FINANCE AND ACCOUNTS EXAM QUESTION ANSWERS

FINANCE AND ACCOUNTS EXAM QUESTION ANSWERS
FINANCE AND ACCOUNTS MULTIPLE CHOICE EXAM QUESTION ANSWERS
Question 1:-Which of the following is not an intangible asset ?
 A:-Goodwill
 B:-Computer software
 C:-Copy rights and patents
 D:-None of the above
 Correct Answer:- Option-D
Question 2:-Which of the following is not classified as 'Inventories' ?
 A:-Work-in-progress
 B:-Stores and spares
 C:-Loose tools
 D:-None of the above
 Correct Answer:- Option-D
Question 3:-Which of the following can be ignored for paying dividend out of revenue profit ?
 A:-Arrears of depreciation
 B:-Accumulated losses (losses during earlier years)
 C:-Transfer a certain percentage of profit to reserves
 D:-None of the above
 Correct Answer:- Option-D
Question 4:-Which of the following is an objective of Internal Reconstruction ?
 A:-For eliminating competition
 B:-For eliminating fictitious assets
 C:-For securing larger share in the market
 D:-All the above
 Correct Answer:- Option-B
Question 5:-Which of the following is not correct for debenture issue ?
 A:-Debentures can be issued for cash
 B:-Debentures can be issued in lieu of dividend
 C:-A company can buy its own debentures
 D:-Debentures can be issued for consideration other than cash
 Correct Answer:- Option-B
Question 6:-Which of the following is not miscellaneous expenditure ?
 A:-Preliminary expenses
 B:-Research and Development expenditure
 C:-Brokerage on issue of shares
 D:-Goodwill yet to be written off
 Correct Answer:- Option-B
Question 7:-Which of the following will affect the trial balance ?
 A:-Loan given to employee was accounted as salary paid
 B:-Repairs to building debited to Building A/c
 C:-Sales return was accounted as purchase
 D:-None of the above
 Correct Answer:- Option-D
Question 8:-Payout ratio indicates as to
 A:-What proportion of net profit has been used for paying dividend ?
 B:-What proportion of revenue has been used for meeting expenses ?
 C:-What proportion of earnings per share has been used for paying dividend ?
 D:-What proportion of net profit has been used for paying interest and tax ?
 Correct Answer:- Option-C
Question 9:-Determination of the amount of provision for doubtful debts in accounting is
 A:-Policy
 B:-Estimate
 C:-Parameter
 D:-None of the above
 Correct Answer:- Option-B
Question 10:-Change in method of depreciation is a change in
 A:-Accounting Policy
 B:-Accounting Method
 C:-Measurement Discipline
 D:-None of the above
 Correct Answer:- Option-A
Question11:-The poetic work written by Kumaran Asan on the basis of the book The Gospel of Buddha
 A:-Duravastha
 B:-Leela
 C:-Karuna
 D:-Nalini
 Correct Answer:- Option-C
Question12:-Author of Jatikkummi ?
 A:-Pandit K. P. Karuppan
 B:-Kumaran Asan
 C:-Sri Narayana Guru
 D:-Muloor
 Correct Answer:- Option-A
Question13:-Which palace is known as Mural Pagoda ?
 A:-Dutch Palace, Bolgatty
 B:-Hill Palace, Thrippunithura
 C:-Krishnapuram
 D:-Padmanabhapuram
 Correct Answer:- Option-D
Question14:-The magazine started by Namboothiri Yuvajana Sangham in 1920
 A:-Kahalam
 B:-Paura Prabha
 C:-Unni Namboothiri
 D:-Yuvajana Vartha
 Correct Answer:- Option-C
Question15:-The brain behind Ezhava Memorial
 A:-T. K. Madhavan
 B:-G. P. Pillai
 C:-R. Sankar
 D:-Dr. Palpu
 Correct Answer:- Option-D
Question16:-Samatwa Samajam was founded by
 A:-Thyeaud Ayya
 B:-Vaikunta Swamikal
 C:-Brahmananda Sivayogi
 D:-Vagbhatananda
 Correct Answer:- Option-B
Question17:-Sree Narayana Sevika Samajam, Aluva, was founded by
 A:-Parvathi Ayyappan
 B:-Arya Pallom
 C:-Devaki Narikkattiri
 D:-Priyadatta Kallatt
 Correct Answer:- Option-A
Question18:-First Printing Press was established in which District ?
 A:-Thiruvananthapuram
 B:-Kollam
 C:-Kottayam
 D:-Alappuzha
 Correct Answer:- Option-C
Question19:-Herman Gundert belonged to which missionary movement ?
 A:-CMS
 B:-Basel Mission
 C:-LMS
 D:-Zenana Mission
 Correct Answer:- Option-B
Question20:-Who was the author of the poem 'Ente Gurunathan' about Gandhiji ?
 A:-Vallathol
 B:-Ulloor
 C:-Kumaran Asan
 D:-Mannathu Padmanabhan
 Correct Answer:- Option-A
Question21:-Which of the following statement is not correct in relation to reduction of share capital ?
 A:-A special resolution must be passed for the reduction of share capital
 B:-Reduction of capital is subject to confirmation by the court
 C:-Articles of association must authorise the company to reduce its share capital
 D:-None of the above
 Correct Answer:- Option-D
Question22:-Which of the following statement is not correct in relation to redemption of preference shares ?
 A:-Partly paid up preference shares cannot be redeemed
 B:-Capital redemption reserve cannot be used for issuing bonus shares
 C:-Premium on redemption of preference shares can be provided out of share premium account
 D:-None of the above
 Correct Answer:- Option-B
Question23:-Which one of the following transactions will affect the flow of fund (Fund flow statement) ?
 A:-Cash sale of goods
 B:-Goods sold on credit
 C:-Machinery sold to a creditor to settle his account
 D:-Providing depreciation for a fixed asset
 Correct Answer:- Option-C
Question24:-Which among the following profit is taken to calculate the Earnings per share ?
 A:-Earnings after paying interest, tax and dividend to preference shareholders
 B:-Earnings after paying interest and tax, but before paying any type of dividend
 C:-Earnings after paying interest, but before paying tax and any type of dividend
 D:-Earnings before paying interest, tax and any type of dividend
 Correct Answer:- Option-A
Question25:-Which of the following method is not used for the computation of Purchase consideration ?
 A:-Ratio of exchange method
 B:-Net asset method
 C:-Net payment method
 D:-None of the above
 Correct Answer:- Option-D
Question26:-What is the value of stock if Current ratio is 2.5, Liquid ratio is 1.5 and Working capital is Rs. 30,000 ?
 A:-10,000
 B:-20,000
 C:-30,000
 D:-50,000
 Correct Answer:- Option-B
Question27:-Which of the following is available for redemption of preference shares ?
 A:-Security Premium Account
 B:-Capital Redemption Reserve
 C:-Workmen's Compensation Fund
 D:-None of the above
 Correct Answer:- Option-C
Question28:-Which of the following cannot be used for issuing bonus shares ?
 A:-Capital redemption Reserve
 B:-Securities Premium collected in cash
 C:-Capital reserve arising due to revaluation of assets
 D:-Debenture Redemption Reserve after redemption of debentures
 Correct Answer:- Option-C
Question29:-Rate of underwriting commission should not exceed
 A:-2½% of the issue price of shares
 B:-5% of the issue price of shares
 C:-5% of the market price or 2½% of the issue price of shares whichever is less
 D:-2½% of the market price or 5% of the issue price of shares whichever is less
 Correct Answer:- Option-B
Question30:-Open underwriting is an agreement for underwriting
 A:-The whole issue of shares or debentures
 B:-A part of the whole shares or debentures
 C:-Shares or debentures not subscribed by the public
 D:-To buy a fixed number of shares or debentures
 Correct Answer:- Option-C
Question 31:-Newly elected Secretary General of UNO ?
 A:-Antonio Guteress
 B:-Ban Ki Moon
 C:-Boutros Gali
 D:-Kurt Waldheim
 Correct Answer:- Option-A
Question 32:-Who won Man Booker Prize 2016 ?
 A:-Paul Beatty
 B:-Ben Okri
 C:-J. M. Coetzee
 D:-Yann Martel
 Correct Answer:- Option-A
Question 33:-Who is the first woman who climbed Mount Everest ?
 A:-Tamae Watanabe
 B:-Malavath Purna
 C:-Arunima Sinha
 D:-Junko Tabei
 Correct Answer:- Option-D
Question 34:-The Preamble of our Constitution makes no mention of
 A:-Justice
 B:-Fraternity
 C:-Liberty
 D:-Adult Franchise
 Correct Answer:- Option-D
Question 35:-First Principal of CMS College, Kottayam ?
 A:-Henry Baker
 B:-Benjamin Bailey
 C:-Joseph Fenn
 D:-Thomas Norton
 Correct Answer:- Option-B
Question 36:-First Diwan of Travancore
 A:-Sir C. P. Ramaswami Iyer
 B:-Raja Kesava Das
 C:-C. Rajagopalachari
 D:-Ramayyan Dalawa
 Correct Answer:- Option-B
Question 37:-First Trade Union formed in Kerala
 A:-Labour Union
 B:-Labour Front
 C:-Thiruvithamkoor Labour Association
 D:-Thiruvithamkoor Labour League
 Correct Answer:- Option-C
Question 38:-First autobiography in Malayalam was written by
 A:-Benjamin Bailey
 B:-Vaikom Pachu Moothathu
 C:-Vengayil Kunjiraman Nair
 D:-V. C. Balakrishna Panicker
 Correct Answer:- Option-B
Question 39:-Author of Malabar Manual
 A:-Lt. Ward and Conner
 B:-T. K. Velu Pillai
 C:-P. Shangunni Menon
 D:-William Logan
 Correct Answer:- Option-D
Question 40:-The peculiar dance form of Kerala
 A:-Bharatanatyam
 B:-Kuchippudi
 C:-Mohiniyattam
 D:-Koodiyattam
 Correct Answer:- Option-C
Question41:-______ method is most suitable in times of decreasing the price of raw materials in the market.
 A:-FIFO
 B:-LIFO
 C:-Base stock
 D:-Average cost
 Correct Answer:- Option-A
Question42:-Which among the following results in the over absorption of overheads ?
 A:-Actual volume of output is less than the estimated lebvel of production
 B:-Overhead actually incurred is more than the estimated overhead
 C:-Standard overhead recovery rate fixed is more than the actual
 D:-None of the above
 Correct Answer:- Option-C
Question43:-Breakeven point will not be changed if
 A:-P/V ratio is decreased
 B:-Sales volume is decreased
 C:-Selling price per unit is decreased
 D:-Variable cost per unit is decreased
 Correct Answer:- Option-B
Question44:-Margin of safety is increased when
 A:-Variable cost per unit is increased
 B:-Fixed cost is decreased
 C:-Selling price per unit is decreased
 D:-Sales volume is decreased
 Correct Answer:- Option-B
Question45:-Calculate Fixed cost if P/V ratio is 40% and Margin of Safety is Rs. 30,000, which is 15% of sales
 A:-Rs. 68,000
 B:-Rs. 70,000
 C:-Rs. 75,000
 D:-Rs. 1,70,000
 Correct Answer:- Option-A
Question46:-Which among the following is correct ?
 A:-Fixed Overhead Volume Variance = Capacity Variance + Calendar Variance + Efficiency Variance
 B:-Fixed Overhead Capacity Variance = Volume Variance + Calendar Variance + Efficiency Variance
 C:-Fixed Overhead Cost Variance = Capacity Variance + Volume Variance + Efficiency Variance
 D:-None of the above
 Correct Answer:- Option-A
Question47:-Which among the following is not a costing technique ?
 A:-Process Costing
 B:-Standard Costing
 C:-Marginal Costing
 D:-Budgetary Control
 Correct Answer:- Option-A
Question48:-Which of the following is not treated as selling and distribution overhead in cost accounts ?
 A:-Advertisement
 B:-Cash discount
 C:-Salesmen salary
 D:-None of the above
 Correct Answer:- Option-B
Question49:-Materials requisition denotes
 A:-An authorisation to store keeper to issue materials
 B:-Formal demand to the purchase department to purchase an item
 C:-List of materials required for a particular job
 D:-None of the above
 Correct Answer:- Option-A
Question50:-Which of the following is included in Cost accounts ?
 A:-Bad debt
 B:-Loss due to strike
 C:-Income tax paid
 D:-Underwriting commission
 Correct Answer:- Option-A
Question51:-Which of the following item is not added/subtracted to/from purchase price to arrive at the material cost price
in cost accounting ?
 A:-Trade discount allowed by the suppliers
 B:-Quantity discount allowed by the suppliers
 C:-Cash discount allowed by the suppliers
 D:-Excise duty paid for the goods purchased
 Correct Answer:- Option-C
Question52:-Which of the following is not a method of pricing of material issue ?
 A:-HIFO Method
 B:-Inflated Price Method
 C:-Standard Price Method
 D:-None of the above
 Correct Answer:- Option-D
Question53:-Time booking means
 A:-Correct recording of employees' attendance time
 B:-Recording actual time taken by worker on various jobs
 C:-Recording of employees' attendance, absence, normal loss and abnormal loss of working hours
 D:-All the above
 Correct Answer:- Option-B
Question54:-Rowan Plan is an example of
 A:-Time rate system
 B:-Piece rate system
 C:-Incentive scheme
 D:-Differential piece rate system
 Correct Answer:- Option-C
Question55:-Over-absorbed or under-absorbed overheads may be disposed off by
 A:-Use of supplementary rate
 B:-Write off to Costing Profit and Loss Account
 C:-Carry forward to the next year's account
 D:-All the above
 Correct Answer:- Option-D
Question56:-Prime cost plus variable overheads is known as
 A:-Cost of sales
 B:-Production cost
 C:-Marginal cost
 D:-Total cost
 Correct Answer:- Option-C
Question57:-In process costing, __________ will not affect the cost of inventory.
 A:-Normal loss
 B:-Abnormal loss
 C:-Standard loss
 D:-Seasonal loss
 Correct Answer:- Option-B
Question58:-In sugar industry, molasses is
 A:-Joint product
 B:-Bye-product
 C:-Waste
 D:-Scrap
 Correct Answer:- Option-B
Question59:-Which of the following entry is applicable in relation to abnormal gain in process account ?
 A:-Process A/c is debited and Abnormal Gain A/c is credited
 B:-Abnormal Gain A/c is debited and Normal loss A/c is credited
 C:-Abnormal gain A/c is debited and Costing Profit and loss A/c is credited
 D:-None of the above
 Correct Answer:- Option-D
Question60:-Which of the following is added to costing profit to arrive at financial profit ?
 A:-Income Tax paid
 B:-Under absorption of overheads
 C:-Rent received
 D:-Interest on debentures paid
 Correct Answer:- Option-C
Question61:-Which of the following is not a long term financial decision ?
 A:-Dividend decision
 B:-Financing decision
 C:-Liquidity decision
 D:-Investment decision
 Correct Answer:- Option-C
Question62:-Contingent investments mean
 A:-Choice of one investment necessitates undertaking one or more other investment (s)
 B:-Investments made during emergency situations in which no emphasis for profit
 C:-Investments made for disposing when a contingency occurs in future
 D:-None of the above
 Correct Answer:- Option-A
Question63:-Which of the following is not applicable to Mutually Exclusive Investments ?
 A:-They serve the same purpose
 B:-They compete with each other
 C:-If one is undertaken, others will have to be excluded
 D:-None of the above
 Correct Answer:- Option-D
Question64:-Which of the following is not correct in the case of NPV Method ?
 A:-Appropriate discount factor is identified using the opportunity cost of capital
 B:-Expected net profit in the whole life of the asset is taken into account for discounting
 C:-Annual depreciation to be provided for the asset is ignored for evaluating the project
 D:-Salvage value of the asset is discounted for the evaluation
 Correct Answer:- Option-B
Question65:-Which of the following method does not consider the time value of money ?
 A:-NPV Method
 B:-ARR Method
 C:-Profitability Index Method
 D:-None of the above
 Correct Answer:- Option-B
Question66:-Which of the following statement is not correct ?
 A:-NPV of a project declines as the discount rate increases
 B:-NPV will be negative if discount rate is lower than IRR
 C:-Project is rejected if IRR is lower than the opportunity cost of capital
 D:-None of the above
 Correct Answer:- Option-B
Question67:-When Profitability Index (PI) is zero,
 A:-Value of discounted future cash inflows and outflows are same
 B:-The firm will be running at BEP and hence no return on investment
 C:-Expected total revenues are equal to total variable cost (excluding depreciation)
 D:-None of the above
 Correct Answer:- Option-A
Question68:-Which method is most suitable to a firm if the demand of its product is based on latest technology ?
 A:-Payback Period Method
 B:-Profitability Index Method
 C:-Net Present Value Method
 D:-Average Rate of Return Method
 Correct Answer:- Option-A
Question69:-Just-In-Time (JIT) Management is a model used for the management of
 A:-Inventory
 B:-Debtors
 C:-Casual workers
 D:-Production
 Correct Answer:- Option-A
Question70:-Which of the following statement is wrong in relation to Miller-Orr-Model ?
 A:-Upper and lower limits of cash are fixed
 B:-It assumes the uniform pattern of cash inflows and outflows
 C:-It rectifies the shortcoming of Baumol's Model
 D:-None of the above
 Correct Answer:- Option-B
Question71:-Which of the following statement is correct in relation to Baumol's Model ?
 A:-It helps in determining a firm's optimum cash balance
 B:-It assumes that cash payments of the firm occur uniformly over a period of time
 C:-As per this model, cash and inventory management problems are one and the same
 D:-All the above
 Correct Answer:- Option-D
Question72:-Which among the following is a remedy for under capitalisation ?
 A:-Redeem long-term debt by issue of fresh equity shares
 B:-Issue bonus shares by capitalising accumulated earnings
 C:-Issue of right shares by capitalising accumulated earnings
 D:-None of the above
 Correct Answer:- Option-D
Question73:-Which among the following is a reason for over capitalisation ?
 A:-Under-estimation of future earnings
 B:-Liberal dividend policy
 C:-Depreciation charged at a lower rate
 D:-None of the above
 Correct Answer:- Option-A
Question74:-Float management is related to
 A:-Cash
 B:-Goodwill
 C:-Inventory
 D:-Fixed assets
 Correct Answer:- Option-A
Question75:-Lock box system is used to
 A:-Reduce the chances of delay and fraud in collection process of cash/cheque
 B:-Control the unauthorised withdrawal of cash from cash box
 C:-Control the unauthorised access of financial documents
 D:-None of the above
 Correct Answer:- Option-A
Question76:-Reverse split means
 A:-Cancellation of preference shares by redemption
 B:-Increasing the number of outstanding shares by issuing bonus shares or right shares
 C:-Increasing the face value of shares by consolidating the denomination of existing shares
 D:-Increasing the number of outstanding shares without any change in the total capital
 Correct Answer:- Option-C
Question77:-Which of the following theories says that the value of a firm does not change due to change in dividend paid ?
 A:-Walter's Model
 B:-Gorden's Model
 C:-Modigliani and Miller
 D:-None of the above
 Correct Answer:- Option-C
Question78:-Bird-in-the-hand theory is related to
 A:-Cost of capital
 B:-Capital budgeting
 C:-Dividend
 D:-None of the above
 Correct Answer:- Option-C
Question79:-Stable dividend policy means
 A:-Constant dividend per share
 B:-Constant percentage of earnings
 C:-Minimum rate of dividend per share plus extra dividend when the company has huge profits
 D:-All the above
 Correct Answer:- Option-D
Question80:-Scrip dividend means
 A:-Dividend in the form of new shares rather than in cash
 B:-Arrear dividend paid to preference shareholders in the form of assets
 C:-Issue of transferable promissory note to pay shareholders at a later date
 D:-Dividend paid before a company's annual general meeting of company as advance
 Correct Answer:- Option-C
Question81:-Teaming and lading denotes
 A:-Book keeping fraud
 B:-Delayed accounting
 C:-Hiding shortage of cash
 D:-All the above
 Correct Answer:- Option-D
Question82:-Audit conducted between two Periodical or Balance Sheet audit is known as
 A:-Interim audit
 B:-Post audit
 C:-External audit
 D:-None of the above
 Correct Answer:- Option-A
Question83:-Audit note book is maintained by
 A:-Chief auditor
 B:-Internal auditor
 C:-Audit clerk
 D:-None of the above
 Correct Answer:- Option-C
Question84:-Who is the owner of Audit working paper ?
 A:-Auditor
 B:-Client
 C:-Company
 D:-None of the above
 Correct Answer:- Option-A
Question85:-Which of the following does not affect the independence of an auditor ?
 A:-Integrity
 B:-Objectivity
 C:-Materiality
 D:-Professional Behavior
 Correct Answer:- Option-C
Question86:-Auditing planning need not cover
 A:-Acquiring knowledge about the client's accounting system
 B:-Establishing expected degree of reliance
 C:-Determining the amount of expense to be incurred
 D:-Co-ordinating the work to be performed
 Correct Answer:- Option-C
Question87:-The technique used to evaluate the internal control system in the organisation
 A:-Risk assessment procedure
 B:-Narrative records
 C:-Observation
 D:-Enquiry with management
 Correct Answer:- Option-B
Question88:-Audit documentation does not include
 A:-Audit programme
 B:-Issues Memoranda
 C:-Engagement letter
 D:-Letter of confirmation and representation
 Correct Answer:- Option-C
Question89:-The principle for verification of intangible assets are
 A:-Existence, Ownership, Valuation, Internal control
 B:-Records and registers, Ownership, Valuation, Internal control
 C:-Rights, Existence, Ownership, Valuation
 D:-Existence, Rights, Revaluation of asset, Internal control
 Correct Answer:- Option-B
Question90:-In which of the following situation the auditor will qualify his report ?
 A:-He is not satisfied with the accounts presented to him
 B:-He finds some discrepancy in the treatment of an item
 C:-Management is not ready to make the desired changes
 D:-All the above
 Correct Answer:- Option-D
Question91:-The best audit report is
 A:-Modified report with qualified opinion
 B:-Modified report with disclaimer of opinion
 C:-Unmodified report with qualified opinion
 D:-Unmodified report with unqualified opinion
 Correct Answer:- Option-D
Question92:-Goodwill is
 A:-Fictitious, but may not be intangible asset
 B:-Intangible, but may not be fictitious asset
 C:-Intangible and Fictitious asset
 D:-None of the above
 Correct Answer:- Option-B
Question93:-Which of the following is not a Deferred Revenue Expenditure ?
 A:-Experimental expenditure
 B:-Plant rearrangement and removing costs
 C:-Development expenditure in the case of plantations
 D:-None of the above
 Correct Answer:- Option-D
Question94:-Which among the following is not a Contingent liability ?
 A:-Claims against the company not acknowledged as debt
 B:-Liability in respect of bills discounted by the company, but not yet matured
 C:-Arrears of dividend on cumulative preference shares issued by the company
 D:-None of the above
 Correct Answer:- Option-D
Question95:-Wasting assets are those assets which are
 A:-Having low realisable value and hence sold as scrap
 B:-Having high rate of depreciation and maintenance cost
 C:-Exhausted in the process of working
 D:-Having huge investment, but low return
 Correct Answer:- Option-C
Question96:-Which of the following matter requiring qualification in audit report ?
 A:-Contingent liability not disclosed
 B:-Inadequate provision for doubtful debts
 C:-Investment shown at cost price when its market price is far below
 D:-All the above
 Correct Answer:- Option-D
Question97:-Which of the following profit can be used for the payment of dividend ?
 A:-Profit on sale of fixed assets
 B:-Profit on revaluation of assets
 C:-Profit on re-issue of forfeited shares
 D:-None of the above
 Correct Answer:- Option-A
Question98:-In which of the following area where different accounting policies can be adopted ?
 A:-Providing depreciation
 B:-Valuation of inventory
 C:-Valuation of investments
 D:-All the above
 Correct Answer:- Option-D
Question99:-Which of the following statement is not correct ?
 A:-Internal auditor is appointed by the shareholders of the company
 B:-Employees of the company can be appointed as the internal auditor
 C:-Internal audit is not compulsory
 D:-None of the above
 Correct Answer:- Option-A
Question100:-Teaming and lading means
 A:-Bookkeeping fraud related to cash
 B:-Misappropriation of goods
 C:-Delayed payments to creditors
 D:-Delayed payments to creditors and immediate collection from debtors
 Correct Answer:- Option-A