Question : Choose which of the following statements is not true.
Option 1: There may be variations in accounting practices followed by different firms, a meaningful comparison of their financial statements is not possible.
Option 2: Window dressing refers to the presentation of a better financial position than what it actually is by manipulating the books of account.
Option 3: Financial analysis does not identify symptoms of the problems.
Option 4: All of the above
Correct Answer: Financial analysis does not identify symptoms of the problems.
Solution : Answer = Financial analysis does not identify symptoms of the problems
Although financial analysis can spot problems, it cannot diagnose them; instead, management must find a solution to address the symptoms.
Hence, the correct option is 3.
Answer laterQuestion : A, B and C were partners sharing profits in the ratio of 1: 2: 2. B died on 30th June 2020 and the profit for the accounting year ended 31st March 2020 was Rs. 36,000. If the profit share of a deceased partner is to be calculated based on previous year's profit, the amount of profit credited to B's Capital Account will be
Option 1: Rs 3,000
Option 2: Rs 2,400
Option 3: Rs 3,600
Option 4: Rs 2,800
Correct Answer: Rs 3,600
Solution : Answer = Rs 3,600
Profit= $36000 \times \frac{2}{5} \times \frac{3}{12}$= 1800 × 2= 3600.
Hence, the correct option is 3.
Question : The computerised accounting system refers to -
Option 1: Printing of Balance sheet and Profit and loss accounts using computer
Option 2: Processing of accounting transaction through computer and produce reports and records
Option 3: Processing of accounting related data and priting reports
Option 4: None of the above
Correct Answer: Processing of accounting transaction through computer and produce reports and records
Solution : In order to provide reports that meet user needs, computerised accounting systems handle financial transactions and events in accordance with generally accepted accounting principles (GAAP).
Hence the Correct answer is option 2.
Question : If an organisation want to develop a computerised accounting system according to its need as the business of organisation is complex. Which software it should opt for -
Option 1: Ready to use Software
Option 2: Customized Software
Option 3: Tailor-made Software
Option 4: Any of above
Correct Answer: Tailor-made Software
Solution : Software that has been created especially for one person, one business, or one organisation is referred to as tailored software, also known as bespoke software, customised software, or personalised applications. There are no restrictions on what the programme may do because it was created just for your business.
Hence the correct answer is option 3.
Question : Under computerised accounting, procedure means:
Option 1: A logical sequence of actions to perform a task
Option 2: The raw fact (as input) for any business application
Option 3: User
Option 4: Computer, associated peripherals, and their network
Correct Answer: A logical sequence of actions to perform a task
Solution : Sequence means a logical sequence of actions to perform a task. Hence, the correct option is 1.
Question : Common-size Balance Sheet shows the percentage relation of each asset/equity and liability…………
Option 1: One accounting period
Option 2: Two or more accounting period
Option 3: To the total of assets/total of equity and liabilities
Option 4: None of the above
Correct Answer: To the total of assets/total of equity and liabilities
Solution : Answer = To the total of assets/total of equity and liabilities
Common-size Balance Sheet shows the percentage relation of each asset/equity and liability to the total of assets/total of equity and liabilities.
Hence, the correct option is 3.
Question : What is/are the features of computerised accounting environment?
Option 1: Simple and Integrated
Option 2: Accuracy & Speed
Option 3: Scalability
Option 4: All of the above
Correct Answer: All of the above
Solution : Following are the features of computerised accounting environment:
1. Simple and Integrated,
2. Accuracy & Speed,
3. Scalability,
4. Instant Reporting, and
5. Security.
Hence, the correct option is 4.
Question : Assertion A :- Price level changes and the purchasing power of money are inversely related. A change in the price level makes analysis of financial statements of different accounting years invalid.
Reason R :- Accounting records ignore changes in the value of money.
In the context of the above two statements, which of the following is correct?
Option 1: Both Assertion A and reason R are correct but the reason R is not the correct explanation of Assertion A
Option 2: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A
Option 3: Both Assertion A is correct but the reason R is not correct
Option 4: Both Assertion A and reason R are not correct
Correct Answer: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A
Solution : Answer = Both Assertion A and reason R are correct but reason R is the correct explanation of Assertion A
It may become invalid to compare financial accounts from various accounting years due to a shift in the level of prices. This is a result of accounting records failing to take changing currency values into account. Since accounting accounts are created at historical cost, changes in the worth of money are not taken into account.
Hence, the correct option is 2.
Question : Accounting Standard (AS-3) has been made mandatory in respect of accounting periods commencing on or after 1st April 2001, for certain enterprises. These enterprises
Option 1: Enterprises whose equity or debt securities are listed on a recognised inventory exchange in India,
Option 2: All other commercial, industrial and business enterprises, whose turnover for the accounting period exceeds Rs. 50 Crores.
Option 3: Both 1 and 2
Option 4: None of the above.
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
AS-3 has been mandatory for Enterprises whose equity or debt securities are listed on a recognised inventory exchange in India, and All other commercial, industrial and business enterprises, whose turnover for the accounting period exceeds Rs. 50 Crores.
Hence, the correct option is 3.
Question : The principles of management are:
Option 1: Fixed and unchangeable
Option 2: Universal and flexible
Option 3: Specific to each organization
Option 4: Derived from accounting principles
Correct Answer: Universal and flexible
Solution : The correct answer is (b) Universal and flexible
The principles of management are considered universal in the sense that they are applicable to various organizations and industries. While the specific application of management principles may vary based on the context and organizational needs, the fundamental principles remain relevant across different settings. These principles provide a framework and guidelines for effective management practices, such as planning, organizing, leading, and controlling.
Furthermore, the principles of management are also flexible, meaning they can be adapted and customized to suit the unique requirements and challenges of each organization. Managers can apply and modify these principles based on the specific circumstances, goals, and resources of their organization.
