Management Sciences MCQs – Page 550

✅ B. 500 being expense on travelling expense credited to travelling expenses

Option A : 500 purchase of old equipment not recorded in the books of A/c at all Option B : 500 being expense on travelling expense credited to travelling expenses Option C : Both Option D : None Correct Answer : 500 being expense on travelling expense credited to travelling expenses Read more

✅ C. Deducted, Added

Option A : Added, Reduced Option B : Added, Added Option C : Deducted, Added Option D : Deducted, Deducted Correct Answer : Deducted, Added Read more

✅ B. All types of cash receipts and payments

Option A : Only cash sales Option B : All types of cash receipts and payments Option C : Only revenue receipts Option D : Only capital receipts Correct Answer : All types of cash receipts and payments Read more

✅ D. Closing stock

Option A : Sales Option B : Purchases Option C : Inward returns Option D : Closing stock Correct Answer : Closing stock Read more

✅ B. Deduct income received in advance from respective income and show it as a liability

Option A : Add income received in advance to respective income and show it as a liability Option B : Deduct income received in advance from respective income and show it as a liability Option C : Add income received in advance to respective income and show it as asset Option D : Deduct income received in advance from respective… Read more

✅ D. The Trial Balance has no statutory importance from the point of view of law

Option A : The Trial Balance is prepared after preparing the Profit and Loss Account Option B : The Trial Balance shows only balances of Assets and Liabilities Option C : The Trial Balance shows only nominal account balances Option D : The Trial Balance has no statutory importance from the point of view of law Correct Answer : The… Read more

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Option A : Previous years profit is overstated and current years profit is also overstate Option B : Previous years profit is understated and current years profit is overstate Option C : Option D : Previous years profit is overstated and current years profit is understate Correct Answer : Previous years profit is overstated and current years profit is understated. Read more

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Option A : Errors which affect one account can be errors of posting Option B : Errors of omission arise when any transaction is left to be recorded Option C : Errors of carry forward from one year to another year affect both Personal and Real A/c Option D : Errors of commission arise when any transaction is recorded in… Read more

✅ D. Gross Profit will decrease by 3,320

Option A : Net Profit will decrease by 3,140 Option B : Gross Profit will increase by 3,320 Option C : Gross Profit will decrease by 3,500 Option D : Gross Profit will decrease by 3,320 Correct Answer : Gross Profit will decrease by 3,320 Read more

✅ B. All credit purchases of goods

Option A : All purchases of goods Option B : All credit purchases of goods Option C : All credit purchases Option D : None of these Correct Answer : All credit purchases of goods Read more

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Option A : 17,000 (overstated Option B : 12,000 (understated Option C : 7,000 (understated Option D : 7,000 (overstate Correct Answer : Read more

✅ D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book

Option A : The Trial Balance will not agree Option B : The balance of creditors is understated Option C : The purchases are understated Option D : The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book Correct Answer : The favorable bank balance as per Pass Book is less than… Read more

✅ A. Mistake in balancing an account

Option A : Mistake in balancing an account Option B : Omitting to record a transaction entirely in the subsidiary books Option C : Recording of a wrong entry in the subsidiary books Option D : Posting an entry on the correct side but in the wrong account Correct Answer : Mistake in balancing an account Read more

✅ C. Sales tax paid in connection with the purchase of office equipment

Option A : Interest on loans and debentures Option B : Annual fire insurance premiums on Plant and Equipment Option C : Sales tax paid in connection with the purchase of office equipment Option D : Small expenditures on long- lived assets, such as ` 20 for a paper weight. Correct Answer : Sales tax paid in connection with the… Read more

✅ C. Results in the acquisition of a permanent asset

Option A : Benefits the current accounting period Option B : Will benefit the next accounting period Option C : Results in the acquisition of a permanent asset Option D : Results in the acquisition of a current asset Correct Answer : Results in the acquisition of a permanent asset Read more

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Option A : Expenses in connection with issue of equity shares Option B : Preoperative expenses Option C : Heavy advertising expenses to introduce a new product Option D : Legal expenses incurred in defending a suit for breach of contract to supply goods Correct Answer : Read more

✅ D. Capital receipts

Option A : Liability Option B : Assets Option C : Revenue receipts Option D : Capital receipts Correct Answer : Capital receipts Read more

✅ C. Installation charges paid in conjunction with the purchase of Office Equipment

Option A : Research and development costs during the year Option B : Interest on borrowed fund utilized for acquisition of Office Furniture Option C : Installation charges paid in conjunction with the purchase of Office Equipment Option D : Monthly rent of a machinery used in the business Correct Answer : Installation charges paid in conjunction with the purchase… Read more

✅ D. A credit balance in the Pass Book indicates excess of deposits over withdrawals

Option A : If a Trial Balance tallies, it always means that none of the transactions has been completely omitted Option B : A Trial Balance will not tally if a transaction is omitted Option C : A customer to whom goods have been sold on credit cannot avail himself of a cash discount Option D : A credit balance… Read more

✅ B. Undercasting or overcastting of a subsidiary book is an example or error of commission

Option A : Entering wrong amount in the subsidiary book affects the agreement of the Trial Balance Option B : Undercasting or overcastting of a subsidiary book is an example or error of commission Option C : Errors of principle do not affect the agreement of Trial Balance Option D : Both Correct Answer : Both and above Read more