Which of the following is TRUE about the financial statements?

• A) Are required by corporations, but not for sole proprietorship or partnerships
• B) In either monetary or no monetary terms, depending upon the need of the decision maker
• C) They are primarily for the benefit of Stakeholders
• D) Are required only for publicly owned business organizations

Which of the following company would like to use the accelerated depreciation method?

• A) A company with low tax burdens
• B) A company with large tax burdens
• C) A company that want to report high net income
• D) A company that want to report huge assets

Which of the following states that the financial statements are presented fairly and in accordance with the generally accepted accounting principle?

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

The local law restricts the number of partners in a partnership firm up to:

• A) 35 members
• B) 20 members
• C) 15 members
• D) 30 members

Which of the following is NOT a characteristic of financial statements?

• A) They always present in monetary terms
• B) Understandable completely by a lay man as well
• C) They help in assessment of future profitability
• D) They always present economic events

Calculate depreciation expense for the year based on Straight Line Method from following information:
Cost of the Asset=Rs.120,000; Life of the Asset = 5 years; Residual value: Rs. 20,000.

• A) Rs. 24,000
• B) Rs. 28,000
• C) Rs. 18,000
• D) Rs. 20,000

When dividends are declared by a corporation's board of directors, what will be its journal entry on the declaration date?

• A) Debit Retained Earnings; Credit Dividends Payable
• B) Debit Cash; Credit Retained Earnings
• C) Debit Dividends payable; Credit Retained Earnings
• D) Debit Retained Earnings; Credit Cash

Failure to record the receipt of a utility bill for services already received will result in which of the following?

• A) An overstatement of fixed assets
• B) An overstatement of equity
• C) An understatement of assets
• D) An overstatement of liabilities

Cash Flow Statement may help the stakeholders to assess the:

• A) Ability to generate future revenues
• B) Future inflows of cash from all sources
• C) Short term Solvency of the company
• D) Ability to use fixed assets

In simple words book value would be the amount of money that a holder of a common share would get if a company is expected to:

• A) Acquire by another company
• B) Liquidate
• C) Merge with another company
• D) Consolidate

Which of the following is true about the common shares?

• A) Shares are issued only by the listed companies
• B) Annual return is given on the share price by the company
• C) It can not be sold below the face value
• D) Shares can be traded on stock market

In partnership if number of partners fall below two, then:

• A) The partnership will dissolve
• B) Non of the given options
• C) The remaining partner will be liable to run the partnership
• D) The partnership will continue

Which one of the following inventory methods shows less expense on income statement during inflation period?

• A) Last-in-First-Out (LIFO)
• B) All of the given options
• C) Average cost method
• D) First-in-First - out (FIFO)

Which of the following is NOT true about the Financial Statement?

• A) It is used for the future projection
• B) It is used by the stakeholders for evaluation purposes
• C) It explains about the external threats faced by the company
• D) It is end product of the Accounting cycle

A company itself can be a partner of a firm because a company:

• A) Can manage it well
• B) Can also be register under Act 1932
• C) Is a juristic person
• D) Has large capital

Which of the following represents the value at which shares can be traded fairly?

• A) Face value
• B) Market value
• C) Book value
• D) Par value

Which of the following is a public limited company?

• A) All of the Given options
• B) Ghani Float Limited
• C) Sitara Chemicals Limited
• D) Dawood Hercules Limited

Generally speaking, investors prefer to buy shares at which of the following price when a company is in a recession phase?

• A) At face value
• B) At Premium value
• C) All of the given option
• D) Below face value

Opinion of the external auditor such as unqualified audit opinion is assurance to the stakeholders that:

• A) The company has the ability to pay debts easily
• B) None of the given options
• C) The management is running the company efficiently
• D) The internal auditor has done his duty efficiently last year

Which of the following is TRUE about the qualified audit report?

• A) It damages the credibility of the auditor
• B) It ensures the fairness of financial statement
• C) It damages the reliability of the financial statements
• D) It ensures that audit has been performed by qualified auditor