This quiz works best with JavaScript enabled. Home > Economy > Accounting > Accounting – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Accounting Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. All information which is of material interest to ..... should be disclosed in accounting statements. A) Proprietors. B) Creditors. C) Investors. D) All of the above. Show Answer Correct Answer: D) All of the above. 2. Which of the following is not deferred revenue expenditure? A) Preliminary expenses. B) Depreciation on fixed assets. C) Heavy advertisement expenditure. D) Expenses incurred in removing the business to more convenient premises. Show Answer Correct Answer: B) Depreciation on fixed assets. 3. Revenue is generally recognised as being earned at that point of time when A) Production is completed. B) Debts are collected. C) Cash is received. D) Sale is effected. Show Answer Correct Answer: D) Sale is effected. 4. The conflicts in project ranking in capital budgeting as per NPV and IRR may arise because of A) Life disparity. B) Size disparity. C) Time disparity. D) All of the above. Show Answer Correct Answer: D) All of the above. 5. As per AS - 2, inventory is to be valued at A) The lower of cost, or net realisable value. B) Net realisable value. C) Actual cost. D) Sales value. Show Answer Correct Answer: A) The lower of cost, or net realisable value. 6. Direct investment and security purchases are classified as A) Capital account transactions. B) Current account transactions. C) Unilateral transfer transactions. D) Merchandise trade transactions. Show Answer Correct Answer: A) Capital account transactions. 7. Ratios may be classified as A) Profitability ratios. B) Financial ratios. C) Leverage ratios. D) All of the above. Show Answer Correct Answer: D) All of the above. 8. The cost of capital method includes A) Dividend yield method. B) Earning yield method. C) Growth in dividend method. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. Which of the following has the highest cost of capital? A) Bonds. B) Loans. C) Equity shares. D) Preference shares. Show Answer Correct Answer: C) Equity shares. 10. The proposal is rejected in case the profitability index is A) Less than Zero. B) Less than one. C) Less than Two. D) Less than five. Show Answer Correct Answer: B) Less than one. 11. What are the advantage of double entry system? A) Lesser possibility of fraud. B) Arithmetical accuracy of records. C) Helps users of accounting information. D) All of the above. Show Answer Correct Answer: D) All of the above. 12. Small nations with more than one major trading partner tend to peg the value of their currencies to A) Gold. B) Silver. C) A single currency. D) A basket of currencies. Show Answer Correct Answer: D) A basket of currencies. 13. Current ratio is a..... ratio A) Profitability. B) Balance sheet. C) Profit and loss. D) Trading account. Show Answer Correct Answer: B) Balance sheet. 14. All of the following are debit items in the balance of payments, except A) Capital outflows. B) Merchandise exports. C) Private gifts to foreigners. D) Foreign aid granted to other nations. Show Answer Correct Answer: B) Merchandise exports. 15. An investor should buy a bond if A) Intrinsic Value > Market Value. B) Intrinsic Value < Market Value. C) Market Value = Redemption Value. D) Market Value < Redemption Value. Show Answer Correct Answer: A) Intrinsic Value > Market Value. 16. The accounting equation (i.e., Assets = Liabilities + Capital) is an expression of the A) Cost Concept. B) Matching Concept. C) Business Entity Concept. D) Money Measurement Concept. Show Answer Correct Answer: C) Business Entity Concept. 17. If depreciation is calculated on the basis of the formula, (n (n + 1))/2, then which of the following methods is adopted? A) Annuity method. B) Sinking fund method. C) Diminishing value method. D) Sum of years digits method. Show Answer Correct Answer: D) Sum of years digits method. 18. Which of the following is a type of responsibility centre? A) Profit Centre. B) Investment Centre. C) Cost or Expense Centre. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. Intrinsic Value of a 'out of money' call option is equal to A) Zero. B) Premium. C) Spot Price. D) Strike Price. Show Answer Correct Answer: A) Zero. 20. Which of the following accounting concepts has the working rule: "anticipate no profits but provide for all possible losses. "? A) Materiality concept. B) Consistency concept. C) Conservatism concept. D) Revenue recognition concept. Show Answer Correct Answer: C) Conservatism concept. ← PreviousNext →Related QuizzesEconomy QuizzesAccounting Quiz 1Accounting 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