Commerce MCQ for PPSC FPSC KKPSC BPSC SPSC Practice Test 2

1- A working paper which is prepared by the accountant for his own convenience is called:

A). Work sheet✔️

B). Cash Flows Statement

C). Balance sheet

D). Final Accounts

E). None of these

2- Any expenditure incurred to  increase the profit earning capacity of the concern is a:

A). Revenue Expenditure

B). Current Expenditure

C). Capital Receipt

D). Capital Expenditure✔️

3- Depreciation on fixed assets is an example of:

A).Revenue Expenditure✔️

B). Capital Expenditure

C). Deferred Revenue Expenditure

D). None of these

4- The capital receipts are shown in the balance sheet on the:

A). Liability Side✔️

B). Asset Side

C). Debit Side

D). None of these

5- Error due to wrong allocation as expenditure between capital and revenue is regarded as:

A). Error of Omission

B). Error of principle✔️

C). Compensation Errors

D). None of these

6- Premium on issue of shares can be used for:

A). Payment of Dividends

B). Writing off preliminary Expenses✔️

C). Paying Fees to Director

D). None of these

7- Pre-incorporation profit is to be credited to:

A). Capital Revenue✔️

B). Profit and Loss Account above the line

C). Profit and Loss Account below the line

D). General premium

8- The excess of purchase price over the net assets is:

A). Goodwill✔️

B). Capital Revenue

C). Preliminary Expenses

D). Share premium

9- Statutory report is necessary in the case of:

A). All companies

B). Public Limited Companies✔️

C). Foreign limited Companies

D). Private limited Companies

10- Dividends are usually paid on:

A). Called up Capital

B). Paid up Capital✔️

C). Subscribed Capital

D). None of these

11- Amount set apart to meet losses to bad debt is a:

A). Provision✔️

B). Reserve

C). Liability

D). None of these

12- Advance payment of tax is in the nature of:

A). Asset

B). Revenue Expense

C). Liability

D). Prepaid Expense✔️

13- Evaluative – positive or negative- concerning people, objects, or events are called:

A). Perceptions

B). Attitudes✔️

C). Beliefs

D). None of these

14- The auditor is required to report that Financial Statements are:

A). True and correct

B). Complete and correct

C). True and fair✔️

D). None of these

15- The auditors are appointed by the following authorities:

A). Creditors

B). Debtors

C). Share Holders✔️

D). None of these

16- Interim audit is conducted for examining the account for:

A). Full one year

B). Next one year

C). Previous one year

D). For a part of current year✔️

17- Payment should be made preferably through:

A). Cross Cheque✔️

B).Bank Draft

C). Pay order

D). Cash Basis

18- In general, the accounts in the Incomes Statement are known as:

A). Real Account

B). Contra Asset

C). Nominal Account✔️

D). Unrecorded rever account

19- In general terms, financial assets appear in the Balance Sheet on:

A). Face Value✔️

B). Current cash Value

C). Cash

D). Estimated future sales Value

20- Which of the following is least important as a measure of short -term liquidity.

A). Debtor Ratio

B). Current Ratio

C). Cash flow from operating activities✔️

D). Quick Ratio

21- External users of financial accounting information include which of the following except.

A). Investors✔️

B). Labour unions

C). Line Manager

D). General public

22- A fixed budget is:

A). A budget for single level of activity

B). A budget which ignored inflation

C). Used only for fixed cost✔️

D). An overhead cost budget

23- Heavy expenditure on advertisement of a new product is a:

A). Capital Expenditure

B). Revenue Expenditure

C). Deferred Revenue Expenditure✔️

D). None of the above

24- Subscriptions received in advance is:

A). An income

B). An Asset

C).A Liability✔️

D).A Loss

25- At the time of admission of a new partner good will raised should be written off in:

A). New profit sharing ratio

B). Old profit sharing ratio✔️

C). Sacrificing ratio

D). Gaining ratio

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