Financial Statements 1 Test 38

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Financial Statements 1 Test 38

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Weekly Quiz Competition

Question 1
1 / -0

American companies prepare their financial statement in Dollars whereas Japanese companies produce financial statement in Yen. This is an example of:

A
Stable monetary unit concept

B
Unit of measurement concept

C
Money value concept

D
Current swap concept

Solution

The unit of measure concept is a standard convention used in accounting, under which all transactions must be consistently recorded using the same currency.
Without a common unit of measure, it would be impossible to produce financial statements.
Question 2
1 / -0

If overtime is resorted to at the desire of the customer, then the overtime premium ____________________.

A
should be charged to costing profit and loss account;

B
should not be charged at all

C
should be charged to the job directly

D
should be charged to the highest profit making department
Question 3
1 / -0

_________ is the expense which is unpaid at the end of the accounting period.

A
Outstanding expenses

B
Prepaid expenses

C
Proposed expenses

D
Working capital
Question 4
1 / -0

All _________ expenses are recorded in the Trading A/c.

A
direct

B
indirect

C
cost

D
none of these
Question 5
1 / -0

Carriage inwards can be included in

A
Direct expenses

B
Indirect expenses

C
Current liability

D
Misc Expenses
Question 6
1 / -0

Trial balance is prepared on____ basis.

A
Monthly

B
Annually

C
Half yearly

D
Any of the above
Question 7
1 / -0

Overvaluation of opening stock in financial accounting results _____________.

A
decreases costing profit

B
decreases financial accounts profit

C
increases costing profit

D
increases financial accounts profit
Question 8
1 / -0

Income includes ______________.

A
Income earned

B
Income received

C
Income receivable

D
All of the above
Question 9
1 / -0

If a company has contingent liabilities, they appear in the __________.

A
balance sheet

B
director's report

C
foot note down the balance sheet

D
chairman's report

Solution

Contingent liability is that amount of financial obligation which may arise in future due to an incident. Contingent liability is shown in notes to account only when this can be measured to a reasonable extent in monetary value and based on future event. It is shown as foot note to the balance sheet.

Question 10

1 / -0

From the given information, find the correct amount of purchases.

Cost of goods sold	$$Rs. 1,20,000$$
Carriage inwards	$$Rs. 1,890$$
Opening stock	$$Rs. 43,640$$
Closing stock	$$Rs. 38,500$$
Purchase returns	$$Rs. 2,150$$
Sales	$$Rs. 2,82,650$$

$$Rs. 1,15,120$$

$$Rs. 62,650$$

$$Rs. 1,10,420$$

None of the above

Solution

Cost of Goods Sold=Opening Stock+Purchases+Carriage Inwards-Purchase returns-Closing Stock.

This can can be tabulated as:

Opening Stock	43,640
Add: Purchases	1,15,120
Add:Carriage Inward	1,890
Less: Purchase returns	-2,150
	_______ 1,58,500
Less:Closing Stock	38,500 _______
Cost of Goods Sold	1,20,000

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Financial Statements 1 Test 38

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Financial Statements 1 Test 38

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Question 1

Stable monetary unit concept

Unit of measurement concept

Money value concept

Current swap concept

Solution

Question 2

should be charged to costing profit and loss account;

should not be charged at all

should be charged to the job directly

should be charged to the highest profit making department

Question 3

Outstanding expenses

Prepaid expenses

Proposed expenses

Working capital

Question 4

direct

indirect

cost

none of these

Question 5

Direct expenses

Indirect expenses

Current liability

Misc Expenses

Question 6

Monthly

Annually

Half yearly

Any of the above

Question 7

decreases costing profit

decreases financial accounts profit

increases costing profit

increases financial accounts profit

Question 8

Income earned

Income received

Income receivable

All of the above

Question 9

balance sheet

director's report

foot note down the balance sheet

chairman's report

Solution

Question 10

$$Rs. 1,15,120$$

$$Rs. 62,650$$

$$Rs. 1,10,420$$

None of the above

Solution

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