Accounting Mcqs

Page No. 4

Which one of the following methods of inventory costing produces ending stock cost close to the market value of the inventory?


aFIFO

✓


bLIFO

✖


cAVCO or average cost

✖


dNone of the above

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View Answer FIFO

Which one of the following methods of inventory costing yields highest taxable income?


aFIFO

✓


bLIFO

✖


cAVCO or average cost

✖


dStandard cost method

✖


View Answer FIFO

All of the following are the methods of inventory costing except


aFIFO

✖


bLIFO

✖


cAVCO or average cost

✖


dStock take

✓


View Answer Stock take

An overstatement in the value of closing stock overstates all of the following except


aNet income

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bCurrent assets

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cCapital of the business

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dCost of goods sold

✓


View Answer Cost of goods sold

The value of inventories or stock is figured out at the lower of cost and


aPurchase price

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bOpportunity cost

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cRealizable value

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dNet realizable value

✓


View Answer Net realizable value

Provision for cash discount on debtors is a percentage of


aDebtors

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bNet debtors

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cNet debtors less provision for doubtful debts

✓


dNet sales

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Provision for doubtful debts account is a/an


aAsset account

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bContra asset account

✓


cNominal account

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dLiability account

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View Answer Contra asset account

Which of the following is a commonly used base to create the provision for doubtful debts?


aTotal purchases

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bTotal credit sales

✓


cTotal current assets

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dTotal current liabilities

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View Answer Total credit sales

Which accounting concept dictates the inclusion of 'provision for doubtful debts' in the financial statements?


aAccrual concept

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bMatching concept

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cGoing concern concept

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dPrudence concept

✓


View Answer Prudence concept

Which of the following is the most common cause of bad debt?


aDebtor refusal to repayment

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bDebtor left the country

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cDebtor committed a crime

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dDebtor declared to be a bankrupt

✓



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