Accounting Mcqs

Page No. 56

Which of the following errors is an error of omission?


aSale of ` 100 was recorded in the Purchases Journal


bWages paid to Mohan have been debited to his account


cThe total of the sales journal has not been posted to the Sales Account


dRepairs to buildings have been debited to buildings account



During the year 2011-2012, the value of closing inventory was overstated by 25,000. Which of the following is true?


a The cost of goods sold was overstated during 2011-2012 and income will be understated during 2012-2013


b The income was overstated during 2011-12 and closing inventory will be overstated during 2012-2013


cThe retained earnings was overstated during 2011-2012 and retained earnings will be understated during 2012-2013


dThe cost of goods sold was understated during 2011-2012 but retained earnings will not be affected during 2012-2013



The concept of conservatism will have the effect of______________?


aOverstatement of Assets


bUnderstatement of Assets


cOverstatement of Liabilities


dUnderstatement of Liabilities



Buildings account is debited with an amount towards repairs. This is an example of?


aError of commission


bError of principle


cError of omission


dCompensating error


View Answer Error of principle

The amount payable to a person as consideration for the use of rights vested in him is


aDividend


bRoyalty


cPurchase consideration


dInstallment


View Answer Royalty

Which of the following methods is not a practical way of realizing revenue?


aDelivery method


bPercentage-of-completion method


cProduction method


dMoving average method


View Answer Moving average method

A few errors committed in Ahhiwalia’s books of account are given below. State which errors would affect the Trial Balance. 0 (a). Sales of `950 to Ram completely omitted from books of account (b). Purchases of `720 from Shyam entered in the purchases journal as `700 (c). Purchases Journal is overcast by `1,000 (d). Sales returns journal is undercast by `200 (e) Amount paid to Agarwal wrongly posted to the debit to Mittal’s account (f) Bank overdraft shown under debit column in the Trial Balance (g) Sales of `500 to Sadiq entered in sales journal as sales to Mushtaq (h) Wages paid for installation of machinery debited to wages account


aa, c and g


bc, d and f


cc, d, e and h


dc, d, f and h


View Answer c, d and f

Which of the following assets is/are to be valued at the lower of cost and net realizable value?


aGoodwill


bInventories


cInvestments


dBoth B. and C. above.


View Answer Inventories

Closing stock is generally valued at______________?


aCost Price


bMarket Price


cCost price or Market price whichever is higher


dCost price or Market price whichever is lower



Which of the following is true regarding closing entries?


aThey must be followed by reversing entries


bThey transfer the balances in all of the Nominal Accounts to the Trading and Profit and Loss Account


cThey must be made after the reversing entries but before the adjusting entries


dThey must be made after the adjusting entries but before the reversing entries



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