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This section includes 7 InterviewSolutions, each offering curated multiple-choice questions to sharpen your Current Affairs knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
What is fixed capital system? |
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Answer» Under the fixed capital method, the capitals of the partners are fixed, unless there is an additional capital or withdrawal of capital. |
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| 2. |
What are non-profit organizations? |
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Answer» Non profit organisations are those organisations which are formed to render social service and not for making profits, such as promotion of education, sports and games, science and technology etc., |
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| 3. |
What is cash flow statement? |
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Answer» It is a type of financial statement. It provides information about the historical change in cash and cash equivalents of an enterprises. |
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| 4. |
How is the gain ratio calculated on retirement of a partner? |
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Answer» Gain ratio = New ratio – old ratio |
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| 5. |
The main object of analysis of financial statement is.(a) to knowledge of profitability(b) To check financial statements(c) To statisfy beneficiary(d) None of these |
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Answer» (a) to knowledge of profitability |
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| 6. |
Mention any two types of debentures. |
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Answer» The different types of debentures are : 1. Secured debenture 2. Redeemable debentures. |
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| 7. |
What is share? |
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Answer» According to Indian Companies Act, 1956 as “Ashare is the share in the share capital of the company”. |
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| 8. |
Name two types of Financial Statements. |
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Answer» 1. Income Statement 2. Position Statement |
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| 9. |
What are the various types of ratios? |
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Answer» 1. Liquidity ratio 2. Solvency ratio 3. Turnover ratio 4. Profitability ratio. |
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| 10. |
Short term financial & position will improve with.(a) Increase in current assets(b) Increase in current liabilities(c) Decrease in current liabilities(d) None of these |
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Answer» (a) Increase in current assets |
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| 11. |
State any two objectives of Financial Statement Analysis? |
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Answer» 1. To know or judge the financial position of the concern. 2. To find the profitability of the firm. |
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| 12. |
Financial analysis is useful(a) For investor’s(b) For share holders(c) For debenture holder(d) All the above |
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Answer» Financial analysis is useful For investor’s |
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| 13. |
The most commonly used tools for financial analysis are.(a) Horizontal analysis(b) vertical analysis(c) Ratio analysis(d) All the above |
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Answer» (d) All the above |
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| 14. |
Cash flow statement is prepared from.(a) Additional information(b) Profit and loss A/C (c) Balance sheet(d) All of these |
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Answer» (d) All of these |
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| 15. |
Objectives of analysis of financial statement are.(a) To assess solvency of the firm(b) Rearrangement of financial statements(c) Dividend decision(d) None of these |
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Answer» Objectives of analysis of financial statement are Dividend decision. |
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| 16. |
Which one of the following is not a non-cash item(a) cash sales(b) Goodwill written off(c) Depreciation(d) None of these |
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Answer» cash sales is not a non-cash item. |
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| 17. |
Suspense account in the trial balance is entered in the ……(a) Trading A/c (b) Profit & loss A/c (c) Balance sheet (d) None |
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Answer» (c) Balance sheet |
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| 18. |
Profit and loss account is also called......(a) Operating profit(b) Balance Sheet(c) Income statement (d) Trading account |
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Answer» Profit and loss account is also called Operating profit. |
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| 19. |
Common-size statement are also known as :- (A) Dynamic Analysis (B) Horizontal Analysis (C) Vertical Analysis (D) External Analysis |
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Answer» Correct option is: (C) Vertical Analysis |
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| 20. |
Cash flow statement is based upon.(a) Accrual basis of accounting(b) cash basis of accounting(c) a and b bot(d) None of these |
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Answer» Cash flow statement is based upon cash basis of accounting |
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| 21. |
Payment of Income-tax is considered as :- (A) Direct expenses (B) Indirect expenses (C) Operating expenses (D) None of these |
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Answer» Correct option is: (A) Direct expenses |
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| 22. |
In a common size balance sheet, if the percentage of non-current assets is 75. What would be the percentage of current assets? (a) 175 (b) 125 (c) 25 (d) 100 |
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Answer» The correct answer is : (c) 25 |
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| 23. |
Profit and loss account is also called.(a) Balance sheet(b) Income statement(c) operating profit(d) None of these |
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Answer» Profit and loss account is also called Income statement |
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| 24. |
Cash flow statement is banked upon(a) Cash basis of accounting(b) Accrual basis of accounting(c) a and b both(d) None of these |
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Answer» Cash flow statement is banked upon Cash basis of accounting. |
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| 25. |
Current Ratio includes :- (A) Stock (B) Debtors (C) Cash (D) All of the above |
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Answer» Correct option is: (D) All of the above |
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| 26. |
The ideal liquid ratio is :- (A) 2 % 1 (B) 1 % 1 (C) 5 % 1 (D) 4 % 1 |
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Answer» Correct option is: (B) 1 % 1 |
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| 27. |
Which of the following item is not considered on cas equivalent?(a) Bank overdraf(b) Commercial paper(c) Treasury bill(d) Investment |
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Answer» (d) Investment |
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| 28. |
An analysis of cash flow is useful for which planning.(a) Short term(b) Long Term(c) Medium Term(d) None of these |
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Answer» An analysis of cash flow is useful for Short term planning. |
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| 29. |
Which of the following item is not considered as cash equivalent ? (A) Bank overdraft (B) Commercial paper (C) Treasury Bill (D) Investment |
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Answer» Correct option is: (D) Investment |
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| 30. |
In common size statements the item of assets in percentage is calcilated on.(a) Total current assets(b) Total fixed assets(c) Total assets(d) None of these |
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Answer» In common size statements the item of assets in percentage is calcilated on Total assets |
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| 31. |
When current ratio is 2 : 5 and the amount of current liability is Rs. 25,000, what is the amount of current assets ? (A) 62,500 (B) 12,500 (C) 10,000 (D) None of these |
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Answer» Correct option is: (C) 10,000 |
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| 32. |
Liquid ratio is :-(A) Liquid Assets/Current Liability(B) Current Liability/Liquid Assets(C) Current Assets/Current Liability(D) None of these |
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Answer» Correct option is: A. Liquid Assets/Current Liability |
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| 33. |
Which of the following item is considered as cash equivalent?(a) Bank overdraft(b) Bills receivable(c) Debtors(d) Short term investment |
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Answer» (a) Bank overdraft |
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| 34. |
Following is added in net profit while calculating cash flow from operating activities.(a) Increase in stocks(b) Decrease in stock(c) Increase in debtors(d) None of these |
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Answer» Decrease in stock is added in net profit while calculating cash flow from operating activities. |
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| 35. |
Break even point refers to that point where.(a) Total costs are more than total sales(b) Total cost are equal to sales(c) Total costs are less than total sets(d) None of these |
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Answer» Break even point refers to the Total cost are equal to sales |
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| 36. |
Cash sales is :- (A) Operating activity (B) Investing activity (C) Financing activity (D) None of these |
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Answer» Correct option is: (A) Operating activity |
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| 37. |
The term Quick-Assets do not include :- (A) Stock (B) Debtors (C) B/R (D) Cash |
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Answer» Correct option is: (A) Stock |
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| 38. |
The term current assets include.(a) Long term investment(b) Short term investment(c) Furniture(d) Preliminary Expensa |
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Answer» (b) Short term investment |
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| 39. |
Operation Ratio is :-(A) Profitability Ratio (B) Activity Ratio(C) Solvency Ratio (D) None of these |
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Answer» Operation Ratio is Profitability Ratio. |
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| 40. |
Current ratio(a) Current assets/current liabilities(b) Liquid assets/Current liabilities(c) Liquid assets/Current liabilities(d) None of these |
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Answer» Current ratio = Current assets/current liabilities |
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| 41. |
While calculating cash flow from operating activities, which of the following will be added ? (A) Increase in Stock (B) Increase in creditors (C) Decrease in B/P(D) None of these |
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Answer» Correct option is: (B) Increase in creditors |
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| 42. |
Distinguish between Sales Book and Sales Account. |
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Answer» Difference between Sales Book and Sales Account. Sales Book: 1. Sales book is a part or sub-division of journal. 2. Sales book is a sub-division of journal and this book is not divided into debit and credit sides. 3. Sales book contains the information about the credit sales of goods only. 4. Total balance of sales book is transferred to the credit side of Sales Account. Sales Account: 1. Sales account is a part of ledger. 2. Sales account is a part of ledger and is divided into two sides’ viz. debit and credit. 3. Sales account contains the information about the total sales of goods, because in this book cash sales and total of credit sales from the sales book are recorded. 4. Balance of sales account is to be transferred to the credit side of trial balance and thereafter to the Trading Account. |
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| 43. |
The term “Current Assets” close not include:-(A) Stock (B) Debtors(C) Car (D) None of these |
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Answer» The term “Current Assets” close not include Car. |
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| 44. |
Liquid assets do not include(a) debtors(b) stock (c) Bills receivable(d) None of these |
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Answer» Liquid assets do not include Bills receivable |
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| 45. |
What are Adjustment Entries? |
| Answer» adjusting journal entries are the journal entries made at the end of a period to correct accounts before the financial statements are prepared. This is the fourth step in the accounting cycle. Adjusting entries are most commonly used in accordance with the matching principle to match revenue and expenses in the period in which they occur. | |
| 46. |
Give one example of an activity which is classified as Financing Activity in case of all the enterprises. |
| Answer» Correct Answer - Dividend Paid | |
| 47. |
Give one example of an activity which is classified as Operating Activity in case of all the enterprises. |
| Answer» Payment made to employees. | |
| 48. |
Which of the following items is not taken into consideration while current Ratio:-(A) Craditors (B) Debtors(C) Furniture (D) Bank overdraft |
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Answer» Furniture is not taken into consideration while current Ratio. |
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| 49. |
Liquid assets include.(a) Prills receivable(b) Debtors(c) Cash balance(d) All the above |
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Answer» Liquid assets include Cash balance |
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| 50. |
Donation received for specific objective will be shown.(a) In income and expenditure A/C(b) On liability side of B/S(c) On assets side of B/S(d) None of these |
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Answer» Donation received for specific objective will be shown On liability side of B/S |
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