MCQ 102 Financial Accounting - dacc.edu.in

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45 Subject: Financial Accounting Subject code: 102 Class: FY B.com

PROF. MUBINA ATTARI www.dacc.edu.in

Unit 1: Accounting Concepts, conventions and Principles

1. Which accounting concept satisfy the valuation criteria a) Going concern, Realization, Cost b) Going concern, Cost, Dual aspect c) Cost, Dual aspect, Conservatism d) Realization, Conservatism, Going concern

2. A trader has made a sale of Rs.75,500 out of which cash sales amounted to Rs.25,500. He

showed trade receivables on 31-3-2014 at Rs.25,500. Which concept is followed by him? a) Going concern b) Cost c) Accrual d) Money measurement.

3. In which of the following cases, accounting estimates are needed? a) Employs benefit schemes b) Impairment of losses c) Inventory obsolescence d) All of the above

4. Diwali advance given to an employee is a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure d) Not an Expenditure

5. A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after taking into consideration the following items. (i) The cost of an asset Rs.23,000 has been taken as an expense (ii) The firm anticipated a profit of Rs.12,000 on the sale of an old furniture (iii) Salary of Rs.7,000 outstanding for the year has not been taken into account. (iv) An asset of Rs.85,000 was purchased for Rs.75,000 and was recorded in the books at Rs.85,000. What is the correct amount of profit to be reported in the books? a) Rs.1,47,000 b) Rs. 1,51,000 c) Rs.1,63,000



d) Rs.1,41,000

6. The process of recording financial data upto trial balance is a) Book keeping b) Classifying c) Summarising d) Analyzing

7. Rohit carrying on real estate business sold a piece of land for Rs.4,00,00,000 (cost Rs.3,50,00,000) then the type of receipt is ______ nature and profit on sale is a) Capital & transferred to capital reserve b) Revenue & transferred to P & L a/c c) Capital & transferred to P & L a/c d) Revenue & transferred to general reserve

8. In income measurement & recognition of assets & liabilities which of the following concepts goes together?

a) Periodicity, Accrual, Matching b) Cost, Accrual, matching c) Going concern, cost, Realization d) Going concern, Periodicity, Reliability

9. Interpretation means

a) Explanation of meaning and significance of the data in Financial Statements. b) Concerned with preparation and presentation of classified data c) Systematic analysis of recorded data d) Methodical classification of data given in Financial Statements.

10. A trader purchases goods for Rs. 2500000, of these 70% of goods were sold during the

year. At the end of 31st December 2009, the market value of such goods were Rs. 500000. But the trader recorded in his books for Rs. 750000. Which of the following concept is violated.

a) Money measurement b) Conservatism c) Consistency d) None of these.



11. Which of the following is wrong? a) All real and personal accounts are transferred to balance sheet b) Nominal accounts are transferred to P & L account c) Each account is opened separately in ledger d) Rent is a personal account, outstanding rent is nominal account

12. If nothing is given in the financial statements about the three accounting assumptions then

it is to be treated as it a) Is assumed that it is not followed. b) Is assumed to be followed c) Is assumed to be followed to some extent d) None of the above

13. The proprietor of the business is treated as creditor for the capital introduced by him due to_____ concept. a) Money measurement b) Cost c) Entity d) Dual aspect

14. Fixed assets are held by business for _____ a) Converting into cash b) Generating revenue c) Resale d) None of the above

15. Which accounting concept specifies the practice of crediting closing stock to the trading account? a) Cost b) Realisation c) Going concern d) Matching

16. Amount spent to increasing the earning capacity is a ______ expenditure a) Capital b) Revenue c) Deferred revenue d) Capital Loss



17. Change in the capital A/c of proprietor may occur due to ______

a) Profit earned b) Loss incurred c) Capital Introduced d) All of the above

18. Consistency with reference to application of accounting procedures means a) All companies in the same Industry should use identical accounting procedures b) Income & assets have not been overstated c) Accounting methods & procedures shall be followed uniform basis year after year d) Any accounting method can be followed as per convenience

19. If one of the cars purchased by a car dealer is used for business purpose, instead of resale, then it should be recorded by_____ a) Dr Drawing A/c & Cr Purchases A/c b) Dr Office Expenses A/c & Cr Motor Car A/c c) Dr Motor Car A/c & Cr Purchases A/c d) Dr Motor Car & Cr Sales A/c

20. If wages are paid for construction of business premises ______ A/c is credited and _____ A/c is debited. a) Wages, Cash b) Premises, Cash c) Cash, Wages d) Cash, Premises

21. Value of goods withdrawn by the proprietor for his personal use should be credited to ____ a) Capital A/c b) Sales A/c c) Drawings A/c d) Purchases A/c



22. Which of the following is incorrect? a) Good will intangible asset b) Sundry debtors - current asset c) Loose tools tangible fixed asset d) Outstanding expenses -current asset.

23. M/s Stationery Mart will debit the purchase of stationery to _______ a) Purchases A/c b) General Expenses A/c c) Stationery A/c d) None

24. Small items like, pencils, pens, files, etc. are written off within a year according to _ concept. a) Materiality b) consistency c) Conservatism d) Realisation

25. Business enterprise is separate from its owner according to _____ concept. a) Money measurement concept b) Matching concept c) Entity concept d) Dual aspect concept

26) Profit and loss is calculated at the stage of a) Recording b) Posting c) Classifying d) Summarising

27) Which of the following is a Real A/c? a) Building A/c b) Capital A/c c) Shyam A/c d) Rent A/c



28) Which of the following factor is not considered while selecting accounting policies? a) Prudence b) Substance over form c) Accountancy d) Materiality 29) Which of the following provide frame work and accounting policies so that the financial statements of different enterprises become comparable. a) Business Standards b) Accounting Standards c) Market Standards d) None 30) Fixed assets are double the current assets and half the capital. The current assets are Rs.3,00,000 and investments are Rs.4,00,000. Then the current liabilities recorded in balance sheet will be a) 2,00,000 b) 1,00,000 c) 3,00,000 d) 4,00,000 31) Which of the following is not a Real Account? a) Cash A/c b) Investments A/c c) Outstanding rent A/c d) Purchases A/c 32) Consistency with reference to application of accounting procedures means a) All companies in the same Industry should use identical accounting b) Income & assets have not been overstated c) Accounting methods & procedures shall be followed uniform basis year after year d) Any accounting method can be followed as per convenience 33) Amount spent to increasing the earning capacity is a ______ expenditure a) Capital b) Revenue c) Deferred revenue d) Capital Loss



34) Amount spent to increasing the earning capacity is a ______ expenditure a) Capital b) Revenue c) Deferred revenue d) Capital Loss

35) ……………………..happens when the fraudster avails multiple loans for the same property simultaneously for a total amount in excess of the actual value of the property.

a) Phishing b) Window dressing c) Shot gunning d) Skimming

36) Various frauds in banking sector are: a) Appraisal fraud b) Mortgage fraud c) Shot gunning d) All of the above

37) Fraudsters may alter cheques to change the name or the amount on the face of cheques. This is called

a) Phishing b) Forgery c) Disbursement fraud d) Skimming

38) The increase of decrease in the prices of various goods and services over a period of time is known as---------------------- a) Price Level Changes b) Inflation c) Deflation 39) Increase in the price of various goods and services over a period of time is known as ---- ------------------------ a) Price Level Changes b) Inflation c) Deflation



40) Traditionally as per the generally accepted accounting principles, transactions are recorded as per -------------- a) Historical cost b) Current market value c) Realizable value 41) Prices of goods and services may increase due to following -------------- demand factors a) Increase in money supply, increase in disposable income b) agricultural growth, inadequate industrial growth c) None of the above 42) Prices of goods and services may increase due to following -------------- demand factors a) Increase in money supply, increase in disposable income b) Inadequate agricultural growth, inadequate industrial growth c) None of the above 43) Current purchasing power method involves adjustment of historic figures at the current purchasing value. Under this method historical figures are multiplied with the ------------ a) Wholesale Price Index b) Consumer Price Index c) Conversion factor 44) A building which was purchased in the year 2001 was recorded as 80 Lakhs when the general price index was 120. The value of the building needs to be changed as per the price changes. The current price index is 360. Find the conversion factor. a) 0.33 b) 3 c) 240 45) XYZ Limited sold goods throughout the year evenly. The total turnover was Rs 120 Lakhs. The general price index at the beginning of the year was 125 and at the end of the year was 150.What value of sales needs to be recorded as per CPP Method. a) Rs. 120 Lakhs b) Rs. 130.91 Lakhs c) Rs.145 Lakhs 46) During inflation the purchasing power of money -------------- a) Increases



b) Decreases c) Does not change 47) One of the main reasons to adopt changes in price accounting is----------- a) To remove the misleading effect on the financial statements due to ongoing increase or decrease in general price levels over a period of time. b) To provide a favorable financial statements revealing better profits and financial position c) Both a and b 48) Current purchasing power method involves adjustment of historic figures at the current purchasing value. Under this method historical figures are multiplied with the ------------ a) Wholesale Price Index b) Consumer Price Index c) Conversion factor 49) A trader has made a sale of Rs.75,500 out of which cash sales amounted to Rs.25,500. He showed trade receivables on 31-3-2014 at Rs.25,500. Which concept is followed by him? a) Going concern b) Cost c) Accrual d) Money measurement 50) Value of goods withdrawn by the proprietor for his personal use should be credited to ____ a) Capital A/c b) Sales A/c c) Drawings A/c d) Purchases A/c

ANSWER KEY

1a 2c 3d 4d 5b 6a 7b 8a 9a 10b 11d 12b 13c 14b 15d 16a 17d 18 19c 20d 21d 22d 23a 24a 25c 26d 27a 28c 29b 30b 31c 32c 33a 34a 35c 36d 37b 38a 39b 40a 41a 42a 43c 44b 45a 46b 47a 48b 49c 50c



Unit2: Piecemeal distribution of cash

1. Amount reserved for Dissolution expenses will be subtracted from which installment (a) First (b) Second (c) Third (d) Last

2. Surplus capital method is suitable when all partners are – (a)Solvent (b)Insolvent (c) Poor (d) None of the above

3. Under maximum loss method, every installment realised is considered as – (a) First realisation (b) Final realisation (c) Both (d) None of the above

4. Surplus capital method is also known as --- (a) Maximum loss method (b) Proportionate capital method (c) Real capital method (d) None of the above

5. Which of the following statement is correct. (a) Dissolution expenses and outside liabilities are to be paid first (b) Dissolution expenses and outside liabilities are to be paid last (c) Dissolution exp. to be paid first and outside liabilities are to be paid last (d) None of the above

6. ______ is the correct payment sequence of dues, (a) Partners loan-capital-creditors-secured loan (b) Creditors- secured loan-partners loan-capital (c) Secured loan-partners loan-creditors –capital (d) Secured loan- creditors- partners loan- capital

7. If there is any cash or bank balance on the date of dissolution, then it should be (a)Deducted from first instalment (b) Added to first installment



(c) Ignored in calculation (d) Given to all partners equally

8. The basic presumption of Maximum loss method is— (a) There will be no further realisation from assets (b) There will be further realisation from assets (c) Both of the above (d) None of the above

9. In piecemeal distribution of cash, final deficit of each partner will be --- (a) In Capital Ratio (b) In Profit &Loss Ratio (c) Not in Capital Ratio (d) Not in Profit &Loss Ratio

10. A, B and C are partners sharing P&L in ratio in 9:6:3.If the capital of C is 60,000,partner B is 90,000 and partner A is 90,000 then who should be taken as base? (a) A’s Capital (b) B’s Capital (c) C’s Capital (d) None of the above

11. Under Maximum Loss Method, which statement is correct (a)Outside liabilities are paid first, partners loan next and then partners are paid (b) Partners loan first and then outside liabilities (c) Partners capital is paid first (d) All paid equally

12. Which of the following statement is correct. (a) Creditors are paid first and then partners are paid last (b) Creditors will be paid last and capital will be paid first (c) Both will returned at the same time (d) None of the above

13. Which of the following statement is correct. (a) General reserve should be Credited to all partners in P&L Ratio (b) General reserve should be Credited to all partners in Capital Ratio (c) General reserve should Not be Credited to all partners (d) None of the above



14. If amount of rs.25,000 was kept a side for the dissolution expense, but the actual expense comes to Rs.17,000, then (a) Rs. 25,000 will be deducted from the last installment (b) Rs. 25,000 will be added from the last installment (c) Rs. 8,000 will be deducted from the second installment (d) None of the above

15. A,B and C are partners sharing profits and loss in ratio of 3:2:1.If their capitals are Rs.45,000;Rs.45,000 and Rs.30,000 Resp., then which partners capital should be taken as base in surplus capital method. (a) A’s Capital (b) B’s Capital (c) C’s Capital (d) None of the above

16. If amount of rs.15,000 was kept a side for the dissolution expense,but the actual expense comes to Rs.10,000 , then (a) Rs. 15,000 will be deducted from the last installment (b) Rs. 15,000 will be added from the last installment (c) Rs. 5,000 will be deducted from the second installment (d) Rs.15,000 should be deducted from 1st installment and Rs5000 should be added in last installment

17. In surplus capital method, the partner whose capital proportion is……………….should

be taken as base. (a) Less (b) More (c) Zero (d) None of the above

18. Ram, Lakhan and Bharat shares P&l in ratio of 3:2:1 n capital is Rs30,000 Rs30,000 and Rs.20,000.Who should be taken as base? (a) Ram (b) Bharat (c) Lakhan (d) None of the above

19. In piecemeal distribution of cash, Debit balance of P&L A/c is- (a) Deducted from partners capital (b) Added in partners capital (c) Should not be distributed (d) None of the above



20. The Capital deficiency of the Insolvent partner will be borne in which ratio (a)Profit Sharing Ratio (b) Loss Sharing Ratio (c) Capital Ratio (d) None of these

21) . In settling the accounts of a firm after dissolution, assets of the firm shall be applied first in paying _____.

a) Each partner proportionately what is due to him on account of loans advanced by him. b) Each partner proportionately what is due to him on account of capital. c) Each partner proportionately what is due to him on account profit sharing ratio d) Each partner proportionately what is due to him on account of current a/c balance.

22). A and B who are partners sharing profit in the ratio of 7:3, admit C as a new partner. A surrenders 1/7 of his share and B surrenders 1/3 of his share in favour of C. The new profit sharing ratio will be ______.

a) 6:2:2 b) 4:1:1 c) 3:2:2 d) 4;4;2

23) A and B who are partners sharing profit in the ratio of 7:3, admit C as a new partner. A surrenders 1/7 of his share and B surrenders 1/3 of his share in favour of C. The new profit sharing ratio will be ______.

a) 6:2:2 b) 4:1:1 c) 3:2:2 d) 4;4;2

24) In piecemeal distribution, amounts realised from assets are used to settle the liabilities in the following order

a) Partner's Loans, Outside Liabilities, Realisation Expenses, Partners Capitals b) Realisation Expenses, Outside Liabilities, Partners Loans, Partners Capitals c) Outside Liabilities, Realisation Expenses, Partners Capitals, Partners Loan d) None of the above

25) The basic presumption of surplus capital method is that a partner who has contributed more capital than his proportionate share capital , should be paid first to the extent of his excess capital over and above the proportionate capital

a) True b) False



26) under surplus capital method, those partner should be paid first those capitals are comparatively in excess of their capital sharing ratio.

a) True b) False

27) under piecemeal distribution of cash , municipal taxes will be paid last , while making the payment of outside liabilities.

a) True b) False

28) The periodic distribution of cash to partners is made in such a way that the unpaid balance of capital of each partner is retained in profit sharing ration.

a) True b) False

29) In the process of dissolution, share of the company are to be issued in fraction

a) True b) False

30) On gradual realization of assets,first preference for distribution of cash, will be for payment of realization expenses.

a) True b) False

31) under piecemeal distribution of cash,after all realization have been made, the final unpaid capital balance must be in capital ratio

a) true b) False

32) In case, an unrealized asset of the firm is taken over by a partner during the course of realization, the market value if such asset are to be added to the gross realization of that month.

a) True b) False

33) Any Profit and loss account, credit balance shown on the liability side, in the balance sheet of the firm as on the date of dissolution, will be adjusted to the capital balance of all the partner in their capital ratio

a) True b) False

34) under the surplus capital method , after the repayment of all outsider liabilities, the ………………..are to be discharged on pro-rata basis.

a) Partners loan. b) Creditors c) Bank loan



d) Taxes

35) Loan to firm by partners wife is a ………………to third party. a) Assets

b) Liabilities c) Current Assets d) Capital

36) On gradual realization of assets , first priority for distribution of available cash will be for payment of………………….

a) Realization Expenses b) Revaluation Expenses c) Dissolution Expenses d) Income

37) Under piecemeal distribution of cash …………….. capital means the capital which is more than the required capital , according to the share of profit an individual partner is sharing.

a) Surplus b) Deficit c) Normal d)Required

38) If the secured assets realized on dissolution of a firm are more than the liabilities to be paid, they are termed as ……………liabilities

a) Fully Secured b) unsecured c) Preferential

39) Out of the unsecured liabilities, those are compulsorily, to be paid as per the law, on preferential basis are termed as……………. Liabilities.

a) Preferential b) Secured c) Unsecured liabilities

40) The basic presumption of surplus capital method is that a partner who has contributed more capital than his proportionate share capital , should be paid first to the extent of his excess capital over and above the proportionate capital

a) True b) False

41) Is government dues are considered as Third party liabilities? a) True



b) False 42) Maximum Loss method is also known as ……….. a) Notional method b) Excess Capital method c) Both of the above d) None of the above 43) Preferential liabilities includes………… a) Government Dues b) Employees dues c) Rent dues d) All of the Above 44) Is rent dues is unsecured loans…. a) True b) False 45) According to order of payment Partner and partnrer’s wife are same level of distribution…. a) Yes b) No 46) Is profit sharing ratio and capital ratio are always same a) Yes b) No 47) Contingent Liabilities and Current liabilities are same a) True b) False 48) Excess capital method and Quotient Method are same. a) True b) False 49) In surplus Capital method is it possible to have a situation of Realization Loss a) Yes b) No c) May be d) Always Loss 50) According to surplus capital method , partners having greater capital should be paid later. a) True b) False

ANSWER KEY 1a 2a 3a 4b 5a 6d 7b 8a 9b 10a 11a 12a 13a 14d 15a 16d 17a 18a 19d 20c 21a 22d 23d 24d 25a 26a 27b 28a 29b 30a 31b 32b 33b 34a 35b 36a 37a 38a 39a 40a 41b 42c 43d 44b 45b 46b 47b 48a 49c 50b



Unit3: Single Entry 1)Single entry systems are maintained by (a) Company (b) Income tax authorities (c) Government (d) Sole trader 2) Single entry system of book keeping is (a) Simple (b) Unauthorized by tax authorities (c) Unscientific (d) all of these 3) 3. If closing capital is >opening capital, it denotes (a) Loss (b) Profit (c) No profit no loss (d) Profit, if there is no introduction of fresh capital 4) If closing capital is < opening capital, it denotes that (b)Loss (b) Profit (c) No profit no loss (d) Loss, if there is no introduction of fresh capital 5) If capital at the end of the year is 40,000: capital introduced during the year Rs. 30,000; drawings 20,000 and loss for the year is 60,000; then Capital at the beginning of the year was: (a) 90,000 (b) 80,000 (c) 70,000 (d) 10,000 6) If capital at the end of the year is 50,000: capital introduced during the year Rs. 30,000; drawings 20,000 and profit for the year is 30,000; then Capital at the beginning of the year (a) 10,000 (b) 30,000 (c) 20,000 (d) 35,000 7) Profit = capital at the end+ drawings-additional capital-…………. (a) Opening capital (b) Closing capital (c) Loss



(d) None of these 8) What should be added in closing capital for calculating opening capital? (a) Loss and drawing (b) Profit and drawing (c) Profit only (d) Loss only 9) When the amount of closing capital (after adjusting drawings ) is less than that of opening capital the difference will be treated as:- (a) Loss (b) Profit (c) Additional capital (d) None of them 10) If opening capital is 24,000; closing capital 40,000; drawing 7,000; fresh capital 8,000. Calculate profit or loss. (a) Profit 15,000 (b) Loss 15,000 (c) Profit 20,000 (d) Loss 20,000 11) Single entry is an: (a) Complex (b) Authorized by tax authorities c) Unscientific (d) all of these 12) In single entry system, it is possible to prepare: (a) A trial Balance (b) Trading & P/L a/c (c) Receipt and payment Account (d) Balance sheet 13) Single entry system is most suitable where: (a) Cash transaction are not numerous (b) Credit transaction are numerous (c) Cash transaction are numerous (d) None of the above 14) In single entry system, profit is ascertained as follows: (a) Opening stock + Drawings + new capital introduced – Closing capital. (b) Closing Capital+ Drawings + new capital introduced – opening capital. ( c)Closing Capital+ Drawings - new capital introduced – opening capital.



(d) Closing Capital- Drawings + new capital introduced – opening capital. 15) Capital at the beginning of the year is ascertained by preparing: (a) Opening statement of affairs (b) Trading & P/L a/c (c) Receipt and payment Account (d) Balance sheet 16) In single entry only, (a) Debtors and Creditors account are maintained (b) Assets account ( c) All expenses account (d) Balance sheet 17) Single entry system cannot be maintained by (a) Sole proprietorship (b) Partnership firm (c) Companies (d) All of the above 18) Quasi single entry system is also known as partly single entry system (a) True (b) False 19) In single entry system, only real and nominal account are maintained (a) true (b) False 20) under single entry system, a trial balance can be drawn (a) True (b) False 21) Single entry system is an incomplete and unscientific system of recording transactions (a) True (b) False 22 ____ system of book keeping is the only scientific method to record farming transaction. (a) Single entry (b) Double entry (c) Balance sheet (d) Adjustment A/c



23) In single entry system it’s difficult to detect____ (a) Account (b) Fraud. (c) Profit. (d) Gross profit 24) Single entry constitutes incomplete records rather than single entry___ (a) credit. (b) Profit. (c) Accounting. (d) Net profit 25) Under pure single entry system only ___ Account are kept. (a) Personal (b) double entry (c) Assets (d) None of these 26) Under the ___ entry system personal accounts, cashbook and other subsidiary books are kept separately. (a) Pure single (b) Quasi single (c) Simple single (d) Double entry 27) ____ Accounting is mainly concerned with the future management planning. (a) Personal. (b) Quasi single entry (c) Pure single entry (d) Management 28) In ___ entry system no records are kept for real or nominal Account. (a) Quasi single (b) pure single (c) Simple single (d) Double entry 29) Most of the farming transactions are transacted on ___ basis. (a) Double entry (b) Creditors. (c) Surplus. (d) Cash



30) In single entry system it’s difficult to operate ___ system (a) Pure single (b) Single entry (c) Internal control (d) Quasi single 31) In single entry system it’s difficult to exercise control over ___. (a) Asset (b) Management (c) Single entry (d) Pure single entry 32) Under ____ entry system, Personal Accounts and Cash Book are kept separately. (a) Simple single (b) Pure s ingle. (c) Quasi single. (d) Double entry 33) Under statement of affairs method which is also termed as ___. (a) Single entry system (b) Quasi single entry system (c) Capital comparison method (d) Double entry system 34) If the closing capital is more than the opening capital it’s shows an increase in capital which means a_____ (a) Profit. (b) Shares. (c) Account. (d) Operating capital 35) The opening capital is ascertained by preparing: (a) Cash book (b) Creditors A/c (c) Debtors A/c (d) Opening statement of affairs. 36) A single entry system it: (a) Complete and scientific system (b) Incomplete and unscientific (c) Incomplete and scientific (d) Complete and unscientific



37) Single entry system has effect: (a) One effect (b) Tow effect (c) Three effect (d) None of the above 38) In single entry system, it is not possible to prepare: (a) Receipts and payments A/c (b) Trial balance (c) Balance sheet (d) Account sales 39) A single entry system is usually adopted by: (a) Company (b) Partnership (c) Government (d) None of above 40) Single entry system is must suited where: (a) Cash transactions are many (b) Credit transactions are many. (c) Cash & credit transactions are more. (d) None of the above 41) Capital can be obtained by preparing: (a) Cash book (b) Statement of affairs (c) Debtors A/c (d) Creditors A/c 42) Credit sale can be obtained by preparing: (a) Cash book (b) Statement of affairs (c) Debtors A/c (d) Creditors A/c 43) Credit purchase can be calculated by preparing: (a) Cash book (b) Statement of affairs (c) Debtors A/c (d) Creditors A/c 44) Cash in hand can be obtained by preparing: (a) Cash book



(b) Statement of affairs (c) Debtors A/c (d) Creditors A/c 45) In single entry system profit is calculated as follows: (a) Opening Capital + Drawing + Fresh Capital- Ending capital (b) Capital at the end – Drawing – Fresh capital- Opening capital (c) Capital at the end + Drawing – Fresh capital. -Opening capital (d) None of the above 46) In single entry system only accounts are opened: (a) Personal A/c (b) Real A/c (c) Nominal A/c (d) Real & Nominal A/c 47) Single entry system cannot be a maintained by: (a) Joint stock company (b) Partnership A/c (c) Sole-tradership A/c (d) All of these 48) Single entry system of book – keeping is generally followed by: (a) Small business (b) Non – trading (c) Large business (d) None 49) A statement of assets and liabilities prepared under the single entry system is called: (a) Balance sheet (b) Financial statement (c) Cash statement (d) Statement of affairs 50) Net worth of an organization means the excess of its total assets over total: (a) Expenses (b) Incomes (c) Liabilities (d) Both (a) and (b)



ANSWER KEY 1d 2d 3d 4d 5aa 6a 7a 8a 9a 10a 11c 12c 13a 14c 15a 16a 17c 18a 19b 20b 21a 22b 23b 24c 25a 26b 27d 28b 29d 30c 31a 32c 33c 34a 35d 36b 37a 38b 39c 40a 41b 42c 43d 44a 45c 46a 47a 48a 49d 50c



UNIT 4: GST

1) Compensation to states under GST (Compensation to States) Act , 2017 is paid by a) Central Government from consolidated fund of India b) Central Government from GST compensation fund of India c) Central Government directly from the collection of compensation cess d) GST Council under Constitution of India.

2) While computing compensation to states, tax revenue of this tax/ these taxes is excluded a) petroleum crude, diesel, petrol, ATF and natural gas b) Alcohol for human consumption c) entertainment tax collected by local authorities d) All of the above

3) Input tax credit on compensation cess paid under GST (Compensation to States) Act, 2017 a) is not available c) is available b) is available but not fully d) is available after one year

4) Maximum rate of CGST prescribed by law for intrastate supply made is---- a) 18% c) 20% b) 40% d) 28%+cess

5) Input tax credit on Compensation cess paid under GST (Compensation to States) Act, 2017 is available for payment of a) IGST only b) IGST and CGST only c) compensation under GST (Compensation to States) Act d) None of the above



6) IGST is payable when the supply is ---

a) Interstate c) Intra-state b) Intra- UT d) All of the above

7) Zero rated supply includes supplies made a) By SEZ unit in India c) to SEZ unit in India b) Both (a) & (b) above d) None of the above

8) With the introduction of GST, imports will be— a) more expensive b) neutral with no change c) cheaper d) None of the above

9) The first committee to design GST model was headed by

a) Vijay Kelkar b) Asim Das Gupta c) Dr. Chidambaram d) None of the above

10) First discussion paper (FDP) which formed the basis for GST in 2009 was released by

a) Union Finance Ministry b) Dr. Manmohan Singh c) GST Council d) Empowered Committee

11) Roll out of GST requires constitutional amendment because—

a) existing laws were cascading b) the powers to levy were exclusive i.e. the state had power to tax the goods but not services and centre had power to tax services and levy on goods c) there are separate laws for goods and services d) All of the above.



12) Works contract under GST is goods used in work relating toa) Immovable property b) Both movable and immovable property c) Immovable property treated as supply of service d) Immovable property treated as supply of goods

13) IGST deals with a) Composition scheme b) Time of supply c) Service tax on imported services d) All of the above

14) The turnover limit of Rs. 50 Lakh for composition scheme is not applicable to the state of

a) Himachal Pradesh b) Assam c) Uttarakhand d) None of the above

15) A supplier is liable to get registered under GST if his aggregate turnover in a financial

year crosses Rs. 20 lakh in a state or UT other than special category states if he is a) an interstate supplier b) an intra-state supplier c) Electronic commerce operator d) Person liable to pay GST under reverse charge

16) One of the following states does not fall under special category given under Art. 279A of the Constitution a) Himachal Pradesh b) Uttarakhand c) Chhattisgarh d) Jammu & Kashmir

17) Exemption from registration is available to a) Central & State Govt. Departments b) Agriculturists c) a) & b) above d) None of the above



18) Agriculturist a) Individual or HUF b) Individual and HUF c) Partnership d) All the above

19) A person is having multiple business requires registration a) Single b) Each business separately c) Either A or B d) None of the above

20) Article _____ of constitution of India empowers parliament to impose IGST in India. a) 69A b) 265A c) 279A d) none of the above

21) Full-fledged GST was recommended by a) Raja Chellaiah committee b) Vijay Kelkar Task Force c) GST Council d) Man Mohan Singh Commission

22) One of the following taxes is already subsumed under GST a) Tax on motor spirit b) Luxury Tax c) Tax on production of alcohol d) Tax on electricity

23) One of the following taxes is not subsumed under GST a) Octroi by local authorities b) Entertainment tax by local authorities c) Entry tax by State Governments d) Tax on lottery by State Governments



24) GST is ______________ a) a value added tax b) tax on goods and services c) tax on consumer goods and services d) none of the above

25) Dual model of GST as adopted in India has been drawn majorly from

a) Australia b) France c) USA d) Canada

26) GST is ____________

a) applicable to the state of J&K b) not applicable to the state of J&K c) going to be applicable to the state of J&K from later date d) both (b) and (c) above

27) The rate of GST as applicable on goods and services are: a) 0% 5% 12% 16% 28% b) 0% 6% 12% 18% 28% c) 0% 5% 12% 18% 28% d) 0% 5% 12% 18% 26%

28) Under which Constitutional Amendment Act, 2016, constitution was amended to introduce GST in India a) 122 b) 121 c) 101 d) none of the above

29) Under the provisions of GST law, tax is levied a) simultaneously by Union and State laws b) only by the Union laws c) only by the State laws d) exclusively by Union and State laws



30) GST Laws are implemented on the recommendation of a) Central Government b) GST Network (GSTN) c) GST Council d) President of India

31) When did the President of India gave assent to the Central GST Law? a) 18th April 2017 b) 22nd April 2017 c) 5th April 2017 d) 12th April 2017

32) Money means:

a) Indian legal tender b) Cheque/ Promissory note c) Foreign currency d) all of the above

33) Where is GST applicable? a) All over India except the state of Jammu and Kashmir b) All over India except the state of Sikkim c) All over India except the state of Meghalaya d) All over India

34) What is the meaning of non-taxable territory? a) Outside taxable territory b) Inside taxable territory c) Interstate taxable territory d) None of the above

35) What does the term “person” includes? a) HUF b) Individual c) LLP d) All of the above



36) GST Council is referred under which Article of the Constitution? a) 279 b) 279A c) 277 d) 276

37) What is the weight of vote that the Centre has in the GST Council?

a) 1/4th of total votes cast b) 1/3rd of total votes cast c) 1/2th of total votes cast d) none of the above

38) What is the weight of vote that the all the States together have in the GST Council?

a) 1/4th of total votes cast b) 2/3rd of total votes cast c) 1/2th of total votes cast d) 3/4th of total votes cast

39) Who is the Chairperson of the GST Council

a) Finance Secretary b) Union Finance Minister c) State’s Finance Minister by rotation d) Prime Minister

40) Taxable turnover below ` 1.5 crore is under the control of

a) State b) Centre c) Both Centre and State d) exempt from the purview of GST

41) Under which Schedule, power to declare certain activity/ transaction as neither supply

of goods nor of services a) Schedule I b) Schedule III c) Schedule II d) Schedule IV



42) When was GST Council constituted? a) 12th September 2016 b) 13th September 2016 c) 20th September 2016 d) 16th September 2016

43) What is address for delivery? a) Recipient address mentioned in the invoice b) Recipient address mentioned in delivery challan c) Not necessarily recipient address d) Recipient address mentioned in the gate pass

44) Who is an agriculturist? a) Individual or HUF b) Individual and HUF c) Partnership d) All of the above

45) An Associated Enterprise is mentioned in? a) Income Tax Act, 1961 b) Central GST Law, 2017 c) State GST Law, 2017 d) Companies Act, 2013

46) Appointed day is __________________ a) date on which the provisions of the act shall come into force b) date on which President gave assent c) date on which both houses passed the act d) date on which it is sent to Finance Ministry

47) What is conveyance? a) vessel b) vehicle c) aircraft d) all of the above



48) Which section mentions about inter-state supply of service? a) section 8 b) section 18 c) section 14 d) section 12

49). When does Quarter end?

a) March b) September c) December d) All of the above

50). Deemed Export is mentioned in which section?

a) section 137 b) section 147 c) section 142 d) section 145

ANSWER KEY

1b 2d 3c 4c 5c 6a 7c 8a 9c 10d 11b 12c 13c 14b 15b 16b 17c 18a 19c 20d 21c 22c 23c 24a 25d 26a 27b 28b 29a 30b 31d 32d 33d 34a 35d 36c 37c 38c 39c 40b 41c 42a 43a 44a 45a 46a 47d 48a 49d 50c

Documents

MCQ 102 Financial Accounting - dacc.edu.in