1. The practice of appending notes regarding contingent liabilities in accounting statements is in
pursuance to:
a) Convention of consistency
b) Money measurement concept
c) Convention of conservatism
d) Convention of disclosure
2. Sales are equal to:
a) Cost of goods sold + gross profit
b) Cost of goods sold - gross profit
c) Gross profit- Cost of goods sold
d) None of the above
3. Identify which is wrong rule
a) Nominal account- debit all expenses & losses
b) Real account- credit what comes in
c) Nominal account- credit all incomes & gains
d) Personal account- debit the receiver
4. The work of factory employees that can be physically associated with converting raw material into
finished goods is classified as
a) Manufacturing overhead
b) Indirect materials
c) Indirect labour
d) Direct labour
5. ______________ cost will still be incurred although a plant is shut down temporarily.
a) Cost of raw material
b) Advertising
c) Depreciation
d) Carriage
6. According to which concept business is treated as a unit apart from owner
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept
7. Variable cost per unit
a) Remains fixed
b) Fluctuates with volume of production
c) Varies in consideration with the volume of sales
d) None of the above
8. Making the provision for doubtful debts and discount on debtors in anticipation of actual bad debts
and discount is an example for which concept
a) Conservatism concept
b) Continuity concept
c) Realization concept
d) All of these
9. liabilities in balance sheet include the following items
a) Long term loan
b) Short term loan
c) Owner’s fund
d) All of these
10. Net profit is calculated in
a) Trading a/c
b) Balancesheet
c) Profit & loss a/c
d) Trial balance.