Question : 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.
Answer laterQuestion : What is chart of accounts?
Option 1: provides an index of every account in an accounting system
Option 2: provides a way of every account in non-accounting system
Option 3: Both 1 and 2
Option 4: None of these
Correct Answer: provides an index of every account in an accounting system
Solution : An index of all the accounts in an accounting system is provided by a chart of accounts (COA), a financial and organisational tool. Hence, the correct option is 1.
Question : R and D are partners as per provisions of Indian Partnership Act 1932. On admission of a new partner M for 1/5 share, a revaluation account is prepared. M claims to have eqal share in revaluation profits. Choose the correct accounting treatment
Option 1:
M's share of revaluation profit is equal
Option 2:
M's share of revaluation profit is 1/5th
Option 3: M's share is revaluation profit is nil
Option 4: All of the above
Correct Answer:
M's share of revaluation profit is 1/5th
Solution : Answer = M's share of revaluation profit is 1/5th
When a new partner is admitted to a partnership, their share of revaluation profit is typically based on their agreed-upon profit-sharing ratio. Since M is admitted for a 1/5 share, their share of revaluation profit would also be 1/5th, in accordance with their profit-sharing ratio.
Hence, the correct option is 2.
Question : 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 : What are the features of computerised accounting software?
Option 1: storage of accounting data and on-line input
Option 2: instantly produces different reports
Option 3: group different account
Option 4: All of the above
Correct Answer: All of the above
Solution : The Top 5 Computerized Accounting System Features
Bringing Together Different Accounting Functions.
Automation, precision, and quickness.
analyses and reports
Accessibility and consistency.
increased control and visibility over finances
Hence the correct answer is option 4.
Question : Which of the following are not the Characteristics of Statement of Profit and Loss (Profit and Loss Account)?
Option 1: It shows the financial performance of a company, i.e., revenues, expenses and Profit or loss for the period.
Option 2: It is prepared for a past period and thus, is a historical document.
Option 3: It is for a specific accounting period.
Option 4: None of the above
Correct Answer: None of the above
Solution : Answer = None of the above
All of the statements listed are characteristics of the Statement of Profit and Loss. It indeed depicts a company's financial performance, covers a specific accounting period, and presents historical data. Therefore, none of the statements are incorrect, and the answer is: "None of the above."
Hence, the correct option is 4.
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 : Social accounting system in India is classified into
Option 1: Income,product and expenditure
Option 2: Enterprise, households and government
Option 3: Assets, liabilities and debt position
Option 4: Public sector, Private sector and Joint sector
Correct Answer: Income,product and expenditure
Solution : The correct answer is Income,product and expenditure.
Social accounting measure is the method of estimating the national income of India. It is the value of total goods and services produced in India i.e GDP of India. In India GDP is measured in 3 ways- Income method, expenditure method, and product method/value added method.
Question : Among the following, which ready to use accounting software package is available in today's market?
Option 1: Tally
Option 2: E.X.
Option 3: Busy
Option 4: All of the Above
Correct Answer: All of the Above
Solution : All the accounting software are readily/ easily available in the todays's market.
Hence the correct answer is option 4.
Question : ____________ shows the financial performance, i.e., the result of business operations during an accounting period and is also known as an Income Statement.
Option 1: Profit and loss account
Option 2: Balance sheet
Option 3: Manufacturing account
Option 4: None of the above
Correct Answer: Profit and loss account
Solution : Answer = Profit and loss account
The Profit and Loss Account, also known as the Income Statement, summarizes a company's financial performance over a specific period by detailing revenues, expenses, gains, and losses. It provides insights into the profitability of the business operations during that accounting period.
Hence, the correct option is 1.
