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MGT401 Current Grand Quiz + Mid Term Quiz Fall 2020 Preparation Material Due Date: 26-12-2020

MGT401 Current Grand Quiz + Mid Term Quiz Fall 2020 Preparation Material Due Date: 26-12-2020

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Grand Quiz MGT401 Financial Accounting II

MGT401 Financial Accounting II Accounting, Banking & Finance

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MGT 401 All in One Quiz 1-45 Lectures

               

By Nawaz Chaudhry

 

 

 

  • Which of the following is NOT the Classification of Current Assets with respect to the Companies Ordinance 1984?
  • Cash Balance
  • Bank Balance
  • Premises
  • Marketable Securities

 

  • Written down value of an asset = __________?

 

 

  • Original cost – Accumulated depreciation
  • Original cost – Appreciation
  • Book value – Accumulated
  • depreciation Original cost Salvage value

 

  • Which of the following entities is not profit oriented entity?

 

  • Solo – proprietorship
  • Partnership
  • Companies
  • Foundations

 

 

  • A Partnership firm has a maximum number of partners.

 

  • 20
  • 15
  • 10
  • 02

 

  • Which of the following is NOT the Classification of Current Assets with respect to the Companies Ordinance 1984?

 

  • Stock
  • General Stores
  • Spare parts
  • Bank over draft

 

 

 

  • Which of the following IAS deals with Inventories?

 

  • IAS 38
  • IAS 23
  • IAS 02
  • IAS 16

 

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

 

  • Property, Plant & Equipment
  • Inventory
  • Financial Statements
  • Financial Instruments

 

  • IAS-16 deals with:

 

  • Property, Plant and Equipment
  • Cash Flow Statement
  • Presentation of Financial Statements
  • Earnings per share

 

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

 

  • Statutory Meeting
  • Annual General Meeting
  • Extraordinary Meeting
  • Board Meeting

 

  • Which of the following is NOT a Qualifying Asset?

 

 

  • 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

 

  • Which of the following is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding?

 

  • Research
  • Development
  • Audit
  • Accounting

 

 

 

 

 

 

 

  • Which of the following IAS deals with the Intangible Assets?

 

  • IAS 38
  • IAS 23
  • IAS 01
  • IAS 16
  • Which of the following is/are the types of stock for manufacturing concerns?

 

  • Raw Material
  • Work in Process
  • Finished Good
  • All of The Given Options

 

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

 

  • Diminishing Balance Method
  • Written Down Value Method
  • Specific Identification Method
  • Sum of Year Digit Method

 

  • All of the following are Fixed assets EXCEPT:
  • Machinery
  • Freehold land
  • Leasehold land
  • Marketable Securities

 

 

  • Which of the following schedule provides disclosure requirements for Listed Companies under Companies Ordinance 1984?

 

  • 4th schedule
  • 5th schedule both 4th and 5th
  • 6th schedule
  • 2nd schedule

 

  • Which of the following investment 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
  • An enterprise would be the subsidiary of another Enterprise if that investor Enterprise can control the subsidiary represents:

 

 

  • Subsidiary Companies
  • Holding Companies
  • Public Limited Companies
  • Private Limited Companies

 

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

 

  • FIFO Method
  • Weighted Average
  • Specific Identification of cost
  • Straight Line Method

 

 

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

 

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

 

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

 

  • Diminishing Balance Method
  • Written Down Value Method
  • Specific Identification Method
  • Sum of Year Digit Method

 

  • 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?

 

  • Applied research
  • Development
  • Business research
  • Accounting

 

  • What is the treatment of Depreciation in accounting?

 

  • Treated as a reserve
  • Treated as an expense
  • Treated as a surplus
  • Treated as a Liability

 

 

 

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

 

 

  • The design of tools, jigs, molds 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 No (38)

 

 

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

 

  • FIFO Method
  • Weighted Average Method
  • Specific Identification Method
  • All of the given options

 

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

 

  • Qualifying Assets
  • Amount to be capitalized related to the Borrowing cost
  • Capitalization period related to the Borrowing cost
  • All of the given options

 

  • Partnership firm has a maximum numbers of

 

 

  • 20
  • 15
  • 10
  • 02

 

  • Which of the following sections of the Companies Ordinance 1984 is related to the Annual General Meeting?

 

  • Section 157
  • Section 158
  • Section 159
  • Section 160

 

  • Which of the following may consist of more than 20 persons in case of partnership?

 

  • Firms of Lawyers
  • Firms of Doctors
  • Firms of Associates
  • All of the given options

 

 

 

 

  • Which one of the following is related to the Allowed Alternative Treatment for an investment in jointly controlled entities?

 

  • Consolidation Method
  • Equity Method
  • Weighted Average Method
  • Sum of Year Digit Method

 

  • Companies are registered under:

 

  • Partnership Act 1932
  • Companies Ordinance 1984
  • Partnership Agreement
  • Income Tax Ordinance 1979

 

 

  • To the Allowed Alternative Treatment, which of the following method is used for stock valuation?

 

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

 

  • Which of the following IAS deals with the Borrowing Costs?

 

 

  • IAS 23
  • IAS 07
  • IAS 01
  • IAS 16

 

  • Which one of the following is the type of stock for trading concerns?

 

  • Raw Material
  • Work in Process
  • Finished Goods
  • Stock in Trade

 

  • What is the meeting requirement for the directors of a Public Limited Company?

 

 

  • At least once in each quarter
  • At least once in each month
  • At least once in each year
  • At least once in each week

 

  • Which of the following represent(s) the Prime Cost?

 

 

  • Direct Material Cost + Direct Labor (all of the given option maybe true but not sure)
  • Cost Total Factory Cost – Factory Overheads
  • Conversion Cost – Factory Overheads + Direct Material Costs
  • All of the given options

 

 

  • Which of the following is/are examples 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

 

 

  • Which one of the following types of information is are available in 4th and 5th schedule of the Companies Ordinance 1984?

 

  • 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

 

  • Which one of the following IAS is related to the Interest in Joint Venture?

 

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

 

  • Which of the following investments are recorded using Equity Method?

 

 

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

 

  • Which one of the following is(are) recorded under the Equity section of the Balance Sheet?

 

  • Share Premium
  • Reserves
  • Accumulated Profit
  • All of the given options

 

Concept of Related Parties is defined in:

 

  • Ordinance 1984
  • IAS
  • Both Companies Ordinance 1984 and IAS
  • Neither in Companies Ordinance 1984 nor in IAS

 

 

  • Which one of the following is NOT recorded under Equity section of the Balance Sheet?

 

  • Share Premium
  • Share Capital
  • Accumulated Profit
  • Dividend Payable

 

 

  • 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

 

 

  • Which of the following is the Classification of Current Assets with respect to the Companies Ordinance 1984?

 

  • Building
  • Land
  • Premises
  • Marketable Securities

 

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

 

  • FIFO Method
  • Weighted Average Method
  • Specific Identification Method
  • Straight Line Method

 

 

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

 

  • Section 235
  • Section 236
  • Section 237
  • Section 238

 

  • Preparation and presentation of Financial Statements are governed by:
  • Companies Ordinance 1984
  • International Accounting Standards
  • International Financial Reporting Standards
  • All of the given options

 

  • Partnership firms are registered under which of the following?

 

  • Partnership Act 1932
  • Companies Ordinance 1984
  • Partnership Agreement
  • Income Tax Ordinance 1979

 

  • 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

 

 

  • 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

 

  • 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

 

  • 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

 

 

  • 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 Page No (51)
  • Material Consumption Account becomes the part of Trading Account

 

  • Which of the following IAS deals with the Associated Companies?

 

  • IAS 27
  • IAS 28
  • IAS 01
  • IAS 07

 

 

 

  • Which of the following is the deduction or allowance allowed by a creditor to a debtor?

 

  • Trade Discount
  • Cash Discount
  • Purchases return
  • Sales return

 

  • 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

 

  • 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
  • Which of the following investments are recorded using Equity Method?

 

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

 

  • 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?

 

  • 20,000
  • 40,000
  • 80,000
  • 60,000

 

Formula (100,000/20%=80,000/2year, =40,000)

 

 

  • 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

 

 

 

 

 

  • 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
  • Octroi duty paid on goods

 

 

  • 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 Page No (20)
  • Fair value
  • Future value
  • Salvage Value

 

 

  • The term “Significant Influence” refers to the:

 

 

  • Ability to participate but not to control financial and management affairs of the enterprise Page No (10)
  • 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

 

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

 

  • Vehicles
  • Good Will
  • Copyrights
  • Trade Marks and Designs

 

 

  • Which of the following entities is profit oriented entity?

 

  • NGOs
  • Trust
  • Societies
  • Sole – proprietorship Page No (1)

 

  • 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 page No (61)

 

 

 

 

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

 

  • 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 Page No (43)

 

  • 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 Page No (21)

 

  • According to the Prudence concept, Stock should be included in Balance Sheet at:

 

  • Cost
  • Its net Realizable value
  • Lower of its total cost or its total net realizable value Page No (47)
  • Higher of its total

 

 

  • Which one of the following is NOT the component of cost?

 

  • Import duties
  • Installation costs
  • Cost of site preparation
  • Transportation outwards

 

 

  • Which one of the following is related to the Benchmark Treatment for an investment in jointly controlled entities?

 

  • Proportionate Consolidation Method Page No (75)
  • Equity Method
  • LIFO Method
  • Specific Identification Method
  • 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

 

  • Which one of the following is a fixed asset?

 

  • Cash in hand
  • Advanced payment
  • Closing stock
  • Leasehold vehicle

 

 

  • Which of the following is an identifiable non-monetary asset without physical substance?

 

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

 

  • 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

 

 

  • 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 Page No (146)

 

 

  • If the holding company owns more than 50% but less than 100% shares of the subsidiary company then the subsidiary type will be termed as:

 

  • Partially owned subsidiary Page No (11)
  • Wholly owned subsidiary
  • Direct subsidiary
  • Indirect subsidiary

 

 

 

 

 

 

  • If stock valuation method is changed every year by the firm, which concept the firm has violated?

 

  • The materiality concepts
  • The consistency concepts
  • The prudence concepts
  • The going concern concept

 

  • Which one of the following is TRUE with respect to “FIFO” in inventory valuation?

 

  • First-In-First-Out
  • First-In-Freight-Out
  • Freight-In-First-Out
  • Freight-In-Freight-Out

 

 

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

 

  • Term Finance Certificates
  • Loan Agreements
  • Trade Receivables
  • All of the given options

 

 

  • Which one of the following is NOT recorded under of Equity section the Balance Sheet?

 

  • Share Premium
  • Share Capital
  • Accumulated Profit
  • Dividend Payable

 

  • 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 Page No (18)
  • Cost
  • Carrying Amount

 

 

 

  • Which of the following is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding?

 

  • Research
  • Development
  • Audit
  • Accounting

 

  • Under which of the following methods for inventory valuation, costs of earliest purchases assumed still to be in inventory?

 

  • FIFO Method Page No (59)
  • LIFO Method
  • Weighted Average Method
  • Specific Identification Method

 

 

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

 

  • Sole-Proprietorship
  • Partnership
  • Public Limited Company
  • Unlimited Company

 

  • Which one of the following is the example of non-profit oriented organization?

 

  • NGO’s
  • Trusts
  • Societies
  • All of the given options

 

 

  • Annual General Meeting (AGM) is required to be held within ________of incorporation.

 

  • 06 months
  • 12 months
  • 15 months
  • 18 months Page No (7)

 

 

  • The amount by which the carrying amount of an asset exceeds its recoverable amount is called as:

 

  • Impairment loss Page No (18)
  • Residual value
  • Depreciation
  • Fair value

 

 

 

 

 

  • Investments made for long term in associated companies, is recorded using

______method of recognition and shown separately in the balance sheet as long- term assets.

 

  • Equity Page No (43)
  • Cost
  • Both Cost and Equity
  • None of the given options

 

  • Costs of purchase of Inventories comprising which of the following:
  • Purchase price
  • Import duties and other taxes
  • Transport less trade discount, rebate and other similar amounts
  • All of the given options Page No (47)

 

 

  • Under Benchmark Treatment IAS-2, does not recommend the following method of stock valuation for incorporating its value in financial statement.

 

  • FIFO method
  • The weighted average cost method
  • LIFO method Page No (48)
  • None of the given options

 

  • A contractual arrangement whereby, two or more parties undertake, an economic activity which is subject to joint control is called_______.

 

  • Joint Venture Page No (74)
  • Subsidiary Companies
  • Associated Companies
  • None of the given options

 

 

  • A complete set of financial statement includes which of the followings:
  • Balance sheet and Income statement
  • A statement of changes in financial position
  • Notes, other statements and explanatory material
  • All of the given options Page No (95)

 

  • In the first step of formation of a Company the availability of name is checked from SECP, that is at least two companies with same name can registered.

 

  • True
  • False

 

 

  • An increase in economic benefits during the accounting period in the form of increase of assets and decrease in liabilities is termed as Expenses.

 

  • True
  • False

 

 

 

  • In IAS 23 Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use.

 

  • True Page No (31)
  • False

 

  • Cash discounts are usually received on bulk purchase and are agreed at the time of negotiation of cost. The cost of inventory is recorded net of these discounts.

 

  • True
  • False Page No (55)

 

 

 

  • There is no concept of capital in:

 

  • Sole proprietorship
  • NGO’s / NPO’s
  • Partnership
  • Public Limited Company

 

 

  • The surplus arising from revaluation of fixed assets of an entity is shown:

 

  • Separately in the balance sheet Page No (108)
  • As indirect income in income statement
  • Added in the fixed asset
  • None of the given options

 

 

 

 

 

 

 

 

  • A Company uses FIFO method to evaluate its stock. The information for the stock is as follows:

Opening stock was 10 units at 2 each.

 Purchases were 30 units at Rs. 3 each, and

Then issues of 12 units were made, followed by issues of 8 units. Closing stock is valued at:

 

  • 50
  • 58
  • 60
  • 70

 

Formula:(OS (10) +PU (90) -(OS)10-20) =60

 

  • Statuary Meeting is required to be held within:

 

  • 3 to 6 months Page No (7)
  • 1 to 3 months
  • 6 to 9 months
  • 9 to 12 months

 

 

  • Goodwill is most appropriately classified as:

 

  • A fixed asset
  • An intangible asset
  • A fictitious liability
  • A semi-fixed asset

 

  • If a Company purchased an Asset for Rs.20, 000. The estimated useful life of asset is ten years. After five years the Book Value of the Asset will be: (using straight line method of depreciation and no residual value)

 

  • 16,000
  • 10,000
  • 8,000
  • 5,000

 

  • The main aim of accounting is to:

 

  • Maintain ledger accounts for every transaction.
  • Provide financial information to users of such information.
  • Produce a Trial balance.
  • Record every financial transaction individually.

 

 

 

 

 

 

 

  • In case of a single member company person(s) is (are) required to be nominated to take over the company in case of a death of the

 

  • One
  • Two
  • Three
  • Four

 

  • Company should be termed as a of another company if other company holds more than 50% of its shares or has the power to appoint more than 50% of its

 

  • Associated
  • Subsidiary
  • Joint Venture
  • None of the given options

 

 

  • Directors or shareholders having voting power can call for Extraordinary General Meetings (EOGM).

 

  • 10% Page No (7)
  • 15%
  • 20%
  • 25%

 

 

  • Quality control during commercial production cost Rs. 10,000/- will be charged to:

 

  • Research expenses
  • Development cost
  • Profit and Loss account
  • None of the given options

 

 

  • Which one of the following is an example of Conversion Cost?

 

  • Labor and factory overheads Page No (54)
  • Labor and work in process
  • Work in process and finished goods
  • Factory overhead and work in progress

 

  • Which of the followings are among the non-current assets?

 

  • Tangible and intangible assets
  • Operating assets
  • Financial assets of a long-term nature
  • All of the given options

 

 

  • Movement of capital issued and reserves are presented through which of the following statement?

 

  • Cash flow statement
  • Statement of changes in equity Page No (102)
  • Income statement
  • Balance sheet

 

  • A maximum limit of the amount of the capital that a company can issue is mentioned in the Memorandum of Association and Article of Association of the company is called:

 

  • Authorized capital Page No (115)
  • Issued capital
  • Subscribed capital
  • Paid up capital

 

  • Cost of inventories will consist of which of the following costs?

 

  • Purchase cost
  • Costs of conversion
  • Other costs incurred in bringing the inventories to their location and condition
  • All of the given options Page No (47)

 

 

  • Cash discounts are received on early payment of the outstanding amount. These discounts are conditional and are not reduced from the value of the

 

  • True Page No (55)
  • False

 

  • In the rare cases of conflict between an IAS and the Framework, the Framework will prevail.

 

  • True Page No (95)
  • False

 

 

  • Current assets will also include marketable securities if they are expected to be realized within twelve months of the Balance Sheet

 

  • True Page No (90)
  • False

 

 

  • Significant influence is the ability to participate and to control the financial and management affairs of the

 

  • True
  • False Page No (10)

 

 

 

 

  • International Accounting Standards (IAS) are issued by International Accounting Standard Board (IASB).

 

  • True
  • False

 

 

  • Contingent assets are:

 

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

 

 

  • A reduction of share capital can be affected through an ordinary

         

  • True
  • False

 

 

  • According to IAS 2 Inventories are assets that are not held for sale in the ordinary course of

 

  • True
  • False Page No (47)

 

  • Which assets are specifically excluded from Financial Assets?

 

  • a: Investments
  • b: Prepaid Expenses
  • c: Physical Assets
  • d: Both (b) and (c) Page No (83)

 

 

  • 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/-

 

 

  • The supplier sent an invoice for Rs. 150 which you have not yet received.
  • The supplier has allowed you Rs. 150 cash discount which you had omitted to enter in your ledgers
  • You have paid the supplier Rs. 150 which he has not yet accounted for
  • You have returned goods worth Rs. 150 which the supplier has not yet accounted for

 

  • Contingent liabilities are:

 

  • A: possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity Page No (108)
  • B: liabilities to pay for goods or services that have been received or supplied and have been invoiced or formally agreed with the supplier
  • Both (A) and (B)
  • None of the given options
  • Accounting policy once selected can never be

 

  • True
  • False

 

  • Minimum Lease Payments are:

 

  • The lease rentals payable by the lessee to the lessor
  • The contingent rent payable by lessee
  • All the payments that the lessee can be required to pay to the lessor Page No (128)
  • None of the given options.

 

 

  • IAS 23, "Borrowing Cost" requires capitalization of borrowing cost as a benchmark

 

  • False Page No (31)
  • True

 

  • Liquidity is:

 

  • Excess of income over expenditure
  • Income generating capability of the business
  • Ability of a business to pay its debts in time Page No (171)
  • Excess of expenditure over income

 

  • A revaluation loss is charged to profit and loss account in the period in which the revaluation is carried

 

  • True Page No (24)
  • False

 

 

 

 

 

 

 

 

 

  • In case of tangible non-current assets, if a policy of revaluation is adopted for the first time, then this is treated as:

 

  • No change in Accounting Policy under IAS 8
  • A change in Accounting Policy
  • A revaluation under IAS 16 Property, Plant and Equipment Page No (18)
  • None of the given options

 

  • Right shares are issued when accumulated profit is being capitalized by the issuance of shares.

 

  • True Page No (118)
  • False

 

 

  • If an entity declares dividends to the holders of equity instruments after the balance sheet date, the entity shall not recognize those dividends as a:

 

  • Equity
  • Liability
  • Liability Page No (83)
  • Asset

 

  • The information as to profitability is provided by the balance sheet of the entity.

 

  • True
  • False Page No (170)

 

  • Lease accounting is regulated by                  which was introduced because of abuses in the use of lease accounting by

 

  • IAS 17 Page No (126)
  • IAS 12
  • IAS 39
  • IAS 32

 

  • A contractual arrangement whereby, two or more parties undertake, an economic activity which is subject to join control, is called Subsidiary Companies.

 

  • True
  • False it’s joint venture Page No (74)

 

  • Which of the following 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?

 

  • Asset
  • Income
  • Expense
  • Liability Page No (100)

 

 

  • Which of the following types of business enjoys greater freedom and flexibility in making business decisions according to the economic conditions?

 

  • Private Limited Company
  • Sole-proprietorship
  • Partnership
  • Public Limited Company

 

  • Proper Books of Accounts are kept by every company under which of the following sections of the Companies Ordinance 1984?

 

  • Section 230
  • Section 233
  • Section 184
  • Section 110
  • Which of the following information must be disclosed in case of loan and advances to subsidiary companies?

 

  • name of each borrower
  • Amount of loans and advances
  • The terms of loan and the particulars of collateral security held
  • All of the given options Page No (45)

 

 

  • Which one of the following is an example of Financial Asset?

 

  • Inventories
  • Patent rights
  • Goodwill
  • Accounts receivable Page No (77)

 

  • Jason invested Rs. 100,000 in bank as bonds for nine months. At the end of the year, this invested amount will be shown in Balance Sheet under the head of:

 

  • Fixed Assets
  • Current Asset Page No (62)
  • Current Liabilities
  • Long Term Liabilities

 

  • Which of the following represents the Financial Information presented in the financial statements relating to the assets and incomes should not be overstated?

 

  • Consistency
  • Profit
  • Materiality
  • Prudence Page No (98)

 

  • Which of the following statement shows the movement of cash inflows and outflows?

 

  • Income Statement
  • Balance Sheet
  • Statement of Owner's equity
  • Cash Flows Statement Page No 86

 

  • Which of the following is an example of current liability?

 

  • Bank Overdraft
  • Stock
  • Goodwill
  • A loan repayable in two years

 

  • Which of the following is a component of current liabilities?

 

  • Assets subject to finance lease
  • Debentures
  • Provision for Taxation Page No (192)
  • Loans taken for more than five years

 

  • A damage claim of Rs.15 million for breach of contract has been served on the Company. The Company legal counsel is of the view that it is possible that the damages will be awarded to the plaintiff. However, the amount of damages cannot be reasonable estimated. What accounting treatment would be made in this regard?

 

  • A provision will be made for damages
  • Damages will be disclosed as contingent liabilities
  • Damages will be treated as accrued income
  • No treatment will be taken

 

 

 

 

 

 

  • Which of the following term represents the amount of share capital collected from the shareholders on application of shares?

 

  • Registered Capital
  • Subscribed Capital
  • Nominal Capital
  • Paid up capital

 

  • Where shares are purchased at a price above the face value, the difference shall be charged to:

 

  • Share Premium Account Page No (116)
  • Share Discount Account
  • Distributable Profit Account
  • Un-Distributable Profit Account

 

  • In case of operating lease, an asset is recorded in the books of lessee at which of the following value?

 

  • Fair value
  • Present value
  • Market value
  • Not recorded at any value

 

  • Which of the following IAS covers the Debentures?

 

  • IAS 32 only
  • IAS 39 only
  • Both IAS 32 and IAS 39 Page No (77)
  • IAS 17

 

 

  • Which of the following events are indicative of conditions that arose after Balance Sheet date?

 

  • Adjusting events after balance sheet date
  • Adjusting events before balance sheet date
  • Non - adjusting events after balance sheet date Page No (183)
  • Non - adjusting events before balance sheet date

 

 

 

 

 

 

 

 

 

  • Which of the following is/are the event/s after the balance sheet date with respect to IAS 10?

 

  • Adjusting events only
  • Non-adjusting events only
  • Both Adjusting and Non-adjusting events Page No (183)
  • None of the given options

 

 

 

  • Which of the following is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the control of the entity?

 

  • Contingent asset Page No (108)
  • Fixed asset
  • Current asset
  • Floating asset

 

  • Which of the following is/are related to the IAS-37?

 

  • Contingent Assets
  • Contingent Liabilities
  • Both Contingent Assets and Contingent Liabilities Page No (111)
  • Inventory

 

 

  • Which of the following is the example of Certain Liabilities?

 

  • Creditors against supplies
  • Accruals against expenses
  • Provision against expected losses
  • Provision against expected profits

 

  • An equity instrument that is subordinate to all other classes of equity instruments is:

 

  • Ordinary share Page No (186)
  • Potential ordinary share
  • Warrants
  • Options

 

 

 

 

 

 

 

 

 

  • Which of the following is/are Financial Instruments that give the holder, the right to purchase ordinary shares?

 

  • Equity shares
  • Potential ordinary shares
  • Warrants or Options (IAS 33) Page No (186)
  • Preference shares

 

  • Which of the following is widely used by investors as a measure of Company performance in comparing the results of a Company over a period of time?

 

  • Earnings Per Share Page No (186)
  • Balance Sheet
  • Cash Flow Statement
  • Notes to the accounts

 

  • Which of the following represents the Equity?

 

  • Share capital + Accumulated profit + General reserves
  • Share capital + Accumulated profit - General reserves
  • Share capital - Accumulated profit - General reserves
  • Accumulated profit - General reserves

 

  • Which of the following is included in the Equity Section of the Balance Sheet?

 

  • Share capital
  • Long term financing Page No (43)
  • Deferred cost
  • Liability against assets subject to finance lease

 

 

  • Which of the following is NOT considered as expense by their function with respect to IAS 01?

 

  • Cost of goods sold Page No (161)
  • Distribution costs
  • Administrative expenses
  • Transportation costs

 

 

 

 

 

 

 

 

 

 

  • Which of the following is TRUE?

 

  • Gross profit - Operating expenses = Operating profit
  • Cost of sales + Operating expenses = Operating profit
  • Cost of sales - Operating expenses = Net profit
  • Cost of sales - Operating expenses = Gross profit

 

 

  • An electricity accrual of Rs. 375 was treated as prepayment in preparing a trader's profit and loss account. As a result, his profit was:

 

  • Understated by Rs. 750
  • Overstated by Rs. 750
  • Understated by Rs. 375
  • Overstated by Rs. 375

 

 

  • Which of the following is the correct formula to find the Present Value? Where FV = Future Value, r = Interest rate and n = Time period

 

  • FV(1 + r)-n
  • FV (1 + r)n Page NO (140)
  • FV(1 - r)-n
  • FV(1 x r)-n

 

  • If you plan to save Rs. 5,000 with a bank at an interest rate of 8%, what will be the worth of your amount after 4 years if bank offers simple interest?

 

  • 5,400
  • 5,900
  • 6,600
  • 6,802

 

 

 

  • What will be the purchase source at the time of re-purchase of shares?

 

  • The purchase shall be in cash and out of the distributable profits. Page No (118)
  • The purchase shall be in cash and out of the un-distributable profits.
  • The purchase shall be in credit and out of the distributable profits.
  • The purchase shall be in cash and out of the Revaluation surplus profits

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