Accounting Mcqs

Page No. 56

Which of the following errors is an error of omission?


aSale of ` 100 was recorded in the Purchases Journal

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bWages paid to Mohan have been debited to his account

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

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dRepairs to buildings have been debited to buildings account

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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

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

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

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

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The concept of conservatism will have the effect of______________?


aOverstatement of Assets

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bUnderstatement of Assets

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cOverstatement of Liabilities

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dUnderstatement of Liabilities

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


aError of commission

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bError of principle

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cError of omission

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dCompensating error

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View Answer Error of principle

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


aDividend

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bRoyalty

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cPurchase consideration

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dInstallment

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View Answer Royalty

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


aDelivery method

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bPercentage-of-completion method

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cProduction method

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dMoving average method

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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

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bc, d and f

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cc, d, e and h

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dc, d, f and h

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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

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bInventories

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cInvestments

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dBoth B. and C. above.

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View Answer Inventories

Closing stock is generally valued at______________?


aCost Price

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bMarket Price

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cCost price or Market price whichever is higher

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dCost price or Market price whichever is lower

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Which of the following is true regarding closing entries?


aThey must be followed by reversing entries

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

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

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

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