Mix Test 1

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Mix Test 1

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Weekly Quiz Competition

Question 1
1 / -0

Gaining ratio is the ratio in which continuing partners have ______ the share from the outgoing partner

A
Both Acquired and Sacrificed

B
Acquired and Sacrificed

C
Sacrificed

D
Acquired

Solution

Explanation:

When a partner retires from the firm, his share will be acquired by the continuing partners. The ratio in which they acquire the share of retired partner, is known as gaining ratio.
Question 2
1 / -0

Goodwill Given in the old Balance Sheet will be:

A
Written off by the Sacrificing partners

B
Written off by the old partners

C
Distributed by Gainer partners

D
Credited to old Partners Capital accounts

Solution

Explanation:

Goodwill given in the old balance sheet will be written off by all the partners (including retiring partner) at the time of retirement of a partner. Goodwill will be written off in the old ratio of all the partners.

As it is fictitious assets so we write it on debit side of partners capital account and reduce partners capital with that effect. So asset goddiwll gone and liabilities capital reduce. debit =credit.
Question 3
1 / -0

Dividend Received is concerned with_________.

A
Operating Activities

B
Both Operating Activities and Financing Activities

C
Financing Activities

D
Investing Activities

Solution

Explanation:

Dividend Received is concerned with investing activities. A firm will received dividend only if it has invested in the shares of some other company and income received on their Investment as Dividend.
Question 4
1 / -0

Redemption of preference Shares is concerned directly with ______.

A
Operating Activities

B
Financing Activities

C
Investing Activities

D
Not concerned with any activity

Solution

Explanation:

Redemption of preference shares is concerned with financing activities. It will be deducted in financing activities as cash used in redemption of prefrence share.
Question 5
1 / -0

Which of the following is not shown under the heading of Reserves and surplus?

A
Bills of exchange

B
Statement of profit and loss

C
Securities Premium Reserve

D
Capital Reserve

Solution

Explanation:

Bills of exchange is not shown under the heading Reserves and surplus but following items will be shown under this heading:

•Securities Premium Reserve

•Statement of profit and loss

•Capital Reserve

Bills of Exchange come as trade payables in current liabilities.
Question 6
1 / -0

Claim against the company not yet acknowledged as debt, is a ….

A
Reserve and Surplus

B
Contingent Liability

C
Current Liability

D
Provisions

Solution

Explanation:

Claim against the company not acknowledged as debt is shown as contingent liability after preparing the balance sheet. It is shown as a footnote to the balance sheet. Contingent liabilities are those which may or may not arise as they are dependent on happening in future.
Question 7
1 / -0

As per the Companies Act, 2013, companies cannot issue ______________

A
Irredeemable Preference Shares

B
Preference Shares

C
Bonus Shares

D
Equity Shares

Solution

Explanation:

There are two types of preference shares in context to the redemption i.e. Redeemable and Non-redeemable preference shares. As per the Companies Act, 2013, companies cannot issue Irredeemable Preference Shares. Redeemable preference shares are those which can be redeemed by the company.
Question 8
1 / -0

Share Forfeiture account is a:

A
Fictitious Asset

B
Personal Account

C
Nominal Account

D
Misc. Expenditure

Solution

Explanation:

All accounts which are prepared for the calculation of profit or loss are nominal accounts. All assets accounts are real and liabilities are personal accounts.
Question 9
1 / -0

Deferred Tax Asset is treated as:

A
Current Assets

B
Fixed Assets

C
Fictitious Assets

D
Liquid Assets

Solution

Explanation:

Deferred tax asset is treated as a fictitious asset because it doesn’t play any role in the firm. It refers to a situation where a business has overpaid taxes or taxes paid in advance. These are eventually returned to the business.
Question 10
1 / -0

Quick Assets do not include:

A
Cash

B
Inventories

C
B/R

D
Bank

Solution

Explanation:

Quick Assets do not include inventories because it cannot be converted into cash quickly ie., illiquid asset

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Re-Attempt Weekly Quiz Competition

Mix Test 1

Result

Mix Test 1

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Rank

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SHARING IS CARING

Question 1

Both Acquired and Sacrificed

Acquired and Sacrificed

Sacrificed

Acquired

Solution

Question 2

Written off by the Sacrificing partners

Written off by the old partners

Distributed by Gainer partners

Credited to old Partners Capital accounts

Solution

Question 3

Operating Activities

Both Operating Activities and Financing Activities

Financing Activities

Investing Activities

Solution

Question 4

Operating Activities

Financing Activities

Investing Activities

Not concerned with any activity

Solution

Question 5

Bills of exchange

Statement of profit and loss

Securities Premium Reserve

Capital Reserve

Solution

Question 6

Reserve and Surplus

Contingent Liability

Current Liability

Provisions

Solution

Question 7

Irredeemable Preference Shares

Preference Shares

Bonus Shares

Equity Shares

Solution

Question 8

Fictitious Asset

Personal Account

Nominal Account

Misc. Expenditure

Solution

Question 9

Current Assets

Fixed Assets

Fictitious Assets

Liquid Assets

Solution

Question 10

Cash

Inventories

B/R

Bank

Solution

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