Changes in the Value of Assets and Liabilities

Q.

What is meant by 'Premium on Redemption of Debentures'?

Q. If there is an increase in the value of plant & machinery, we debit the account and credit the account.

1. plant and machinery
2. bank
3. revaluation
4. profit and loss

Q. When the debit side of the revaluation account is less than credit side, the difference is called on revaluation.

1. profit
2. loss
3. net loss
4. gross profit

Q. After making provision for claim if any, balance of workmen's compensation reserve is distributed among ___ partners in their ___ ratio:

1. New, New
2. Old, New
3. New, Old
4. Old, Old

Q. Under which line item (major head) of the Statement of Profit and Loss of a financial company will the following be shown:

(i) Interest on Loans Given: (ii) Gain (Profit) on Sale of Securities; (iii) Loss on Sale of Fixed Assets; (iv) Interest paid on Deposits; (v) Depreciation on Computers; (vi) Goodwill Written off; (vii) Commission paid for Deposit Mobilisation; and (viii) Repairs Expenses?

Q.

The journal entry for the decrease in value of an asset is

1. None of the above

2. Revaluation A/c Dr.

   To Asset A/c

3. Asset A/c Dr.

   To Revaluation

4. Revaluation A/c Dr.

   To Bank A/c

Q.

What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?

Q. On the death of a partner, the remaining balance in workmen compensation reserve is transferred to partner's capital account in their ratio.

1. old
2. new
3. gaining
4. sacrificing

Q.

For the increase in the value of assets , the journal entry is -

1. None of the above

2. Revaluation A/c Dr.

   To Asset A/c

3. Asset A/c Dr.

   To Revaluation

4. Revaluation A/c Dr.

   To Bank A/c

Q.

Which of the following transactions and events results in a decrease in both total assets and net income?

1. Recognising previously recorded deferred revenue as revenue.

2. Collecting cash from an account receivable.

3. The accrual of wages expense at year-end.

4. Adjustment of the prepaid rent account for rent used during the period.

Q. The debit balance in the Profit & Loss Account is ___________.

1. Surplus
2. Gain
3. Real Asset
4. Loss

Q. The partner's capital account is to be credited when one partner is going to lose his share in future, and the remaining partner is going to gain.

1. sacricing
2. new
3. gaining
4. all

Q. Which of the following are current assets of a business?
(i) Income received in advance
(ii) Stock
(iii) Debtors
(iv) Pre-paid expenses
(v) Accrued income
Select the correct answer from the options given below -

1. Both (i) and (iv) of the above
2. Both (ii) and (iii) of the above
3. (i), (ii) and (iii) of the above
4. (ii), (iii), (iv) and (v) of the above

Q.

Calculate the result of Cash Flow and state the nature of activity involved in the following transaction :

Sold machinery of original Cost Rs 2, 20, 000 with an accumulated depreciation of Rs 90, 000 fo Rs 70, 000.

Q. Accrued income is ______ to the expenses in the profit and loss account.

1. Deducted
2. Rounded off
3. Added
4. None

Q. State whether Revaluation Account is debited or credited to record the decrease in the value of Plant and machinery.

Q. State whether the following statement are True or False.

Credit balance of profit and loss account shows net profit of the business.

Q. Payment of compensation to a worker, who has been discharged from service, is a _________.

1. Non-business expenditure
2. Capital expenditure
3. Revenue expenditure
4. Deferred- revenue expenditure

Q. When money is withdrawn from the bank, the bank_________the account of the customer.

1. Make addition to
2. Credit
3. Debit
4. Give no effect

Q. Select the most appropriate answer from the alternatives given below :

An amount received from the Insurance Company against the joint life policy is __________.
a) debited to deceased partner
b) credited to deceased partner
c) credited to continuing partners capital A/c
d) credited to all partners capital A/c in their profit sharing ratio.

Q. Prepaid expenses is shown under ___________ side of balance side.

1. Asset
2. Debit
3. Liability
4. Credit

Q. Objective Questions :
Answer in one Sentence :

How would you treat general reserve on death of a partner?

Q. Write the word/term or phrase which can substitute each of the following statement.

Excess actual capital over proportionate capital.

Q. The value of a fixed asset after deducting depreciation is known as its:

1. Market Value
2. Book value
3. Face Value
4. Realisable value

Q. Residual value of the asset is realized at the _______.

1. Middle of the year
2. Purchase of asset
3. End of the year
4. End of effective life of asset

Q. Accrued Income is shown _________________.

1. By way of deduction in the income statement
2. As a current asset
3. As a long-term liability
4. As a current liability

Q. When one partner is going to loose his share in future and the remaining partner is going to gain, so partner's capital account is to be debited.

1. gaining
2. losing
3. new
4. all

Q. Taking all ______ assets with additions after charging depreciation and showing them on the assets side is one step adopted in preparation of balance sheet.

1. fixed
2. current
3. tangible
4. non-current

Q. The portion of the acquisition cost of the asset, yet to be allocated is known as ___________.

1. Written down value
2. Accumulated value
3. Realised value
4. Salvage value

Q. Amount which has accrued but is still to be received.

1. Outstanding Income
2. Outstanding Expense
3. Prepaid Income
4. Prepaid Expense