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.
| 1801. |
How will you show unexpired insurance given in the Trial Balance in final accounts? |
| Answer» Solution :UNEXPIRED insurance given in the Trial Balance is SHOWN on the assets side of the Balance SHEET | |
| 1802. |
How will you treat payment of dividend in a Cash flow statement? |
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Answer» Cash Flow from Operating Activities |
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| 1803. |
How will you deal invrease in the balance of 'Securities Premium Reserve' while perparing a Cash Flow Statement? |
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Answer» Cash FLOW from Operating ACTIVITIES |
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| 1804. |
How will you classify loans given by Tata Finance Company? |
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Answer» CASH Flow from OPERATING Activities |
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| 1805. |
How will Goodwill Account appearing in the Balance Sheet be treated on dissolution of the firm ? |
| Answer» Solution :Goodwill Account APPEARING in the Balance SHEET is closed like other ASSETS , i.e., by transferring it to the Debit side of the Realisation Account at its book VALUE. | |
| 1806. |
How will you Bank Overdraft in a Cash Flow Statement ? |
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Answer» Cash FLOW from Operating ACTIVITIES |
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| 1807. |
How will you classify deposits by customers in Axis Bank? |
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Answer» CASH FLOW from Operating ACTIVITIES |
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| 1808. |
How will purchased goodwill be shown in Cash Flow Statement? |
| Answer» SOLUTION :It will be SHOWN as INVESTING ACTIVITY. | |
| 1809. |
How the solvency of a business is assessed by financial statement analysis? |
| Answer» | |
| 1810. |
How the solvency of a business is assessed by Financial Statement Analysis. |
| Answer» SOLUTION :Throughsolvency Ratios, the SOLVENCY of a BUSINESS is assessed by FINANCIAL STATEMENT Analysis. | |
| 1811. |
How the goodwill is valued under the super profits method? |
| Answer» SOLUTION :Under this method, first, SUPER profits are calculated by deducting normal profit from the average profit and then goodwill is calculated by multiplying the super profits by the GIVEN number of YEAR's purchase. | |
| 1812. |
How the goodwill is valued under the Capitalisation of Super Profit method? |
| Answer» SOLUTION :`"Goodwill"= ("Super Profit" XX 100)/("Normal Rate of Return")` | |
| 1813. |
How the goodwill is valued under the Capitalisation of Average Profits method? |
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Answer» Solution :First of all, Capitalised value of Average Profits is CALCULATED as per the following formula : Capitalised value of Average Profits = `("Average Profits" XX 100)/("Normal Rate of Return")` Thereafter, Goodwill is calculated as FOLLOWS : Goodwill = Capitalised Value of Average Profits - Capital EMPLOYED |
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| 1814. |
How much amount will be shown in Income and Expenditure Account in the following case? : {:("","31-3-2009","31-3-2010"),("Unpaid for Medicines"," 10,000"," 12,000"),("Stock of Medicines"," 8,000"," 13,000"):} Payment made for medicines during 2009-10 was Rs 2,50,000. |
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Answer» RS 2,53,000 |
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| 1815. |
How Share Issue Expenses are shown in the Balance Sheet ? |
| Answer» Solution :It is shown under the head ''Other Current/Non-Current ASSETS'' depending on WHETHER the amount will be amortized in the NEXT 12 month or thereafter. Amount to be amortized in the next 12 month will be shown under the head ''Other Current Assets'' and the amount to be amortized after 12 MONTHS will be shown under the head ''Other Non-Current Assets''. | |
| 1816. |
How 'preliminary expenses' appear in the Balancec Sheet ? |
| Answer» SOLUTION :Preliminary EXPENSES are not SHOWN in the BALANCE Sheet. As per As-26, they are WRITTEN off in the same year in which they are incurred. | |
| 1817. |
How the goodwill is valued under the average profits method ? |
| Answer» Solution :Under this METHOD normmal past profits of the BUSINESS for a number of years are totalled and average is CALCULATED. GOODWILL is then calculated by multiplying the average profits by agreed number of YEAR purchasse (such as two or three). | |
| 1818. |
How 'securities premium reserve' appears in the Balance Sheet ? |
| Answer» SOLUTION :It APPEARS on the EQUITY and liabilities side of the BALANCE Sheet under 'Reserves and Surplus'. | |
| 1819. |
How much amount will be shown in Income and Expenditure Account in the following case? {:("","1-4-2009","31-3-2010"),("Creditors for Stationery"," 8,000"," 6,000"),("Stock of Stationery"," 3,000"," 3,200"):} During 2009-10 payment made for Stationery was Rs 60,000. |
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Answer» RS 57,800 |
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| 1820. |
How much amount will be shown in Balance Shhet if Sports Fund Rs 1,00,000 (Opening Balance), Interest on Sports Fund Investments Rs 5,000, Tournament Expenses were Rs 20,000, Sports Fund Investment Rs 80,000? |
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Answer» RS 85,000 |
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| 1821. |
How much amount will be shown in Balance Sheet if Sports Fund Rs. 1,00,000 (Opening Balance ) , on sports Fund Investments Rs. 5,000, Tournament Expenses were Rs. 20,000 , Sport Fund Investment Rs. 80,000 ? |
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Answer» RS. 85,000 |
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| 1822. |
Howmuchamountwill bepaidto A , If hisopening capitalisRs, 2,00,000 andhisshareof realisationprofitamounts toRS. 10,000 andhehastakenoverassets valuingRs, 25,000 fromthe firm? |
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Answer» RS, 2,35,000 |
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| 1823. |
How muchamountwillbe paidto creditors forRs, 25,000 ifRs, 5,000 of thecreditors are notto bepaidand theremainingcreditors agreed to accept 5%less amount ? |
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Answer» RS, 18,750 |
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| 1824. |
How is 'window dressing' a limitation of Financial Statement Analysis? |
| Answer» Solution :Window dressing MEANS presenting better financial position than actual. On ACCOUNT of such a situation, financial ANALYSIS may give FALSE information to the USERS. | |
| 1825. |
How is unamortised portion of Share Issue Expenses, Discount on Issue of Debentures and Loss on Issue of Debentures shown? |
| Answer» Solution :Under the head 'Other Current/Non-current Assets' DEPENDING on whether the AMOUNT will be amortised in the NEXT 12 months or within the PERIOD of Operating Cycle or thereafter. S | |
| 1826. |
How is 'Share Application Money' shown in a company's Balance Sheet? |
| Answer» Solution :SHARE Application Money' is shown as 'Other Current Liability' under the head Current Liabilities, it being the AMOUNT refundable to applicants. For example, amount RECEIVED in excess of Issued CAPITAL or when MINIMUM subscription is not received, it is shown as 'Other Current Liability'. | |
| 1827. |
How is the Analysis of Financial Statements useful to potential investors and tax authorities? Explain in brief. |
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Answer» Solution :Importance of Analysis of Financial Statements: (i)Potential INVESTORS: Analysis of Financial Statements provides important information to prospective investors. On the basis of the quantum of dividends and profits, the real value of the shares, or their MARKET value and the returns to be received in future can be ESTIMATED easily. They get information regarding administrative efficiency, financial position and profit earning capacity of the COMPANY. (ii) Taxation AUTHORITIES: Tax Authorities are interested in knowing the profits of the business so that the income tax can be collected correctly. |
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| 1828. |
How is Sacrificing Ratio calculated? |
| Answer» SOLUTION :Sacrificing RATIO is scrificed SHARE in profit of two or more partners in terms of ratio. Sacrificed share of each partner is CALCULATED as follows: | |
| 1829. |
How is Inventory Turnover Ratio computed? |
| Answer» SOLUTION :INVENTORY Turnover Ratio = `("COST of REVENUE from Operations"("Cost of Good Sold"))/("Average Inventory")` | |
| 1830. |
How is inventory trunover ratio computed? |
| Answer» | |
| 1831. |
How is purchase of goodwill shown in Cash Flow Statement? |
| Answer» Solution :It will be SHOWN as OUTFLOW under 'cash FLOW from investing ACTIVITIES'. | |
| 1832. |
How is Goodwill adjusted in the books the firm when a partner ratires from partnership of dies? |
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Answer» Solution :When a partner RETIRES or dies, his SHARE of profit is acquired by the remaining or continuing PARTNERS. The gaining partners compensate the retiring or DECEASED partney by paying Goodwill in their gaining ratio. The wntry recorded for this purpose is as Follows: `{:("Gaining Partnes'Capital"A//cs,...Dr.,["In gaining ratio"]),("To retiring/Deceased Partner's Capital" A//c,,["With his share of Goodwill"]):}` If Goodwill already appears in the OLD Balance Sheet, it is writter off by recording the following entry: `{:("All Partners' Capital/Current "A//cs,...Dr.,["In old ratio"]),("To Goodwill " A//c,,):}` |
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| 1833. |
How is financial strength of a business unit assessed? |
| Answer» Solution :The financial strength of a business UNIT can be ASSESSED on the BASIS of its earning capacity and its ABILITY to PAY debts and dividends. | |
| 1834. |
How is inventory (stock ) valued ? |
| Answer» Solution :Goods are those products which a firm desals in .Goods are either MANUFACTURED or PURCHASED for RESALE . | |
| 1836. |
How is Financial Statement Analysis useful to Finance Manager? |
| Answer» Solution :Financial StatementAnalysis is very useful to FINANCE Manager for TAKING financial decisions for the business. Financial ANALYSIS can shed light on the financial STRENGTHS and weaknesses of the business unit. | |
| 1837. |
How is entrance fee dealt with in the final accounts of non-profit organisation? |
| Answer» SOLUTION :It is TREATED as revenue income and CREDITED to Income and credited to Income and EXPENDITURE ACCOUNT. | |
| 1838. |
How is Change In Inventories calculated and shown in the Statement of Profit and Loss? |
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Answer» |
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| 1839. |
How is debit balance (loss) of Surplus, i.e., Balance in Statement of Profit and Loss shown? |
| Answer» Solution :It is shown as negative amount under the HEAD 'Reserves and SURPLUS'. | |
| 1840. |
How is Closing Stock (inventory) valued? |
| Answer» Solution : It is valued at Cost or Net REALISABLE Value, WHICHEVER is LOWER FOLLOWING PRUDENCE Concept. | |
| 1841. |
How is capiutal exployed calculated? |
| Answer» | |
| 1842. |
How is Capital Employed calculated? |
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Answer» Solution :It can be calculated by following either Liabilities SIDE approach or Assets Side approach. When Liabilities Side approach is followed, the total of Share CAPITAL plus RESERVES and SURPLUS less Fictitious Assets plus Long-term Debts is the Capital Employed When Assets Side approach is followed, the total of FIXED Assets and Current Assets less Current Liabilities is the Capital Employed |
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| 1843. |
How is average inventroy computed? |
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| 1844. |
How goodwill is recorded on the retirement of a partner ? |
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Answer» `{:("Remaining PARTNER's Capital A/cs","Dr. (In Gaining RATIO)"),("To RETIRING Partner's Capital A/c", "(with his share of GOODWILL)"):}` |
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| 1845. |
How is Average Inventory computed? |
| Answer» Solution :AVERAGE INVENTORY = `("Opening Inventory+ CLOSING Inventory")/("2")` | |
| 1846. |
How does the nature of business affect the value of goodwill of a firm? |
| Answer» Solution :A firm which produces GOODS having a stable DEMAND will be ABLE to earn more profits and HENCE will have more goodwill | |
| 1847. |
How does the market situation affect the value of goodwill of a firm? |
| Answer» Solution :The monopoly CONDITION or LIMITED competition enables the concern to earn high profits which leads to HIGHER VALUE of GOODWILL. | |
| 1848. |
How does the factor 'quality of product' affect the goodwill of a firm? |
| Answer» Solution :Better quality of product will INCREASE the sales and profit which will increase the VALUE of GOODWILL. | |
| 1849. |
How does the factor 'Location' affect the goodwill of a firm? |
| Answer» Solution :BETTER location will attract more customers resulting in incease in sales and profits which in turn will RESULT in increase in the value of GOODWILL. | |
| 1850. |
How does the factor 'Efficiency of Management' affect the goodwill of a firm? |
| Answer» Solution :If the MANAGER is capable and competent, the FIRM will earn high PROFITS which will increase the VALUE of goodwill. | |