Which of the following is NOT a part of the five-year summary of a company?

• A) Net income/Loss
• B) Discontinued operations
• C) Net sales
• D) Total assets

The error in the inventory evaluation during the current year will affect:

• A) Income of the year
• B) All of the given options
• C) Closing inventory
• D) Retained earning of the year

Audit opinions CANNOT be classified as which of the following?

• A) Disagreement of opinion
• B) Qualified opinion
• C) Unqualified opinion
• D) Adverse opinion

Which of the following account is debited when the shares are issued below the par value?

• A) Discount on issue of shares
• B) Premium on issue of shares account
• C) Share capital account
• D) Loss on issue of shares account

All of the following are true about the partnership business Except:

• A) Liability of partners is unlimited normally
• B) It must be formed for profit
• C) There can be maximum 10 partners
• D) It is registered under Partnership Act 1932

All of the following are based on Matching Principle under GAAP Except:

• A) Recording of Expenses
• B) Cash Flow Statement
• C) Measurement of Net income
• D) Depreciation charged during a period

Dividend must be approved by which of the following each time before they are paid to shareholders?

• A) Common Stockholders
• B) Management
• C) Preferred Stockholders
• D) Board of directors

Net income calculated under GAAP is based on:

• A) Matching principle
• B) Separate entity principle
• C) Realization principle
• D) Cost principle

Use the following information to compute gross margin. Sales price of merchandise sold to customers Rs. 10,000, beginning inventory Rs. 1,000, inventory purchases Rs. 4,000, and cost of inventory sold Rs. 3,000.

• A) Rs. 3000
• B) Rs. 5,000
• C) Rs. 2,000
• D) Rs. 7,000

If the opening inventory is understated in the year; the cost of goods sold will be _______ and gross profit __________.

• A) Understated, Overstated
• B) Overstated, understated
• C) Understated, understated
• D) Overstated, Overstated

Which of the following is the basic purpose of an accounting system?

• A) Develop financial statements in conformity to GAAP
• B) Meet an organization's need for accounting information as efficiently and effectively as possible
• C) Provide all useful information to decision makers at any cost
• D) Record changes in the financial position of an organization

Opinion of the auditor is termed as unqualified when the auditor concludes the following points about the financial statements Except:

• A) Balance sheet showing sound position
• B) Financial statements are free from misleading information
• C) Financial statements shows consistency in the accounting policies
• D) Financial statements are presented fairly and unbiased

All of the following are the rights of the common shareholders of a Company Except:

• A) Right to attend the general meeting
• B) Right to take part in the decision making
• C) Right to vote
• D) Right to take dividend

Which of the following is TRUE regarding the entry to recognize the depreciation expense?

• A) It is an application of matching principle
• B) Usually includes an offsetting credit to cash
• C) It is done only at the end of each month
• D) It is a closing entry

The appropriate journal entry to record equipment depreciation expense would consist of a debit to Depreciation Expense and a credit to which of the following accounts?

• A) Accumulated Depreciation: Equipment
• B) Retained Earnings
• C) Cash
• D) Equipment Expense

Which of the following best describes the meaning of the term “Purchases”?

• A) Goods bought on credit
• B) Goods paid
• C) Items bought
• D) Goods bought for resale

To find the value of closing stock at the end of a period we:

• A) Do this by stocktaking
• B) Deduct cost of goods sold from sales
• C) Look in the stock account
• D) Deduct opening stock from cost of goods sold

Calculate Written Down Value (WDV) from following information:
Cost of fixed asset = Rs. 300,000; Accumulated depreciation= Rs. 180,000; Salvage value=30,000

• A) Rs. 90,000
• B) Rs. 30,000
• C) Rs. 150,000
• D) Rs. 120,000

Which of the following is NOT the part of annual report?

• A) Five year summary
• B) Auditor’s report
• C) Financial statements
• D) Future investments report

Which of the following would be more important for a short term creditor?

• A) Stability
• B) Solvency
• C) Liquidity
• D) Profitability