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2401.

Comparative statement of Profit & Loss provides information about :

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Rate of increase or decrease in REVENUE from operations
Rate of increase or decrease in COST of revenue from of operations
Rate of increase or decrease in NET PROFIT
All of the above

Answer :D
2402.

(commission topartners andDistributionof profit ) X and Yarepartners in a firmX geta commmissionof 10%on thenetprofitsbeforechargingany ammissionan Y getcommissionfo 10 %on thenetprofits aftercharging allcommission . computethe missingfigure (?)fromthe followingprofit andLossappropriationAccount for theyearended31st March, 2019:

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SOLUTION :
Workingnotes: 1.Calculationfo profitbefore chagingany commlssion : x'scommission10% on the net profitbeforechargingany COMMISSION=RS, 1,65,000B
`THEREFORE` Netprofitbeforechargingany commission`=1,65,000xx100//10=Rs. 16,50,000`
2.Calculationof y's commission :
Net profitafter chargingX's commission`=Rs. 16,50,000-Rs. 1,65,000 =Rs. 14,85,000`
Y'scopmmission`=Rs. 14,85,000xx10//110=Rs. 1,35,000`
2403.

Comparative Balance Sheet :

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Provides a summarized view of the operations of the firm
Presents the financial POSITION of the firm
Presents the CHANGE in VARIOUS ITEMS of balance sheet
None of the above

Answer :C
2404.

Common size analysis is also known as______analysis.

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ANSWER :VERTICAL
2405.

Common size statements and financial ratios are the two tools employed in vertical analysis.

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ANSWER :1
2406.

Comparative analysis is also know as _______analysis.

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ANSWER :HORIZONTAL
2407.

Classity the following transactiona as Operating Activities for: (i) FinacialEnterprise , and (ii)Non- finanical Enterprise. (a)Pruchase of securites of a company , (b)Brokerage paid tor the above purchases (c ) Sale of Securitiesof a company, (d)Dividend and interestrecived on securities, (e)Dividend paid to shareholders, (f)Interest paidon borrowings, (g) Loan andadvances made, and (h)Receiptofloans and advances made.Givenreason ofyour answer.

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Solution :(i) FINANCIAL Enterprise : All thetransactions except (e) and (f) (i.e., Dividend paid to shareholdersbe classitied or shown as OPERATING Activities. It is so because Purchase andSale of Securities and also Borrowings and Advancing Loans are the principal revenue producing activities of a financial enterprise.
Non financial Enterprise: All the transactions except (e) and (f) (i.e., Dividend paid to shareholders and Interest paid onborrowings respectively) shall be classified asInvesting Activities because these are not the principal revenue producing activities of the enterprise.
Transactions (e) and (f) shall be classified as Financing Activities because these are related to activities that change the SIZE and composition of the owners' capital and borrowings.
When does the Cash Flow Arise?
Cash Flow arises when the net effect of a transaction either increases or decreases the amount of Cash and Cash EQUIVALENTS. It arises when a transaction affects either:
1. A Current Account (other than Cash and Cash Equivalents) on one hand and Cash and Cash Equivalents on the other hand, e.g., cash received from debtors (Trade Receivables),
OR
2. A Non-Current Account on one hand and Cash and Cash Equivalents on the other hand e.g., purchase of goodwill, causes a change in cash position.
2408.

Classify the liabilities (Trade Payable) given below as Non-current Liabilities and Current Liabilities giving reasons for such classification:

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SOLUTION :
2409.

Classify the following transactions as Operating Activitles for a financial company and a non-financial company : (a) Purchase of Shares on a Stock Exchange (b) (c ) Dividend paid on Shares. (d) Loans given(e ) Loans taken(f)Interest paid on borrowings.

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Answer :FINANCIAL Company : (a),(B), (d),(e),(f); Non -fincial Company : NONE
2410.

Classify the following Assets (Trade Receivables) into non-current assets and current assets and give reasons for such classification:

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Solution :STATEMENT SHOWING CLASSIFICATION OF ASSETS (TRADE RECEIVABLES)
2411.

Classify the following activities as (i) Operating,(ii) Investing or (iii) Financing in case of a 'Financial Enterprise'.(a) Proceeds from Sale of Investments(b) Interest received on Debentures held as Investment.

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SOLUTION :(a) OPERATING ACTIVITY(B) Operating Activity.
2412.

(Classification of Shareholders' Funds'). Name the sub-heads under the head 'Shareholders' Funds'.

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Solution :(i) Share Capital,
(ii) RESERVES and Surplus, and
(iii) MONEY Received against Share WARRANTS.
2413.

(Classification of 'Non-current Assets'). Name the sub-heads under the head 'Non-current Assets' in the Assets part of the Balance Sheet as per Schedule III of the Companies Act, 2013.

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Solution :(i) Fixed Assets,
(ii) Non-current INVESTMENTS,
(iii) DEFERRED TAX Asset (Net),
(iv) Long-term Loans and Advances, and
(V) Other Non-Current Assets.
2414.

(Classification of 'Non-current Liabilities'). Name the sub-heads under the head 'Non-current Liabilities' in the Equity and Liabilities part of the Balance Sheet as per Schedule III of the Companies Act, 2013.

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SOLUTION :(i) Long-term Borrowings,
(ii) DEFERRED TAX LIABILITIES (Net),
(iii) Other Long-term Liabilities,
(iv) Long-term Provisions.
2415.

(Classification of Equity and Liabilities). State the major heads under Equity and Liabilities part of the company's Balance Sheet.

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Solution :MAJOR HEADS on Equity and Liabilities part are:
• Shareholders' Funds,
• Share APPLICATION Money Pending Allotment,
• Non-CURRENT Liabilities, and
• Current Liabilities.
2416.

(Classification of 'Current Liabilities). Name the sub-heads under the head 'Current Liabilities' in the Equity and Liabilities Part of the Balance Sheet.

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SOLUTION :(i) Short-term Borrowings,
(ii) Trade Payables,
(III) Other CURRENT Liabilities,
(IV) Short-term Provisions.
2417.

(Classification of 'Current Assets'). Name the sub-heads under the head 'Current Assets' in the Assets part of the Balance Sheet as per Schedule III of the Companies Act, 2013.

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SOLUTION :(i) Current INVESTMENTS,
(ii) Inventories,
(III) Trade Receivables,
(iv) Cash and Cash Equivalents,
(v) Short-term LOANS and Advances,
(VI) Other Current Assets.
2418.

(Classification of Assets). State the major heads under which the items appearing in the Assets part of the company's Balance Sheet are classified.

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Solution :The major heads on ASSETS part are:
(i) Non-current Assets, and (II) Current Assets.
2419.

(Classification of ' Fixed Asset'). Name the sub-heads under the head 'Fixed Assets' in the Assets part of the Balance Sheet as per Schedule III of the Companies Act, 2013.

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Solution :(i) TANGIBLE ASSETS,
(ii) Intangible Assets,
(III) Captial Work-in-Progress, and
(iv) Intangible Assets under DEVELOPMENT.
2420.

(Classification of Assets). Rearrange the following items under assets according to Schedule III: (i) Office Equipment, (ii) Loose Tools, (iii) Goodwill, (iii) Trademarks, (v) Bills Receivable, (vi) Debtors (vii) Land, (viii) Building, (ix) Stock-in-Trade, (x) Stores and Spare Parts, (xi) Furniture, (xii) Vehicles, (xiii) Advance to Subsidiaries (xiv) Cash at Bank, (xv) Cash in Hand, (xvi) Work-in Progress (Machinery), (xvii) Plant, (xviii) Interset Accured on Investments, and (xix) Deposits with Electricity Supply Company.

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Solution :(i) Fixed Assets (Tangible): OFFICE Equipment, Land, Building, Furniture, Vehicles, Plant.
(II) Fixed Assets (Intangible): Goodwill, Trademarks.
(iii) Captial Work-in Progress: Work-in-Progress (Machinery),
(iv) Long-term Loans and ADVANCES: Advance to Subsidaiaries, Deposits with Electricity Supply Company.
(v) Inventories: Loose Tools, Stock-in-TRADE, Stores and Spare Parts.
(vi) Trade RECEIVABLES: Bills Receivable, Debtors.
(vii) Cash and Cash Equivalents: Cash at Bank, Cash in Hand.
(Other Current Assets: Interest Accured on Investments.
2421.

Claims against the Company not acknowledged as debts' is shown under the head ............

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CURRENT Liabilities
Non-Current Liabilities
Commitments
Contingent liabilities

Answer :D
2422.

Claim of the retiring partner is payable in the following form

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Fully in cash
Fully transferred to Loan Account to be paid later with some interest on it
Partly in cash and partly as loan repayable later with agreed interest
Any of the above

Solution :NEW Profit-sharing RATIO LESS Old Profit-sharing ratio
2423.

Claim of the retiring partner is payable in the following form :

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Fully in CASH.
Fully TRANSFERRED to LOAN Account to be paid LATER with some interest on it.
Partly in cash and party as loan repayable later with AGREED interest.
Any of the above.

Solution :Any of the above.
2424.

Choose NPO from the followings

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RELIANCE INDUSTRIES Limited
Indian HOCKEY Federation
INFOSYS LTD
None of these

Solution :Infosys Ltd
2425.

Choose NPO from the following :

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RELIANCE INDUSTRIES Limited
INDIAN HOCKEY FEDERATION
Infosys Ltd.
None of These.

Solution :Indian Hockey Federation
2426.

Change in theexistingagreement between thepartners is called :

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DISSOLUTIONOF FIRM
DISSOLUTION of partnership
Dissolutionof BUSINESS
All of theabove

Answer :B
2427.

Change in profit-sharing ratio amounts to dissolution of partnership or partnership firm? Give, reason in support of your answer. Or Does the charge in profit-sharing ratio result into dissolution of the partnership firm? Give, resaon in support of your answer.

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Solution :Change in profit-sharing RATIO AMOUNTS to dissolution of PARTNERSHIP and not dissolution of firm as the existing AGREEMENT COMES to an end and the firm continues under new agreement.
2428.

Chandra Tubes Ltd. Issued 70,000, 7% debentures of Rs.100 each on June 30, 2011 redeemable at a premium of 6% on July 1, 2015. The Board of Directors have decided to transfer out of profits Rs.7,50,000 to Debenture Redemption Reserve on March 31, 2013, Rs.5,00,000 on March 31, 2014 and Rs.5,00,000 on March 31, 2015. Record necessary journal entries regarding issue and redemption of debentures. Ignore entries relating to writing off loss on issue of debentures and interest paid thereon.

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SOLUTION :Debenture Redemption INVESTMENT Rs.10,50,000 on 30TH April, 2015, Debenture Redemption RESERVE amounting to Rs.17,50,000 will be transferred to General Reserve.
2429.

Cemto Ltd. forfeited 6,000 shares of Rs. 10 each issued at a premium of Rs. 2 per share for the non-payment of final call of Rs. 3 per share. 300 of theforfeited shares were reissued for Rs. 8 per share as fully paid-up. Pass necessary Journal entries for theforfeiture and reissue of shares. Also prepare Share Forfeited Account.

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Solution :GAIN on Reissue to be SHARES transferred to CAPITAL RESERVE = Rs.1,500,
Balance of Shares Forfeited Account = Rs. 39,900.
2430.

Chaman, Raman and Suman are partners sharing profits in the ratio of 5:3:2. Raman retires, the new profit sharing ratio between Chaman and Suman will be 1:1. The goodwill of the firm is valued at Rs. 1,00,000 Raman’s share of goodwill will be adjusted

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by DEBITING Chaman’s CAPITAL ACCOUNT and Suman’s Capital Account with Rs 15,000 each.
by debiting Chaman’s Capital account and Suman’s Capital Account with Rs. 21,429 and 8,571 respectively.
by debiting only Suman’s Capital Account with Rs. 30,000.
by debiting RAMAN’s Capital account with Rs. 30,000.

Answer :C
2431.

Change in Investories means :

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DIFFERENCE between OPENING INVENTORIES and CLOSING Inventories
Difference between Closing INVESTORIES and Opening Inventories
Difference between Opening Investories and Closing Inventories, if Opening Inventories are higher
Difference between Closing Inventories and Opening Inventories, if Closing Inventories are higher.

Answer :A
2432.

Casio Machines Ltd. has an opening balance of 5,00,000 in Securities Premium Reserve and also debit balance of Rs 10,00,000 in Surplus, i.e., Balance in Statement of Profit and Loss under Reserves and Surplus. During the year ended 31st March, 2019, it incurred a loss of Rs 15,00,000. How will it be shown in Note to Accounts on Reserves and Surplus?

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SOLUTION :
(20,00,000) will be SHOWN against Reserves and Surplus under SHAREHOLDERS' FUNDS in the Balance Sheet.
2433.

Cash Revenue from Operations Rs. 4,00,000, Credit Revenue from Operations Rs. 21,00,000,Revenue from Operations ReturnRs. 1,00,000, Cost of revenue from operations Rs. 19,20,000. G.P. ratio will be

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`4%`
`23.2%`
`80%`
`20%`

ANSWER :D
2434.

Cash from Operating activities will decrease due to :

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Invtrsdr in Current Assets
Decrease in Current LIABILITIES
NEITHER of the TWO
Both A and B above

Answer :D
2435.

Cash from operating activities consists of :

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OPERATING PROFIT
Decrease/Increasees in CURRENT ASSETS
Decrease/Increase in Current Assets
All of the above

ANSWER :D
2436.

Cash flow statement is prepared for financial planning of .............

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LONG RANGE
MEDIUM range
SHORT range
Very Long range

Answer :C
2437.

Cash Flow Statement is based upon:

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ACCRUAL BASIS of ACCOUNTING.
CASH basis of accounting.
accounting equation.

Solution :cash basis of accounting.
2438.

Cash flow statement is a tool of financial statement analysis.

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ANSWER :1
2439.

Cash deposit with the bank with a maturity date after two months belongs to which of the following in the cash flow statement ?

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INVESTING activities
Financing activities
Cash and Cash equivalents
Operating activities

Answer :C
2440.

Cash deposit with the bank with a maturity date after two months belongs to which of the following while preparing Cash Flow Statement?(a) Investing Activities(b) Financing Activities(c ) Cash and Cash Equivalents(d) Operating Activities

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SOLUTION :(C ) CASH and Cash EQUIVALENTS.
2441.

Cash Book can never have a credit balance. Why?

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Solution : CASH BOOK can NEVER have a credit balance because if the firm does not have cash it cannot make the PAYMENT
2442.

CashBalanceshownin theBalancesheetis shownon dissolutionof firmin :

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Realisationaccount
Cash ACCOUNT
CAPITAL account
None of theabove

Answer :B
2443.

Cash Balance Rs. 5,000, Trade payables Rs. 40,000, Inventory Rs. 50,000, Trade Receivables Rs. 65,000 and Prepaid Expenses are Rs. 10,000. Liquid Ratio will be :

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`1.75:1`
`2:1`
`3.25:1`
`3:1`

ANSWER :A
2444.

Cash Balance Rs. 15,000, Trade Receivables Rs. 35,000, Inventory Rs. 40,000, Trade Payables Rs. 24,000 and Bank Overdraft is Rs. 6,000. Current Ratio will be:

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`3.75:1`
`3:1`
`1:3`
`1:3.75`

ANSWER :B
2445.

Cash and Cash Equivalents does not include

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Cheques
Balance with banks
Bank DEPOSITS with NORE than 12 MONTHS maturity
INVENTORIES

Solution :Inventories
2446.

Capitalsof A,B and Cas on31st March, 2019amountedto Rs,90,000 ,RS, ,3,30,000and Rs. 3,30,000and Rs. 6,00,000respectivelyprofitof Rs.1,80,000for theyear ended31stMarch2019wasdirtributedin theratioof 4:1:1 afterallowingintereston capitals @10%p.a During the yeareach partnerswithdrew Rs. 3,60,000thepartnershipDeedwassilentas toprofitsharingratioprovidedfor intereston capital 212% . passthe necessaryadjustmententryshoeing theworking clearly .

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ANSWER :DEBIT A byRs. 66,000 andCreditB byRs. 30,000 and CByt RS. 36,000
2447.

Carriage Inwards is shown in the Statement of Profit and Loss under:

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Cost of MATERIALS CONSUMED,
Other Expenses,
EMPLOYEES Benefit Expenses,
Any of the above.

Solution :Other Expenses,
2448.

capitalAccountsof A and Bstoodat Rs. 4,00,000andRs. 3,00,000 respectively afternecessary adjustments in respectof thedrawingsand thenetprofitfortheyearended31st March,2019It wassubsequentlynoticedthat 5%p.a intereston capitaland alsodrawingwerenoit takenintoaccountinarrivingat thedisttributableprofitat the end of eachhalf year .the profitfor theyear as adjustment amountedtoRS. 2,00,000the partnersshareprofitsin theratioof 3:2you arereuiredto pass journalenterisand showadjustedcapital Accounts of thepatners.

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Solution :(I)for interest on capital: DR profirand lossadjustmentA/C Rs. 29,200
Cr. A's capital A/C Rs. 16,400 andB's CapitalA/C Rs. 12,800
(II) for intereston drawings on drawings : Dr ,A's capitalA/CRs. 900And B's capitalA/C Rs. 450
Cr. proftand loss adjustmentA/C Rs. 1,350.
(iii)loss on adjustment : Dr.A's Ca[PITA,l A/c Rs. 16,710 andB's ca[pital A/c 11,41240
Cr. PROFITAND losssdjustment A/C Rs. 27,850.
2449.

Can you state the risks carried by FMCG- Cigarettes segment ?

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Solution :It CARRIES the risk of high IMPOSITION of tax due to Government policies which MAY reduce the demand for the PRODUCT .It will haveadverseeffect on the company's profit .
2450.

Can a Trial Balance be prepared to check the arithmetical accuracy of the books of account under Single Entry System?

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Solution :No, a Trial BALANCE cannot be prepared to check the ARITHMETICAL accuracy of the books of ACCOUNT under Single ENTRY SYSTEM as all the accounts are not prepared