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Unformatted text preview: 1 Question Paper Financial Accounting (CFA510): January 2008 Answer all 70 questions. Marks are indicated against each question. Total Marks : 100 1. Which of the following events/transactions is not recorded in the books of accounts of a business? (a) Withdrawal of goods by the proprietor for his personal consumption (b) Sale of an asset on credit (c) Purchase of a new asset in exchange of an old asset (d) Receipt of interest by proprietor on bank fixed deposit held jointly with his spouse (e) Loss of stock by fire. (1 mark) <Answer> 2. In relation to price, the phrase markdown means (a) The first selling price at which goods are offered (b) The selling price lowered below the cost (c) The selling price lowered below the original selling price (d) The selling price lowered below the previous selling price (e) The difference between the cost and the original selling price. (1 mark) <Answer> 3. Revenue does not include (a) Inflow of cash out of sale of goods (b) Interest on investment (c) Rent received (d) Dividend received (e) Advance received for supplies. (1 mark) <Answer> 4. In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life? (a) Straight line method (b) Written down value method (c) Units-of-production method (d) Sum-of-the-years’-digits method (e) Machine-hour rate method. (1 mark) <Answer> 5. At the time of finalization of accounts, entries passed for outstanding expenses, depreciation and interest on capital are referred to as (a) Opening entries (b) Journal entries (c) Adjustment entries (d) Contra entries (e) Closing entries. (1 mark) <Answer> 6. Which of the following accounts appear(s) in the balance sheet of a business? I. Stock at the end of the financial year. II. Stock at the beginning of the financial year. III. Prepaid rent. IV. Interest received. (a) Only (I) above (b) Only (II) above (c) Both (I) and (III) above (d) Both (II) and (III) above (e) (I), (III) and (IV) above. (1 mark) <Answer> 2 7. Balance appearing in the credit column of a trial balance can be I. An income. II. An outstanding expense. III. A Liability. IV. An income received in advance. (a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (III) above (e) All (I), (II), (III) and (IV) above. (1 mark) <Answer> 8. The rule applicable to a nominal account is (a) Debit what comes in and credit what goes out (b) Debit the receiver and credit the giver (c) Debit all expenses and losses and credit all incomes and gains (d) Debit the giver and credit the receiver (e) Debit what goes out and credit what comes in. (1 mark) <Answer> 9. Balance Sheet of a business concern is a (a) Statement of revenue and expenses (b) Statement of cash receipts and cash payments (c) Cash flow statement (d) Valuation statement (e) Statement of assets and liabilities....
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This note was uploaded on 07/20/2010 for the course ICFAI CFA taught by Professor Cfa during the Fall '09 term at Indian School of Business.
- Fall '09