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SRI RAMAKRISHNA COLLEGE OF ARTS AND SCIENCE

Multiple Choice Questions


II B.Com (BPS)- Open Elective
ACCOUNTING FOR CORPORATE MANAGEMENT

1. Book Keeping means ___________________


A. Classifying
B. Recording
C. Summarising
D. None of these
ANSWER: B

2. Which one is current assets?


A. Building
B. Furniture
C. Stock
D. Investment
ANSWER: C

3. Bank account is _________


A. Nominal account
B. Real account
C. Personal account
D. none of these above
ANSWER: C

4. According to the going concern concept, a business entity is assumed to have:


A. long life.
B. a very short life.
C. an indefinite life.
D. a medium life.
ANSWER: A

5. Revenue is considered as being earned when:


A. cash is received.
B. production is done.
C. sale is effected.
D. purchase is done.
ANSWER: C

6. In book-keeping posting means:


A. to record the transactions from the journal to ledger.
B. to record the transactions in the journal.
C. to record the transactions in the subsidiary books.
D. to record the transactions in the cash book.
ANSWER: A

7. The basic rule of book keeping, debit the receiver and credit the giver is applicable to:
A. nominal account.
B. real account.
C. personal account.
D. drawing account.
ANSWER: C

8. The credit balance of bank account indicates:


A. amount payable by the bank.
B. amount payable to the bank
C. cash at bank.
D. loan from bank.
ANSWER: B

9. Which of the following accounts will invariably have a debit balance?


A. Bank account.
B. Accounts Receivable account.
C. Accounts payable account.
D. Loan account.
ANSWER: B

10. Which of the following accounts will invariably have a credit balance?
A. Discount account.
B. Account payable account.
C. Cash account.
D. Purchases account.
ANSWER: B

11. Which of the following accounts have only credit balance?


A. Accounts payable account.
B. Salaries outstanding account.
C. Reserve fund account.
D. All of the above accounts.
ANSWER: D

12. Which of the following accounts may have a debit or credit balance?
A. Discount Received account.
B. Sales account.
C. Trade expenses account.
D. Loan account.
ANSWER: D

13. Which of the following books should be used to record purchase of furniture on credit?
A. Cash book.
B. Journal proper.
C. Purchases book.
D. Sales book.
ANSWER: B

14. Which of the following accounts is increased by debit entries?


A. Machinery account.
B. Purchases return account.
C. Discount Received account.
D. Commission received account.
ANSWER: A

15. The credit balance in the bank account is :


A. an asset.
B. a liability.
C. an expense.
D. contingent liability.
ANSWER: B

16. Returns outward book makes a record of:


A. goods returned to the suppliers.
B. goods returned to customers.
C. goods returned to proprietor.
D. goods returned to neighbors.
ANSWER: A

17. Cash book prepared on imprest system is:


A. Two column cash book.
B. cash book.
C. petty cash book.
D. purchase book.
ANSWER: C

17. Depreciation is provided on ________


A. working capital
B. current assets
C. fixed assets
D. intangible assets.
ANSWER: C

18. Heavy advertising to launch a new product is a _____________


A. capital expenditure.
B. deferred revenue expenditure
C. other expenditure.
D. revenue expendture
ANSWER: C

19. Accounts receivable includes ____________


A. sundry debtors.
B. bill receivable.
C. promissory note.
D. all of the above.
ANSWER: D

20. Provision for bad debts is calculated on ____________


A. creditors.
B. Sales.
C. Purchases.
D. Debtors.
ANSWER: D

21. An example of revenue expenditure is ____________


A. Purchase of land.
B. Salaries.
C. Lease.
D. Purchase of buildings.
ANSWER: B

22. Balance sheet is prepared primarily with the following group in view:
A. Owners.
B. Creditors.
C. Government.
D. Management.
ANSWER: A

23. Which one the following is an example of an intangible asset?


A. Preliminary expenses.
B. Discount on issue of debentures.
C. Investments.
D. Copyrights.
ANSWER: D

24. The excess of current assets over current liabilities is called ________.
A. Net tangible worth.
B. Networth.
C. Gross working capital.
D. Net working capital.
ANSWER: C

25. The discount column of a triple column cash book records _______.
A. trade discount.
B. cash discount.
C. quantity discount.
D. seasonal discount.
ANSWER: B

26. Journal proper issued to record ________.


A. all purchases of goods.
B. all sales of goods.
C. all business expenses paid in cash.
D. all adjusting and rectification entries.
ANSWER: D

27. When machinery is sold for cash, the entry should be made in __________.
A. sales book .
B. cash book.
C. Journal.
D. petty cash book..
ANSWER: B

28. Which one of the following is an example of personal account?


A. Capital account.
B. Building account.
C. Cash account.
D. Investment account.
ANSWER: A

29. The appropriate book to record credit purchase of machinery is ________.


A. purchases book.
B. journal .
C. cash book.
D. petty cash book
ANSWER: B

30. Bills Receivable book is a ________.


A. subsidiary
B. principal book.
C. ledger.
D. memorandum book.
ANSWER: A

31. The balance of the petty cash book is _________.


A. an asset.
B. a liability.
C. an income .
D. an expenditure.
ANSWER: A
32. The balance of cash account indicates __________.
A. net income for the period.
B. net loss for the period.
C. net cash on hand.
D. net worth of the business.
ANSWER: C

33. Basic objective of cost accounting is ________.


A. tax compliance.
B. financial audit.
C. cost ascertainment
D. profit analysis.
ANSWER: C

34. Direct cost incurred can be identified with _________.


A. each department.
B. each unit of output.
C. each month.
D. each executive.
ANSWER: B

35. Overhead cost is the total of ________.


A. all indirect costs.
B. all direct costs.
C. indirect and direct costs.
D. all specific costs.
ANSWER: A

36. Operating costing is suitable for _______.


A. job order business.
B. contractors.
C. sugar industries.
D. service industries.
ANSWER: D

37. Process costing is suitable for ________.


A. hospitals.
B. oil reefing firms.
C. transport firms.
D. brick laying firms.
ANSWER: B

38. Costing refers to the techniques and processes of _________.


A. ascertainment of costs.
B. allocation of costs.
C. apportion of costs.
D. distribution of costs.
ANSWER: A

39. Cost accounting was developed because of the ____.


A. limitations of the financial accounting.
B. limitations of the management accounting.
C. limitations of the human resource accounting.
D. limitations of the double entry accounting.
ANSWER: A

40. ____________ is refers to the verification of cost accounts and check on the adherence to the
cost accounting plan
A. Cost Audit
B. Cost centre
C. Cost unit
D. Cost profit
ANSWER: A

41. Wages paid to a labour who was engaged in production activities can be termed as _______.
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.
ANSWER: A

42. The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost.
B. historical cost.
C. sunk cost.
D. shutdown cost.
ANSWER: D

43. Material control involves______________


A. consumption of material
B. issues of material
C. purchase of materials
D. purchase storage and issues of materials.
ANSWER: D

44. Material requisition is meant for


A. purchase of material
B. supply of material from stores
C. sales of material
D. none of the above.
ANSWER: B
45. ABC analysis is _____________
A. always better control
B. advantage of better control
C. at the best control
D. none of the above.
ANSWER: A

46. JIT inventory system


A. job in time
B. just inventory time
C. just in time
D. none of the above.
ANSWER: C

47. FIFO is
A. fast investment in future orders
B. first in first out
C. fast issue of first order
D. none of the above.
ANSWER: B

48. Scrap is
A. residue of raw material
B. wastage of material
C. surplus material
D. abnormal loss of material
ANSWER: A

49. Sales document is an ---------------of the company.


A. External document
B. Internal document
C. Cumulative document
D. Separate document
ANSWER: B

50. Sales order is a statement of ------------


A. Intend
B. Island
C. Income
D. Inference
ANSWER: A

51. EDI refers to -----------------


A. Electronic Design Interchange
B. Electronic Data Interchange
C. Electronic Data Interface
D. Electronic Data Interact
ANSWER: B

52. In cash basis of accounting, revenue is recognized when the ------------ is received
A. accrual
B. outstanding
C. actual receipt
D. actual payment
ANSWER: D

53. -------------- is the process to recover outstanding overdue balances.


A. Payment
B. Collection
C. Bills
D. Invoice
ANSWER: B

54. Purchase order is an order to the ----------- to provide materials.


A.Debtor
B.Supplier
C.Purchaser
D.Creditor
ANSWER: B

55. ----------- is an activity of processing to supply goods and services to final consumers.
A. Supply chain
B. Purchases
C. Sales
D. Process
ANSWER: A.

56. ---------------- company have the word Limited at the end of their names.
A. Public
B. Joint
C. Partnership
D. Private
ANSWER: D.

57. Accounting cycle starts with recording of a transaction and gets completed with -----------
A. Book closing
B. End of Accounts
C. Closing
D. none.
ANSWER: A.
58. Each acting entry has an underlying document called ----------
A. Voucher
B. Invoice
C. Bill
D. Exchange
ANSWER: A.

59. Purchase requisition is the initiation of the ------------


A. Sales
B. Purchases
C. Purchase process
D. Sales process
ANSWER: C.

60. Consumers can be defined as an -------------------


A. Customers
B. Users
C. End users
D. Debtors
ANSWER: C.

61. Inventory which is to be stored and sold when market price is high is called ---------
A. Bulls
B. Bears
C. Hedge
D. Pledge
ANSWER: C.

63. Cash Application process is ----------- process.


A. Monthly
B. Average
C. Daily
D. None of the above
ANSWER: C.

64. ------------ service are provided by Federal Reserve Bank in USA


A.
ANSWER: A.

65. Fedwire service ensures faster transfer for --------.


A. Credit
B. Loans
C. Funds
D. Cash
ANSWER: C.

66. The general ledger is the -------------- record of all transaction.


A. Alphabetical
B. Chronological
C. Consequent
D. Numerical
ANSWER: B.

67. R2R represents ----------------


A. Record to report
B. Record to respect
C. Rearrange to rack
D. Response to Record.
ANSWER: A.

68. -----------are primary books to book the journal entries or transactions


A. Journal
B. Ledger
C. Trial Balance
D. Balance Sheet
ANSWER: A.

69. All the transaction related to P2P(Procure to payment) is ----------


A. Accounts payable
B. Accounts receivables
C. Purchases
D. Sales
ANSWER: A.

70.
A.
ANSWER: C.

71.
A. Alphabetical
B. Chronological
C. Consequent
D. Numerical
ANSWER: B.
72.
A.
ANSWER: A.

73.
A.
ANSWER: C.

74. The account code can be 4 to 6 characters with ------------


A. alpha numeric or
B. only numeric
C. either of the above
D. Neither the above
ANSWER: C.

75. Business unit code represents ----------


A. The country of operation
B. Region within a country
C. Business lines
D. Both A & B
ANSWER: A.

76. The purpose of Reconciliation is to ensure the financial statement disclose a -----------
A. True and Fair view
B. Accurate values
C. Both the above
D. None
ANSWER: A.

77. Under statutory reports, the directors report is signed by the ------------------- on behalf of the
directors
A. Lawyer
B. Company Secretary
C. Director
D. Managing Director
ANSWER: B.

78. Accounts receivable is also known as


A. Trade receivables and debtors.
B. Trade Payables
C. Creditors
D. Debtors.
ANSWER: A.

79. The purpose of XBRL is to convert the -----------into a meaningful comparable information.
A. Recorded data
B. Financial data
C. Credit data
D. None
ANSWER: B.

80. Debtors has a legal obligations ------------the goods and services


A. To receive
B. To pay for
C. To attain
D. None
ANSWER: B.

81. Accounts receivable are recorded at their settlement value, they are ---------
A. Secured by collateral
B. received
C. Payable
D. not secured by collateral
ANSWER: D.

82. Entry for recording cash sales in


A. Cash / bank a/c Dr.
To Sales a/c

B. Debtors a/c Dr.


To sales a/c

C. Sales a/c Dr.


To Bank a/c

D. Bank a/c Dr.


To debtors a/c
ANSWER: A.

83. Total AR/ debtors are trade receivable resulting from -----------
A. credit sales
B. Credit purchase
C. Cash sales
D. Cash purchases
ANSWER: A.

84. To do credit sales any business would get into a -------------


A. agreement
B. master sales agreement
C. Debit note
D. Credit note
ANSWER: B.

85. Customer set up would be done in the sellers books with -----------
A. Minor name
B. Name of buyer
C. legal name of the buyer
D. none
ANSWER: C.

86. MSA represents


A. Master Sales agreement
B. Member sales agreement
C. Master in Sales agreement
D. None of the above
ANSWER: A.

87. Changing master records is called customers --------


A. Record editing
B. Editing
C. Customizing
D. Master maintenance or modification
ANSWER: D.

88. Bills of account is where customer wants the bill/ invoice to be set to ----------
A. sold to account
B. bill to account
C. ship to account
D. installation account
ANSWER: A.

89. -----------is a plan to control or improve ones credit


A. Bills management
B. Credit management
C. Accounts management
D. None of the above.
ANSWER: B.
90. One of the key components of effective credit management is -----------
A. Risk measurement
B. Credit management
C. Credit measurement
D. Debit Assessment
ANSWER: A.

91. ------- can provide the trade reference about a customer within the country or outside the
country.
A. Credit rating agencies
B. Customer Rating
C. Agencies
D. None of the above
ANSWER: A.

92. Which of the given below in credit rating agencies


A. CRISIL
B. CRIBIL
C. CRECIL
D. None
ANSWER: A.

93. Revenue recognition combines ----------


A. Actually received and paid
B. accrual accounting
C. matching principles
D. Both B and C
ANSWER: D.

94. Percentage of completion method and completed contract method is used in -----------
A. Short Term Contracts
B. Gesture periods
C. Long Term Contracts
D. None
ANSWER: C.

95. Pre billing closing reconciliation is process of data validation and analysis to ensure
appropriate -----------
A. Book keeping
B. Entry
C. Record
D. Invoice.
ANSWER: D.

96. Cash basis of accounting revenue is recognized only when the -------- is received.
A. Actual payment
B. Credit payment
C. Credit
D. Debit
ANSWER: A.
97. ----------- software solution interpreting each department / module / functions of an
enterprise.
A. ERP
B. SAP
C. SSAP
D. None
ANSWER: A.

98. ERP serves as a --------


A. Decentralized data
B. Cluster data
C. Centralized database
D. All the above
ANSWER: C.

99. ---------- are in the most power full ERPs widely used across the world.
A. FORTON
B. Oracle application & SAP
C. JAVA
D. All the above
ANSWER: B.

100. -------------is a computer based settlement and clearing facility to process the electronic
transactions.
A. ACH (Automated Clearing House)
B. Automated Warehouse
C. Automated Teller machine
D. None
ANSWER: A.

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Extra Questions , if u want u insert if anything is missing. After that delete these.
4. Drawings account is related to ___________
A. Nominal Account.
B. Personal Account.
C. Real Account.
D. None of the above
ANSWER: B

5. Which of the following is related to nominal account?


A. Bank account.
B. Commission account.
C. Furniture account.
D. Interest received account
ANSWER: B

6. Goodwill account is related to ___________


A. Nominal account.
B. Personal account.
C. Real account .
D. Tangible account.
ANSWER: C

7. Prepaid insurance is ________________


A. Nominal account.
B. Personal account.
C. Real account.
D. Prepaid account.
ANSWER: B

8. Goods destroyed by fire should be credited to _____________


A. Purchases account.
B. Sales account.
C. Loss of goods by fire account.
D. Insurance account.
ANSWER: A

9. The credit balance of bank account indicates _____________


A. amount payable by the bank.
B. amount payable to the bank.
C. cash at bank.
D. loan from bank.
ANSWER: B

10. Returns outward book makes a record of ____________


A. goods returned to the suppliers.
B. goods returned to customers.
C. goods returned to proprietor.
D. goods returned to neighbors.
ANSWER: A

11. Cash book prepared on imprest system is ______________


A. two column cash book.
B. cash book.
C. petty cash book
D. purchase book.
ANSWER: C

12. The statement sent along with purchase return is _____________


A. credit note.
B. bills payable book.
C. debit note.
D. purchases return book.
ANSWER: A

13. Debit Means:


A. Decrease in asset.
B. Increase in liability.
C. An entry on the left hand side of an account.
D. Moderate increase in liability.
ANSWER: C

14. Drawings account is related to:


A. Nominal Account.
B. Personal Account.
C. Real Account.
D. Company drawings account.
ANSWER: B

15. Which of the following is related to nominal account?


A. Bank account.
B. Commission account.
C. Furniture account.
D. Interest received account
ANSWER: B

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