Commerce exams sample papers

CA CPT Fundamentals of Accounting Questions with Answers

Fundamentals of Accounting - Practice Test

Question 1
The determination of expenses for an accounting period is based on the principle of
A
Materiality
B
Objectivity
C
Matching
D
Periodicity
Question 2
Discount on issue of debentures is a _____

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A
Capital loss to be shown as goodwill
B
Capital loss to be written off from capital reserve
C
Revenue loss to be charged in the year of issue
D
Capital loss to be written off over the tenure of the debentures
Question 3
In the case of downward revaluation of an asset, which is for the first time revalued, _______ account is debited.
A
General Reserve
B
Profit & Loss account
C
Fixed Asset
D
Revaluation Reserve
Question 4
If delcredere commission is allowed for bad debt, consignee will debit the bad debt amount to:
A
Debtors A/c
B
Commission Earned A/c
C
Consignor A/c
D
General Trading A/c
Question 5
Fundamental accounting assumptions are
A
Business entity
B
Going concern
C
Dual aspect
D
Materiality
Question 6
Revenue from sale of products, is generally, realized in the period in which

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A
Cash is collected
B
None of these
C
Products are manufactured
D
Sale is made
Question 7
Which account is the odd one out?
A
Plant and Machinery
B
Stock of raw materials
C
Office Furniture & Equipment
D
Freehold Land and Buildings
Question 8
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
Net realizable value
B
Historical cost
C
Cost price or market value, whichever is lower
D
Cost less depreciation
Question 9
Which of the following is not a sub-field of accounting?
A
Management accounting
B
Book-keeping
C
Cost accounting
D
Financial accounting
Question 10
A Bank Reconciliation Statement is prepared to know the causes for the difference between:

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A
the balances as per cash column of Cash Book and the Pass Book
B
None of these
C
the balance as per bank column of Cash Book and the Pass Book
D
the balance as per bank column of Cash Book and balances as per cash column of Cash Book
Question 11
A change in accounting policy is justified
A
To ensure more appropriate presentation of the financial statement of the enterprise
B
All of these
C
To comply with accounting standard
D
To comply with law
Question 12
Which of the following errors are not revealed by the Trial Balance:
A
wrong totaling of an account
B
errors of commission
C
compensating errors
D
wrong balancing of an account
Question 13
Contra entries are passed only when
A
None of these
B
Simple cash book is prepared
C
Three-column cash book is prepared
D
Double column cash book is prepared
Question 14
Which of the following are of capital nature?
A
Purchase of a goods
B
Cost of repair
C
Wages paid for installation of machinery
D
Rent of a factory
Question 15
Change in accounting estimate means
A
Differences arising between certain parameters estimated earlier and actual results achieved during the current period.
B
Both
C
Differences arising between certain parameters estimated earlier and reestimated during the current period.
D
None
Question 16
In Double Entry System of Book-keeping every business transaction affects:
A
The same account on two different dates
B
All of these
C
Two accounts
D
Two sides of the same account
Question 17
The owner of the consignment stock is ________
A
Consignee
B
Consignor
C
Debtors
D
Debtors
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
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
6
B
7
C
12
D
4
Question 20
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
Closing stock
B
Sales
C
liability
D
Goods in transit
Question 21
In the books of manufacturing concern, opening stock consists of
A
Work-in-progress
B
Finished goods
C
All of these
D
Raw materials
Question 22
Interest on capital will be paid to the partners if provided for in the agreement but only from____
A
Reserves
B
Profits
C
Goodwill
D
Accumulated Profits
Question 23
The balance of the petty cash is ____
A
income
B
an asset
C
an expense
D
liability
Question 24
The preparation of a trial balance is for:
A
Locating errors of principle
B
Locating clerical errors
C
Locating errors of commission
D
All of these
Question 25
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
Added
B
None of these
C
Deducted
D
Not required to be adjusted
Question 26
RPC Ltd. follows the written down value method of depreciating machinery year after year due to

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A
Convenience
B
Comparability
C
All of these
D
Consistency
Question 27
In the absence of any provision in the partnership agreement, profits and losses are shared
A
None of these
B
In the ratio of loans given by them to the partnership firm
C
Equally
D
In the ratio of capitals
Question 28
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
Policy Value for the dead partner and Surrender Value for the rest
B
Surrender Value for all the partners
C
Policy Amount
D
Surrender Value
Question 29
Loss on issue of debentures is treated as ___
A
Current asset
B
Current liability
C
Intangible asset
D
Miscellaneous expenditure
Question 30
Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation, is termed as ___
A
None of these
B
Liability
C
Contingent liability
D
Provision
Question 31
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 borne by bank
B
The discounting charges will be recorded in memorandum account
C
The drawer of the bill
D
The drawer of the bill
Question 32
Purchases book records:
A
All credit purchases
B
All cash purchases
C
None of these
D
Credit purchases of goods in trade
Question 33
It is essential to standardize the accounting principles and policies in order to ensure
A
Consistency
B
Comparability
C
All of these
D
Transparency
Question 34
Which of the following types of information are found in subsidiary ledgers, but not in the general ledger?
A
Total cost of goods sold for the period
B
The amount owed to a particular creditor
C
The quantity of a particular product sold during the period
D
The portion of total current assets that consist of cash
Question 35
Dividends are usually paid as a percentage of ______

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A
Called-up capital
B
Net profit
C
Authorized share capital
D
Paid-up capital
Question 36
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
Del-creder’s commission is generally relevant for credit sales
C
Del-creder’s commission is allowed by consignor to consignee
D
If del-creder’s commission is allowed, bad debt will be debited in consignment account
Question 37
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 also understated
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 overstated
Question 38
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
Expected life
C
Production life
D
Useful life
Question 39
Under inflationary conditions, ________ method will show highest value of closing stock?
A
FIFO
B
Weighted Average
C
None of these
D
LIFO
There are 39 questions to complete.

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