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Financial Accounting - Questions & Answers for Competitive Exams | GkSeries

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Questions
1. Under the diminishing balance method depreciation is calculated on _______.
  • [A] original value.
  • [B] written down value.
  • [C] scrap value.
  • [D] market value.

Answer: Option [B]

2. The amount of depreciation charged on machinery will be debited to _______.
  • [A] machinery account.
  • [B] depreciation account.
  • [C] cash account
  • [D] none of the above.

Answer: Option [B]

3. The accounts of non-trading concerns are generally maintained according to
  • [A] Mercantile accounting system.
  • [B] Cash accounting system.
  • [C] Double entry book keeping system.
  • [D] Single entry system.

Answer: Option [C]

4. The permanent, continuing and gradual shrinkage in the book value of a fixed asset is called
  • [A] depreciation .
  • [B] appreciation.
  • [C] reduction.
  • [D] computation.

Answer: Option [A]

5. Loss of usefulness occasioned by improved production methods is known as _______
  • [A] physical deterioration.
  • [B] obsolescence.
  • [C] disuse.
  • [D] none of the above.

Answer: Option [B]

6. The main source of income for non-trading concern is
  • [A] Subscription
  • [B] Sales
  • [C] Dividend on investment
  • [D] entrance fee

Answer: Option [A]

7. If the asset is sold, the provision for depreciation relating to the asset sold is transferred to _______.
  • [A] asset account.
  • [B] liability account
  • [C] P & L account.
  • [D] none of the above.

Answer: Option [A]

8. The asset account appears in the books at original cost when a ______.
  • [A] P & L account is maintained.
  • [B] balance sheet is maintained.
  • [C] provision for depreciation account is maintained.
  • [D] provision for depreciation account is not maintained.

Answer: Option [C]

9. Fire insurance and repairs on assets should be divided among the different departments on the basis of _________.
  • [A] light points.
  • [B] H.P of machine.
  • [C] value of each assets
  • [D] floor area.

Answer: Option [C]

10. Lighting expenses should be divided among the different departments on the basis of _________
  • [A] light points.
  • [B] H.P of machine.
  • [C] sales ratio.
  • [D] none of the above.

Answer: Option [A]

11. Expenses which cannot be apportioned to department must be shown in the _______.
  • [A] balance sheet.
  • [B] trading account.
  • [C] P & L account.
  • [D] P & L Appropriation account.

Answer: Option [C]

12. When goods are transferred from one department to other, the department transferring the goods should be ___________.
  • [A] debited.
  • [B] credited
  • [C] added.
  • [D] none of the above.

Answer: Option [B]

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