Multiple Choice Questions (MCQ's) of Accounting

[awaisaftab]

A.O.A

Dear Members,

I have a wounderful idea the idea is that let us share on this website the MCQ's related to accounting and we being professional accountant encounters them very frequently. Ussually all big business organiztion as well as public organization conduct tests for hiring accounting professional.

Let us start to share the MCQ's of our choice


Please give seggestion in this regard

Awais Aftab
ACMA (Finalist)

[awaisaftab]

Please Reply

The profit and loss a/c or income stmt summarizes
a.Profitability
b.Sales
c.Purchase
d.None of above

Pleaz reply wiht aurgomentst

[danishayub_76]

It summarizes the profitability of the organizaiton/entity.

[danishayub_76]

What is the difference between Management & Administration?

[awaisaftab]

which of the following manufacturer will not adopt process costing very logically.

1. Frozen Jooses
2.Fertilizers
3.Cement
4.Biscuits

[danishayub_76]

Manufacturer of Frozen Juices. (i think) if i am wrong, please let me know.
Best wishes

[awaisaftab]

yar some information is missing and I m forgetting it. I will edit it on tomorrow

[Astute Accountant]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by danishayub_76</i>
<br />What is the difference between Management & Administration?
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

* Administration is a wider term while management is its subset.

* Administration is the paper work. Management is how you deal with the people or people management.

* Administration manages the outside contacts and the facility as a whole. Management is closer to the employees.

* Administration is over the management and more over the money of the organization and licensing of an organization.

* Management manages employees. As a manger, you can also be administrator but as an administrator, you may not be a manager.

[awaisaftab]

Who shall receeive the share in capital profits of company
a.Preference Shareholders
b.Creditors
c.Equity Shareholders
d.Directors

[awaisaftab]

The contingent liability of a holding company in respect of one of its subsidiary and vice versa shall be shown in the following manner in Consolidated Balance Sheet
a.As foot note

b.In balace Sheet

c. contingent liability shall not been shown in Consolidated Balance Sheet

d.None of the above

[danishayub_76]

A. As footnote.

[danishayub_76]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by awaisaftab</i>
<br />Who shall receeive the share in capital profits of company
a.Preference Shareholders
b.Creditors
c.Equity Shareholders
d.Directors

<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Capital Profits of a company are not available for distribution as dividend etc. to shareholders either Ordinary or Preferred Shareholders. I think the capital profits are not available to any of the above, This profit is available for company itself. For example Share premium is a capital profit, it can be utilized for wirring of preliminary expenses, commission/discounts on issuance of shares, and bonus shares.
I need your further guidance in this regard

[awaisaftab]

Dear Danish

You explained the capital reserve in god way but you did not mention the capital profit (Capital Reserves) arising from the purchase of subsidiary at lesser amount.

For instantce Comapany A purchased 60% shares of Company B (60,000 thousands shares out of 100,000 shares @ 10 each ) at a cost of 500,000/- . The capital reserve or capital Profit of Comapany A will be

Paid Up value of Shares========== Rs 600.000
(60,000x10)
Amount Paid by Company A =======<u>Rs 500,000</u>
Capital Reserve =============== Rs 100,000/-



This capital profit shall only be available to the equity shareholders for issuing them right share or for any other purpose,alowed by Law.


Regards

Awais Aftab

[awaisaftab]

Which of the following is an example Un-Earned Income

1.Cash Paid to Supplier
2.Advance received from bank
3.Advance received from a customer for a purchase order placed by him
4.Cash discount received from customer.

[danishayub_76]

ii. Advance received from Customer.

Thanks Awais Bhai for explaing capital reserves.

Best wishes