📒Accounting MCQs
Accounting MCQs
397 MCQs161
Which of the following should not be treated as revenue expenditure?
AInterest on loans and debentures
BAnnual fire insurance premiums on Plant and Equipment
CSales tax paid in connection with the purchase of office equipment is a non-recurring expenditure whose benefit is going to last for more than one accounting period and hence not a revenue expenditure
DSmall expenditures on long- lived assets, such as ` 20 for a paper weight.
162
Which of these errors affect only one account?
AErrors of casting
BErrors of carry forward
CErrors of posting
DAll the three
163
Which of the following items should not be capitalized relating to fixed assets?
AInterest payable on loans or deferred credits taken for the acquisition or construction of fixed assets before they are ready for use
BStand by equipment and servicing equipment
CExpenditure incurred on test runs and experimental production
DAdministration and general expenses Only those expenses which relate to and specifically attributable to the asset are capitalized. Administration and general expenses cannot be specifically attributable to the asset and hence cannot be capitalized.
164
Which of the following enhances the earning capacity of an asset?
AIncrease in working capacity of an asset
BReduction in operating costs
CReplacing damaged parts of an asset
DBoth A and C above Enhancement of earning capacity can be by way of replacement of worn out or damaged parts which retarded the earning capacity and increase in the working capacity increases the earning capacity of the asset.
165
Which one of the following is a capital expenditure?
ACompensation paid to Directors on termination of their services
BExpenditure incurred in connection with the renewal of a Trade Mark.
CGratuities paid to Directors on termination of their services.
DRoyalty paid in installments for the purchase of rights to manufacture and sell patient medicines.
166
Which of the following statements are / is true? – Events after Balance Sheet are?
AAll the significant events after the Balance Sheet date
BThe events after Balance Sheet date but before submitting it to the Registrar of Companies
CThe events after Balance Sheet date but before its approval by the board
167
Which one of the following should be considered a revenue expenditure?
A1000 paid for the execution of a new plant
BLoss of 10,000 incurred in increasing the sitting accommodation of a hotel
CDamage paid on account of breach of a contract to supply certain goods
DRepair to machinery purchased, second hand.
168
Which of the following statements is true with regard to written down value method of depreciation?i. The rate at which the asset is written off reduces year after year ii. The amount of depreciation provided reduces from year to year iii. The rate of depreciation as well as the amount of depreciation reduce year after year iv. The value of the asset gets reduced to zero over a period of time
AOnly (i) above
BOnly (ii) above
CBoth (i) and (ii) above
D(i),(ii) and (iii) above
169
Which column of a cash book will not have credit balance___________?
ABank column
BDiscount column
CCash column
DNone
170
The closing balance of a petty cash book is a / an___________?
ALiability
BGain
CAssets
DLoss