Accounting Mcqs

Page No. 23

Provision for bad debts is made as per the


aConservatism concept

✓


bCost concept

✖


cConsistency concept

✖


dGoing concern concept

✖


View Answer Conservatism concept

If the opening inventory of a business is undercast, it will


aIncrease gross profit and decrease net profit

✖


bDecrease gross profit as well as net profit

✖


cIncrease value of assets

✖


dIncrease gross profit as well as net profit

✓



Declared dividend should be classified in the balance sheet as a


aProvision

✖


bCurrent liability

✓


cReserve

✖


dCurrent asset

✖


View Answer Current liability

Amortization of unidentified intangible assets is in terms of


aConservatism concept

✖


bMateriality concept

✖


cMatching concept

✓


dCost concept

✖


View Answer Matching concept

Which of the following is not considered as Research & Development costs?


aTesting in search for product alternatives

✖


bLegal work on patent application

✓


cModification of design of a process

✖


dSearching for application of new research findings

✖



Based on which of the following concepts, is share capital account shown on the liability side of a balance sheet?


aBusiness entity concept

✓


bMoney measurement concept

✖


cCost concept

✖


dGoing concern concept

✖



The maximum amount beyond which a company is not allowed to raise funds by issue of shares is


aIssued capital

✖


bReserve capital

✖


cNominal capital

✓


dSubscribed capital

✖


View Answer Nominal capital

Which of the following ratios indicate the short-term liquidity of a business?


aInventory turnover ratio

✖


bDebt equity ratio

✖


cAcid test ratio

✓


dProprietary ratio

✖


View Answer Acid test ratio

Which of the following is true when a debtor pays his dues?


aThe asset side of the balance sheet will decrease

✖


bThe asset side of the balance sheet will increase

✖


cThe liability side of the balance sheet will increase

✖


dThere is no change in total assets or total liabilities

✓



Bank pass book is also known as


aBank book

✖


bBank account

✖


cBank column

✖


dBank statement

✓


View Answer Bank statement

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