Accounting Fundamentals (ACCT102)-Semester I

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AMITY (Assignment) BBA Semester 1
Accounting Fundamentals (ACCT102)-Semester I

1st Module Assessment

Question 1. Accounts that normally have debit balances are:

a. assets, expenses, and share capital—ordinary
b. assets, expenses, and revenues
c. assets, liabilities, and dividends
d. assets, dividends, and expenses

Question 2. A trial balance shows –

a. Honesty of accountants
b. None of these
c. Accuracy of account
d. Only arithmetical accuracy of accounts

Question 3. Accounts related to assets or properties or possessions.

a. Artificial Personal Account
b. Personal Account
c. Real Account
d. Nominal Account

Question 4. Debits:
a. increase assets and decrease liabilities
b. increase both assets and liabilities
c. decrease both assets and liabilities
d. decrease assets and increase liabilities

Question 5. Posting:

a. is an optional step in the recording process
b. transfers journal entries to ledger accounts
c. transfers ledger transaction data to the journal
d. normally occurs before journalizing.

Question 6. The following account has a credit balance
a. Plant and Equipment A/c
b. Sundry Creditors A/c
c. Purchase A/c
d. None of the above

Question 7. A revenue account:

a. has a normal balance of a debit
b. is increased by credits
c. is increased by debits
d. is decreased by credits

Question 8. Which of the following is a type of Voucher?

a. Non-Cash or Transfer Voucher
b. Payment Voucher
c. All of the above
d. Receipt Voucher

Question 9. A ledger:

a. is a collection of the entire group of accounts maintained by a company
b. contains only asset and liability accounts.
c. should show accounts in alphabetical order
d. is a book of original entry.

Question 10. The purchase of supplies on account should result in:

a. a debit to Supplies Expense and a credit to Cash.
b. a debit to Supplies and a credit to Accounts Payable
c. a debit to Supplies Expense and a credit to Supplies
d. a debit to Supplies and a credit to Accounts Receivable.

Question 11. Ram purchased a car INR. 10,000 paid INR. 3000 as cash and balance amount will be paid in three equal installments due to this ______.

a. Assets will increase by 7000 with corresponding increase in liability by 7000
b. Both (b) and (c)
c. Total liabilities increase by 3000
d. Total assets increase by 10,000

Question 12. In which book of prime entry will a business record debit notes in respect of goods which have been sent back to suppliers?

a. The sales returns day book
b. The cash book
c. The purchase day book
d. The purchase returns day book

Question 13. Which of the following would be recorded in the sales day book?
a. Trade discounts
b. Credit notes received
c. Discounts allowed
d. Sales invoices

Question 14. From the following details estimate the capital as on 31.03.2017, Capital as on 01.04.2016 INR. 4,10,000. Drawings INR. 40,000, Profit during the year INR. 50,000

a. 4,20,000
b. 4,10,000
c. 4,00,000
d. 4,50,000

Question 15. Before posting a payment of €5,000, the Accounts Payable of Senator Company had a normal balance of €16,000. The balance after posting this transaction was:

a. Cannot be determined
b. € 5,000
c. € 21,000
d. € 11,000

Question 16. At 30 November 20X5 Jenny had a bank loan of $8,500 and a balance of $678 in hand in her bank account. How should these amounts be recorded on Jenny’s opening trial balance at 1 December 20X5?

a. Credit $8,500 and Debit $678
b. Credit $7,822
c. Debit $8,500 and Credit $678
d. Debit $7,822

Question 17. The trial balance of Clooney Corporation had accounts with the following normal balances: Cash $5,000, Service Revenue $85,000, Salaries and Wages Payable $4,000, Salaries and Wages Expense $40,000, Rent Expense $10,000, Share Capital— Ordinary $42,000, Dividends $15,000, and Equipment $61,000. In preparing a trial balance, the total in the debit column is: ………..

a. $131,000
b. $91,000
c. $216,000
d. $116,000
30 out of 30
Accounting Fundamentals (ACCT102)-Semester I

2nd Module Assessment

Question 1. Current Liabilities means

a. Liabilities which are payable immediately
b. Liabilities which are payable within 12 months
c. Liabilities which are readable within 3 months
d. Liabilities which payable after one accounting year

Question 2. Payment to a creditor

a. Only reduce an asset.
b. Increase an asset, reduce a liability
c. Only reduce a liability
d. Reduce an asset, reduce a liability

Question 3. Assets are listed on the balance sheet in the order of their

a. liquidity.
b. purchase date.
c. balance.
d. adjustments

Question 4. __ Account charges the COGS and other direct expenses and losses against the sales revenue to determine the gross operating result of the concern during a particular accounting period.

a. Income & Expenditure
b. Trading
c. Receipts & Payments
d. Profit & Loss

Question 5. Balance sheet is prepared

a. At a particular date
b. For the close of a period
c. At the close of a day
d. For showing performance of an organisation

Question 6. Among the financial statements, _ is/ are referred to as ‘period statement’.

a. Profit & Loss Account
b. Balance Sheet
c. Both (a) and (b)
d. Trading Account.

Question 7. A trial balance will have no balance, if __

a. None of the above
b. The purchase on credit basis is debited to purchases and credited to cash
c. 500 cash payment to creditors is debited to creditors for 50 and credited to cash as 500
d. correct entry is posted twice

Question 8. Gross profit is the difference between

a. None of the above
b. Sales and non-operating expenses
c. Sales and cost of goods sold
d. Sales and operating expenses

Question 9. Which of the following is a position statement?

a. Trial balance
b. Balance sheet
c. funds flow statement
d. Profit and loss account

Question 10. The financial statements of an organisation are drafted using the _.

a. Transactions
b. Ledger balances
c. None of the above.
d. Events

Question 11. Where is carriage inwards disclosed?

a. Profit and loss account
b. Trading account
c. Trial balance
d. Balance sheet

Question 12. Where is discount received disclosed?

a. Trial balance
b. Profit and loss account
c. Trading account
d. Balance sheet

Question 13. Which of the following is the correct formula for cost of sales?

a. Opening inventory – closing inventory + purchases
b. Purchases – closing inventory + sales
c. Opening inventory – purchases + closing inventory
d. Opening inventory + closing inventory – purchases

Question 14. Carriage outwards is disclosed in

a. Balance sheet
b. Trial balance
c. Trading account
d. Profit and loss account

Question 15. If a company wants to earn a 25% profit on sales, what will be the profit mark up on the cost.

a. 30%
b. 25%
c. 20%
d. 33.33%

Question 16. Given that values of opening inventory, purchases and Cost of Goods Sold for a particular accounting period are INR. 1,00,000, INR. 9,30,000 and INR. 7,50,000, the closing inventory will be:

a. 2,40,000
b. 4,80,000
c. 2,80,000
d. 8,20,000

Question 17. Prisha has not kept accurate accounting records during the financial year. She had opening inventory of $6,700 and purchased goods costing $84,000 during the year. At the year end she had $5,400 left in inventory. All sales are made at a mark up on cost of 20%. What is Prisha’s gross profit for the year?

a. $16,540
b. $13,750
c. $20,675
d. $17,060

30 out of 30
Accounting Fundamentals (ACCT102)-Semester I

4th Module Assessment
Question 1. Which of the following is the main objective of a financial statement?

a. to know the solvency
b. All
c. to know the earning capacity
d. to know the debt capacity
Clear my choice
Question 2. Which of the following is technique of financial statement analysis?

a. Trend analysis
b. Common‐size statement
c. Comparative statement
d. All
Clear my choice
Question 3. Comparisons of data within a company are an example of the following comparative basis:

a. Both intracompany and intercompany.
b. Intracompany.
c. Industry averages.
d. Intercompany.
Clear my choice
Question 4. The term financial statement refers to…

a. Income statement
b. Balance sheet
c. Cash flow and Fund Flow
d. All
Clear my choice
Question 5. In horizontal analysis, each item is expressed as a percentage of the:

a. total assets amount
b. base year amount
c. net income amount
d. equity amount
Clear my choice
Question 6. A measure useful in evaluating the effi ciency in managing inventories is:

a. return on shareholders’ equity.
b. average days to sell inventory.
c. inventory turnover
d. Both (a) and (b).
Clear my choice
Question 7. Which technique used for figures of two or more periods are placed side by side to facilitate easy and meaningful comparisons?

a. Trend Analysis
b. None
c. Common‐size statement
d. Comparative statement
Clear my choice
Question 8. Which is an example of a cash flow from a financing activity?

a. None of the above
b. Purchase of equipment for cash.
c. Issuance of debt for cash
d. Receipt of cash from sale of land.
Clear my choice
Question 9. Free cash fl ow provides an indication of a company’s ability to:

a. generate cash to pay dividends
b. generate cash to invest in new capital expenditures.
c. generate net income.
d. Both (b) and (c).
Clear my choice
Question 10. The process of comparing various financial factors of a company over a period of time is known as …

a. Ratio Analysis
b. Inter‐industry comparison
c. Inter‐firm comparison
d. Intra‐firm comparison
Clear my choice
Which of the following items is reported on a statement of cash fl ows prepared by the direct method?

a. Increase in accounts receivable.
b. Cash payments to suppliers
c. Loss on disposal of building
d. Depreciation expense.

Question 11. Which is an example of a cash flow from an operating activity?

a. Payment of cash to lenders for interest
b. None of the above.
c. Receipt of cash from the sale of ordinary shares
d. Payment of cash to reacquire shares.
Clear my choice
Question 12. Which of the following measures is an evaluation of a firm’s ability to pay current liabilities?

a. Acid-test ratio.
b. Both (a) and (b).
c. Return on assets.
d. Current ratio.
Clear my choice
Question 13. Which of the following is incorrect about the statement of cash flows?

a. The indirect method may be used to report cash provided by operations.
b. The operating section is the last section of the statement.
c. The direct method may be used to report cash provided by operations.
d. The statement shows the cash provided (used) for three categories of activity.
Clear my choice
Question 14. The statement of cash flows classifies cash receipts and cash payments by these activities:

a. operating and non-operating.
b. investing, financing, and non-operating.
c. investing, financing, and operating.
d. financing, operating, and non-operating.
Clear my choice
Question 15. Sammy Company reported net sales of £300,000, £330,000, and £360,000 in the years, 2012, 2013, and 2014, respectively. If 2012 is the base year, what is the trend percentage for 2014?

a. 130%
b. 77%.
c. 108%.
d. 120%.
Clear my choice
Question 16. Tiger Equipment Sales Co. had accounts receivable at the beginning and end of the year of $200,000 and $300,000, respectively. The net sales were $1,000,000. Determine the accounts receivable turnover and number of days’ sales in accounts receivable.

a. 3.3, 109
b. 3.3, 91
c. 4.0, 109
d. 4.0, 91.25
Clear my choice
Question 17. Horizon Company has the following current account information for a recent balance sheet: Cash $ 25,000;Temporary investments 25,000; Accounts receivable 125,000; Merchandise inventory 100,000; Accounts payable 75,000; Accrued expenses 25,000 What are the current and quick ratios?
a. 2.50, 1.50
b. 2.75, 1.75
c. 2.75, 0.50
d. 1.75, 2.50

30 out of 30
Accounting Fundamentals (ACCT102)-Semester I

5th Module Assessment

Question 1. If expenses of liquidation of the vendor company are paid by the purchasing company then, in purchasing company’s book, the account debited is

a. Liquidation expense account.
b. Goodwill account
c. Vendor company account
d. None of the above
Clear my choice
Question 2. Which of the following statements is not a feature of a private company?

a. None of the above
b. Does not involve participation of public in general.
c. Restricts the rights of members to transfer its shares.
d. Does not restrict on the number of its members to any limit.
Clear my choice
Question 3. The Securities Premium amount may be utilized by a company for __.

a. Writing off the expenses/discount on the issue of debentures
b. Writing off any loss of revenue nature
c. None of the above
d. Writing off any loss on sale of fi xed asset
Clear my choice
Question 4. Which of the following statement is true in case of a Foreign Company?

a. A Company incorporated in India and has a place of business in India.
b. A Company incorporated in India and has place of business outside India
c. None of the above
d. A Company incorporated outside India and has a place of business in India
Clear my choice
Question 5. In case of amalgamation, the entry for elimination of unrealized profit or loss on stock is made

a. None of the above
b. By the purchasing company
c. By the third party
d. By the vendor company
Clear my choice
Question 6. Amalgamation adjustment reserve is opened in the books of the amalgamating company to incorporate

a. Assets of the amalgamating company
b. Non- Statutory reserves of the amalgamating company
c. None of the above
d. Statutory reserves of the amalgamating company
Clear my choice
Question 7. When the object of reconstruction is usually to re-organise capital or to compound with creditors or to effect economies then such type of reconstruction is called

a. Internal reconstruction with liquidation
b. None of the above
c. Internal reconstruction without liquidation of the company
d. External reconstruction
Clear my choice
Question 8. The excess price received over the par value of shares, should be credited to __.

a. Securities premium account
b. Share capital account
c. Calls-in-advance account
d. None of the above
Clear my choice
Question 9. Debenture interest

a. Accumulates in case of losses or inadequate profi ts
b. Is payable before the payment of any dividend on shares
c. None of the above
d. Is payable after the payment of preference dividend but before the payment of equity dividend _.
Clear my choice
Question 10. Which of the following statement is not a feature of a Company?

a. None of the above
b. Perpetual Existence
c. Members have unlimited liability
d. Separate legal entity
Clear my choice
Question 11. When shares are forfeited, the share capital account is debited with and the share forfeiture account is credited with __.

a. Called up capital of shares forfeited; Calls in arrear of shares forfeited
b. None of the above
c. Paid-up capital of shares forfeited; Called up capital of shares forfeited
d. Called up capital of shares forfeited; Amount received on shares forfeited
Clear my choice
Question 12. Under the ‘pooling of interests’ method, the difference between the purchase consideration and share capital of the transferee company should be adjusted to

a. Amalgamation adjustment account
b. General reserve
c. None of the above
d. Goodwill or capital reserve
Clear my choice
Question 13. At the time of amalgamation, purchase consideration does not include

a. None of the above
b. Preference shares issued by the transferee company to the preference shareholders of the transferor company
c. Payments made in the form of assets by the transferee company to the shareholders of the transferor company
d. The sum which the transferee company will directly pay to the creditors of the transferor company
Clear my choice
Question 14. A process of reconstruction, which is carried out without liquidating the company and forming a new one is called

a. None of the above
b. Amalgamation
c. External reconstruction
d. Internal reconstruction.
Clear my choice
Question 15. G Ltd. acquired assets worth INR. 7,50,000 from H Ltd. by issue of shares of INR. 100 at a premium of 25%. The number of shares to be issued by G Ltd. to settle the purchase consideration = ?

a. 9,375 shares
b. 7,500 shares
c. 8,550 shares
d. 6,000 shares
Clear my choice
Question 16. F Ltd. purchased Machinery from G Company for a book value of INR. 4,00,000. The consideration was paid by issue of 10% debentures of INR. 100 each at a premium of 25%. The debenture account was credited with __.

a. 4,20,000
b. 3,20,000
c. 5,00,000
d. 4,00,000
Clear my choice
Question 17. T Ltd. proposed to issue 6,000 equity shares of INR. 100 each at a premium of 40%. The minimum amount of application money to be collected per share as per the Companies Act, 2013

a. INR. 5.00
b. INR. 6.00
c. INR. 10.00
d. INR. 7.00
30 out of 30

Accounting Fundamentals (ACCT102)-Semester I

Question 1. Compute the times interest earned for 2014.
Select one:
a. 11.2 times.
b. 14.0 times.
c. 65.3 times
d. 13.0 times
Clear my choice
Question 2. Compute the days in inventory for 2014.
Select one:
a. 60.8 days.
b. 24 days.
c. 64.4 days
d. 6 days.
Clear my choice
Question 3. Compute the current ratio for 2014.
Select one:
a. 3.75:1.
b. 1.26:1.
c. 3.0:1.
d. .80:1.
Clear my choice
Question 4. Compute the profi t margin for 2014.
Select one:
a. 5.90%
b. 17.1%.
c. 18.10%
d. 37.9%.
Clear my choice
Question 5. Compute the return on ordinary shareholders’ equity for 2014.
Select one:
a. 47.9%.
b. 61.2%.
c. 51.7%.
d. 59.40%

15 out of 15
Accounting Fundamentals (ACCT102)-Semester I

Accounting Fundamentals (ACCT102)-Semester I

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