1) Under straight line method, the amount of depreciation is a) Fluctuating every year b) Increasing every year c) Decreasing every year d) Constant for all the years 2) If the total charge of depreciation and maintenance cost are considered, the method that provides a uniform charge is a) Insurance policy method b) Straight line method c) Diminishing balance method d) Annuity method 3) Under the written down value method of depreciation, the amount of depreciation is a) None of the above b) Uniform in all the years c) Decreasing every year d) Increasing every year 4) Depreciation is caused by a) Obsolescence, Lapse of time, Usage b) Lapse of time  c) Usage  d) Obsolescence  5) For which of the following assets, the depletion method is adopted for writing off cost of the asset?  a) Plant and machinery b) Mines and quarries  c) Buildings  d) Trademark 6) A depreciable asset may suffer obsolescence due to____ a) None of the above. b) Passage of time  c) Wear and tear  d) Technological changes  7) Which method shall be efficient, if repairs and maintenance cost of an asset increases as it grows older. a) Annuity method b) Straight line method  c) Reducing balance method  d) Sinking fund method  8) Residual value of an asset means the amount that it can fetch on sale at the ____of its useful life. a) None b) Beginning c) End  d) Middle  9) Depreciation is to be calculated from the date when a) Invoice of assets is received b) Asset is put to use  c) Purchase order is made  d) Asset is received at business premises  10) If the rate of depreciation is same, then the amount of depreciation under straight line method vis-à-vis written down value method will be a) Lower in the first year but equal in subsequent years b) Equal in all years   c) Equal in the first year but higher in subsequent years d) Equal in the first year but lower in subsequent years  11) Amount spent on increasing the seating capacity in a cinema hall is a) None of the above. b) Capital expenditure  c) Revenue expenditure  d) Deferred revenue expenditure  12) Expenditure incurred ` 20,000 for trial run of a newly installed machinery will be a) Deferred revenue expenditure b) Preliminary expense  c) Revenue expenditure d) Capital expenditure  13) Interest on bank deposits is a) Revenue expenditures b) Capital receipt c) Revenue receipt  d) Capital expenditures 14) Amount received from IDBI as a medium term loan for augmenting working capital a) Capital receipt b) Capital expenditures  c) Revenue expenditures d) Revenue receipts 15) Revenue expenditure is intended to benefit a) Any period b) Past period  c) Future period  d) Current period 16) Pre-operative expenses are a) Capital expenditure b) Revenue expenditure  c) Prepaid revenue expenditure  d) Deferred revenue expenditure  17) Closing stock is an item of . a) Intangible asset b) Fixed asset  c) Current asset d) Fictitious asset  18) Balance sheet is a) None of the above b) An account c) A statement  d) Neither a statement nor an account  19) Net profit of the business increases the a) Capital b) Drawings c) Receivables d) Debts 20) Carriage inwards will be shown a) On the assets side b) In the trading account  c) In the profit and loss account  d) On the liabilities side  21) Bank overdraft should be shown a) On the assets side b) In the trading account  c) Profit and loss account  d) On the liabilities side  22) Balance sheet shows the of the business. a) Purchases b) Profitability c) Financial position  d) Sales  23) Drawings appearing in the trial balance is a) Subtracted from the capital b) Added to the purchases  c) Subtracted from the purchases  d) Added to the capital  24) Salaries appearing in the trial balance is shown on the a) Assets side of the balance sheet b) Debit side of trading account  c) Debit side of profit and loss account  d) Liabilities side of the balance sheet  25) Current assets does not include a) Prepaid expenses b) Cash  c) Stock  d) Furniture  26) Goodwill is classified as a) An intangible asset b) A current asset  c) A liquid asset  d) A tangible asset  27) Error of principle arises when a) There are wrong postings and wrong castings b) There is complete omission of a transaction  c) There is partial omission of a transaction  d) Distinction is not made between capital and revenue items  28) Errors not affecting the agreement of trial balance are a) Errors of partial omission b) Errors of principle  c) Errors of overcastting d) Errors of undercasting  29) The difference in trial balance is taken to a) The profit and loss account b) The capital account  c) The trading account d) The suspense account  30) A transaction not recorded at all is known as an error of a) Duplication b) Principle  c) Complete omission  d) Partial omission  31) Wages paid for installation of machinery wrongly debited to wages account is an error of a) Duplication b) Partial omission c) Principle  d) Complete omission  32) Which of the following errors will not affect the trial balance? a) Carried forward wrong amount in a ledger account b) Wrong balancing of an account c) Posting an amount in the wrong account but on the correct side d) Wrong totalling of an account  33) Goods returned by Senguttuvan were taken into stock, but no entry was passed in the books. While rectifying this error, which of the following accounts should be debited? a) Purchases returns account b) Senguttuvan account  c) Sales returns account  d) Returns outward account 34) A credit purchase of furniture from Athiyaman was debited to purchases account. Which of the following accounts should be debited while rectifying this error? a) None of these b) Purchases account  c) Athiyaman account d) Furniture account 35) The total of purchases book was overcast. Which of the following accounts should be debited in the rectifying journal entry? a) None of the above b) Purchases account  c) Suspense account d) Creditor account 36) Which of the following errors will be rectified using suspense account? a) A credit sale of goods to Ravivarman was not entered in the sales book. b) Purchases returns book was undercast by ` 100 c) Goods returned by Narendran was not recorded in the books d) Goods returned by Akila ` 900 was recorded in the sales returns book as ` 90

+1 ACCOUNTANCY lesson 9-12 Prepared by M.MuthuSelvam Cell No: 9842104826

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