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    Eco MCQ

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    this.is.goldensnowflakes
    This document contains multiple choice questions related to accounting concepts like costs, ratios, depreciation methods, types of accounts, and the accounting cycle. It includes 20 questions in CA3 Economics and 22 questions in CA2 that cover topics like direct and indirect costs, fixed and variable costs, cost of production, prime cost, depreciation methods like straight line and diminishing balance, accounting equation, types of accounts, and the basic purpose of financial accounting.

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    Eco MCQ

    Uploaded by

    this.is.goldensnowflakes
    50 views9 pages
    This document contains multiple choice questions related to accounting concepts like costs, ratios, depreciation methods, types of accounts, and the accounting cycle. It includes 20 questions in CA3 Economics and 22 questions in CA2 that cover topics like direct and indirect costs, fixed and variable costs, cost of production, prime cost, depreciation methods like straight line and diminishing balance, accounting equation, types of accounts, and the basic purpose of financial accounting.

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    This document contains multiple choice questions related to accounting concepts like costs, ratios, depreciation methods, types of accounts, and the accounting cycle. It includes 20 questions in CA3 Economics and 22 questions in CA2 that cover topics like direct and indirect costs, fixed and variable costs, cost of production, prime cost, depreciation methods like straight line and diminishing balance, accounting equation, types of accounts, and the basic purpose of financial accounting.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    50 views9 pages

    Eco MCQ

    Uploaded by

    this.is.goldensnowflakes
    This document contains multiple choice questions related to accounting concepts like costs, ratios, depreciation methods, types of accounts, and the accounting cycle. It includes 20 questions in CA3 Economics and 22 questions in CA2 that cover topics like direct and indirect costs, fixed and variable costs, cost of production, prime cost, depreciation methods like straight line and diminishing balance, accounting equation, types of accounts, and the basic purpose of financial accounting.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 9

    CA3 Economics - MCQ

    1. Advertising expenses – Indirect Cost.


    2. Recording of financial transactions – Bookkeeping.
    3. Ideal liquid ratio – 1:1
    4. Elements of Cost – All.
    5. Ideal current ratio – 2:1
    6. SBI – Personal Account.
    7. Goodwill – Real account.
    8. Rent – Fixed Cost.
    9. Solvency Ratio is used to measure – Long term solvency.
    10. “Debit all expenses and credit all incomes” – Nominal Account
    11. Recording of financial transaction from journal to ledger – Posting
    12. WDV – Written Down Value.

    CA2
    1. Drawing office salaries is considered under ____________ overheads.
    a) Factory
    b) Office
    c) Selling
    d) Distribution
    2. Prime cost is ____________ cost.
    a) Direct Cost
    b) Indirect Cost
    c) Factory Cost
    d) Production Cost
    3. Overheads are ________ cost.
    a) Direct Cost
    b) Indirect Cost
    c) Production Cost
    d) Variable Cost
    4. Factory Cost is = Prime Cost + _________ .
    a) Direct Cost
    b) Factory Overheads
    c) Cost of Production
    d) None of the above
    5. Cost of Production is = Factory Cost + __________ .
    a) Factory Overheads
    b) Office overheads
    c) Direct Cost
    d) Prime Cost
    6. Cost of Sales = Cost of Production + __________ .
    a) Selling Overheads
    b) Direct Cost
    c) Factory Overheads
    d) Factory cost

    7. Sales = Total ________ + Profit.


    a) Production
    b) Price
    c) Cost
    d) Overheads
    8. Fixed cost is a cost:
    (a) Which changes in total in proportion to changes in output
    (b) which is partly fixed and partly variable in relation to output
    (c) Which do not change in total during a given period despise changes in
    output
    (d) which remains same for each unit of output
    9. Element/s of Cost of a product are:
    (a) Material only
    (b) Labour only
    (c) Expenses only
    (d) Material, Labour and expenses
    10. Total cost of a product: Rs. 10,000
    Profit: 25% on Selling Price
    Profit is:
    (a) Rs. 2,500
    (b) Rs. 3,000
    (c) Rs. 3,333
    (d) Rs. 2,000
    11. Calculate the prime cost from the following information:
    Direct material: Rs. 1,00,000
    Direct labour: Rs. 60,000
    Direct expenses: Rs. 10,000
    (a) Rs. 1,80,000
    (b) Rs. 2,00,000
    (c) Rs. 1,70,000
    (d) Rs. 2,10,000

    12. The Depreciation remains constant according to which method?


    a) Sum of years digit
    b) Units of production
    c) Declining Balance
    d) Straight Line Method

    13. What is the principal objective of Depreciation?


    a) Show last year's profit.
    b) Show records to Income Tax Department.
    c) To get a tax rebate.
    d) To calculate net profit.

    14. Depreciation under Diminishing Balance Method is calculated on?


    a) Scrap Value
    b) Book Value
    c) Cash Account
    d) Repair

    15. What is Sum of Years Digit?


    a) The amount of depreciation each year is fixed and equal.
    b) Way to work out the loss of value of an asset over time.
    c) System of recording larger depreciation expenses during the earlier years.
    d) An accelerated method for calculating an asset's depreciation.

    16. Salvage value means*


    a) Definite sale price of the asset
    b) Cash to be received when life of the asset ends
    c) Cash to be paid when asset is disposed off
    d) Estimated disposal value

    17. Purchase Cost of an asset Rs. 500000. Installation Charge 10000, Import
    duty 20000, Labour Charge 20000. Life of that asset is 5 years. Calculate
    annual depreciation as per SLM method*
    a) Rs. 11000
    b) Rs. 110000
    c) Rs. 1100000
    d) Rs. 100000

    18. Purchase cost of machine Rs. 100000. Life of that machine is 5 years.
    Calculate annual depreciation as per diminishing balance method.
    a) Rs. 20000
    b) Rs. 10000
    C) Rs. 1000
    D) Rs. 2000

    19. Define Depreciation?

    A. An increase in the value of an asset over time.


    B. Resource diminishes over the long run because of utilization.
    C. Assets that can quickly be turned into cash.
    D. Possession of assets over liabilities.

    20. What causes Depreciation?

    A. Loss of goods
    B. Purchase of Goods
    C. Increased Liability
    D. Wear & Tear

    21. What is the reason behind making a provision for depreciation in


    accounts?

    A. To show the current value of assets


    B. To show current liabilities
    C. To charge the cost of assets against profits
    D. To purchase new assets

    22. What is Amortization?

    A. Accounting techniques are used to periodically lower the book value of a


    loan.
    B. Notable reduction in the utility of an inventory item or fixed asset.
    C. Accrual accounting technique used to allocate the cost of extracting
    natural resources
    D. The loss in the physical efficiency of an asset as it ages

    23. What is obsolescence?

    A. Accounting techniques are used to periodically lower the book value of a


    loan.
    B. Notable reduction in the utility of an inventory item or fixed asset.
    C. Accrual accounting technique used to allocate the cost of extracting
    natural resources
    D. The loss in the physical efficiency of an asset as it ages.

    CA1
    1. The main Purpose of Financial Accounting is?

    A. To Provide financial information to shareholders


    B. To maintain balance sheet
    C. To minimize taxes.
    D. To keep track of liabilities

    2. The kind of debts which are needed to be repaid in a short term is known
    as?

    A. Fixed Liabilities
    B. Current Liabilities
    C. Depreciating Assets
    D. Intangible Assets

    3. The Expenses, Profit & Loss of an organisation are recorded in which


    account?

    A. Current Account
    B. Personal Account
    C. Nominal Account
    D. None of the above

    4. Recording financial transaction is part of?

    A. Accounting
    B. Book Keeping
    C. Data Entry
    D. Journal

    5. Examining of financial information refers to?

    A. Analysis
    B. Auditing
    C. Recording
    D. Balance Sheet

    6. Who is an external user of financial statements?

    A. Shareholders
    B. CEO
    C. Manager
    D. Creditor

    7. Identifying an economic transaction is which phase of accounting cycle?

    A. First
    B. Second
    C. Third
    D. Last

    8. What are Liabilities?

    A. Resources of a Company
    B. Expenses of a Company
    C. Obligations of a Company
    D. None of the above

    9. What is the common characteristic of all the assets owned by a company?

    A. Intangible
    B. Long Life
    C. Future Economic Benefits
    D. None of the above

    10. Capital + Liabilities = ?

    A. Revenue
    B. Assets
    C. Unearned Income
    D. Voucher

    11. What is the total of all direct costs known as?


    A) Cost of production
    B) Cost of sales
    C) Prime cost
    D) Works cost
    12. “Debit the Receiver, credit the giver” is the rule of:
    (a) Nominal Account
    (b) Real Account
    (c) Personal Account
    (d) None of these
    13. “Debit all Expense & Loses, Credit all Income & gain” is the rule of:
    (a) Nominal Account
    (b) Real Account
    (c) Personal Account
    (d) None of these
    14. The rule for Real Account is:
    (a) Debit the Receiver, Credit the Giver
    (b) Debit what comes in, Credit what goes out
    (c) Debit all Expense & Loses, Credit all Income & gain
    (d) None of these
    15. ‘State Bank of India’ is an example of:
    (a) Nominal Account
    (b) Real Account
    (c) Personal Account
    (d) Impersonal Account
    16. Accounting is the language of:
    (a) Printing
    (b) Business
    (c) Literature
    (d) None of these
    17. Identify the odd one out:
    (a) Building
    (b) Land
    (c) Machine
    (d) Goodwill
    18. Which of the following is a branch of Accounting:
    (a) Financial Accounting
    (b) Cost Accounting
    (c) Management Accounting
    (d) All of These
    19. Account relating to the persons or firms is called
    (A) Personal accounts
    (B) Real accounts
    (C) Nominal accounts
    (D) All of the above
    20. According to the Golden Rule of Accounting (Modern Approach), Building
    Account is ____:
    (a) Assets Accounts
    (b) Liability Accounts
    (c) Personal Accounts
    (d) Nominal Accounts

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