InterviewSolution
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InterviewSolution
This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 501. |
What is gross profit+ materials consumed ? |
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Answer» Purchases |
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| 502. |
What is Going Concern Concept (Assumption)? |
| Answer» Solution :According to this concept, it is ASSUMED that business enterprise will CONTINUE for a foreseeable PERIOD and there is no INTENTION to close the business or scale down its operation significanty | |
| 503. |
What is Error of Principle? |
| Answer» SOLUTION :Error of Principle ARISES when the transaction is RECORDED IGNORING the distinction between the CAPITAL item and revenue item. | |
| 504. |
What is Dissolution of Partnership ? |
| Answer» Solution :Dissolution of PARTNERSHIP means CHANGE in EXISTING relations of the PARTNERS. The firm CONTINUES its business. | |
| 505. |
What is Dual Aspect Concept of accounting? |
| Answer» SOLUTION :ACCORDING to this principle, EVERY transaction has two aspects (ie, DEBIT and Credit) and both the aspects are recorded in the books of account | |
| 506. |
What is dissolution of a firm ? |
| Answer» | |
| 507. |
What is Depreciation? |
| Answer» Solution :DEPRECIATION means fall in the value of FIXED ASSETS due to their use in business,PASSAGE of time or OBSOLESCENCE | |
| 508. |
what is Debt to Equity Rati0 ? |
| Answer» SOLUTION :Debt to EQUITY Ratio expresses a relationship between DEBTS (EXTERNAL equities) and the equity (internal equities) | |
| 509. |
What is Debit Voucher? |
| Answer» Solution : Debit Voucher is the DOCUMENTARY EVIDENCE of the cash PAYMENT | |
| 510. |
What is Debentures Redemption Reserve (DRR)? |
| Answer» SOLUTION :DRR is a reserve created out of profits available for dividend forthe PURPOSE of REDEMPTION of debentures. | |
| 511. |
What is Credit Note? |
| Answer» Solution : A CREDIT Note is a document sent by the SELLER to a customer showing that the Customer's Account has been CREDITED with the AMOUNT shown. | |
| 512. |
What is Credit Voucher? |
| Answer» Solution :Credit VOUCHER is the DOCUMENTARY EVIDENCE of CASH receipt | |
| 513. |
What is Contingent Liability? |
| Answer» SOLUTION :CONTINGENT Liability is that liability which MAY become payable DEPENDING on a HAPPENING in future. | |
| 514. |
What is Comparative Balance Sheet ? |
| Answer» SOLUTION :Comparative BALANCE Sheet ANALYSIS is the study of the trend of same items, group of items and computed items in two or more Balance Sheets of the business enterprise on DIFFERENT dates. | |
| 515. |
What Is Cash Book? |
| Answer» Solution :CASH BOOK is a special Journal in which all cash transactions are RECORDED. | |
| 516. |
What is Capital Reserve? |
| Answer» Solution : CAPITAL RESERVES are CREATED out of the profits of capital nature, which are not available for distribution as CASH dividend | |
| 517. |
What is Capital Fund? |
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Answer» |
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| 518. |
What is Basic Accounting Equation? |
| Answer» SOLUTION : Assets=Capital+ LIABILITIES | |
| 519. |
What is book keeping ? |
| Answer» Solution :Book keeping is a PART of accounting and is CONCERNED with RECORD keeping or maintenance of books of accounting which is often routine and clerical in NATURE . | |
| 520. |
What is Balance Sheet? |
| Answer» Solution :A BALANCE Sheet is a STATEMENT of assets and liabil TIES of an ENTERPRISE at a given date. | |
| 521. |
What is an Accrued Income? |
| Answer» Solution : Accrued Income means income which has been earned by the BUSINESS during the accounting YEAR but which has not YET become DUE and, therefore, has not been received. | |
| 522. |
What is an Accouting Cycle ? |
| Answer» Solution :An ACCOUNTING Cycle is a COMPLETE sequence BEGINNING with the recoding of the transactions and ening with the preparation of final accounts . | |
| 523. |
What is Amortisation? |
| Answer» Solution :Amortisation REFERS to the economic deterioration of INTANGIBLE assets LIKE goodwill.patents, trademarks, COPYRIGHTS, etc. | |
| 524. |
What is adjusted purchases? |
| Answer» SOLUTION :ADJUSTED Purchases Net Purchases+Opening STOCK - Closing Stock | |
| 525. |
What is Accounting Entity Assumption (or business Entity Assumption) ? |
| Answer» SOLUTION :According to this ASSUMPTION , a business is treated as a separate entiy that is distinct from its owner'(s) and all other ECONOMIC proprieto₹ . | |
| 526. |
What is a Suspense Account? |
| Answer» Solution :SUSPENSE Account is an account in which the AMOUNT of difference in the Trial Balance is put till such TIME that erro₹ are located and rectified | |
| 527. |
What is a share ? |
| Answer» SOLUTION :TOTAL CAPITAL of the Company is divided in UNITS of SMALL denominations such as Rs. 10 or Rs. 100. Each such unit is called share. | |
| 528. |
What is a Receipts and Payments Account? |
| Answer» Solution : A RECEIPTS and PAYMENTS Account is a summary of BANK and cash transactions. It is based on cash basis of accounting. Receipts are shown on the left HAND side while payments are shown on the right hand side. It starts with the opening cash and bank BALANCES and ends with their closing balances. | |
| 529. |
What is a Not-For-Profit Organisation? Give two examples. |
| Answer» Solution :A Not-For-Proit Organisation is a VOLUNTARY association ofpersons set-up for the WELFARE of the society or charltable activities or for the promotion of art, culture and sports, etc. EXAMPLES are: SCHOOLS, charitable HOSPITALS, sports associations, etc. | |
| 530. |
What is a contingent liability? Where is it shown in the Balance Sheet? Give an example of contingent liabilities. |
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Answer» |
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| 531. |
What is a compound Journal entry? |
| Answer» Solution : In a compound Journal ENTRY, more than ONE accounts are EITHER DEBITED or credited. | |
| 532. |
What is a bill of Exchage ? |
| Answer» Solution :Accordingto section 5 of the NEGOTIABLE Instrument Act,1881 ,A bill of exchange is an instrument in writing ,Containing an unconditional order ,SIGNED by the maker,DIRECTING a certainperson to pay a certain sum of money only to ,or to the order of ,a certainperson or to the BEARER of the instrument ." | |
| 533. |
What is a Bank Reconciliation Statement? |
| Answer» SOLUTION :Bank Reconciliation Statement is a statement which recondles the bank BALANCE as per Cash Book with the balance as per Bank PASS Book (or Statement) by showing all CAUSES of differences between the two. | |
| 534. |
What does'return on investment' ratio indicate? |
| Answer» | |
| 535. |
What does proprietary ratio indicate? |
| Answer» | |
| 536. |
What does Profit and Loss Account show? |
| Answer» SOLUTION : It SHOWS the Net PROFIT EARNED, i.e., GROSS Profit less Expenses incurred during the year | |
| 537. |
What does 'ROI' ratio indicate? |
| Answer» SOLUTION :RETURN on Investment (ROI) ratio indicates the profit EARNED on the capital invested in the business. | |
| 538. |
What does Operating Ratio of 65.40 % indicates against Industry Standard of 75%? |
| Answer» Solution : It INDICATES that the COMPANY has PERFORMED better as its operating cost is lower. | |
| 539. |
What does Liquid Ratio of 0.78 : 1 indicate ? |
| Answer» Solution :It indicates that the company may face peoblems in MEETING its immediates liabilities on TIME .It is CONSIDERED that Quick Ratio of 1: 1 is better. | |
| 540. |
What does Gross Profit Ratio indicate? |
| Answer» SOLUTION :GROSS PROFIT Ratio indicates the RELATIONSHIP between gross profit and Revenue from Operations (Net Sales). | |
| 541. |
What does low Trade Receivables Turnover Ratio indicate? |
| Answer» SOLUTION :It MAY be an INDICATION of long credit period or SLOW realisation from debtors. | |
| 542. |
What does it mean-Collection period of 1.5 months ? |
| Answer» SOLUTION : The COLLECTION PERIOD of 1.5 months or 45 days implies that DEBTS are collected in 45 days. | |
| 543. |
What does gorss profit ratio indicate? |
| Answer» | |
| 544. |
What does an Irredeemable Debenture mean? |
| Answer» Solution :IRREDEEMABLE DEBENTURES or perpetual Debentures are those debentures which are not repayable during the LIFETIME of the COMPANY. | |
| 545. |
What does a Trading Account show? |
| Answer» Solution : It SHOWS the Gross Profit,I.e., EXCESS of Revenue from OPERATIONS over COST of Revenue from Operations, earned during the YEAR. | |
| 546. |
What does a low Working Capital Turnover Ratio indicate? |
| Answer» SOLUTION :It is an indication of inefficiency of working CAPITAL MANAGEMENT. | |
| 547. |
What does a low working capital trunover ratio indicate? |
| Answer» | |
| 548. |
What does a low trade receivable trunover ratio indicate? |
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| 549. |
What does a company create 'Debentures Redemption Reserve'? |
| Answer» SOLUTION :Debentures Redemption RESERVE (DRR) is CREATED when debentures have to be redeemed out of PROFITS. It is created before redemption of debentures. | |
| 550. |
What does a low Proprietary Ratio mean? |
| Answer» Solution : It MEANS more USE of long-term DEBTS in FINANCING total assets of the business | |