This quiz works best with JavaScript enabled. Home > Economy > Accounting > Accounting – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Accounting Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Cost of inventories includes A) Direct material only. B) Direct Labour + Direct Expenses. C) Direct Material + Direct Expenses. D) All costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Show Answer Correct Answer: D) All costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. 2. All capital expenditures and receipts are taken to A) Trial balance. B) Balance sheet. C) Trading and Profit and Loss Account. D) None of the above. Show Answer Correct Answer: B) Balance sheet. 3. Which of the following profits are capital profits? A) Profit made on redemption of debentures. B) Premium received on issue of shares or debentures. C) Profit set aside for redemption of preference shares. D) All of the above. Show Answer Correct Answer: D) All of the above. 4. Stock is valued in the books of accounts at A) Cost price. B) Market price. C) Cost price of market price whichever is less. D) Depends whether LIFO method is used or FIFO method is used. Show Answer Correct Answer: D) Depends whether LIFO method is used or FIFO method is used. 5. According to which of the following the firms market value is not affected by capital market. A) Net Income Approach. B) The Traditional View. C) M.M. Hypothesis. D) None of the above. Show Answer Correct Answer: C) M.M. Hypothesis. 6. Receipts and payments account of non-trading concerns is a A) Real Account. B) Personal Account. C) Nominal Account. D) All of the above. Show Answer Correct Answer: A) Real Account. 7. If cost of goods sold is Rs. 100,000, other; operating expenses are Rs. 20,000 and total net sales are Rs. 150,000 the operating ratio will be equal to ..... A) 70 %. B) 80 %. C) 90 %. D) 100 %. Show Answer Correct Answer: B) 80 %. 8. The largest volume of foreign exchange trading takes place in A) The United Kingdom. B) The United States. C) Germany. D) China. Show Answer Correct Answer: A) The United Kingdom. 9. A ..... is a regional trading bloc in which member countries eliminate internal trade barriers but maintain existing barriers against countries that are not members A) Monetary union. B) Customs union. C) Common market. D) Free trade area. Show Answer Correct Answer: D) Free trade area. 10. Capital Budgeting Decisions are based on A) Incremental Assets. B) Incremental Capital. C) Incremental Profit. D) Incremental Cash Flows. Show Answer Correct Answer: D) Incremental Cash Flows. 11. Which one of the following ratio is the indicator of the long term solvency of the firm? A) Acid test ratio. B) Debt equity ratio. C) Time interest earned ratio. D) None of these. Show Answer Correct Answer: B) Debt equity ratio. 12. Dividend Payout Ratio is A) DPS $\div$ EPS. B) PAT Capital. C) Pref. Dividend $\div$ PAT. D) Pref. Dividend $\div$ Equity Dividend. Show Answer Correct Answer: A) DPS $\div$ EPS. 13. Scruting of financial transactions is called A) Auditing. B) Accounting. C) Budgeting. D) Programming. Show Answer Correct Answer: A) Auditing. 14. Which exchange rate system does not require monetary reserves for official exchange rate intervention A) Dual exchange rates. B) Pegged exchange rates. C) Floating exchange rates. D) Managed floating exchange rates. Show Answer Correct Answer: C) Floating exchange rates. 15. Which factor of production in the United States is most likely to be made worse off (its factor payment will decrease) because of the North American Free Trade Agreement? A) Unskilled labor. B) Skilled labor. C) Capital. D) Land. Show Answer Correct Answer: A) Unskilled labor. 16. How will the increase in volatility in asset price affect the value of the option? A) Increase the value. B) Decrease the value. C) May not affect. D) Any of the above. Show Answer Correct Answer: A) Increase the value. 17. As per SEBI's guidelines underwriting is A) Optional. B) Mandatory. C) Not necessary. D) Not mandatory. Show Answer Correct Answer: B) Mandatory. 18. Given, Ke = (DPS / MP) X 100, may be used in A) Calculating capital structure. B) Calculating cost of equity capital. C) Calculating dividend yield on equity share. D) All of the above. Show Answer Correct Answer: B) Calculating cost of equity capital. 19. The Financial Management is responsible for the A) Recording the transaction. B) Finance function of the firm. C) Controlling of the organisation. D) Organising training programmes. Show Answer Correct Answer: B) Finance function of the firm. 20. Which of the following provisions held for various assets should be transferred to the realisation account upon dissolution of the firm? A) Provision for Discounts. B) Provision for Depreciation. C) Investment Fluctuation Fund. D) All of the above. Show Answer Correct Answer: D) All of the above. Next →Related QuizzesEconomy QuizzesAccounting Quiz 2Accounting Quiz 3Accounting Quiz 4Accounting Quiz 5Accounting Quiz 6Accounting Quiz 7Accounting Quiz 8Accounting Quiz 9Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books