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CA CPT Fundamentals of Accounting Questions with Answers

CA CPT Fundamentals of Accounting Questions
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Fundamentals of Accounting - Practice Test

Question 1
In the absence of any provision in the partnership agreement, profits and losses are shared
A
In the ratio of loans given by them to the partnership firm
B
Equally
C
In the ratio of capitals
D
None of these
Question 2
The number of production or similar units expected to be obtained from the use of an asset by an enterprise is called as ____
A
Unit life
B
Production life
C
Useful life
D
Expected life
Question 3
It is essential to standardize the accounting principles and policies in order to ensure
A
Transparency
B
Consistency
C
Comparability
D
All of these
Question 4
Which of the following are of capital nature?
A
Wages paid for installation of machinery
B
Cost of repair
C
Purchase of a goods
D
Rent of a factory
Question 5
Which of the following errors are not revealed by the Trial Balance:
A
compensating errors
B
wrong balancing of an account
C
wrong totaling of an account
D
errors of commission
Question 6
A Bank Reconciliation Statement is prepared to know the causes for the difference between:

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A
the balance as per bank column of Cash Book and balances as per cash column of Cash Book
B
the balance as per bank column of Cash Book and the Pass Book
C
None of these
D
the balances as per cash column of Cash Book and the Pass Book
Question 7
In the case of downward revaluation of an asset, which is for the first time revalued, _______ account is debited.
A
Fixed Asset
B
General Reserve
C
Revaluation Reserve
D
Profit & Loss account
Question 8
Which account is the odd one out?
A
Freehold Land and Buildings
B
Plant and Machinery
C
Stock of raw materials
D
Office Furniture & Equipment
Question 9
Interest on capital will be paid to the partners if provided for in the agreement but only from____
A
Reserves
B
Goodwill
C
Profits
D
Accumulated Profits
Question 10
Which of the following is not a sub-field of accounting?
A
Financial accounting
B
Cost accounting
C
Book-keeping
D
Management accounting
Question 11
Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation, is termed as ___
A
Contingent liability
B
Liability
C
Provision
D
None of these
Question 12
As per Section 37 of the Indian Partnership Act, 1932, the executors would be entitled at their choice to the interest calculated from the date of death till the date of payment on the final amount due to the dead partner at ________ percentage per annum.
A
4
B
7
C
12
D
6
Question 13
Which of the following types of information are found in subsidiary ledgers, but not in the general ledger?
A
The portion of total current assets that consist of cash
B
The quantity of a particular product sold during the period
C
Total cost of goods sold for the period
D
The amount owed to a particular creditor
Question 14
Change in accounting estimate means
A
None
B
Both
C
Differences arising between certain parameters estimated earlier and reestimated during the current period.
D
Differences arising between certain parameters estimated earlier and actual results achieved during the current period.
Question 15
Purchases book records:
A
None of these
B
All cash purchases
C
Credit purchases of goods in trade
D
All credit purchases
Question 16
The balance of the petty cash is ____
A
liability
B
an expense
C
an asset
D
income
Question 17
Fundamental accounting assumptions are
A
Business entity
B
Dual aspect
C
Materiality
D
Going concern
Question 18
The portion of the acquisition cost of the asset, yet to be allocated is known as ___

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A
Written down value
B
Realisable value
C
Accumulated value
D
Salvage value
Question 19
The determination of expenses for an accounting period is based on the principle of
A
Objectivity
B
Materiality
C
Matching
D
Periodicity
Question 20
While finalizing the current year’s profit, the company realized that there was an error in the valuation of closing stock of the previous year. In the previous year, closing stock was valued more by Rs.50,000. As a result
A
Previous year’s profit is understated and current year’s profit is overstated
B
Previous year’s profit is overstated and current year’s profit is also overstated
C
Previous year’s profit is overstated and current year’s profit is understated
D
Previous year’s profit is understated and current year’s profit is also understated
Question 21
In Double Entry System of Book-keeping every business transaction affects:
A
The same account on two different dates
B
Two sides of the same account
C
Two accounts
D
All of these
Question 22
Dividends are usually paid as a percentage of ______

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A
Paid-up capital
B
Net profit
C
Called-up capital
D
Authorized share capital
Question 23
If delcredere commission is allowed for bad debt, consignee will debit the bad debt amount to:
A
Debtors A/c
B
Consignor A/c
C
General Trading A/c
D
Commission Earned A/c
Question 24
A change in accounting policy is justified
A
To comply with law
B
To comply with accounting standard
C
All of these
D
To ensure more appropriate presentation of the financial statement of the enterprise
Question 25
Under inflationary conditions, ________ method will show highest value of closing stock?
A
None of these
B
LIFO
C
Weighted Average
D
FIFO
Question 26
Contra entries are passed only when
A
Simple cash book is prepared
B
Three-column cash book is prepared
C
None of these
D
Double column cash book is prepared
Question 27
Revenue from sale of products, is generally, realized in the period in which

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A
None of these
B
Products are manufactured
C
Cash is collected
D
Sale is made
Question 28
Discount on issue of debentures is a _____

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A
Capital loss to be written off from capital reserve
B
Revenue loss to be charged in the year of issue
C
Capital loss to be shown as goodwill
D
Capital loss to be written off over the tenure of the debentures
Question 29
If a venturer draws a bill on his co-venturer and if the drawer discounts the bill with same sets of books maintained, the discounting charges will be borne by__
A
The discounting charges will be recorded in memorandum account
B
The drawer of the bill
C
The discounting charges will be borne by bank
D
The drawer of the bill
Question 30
In the books of manufacturing concern, opening stock consists of
A
All of these
B
Finished goods
C
Work-in-progress
D
Raw materials
Question 31
Loss on issue of debentures is treated as ___
A
Current asset
B
Miscellaneous expenditure
C
Intangible asset
D
Current liability
Question 32
At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partners.
A
Surrender Value
B
Policy Amount
C
Policy Value for the dead partner and Surrender Value for the rest
D
Surrender Value for all the partners
Question 33
RPC Ltd. follows the written down value method of depreciating machinery year after year due to

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A
Comparability
B
Consistency
C
Convenience
D
All of these
Question 34
Sales for the year ended 31st March, 2005 amounted to Rs. 10,00,000. Sales included goods sold to Mr. A for Rs. 50,000 at a profit of 20% on cost. Such goods are still lying in the godown at the buyer’s risk. Therefore, such goods should be treated as part of
A
Sales
B
liability
C
Closing stock
D
Goods in transit
Question 35
The owner of the consignment stock is ________
A
Debtors
B
Debtors
C
Consignor
D
Consignee
Question 36
When preparing a Bank Reconciliation Statement, if you start with a debit balance as per the Cash Book, then cheques issued but not presented within the period are _____
A
None of these
B
Deducted
C
Added
D
Not required to be adjusted
Question 37
Which of the following statement is not true:
A
If del-creder’s commission is allowed, bad debt will not be recorded in the books of consignor
B
If del-creder’s commission is allowed, bad debt will be debited in consignment account
C
Del-creder’s commission is allowed by consignor to consignee
D
Del-creder’s commission is generally relevant for credit sales
Question 38
If a concern proposes to discontinue its business from March 2005 and decides to dispose off all its assets within a period of 4 months, the Balance Sheet as on March 31, 2005 should indicate the assets at their ___
A
Cost less depreciation
B
Historical cost
C
Net realizable value
D
Cost price or market value, whichever is lower
Question 39
The preparation of a trial balance is for:
A
Locating errors of commission
B
All of these
C
Locating errors of principle
D
Locating clerical errors
There are 39 questions to complete.
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Vishal Arora