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Subjetive Model Test 2

Petro Bangla Subjective practice question
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49 views10 pages

Subjetive Model Test 2

Petro Bangla Subjective practice question
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Subjective Model Test-2

Post: Assistant Manager (Finance)


Assistant officer (Finance)
Exam Date: 12 May, 2024
Organized By- Encyclopedia Publications
Time: 30 Minutes Total Marks: 50 Total Questions: 50
1. What type of accounting is mandatory as per IAS/IFRS-
A. Cost Accounting
B. Managerial Accounting
C. Financial Accounting
D. Forensic Accounting
E. None Ans. C
2. All of the following sources of financing are spontaneous except-
A. Trade credit
B. Note payable
C. Deferred revenue
D. Accrued expense
E. Bank overdraft Ans. E
Explanation: In a business setting, a spontaneous source of funds refers to financing which
arises from day-to-day operations. Unlike the formal process of procuring a loan or issuing
equity, spontaneous financing doesn't require any special action. It happens spontaneously
during the course of business. Examples of spontaneous sources of financing-
i. Trade credit
ii. Note payable
iii. Deferred revenue
iv. Accrued expense
অর্ থা’, প্রতিষ্ঠানের দৈেতিে কার্ থক্রম পতরচালোর জন্য ইেফরমালভানে যর্সে অর্ থায়নের সুনয়াগ সৃতি হয় িানক Spontaneous
Sources of Financing েনল।
3. Which of the following is not true about Capital Lease?
A. The lease term is greater than or equal to 75% of the useful life.
B. The present value of the lease payments is greater than or equal to 90% of the fair value of
the assets.
C. At the end of lease period the ownership of the asset may transfer to the lessee.
D. Cost of repair and maintenance are borne by the lessor.
E. None Ans. D
Explanation: In case of capital leasing the cost of repair and maintenance are borne by lessee.
4. Cash paid to Hemant Joshi Rs. 800 was debited o Hiral Hoshi as Rs. 8,000. This is an
example of-
A. compensating error
B. error of omission
C. error of commission
D. error of principles
E. None Ans. C
Explanation:
Compensating Error একটি ভুল আনরকটি ভুনলর মাধ্যনম সংন াধে হনয় র্াওয়ানক Compensating Error েনল।
Error of Omission সম্পূর্ থ যলেনৈর তলতপব্ধকরর্ হনি োৈ র্াওয়ার ভুল।
Error of Commission টাকার পতরমাে কম যেত তলখার কারনে সৃি ভুল।
Error of Principles সম্পতিোচক তহসােনক খরছ এেং খরছোচক তহসােনক সম্পতিোচক তহসানে
তলতপব্ধকরর্জেীি ভুল।
5. Which one of the following is an example of offset accounting-
A. Sales
B. Purchase of Machinery
C. Account Receivable
D. Allowance for bad debt
E. Cash Ans. D
Explanation: (অর্ থাৎ, যর্ তহসানের মাধ্যনম অন্য একটি তহসানের পতরমাে ো মূল্য কমানো হয় িানক কন্ট্রা একাউন্ট েনল।
যর্মে, তেক্রয় যফরি দ্বারা তেক্রনয়র পতরমাে কমানো হয় আোর অেচয় সতিতি দ্বারা স্হায়ী সম্পনৈর মূল্য কমানো হয়)
List of Contra Accounts:
Types of Accounts Contra Accounts
Purchase Purchase return, purchase discount
Sales Sales return, sales discount
Asset Accumulated Depreciation
Liability Provision for account payable, discount on bonds payable
Owners’ Equity Treasury stock, drawings, dividend
ন োট: নকোন ো নকোম্পোন যখ ন নের নেয়োর ন নেই মোনকেট নেনক নকন ন য় তখ তোনক
নেেোনর স্টক বনে)
6. Mezzanine Financing has the characteristics of-
A. debt financing
B. equity financing
C. hybrid of debt and equity financing
D. None Ans. C
Explanation: Mezzanine Financing: Mezzanine Financing হনে Debt এেং Equity এর একটি
Hybrid Financing অর্াথ ৎ, ইসুু করার সময় এটি Debt Financing তহনসনে র্াকনলও ভতেষ্যনি যকাে কারনে উক্ত
যলাে Default হনয়নগনল এটিনক Equity যি রুপান্তর করা হয়।
7. Conceptual framework of accounting was developed by-
A. IASC
B. IASB
C. IASCO
D. FASB
E. None Ans. B
Explanation: Conceptual Framework of Accounting was developed by International
Accounting Standard Board (IASB).
• IASC: International Accounting Standards Committee (IASC)
• IASB: International Accounting Standard Board (IASB)
• IASCO: International Organization of Securities Commissions (IOSCO)
• FASB: Financial Accounting Standards Board (FASB)
8. Which of the following characteristics is not true about Preferred Shares?
A. Have dividend priority over common stock.
B. Do not have voting rights.
C. Dividend can be cumulative or non-cumulative.
D. Residual claimer of the assets.
E. Do not represent the ownership of the company. Ans. D
Explanation: প্রতিষ্ঠানের সমস্ত ৈায়-নৈো পতরন ানধর পনর অেত ি সম্পনৈর মাতলকাোনক Residual Claim েলা হয়।
Common stockholders are called the residual claimer of the assets.
9. Variable cost per unit----
A. varies with the level of output
B. changes with the level of output
C. changes with the growth of the firm
D. does not change with the volume of production
E. None Ans. D
Explanation: In financial management, variable cost per unit refers to costs that does not
fluctuate in direct proportion to the level of output or production. Therefore, the correct option
is D: does not changes with the level of output.
• Fixed cost per unit varies with the level of output.
• Variable cost per unit does not vary with the level of output.
10. Which one of the following principles of accounting-
A. Economic Entity
B. Going Concern
C. Revenue Recognition
D. Accounting period
E. Monetary unit Ans. C
Explanation: Revenue Recognition ব্যতিি োতক সেগুনলা হনে Accounting Assumptions/ Concepts.
(Second Edition: Page-14)
11. An entry of Rs. 6,500 was wrongly posted to Salaries account instead of Machinery
Account as salaries are to be capitalized. It is –
A. an error of commission
B. a clerical error
C. an error of principle
D. an error of omission
E. None Ans. C
Explanation: When revenue expenses are recorded as capital expenditure and capital
expenditure are recorded as revenue expense these types of errors are called error of principles.
(অর্াথ ’, মূলধেজািীয় ব্যয়নক মুোফা জািীয় এেং মুোফা জািীয় ব্যয়নক মূলধেজািীয় ব্যয় তহসানে তলতপেদ্ধ করার কারনে
যর্ ভুল হয় িানক েীতিগি ভুল ো Error of Principles েনল।
12. Assets are classified as short and long term under which principles/assumptions of
accounting-
A. Periodic Concept
B. Going Concern Concept
C. Matching Principles
D. Monetary Measurement Concept
E. None Ans. B
Explanation: Going Concern Concept: The going concern assumption assumes that any
organization will continue to operate its business for the foreseeable future or indefinite time
period. Under this assumption;
• Assets and liabilities are classified as short term and long term.
• Expenditure is classified as revenue expense and capital expense.
• Depreciation and amortization are recorded under this principle.
• Assets are recorded at historical cost.
13. Which of the following is true when a bond is trading at a discount?
A. Coupon rate >Current yield > Yield to maturity
B. Coupon rate < Current yield < Yield to maturity
C. Coupon rate = Current yield = Yield to maturity
D. Coupon rate < Current yield = Yield to maturity
E. None Ans. B
Explanation: Discounted bond: When a bond is sold at a price lower than the face value then
the bond is called discounted bond. (Market Price < Face Value).
Coupon Rate = (Annual Return)/(Face Value)
Current Yield = (Annual Return)/(Market Price)
Yield to Maturity = Sum of all interest payment+ Principal amount

(Coupon Rate এেং Current Yield এর মনধ্য Current Yield েড় হনে কারর্ সূত্র অনুর্ায়ী Current Yield যক
ভাগ করা হনে Market Value তৈনয় আর Discount Bond এ Market Value সেসময় Face Value যর্নক কম
র্ানক। Yield to Maturity যর্নহতু সকল Interest এেং Principal এর সমতি িাই এটি অেশ্যই অন্য দুটি যর্নক েড়
হনে সুিারাং Coupon rate < Current yield < Yield to maturity)
14. Which of the followings are classified as investment grade high credit rating bond?
A. Euro Bond
B. Senior Bond
C. Zero coupon bond
D. Anger Bond
E. Junk Bond Ans. D
15. Which of the followings is not traded on stock exchange –
A. Shares
B. Bonds
C. Forward
D, Futures
E. Options Ans. C
16. Property Plant and Equipment are recorded under which of the IAS-
A. IAS 41
B. IAS 38
C. IAS 16
D. IAS 7
E. None Ans. C
Explanation:
IAS-7- Statement of Cash Flow
IAS- 16: Property Plant and Equipment
IAS- 38: Intangible Assets
IAS -41: Agriculture
17. Which of the following is an internal source of financing?
A. Bond
D. Debenture
C. Venture funding
D. Equity share
E. None of the above Ans. E
Explanation: Retained earnings, sinking fund এেং যর্নকাে ধরনের Reserve ব্যতিি Financing এর
সেগুনলা Source External.
18. Which of the following stock is traded at value than their intrinsic value-
A. Growth stocks
B. Value stocks
C. Income stocks
D. Defensive stocks
E. Cyclical stocks Ans. B
Explanation: Value Stocks: Value stocks are stocks that are being traded at a value lower than
their intrinsic value.
Intrinsic Value: The intrinsic value of a business is the present value of all expected future
cash flows, discounted at the appropriate discount rate. ***
19. An option make profit-
A. When the option is exercised in the money.
B. When the option is exercised at the money.
C. When the option is exercised out of the money.
D. When the option is exercised above the money.
E. None Ans. A
Explanation:
In the money Option is profitable
Out of the money Option is not profitable
At the money Neither profitable nor unprofitable.
20. Companies that are failed to hold AGM and also failed to declared any dividend for two
consecutive years are called-
A. A Category company
B. B Category company
C. G Category company
D. N Category Company
E. Z Category company Ans. E
Explanation:
Category Criteria
A- Category Company • Regular in holding AGM
• Declared at least 10% dividend in last FY
B- Category Company • Regular in holding AGM but
• Failed to declare 10% dividend
G- Category Company Listed in stock exchange but not goes into commercial operation
N- Category Company Newly listed but not holding AGM and declared dividend yet.
Z- Category Company • Failed in holding AGM and
• Failed to declare 10% dividend

21. Low default risk security issued by financially secured firms is classified as-
A. treasury bills
B. commercial papers
C. Sukuk
D. certificate of deposits
E. mutual funds Ans. B
Explanation: সাধারর্ি যর্সে যকাম্পাতে Financially strong িারাই Commercial Papers ইসুু করনি পানর।
িাই এই ধরনের Security যি Low default risk র্ানক।
22. By hedging a portfolio, a bank manager –
A. reduces interest rate risk.
B. increases reinvestment risk.
C. increases exchange rate risk.
D. increases the probability of gains.
E. None Ans. A
23. Which of the following stocks provide regular steady income-
A. Growth stocks
B. Defensive stocks
C. Blue chips stocks
D. Income stocks
E. Cyclical stocks Ans. D
Explanation: Income stocks: Income stocks are stocks that offer regular and steady income,
usually in the form of dividends, over a period of time with low exposure to risk.
(অর্ থাৎ, যর্সে য য়ার প্রতিেছর ভানলা পতরমাে লভুাং (dividend) তৈনয় র্ানক যসইসে য য়ারনক Income
stocks েনল)
24. A contract that requires the investor to sell securities on a future date is called-
A. short contract
B. long contract.
C. hedge.
D. micro hedge.
E. None Ans. A
Explanation:
• Long Contract/Position: A person who agrees to buy an asset at a future date has gone
long contract.
• Short contract/Position: A contract that requires the investor to sell securities on a
future date is called a short contract.
25. At the beginning of the year, XYZ Company had total assets of Tk 1,00,000 and the total
liability of Tk 60,000. During the year the assets are decreased by Tk 15,000 and the
liability are increased by Tk 8,000. What is the amount of Owner’s Equity?
A. Tk 27,000
B. Tk 17,000
C. Tk 43,000
D. Tk 50,000
E. None Ans. B
Explanation: Using Accounting Equation:
A= L+ OE
1,00,000= 60,000+OE
(15,000) = 8,000+ OE
85,000 = 68,000+ OE
OE= 17,000
26. Shareholder wealth in a firm is represented by-
A. the number of people employed in the firm
B. the book value of the firm's assets less the book value of its liability
C. the amount of salary paid to its employee
D. the market price per share of the firm's common stock
E. None Ans. D
Explanation: Shareholder wealth in a firm is represented by the market price per share of the
firm's common stock.
27. When debit balance is equal to credit balance then the trial balance means
A) Account balances are correct
B) Mathematically Capital+ Liabilities=Assets
C) No mistake in recording transactions
D) No mistake in posting entries to ledger accounts
E. None Ans. B
Explanation: Trial Balance এর দুই পা তমনল র্াওয়া মানে গাতর্তিকভানে (Mathematically), সম্পৈ =
ৈায়+ মতলকাোসত্ত্ব বুঝানো হয়। এর মাধ্যনম তহনসনের সেতেষয় সঠিকভানে তলতপব্ধ হনয়নছ এটা তেতিিভানে েলা র্ানে ো।
28. How does failure to record accrued revenue distort the financial reports?
A. It understates revenue, net income, and current assets
B. It understates net income, stockholders’ equity, and current liabilities
C. It overstates revenue, stockholders’ equity, and current liabilities
D. It understates current assets and overstates stockholders’ equity
E. None Ans. A
29. Which of the following statements is false regarding Profit Maximization?
A. It consider the time value of money.
B. It ignores the risk and uncertainty.
C. It focus on short term goals.
D. All of the statements are false
E. None Ans. A
Explanation: Profit Maximization ignores the time value of money.
30. Which of the following errors in the journal entry will not be detected by trial balance:
A. The debit part is overstated but the credit part is correctly recorded
B. The debit part is correctly recorded but the credit part is overstated
C. Both the debit and credit parts are overstated by the same amount
D. The debit part is correctly recorded but the credit part is understated
E. None Ans. C
Explanation: তহসানের যর্নকাে একপান কম (understated) ো যেত (overstated) যলখা হনল িা যরওয়াতমনলর
মাধ্যনম ধরা পড়নলও উভয় পান একই পতরমাে টাকা কম ো যেত যলখা হনল িা যরওয়াতমনল মাধ্যনম ধরা পনড়ো।
31. Which one of the following is not an example of personal account?
A. Rahim's Account
B. Salary account
C. Prepaid insurance account
D. AB Bank Account
E. None Ans. B
Explanation: প্রতিষ্ঠানে আয়-ব্যয়োচক তহসােসমূহ হনে Nominal Accounts যর্মে, Salary account.
32. The original cost of a physical asset was $45,000. It was purchased on January 1, 2015. It
has an estimated useful life of 10 years and has been depreciated under the straight-line
method. At the end of the 6th year, after adjusting entries have been recorded and posted,
the book value of the physical asset will be which of the following?
A) $22,500
B) $27,000
C) $18,000
D) $40,500
E. None Ans. C
Explanation: Book value is the original cost of an asset less its accumulated depreciation. The
annual depreciation is $4,500 (=$45,000 /10). The accumulated depreciation is $27,000
(=$4,500 x 6). The book value is $18,000 (=$45,000 - $27,000).
33. When the price of a bond is below the face value, the bond is said to be-
A. Trading at par
B. Trading at a premium
C. Trading at a discount
D. Trading below par
E. None Ans. C
Explanation:
Trading at par Sold the bond at face value
Trading at a premium Sold the bond above the face value
Trading at a discount Sold the bond below the face value
34. Valuing assets at their liquidation/market value rather than their cost is consistent with
the-
A. Time period assumption
B. Matching principle
C. Going concern assumption
D. Fair Value Principles
E. None Ans. D
Explanation: Valuing assets at their liquidation value rather than their cost is inconsistent with
the Going concern assumption or Historical cost principle because under going concern
assumption or historical cost principles assets are recorded at their original cost not liquidation
cost or fair value.
(Going concern assumption এেং Historical cost principle অনুর্ায়ী সম্পতিনক ক্রয় মূনল্য ো ঐতিহাতসক
মূনল্য তলতপেদ্ধ করা হয়। সুিারং এখানে সঠিক আেসার হনে Going concern assumption)

Valuing assets at their liquidation value rather than their cost is consistent with the Fair
Value Principle. (Fair Value Principle অনুর্ায়ী সম্পতিনক চলতি োজার মূনল্য তলতপেদ্ধ করা হয় ।)
35. The accounting entries are recorded as per the Generally Accepted Accounting Principles.
If any of these principles is violated or ignored, errors resulting from such violation are
known as –
A. Error of omission
B. Error of negligence
C. Errors of principles
D. Compensating errors
E. None Ans. B
Explanation: Error of Negligence: The accounting entries are recorded as per the Generally
Accepted Accounting Principles. If any of these principles is violated or ignored, errors
resulting from such violation are known as Error of Negligence.
36. Adjusting Entries?
A. Assign revenue to the period in which they are earned
B. Help to properly measure the period’s Net Profit / Loss
C. Bring asset and liability account to correct balances
D. All of about statements are true regarding Adjusting Entries
E. None of the above Ans. D
37. The responsibility of use and maintenance of the asset in operating lease lies with the --
A. Lessor
B. Lessee
C. Messi
D. Desi
E. None Ans. A
Explanation: The responsibility of repair and maintenance of the asset lies with--
In operating lease Lessor
In capital lease Lessee
38. Which one of the following is an example of contra account?
A. Capital Account
B. Purchase Account
C. Treasury Stock
D. Inventory Account
E. Sale Account Ans. C
Explanation: Contra Account: A contra account is an account that reduce the value of related
account. i.e. treasury stock, accumulated depreciation.
Treasury stock: যকাে যকাম্পাতে মানকথট যর্নক তেনজর য য়ার তেনজই তকনে যেওয়ানক Treasury Stock েনল। এর
মাধ্যনম Capital Account হ্রাস পায়।
39. Type of option which can be exercised at any time before expiry date which is classified
as-
A. European option
B. American option
C. Australian option
D. money option
E. None Ans. B
Explanation: Types of Option based on Exercised Time:
• A European Option may be exercised only at the expiration date (at maturity) of
the option, i.e. at a single pre-defined point in time.
• An American Option on the other hand may be exercised at any time before the
expiration date.
40. Which of the followings are speculative grade high-yield bond-
A. Angel Bond
B. Perpetual Bond
C. Senior Bond
D. Junk Bond
E. Bearer Bond Ans. D
Explanation: Junk Bond: Junk bonds, also known as a speculative-grade bond or high-yield
bonds, are risky investments that have higher rates of default but offer significantly higher
returns. High risk, High gain bond.
41. There are currently 41- IAS and --------- IFRS.
A. 16
B. 17
C. 18
D. 19
E. 20 Ans. C
Explanation: Recently েতুে একটি IFRS যুক্ত হনয়নছ IFRS 18: Presentation and disclosures in
Financial Statements.
42. Which one of the following is an example of expenditure-
A. Purchase inventory
B. Purchase machinery
C. Salary paid to employee
D. Depreciation
E. None Ans. B
Explanation: Expenditure refers to the amount spent by the entity for the purpose of purchasing
long term fixed assets অর্াথ ৎ, প্রতিষ্ঠানের ৈীর্ থনময়াৈী সম্পৈ ক্রনয় যর্ অর্ থ ব্যয় হয় িানক Expenditure/Cost েনল।
43. The process of originally recording a business transaction in the accounting records is
termed:
A. Initiating
B. Footing.
C. Posting
D. Balanci
E. None Ans. E
Explanation: The process of originally recording a business transaction in the accounting
records is termed as journalizing.
44. Which of the following correctly represents the sequence of the accounting cycle?
A. Transaction analysis > Ledger > Journal > Trial balance > Adjusting entries
B. Transaction analysis > Journal > Ledger > Adjusting entries > Trial balance
C. Transaction analysis > Journal > Ledger > Trial balance > Adjusting entries
D. Transaction analysis>Journal> Trial balance> Ledger> Adjusting Entries
E. None of the above Ans. C
45. Which of the following goodwill is considered the best goodwill for an organization?
A. Dog goodwill
B. Cat goodwill
C. Rag goodwill
D. Rabbit goodwill
E. None Ans. B
Explanation: Cat Goodwill: Cat goodwill is considered the best goodwill for an organization
because these types of customers are more loyal to a brand or company.
46. Find out value of account receivable from following; Cash Rs. 48,000, account payable
Rs. 33,000, office equipment Rs. 21,000 owner equity Rs. 77,000?
A. Rs. 21,000
B. Rs. 51,000
C. Rs. 15,000
D. Rs. 110,000
E. None Ans. E
Explanation: Asset = Liability + Owner's Equity
➢ cash+ Account Receivable+ Office Equipment= Account payable+ Owner's equity
➢ 48,000+ AR+ 21,000= 33,000+77,000
➢ AR = 1,10,000-69000
➢ AR= 41,000
47. Which cost is incurred even if the company is closed?
A) Sunk cost
B) Historical cost
C) Shut-down cost
D) Imputed cost
E. None Ans. C
Explanation: Shut-down: প্রতিষ্ঠানে এমে তকছু খরছ আনছ যর্গুনলা প্রতিষ্ঠানের উৎপাৈে েন্ধ র্াকনল চলনি র্ানক যর্মে,
Salary of permanent employee, rent of the office building etc. এগুনলানক Shutdown cost েনল।
48. Which of the following is a real account?
A. Rahim's Account
B. Salary Account
C. Goodwill Account
D. Purchase Account
E. None of the above Ans. C
Explanation: Real Account: All assets in a business either tangible or intangible are
classified as real account.
49. Which one of the following securities is money market instrument?
A. Common stock
B. Preferred stock
C. Treasury bonds
D. Treasury bills
E. Corporate bonds Ans. D
Explanation:
Treasury bonds (long-term) Capital market instrument
Treasury bills (short-term) Money market instruments
50. Which of the following factors affect the option price?
A. Current price of underlying assets.
B. Expected dividend of the underlying assets.
C. Maturity date
D. Risk free interest rate
E. All of the above factors affect the option price. Ans. E
Explanation: Factors Affecting the Option Price:
• Current price of underlying assets.
• Volatility of the price of the underlying asset.
• Expected dividend of the underlying assets.
• Strike price: the price at which a put or call option can be exercised. It is also known
as the exercise price.
• Maturity date and
• Risk free interest rate.

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