According to Companies Act, 1956 Secret Reserves can be created by:
1.Only Private Company
2.Banking and insurance companies
3.Only Public Company
4.Companies Registered under Companies Act
As per American Belief, Accounts are of how many types-
1. Two
2.Three
3. Five
4. Four.
Asset Disposal A/c is prepared when :
1.Provision for Depreciation A/c is prepared
2.Asset A/c is prepared
3.Profit & Loss A/c is prepared
4. Depreciation A/c is prepared
At the end of the year, Depreciation Account is transferred to :
1.Balance Sheet
2. Trading Account
3.Profit & Loss Appropriation Account
4.Profit & Loss Account
Book – keeping is-
1. An art
2. A science
3.An art and science both
4.None of these.
Cash – book always show-
1.Debit balance
2.Credit balance
3.Debit or Credit balance
4.None of these.
Cash, goods or assets invested by the proprietor in the business for earning profit is called-
1.Profit
2.Capital
3.Fixed assets
4.None of these.
Depreciation is a process of :
1.Allocation
2.Valuation
3.None of these
4.Depletion
Depreciation is Charged on :
1.Current Assets
2. Fixed Tangible Assets
3.None of these
4. Both Current and Fixed Assets
Dividend Equalisation Reserve is :
1.Specific Reserve
2. None of these
3.Secret Reserve
4.General Reserve
Errors are rectified in this book-
1.Ledger book
2.Journal proper
3.Trial balance
4.None of these.
Errors Committed by omitting entries in the Journal book is called –
1.Error of commission
2. Error of principle
3. Error of omission
4.None of these.
Errors committed due to lack of basis principle of Accounting are called –
1.Compensating errors
2. Error of principle
3. Single sided error
4.None of these.
Every fixed asset loses its value due to use or other reasons. This decline in the value of asset is known as
1. Amortization
2. Provisions
3.Depreciation
4.Devaluation
Following are the causes of Depreciation except
1.Wear and tear due to use or passage of time.
2. normal factors
3. Expiration of legal rights.
4. Obsolescence.
General Reserves are shown in :
1.Revaluation Account
2. Profit and Loss Account
3.None of these
4.Balance Sheet
Generally the duration of an Accounting period is of-
1. 6 months
2. 3 months
3. 12 months
4.1 month.
How many columns are there in a Ledger (in one side)-
1.Six
2. Four
3.Five
4.Seven.
How many methods are there for preparing Trial Balance –
1.One
2. Three
3.Four
4.None of these.
If the trial balance does not tally after many efforts then following Account is opened –
1. Purchase account
2.Suspense account
3.Sales account
4. None of these.
In India, the accounting standard board was set up in the year-
1.1972
2.1977
3.1956
4.1932.
Liabilities and Assets amount to Rs. 50,000 and Rs. 7,800 respectively. The difference Amount shall represent-
1.Creditors
2.Debentures
3.Profit
4.Capital.
Meaning of credibility of going concern is:
1.Closing of business
2. Opening of business
3.Continuing of business
4. None of these.
Of the two sides of Trial balance does not tally, which Account is opened –
1.Suspense Account
2.Personal Account
3. Real Account
4.None of these.
Provision is created by debiting :
1.Profit and Loss Account
2.None of these
3. Profit and Loss Appropriation Account
4. Trading Account
The amount drawn by businessmen for his personal use is-
1.Capital
2.Drawing
3.Expenditure
4.Loss.
The art of recording all business transactions in a systematic manner in a set of books is called-
1.Accounting
2. Book – keeping
3.Ledger
4. None of these.
The balance of good’s Account is transferred to-
1.Profit and loss Account
2.Trading Account
3.Balance sheet
4. None of these.
The basic accounting postulates are denoted by –
1.Concepts
2.Book – keeping
3.Accounting standards
4.None of these.
The basis of recording transactions is-
1.Vouchers
2.Profit
3.Order form
4.Quotation list.
The cash – book meant for recording petty expenses is called –
1.Simple cash – book
2.Petty cash – book
3.Triple column
4.None of these.
The cause of Depreciation is :
1.Wear and tear
2.Obsolescence
3.All of these
4. Usage of Asset
The depreciation charged on an asset will be credited to :
1.Depreciation A/c
2. Asset A/c
3. Bank A/c
4. Cash A/c
The entry which affects cash and bank column of a triple column cash – book is known as –
1.Compound entry
2.Contra entry
3.Journal entry
4.None of these.
The entry which is passed for bringing forward the balances of personal and Real Account as shown in the last year’s balance sheet is called –
1.Closing entry
2. Journal entry
3.Opening entry
4. None of these.
The error which can be disclosed by Trial balance-
1. Error of omission
2.Error of principal
3.Compensatory error
4.None of these.
The loss on sale of an asset is debited to:
1.Profit and Loss Account
2. Trial Balance Cr. Side
3. Balance Sheet
4. Trading Account
The Mathematical Expression defining the comparative relationship between Assets and Liabilities of any person, institution or Business concern is called-
1.Accounting
2. Accounting Equation
3.Book – keeping
4. None of these.
The person, firm or institution who does not pay the price in cash for the goods purchased or the services received is called-
1.Creditor
2.Proprietor
3.Debtor
4.None of these.
The process of recording, classifying and summarizing all business transactions in order to know the financial result is called –
1.Book – keeping
2.Accounting
3.Journalizing
4.None of these.
The sum of Liabilities and Capital is-
1.Expense
2. Income
3.Drawings
4.Assets.
Under Reducing Balance Method, depreciation to be charged :
1.Scrap Value
2. None of these
3. Real Value
4. Original value
What kind of accuracy is tested by Trial balance-
1.Theoritical
2.Practical
3.Arithmetical
4. None of these.
What statement is used while closing a Drawing Account-
1.Balance c/d
2. By Trading A/c
3.By P & L A/c
4.By Capital Account.
Which Account is opened first in ledger book-
1.Personal
2.Real
3.Non – real
4.None of these.
Which of the following is entered in cash – book-
1.Only cash transactions
2.Only credit transactions
3.Both cash and credit transactions
4.None of these.
Which of the following is prepared on the basis of Trial Balance –
1. Journal
2. Ledger
3. Final Accounts
4.None of these.
Which of the following is the example of Capital Reserve?
1.Workmen’s Compensation Fund
2.None of these
3.Premium Received on issue of shares or debentures
4. General Reserve
Which of the following is the example of Revenue Reserve?
1.Profit on Redemption of Debentures
2.Profit on Revaluation of Fixed
3.Investment Fluctuation Fund
4. Profit on Re-issue of forfeited shares
Which of the following methods of depreciation is not recognized by Income Tax Law?
1.Straight line Method
2.None of these
3.Both, Straight Line and Diminishing Balance Methods
4. Diminishing Balance Method