1

Basic Accounting

Question Bank1. The Double Entry System of

accounting originated in2. Accounting principles are generally

based on3. The system of recording transactions

based on dual concept is called4. Book – keeping is mainly related to5. Financial statements is a part of6. The accounting equation is based on7. Making the provision for doubtful

debts in anticipation of actual baddebts is on the basis of

8. The assumption that a businessenterprise will not be sold orliquidated in the near future is knowas the

9. Disclosing essential information inaccounting observes the principle of

2

Answer Sheet1. Itally2. Practicability3. Double entry system4. Recoding of financial data5. Accounting6. Dual aspect concept7. Convention of conservatism8. Going Concern Concept9. Full disclosure

3

10. According to which of thefollowing principles all costs whichare applicable to revenue of theperiod should be charged againstthat revenue.

11. According does not record non –financial transactions because of

12. The determination of expenses for anaccounting period is based on theprinciple of

13. Dual aspect concept results in theaccounting equation

14. On sale of old furniture owner’sequity would

15. The immediate recognition of loss issupported by the underlying principleof

16. Revenue is generally recognized at thepoint of sale. Which principle isapplied

17. Accounting is the process ofmatching of

4

Answer Sheet10. Matching11. Money Measurement concept12. Matching13. Capital + Liabilities = Assets14. May or may not change15. Conservatism16. Revenue recognition17. Revenues and costs

5

18. Payment of a liability results in19. Economic life of an enterprise is split

into the periodic interval as per20. Capital brought in by the proprietor

will result21. Which AS has been withdrawn by

ICAI.22. Fundamental Accounting Assum-

ptions are specified in23. Provision should be made for

Discount on Debtors due to ----principles.

24. Cost Concepts deals with thevaluation of.

25. -----principle requires that the sameaccounting method should be usedfrom one accounting period to thenext.

26. ---- principle is an exception of Fulldisclosure method.

27. AS in India are issued by-28. The concept of conservatism when

applied to the balance sheet resultsin-

6

Answer Sheet18. Decrease in total Assets19. Periodicity20. Increase in asset and increase in

liability.21. AS 822. AS 123. Matching & Prudence Concept24. Fixed Assets25. Consistency Concept26. Materiality27. ICAI28. Understatement of Assets

7

Basic of Accounting 2

Question Bank1. Current Assets means,2. Current Liabilities means3. Financial statements are prepared

primarily for the benefit of4. Which one is the language of

business?5. What is the main function of

accounting?6. ________ is a base for accounting.7. Financial Statements are part of

______.8. Accounting is an art & a science.

(True / False)9. Where book keeping ends,

accountancy starts. (True / False)10. Difference between asset & liability

is11. Net worth is the difference

between

8

Answer Sheet1. Assets which are converted into

cash or consumed within a periodof not more than 1 year.

2. Payables within 1 year.3. External parties to the business.4. Accountancy5. Communication through recording

of transactions6. Book Keeping7.- Accounting8. True9. True10. Capital11. Total Assets less external liabilities

9

12. Basic Accounting Assumptionsaccording to AS-1

13. Accounting conventions haveuniversal applications.

14. What was basic need to formAccounting Standards?

15. What are major guidelines forselection of Accounting Policies?

16. Examples of Accounting policies,17. Examples of Accounting estimates,18. What are accounting conventions?

10

Answer Sheet12. Going Concern, Consistency &

Accrual Concept13. No.14. To set of accounting policies to be

followed by an entity.15. Prudence, Substance over form &

Materiality16. Choose the method for depreciation

& inventory valuation.17. Salvage value & useful life of an

asset.18. Conservatism, Full disclosure,

consistency & materiality.

11

Journal & Ledger

Question Bank1. Recording means2. Classification means3. Analysis & Interpretation means4. Who developed the double entry

system?5. Writing of transactions in the ledger

is called.6. Unexpired portion of any capital

expenditure is shown in thefinancial statements

7. Expired portion of any capitalexpenditure is shown in thefinancial statements

8. Purchase book records9. Drawing account is in the nature of10. Journal Proper records11. Transactions are recorded in books

________ order.

12

Answer Sheet1. Making entries in original books2 Making entries in ledger3. Ratio & trend analysis of Financial

statements4. Lucas Pacilio5. Posting6.- As an assets.7. As an expenses.8. Credit purchase of goods9. Personal account10. Opening entry11. Chronological

13

12. Bank overdraft can be classified as13. Penaly for illegal action is classified

as14. Classify Cash Book-15. What are the columns in three

columns cash book?16. Which column of cash book is not

balanced?17. Categorize the Trademark, Patent

& Copyright account.18. Retained earning is classified as19. Journal is a ________ book.20. Which one is the book of original

entry.21. Which book is written by Lucas

Pacilio?22. How many parts have journal?23. L.F. column in the journal is filled

at the time of,24. Accounting equation of Dual Aspect

concept is25. Liability + owners equity = ?

14

Answer Sheet12. Personal13. Revenue exp14. Subsidiary book15. Cash, Bank & Discount16. Discount column17. Intangible assets18. Owners fund19. Subsidiary book20. Journal21. D. Cumutary22. Seven23. Posting24. Asset = Equities + Liabilities25. Total Liability

15

Accounting Concepts

1. Going Concern Concept- Record allthe transactions in such a way thatbusiness will not be shut down &will run for forever.

2. Money Measurement Concept-Only those transactions can be re-corded which can be measured interms of money.

3. Separate Entity Concept- Business& Businessman both have their dif-ferent identity.

4. Historical Cost Concept- All assets& liabilities should be recorded attheir original cost in the financialstatements.

5. Dual Aspect Concept- Every trans-action has two aspects, one is calleddebit & the other is credit.

16

6. Periodicity Concept- Finalization of fi-nancial statements after completion of aparticular period. i.e. monthly, quarterlyor yearly.

7. Prudence Concept- Make all the provi-sions for expected losses but don’t tryto expect any future profit or gains.

8. Realization Concept- If there is anydoubt to ultimate collection of any rev-enue or profit, don’t recognize them .Postpone them until or unless actuallyrealizes in cash.

9. Accrual Concept- Recognize all the ex-penses & income of a particular periodeven not incurred or earned actually incash (Accrued income & outstandingexp) Don’t recognize those income orexpenses which are not of a particularperiod even they realizes or paid actu-ally in cash ( Prepaid exp & unearnedincome)

17

10. Matching Concept- Recognize onlythose income or expenses at thetime of preparation of financialstatement which are of that periodfor which we are preparing our fi-nancial statements.

11. Materiality Concept- All the im-portant facts & figures should bedisclosed separately.

18

S.

A

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o.

Stan

dard

1A

S-1

Dis

clos

ure

of A

ccou

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licie

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AS-

2In

vent

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Valu

atio

n3

AS-

3C

ash

Flow

Sta

tem

ent

4A

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Con

tinge

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s &

Eve

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ter

the

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ance

She

et d

ate

5A

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Net

Pro

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for

the

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od,

Prio

r Pe

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s &

Cha

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in

Acc

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Polic

ies

6A

S-6

Dep

reci

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n A

ccou

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g7

AS-

7A

ccou

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g fo

r C

onst

ruct

ion

Con

trac

ts8

AS-

8(D

elet

ed)A

ccou

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g fo

r R

esea

rch

&D

evel

opm

ents

Lis

t of

Acc

ount

ing

Stan

dard

19

9A

S-9

Rev

enue

Rec

ogni

tion

10A

S-10

Acc

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for

Fixe

d A

sset

11A

S-11

Acc

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for

the

Effe

cts

of C

hang

es i

n Fo

reig

nEx

chan

ge R

ates

12A

S-12

Acc

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for

Gov

ernm

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Gra

nts

13A

S-13

Acc

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for

Inve

stm

ents

14A

S-14

Acc

ount

ing

for

Am

alga

mat

ion

15A

S-15

Acc

ount

ing

for

Ret

irem

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Ben

efits

in

the

fina

ncia

l st

atem

ents

of

empl

oyer

16A

S-16

Bor

row

ing

Cos

t17

AS-

17Se

gmen

t R

epor

ting

18A

S-18

Rel

ated

Par

ty D

iscl

osur

es19

AS-

19Le

ases

20

20A

S-20

Earn

ing

Per

Shar

es21

AS-

21C

onso

lidat

ed F

inan

cial

Sta

tem

ents

22A

S-22

Acc

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ing

for

Taxe

s on

Inc

ome

23A

S-23

Acc

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for

Inve

stm

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in

Ass

ocia

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inC

onso

lidat

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inan

cial

Sta

tem

ents

24A

S-24

Dis

cont

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pera

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25A

S-25

Inte

rim

Fin

anci

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epor

ting

26A

S-26

Inta

ngib

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sset

s27

AS-

27Fi

nanc

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Rep

ortin

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Int

eres

t in

Joi

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28A

S-28

Impa

irm

ent

of A

sset

s29

AS-

29Pr

ovis

ions

, C

ontin

gent

Lia

bilit

ies

& C

ontin

gent

Ass

ets

30A

S-30

Acc

ount

ing

for

Fina

ncia

l In

stru

men

ts

21

Capital & Revenue Exp

Question BankCategories the following in Capital,Revenue & Deferred RevenueExpenditure:-1. Wages paid for installation of Fixed

Assets2. Free Gift given to customers on the

launching of a new product.3. Temporary construction of huts

done for the construction of bridge.4. Expenditure incurred for the

purpose of obtaining a licence forthe running of Cinema.

5. Amount of repair incurred on thepurchase of second hand furniture.

6. Expenditure incurred by a publisherfor acquiring copyrights .

7. Amount incurred on increasing theseating capacity in a cinema.

22

Answer Sheet1. Capital Exp2. Deferred Revenue Exp3. Capital Exp4. Capital Exp5. Capital Exp6. Capital Exp7. Capital Exp

23

8. An entity spent on painting of thefactory premises.

9. An AC was installed in the officeof the Managing Director of acompany.

10. Traveling exp incurred on theunsuccessful dealing of Land.

11. Compensation paid to workers ontheir VRS.

12. Renewal fee for Patents.13. Successful Research &

Development exp are14. Unsuccessful Research &

Development exp are15. Expenditure incurred on

demolition of old building forconstruction of new one.

16. Freight & Taxes paid for purchaseof new machinery

17. Overhauling expenses for theengine of a motor car to get betterfuel efficiency.

24

Answer Sheet8. Revenue Exp9. Capital Exp10. Revenue Exp11. Deferred Revenue Exp12. Revenue Exp13. Capital Exp14. Revenue Exp15. Capital Exp16. Capital Exp17. Capital Exp

25

18. Share Premium received on issueof new share.

19. Loss by theft of cash by cashier .20. Loss on sale of a furniture.21. Uniform expenditure incurred for

workers & staff.22. Amount spent for removal of stock

from old site to new site.23. Money spent to reduce working

expenses.24. Heavy advertisement exp is

incurred to introduce a newproduct.

25. Amount spent as lawyer’s fee todefend a suit claiming that thefirm’s factory site belonged to theplaintiff’s land .

26. Legal Fee to acquire a land.

26

Answer Sheet18. Capital Receipt19. Revenue Loss20. Revenue Loss21. Revenue Exp22. Revenue Exp23. Capital Exp24. Deferred Revenue Exp25. Revenue Exp26. Capital Exp

27

Bank Reconciliation Statement

Question Bank1. Define BRS.2. BRS is prepared by.3. Debit balance in the pass book

means4. Credit Balance in the Cash Book

means (with ref. to pass book)5. Favorable Bank Pass book means6. Favorable Cash Book means7. Purchase & Sale of shares &

Debentures are the main work ofthe bank. True/False

8. A BRS is a part of FinancialStatement- True/ False

28

Answer Sheet1. It is a statement to reconcile the

differences between Cash Book &Pass Book

2. Customer / Business3. Bank Overdraft4. Bank Overdraft5. Credit Balance in Pass Book6. Debit balance in Cash Book7. False8. False

29

9. What will be the treatment of thefollowings-a. Interest & Exp charged by bankb. Cheque issued not presented for

paymentc. Cheque deposited not credited by the

bankd. Insurance premium directly paid by the

bank .e. Dividend directly collected by the

bank.f. Overcasting of Dr. side of the cash

book.g. Undercasting of Cr side of the pass

book.h. Wrong over Cr made in the cash booki. Wrong under Dr made in the Pass book

Important TipsBook Dr Side Cr SideCash Book Receipts PaymentsPass Book Payment Receipts

30

Answer Sheet9.

Favo

rabl

eFe

vora

ble

Unf

avor

able

Unf

avor

able

Cas

hPa

ss B

ook

Cas

h Ba

lanc

eBo

ok B

alla

nce

Bala

nce

a. L

ess

Add

Add

Less

b. A

ddLe

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ssA

ddc.

Les

sA

ddA

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ssd.

Les

sA

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f. Le

ssA

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Les

sA

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Add

Less

Less

Add

i. A

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ssLe

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31

Depreciation

Question Bank1. Under which AS , Depreciation

Accounting is dealt with.2. Which type of Assets, depletion

method is used.3. Change in the method of

depreciation means4. Changes in method of depreciation

will take effect fromRetrospective/ Prospective.

5. What are those 2 common methodsof Depreciation generally used.

6. Obsolescence in an asset due to7. Depreciation is Real / Nominal /

Personal account8. Depreciation is cash / non cash

item.9. Under Annuity method amount of

depreciation remains-----.

32

Answer Sheet1. AS-62. Wasting Assets (mines & quarries)3. Changes in Accounting policies4. Retrospective5. WDV & SLM6. Technology Changes, Changes in

market demand for the product/service & legal or otherrestrictions.

7. Nominal A/c8. Non cash item.9. Same

33

10. Depreciation Fund method isspecially designed to provide

11. Annuity method is suitable for thoseassets where

12. Under sum of year digit method,the value of depreciation will

13. Under which method the value ofDepreciation remains constantduring its economic life of assets.

14. Book Value means15. On which asset generally

depreciation is not charged.16. Depreciation is a process of :-

valuation / allocation.17. ________ method of Depreciation

is applied for low valued assetswhich have ready market.

18. “Depreciable Amount” of adepreciable assets is its

19. Under WDV method , depreciation_ _ _ _ _ _ _ _ every year.

34

Answer Sheet10. Fund for assets replacement.11. Interest on amount is concerned.12. Decrease every year.13. SLM14. The value as shown in Financial

Statements.15. Land16. Allocation17. Revaluation Method18. Historical Cost- Residual Value19. Decreases

35

20. Under SLM, depreciation iscalculated on

21. For the purpose of calculation ofDepreciation which type ofaccounting estimates are required

22. Scrap Value of an asset means theamount that it can fetch on sale atthe ---- of its ---- life.

23. Accelerated Depreciation methodis also called.

24. Net Realisable Value of an assetmeans.

25. Which one method is appropriatefor Leasehold Property.

26. Under which method ofDepreciation, the assets accountappears at its original cost over itslife.

27. An asset value will not get zerovalue under-----.

28. Which type of assets are appearingin in the books, which have novalue.

36

Answer Sheet20. Historical (Original) Cost21. Useful Life & Residual Value22. End, useful23. Sum of Year Digit method.24. Sale Price less cost incurred for sale.25. SLM26. Depreciation fund Method.27. WDV Method28. Fictitious Assets

37

Inventory Valuation

Question Bank1. Which AS is applicable for

Inventory Valuation?2. Can be Inventory an Intangible

assets?3. Spare parts of machinery are the

part of Inventory?4. Continuous information about the

stock is provided by5. What is the main feature of Base

Stock Method?6. Stock are valued at7. Stock is a part of Current asset or

fixed assets?8. Under FIFO method goods are

issued at9. Under LIFO method goods are

issued at

38

Answer Sheet1. AS-22. No3. No4. Perpetual inventory system5. To maintain minimum stock6. Cost or NRV , whichever is less7. Current Assets8. First receipts of goods9. Latest receipts of goods

39

10. In case of inflation ,whichinventory method would beconsidered suitable

11. When inventory is valued at Lowerof Cost or NRV, which concept isfollowed?

12. Improper valuation of inventoriesaffects

13. Net Realisable Value means14. Undervaluation of Closing Stock

will result15. What is the meaning of Cost

Formulae in inventory valuation?16. Under which system of Inventory

Valuation, Resultant Figures comesas Cost of Goods sold

17. Which one method will be used tovalue damaged stock

18. Under inventory valuation what isthe meaning of Cost?

19. What is the treatment of Stock withcustomers on approval basis?

40

Answer Sheet10. LIFO11. Conservatism Concept12. Balance Sheet & Profit and Loss a/

c13. Expected sale value less sales related

exp14. Current years income is

Understated15. Formulae used for pricing the goods16. Periodic Inventory System17. Net Realisable Value18. Cost of Goods + Conversion Cost

+ Other related costs to bring theinventory in its present condition

19. Add the cost of goods in closingstock

41

20. Conversion cost means21. By product should be valued at22. Which type of difference is not

there while valuing the goods atFIFO & LIFO method

23. Storage cost of WIP is form partof cost of inventory.

24. Stock for Share trading constitutesInventories.

25. Is there any applicability of AS-2in construction projects?

42

Answer Sheet20. Cost of Labor & Overhead (fixed

or variable)21. Net Realisable value22. Quantity of stock left23. No24. No25. No

43

Rectification of Mistakes

Question Bank1. Error of Principle means2. When Suspense a/c is opened?3. When P/L Adjustment a/c need to

be opened?4. Which type of errors do not affect

Trial Balance?5. Difference of Trial Balance is

transferred to

44

Answer Sheet1. Transactions recorded in

contravention with generalaccounting policies.

2. Errors find out after thepreparation of Trial Balance butbefore Financial Statement.

3. Errors find out after FinancialStatement (only for Nominalnature a/c)

4. Errors of Commission & Error ofPartial Omission

5. Suspense A/c

45

6. Rectify the following- Goodspurchased of Rs 5000a. No any entry has been passed.b. Only Cash a/c is credited.c. Only Purchase a/c is debited.d. Purchase a/c is debited with Rs

500 only.e. Cash a/c is credited with only

Rs 500.f. Cash a/c is wrongly debited.g. Purchase a/c is wrongly

credited.h. Sales a/c is debited wrongly.i. Sales a/c is credited wrongly.

Rectify all above by assuming that-A. Errors has been find out before

Trial Balance.B. Errors has been find out after Trial

Balance but before the finalizationof Financial Statements.

C. Errors has been find out after thefinalization of FianncialStatements.

46

Answer Sheet

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a/cD

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P/L

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To S

uspe

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uspe

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a/c

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c.To

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spen

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a/c

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47

Bills of Exchange

Question Bank1. Under which act, Bills of Exchange

are covered?2. How many parties are in Bills of

Exchange?3. Bills of exchange contains4. Promissory Note contains5. Which one instrument can not be

payable to bearer.6. Cheque is a7. Indian currency is a8. When the bill is to be produced

before Notary Public?9. Who signs the Bill of exchange?10. Who accepts the bill of exchange?11. Who is the party to get the amount

of bill of exchange?12. Drawer means13. Bill Receivable is shown under

48

Answer Sheet1. Negotiable Instruments Act, 18812. Drawer, Drawee & payee3. Unconditional Order4. Unconditional Promise5. Promissory Note6. Bill of exchange7. Promissory Note8. At the time of the dishonour of

the bill9. Drawer10. Drawee11. Bearer / holder of the instrument12. A person who draws/ writes the bill13. Loans & Advances in the Balance

Sheet (Asset Side)

49

14. Calculation of Date of maturity ofbill

15. Endorsement of bill means16. What is the meaning of term of

bill?17. What is crossed cheque?18. The main motto of

Accommodation bill.19. Accommodation bill means20. Encashment of bill with bank

before its due date21. A bill is drawn in India & made

payable to outside India is22. Retirement of bill means23. B/R a/c is a personal / real a/c.24. After sight bill means25. Usually the term of the bill does

not exceed of26. Officer appointed by the

government for noting ofdishonored bill

50

Answer Sheet14. Due Date + 3 Days of Grace15. Transfer of right on Bill from

drawer to the creditor16. Duration of the bill17. Drawing two parallel lines18. To meet out the requirements of

funds by the parties.19. Bills of exchange drawn by two

people on each other for mutualbenefits.

20. Discounting21. Foreign Bill22. Making the payment of bill before

its due date23. Personal a/c24. Term of the bill beginning with the

date of signature of the drawee.25. 180 days26. Notary Public

51

Consignment Account

Question Bank1. Consignment account is in the

nature of-2. Consignee account is in the nature

of3. Goods sent on consignment account

is in the nature of4. The owner of the consignment

stock is5. In consignment, goods are sold on

the behalf & at the risk of6. In consignment the consignor

transfers _________ to consignee.7. What is the relationship between

consignor & consignee.8. A proforma invoice is sent by9. What is valuation method to record

unsold goods in consignment10. What is the treatment of Normal

Loss?

52

Answer Sheet1. Nominal Account.2. Personal Account3. Real Account4. Consignor5. Consignor6. Possession of goods7. Principle & Agent8. Consignor to consignee9. Original cost+ Proportion of (exp

by consignor + non recurring expby consignee.)

10. It is unavoidable & should be spreadover the entire consignment .

53

11. Commission provided by consignorto the consignee to promote creditsales is known as-

12. The loss which is due to inherentcharacteristic of goods known as

13. Avoidable loss is also known as14. Is there any need to pass journal

entry for normal loss15. If consignor gives Del creder

commission to consignee, the lossof bad debts will bear by

16. Why overriding commission is to bepaid?

17. What is loading in consignment?18. The Abhnormal Loss on

consignment is credited to19. Closing Stock on Consignment with

consignee, which account will bedebited

20. What is the main object to sendgoods at invoice price

54

Answer Sheet11. Del- creder Commission12. Normal Loss13. Abhnormal Loss14. No need15. Consignee16. For making sales above specified

price17. Goods sent at inflated rate18. Consignment A/c19. Consignment Stock a/c20. To hide the real profit.

55

21. How many parties are there inConsignment?

22. Godown rent & Insurance are nonrecurring expenses (True / False)

23. Insurance & Freight are nonrecurring exp. (True / False)

24. What is the main object ofConsignee to provide his services?

25. Profit on consignment belongs to

56

Answer Sheet21. 222. False23. True24. To earn commission25. Consignor

57

Partnership-Introduction& Admission

Question Bank1. In normal partnership the

maximum number of partners2. Current Capital a/c of partners are

to be opened in the case of3. Partners are entitled to get salary

even there is no Partnership deed4. Max rate of Interest on Loans to

Partners if no Partnership deed isthere

5. Interest on capital to partners,calculated on

6. In the absence of Partnership deedthe profit sharing ratio

7. What are the relations amongst thepartners

8. Under which act ,the maximumnumber of partners are prescribed

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Answer Sheet1. 202. Capital is Fixed3. False4. 6%5. Capital in the beginning of the year6. Equal7. Agent of each other8. 20, Companies Act, 1956

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9. What are the methods to calculateGoodwill?

10. Goodwill is an intangible assets ofthe firm , which helps it to earn

11. Interest on capital, Salary topartners & Bonus to partners are

12. Goodwill is a Fictitious Asset?13. Methods to calculate Interest on

Drawing.14. A new partner can be admitted with

the consent of15. When a new partner admit & take

profit sharing ratio the old partners16. Sacrificing Ratio is equal to17. Revaluation Account opens at the

time of admission of partner duet o

18. Revaluation Profit or loss belongsto only

19. Revaluation profit or loss must bedistributed in

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Answer Sheet9. Simple Profit, Super Profit ,

Capitalization & Annuity Method10. Super Profits11. Appropriation of Profits12. False, it is an Intangible Assets13. Product Method, Average Due Date

& Simple Method14. All Partners15. Sacrifices16. Old Ratio less New Ratio of old

partners17. Revaluing all the assets & liabilities18. Existing partners19. Old profit sharing ratio

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20. At the time of admission Goodwillamount must be allocated amongst

21. Goodwill raised must be written offin the ratio

22. Memorandum revaluation accountis opened due to

23. Any undistributed reserves & profitat the time of admission must bedistributed amongst

24. Methods to Accounting treatmentof Goodwill at the time ofadmission

25. Premium method of goodwill is usedwhen

26. Revaluation & Memorandumrevaluation methods of Goodwillare used when

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Answer Sheet20. Old partners in their sacrificing

ratio21. New profit sharing ratio22. Keep intact the book values of

assets & liabilities23. Old partners in their old profit

sharing ratio24. Premium, Revaluation &

Memorandum Revaluation method25. New partner brings the amount of

goodwill in cash26. New partner does not bring the

amount of goodwill in cash

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Retirement & Death of Partner

Question Bank1. Gaining Ratio is calculated at the

time of2. Revaluation account is opened at

the time of3. Profit on revaluation must be

distributed amongst4. If retiring partners does not give

any public notice of his retirementthe consequences are

5. Gaining Ration means6. In case of retirement of partner ,

the retiring partners loan accountwould be shown

7. Treatment of any undistributedprofit or reserve shown by balancesheet.

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Answer Sheet1. Retirement of partner2. Admission and retirement of

partner.3. All the partners4. He continues to be liable for

obligation incurred after hisretirement

5. New Ratio less Old Ratio6. In the total amount due to him7. Must be credited in the capital

account of all partners in the profitsharing ratio

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8. Methods of accounting treatmentof Joint Life Policy

9. What is the main object of JointLife Policy?

10. Treatment of Revaluation accounta. Increase in the value of Assetsb. Decrease in the value of

Assetsc. Increase in Liabilityd. Decrease in Liability

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Answer Sheet8. As an Expenses, Asset & Asset and

Liability9. Meet out the cash requirement to

settle the accounts of retiring ordeceased partners.

10.Nature Treatment

(Admission orretirement)

Increase in Assets Asset a/c Dr.To Revaluation

Decrease in Assets Revaluation a/c Dr.To Assets a/c

Increase in Liability Revaluation a/c Dr.To Liability a/c

Decrease in Liability Liability a/c Dr.To Revaluation a/c

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Company Accounts - I

Question Bank1. Under which Act a company

governs.2. Minimum number of members in

public company.3. Minimum number of members in

private company4. Shareholders of any company

having the position of5. Shareholders are eligible to get their

share of profit in the name of6. A Private company must be

registered with a minimum sharecapital of

7. A Public company must beregistered with a minimum sharecapital of

8. Maximum number of members inany private company can not bein excess of

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Answer Sheet1. Companies Act, 19562. 73. 24. Owners5. Dividend6. Rs 1 Lac7. Rs 5 Lacs8. 50

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9. Maximum number of members inany public company can not be inexcess of

10. Shares are a movable assets (True /False)

11. Maximum amount of share capitalthat a company can issue

12. Maximum limit of discount acompany can offer on its share

13. Discount on issue of share is in thenature of

14. Minimum amount to be called upat the time of share application is

15. Interest rate on calls in arrears is16. Interest rate on calls in advance is17. Calls in arrear is shown as18. Security premium is shown under19. Is it possible for a company to issue

bonus share if articles ofassociation does not permit.

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Answer Sheet9. Unlimited10. True11. Authorized Share Capital12. 10%13. Capital Loss14. 25%15. 5%16. 6%17. Reduced from subscribed share

capital18. Reserve & Surplus19. No

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20. What are the rates of commissionprescribed by Companies Act tounderwriters?

21. Main objects of the company arestated in

22. How many months of gap shouldbe there between two calls?

23. According to the SEBI guidelines ,what %age of subscription mustbe receive by company beforemaking any allotment of shares?

24. Is it necessary to receive theamount of Security Premium withthe amount of Allotment only?

25. Profit on reissue of forfeited sharesis transferred to .

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Answer Sheet20. Shares @5% & Debentures @ 2.5%21. Memorandum of Association22. 1 months23. 90%24. No, it can be receive with any calls.25. Capital Reserve

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Preference Shares &Debtenturesw

Question Bank1. Preference Shareholders are2. A Preference Shareholders can not

vote. (True / False)3. A transfer to Capital Redemption

Reserve can be maintained outfrom

4. Capital Redemption Reserve can beused only in

5. Partly paid preference shares canbe redeemed. (True / False)

6. Preference Shares can be redeemedout from

7. Preference Shareholders gets8. Right shares are to be issued to9. Debenture holders are10. 9%, 10000 debentures of Rs 100

each. 9% stands for

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Answer Sheet1. Owner of the Company2. True3. Free Reserve4. Issue of Bonus Shares5. False6. Fresh issue of Equity shares & / or

Transfer of free reserve in CRR.7. Fixed %age of dividend8. Existing shareholders9. Lenders of the company10. Rate of Interest / Coupon rate

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11. Can debenture be redeemed atdiscount?

12. Premium on redemption ofdebenture is a Real Account.

13. Loss on issue of Debenture isgenerally written off in

14. Interest paid to Debenture holdersis an appropriation of profit.

15. Discount on issue of debenture is a16. In case of Investment , market

price must be disclosed in case of17. Which schedule of the Companies

act deal with the presentation offinancial statements?

18. There are no legal restrictionssimilar to shares, for issue ofdebentures at a discount.

19. Can debentures be issued atdiscount?

20. Types of Debentures?

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Answer Sheet11. No.12. No, Nominal a/c13. Over the period of redemption.14. No, it is a charge against profit.15. Capital Loss16. Quoted Investment17. Schedule VI18. True19. True20. a. Registered Debentures

b. Bearer Debenturesc. Secured or Mortgage Debenturesd. Unsecured Debenturese. Redeemable Debenturesf. Irredeemable Debenturesg. Convertible Debenturesh. Non Convertible Debentures