Home » MCQs » Financial Accounting Multiple Choice Questions#5

1) 

What would be the value of conversion cost, if the cost of material consumed during the month is $5,000, labor cost incurred is $2,000 and the factory over head cost is $1,000?


A)  $3,000RIGHT ANSWER!!!

B)  $5,000WRONG ANSWER

C)  $7,000WRONG ANSWER

D)  $8,000WRONG ANSWER


2) 

Mr. A & B entered into a partnership with an equal share in profit or loss. The agreement provides that Mr. A will receive $10,000 and Mr. B will receive $8,000 as salary allowance. The net income for the year is $85,000. What will be the total share of Mr. A?


A)  $52,500WRONG ANSWER

B)  $42,500WRONG ANSWER

C)  $43,500RIGHT ANSWER!!!

D)  $50,500WRONG ANSWER


3) 

Which of the following capital is taken up by the general public?


A)  Issued capital RIGHT ANSWER!!!

B)  Subscribed capital WRONG ANSWER

C)  Authorized capital WRONG ANSWER

D)  Reserve capital WRONG ANSWER


4) 

All of the following have an effect on ‘operating activities’ while preparing the statement of cash flows except:


A)  Provision for doubtful debts WRONG ANSWER

B)  Gain or loss on currency exchange rate WRONG ANSWER

C)  Depreciation charged on fixed asset
WRONG ANSWER

D)  Amount received for disposal of a fixed asset RIGHT ANSWER!!!


5) 

Which of the following financial statement is helpful for the investors and creditors to assess the cash and non cash aspects of operating, investing and financing transactions on an entity’s financial position?


A)  Balance Sheet WRONG ANSWER

B)  Income Statement WRONG ANSWER

C)  Statement of cash flows RIGHT ANSWER!!!

D)  Statement of changes in equity WRONG ANSWER


6) 

According to the statement of cash flows following are the examples of investing activities except:


A)  Sales of machinery WRONG ANSWER

B)  Capital invested by the owners RIGHT ANSWER!!!

C)  Purchase of building for the business use WRONG ANSWER

D)  Cash received from the disposal of equipment WRONG ANSWER


7) 

Which of the following items of balance sheet are useful in evaluating a company’s liquidity?


A)  Current assets and other assets WRONG ANSWER

B)  Current liabilities and current assets RIGHT ANSWER!!!

C)  Current liabilities and plant and equipment WRONG ANSWER

D)  Non current liabilities and other assets WRONG ANSWER


8) 

Which of the following can be distributed among the share holders?


A)  Capital reserve.
WRONG ANSWER

B)  General reserve
RIGHT ANSWER!!!

C)  Revaluation reserve WRONG ANSWER

D)  All of the given options WRONG ANSWER


9) 

Fixed Assets (WDV) + Working Capital =?


A)  Total assets employed RIGHT ANSWER!!!

B)  Total liabilities WRONG ANSWER

C)  Total assets WRONG ANSWER

D)  Current assets WRONG ANSWER


10) 

Shares for which amount is paid by public are called ______ shares.

A)  Authorized WRONG ANSWER

B)  Paid up RIGHT ANSWER!!!

C)  Bonus shares WRONG ANSWER

D)  All are correct options WRONG ANSWER



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