1. Patent Rights account is a ‐‐‐‐‐‐ account
A) Real
b) Personal
c) Nominal
d) Fictitious
Answer-a
2. Principal books of accounting is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
a) Journal
b) Profit and loss
c) Ledger
d) Balance sheet
Answer-c
3. What is the equation of gross profit?
a) Opening stock +Purchase +Direct expense – Closing stock
b) Sales –Cost of goods sold
c) Sales returns –Cost of goods sold
d) Sales + Cost of goods sold
Answer-B
4. Bad debt shown in adjustment is known as :
a) Provision for bad debt
b) Bad debt
c) Further bad debt
d) Net bad debt
Answer –C
5. Prepaid expenses is ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ to the business
a) Income
2. b) Expense
c) Asset
d) Liability
Answer –C
6. Accounting principles are based on
a) Convenience in accounting
b) Objectivity
c) Subjectivity
d) Practicability
Answer –D
7. International Accounting Standard 4 (IAS 4) Related of depreciation accounting was
withdrawn in the year......
a) 1997
b) 1998
c) 1996
d) 1999
Answer –D
8. Adjustment made for outstanding expenses, accrued incomes etc. in the financial
statements is due to the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ principle
a) Matching
b) Business entity
c) Materiality
d) Consistency
Answer -A
9. Contingent liabilities are shown as a foot note in the balance sheet as per ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
accounting principle
a) Full disclosure
b) Objectivity
3. c) Materiality
d) Consistency
Answer -A
10. Interim dividend is shown in
a) P and L a/c
b) P and L appropriation a/c
c) Asset side of balance sheet
d) Liability side of balance sheet
Answer –B
11. Purchase for office furniture on account is recorded in :
a) Cash book
b) Purchase book
c) General journal
d) Journal proper
Answer –c
12. Bank account is a
a) Personal account
b) Real account
c) Nominal account
d) Income Account
Answer –A
13. In financial planning, most high option price will lead to
a) longer option period
b) smaller option period
c) lesser price
d) higher price
Answer –A
4. 14. In financial planning, a higher strike price leads to call option
a) price is higher
b) rate is lower
c) price is lower
d) rate is higher
Answer –A
15. 'Intermediaries' refers to which type of organisation?
a) Sales staff.
b) Multi Tied Advisors
c) IFAs
d) Financial Regulators
Answer –A
16. Identify the term for the definition: 'the standard deviation of the (arithmetic) average return:
a) Risk
b) Correlation Coefficient
c) Total Return
d) Capital Gain
Answer –A
17. An internal audit is carried out by:
(a) Employees of the organisation
(b) External auditors when focusing on internal controls of the organisation.
(c) Qualified accountants who have specialist knowledge of the internal systems of the
organisation.
(d) Qualified Company secretary who have specialist knowledge of the internal systems of the
organisation.
Answer -A
18. A bank reconciliation will be an essential check for an external auditor to
carry out because:
(a) It provides an independent check on the work of the internal auditors in relation to the bank
records.
5. (b) It proves that there have been no double entry errors in the recording of either the sales
receipts or purchase payments.
c) It checks the organisation's bank record against the bank statement, which is an independent
external source.
d) It helps him to identify any error occurred in business operation.
Answer -C
19. Coststhat change in response toalternativecoursesof actionare called:
(a) Relevantcosts
(b) Differential costs
(c) Target costs
(d) Sunkcosts
Answer -B
20. The total cost incurred inthe operationof a businessundertakingotherthanthe costof
manufacturingandproductionisknownas:
(a) Directcost
(b) Variable cost
(c) Commercial cost
(d) Conversioncost
Answer -C
21.......................... Of the Indian Income Tax Act 1961 empowers the income tax authorities
to conduct inquiries. It provides powers to summon persons / witnesses examine them under
oath, compel production of books of account and documents, and issue commissions.
a) Section 161
b) Section 121
c) Section 131
d) Section 151
22. In cases of excess tax deduction at source and double taxation relief , the assessee must
apply for refund in the prescribed ..................... within one year from the last date of
assessment year to which claimed is related.
6. (a) Form No. 30
(b) Form No. 31
(c) Form No. 32
(d) Form No. 33
Answer -A
23. Section 240 of Income Tax Act 1961 deals with:
(a) Delay in the payment of taxes.
(b) Refund on excess payment of tax
(c) Refund on appeal.
(d) Power to withhold refunds.
ANSWER -C
