Explore topic-wise InterviewSolutions in .

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.

651.

Under which major head and sub-head of the Assets part of the Balance Sheet will the following be shown: (i) Intangible Assets, (ii) Intangible Assets under Development, (iii) Investments (more than 12 months), (Iv) Deferred Tax Assets (Net), (v) Stores and Spares, and (vi) Loose Tools?

Answer»

Solution :(i) Fixed Assets: INTANGIBLE Assets under Non-current Assets;
(ii) Fixed Assets: Intangible Assets under DEVELOPMENT under Non-current Assets;
(iii) Non-current INVESTMENTS under Non-current Assets;
(iv) DEFERRED Tax Assets (Net) under Non-Current Assets;
(v) Inventories under Current Assets;
(vi) Inventories under Current Assets.
Discussion
652.

Under which line item of the financial statements following items will be shown: (i) Sales, (ii) Loss on Sale of Vehicle, (iii) Debentures, (iv) Unamortised Loss on issue of Debentures (to be written of within 12 of the date of Balance Sheet), (v) Encashable Leave Payable at the Time of Retirement, (vi) Tax Reserve, (vii) Carriage on Purchases of Stock-in-Trade, and (viii) Telephone and Internet Expenses?

Answer»

Solution :Revenue from Operations; (i)Sales ;
Other Expenses: (ii) Loss on Sale of Vehicle, (vi) TAX Reserve and (viii) Telephone and INTERNET Expenses;
Long-term Borrowings: (iii) Debentures ;
Other Non-current Assets: (iv) Unamortised Loss on issue of Debentures (to be written of WITHIN 12 of the date of Balance Sheet ;
Long-term PROVISIONS: (v) Encashable Leave Payable at the TIME of Retirement ;
Reserves and Surplus: (vi) Tax Reserve .
Discussion
653.

under which line item (major head) of the Statement of Profit and Loss of non-financial company will the following be shown: (i) Sale of Goods, (ii) Revenue from Services Rendered, (iii) Interest Earned, (iv) Gain (Profit) on Sale of Assets, (v) Purchases of Stock-in-Trade, (vi) Salaries and Wages, (vii) Interest paid to Bank, and (viii) Carriage Outward?

Answer»


SOLUTION :REVENUE from Operations: (i) and (II);
Other Income: (III) and (iv);
PURCHASES of Stock-in-Trade: (v);
Employees Benefit Expenses: (vi);
Finance Costs: (vii);
Other Expenses: (viii).
Discussion
654.

Under which line item (major head) of the Statement of Profit and Loss of a financial company will the following be shown: (i) Interest on Loans Given, (ii) Gain (Profit) on Sale of Securities, (iii) Loss on Sale of Fixed Assets, (iv) Interest paid on Deposits, (v) Depreciation on Computers, (vi) Goodwill Written off, (vii) Commission paid for Deposit Mobilisation, and (viii) Repairs Expenses?

Answer»

Solution :Revenue from Operations: (i) and (ii); Finance Costs: (IV) and (vii); Depreciation and AMORTISATION Expenses: (V) and (vi); Other Expenses: (III) and (viii).
Discussion
655.

Under which heads the following items on the Assets part of the Balance Sheet of a company will be presented: (i) Sundry Debtors, (ii) Patents and Trademarks, (iii) Shares in Quoted Companies, (iv) Advances recoverable in cash, (v) Prepaid Insurance, and (vi) Work-in-Progress (Machinery)?

Answer»


SOLUTION :Head (Sub-head, if any):(i) Current Assets (Trade Receivables);
(II) Non-Current Assets (Fixed Assets: Intangible Assets);
(iii) Non-current Assets (Non-Current INVESTMENTS);
(iv) Current Assets (Short-term Loans Advances);
(v) Current Assets (Other Current Assets);
(VI) Non-Current Assets (Fixed Assets: Capital Work-in-Progress).
Discussion
656.

Under which heads the following items are shown in the Balance Sheet of a company: (i) Calls-in-Arrears, (ii) Commission Received in Advance, (iii) Debentures, (iv) Stores and Spare Parts, (v) Land and Building, (vi) Forfeited Shares Account?

Answer»

Solution :(i) SHARE Capital under the main head SHAREHOLDERS' Funds (Shown by way of deduction from Subscribed but not FULLY paid-up under Subscribed Capital;
(ii) Other Current Liabilities under Current Liabilities;
(iii) Long-term Borrowings under Non-current Liabilities;
(IV) Inventories under Current;
(V) Fixed Assets-Tangible Assets under Non-current Assets;
(vi) Share Capital under the main head Shareholders' Funds (Shown by way of addition to Subscribed Capital).
Discussion
657.

Under which heads the following are shown in a company's Balance Sheet: (i) Public Deposits, (ii) Office Furniture, (iii) Prepaid Rent, (iv) outstanding Salaries, (v) Computer Software, (vi) Interest Accrued on Investment?

Answer»

Solution :(i) Long-term Borrowings under Non-current LIABILITIES;
(II) Fixed Assets (Tangible Assets) Under Non-current Assets;
(III) Other Current Assets under Current Assets;
(iv) Other Current Liabilities under CurrentLiabilities;
(v) Fixed Assets (INTANGIBLE Assets) under Non-current Assets;
(vi) Other Current Assets under Current Assets.
Discussion
658.

Under which heding the itme 'Bills Discounted but not yet matured' will be shown in the Balance Sheet of a company?

Answer»

CURRENT Liability
Current Assets
Contingent LIABILITIES
Unamortized Expenditure

Answer :C
Discussion
659.

Under which heads and sub-heads wil the following items appear in the Balance Sheet of a Company as per Schedule III, Part I of the Companies Act, 2013? (i) Subsidy Reserve, (ii) Mining Rights, (iii) Provision for Doubtful Debts.

Answer»


SOLUTION :
Discussion
660.

Under which heads the following items are classified or shown on the Assets part of the Balance Sheet of a company: (i) Loose Tools, (ii) Bills Receivable, (iii) Sundry Debtors, and (iv) Advances Recoverable in Cash?

Answer»

SOLUTION :(i) Loose TOOLS: Inventories under Current Assets;
(II) Bills Receivable: Trade Receivables under Current Assets;
(iii) Sundry DEBTORS: Trade Receivables under Current Assets:
(iv) ADVANCES Recoverable in Cash: Short-term Loans and Advances under Current Assets.
Discussion
661.

Under which head following revenue items of a non-financial company will be classified or shown: (i) Sales, (ii) Revenue from Services Rendered, (iii) Sale of Scrap, (iv) Interest Earned on Loans, and (v) Gain (Profit) on Sale of Investments?

Answer»

Solution :REVENUE from OPERATIONS: (i) Sales; (ii) Revenue from Services Rendered; (iii) Sale of SCRAP;
Other Income: (iv) Interest EARNED on Loans; (V) Gain (Profit) on Sale of lnvestments.
Discussion
662.

Under which head following revenue items of non-financial company will be classified or shown: (i) Gain (Profit) on Sale of Fixed Asset, (ii) Fee Received for Arranging Loans, (iii) Interest on Loans Given, (iv) Gain (Profit) on Sale of Investments and (v) Sale of Miscellaneous items?

Answer»

Solution :Revenue from OPERATIONS: None;
Other Income: (i) Gain (PROFIT) on Sale of Fixed Asset; (ii) Fee Received for Arranging Loans; (iii) Interest on Loans Given; (IV) Gain (Profit) on Sale of Investments; (V) Sale of Miscellaneous Items.
Discussion
663.

Under which head following revenue items of a non-financial company will be shown? (i) Sales, (ii) Saleof Scrap, (iii) Interest Earned, and (iv) Dividend.

Answer»


Solution :Revenue from OPERATIONS: SALES and SALE of SCRAP.
Other Income: Interest Earned and DIVIDEND.
Discussion
664.

Under which heads are the following items shown in the Balance Sheet of a company as per Schedule III? (i) Forfeited Shares Account, (ii) Proposed Dividend, (iii) Unclaimed Dividend, and (iv) Arrears of Fixed Cumulative Dividend.

Answer»


Solution :(i) Forfeited Shares Account is added to the Subscribed Captial' under the sub-head Share Capital of the major head Sharcholders' FUNDS in the Equity and Liabilities part of the Balance Sheet.
(ii) Proposed Dividend is shown as Contingent Liability in the Notes to ACCOUNTS.
(III) UNCLAIMED Dividend is shown as Other CURRENT Liability under the head Current Liabilities in the Equity and Liabilities part of the Balance Sheet.
(iv) Arrears of Fixed Cumulative Dividend is shown as Contingent Liability in the Note to Accounts.
Discussion
665.

Under which head following revenue items of a financial company will be classified or shown: (i) Gain (Profit) on Sale of Building, (ii) Revenue from Project Consultancy Rendered, (iii) Sale of Scrap, (iv) Interest earned on Loans, and (v) Gain (Profit) on Sale of lnvestments?

Answer»

SOLUTION :Revenue from Operations: (iv) Interest earned on Loans; (v) Gain (PROFIT) on SALE of Investments;
Other Income: (i) Gain (Profit) on Sale of Building; (ii) Revenue from Project Consultancy Rendered; (III) Sale of Scrap.
Discussion
666.

Under which head and how are the following items shown in the Balance Sheet of a company under Schedule III: (i) Calls-in-Arrears: (ii) Share Application Money Pending Allotment, (iii) Unpaid Dividend, and (iv) Dividend not paid on Cumulative Preference Shares?

Answer»

Solution :(i) Calls-In-Arrears is shown under Shareholders' Funds by way of deduction from 'Subscribed but not FULLY PAID-up' under Subscribed Capital.
(ii) SHARE Application Money. Pending Allotment is shown as a separate fine item between Equity and Non-current Liabilities.
(iii) Unpaid DIVIDEND is shown as Other Current Liability under Current Liabilities.
(iv) Dividend not paid on CUMULATIVE Preference Shares is shown as Contingent Liability in the Notes to Accounts.
Discussion
667.

Under which head following revenue items of a financial companywill be shown? (i) Interest Earned, (ii) Dividend, (iii) Profit on Sale of Asset, and (iv) Refund of Income Tax.

Answer»


SOLUTION :Revenue from Operation: Interest Earned and Dividend.
Other Income: PROFIT on SALE of Asset and REFUND of Income Tax.
Discussion
668.

Under which expense head is Loss on Issue of Debentures shown? Give reason.

Answer»


SOLUTION :N/a
Discussion
669.

Under which activity will you show the dividend received?

Answer»

SOLUTION :INVESTING ACTIVITY
Discussion
670.

Under which activity will you show the dividend paid?

Answer»

SOLUTION :FINANCING ACTIVITY
Discussion
671.

Under which activity is dividend received shown ?

Answer»

SOLUTION :INVESTING ACTIVITIES
Discussion
672.

Under what heads and sub-heads the following items will appear in the Balance Sheet of a Company as per Schedule III, Part I of the Companies Act, 2013? (i) Tax Reserve, (ii) Interest on Calls-in-Advance, (iii) Stores and Spares.

Answer»


SOLUTION :
Discussion
673.

Under what main heads and sub-heads of Assets part are the following items classified or shown in the Balance Sheet of a company as per Sechdule III? (i) Bills Receivable, (ii) Sundry Debtors, (iii) Long-term Investments, (iv) Shares in Listed Companies (v) Prepaid Insurance, (vi) Deposit with Customs Authorities, and (vi) Building.

Answer»


SOLUTION :
CONSIDERING it to be DEPOSITED for long-term.
Discussion
674.

Under what circumstances premium for Goodwill paid by the incoming partners is not recorded in the books of account?

Answer»

SOLUTION :Premium for Goodwill is not recorded in the BOOKS of account when the incoming partner PAYS it PRIVATELY to the sacrificing partners.
Discussion
675.

Under the cpitalisation method the formula for clculating the goodwill is:

Answer»

SUPER profits MULTIPLE by the rate of return
A average profits multiplies by the rate of return
Super profits DIVIDED by the rate of return
Average profits divided by the rate of return

Answer :B
Discussion
676.

Under the Capitalisation of Super Profit, the formula for calculating the goodwill is

Answer»

Super profit MULTIPLIED by the rate of return
Average profit multiplied by the rate of return
Super profit DIVIDED by the rate of return
Average profit DIVIED by the rate of return

Solution :Super profit divided by the rate of return
Discussion
677.

Under the Capitalisation of Super Profit , the formula for calculating the foodwill is

Answer»

Super PROFIT MULTIPLIED by the RATE of return.
Average profit multiplied by the rate return.
Super profit DIVIDED by the rate of return.
Average profit divided by the rate of return.

Solution :Super profit divided by the rate of return.
Discussion
678.

Unclaimed dividend appears in a Company's balance Sheet under the Sub-head ............

Answer»

Short-term Borrowings
Trade Payables
Other CURRENT Liabilities
Short-term Provisions

Answer :C
Discussion
679.

Two newly qualified doctors set up clinic for equal share. They charge consulting fee from each patient "@ Rs 500" per visti. At the same time they give free consultation to patients who cannot pay their fees. Can this set up be termed as Not-for-Profit Organisation ? why

Answer»


Solution :No this set-up cannot be termed as Not-for -Profit Organisation since it is set-up with the purpose to EARN profit it is only that a some of the patients are EXAMINED free of COST.
Discussion
680.

Triphati and Chauhan are partners in a firm sharing profits and losses in the ratio of 3:2. Their capitals were Rs.60,000 and Rs.40,000 as on January 01, 2015. During the year they earned a profit of Rs. 30,000.According to the partnership deed both the partners are entitled to Rs. 1,000 per month as salary and 5% interest on their capital.They are also to be charged an interest of 5% on their drawings,irrespective of the period, which is Rs. 12,000 for Tripathi, Rs. 8,000 for Chauhan. Prepare Partner’s Accounts when, capitals are fixed.

Answer»


ANSWER : TRIPATHI’s CURRENT account BALANCE Rs. 3,600,Chauhan’s Current account Balance Rs.6,400
Discussion
681.

Tulip Ltd. Issued Rs.4,00,000, 9% Debentures of Rs.100 each on April 1, 2014 at a premium of 6% redeemable at a premium of 10% on 31st March, 2018. Assume that required investment was made in 10% Government Securities on April 30 of the financial year in which redemption is due. Debentures were redeemed on the due date. Pass journal entries at the time of Issue and Redemption of Debentures.

Answer»

SOLUTION :

*INTEREST is CALCULATED for 11 MONTHS.
Discussion
682.

Two basic measures of liquidity are :

Answer»

Inventory turnover and CURRENT ratio
Current ratio and Quick ratio
Gross PROFIT ratio and OPERATING ratio
Current ratio and AVERAGE Collection Period

Answer :B
Discussion
683.

Trade Receivables Turnover Ratio of a company is 6 times. State with reason whether the ratio will improve, decrease or not change due to increase in the value of Closing Inventory (Stock) by Rs. 50,000.

Answer»

Solution :No change due to increase in the VALUE of closing stock by Rs. 50,000 because it will affect neither net CREDIT sales nor average TRADE receivables.
Discussion
684.

Trade receivables or debtors Turnover ratio of a company is 6 times state with reason whether the ratio will imporve decrease or not change due to increase in the value of closing stock by Rs 50000.

Answer»
Discussion
685.

Trade Receivable Turnover Ratio =("credit Revenue from operations(Net sales)")/("Average Trade Receivables") =(Rs 800000)/(Rs 1500000)=5.33 Times

Answer»
Discussion
686.

Trade Receivables Rs. 40,000, Trade Payables Rs. 60,000, Prepaid Expenses Rs. 10,000, Inventory Rs. 1,00,000 and Goodwill is Rs. 15,000. Current Ratio will be:

Answer»

`1:2`
`2:1`
`2.33:1`
`2.5:1`

ANSWER :D
Discussion
687.

Trade Investments appear in a Company's Balance Sheet under the Sub-head ............

Answer»

CURRENT INVESTMENTS
Non-Current Investment
Intangible Assets
Short TERM LoansandAdvances

Answer :B
Discussion
688.

Total revenue from operations Rs. 9,00,000, Cash revenuefrom operations Rs. 3,00,000, Debtors Rs. 1,00,000, B/R Rs. 20,000. Trade Receivables Turnover Ratio will be :

Answer»

5 TIMES
6 Times
7.5 Times
9 Times

ANSWER :A
Discussion
689.

Total revenue from operations Rs. 27,00,000, Credit revenue from operations Rs. 18,00,000, Opening DebtorsRs. 3,20,000, Closing Debtors Rs. 4,00,000, Provision for Doubtful Debts Rs. 60,000. Trade Receivables Turnover Ratio will be :

Answer»

7.5 TIMES
9 times
6 times
5 times

ANSWER :D
Discussion
690.

Total Revenue from Operations Rs. 15,00,000, Cost of Revenue from Operations Rs. 9,00,000 and Operating Expenses Rs. 2,25,000. Calculate operating ratio :

Answer»

`75%`
`25%`
`60%`
`15%`

ANSWER :A
Discussion
691.

Total Purchases Rs. 4,50,000, Cash Purchases Rs. 1,50,000, Creditors Rs. 50,000, Bills Payables Rs. 10,000. Trade Payables Turnover Ratio will be :

Answer»

7.5times
6 TIMES
9 times
5 times

ANSWER :D
Discussion
692.

Total Debts Rs150000, Current Liabilities Rs 500,000, Capital Employed Rs 1500000. Calculate Total Assets to Debt Ratio.

Answer»

Solution :TOTAL ASSETS to Debt Ratio =`("Total Assets")/("Debt")=(Rs 2000000)/(Rs 1000000)=2:1`
Debt =Total Debts -Current LIABILITIES
=Rs 1500000-Rs 500000=Rs 1000000
Total Assets=Capital EMPLOYED + Current Liabilities
=Rs 1500000+Rs 500000=Rs 2000000
Discussion
693.

Total capital employed in the firm is Rs 8,00,000, Normal Rate of Return is 15% and Profit for the year is Rs 12,00,000. The value of goodwill of the firm as per capitalisation method would be

Answer»

RS 82,00,000
Rs 12,00,000
Rs 72,00,000
Rs 42,00,000

Answer :C
Discussion
694.

Total Capial employed in the firm is Rs8,00,000, reasonable rate of return is 15% and Profit for the year is Rs 12,00,000. The value ofgoodwill of the firm as per capitalization method would be:

Answer»

RS `82,00,000`
Rs `12,00,000`
Rs `72,00,000`
Rs `42,00,000`

ANSWER :C
Discussion
695.

Total assets of a firm including fictitions assets of Rs. 5,000 areRs. 85,000. Liabilities of the firm are Rs.30,000 . Normal rate of rete of return is 10% and the average profit of the is firm is Rs.8,000 . Calculate goodwill as per capitalisation of super profit.

Answer»

RS. 20,000
Rs.30,000
Rs. 25,000
None of These.

Answer :B
Discussion
696.

Total capital employed in the firm is Rs. 8,00,000, Normal Rate of Return is 15% and Profit for the year is Rs. 12,00,000 . The value of goodwill of the firm as per capitalisation method would be

Answer»

Rs.00,000.
Rs. 12,00,000.
Rs. 72,00,000
Rs. 42,00,000.

Answer :C
Discussion
697.

Total credit revenue from operations of a firm is Rs. 5,40,000. Average collection period is 3 months. Opening debtors are Rs. 1,10,000. Its closing debtors will be:

Answer»

RS. 1,35,000
Rs. 1,60,000
Rs. 2,20,000
Rs. 1,80,000

Answer :B
Discussion
698.

Total assets of a firm including fictitious assets of Rs 5,000 are Rs 85,000. Liabilities of the firm are Rs 30,000. Normal rate of return is 10% and the average profit of the firm is Rs 8,000. Calculate goodwill as per capitalisation of super profit

Answer»

RS 20,000
Rs 30,000
Rs 25,000
None of these

Answer :B
Discussion
699.

Tom and Harry were partners in a firm sharing profits in the ratio of 5:3. During the year ended 31st March, 2015 Tom had withdrawn Rs. 40,000. Interest on his drawings amounted to Rs.2,000 Pass necessary Journal entry for charging interest on drawings assuming that the capitals of the partners were fluctuacting.

Answer»

SOLUTION :
Discussion
700.

Top Ramen Ltd. Decides to redeem 1,000, 10% Debentures of Rs.100 eachredeemable at 10% premium. The company will have to invest in specified securities at least

Answer»

Rs.15,000.
Rs.16,500.
Rs.25,000
Rs.27,500.

Answer :a
Discussion