Sample Questions on Accountancy

1. Which of the following is not a current liability?
A. Bank Overdraft
B. Bills Payable
C. Outstanding Expenses
D. Equity Share Capital

2. Contingent Liability is shown owing to the
A. Convention of conservatism
B. Convention of materiality
C. Convention of full disclosure
D. Dual aspect concept

3. Revenue is generally recognized as being earned at the point of time when
A. Production is completed
B. Sales is effected
C. Cash is received
D. Unproductive assets are sold off

4. Under inflationary conditions, which of the following methods of inventory valuation will show highest value of closing stock?
C. Weighted average
D. None of the above

5. if average stock is Rs. 12,000, closing stock is Rs. 3,000 more than opening stock then the value of the closing stock will be
A. Rs. 12,000
B. Rs. 24,000
C. Rs. 10,500
D. Rs. 13,500

6. The method of inventory valuation most widely used in Accounting is
A. Cost price
B. Market price
C. The higher of cost or market price
D. The lower of cost or market price

7. A manager gets 5% commission on net profit after charging such commission, gross profit Rs. 58,000 and expenses of indirect nature other than manager’s commission are Rs. 16,000. The commission amount will be
A. Rs. 2,900
B. Rs. 2,000
C. Rs. 1,500
D. Rs. 2,200

8. Which of the following accounts can be used for transfer to capital redemption reserve account?
A. General Reserve Account
B. Forfeited Shares Account
C. Profit prior to incorporation
D. Securities Premium Account

9. Loss on Issue of debentures is treated as—
A. Intangible Asset
B. Current Asset
C. Current Liability
D. Miscellaneous Expenditure

10. Which financial statement represents the accounting equation, Assets=Liabilities+Owner’s Equity
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Fund Flow Statement

11. The debts written off as bad, if recovered subsequently are
A. Credited to Bad Debts Recovered Account
B. Credited to Debtors Account
C. Debited to Profit and Loss Account
D. Debited to Bad Debts Recovered Account

12. Which of these is not a part of Double Entry System?
A. Memorandum Joint Venture Account
B. Joint Venture Account
C. Joint Bank Account
D. Co-Venture Account

13. An amount of Rs. 5,000 received from Pankaj credited to Pooja would affect
A. Pooja’s Account
B. Pankaj’s Account
C. Pankaj‘s and Pooja’s Account
D. Cash Account and Pooja’s Account

14. Economic life of an enterprise is split into the periodic interval as per
A. Periodicity
B. Matching
C. Going Concern
D. Accrual

15. Patents Accounts are
A. Secured Loan Account
B. Nominal Account
C. Real Account
D. Debtors Account

16. Goods costing Rs. 2,00,000 sent out to the consignee at cost plus 25%. Invoice price of the goods will be
A. 2,40,000
B. 2,30,000
C. 2,10,000
D. 2,50,000

17. The fair value of the share is the average of
A. Par Value and Market Value
B. Intrinsic Value and Par Value
C. Intrinsic Value and Yield Value
D. Par Value and Yield Value

18. In the absence of any provision in the partnership agreement, profits and losses are shared
A. In the ratio of capitals
B. Equally
C. In the ratio of loans given by them to the partnership firm
D. None of the above

19. Entrepot trade refers to
A. Imports
B. Exports
C. Foreign trade
D. Goods imported for re-export

20. The factor affecting international trade is
A. Political relations between the two trading partners
B. The state of economic development
C. The trade policy of the governments
D. All of the above

Selected Questions Previous Question
Typical Questions Old Papers
Test Papers Basic Accounting
Important Questions Financial Accounting
Question Bank Civil Accounts
Practice Set Financial Rules
Mock Test Book Keeping
Sample Papers Accounts and Audit
Model Question

21. What does SDR stand for?
A. Special Duty Rubber
B. Special Drawing Rights
C. Strategic Defense Relation
D. None of the above

22. Which of the following is not a feature of Development Banks?
A. They accept deposits from the public
B. They specialize in providing medium and long term finances
C. They promote economic development by encouraging investment
D. They are of two types- industrial and agricultural

23. 91-day Treasury Bill are issued by
A. Reserve Bank of India
B. State Bank of India
C. Commercial Banks
D. Government of India

24. Which of the following is not related to the trait theory of leadership?
A. Physical factors such as height
B. intelligence and extroversion
C. Self-confidence and ambition
D. Training and experience of employees

25. which of the following principles states that recurring decisions should be handled in a routine manner by lower level managers whereas problems involving unusual matters should be referred to higher levels
A. Principle of unity of command
B. Scalar principle
C. Principle of exception
D. Principle of commitment

26. ‘Grapevine’ refers to a term used in relation to
A. Formal communication
B. Informal communication
C. Both formal and informal communication
D. This term is not used in relation to communication

27. Collective bargaining is concerned with
A. Trade union
B. Independent association
C. Voluntary organization
D. Statutory body

28. An internal auditor can be removed by
A. The Shareholders
B. The Statutory Auditor
C. The Management or Directors
D. The Government

29. Except in a special cases, the retiring auditor is automatically
A. Dismissed
B. Disqualified
C. Suspended
D. Reappointed

30. Test checking implies checking
A. Each and every item
B. representative sample of items
C. Only a few items in detail
D. Random items

31. Balance sheet audit would not be applicable or effective in
A. Units where qualified accountants are employed
B. Enterprises where mechanised accounting system is in operation
C. Small business organization with low key transactions
D. Organizations with an efficient inbuilt system of internal control and check

32. Which one of the following type of audit is not excluded while computing ceiling on number of audits
A. Audit of a private company
B. Audit of a foreign company
C. A joint audit
D. A branch audit

33. What does vouching relate to?
A. Cash receipts
B. Cash payments
C. Credit transactions
D. All of the above

34. Continuous audit refers to
A. Interim audit
B. Audit at year end
C. Internal audit
D. Regular audit

35. The scope of the interim audit falls within the purview of
A. Partial audit
B. Final audit
C. Internal audit
D. Continuous audit

36. The minimum number of directors in a public limited company is
A. 1
B. 2
C. 3
D. 7

37. What is the maximum number of partners permissible for a partnership firm carrying on general business?
A. 7
B. 10
C. 20
D. 50

38. When a partner is guilty of negligence or fraud within the scope of his authority
A. Only he will be held liable for his acts
B. He can be expelled if he refuses to assume liability
C. All partners are liable, provided there is an agreement to this effect
D. All partners automatically also become liable

39. The voting rights of members in a cooperative organization are
A. ln proportion to the capital held
B. Equal, irrespective of capital contribution
C. Dependent on their popularity among the members
D. Proportionate to the capital held and loans given by members

40. A change in a company’s registered office from one state to another may be effected by
A. An ordinary resolution
B. A resolution of the Board of Directors
C. A special resolution
D. A special resolution and confirmation from the company law board

41. How may undercapitalization be remedied?
A. By reduction of intere4st on debentures
B. By redemption of preference shares
C. By redemption of debentures
D. By issue of bonus shares

42. A partnership firm cannot raise funds by
A. Bank loans
B. Partners loans
C. Debentures
D. Partners capitals

43. Promoters wanting to retain control of the company should raise a large proportion of funds by way of
A. Equity capital
B. Preference capital
C. Debentures
D. Preference capital and debentures

44. What does ploughing back of profit means?
A. Earning black money
B. Dividends not claimed by the shareholders
C. Not paying dividend in a certain year
D. Retaining the earnings

45. Which of the following institution was the first to be established?
A. Unit Trust of India
B. Industrial Finance Corporation of India
C. Industrial Credit and Investment Corporation of India
D. Industrial Development Bank of India

46. A stock is distinguished from a share in that it
A. Is transferable by mere delivery
B. Must have distinctive numbers
C. Has no nominal value y
D. is always partly paid

47. Bearer debentures are treated as
A. Negotiable instruments
B. Mortgage debentures
C. Naked debentures
D. First debentures

48. The underwriting commission in case of debentures cannot exceed
A. 1%
B. 2.5%
C. 3.5%
D. 5%

49. Which of the following is not a component of the new issue market?
C. The Stock Exchange
D. The UTI

50. The most usual method of marketing new securities is
A. Stock exchange placing
B. Rights issue
C. Direct sale to public through prospectus
D. Private placing