Accounting For Managers

11. Amount brought in by proprietor should be credited to

  1. cash account
  2. capital account
  3. drawings account
  4. creditors account
Correct answer: (B)
capital account

12. Which of the following is a real (permanent) account?

  1. Goodwill
  2. Sales
  3. Accounts Receivable
  4. Both Goodwill and Accounts Receivable
Correct answer: (D)
Both Goodwill and Accounts Receivable

13. Which of the following errors will be disclosed in the preparation of a trial balance?

  1. Recording transactions in the wrong account.
  2. Duplication of a transaction in the accounting records.
  3. Posting only the debit portion of a particular journal entry.
  4. Recording the wrong amount for a transaction to both the account debited and the account credited.
Correct answer: (C)
Posting only the debit portion of a particular journal entry.

14. Management Accounting provides invaluable services to management in performing

  1. All management function
  2. Interpret financial data
  3. Controlling function
  4. None of these
Correct answer: (A)
All management function

15. If closing stock appears in the trial balance, it should be

  1. Credited to the trading account
  2. Credited to the profit and loss account
  3. Deducted from the purchases in the trading account
  4. Shown on the liability side of the Balance sheet
Correct answer: (A)
Credited to the trading account

16. Financial information should be neutral and bias free" is the dictation of which one of the following?

  1. Completeness concept
  2. Faithful representation Concept
  3. Objectivity Concept
  4. Duality Concept
Correct answer: (C)
Objectivity Concept

17. Which of the following statements is not an objective of financial reporting?

  1. Provide information that is useful in investment and credit decisions.
  2. Provide information regarding policy of organisation
  3. Provide information that is useful in assessing cash flow prospective
  4. None of theses
Correct answer: (B)
Provide information regarding policy of organisation

18. A company's telephone bill consisting of a Rs.200 monthly base amount, plus long distance charges, would be classified as a:

  1. Variable cost
  2. Committed fixed cost
  3. Direct cost
  4. Semi variable cost
Correct answer: (D)
Semi variable cost

19. A book containing a chronological record of business transaction & original record

  1. Journal
  2. Ledger
  3. Trial balance
  4. None of these
Correct answer: (A)
Journal

20. Which of these items would be accounted for as an expense?

  1. Repayment of bank Loan
  2. Dividend to stock holders
  3. The purchase of land
  4. Payment of current period rent
Correct answer: (D)
Payment of current period rent
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