CMA – Inter (Group 1)
PAPER - 5
Financial Accounting
Bit Questions
1
, CMA – Inter (Group 1)
PAPER - 5
Financial Accounting :: Bit Questions
Choose the most appropriate one from given four alternatives.
1. If an employee of the business files a legal suit on business, it is considered in the books as a
(a) Legal Expense (b) Liability
(c) Contingent Asset (d) Contingent Liability
2. At the end of the accounting year the capital expenditures are shown in the
(a) assets side of the Balance Sheet. (b) liabilities side of the Balance Sheet.
(c) debit side of the Profit and Loss A/c. (d) credit side of the Profit and Loss A/c.
3. Which of the following is not a method of charging depreciation?
(a) Sinking Fund Method (b) Sum of years Digit Method
(c) Working hours Method (d) Asset's Life-cycle Method
4. If average inventory is `1,25,000 and closing inventory is `10,000 less than opening inventory
then the value of closing inventory will be
(a) ` 1,35,000 (b) ` 1,15,000
(c) ` 1,30,000 (d) ` 1,20,000
5. The Accommodation bill is drawn
(a) to finance actual purchase or sale of goods. (b) to facilitate trade transmission.
(c) when both parties are in need of funds. (d) None of the above
6. Balance of X's account in creditors ledger is transferred to X's account in debtors ledger, in this
case
(a) X's account in debtors ledger will be debited. (b) X's account in creditors ledger will be debited.
(c) Suspense account will be debited. (d) None of the above
7. Ground rent or surface rent means
(a) Minimum rent (b) Maximum royalty payable
(c) Minimum royalty payable (d) Fixed rent payable in addition to minimum rent
8. Accounting standard in India are issued by
(a) Government of India (b) Reserve Bank of India
(c) The Institute of Chartered Accountants of India
(d) The Institute of Accounting Standard of India
9. As on 31st March, 2017 debtors; and additional bad debts are ` 8,00,000 and ` 10,000 respectively.
If the provision for bad debts is made at 5% on debtors then amount of such provision will be
(a) ` 40,000 (b) ` 50,000
(c) ` 39,500 (d) ` 40,500
10. Income and Expenditure Account is a
(a) Nominal Account (b) Real Account
(c) Personal Account (d) Artificial Personal Account
11. Creditors ledger adjustment account is opened in
(a) General Ledger (b) Debtors Ledger
(c) Creditors Ledger (d) Either (b) or (c)
12. Receipts and Payments account is a
(a) Nominal Account (b) Real Account
(c) Personal Account (d) Artificial Personal Account
13. A resource owned by the business with purpose of using it for generating future profit, is known as
(a) Capital (b) Asset (c) Liability (d) Surplus
14. Outward Invoice issued is a source document of
(a) Purchase Book (b) Sales Book
(c) Return Inward Book (d) Return Outward Book
15. Which of the following is of capital nature?
(a) Commission on purchases (b) Cost of repairs
2
, CMA – Inter (Group 1)
(c) Rent of factory (d) Wages paid for installation of machinery
16. If any stock is taken by a co-venturer, it will be treated as
(a) an income of the joint venture. (b) an expense of the joint venture.
(c) to be ignored from joint venture.
(d) it will be treated in the personal books of the co-venturer.
17. Contingent liability would appear
(a) on the liability side of the Balance Sheet. (b) on the assets side of the Balance Sheet.
(c) do not shown in the books of accounts. (d) as a note in Balance Sheet.
18. Income statement of a Charitable Institution is known as
(a) Statement of profit and loss (b) Receipts and Payments Account
(c) Income and Expenditure Account (d) Profit and Loss Account
19. Which of the following account is mainly prepared at the time of dissolution of the firm
(a) Revaluation A/c (b) Goodwill A/c
(c) Realization A/c (d) Memorandum Revaluation A/c
20. Advertisement expenses are apportioned among departments in the proportion of
(a) sales of each department (b) purchases of each department
(c) no. of units sold by each department (d) cost of sales of each department
21. In Hire Purchase system cash price plus interest is known as
(a) Capital value of asset (b) Book value of asset
(c) Hire purchase price of asset (d) Hire purchase charges
22. Which one is/ are the method/s of Accounting for Branches
(a) Final Accounts Method; (b) Debtors Method and
(c) Stock and Debtors Method. (d) All of the above
23. is similar to the Profit and loss A/c
(a) Income and Expenditure A/c (b) Receipts and Payments A/c
(c) Balance Sheet (d) None of the Above
24. Kuntal draws a bill on shyam for ` 7,000 kuntal endorsed it to Ram. Ram endorsed it to Rahim.
The payee of the bill will be:
(a) Kuntal (b) Ram (c) Shyam (d) Rahim
25. Bad debts are apportioned among departments in the proportion of
(a) Sales of each department (b) Number of units sold each department
(c) Cost of sales of each department (d) None of the above
26. Which of the following is not a Fundamental Accounting Assumption?
(a) Going Concern (b) Consistency (c) Accrual (d) Materiality
27. is equal to estimated selling price less the estimated costs of completion and the
estimated costs necessary to make the sale.
(a) Net Realisable value (b) Cost of Conversion
(c) Cost of Purchase (d) None of the above
28. are investments which are held beyond the current period as to sale or disposal.
(a) Non-current Investments (b) Current Investments
(c) Current Liabilities (d) None of the above
29. An obligation which may or may not materialize is a/an .
(a) Loss (b) Asset (c) Contingent Liability (d) None of the above
30. voucher denotes payment of cash.
(a) Cash Payment (b) Cash Receipt (c) Bank Payment (d) All of the above
31. Which of the following is an example of Capital Expenditure?
(a) Inventory of raw materials, work-in-progress and finished goods;
(b) Insurance premium; (c) Taxes and legal expenses;
(d) None of the above.
32. Which of the following errors is not disclosed by a Trial Balance?
(a) Errors of Omission (b) Errors of Commission
(c) Compensating Errors (d) All of the above
33. is specially suited to mines, oil wells, quarries, sandpits and similar assets of a
wasting character.
(a) Depletion (b) Depreciation (c) Amortisation (d) Delapidation
34. The following account has a credit balance
3
, CMA – Inter (Group 1)
(a) Plant and Equipment A/c (b) Loans A/c
(c) Purchase A/c (d) None of the above
35. From the following details estimate the capital as on 31.03.2017, Capital as on 01.04.2016
`4,10,000. Drawings ` 40,000, Profit during the year ` 50,000
(a) ` 4,10,000 (b) ` 4,50,000
(c) ` 4,20,000 (d) ` 4,00,000
36. A and B purchased a piece of land for ` 30,000 and sold it for ` 60,000 in 2016. Originally A had
contributed ` 12,000 and B ` 8,000. The profit on venture will be
(a) ` 30,000 (b) ` 20,000
(c) ` 60,000 (d) Nil
37. AB Ltd. has signed at 31st December, 2017 the Balance Sheet date, a contract where the Total
Revenue is estimated at ` 15 Crores and Total Cost is estimated at ` 20 Crores. No work began on
the contract. Is the Contractor required to give any accounting effect for the ended 31st
December, 2017?
(a) Recognise expected loss of ` 5 Crores (b) Recognize ` 15 Crores as Profit
(c) No entry (d) None of the above
38. Which of the following item does not match with receipts and payments account?
(a) It is a summarized cash book (b) Transactions are recorded in it on cash basis
(c) It records revenue transactions only (d) It serves the purpose of a real account
39. Which of the following is/ are the basic features of a Joint Venture
(a) The profit or loss on joint venture is shared between the co-venturers in the agreed ratio;
(b) The co-venturers may or may not contribute initial capital;
(c) The JV is dissolved once the purpose of the business is over;
(d) All of the above.
40. Excess of hire purchase price over cash price is known as
(a) Installment (b) Cash down payment
(c) Interest (d) Capital value of asset
41. Which of the following is/are revenue expenditure?
(a) Consumable Stores (b) Taxes and legal expenses
(c) Rent of factory building (d) All of Above
42. AS-9 is related to
(a) Revenue Recognition (b) Cash Flow Statement
(c) Accounting for Fixed Assets (d) Disclosure of Accounting policies
43. The person to whom bill is endorsed is known as .
(a) Endorsee (b) Drawee
(c) Drawer (d) None of the above
44. The following account has a credit balance
(a) Plant and Equipment A/c (b) Loans A/c
(c) Purchase A/c (d) None of the above
45. Which of the following is/are feature/features of Income and Expenditure Account?
(a) It follows Nominal Account
(b) All Capital incomes and expenditures are excluded
(c) Profit on sale of asset is credited
(d) All of the above
46. The debts which are not bad is known as
(a) Good debt (b) Bad Debt
(c) Doubtful Debt (d) None of the above
47. Accounting standards in India are issued by
(a) Comptroller and Auditor general of India (b) Reserve bank of India
(c) The Institute of Accounting standards of India
(d) The Institute of Chartered Accountants of India
48. A transaction without immediate cash settlement is known as
(a) Cash Transaction; (b) Credit Transaction;
(c) Deferred Transaction; (d) None of the above.
4
PAPER - 5
Financial Accounting
Bit Questions
1
, CMA – Inter (Group 1)
PAPER - 5
Financial Accounting :: Bit Questions
Choose the most appropriate one from given four alternatives.
1. If an employee of the business files a legal suit on business, it is considered in the books as a
(a) Legal Expense (b) Liability
(c) Contingent Asset (d) Contingent Liability
2. At the end of the accounting year the capital expenditures are shown in the
(a) assets side of the Balance Sheet. (b) liabilities side of the Balance Sheet.
(c) debit side of the Profit and Loss A/c. (d) credit side of the Profit and Loss A/c.
3. Which of the following is not a method of charging depreciation?
(a) Sinking Fund Method (b) Sum of years Digit Method
(c) Working hours Method (d) Asset's Life-cycle Method
4. If average inventory is `1,25,000 and closing inventory is `10,000 less than opening inventory
then the value of closing inventory will be
(a) ` 1,35,000 (b) ` 1,15,000
(c) ` 1,30,000 (d) ` 1,20,000
5. The Accommodation bill is drawn
(a) to finance actual purchase or sale of goods. (b) to facilitate trade transmission.
(c) when both parties are in need of funds. (d) None of the above
6. Balance of X's account in creditors ledger is transferred to X's account in debtors ledger, in this
case
(a) X's account in debtors ledger will be debited. (b) X's account in creditors ledger will be debited.
(c) Suspense account will be debited. (d) None of the above
7. Ground rent or surface rent means
(a) Minimum rent (b) Maximum royalty payable
(c) Minimum royalty payable (d) Fixed rent payable in addition to minimum rent
8. Accounting standard in India are issued by
(a) Government of India (b) Reserve Bank of India
(c) The Institute of Chartered Accountants of India
(d) The Institute of Accounting Standard of India
9. As on 31st March, 2017 debtors; and additional bad debts are ` 8,00,000 and ` 10,000 respectively.
If the provision for bad debts is made at 5% on debtors then amount of such provision will be
(a) ` 40,000 (b) ` 50,000
(c) ` 39,500 (d) ` 40,500
10. Income and Expenditure Account is a
(a) Nominal Account (b) Real Account
(c) Personal Account (d) Artificial Personal Account
11. Creditors ledger adjustment account is opened in
(a) General Ledger (b) Debtors Ledger
(c) Creditors Ledger (d) Either (b) or (c)
12. Receipts and Payments account is a
(a) Nominal Account (b) Real Account
(c) Personal Account (d) Artificial Personal Account
13. A resource owned by the business with purpose of using it for generating future profit, is known as
(a) Capital (b) Asset (c) Liability (d) Surplus
14. Outward Invoice issued is a source document of
(a) Purchase Book (b) Sales Book
(c) Return Inward Book (d) Return Outward Book
15. Which of the following is of capital nature?
(a) Commission on purchases (b) Cost of repairs
2
, CMA – Inter (Group 1)
(c) Rent of factory (d) Wages paid for installation of machinery
16. If any stock is taken by a co-venturer, it will be treated as
(a) an income of the joint venture. (b) an expense of the joint venture.
(c) to be ignored from joint venture.
(d) it will be treated in the personal books of the co-venturer.
17. Contingent liability would appear
(a) on the liability side of the Balance Sheet. (b) on the assets side of the Balance Sheet.
(c) do not shown in the books of accounts. (d) as a note in Balance Sheet.
18. Income statement of a Charitable Institution is known as
(a) Statement of profit and loss (b) Receipts and Payments Account
(c) Income and Expenditure Account (d) Profit and Loss Account
19. Which of the following account is mainly prepared at the time of dissolution of the firm
(a) Revaluation A/c (b) Goodwill A/c
(c) Realization A/c (d) Memorandum Revaluation A/c
20. Advertisement expenses are apportioned among departments in the proportion of
(a) sales of each department (b) purchases of each department
(c) no. of units sold by each department (d) cost of sales of each department
21. In Hire Purchase system cash price plus interest is known as
(a) Capital value of asset (b) Book value of asset
(c) Hire purchase price of asset (d) Hire purchase charges
22. Which one is/ are the method/s of Accounting for Branches
(a) Final Accounts Method; (b) Debtors Method and
(c) Stock and Debtors Method. (d) All of the above
23. is similar to the Profit and loss A/c
(a) Income and Expenditure A/c (b) Receipts and Payments A/c
(c) Balance Sheet (d) None of the Above
24. Kuntal draws a bill on shyam for ` 7,000 kuntal endorsed it to Ram. Ram endorsed it to Rahim.
The payee of the bill will be:
(a) Kuntal (b) Ram (c) Shyam (d) Rahim
25. Bad debts are apportioned among departments in the proportion of
(a) Sales of each department (b) Number of units sold each department
(c) Cost of sales of each department (d) None of the above
26. Which of the following is not a Fundamental Accounting Assumption?
(a) Going Concern (b) Consistency (c) Accrual (d) Materiality
27. is equal to estimated selling price less the estimated costs of completion and the
estimated costs necessary to make the sale.
(a) Net Realisable value (b) Cost of Conversion
(c) Cost of Purchase (d) None of the above
28. are investments which are held beyond the current period as to sale or disposal.
(a) Non-current Investments (b) Current Investments
(c) Current Liabilities (d) None of the above
29. An obligation which may or may not materialize is a/an .
(a) Loss (b) Asset (c) Contingent Liability (d) None of the above
30. voucher denotes payment of cash.
(a) Cash Payment (b) Cash Receipt (c) Bank Payment (d) All of the above
31. Which of the following is an example of Capital Expenditure?
(a) Inventory of raw materials, work-in-progress and finished goods;
(b) Insurance premium; (c) Taxes and legal expenses;
(d) None of the above.
32. Which of the following errors is not disclosed by a Trial Balance?
(a) Errors of Omission (b) Errors of Commission
(c) Compensating Errors (d) All of the above
33. is specially suited to mines, oil wells, quarries, sandpits and similar assets of a
wasting character.
(a) Depletion (b) Depreciation (c) Amortisation (d) Delapidation
34. The following account has a credit balance
3
, CMA – Inter (Group 1)
(a) Plant and Equipment A/c (b) Loans A/c
(c) Purchase A/c (d) None of the above
35. From the following details estimate the capital as on 31.03.2017, Capital as on 01.04.2016
`4,10,000. Drawings ` 40,000, Profit during the year ` 50,000
(a) ` 4,10,000 (b) ` 4,50,000
(c) ` 4,20,000 (d) ` 4,00,000
36. A and B purchased a piece of land for ` 30,000 and sold it for ` 60,000 in 2016. Originally A had
contributed ` 12,000 and B ` 8,000. The profit on venture will be
(a) ` 30,000 (b) ` 20,000
(c) ` 60,000 (d) Nil
37. AB Ltd. has signed at 31st December, 2017 the Balance Sheet date, a contract where the Total
Revenue is estimated at ` 15 Crores and Total Cost is estimated at ` 20 Crores. No work began on
the contract. Is the Contractor required to give any accounting effect for the ended 31st
December, 2017?
(a) Recognise expected loss of ` 5 Crores (b) Recognize ` 15 Crores as Profit
(c) No entry (d) None of the above
38. Which of the following item does not match with receipts and payments account?
(a) It is a summarized cash book (b) Transactions are recorded in it on cash basis
(c) It records revenue transactions only (d) It serves the purpose of a real account
39. Which of the following is/ are the basic features of a Joint Venture
(a) The profit or loss on joint venture is shared between the co-venturers in the agreed ratio;
(b) The co-venturers may or may not contribute initial capital;
(c) The JV is dissolved once the purpose of the business is over;
(d) All of the above.
40. Excess of hire purchase price over cash price is known as
(a) Installment (b) Cash down payment
(c) Interest (d) Capital value of asset
41. Which of the following is/are revenue expenditure?
(a) Consumable Stores (b) Taxes and legal expenses
(c) Rent of factory building (d) All of Above
42. AS-9 is related to
(a) Revenue Recognition (b) Cash Flow Statement
(c) Accounting for Fixed Assets (d) Disclosure of Accounting policies
43. The person to whom bill is endorsed is known as .
(a) Endorsee (b) Drawee
(c) Drawer (d) None of the above
44. The following account has a credit balance
(a) Plant and Equipment A/c (b) Loans A/c
(c) Purchase A/c (d) None of the above
45. Which of the following is/are feature/features of Income and Expenditure Account?
(a) It follows Nominal Account
(b) All Capital incomes and expenditures are excluded
(c) Profit on sale of asset is credited
(d) All of the above
46. The debts which are not bad is known as
(a) Good debt (b) Bad Debt
(c) Doubtful Debt (d) None of the above
47. Accounting standards in India are issued by
(a) Comptroller and Auditor general of India (b) Reserve bank of India
(c) The Institute of Accounting standards of India
(d) The Institute of Chartered Accountants of India
48. A transaction without immediate cash settlement is known as
(a) Cash Transaction; (b) Credit Transaction;
(c) Deferred Transaction; (d) None of the above.
4
