We are presenting you the Accounts MCQ for SEBI Grade A Commerce and Accountancy Section of the exam. These Accounts MCQ for SEBI Grade A are prepared as per latest syllabus.
Q1. Income and Expenditure is
To understand the Golden Rules of Accounting we must first understand the types of accounts. The account classification applies to all the types of general ledgers. In other words, every account will fall in one of the broad classifications given below. There are three types of accounts:
A Real Account is a general ledger account relating to Assets and Liabilities other than people accounts. These are accounts that don’t close at year-end and are carried forward. An example of a Real Account is a Bank Account. A Personal account is a General ledger account connected to all persons like individuals, firms and associations. An example of a Personal Account is a Creditor Account. A Nominal account is a General ledger account pertaining to all income, expenses, losses and gains. An example of a Nominal Account is an Interest Account.
Q2. The concept of _______ requires that profits should not to be record until realized but all losses, even those which may have a remote possibility, are to be provided for in the books of account.
Conservatism states that the accountant should not anticipate any future income however they should provide for all possible losses
Q3. Net profit made by company during FY 18-19 is INR 10,00,000/-.
Following expenses were charged in statement of P&L
Depreciation: 50,000 Interest Expense: 1,00,000 and Preliminary expense of INR 25,000 were written off. Calculate Closing cash balance?
Note opening cash balance is INR 2,00,000
Profit : INR 10,00,000
Add : INR 75,000 (Non-cash expense Depreciation and Expense written off)
Add : INR 2,00,000 (Opening cash balance)
Closing cash balance : 12,75,000
Q4. Net worth of a company is?
Net worth of the company is shareholders fund which is Share capital plus reserves. Another way to calculate net worth is Total assets minus outside liabilities.
Q5. Which of following will not be termed as Inventory?
As per AS-2- Inventories are assets:
Goods sent from one warehouse to another is a mere change in location of Inventory.
Q6. ABC limited BOD proposed dividend on 30.03.2018 and the same was approved bin general meeting on 31.12.2018 and actually the dividend was paid on 15.04.2019. Being a shareholder of ABC ltd in which Financial year you will recognize income?
As per AS-9 Revenue Recognition. Dividends from investments in shares are not recognised in the statement of profit and loss until a right to receive payment is established.
Right to receive payment is established on the day the dividends are approved by shareholder hence the whole income will be recognized on FY 18-19
Q7. Company installed a heavy plant of chemical refinery for INR 50 Crore. Professional fee related to Installation paid is INR 2 Crore. The refinery has to be dismantled at the end of 10 years at the cost of INE 1 Crore. Calculate the amount of asset recorded Initial Recognition?
NOTE: PV factor at the end of 10th year is 0.38(10% Discount rate)
As per AS-10 Property, plant and equipment initial cost is purchase price including any costs directly attributable to bringing the asset to the location and the initial estimate of the costs of dismantling, removing the item and restoring the site on which it is located. The dismantling will be incurred after 10 year hence PV factor taken to calculate present value of future cost i.e (1crore*0.38)
Q8. On 28-02-2020 Nestle India limited imported a batch of Dark Chocolate from Nestle Switzerland at 1,00,000 Swis Franc. The amount is payable on 30-04-2020. Calculate the amount to be recognized as exchange gain/loss as at 31-03-2020 by Nestle India limited.
1 Swis Franc = 80 INR (28.02.2020)
1 Swis Franc = 85 INR (31.03.2020)
1 Swis Franc = 90 INR (30.04.2020)
On transaction date sale recorded at 80*1,00,000/=80,00,000. As on balance sheet the value of swiss frac appreciated to 85. Now on balance sheet date we incurred exchange loss of (85-80)*1,00,000=5,00,000/-
Q9. Contingent Liability is shown under which of the following head of balance sheet?
A contingent liability is:
Q10. A limited company has ______?
All of the above are features of company limited by shares
Q11. Gupta limited made a short-term investment in gold of 10,00,000 on 01st Jan’19. As on 31.03.2019 the market value gold decrease to INR 8,00,000. And to make the sale of gold a commission of 2% is to paid on sale value as per Association of Gold Traders of INDIA.
The value of Investment in the books of account should be-
As per AS-13 Accounting for Investment. The carrying amount for current investments is the lower of cost and fair value. Net realisable value provides an evidence of fair value. 784,000 [(8,00,000 – 2%(8,00,000)].
Q12. Maximum capital that a company can raise is called _______?
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