Accounting Objective Questions and Answers

134. Cost of goods purchased for resale is an example of:

135. A sole trader introduced fresh capital during the year Rs. 10,000 and his drawings were Rs. 4,000. If the profit of the year is Rs. 3,000 and the closing balance of capital is Rs. 40,000, the the balance of capital at the beginning of the year will be

A. Rs. 21,000

136. Securities premium can be used by a company for

A. Issuing fully paid bonus shares to its members

B. Redemption of preference Shares

C. Payment of Dividend on Shares

D. None of these

Discussion

137. 'P' and 'Q' are partners, sharing profits in the ratio of 8 : 5 respectively. On 1^st April 2016, they admitted R into partnership. The new profit sharing ratio among P, Q and R is fixed as 6 : 4 : 3 respectively. The sacrifice ratio of 'P' will be

A. $$\frac{2}{{13}}$$

B. $$\frac{1}{{13}}$$

C. $$\frac{3}{{13}}$$

D. None of these

Discussion

138. 'Double entry system' refers to-

A. Every business transaction has two aspects

B. For every transaction, two accounts is prepared

C. Every business transaction is written twice

D. All of the above

Discussion

139. Dividends are usually paid on

A. Paid up capital

B. Authorised capital

C. Called up capital

D. Issued capital

Discussion

140. A and B are partners sharing profits in the ratio of 3 : 2. Their books showed goodwill at Rs. 3,000. C is admitted with $${\frac{1}{4}^{{\text{th}}}}$$ share of profits and brings Rs. 10,000 as his capital. But, he is not able to bring in cash for his share of the goodwill of Rs. 3,000. How will you treat this?

A. Goodwill is raised by Rs. 12,000

B. C will remain as debtor for Rs. 3,000

C. C's account is debited by Rs. 3,000

D. Goodwill is raised by Rs. 9,000

Discussion

Accounting MCQs