Accountancy Test

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Accountancy Test - 16

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Weekly Quiz Competition

Question 1
5 / -1

There are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the appropriate option from the options given below

Assertion (A): Equity shares are those shares which are not preference shares.

Reason (R): Equity shares are the least issued class of shares and carries the minimum risks and rewards of the business.

A
Both Assertion (A) and Reason (R)are true and Reason (R) is the correct explanation of Assertion (A)

B
Both Assertion (A)and Reason (R)are true, but Reason (R) is not the correct explanation of Assertion (A)

C
Assertion (A) is false, but Reason (R) is true

D
Assertion (A) is true, but Reason (R) is false

Solution

Equity shares are the most commonly issued class of shares and carries the maximum risks and rewards of the business.
Question 2
5 / -1

Which of the following points out the nature of financial statements?

(i) Financial statements are prepared on the basis of recorded facts.

(ii) Certain accounting conventions are followed while preparing financial statements.

(iii) Financial statements are prepared on certain basic assumptions (pre-requisites) known as postulates.

(iv) Facts and figures presented through financial statements are based on personal opinion, estimates and judgements.

A
Only(i)

B
(i) and (ii)

C
(i), (ii) and (iii)

D
(i), (ii), (iiii) and (iv)
Question 3
5 / -1

Company’s balance sheet should be prepared according the provision of ______ of the of Companies Act, 2013.

A
Schedule I

B
ScheduleI III

C
Schedule II

D
Schedule IV

Solution

Company’s balance sheet should be prepared according to the provision of Schedule III of the Companies Act, 2013.

Explanation: Schedule III of the Companies Act, 2013 prescribes the general instructions for the preparation of the balance sheet and statement of profit and loss of a company. It provides the format and guidelines for presenting financial information in a clear and organized manner.
Question 4
5 / -1

Under which of the following head/ sub-head is ‘forfeited shares’ presented in the balance sheet of a company?

A
Reserves and surplus

B
Share capital

C
Other long-term liabilities

D
Othercurrent liabilities

Solution

Forfeited shares are shown by adding it to subscribed capital.
Question 5
5 / -1

Preliminary expenses are treated as ‘short-term borrowings’ in the balance sheet of a company.

A
True

B
False

C
Partially true

D
Can't say

Solution

They are written-off in the year they are incurred.
Question 6
5 / -1

Which of the following will be included under shareholder’s funds?

A
General reserve of ₹ 50,000

B
Public deposits amounting to ₹ 1,20,000

C
Trade receivables of ₹ 83,000

D
Provision for taxation of ₹ 1,20,000

Solution

General reserve will be included under reserves and surplus and will be a part of shareholders’ funds.
Question 7
5 / -1

Amount provided for any known liability whose amount as yet is uncertain is known as

A
Liability

B
Reserve

C
Provision

D
None of the above

Solution

Provision is made to meet a specific liability whose amount cannot be determined with substantial accuracy.
Question 8
5 / -1

Loose tools are shown as non-current assets in the balance sheet of a company.

A
True

B
False

C
Partially true

D
Can't say

Solution

Loose tools are shown under the head current assets and sub-head inventories on the assets side of the balance sheet of a company.
Question 9
5 / -1

Which of the following is/are a component of trade payables?

A
Sundry creditors

B
Bills payable

C
Both(a)and(b)

D
None of the above

Solution

Trade receivables include both sundry creditors and bill payables.
Question 10
5 / -1

How do financial statements serve purpose of lenders?

A
Lenders take decisions based on the financial performance of the undertakings as shown by the financial statements of a company.

B
Financial statements ignore price level changes.

C
Financial statements only incorporate monetary aspects of a business.

D
None of the above

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Accountancy Test - 16

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Accountancy Test - 16

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Question 1

Both Assertion (A) and Reason (R)are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A)and Reason (R)are true, but Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is false, but Reason (R) is true

Assertion (A) is true, but Reason (R) is false

Solution

Question 2

Only(i)

(i) and (ii)

(i), (ii) and (iii)

(i), (ii), (iiii) and (iv)

Question 3

Schedule I

ScheduleI III

Schedule II

Schedule IV

Solution

Question 4

Reserves and surplus

Share capital

Other long-term liabilities

Othercurrent liabilities

Solution

Question 5

True

False

Partially true

Can't say

Solution

Question 6

General reserve of ₹ 50,000

Public deposits amounting to ₹ 1,20,000

Trade receivables of ₹ 83,000

Provision for taxation of ₹ 1,20,000

Solution

Question 7

Liability

Reserve

Provision

None of the above

Solution

Question 8

True

False

Partially true

Can't say

Solution

Question 9

Sundry creditors

Bills payable

Both(a)and(b)

None of the above

Solution

Question 10

Lenders take decisions based on the financial performance of the undertakings as shown by the financial statements of a company.

Financial statements ignore price level changes.

Financial statements only incorporate monetary aspects of a business.

None of the above

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