This quiz works best with JavaScript enabled. Home > Economy > Accounting > Accounting – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Accounting Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The profit on the reissue of forfeited share are transferred to A) Capital A/ c. B) General Issues. C) Capital Reserve. D) Profit & Loss A/c. Show Answer Correct Answer: C) Capital Reserve. 2. Relationship between Spot and Forward Exchange Rate s is referred to as A) One-price rule. B) Interest Rate Parity. C) Exchange Power Parity. D) Purchasing Power Parity. Show Answer Correct Answer: B) Interest Rate Parity. 3. ..... represent the most widely used tool in international finance for measuring the average value of a currency relative to a number of other currencies. A) Real exchange rates. B) Cross exchange rates. C) Exchange rate indexes. D) Nominal exchange rates. Show Answer Correct Answer: B) Cross exchange rates. 4. The expired portions of capital/deferred revenue expenditures and revenue expenditures (adjusted for outstanding and prepaid expenses) are regarded as A) Loss. B) Expenses. C) Payments. D) All of the above. Show Answer Correct Answer: B) Expenses. 5. Following expenses are not shown in Profit & Loss Account A) Domestic and household expenses. B) Life insurance premium. C) Income tax. D) All of the above. Show Answer Correct Answer: D) All of the above. 6. Which one of the following is capital expenditure? A) Cost of advertisement. B) Purchase of machine oil. C) Purchase of raw material. D) Purchase of a delivery van. Show Answer Correct Answer: D) Purchase of a delivery van. 7. An aggressive share would have a beta A) Equal to Zero. B) Equal to one. C) Less than Zero. D) Greater than one. Show Answer Correct Answer: D) Greater than one. 8. Capital profits can be distributed as dividend only if A) They are realised in cash. B) The capital losses have been written off. C) The surplus remains after the revaluation of all assets. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. The overall capitalisation rate and the cost of debt remain constant for all degrees of financial leverage is advocated by A) M-M Approach. B) Traditional Approach. C) Net Income Approach. D) Net operating Income Approach. Show Answer Correct Answer: A) M-M Approach. 10. Credit Rating of a debt security is A) Merely opinion. B) Positive suggestion. C) Guarantee of Repayment. D) None of the above. Show Answer Correct Answer: A) Merely opinion. 11. Risk in capital budgeting implies that the decision maker knows ..... of the cash flows. A) Probability. B) Variability. C) Certainity. D) None of these. Show Answer Correct Answer: A) Probability. 12. In MM-Model, irrelevance of capital structure is based on A) Decreasing k0. B) Arbitrage Process. C) Cost of Debt and Equity. D) All of the above. Show Answer Correct Answer: B) Arbitrage Process. 13. Which is the items of capital structure? A) Debt Capital. B) Equity Capital. C) Preference Share Capital. D) All of the above. Show Answer Correct Answer: D) All of the above. 14. Amalgamation of firms takes place to A) Avoid competition. B) Reduce unnecessary advertisement expenditure. C) To secure internal and external economies of scale. D) All of the above. Show Answer Correct Answer: D) All of the above. 15. Financial break-even level of EBIT is A) Intercept at X-axis. B) Intercept at Y-axis. C) Slope of EBIT-EPS line. D) None of the above. Show Answer Correct Answer: A) Intercept at X-axis. 16. The European Union is an example of a/an A) Customs union. B) Free trade area. C) Economic union. D) Common market. Show Answer Correct Answer: D) Common market. 17. The difference between bid (buying) rates and ask (selling) rates is called the A) Profit. B) Spread. C) Arbitrage. D) Forward transaction. Show Answer Correct Answer: B) Spread. 18. Identify the transaction that has no effect on the current ratio. A) Motor car sold for cash. B) Bills receivable collected. C) Machinery bought for cash. D) Preference shares redeemed. Show Answer Correct Answer: B) Bills receivable collected. 19. Under the EU's Common Agricultural Policy, a variable import levy equals the A) World price. B) Support price of the EU. C) Amount by which the EU's support price exceeds the world price. D) Amount by which the world price exceeds the EU's support price. Show Answer Correct Answer: C) Amount by which the EU's support price exceeds the world price. 20. Payment to creditors is a manifestation of cash held for A) Speculative Motive. B) Precautionary Motive. C) Transactionary Motive. D) All of the above. Show Answer Correct Answer: C) Transactionary Motive. ← PreviousNext →Related QuizzesEconomy QuizzesAccounting Quiz 1Accounting Quiz 2Accounting Quiz 4Accounting Quiz 5Accounting Quiz 6Accounting Quiz 7Accounting Quiz 8Accounting Quiz 9Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books