Question : There are various applications of spreadsheet in accounting. What are they?
Option 1: Text and Nunmber in accounting
Option 2: Calculation of Expense
Option 3: Calculation of income
Option 4: All of the above
Correct Answer: All of the above
Solution : The various applications of spreadsheet in accounting are as follows :
Text and number in Accounting
Calculation of Expense
Calculation of Income
Prepration of trading account
Preparation of Profit Loss Account
Trial Balance
Balance Sheet
Hence the correct answer is option 4.
Answer laterQuestion : The accounting standard prescribes that Cash Flow Statement be prepared either by
Option 1: Direct Method
Option 2: Indirect Method
Option 3: Both 1 and 2
Option 4: Neither 1 nor 2
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
The accounting standard prescribes that the Cash Flow Statement be prepared using either the Direct Method, which lists actual cash inflows and outflows, or the Indirect Method, which adjusts net income for non-cash items.
Hence, the correct option is 3.
Question : E, D and R are partners, sharing profits in the ratio of 2:2:1. D died on 30th June 2020 and profits for the accounting year 2019-20 were Rs. 36,000. The share of profit will be credited to Diya, for the period 1st April. 2020 to 30th June, 2020 is____________.
Option 1: Rs 3,000
Option 2: Rs 3,600
Option 3: Rs 2,600
Option 4: None of the above
Correct Answer: Rs 3,600
Solution : Answer = Rs 3600
Profit= 36,000
D's share= $36,000 \times \frac{2}{5}$= $14,400 \times \frac{3}{12}$= Rs 3,600
Hence, the correct option is 2.
Question : Choose the correct statement with respect to the Share of Profit or Loss and the year of death will be?
Option 1: Deceased partner is entitled to his share in profit from the beginning of the accounting year up to the date of his death.
Option 2: He bears loss, if any incurred by the firm during this period.
Option 3: Both 1 and 2
Option 4: Neither 1 nor 2
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
Deceased partners are entitled to their share in the profit from the beginning of the accounting year up to the date of his death and he has also borne loss if any. This ensures a fair treatment of the deceased partner's interest in the partnership.
Hence, the correct option is 3.
Question : Statement 1: In management accounting, data from cost accounting and financial accounting are both used.
Statement 2: Therefore, a suitable system is required to combine cost accounts and financial accounts.
Option 1: Both the statements are true
Option 2: Both the statements are false
Option 3: Statement 1 is true and statement 2 is false
Option 4: Statement 1 is false and statement 2 is true
Correct Answer: Both the statements are true
Solution : In management accounting, data from cost accounting and financial accounting are both used. Therefore, a suitable system is required to combine cost accounts and financial accounts. Data duplication is prevented. The integration mechanism must be precise and trustworthy. Hence, the correct option is 1.
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 : R, M and P were partners in a firm. P died on 29th February, 2020. His share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years of profits before death. Profits for the years ended 31st March, 2017, 2018 and 2019 were Rs. 80,000, Rs. 90,000 and Rs. 1,00,000 respectively.
Question:-
If profit-sharing ratio of remaining partners changes and new ratio being 3: 2. Then
Option 1: Profit and loss suspense account debited by Rs 27,500
Option 2: Profit and loss suspense account credited by Rs 27,500
Option 3: Debited R’s capital account with RS 22,000 and M’s capital account Rs 5500 credited P’s capital account Rs 27,500
Option 4: None of the above
Correct Answer: Debited R’s capital account with RS 22,000 and M’s capital account Rs 5500 credited P’s capital account Rs 27,500
Solution : Answer = Debited R’s capital account with RS 22,000 and M’s capital account Rs 5500 credited P’s capital account Rs 27,500
If the profit sharing ratio of remaining partners and the new ratio is 3:2, then the entry will be:
R's capital A/c Dr 22,000
M's capital A/c Dr 5,500
To P's capital A/c 27,500
[In gaining ratio= New Ratio - Old Ratio]
Hence, the correct option is 3.
Question :
R, M and P were partners in a firm. P died on 29th February, 2020. His share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years of profits before death. Profits for the years ended 31st March, 2017, 2018 and 2019 were Rs. 80,000, Rs. 90,000 and Rs. 1,00,000 respectively.
Question:- If the profit-sharing ratio of remaining partners does not change; P’s share of profit will be ----
Option 1: Profit and loss suspense account debited by Rs 27,500
Option 2: Profit and loss suspense account credited by Rs 27,500
Option 3: Debited R’s capital account with Rs 22,000 and M’s capital account Rs 5,500 credited P’s capital account Rs 27,500
Option 4: None of the above
Correct Answer: Profit and loss suspense account debited by Rs 27,500
Solution : Answer = Profit and loss suspense account debited by Rs 27,500
Total profits=80,000+ 90,000+1,00,000= 2,70,000.
Average profit= $\frac{2,70,000}{3}$= 90,000.
P's share= 90,000×$\frac{1}{3}$×$\frac{11}{12}$= Rs 27,500
Profit & loss suspense A/c Dr 27,500
To P's capital A/c 27,500
Hence, the correct option is 1.
Question : Which of the following statements is false?
Option 1: Loss on Issue of Debentures is debited at the time of issue of debentures following the Prudence Concept of Accounting.
Option 2: Loss on Issue of Debentures is written off from Securities Premium Reserve, if it exists and thereafter from Statement of Profit and Loss.
Option 3: Loss on Issue of Debentures Account is an Expense Account and Premium on Redemption of Debentures Account is a Liability Account.
Option 4: Premium on Redemption of Debentures Account is credited at the time of payment, i.e., on redemption of debentures.
Correct Answer: Premium on Redemption of Debentures Account is credited at the time of payment, i.e., on redemption of debentures.
Solution : Answer = Premium on Redemption of Debentures Account is credited at the time of payment, i.e., on redemption of debentures.
Discount or Loss on Issue of Debentures is a capital loss for a company, which is written off in the year it is incurred, i.e., in the year the debentures are allotted from:
(i) Securities Premium Reserve, if it exists, i.e., has a balance, and
(ii) Statement of Profit and Loss.
At the time of redemption of Debentures premium on redemption of Debentures A/c is debited.
Question : The analysis of the interrelationship between the economy and the environment in the economic environmental accounting system was forwarded by_____.
Option 1: Central Statistical Office
Option 2: National Environmental Engineering Institute
Option 3: Directorate of Economics and Statistics
Option 4: United Nations Statistical Office
Correct Answer: United Nations Statistical Office
Solution : The correct answer is the United Nations Statistical Office.
Formerly known as the United Nations Statistical Office, the United Nations Statistics Division (UNSD), under the Department of Economic and Social Affairs (DESA) of the UN Secretariat, is responsible for providing the necessary statistics and coordinating the efforts of the international statistical system.
The United Nations Statistical Office provided an examination of the relationship between the environment and the economy in the economic environmental accounting system.
