This quiz works best with JavaScript enabled. Home > Economy > Accounting > Accounting – Quiz 21 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Accounting Quiz 21 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Consider the following statements: Redeemable preference shares can be redeemed out of A) Profits available for dividends. B) Sale proceeds of the new issue of shares. C) All of the above. D) None of these. Show Answer Correct Answer: C) All of the above. 2. Which method does not consider the time value of money A) Profitability Index. B) Net present value. C) Average rate of return. D) Internal Rate of Return. Show Answer Correct Answer: C) Average rate of return. 3. Which ratio explains that how much portion of earning is distributed in the form of dividend? A) Pay-out Ratio. B) Equity-Debt Ratio. C) Earning Yield Ratio. D) Dividend-Debt Ratio. Show Answer Correct Answer: A) Pay-out Ratio. 4. Which of the following is the test of the long term liquidity of a business? A) Current ratio. B) Operating ratio. C) Stock turnover ratio. D) Interest coverage ratio. Show Answer Correct Answer: D) Interest coverage ratio. 5. The role of ..... is to direct one nation's savings into investments of another nation A) Capital flows. B) Services flows. C) Current account flows. D) Merchandise trade flows. Show Answer Correct Answer: A) Capital flows. 6. "Capital budgeting as acquiring inputs with long run return" . Who said? A) Lynch. B) J. Betty. C) Richard and Green. D) Charles Horngreen. Show Answer Correct Answer: C) Richard and Green. 7. Which of the following is the variability of the return from a share associated with the market as a whole? A) Avoidable. B) Systematic. C) Unsystematic. D) None of the above. Show Answer Correct Answer: B) Systematic. 8. Which of the following is not available in India? A) Index Futures. B) Index Options. C) Commodity Futures. D) Commodity Options. Show Answer Correct Answer: D) Commodity Options. 9. Profit and Loss Account is also called A) Income Statement. B) Cash Flow Statement. C) Funds Flow Statement. D) None of the above. Show Answer Correct Answer: A) Income Statement. 10. Capital Employed is A) Bank. B) Cash + Bank. C) Assets + Cash. D) Shareholders Funds + Long Term Funds. Show Answer Correct Answer: D) Shareholders Funds + Long Term Funds. 11. The fund as used in funds flow statement means A) Cash. B) Current assets. C) Current liabilities. D) Current assets minus current liabilities. Show Answer Correct Answer: D) Current assets minus current liabilities. 12. Ageing schedule incorporates the relationship between A) Average Age of Directors. B) Average Age of All Employees. C) Debtors and Days Outstanding. D) Creditors and Days Outstanding. Show Answer Correct Answer: C) Debtors and Days Outstanding. 13. Which of the following pairs is not correctly matched? A) Accounting year: 1st April to 31st March. B) Accounting equation: Assets = Liabilities + Capital. C) Cost concept: Recognising transactions at historical cost. D) Accrual concept: Recognising revenue on receipt of cash. Show Answer Correct Answer: D) Accrual concept: Recognising revenue on receipt of cash. 14. In case of a limited company, the term financial statements includes A) Profit and loss account, profit and loss appropriation account and balance sheet. B) Balance sheet. C) Profit and loss and balance sheet. D) None of the above. Show Answer Correct Answer: A) Profit and loss account, profit and loss appropriation account and balance sheet. 15. A contract which gives the holder a right to buy a particular asset at a particular rate on or before a specified date is known as A) Strangle. B) Straddle. C) American Option. D) European Option. Show Answer Correct Answer: C) American Option. 16. Which of the following reserves cannot be utilised for making the partly paid up shares fully paid up? A) Plant Revaluation Reserve. B) Securities Premium Account. C) Capital Redemption Reserve Account. D) All of the above. Show Answer Correct Answer: D) All of the above. 17. The ideal ratio between total long term funds and total long terms loan is ..... A) 1 : 1. B) 2:1. C) 3 :1. D) 4:1. Show Answer Correct Answer: B) 2:1. 18. Two mutually exclusive projects with different economic lives can be compared on the basis of A) Net Present Value. B) Profitability Index. C) Internal Rate of Return. D) Equivalent Annuity value. Show Answer Correct Answer: D) Equivalent Annuity value. 19. Dividend policy of a company mainly concern with (i) dividend payout and (ii) Stability of dividend A) Only (i) is correct. B) Only (ii) is correct. C) Both (i) and (ii) are correct. D) Both (i) and (ii) are incorrect. Show Answer Correct Answer: C) Both (i) and (ii) are correct. 20. Which financial instrument provides a buyer the right to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a couple of years A) Cable transfer. B) Letter of credit. C) Bill of exchange. D) Foreign currency option. Show Answer Correct Answer: D) Foreign currency option. ← 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