Questions Answers

Income from after sales service deferred revenue

Lang Industries provided services to customers then sent invoices for the a Assets and retained earnings increase
mounts owed. What effect does this transaction have on the accounting eq
uation?
Fresh capital issued by sole proprietor by issuing cheque in favor of the firm bank, sole proprietor
is recorded by debiting ______ account and crediting ______ account

Salaries paid in cash recorded by ________ cash Credited in cash account, debited in salary
account
Investing acitivities includes the purchase and sale of non current assests FIXED ASSET, intangible assets, long term
such as investments (all of the above)
Tax expense in statement of profit and loss is 4000000. Cash outflow during
the year when current tax liability is 200000 and 300000 at end of the year

Expenses can be matched against revenue d) in the same time period as the revenue
a. if the earnings process is not complete that it helped to generate
b. when cash is collected from the sale of products
c. when payment is made for costs related to revenue
d. in the same time period as the revenue that it helped to generate
Depreciation in spirit is similar to amortization
Which activities result in a cash inflow Operating activities, Investment, financing
activities
K Kumar purchased furniture of 10000 in cash. Net worth changes by Zero
Accounting entry for recording payment of telephone bill Debit telephone and credit cash
A company has net sales of Rs300 lakhs, cash depreciation expenses of 120 Lakhs (300-140-40)
Rs50 lakhs. If debtors increase over the period by Rs40 lakhs, cash from
expenses(including taxes) of Rs140 lakhs and operation will be
Adjusting journal entries are made at the end of period when cash receipts and payments occur before or
after point in time when revenues and
expenses should be recognized under the
accrual basis of accounting
Books of original entry are called Journal
investments in associates and joint ventures ARE usually classified as ___ Operating
asset for ratio analysis
Which ratios measure solvency Debt to equity + Equity + Debt
Machinery bought for 50 L. Expense of installation and transportation is 808000
50000. Useful life of machine is 5 years. Whats the value of assets after 2
years?
the generally accepted rules that accountant tend to follow when preparing Accounting standard
financial statement
What is not an asset Debtors and trade receivables
what does current ratio tell us current ratio is a measure of a companies
liqudity
Which of the following is true about balance sheet: Both a and b are true
a. A companies asset, liability and equity are reported on a balance sheet
b. because a balance sheet is reported in a specific point in time it is often
refer to as
a snapshot of a business

in which section of the annual report would u find. Financial statement in Independent auditor's report
our opinion present fairly the financial positon operating results and cash
flow in confirmity with generally accepted accounting principles.
when the company is paying dividend it has what effect on its equity? decrease in equity and requires debit entry
The balance sheet of KK limited as at march 31, 2017 shows 100000 equity 80000
shares under the heading paid up capital. During September 2017, KKl
bought back 20000 shares from shareholders. The number of outstanding
shares as at march 31 2018 is ____
The accounting process involves in recording Quantifiable economic event
a. Quantifiable economic event
b. Non quantifiable economic event
c. All of them
d. None of them
All accounts can be characterized in the form known as T account form due its resemblance to capital letter T
to
Prepaid expense is a _______ asset non monetary
retained earning is synonymous to undistributed profit
the financial year of AB limited is from April 1 to march 31 of the next year. Zero
On July 1, 2018 it paid
12 lakhs towards insurance premium for an insurance policy that covers a
period of one year. In the
balance sheet as at march 31, 2019 prepaid insurance premium will be
measured at___
ROIC increases with increase in All of the above
Liquidity ratio assess a company's ability to meet its __ financial obligation short term

Which ratios measure effectiveness with which a concern uses the Turnover ratios
resources as assets at its disposal
An amount of Rs 50000 claim for workman compensation under dispute is a Contingent liability

If current ratio is given as 2.5 liquid assets are 60000 and quick ratio is 1.5 40000
then the value of stock will be
GMC sells cars and pays each salesperson a commission of Rs 800 for each Tom will recognize revenue in the same
car sold. During the month that the car dealer recognizes
month of December, a sales person, tom, sold 3 new cars. GMS pays expenses
commission on the 5th day of
the month following the sale. Tom operates on the cash basis; the car
dealer operates on the accrual
basis. The following statement is true?
Which of these is not a coverage ratio Operating coverage ratio
Which of these is not a business asset Equity
Trade investments are usually classified as___ asset non operating
Machinery is purchased on credit. What effect does it have on accounting both liabilities and assets increased by same value
equation?
payment is made for machinary purchases previously on credit. What effect assets and liabilities decresae
does this transaction have on accounting equation.
Double entry implies that Recording two aspects of every transactions

Accounting information includes only financial information measured in TRUE

monetary terms
Unpaid and unrecorded expenditures are called Accrued expenses
Which of the following is that main objective of financial accounting? To ascertain financial results and financial
position and to provide information to
various users.
On December 31,2010 Bosco corporation signed a one year contract to Equally throughout the year 2011, as the
provide services to cosco revenue is earned
company for 120000. cosco will pay for the services on January 1, 2011.
using the accrual basis of
accounting, when should bosco corporation recognize revenue?
the current ratio of BM ltd is 2:1 while quick ratio is 1.80:1 . If the current 8000
liabilites are 40000. the value of stock will be
Net profit reported at 5000000. Net profit includes interest expense NONE OF THE ABOVE
500000 income tax expense
2000000, interest income 300000. exchange difference(loss) arising from
translation of amount
payable against purchase of equipment in functional currency 250000 and
depreciation 600000.
there is no change in working capital. there was no income tax liability at
the beginning and at the
end of the year. cash flow from operating activities is
During 2017-18 S fashion limited SFL sold goods worth 1000 crores. Its 100 crore
customer loyalty
program allow customers to avail 10% discount of total purchase in the
financial year in the next
financial year. The management estimates that only 80% are return
customer and their purchase on
average increases 20% over previous year. SFL should recognize deferred
revenue at___ in financial
statement for 2017-18