Study Groups By Subject code Wise (Click Below on your university link & Join Your Subject Group)

[ + VU Study Groups Subject Code Wise ]  [ + COMSATS Virtual Campus Study Groups Subject Code Wise ]

Looking For Something at vustudents.ning.com?Search Here

MGT401 Final Term Solved Papers

See the attached file please

Tags: Final, MGT401, Papers, Solved, Term

Views: 2555

Attachments:

Replies to This Discussion

Note: (This is Featured Discussion)

For Important Helping Material related to this subject (Solved MCQs, Short Notes, Solved past Papers, E-Books, FAQ,Short Questions Answers & more). You must view all the featured Discussion in this subject group.

For how you can view all the Featured discussions click on the Back to Subject Name Discussions link below the title of this Discussion & then under featured Discussion corner click on the view all link.

MGT401 Final Term Solved Papers

 

Quiz Start Time: 10:49 PM
Question # 1 of 15 ( Start time: 10:49:55 PM ) Total Marks: 1
Which of the following is/are equal to “Capital”?
Select correct option:
Net Assets
Assets – Liabilities            page # 107
Net worth of the firm
All of the given options

Quiz Start Time: 10:49 PM
Question # 2 of 15 ( Start time: 10:50:57 PM ) Total Marks: 1
Which of the following should not be recognized as an asset?
Select correct option:
Patent rights
Internally Generated Goodwill    page 36
Copy rights
Goodwill

Quiz Start Time: 10:49 PM
Question # 3 of 15 ( Start time: 10:51:22 PM ) Total Marks: 1
Which is/are the qualitative characteristic/ characteristics of financial statements according to the IASB’s Framework?
Select correct option:
Understandability
Comparability
Relevance
All of the given           page 96

Quiz Start Time: 10:49 PM
Question # 4 of 15 ( Start time: 10:51:53 PM ) Total Marks: 1
Which of the following represents the meaning of turnover in accounting?
Select correct option:
Gross sale    page 152
Total profit
Total output
Total investment
Quiz Start Time: 10:49 PM
Question # 5 of 15 ( Start time: 10:52:20 PM ) Total Marks: 1
According to IAS-16, at which amount assets can be recorded in the books of accounts of a company?
Select correct option:
Cost amount
Realization amount
Revalued amount
Both cost & revalued amount    page 20

Quiz Start Time: 10:49 PM
Question # 6 of 15 ( Start time: 10:52:56 PM ) Total Marks: 1
Which of the following IAS deals with the Borrowing Costs?
Select correct option:
IAS 23  page162,163
IAS 07
IAS 01
IAS 16

Quiz Start Time: 10:49 PM
Question # 7 of 15 ( Start time: 10:53:13 PM ) Total Marks: 1
Which of the following is the person who originally owns the rights to use the asset, in other words he owns the asset and allows the lessee to use it?
Select correct option:
Lessor           page 126
Lessee
Creditor
Debtor

Quiz Start Time: 10:49 PM
Question # 8 of 15 ( Start time: 10:53:38 PM ) Total Marks: 1
Which activities by definition do not fulfill the recognition criteria according to IAS-38?
Select correct option:
Development activities
Research activities           page 37
Both development and research activities
None of the given options

Quiz Start Time: 10:49 PM
Question # 9 of 15 ( Start time: 10:54:06 PM ) Total Marks: 1
Which type of lease is normally Not long term and transfers all the risks and rewards of ownership?
Select correct option:
Finance lease     page 126
Operating lease
Sale & lease back
Hire Purchase Agreement

Quiz Start Time: 10:49 PM
Question # 10 of 15 ( Start time: 10:54:50 PM ) Total Marks: 1
Which one of the following is NOT recorded under Equity section of the Balance Sheet?
Select correct option:
Share Premium
Share Capital
Accumulated Profit
Dividend Payable

Quiz Start Time: 10:49 PM
Question # 11 of 15 ( Start time: 10:55:20 PM ) Total Marks: 1
The financial charges calculated at the interest rates implicit in the lease and are charged to:
Select correct option:
Profit and loss account       page 145
Balance sheet
Profit and loss appropriation account
Notes to the account

Quiz Start Time: 10:49 PM
Question # 12 of 15 ( Start time: 10:55:55 PM ) Total Marks: 1
Historical cost convention:
Select correct option:
Account for only past transactions
Fails to measure the changing price levels over time
Records all assets at their cost to the company, without considering any adjustment for depreciation
Has replaced in accounting records by a system of current cost accounting

Quiz Start Time: 10:49 PM
Question # 13 of 15 ( Start time: 10:56:35 PM ) Total Marks: 1
Which of the following IAS deals with Inventories?
Select correct option:
IAS 38
IAS 23
IAS 02
IAS 16

Quiz Start Time: 10:49 PM
Question # 14 of 15 ( Start time: 10:56:56 PM ) Total Marks: 1
Which of the following is considered as inflow of cash?
Select correct option:
Re-purchase of shares
Redemption of debentures
Issuance of debentures
Payment of dividend

Quiz Start Time: 10:49 PM
Question # 15 of 15 ( Start time: 10:57:22 PM ) Total Marks: 1
If the ownership transferred by the end of the lease term then it is called:
Select correct option:
Finance lease
Operating lease
Hire purchase
Possession

Quiz Start Time: 10:59 PM
Time Left 88
sec(s)
Question # 1 of 15 ( Start time:
10:59:05 PM ) Total Marks: 1
Who elect the Board of Directors (BODs) of a company?
Select correct option:
Managers
Shareholders
Employees
Both Managers & Employees

Quiz Start Time: 10:59 PM
Question # 2 of 15 ( Start time: 10:59:34 PM ) Total Marks: 1
When capitalization of borrowing cost should be stopped for a qualifying asset?
Select correct option:
When substantially all activities that are necessary to prepare the qualifying asset for its use or sale are complete        page 32
When slightly all activities that are necessary to prepare the qualifying asset for its use or sale are complete
When a qualifying asset is substantially in use
When a qualifying asset is slightly in use

Quiz Start Time: 10:59 PM
Question # 3 of 15 ( Start time: 11:00:41 PM ) Total Marks: 1
The concepts of present value and future value are:
Select correct option:
Directly related to each other
Not related to each other
Proportionately related to each other
Inversely related to each other        doubts (because it depends on interest rate )

Question # 4 of 15 ( Start time: 11:01:34 PM ) Total Marks: 1
Which of the following IAS covers the treatment of Accounting Policies?
Select correct option:
IAS 8              page 165
IAS 7
IAS 16
IAS 18

Quiz Start Time: 10:59 PM
Question # 5 of 15 ( Start time:
11:02:00 PM ) Total Marks: 1
Which of the following is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding?
Select correct option:
Research         page 37
Development
Audit
Accounting

Question # 7 of 15 ( Start time: 11:02:46 PM ) Total Marks: 1
Which of the following represents that the shares are issued at a price below the face value?
Select correct option:
Share issued at premium
Share issued at discount
Share issued at par value
Share issued at nominal value

Question # 8 of 15 ( Start time: 11:03:13 PM ) Total Marks: 1
ABC
Co. recognizes the sales revenue when goods and services have been supplied while costs are recorded when goods and services have been received. The accounting concept which governs the above statement is:
Select correct option:
Accruals concept
Materiality concept            doubt here not sure
Realization concept
Dual aspect concept

Question # 9 of 15 ( Start time: 11:04:38 PM ) Total Marks: 1
Which of the following is/are NOT the example(s) of current liability?
Select correct option:
Sundry Debtors
Debentures
Loan given to Mr. A for shorter period
All of the given options

Question # 10 of 15 ( Start time: 11:05:16 PM ) Total Marks: 1
Which of the following is TRUE with respect to the Operating Lease?
Select correct option:
A lease is classified as an operating lease if it not transfers substantially all the risks and rewards incident to ownership
A lease is classified as an operating lease if it transfers substantially all the risks and rewards incident to ownership
A lease is classified as an operating lease if it transfers substantially 49%% of the risks and rewards incident to ownership
A lease is classified as an operating lease if it transfers substantially 50% of the risks and rewards incident to ownership

Question # 11 of 15 ( Start time: 11:05:48 PM ) Total Marks: 1
If issuance of debentures against cash is Rs. 3,000 and repurchase of shares of Rs. 4,000 then which of the following is correct?
Select correct option:
Inflow of cash Rs. 7,000
Outflow of cash Rs. 7,000
Inflow of cash Rs. 1,000
Outflow of cash Rs. 1,000

Question # 12 of 15 ( Start time: 11:06:31 PM ) Total Marks: 1
When it is suitable to use specific identification cost method?
Select correct option:
When items of inventories are normally interchangeable
When items of inventories are not normally interchangeable                page 48
When goods are produced for regular projects
None of the given options

 

Question # 14 of 15 ( Start time: 11:08:43 PM ) Total Marks: 1
Which of the following is TRUE with respect to the application of Cash Flow Statement?
Select correct option:
Purchase of equipment for cash is considered as inflow of cash
Purchase of equipment on account is considered as outflow of cash
Purchase of equipment on credit is considered as outflow of cash
Purchase of equipment for cash is considered as outflow of cash

Question # 15 of 15 ( Start time: 11:09:18 PM ) Total Marks: 1
Which of the followings schedule of Companies Ordinance 1984 describes about the additional heads of non-current assets?
Select correct option:
5th Schedule
4th Schedule
6th Schedule
2nd Schedule

Question # 1 of 15 ( Start time: 11:12:15 PM ) Total Marks: 1
Which one of the following is related to the Benchmark Treatment for an investment in jointly controlled entities?
Select correct option:
Proportionate Consolidation Method         page 75
Equity Method
LIFO Method
Specific Identification Method

Question # 2 of 15 ( Start time: 11:13:18 PM ) Total Marks: 1
Preparation and presentation of Financial Statements are governed by:
Select correct option:
Companies Ordinance 1984
International Accounting Standards
International Financial Reporting Standards
All of the given options

Question # 3 of 15 ( Start time: 11:13:46 PM ) Total Marks: 1
Impairment loss on an asset is occurred due to:
Select correct option:
Internal factors
External factors
Both internal and external factors
None of the given option

Question # 4 of 15 ( Start time: 11:14:54 PM ) Total Marks: 1
What should be the treatment of research cost incurred by a business according to IAS-38?
Select correct option:
It should be recorded as a part of capital of the business
It should be recorded as non-current asset
It should be recorded as current asset
It should be recorded as expense for the period          page 37

Question # 5 of 15 ( Start time: 11:15:30 PM ) Total Marks: 1
Which of the following is the gross inflow of economic benefits during the period arising in the course of ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants?
Select correct option:
Revenue          page 159
Expense
Asset
Liability

Question # 7 of 15 ( Start time: 11:16:36 PM ) Total Marks: 1
What is the treatment of Accumulated Depreciation in accounting?
Select correct option:
Treated as a reserve
Treated as a contra asset
Treated as a surplus
Treated as an expense

Question # 8 of 15 ( Start time: 11:17:02 PM ) Total Marks: 1
Which of the following is considered as outflow of cash?
Select correct option:
Issuance of shares
Loan taken from bank
Issuance of debentures
Payment of dividend

Question # 9 of 15 ( Start time: 11:17:29 PM ) Total Marks: 1
Which of the following is/are example(s) of development activities?
Select correct option:
The design of tools, jigs, moulds and dies involving new technology
The design, construction and testing of pre-production or pre-use prototypes and models
The design, construction and operation of a pilot plant
All of the given options         page 38

Question # 10 of 15 ( Start time: 11:17:53 PM ) Total Marks: 1
Which of the following represents the Conversion Cost?
Select correct option:
Direct Material + Direct Labor
Direct Material + Indirect Material + FOH
Direct Material + FOH
Direct Material + Direct Labor + FOH

Question # 11 of 15 ( Start time: 11:19:00 PM ) Total Marks: 1
Which of the following meeting is held once in the life of a company?
Select correct option:
Statutory Meeting
Annual General Meeting
Extraordinary Meeting
Board Meeting

Question # 12 of 15 ( Start time: 11:20:11 PM ) Total Marks: 1
Which of the following is/are the physical asset(s)?
Select correct option:
Term Finance Certificates
Loan Agreements
Trade Receivables
All of the given options           page 84

Question # 13 of 15 ( Start time: 11:20:42 PM ) Total Marks: 1
What would be the present value of Rs. 8,500 to be received after 8 years at a discount rate of 10 percent?
Select correct option:
Rs. 3,965
Rs. 7,992
Rs. 15,300
Rs. 18,221

Here n = 8
i = 10% p.a
FV= Rs. 8500
PV = FV / (1 + i)^n
PV = 8500 / (1+10%)^8
PV = 8500 / (1.1)^8
PV = 8500 / 2.144
PV = Rs. 3964.55

Question # 14 of 15 ( Start time: 11:21:54 PM ) Total Marks: 1
Which of the following business is formed by the approval of State Bank of Pakistan?
Select correct option:
Money Exchange Company
Non Banking Finance Corporation
Trade organization u/s 42 of the Companies ordinance 1984
Corporate Brokerage House

Question # 15 of 15 ( Start time: 11:22:27 PM ) Total Marks: 1
Which of the following is NOT the type of Market Risk?
Select correct option:
Price Risk
Liquidity Risk              page # 84
Interest Rate Risk
Currency Risk

Question # 1 of 15 ( Start time: 11:23:24 PM ) Total Marks: 1
Which of the followings is NOT the cost of inventory?
Select correct option:

Conversion cost
Purchasing cost
Distribution cost             still doubt
Freight inward cost

Question # 7 of 15 ( Start time: 11:29:48 PM ) Total Marks: 1
Which one of the following is an example of Financial Asset?
Select correct option:
Inventories
Patent rights
Goodwill
Accounts receivable    which are in money form not in physical

Question # 8 of 15 ( Start time: 11:30:36 PM ) Total Marks: 1
When we see the capital with respect to the net assets then it is called:
Select correct option:
The financial concept of capital maintenance  page 104
The physical concept of capital maintenance
Both physical and financial concept of capital maintenance
Neither physical nor financial concept of capital maintenance

Question # 9 of 15 ( Start time: 11:32:03 PM ) Total Marks: 1
If an intangible resource does not fulfill the criteria of intangible asset then what will be the treatment of expenditures incurred to acquire such intangible resource?
Select correct option:
It will be recorded as non-current asset of the company
It will be recorded as an expense for the period
It will be recorded as current asset of the company
It will be recorded as capital of the company

Question # 10 of 15 ( Start time: 11:32:35 PM ) Total Marks: 1
Which of the followings information(s) should be disclosed by a company in respect of long term loans made to others?
Select correct option:

Interest rate
Period or installments for loan repayment
Any other terms and conditions which have material effects
All of the given options        page 45,46

Question # 11 of 15 ( Start time: 11:33:16 PM ) Total Marks: 1
According to IAS-16, property, plant and equipment are the assets which held for
Select correct option:

Production of goods or services
Supply of goods or services
Administrative purpose
All of the given options

Question # 12 of 15 ( Start time: 11:33:50 PM ) Total Marks: 1
Which of the following option is/are TRUE with respect to the Disclosure requirement for intangible assets acquired by the way of Government grants?
Select correct option:

The fair value initially recognized
Disclosure for carrying amount
Disclosure for the amount of commitments for acquisition of intangible assets
All of the given options                  page 203

Question # 13 of 15 ( Start time: 11:34:22 PM ) Total Marks: 1
What is the policy about how we should depreciate an asset under IAS-16?
Select correct option:
All the assets which having a known useful life should be depreciated
Assets should be depreciated by systematically allocating their depreciable amount over their useful life
Assets should be recognized in the balance sheet at their carrying amount
The carrying amount of an asset is the value which recognized in the accounts after deducting depreciation and impairment of losses

Question # 14 of 15 ( Start time: 11:35:09 PM ) Total Marks: 1
A legal obligation is that which is derived from:
Select correct option:
www.vustudents.ning.com

 


A contract
A legislation
Other operation of law
All of the given options page 109

Question # 15 of 15 ( Start time: 11:35:41 PM ) Total Marks: 1
Which institute issues the “Certificate of Incorporation” in
Pakistan?
Select correct option:

SEC
SECI
SECP
SECB

Question # 1 of 15 ( Start time: 11:37:15 PM ) Total Marks: 1
Which one of the following is an appropriation by a limited liability company?
Select correct option:

Directors' salaries
Free Sample Distribution
Dividends
Loan interest

Question # 2 of 15 ( Start time: 11:37:57 PM ) Total Marks: 1
Which of the following is NOT a current liability?
Select correct option:

Accounts payable
Accrued liabilities
Bills payable
Bonds payable

Question # 3 of 15 ( Start time: 11:38:33 PM ) Total Marks: 1
Which of the following represents the objective of the financial statements?
Select correct option:

To provide the information about the business objectives
To provide the information about the business liabilities
To provide the information about the business assets
To provide the information about the Financial position, Financial performance and Changes in financial position

Question # 4 of 15 ( Start time: 11:39:20 PM ) Total Marks: 1
Olympia manufacturing changes its inventory valuation method from average cost method to FIFO (First in First out) method. Company should account for this change as:
Select correct option:

Change in estimate and account for it prospectively
Change in accounting policy and account for it retrospectively
Change in accounting policy and account for it prospectively  page 168
Account for it as a correction of an error and account for it retrospectively

Question # 5 of 15 ( Start time: 11:40:00 PM ) Total Marks: 1
Which of the following is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction?
Select correct option:

Depreciable Amount
Fair Value
Cost
Carrying Amount

Question # 6 of 15 ( Start time: 11:40:33 PM ) Total Marks: 1
How many person(s) is(are) required to takeover the business after the death of a member in case of Single Member company?
Select correct option:

Seven
Three
Two       page 2
One

Question # 7 of 15 ( Start time: 11:41:09 PM ) Total Marks: 1
Which of the fallowing is TRUE with respect to Liability?
Select correct option:

It is a present obligation of the entity arising from a past event the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.
It is a past obligation of the entity arising from a future event the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.
It is a present obligation of the entity arising from a past event the settlement of which is expected to result in an inflow from the entity of resources embodying economic benefits.
It is not a present obligation of the entity arising from a past event the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

Question # 8 of 15 ( Start time: 11:41:50 PM ) Total Marks: 1
Which key criteria for an item of property, plant & equipment which will be recognized as an asset under IAS-16?
Select correct option:

When it can be measured reliably
When it is controlled by the entity
When it is probable that economic benefits will flow to the entity from the asset
When it has a remaining value

Question # 9 of 15 ( Start time: 11:42:47 PM ) Total Marks: 1
A person who acquires shares in a Company is known as a:
Select correct option:

Director
Shareholder
Partner
Manager

Question # 10 of 15 ( Start time: 11:43:36 PM ) Total Marks: 1
Which company is required to represent financial statements after every three, six and twelve months to SECP and shareholders by Companies Ordinance 1984?
Select correct option:

Public Listed Company
Public Unlisted Company
Single Member Company
Private Unlisted Company

Question # 12 of 15 ( Start time: 11:45:22 PM ) Total Marks: 1
If the holding company owns more then 50% but less then 100% shares of the subsidiary company then the subsidiary type will be termed as:
Select correct option:

Partially owned subsidiary
Wholly owned subsidiary
Direct subsidiary
Indirect subsidiary

Question # 14 of 15 ( Start time: 11:46:34 PM ) Total Marks: 1
Which of the following sections of Companies Ordinance 1984 are related to the Non Profit oriented entities?
Select correct option:

Section 42            page 03
Section 43
Section 44
Section 45

Question # 15 of 15 ( Start time: 11:47:53 PM ) Total Marks: 1
Which of the following is an artificial person recognized by law?
Select correct option:

Limited company
Partnership
Sole-proprietorship
Trust

Question # 1 of 15 ( Start time: 03:53:31 PM )  Total Marks: 1 

All are the types of the financial statements according to IAS-1 except: 

Select correct option: 

 Balance sheet

 Statement of changes in equity

 Director’s report

 Notes to the financial statements

Question # 2 of 15 ( Start time: 03:53:48 PM )  Total Marks: 1 

In 3 years you are to receive Rs. 5,000. If the interest rate were to suddenly increase, the present value of that future amount to you would: 

Select correct option: 

 

 Fall

 Rise

 Remain same

 Non of the given options

Question # 4 of 15 ( Start time: 03:54:27 PM )  Total Marks: 1 

When borrowing cost can be capitalized? 

Select correct option: 

 

 When it is directly attributable to construction of qualifying asset

 When it is directly attributable to acquisition of qualifying asset

 When it is directly attributable to production of qualifying asset

 All of the given options

Question # 5 of 15 ( Start time: 03:54:49 PM )  Total Marks: 1 

“In situations of uncertainty, more confirmatory evidence is required about the existence of a gain or an asset than about the existence of a loss or a liability.” This statement reflects the accounting concept of: 

Select correct option: 

 

 Accrual

 Prudence                page 98

 Going Concern

 Reliability

Question # 6 of 15 ( Start time: 03:55:19 PM )  Total Marks: 1 

IAS-16 deals with: 

Select correct option: 

 

 Property, Plant and Equipment

 Cash Flow Statement

 Presentation of Financial Statements

 Earning per share

Question # 7 of 15 ( Start time: 03:55:29 PM )  Total Marks: 1 

Which of the following is not a recommended method of inventory costing under IAS-2? 

Select correct option: 

 

 FIFO (First in First Out)

 LIFO (Last in First Out)

 Average Cost

 None of the given options

Question # 8 of 15 ( Start time: 03:56:35 PM )  Total Marks: 1 

Which of the following will be included in the cost of inventory? 

Select correct option: 

 

 Conversion cost

 Purchasing cost

 Freight inward cost

 All of the given options

Question # 10 of 15 ( Start time: 03:58:12 PM )  Total Marks: 1 

Which of the following section of the Companies Ordinance 1984 deals with Revaluation of Fixed Assets? 

Select correct option: 

 

 Section 235            page 25

 Section 236

 Section 237

 Section 238

Question # 11 of 15 ( Start time: 03:59:15 PM )  Total Marks: 1 

Which of the following is/are the component(s) of equity? 

Select correct option: 

 

 Share Capital

 Reserves

 Share Premium

 All of the given options

Question # 13 of 15 ( Start time: 04:00:12 PM )  Total Marks: 1 

Which of the following costs can be capitalized? 

Select correct option: 

 

 Purchases of assets financed through issue of debentures

(cost are directly attributable so can be capitalized)

 Assets that are not currently in use because of excess capacity

 Assets not currently undergoing activities necessary to prepare for intended use

 Assets intended for sale or use that are produced as discrete projects

Question # 14 of 15 ( Start time: 04:01:17 PM )  Total Marks: 1 

What will be the accounting treatment of loss in the books of accounts of a company which arises from the revaluation of an asset? 

Select correct option: 

 

 Dr.      Asset A/C

Cr.                   Revaluation A/C

 Dr.      Asset A/C

Cr.                   Accumulated Depreciation A/C

 Dr.      Asset A/C

Cr.                   Disposal of Asset A/C

 Dr.      Revaluation A/C

Cr.                   Asset A/C

Question # 15 of 15 ( Start time: 04:02:02 PM )  Total Marks: 1 

Which of the following IAS is related to the Consolidated and Separate Financial Statements? 

Select correct option: 

 

 IAS 27             page  72

 IAS 28

 IAS 31

 IAS 32 

MGT401 Financial Accounting II

Question # 1 of 15 ( Start time: 05:49:17 PM )  Total Marks: 1 

Which of the following option is/are TRUE with respect to the Disclosure requirement for intangible assets acquired by the way of Government grants? 

Select correct option: 

 

 The fair value initially recognized

 Disclosure for carrying amount

 Disclosure for the amount of commitment for acquisition of intangible assets

 All of the given options   

Question # 2 of 15 ( Start time: 05:50:43 PM )  Total Marks: 1 

Which of the following is the ability to govern the financial and operating policies of an enterprise so as to obtain from its activities? 

Select correct option: 

Control

 Significant Influence

 Direct Subsidiary

 Indirect Subsidiary

Question # 3 of 15 ( Start time: 05:52:09 PM )  Total Marks: 1 

Which one of the following methods for inventory valuation is NOT suitable for homogeneous units? 

Select correct option:  

 FIFO Method

 LIFO Method

 Weighted Average Method

 Specific Identification Method   reference page # 60 handout

Question # 4 of 15 ( Start time: 05:53:40 PM )  Total Marks: 1 

Which of the following meeting is held once in the life of a company? 

Select correct option: 

 

 Statutory Meeting

 Annual general meeting

 Extraordinary Meeting

 Board Meeting 

Question # 5 of 15 ( Start time: 05:55:11 PM )  Total Marks: 1 

Which of the following is INCORRECT with respect to Perpetual Inventory System? 

Select correct option: 

 

 Receipt of inventory is debited to Stock Account

 Issuance of inventory is credited to Stock Account and Debited to Material Consumption Account

 Receipt of inventory is debited to Purchase Account

 Material Consumption Account becomes the part of Trading Account

 

Question # 6 of 15 ( Start time: 05:56:16 PM )  Total Marks: 1 

Which of the following business is formed by the approval of Ministry of Interior? 

Select correct option: 

 

 Money Exchange Company 

 Non Banking Finance Corporation

 Security Services Providing Company 

 Corporate Brokerage House

Question # 7 of 15 ( Start time: 05:57:41 PM )  Total Marks: 1 

The closing balance of inventory will be if: Opening inventory will Rs.1, 000, purchases will Rs.10, 000 and cost of sales will Rs.10,500. 

Select correct option: 

 

 Rs. 1,000

 Rs. 500

 Rs. 1,500

 Rs. 950

Question # 8 of 15 ( Start time: 05:58:52 PM )  Total Marks: 1 

Which of the following IAS deals with the Borrowing Costs? 

Select correct option: 

 

 IAS 23

 IAS 07

 IAS 01

 IAS 16

Question # 9 of 15 ( Start time: 05:59:23 PM )  Total Marks: 1 

On which certificate, the birth date of a company is mentioned? 

Select correct option: 

 

 Certificate of Corporation

 Certificate of Incorporation page # 5  handouts

 Certificate of Quality

 Certificate of Excellence

Question # 10 of 15 ( Start time: 06:00:33 PM )  Total Marks: 1 

Who sign the Articles of Association (AOA) of a company? 

Select correct option: 

 

 Managers of the company

 Employees of the company

 Sponsors of the company

 All of the given options

Question # 11 of 15 ( Start time: 06:01:54 PM )  Total Marks: 1 

Which of the following is NOT the method of stock valuation? 

Select correct option: 

 

 FIFO Method

 Weighted Average Method

 Specific Identification Method

 Straight Line Method

Question # 12 of 15 ( Start time: 06:02:12 PM )  Total Marks: 1 

Which one of the following is a method of stock valuation? 

Select correct option: 

 

 Diminishing Balance Method

 Written Down Value Method

 Specific Identification Method

 Sum of Year Digit Method

Question # 13 of 15 ( Start time: 06:02:47 PM )  Total Marks: 1 

Which of the following statement is/are INCORRECT under the Cost Method for recognition of investment in associated companies? 

Select correct option: 

 

 Any distribution of profits by the investee company is recorded as an expense

 Any distribution of profits by the investor company is recorded as an income

 The carrying amount of the investment is increased or decreased to reorganize the investor’s share of profits or losses of the investee after the date of acquisition

 All of the given options

Question # 14 of 15 ( Start time: 06:03:48 PM )  Total Marks: 1 

In case of calling Extraordinary General Meeting (EOGM), at least how much voting right is required by any director or share holder of a company according to Companies Ordinance 1984? 

Select correct option: 

 5%  voting rights

 10% voting rights  page # 7 hanouts

 15% voting rights

 20% voting rights

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks: 1 

LIFO means? 

Select correct option: 

 

 Last-In-First-Out

 Large Integrated Financial Organization

 The Last-In-First-Out method of approximating the cost of stock

 None of the given options

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks: 1 

Which institute issues the “Certificate of Incorporation” in Pakistan?

SEC

SECI

SECP

SECB

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks: 1 

Depreciation is

A systematic allocation of depreciable amount of an asset over its estimated useful life

The end life of an asset

The increase in value of asset

Another name of Impairment

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks: 1 

Which of the following IAS deals with the Associated Companies?

IAS 27

IAS 28

IAS 01

IAS 07

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks

An inventory valuation system should exclude the cost of:

Carriage in

Carriage out

Both Carriage in & Carriage out

None of given options

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks

In which year, local legislations of Pakistan permitted to make private limited company by a single person?

1999

2000

2002

2001

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks

Which of the following is/are example(s) of development activities?

The design of tools, jigs, moulds and dies involving new technology

The design, construction and testing of pre-production or pre-use prototypes and models

The design, construction and operation of a pilot plant

All of the given options {page # 38} handouts

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks

An inventory valuation system should include the cost of:

Carriage in

Carriage out

Both carriage in and carriage out

None of the given option

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks

According to Companies Ordinance 1984, minimum number of member/members in public unlisted company must be

2

7

3          page  # 03

1

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks

Concept of Related Parties is defined in:

Companies Ordinance 1984

IAS

Both Companies Ordinance 1984 and IAS      (FOURTH SCHEDELE AND IAS 24)

Neither in Companies Ordinance 1984 nor in IAS

Question # 15 of 15 ( Start time: 06:04:10 PM )  Total Marks

Which of the following is an artificial person recognized by law?

Trust

Limited company

Sole proprietorship

Partnership

 

Q:Which of the following term represents the total par value of shares offered to the general public for contribution?

Registered capital

Issued Capital

Subscribed capital

Paid up capital

 

Q:Which of the following fulfill the definition of cash equivalents?

Cash equivalent are those short term investment that can be converted into cash at any time

Investment unto three months of maturity

Short term investment papers up to two months of maturity

All of the given

 

Q: Depreciation calculation which is at a lesser amount for every following period:

Reducing balance method

Straight line method

Sum of digit method

Output method

 

Q:The part of the cost of the fixed asset consumed during its period of use by the firm is:

Amortized

Depreciated

Deteriotion

Depleted

 

Q:which of the following is/are included in finance costs?

Mark up paid on loans

Mark up paid on leases

Costs paid to obtain finacial services

All of the given  

Q:which of the following is recorded in the current liabilities section of the balance sheet?

Debentures

Obligation under finance lease

Deffered taxation

Creditors

 

Q:Which of the following is True about the uses of provision IAS-37?

A provision should be used only for expenditure for which the provision was originally recognized

A provision should be used only for which the provision was originally recognized

A provision should bot be used only for expnditure for which the provision was originally recognized

None of the given

 

Q:which of the following document present the information abou Underwriters?

prospectus

statement in lieu of prospectus

Articles of association

Memorandum of association

 

Q:If you  plan to save Rs 8,000 with a bank at an interest rate of 8%,what will be the worth of your amount after 4 years if interest is compunded annually?

RS 8.640

RS10,560

RS10,884

FINALTERM EXAMINATION
Spring 2009
MGT401- Financial Accounting II

 

Marks: 81


Question No: 1 ( Marks: 1 ) - Please choose one
Which of the following statement shows the sources from which business generated cash and its application?

  • Income Statement
  • Cash Flow Statement
  • Statement of Changes in Owners Equity
  • Balance Sheet


Question No: 2 ( Marks: 1 ) - Please choose one
Which of the following represents the Dilution in earning?

  • Basic Earning Per Share - Diluted Earning Per Share
  • Basic Earning Per Share + Diluted Earning Per Share
  • Basic Earning Per Share x Diluted Earning Per Share
  • Basic Earning Per Share / Diluted Earning Per Share


Question No: 3 ( Marks: 1 ) - Please choose one
Which of the following guide an entity to change the accounting policy?

  • The application of an accounting policy for transactions, other events or conditions that differ in substance from those previously occurring
  • The application of a new accounting policy for transactions, other events or conditions that did not occur previously or were immaterial
  • If the change is required by a standard or an interpretation
  • All of the given options


Question No: 4 ( Marks: 1 ) - Please choose one
How many days before notice is served to the members for Extraordinary Meeting?

  • 60days
  • 30days
  • 40days
  • 21days


Question No: 5 ( Marks: 1 ) - Please choose one
Which one of the following is equal to the carrying cost of an asset?

  • Original cost minus Accumulated depreciation
  • Original cost plus Accumulated depreciation
  • Original cost minus Residual value
  • Written down value minus Accumulated depreciation


Question No: 6 ( Marks: 1 ) - Please choose one
What cost should be charged to the equipment if:

Equipment was purchased for Rs. 34,000;
Costs were incurred on the date of purchase:
Loss on sale of old equipment Rs. 4,000;
Installation costs Rs. 3,000; and Breaking-in costs Rs. 500

  • Equipment should be charged with Rs. 37,500
  • Equipment should be charged with Rs. 34,000
  • Equipment should be charged with Rs. 38,000
  • Equipment should be charged with Rs. 37,000


Question No: 7 ( Marks: 1 ) - Please choose one
Which of the following is the systematic allocation of the depreciable amount of an
intangible asset over its useful life?

  • Depreciation
  • Amortization
  • Depletion
  • Impairment


Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following investments are recorded using Cost Method?

  • Investments made for longer period
  • Investments made for shorter period
  • Investments made for shorter and longer period
  • None of the given options


Question No: 9 ( Marks: 1 ) - Please choose one
Under which of the following methods for inventory valuation, inventory is valued at most recent costs?

  • FIFO Method      page 59
  • LIFO Method
  • Weighted Average Method
  • Specific Identification Method


Question No: 10 ( Marks: 1 ) - Please choose one
Which of the following IAS affect(s) the recognition, presentation and disclosure of fixed assets in financial statements?

  • IAS 36
  • IAS 38
  • IAS 01
  • All of the given options         page # 66


Question No: 11 ( Marks: 1 ) - Please choose one
Which of the following is TRUE with respect to the Equity Method for Associate?

  • Distributions (dividend) received from the investee reduce the carrying amount of the investment      page# 78
  • Distributions (dividend) received from the investor reduce the cost of the investment
  • Distributions (dividend) received from the investee increase the carrying amount of the investment
  • Distributions (dividend) received from the investee reduce the market value of the investment


Question No: 12 ( Marks: 1 ) - Please choose one
Which of the following is shown under the heading of Stores and Spares in Balance
Sheet?

  • Packing Material
  • Raw Materials
  • Short Term Investments
  • Loose Tools

Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following represents the objective of the financial statements?

  • To provide the information about the business objectives
  • To provide the information about the business liabilities
  • To provide the information about the business assets
  • To provide the information about the Financial position, Financial performance and Changes in financial position


Question No: 14 ( Marks: 1 ) - Please choose one
Which of the following is/are NOT the example(s) of current liability?

  • Sundry Debtors
  • Debentures
  • Loan given to Mr. A for shorter period
  • All of the given options

Question No: 15 ( Marks: 1 ) - Please choose one
Contingent liabilities are written in Balance Sheet as:

  • Long Term Deposits
  • Current Liabilities
  • Long Term Loans
  • Foot Notes


Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following represents the issuance of shares at a price below the face value?

  • Shares issued at premium
  • Shares issued at discount
  • Shares issued at par value
  • Shares issued at nominal value



Question No: 17 ( Marks: 1 ) - Please choose one
When a share having a face value of Rs.100 is issued at Rs.110 then which one of the
following option is correct under this situation?

  • Shares issued at premium
  • Shares issued at discount
  • Shares issued at nominal value
  • Shares issued at market value


Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following will not be treated as a reduction in share capital but will be
written off as an expense as allowed by the Companies Ordinance 1984?

  • Premium on shares
  • Discount on shares
  • Nominal value of shares
  • Market value of shares


Question No: 19 ( Marks: 1 ) - Please choose one
If ABC Limited Company has paid up capital of Rs. 800,000 divided into 8,000 shares of Rs.100 each. Two bonus shares are issued for every four shares held within the Company. Then, which of the following represents the number of bonus shares held by Company?

  • 4,000 bonus shares   8000/4*2=4000
  • 8,000 bonus shares
  • 16,000 bonus shares
  • 32,000 bonus shares


Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following account will be credited when shares are repurchased at
premium?

  • Paid up Capital
  • Share Premium Account
  • Accumulated Profit and Loss Account
  • Cash Account


Question No: 21 ( Marks: 1 ) - Please choose one
The type of lease in which ownership is not transferred by the end of the lease term is
called:

  • Finance lease
  • Operating lease
  • Hire purchase
  • Possession


Question No: 22 ( Marks: 1 ) - Please choose one
Under sale and lease back of operating lease, the excess shall be deferred and amortized over the period for which the asset is expected to be used if:

  • Sale price > Fair value            page # 130
  • Sale price < Fair value
  • Sale price = Fair value
  • Sale price < Book value


Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following is TRUE about the Published Financial Statements?

  • Published statements are prepared by the external auditors
  • Published statements are put in front of the Board of Directors for approval
  • Published statements has been approved by the Board of Directors
  • None of the given options


Question No: 24 ( Marks: 1 ) - Please choose one
With respect to IAS 10, the destruction of a major production plant by a fire after the Balance sheet date is considered as which of the following?

  • Adjusting Event
  • Non-Adjusting Event        page #185
  • Bogus Event
  • Contingent Event


Question No: 25 ( Marks: 1 ) - Please choose one
With respect to IAS 10, the discovery of fraud that shows the financial statements are incorrect after the balance sheet date is considered as which of the following?

  • Adjusting Event           page #185
  • Non-Adjusting Event            
  • Bogus Event
  • Contingent Event


Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following IAS covers the treatment & recognition of Contingent Assets?

  • IAS 33
  • IAS 37
  • IAS 38
  • IAS 39


Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following elaborate that the chance of future event occurring is more than revote but less than likely with respect to IAS-37?

  • Probable
  • Possible
  • Remote
  • Warranty


Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares?

  • Basic Earning per share
  • Diluted Earning per share
  • Dividend per share
  • Book value per share


Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following is correct formula to calculate Basic Earning per Share?

  • Profit available for distribution to ordinary shareholders / Weighted average number of ordinary shares outstanding during the year
  • Profit available for distribution to preference shareholders / Weighted average number of ordinary shares outstanding during the year
  • Profit available for distribution to ordinary shareholders / Weighted average number of preference shares outstanding during the year
  • Profit available for distribution to equity shareholders / Total number of shares outstanding during the year

Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following is NOT a current liability?

  • Outstanding liabilities
  • Provision for taxation
  • Bills payable
  • Bonds payable


Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is related with the IAS-8?

  • Borrowing costs
  • Provisions
  • Prior period errors
  • Contingencies


Question No: 32 ( Marks: 1 ) - Please choose one
Prior period errors include the effects of:

  • Mathematical mistakes only
  • Mistake in applying accounting policies only
  • Both Mathematical mistakes & Mistake in applying accounting policies
  • Mistakes in selecting accounting policies



Question No: 33 ( Marks: 1 ) - Please choose one
In the absence of Standard, in relation to a transaction, management shall use its
judgment in developing an accounting policy that result in information that is:

  • Relevant to the economic decision-making needs of user
  • Unreliable in the financial statement
  • Irrelevant to the economic decision-making needs of user
  • Irrelevant to the non-economic decision-making needs of user


Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following is/are NOT included in the Equity Section of the Balance Sheet?

  • Long term financing
  • Deferred cost
  • Liability against assets subject to finance lease
  • All of the given options


Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following is TRUE with respect to IAS-02?

  • Under periodic inventory system purchases account is not used
  • Goods in transit shipped FOB shipping point should be included in the inventory of seller
  • Goods in transit shipped FOB destination should be included in the inventory of buyer
  • Interest costs for routine inventories are not product costs


Question No: 36 ( Marks: 1 ) - Please choose one
Which of the following is TRUE with respect to the measurement of Revenue
IAS 18?

  • Revenue shall be measured at the fair value of the consideration received or receivable                                          page # 159
  • Revenue shall be measured at the future value of the consideration received or receivable
  • Revenue shall be measured at the discounted value of the consideration received or receivable
  • Revenue shall not be measured at the fair value of the consideration received or receivable


Question No: 37 ( Marks: 1 ) - Please choose one
Amir & Co. sells goods with a list price of Rs. 12,000 to credit customer. The customer is entitled to a 5% trade discount and also to a further 2.5 % discount on list price if payment is made within 10 days of the invoice date. What amount should be credited to the sales account in Amir s Books?

  • Rs. 11,700
  • Rs. 12,000
  • Rs. 11,400

2.5% discount is not recognize yet( only discounted upto 5% is considered yet)

  • Rs. 11,100


Question No: 38 ( Marks: 1 ) - Please choose one
Which of the following is the example of Administrative Cost?

  • Rent expenses
  • Advertising expenses
  • Selling expenses
  • Financial charges


Question No: 39 ( Marks: 1 ) - Please choose one
Which of the following is included in the cost of goods sold?

  • Direct labour cost
  • Distribution expenses
  • Selling expenses
  • Administrative expenses

Q. 01: Which of the following type of the business is governed under the Partnership Act 1932 in Pakistan?

 

  • Sole-Proprietorship
  • Partnership
  • Limited Companies
  • Unlimited Companies

 

Q. 02:  Which of the following is/are not example of current liability?

 

  • Sundry Debtors
  • Debentures
  • Loan given to Mr. A for shorter period
  • All of the given options

 

Q. 03: Which of the following are the resources controlled by the entity as a result of a past event from which future economic benefits are expected to flow to the entity?

 

  • Assets
  • Gains
  • Liabilities
  • Expenses

 

Q. 04: All of the following are the assets of the firm except

 

  • A building owned by the firm
  • Goods in transit
  • Money owed to the firm by it’s debtors
  • Money which the firm has borrowed and has not yet been repaid.

 

Q. 05: Which of the following is related to the qualitative characteristics that make financial information useful?

 

  • Reliability only
  • Relevancy only
  • Both Reliability and Relevancy
  • Comparability

 

Q. 06: Which of the following statement is true regarding Going Concern Concept?

 

  • The Business is profitable
  • The assets of the Business are valued at Market Value
  • The business will continue until the Directors decide to close it
  • The Business will continue its working          page #96

 

Q. 07: Under which of the following assumptions, the Financial Statements are to be prepared?

 

  • Future Assumptions
  • Past Assumptions
  • Accrual Basis and Going Concern Basis
  • Accrual Basis Assumption only

 

Q. 08: Which one of the following is not a physical asset?

 

  • Term Finance Certificates
  • Loan Agreements
  • Trade Receivables
  • Goodwill

 

Q. 09: Which one of the following is not the example of Financial Instruments?

 

  • Share Capital
  • Loans Payable
  • Debentures
  • Inventories

 

Q. 10: The firm uses diminishing balance method for calculating Depreciation. The vehicle costing 20,000 was sold after two years. The sale resulted neither in loss or profit. What was the sale price of the Vehicle?

 

  • 7,200
  • 12,000
  • 12,800    considering rate 20% rate on depreciation
  • 16,000

 

Q. 11: Which of the following is/are not included in the disclosure requirement of Trade Debts with respect to the Companies Ordinance 1984?

 

  • Amount due in respect of goods sold
  • Amount due in respect of services rendered
  • Amount due in respect of other contractual obligation
  • Amount due which are in nature of loans or advances.

 

 

Q. 12: A firm has two categories of stock. The cost and Net Realizable Value (NRV) of each is as follows:

                                                                        Cost                             NRV

Category 1                                                      Rs. 35,000                  Rs. 22,000

Category 2                                                      Rs. 22,000                  Rs. 25,000

 

What amount will be disclosed.

 

  • 44,000                    in category 1 NRV is less and in category 2 cost is less
  • 47,000
  • 57,000
  • 60,000

 

Q. 13: Which of the following method is suitable for calculating the cost of inventory when actual costs of individual units of merchandise can be determined from the accounting records?

 

  • FIFO Method
  • LIFO Method
  • Weighted Average Method
  • Specific Identification Method

 

Q. 14: Which of the following authority regulates/governs the functioning of Companies?

 

  • Securities & Exchange Commission of Pakistan
  • Federal Government
  • Ministry of Finance
  • All of the Given Options

 

Q. 15: Which of the following is true about the meeting of Directors?

 

  • The quorum for a meeting of Directors of a listed company should not less than 1/3 of their members or four which is greater.
  • The quorum for a meeting of Directors of a listed company should not less than 1/3 of their members or four which is lesser.
  • The quorum for a meeting of Directors of a listed company should not less than 1/2 of their members or four which is greater.
  • The quorum for a meeting of Directors of a listed company should not less than 1/2 of their members or four which is lesser.

 

Q. 16: Which of the following is true about the Companies Limited by shares?

 

  • Company has limited shares to offer
  • Shareholders of the Company are limited
  • Liability of Shareholders is limited
  • Liability of Shareholders is unlimited

 

Q. 17: Proper Books of Accounts are kept by every company under which of the following section of Companies Ordinance 1984?

 

  • 230
  • 233
  • 184
  • 110

 

Q. 18: Which of the following is not attributable to the Property Plant & Equipment?

 

  • Costs of site preparation
  • Administration and other general overhead costs
  • Initial delivery and handling charges
  • Installation and Assembly cost

 

Q. 19: Which of the following expenditure can not be capitalized?

 

  • Initial Composition Cost
  • Cost of adding Air conditioner to the Computer Room
  • Cost of Adding extra RAM to Computer
  • New tyres placed on a motor car

 

Q. 20: ABC (Pvt) Limited is engaged in production of an asset. The production started on July 31, 2007. The Production completed on July 31, 2008. The works manager checked the asset and required some minor modifications. These modifications were completed on August 30, 2008. The Asset was delivered to Works Manager on September 10, 2008. The production started from such asset on October 01, 2008. When should capitalization cease?

 

  • July 31, 2007
  • July 31, 2008
  • August 30, 2008
  • October 01, 2008

 

Q. 21: Which of the following is an identifiable non-monetary asset without physical substance?

 

  • Tangible Asset
  • Intangible Asset
  • Floating Asset
  • Circulating Asset

 

Q. 22: Which of the following is the application of research findings or other knowledge to a plan design for the production of new or substantially improved material, devices products, processes, systems or services before the start of commercial production or use?

 

  • Applied Research
  • Business Research
  • Development
  • Accounting

 

 

Q. 23: Which of the following is an example of Intangible Asset?

 

  • Preliminary Expenses
  • Copy rights
  • Investments
  • Discounts on issue of shares

 

Q. 24: Which of the following statement is true under the Cost method for recognition of investments in associated companies?

 

  • Any distribution of profits by the investee company is recorded as an income
  • Any distribution of profits by the investee company is recorded as an expense
  • Any distribution of profits by the investor company is recorded as an income
  • Any distribution of profits by the investor company is recorded as an expense

 

Q. 25: Which of the following IAS is related to Financial Instruments Disclosure and Presentation?

 

  • IAS 27
  • IAS 28
  • IAS 31
  • IAS 32

 

Q. 26: Which of the following is related to IAS 31?

 

  • Consolidated and Separate Financial Statements
  • Interest in Joint Venture
  • Financial Instruments Disclosure and Presentation
  • Financial Instruments Recognition and Measurement

 

Q. 27: Which of the following is true with respect to the disclosure requirement of Investment in Associate?

 

  • Explanations when investments are less than 20% are accounted for by the equity method or when investments of more than 20% are not accounted for by the equity method.
  • Explanations when investments are less than 10% are accounted for by the equity method or when investments of more than 10% are not accounted for by the equity method.
  • Explanations when investments are less than 10% are accounted for by the equity method or when investments of more than 20% are not accounted for by the equity method.
  • Explanations when investments are less than 20% are accounted for by the equity method or when investments of more than 10% are not accounted for by the equity method.

Q. 28: Which of the following is true with respect to the Disclosure requirement in Consolidated Financial Statements?

 

  • The nature of relationship between the parent and subsidiary when the parent does not own, directly or indirectly through subsidiaries, more than 1/2 of the voting power
  • The nature of relationship between the parent and subsidiary when the parent does not own, directly or indirectly through subsidiaries, more than 1/3 of the voting power
  • The nature of relationship between the parent and subsidiary when the parent does not own, directly or indirectly through subsidiaries, more than 1/4 of the voting power
  • The nature of relationship between the parent and subsidiary when the parent does not own, directly or indirectly through subsidiaries, more than 1/5 of the voting power

Question No: 20    ( Marks: 1 )     -  Please choose one

An entity shall not present any items of income and expense as extraordinary items, either on the face of the income statement or in the notes

  • True
  • False

Question No. 1 Marks : 01

Contingent assets are:

  • Recognized as asset in the balance sheet
  • Any of the given options depending upon certain condition
  • Disclosed in the financial statements
  • None of the given options

Question No. 2 Marks : 01

A reduction of share capital can be effected through an ordinary resolution.

  • True
  • False

Question No. 3 Marks : 01

According to IAS 2 Inventories are assets that are not held for sale in the

ordinary course of business.

o True

o False

Question No. 4 Marks : 01

Which assets are specifically excluded from Financial Assets:

b: Prepaid Expenses

a: Investments

c: Physical Assets

d: Both (b) and (c)

Question No. 5 Marks : 01

A supplier sends you a statement showing a balance outstanding of Rs.

14,350. Your own records show a balance outstanding of Rs. 14,500/-

o The supplier sent an invoice for Rs. 150 which you have not yet

received.

o The supplier has allowed you Rs. 150 cash discount which you

had omitted to enter in your ledgers

o You have paid the supplier Rs. 150 which he has not yet

accounted for

o You have returned goods worth Rs. 150 which the supplier has

not yet accounted for

Question No. 6 Marks : 01

Repurchased shares can be reissued by Public Unlisted Companies.

  1. true
  2. False

MGT 401 Quizzes

1. Which of the following is NOT the Classification of Current Assets with respect to

the Companies Ordinance 1984?

Select correct option:

Cash Balance

Bank Balance

Premises

Marketable Securities

2. Written down value of an asset = --------------

Select correct option:

Original cost – Accumulated depreciation

Original cost – Appreciation

Book value – Accumulated depreciation

Original cost – Salvage value

3. Which of the following entities is not profit oriented entity?

Select correct option:

Sole - proprietorship

Partnership

Companies

Foundations

4. All of the following are Fixed assets EXCEPT:

Select correct option:

Machinery

Freehold land

Leasehold land

Marketable securities

5. A Partnership firm has a maximum ____ numbers of partners.

Select correct option:

20

15

10

02

6. Question # 6 of 15 ( Start time: 04:59:10 PM ) Total Marks: 1

Which of the following is NOT the Classification of Current Assets with respect to

the Companies Ordinance 1984?

Select correct option:

Stock

General Stores

Spare parts

Bank over draft

7. Question # 7 of 15 ( Start time: 05:00:37 PM ) Total Marks: 1

Which of the following IAS deals with Inventories?

Select correct option:

IAS 38

IAS 23

IAS 02

IAS 16

8. Which one of the following is related to IAS 32 & 39?

Select correct option:

Property, Plant & Equipment

Inventory

Financial Statements

Financial Instruments

9.

Question # 9 of 15 ( Start time: 05:02:58 PM ) Total Marks: 1

IAS-16 deals with:

Select correct option:

Property, Plant and Equipment

Cash Flow Statement

Presentation of Financial Statements

Earning per share

10. Which of the following meeting is held once in the life of a company?

Select correct option:

Statutory Meeting

Annual General Meeting

Extraordinary Meeting

Board Meeting

11. Question # 11 of 15 ( Start time: 05:05:02 PM ) Total Marks: 1

Which of the following is NOT a Qualifying Asset?

Select correct option:

Power plan being in the process of manufacture

Inventories requiring a substantial period for manufacturing

Special order for a special inventory that will be manufactured in 5 months

Asset ready for use

12. Question # 12 of 15 ( Start time: 05:06:24 PM ) Total Marks: 1

Which of the following is original and planned investigation undertaken with the

prospect of gaining new scientific or technical knowledge and understanding?

Select correct option:

Research

Development

Audit

Accounting

13. Which of the following IAS deals with the Intangible Assets?

Select correct option:

IAS 38

IAS 23

IAS 01

IAS 16

Question # 14 of 15 ( Start time: 05:08:00 PM ) Total Marks: 1

Which of the following is/are the type(s) of stock for manufacturing concerns?

Select correct option:

Raw Material

Work in Process

Finished Goods

All of the given options

Question # 15 of 15 ( Start time: 05:09:48 PM ) Total Marks: 1

Which one of the following is a method of stock valuation?

Select correct option:

Diminishing Balance Method

Written Down Value Method

Specific Identification Method

Sum of Year Digit Method

14. All of the following are Fixed assets EXCEPT:

Select correct option:

Machinery

Freehold land

Leasehold land

Marketable securities

15. Which of the following schedule provides disclosure requirements for Listed

Companies under Companies Ordinance 1984?

Select correct option:

4th schedule

5th schedule

6th schedule

2nd schedule

16. Which of the following investment are recorded using Cost Method?

Select correct option:

Investments made for longer period

Investments made for shorter period

Investments made for shorter and longer period

None of the given options

17. An enterprise would be the subsidiary of another enterprise if that investor

enterprise can control the subsidiary represents:

Select correct option:

Subsidiary Companies

Holding Companies

Public Limited Companies

Private Limited Companies

18. Which of the following is NOT the method of stock valuation?

Select correct option:

FIFO Method

Weighted Average Method

Specific Identification Method

Straight Line Method

19. Which of the following IAS is related to the Consolidated and Separate Financial

Statements?

Select correct option:

IAS 27

IAS 28

IAS 31

IAS 32

Which one of the following is a method of stock valuation?

Select correct option:

Diminishing Balance Method

Written Down Value Method

Specific Identification Method

Sum of Year Digit Method

20. Which of the following is the application of research findings or other knowledge

to a plan or design for the production of new or substantially improved materials,

devices, products, processes, systems or services before the start of commercial

production or use?

Select correct option:

Applied research

Development

Business research

Accounting

21. What is the treatment of Depreciation in accounting?

Select correct option:

Treated as a reserve

Treated as an expense

Treated as a surplus

Treated as a Liability

22. Which of the following is/are example(s) of development activities?

Select correct option:

The design of tools, jigs, moulds and dies involving new technology

The design, construction and testing of pre-production or pre-use prototypes and

models

The design, construction and operation of a pilot plant

All of the given options

23. Which of the following is/are the method(s) for calculating the cost of inventory?

Select correct option:

FIFO Method

Weighted Average Method

Specific Identification Method

All of the given options

24. Which of the following is (are) related with the IAS 23?

Select correct option:

Qualifying Assets

Amount to be capitalized related to the Borrowing cost

Capitalization period related to the Borrowing cost

All of the given options

25. Partnership firm has a maximum ____ numbers of partners.

Select correct option:

20

15

10

02

26. Which of the following sections of the Companies Ordinance 1984 is related to the

Annual General Meeting?

Select correct option:

Section 157

Section 158

Section 159

Section 160

27. Which of the following may consist of more than 20 persons in case of

partnership?

Select correct option:

Firms of Lawyers

Firms of Doctors

Firms of Associates

All of the given options

28. Which one of the following is related to the Allowed Alternative Treatment for an

investment in jointly controlled entities?

Proportionate Consolidation Method

Equity Method

Weighted Average Method

Sum of Year Digit Method

IAS-16 deals with:

Select correct option:

Property, Plant and Equipment

Cash Flow Statement

Presentation of Financial Statements

Earning per share

29. Companies are registered under:

Select correct option:

Partnership Act 1932

Companies Ordinance 1984

Partnership Agreement

Income Tax Ordinance 1979

30. Which of the following business is formed by the approval of Stock Exchange?

Select correct option:

Money Exchange Company

Non Banking Finance Corporation

Trade organization u/s 42 of the Companies ordinance 1984

Corporate Brockage House

31. to the Allowed Alternative Treatment, Which of the following method is used for

stock valuation?

Select correct option:

FIFO Method

LIFO Method

Weighted Average Method

Specific Identification Method

32. 1: Which of the following IAS deals with the Borrowing Costs?

Select correct option:

IAS 23

IAS 07

IAS 01

IAS 16

33.: Which one of the following is the type of stock for trading concerns?

Select correct option:

Raw Material

Work in Process

Finished Goods

Stock in Trade

34. : What is the meeting requirement for the directors of a Public Limited

Company?

Select correct option:

At least once in each quarter

At least once in each month

At least once in each year

At least once in each week

35.: of the following represent(s) the Prime Cost?

Select correct option:

Direct Material Cost + Direct Labour Cost

Total Factory Cost – Factory Overheads

Conversion Cost – Factory Overheads + Direct Material Costs

All of the given options

38. ijeeb191: Which of the following is the Classification of Current Assets with

respect to the Companies Ordinance 1984?

Select correct option:

Building

Land

Premises

Marketable Securities

39. ijeeb191: Which of the following is/are example(s) of research activities?

Select correct option:

ijeeb191: Activities aimed at obtaining new knowledge

The search, evaluation, final selection and application of research findings

The search for alternatives

All of the given options

40. ijeeb191: Which one of the following type(s) of information is(are) available in 4th

and 5th schedule of the Companies Ordinance 1984?

Select correct option:

Definitions and general requirements for preparation and presentation of financial

statements

Requirements for Balance Sheet

Requirements for Profit and Loss Account

All of the given options

41. ijeeb191: Which one of the following IAS is related to the Interest in Joint

Venture?

Select correct option:

IAS 27

IAS 28

IAS 31

IAS 32

42. Which of the following fixed asset is shown at cost rather at book value?

Machinery

Furniture

Vehicles

Land

43. Which of the following is an example of Capital Expenditure

Wages paid on the purchases of goods

Carriage paid on the purchases of goods

Transportation paid on machinery purchased

Octori duty paid on goods

44. Which of the following methodology is adopted for the valuation of investments in

associated companies?

Equity Method

At cost or Under IAS 39

At amortized cost

At fair value

:

45. In case an item of property, plant and equipment is exchanged for similar asset of

the enterprise, the cost of the new asset is measured at the -------------- of the old

asset.

Carrying value

Fair value

Future value

Salvage Value

46. Which of the following represent(s) the Prime Cost?

Direct Material Cost + Direct Labour Cost

Total Factory Cost – Factory Overheads

Conversion Cost – Factory Overheads + Direct Material Costs

All of the given options

47. Which of the following costs can be capitalized?

Purchases of assets financed through issue of debentures

Assets that are not currently in use because of excess capacity

Assets not currently undergoing activities necessary to prepare for intended use

Assets intended for sale or use that are produced as discrete projects

48. Which one of the following is(are) NOT recorded under Current Liabilities section

of the Balance Sheet?

Debentures

Deferred Taxation

Obligation Under Finance Lease

All of the given options

49. Which of the following is the deduction or allowance allowed by a creditor to a

debtor?

Trade Discount

Cash Discount

Purchases return

Sales return

50. The term “Significant Influence” refers to the:

Ability to participate but not to control financial and management affairs of the enterprise

Ability to participate and control financial and management affairs of the enterprise

Neither to control nor to participate in financial affairs of the enterprise

None of the given options

51. Which of the following is a rebate or allowance from the scheduled price granted

by the seller to the buyer?

Trade Discount

Cash Discount

Purchases return

Sales return

52. Which of the following entities is profit oriented entity?

NGOs

Trust

Societies

Sole - proprietorship

53. Which of the following is/are the Classification of Current Assets with respect to

the Companies Ordinance 1984?

Cash Balance

Loans and Advances

Bank Balance

All of the given

54. What is the treatment of Accumulated Depreciation in accounting?

Treated as a reserve

Treated as a contra asset

Treated as a surplus

Treated as an expense

55. Which of the following IAS deals with Inventories?

IAS 38

IAS 23

IAS 02

56. Which one of the following is NOT the component of cost?

Import duties

Installation costs

Cost of site preparation

Transportation outwards

58. Which one of the following is related to the Benchmark Treatment for an

investment in jointly controlled entities?

Proportionate ConsolidationMethod

Equity Method

LIFO Method

Specific Identification Method

59. Which of the following is/are NOT the example(s) of Financial Asset?

Minority interest

Sale of goods

Purchases of goods

All of the given options

60. Which one of the following is a fixed asset?

Cash in hand

Advanced payment

Closing stock

Leasehold vehicle

65. Which of the following is INCORRECT with respect to Perpetual Inventory

System?

Receipt of inventory is debited to Stock Account

Issuance of inventory is Credited to Stock Account and Debited to Material

Consumption Account

Receipt of inventory is debited to Purchase Account

Material Consumption Account becomes the part of Trading Account

66. Which of the following is/are the Classification of Current Assets with respect to

the Companies Ordinance 1984?

Stock

Cash Balance

Finished Goods

All of the given options

67. :Which of the following is an identifiable non-monetary asset without physical

substance?

Tangible Asset

Intangible Asset

Floating Asset

Circulating Asset

68. :Which of the following represent(s) the Cost of goods sold?

Sales – Gross Profit

Opening Stock + Purchases – Closing Stock

Cost of goods Manufactured + Opening Finished Goods Inventory – Closing Finished

Goods Inventory

All of the given options

69. Which of the following is(are) example(s) of Borrowing costs?

Interest on bank overdrafts

Interest on short-term borrowings

Interest on long-term borrowings

All of the given options

70. Which of the following is the ability to govern the financial and operating policies

of an enterprise so as to obtain from its activities?

Control

Significant Influence

Direct Subsidiary

Indirect Subsidiary

72. Which of the following IAS deals with the Associated Companies?

IAS 27

IAS 28

IAS 01

IAS 07

76. 8:52 PM Which of the following is an asset that necessarily takes a substantial

period of time to get ready for its intended use or sale?

Qualifying Asset

Outstanding Asset

Tangible Asset

Intangible Asset

78. Which of the following business is formed by the approval of State Bank of

Pakistan?

Money Exchange Company

Non Banking Finance Corporation

Trade organization u/s 42 of the Companies ordinance 1984

Corporate Brockage House

79. If Original cost is Rs. 100,000; Depreciation rate is 20% p.a. using straight line

method; what will be the value of accumulated depreciation at the end of 2nd

year?

Rs.20,000

Rs. 40,000

Rs. 80,000

Rs. 60,000

80. Concept of Related Parties is defined in:

Companies Ordinance 1984

IAS

Both Companies Ordinance 1984 and IAS

Neither in Companies Ordinance 1984 nor in IAS

81. Which one of the following is related to the IAS 39?

Consolidated and Separate Financial Statements

Interest in Joint Venture

Financial Instruments Disclosure and Presentation

Financial Instruments Recognition and Measurement

82. Which of the following IAS affect(s) the recognition, presentation and discourse of

fixed assets in financial statements?

IAS 01

IAS 16

IAS 23

All of the given options

83. Which of the following is TRUE with respect to the disclosure requirements of

Trade Debts?

Select correct option:

Doubtful debts is deducted from the Provision for doubtful debts

Doubtful debts and its Provision is shown separately as asset

Provision for doubtful debts is not taken into consideration

None of the given options

85. If: •Manufacturing Cost is Rs. 30,000 •Opening Work in Process Inventory is Rs.

5,000 •Closing Work in Process Inventory is Rs. 10,000 Then:What is the amount

of Cost of Goods Manufactured?

Select correct option:

Rs. 35,000

Rs. 25,000

Rs. 15,000

Rs. 20,000

86. Which of the following is/are the physical asset(s)?

Select correct option:

Term Finance Certificates

Loan Agreements

Trade Receivables

All of the given options

88. In case an item of property, plant and equipment is exchanged for similar asset of

the enterprise, the cost of the new asset is measured at the -------------- of the old

asset.

Select correct option:

Carrying value

Fair value

Future value

Salvage Value

90. If the holding company owns more then 50% but less then 100% shares of the

subsidiary company then the subsidiary type will be termed as:

Select correct option:

Partially owned subsidiary

Wholly owned subsidiary

Direct subsidiary

Indirect subsidiary

91. Which of the following is NOT related to the qualitative characteristics that make

financial information useful?

Select correct option:

Reliability only

Relevancy only

Both Reliability and Relevancy

Understandability

92. 5:57 PM Which of the following sections of the Companies Ordinance 1984 is

related to the Statutory Meeting?

Select correct option:

Section 157

Section 158

Section 159

Section 160

95. What will be the Book value of asset if its Original cost is Rs. 100,000;

Accumulated depreciation is Rs. 40,000; and Depreciation for the year is Rs.

20,000?

Select correct option:

Rs. 140,000

Rs. 160,000

Rs. 80,000

Rs. 60,000

97. Which of the following is an example of Revenue Expenditure?

Select correct option:

Carriage paid on the purchases of goods

Transportation paid on machinery purchased

A second-hand car was purchases for Rs. 7,000 and Rs. 5,000 were spent for his repairs

and overhauling

An additional room was constructed at a cost of Rs. 15,000

98. Which of the following IAS deals with Revaluation of Assets?

Select correct option:

IAS 16

IAS 07

IAS 01

IAS 23

99. If the holding company owns marginally less than 100% shares of the subsidiary

company then the subsidiary type will be termed as:

Select correct option:

Partially Owned Subsidiary

Wholly Owned Subsidiary

Virtually Wholly Owned Subsidiary

Indirect Subsidiary

100. Which of the following is/are the Classification of Current Assets with

respect to the Companies Ordinance 1984?

Select correct option:

Cash Balance

Loans and Advances

Bank Balance

103. Which one of the following is NOT recorded under Equity section of the

Balance Sheet?

Select correct option:

Share Premium

Share Capital

Accumulated Profit

Dividend Payable

106. Which one of the following methods for inventory valuation is NOT suitable

for homogeneous units?

Select correct option:

FIFO Method

LIFO Method

Weighted Average Method

Specific Identification Method

108. Which of the following is NOT the type of Market Risk?

Select correct option:

Price Risk

Liquidity Risk

Interest Rate Risk

Currency Risk

112. Which of the following is the type of business owned by one person?

Select correct option:

Sole-Proprietorship

Partnership

Public Limited Company

Unlimited Company

113. Which one of the following is(are) recorded under the Equity section of the

Balance Sheet?

Select correct option:

Share Premium

Reserves

Accumulated Profit

All of the given options

115. Which of the following asset is not an example of Intangible Fixed Assets?

Select correct option:

Vehicles

Good Will

Copyrights

Trade Marks and Designs

116. Which of the following represents the Qualifying Asset?

Select correct option:

Inventory routinely manufactured

Asset ready for use

Manufacturing plants

None of the given options

117. A Private limited company can be formed at least by:

Select correct option:

2 members

3 members

1 member

07 members

118. Which one of the following is an example of Financial Asset?

Select correct option:

Inventories

Patent rights

Goodwill

Accounts receivable

119. Which of the following option is/are TRUE with respect to the Disclosure

requirement for intangible assets acquired by the way of Government grants?

Select correct option:

The fair value initially recognized

Disclosure for carrying amount

Disclosure for the amount of commitments for acquisition of intangible assets

All of the given options

120. If stock valuation method is changed every year by the firm, which concept

the firm has violated?

Select correct option:

The materiality concept

The consistency concept

The prudence concept

The going concern concept

122. Question # 14 of 15 ( Start time: 01:51:03 PM ) Total Marks: 1

Which of the following sections of Companies Ordinance 1984 are related to the Non

Profit oriented entities?

Select correct option:

Section 42

Section 43

Section 44

Section 45

123. Which of the following may result for an inability to sell a financial asset

quickly at close to its fair value?

Select correct option:

Price Risk

Liquidity Risk

Interest Rate Risk

Currency Risk

124. Which of the following schedule of the Company Ordinance 1984 is related to

the classification of intangible assets?

Select correct option:

4th schedule

5th schedule

6th schedule

2nd schedule

125. The closing stock will be shown under the head of _______ in Balance Sheet.

Select correct option:

Non current Assets

Current Assets

Intangible Assets

Tangible Assets

126. Which of the following is another name for Authorized Capital of a

company?

Select correct option:

Nominal Capital

Issued Capital

Subscribed Capital

Paid up Capital

127. Which of the following is/are excluded from Financial Assets?

Select correct option:

Physical Assets

Inventories

Prepaid expenses

All of the given options

130. Which of the following statement shows the financial position of the

business?

Select correct option:

Cash Flows Statement

Income Statement

Balance Sheet

Statement of Owner's equity

131. According to the Benchmark Treatment, Which of the following method is

used for stock valuation?

Select correct option:

FIFO Method or LIFO Method

LIFO Method

FIFO orWeighted Average Method

Specific Identification Method

132. If the holding company owns100% shares of the subsidiary company then

the subsidiary type will be termed as:

Select correct option:

Partially Owned Subsidiary

Wholly Owned Subsidiary

Direct Subsidiary

Indirect Subsidiary

133. Under which of the following methods for inventory valuation, costs of

earliest purchases assumed still to be in inventory?

Select correct option:

FIFO Method

LIFO Method

Weighted Average Method

Specific Identification Method

134. What is the maximum number of shareholders allowed for a Public Limited

Company?

Select correct option:

20

50

10

Unlimited

135. Which of the following is/are equal to “Capital”?

Net Assets

Assets – Liabilities

Net worth of the firm

All of the given options

136. Which of the following is the amount for which an asset could be exchanged

between knowledgeable, willing parties in an arm’s length transaction?

Depreciable Amount

Fair Value

Cost

Carrying Amount

2

137. Which of the following asset is NOT an example of Tangible Fixed Assets?

Patent rights

Furniture

Vehicles

Machinery

138. Which of the following schedule provides disclosure requirements for Listed

Companies under Companies Ordinance 1984?

4th schedule

5th schedule

6th schedule

2nd schedule

139. Which one of the following schedule provides disclosure requirements for

Non-Listed Companies under Companies Ordinance 1984?

4th schedule

5th schedule

6th schedule

2nd schedule

141. Which of the following is NOT an accounting concept?

Prudence

Going concern

Depreciation

Matching

142. Depreciation is:

A systematic allocation of depreciable amount of an asset over its estimated useful life

The end life of an asset

The increase in value of asset

Another name of Impairment

144. Which of the following represents the interest and other costs incurred by an

entity in connection with the borrowing of funds?

Loan

Interest on borrowed money paid during the period

Outstanding interest on borrowed money

Borrowing Costs

145. When we see the capital with Production capacity or operating capability of

the enterprise then it called:

The financial concept of capital maintenance

The physical concept of capital maintenance

Both physical and financial concept of capital maintenance

Neither physical nor financial concept of capital maintenance

146. Which of the following is/are example(s) of research activities?

Activities aimed at obtaining new knowledge

The search, evaluation, final selection and application of research findings

The search for alternatives

All of the given options

147. which one of the following is(are) NOT recorded under Current Liabilities

section of the Balance Sheet?

Select correct option:

Debentures

Deferred Taxation

Obligation Under Finance Lease

All of the given options

148. Which of the following section of the Companies Ordinance 1984 deals with

Revaluation of Fixed Assets?

Select correct option:

Section 235

Section 236

Section 237

Section 238

149. Which of the following IAS affect(s) the recognition, presentation and

discourse of fixed assets in financial statements?

Select correct option:

IAS 01

IAS 16

IAS 23

All of the given options

Question No: 40 ( Marks: 1 ) - Please choose one

If A Limited Company entered into a contract with Pakistan Leasing Company to acquire

an asset with down payment of Rs.30, 000, semi-annual payment of Rs. 50,000 and the

lease term is 2 years. The lessee guaranteed the lessor to purchase the asset at the end of

lease term at Rs. 10,000 which is estimated residual value. Then what is the amount of

Minimum Lease Payment with respect to the lessee?

Rs. 130,000

Rs. 220,000

Rs. 230,000

Rs. 240,000

Question No: 41 ( Marks: 1 ) - Please choose one

The present value of a sum of Rs. 100 to be received in the future will be:

More than Rs. 100

Equal to Rs. 100

Less than Rs. 100

None of the given options

Question No: 42 ( Marks: 1 ) - Please choose one

Which of the following process can be defined as the process of generating earnings from

previous earnings?

Discounting

Compounding

Factorization

None of the given options

Question No: 43 ( Marks: 3 )

For what purpose Prospectus is issued by the Companies?

Question No: 44 ( Marks: 3 )

If:

Paid up capital on 1st January, 2007 was 124,000 shares of Rs. 10 each

Fresh issue of share capital on 31st March, 2007 was 24,000 shares of Rs. 10 each

Profit before tax 330,000

Tax rate 40%.p.a

Then, calculate Earning per share for 2008.

Question No: 45 ( Marks: 3 )

If:

ABC Limited exchanged Oil with XYZ Limited,

Particulars Rs.

Cost of Oil given up by ABC Limited 10,000

Cost of Oil received by ABC Limited 10,000

Then:

Pass Journal Entries in the books of both parties.

Question No: 46 ( Marks: 5 )

Classify the followings as Operating, Investing or Financing activities:

Sr.#.                             Entries                                                                        Classification

0                      Change in Accounts receivable and Inventory          Operating activity

1       Change in Property, Buildings and Equipment                                 investing activity

2     Change in Accumulated depreciation & amortization             operating activity

3     Change in Accounts payable, Accrued wages & Salaries payable   operating activity

4      Change in Note payable                                                                  operating activity

5          Net income                                                                                 operating activity

 

Question No: 47 ( Marks: 5 )

What are the different ways of defining Contingent Liabilities with respect to IAS-37?

Question No: 48 ( Marks: 10 )

For the year ended 31st December 2007, ABC Company reported a Net Income of Rs.

84,000. The opening and closing balances of Current assets and Current liabilities were

as follows:

Current Assets:          2007                                       2006

Rs. Rs.

Cash                             60,000                                       80,000

Accounts receivable      250,000                                    190,000

Inventory                      437,000                                     360,000

Prepaid expenses          12,000                          14,000

Current liabilities:

Accounts payable          420,000                                     390,000

Accrued liabilities          8,000                                        12,000

Company s Income Statement for the most recent year was as follows:

ABC Company

Income Statement

For the year ended 31st December, 2007

Rs.

Sales                                        1,000,000

Less: Cost of goods sold            580,000

Gross margin                             420,000

Less Operating expenses           300,000

Income before taxes                  120,000

Less income taxes (30%)           36,000

Net Income                               84,000

Required:

Using the direct method, convert the company s Income Statement to a cash basis if the

depreciation charges were Rs. 50,000 and the Deferred Income Taxes on the balance

sheet increased by Rs. 60,000 during the year.

An asset has been leased on July 01, 2005 at a cost of Rs. 871,000. The security deposit Rs. 300,000 and lease rentals include 4 annual installments of Rs. 200,000 each, starting from June 30, 2006. The implicit rate of return (IRR) is 15% p.a. Depreciation is to be charged at 20% on written down method and Residual value is Rs. 200,000.

Draw the entries for the following:

1. Recording of asset at the inception of lease

2. Recording of current maturity at the inception of lease

3. Payment of security deposit

4. Payment of first rental installment as on June 30, 2006

5. Recording of current maturity as on June 30, 2006

Question No: 49 ( Marks: 10 )

Briefly describe the disclosure requirements of Operating Lease with respect to standard.

 

Q. 29: (Marks 3)

If:

  • Cost of investment                                         Rs. 17,401,095
  • Company’s share in loss of subsidiary                     Rs.   3,129,441

 

Then:

             How would you disclose this matter in notes to the accounts for the year 2008?

 

Answer:

 

We will disclose this matter in notes to the accounts for the year 2008 as follows:

 

Investment in Subsidiary:

 

Cost of Investment                                                        Rs. 17,401,095

Company’s share in loss of subsidiary               Rs.   3,129,441

Net Investment                                                          Rs.  14,271654

 

Q. 30: (marks 3)

What items are included in Notes to the accounts of Stock In Trade?

 

Answer:

 

The following items may be included in Notes to the Accounts of Stock in Trade:

 

  • The Accounting Policy adopted
  • Method of Stock Valuation
  • Net Realizable Value Concept method
  • Cost Method

Q. 31: (Marks 5)

What do you know about the Bad Debts and Doubtful debts? What factors determine the debts are bad?

 

Answer:

 

Doubtful Debts:

 

Such debts which have been doubted that those debts are not recoverable are recorded in the head of Doubtful Debts.

 

Bad Debts:

 

Such debts which are not receivables conformingly are recorded as Bad debts and are written off in the current period as an expense.

 

Factors that determine bad debts are:

 

  • The debtor has been shifted to foreign forever
  • The debtor has been bankrupted
  • The debtor has been escaped without any intimation

 

Q. 32: (Marks 5)

Define Current Liabilities. What heads should be included in Current Liabilities?

 

Answer:

 

Current Liabilities:

 

The current liabilities are all of such liabilities which are expected to be paid within on accounting or period or within 12 months period.

 

Heads of Current Liabilities:

 

Mainly the current liabilities are classified into following categories:

  • Trade Payables
  • Interest Payables
  • Accrued Expenses
  • Short term Borrowings
  • Current portion of long term liabilities
  • Others (to be specified)

Explain in light of IAS 7 "Cash Flows" what is meant by Cash Flow from

Investing Activities? Give examples.

 

What is the method of recognition in case of exchange of similar assets?

What are the disclosure requirements of the Companies Ordinance 1984 for

Contingent Liabilities?

 

What conditions are to be satisfied for recognition of revenue from sale of

goods?

 

Briefly explain the following methods for measurement of elements of

financial statement:

Historical cost

Current cost

Realizable value

Present value

 

How is a surplus on revaluation of assets treated?

RSS

Main Forum Discussions By Categories Wise

Latest Activity In Forum

Newest Discussions In Forum

Most Popular Discussion

Member of The Month

1. +_Muskan khan_+

Lahore, Pakistan

Picture of The Day

  • Add Photos
  • View All

Videos

  • Add Videos
  • View All

Site Info

About Us

48000+ Members

VU Students Web Mail

Get Registered Web Mail

VUSTUDENTS Toolbar

Become a Team Member

Moderators Group

Safety Guidelines for New

Site FAQ & Rules

Safety Matters

Online Safety

Terms of Service

Disclaimer

+ Report an Issue

Advertise with Us

Rules For Blog Post

Management: Admins,Moderators

Awards Badges List

Public Us On Google

Like Our Facebook Page

© 2014   Created by + M.Tariq Malik.

Promote Us  |  Report an Issue  |  Privacy Policy  |  Terms of Service