MCQs Model Test

Q1. Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as

1. Contingent liability
2. Liability
3. Provision
4. Reserve

Answer: C

Q3. For charging depreciation, on which of the following assets, the depletion method is adopted?

1. Wasting Assets (Mines)
2. Land
3. Goodwill
4. All of these

Q4. Cost of Machinery Rs. 80,000, Salvage Value Rs. 5,000, estimated life 4 years. Depreciation for the first year by sum of digit method is

1. Rs. 30,000
2. Rs. 15,000
3. Rs. 12,000
4. Rs. 7,500

Q5. When the incoming partner brings his share of goodwill in cash, the amount of brought-in share of goodwill is credited to

1. Cash Account
2. Bank Account
3. Premium for Goodwill
4. Old Partner’s Capital Account

Q6. For shares issued to promoters for their services, account debited is

1. Goodwill Account
2. Promotion Expenses Account
3. Promoters Account
4. Directors Account

Q7. Transaction between business and owner are recorded following..................concept.

1. Periodicity
2. Business Entity
3. Prudence
4. Going Concern

Q8. One of the Fundamental accounting assumption is

1. Materiality
2. Going Concern
3. Business entity
4. Dual aspect

Q9. X Ltd. depreciate machinery by written down value method year after year due to

1. Consistency
2. Comparability
3. Convenience
4. All of these

Q10. Contra-entries are passed only when

1. Double column cash book is prepared
2. Three-column cash book is prepared
3. Simple cash book is prepared
4. None of these