Commerce MCQ for PPSC FPSC KKPSC BPSC SPSC Practice Test 4

1- Sales Mustafa of Rs 10,000 not recorded in the books would affect:

A). Sales Account

B). Mustafa Account

C). Sales Account and Mustafa Account✔️

D). None of the above

2- Depreciation is a process of:

A). Valuation

B). Allocation✔️

C). Both A & B

D). None of these

3- Loss on sale of an asset should be written off against:

A). Share premium account

B). Sales account

C). Depreciation fund account

D). None of the above✔️

4- Income and expenditure account reveals:

A). Cash in hand

B). Surplus or deficiency✔️

C). Capital account

D). None of the above

5- The cost of goods and service used up in the process of obtaining revenue are called:

A). Net Income

B). Revenue

C). Expenses✔️

D). Liabilities

6- The correct form of Accounting equation is:

A). Assets+ Liabilities= equity

B).Assets-Liabilities= equity

C) Assets- Receivable= equity

D). Assets+ Receivable= equity✔️

7- What type of budget is designed to take into account forecast changes in costs, prices etc.

A). Rolling budget

B). Functional budget

C). Flexible budget✔️

D). Master budget

8- Working Capital is the:

A). Effective capital of the company when the business is in full swing.

B). Capital borrowed from the bank

C). Difference between the current assets and current Liabilities✔️

D). None of them

9- The most acceptable method of measuring income is:

A).To match the costs with revenue

B). To find out the difference in net worth as on two dates✔️

C). To apply normal rate of return on capital invested.

D). None of above

10- Up what level Agriculture income is exempt from tax?

A).Rs 80,000✔️

B).Rs 100,000

C).Futally exempt

D). Totally taxable

11- Average relief is available on the following except:

A). Donation for Charitable purpose

B). Investment in Shares

C). Retirement Annuity scheme✔️

D). None of above

12- Special tax relief is granted to a senior citizen if his age is:

A).50 years or above

B).60 years or above✔️

C).65 years or above

D). None of the above

13- When preparing balance sheet of a company. Goodwill, patents, Trade Mark and designs come under the head of:

A). Fixed Assets✔️

B). Fictitious Assets

C). Current Assets

D). None of the above

14-The role of finance function in the future will be:

A). Tactical

B). Professional Advisor✔️

C). Stewards

D). None of above

15- In principle current Assets are financed from:

A). Retained Earning

B). Long term debt

C). Issue of fresh Capital✔️

D). Current Liabilities

16- A Non-banking assets is:

A). Item of office equipment

B). Bank premises

C). Both A & B

D). None of the above✔️

17- A balance sheet is prepared to find out Financial position of a firm:

A). For a specified period

B). On a particular date✔️

C). At the time of sale of business

D). None of these

18- Assets would be overstated if necessary adjusting entry was omitted for:

A). Expired Insurance✔️

B). Accrued Salaries

C).Accrued interest Earned

D). None of these

19- Which of the following is not an intangible asset?

A).A patent

B). A trademark

C). An investment in marketable securities

D). None of these✔️

20- Advance payment are recognized as:

A). Receivable

B). Payable✔️

C). Deadbolt

D). None of these

21- If sales increase by 10% from year 1 to 2 and cost of goods sold increase only 6% , the gross profit on sales will increase by:




D). None of these

22- Which of the following amounts appears in both the income statement and balance sheet?

A). Net Income✔️

B). Accumulated depreciation

C). Dividends

D). None of these

23- In projecting the future profitability of a trading company, investors will be least concerned with changes in:

A). The gross profit rate✔️

B).The quick ratio

C). Sales volume

D). None of these

24- Revenue is most commonly recognized at time when:

A). Cash is collected

B). The order is received from customers

C). The sale in made✔️

D). None of these

25- Which of the following is ascertained by drawing up an income and expenditure account?

A). Cash is hand

B). Surplus or deficiency✔️

C). Capital Fund

D). None of these

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