Welcome to your AFB 100 MCQ SET-02

1. A person purchased a lap top for Rs.30000 by raising a loan from the bank at 12% on simple rate of interest, payable in 2 years as weekly payment. The total amount of interest would be Rs. ______ and the weekly instalment would be Rs. ______.
2. When the balance as per the cash book is staring point, in the reconciliation, the amount of cheques issued and not presented are
3. Which among the following is not correct in the context of annuity
4. A person wants to have Rs.2 lac annually for 20 years by investing the amount in an annuity interest rate of 5%. He will have to invest
5. A sinking fund can be created for using it for (a) pay a loan in lump sum (b) to redeem a bond (c) to buy new machinery (d) to replace a worn out equipment
6. When the required rate of return is (less than / more than) the coupon rate, the discount on the bond _______ as maturity approaches
7. To make provision on bad debts, which of the following journal entry is correct:
8. When the future cash flow from a project is discounted, the project can be accepted if
9. Internal rate of return (IRR) is the ________ rate at which the net present value of the cash flows from a project is _______
10. The estimated value of an asset at which it can be dispose of after a given no. of years of useful life is called
11. A fixed asset is purchased for Rs.1 lac with excepted useful life of 5 years. Its depreciated value at the end of 3rd year will be Rs.______. If it is sold for Rs.45000, the firm will make profit/loss of Rs._______
12. Business transactions are recorded on the basis of certain set of rules and criteria, which are called:
13. Which of the following accounting standard prescribed by ICAI in India does not match the description
14. The accounting method in which the profit represents the excess of receipts over the expenditure:
15. Which among the following is not a correct statement
16. Health of the proprietor which affects the business activity and hence the profit, is not recorded in the books due to which of the following
17. When a business earns profits, these are shown in the balance sheet as
18. Name the accounts involved in the following transactions i.e. the firm has purchased machinery from XYZ, for cash
19. Which of the following is a correct statement regarding a cash book (a) it is book of original (b) it is subsidiary book and a ledger account also (c) it records all cash transactions (d) the fundamental rule that each entry should be first recorded in the book of prime entry and then posted applies to cash book also
20. The accounting cycle of business transactions follows the following order
21. When two sides of an account are equalized by putting the difference on the side where amount is short, the process is called
22. The debit balance of an account may represent either an asset or an expense. Which of the following is not in connection with the debit balance
23. The accounts showing transactions with persons like customers, suppliers, banks, owners etc. are categorized as personal account. Which of the following is not sub-category of such accounts
24. Which of the following accounts is not a real account
25. A firm has incurred huge expenditure on advertisement the benefit of which would be available for few years. It debits its profit and loss account for a part of the amount while the other part is not debited. These two parts would be classified as
26. Which of the rule for debit or credit of account is properly matched out of the following
27. Debit in real account means (a) the value of the asset whose account is being debited has increased (b) the value of the asset whose account is being debited has decreased (c) business has acquired more of that asset (d) business has sold that asset
28. A nominal account has been debited which signifies that (a) there has been some expense (b) there has been some loss (c) some income has diminished (d) some profit has diminished
29. Which of the following statement is true with regard to debit or credit to cash book
30. The left hand side of an account is called ________ and right hand side entry is called ______
31. Which of the following is not correct
32. Name of the account book where the individual records of expenses, assets and persons are maintained is called
33. Wages paid to Mohan, the peon is to be credited to ______ and cash received from a debtor being payment of goods sold would be debited to ______:
34. A business firm can adopt an accounting procedure which it has to follow later on also due to which of the following accounting concepts
35. The double entry accounting system (a) keeps a complete record of business transactions (b) it ensures arithmetical accuracy (c) balance sheet can be prepared at the end of year only by using this system (d) system being scientific, eliminates the commission of fraud
36. The accrual system of income recognition makes distinction between
37. Machinery account has been showing balance of Rs.2.70 lac. An entry of Rs.0.30 Lac is made on right side of this account. This will _______ (increase / decrease ) the balance which would be Rs.____.
38. The balance of cash book and the balance as per pass book of the bank are required to be reconciled because of which of the following reasons (which is not true)
39. A cheque is issued by a firm but not presented, while the other cheque drawn in its favour, is deposited by the firm with the bank. In the first case the entry will be first made by the ______ in its books and for the 2nd case, entry will be first made by the_______.
40. For the purpose of reconciliation statement, if there is positive balance, it appears on ______ side of in the cash book and ______ side in the pass book
41. When pass book has a higher balance than the cash book and account is a current account with the bank, this may be on account of
42. (a) credit balance as per cash book means overdraft (b)direct deposit by a firm’s debtor in the bank is first recorded by the bank (c) debit of bank charges by the bank reduce the balance. In the context of reconciliation, which of these is correct
43. Bank reconciliation statement is ______.
44. . The receipt side of the cash books is overcast by Rs.100 and the overdraft as per pass book is the starting point. The amount of Rs.100 will be
45. In gross trail balance, which of the following is taken (a) total of debit columns of each ledger account (b) total of credit columns of each ledger account (c) total of receipt of cash book (d) total of payment of cash book
46. Trial balance remains untallied due to errors. Various types of errors can be (a) error of omission (b) error of commission (c) errors of principal (d) intentional errors
47. XYZ had purchased certain goods from ABC firm but these were not recorded in the purchase journal. This is error of _____. It will (affect / not affect) the trial balance
48. An error that nullifies the wrong effect of another error is called ________:
49. Goods purchased from Ramesh Kumar have been recorded in the sales register
50. A purchase of Rs.6800 has been made by the firm but the amount has been posted to creditor’s account for Rs.6000. for rectification, the journal entry would be
51. Which of the following is not true
52. (a) a recurring expenses which is to be made frequently is called a revenue expenses (b) a non-recurring expenses is a capital expense (c) purchase of motor cars from the manufacturer by a dealer is a revenue expenses (d) purchase of machinery by a manufacturing firm for its use is a capital expenses
53. Which of the following expenses and their type does not match
54. A sum of Rs.3000 paid to Mr. A against acceptance was debited to account of Mr. B. The rectificatiobn can be done by
55. The profits represent excess of receipts over the payment, as per which of the following accounting methods
56. A company came out with a public issue of 1 lac shares of Rs.10 each payable Rs.4 as application money, Rs.4 as allotment money and Rs.2 as 1st and final call. The company has received applications for 2 lac shares, what will be amount of share capital forfeited
57. A party draws a bill of exchange in Delhi payable in Bangalore by a foreigner and no sale or purchase has actually taken place. Such bills are called
58. A bill has been received by a drawee X from drawer Y and has been dishonoured and noted. What journal entries will be passed in the books of the drawee
59. The books in which all particulars relating to bills accepted are recorded is called bills ____ (receivable/payable) books and the entry is posted to the debit of respective _____ (debtor/creditor)
60. Which of the following statements best explains the relationship between Journal & Ledger
61. A company came out with a public issue of 1 lac shares of Rs.10 each payable Rs.4 as application money, Rs.4 as allotment money an Rs.2 as 1st and final call. The company has received applications for 2 lac shares. In the problem, which account would be debited and which account would be credited
62. Which of the following transactions will increase as and also decrease an asset
63. The general reserve at the time of amalgamation of firms is transferred to
64. A company came out with a public issue of 1 lac shares of Rs.10 each payable Rs.4 as application money, Rs.4 as allotment money AND Rs.2 as 1st and final call. The company has received applications for 2a lac shares. By what amount, the bank account would be credited
65. An invoice of rs.560 is entered in the sales book as Rs.650/- The correct total of the debit side of the trial balance is Rs.21240. Assuming no other error, what is the total of the credit side of the trial balance
66. The rule ‘credit the giver’ would be applicable in which of the following transactions
67. A purchase of Rs.251 from Ramesh & Co. has been entered in the purchase book as 215. Debit side of the trial balance is 17364. Assuming no other error, what should be the total of e credit column of the trial balance
68. Stock does not include
69. What is the amount of opening Expenses when: Sales- Rs.14900, Gross Profit- Rs.3300 and Net Loss- Rs.500
70. Depreciation is appearing in the trial balance of a company. While making final accounts, it should be shown in
71. An entry of Rs.500 was wrongly posted to wages A/c instead of Machinery Account, as wages are to be capitalized. It is an error of
72. The provision for bad and doubtful debts at the time of dissolution of a firm is transferred to which of the following accounts
73. A firm purchased machinery worth Rs.230000 and spend Rs.15000 on its installation. Its expected useful life is 5 years when its scrap value will be Rs.45000. what is the amount annual depreciation
74. Which is a Source of Funds
75. Wages paid to labour have been credited to wages account. It is an
76. (Cost price of assets –scrap value) / no. of years of estimated life of the asset. This method of depreciation calculation is
77. Which of the following accounting entry is passed at the end of the first year in case of sinking fund method
78. An asset is purchased for Rs.2 lac. Its depreciated value is Rs.1 lac at the end of 5th year at 10%. The depreciation in this case has been charged at _____ under _____method
79. Full amount of depreciation is not provided to the debit of profit and loss account in which of the following methods of depreciation
80. Group A (a) cost of a fixed asset (b) residual value (C) depreciation cost (d) estimated life. Group B (i) cost less residual value (ii) purchase price excluding any other type of expenses (iii) value on estimated date of disposal (iv) no. of years asset is expected to be in use. Which of the following is not matched
81. . In a balance sheet which of the following equations, is not correct
82. The promoter brings capital of Rs.20000 out of which he purchases furniture worth Rs.2000 & machinery of Rs.3000. The balance sheet of the firm will show
83. Owner’s equity is equal to
84. Prepaid insurance Account is
85. The profit or loss disclosed by the accounts of a company is
86. An insurance company admitted claim of a firm for Rs.4000 against the loss of goods worth Rs.10000. The abnormal loss of Rs.6000 would be debited to which of the following
87. Which of the following errors is revealed by the trial balance
88. Which of the following does not match in the context of computer based accounting
89. Balance sheet and profit and loss account prepared by a bank (a) are submitted to RBI by banks (b) within 6 months from close of the financial year (c) in three copies (d) alongwith auditor’s report. Which of these is correct statement
90. Form B (under provisions of banking Regulation Act) is used by banks to
91. Provisions made for loan accounts are placed under which of the following item
92. Banks have different types of capital. What is the proper order
93. Contingency liabilities in a bank balance sheet include (a) claims against the bank not acknowledged as debt (b) liability for partly paid investments (c) guarantees given on behalf of the customers (d) liability on account of outstanding forward exchange contracts
94. Difference on account of incomplete recording of transactions between two branches is called ________. Its balance is ______
95. Which of the following items are shown in the other liabilities in the balance sheet (a) unexpired discount (b) outstanding charges like rent (c) deposits of staff security deposit (d) margin deposits
96. A joint stock company’s features include (a) artificial person (b) perpetual succession (c) limited liability (d) common seal
97. Classification of companies can be (i) on the basis of incorporation (ii) on the basis of ownership (iii) on the basis of liability. These companies may be (a) public company (b) company limited with shares (c) subsidiary company (d) foreign company. Which of the following does not match
98. a company had come out with a public issue of 20000 shares of Rs.10 each payable Rs.2 with application and balance on allotment. The called up capital of the company is Rs
99. The shares that can be purchased by an employee at a pre-determined price at the time of a public issue is called
100. A joint stock company prepares its balance sheet as per part ______ Schedule _____ of company Act 1956


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