Management Sciences MCQs – Page 592

✅ 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

✅

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

✅ 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

✅ 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

✅ D. Error of principle involves an incorrect allocation of expenditure or receipt between capital and revenue

Option A : Error of casting affects personal accounts Option B : Omission of a transaction from a subsidiary record affects only one account Option C : Error of carry forward affects two accounts Option D : Error of principle involves an incorrect allocation of expenditure or receipt between capital and revenue Correct Answer : Error of principle involves an… Read more

✅ C. All such transactions for which no special journal has been kept by the business

Option A : Credit purchase of fixed assets Option B : Return of goods Option C : All such transactions for which no special journal has been kept by the business Option D : None of these Correct Answer : All such transactions for which no special journal has been kept by the business Read more

✅ B. It is adjusted in the Purchase A/c

Option A : It is already adjusted in the opening stock Option B : It is adjusted in the Purchase A/c Option C : It is adjusted in the Cost of Sale A/c Option D : It is adjusted in the Profit &Loss A/c Correct Answer : It is adjusted in the Purchase A/c 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. Inventories

Option A : Goodwill Option B : Inventories Option C : Investments Option D : Both Correct Answer : Inventories Read more

✅ D. Moving average method

Option A : Delivery method Option B : Percentage-of-completion method Option C : Production method Option D : Moving average method Correct Answer : Moving average method Read more

✅ B. Royalty

Option A : Dividend Option B : Royalty Option C : Purchase consideration Option D : Installment Correct Answer : Royalty Read more

✅ B. Error of principle

Option A : Error of commission Option B : Error of principle Option C : Error of omission Option D : Compensating error Correct Answer : Error of principle Read more

✅ B. Understatement of Assets

Option A : Overstatement of Assets Option B : Understatement of Assets Option C : Overstatement of Liabilities Option D : Understatement of Liabilities Correct Answer : Understatement of Assets Read more

✅ C. The retained earnings was overstated during 2011-2012 and retained earnings will be understated during 2012-2013

Option A : The cost of goods sold was overstated during 2011-2012 and income will be understated during 2012-2013 Option B : The income was overstated during 2011-12 and closing inventory will be overstated during 2012-2013 Option C : The retained earnings was overstated during 2011-2012 and retained earnings will be understated during 2012-2013 Option D : The cost of… Read more

✅ C. The total of the sales journal has not been posted to the Sales Account

Option A : Sale of ` 100 was recorded in the Purchases Journal Option B : Wages paid to Mohan have been debited to his account Option C : The total of the sales journal has not been posted to the Sales Account Option D : Repairs to buildings have been debited to buildings account Correct Answer : The total… Read more