @ 5% p.a. is Rs. 1,261 on a certain sum The
principal is - Marks: 2+ 0.5-
Rs. 8,000
Rs. 9,000
Rs. 10,000
Rs. 11,000
Rs. 12.000
Module : Module A
Chapter : Chapter2
34. Simple interest on a sum at 4% p.a. for two years is Rs.800. The compound interest on
the same sum for the same period is- Marks: 2+ 0.5-
Rs. 81.60
Rs. 816
Rs. 1,600
Rs. 1,816
Rs. None of the above.
Module : Module A
Chapter : Chapter2
35. A sum amounts to Rs. 2,916 in 2 years and to Rs. 3,149.28 in 3 years at Compound
interest. The sum is- Marks: 2+ 0.5-
Rs. 1,000
Rs. 1,500
Rs. 2,000
Rs. 2,500
Rs. 3,000
Module : Module A
Chapter : Chapter2
36. A sum of money at compound interest amount to Rs. 10,648 in 3 years and Rs. 9,680
in 2 years. The rate of interest is- Marks: 2+ 0.5-
5%
10%
15%
20%
25%.
Module : Module A
Chapter : Chapter2
37. Rs. 400 at 5% p.a. compound interest will amount to Rs. 441 in- Marks: 2+ 0.5-
1 year
2 years
3 years
4 years
5 years.
Module : Module A
Chapter : Chapter2
38. 20. What is the principal amount which earns Rs. 264 as compound interest for the
second year @ 10% p.a.? Marks: 2+ 0.5-
Rs. 2,000
Rs. 2,200
Rs. 2,400
Rs. 2,600
Rs. 2,800.
Module : Module A
Chapter : Chapter2
39. If Rs. 7,500 are borrowed at compound interest at the rate of 4% p.a. then after 2
years the amount to be paid is- Marks: 2+ 0.5-
Rs. 7,800
Rs. 8,082
Rs. 8,100
Rs. 8,112
Rs. 8,200
Module : Module A
Chapter : Chapter2
40. If compound interest for 2 Years at the rate of 4% of some money is Rs. 102, find the
simple interest at the same rate for 2 years. Marks: 2+ 0.5-
Rs. 108.16
Rs. 100
Rs. 110
Rs. 120
Rs. 130.
Module : Module A
Chapter : Chapter2
41. What is the rate percent per annum if a sum doubles itself in 12 years at Compound
rate of interest? Marks: 2+ 0.5-
5.2%
5.4%
5.5%
5.8%
5.9%
Module : Module A
Chapter : Chapter2
42. If a sum of money trebles itself in 2 years at compound interest, then it will be 27
times of itself in- Marks: 2+ 0.5-
5 years
6 years
12 years
15 years
18 years
Module : Module A
Chapter : Chapter2
43. The simple interest and compound interest of first year, are- Marks: 2+ 0.5-
equal
unequal.
The Correct Answer is : equal
Module : Module A
Chapter : Chapter2
44. When compound interest is calculated half yearly, then the period becomes- Marks: 2+
0.5-
half
double
one fourth
one tenth
None to the above.
The Correct Answer is : double
Module : Module A
Chapter : Chapter2
45. If the true discount on a sum due 2 years hence @ 5% per annum be Rs. 300, then the
sum due is - Marks: 2+ 0.5-
Rs. 3,000
Rs. 3,200
Rs. 3,300
Rs. 3,500
Rs. 3,600
Module : Module A
Chapter : Chapter3
46. The present worth of Rs. 7,020 due in two equal half-yearly instalments @ 8%p.a.
simple interest is - Marks: 2+ 0.5-
Rs 6,500
Rs. 6,625
Rs. 6,750
Rs. 7,000
Rs. 7,100
Module : Module A
Chapter : Chapter3
47. The simple interest and the true discount on a certain sum for a given time and at a
given rate are Rs. 1000 and Rs. 80, respectively. The sum is - Marks: 2+ 0.5-
Rs. 400
Rs. 800
Rs.1,00
Rs.2,000
None of the above.
Module : Module A
Chapter : Chapter3
48. 4. A person buys a watch for Rs. 1,950 in cash and sells it for Rs. 2,200 on credit of 1
year. If the rate of interes Is 10% he - Marks: 2+ 0.5-
loses Rs. 50.

Loses Rs.30
Gains Rs.30
Gains Rs.50
Gains Rs.150.
The Correct Answer is : Gains Rs.50
Module : Module A
Chapter : Chapter3
49. A has to pay Rs. 22,000 to B after 1 year. B asks A to pay Rs. 11,000 in cash
Immediately and defer the payment of Rs. 11,000 for 2 years. A agrees to it. Counting the
rate of interest at 10% p.a. in this new mode of payment - Marks: 2+ 0.5-
there is no gain or loss to any one

A gains Rs. 734
A loses Rs. 734
A gain Rs. 1,100
B gains Rs. 1,100.
The Correct Answer is : A gains Rs. 734
Module : Module A
Chapter : Chapter3
50. A owes B Rs. 1,802 due 1 year hence. However, a wants to settle the account after 3
months. How much cash should he pay, if rate is 8% p.a.? Marks: 2+ 0.5-
Rs. 1,700
Rs. 1,740
Rs. 1,750
Rs. 1,760
None of the above.
Module : Module A
Chapter : Chapter3
51. You want to sell your fridge. There are two offers, one at cash payment of Rs. 16,200
and another at a credit of Rs. 16,500 to be paid after 6 months. If money being worth
6.25% per annum simple interest, which offer is better? Marks: 2+ 0.5-
Both are equally good.

Rs. 16,200 in cash.
Rs 16,500 due 6 months hence.
The Correct Answer is : Rs. 16,200 in cash.
Module : Module A
Chapter : Chapter3
52. A person purchased a watch for Rs. 3,000 and sold it the same day for Rs,3,600
allowing the buyer a credit of 9 years. If the rate of interest be 7.5% p.a. he has a gain of -
Marks: 2+ 0.5-
4.5%
5%
5.5%
6%
6.5%
Module : Module A
Chapter : Chapter3
53. Goods were bought for Rs. 2,400 and sold the same day for Rs. 2,601 at credit of 9
months and still there was a gain of 2%. The rate per cent is - Marks: 2+ 0.5-
1
1
1
1
1
The Correct Answer is : 1
Module : Module A
Chapter : Chapter3
54. The true discount on Rs. 9,300 due after a certain period at 5% p.a. is Rs. 300. The
time after which it is due, is - Marks: 2+ 0.5-
4 months
6 months
8 months
9 months
10 months
The Correct Answer is : 8 months
Module : Module A
Chapter : Chapter3
55. The true discount on Rs. 5,150 due 4 months hence is Rs. 150. The rate per cent is -
Marks: 2+ 0.5-
5%
6%
7%
8%
9%
Module : Module A
Chapter : Chapter3
56. 12. The true discount on a bill due 10 months hence @ 6% p.a is Rs. 2,625. TheAmount
of the bill is - Marks: 2+ 0.5-
Rs. 50,000
Rs. 55,125
Rs. 65,000
Rs, 65,125
None of the above
Module : Module A
Chapter : Chapter3
57. 13. Rs. 2,000 is the true discount on Rs. 26,000 due after a certain time. What will be
the true discount on the same sum due after half of the former time, the rate of interest
being the same? Marks: 2+ 0.5-
Rs. 1,000
Rs. 1,040
Rs. 1,300
Rs. 1,400
Rs. 1,540
Module : Module A
Chapter : Chapter3
58. 14. If Rs. 100 be allowed as true discount on a bill of Rs. 1,100 due at the end of a
Certain period, then the discount allowed on the same sum due at the end of double the
time is - Marks: 2+ 0.5-
Rs. 183.30
Rs. 200.00
Rs. 218.10
Rs. 222.00
Rs. 225.00
The Correct Answer is : Rs. 183.30
Module : Module A
Chapter : Chapter3
59. A trader paid Rs. 700 to a lender due after 18 months at the rate of 8% p.a. simple
interest. The true discount is - Marks: 2+ 0.5-
Rs.60
Rs.65
Rs.70
Rs. 75
Rs. 80
Module : Module A
Chapter : Chapter3
60. Which expression does not represent true discount? Marks: 2+ 0.5-
A-P
ART
PRT
ART
None of the above.
The Correct Answer is : ART
Module : Module A
Chapter : Chapter3
61. True discount is equivalent to - Marks: 2+ 0.5-
Interest
Principal amount
Amount
All of the above
None of the above.
Module : Module A
Chapter : Chapter3
62. Present value is equivalent to - Marks: 2+ 0.5-
Interest
Principal amount
Amount
All of the above
None of the above.
The Correct Answer is : Principal amount
Module : Module A
Chapter : Chapter3
63. If the true discount on Rs. 14,500 due after 5 years is Rs. 4,500 then the rate of true
discount will be - Marks: 2+ 0.5-
5%
6%
7%
8%t
9%
Module : Module A
Chapter : Chapter3
64. Write true of false - In case of simple interest, A * R * T True Discount = ----------------
- 100 + (R * T) Marks: 2+ 0.5-
True
False
The Correct Answer is : True
Module : Module A
Chapter : Chapter3
65. 21Banker's discount is calculated on - Marks: 2+ 0.5-
Present value
Sum due
True discount
All of the above
The Correct Answer is : Sum due
Module : Module A
Chapter : Chapter3
66. Banker's gain is - Marks: 2+ 0.5-
Amount + Banker's Discount

Amount - Banker's Discount
Amount - Present Value
True Discount + Banker's Discount.
Banker's Discount - True Discount.
The Correct Answer is : Banker's Discount - True Discount.
Module : Module A
Chapter : Chapter3
67. 23. A bill of Rs. 2,000 id due 10 years hence at simple interest rate 5% p.a. Find
Banker's discount. Marks: 2+ 0.5-
Rs. 200
Rs. 225
Rs. 300
Rs. 333.33
Rs. 1,000
Module : Module A
Chapter : Chapter3
68. The banker's discount on a bill due 6 months hence at 6% p.a. is Rs. 370.80. The true
discount is - Marks: 2+ 0.5-
Rs. 61.80
Rs. 123.60
Rs. 220.00
Rs. 360.00
Rs. 480.00
Module : Module A
Chapter : Chapter3
69. The difference between banker's discount and true discount of a bill which is due after
6 months, is Rs. 75 at the rate of 5% p.a. Find out the-(a) True discount (b) banker's
discount and (c) value of the bill. Marks: 2+ 0.5-
Rs. 3,075; Rs. 3,000; Rs.1,23,000

Rs. 2,075; Rs. 3,000; Rs. 2,13,000
Rs. 3,000; Rs. 3,075; Rs. 1,23,000
Rs. 2,500; Rs. 3,075; Rs. 3,12,000.
None of the above.
The Correct Answer is : Rs. 3,000; Rs. 3,075; Rs. 1,23,000
Module : Module A
Chapter : Chapter3
70. The true discount on a bill of Rs. 5,400 is Rs. 900. The banker's discount will Marks: 2+
0.5-
Rs. 600
Rs. 1,110
Rs. 1,500
Rs. 1,800
Rs. 2,000.
Module : Module A
Chapter : Chapter3
71. The present worth of a certain bill due sometime hence is Rs. 1,600 and the true
discount is Rs. 27. The banker's discount will Marks: 2+ 0.5-
Rs. 68.76
Rs. 74
Rs. 75.24
Rs. 76
Rs. 77.
Module : Module A
Chapter : Chapter3
72. The banker's gain on a sum due 3 years hence at 5% is Rs. 900. The banker's discount
is - Marks: 2+ 0.5-
Rs. 1,500
Rs. 6,900
Rs.7,20
Rs. 8,100
Rs. 8,200
Module : Module A
Chapter : Chapter3
73. The banker's discount on a certain sum due 2 years hence is 11/10 of the true
discount. The rate per cent is - Marks: 2+ 0.5-
5%
5.33%
6%
10%
11%
Module : Module A
Chapter : Chapter3
74. The present worth of a sum due sometime hence is Rs.5,760 and the banker's gain is
Rs. 10. The true discount is - Marks: 2+ 0.5-
Rs. 160
Rs. 180
Rs. 240
Rs. 320
Rs. 400.
Module : Module A
Chapter : Chapter3
75. The present worth of a certain sum due sometime hence is Rs. 16,000 and the true
discount is 1,600. The banker's gain is - Marks: 2+ 0.5-
Rs. 100
Rs. 160
Rs. 200
Rs. 240
Module : Module A
Chapter : Chapter3
76. The banker's gain of a certain sum due 2 years hence at 5% p.a. is Rs. 40. The Present
worth is - Marks: 2+ 0.5-
Rs. 4,000
Rs. 4,400
Rs. 6,000
Rs. 8,000
Rs. 10,000
Module : Module A
Chapter : Chapter3
77. A bill is discounted @ 5% p.a. If banker's discount be allowed, at what rate per cent
must the proceeds be invested, so that nothing may be lost? Marks: 2+ 0.5-
4%
5%
5
6%
7%.
Module : Module A
Chapter : Chapter3
78. The banker's discount on a sum of money for 1---- years is Rs. 600 and the true 2
discount on the same sum for 2 years is Rs. 750. The rate per cent is - Marks: 2+ 0.5-
3%
1
4%
5%
1
Module : Module A
Chapter : Chapter3
79. The banker's gain of a certain sum of money is Rs. 72 and the true discount on the
same sum for the same time and at the same rate is Rs. 60. The sum is - Marks: 2+ 0.5-
Rs. 280
Rs. 300
Rs. 320
Rs. 360
Rs. 600.
Module : Module A
Chapter : Chapter3
80. The banker's discount on a bill due 1 years 8 months hence is Rs. 100 and the true
discount on the same sum at the same rate per cent is Rs. 90. the rate per cent is -
Marks: 2+ 0.5-
5%
1
2
6%
2
Module : Module A
Chapter : Chapter3
81. The banker's discount on Rs. 800 at 6% is the same as the true discount for the same
time and at the same rate. The time is - Marks: 2+ 0.5-
2 months
3 months
4 months
5 months
6 months
Module : Module A
Chapter : Chapter3
82. The banker's gain on a bill due 1 year hence at 5% is Re. 1 The true discount is -
Marks: 2+ 0.5-
Rs. 5
Rs. 10
Rs. 15
Rs. 20
Rs. 25.
Module : Module A
Chapter : Chapter3
83. A person deposits Rs. 100 per month in a Recurring Deposit account carrying Simple
interest @ 6.5% Find the amount at the end of one year. Marks: 2+ 0.5-
Rs. 1,200
Rs. 1,278
Rs.1,242.25
Rs. 1,300
None of the above.
The Correct Answer is : Rs.1,242.25
Module : Module A
Chapter : Chapter4
84. Mr. A borrowed Rs. 10,400. He wants to pay this in two annual equal instalmets. The
rate of compound interest is 8% per annum. Find the amount of each instalment.
Marks: 2+ 0.5-
Rs. 2,916
Rs. 5,832
Rs. 5,200
Rs. 5,000
None of the above.
Module : Module A
Chapter : Chapter4
85. A person wants to pay his loan of Rs. 2,522 payable in three equal annual Instalments.
If the rate of compound interest is 5% p.a.; find out the amount of each instalment
Marks: 2+ 0.5-
Rs 600
Rs. 650
Rs. 700
Rs. 750
Rs. 800.
The Correct Answer is : Rs. 800.
Module : Module A
Chapter : Chapter4
86. A lease of Rs.80,000 was taken on 1st January 2005 for 2 years. Calculate the Annuity
(Annual Depreciation) if rate of increase is 10% p.a. Marks: 2+ 0.5-
Rs. 40,000
Rs.44,000
Rs. 46,000
Rs. 46,095.24
None of the above.
Module : Module A
Chapter : Chapter4
87. A lease was taken for 3 years for Rs. 6,620 on 2st January, 2005. Depreciation Fund
method is used for depreciation. Calculate Annuity (Annual Depreciation) if annual rate of
depreciation is 10% p.a. Marks: 2+ 0.5-
Rs. 1,900
Rs. 2,000
Rs. 2,100
Rs. 2,200
Rs. 2,300
Module : Module A
Chapter : Chapter4
88. Shradha borrowed some money from a money-lender. She returns this in two Annual
equal instalments of Rs. 5,832 each. Find the sum, if the rate of compound interest is 8%
p.a. Marks: 2+ 0.5-
Rs. 5,832
Rs. 5,200
Rs. 11,664
Rs. 10,400
None of the above.
Module : Module A
Chapter : Chapter4
89. A sum of money was borrowed the paid back in 2 annual instalments of Rs. 1,864 and
Rs1,740, respectively. If the rate of compound interest was 16% p.a. find out the sum
borrowed. Marks: 2+ 0.5-
Rs.3,604
Rs.3,202
Rs. 2,900
Rs.2,700
Rs.2,000
Module : Module A
Chapter : Chapter4
90. Calculate the amount of an annuity of Rs. 12,000 fir 15 years. Rate of interest is 1 4 ---
p.a. 2 Marks: 2+ 0.5-
Rs. 2,49,912
Rs. 1,24,956
Rs. 1,00,000
Rs. 1,12,000
Rs. 1,60,000
Module : Module A
Chapter : Chapter4
91. Calculate the present value of an annuity of Rs. 12,000 for 15 years. The rate 1of
compound interest is 4 - p.a. 2 Marks: 2+ 0.5-
Rs. 1,00,000
Rs. 1,20,000
Rs. 1,28,880
Rs. 2,57,760
Rs. 64,440.
Module : Module A
Chapter : Chapter4
92. A woman retire at the age of 60 years and her employer gives her a pension of Rs.
12,000 a year paid on half-yearly instalments for the rest of her life. Supposing her
expectation of life to be 13 years more and that interest is @ 4% p.a. payable half-yearly,
what single sum is equivalent to this pension? Marks: 2+ 0.5-
Rs. 3,00,000
Rs. 2,50,000
Rs. 2,41,500
Rs. 1,20,750
None of the above.
Module : Module A
Chapter : Chapter4
93. A man deposits Rs. 500 every six months into a bank which allows him 1 interest
payable quarterly at the rate of 2 ---% p.a. Find the sum which will 2 stand to his credit
and the end of 10 years from his first payment. Marks: 2+ 0.5-
Rs. 10,000 approx

Rs. 11,000 approx.
Rs. 12,000 approx.
Rs. 13,000 approx.
Rs. 14,000 approx.
The Correct Answer is : Rs. 11,000 approx.
Module : Module A
Chapter : Chapter4
94. A farmer could not pay annual instalments worth Rs. 800 each for four years. If a
simple rate of interest is calculated at the rate of 5% p.a., how much has he to pay now?
Marks: 2+ 0.5-
Rs. 3,200
Rs. 3,440
Rs. 3,640
Rs. 3,840
Rs. 4,040
Module : Module A
Chapter : Chapter4
95. A person desires to create a endowment fund to provide for a prize of Rs.3,000 every
pear. If the fund can be invested at 10% per annum compound interest, find the amount
of the endowment. Marks: 2+ 0.5-
Rs. 3,000
Rs. 6,000
Rs. 15,000
Rs. 20,000
Rs. 30,000
Module : Module A
Chapter : Chapter4
96. My daughter is 5 years old. In order to provide a sum Rs. 1,00,000 when she
Completes 21 years, I have decided to invest a fixed sum of money every year beginning
immediately and the last payment will be when she completes 21 years. Find the fixed
sum of money assuming the money earns compound interest at the rate of 8%p.a.
Marks: 2+ 0.5-
Rs 1,483 approx.
Rs.1,400 approx.
Rs.1,500 approx.
Rs. 2,966 approx.
Rs. 3,500 approx.
Module : Module A
Chapter : Chapter4
97. The rate of interest in a bank is 5% compounded annually. What should I invest per
year to get Rs. 6,00,00 at the end of 20 years? Marks: 2+ 0.5-
Rs. 8,000 approx.

Rs. 9,073 approx.
Rs. 18,146 approx
Rs. 36,292 approx
Rs. 40,000 approx.
Module : Module A
Chapter : Chapter4
98. A firm has leased a leasehold property for 3 years on 1st January, 2005 for
Rs.1,00,000 and his decided to replace it by creating a depreciation fund. The rate of
compound interest on investments is 55 p.a. Calculate the annual depreciation (i.e. the
amount to be invested). Marks: 2+ 0.5-
Between Rs. 30,000 and Rs. 31,000

The Correct Answer is : Between Rs. 31,000 and Rs. 32,000
Module : Module A
Chapter : Chapter4
99. A machine costs Rs. 5,00,000 and its effective life estimated to be 10 years Its scrap
value is Rs. 50,000. What amount should be retained out of profits at the and of each year
to accumulate at 5% p.a. with compound interest for 10 years to replace the machine by
another one costing Rs. 5,00,000? Marks: 2+ 0.5-
Rs. 33,771
Rs. 34,771
Rs. 35,771
Rs. 36,771
Rs. 37,771
Module : Module A
Chapter : Chapter4
100. what annual instalment will discharge a debt of Rs. 92,400 due in years at 5% simple
interest? Marks: 2+ 0.5-
Rs. 20,000
Rs. 21,000
Rs. 22,000
Rs. 23,000
None of the above
Module : Module A
Chapter : Chapter4
101. A certain sum @4% simple interest per annum becomes Rs.31,360 in 3 years.What
will be the amount of instalment per year to repay the loan in 3 years? Marks: 2+ 0.5-
Rs.10,051 approx.
Rs.11,000 approx.
Rs.11,120 approx.
Rs.11,215 approx.
Rs.11,300 approx.
The Correct Answer is : Rs.10,051 approx.
Module : Module A
Chapter : Chapter4
102. A person borrowed Rs. 6,560 at 5% compound interest to repay in two equal Annual
instalments. Find the amount of each instalment. Marks: 2+ 0.5-
Rs. 2,835
Rs., 3,285
Rs, 3,320
Rs. 3,528
Rs. 5,328.
Module : Module A
Chapter : Chapter4
103. Neeta, Anita and Sunita are equal partners in a firm. They have agreed that in case of
death of anyone of them, an annuity in 10 annual equal instalments will be paid to he
husband carrying compound interest @ 10% p.a. Calculate the annuity to be paid to
Sunitas husband after her death if her capital is Rs. 6,00,000. Marks: 2+ 0.5-
Rs. 79,406 approx

Rs. 97,640 approx
Rs. 64,697 approx
Rs. 97,460 approx
Rs. 60,497 approx.
Module : Module A
Chapter : Chapter4
104. Mr. A purchased a machinery from Mr. B on hire-purchase system, the cash price of
which is Rs. 1,00,000. Payment is to be made in 3 equal annual instalments including
interest on the unpaid balance @10% per annum. Each instalment is to be paid at the end
of each year. Calculate the amount of annual instalment. Marks: 2+ 0.5-
Rs.33,333.33
Rs. 45,000
Rs. 66,666.67
Rs. 40,211.50
None of the above.
Module : Module A
Chapter : Chapter4
105. A Washing machine worth Rs. 10,000 is purchased on instalment payment system
under which 10 equal annual instalments including interest at 10% p.a. are payable. Find
the amount of annual instalment. Marks: 2+ 0.5-
Rs. 1,627.43
Rs. 1,000.00
Rs. 1,333.00
Rs. 1,225.00
Rs. 1,250.00
Module : Module A
Chapter : Chapter4
106. A shopkeeper advertises the case price of a colour. T.V. as Rs. 8,500. The same T.V.
can also be purchased by paying Rs. 1,600 immediately and the balance in equal 8
instalments monthly of Rs. 900 each. Find the rate of interest. Marks: 2+ 0.5-
5% p.a.
6%p.a.
8%p.a.
10%p.a.
12%p.a.
The Correct Answer is : 12%p.a.
Module : Module A
Chapter : Chapter4
107. 25. A company has issued debentures for Rs. 1,000,00 on 1st January 2005 which are
redeemable on 31st December, 2008. The company has created Debenture Redemption
fund for the redemption of debentures at the end of the year. 10% annual interest will be
received on the investment. Calculate the annuity amount. Marks: 2+ 0.5-
Rs. 17,547 approx.

Rs. 18,547 approx.
Rs. 21,547 approx.
Rs. 25,000 approx.
Rs. 25,200 approx.
Module : Module A
Chapter : Chapter4
108. The cost price of a Rs. 100 bond at a discount of 5%, when brokerage is --- %, will be
- Marks: 2+ 0.5-
Rs. 95
Rs. 100
Rs. 95 + --- = Rs. 95.25
Rs. 95 - -- = Rs. 94.75
Rs. None of the above. 1
The Correct Answer is : Rs. 95 + --- = Rs. 95.25
Module : Module A
109. The income derived from a 6 --- % bond at Rs. 95 is - 2 Marks: 2+ 0.5-
Rs. 1.50
Rs. 6.30
Rs. 6.50
Rs. 11.50
None of the above.
Module : Module A
110. 1 1 1 3. The case realized by selling a 5 --- % stock at 106 ---, brokerage being --- %
is 2 4 4 Marks: 2+ 0.5-
Rs, 105.25
Rs. 105.75
Rs. 106.00
Rs. 106.25
None of the above.
Module : Module A
111. How much stock at Rs. 85 can be purchased for Rs. 1,360? Marks: 2+ 0.5-
Rs. 1,360 stock

Rs. 1,400 stock
Rs. 1,560 stock
Rs. 1,600 stock
Rs. 1,660 stock.
The Correct Answer is : Rs. 1,600 stock
Module : Module A
112. The income from a 6% stock of Rs 18,360 is Rs. 720. Find the price stock of Rs. 100
Marks: 2+ 0.5-
Rs. 125
Rs. 130
Rs. 135
Rs. 150
Rs. 153.
Module : Module A
113. What income will be derived from Rs. 75,000 of 4 --- stock? 2 Marks: 2+ 0.5-
Rs. 3,357
Rs. 3,537
Rs. 3,573
Rs. 3,750
Rs. 3,375.
The Correct Answer is : Rs. 3,375.
Module : Module A
114. What income can be be derived from an investment of Rs. 11,628 in the 6 --- % stock
at Rs. 153? Marks: 2+ 0.5-
Rs. 722
Rs. 756
Rs. 345
Rs. 543
Rs. None of the above.
Module : Module A
115. By investing in 6% stock at 96, an income of Rs. 100 will be derived by making An
investment of - Marks: 2+ 0.5-
Rs. 1,504
Rs. 1,600
Rs. 1,667
Rs. 3,200
Rs. 5,760.
Module : Module A
116. An investment of Rs. 12,000 in a stock quoted at 120 produces an income of Rs. 780.
Find 780. Find the rate of interest. Marks: 2+ 0.5-
6.5%
7.8%
8.0%
8.3%
9%
Module : Module A
117. To produce an annual income of Rs. 1,000 in a 4% stock at 90, the amount of stock
needed is - Marks: 2+ 0.5-
Rs.22,500
Rs.25,000
Rs.27,500
Rs 36,000
Rs.40,000
The Correct Answer is : Rs.25,000
Module : Module A
118. A man invests in a 4.5% stock at 96. The interest obtained by him is - Marks: 2+ 0.5-
0.5%
1%
4%
4.5%
4.69%
Module : Module A
119. By investing Rs. 3,300 in a 5.5% stock, a man earns Rs. 231. The stock is then quoted
at - Marks: 2+ 0.5-
Rs. 78
4
Rs. 93
3
Rs. 99
Module : Module A
120. A invested some money in 4% stock at 96. B wants to invest in equally good 5%
stock. B must buy a stock worth - Marks: 2+ 0.5-
rs. 77
Rs. 80
Rs. 100
Rs. 120
Rs. 125
Module : Module A
121. Shradha wants to purchase a 6% stock which must yield 5% on her capita. AtWhat
price must she buy the stock? Marks: 2+ 0.5-
Rs. 100
Rs. 105
Rs. 110
Rs. 115
Rs. 120.
Module : Module A
122. Which is better investment - 3% stock at 81 or 4% stock at 135? Marks: 2+ 0.5-
3% stock at 81
4% stock at 135
Both ate equally good
The Correct Answer is : 4% stock at 135
Module : Module A
123. Which is better stock - 5% at 286 or 3.5% at 186? Marks: 2+ 0.5-
5% at 286
3.5% at 186
The Correct Answer is : 3.5% at 186
Module : Module A
124. 17. Which is better investment - 4% stock at par with an income-tax at 5% or 4.5%
stock at 110 free from income-tax.? Marks: 2+ 0.5-
4% stock at par
4.5% stock at 110
The Correct Answer is : 4.5% stock at 110
Module : Module A
125. By investing in 3.75% stock at 96, Shubhra earns Rs. 1,000. The investment made is.
Marks: 2+ 0.5-
Rs. 9,600
Rs. 10,000
Rs. 25,600
Rs. 30,000
Rs. 48,000
Module : Module A
126. A man purchased 9,500 shares at Rs.12 per share in the open market; the face Value
of shares being Rs. 10. The company declared a dividend of 8%. What amount of dividend
will he receive? Marks: 2+ 0.5-
Rs. 7,600
Rs. 9,120
Rs.10,000
Rs. 9,500
None of the above.
Module : Module A
127. A person purchased 40 shares of Rs. 50 each at a discount of 5%, the rate of dividend
being 4.75%. The rate of income on invested amount is - Marks: 2+ 0.5-
3.25%
4.25%
4.50%
4.75%
None of the above.
Module : Module A
128. A man wants to buy Rs. 20 shares, the dividend being 9%. He wants to have an
income of 12% on his investment. At what market price should he purchase each share.
Marks: 2+ 0.5-
Rs. 12
Rs.15
Rs. 18
Rs. 20
Rs.21.
Module : Module A
129. A man invested Rs. 3,880 in a stock at 97 to obtain an income of Rs. 220. The rate of
dividend on stock is - Marks: 2+ 0.5-
25%
22.5%
15%
12%
5.5%
Module : Module A
130. Maya invested Rs. 8,910 in Rs. 10 shares quoted at Rs. 8.25. If the rate of Dividend is
6%, her annual income is - Marks: 2+ 0.5-
Rs. 208
Rs. 534
Rs. 648
Rs. 656
Rs. 700.
Module : Module A
131. A woman invests some money partly in 4% stock at 120 an partly in 3% stock at 96.
To get equal dividends from both, she must invest the money in the ratio- Marks: 2+ 0.5-
1:2
2:3
3:4
4:5
15:16.
The Correct Answer is : 15:16.
Module : Module A
132. Cash flow each year is equal to - Marks: 2+ 0.5-
Accounting profit only

Accounting profit minus tax
Accounting profit minus tax plus depreciation
All of the above
None of the above.
The Correct Answer is : Accounting profit minus tax plus depreciation
Module : Module A
133. Capital budgeting involves Marks: 2+ 0.5-
Selection of projects for implementation

Estimation of cost benefit of projects
Generation of investment ideas
All of the above
None of the above.
The Correct Answer is : All of the above
Module : Module A
134. Capital budgeting involves Marks: 2+ 0.5-
Selection of projects for implementation

Estimation of cost benefit of projects
Generation of investment ideas
All of the above
None of the above.
Module : Module A
135. Capital expenditure decisions involve those generating benefits for a period -
Marks: 2+ 0.5-
Exceeding one year

Exceeding two years
Exceeding five years
Exceeding ten years
None of the above.
The Correct Answer is : Exceeding one year
Module : Module A
136. Payback period is a applicable Marks: 2+ 0.5-
In evaluating a single project

In evaluating mutually exclusive projects
In evaluating term loan proposals
In evaluating single project or mutually exclusive projects
None of the above.
The Correct Answer is : In evaluating single project or mutually exclusive projects
Module : Module A
137. While evaluating capital investment proposals, the time value of money is Considered
in case of - Marks: 2+ 0.5-
Payback period method

Discounted cash flow method
Accounting rate of return method
All of the above
None of the above
The Correct Answer is : Discounted cash flow method
Module : Module A
138. Depreciation is included in costs in case of - Marks: 2+ 0.5-
Payback period method

Present value index method
All of the above.
None of the above.
The Correct Answer is : Accounting rate of return method
Module : Module A
139. The return after the pay-off period is not considered in case of - Marks: 2+ 0.5-
Payback method
Internal rate of return method
Present value index method
All of the above
None of the above
The Correct Answer is : Payback method
Module : Module A
140. The cash inflows on account o operations are presumed to have been re-invested at
the cut-off rate in case of - Marks: 2+ 0.5-
Payback method
Discounted cash flow method
All of the above.
None of the above.
The Correct Answer is : Discounted cash flow method
Module : Module A
141. Time value of money is considered under - Marks: 2+ 0.5-
Payback method
Internal rate of return method
All of the above
None of the above.
The Correct Answer is : Internal rate of return method
Module : Module A
142. The method of appraisal based on accounting projects rather than cash flows is -
Marks: 2+ 0.5-
Payback period
Average rate of return
Discounted payback period
Benefit-cost-ratio.
None of the above
The Correct Answer is : Average rate of return
Module : Module A
143. Ranking of projects under NPV and IRR may differ if - Marks: 2+ 0.5-
the period of life of the projects is different

the timing of the cash flows is different
either (i) or (ii) is present
both (i) and (ii) are present
None of the above.
The Correct Answer is : either (i) or (ii) is present
Module : Module A
144. Internal rate of return is the rate at which - Marks: 2+ 0.5-
the net present value is nil

the net present value is positive
the discount rate equals the firm's net profit rate
the income generated by the project meets the cost of the funds
None of the above
The Correct Answer is : the net present value is nil
Module : Module A
145. Which one of the following statement is true? Marks: 2+ 0.5-
The working capital released on the termination of a project is not cash

Depreciation on asset is included in cost in computing discounted cash
Increase in working capital due to investment proposal is included in
Cost of investment in the new plant is the cost of new plant plus the
Between two mutually exclusive projects, that one should be preferred
The Correct Answer is : Increase in working capital due to investment proposal is
included in
Module : Module A
The internal rate of return and net present value are synonymous terms.
Cash flows from a project can be estimated accurately.
The inflation and deflation factors need not be taken into account while estimating
future cash inflows since it is difficult to predict future price changes.
Cash flows from a project can be worked out only on the basics of certain probabilities
No additional working capital is required in case of an expansion of an existing project.
The Correct Answer is : Cash flows from a project can be worked out only on the basics
of certain probabilities
Module : Module A
Chapter :
147. Which one of the following statements is false? Marks: 2+ 0.5-
Discounted cash flow technique takes into account the time value of money.
Depreciation is considered while calculating the return on a project according to the
Accounting Rate of Return Method.
Internal Rate of Return determines the maximum rate of interest that a firm can afford
to pay on the borrowings for the particular project.
Tax concessions have no role to play in estimating the cash flows from a project
All of the above.
The Correct Answer is : Tax concessions have no role to play in estimating the cash
flows from a project
Module : Module A
NPV and profitability index always yield identical results.

Profitability index is also known as benefit-cost ratio.
Payback method disregards cash flows after the payback period
Mathematical techniques and available for dealing with risk and uncertainty factors
involved in determining future cash inflows from a project.
Depreciation is not a source of cash inflow.
The Correct Answer is : NPV and profitability index always yield identical results.
Module : Module A
149. Profitability Index is also known as- Marks: 2+ 0.5-
Benefit-cost-ratio
Desirability fact or
Both (i) and (ii)
All of the above
None of the above.
The Correct Answer is : Both (i) and (ii)
Module : Module A
150. A machine costs Rs. 5,00,000 and would fetch Rs. 2,50,000 in the first year;
Rs.1,50,000 in second year and Rs. 1,00,000 in third year. Payback period would be-
Marks: 2+ 0.5-
1 year
2 years
1
3 years
1
Module : Module A
151. The economic life of a plant is 8 years and its cost is Rs. 10,00,000. Annual savings
(cash inflow) is Rs.2,00,000. Post payback profit would be - Marks: 2+ 0.5-
Rs. 2,00,000
Rs. 3,00,000
Rs.4,00,000
Rs. 6,00,000
Rs. 8,00,000
Module : Module A
152. The total flows of a plant after tax but before depreciation for 5 years are Rs. 45,800
and total depreciation amounts to Rs.32,000.Initial investment in the plant is Rs. 30,000.
The average rate of return would be - Marks: 2+ 0.5-
6.3%
9.2%
18.4%
20%
22%
Module : Module A
153. Which one of the following is a 'false' statement? Marks: 2+ 0.5-
Depreciation is a part of the operating cost.

Depreciation is provided to know the correct profit
Depreciation is a fall in the value of fixed assets.
Fall in the market price is the main cause of depreciation.
Depreciation is shown in debit side of Profit & Loss a/c.
The Correct Answer is : Fall in the market price is the main cause of depreciation.
Module : Module A
154. Depreciation arises because of - Marks: 2+ 0.5-
Fall in the value of money.

Fall in the market value of a fixed asset.
Fall in the utility of a fixed asset.
Fall in the value of a fixed asset owing to wear and tear
None of the above.
The Correct Answer is : Fall in the value of a fixed asset owing to wear and tear
Module : Module A
155. The main objective of providing depreciation is- Marks: 2+ 0.5-
to reduce tax burden

To calculate true profits
To show true financial position
To provide funds of replacement of fixed assets.
All of the above.
The Correct Answer is : All of the above.
Module : Module A
156. Depreciation is the process of - Marks: 2+ 0.5-
Valuation of a fixed asset

Apportionment of the cost of the fixed asset over its useful life
Maintenance of asset in a state of efficiency
All of the above
None of the above.
The Correct Answer is : Apportionment of the cost of the fixed asset over its useful life
Module : Module A
157. Under the straight line method of depreciation, amount of depreciation - Marks: 2+
0.5-
increases every year

decreases every year
is constant every year
increases for some years
None of the above.
The Correct Answer is : is constant every year
Module : Module A
158. Under the diminishing balance method, depreciation is calculated on - Marks: 2+ 0.5-
the original cost.

The written down value
The scrap value
The market value
None of the above.
The Correct Answer is : The written down value
Module : Module A
159. Under the diminishing balance method of depreciation- Marks: 2+ 0.5-
The amount on which depreciation is calculated, is reduced from year to year

the rate % declines from year to year
the rate % as well as amount reduces every year
All of the above.
None of the above
The Correct Answer is : The amount on which depreciation is calculated, is reduced from
year to year
Module : Module A
160. The amount of depreciation charged on machinery will be credited to - Marks: 2+ 0.5-
Machinery a/c
Depreciation a/c
Cash a/c
P & L a/c
None of the above.
The Correct Answer is : Machinery a/c
Module : Module A
161. Machine Hour Rate Method of providing depreciation is useful when - Marks: 2+ 0.5-
output can be effectively measured

utility of the machine can be directly related to its productive use
use of the machine can be measured in terms of time
All of the above
None of the above
The Correct Answer is : use of the machine can be measured in terms of time
Module : Module A
162. In case of Annuity Method of depreciation - Marks: 2+ 0.5-
increases every year

decreases every year
remains constant every year
All of the above
None of the above
The Correct Answer is : remains constant every year
Module : Module A
163. For providing depreciation on leasehold property, the appropriate method of
depreciation is - Marks: 2+ 0.5-
Fixed Instalment Method

Written Down Value Method
Revaluation Method
Replacement Method
None of the above.
The Correct Answer is : Fixed Instalment Method
Module : Module A
164. Depletion Method of depreciation is used in - Marks: 2+ 0.5-
Machinery, Building, Furniture, etc.

Cattle
Loose tools, etc.
Mines, Quarries, etc.
None of the above.
The Correct Answer is : Mines, Quarries, etc.
Module : Module A
165. Depreciation is charged by allocating depreciable cost in proportion of the annual
output to the probable life-time output under the - Marks: 2+ 0.5-
Working Hours Method

Production Units Method
Valuation Method
All of the above
None of the above
The Correct Answer is : Production Units Method
Module : Module A
166. 14. A machinery worth Rs. One lakh with expected life of 10 years is purchased. The
depreciation on it is charged equally every year. The method of depreciation is - Marks: 2+
0.5-
Straight Line Method

Written Down Value Method
Sinking Fund Method
Annuity Method
Insurance Policy Method
The Correct Answer is : Straight Line Method
Module : Module A
167. The interest lost on the acquisition of an asset is taken into account in calculating the
amount of depreciation in - Marks: 2+ 0.5-

Revaluation Method
Diminishing Balance Method
Depletion Method
Annuity Method
The Correct Answer is : Diminishing Balance Method
Module : Module A
168. On a machinery, depreciation @ 10% is Rs. 30,000 for the first year, Rs. 27,000 for
the second year. What will be amount of depreciation for the third year? Marks: 2+ 0.5-
Rs. 30,000
Rs. 24,300
Rs. 20,400
Rs. 22,600
Rs. 27,000.
Module : Module A
169. Mr. A purchased a second hand machinery for Rs. 80,000 on 1st April 2001 and spent
Rs. 35,000 on its over-hauling and installation. Depreciation is charged @ 10% on original
cost. On 30th June 2004, the machinery was sold off for Rs. 65,000. What is the amount of
loss to the written of, presuming the accounting ear ends on 31st March every year?
Marks: 2+ 0.5-
Rs. 15,500
Rs. 12,625
Rs. 13,095
Rs. 13,505
None of the above
Module : Module A
170. Mr. X purchased a machine worth Rs. 2,00,000 on 1st January 2002. The machine is
depreciated at 10% p.a.; on original cost. One 1st July 2004, the machinery was sold for
Rs. 1,20,000. What is the amount of loss to be written off, assuming that the books are
closed on 31st December. Marks: 2+ 0.5-
Rs. 25,000
Rs. 30,000
Rs. 35,000
Rs. 40,000
Rs. 45,000
Module : Module A
171. A company purchased a car for Rs. 2,00,000 on 1st January 2003. Depreciation is
charged at 20% p.a. under written down value method. The car was sold on 1st July 2004
for Rs. 1,60,000. calculated the amount Profit/loss on the sale of the car. Marks: 2+ 0.5-
(-) Rs. 10,000

(-) Rs. 12,000
Rs. 14,000
Rs. 16,000
Rs. 18,000
Module : Module A
172. On 1st January 2002, Mr. X purchased a plant costing Rs. 82,000 and spent Rs. 8,000
in its erection. The estimated effective life of the plant is 10 years, its scrap value being
Rs. 10,000. What will be the depreciation value at the end of the 3rd year, under straight
line method? Accounts are closed on 31st December each year; Marks: 2+ 0.5-
Rs. 81,000
Rs. 72,000
Rs. 56,000
Rs. 70,000
Rs. 60,000
Module : Module A
173. A firm purchased a machine for Rs. 5,00,000 on 1st April 2004, Its estimated
effective life is 5 years at the end of which it will have a scrap value of Rs. 1,40,000. What
will be the amount of depreciation each year if charged under straight line method/
Marks: 2+ 0.5-
Rs. 60000
Rs. 72,000
Rs. 80,000
Rs. 1,00,000
Rs. 1,20,000.
Module : Module A
174. On 1st January 2002, a firm purchased machinery worth Rs., 1 lakh, and on 1st July
2004, it buys additional machinery worth Rs. 20,000 and spends Rs. 2,000 and spends Rs.
2,000 on its erection. Annual depreciation is 10% on straight line method. What will be
written down value at the end of 5th year? Marks: 2+ 0.5-
Rs. 66,000
Rs. 66,500
Rs. 90,000
Rs. 50,000
Rs. 1,00,000
Module : Module A
175. Mr. X Purchased a machinery for Rs. 1 lakh, its effective life being 5 years and scrap
value at the end of 5 years Rs. 10,000. The machinery is sold at the end of 3rd year for Rs.
45,000. If depreciation is charged on straight line method, what is the profit/loss on this
sale? Marks: 2+ 0.5-
Profit Rs. 36,000

Profit Rs. 18,000
Profit Rs. 1,000
Loss Rs. 1,000
Loss Rs. 18,000
The Correct Answer is : Loss Rs. 1,000
Module : Module A
176. A firm purchased a machinery worth Rs. 2,05,000 and spent Rs. 20,000 on its
installation. Its effective useful life is estimated at 10 years and scrap value Rs. 25,000.
What will be the depreciated value at the end of 3rd year under straight line method?
Marks: 2+ 0.5-
Rs. 2,25,000
Rs. 60,000
Rs. 1,65,000
Rs. 45,000
Rs. 55,000
Module : Module A
177. ............... is maintained for known liabilities. Marks: 2+ 0.5-
Provision
Reserve
Reserve Fund
Capital Reserve
All of the above.
The Correct Answer is : Provision
Module : Module A
178. Provision is also known as - Marks: 2+ 0.5-
Capital Reserve
Contingency Reserve
Reserve Fund
Specific Reserv
None of the above.
The Correct Answer is : Specific Reserv
Module : Module A
179. ..................... is created for unknown liability. Marks: 2+ 0.5-
Provision for depreciation

Provision for bad and doubtful debts.
Provision for taxation
General Reserve
None of the above
The Correct Answer is : General Reserve
Module : Module A
180. Profit or Loss on Depreciation fund Investment is transferred to - Marks: 2+ 0.5-
Profit & Loss a/c

Fixed Asset a/c
Depreciation Fund a/c
General Reserve
Capital Reserve.
The Correct Answer is : Depreciation Fund a/c
Module : Module A
181. The profit on depreciation policy is transferred to - Marks: 2+ 0.5-
Profit & Loss a/c

Fixed Asset a/c
Insurance Policy a/c
Depreciation Reserve
Capital Reserve.
The Correct Answer is : Depreciation Reserve
Module : Module A
182. Depreciable assets are the assets which - Marks: 2+ 0.5-
Have a limited useful life

are held by the enterprise for use in the production or supply of goods an services
are expected to be used during more than one accounting period
All of the above
None of the above.
Module : Module A
183. The appropriate method of depreciation in the case of livestock is - Marks: 2+ 0.5-
Diminishing Balance Method
Depletion Method
Appraisal Method
Retirement Method
The Correct Answer is : Appraisal Method
Module : Module A
184. Which of the following factors has a bearing on the useful life a fixed asset?
Marks: 2+ 0.5-
Physical wear and tear

Obsolescence
Legal or other limits on the use of the asset
(i) & (ii)
All of the above.
Module : Module A
185. The economic factors causing depreciation, are - Marks: 2+ 0.5-
depletion
wear and tear
effluxion of time
obsolescence and inadequacy
All of the above.
The Correct Answer is : obsolescence and inadequacy
Module : Module A
186. Which one of the following assets does not require provision for depreciation
Marks: 2+ 0.5-
Land
Leased assets
Livestock
Loose tools
All of the above.
The Correct Answer is : Land
Module : Module A
187. Accountants prefer to use the historic cost rather then any other cost for computing
depreciation, because of the accounting convention of - Marks: 2+ 0.5-
Consistency
Conservatism
Cost
Disclosure
Matching.
The Correct Answer is : Cost
Module : Module A
188. accelerated methods of depreciation are favoured because of - Marks: 2+ 0.5-
the provisions in the Companies Act

considerable, saving in taxes
the possibility of raising more resources for replacement of assets
the fact that assets are more productive in earlier years rather than in the later years.
None of the above
The Correct Answer is : the fact that assets are more productive in earlier years rather
than in the later years.
Module : Module A
189. Which one of the following statements is 'true' Marks: 2+ 0.5-
the term 'depreciation', 'depletion' and 'amortization' refer to one and the same thing.
No method of depreciation accurately calculates the charge to be made in respect of the
asset.
Depreciation base refers to the amount on which the rate of depreciation is applied for
computing the amount of depreciation.
The total amount of depreciation to be allocated over the useful like of the asset is the
difference between the total acquisition cost and the replacement value.
The total amount of depreciation to be written off over the life of an asset is equal to
the cost of the asset plus its depreciation.
The Correct Answer is : No method of depreciation accurately calculates the charge to
be made in respect of the asset.
Module : Module A
190. Accounting is the language of Marks: 2+ 0.5-
Business
Statistics
Investment
Industry
None of the above
The Correct Answer is : Business
Module : Module B
Chapter : Chapter1
191. The word book keeping denotes Marks: 2+ 0.5-
Art of recording business dealings in books

Keeping of books of account
Maintaining stock of books for sale purchase
All of the above
None of the above
The Correct Answer is : Art of recording business dealings in books
Module : Module B
Chapter : Chapter1
192. The objective of book Keeping is Marks: 2+ 0.5-
To know the profit and loss in the business

To know the assets and liabilities in the business
To know the deptors and creditors in the business
All of the above
None of the above
Module : Module B
Chapter : Chapter1
193. The prime function of Accounting is to Marks: 2+ 0.5-
Record business transactions

Record qualities of the business man
Record and classify business transaction
Provide the informational basis for action
None of the apve
The Correct Answer is : Record and classify business transaction
Module : Module B
Chapter : Chapter1
194. Kautilya wrote book on Marks: 2+ 0.5-
Accounting
Economics
Statistics
Palmistry
None of the above
The Correct Answer is : Economics
Module : Module B
Chapter : Chapter1
195. The modern concept of book-keeping and accounting was given by Marks: 2+ 0.5-
Bhaskaracharya
Luca De Bargo Pacioli
Shukla& Grewal
Pickle
None of the books
The Correct Answer is : Luca De Bargo Pacioli
Module : Module B
Chapter : Chapter1
196. Management Accounting provides services to the management in performing
Marks: 2+ 0.5-
Co _ Ordinating management funtions

Controlling funtions
All management function
Communication functions
None of the above
The Correct Answer is : All management function
Module : Module B
Chapter : Chapter1
197. In India accounting provides services to the management in performing Marks: 2+
0.5-
Government of India
Board of direct Taxes
Accounting Association
Accounting standards Board
All of the above
The Correct Answer is : Accounting standards Board
Module : Module B
Chapter : Chapter1
198. Accounting standard 6 deals with Marks: 2+ 0.5-
Constucture cortract
Revenue Recorgnition
Fixed Assets
Depreication
Government grant
The Correct Answer is : Depreication
Module : Module B
Chapter : Chapter1
199. The Accounting standatd for dislosure of Accounting policeis is Marks: 2+ 0.5-
No.1
No.2
No.3
No.4
No.5
The Correct Answer is : No.1
Module : Module B
Chapter : Chapter1
200. Compliance with accounting standards is the duty of the Marks: 2+ 0.5-
Employees
Board of directors
Accountant
Cashier
Auditor
The Correct Answer is : Auditor
Module : Module B
Chapter : Chapter1
201. The abbroviation GAAB stands for Marks: 2+ 0.5-
Generally Accepted Accountiong Policies

Generally Accepted Accountiong practice
Generally Accepted Accountiong principles
Generally Accected and audio procedures
None of the above
The Correct Answer is : Generally Accepted Accountiong principles
Module : Module B
Chapter : Chapter1
202. Prior Period income should be Marks: 2+ 0.5-
inclusive determination of current profits

excluded for determination of current profits
shown in P&Lo a/c ofthe current year
(i)of (ii) above
(i) ( iiiO above
The Correct Answer is : (i) ( iiiO above
Module : Module B
Chapter : Chapter1
203. Accounting principles are generally based on Marks: 2+ 0.5-
Subjectivity
Practicability
Convenience in recording
Imagination
None of the above
The Correct Answer is : Practicability
Module : Module B
Chapter : Chapter1
204. The sustem of recording business transactuibs based on dual aspect concept is called
Marks: 2+ 0.5-
Single entry sustem

Double entry system
Double accout system
All of the abvoe
none of the abvoe
The Correct Answer is : Double entry system
Module : Module B
Chapter : Chapter1
205. The concvention of conservatio is applicatble Marks: 2+ 0.5-
In provioding for depreciation

In providing for discount on debtors
In providing for discount on deptors
In making provision for bad and doubtful depts
In provididng for taxation
The Correct Answer is : In making provision for bad and doubtful depts
Module : Module B
Chapter : Chapter1
206. Under the money measurement concept the following will be recorded in the books of
account of the busuiness - Marks: 2+ 0.5-
Value of furniture
Quality of companys goods
Bad heaslth of managing director
All of the above
None of the abvoe
The Correct Answer is : Value of furniture
Module : Module B
Chapter : Chapter1
207. Compliance of accounting standartds is the duty of Marks: 2+ 0.5-
Board of Directors
Auditor
Company secretary
Central Government
None of the abvoe
The Correct Answer is : Auditor
Module : Module B
Chapter : Chapter1
208. the concept of conservations when applied to Balance sheet results in Marks: 2+ 0.5-
Understatement of assets
Overstandment of liabilities
Underestatement of liability
Overstatement of assets
Overstatement of cpital
The Correct Answer is : Understatement of assets
Module : Module B
Chapter : Chapter1
209. The practie of appendintg neptes regarding contingent liabilitaeis in accounting
statements is in pursuance to Marks: 2+ 0.5-
Convention of disclosure
Convention of conservatism
Concept of money measurement
Concept of mone
Concern of accouting period
The Correct Answer is : Convention of disclosure
Module : Module B
Chapter : Chapter1
210. Recoding business transactions on the basis of documents is to opserve the
accountion assumption of Marks: 2+ 0.5-
Accouting cquity
Going concern
Money ,measurement
Verifiable objective
Accounting period
The Correct Answer is : Verifiable objective
Module : Module B
Chapter : Chapter1
211. Treatment of capital as liability opserves the accounting assumpting of Marks: 2+ 0.5-
busuness
Revenue realisation
full disclosure
historical cost principle
materality
The Correct Answer is : busuness
Module : Module B
Chapter : Chapter1
212. Accounting period consists oif Marks: 2+ 0.5-
12months
24months
36months
48months
60months
The Correct Answer is : 12months
Module : Module B
Chapter : Chapter1
213. In construction work revenue is identified on the basis of Marks: 2+ 0.5-
sales
cash received
balanced due
work completed
none of the abvoe
The Correct Answer is : work completed
Module : Module B
Chapter : Chapter1
214. Accounting to the principles of matching cost and revenur income of a business can
sbe ascertaineed by Marks: 2+ 0.5-
Total recreiveed
Total. pauments
matching total sales and purchases
matching revenue with the cost of the business
all of the books
The Correct Answer is : matching revenue with the cost of the business
Module : Module B
Chapter : Chapter1
215. According to the concept of conservatism the stock in trade is valued at Marks: 2+ 0.5-
cost price
market price
cost of market price whicheverr is lower cost or markert price whichevert islower
cost of market price whicheverr is lower cost or markert price whichevert is higher
none of the above
The Correct Answer is : cost of market price whicheverr is lower cost or markert price
whichevert islower
Module : Module B
Chapter : Chapter1
216. The following convention cosiders the qualities and disqualitie s of genetal menager
Marks: 2+ 0.5-
convention of coservatism
convention of feasibility
convention of materialit
all of the above
none of the above
The Correct Answer is : convention of coservatism
Module : Module B
Chapter : Chapter1
217. he concept of conservatism takes into account Marks: 2+ 0.5-
all future lossed but leaves all future profits

all future proits but leaves all future losseS
all future profits and all future lossed
all of he above
none of the above
The Correct Answer is : none of the above
Module : Module B
Chapter : Chapter1
218. The policy of anticipate no profit and provide for the possible lossed arises due to
Marks: 2+ 0.5-
convention disclosure
convention of materialism
convention of consistecy
convention of feasibility
convention of conservation
The Correct Answer is : convention of feasibility
Module : Module B
Chapter : Chapter1
219. Non financial information is not recorded in accounts to Marks: 1+ 0.25-
accural concept
entity concept
dual aspect concept
meoney measurement concept
none of the above
The Correct Answer is : meoney measurement concept
Module : Module B
Chapter : Chapter1
220. According to the concept of money meaurement the following will not be recording in
the ooks of accounts Marks: 2+ 0.5-
simplicity of the general management

deathe of the general manager
(i) and (ii) both
gratuaitay paid to hte general managers wife after his dearth
pension paid to the general managers wife after his death
The Correct Answer is : (i) and (ii) both
Module : Module B
Chapter : Chapter1
221. According to the concept of going concern a business is presumed to have Marks: 2+
0.5-
a limited life
a long life
a definite life
an indefinite life
none of the above
The Correct Answer is : a long life
Module : Module B
Chapter : Chapter1
222. Realisation concept miplies realisation of revenure at Marks: 2+ 0.5-
the reciept of the order

the delivery of goods
the reciept of cash from the customert
the cancellation of an ofder
all of the abvoe
The Correct Answer is : the delivery of goods
Module : Module B
Chapter : Chapter1
223. The concern concept according to which a fact or happining which canot be expressed
in terms of money is not recorded in the accounting books is callled Marks: 2+ 0.5-
cost concept
matching concept
realisation concept
money measurement concept
accounting period concept
The Correct Answer is : money measurement concept
Module : Module B
Chapter : Chapter1
224. Profit represents excess of receipts over expenditure in Marks: 2+ 0.5-
mercantile system of accounting

cash system of accounting
hybrid system of accounting
all tof the above
none of the above
The Correct Answer is : cash system of accounting
Module : Module B
Chapter : Chapter1
225. income and expenses are recognised as and when they are due irrestective of their
actual reciept payment in Marks: 2+ 0.5-
mercantile system of accounting

cash system of accounting
hybrid system of accounting
all of the above
none or the above
The Correct Answer is : mercantile system of accounting
Module : Module B
Chapter : Chapter1
226. Point out the correct accounting equation Marks: 2+ 0.5-
capital =Assets+Liabilities
Assets =Capital +liabilities
Assets= Capital _liabililties
Liabilities =Assets +capital
Capital =caprtal -Assets
The Correct Answer is : Assets =Capital +liabilities
Module : Module B
Chapter : Chapter1
227. Ponit out the incorrect accounting equation Marks: 2+ 0.5-
capital =assets -liabilities

assets =capital +liabiliteis
liabilities =assets +capital
assets = liabilities +capital
all of the abvoe
The Correct Answer is : liabilities =assets +capital
Module : Module B
Chapter : Chapter1
228. Purchase of a T.V set for the propreitor will Marks: 2+ 0.5-
increase assets and decrease capital

increase capital and decrease assets
increase assets and increas capital
decrease assets and decrease capital
none of the above
The Correct Answer is : decrease assets and decrease capital
Module : Module B
Chapter : Chapter1
229. calculate gross income from the following information sales Rs 2,00,000sales Rs
4,000opening stock Rs 20,000pruchases 1,20,000purchase retures 2,000wages
14,000frieght 6,000salaries 40,000closing stock 24,000 Marks: 2+ 0.5-
Rs 60,000
Rs 78,000
Rs 1,34,000
Rs 62,000
Rs 1,96,000
The Correct Answer is : Rs 62,000
Module : Module B
Chapter : Chapter1
230. calculate -(a) cost of goods sosd (b) gross profit and (c) bet profit frim the following
igures opening Rs 40,000purchases Rs 2,00,000purchases returns Rs 20,000direct
expenses Rs 30,000]closing stock Rs 20,000indirect expenses RS 20,000sales Rs
2,50,000sales returns 10,000 Marks: 2+ 0.5-
Rs 2, 30,000 Rs 10,000 Rs 5,000

Rs 2,30,000 Rs 5,000: Rs 10,000
Rs 2,30,000 Rs 10,000 (-) Rs 10,000
Rs 2,10,000 Rs 10,000 Rs 5,000
Rs 2,10,000 Rs 5,000 Rs 10,000
The Correct Answer is : Rs 2,30,000 Rs 10,000 (-) Rs 10,000
Module : Module B
Chapter : Chapter1
231. sales during the year is Rs 1,00,000 grosss profits is 25% on cost find out the
amount of gross profit Marks: 2+ 0.5-
Rs 20,000
Rs 25000
Rs 30,000
Rs 33,000
Rs 40,000
Module : Module B
Chapter : Chapter1
232. calculate sales if cost of sales is Rs 1,60,000 and the gross loss is Rs 68,00 Marks: 2+
0.5-
Rs 2,28,000
Rs 92,000
Rs 2,52,00
RS 1,42,000
none of the abvoe
Module : Module B
Chapter : Chapter1
233. find out net profit from the following figares cash sale = Rs 70,000credit sales =RS
80,000cost of goods =Rs 1,04,000selling expenses =Rs 13,400 Marks: 2+ 0.5-
(-) ?Rs .34,000

(-) rs 24,000
Rs 32,600
RS 46,000
none of the books
Module : Module B
Chapter : Chapter1
234. what will be the capital of the propeitor if his her assets are Rs 1,90,00 and liabilities
Rs 1,25,000 Marks: 2+ 0.5-
Rs 0,000
Rs 65,000
RS 75,000
Rs 1,90,000
none of the books
Module : Module B
Chapter : Chapter1
235. Revenue is said to be realised Marks: 2+ 0.5-
when sales are made

when goods are manufacturd
when order is recieved
when cash is recieved
when tenders are invited
The Correct Answer is : when sales are made
Module : Module B
Chapter : Chapter1
236. The term Expense;denotes Marks: 2+ 0.5-
cost of services and things used for generating revenue

payment or the icurings of a dept for an asset
cost which fails to proece revenue
all of the above
none of theabove
The Correct Answer is : cost of services and things used for generating revenue
Module : Module B
Chapter : Chapter1
237. in case of traditional approach the expense to be matched with revenue is based on
Marks: 2+ 0.5-
original cost
cast cost
replacement cost
all of the abvoe
none of the abvoe
The Correct Answer is : original cost
Module : Module B
Chapter : Chapter1
238. In case of gold and silver revenue is recognised in the accounting period in which it is
Marks: 2+ 0.5-
sold
deliverred
mined
all of the above
none of the abvoe
The Correct Answer is : mined
Module : Module B
Chapter : Chapter1
239. in long term contracsts revenur is generall y recognised Marks: 2+ 0.5-
only onm full compleetion of the contract

even when a part of the contract has been colmpleted
only when full cash is receivced
when contract is signed
none of the above
The Correct Answer is : even when a part of the contract has been colmpleted
Module : Module B
Chapter : Chapter1
240. which one of the following statement is true? Marks: 2+ 0.5-
matching concept requires that revenur should always be equal to the expenditure
the mercanntile system of accoucting is acceptable only for trader
hybrid system of accounting is not permitted as per income tax law in india
going concern concept assumes that the firm is making
the cost of self constructed fixed assets should be treated as revenue expenditure
The Correct Answer is : hybrid system of accounting is not permitted as per income tax
law in india
Module : Module B
Chapter : Chapter1
241. which one of the following statement is false? Marks: 2+ 0.5-
the accounting principle followed for financiall accounting are not applicaable for
manbagement accounting
the selection of a specific accounting policy is left to the discretion of the firm,
concerned
according to AS 4 cintingeney profits should not e recognised in financial stqatement
AS 1 is regarding disclosing disclosure of accounting pllicies
As 10 is regarding according accounting for fixed asseerts
The Correct Answer is : the accounting principle followed for financiall accounting are
not applicaable for manbagement accounting
Module : Module B
Chapter : Chapter1
242. the accounting period concept states that Marks: 2+ 0.5-
accounting year should be the same as financial years

the accounting period can be only one year
the accounting period should be the calender year
the accounting period should be different from the calender year
none of the above
The Correct Answer is : none of the above
Module : Module B
Chapter : Chapter1
243. In book-keeping , the transactions are recorded under .....types of accounts
Marks: 2+ 0.5-
Two
Three
Four
Five
Six
The Correct Answer is : Three
Module : Module B
Chapter : Chapter2
244. Sales book is maintained to record - Marks: 2+ 0.5-
all sales (cahs and credit)

all cash sales of goods only
all credit sales of goods only
All of the above
None of the above
The Correct Answer is : all credit sales of goods only
Module : Module B
Chapter : Chapter2
245. The periodic total of the sales book is posted to the Marks: 2+ 0.5-
Debit of Sales Account

Credit of Sales Account
Debit of Cash Account
Credit of Cash Account
None of the above
The Correct Answer is : Credit of Sales Account
Module : Module B
Chapter : Chapter2
246. Sales Account in ledger records- Marks: 2+ 0.5-
Only cash sales of merchandise

Only credit sales of merchandise
Both cash and credit sales of merchandise
Only credit sale of old assets
All of the above.
The Correct Answer is : Both cash and credit sales of merchandise
Module : Module B
Chapter : Chapter2
247. Withdrawals by propritor would - Marks: 2+ 0.5-
reduce liabilities and increase assets

reduce assets and increase liabilities
reduce both the assets and owner's equity
reduce owner's equity and increase laibilities
None of the above.
The Correct Answer is : reduce both the assets and owner's equity
Module : Module B
Chapter : Chapter2
248. Returns Inward Book is maintained to record - Marks: 2+ 0.5-
Return of goods purchased

Return of goods sold
Return of old assets sold
Return of anything purchased
Return of anything sold.
The Correct Answer is : Return of goods sold
Module : Module B
Chapter : Chapter2
249. Returns Outward Book is maintained to record - Marks: 2+ 0.5-
Return of goos pruchases

Return of old assets sold
Return of anything sold
The Correct Answer is : Return of goos pruchases
Module : Module B
Chapter : Chapter2
250. Returns Outward Book is mainteained to record- Marks: 2+ 0.5-
Return of goods purchased

Return of old assets purchased
Return of anything sold.
The Correct Answer is : Return of goods purchased
Module : Module B
Chapter : Chapter2
251. Salary Outstanding Account is a personal account Marks: 2+ 0.5-
True
False
Incomplete statement
All of the above
None of the above.
Module : Module B
Chapter : Chapter2
252. The amount of Rs. 5,000 paid to a transport company to carry a machine should be
debited to - Marks: 2+ 0.5-
Cash a/c
Machinery a/c
The Transport Caompany's a/c
Freight a/c
None of the above
The Correct Answer is : Freight a/c
Module : Module B
Chapter : Chapter2
253. Closing stock of office stationery is written in the - Marks: 2+ 0.5-
credit side on Trading a/c

credit side of P & L a/c
assets side of Balance Sheet
liabilities side of Balance sheet
None of the above
The Correct Answer is : assets side of Balance Sheet
Module : Module B
Chapter : Chapter2
254. Provision for discount on creditors will always show a debit balance. Marks: 2+ 0.5-
True
False
Incomplete statement
All of the above
None of the above
Module : Module B
Chapter : Chapter2
255. Sale of an old aset on credit at a price higher than written down value of the asset,
would - Marks: 2+ 0.5-
leave owner's equity unaffected

increae owner's equity to the extent of less vlaue
decrease owner's equity by the amount of sale
increase owner's equity to the extent of profit on sale
None of the above.
The Correct Answer is : increase owner's equity to the extent of profit on sale
Module : Module B
Chapter : Chapter2
256. Which one of the following statements is 'true'? Marks: 2+ 0.5-
Only a limited number of transactions affect the accounting equation.

The basic unit of accounting is a journal entry
Transaction analysis analyses the effect of transactions on the variables of the
accounting equation.
When the balance of an asset is to be reduced, the Asset a/c is to be debited.
Decreae in one asset with no change in capital will result in decreae in another asset.
The Correct Answer is : Transaction analysis analyses the effect of transactions on the
variables of the accounting equation.
Module : Module B
Chapter : Chapter2
257. The discount column of a triple-column cash Book records- Marks: 2+ 0.5-
cash discount
trade discount
bank discount
seasonal discount
quantity discount.
The Correct Answer is : cash discount
Module : Module B
Chapter : Chapter2
258. The appropriate book to record credit purchase of furniture is - Marks: 2+ 0.5-
Journal
Purchases Book
Cash Book
Petty Cash Book
Sales Book.
The Correct Answer is : Journal
Module : Module B
Chapter : Chapter2
259. Sales a/c Dr. To Trading a/cisan example of - Marks: 2+ 0.5-
Opening entry
Closing entry
Transaction entry
Adjustment entry
Rectification entry
The Correct Answer is : Closing entry
Module : Module B
Chapter : Chapter2
260. Posting is donw from Marks: 2+ 0.5-
ledger to ledger
one subsidiary book to another
ledger to subsidiary book
subsidiary book to ledger
None of the above
The Correct Answer is : subsidiary book to ledger
Module : Module B
Chapter : Chapter2
261. Ledger is a principle book in which - Marks: 2+ 0.5-
only real accounts are kept

only personal accounts are kept
only representative personal accounts are kept
only nominal accounts are kept
All account are kept
The Correct Answer is : All account are kept
Module : Module B
Chapter : Chapter2
262. Bills Receivable Book and Bills Payable book are- Marks: 2+ 0.5-
Principal Books
Ledger
Subsidiary Books
Memorandum Books
None of the above
The Correct Answer is : Subsidiary Books
Module : Module B
Chapter : Chapter2
263. The balance of Cash Account indicates Marks: 2+ 0.5-
Net loss for the period

Net profit for the period
Net cash on hand
Net worth of the business
Net amount due from debtors.
The Correct Answer is : Net cash on hand
Module : Module B
Chapter : Chapter2
264. Transferring the debit and creidt items from journal to their respective accounts in
the ledger is called - Marks: 2+ 0.5-
single entry
double entry
posting
balancing
invoicing
The Correct Answer is : posting
Module : Module B
Chapter : Chapter2
265. the amount and goods brought in by the proprietor in the business should be credited
to - Marks: 2+ 0.5-
Drawings Account
Cash account
Capital Account
Purchases Account
None of the above
The Correct Answer is : Capital Account
Module : Module B
Chapter : Chapter2
266. In case of debt becoming bad, the amount should be credited to - Marks: 2+ 0.5-
Provision of Bad Debts a/c

Bad Debts a/c
Sales a/c
Creditor's a/c
Debtor's a/c
The Correct Answer is : Debtor's a/c
Module : Module B
Chapter : Chapter2
267. The amount of salary paid to Mr. A should be debited to - Marks: 2+ 0.5-
Cash a/c
Salaries a/c
Mr. A's a/c
Outstanding Salaries a/c
None of the above
The Correct Answer is : Salaries a/c
Module : Module B
Chapter : Chapter2
268. Cash discount allowed to a debtor should be credited to - Marks: 2+ 0.5-
Sales a/c
Discount a/c
Cash a/c
Customer's a/c
None of the above
The Correct Answer is : Customer's a/c
Module : Module B
Chapter : Chapter2
269. The return of goods by a customer should be debited to- Marks: 2+ 0.5-
Goods a/c
Sales Returns a/c
Customer's a/c
Purchase Returns a/c
None of the above
The Correct Answer is : Sales Returns a/c
Module : Module B
Chapter : Chapter2
270. Sales made of Mr. X for should be debited to - Marks: 2+ 0.5-
Mr. X's a/c

Sales a/c
Cash a/c
Purchases a/c
None of the above.
The Correct Answer is : Cash a/c
Module : Module B
Chapter : Chapter2
271. Prepaid Expenditure a/c is Marks: 2+ 0.5-
Real Account
Natural Personal Account
Representative Personal Account
Nominal Account
None of the above
The Correct Answer is : Representative Personal Account
Module : Module B
Chapter : Chapter2
272. Loan taken from Khushboo should be credited to - Marks: 2+ 0.5-
Cash a/c
Bank a/c
Loan from Khushboo a/c
Khushboo's a/c
None of the above
The Correct Answer is : Loan from Khushboo a/c
Module : Module B
Chapter : Chapter2
273. Select the true statement from the follwing Marks: 2+ 0.5-
Every transaction is recorded first in the cash Book

Bank account is not a personal account
Narration is necessary
Drawing Accounts is a real acocunt
Journal is a book of original entry.
The Correct Answer is : Journal is a book of original entry.
Module : Module B
Chapter : Chapter2
274. Interest paid on borrowings is an example of - Marks: 2+ 0.5-
Real Account
Personal account
Nominal Account
All of the above.
None of the above
The Correct Answer is : Nominal Account
Module : Module B
Chapter : Chapter2
275. Interest received in advance is an example of - Marks: 2+ 0.5-
Real Account
Personal Account
Nominal Account
All of the above
None of the above
The Correct Answer is : Personal Account
Module : Module B
Chapter : Chapter2
276. Goodwill Account is an example of - Marks: 2+ 0.5-
Real (tangible)account
Real (intangible) account
Personal account
Nominal account
None of the above
The correct Answer is : Real (intangible) account
Module : Module B
Chapter : Chapter2
277. The debit balance is cash Account indicates- Marks: 2+ 0.5-
Total csh received

Total cash paid
Net income
Cash in hand
None of the above
The Correct Answer is : Cash in hand
Module : Module B
Chapter : Chapter2
278. Cash Account is a - Marks: 2+ 0.5-
Nominal Account
Real Account
Personal account
All of the above
None of the above
The Correct Answer is : Real Account
Module : Module B
Chapter : Chapter2
279. Debit entries will increaes the balance of - Marks: 2+ 0.5-
Purchaes Accounts
Plant & Machinery Accounts
(i) and (ii) both
Sales Accounts
Purchase Returns Accounts
The Correct Answer is : (i) and (ii) both
Module : Module B
Chapter : Chapter2
280. Debit entries will decrease the balance of - Marks: 2+ 0.5-
Salaries Accounts
Furniture Account
Bank Account
Cash Account
Capital Account
The Correct Answer is : Cash Account
Module : Module B
Chapter : Chapter2
281. Debit entires will decrease the balance of - Marks: 2+ 0.5-
Salaries Account
Furniture Account
Bank Account
Cash Account
Capital Account
Module : Module B
Chapter : Chapter2
282. Debit entries will decrease the balance of - Marks: 2+ 0.5-
Salaries Account
Furniture Account
Bank Account
Cash Account
Capital Account
Module : Module B
Chapter : Chapter2
283. Credit entries will increase the balance of - Marks: 2+ 0.5-
Goodwill Account
Purchases Account
Sales Returns Account
Bank Overdraft
None of the above.
The Correct Answer is : Bank Overdraft
Module : Module B
Chapter : Chapter2
284. Credit entries will decrease the balance of- Marks: 2+ 0.5-
Capital Account
Cash Account
Purchases Return Account
(i) and (ii) both
(i) and (iii) both.
The Correct Answer is : Cash Account
Module : Module B
Chapter : Chapter2
285. Cash discount is allowed on - Marks: 2+ 0.5-
Purchases
sales
as a commission for sales
prompt payment
All of the above
The Correct Answer is : prompt payment
Module : Module B
Chapter : Chapter2
286. Cash Books is a - Marks: 2+ 0.5-
subsidiary journal
subsidiary journal and ledger account
ledger account
All of the above
None of the above.
The Correct Answer is : ledger account
Module : Module B
Chapter : Chapter2
287. Purchase Book is maintained to record - Marks: 2+ 0.5-
all cahs purchases

all credit purchases
all purchases of goods
all credit purchases of goods
All of the above.
The Correct Answer is : all credit purchases of goods
Module : Module B
Chapter : Chapter2
288. The periodic totoal of purchases of goods is posted to - Marks: 2+ 0.5-
debit of Cash Acocunt

debit of Purchase Account
credit of Cash Account
credit of Purchase Account
None of the above.
The Correct Answer is : debit of Purchase Account
Module : Module B
Chapter : Chapter2
289. The debit balance of Petty Cash Book is- Marks: 2+ 0.5-
an expense
an asset
a liability
a gain
an income
The Correct Answer is : an asset
Module : Module B
Chapter : Chapter2
290. The term 'Imprest System' is used in relation to - Marks: 2+ 0.5-
Purchases Book
Sales Book
Cash Book
Petty Cash Book
All of the above.
The Correct Answer is : Petty Cash Book
Module : Module B
Chapter : Chapter2
291. Mr. A sold some old machinery not in use having book value as zero, for Rs. 10,000.
It will be credited to - Marks: 2+ 0.5-
Sales Account
Trading Account
Profit on sale of fixed assets
All of the above
None of the above.
The Correct Answer is : Profit on sale of fixed assets
Module : Module B
Chapter : Chapter2
292. Mr. A purchased fixed assets with the available cash. This transaction would -
Marks: 2+ 0.5-
reduce current assets and current liabilities

reduce current assets and increase fixed assets
reduce current assets and reduce fixed assets
reduce current assets and increase current liabilities
keep current assets and fixed assets unchanged.
The Correct Answer is : reduce current assets and increase fixed assets
Module : Module B
Chapter : Chapter2
293. The system of double entry is based on the principle thate- Marks: 2+ 0.5-
Double voucher is prepared to record the transaction

Head of one account is debited or credited twice
Every transaction has two-fold effect and it affects two accounts in opposite direction
All of the above
None of the above
The Correct Answer is : Every transaction has two-fold effect and it affects two accounts
in opposite direction
Module : Module B
Chapter : Chapter2
294. Double entry system of book-keeping refers to a system where - Marks: 2+ 0.5-
Each trasaction is recorded in two sets of account books.

The number of accounts with a debit balance must agree with the number of accounts
with credit balance.
Each transaction is recorded twice-once in journal and then in ledger
Each debit and credit entries are passed for each transaction .
All of the above.
The Correct Answer is : Each debit and credit entries are passed for each transaction .
Module : Module B
Chapter : Chapter2
295. Debit signifies - Marks: 2+ 0.5-
Increase in assets accounts

Decrease in capital account
Decrease in liabilities accounts
All of the above
None of the above
Module : Module B
Chapter : Chapter2
296. Credit signifies - Marks: 2+ 0.5-
Increase in assets accounts

Decrease in capital account
Increase in liabilities accounts
All of the above
None of the above
The Correct Answer is : Increase in liabilities accounts
Module : Module B
Chapter : Chapter2
297. In double entry sytstem of book-keeping, every business transaction affects -
Marks: 2+ 0.5-
One account
Two accout
Debit and credit side of the same account
All of the above
None of the above.
The Correct Answer is : Two account
Module : Module B
Chapter : Chapter2
298. In book-keeping, posting means - Marks: 2+ 0.5-
To record the transactionw with the help of a voucher

To record the transactionw with the help of other records
To record the transactionw in the books of original entry
To record the transactionw from the books of original entry to the ledger
All of the above
The Correct Answer is : To record the transactionw from the books of original entry to
the ledger
Module : Module B
Chapter : Chapter2
299. Real account srelate to - Marks: 2+ 0.5-
Expenses
Incomes
Assets
Liabilities
Debtors and Creditors.
The Correct Answer is : Assets
Module : Module B
Chapter : Chapter2
300. Personal accounts relate to - Marks: 2+ 0.5-
Expenses and Incomes

Assets and Liabilities
Debtors and creditors
All of the above
None of the above
The Correct Answer is : Debtors and creditors
Module : Module B
Chapter : Chapter2
301. The basic rule of Book-keeping-debit and expenses/Losses and credit the
income/gains is applicable to - Marks: 2+ 0.5-
Real Accounts
Personal Accounts
Nominal Accounts
All of the above
None of the above.
The Correct Answer is : Nominal Accounts
Module : Module B
Chapter : Chapter2
302. Which of the following events is not a business transaction? Marks: 2+ 0.5-
Withdrawas of goods by the proprietor for domestic use

Purchase of goods on credit
Making promise to supply goods
Loss of goods by theft
Sale of goods for cash
The Correct Answer is : Making promise to supply goods
Module : Module B
Chapter : Chapter2
303. Wages owing is - Marks: 2+ 0.5-
Real Account
Personal Account
Nominal Account
All of the above
None of the above
Module : Module B
Chapter : Chapter2
304. goods drawn by the proprietor from the business fro personal use - Marks: 2+ 0.5-
Increase assets andecreases expenses

Increases assets and decreases liabilities
Increases capital and decreases assets
Increases liabilities and decreases assets
None of the above.
Module : Module B
Chapter : Chapter2
305. Interest on drawings - Marks: 2+ 0.5-
Increases expenses and decreases liabilit

Increases liability and decreaes capital
Increases assets and decreases capital
Increases revenues and decreases capital
All of the above
The Correct Answer is : Increases revenues and decreases capital
Module : Module B
Chapter : Chapter2
306. Recovery of bad debts previously written off Marks: 2+ 0.5-
Increases revenue and assets

Increases expenses and assets
Increaes assets and capital
Decreaes assets and excpenses
Decreases revenue and assets
The Correct Answer is : Increases revenue and assets
Module : Module B
Chapter : Chapter2
307. Rs. 5,000 received from Ramesh, whose account was previously written off as bad
debts, should be credited to - Marks: 2+ 0.5-
Bad Debts a/c

Bad Debts Recovered a/c
Bad Debts Provision a/c
Ramesh a/c
None of the above
The Correct Answer is : Bad Debts Recovered a/c
Module : Module B
Chapter : Chapter2
308. A balance sheet discloses - Marks: 2+ 0.5-
Cash position of the business

Financial position of the business
Profit earning capacity of the busiess
Risk taking capacity of the business
All of the above
The Correct Answer is : Financial position of the business
Module : Module B
Chapter : Chapter2
309. Cost of sales is Rs. 40,000 net sales amount to Rs. 60,000 and Closing stock is valued
at Rs. 10,000. The gross profit will be - Marks: 2+ 0.5-
Rs. 10,000
Rs. 20,000
Rs. 30,000
Rs. 40,000
Rs. 40,000
Module : Module B
Chapter : Chapter2
310. If a receipt of rs. 20,000 from Manan (our debtor) has not been recorded in the
books, the profit will show - Marks: 2+ 0.5-
An increase of Rs. 20,000

A decrease of rs. 20,000
Neither an increae nor a decrese
An increae of Rs. 10,000
A decreae of Rs. 10,000
The Correct Answer is : Neither an increae nor a decrese
Module : Module B
Chapter : Chapter2
311. Cash Book records- Marks: 2+ 0.5-
all transactions
all cash transactions
all credit transactions
all non-cash transactions
None of the above
The Correct Answer is : all cash transactions
Module : Module B
Chapter : Chapter2
312. Discount column of Cash Book is - Marks: 2+ 0.5-
balanced
totalled
either balanced or totalled
neither balanced nor totalled
sometimes balanced, sometimes totalled
The Correct Answer is : totalled
Module : Module B
Chapter : Chapter2
313. Cash Book does not record- Marks: 2+ 0.5-
credit purchased
credit sales
outstanding expenses
accrued income
All of the above.
Module : Module B
Chapter : Chapter2
314. Cash column of the Cash Book always has a - Marks: 2+ 0.5-
debit balance
credit balance
either debit or credit balance
neither debit nor credit balance
None of the above.
The Correct Answer is : debit balance
Module : Module B
Chapter : Chapter2
315. Bank column of the Cahs Book has - Marks: 2+ 0.5-
debit balance
credit balance
either debit or credit balance
neither debit or credit balance
None of the above.
The Correct Answer is : either debit or credit balance
Module : Module B
Chapter : Chapter2
316. All credit transactions are recorded at ....side of the cash Book. Marks: 2+ 0.5-
debit
credit
either debit or credit
neither debit nor credit
Noen of the above.
The Correct Answer is : neither debit nor credit
Module : Module B
Chapter : Chapter2
317. Which of the following is a contra entry? Marks: 2+ 0.5-
Selling goods for cash

Receiving cash from Suresh and allowing him discount
Depositing cheque into the bank which was received the same day
Depositing cheque into the bank which was received the proviious day
All of the above.
The Correct Answer is : Depositing cheque into the bank which was received the
proviious day
Module : Module B
Chapter : Chapter2
318. Petty Cash Book records- Marks: 2+ 0.5-
Petty expenses
Petty expenses paid in cash
all expenses
outstanding expenses
All of the above.
The Correct Answer is : Petty expenses paid in cash
Module : Module B
Chapter : Chapter2
319. Which of the following accounts will invariably have a debit balance? Marks: 2+ 0.5-
Bank Account
Current Account of a Partner
Accounts Receivables
Accounts Payable
None of the above.
The Correct Answer is : Accounts Receivables
Module : Module B
Chapter : Chapter2
320. Errors detected before the preparation of trial balance will be rectified- Marks: 2+ 0.5-
by opening suspense a/c

without opening Suspense a/c
by tranferring to Trading a/c
by transferring to p&L a/c
None of the above
The Correct Answer is : without opening Suspense a/c
Module : Module C
Chapter : Chapter1
321. Suspense a/c in the trial balance will be entered in the- Marks: 2+ 0.5-
Trading a/c
P & L a/c
Manufacturing a/c
Balance sheet
None of the above
The Correct Answer is : Balance sheet
Module : Module C
Chapter : Chapter1
322. Which one of the following is a true statement ? Marks: 2+ 0.5-
Errors of principle affect the agreement of the trial balance

If the two sides of trial balance tally, the books of accounts can be taken as absolutely
accurate
Errors of commission are commited in those case where proper distinction between
revenue and capital items is not made
All errors affect the agreement of the trial balance
Errors of omission do not affect the agreement of the trial balance
The Correct Answer is : Errors of omission do not affect the agreement of the trial
balance
Module : Module C
Chapter : Chapter1
323. Which one of the following is a false statement ? Marks: 2+ 0.5-
In case of compensating error, one error neutralises the effect of the other error.
Undercasting the purchases book is the error of commission
Errors of principle cannot be detected by trial balance
Errors of complete omission cannot be detected by trial balance
All errors affect the agreement of the trial balance
The Correct Answer is : All errors affect the agreement of the trial balance
Module : Module C
Chapter : Chapter1
324. A trial balance is a- Marks: 2+ 0.5-
real account
personal account
nominal account
list of balance of all account
list of assets and liablities
The Correct Answer is : list of balance of all account
Module : Module C
Chapter : Chapter1
325. A trial balance checks- Marks: 2+ 0.5-
honesty of the accountant

honesty of the owners
arithmethic accuracy of books
All of the above
None of the above
The Correct Answer is : arithmethic accuracy of books
Module : Module C
Chapter : Chapter1
326. The following can be detected by preparing a trial balance- Marks: 2+ 0.5-
errors of principle
errors of omission
errors of commision
errors of compensation
None of the above
The Correct Answer is : None of the above
Module : Module C
Chapter : Chapter1
327. In trial balance, an outstanding expenditure account will show a- Marks: 2+ 0.5-
debit balance
credit balance
sometimes debit and sometimes credit balance
only nil balance
None of the above
The Correct Answer is : credit balance
Module : Module C
Chapter : Chapter1
328. Wrong balancing of account is- Marks: 2+ 0.5-
error of principle
error of omission
error of commission
error of compensation
None of the above
The Correct Answer is : error of commission
Module : Module C
Chapter : Chapter1
329. Bills Receviable a/c and Bills Payable a/c are a part of- Marks: 2+ 0.5-
Journal
Ledger
Trading a/c
P&L
Balance sheet
The Correct Answer is : Ledger
Module : Module C
Chapter : Chapter1
330. Bills Receivable Book and bills payable Book are- Marks: 2+ 0.5-
principle Books
Subsidiary Books
Books containing names and addresses of debtors and creditors
Books containing blank forms of bills of exchang
None of the above
The Correct Answer is : Subsidiary Books
Module : Module C
Chapter : Chapter1
331. Retiring a bill under a rebate means- Marks: 2+ 0.5-
paying the bill on due date

paying the bill before due date
paying the bill after due date
dishonouring the bill
accepting a new bill
The Correct Answer is : paying the bill before due date
Module : Module C
Chapter : Chapter1
332. Rent paid to landlord amounting to Rs.700 was credited to Rent a/c with Rs.7000. In
the rectification entry, Rent a/c will be debited with- Marks: 2+ 0.5-
Rs.700
Rs.7000
Rs.6300
Rs.7700
None of the above
Module : Module C
Chapter : Chapter1
333. A watch purchased for Rs.3,000 for the son of a partner, was debited to trade
expenses account with Rs.300. The partners drawing account should be debited in the
rectifying entry with- Marks: 2+ 0.5-
Rs.300
Rs.2700
Rs.3300
Rs.5700
Rs. 3000
Module : Module C
Chapter : Chapter1
334. wages paid for repairs to plant should be debited to- Marks: 2+ 0.5-
wages a/c
Repairs a/c
plant a/C
Cash a/c
None of the above
The Correct Answer is : Repairs a/c
Module : Module C
Chapter : Chapter1
335. Asha's a/c, instead of being debited with Rs. 5,000 has wrongly been credited with
Rs.5,000. it should be debited in the rectifying entry with- Marks: 2+ 0.5-
half amount
same amount
double amount
triple amount
None of the above
The Correct Answer is : double amount
Module : Module C
Chapter : Chapter1
336. A firm dealing in furniture debits Furniture a/c on purchasing furniture for cash or on
credit. It is an error of- Marks: 2+ 0.5-
principle
omission
commission
compensation
None of the above
The Correct Answer is : principle
Module : Module C
Chapter : Chapter1
337. Sales to Mohan Rs. 445 posted to his account as Rs.544, would affect- Marks: 2+ 0.5-
Cash a/c
Sales a/c
Mohan a/c
All of the above
None of the above
The Correct Answer is : Mohan a/c
Module : Module C
Chapter : Chapter1
338. sales to sohan Rs. 5000 not recorded in the books would affect- Marks: 2+ 0.5-
cash a/c
sales a/c
sohan a/c
Both Cash a/c and Sales a/c
Both sales a/c and Sohan's a/c
The Correct Answer is : Both sales a/c and Sohan's a/c
Module : Module C
Chapter : Chapter1
339. Goods purchased from Mr.X for Rs.10,000 was passed through the sales Books . The
rectification of error will Marks: 2+ 0.5-
increase in gross profit

decrease in gross profit
no effect on gross profit
decrease in balance of Purchases a/c
None of the above
The Correct Answer is : decrease in gross profit
Module : Module C
Chapter : Chapter1
340. A sumof Rs.3,000 written off as bad debts now received, cedited to the debtor oul;d
result in- Marks: 2+ 0.5-
increase the net profit by Rs. 3000

decrease the net profit by Rs. 3000
no effect on net profit
increase in the balance of debtor's account
None of the above
The Correct Answer is : decrease the net profit by Rs. 3000
Module : Module C
Chapter : Chapter1
341. Carriage charges paid for a new plant purchased, if debited to carriage a/c would
affect- Marks: 2+ 0.5-
cash a/c
carriage a/c
Plant a/c
cash a/c and Carriage a/c
carriage a/c and plant a/c
The Correct Answer is : carriage a/c and plant a/c
Module : Module C
Chapter : Chapter1
342. An amount of Rs. 1000 receivedfrom Mr. Sanjay credited to sanjeev's a/c would
affect- Marks: 2+ 0.5-
sanjay's a/c
sanjeev's a/c
Cash a/c
Both sanjay's a/c and sanjeev's a/c
None of the above
The Correct Answer is : Both sanjay's a/c and sanjeev's a/c
Module : Module C
Chapter : Chapter1
343. A sale of Rs. 2000 to Mr. X recorded in the Purchases Book would affect- Marks: 2+
0.5-
Purchases a/c
sales a/c
Purchases a/c and Cash a/c
sales a/c and Cash a/c
Purchases a/c, Sales a/c and Mr.X's a/c
The Correct Answer is : Purchases a/c, Sales a/c and Mr.X's a/c
Module : Module C
Chapter : Chapter1
344. Thye different in the debit and credit side of trial balance is transferred to- Marks: 2+
-
0.5
Difference a/c
suspense a/c
Capital a/c
Profit & loss a/c
None of the above
The Correct Answer is : suspense a/c
Module : Module C
Chapter : Chapter1
345. Bank Reconciliation Statement is - Marks: 2+ 0.5-
A ledger account
A Part of cash book with bank column
A statement showing the causes of difference between the cash book and the Pass book
balances
All of the above
None of the above.
The Correct Answer is : A statement showing the causes of difference between the cash
book and the Pass book balances
Module : Module C
Chapter : Chapter1
346. Bank Reconciliation Statement may be Prepared with the balance of Marks: 2+ 0.5-
Cash Book
Pass Book
Either Cash Book or Pass Book
Neither Cash Book nor Pass Book
None of the above.
The Correct Answer is : Either Cash Book or Pass Book
Module : Module C
Chapter : Chapter1
347. The debit balance of Pass Book shows- Marks: 2+ 0.5-
deposit (Plus) balance

overdraft (minus) balance
either deposit or overdraft balance
neither deposit nor overdraft balance
None of the above.
The Correct Answer is : overdraft (minus) balance
Module : Module C
Chapter : Chapter1
348. Pass Book is Marks: 2+ 0.5-
a copy of receipts and Payments of the firm

a copy of the firm's ledger account maintained by the bank
a copy of the banking transactions entered in the Cash Book
a record of all transactions
a record of withdrawals from the bank.
The Correct Answer is : a copy of the firm's ledger account maintained by the bank
Module : Module C
Chapter : Chapter1
349. Overdraft facility is available only in- Marks: 2+ 0.5-
Savings Bank Account

Current Account
Recurring Deposit Account
Fixed Deposit Account
All of the above.
The Correct Answer is : Current Account
Module : Module C
Chapter : Chapter1
350. The bank balance is treated as plus (dposit) balance if it is a- Marks: 2+ 0.5-
debit balance of Cash Boook

credit balance of Pass Book
both (i) and (ii)
credit balance of Cash Book
debit balance of pass Book.
The Correct Answer is : both (i) and (ii)
Module : Module C
Chapter : Chapter1
351. Bank column in Cash Book shows a credit balance, What does it mean? Marks: 2+ 0.5-
there must be un-deposited cash

There is overdraft balance
There must be some crror in recording
Cashier has embezzled cash
None of the above.
The Correct Answer is : There is overdraft balance
Module : Module C
Chapter : Chapter1
The balance as shown by the Bank Pass Book and the balance as shown by the bank
column of Cash Book are always equal.
Cheques issued but no presented will reduce the balance as per Pass Bank.
Pass Book is the statement of account maintained by the customer of the bank
Favourable balance as per Cash Book means credit balance in the bank column of Cash
Book
When money is withdrawn from the bank, the Bank debits the Customer's Account.
The Correct Answer is : When money is withdrawn from the bank, the Bank debits the
Customer's Account.
Module : Module C
Chapter : Chapter1
353. Which one of the following statements is 'false' Marks: 2+ 0.5-
Pass Book is the statement of Account of the customer maintained by the bank
Cheques sent for collection but not yet collected will result in increasing the balance of
the Cash Book
The Bank Reconciliation Statement is Prepared to reconcile the balance as shown by
Cash Book and the balance as shown by Pass Book
Direct collections received by the bank on half of its customer will decrease the balance
as per the Cash Book
Cheques issued but not presented for payment will increase the balance as Per Pass
Book
The Correct Answer is : Direct collections received by the bank on half of its customer
will decrease the balance as per the Cash Book
Module : Module C
Chapter : Chapter1
354. A bank reconciliation statement is prepared to know the causes for the difference
between- Marks: 2+ 0.5-
the balance as per cash column of the Cash Book and Pass Book
the balance as per bank column of the Cash Book and Pass Book
both (i) and (ii)
neither (i) nor (ii)
None of the above.
The Correct Answer is : the balance as per bank column of the Cash Book and Pass Book
Module : Module C
Chapter : Chapter1
355. A bank reconcilitation statement is Marks: 2+ 0.5-
Part of Cash Book

Part of Bank Book Account
A separate statement
a separate statement attached to Cash Book
None of the above.
The Correct Answer is : A separate statement
Module : Module C
Chapter : Chapter1
356. A bank reconciliation statement is prepared by- Marks: 2+ 0.5-
bank
customer of the bank
creditors
government
All of the above.
The Correct Answer is : customer of the bank
Module : Module C
Chapter : Chapter1
357. A bank reconciliation statement is prepared with the help of- Marks: 2+ 0.5-
bank pass book and bank column of cash book

bank pass book cash coumn of cash book
bank pass book and petty cash book
All of the above
None of the above.
The Correct Answer is : bank pass book and bank column of cash book
Module : Module C
Chapter : Chapter1
358. If you start with the cash book deposit balance in a bank reconciliation statement,
which items will you add ? Marks: 2+ 0.5-
Cheques issued but not yet Presented for Payment

Accounts directly deposited by a customer into bank
Interest allowed by the bank
Inerest charged by the bank
(i), (ii), and (iii).
The Correct Answer is : (i), (ii), and (iii).
Module : Module C
Chapter : Chapter1
359. If you start with cash book deposit balance in a bank reconciliation statement, which
item/items will you deduct? Marks: 2+ 0.5-
Dishonoured cheques
Discounted bills dishonoured
Dividend on shares collected by bank
(i) and (ii)
(i) and (ii)
The Correct Answer is : (i) and (ii)
Module : Module C
Chapter : Chapter1
Normally if Cash Book shows a debit balance, Pass Book also shows a debit balance
A credit entry in Pass Book means a credit entry in Cash Book
For a dishonoured cheque, bank account is debited.
When a customer directly pays into bank, bank Account is debilted.
None of the above
The Correct Answer is : When a customer directly pays into bank, bank Account is
debilted.
Module : Module C
Chapter : Chapter1
Debit balance in Pass Book means overdraft.

bank Pass Book is a copy of customer's account in the books of bank
For a dishonoured cheque, bank account is debited.
A debit entry in Pass Book means a credit entry in Cash Book
A bank reconciliation statement is prepared to find out the causes of difference between
the balance of Cash Book and Pass Book
The Correct Answer is : For a dishonoured cheque, bank account is debited.
Module : Module C
Chapter : Chapter1
362. The main purpose of preparing a Bank Reconciliation on Statement is- Marks: 2+ 0.5-
to know the Cash Book Balance
to know the Pass Book Balance
to compare the transactions in the Cash Book and Pass Book
to correct the Cash Book
to reconcile Balance as Per Cash Book with the Pass Book Balance
The Correct Answer is : to reconcile Balance as Per Cash Book with the Pass Book
Balance
Module : Module C
Chapter : Chapter1
363. Bank Reconciliation Statement is a- Marks: 2+ 0.5-
separate statement
ledger account
sub-division of journal
Part of Cash Book
compulsory statement under law
The Correct Answer is : separate statement
Module : Module C
Chapter : Chapter1
364. Unfavourable bank balance means- Marks: 2+ 0.5-
debit balance in Cash Book

debit balance in Pass Book
credit balance in Cash Book
credit balance in Pass Book
both (ii) and (iii)
The Correct Answer is : both (ii) and (iii)
Module : Module C
Chapter : Chapter1
365. A cheque received and deposited in the book on the same day is recorded in the
Marks: 2+ 0.5-
bank column of Cash Book

cash column of Cash Book
both (i) and (II)
discount column of Cash Book
all the three column of Cash Book
The Correct Answer is : bank column of Cash Book
Module : Module C
Chapter : Chapter1
366. An amount of Rs. 5,000 is debited twice in the Pass Book. When overdraft balance as
Per the Cash Book is the starting Point- Marks: 2+ 0.5-
Rs. 5,000 will be added

The Correct Answer is : Rs. 5,000 will be added
Module : Module C
Chapter : Chapter1
367. Which one of the following statement is 'true'? Marks: 2+ 0.5-
Pass Book overdraft will be less than Cash Book overdraft if there are cheques
deposited but not collected by the bank
If the Payment side of the Cash Book is undercast, Cash Book overdraft will be more
than the Pass Book overdraft
When there are cheques unpresented, favourable balances Per Cash Book will be less
than that of the Pass Book
When a banker collectes bills and credits the account, Pass Book overdraft shows higher
balance than the Cash Book overdrft balance
Pass Book is a copy of Cash Book as Prepared by the customer of the bank
The Correct Answer is : When there are cheques unpresented, favourable balances Per
Cash Book will be less than that of the Pass Book
Module : Module C
Chapter : Chapter1
368. Which one of the following statements is 'false'? Marks: 2+ 0.5-
pass book is a copy of customer's account in the ledger of the bank

Normally, if the Pass Book shows credit balance, the Cash Book shows debit balance
Unfavourable bank balacne means debit balance in Pass Book and credit balance in Cash
Book
Unfavouable bank balance means credit balane in Pass Book and debit balance in Cash
Book
Favourable bank balance means credit balance in Pass Book and debit balance in Cash
Book
The Correct Answer is : Unfavourable bank balance means credit balane in Pass Book
and debit balance in Cash Book
Module : Module C
Chapter : Chapter1
369. Goods of Rs. 2,000 returned to Mr. Y, entered in the Sales Book would affect -
Marks: 2+ 0.5-
Y's a/c
Purchases a/c
(Purchase Returns a/c
Sales a/c
Purchase Returns a/c and Sales a/c
The Correct Answer is : Purchase Returns a/c and Sales a/c
Module : Module C
Chapter : Chapter2
370. Debiting Wages a/c for wages paid for the construction of building is - Marks: 2+ 0.5-
error of principle
error of omission
error of commission
compensation error
None of the above.
The Correct Answer is : error of principle
Module : Module C
Chapter : Chapter2
371. a fixed asset purchased on credit has been wrongly recorded in the purchases book.
The following rectification entry will be passed - Marks: 2+ 0.5-
debit Purchases a/c / credit Fixed Asset a/c

debit Fixed Asset a/c / credit Purchases a/c
debit Fixed Asset a/c / credit Supplier's a/c
debit Supplier's a/c / credit Fixed Asset a/c
debit Purchase a/c / credit Supplier's a/c.
The Correct Answer is : debit Fixed Asset a/c / credit Purchases a/c
Module : Module C
Chapter : Chapter2
372. An amount spent on the repairs of the building has been debited to building a/c. The
following rectification entry will be passed- Marks: 2+ 0.5-
debit building a/c credit Cash a/c

debit Building a/c credit Repairs a/c
debit Repairs a/c / credit Building a/c
debit Repairs a/c / credit Cash a/c
debit Cash a/c / credit Repairs a/c
The Correct Answer is : debit Repairs a/c / credit Building a/c
Module : Module C
Chapter : Chapter2
373. Rs. 5,000 paid as salary to Mr. X- a clerk has been debited to his personal account.
The rectification entry will be - Marks: 2+ 0.5-
debit Cash a/c / credit Salary a/c

debit Salary a/c / credit Cash a/c
debit Mr. X's a/c / credit Cash a/c
debit Salary a/c / credit Mr. X's a/c
None of the above.
The Correct Answer is : debit Salary a/c / credit Mr. X's a/c
Module : Module C
Chapter : Chapter2
374. A sales of old car amounting to Rs. 20,000 has been credited to Sales a/c Pass the
rectification entry- Marks: 2+ 0.5-
debit cash and credit car

debit car and credit cash
debit car and credit sales
debit sales and credit car
debit slaes and credit cash.
The Correct Answer is : debit sales and credit car
Module : Module C
Chapter : Chapter2
375. Rs. 5,000 received from A but wrongly credited to B's account. The entry can be
corrected as - Marks: 2+ 0.5-
debit cash and credit A

debit cash and credit B
debit A and credit B
debit B and credit A
None of the above.
The Correct Answer is : debit B and credit A
Module : Module C
Chapter : Chapter2
376. Rs. 1,000 was posted to Depreciation a/c as depreciation on furniture but was not
posted to Furniture a/c. If total of debit side of the trial balance is Rs. 13,000, what should
it be after rectification of error? Marks: 2+ 0.5-
Rs. 12,000
Rs. 13,000
Rs. 14,000
Rs. 15,000
None of the above.
Module : Module C
Chapter : Chapter2
377. Purchases boo is overcast by Rs. 10,000. The present gross profit is Rs. 90,000. What
would be the correct amount of gross profit after rectification of the error? Marks: 2+ 0.5-
Rs. 80,000
Rs. 90,000
Rs. 1,00,000
Rs. 1,10,000
None of the above.
Module : Module C
Chapter : Chapter2
378. A sales of Rs. 3,000 to Mr. X has been omitted from recording in the Sales Book. The
existing total of debit side of the trial balance is Rs. 2,00,00. What will be the total of
credit side, presently? Marks: 2+ 0.5-
Rs 2,03,000
Rs. 1,97,000
Rs. 2,06,000
Rs. 1,94,000
None of the above.
Module : Module C
Chapter : Chapter2
379. No adjustment entry was passed for an amount of Rs. 500 relating to outstanding
salary. The gross profit which is presently Rs. 18,500 will now be- Marks: 2+ 0.5-
Rs. 19,000
Rs. 17,500
Rs. 19,500
Rs. 18,000
No change.
The Correct Answer is : No change.
Module : Module C
Chapter : Chapter2
380. Discount amounting to Rs. 100 allowed by the creditors has been posted to the debit
to Discount a/c. By how much amount will the total of credit side of trial balance increase
after rectification? Marks: 1+ 0.25-
Nil
Rs. 100
Rs. 200
- Rs. 100
_ Rs. 200.
Module : Module C
Chapter : Chapter2
381. Rs. 140 discount allowed to a customer wrongly credited to Discount a/c, Total of
debit side of the trial balance is Rs. 39,280. What should it be after rectification?
Marks: 2+ 0.5-
Rs. 39,340
Rs. 39,420
Rs. 39,560
Rs. 39,400
None of the above.
Module : Module C
Chapter : Chapter2
382. Which account is generally prepared for rectification of errors? Marks: 2+ 0.5-
Adjustment a/c
Memorandum a/c
Profit & Loss a/c
Rectification a/c
Suspense a/c
The Correct Answer is : Suspense a/c
Module : Module C
Chapter : Chapter2
383. Errors of principle arise when- Marks: 2+ 0.5-
there is an omission of transaction

there is a commission of transaction
wrong amounts are entered in the books
transactions are entered in wrong subsidiary books.
Proper distinction is not made between capital and revenue items.
The Correct Answer is : Proper distinction is not made between capital and revenue
items.
Module : Module C
Chapter : Chapter2
384. Preparation of trial balance helps in detecting the - Marks: 2+ 0.5-
errors of principle
errors of omission
errors of commission
compensation errors
clerical errors.
The Correct Answer is : clerical errors.
Module : Module C
Chapter : Chapter2
385. Which one of the following errors will affect the agreement of the trial balance?
Marks: 2+ 0.5-
Cash sale of furniture credited to Sales a/c.

A sale of Rs. 500 to Mr. Entered in sale Book as Rs. 5,000.
Purchase of Rs. 5,000 credited to Charat instead of Bharat.
A sales return of Rs. 2,000 correctly entered in the sales Returns Book but posted to the
debit side of Seema.
None of the above.
The Correct Answer is : A sales return of Rs. 2,000 correctly entered in the sales Returns
Book but posted to the debit side of Seema.
Module : Module C
Chapter : Chapter2
386. Goods worth Rs. 1,000 returned by Bhanu were taken into stock, but on entry was
passed. This is an error of- Marks: 2+ 0.5-
calculation
compensation
commission
omission
principle
The Correct Answer is : omission
Module : Module C
Chapter : Chapter2
387. Which one of the following is an error of principle? Marks: 2+ 0.5-
cash sale of Rs. 200 wrongly entered in Sales Book.

Sales of Rs. 200 entered in the books as Rs. 2,000
Purchase of Rs. 2,000 entered in the books as Rs. 200
Purchase transaction entered in Purchases Return Book.
Debiting Repairs a/c instead of Furniture a/c
The Correct Answer is : Debiting Repairs a/c instead of Furniture a/c
Module : Module C
Chapter : Chapter2
388. Which one of the following statements is 'true' ? Marks: 2+ 0.5-
Revenue expenditure treated as capital expenditure or vice-versa, is an example of

error of commission.
In Book-Keeping, error are rectified by striking off the wrong figure and replacing it
with the correct figure.
Entering the wrong amount in the subsidiary books affects the agreement of the trial
balance.
Every type of error affects the agreement of the trial balance
Over-casting and Under-casting of a subsidiary books are the examples of errors of
commission.
The Correct Answer is : Over-casting and Under-casting of a subsidiary books are the
examples of errors of commission.
Module : Module C
Chapter : Chapter2
Short debit to an account increases the credit side of the trial balance.
Excess debit to an account is rectified by debiting by debiting the amount to the
account.
Some errors affect the agreement of trial balance while other do not.
An error of omission arises due to not writing the transaction in the books.
A transaction relating to sale of an asset being entered in Sales Book is an
The Correct Answer is : Excess debit to an account is rectified by debiting by debiting
the amount to the account.
Module : Module C
Chapter : Chapter2
390. Select the capital expenditure- Marks: 2+ 0.5-
Carriage paid on goods purchased

Legal expenses incurred for abuse of trade mark
Payment of compensation to a discharged employee
Repairs to motor-car
Expenditure incurred on issue of equity shares.
The Correct Answer is : Expenditure incurred on issue of equity shares.
Module : Module C
Chapter : Chapter3
391. An expenditure is a capital expenditure because- Marks: 2+ 0.5-
the amount is very large

the amount is paid in lump-sum
it is intended to benefit in the current period
it is intended to benefit in the future period
None of the above.
The Correct Answer is : it is intended to benefit in the future period
Module : Module C
Chapter : Chapter3
392. An expenditure is a revenue expenditure because- Marks: 2+ 0.5-
the amount is very small

the amount is paid in instalments
None of the above.
The Correct Answer is : it is intended to benefit in the current period
Module : Module C
Chapter : Chapter3
393. A loss is treated as a capital loss because- Marks: 2+ 0.5-
it relates to current assets

it relates to fixed assets
it arises due to abnormal reasons
it reduces profit
None of the above.
The Correct Answer is : it arises due to abnormal reasons
Module : Module C
Chapter : Chapter3
394. Acquisition of fixed assets is an example of- Marks: 2+ 0.5-
revenue expenditure
capital expenditure
deferred revenue expenditure
All of the above
None of the above.
The Correct Answer is : capital expenditure
Module : Module C
Chapter : Chapter3
395. Maintenance of fixed assets is an example of- Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
The Correct Answer is : revenue expenditure
Module : Module C
Chapter : Chapter3
396. An expenditure charged to P & L a/c over a period of 3 to 5 years is an example of
Marks: 2+ 0.5-
revenue expenditure
capital expenditure
all of the above
None of the above.
The Correct Answer is : deferred revenue expenditure
Module : Module C
Chapter : Chapter3
397. An expenditure which helps in increasing the earning capacity of the firm is-
Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
398. Construction of building is an example of- Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
399. A loss is treated as capital loss because- Marks: 2+ 0.5-
it arises due to normal reasons

it arises due to abnormal reasons
it relates to fixed assets
it relates to current assets
it relates to liabilities.
The Correct Answer is : it arises due to abnormal reasons
Module : Module C
Chapter : Chapter3
400. Cost of goods purchase for resale is an example of- Marks: 2+ 0.5-
Capital expenditure
revenue expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
401. Which one of the following is a capital item? Marks: 2+ 0.5-
Depreciation on fixed assets

Painting of building
Advertisement expenses
Legal expenses incurred in defending a suit for breach of contract to supply goods.
Acquisition of new asset.
The Correct Answer is : Acquisition of new asset.
Module : Module C
Chapter : Chapter3
402. Which one of the following is a revenue item? Marks: 2+ 0.5-
Expenditure incurred on issue of equity shares

Cost of formation of a new company
Money raised by issue of preference shares
Expenditure incurred for replacing an asset.
Depreciation on fixed assets.
The Correct Answer is : Depreciation on fixed assets.
Module : Module C
Chapter : Chapter3
403. An expenditure incurred on shifting the stock to a new site is an example of-
Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
404. An expenditure on advertisement for furtherance of market for products is an
example of- Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
405. Expenditure incurred on research and development is an example of- Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
406. Outstanding expenditure on wages and salaries is an example of- Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
407. A Loss is a revenue loss because- Marks: 2+ 0.5-
it arises due to normal operations of business

it decreases tax liability
It is related to current assets
It is related to fixed assets
None of the above.
The Correct Answer is : it arises due to normal operations of business
Module : Module C
Chapter : Chapter3
408. Expenditure incurred as cost of raw-material purchased and meant for processing
and re-sale is an example of- Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
409. Amount paid for acquiring good will is an example of- Marks: 2+ 0.5-
revenue expenditure
capital expenditure
All of the above
None of the above.
Module : Module C
Chapter : Chapter3
410. A receipt is revenue receipt because- Marks: 2+ 0.5-
it is received in the accounting year

the amount is small
it relates to routine activity of the business
it is received from debtors
None of the above.
The Correct Answer is : it relates to routine activity of the business
Module : Module C
Chapter : Chapter3
411. A receipt is a capital receipt because- Marks: 2+ 0.5-
It is received in the accounting year

The amount is heavy
It is not credited to Capital a/c
It relates to availability of long period
None of the above
The Correct Answer is : It relates to availability of long period
Module : Module C
Chapter : Chapter3
412. Incorrect treatment of capital expenditure as revenue expenditure would result in -
Marks: 2+ 0.5-
Increase in capital and reserves
Decrease in capital and reserves
Decrease in loss
Increase in profits
Decrease in profit or increase in losses.
The Correct Answer is : Decrease in profit or increase in losses.
Module : Module C
Chapter : Chapter3
413. Incorrect treatment of revenue expenditure as capital expenditure would result in-
Marks: 2+ 0.5-
increase in liability
increase in losses
decrease in profit or increase in losses
increase in profit or decrease in losses
None of the above.
The Correct Answer is : increase in profit or decrease in losses
Module : Module C
Chapter : Chapter3
414. a revenue expenditure is intended to benefit- Marks: 2+ 0.5-
past period
current period
future period
both (i) and (ii)
both (ii) and (iii)
The Correct Answer is : current period
Module : Module C
Chapter : Chapter3
415. The distinction between capital and revenue is necessary for the preparation of-
Marks: 2+ 0.5-
Receipts & Payment a/ only

Profit & Loss a/c only
Final Account.
Cash Flow Statement
Funds Flow Statement
The Correct Answer is : Final Account.
Module : Module C
Chapter : Chapter3
416. Premium received on issue of shares is a- Marks: 2+ 0.5-
revenue receipt
capital receipt
deferred revenue receipt
deferred capital receipt
None of the above.
The Correct Answer is : capital receipt
Module : Module C
Chapter : Chapter3
417. Wages paid for erection of machinery must be debited to- Marks: 2+ 0.5-
Wages a/c
Machinery a/c
Deferred wages a/c
Repairs a/c
Profit & Loss a/c.
The Correct Answer is : Machinery a/c
Module : Module C
Chapter : Chapter3
418. An expenses incurred in order to reduce the operating costs, is - Marks: 2+ 0.5-
revenue expenditure
Capital expenditure
Promotional expenditure
Deferred revenue expenditure
None of the above.
The Correct Answer is : Capital expenditure
Module : Module C
Chapter : Chapter3
419. Amount spent on advertisement campaign, the benefit of which is likely to last for 5
years, is- Marks: 2+ 0.5-
revenue expenditure
Capital expenditure
Deferred revenue expenditure
Deferred capital expenditure
None of the above.
The Correct Answer is : Deferred revenue expenditure
Module : Module C
Chapter : Chapter3
Loss on sale of fixed assets being capital in nature, should not be debited to P &L a/c
An expenditure intended to benefit the current period is capital expenditure.
The distinction between capital and revenue items is necessary for the preparation of
final accounts.
An amount obtained on sale of fixed assets is an example of revenue receipt.
An amount spent on re-conditioning of an old vehicle should be debited to repairs a/c.
The Correct Answer is : The distinction between capital and revenue items is necessary
for the preparation of final accounts.
Module : Module C
Chapter : Chapter3
Any expenditure incurred to maintain the assets in the same state of efficiency is
revenue expenditure.
Heavy expenditure of revenue nature the impact of which is expected to last for more
than a year is termed as 'Deferred revenue Expenditure'.
Any expenditure which is unreasonably large, is capital expenditure.
An amount obtained on sale of fixed assets is an example of revenue receipt.
An amount spent on re-conditioning of an old vehicle should be debited to repairs a/c.
The Correct Answer is : Any expenditure which is unreasonably large, is capital
expenditure.
Module : Module C
Chapter : Chapter3
Any expenditure incurred to maintain the assets in the same state of efficiency is
revenue expenditure.
Heavy expenditure of revenue nature the impact of which is expected to last for more
than a year is termed as 'Deferred revenue Expenditure'.
Any expenditure which is unreasonably large, is capital expenditure.
Loss on sale of fixed assets being capital in nature, should be debited to P & L a/c.
Carriage paid on purchase of machinery is an example of capital expenditure.
The Correct Answer is : Any expenditure which is unreasonably large, is capital
expenditure.
Module : Module C
Chapter : Chapter3
423. The ascertainment of value of stocks from accounting records is known as- Marks: 2+
0.5-
Periodic inventory
Scientific inventory
Perpetual inventory
Continuous stock
None of the above.
The Correct Answer is : Perpetual inventory
Module : Module C
Chapter : Chapter4
424. The system which gives a continues information regarding quantity and value of
Inventory, is known as- Marks: 2+ 0.5-
periodic inventory
perpetual inventory
continuous stock taking
FIFO system
None of the above.
The Correct Answer is : perpetual inventory
Module : Module C
Chapter : Chapter4
425. Inventory is valued at cost or net realizable value on account of the accounting
principle of - Marks: 2+ 0.5-
Consistency
Conservatism
Realisation
Going concern
Accounting period
The Correct Answer is : Conservatism
Module : Module C
Chapter : Chapter4
426. The test of 'Objectivity' and 'Verifiability' is satisfied by valuing inventory at-
Marks: 2+ 0.5-
historical cost
net realizable value
current replacement price
price adjustment of completion
All of the above.
The Correct Answer is : historical cost
Module : Module C
Chapter : Chapter4
427. Selling expenses are included in inventory valuation by- Marks: 2+ 0.5-
trading concerns.
Process industries
Job order industries
Public utilities
Manufacturing industries.
The Correct Answer is : Job order industries
Module : Module C
Chapter : Chapter4
428. The value of inventory will be the least in case of- Marks: 2+ 0.5-
Item by item method

Aggregate or total inventory method
Group or category method
All of the above.
None of the above.
The Correct Answer is : Item by item method
Module : Module C
Chapter : Chapter4
429. Historical inventory costs are reduced to net realizable value because of the a
accounting principle of- Marks: 2+ 0.5-
consistency
conservatism
going concern
matching
realization.
The Correct Answer is : conservatism
Module : Module C
Chapter : Chapter4
430. AS-2 recommends the application of lower of cost or net realizable value by taking -
Marks: 2+ 0.5-
each item
group of several items
aggregate of all items
either (i) or (ii)
either (ii) or (iii)
The Correct Answer is : either (i) or (ii)
Module : Module C
Chapter : Chapter4
431. The cost formula recommended by IAS-2 for valuation of inventories is - Marks: 2+
0.5-
FIFO or Weighted Average

LIFO
NIFO or Latest purchase price
Standard cost
(i) and (ii)
The Correct Answer is : FIFO or Weighted Average
Module : Module C
Chapter : Chapter4
432. Plantation and farm production is valued at net realizable value because of -
Marks: 2+ 0.5-
administrative price
the government regulation
the absence of cost particulars
the difficulty in ascertaining the cost
All of the above.
The Correct Answer is : the difficulty in ascertaining the cost
Module : Module C
Chapter : Chapter4
433. Which one of the following statement id 'true'? Marks: 2+ 0.5-
Perpetual inventory and continuons stock taking mean one and the same.
Inventory valuation affects only the income statement.
Inventories should be valued at the lower of historical cost and current replacement
cost.
The reduction of historical cost to net realizable value is due to the application of the
accounting convention of conservatism.
An enterprise is at full liberty to change its policy of stock valuation from time to time to
suit its convenience.
The Correct Answer is : The reduction of historical cost to net realizable value is due to
the application of the accounting convention of conservatism.
Module : Module C
Chapter : Chapter4
LIFO method is suitable fro items which are of non-perishable and bulky type.
Periodic inventory gives a continuous balance of stock in hand.
FIFO method does not correlate the ascertained from accounting records is known as
perpetual inventory.
The system whereby stock valuation can be ascertained from accounting records is
known as perpetual inventory.
A major objective of accounting for inventories is the proper determination of
inventories of the purpose of financial statements.
The Correct Answer is : Periodic inventory gives a continuous balance of stock in hand.
Module : Module C
Chapter : Chapter4
435. A bill of exchange has Marks: 2+ 0.5-
2 parties
3 parties
4 parties
5 parties
any number of parties.
The Correct Answer is : 3 parties
Module : Module C
Chapter : Chapter5
436. A bill of exchange is drawn by- Marks: 2+ 0.5-
debtor
creditor
bank
(i) or (ii)
None of the above.
The Correct Answer is : creditor
Module : Module C
Chapter : Chapter5
437. Bills Receivable Book and Bills Payable Book are a part of- Marks: 2+ 0.5-
Journal
Ledger
Profit & Loss Account
Balance Sheet
None of the above.
The Correct Answer is : Journal
Module : Module C
Chapter : Chapter5
438. Bills Receivable Book and Bills Payable Book are- Marks: 2+ 0.5-
Principal books
Subsidiary books
Books containing blank forms for writing bills of exchange
All of the above
None of the above.
The Correct Answer is : Principal books
Module : Module C
Chapter : Chapter5
439. A bill drawn on 1st January 2005 for 4 months, will mature for payment on-
Marks: 1+ 0.25-
30th April 2005

1st May 2005
4th May 2005
3rd May 2005
5th May 2005.
The Correct Answer is : 4th May 2005
Module : Module C
Chapter : Chapter5
440. A bill of exchange contains- Marks: 2+ 0.5-
a promise to deliver goods

a promise to pay money
a request to deliver goods
a request to make payment
an unconditional order.
The Correct Answer is : an unconditional order.
Module : Module C
Chapter : Chapter5
441. Bills Receivable Account and Bills Payable Account are- Marks: 2+ 0.5-
real accounts
Personal accounts
Nominal accounts
Representative personal accounts
Both (ii) and (iii)
The Correct Answer is : real accounts
Module : Module C
Chapter : Chapter5
442. a promissory note is prepared by- Marks: 2+ 0.5-
Buyer
Seller
Commission Agent
Bank
Endorsee.
The Correct Answer is : Buyer
Module : Module C
Chapter : Chapter5
443. On the acceptance of a bill, the acceptor debits- Marks: 2+ 0.5-
Payee's a/c
Creditor's a/c
Bills payable a/c
Bills receivable a/c
Bank's a/c
The Correct Answer is : Creditor's a/c
Module : Module C
Chapter : Chapter5
444. When a bill discounted is dishonoured, the drawer credits- Marks: 2+ 0.5-
Bank a/c
Discount a/c
Acceptor's a/c
Bills Receivable a/c
None of the above.
The Correct Answer is : Bank a/c
Module : Module C
Chapter : Chapter5
445. Noting Charges a/c is debited by- Marks: 2+ 0.5-
the acceptor
the drawer
the endorser
the presenter
the discounting banker.
The Correct Answer is : the acceptor
Module : Module C
Chapter : Chapter5
446. When a bill is endorsed, credit is given to- Marks: 2+ 0.5-
Bank's
Acceptor's a/c
Endorser's a/c
None of the above.
The Correct Answer is : Bills Receivable a/c
Module : Module C
Chapter : Chapter5
447. When a bill endorsed is dishonoured, the drawer credits- Marks: 2+ 0.5-

Bank a/c
Endorser's (Creditor's)a/c
Acceptors' a/c
Bills Payable a/c.
The Correct Answer is : Endorser's (Creditor's)a/c
Module : Module C
Chapter : Chapter5
448. On the dishonour of the bill received through endorsement, debit is given to-
Marks: 2+ 0.5-
Payee's a/c
Acceptor's a/c
Endorser's a/c
Bank a/c
The Correct Answer is : Endorser's a/c
Module : Module C
Chapter : Chapter5
449. Retiring a bill under rebate means- Marks: 2+ 0.5-
dishonouring the bill

making payment of the bill after the due date
making payment of the bill before the due date
making payment of the bill on the due date
discounting the bill.
The Correct Answer is : making payment of the bill before the due date
Module : Module C
Chapter : Chapter5
450. In case of renewal of the bill, interest is calculated for the period of- Marks: 2+ 0.5-
original
fresh bill
original + fresh bill
3 months
4 months.
The Correct Answer is : fresh bill
Module : Module C
Chapter : Chapter5
451. In case of renewal of the bill, interest is calculated for the period of- Marks: 2+ 0.5-
Drawing and discounting the bill

Discounting and due date
Drawing and due date
3 months
All of the above.
The Correct Answer is : Discounting and due date
Module : Module C
Chapter : Chapter5
452. The entry regarding payment of the bill will be passed in the books of the drawer if
the bill is- Marks: 2+ 0.5-
retained
endorsed
discounted
retained or sent to bank for collection
retained or endorsed.
The Correct Answer is : retained or sent to bank for collection
Module : Module C
Chapter : Chapter5
453. Nothing charges are paid to the notary public by- Marks: 2+ 0.5-
drawer of the bill

endorsee
bank
either of the above three parties
acceptor of the bill
The Correct Answer is : either of the above three parties
Module : Module C
Chapter : Chapter5
454. For payment of noting charges to the notary public- Marks: 2+ 0.5-
Noting charges a/c is debited

Bank a/c is debited
Noting charges a/c is credited
Acceptors a/c is credited
Cash a/c is credited.
The Correct Answer is : Cash a/c is credited.
Module : Module C
Chapter : Chapter5
455. The payment of Promissory Note is made by its- Marks: 2+ 0.5-
maker
payee
bank
Any of above
None of above
The Correct Answer is : maker
Module : Module C
Chapter : Chapter5
456. A bill was drawn on 1st January 2005 for six months. The drawee cleared the bill on
4th March 2005. The drawee should be allowed a rebate for- Marks: 2+ 0.5-
2 months
3 months
4 months
5 months
6 months.
Module : Module C
Chapter : Chapter5
457. 23. A bill for Rs. 10,000 was dishonoured with Rs. 150 as noting charges. It was
renewed with interest of Rs. 250. The amount of the new bill will be - Marks: 2+ 0.5-
Rs. 10,000
Rs. 10,150
Rs. 10,250
Rs. 10,400
Rs. 10,100.
Module : Module C
Chapter : Chapter5
458. 24. A is drawer and B is acceptor of the bill. A endorses the bill to C. The bill is
dishonoured on due date. A will debit- Marks: 2+ 0.5-
B's a/c
C's a/c
Cash a/c
None of the above.
The Correct Answer is : B's a/c
Module : Module C
Chapter : Chapter5
459. A pays Rs. 10,000 to B on maturity of the bill he bad accepted. A will debit- Marks: 2+
0.5-
B's a/c
Cash a/c
Bills Payable a/c
None of the above.
The Correct Answer is : Bills Payable a/c
Module : Module C
Chapter : Chapter5
Bills Receivable a/c is a personal account.

Noting charge is an item of expense for the party paying it.
An accommodation bill is one which is drawn and accepted without any consideration.
In the case of an accommodation bill, discount is to be borne by the drawer as he
discounts the bill.
No entry is needed in the case of a bill which is endorsed in favour of a creditor.
The Correct Answer is : An accommodation bill is one which is drawn and accepted
without any consideration.
Module : Module C
Chapter : Chapter5
Retiring of a bill is different from dishonour of a bill

The journal entries in respect of bills receivable discounted form a bank and of bills
receivable sent to the bank for collection, are the same.
An accommodation bill is one which is drawn and accepted without any consideration.
In the case of an accommodation bill, discount is to be borne by the drawer as he
discounts the bill.
No entry is needed in the case of a bill which is endorsed in favour of a creditor.
The Correct Answer is : The journal entries in respect of bills receivable discounted form
a bank and of bills receivable sent to the bank for collection, are the same.
Module : Module C
Chapter : Chapter5
Retiring of a bill is different from dishonour of a bill

The journal entries in respect of bills receivable discounted form a bank and of bills
receivable sent to the bank for collection, are the same.
A bill of exchange contains an unconditional order to a certain person to pay a certain
sum of money.
A bill of exchange payable otherwise than on demand can be made payable to the
bearer.
No accounting entry is passed in the books of the drawee when a bill receivable is either
discounted from the bank or endorsed to some oth
The Correct Answer is : The journal entries in respect of bills receivable discounted form
a bank and of bills receivable sent to the bank for collection, are the same.
Module : Module C
Chapter : Chapter5
A bill received from a debtors is called Bills Receivable.

No cancellation entry is required when a bill is renewed.
An accommodation bill can be drawn for the benefit of drawer only.
Rebate at the time of retirement of a bill is a gain for the drawee.
A promissory note can be made payable to the bearer.
The Correct Answer is : Rebate at the time of retirement of a bill is a gain for the
drawee.
Module : Module C
Chapter : Chapter5
464. The relationship between the Consignor and Consignee is that of- Marks: 2+ 0.5-
Principal and agent

Seller and buyer
Bailor and bailee
Creditor and debtor
None of the above.
The Correct Answer is : Principal and agent
Module : Module C
465. Consignment Account is of the nature of a- Marks: 2+ 0.5-
Real Account
Personal Account
Nominal Account
None of the above
Module : Module C
466. Goods sent on Consignment Account is a- Marks: 2+ 0.5-
Real Account
Personal Account
Nominal Account
None of the above.
The Correct Answer is : Real Account
Module : Module C
467. Consignee's Account is a Marks: 2+ 0.5-
Real Account
Personal Account
Nominal Account
None of the above.
Module : Module C
468. When goods are sent on consignment, credit is given to- Marks: 2+ 0.5-
Purchase a/c
Consignment a/c
(Consignee's a/c
Sales a/c
Goods sent on Consignment a/c
The Correct Answer is : Goods sent on Consignment a/c
Module : Module C
469. Del Credere Commission is allowed to the consignee to bear- Marks: 2+ 0.5-
normal loss
abnormal loss
(loss on account of bad debts
Loss on account of discount allowed to buyers
All of the above.
The Correct Answer is : (loss on account of bad debts)
Module : Module C
470. Del credere Commission is calculated on - Marks: 2+ 0.5-
cash sales
credit sales
total sales
credit sales minus cash sales
cash sales minus credit sales.
The Correct Answer is : total sales
Module : Module C
Chapter :
471. The normal loss on consignment is credited to- Marks: 2+ 0.5-
Consignor's a/c
Consignee's a/c
Consignment a/c
Profit & Loss a/c
None of the above.
The Correct Answer is : Consignment a/c
Module : Module C
472. Abnormal loss of stock after adjusting for recovery from insurance claim, is debited
to - Marks: 2+ 0.5-
Trading a/c
P & L a/c
Capital a/c
Consignment a/c
Consignee's a/c.
The Correct Answer is : P & L a/c
Module : Module C
473. Over-riding commission is calculated on- Marks: 2+ 0.5-
cash sales
credit sales
total sales
credit sales minus cash sales
cash sales minus credit sales.
The Correct Answer is : total sales
Module : Module C
474. Account Sales' indicates - Marks: 2+ 0.5-
the net sales effected by the consignee

the net amount due by consignee to consignor
the net commission due by consignor to consignee
All of the above
None of the above.
The Correct Answer is : the net amount due by consignee to consignor
Module : Module C
475. On sales being made by the consignee of the goods received by him on consignment,
the amount is credited by him to- Marks: 2+ 0.5-
Goods Received on Consignment a/c

Purchased a/c
Sales a/c
Trading a/c
Consignor's a/c.
The Correct Answer is : Consignor's a/c.
Module : Module C
476. Shradha sends 100 watches to Shubhra at an invoice price of Rs. 1,200 which is cost
+ 20%. 10 watches are lost in transit and an amount of Rs. 8,000 is received from the
insurance company in full settlement. The amount to be credited to Consignment a/c
being abnormal loss, is - Marks: 2+ 0.5-
Rs. 2,000
Rs. 8,000
Rs. 10,000
Rs. 12,000
None of the above.
Module : Module C
'Sales Account' and 'Account Sales' are synonymous terms.

Despatch of goods on consignment amounts to sale of goods by the consignor.
Abnormal loss of stock arises on account of natural and inherent characteristics of
goods.
A consignee is paid over-riding commission or bearing the risk of bad debts on amount
of credit sales made by him.
The consignee passes no entry in his books for unsold stock of the consignor, lying with
him.
The Correct Answer is : The consignee passes no entry in his books for unsold stock of
the consignor, lying with him.
Module : Module C
478. Which one of the following statement is 'false'? Marks: 2+ 0.5-
The relationship between the consignor and consignee is similar to the one between the
seller and the buyer.
Over-riding commissions is usually paid to the consignee by the consignor for pushing a
new product in the market
Del Credere Commission is paid to the consignee by the consignor to bear the risk of
bad debts.
The Consignment Account is in the nature of a nominal account.
The cost price of the closing stock is arrived at after including proportionate non-
recurring expenses incurred by the consignor and the consignee.
The Correct Answer is : The relationship between the consignor and consignee is similar
to the one between the seller and the buyer.
Module : Module C
for calculating the value of abnormal loss of stock, proportionate non-recurring

expenses are not considered.
Account Sales is the Sales Account in the books of the consignor.
Account Sales is a periodical statement rendered by the consignee to the consignor.
When goods are sent on consignment, the Consignee's a/c is debited.
Abnormal loss arises due to natural causes such as evaporation, drying breaking in bulk,
etc.
The Correct Answer is : Account Sales is a periodical statement rendered by the
consignee to the consignor.
Module : Module C
480. Joint Venture Account is an example of- Marks: 2+ 0.5-
Real Account
Personal Account
Nominal Account
None of the above.
Module : Module C
481. When goods are purchased for the joint venture, the amount is debited to - Marks: 2+
0.5-
Purchases a/c
Trading a/c
Joint venture a/c
Joint Venture's Capital a/c
None of the above
The Correct Answer is : Joint venture a/c
Module : Module C
482. Joint Venture Account with B' is an example of- Marks: 2+ 0.5-
Real Account
Personal Account
Nominal Account
None of the above.
Module : Module C
483. When A advances money to B in the course of joint venture, then A debits such
money to- Marks: 2+ 0.5-
Joint Venture a/c

(Joint Bank a/c
B's Personal a/c
Expenses a/c
Cash a/c.
The Correct Answer is : Joint Venture a/c
Module : Module C
484. Joint Bank a/c is opened- Marks: 2+ 0.5-
When no separate books for the joint venture are maintained

When separate books for the joint venture are maintained.
When only one joint venturer maintains the account.
When all joint venturers maintain the accounts
None of the above.
The Correct Answer is : When separate books for the joint venture are maintained.
Module : Module C
485. In case of Memorandum Method, when there are three co-venturer, each co-venturer
w will open in his books for the venuture- Marks: 2+ 0.5-
one account
two account
three accounts
four accounts
five accounts.
The Correct Answer is : one account
Module : Module C
486. Which one of the following statements is true? Marks: 2+ 0.5-
A joint venture business has an indefinite life.

Joint venture and partnership are synonymous terms.
Principle of 'mutual agency' is applicable in a joint venture.
A co-venturer works on commission basis.
A joint venture is an example of 'profit seeking terminable venuture'.
The Correct Answer is : Principle of 'mutual agency' is applicable in a joint venture.
Module : Module C
Joint Venture a/c is a nominal account.

The opening of a Joint Bank a/c is an indication that separate books are kept for the
joint
There is no difference between the legal character of partnership and that of joint
No accounting entry is passed when the goods are transferred from one venturer to the
Persons agreeing to participate in joint venture business are termed as co-venturers.
The Correct Answer is : There is no difference between the legal character of
partnership and that of joint
Module : Module C
488. In a lease agreement, there are .. parties.Persons agreeing to participate in joint
venture business are termed as co-venturers.Persons agreeing to participate in joint
venture business are termed as co-venturers. Marks: 1+ 0.25-
two
three
four
five
ten
The Correct Answer is : two
Module : Module C
Under leasing agreement, risk of obsolescence is borne by the lessee

Lease rent paid by the lessee is not an expense.
In an operating lease, period of lease is much less as compared to the economic life of
the asset.
Lessor connot claim depreciation on leased asset.
Leasing is not a tool of tax planning.
The Correct Answer is : In an operating lease, period of lease is much less as compared
to the economic life of the asset.
Module : Module C
Depreciation on asset acquired under hire-purchase system is calculated on the cash

price
If the hire-buyer fails to pay any instalment, the vendor has a right to seize the goods.
'Here-purchase /stock' and 'Instalments Not Yet Due' are synonymous terms.
'Hire-purchase Trading Account' is prepared in case the goods of small value are the
On seizure of the goods by hire-vendor, the hire-buyer transfers the balance of the
The Correct Answer is : On seizure of the goods by hire-vendor, the hire-buyer transfers
the balance of the
Module : Module C
The ownership of property in goods passes to the hire-buyer as soon as the hire-vendor
Interest is calculated on the hire-purchases price at given rate of interest.
In hire-purchase system, if rate of interest is not give, the amount of interest is divided
equally over all the hire-purchase instalments.
Depreciation on asset acquired under hire-Purchase system is calculated on the cash
price of the asset.
The buyer cannot dispose off goods purchased under Instalment
The Correct Answer is : Depreciation on asset acquired under hire-Purchase system is
calculated on the cash price of the asset.
Module : Module C
The buyer can dispose off goods purchased on instalment basis.

On default of payment of a an instalment, the seller cannon take back the possession of
g good s in hire-purchase system.
The buyer has right to terminate the contract in instalment system.
Ownership does not pass to the buyer immediately in instalment sale.
Hire-Purchase System' and 'Instalment Payment System' are synonymous terms.
The Correct Answer is : The buyer can dispose off goods purchased on instalment basis.
Module : Module C
493. In case of hire-purchase, Asset Account is debited with- Marks: 1+ 0.25-
Hire-Purchase price
Cost price to the seller
Cash price
Cost price + interest
Cash price - interest.
The Correct Answer is : Cash price
Module : Module C
494. The hire-buyer charges depreciation an- Marks: 2+ 0.5-
Cash price of the asset

Hire-Purchase price of the asset
Higher of the two.
Lower of the tow.
Non of the above.
The Correct Answer is : Cash price of the asset
Module : Module C
495. The amount of interest is credited by the hire-buyer to- Marks: 2+ 0.5-
Assets a/c
Interest a/c
Vendor's a/c
P & L a/c
None of the above.
The Correct Answer is : Vendor's a/c
Module : Module C
496. One seizure of the goods by the hire-vendor, the hire-buyer transfers the balance of
the asset account to - Marks: 2+ 0.5-
Goods Returned a/c

Profit & Loss a/c
Hire Vendor's a/c
Trading a/c
None of the above.
The Correct Answer is : Hire Vendor's a/c
Module : Module C
497. The cost of goods sold is transferred by the hire-vendor to- Marks: 2+ 0.5-
Purchases a/c
Sales a/c
Hire-Purchases trading a/c
P & L a/c
None of the above.
The Correct Answer is : Purchases a/c
Module : Module C
498. In case of sale under the Instalment Payment System, total interest receivable by the
s seller is credited to - Marks: 1+ 0.25-
Interest a/c
Interest Suspense a/c
Sales a/c
Trading a/c
None of the above.
The Correct Answer is : Interest Suspense a/c
Module : Module C
499. Maintenance Suspense Account for free repairs of asset is opened by- Marks: 2+ 0.5-
Buyer
Seller
Both of them
As agreed between the two
None of the above.
The Correct Answer is : Seller
Module : Module C
500. Under hire-purchase system, the asset can be got insured by - Marks: 2+ 0.5-
Buyer
Seller
Both of them
As agreed between the two.
None of the above.
The Correct Answer is : Seller
Module : Module C
501. In hire-purchase system, hire-buyer can maintain his accounts under- Marks: 2+ 0.5-
Asset Accrued Method

Total Cash Price Method
Any of the two methods
As required by the seller
None of the above.
The Correct Answer is : Any of the two methods
Module : Module C
502. If rate of the interest is not given, but amount of instalments are equal and periods of
instalments are also equal, the amount of interest included in the instalments is calculated
by- Marks: 2+ 0.5-
Inverse Reatio Method

Products Method
Annuity Method
All of the above
None of the above
The Correct Answer is : Inverse Reatio Method
Module : Module C
503. Under the Hire-Purchase System, the buyer becomes the owner of goods- Marks: 2+
0.5-
immediately after the delivery of goods.

Immediately after the down payment
Immediately after the signing of the agreement
Immediately after the payment of the first instalment
Immediately after the payment of the last instalment.
The Correct Answer is : Immediately after the payment of the last instalment.
Module : Module C
504. 17. Under the Instalment Payment System of Purchase, Interest Suspense a/c in the
books of the buyer is - Marks: 2+ 0.5-
debited with the interest payable in respect of instalments due.

Debited with the interest payable in respect of instalments not due.
Debited with the difference between total instalment price and cash price.
Credited with the difference between the total instlament price and cash price.
None of the above.
The Correct Answer is : Debited with the difference between total instalment price and
cash price.
Module : Module C
505. Stock out on the hire at cost price is ascertained by- Marks: 2+ 0.5-
taking the cost in the proportion of paid instalments to total intalments

taking the cost in the proportion of value of unpaid instalments to hire-purchase price
deducting the gross profit margin from instalment not due the unpaid.
All of the above
None of the above.
The Correct Answer is : deducting the gross profit margin from instalment not due the
unpaid.
Module : Module C
The Income & Expenditure Account does not make a difference between capital and r
A heavy cash balance in the Receipts and Payments Account at the end of the
Income & Expenditure Account records all incomes and expenses received or paid
during
Receipts & Payment account is a nominal account.
Income & Expenditure Account is a real account.
The Correct Answer is : A heavy cash balance in the Receipts and Payments Account at
the end of the
Module : Module C
Receipts & Payments Account starts with an opening balance.

Receipts & Payment Account is a real Account.
Income & Expenditure Account is a nominal account
Receipts & Payment Account is a personal account.
A non-trading institution also prepares its final accounts.
The Correct Answer is : Receipts & Payment Account is a personal account.
Module : Module C
508. Amount received from the sale of scrap by a club is treated as- Marks: 2+ 0.5-
an income
an expense
an asset
a liability
None of the above.
The Correct Answer is : an income
Module : Module C
509. Subscription received in advance during the current year is- Marks: 2+ 0.5-
an expense
an income
an outstanding expenditure
an accrued income
a liability.
The Correct Answer is : a liability.
Module : Module C
510. Life membership fee received by a non-trading institution is- Marks: 2+ 0.5-
an expense
an income
an asset
an accrued income
a liability.
The Correct Answer is : a liability.
Module : Module C
511. Tournament expenses of the sports club are- Marks: 2+ 0.5-

recorded as assets
recorded as deferred revenue expenditure
posted as expenditure
recorded as liability
deducted from tournament fund at the liabilities side a balance sheet.
The Correct Answer is : deducted from tournament fund at the liabilities side a balance
sheet.
Module : Module C
512. Receipts & Payment Accounts is a- Marks: 2+ 0.5-
Personal account
Real account
Nominal account
Either Real Account or Personal Account
Either Real Account or Nominal Account
The Correct Answer is : Real account
Module : Module C
513. Income & Expenditure account is a - Marks: 2+ 0.5-
Real account
Personal account
Nominal account
Either Real Account or Personal Account
Either Real Account or Nominal Account.
The Correct Answer is : Nominal account
Module : Module C
514. Income & Expenditure Account is prepared by- Marks: 2+ 0.5-
trading institutions
manufacturing industry
banks
non-trading institution
all institutions.
The Correct Answer is : non-trading institution
Module : Module C
515. Subscription outstanding of a club during the previous year was Rs. 20,000 and
received During the current year Rs. 2,40,000. Subscription shown in the credit side of
income & Expenditure a/c will be- Marks: 2+ 0.5-
Rs. 20,000
Rs. 2,20,000
Rs. 1,80,000
Rs. 2,40,000
Rs. 2,60,000
Module : Module C
516. The Credit balance in an income & Expenditure a/c indicates - Marks: 2+ 0.5-
the excess of expenditure over income

the excess of income over expenditure
the excess of cash receipts over cash payments
the excess of cash payments over cash receipts
None of the above.
The Correct Answer is : the excess of income over expenditure
Module : Module C
517. Which one of the following items should not be entered in Receipts and Payment a/c
of a Non-trading organization? Marks: 2+ 0.5-
Sales of old newspapers and magazines

Expenses paid for the previous year
Loss on sale of old furniture.
Subscriptions received in advance
Donation received for the current year.
The Correct Answer is : Loss on sale of old furniture.
Module : Module C
518. Which one of the following items will not appear in the Balance Sheet of non-trading
Organization. Marks: 2+ 0.5-
Donations received during the year

Subscription received in advance
Entrance fee paid by the new members
Subscriptions relating to previous years received during the year
All of the above.
The Correct Answer is : Entrance fee paid by the new members
Module : Module C
519. An income arising from special fund of a club will be shown in the- Marks: 2+ 0.5-
Special fund in the Balance Sheet

Credit side of Income & Expenditure a/c
Special fund in the Balance Sheet
(i) and (iii)
(i) and (iii)
The Correct Answer is : Special fund in the Balance Sheet
Module : Module C
520. The Income & Expenditure a/c of a club shows subscriptions of Rs. 50,000.
Subscriptions Accrued at the beginning of the year are Rs. 5,000 and subscriptions
accrued at the end of the year are Rs. 7,500. The amount that figures in Receipts &
Payment a/c under the head 'Subscriptions' will be- Marks: 2+ 0.5-
Rs. 42,500
Rs. 47,500.
Rs. 50,000.
Rs. 55,000.
Rs. 57,500.
The Correct Answer is : Rs. 47,500.
Module : Module C
521. In a club, amount received fro special fund is Rs. 17,000 and expenditure incurred
from The fund is Rs. 9,000. the amount to be credited to Income & Expenditure a/c would
be Marks: 2+ 0.5-
Nil
Rs. 8,000
Rs. 9,000
Rs. 17,000
Rs. 26,000.
The Correct Answer is : Nil
Module : Module C
522. The Receipts & Payment a/c of a cricket club shows the following details -
Subscriptions : Current received Rs. 21,000 Arrears received Rs. 1,000 Advance received
Rs. 1,600There are 12,000 members each of them paying an annual subscription of Rs. 20.
The amount to be credited to Income & Expenditure a/c will be- Marks: 2+ 0.5-
Rs. 21,600
Rs. 22,600
Rs. 23,600
Rs. 24,000
Rs. 25,000
Module : Module C
523. Stock of stationery of a club on 1st January 2005 Rs. 3,000; Creditors for stationery
on 31st December 2005 Rs. 2,000; Opening balance of creditors for stationery Rs. 3,000;
Payment for stationery during the year 2005 Rs.14,000; Stock of stationery on 31st
December 2005 Rs. 2,000. The amount to be charged for stationery to the income & Expen
Marks: 2+ 0.5-
Rs. 13,000
Rs. 14,000
Rs. 15,000
Rs. 16,000
Rs. 17,000.
Module : Module C
524. Discount on issue of shares is a- Marks: 2+ 0.5-
revenue loss
capital loss
deferred revenue expenditure.
revenue and capital loss both.
Non of the above.
The Correct Answer is : capital loss
Module : Module D
Chapter : Chapter1
525. call paid in Advance Account is shown separately in- Marks: 2+ 0.5-
assets side of Balance sheet

liabilities side of balance sheet
debit side of P&L a/c
credit side p&L a/c
debit side of Trading a/c
The Correct Answer is : liabilities side of balance sheet
Module : Module D
Chapter : Chapter1
526. Interest @ ... is charged on calls in arrear according to Table 'a' of the Companies Act.
Marks: 2+ 0.5-
3%
5%
6%
9%
12%
Module : Module D
Chapter : Chapter1
527. The rate of discount on share cannot execeed- Marks: 2+ 0.5-
3%
5%
6%
10%
12%
Module : Module D
Chapter : Chapter1
528. Capital Reserve is formed if shares are- Marks: 2+ 0.5-
P & L a/c
Share Capital a/c
Capital Reserve.
Goodwill a/c
General Reserve
The Correct Answer is : Capital Reserve.
Module : Module D
Chapter : Chapter1
529. Capital Resrve is formed ifshares are- Marks: 2+ 0.5-
issued
forfeited
forfeited and re-issued
All of the above
None of the above
The Correct Answer is : forfeited and re-issued
Module : Module D
Chapter : Chapter1
530. Discount on re-issue of forfeited shares should not exceed- Marks: 2+ 0.5-
6% of the subscribed capital

12% of the re-issued capital.
10% of the authorised capital
9% of the paid up capital
the amount received so far on forfeited shares.
The Correct Answer is : the amount received so far on forfeited shares.
Module : Module D
Chapter : Chapter1
531. Preference Shareholders have a prefrence as regards- Marks: 2+ 0.5-
dividend
intrest
commision
refund of capital
divident and refund of capital .
The Correct Answer is : divident and refund of capital .
Module : Module D
Chapter : Chapter1
532. Calls money on shares should not exceed .....of the face value of the share. Marks: 2+
-
0.5
1/2
1/3
1/4
1/5
1/6
The Correct Answer is : 1/4
Module : Module D
Chapter : Chapter1
533. A company had issued and received share capital of shares (face value RS.10) and
called application@ Rs5/- and allotment money Rs 5-/ Holders of 200 shares failed to pay
the allotment money.What amont will the company forfeit? Marks: 2+ 0.5-
Rs.500
Rs1,000
Rs2,000
Rs 10.000
Rs20,000
The Correct Answer is : Rs1,000
Module : Module D
Chapter : Chapter1
534. A company issues 3,00,000 share of Rs10 each at discount of Rs1 per share.what will
be the amount of paid up capital? Marks: 2+ 0.5-
Rs3,00,000
Rs.2,70,000
Rs.30,00,000
Rs. 27,00,000
None of the above.
The Correct Answer is : Rs.30,00,000
Module : Module D
Chapter : Chapter1
535. A company issues3,00,000 share of Rs. 10 each at a prmium of Rs. 2 per share. What
will be the amount of paid up capital? Marks: 2+ 0.5-
Rs. 30,00,000
Rs. 6,00,000
Rs. 36,00,000
Rs. 24,00,000
None of the above
Module : Module D
Chapter : Chapter1
536. A company came out with a public issue of 1,00,00 shares of Rs. 10 each and called
Rs. 4 on allotment . What will be the balance in shares Forfeited a/c? Marks: 2+ 0.5-
Rs.10,000
Rs.15,000
Rs.20,000
Rs.25,000
Non of the above
Module : Module D
Chapter : Chapter1
Share Premium amount can distributes as dividend amongst the shareholders.

In the very first year of working of the company shares can be issued at a discount.
Capital Redemption Reserve can be utilise for payment of dividend.
Court permission is not required for isssur of shares at a discount.
If calls on shares are not received, company can forfeit these shares.
The Correct Answer is : If calls on shares are not received, company can forfeit these
shares.
Module : Module D
Chapter : Chapter1
Shares of a limited company can be classified into preference and equity shares.
prefrence shares enjoy prefrence as to divided and repayment of capital over equity
shares.
Paid up capital is the amount with which the company is formed .
Capital subscribeed by the public is called subscriberd capital.
Issue of non-voting shares must be authorised by Articales of Association of the
company.
The Correct Answer is : Paid up capital is the amount with which the company is formed
.
Module : Module D
Chapter : Chapter1
539. The main object of permitting the company to issue non-voting equity shares is--
Marks: 2+ 0.5-
to give higher dividend

to give perference on re-payment
to raise resources without losing management control
All of the above
Non of the above.
The Correct Answer is : to raise resources without losing management control
Module : Module D
Chapter : Chapter1
540. Which one of the following conditions is 'fase' reference to issue of non-voting equity
share? Marks: 2+ 0.5-
For issue of non- voting shares, a special resolution must be passed at the general body
meeting .
Holders of non-voting equity share are entitled to all right including bonus shares but do
not enjoy voting rights.
Only public company limited by share can issues non-voting equity shares
Only public company limited by shares can issue non-voting equity shares.
No company will be permitted to convert shares with voting rights into the shares
withought voting right..
The Correct Answer is : Only public company limited by share can issues non-voting
equity shares
Module : Module D
Chapter : Chapter1
541. If a share of Rs 100 ,on which Rs 60 have been paid ,is forefeited , it can be re-issued
at the minimum price of- Marks: 2+ 0.5-
Rs 40
Rs.60
Rs.100
Rs.140
Rs.160
The Correct Answer is : Rs 40
Module : Module D
Chapter : Chapter1
542. If the preference share capital of Rs1,00,000 is to be redeemed, and for this 5.000
equity share of Rs . 10 each have been issued at discount of10%,the amount to be
transferred to capital redemtion /Reserve will beIf the preference share capital of
Rs1,00,000 is to be redeemed, and for this 5,000 equity shares of rs. 10 each have been
issued at a discount of 10% , the amount to be transferred to Capital Redemption Reserve
will be.- Marks: 2+ 0.5-
Rs.45,000.
Rs.50,000.
Rs.55,000
Rs.60,000
Rs.5,000
Module : Module D
Chapter : Chapter1
543. Which one of the following is a 'false ' circumstance with reference to issue of bonuse
shares? Marks: 2+ 0.5-
A company can issue shares if its articals of association so provide

Sanction of Controller of Capital Issues is Not required for issue of bonus shares.
Bonus shares can be isued when the company has good profits but does not have
sufficient cash resources to pay.
Bonus shares can be issuied when the company wishes to builed up reserves for
expantion or for repayment of long -term liabilities.
Bonus shares can be issued when the company whishes to utilise certain reserves ,like
share premium,Capital Reserve, etc.
The Correct Answer is : Sanction of Controller of Capital Issues is Not required for issue
of bonus shares.
Module : Module D
Chapter : Chapter1
544. The difference between subscribed capital and called -up capital is called.- Marks: 2+
-
0.5
paid up capital
uncalled capital.
calls in advance
calls in arrear
authorised capital.
The Correct Answer is : uncalled capital.
Module : Module D
Chapter : Chapter1
545. When shares are forfeited, the Share Capital a/c is debited by- Marks: 2+ 0.5-
called up amount
paid up amount
call in arrear
calls received in advance
nominal value of such shares
The Correct Answer is : called up amount
Module : Module D
Chapter : Chapter1
546. Premium received on issue of shares can be used for- Marks: 2+ 0.5-
Redemption of debentures
paying fees for auditors
paying fees for directors
writing off preliminary expenses
All ofthe above.
The Correct Answer is : writing off preliminary expenses
Module : Module D
Chapter : Chapter1
547. The profit on re-issue of forfeited shares is transferred to - Marks: 2+ 0.5-
Capital Redemption Reserve
Devlopment Fund
Profit & Loss a/c
Capital Reserve
General Reserve
The Correct Answer is : Capital Reserve
Module : Module D
Chapter : Chapter1
548. Rights shares mean the shares which are - Marks: 2+ 0.5-
issued to directors of the company

issuied for a consideration other than cash
offered to the exiting shareholders
issuied to holders of convertible debentures
issuied to promoters of the company for thier services.
The Correct Answer is : offered to the exiting shareholders
Module : Module D
Chapter : Chapter1
549. Unless otherwise stand,a preference shre is alway deemed to be- Marks: 2+ 0.5-
Cumulative, participating and non-convertible

Non-cumulative, participating and non-convertible
cumulative, non-participating and non-convertible
Non-cumulative, non participating and non-nonconvertible
cumulative, participating and convertible.
The Correct Answer is : cumulative, non-participating and non-convertible
Module : Module D
Chapter : Chapter1
550. A company issuied shares of Rs 100 each on which Rs 80 per share is called
up.Ashareholder has not paid the call Rs . 20 per share on 100 shares .The amount
credited to share capital in respect of him will be.- Marks: 2+ 0.5-
Rs,2,000
Rs.6,000
Rs.8,000
Rs.10,000
Rs.12,000
Module : Module D
Chapter : Chapter1
551. An equity share of Rs 100 on Which Rs. 100 on which Rs. 80 is called up, is forfeited
for non-payment of the first call of Rs,20 per share . If the share is to be re-issuied as fully
paid up , the minimum amount to be collected will be - Marks: 2+ 0.5-
Rs.20
Rs.40
Rs.60
Rs.80
Rs.100
Module : Module D
Chapter : Chapter1
552. 100 shares of Rs10 each of which Rs 8 per share is called up, are forfeited for non
payment of first call of Rs2 per Share. Of these shares, 60 were re- issued at Rs. per share.
The amount to be transferred to Capital Reserve, will be.- Marks: 2+ 0.5-
Rs.120
Rs.240
Rs.360
Rs.480`
Rs.600
Module : Module D
Chapter : Chapter1
553. ...Is called the Charter of the company. Marks: 2+ 0.5-
Memoradum of Association
Articles of Association
prospectus
List of members
All of the above.
The Correct Answer is : Memoradum of Association
Module : Module D
Chapter : Chapter1
554. A. private company has to provide in its Articals ofassociation- Marks: 2+ 0.5-
for permitting free transfer of its shares

for prohibiting transfer of its shares
for restring transfer of its shares
for all of the above.
for non of the above
The Correct Answer is : for restring transfer of its shares
Module : Module D
Chapter : Chapter1
555. Rgisterred Company are formed under- Marks: 2+ 0.5-
for Partenership Act

the Companies Act
an act passed by the parliament
international law
Non of the above.
The Correct Answer is : the Companies Act
Module : Module D
Chapter : Chapter1
556. A company comes into existence when it gets the certificate of Marks: 2+ 0.5-
incorporation
commencomg the business
Pollution department
income-tax department
non of the above
The Correct Answer is : incorporation
Module : Module D
Chapter : Chapter1
557. A document inviting deposit from the or inviting offers from the public to subscribe
for the shares and debentures of a company is termed as- Marks: 2+ 0.5-
Memorandum of Association
Articles of Association
Minutes Book
Register of charges
prespectus
The Correct Answer is : prespectus
Module : Module D
Chapter : Chapter1
558. Which one of the following statements is false Marks: 2+ 0.5-
A private company restricts the right of its members to tranfers shares

A private company limits the number of members to fifty
A private company prohibits any invitation to the public to subscribe for its share or
debentures
A private company may be registered with only two members
A private company is required to write only Ltd at the end of its name
The Correct Answer is : A private company is required to write only Ltd at the end of its
name
Module : Module D
Chapter : Chapter1
559. A government company is one whose ....of the paid up share capital is held by the
Central Govt. or by ttwo or more of them together. Marks: 2+ 0.5-
50%
51%
not less than 51%
75%
100%
The Correct Answer is : not less than 51%
Module : Module D
Chapter : Chapter1
560. A company which is incorporated out side India but which has a place of business in
india , is termed as/an- Marks: 2+ 0.5-
Statutory Company
Indian Company
Foreign Company
Holding Company
Subsidiary Company
The Correct Answer is : Foreign Company
Module : Module D
Chapter : Chapter1
561. Which one of the following statments is true Marks: 2+ 0.5-
Partnership is are relationship between two persons only

Liability of partners is always limited .
A company does not have a perpectual succe sion.
The common scal is affixed on all important documents and contracts of the company
The maximum number of members of is 50 in case ofa public company .
The Correct Answer is : The common scal is affixed on all important documents and
contracts of the company
Module : Module D
Chapter : Chapter1
562. which oneof the following statements is false? Marks: 2+ 0.5-
shareholders liability is limited in case of a public company .

shares are not freely transferable in a private limited company .
The minimum number of members is 7 and maximum unlimited in caseof a public
company .
A company incorporated by a special Act of Parliament is called a statutory company.
Minimum number of directors in private company is three.
The Correct Answer is : Minimum number of directors in private company is three.
Module : Module D
Chapter : Chapter1
563. Shareholders get- Marks: 2+ 0.5-
fees
commission
interest
dividend
royalty
The Correct Answer is : dividend
Module : Module D
Chapter : Chapter1
564. share Allotment Account is - Marks: 2+ 0.5-
Real Account
Personal Account
Nominal Account
Asset Account
None of the above.
Module : Module D
Chapter : Chapter1
565. Premium received on issue of shares is shown in- Marks: 2+ 0.5-
assets side of Balance Sheet

liabilities side of balance sheet
debit side of P & L a/c
credit side of cash Account
The Correct Answer is : liabilities side of balance sheet
Module : Module D
Chapter : Chapter1
566. Disccount allowed on issue of shares is shown in - Marks: 2+ 0.5-
assects side of Balance sheet

liabilities side of Balance sheet
credit side of p&L a/c.
debit side of share capital a/c.
The Correct Answer is : assects side of Balance sheet
Module : Module D
Chapter : Chapter1
567. Overdraft facility is given by the bank only to such customer who already has-------
Marks: 2+ 0.5-
Saving bank a/c

Fixed Deposit a/c
Recurring a/c
Current a/c
Any of the above
The Correct Answer is : Current a/c
Module : Module D
Chapter : Chapter1
568. In the new formats of final accounts of a bank, Balance Sheet consist of Schedule
No1 to------- and profit &loss a/c from Schedule No. 13 to---------- Marks: 2+ 0.5-
5:16
7:16
12:16
10;14
6:12
The Correct Answer is : 12:16
Module : Module D
Chapter : Chapter1
569. Claims against the bank not acknowledged debt is a contingent liability and is shown
in Schedule No-------- of the balance sheet. Marks: 2+ 0.5-
5
7
12
15
16
Module : Module D
Chapter : Chapter1
570. Non -banking asset acquired in satisfaction of claims are shown under Schedule No
11 bearing the heading------ Marks: 2+ 0.5-
Other Asset
Non banking Asset
Advances
Investments
Money at Call and Short Notice.
The Correct Answer is : Other Asset
Module : Module D
Chapter : Chapter1
571. When the report of bad financial position of a customer is recived , the bank for the
interest due, debits Customer's a/c and credits Marks: 2+ 0.5-
Interest a/c
Oustanding Interest a/c
Accrued Interest a/c
None of the above
The Correct Answer is : Interest Suspense a/c
Module : Module D
Chapter : Chapter1
572. Which one of the following statements is ' true' Marks: 2+ 0.5-
State Bank of India is not a nationalised bank

Schedule No.9 10 11 and 12 are shown in profit & loss Account of a bank.
Rebate on bills discounted is the discount recived by bank in the previous year.
Two or more persons cannot take a joint loan from a bank.
Bank's advanced include loans,cash credits, overdrafts,and discounting and purchase of
bills.
The Correct Answer is : Bank's advanced include loans,cash credits, overdrafts,and
discounting and purchase of bills.
Module : Module D
Chapter : Chapter1
A bank must at least 20% of net profits of the year prior to declaration of dividend to
statutory reserve , unless the central government condones this binding.
slip system in a bank is not a diffrent accounting system but a method of rapid posting
it. the books of account.
Schedule 6 deals with ' Other liabilities and Provision' of a bank .
State Bank of india is a nationalised bank.
Non -banking assets are the tangible assetes which a bank recovers as a claim against
non-payment of its advances.
The Correct Answer is : Schedule 6 deals with ' Other liabilities and Provision' of a bank
.
Module : Module D
Chapter : Chapter1
574. Banks prepare their accounts for the Marks: 2+ 0.5-
Calender Year
Financial Year
Assessment Year
Diwali Year
Co-operative Year.
The Correct Answer is : Financial Year
Module : Module D
Chapter : Chapter1
575. For a bank, Rebate on bills discounted is an item of---- Marks: 2+ 0.5-
an income
an expenditure
an accrued income
an income recived in Advance
an asset
The Correct Answer is : an income recived in Advance
Module : Module D
Chapter : Chapter1
576. The heading 'Other Assets'does not include. Marks: 2+ 0.5-
Gold
Silver
Interest accured
inter- branch adjustments (Dr)
All of the above
The Correct Answer is : Gold
Module : Module D
Chapter : Chapter1
577. A non - banking asset is Marks: 2+ 0.5-
Furniture, Fixture and Fittings

Office equipment
money at call and short notice
an asset acquired from the debtors in satisfaction of claims against them
None of the above
The Correct Answer is : an asset acquired from the debtors in satisfaction of claims
against them
Module : Module D
Chapter : Chapter1
578. When income of a bank is to be recognised on cash basis, a distinction must be made
between. Marks: 2+ 0.5-
Current and non -current assets

Banking and non banking assets
Monetary and non monetary assets
Performing and non- performing assets
Tangible and intengible assets
The Correct Answer is : Performing and non- performing assets
Module : Module D
Chapter : Chapter1
579. A non - performing asset of a bank is Marks: 2+ 0.5-
cash balance
cash balance with RBI
Monetary at call and short notice
An asset which cases to generate income
none of the above
The Correct Answer is : An asset which cases to generate income
Module : Module D
Chapter : Chapter1
580. Banks show the provision for Income tax under the head Marks: 2+ 0.5-
deposit
Borrowings
Contigent liability
Contigency Accounts
Other Liabilities and provision
The Correct Answer is : Other Liabilities and provision
Module : Module D
Chapter : Chapter1
581. ......... is Peculiar of banking company accounts. Marks: 2+ 0.5-
A.T.M.
Bank Draft.
Cheque Book.
Fixed Deposit.
The Correct Answer is : Cheque Book.
Module : Module D
Chapter : Chapter1
582. The various item of assets in the Balance Sheet of banking company are arranged in
order of---------- Marks: 2+ 0.5-
liquidity
permanency
tangibility
floating
any order,
The Correct Answer is : liquidity
Module : Module D
Chapter : Chapter1
583. bills Recivables being Bills for collection appear on -------- side of Balance sheet of
banking company. Marks: 2+ 0.5-
only asset side
only liabilities side
both sides
sometimes on asset side and sometimes on liability side.
in one year on asset side and next year liabilities side.
The Correct Answer is : both sides
Module : Module D
Chapter : Chapter1
584. Rebate on bills discounted for a banking company is---- Marks: 2+ 0.5-
an expense
an income
a banking asset
a liability
a non -banking asset.
The Correct Answer is : a liability
Module : Module D
Chapter : Chapter1
585. A non -banking asset must be disposed of by the banking company within --------
Marks: 2+ 0.5-
two years
five years
seven years
one years
ten years
The Correct Answer is : seven years
Module : Module D
Chapter : Chapter1
586. The formats of the profit & loss Account and balance sheet in the case of a banking
company have been revised w.e.f. Marks: 2+ 0.5-
1st April 1949

1st April 1991
1st April 1992
1st April 2000
1st April 2004
The Correct Answer is : 1st April 1991
Module : Module D
Chapter : Chapter1
587. This item is not included in schedule 13 of profit & loss Account of a bank. Marks: 2+
0.5-
income on investment
interest on advances
intrest on borrowings from R.B.I
all of the above
None of the above
The Correct Answer is : interest on advances
Module : Module D
Chapter : Chapter1
588. The regulation of banks in india before 1936 was done Marks: 2+ 0.5-
under indian Banking Companies Act

Under Banking Regulation Act
Under Companies act
All of the above
None of the Above.
The Correct Answer is : Under Companies act
Module : Module D
Chapter : Chapter1
589. Fourteen major banks were nationalised in the year -------- Marks: 2+ 0.5-
1969
1971
1973
1993
2000
Module : Module D
Chapter : Chapter1
590. in the amended formats of final accounts of a bank, the number of total schedules
prescribed are----------- Marks: 2+ 0.5-
8
10
12
16
20
Module : Module D
Chapter : Chapter1
591. Indian Banking companies Act 1949 was changed in 1966 with the new name of ------
-------- Marks: 2+ 0.5-
Indian banking Regulation Act, 1949

Indian banking Regulation Act, 1966
Indian banking companies Act, 1966
Indian Banking Act , 1966
Banking in india Act , 1966
The Correct Answer is : Indian banking Regulation Act, 1949
Module : Module D
Chapter : Chapter1
592. The rate as percentage of net profits of Statutory Reserve to be maintained by a bank
under Sec.17 of Indian Banking Regulation Act , 1949, is--------- Marks: 2+ 0.5-
10%
15%
20%
25%
30%
Module : Module D
Chapter : Chapter1
593. In a banking company, intrest on doubtful debts is credited to--------- Marks: 2+ 0.5-
customer's a/c
Interest Suspense a/c.
Interest a/c.
Accrued Interest a/c
Oustanding Interest a/c.
The Correct Answer is : Interest Suspense a/c.
Module : Module D
Chapter : Chapter1
594. When Customer get a bill discounted, the bank debits Bills Discounted a/c and
credits------- Marks: 2+ 0.5-
customer a/c
Interest a/c
accrued Interest a/c
Oustanding Interest a/c.
The Correct Answer is : customer a/c
Module : Module D
Chapter : Chapter1
595. A and B are partners in the ratio of 5 : 3. They admit C for 1/4th share which he
acquires 3/4th from A and 1/4th from B. C pays Rs. 20,000 for his share of goodwill. A and
B will be credited by Rs...... and Rs...... , respectively- Marks: 2+ 0.5-
Rs. 5,000: Rs; 15,000

Rs. 10,000; Rs. 10,000
Rs. 15,000; Rs. 5,000
Rs. 12,000; Rs. 8,000
Rs. 8,000; Rs. 12,000
The Correct Answer is : Rs. 15,000; Rs. 5,000
Module : Module D
Chapter : Chapter1
596. A and B are partners sharing profits in 6 : 3. C is admitted for 1/4th and ratio of A
and I will be .... and the new ratio of all the partners will be.... Marks: 2+ 0.5-
2 : 3; 15 : 8 : 9
3 : 5; 15 : 8 : 9
5 : 3; 9 : 8 : 15
5 : 3; 15 : 9 : 8
3: 5; 15 : 9 : 8
The Correct Answer is : 5 : 3; 15 : 9 : 8
Module : Module D
Chapter : Chapter1
597. On the incoming of new partner, assetsand liabilities of the firm are revalued for the-
Marks: 2+ 0.5-
benefit of the new partner

benefit of the old patners
benefit of the old partners who are sacrificing
benefit of the of new and the old partners
All of the above
The Correct Answer is : benefit of the of new and the old partners
Module : Module D
Chapter : Chapter1
598. Revaluation of goodwill must be effected through- Marks: 2+ 0.5-
Revaluation a/c
Realisation a/c
Partners' Capital a/cs
P & L a/c
P & L Appropriation a/c.
The Correct Answer is : Partners' Capital a/cs
Module : Module D
Chapter : Chapter1
599. On the admission of a new partner, the balances of reserves abd accumulated profits
transferred to- Marks: 2+ 0.5-
old partners in th old ratio

old partnersin the new ratio
old partners in the sacrificing ratio
old partners in the capital ratio
old and new partners in the new ratio
The Correct Answer is : old partners in th old ratio
Module : Module D
Chapter : Chapter1
600. A is admitted as a new partner and agress to pay Rs. 12,000 as premium/goodwill,
but brings only Rs. 10,000 in cash. The balance of Rs. 2,000 must be debited to- Marks: 2+
0.5-
A's Capital a/c

A's Current a/c
A's Loan a/c
Revaluation a/c
Goodwill a/c.
The Correct Answer is : A's Current a/c
Module : Module D
Chapter : Chapter1
601. The sum of the shares sacrificed by old partners in favour of the new partner, is equal
to- Marks: 2+ 0.5-
the total share of the firm

the share given to the new partner
the share retained by the old partners
the share given to new partner less the share gained by the old partners
None of the above.
The Correct Answer is : the share given to the new partner
Module : Module D
Chapter : Chapter1
602. A and B are partners sharing profits and losses in the ratio of 2 : 3. They admit C into
the firm giving him 25% share. If C brings in Rs 30,000 as his share of capital and capitals
are to be kept in the profit sharing ratio, B's capital should be- Marks: 2+ 0.5-
Rs. 36,000
Rs. 45,000
Rs. 48,000
Rs. 54,000
Rs. 60,000
Module : Module D
Chapter : Chapter1
603. A and B are partners in th ratio of 4 : 3. They admit C who brings in Rs. 35,000
towards goodwil . The new profit sharing ratio is 3 : 3 : 2. A will get- Marks: 2+ 0.5-
Rs. 15,000
Rs. 20,000
Rs. 27,000
Rs. 30,000
Rs. 35,000
Module : Module D
Chapter : Chapter1
604. A and B are partners in the ratio of 4 : 1. They admit C into partnership and decid to
share the profit equally in the new firm. C pays for premium/goodwill Rs. 30,000. In the
connection- Marks: 2+ 0.5-
A and B will receive Rs. 15,000 eacg.

A will receive Rs. 24,000 and B RS. 6,000.
A will receive the entire Rs. 30,000.
B will receive the entire Rs. 30,000
A will receive Rs. 42,000 and B will pay Rs. 1: 000. Hint. Sacrifice Ratio = Old Ratio-New
Ratio Gaining Ratio = New Ratio -Old Ratio A's scrifice =4/5-1/3=7/15 P's gain

=1/3 /5=2/15 C pay for goodwill for 1/3 ratio = Rs. 30,000 Therefore, for 1 it will be
30,000 X 3/1 therefor, for/15th gain, it will be 30,000 X 3/1X2/15= Rs. 12,000 Thus, B
wil pay Rs. 12,000, C will pay Rs. 30,000 and A will receive 12,00+30,000=Rs. 42,000
The Correct Answer is : A will receive Rs. 42,000 and B will pay Rs. 1: 000. Hint.
Sacrifice Ratio = Old Ratio-New Ratio Gaining Ratio = New Ratio -Old Ratio A's scrifice

=4/5-1/3=7/15 P's gain =1/3 /5=2/15 C pay for goodwill for 1/3 ratio = Rs. 30,000
Therefore, for 1 it will be 30,000 X 3/1 therefor, for/15th gain, it will be 30,000 X
3/1X2/15= Rs. 12,000 Thus, B wil pay Rs. 12,000, C will pay Rs. 30,000 and A will receive
12,00+30,000=Rs. 42,000
Module : Module D
Chapter : Chapter1
605. A and B are partners sharing profits in the ratio 2 : 1. They adnut C as a partner for
one-third share which he receives equally from A and B. The newprofit sharing ratio will
be- Marks: 2+ 0.5-
2 :3:4
3 :2:4
4 :2:3
4 :3:2
2 : 4 : 3.
The Correct Answer is : 4:2:3
Module : Module D
Chapter : Chapter1
606. Which one of the following statements is true ? Marks: 2+ 0.5-
When a new partner is admitted, he gets a part of the acumulated profits of the firm
according to his profit sharing ratio.
On admission of a new partner, profit or loss on revaluation is transferred to the old
partner's capital accounts in their new ratio.
Recaluation a/c' is also known as 'P & L Adjustment a/c'.
When, on incoming of a new partner goodwill is inreased under revaluation method, the
goodwill is distrubuted among old partners in their new ratio.
New and sacfifice ratios are the same.
The Correct Answer is : Recaluation a/c' is also known as 'P & L Adjustment a/c'.
Module : Module D
Chapter : Chapter1
607. Which one of the following statements is false ? Marks: 2+ 0.5-
The amount of goodwill brought in by the new partner is distrubuted amongst the old
partners in their sacrifice ratio.
When Goodwill a/c appears in the books at proper value, the new partner has to pay
proportionate amount by way of goodwill, to the old partners.
In case Memorandum Revaluation Account is opened, the assest and liabilities appear
the new Balance Sheet at their old values.
The amount of goodwill credited to the old partner on admission of a new partner, may
be withdrawn by them in any proportion.
On admission of a new partner, profit or loss on revaluation is transferred to th old
partners' capital accounts in their old ratio.
The Correct Answer is : When Goodwill a/c appears in the books at proper value, the
new partner has to pay proportionate amount by way of goodwill, to the old partners.
Module : Module D
Chapter : Chapter1
608. A, B and C are partners sharing profits and lossed in the ratio of 4: 3: 2. D is admitted
for 1/10 share. The new ratio will be- Marks: 2+ 0.5-
4:4:3:2
4:3:2:1
5:4:3:2
1:2:3:4
None of the above.
The Correct Answer is : 4:3:2:1
Module : Module D
Chapter : Chapter1
609. Profit or loss on revaluation is transferred to Capital Account of Marks: 2+ 0.5-
old partners
new partners
all partners
None of the above
The Correct Answer is : old partners
Module : Module D
Chapter : Chapter1
610. The sacrifies of an old partners is equal to- Marks: 2+ 0.5-
new share-old share

old share-new share
None of the above.
The Correct Answer is : old share-new share
Module : Module D
Chapter : Chapter1
611. If new partners brings the amount of goodwill in capital, goodwill is transffered to
the old partners in- Marks: 2+ 0.5-
old ratio
new ratio
sacrifice ratio
gaining ratio
None of the above
The Correct Answer is : sacrifice ratio
Module : Module D
Chapter : Chapter1
612. If Goodwill a/c is raised after the admission of a new partner, it will be credited to-
Marks: 2+ 0.5-
New Partner's Capital a/c

Old Partner's Capital a/cs
All Partner's Capital a/cs
New Partner's Drawings a/cs
All Partner's Drawings a/cs.
The Correct Answer is : All Partner's Capital a/cs
Module : Module D
Chapter : Chapter1
613. Goodwill brought in cash by new partner is called- Marks: 2+ 0.5-
Capital
Loan
Premium
Drawing
None of the above.
The Correct Answer is : Premium
Module : Module D
Chapter : Chapter1
614. If nothing otherwise metioned, on admission of a new patner, th e old ratio is itself-
Marks: 2+ 0.5-
new ratio
sacrifies ratio
gaining ratio
All of the above
None of the above.
The Correct Answer is : sacrifies ratio
Module : Module D
Chapter : Chapter1
615. On the admission ofa new partner, an increase on the value of an asset is debited to -
Marks: 2+ 0.5-
Revaluation a/c
Old Partner's Capital a/cs
Asset a/c
New Partner'a Capital a/c
None of the above.
The Correct Answer is : Asset a/c
Module : Module D
Chapter : Chapter1
616. A and B shared profit in the ratio of 3 : 2. C was admitted asa partner for1/5th share.
He acquirs 3/20th from B. The new profit sharing ratio would be- Marks: 2+ 0.5-
10 : 6 : 4
6 : 10 : 4
8:8:4
9:7:4
12 : 4 : 4
Module : Module D
Chapter : Chapter1
617. Goodwill of a firm of A and B is valued at Rs. 60,000. Goodwill appears in th books at
Rs. 24,000. C is admitted for 1/4th share. He will be required to bring for goodwill-
Marks: 2+ 0.5-
Rs. 21,000
Rs. 9,000
Rs. 15,000
Rs. 6,000
Rs. 36,000.
Module : Module D
Chapter : Chapter1
618. A and B are partners sharing profits in the ratio of 3 : 1. C is admitted for 1/4th
share. The profit sharing ratio will be- Marks: 2+ 0.5-
9 :3:4
3 :4:9
4 :9:3
3 :9:4
9 :4:3
Module : Module D
Chapter : Chapter1
619. A and B share profits in the ratio of 4/5th and 1/5th. C is admitted for 1/2 share. The
profit sharing ratio will be- Marks: 2+ 0.5-
1 :5:4
4 :1:5
5 :1:4
5 :4:1
1 :4:5
Module : Module D
Chapter : Chapter1
620. Computerised Accounting means accounting performed by- Marks: 2+ 0.5-
clerk
accountant
director
computer
top management
The Correct Answer is : computer
Module : Module D
Chapter : Chapter1
621. regular back-up of data is required to guard against- Marks: 2+ 0.5-
Theft of the computer

Theft of the software
Loss of data
loss of printer
None of the above
The Correct Answer is : Loss of data
Module : Module D
Chapter : Chapter1
622. Computerised accounting software may be- Marks: 2+ 0.5-
single user type software

double user type software
triple user type software
multiple user type software
all of the above
The Correct Answer is : all of the above
Module : Module D
Chapter : Chapter1
623. The set of instructions written by programmer for a computer is called- Marks: 2+ 0.5-
software
hardware
Computer program
software program
Computer program- software program
The Correct Answer is : Computer program- software program
Module : Module D
Chapter : Chapter1
624. The central processing unit in a computer coprises the following- Marks: 2+ 0.5-
Control unit and logical unit

Storage unit, control unit and output unit
Input unit, output unit and control unit
input unit, logical unit and output unit
Control unit, logical unit and storage unit
The Correct Answer is : Control unit and logical unit
Module : Module D
Chapter : Chapter1
625. A small enterprise generally uses- Marks: 2+ 0.5-
Bespoken system
Customised software
system software
off the shelf software
None of the above
The Correct Answer is : off the shelf software
Module : Module D
Chapter : Chapter1
626. Internet storage in a computer is known as- Marks: 2+ 0.5-
Back storage
Primary storage
secondary storage
Tertiary storage
none of the above
The Correct Answer is : Primary storage
Module : Module D
Chapter : Chapter1
627. In a computer system, the formula that is worked in different ways to ensure that the
same results will follow, is called- Marks: 2+ 0.5-
Layout cheek
Limit ckeck
Redundant check
Cross check
Comparability check
The Correct Answer is : Cross check
Module : Module D
Chapter : Chapter1
628. Application software is concerned with- Marks: 2+ 0.5-
the programming used to control input unit

the programming used to control output unit
the programming to execute specific functions
the programming used to control the operations of the control unit
None of the above
The Correct Answer is : the programming to execute specific functions
Module : Module D
Chapter : Chapter1
629. Debugging is done by- Marks: 2+ 0.5-
programme coding
programme design
programme maintenance
programme varification
None of the above
The Correct Answer is : programme varification
Module : Module D
Chapter : Chapter1
630. Which one of the following statement is 'true' ? Marks: 2+ 0.5-
primary storage is a part of CPU

a set of programmes intended to control the computer is called application software
A spread sheet6 is an electronic Worksheet with columns and rows for manipulation of
accounting and statistical data
MICR is device that helps to position the cursor
Input is not the bridge between data and the processing
The Correct Answer is : A spread sheet6 is an electronic Worksheet with columns and
rows for manipulation of accounting and statistical data
Module : Module D
Chapter : Chapter1
Personal computer is a micro-computer which is intended to process the individual

needs of an individual
Software which is tailor-made to meet the requirements of a big enterprise is called
'Bespoken'
speed and accuracy distinguish the manual accounting and computerised accounting
Primary storage is a part of CPU
parity cheek ensures that information is not lost5 or garbled
The Correct Answer is : Primary storage is a part of CPU
Module : Module D
Chapter : Chapter1
632. Wthich one of the following statement is ture? Marks: 2+ 0.5-
If premium on joint life policy of partners is treated as a business expenditure, it is

shown in the assets side of the balance sheet of the firm.
the Premium on joint life policy of the partners is always treated as an investment.
If Goodwill a/c is raised at full value and written off, the capital a/cs of the continuing
partners will be debited in gaining ratio while writing off goodwill.
the executors of a deceased partner are cntitled to receive a share in the Profit for the
period between the last financial statements to the date of the death.
New and gaining ratios among the continuing parthers are always the same.
The Correct Answer is : the executors of a deceased partner are cntitled to receive a
share in the Profit for the period between the last financial statements to the date of the
death.
Module : Module D
Chapter : Chapter1
633. which one of the following statements is false? Marks: 2+ 0.5-
Retirement of a partner means that a partner breaks off all his relations as partner with
all ofther partners and withdraws himself from the firm.
The entire share of the retiring partner may sometimes be acquired or purchased by one
or some partners.
Profit or loss on revaluation is transferred only to continuing partners' capital accounts.
New and gaining ratios among continuing partners may be the same or different.
A dormant or sleeping partner need not give a public notice of his retirement.
The Correct Answer is : Profit or loss on revaluation is transferred only to continuing
partners' capital accounts.
Module : Module D
Chapter : Chapter1
634. In the event of death of a partner, the accumulated profits and losses are shared by
the partner in Marks: 2+ 0.5-
capital ratio
new ratio
old ratio
sacrifice ratio
gaining ratio
The Correct Answer is : old ratio
Module : Module D
Chapter : Chapter1
635. On the death of a Partner, the amount received from join life policy should be
credited to the capital accoundts of - Marks: 2+ 0.5-
all Partners including the deceased Partner`

only continuing Partners
only the deceased Partner
All of the above.
None of the above.
The Correct Answer is : all Partners including the deceased Partner`
Module : Module D
Chapter : Chapter1
636. A, B and C are Parnters sharing the Profit in the ratio of 2 : 2 : 1. C retired. The new
profit sharing ratio between A and B will be- Marks: 2+ 0.5-
1 :1
2 :1
3 :1
1 :1
1 :2
Module : Module D
Chapter : Chapter1
637. X, Y, Z are partners sharing profits equally. Y retires, Goodwill appearing in the books
is Rs. 60,000. It is valued ar Rs. 1,20,000 Y will be credited with- Marks: 2+ 0.5-
Rs. 60,000
Rs. 40,000
Rs. 20,000
Rs. 1,20,000
None of the above.
Module : Module D
Chapter : Chapter1
638. A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. B retires.
His share was taken up by A and C in the ratio of 2 : 1. The new share between A and C
will be- Marks: 2+ 0.5-
3 :7
5 :2
7 :3
2 :5
5 : 7.
Module : Module D
Chapter : Chapter1
639. Old profit sharing ratio minus new profit sharing ratio is equal to- Marks: 2+ 0.5-
sacrificing ratio
gaining ratio
capital ratio
old ratio
None of the above.
The Correct Answer is : sacrificing ratio
Module : Module D
Chapter : Chapter1
640. A retiring Partner continues to be liable for obligation incurred after his retirement,
if- Marks: 2+ 0.5-
he does not give Public notice

he starts a similar business
unpaid amount is transferred to his loan a/c
he gives a public notice
None of the above.
The Correct Answer is : he does not give Public notice
Module : Module D
Chapter : Chapter1
641. Premium paid on Joint Life Policy of Partners is- Marks: 2+ 0.5-
debited to P & L a/c

credited to P & L a/c
debited to Partners' Capital a/cs
credited to Partners' Capital a/cs
None of the above.
The Correct Answer is : debited to P & L a/c
Module : Module D
Chapter : Chapter1
642. On the retirement or death of a partner, Profit or loss on revaluation is transferred to
Partners' Capital a/cs/ Current a/cs in- Marks: 2+ 0.5-
old Profit sharing ratio

sacrificing ratio
gaining ratio
capital ratio
new ratio of the remaining partners.
The Correct Answer is : old Profit sharing ratio
Module : Module D
Chapter : Chapter1
643. If goodwill is raised at full value in the books of the firm on retirement of a partner,
and is to be written off completely, then the capital accounts of the remaining partners
will be debited in- Marks: 2+ 0.5-
old Profit sharing ratio

new profit sharing ratio
sacrificing ratio
gaining ratio
capital ratio
The Correct Answer is : new profit sharing ratio
Module : Module D
Chapter : Chapter1
644. Joint Life Policy Reserve a/c is transfered to- Marks: 2+ 0.5-
the Capital a/c of the retiring Partner

all Partners in the old Profit sharing ratio
remaining Partners in their new ratio
retiring Partner and remaining Partner who sacrifices his ratio
None of the above.
The Correct Answer is : all Partners in the old Profit sharing ratio
Module : Module D
Chapter : Chapter1
645. Sec. 37 of the Indian Partnership Act.,1932 Provides interest on the amount left by
the retiring or deceased Partner at Marks: 2+ 0.5-
4%
5%
6%
Bank rate
Prime lending rate.
Module : Module D
Chapter : Chapter1
646. Which one of the following statement is ' false '? Marks: 2+ 0.5-
Creating a reserve for discount on creditors is not srictly according to the principal of
conservatism .
' Salary paid in advance ' is not an expence because neither decreases assets nor
increases liailities .
Stock at the end appearing in trial balance is taken only to Balance sheet .
The terms 'Accured Income 'and ' Income received in advance 'are the same thing
Trading a/c shows gross profit / gross loss while P & L a/c shows net profit / net loss .
The Correct Answer is : The terms 'Accured Income 'and ' Income received in advance
'are the same thing
Module : Module D
Chapter : Chapter1
647. Stock appearing outside the Trial balance will be shown in - Marks: 2+ 0.5-
Trading a/c
P & L a/c
Balance sheet
Trading a/c and Balance sheet
P & L a/c and Balance sheet
The Correct Answer is : Trading a/c and Balance sheet
Module : Module D
Chapter : Chapter1
648. The balance of petty cash is - Marks: 2+ 0.5-
an expence
an income
an asset
a liability
None of the above
Module : Module D
Chapter : Chapter1
649. An asset has - Marks: 2+ 0.5-
debit balance
credit balance
somatimes debit and sometimes credit balance
debit balance in the beginning and credit balance at the end
None of the balance
The Correct Answer is : debit balance
Module : Module D
Chapter : Chapter1
650. A liabilities has - Marks: 2+ 0.5-
debit balance
credit balance
sometimes debit and sometimes credit balance
credit balance in the beggining debit balanceat the end
None of the above
The Correct Answer is : credit balance
Module : Module D
Chapter : Chapter1
651. Net profit is........ of the firm. Marks: 2+ 0.5-
an asset
a liability
an expenditure
an extra ordinary income
None of the above
Module : Module D
Chapter : Chapter1
652. Net loss is ............. 0f the firm . Marks: 2+ 0.5-
an asset
a liability
an income
an extra ordinary expenditure
None of the above
Module : Module D
Chapter : Chapter1
653. Which of the following is a contigent liability ? Marks: 2+ 0.5-
Bank overdraft
Short-term loans
Long- terms loans
Outstanding salaries
Liabilities on bills discounted.
The Correct Answer is : Liabilities on bills discounted.
Module : Module D
Chapter : Chapter1
654. Goods costing Rs. 8,000 were damaged by fire . insurance company admitted a claim
of Rs. 6,500. Profit & Loss a/c will be debited with - Marks: 2+ 0.5-
Rs. 8,000
Rs. 6,500
Rs. 4,500
Rs. 1,500
None of the above
Module : Module D
Chapter : Chapter1
655. A manager is entitled to receive a commission @ 5 % on net profit after charging
such commission . Gross profit of the firm is Rs. 2,00,000 and selling and administrative
expence amount to Rs .1,47,000. His commission will be - Marks: 2+ 0.5-
Rs.5,250
Rs.2,625
Rs.2,500
Rs.10,000
Rs. 52,500
Module : Module D
Chapter : Chapter1
656. The output of financial accounting is - Marks: 2+ 0.5-
the measurment of accounting income

the measurment of taxable income
the preparation of financial statements
the preparation of financial position
All the above
The Correct Answer is : the preparation of financial statements
Module : Module D
Chapter : Chapter1
657. Income of a business concern - Marks: 2+ 0.5-
is measured as per the requirment of tax authorities.

is measured as per the articles of association .
is subjectives and influenced by the wishes of the accountant .
can never be measured objectivly to give an accurate figure .
None of these .
The Correct Answer is : is subjectives and influenced by the wishes of the accountant .
Module : Module D
Chapter : Chapter1
658. The basic objective of accounting is to - Marks: 2+ 0.5-
satisfy the legle requirments.

satisfy the listing requirments of stock exchange.
report to the shareholder.
provide quantitative information to the users of financial statement.
None of the above
The Correct Answer is : provide quantitative information to the users of financial
statement.
Module : Module D
Chapter : Chapter1
659. Information about the performance of a business enterprise is disclosed by -
Marks: 2+ 0.5-
Trading a/c
Trading and P&L a/c
Balance sheet
Cash Flow Statement
Both ( 3) and ( 4 ).
The Correct Answer is : Trading and P&L a/c
Module : Module D
Chapter : Chapter1
660. External reporting is the result of - Marks: 2+ 0.5-
Financial Accounting
Management Accounting
Cost Accounting
Human Resource Accounting
Inflation Accounting
The Correct Answer is : Financial Accounting
Module : Module D
Chapter : Chapter1
661. Special purpose financial statement are prepared by - Marks: 2+ 0.5-
Financial Accountant
Management Accountant
Cost Accountant
Both (1) and (2)
Both (3) and (4)
The Correct Answer is : Management Accountant
Module : Module D
Chapter : Chapter1
662. Assets are usually shown in the balance sheet at - Marks: 2+ 0.5-
revalud cost
replacement cost
net realisable cost
unexpired cost
None of the above
The Correct Answer is : unexpired cost
Module : Module D
Chapter : Chapter1
663. The most acceptable way of measuring income is - Marks: 2+ 0.5-
to match the costs with revenue

to apply normal rate of return on capital invested
to apply the average rate of return in industry on capital employed
to find out the difference in net worth as on two dates
None of the above .
The Correct Answer is : to match the costs with revenue
Module : Module D
Chapter : Chapter1
664. During a period of rising prices , higher profits can be shown by valuing stick at -
Marks: 2+ 0.5-
FIFOP Method
LIFO Method
NIFO Method
Simple Average Price Method
Weight Average Price Method
The Correct Answer is : FIFOP Method
Module : Module D
Chapter : Chapter1
665. Balance Sheet is prepared primarily with the following group in view - Marks: 2+ 0.5-
owners
debtors
creditors
management
government.
The Correct Answer is : owners
Module : Module D
Chapter : Chapter1
666. Goodwill is an example of - Marks: 2+ 0.5-
fixed asset
fictitious asset
current asset
tangible asset
intangible asset.
The Correct Answer is : intangible asset.
Module : Module D
Chapter : Chapter1
667. Which one of the following is an example of an intangible asset ? Marks: 2+ 0.5-
Building
Investment
Discount on issue of shares and debentures
Copyright
Preliminary expences.
The Correct Answer is : Copyright
Module : Module D
Chapter : Chapter1
668. Which one of the following is an example of current asset ? Marks: 2+ 0.5-
Machinery
Vehicles
Patents
Prepaid expences
Goodwill.
The Correct Answer is : Prepaid expences
Module : Module D
Chapter : Chapter1
669. Which one of the following is an example of current liability ? Marks: 2+ 0.5-
Share Premium
Workmen's composation Fund
10% Debenture
Bank Overdraft
Bank Loan taken for two years .
The Correct Answer is : Bank Overdraft
Module : Module D
Chapter : Chapter1
670. Balance sheet is - Marks: 2+ 0.5-
a statement showing flows of fund

a statement is of position
a statement showing income
a statement showing only current assets
a statement showing only fixed asset
The Correct Answer is : a statement is of position
Module : Module D
Chapter : Chapter1
671. The excess of current assets over current liabilities is called - Marks: 2+ 0.5-
Gross Working Capital

Net Working Capital
Gross tangible worth
Net tangible worth
Net worth.
The Correct Answer is : Net Working Capital
Module : Module D
Chapter : Chapter1
672. Unexpired income as on the date of Balance Sheet, is shown as - Marks: 2+ 0.5-
an expenditure
a revenue
an asset
a liability
None of the above .
Module : Module D
Chapter : Chapter1
673. Both assets and owners' eqity would be increased by - Marks: 2+ 0.5-
Proprietor' drawing
Payment from debtors
Payment to creditors
Purchase of fixed asset on credit
Capital brought in by the proprietors.
The Correct Answer is : Capital brought in by the proprietors.
Module : Module D
Chapter : Chapter1
674. The net worth of a limited company ia equal to - Marks: 2+ 0.5-
Fixed asset - fixed liabilities

Current asset - Current liabilities
Fixed Asset - Current Liabilities
Fixed Liabilities - Current Liabilities
The total of shareholder' funds.
The Correct Answer is : The total of shareholder' funds.
Module : Module D
Chapter : Chapter1
675. An outstanding expence can best be described as an amount - Marks: 2+ 0.5-
not paid and not currently matched with revenue

not paid and currently matched with revenue
paid and not currently matched with revenue
paid and currently matched with revenue
All of the above
The Correct Answer is : not paid and currently matched with revenue
Module : Module D
Chapter : Chapter1
676. The terms ' Reserve ' in financial statement signifies- Marks: 2+ 0.5-
the amount of provision for bad debts

the amount of provision taxation
the amount set apart for contigent liabilities
the amount of provision for depreciation
the amount of profits set a part for general or specific purpose .
The Correct Answer is : the amount of profits set a part for general or specific purpose .
Module : Module D
Chapter : Chapter1
677. In the total assets increased by Rs.1,50,000 and the total liabilities increased by Rs.
60,000 in the same accounting period , the capital is that period would - Marks: 2+ 0.5-
decreased by Rs. 60,000

decreased by Rs. 90,000
increased by Rs. 60,000
increased by Rs 90,000
increased by Rs 2,10,000.
The Correct Answer is : increased by Rs 90,000
Module : Module D
Chapter : Chapter1
678. Outstanding expences appering in the trial balance are shown in - Marks: 2+ 0.5-
Debit side of P& L a/c only

Credit side of P&L a/c only
Assets side of Balance Sheet only
Liabilities side of Balance Sheet only
Debit side of P& L a/c and asset side of Balance Sheet
The Correct Answer is : Liabilities side of Balance Sheet only
Module : Module D
Chapter : Chapter1
679. Which one of the following statement is 'true ' ? Marks: 2+ 0.5-
The accounting policies do not differ from enterprise to enterprise

Reserve of a business enterprise alway represent the amount which can spend readily
The figures as shown in the balance sheet , are the future estimated values of assets
and liabilities .
Balance Sheet is a statement of assets and liabilities as on a given date .
Total capital employed by a company is the sum of shareholder' funds plus current
liabilities .
The Correct Answer is : Balance Sheet is a statement of assets and liabilities as on a
given date .
Module : Module D
Chapter : Chapter1
A Balance Sheet can only indicate the items that can be expressed in terms of money.
Security , capable of being realised and not held with the intention of retaini9ng it for
more than one year , is a current asset .
An iron safe is a fixed asset for a medical shop and current asset for a shop dealing in
iron safes.
Liquidity is the ability of an organisationto meet current liabilities out of its current
assets .
The closing stock of office stationary is credited to Trading a/c
The Correct Answer is : The closing stock of office stationary is credited to Trading a/c
Module : Module D
Chapter : Chapter1
681. The purpose of finacial statement / final accounts is to as certain Marks: 2+ 0.5-
profit
profit or loss
value of assets
value of liabilities
profit or loss and financial position
The Correct Answer is : profit or loss and financial position
Module : Module D
Chapter : Chapter1
682. Financial statement are prepared Marks: 2+ 0.5-
at the end of calender year

at end of accounting year
at the end of assessment year
on every diwali
on every christmas
The Correct Answer is : at end of accounting year
Module : Module D
Chapter : Chapter1
683. Gross profit is ascertained by preparing - Marks: 2+ 0.5-
Trial balance
trading a/c
profit & loss a/c
balance sheet
all of the above
The Correct Answer is : trading a/c
Module : Module D
Chapter : Chapter1
684. Suspence a/c appering in the trial balance is shown in the - Marks: 2+ 0.5-
Ledger
Trading a/c
P & L A/C
Balance sheet
All of the above
The Correct Answer is : Balance sheet
Module : Module D
Chapter : Chapter1
685. Balance sheet is prepared to know - Marks: 2+ 0.5-
Gross profit
Net profit
Balance of accounts
Errors
Financial position
The Correct Answer is : Financial position
Module : Module D
Chapter : Chapter1
686. The statement showing assets and liabilities is - Marks: 2+ 0.5-
Trial balance
Trading a/c
P & l a/c
Balace sheet
None of these
The Correct Answer is : Balace sheet
Module : Module D
Chapter : Chapter1
687. Working capital is - Marks: 2+ 0.5-
Proprietor own capital

Borrowed capital
Amount of of sale
all assets - all libilities
Current assets - current libilities
The Correct Answer is : Current assets - current libilities
Module : Module D
Chapter : Chapter1
Capital = Assests - Liabilities

Balance sheet is an account
Balance sheet may be prepared by half- yearly or annually
Cash will be the first item is assets side of balance sheet if assets are arranged in the
order of liqidity
Capital will be the last item in the liabilities side if liabilities are arranged in the order of
liqidity.
The Correct Answer is : Balance sheet is an account
Module : Module D
Chapter : Chapter1
689. Sales are equals - Marks: 2+ 0.5-
Gross profit - Cost of goods sold

Gross profit + Cost of goods sold
Cost of goods sold - Gross profit
Gross profit - Net profit
Gross profit + Net profit
The Correct Answer is : Gross profit + Cost of goods sold
Module : Module D
Chapter : Chapter1
690. Goods distributed as samples should be credited to - Marks: 2+ 0.5-
Purchase a/c
Sales a/c
Advertisement a/c
P & L a/c
None of these above
The Correct Answer is : Purchase a/c
Module : Module D
Chapter : Chapter1
691. Intrest on Drawing is - Marks: 2+ 0.5-
Expenditure for the business

Income for the business
Asset for the business
Liabilities for the business
None of the above
The Correct Answer is : Income for the business
Module : Module D
Chapter : Chapter1
692. Outstanding salaries are shown as - Marks: 2+ 0.5-
Expenditure
Income
Asset
Liabilities
None of the above
The Correct Answer is : Liabilities
Module : Module D
Chapter : Chapter1
693. Which one of the following statement is 'true' ? Marks: 2+ 0.5-
Stock at the end appering in the trial balance is taken only to the Balance sheet
All intangible assets are fictitious assets
Goods taken out by the proprietor from the business for personal use are credited to
sales a/c .
The current liabilities mean the liabilities which are payable after a year .
Premium paid on the life policy of the proprietor is debited to P & L a/c .
The Correct Answer is : Stock at the end appering in the trial balance is taken only to
the Balance sheet
Module : Module D
Chapter : Chapter1
694. Dividened can be paid out of- Marks: 2+ 0.5-
General Reserve
Capital Reserve
Share Premium
Pre-incorporation Profits
All of the above
The Correct Answer is : General Reserve
Module : Module D
Chapter : Chapter1
695. Share Premium Account is shown in the liabilities side of the Balance Sheet under the
heading - Marks: 2+ 0.5-
Share Capital
Reserves and Surplus
Current Liabiliities and Provisions
Contigent Liabilities
Secured Loans
The Correct Answer is : Reserves and Surplus
Module : Module D
Chapter : Chapter1
696. Claims against the company nnot acknowledged as debts is a- Marks: 2+ 0.5-
current liability
secured loan
unsecured loan
provision
Contingent
The Correct Answer is : Contingent
Module : Module D
Chapter : Chapter1
697. Indicate the item that figures in P&L a/c below the line- Marks: 2+ 0.5-
Provision for doubtful debts

provision for taxation
Provision for gratuity payable to employees
Contribution to Provident Fund
Transfer to Sinking Fund
The Correct Answer is : Transfer to Sinking Fund
Module : Module D
Chapter : Chapter1
698. Advance payment of tax is in the nature of - Marks: 2+ 0.5-
Prepaid Expenditure,
Revenue Expenditure
Asset
Liability
Contingent Liability
The Correct Answer is : Prepaid Expenditure,
Module : Module D
Chapter : Chapter1
699. Provision for taxation on current profits iis shown- Marks: 2+ 0.5-
above the line in P&L a/c

below the linne in P & L a/c
above the line in P & L a/c and on the liabilities side of Balance Sheet
below the line in P & L a/c and on the liabilities side of Balance Sheet
below the line in P & L a/c and on assets side of Balance Sheet
The Correct Answer is : above the line in P & L a/c and on the liabilities side of Balance
Sheet
Module : Module D
Chapter : Chapter1
700. Divisible profits do not include- Marks: 2+ 0.5-
Revalution Reserve
General Reserve
Revenue Reserve
Balance of Profit & Loss a/c
Subsidies provided by government in pursurance of guarantee for dividend
The Correct Answer is : Revalution Reserve
Module : Module D
Chapter : Chapter1
701. Amount set aside to meet losses due to bed debts is- Marks: 2+ 0.5-
an asset
a liability
a contingent liability
a provision
a reserve
The Correct Answer is : a provision
Module : Module D
Chapter : Chapter1
702. Tax assessed in pprevious year was Rs.30,000 while the provision for taxation in that
year was Rs,40,000. The adjustment for this in the current year would be- Marks: 2+ 0.5-
a debit of Rs,10,000 above the line P & L a/c

a debit of Rs. 10,000 below the line in P & L a/c
a credit of Rs. 10,000 above the line in P&L a/c
a credit of Rs. 10,000 below the line in P&L a/c
a credit of Rs. 30,000 above the line in P&L a/c
The Correct Answer is : a credit of Rs. 10,000 below the line in P&L a/c
Module : Module D
Chapter : Chapter1
703. Preliminary expense is an example of- Marks: 2+ 0.5-
Current assets
Fixed assets
Fictitious assets
Tangible assets
Prepaid expenditure
The Correct Answer is : Fictitious assets
Module : Module D
Chapter : Chapter1
704. which one of the following statements is ;true;? Marks: 2+ 0.5-
Provision is maintained for unknown liabilities

Livestock is a current asset.
Preliminary expenses are current liabilities.
Contingent liabilities are shown as a footnote.
Public deposits with the company are shown in the assets side of the Balance Sheet.
The Correct Answer is : Contingent liabilities are shown as a footnote.
Module : Module D
Chapter : Chapter1
705. Which one of the following statements is :false ? Marks: 2+ 0.5-
Discount on issue of shares and debentures is misccellancous expendiure

Bills receivables are shown under the heaing loans and advances.
Unclaimed dividend is currrent liabilities
Proposed dividend is shown under the heading R serves and Surplus
Goodwill of the company is shown under the heading :Fixed Assets.
The Correct Answer is : Proposed dividend is shown under the heading R serves and
Surplus
Module : Module D
Chapter : Chapter1
706. which one of the following statements is true? Marks: 2+ 0.5-
final dividend ccan be declared by directors.

arrers of cumulative preference dividend is a current liability
loose tools: appears as a fixed asset in the Balance Sheet of a company.
a dividend can be paid on callls in advance.
Managerial remuncratiojn is calculated before providing for taxation
The Correct Answer is : Managerial remuncratiojn is calculated before providing for
taxation
Module : Module D
Chapter : Chapter1
707. The prescribed form of Balance Sheet for the Companies has been given in the
Schedule. Marks: 2+ 0.5-
VI Part I
VI Part II
VI Part III
VI Part IV
VI Part V
The Correct Answer is : VI Part IV
Module : Module D
Chapter : Chapter1
708. .....is shown under the heading :Fised Assetrs? Marks: 2+ 0.5-
Patents and Trademarks

Livestock
Goodwill
All of the above
None of the above.
Module : Module D
Chapter : Chapter1
709. Share Capital is shown in the Balance Sheet as - Marks: 2+ 0.5-
Autnorised
Issued
Subscribed and Paid up
All of the above
None of the above.
Module : Module D
Chapter : Chapter1
710. Current liabilities are the liabilities which are to be paid at the most within.....months.
Marks: 2+ 0.5-
3
6
9
12
24
Module : Module D
Chapter : Chapter1
711. Lons as per the Schedule VI are classified as _ Marks: 2+ 0.5-
Secured and unsecured

Cumulative and non-cumulative
Redeemable and irredeemable
Fixed and current
All of the aboive,
The Correct Answer is : Secured and unsecured
Module : Module D
Chapter : Chapter1
712. According to the prescribed order of assets under Schedule VI Part I ...... assets
should be shown first of all. Marks: 2+ 0.5-
loans and advances

currents
fixed investments
investments
None of the above.
The Correct Answer is : fixed investments
Module : Module D
Chapter : Chapter1
713. Workmen's Compensation Fund is a - Marks: 2+ 0.5-
provision
reserve
surplus
current liability
loan.
The Correct Answer is : provision
Module : Module D
Chapter : Chapter1
714. Preparation of final accounts of a company is governed by the Section of the
Companies Act. Marks: 2+ 0.5-
203
209
210
211
212
Module : Module D
Chapter : Chapter1
715. Section..... of the Companies Act requires the Balance Sheet to be prepared in the
precribed form. Marks: 2+ 0.5-
208
209
210
211
212
Module : Module D
Chapter : Chapter1
716. Section..... of the Companies Act makes compulsory for every company to keep
certain books of accounts. Marks: 2+ 0.5-
208
209
210
211
212
Module : Module D
Chapter : Chapter1
717. Dividends are usually paid on - Marks: 2+ 0.5-
Authorised Share Capital

Issued Share Capital
Subscribed Share Capital
Paid up Share Capital
Called up Share Capital.
The Correct Answer is : Paid up Share Capital
Module : Module D
Chapter : Chapter1
718. Interest on capital allowed to partners should be treated as Marks: 2+ 0.5-
an appropriation of profits
a charge against profits
a charge when profits are not available
an appropriation when profits are not available
an appropriation when profits are available
The Correct Answer is : an appropriation of profits
Module : Module D
Chapter : Chapter1
719. A partner's capital balance at the end of the year is Rs. 1,00,000 after adjusting for
drawings Rs. 20,000 and his share in the profits Rs. 10.000. Interest payable to him at 5%
p.a. on the opening capital balance, would be Marks: 2+ 0.5-
Rs. 3,500
Rs. 4,000
RS. 4,500
RS. 5,000
Rs. 5,500
Module : Module D
Chapter : Chapter1
A partner who sleeps for 12 hours a day, is called 'sleeping partner'.

A Quasi partnership protects the third parties who may make a nonpartner liable.
Law makes a difference to liabilities towards third parties
Under the Indian Partnership Act, 1932, all the partners jointly and severally have
limited liabilities towards third parties
Under the Indian Partnership Act, 1932, limited partnership is permitted
The Correct Answer is : A Quasi partnership protects the third parties who may make a
nonpartner liable.
Module : Module D
Chapter : Chapter1
721. Which one of the followiing statements is false? Marks: 2+ 0.5-
A sleeping or dormant partner is normally not interested in the day-to-day working of

the partnership
Law makes no difference between a working partner and sleeping partner in reference
to liabilities towards third parities
Under the Indian Partnership Act, 1932, all the partners, working or sleeping, jointly
and severally have unlimited liabilities towards third parties
Limited partnership means partnership for a limited period of time.
A quasi or nominal partner is in fact not a partner in the firm, but it estops him from
disclaiming his status as a partner vis-a-vis third parties if he keeps quiet
The Correct Answer is : Limited partnership means partnership for a limited period of
time.
Module : Module D
Chapter : Chapter1
722. Which one of the following is true? Marks: 2+ 0.5-
There can be minimum three and maximum thirty partners in a partnership firm.
A partnership firm enjoys a separate legal entity apart from its partners.
Partnership deed is not in writing.
Partners' Current Accounts are maintained in case of Fluctuating Capital System.
No limit regarding maximum number of partners in a firm has been prescribed by the
Indian Partnership Act, 1932.
The Correct Answer is : No limit regarding maximum number of partners in a firm has
been prescribed by the Indian Partnership Act, 1932.
Module : Module D
Chapter : Chapter1
In the absence of any contract of the contrary, partners are required to share profits
and losses equally.
If it is proved that there has been definite loss to the firm owing to negligence of a
partner, that partner will make good such loss.
If the partnership deed is silent on certain points, the relevant provisions of the
Partnership Act, 1932 will apply
Partners are mutual agents for each other.
Partners are not mutual agents for each other.
The Correct Answer is : Partners are not mutual agents for each other.
Module : Module D
Chapter : Chapter1
724. An ordinary partnership firm can have maximum Marks: 2+ 0.5-
10 partners
20 partners
50 partners
100 partners
any number of partners.
The Correct Answer is : 20 partners
Module : Module D
Chapter : Chapter1
725. A partnership firm engaged in banking business can have maximum Marks: 2+ 0.5-
5 partners
10 partners
20 partners
50 partners
any number of partners
The Correct Answer is : 10 partners
Module : Module D
Chapter : Chapter1
726. Partners' Current Accounts are opened when their captial accounts are Marks: 2+ 0.5-
fixed
fluctuating
in both of the above
having zero balances
None of the above
The Correct Answer is : fixed
Module : Module D
Chapter : Chapter1
727. In absence of an agreement to the contrary, the partners shall Marks: 2+ 0.5-
be paid salaries
not be paid salaries
be paid salaries upto Rs 1,000 p.m.
be paid salaries if they are working partner.
be paid salaries if they are sleeping partners
The Correct Answer is : not be paid salaries
Module : Module D
Chapter : Chapter1
728. Suppose, the partnership deed provides for a salary of Rs. 5,000 p.m. to partner X. If
X withdraws only Rs. 3,000 in a month, the remaining Rs. 2,000 will be Marks: 2+ 0.5-
debited to his Capital a/c

credited to his Drawing a/c
credited to his Current a/c
credited to P & L Adjustment a/c
None of the above
The Correct Answer is : credited to his Current a/c
Module : Module D
Chapter : Chapter1
729. In the absence of an agreement to the contrary, If partners sleeping or working
share profits and losses Marks: 2+ 0.5-
in the ratio of their orginal captial

in the ratio of their latest captial
in the ratio of average captial
in equal ratio
None of the above
The Correct Answer is : in equal ratio
Module : Module D
Chapter : Chapter1
730. In abscence of any provisions in the partnership agreement, partners can charge on
the loans given by them to the firm Marks: 2+ 0.5-
interest at 6% p.a.
interest at 12% p.a.
interest at 15% p..a.
interest at 10% p.a.
no interest
The Correct Answer is : interest at 6% p.a.
Module : Module D
Chapter : Chapter1
731. The current account of a partner Marks: 2+ 0.5-
will always have a debit balance

will always have a credit balance
will never have a balance
may have a debit or a credit balance
None of the above
The Correct Answer is : may have a debit or a credit balance
Module : Module D
Chapter : Chapter1
732. Goodwill in a partnership firm can be valued or revalued on the occasion of Marks: 2+
-
0.5
only on incoming of a partner

only on outgoing of a partner
only on dissolution of a firm
on all the above
None of the above
The Correct Answer is : on all the above
Module : Module D
Chapter : Chapter1
733. The balance of a partner's captial account will get reduced wish this amount
Marks: 2+ 0.5-
Partner's salary
Interest on partner's capital
Interest on partner's drawings
Interest on partner's loan
All of the above
The Correct Answer is : Interest on partner's drawings
Module : Module D
Chapter : Chapter1
734. In the absence of any provision in the partnership deed, the partnership Act provides
for Marks: 2+ 0.5-
Interest on drawings
Interest on captials
Interest on advances given by partners
Interest on loans given by creditors
Interest on loans given by banks
The Correct Answer is : Interest on advances given by partners
Module : Module D
Chapter : Chapter1

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1. When a person borrows money, he pays in return some extra money to the lender .

320 + 1,200 = Rs. 1,520

Rs. 4,509 approx.

loses Rs. 50.

there is no gain or loss to any one

Both are equally good.

Amount + Banker's Discount

Rs. 3,075; Rs. 3,000; Rs.1,23,000

Rs. 10,000 approx

Rs. 8,000 approx.

Between Rs. 30,000 and Rs. 31,000

Rs. 79,406 approx

Rs. 17,547 approx.

Rs. 1,360 stock

Accounting profit only

Selection of projects for implementation

Selection of projects for implementation

Exceeding one year

136. Payback period is a applicable Marks: 2+ 0.5-

In evaluating a single project

Payback period method

Payback period method

the period of life of the projects is different

the net present value is nil

145. Which one of the following statement is true? Marks: 2+ 0.5-

The working capital released on the termination of a project is not cash

NPV and profitability index always yield identical results.

149. Profitability Index is also known as- Marks: 2+ 0.5-

Depreciation is a part of the operating cost.

Fall in the value of money.

to reduce tax burden

Valuation of a fixed asset

increases every year

the original cost.

The amount on which depreciation is calculated, is reduced from year to year

output can be effectively measured

increases every year

Fixed Instalment Method

Machinery, Building, Furniture, etc.

Working Hours Method

Straight Line Method

Straight Line Method

(-) Rs. 10,000

Profit Rs. 36,000

Provision for depreciation

Profit & Loss a/c

Profit & Loss a/c

Have a limited useful life

Physical wear and tear

185. The economic factors causing depreciation, are - Marks: 2+ 0.5-

the provisions in the Companies Act

189. Which one of the following statements is 'true' Marks: 2+ 0.5-

190. Accounting is the language of Marks: 2+ 0.5-

Art of recording business dealings in books

To know the profit and loss in the business

Record business transactions

Co _ Ordinating management funtions

Generally Accepted Accountiong Policies

inclusive determination of current profits

Single entry sustem

In provioding for depreciation

all future lossed but leaves all future profits

simplicity of the general management

the reciept of the order