This quiz works best with JavaScript enabled. Home > Economy > Accounting > Accounting – Quiz 18 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Accounting Quiz 18 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Debt Equity Ratio is computed by A) Reserve / Capital. B) Assets / Current Assets. C) (Reserve + Capital + Loss) / 2. D) Total Liabilities /Shareholders Equity. Show Answer Correct Answer: D) Total Liabilities /Shareholders Equity. 2. Which one is more appropriate for cost of retained earning? A) Opportunity cost to the firm. B) Weighted Average cost of capital. C) Expected rate of return by the investor. D) None of the above. Show Answer Correct Answer: A) Opportunity cost to the firm. 3. Break-even of a Put option occurs when spot price is equal to A) Premium. B) Strike price + Premium. C) Strike Price - Premium. D) None of the above. Show Answer Correct Answer: C) Strike Price - Premium. 4. Profitability Index, when applied to divisible projects, impliedly assumes that A) NPV is addictive in nature. B) NPV is linearly proportionate to part of the project taken up. C) Both (a) and (b). D) Project cannot be taken in parts. Show Answer Correct Answer: C) Both (a) and (b). 5. Capital Redemption Reserve can be utilised by the company only for A) Issue of fully paid bonus shares. B) Distribution of dividend. C) Redemption of shares. D) All of the above. Show Answer Correct Answer: A) Issue of fully paid bonus shares. 6. Bonus shares can be issued by a company A) Out of share premium not collected in cash. B) Out of free reserves built out of genuine profit. C) Out of the Reserves created by revaluation of fixed assets. D) Without any provision for it in the Articles of Association of the company. Show Answer Correct Answer: B) Out of free reserves built out of genuine profit. 7. A company with a paid up capital of 5000 equity shares of Rs. 10 each has a turnover of four times with a margin of 8 % on sales. The ROI of the company will be A) 31 %. B) 32 %. C) 33 %. D) 34 %. Show Answer Correct Answer: B) 32 %. 8. Indicate the item that appears below the line in the Profit and Loss Account A) Proposed Dividend. B) Provision for Taxation. C) Contribution to Provident Fund. D) Miscellaneous expenditure written off. Show Answer Correct Answer: A) Proposed Dividend. 9. Finance functions are A) Raising of funds. B) Planning for funds. C) Allocation of Resources. D) All of the above. Show Answer Correct Answer: D) All of the above. 10. A sound dividend policy contains the ..... features. A) Stability. B) Distribution of dividend in cash. C) Gradually Rising dividend Rates. D) All of the above. Show Answer Correct Answer: D) All of the above. 11. The information provided by the financial accounting system is A) Significant. B) Sufficient for smooth, orderly and efficient conduct of business. C) Both (a) and (b). D) Not sufficient for smooth, orderly and efficient conduct of business. Show Answer Correct Answer: C) Both (a) and (b). 12. Which one of the following is not a sources of conflict in project ranking in capital budgeting decision as per NPV and IRR. A) No time disparity. B) No capital Budget constraints. C) Independent Investment project. D) None of the above. Show Answer Correct Answer: D) None of the above. 13. Current assets include A) Stock in trade. B) Sundry Debtors. C) Stores & Spare parts. D) All of the above. Show Answer Correct Answer: D) All of the above. 14. Which of the following assets are dealt with by AS - 10 (Accounting Standard on Fixed Assets)? A) Goodwill and patents. B) Trademarks and designs. C) Land, building, plant and machinery, vehicles, furniture and fittings. D) All of the above. Show Answer Correct Answer: D) All of the above. 15. A lease which is generally not cancellable and covers full economic life of the asset is known as A) Finance Lease. B) Operating Lease. C) Economic Lease. D) Sale and leaseback. Show Answer Correct Answer: A) Finance Lease. 16. Stock beta measures A) EPS. B) Dividend. C) Stock Volatility. D) Debt Equity Ratio. Show Answer Correct Answer: C) Stock Volatility. 17. In India, NIFTY and SENSEX are calculated on the basis of A) Paid up Capital. B) Market Capitalization. C) Free-float Capitalization. D) Authorized Share Capital. Show Answer Correct Answer: C) Free-float Capitalization. 18. What are the important objectives of accounting? A) Calculation of profit or loss. B) Depiction of financial position. C) To make information available to variousgroups and users. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. Which is the functions of Financial Control? A) Audit. B) Planning for Control. C) Accounting Functions. D) All of the above. Show Answer Correct Answer: D) All of the above. 20. Forward exchange rate is the rate of exchange between two currencies A) Would prevail at a future date. B) Prevailing today for future delivery. C) Prevailing today for immediate delivery. D) None of the above. Show Answer Correct Answer: B) Prevailing today for future delivery. ← PreviousNext →Related QuizzesEconomy QuizzesAccounting Quiz 1Accounting Quiz 2Accounting Quiz 3Accounting Quiz 4Accounting Quiz 5Accounting Quiz 6Accounting Quiz 7Accounting Quiz 8Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books