(1 marks questions)



1. A business is an artificial entity distinct from its proprietors. This is based on which concept?

a) accrual concept                         b)money measurement concept

c)entity concept                            d)periodicity concept


2. --------------- has more than one owner who have agreed to share profits of a business, carried on by all or any of them acting for all.

a)Corporate entity                         b)partnership firm

c)all business entity                       d)sole proprietorship firm


3. “Anticipate no profit but provide all possible losses”. Which concept says so?

a)the realization concept               b) the matching concept

c)concept of prudence                 d)the accrual concept


4.The valuation of assets & liabilities principle depends on which concept ?

a)the cost concept                         b)money measurement concept

c)the periodicity concept              d)the going concern concept


5.According to the income tax law,1961 , business unit should follow a uniform   

accounting period ie:

a)fiscal year                                  b)calendar year

c)both of the years                                    d)none.


6.A happening of consequence to an entity known as--------------

a)event                                          b)vouchers

c)books                                          d)journal


7.Which of the following is a type of vouchers ?

a)receipt voucher                           b)payment vouchers

c)journal vouchers                         d)all of these


8. -----------------  is drawn to record all non-cash transactions and events.

a)receipt voucher                           b)payment vouchers

c)journal vouchers                                  d) all of the above


9.FASB stands for:

a)financial accounting standard board

b)financial accounting state board

c)none of the above


10.Which of the following equation is correct ?

a)assets = liability + capital

 b) liability =assets + capital

 c)assets = capital – liability

 d) none of the above


11. ------------ is the residual interest of owners in assets over liabilities.

a)assets                              b)capital

c)capitalization                  d) liability


12.The income and expenses should be recognized as & when they are earned and incurred , irrespective of whether the money is received or paid in connection thereof.

a)accrual concept                        b)cost concept

c)cash basis                       d)none of the above


13. If you pass in MBA. It will give you a great deal of satisfaction .this expression can not be made in money term . this is because of which concept ?

a)accrual                            b)money measurement

c)cost concept                   d)business entity concept


14. ------------- is a book of first entry or prime entry .

a)primary book               b)secondary book

c)cash book                       d)all of above


15. ------------- records credit sale of goods.

a)purchase day book

b)sale day book

c)journal day book


16. ------------ is a documentary evidence in writing , containing an unconditional

order signed by the maker , directing a certain person to pay a certain sum of money to the bearer of the instument.

a)B/E                                b)B/R

c)B/P                                 d)all


17. ------------- records goods returned to the suppliers.

a)return inward                 b)return outward

c)sales return                     d) none of the above


18. ------------- records credit purchases of traded gooda and ------------- records                    

credit sale of traded goods.

                        goods return , goods purchased

                        purchase day book , sale day book

                        purchase return , sales return

                         sales day book , purchase day book


19.Ram commenced business with Rs. 15000.

The J.E for this is:

a)Ram’s a/c dr.                  b)Ram’s capital a/c dr.

          to cash a/c                        to cash a/c

c)cash a/c     dr.                d)capital a/c              dr.

          to Ram’s capital a/c         to Ram’s a/c


20.Withdrew cash from bank for private use Rs. 20,000.

The J.E is :        cash a/c   dr.

                                 To Bank a/c

a) true                                b)false


21. cost sheet shows the total cost of _______ only.


a. Purchase                              b. Production

c. Sales                                    d. All of above


22. PRIME Cost + Factory overhead =?


a. Factory Cost                      b. Production Cost

c. Selling & Distribution         d. Total Cost 


23 A Cost Sheet with sales & profit data are called _________ .


a. Expert Cost Sheet               b. Extended Cost Sheet

c. Cost Sheet production        d. None of above


24 _________ refers to the cost of materials, which become a major part of the finished product.


a. Direct labour cost                b. Direct expense cost

c. Direct material cost           d. All of above


25 Sunk cost is relevant cost.


a. True                                     b. False


26 Depreciation is a type of which cost.


a. Non-cash cost                     b. Incremental cost

c. Sunk cost                             d. Imputed cost


27. Opportunity cost is also known as opportunity lost.


a. True                                    b. False


28. A cost, which can be influenced by the action of a specified number of an undertaking, is called.


a. Controllable cost                 b. Non-Controllable cost

c. Incremental                                    d. Detrimental cost

29. P/V ratio = C/S


a. True                                     b. False


30. Which of the following is correct.


a. C=s-vc                                 b. C=F+P

c. S=c-vc                                 d. All of the above


31. P/V stands for profit/value ratio.


a. True                                     b. False


32. Calculate B.E.P from the following figures.

TS = Rs 50,00,000                  VC = Rs 2,75,000

N.P.= Rs 1,08,000                  BEP= ?


a. Rs. 2,30,000                        b. Rs. 2,60,000

c. Rs. 3,00,000                        d. Rs. 3,30,000


33. In a B.E. chart, the horizontal axps (x-axis) represents _________ .


a. Cost of production              b. Output

c. Input                                   d. Profit


34. Variable Cost = Marginal Cost.


a. True                                    b. False


35. Which of the following are the advantages of Break – even chart.


a. It helps to determine the selling price to give a desired volume of profit.

b. It facilities Inter firm comparison of profit fifi.

c. It shows the affect of increase and decrease in selling price.

d. All of the above.


36. Sales - ____________ = Margin of safety


a. Break even point                 b. Break even sales

c. P/V ratio                              d. Profit


37. Which of the following heads is not an application of marginal costing.


a. Competition                        b. Recession

c. Special customer                d. None of above




38. F.C = P/V X S – F.


a. True                                     b. False


39. Which of the following is correct.


a. P/V ratio = Change in profit X 100                                 b. P/V ratio = C/S

                      Change in sales

c. P/C ratio = C/S                                                        d. All of the above


40. Graphical representation of cost & revenue showing their relations at different volumes of output is called _________.


a. Break even chart                 b. Break-even point

c. Margin of safety                  d. Profit/volume ratio


                        ( 2 marks question)


1.      -------------- records daily cash & bank receipt and payment.

a)cash book                      b)bank book


2.      state in which journal the following items would be recorded

A)cash purchase of goods             1)purchase

B)credit sale of goods                   2)journal

C) credit sale of furniture            3)sale


a)      A,1 ; B,3 ; C,2

b)     A,2 ; B,3 ; C,3

c)      A,1 ; B,2 ; C,3


3.      -------------- will have separate accounts for each customer.

a)journal ledger                 b)creditor ledger

c) debtor ledger               d)cash ledger


4.      Main ledger is type of secondary book.

a)true                                 b)false


5.      subsidiary ledger is:

a)general ledger

b)debtor ledger

c)creditor ledger

d)all of the above


6.A formal record of a particular type of transaction is known as:


   a. Ledger                                    b. Account

  c. Posting                                   d. Balancing


7. Match the following:

a. Recording of transaction from journal to the ledger.                            1. Ledger

b. Book of secondary entries.                                                                   2. Posting

c. Formal record of particular type of transaction.                                   3. Balancing

d. Closing of the ledger accounts by putting the difference                    4. Account

on the appropriate side of the A/C. 


8. Trail Balance is a part of book of Accounts.

a. True                                          b. False


9. The purpose of trail balance is to:

a. Check the arithmetical accuracy of ledger balances.

b. Have an overview of the operations of the business as on a particular date.

c. Both a & b.

d. None of above.


10. ________ is a separate statement proposed to test the accuracy of the ledger balances.

a. Final Accounts                         b. Trail Balance

c. Journal Entries                           d. Balance Sheet


11. PRIME Cost is :


a. 2,19,200                                    b. 3,19,200

c. 1,19,800                                    d. 4,00,200


12. Work Cost is :


a. 2,67,800                                    b. 3,67,200

c. 2,67,200                                    d. 2,37,200


13. Cost of production is:


a. 2,56,000                                    b. 2,36,000

c. 2,33,000                                    d. 2,56,600


14. Total Cost is:


a. 2,45,000                        b. 2,35,000

c. 3,45,000                                    d. 2,54,000


15. “ The amount at any given volume of output by which the aggregate costs are changes if the volume of output is increased or decreased by one unit” is called:


a. Absorption                               b. Marginal Costing

c. Variable Costing                       d. C.V.P analysis


16. The establishment of budget relating responsibilities of executives to the requirements of a policy and continuous comparison of actual with budgeted result is called:


a. Budget                          b. Budgeting system

c. Budgetary control                   d. All of the above


17. Fixed and flexible budgets are divided according to which category.

a. Scope                            b& f`ibiAncy

c. Period                            d. None of the above


18. The consolidated summary of various functional budget is called:


a. Functional budget         b. Flexible budget

c. Master budget               d. Fixed budget


19. __________ is the target of each section of a organization.


a. Cost                                          b. Profit

c. Budget                          d. All of the above


20. Budgeting is time consuming as well as length.


a. True                                           b. False



(4 marks Question)



1. If: share – capital – 1,60,000

            general reserves – 60,000

            profit & loss A/c – 1,00,000

            loan @ 15% int – 2,00,000

            sales too the yr. – 5,60,000

            tax paid -              40,000

Profit for the current year after Interest & tax – 80,000


Debt – Equity ratio is:


a. 3,20,000                              b. 2,20,000

c. 1,80,000                              d. 2,60,000


2. Interest coverage ratio is:


a. 4 times                                 b. 5 times

c. 6 times                                 d. 3 times


3. Return coverage ratio is:


a. 28.9%                                  b. 5 times

c. 6 times                                 d. 3 times


4. Capital turnover ratio is:

a. 1.50 times                            b. 1.08 times

c. 1.80 times                            d. 2.02 times


5. Fund may be interpreted in which ways:


a. Cash                                                b. Total Current assets

c. Net working capital             d. All of above


6. Fund flow statement is also known as:


a. Fund statement                   b. Statement of source & tree of fund

c. Inflow & outflow of fund d. All of above


7. The turn fund means.


a. Gross working capital         b. Net working capital

c. Net working capital             d. All of above


8. According to _________, the FFS describe the sources from which additional funds were derived and the uses to which these funds are put.


a. Robert Anthony                  b. None of above

c. ICAI, India                         d. None of above


9. Fund flow statement reveals the inflow and outflow of cash during a particular period.


a. True                                                b. False


10. Which of the following is the use of CFS.


a. It helps in short term financial decision relating to liquidity.

b. It explain the reasons for low cash balances.

c. It shows source & uses of cash.

d. All of above.


11. Cash flow is also prepared in statement form.


a. True                                     b. False


12. Fund flow statement is prepared to explain the reasons for low cash balance.


a. True                                                b. False



13. CFO = Increase in C.A + Increase in C.L.


a. True                                     b. False


14. To calculate cash flow operation, which of these two cases will used in Net profit.


a. Add                                                 b. Subtract


15. The sale accounting is under cast by Rs 15,000. This could be rectify as:


Sales Account




                                                  By rectification                        15000


a. True                                          b. False