Home » MCQs » Financial Accounting Multiple Choice Questions#10

1)
 
Cost of asset

$1,00,000
Life of asset
5 years
Depreciation for each year
$ 5,000
Sale price after 5 years
$50,000
Book value of Asset after 5 years
     ?

A)  $25, 000 RIGHT ANSWER!!!


B)  $75,000 WRONG ANSWER

C)  $15,000 WRONG ANSWER

D)  $1, 00,000
WRONG ANSWER


2) 

Debenture is also named as:

A)  Share WRONG ANSWER

B)  Bond RIGHT ANSWER!!!

C)  Reserve WRONG ANSWER

D)  Equity WRONG ANSWER


3) 

A company declares a cash dividend to be paid to its stockholders next month. The effect of the transaction is to:

A)  Decrease assets and liabilities.
RIGHT ANSWER!!!

B)  Increase assets and stockholders' equity.
WRONG ANSWER

C)  Decrease assets and stockholders' equity.
WRONG ANSWER

D)  Increase liabilities and decrease stockholders' equity.
WRONG ANSWER


4) 

The net income calculated in the income statement for the accounting period is reported on:

A)  Bank Statement
WRONG ANSWER

B)  Statement of retained earnings
WRONG ANSWER

C)  Statement of cash flows
WRONG ANSWER

D)  None of the given options
RIGHT ANSWER!!!


5) 

Which of the following is the most important document of the company?

A)  Memorandum of Association
RIGHT ANSWER!!!

B)  Articles of Association
WRONG ANSWER

C)  Annual Report
WRONG ANSWER

D)  Prospectus WRONG ANSWER


6) 

Authorized share capital is also known as:


A)  Registered capital
RIGHT ANSWER!!!

B)  Issued capital
WRONG ANSWER

C)  Paid up capital
WRONG ANSWER

D)  Called up capital
WRONG ANSWER


7) 

Goods purchased from “Mr. A” for $2,000 passed through the sales book. The rectification of error will result in:


A)  Increase of gross profit RIGHT ANSWER!!!

B)  Decrease of gross profit WRONG ANSWER

C)  Remains constant and no effect on net profit
WRONG ANSWER

D)  There is no relation between goods purchased and gross profit
WRONG ANSWER


8) 

Which of the following entry will be recorded when the Bad Debts are recovered?

A)  Cash account (Dr.) & Bad Debts recovered account (Cr.)
RIGHT ANSWER!!!

B)  Accounts Receivable account (Dr.) & Bad Debts recovered account (Cr.)
WRONG ANSWER

C)  Bad debts recovered account (Dr.) and Profit & Loss account (Cr.)
WRONG ANSWER

D)  Provision for doubtful debts account (Dr.) & Cash account (Cr.)
WRONG ANSWER


9) 

Which of the following would be deducted from Sundry Debtors in Balance Sheet?

A)  Bad debts (Trial balance item)
WRONG ANSWER

B)  Old provision for doubtful debts
WRONG ANSWER

C)  New provision for doubtful debts
WRONG ANSWER

D)  Both Bad debts (given in adjustment) and new provision for doubtful debts
RIGHT ANSWER!!!


10) 

The amount received; in excess of the face value of the shares is transferred to which of the following?


A)  Share premium account
RIGHT ANSWER!!!

B)  Share holder account
WRONG ANSWER

C)  Share capital account
WRONG ANSWER

D)  Right share
WRONG ANSWER




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