1 Question Description What term refers to the process of automatically importing financial data from bank accounts into accounting software?
A Bank integration
B Data migration
C Data extraction
D Bank feed
E None of the above
Correct Answer D
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2 Question Description Which of the following activities would be categorized as a financing activity in a Cash Flow Statement?
A Purchase of equipment
B Sale of investments
C Issuance of shares
D Sale of products
E None of the above
Correct Answer C
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3 Question Description Which of the following is/are a limitation(s) of a Balance Sheet?
I. It does not contain certain assets and liabilities despite its claim to be the statement of all assets and liabilities.
II. The factors, which have a vital bearing on the earnings of the organization are not disclosed.
III. Personal judgment plays a great part in determining the figures of the balance sheet.
A Only (I) above
B Only (II) above
C Both (II) and (III) above
D All (I), (II) and (III) above
E None of the above
Correct Answer D
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4 Question Description Which of the following statements is true with respect to depreciation under diminishing balance method?
A The amount of depreciation keeps increasing every year while the rate of depreciation keeps decreasing
B The amount of depreciation and the rate of depreciation decrease every year
C The amount of depreciation decreases while the rate of depreciation remains the same
D The amount of depreciation and the rate of depreciation increase every year.
E None of the above
Correct Answer C
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5 Question Description X,Y and Z are partners in a firm. At the time of division of profit for the year there was dispute between the partners. Profits before
interest on partner’s capita was Rs.6,000 and Z demanded minimum profit of Rs.5000 as his financial position was not good.
However, there was no written agreement. Profits to be distributed to X, Y and Z will be:
A Other partners will pay Z the minimum profit and will suffer loss equally.
B Other partners will pay Z the minimum profit and will suffer loss in capital ratio.
C X and Y will take Rs.500 each and Z will take Rs.5,000
D Rs.2,000 to each the partner.
E None of the above
Correct Answer D
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6 Question Description If a shareholder does not pay his dues on allotment, for the unpaid amount there will be a
A Credit balance in share allotment account
B Debit balance in share forfeiture account
C Credit balance in share forfeiture account
D Debit balance in share allotment account
E None of the above
Correct Answer D
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7 Question Description Under which of the following conditions is a balance sheet said to be window dressed?
A When income is accounted for on accrual basis
B When prepaid expenses are considered and accounted for in the preparation of final accounts
C When an adequate provision for expenses and potential losses is not made
D When a provision for the probable loss is made in advance of its occurrence
E None of the above
Correct Answer C
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8 Question Description Which financial information is not readily available in Single Entry System Accounting?
A Total assets and liabilities
B Gross profit and net profit
C Total revenue and expenses
D Cash flow statement
E None of the above
Correct Answer D
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9 Question Description Arrange in the order of liquidity in the Balance Sheet—Cash, Building, Goodwill, Debtors, Machine.
A Debtors Cash, Building, Goodwill, Machine.
B Cash, Goodwill, Debtors, Machine, Building
C Cash, Building, Goodwill, Debtors, Cash Machine.
D Cash, Debtors, Machine, Building, Goodwill.
E None of the above
Correct Answer D
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10 Question Description Retiring partner is compensated for parting with the firm’s future profits in favour of remaining partners. The remaining partners
contribute to such compensation amount in
A Gaining Ratio
B Capital Ratio
C Sacrificing Ratio
D Profit-Sharing Ratio
E None of the above
Correct Answer A
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11 Question Description What does "ACID" stand for in the context of database transactions?
A Atomicity, Consistency, Isolation, Durability
B Automated, Converged, Isolated, Durable
C Aggregated, Comprehensive, Integrated, Durable
D Accelerated, Coordinated, Intelligent, Dynamic
E None of the above
Correct Answer A
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12 Question Description Which of the following is not true?
A Loss on reissue of shares cannot be more than the gain on forfeiture of those shares.
B Where all the forfeited shares are not reissued the share forfeited account will show a credit balance equal to gain on forfeiture of
share not yet re-issued.
C When the shares are forfeited, securities premium is debited along with share capital where premium has not been received.
D Where forfeited share are re-issued at premium, the amount of such premium is credited to capital reserve account.
E None of the above
Correct Answer D
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13 Question Description Which accounting software is known for its cloud-based approach and is popular for small businesses?
A QuickBooks
B Tally
C SAP
D Oracle Financials
E None of the above
Correct Answer A
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14 Question Description The value of the goodwill, according to the simple profit method, is
A The product of current year’s profit and number of years of purchase
B The product of last year’s profit and the number of years of purchase
C The product of average profit of the given years and number of years of purchase
D The product of expected average profit for future years and number of years of purchase
E None of the above
Correct Answer C
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15 Question Description What is the purpose of using a common size statement in financial analysis?
A To evaluate the solvency of a company.
B To calculate the tax liability of a company.
C To compare financial data over different periods or between companies.
D To determine the market value of a company's assets.
E None of the above
Correct Answer C
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16 Question Description If machinery account is debited with the amount of repairs incurred on the machine, this is an example of
A Compensating error
B Error of principle
C Error of commission
D Error of omission
E None of the above
Correct Answer B
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17 Question Description If debt is Rs.220, cash balance is Rs.20 and equity is Rs.300, the gearing ratio is
A 20%
B 40%
C 50%
D 30%
E None of the above
Correct Answer B
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