Financial Accounting ICOM Part 01 Top 500 + MCQS Download Pdf Chapter No 10

written by Assad Javaid | April 29, 2021

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Top 500+ New Financial Accounting ICOM MCQs with Answers | Download PDF

Chapter – 10

Final Account

Encircle the most appropriate answer from the following :

1. It is prepared to determine the gross profit or gross loss:

  1. Trading account
  2. Balance sheet
  3. Profit or loss account
  4. None of these

2. It is prepared to determine the net profit or net loss:

  1. Trading account
  2. Cash book
  3. Profit or loss account
  4. Balance sheet

3. Which of the following discloses the financial position of the business.

  1. Trading account
  2. Profit or loss appropriation account
  3. Profit or loss account
  4. Balance sheet

4. Gross profit equals to:

  1. Net profit minus expenses
  2. Sales minus cost of goods sold
  3. Sales minus closing stock
  4. Purchases minus closing stock

5. Cost of sales is equal to:

  1. Sales – purchase
  2. Purchases – return +closing stock
  3. Opening stock + Purchases (Net) –

closing stock

  • Sales +Opening stock – (Purchases+closing stock)

6. Net profit is equal to:

  1. Gross profit – Expenses
  2. Sales – expenses
  3. Sales – Cost of goods sold
  4. Capital- Expenses

7. The price of goods sold or services rendered to the customers is called:

  1.  Expense
  2. Profit
  3. Revenue
  4. Sales

8. Profit or loss appropriation account is not prepared in the case of:

  1. Partnership
  2. Joint Stock company
  3. Sole tradership
  4. Partnership at will

9. Excise duty is a

  1. Direct Revenue
  2. Direct Expense
  3. Indirect Revenue
  4. Indirect Expense

10. The valuation of closing stock is at:

  1. Cost Price
  2. Market Price
  3. Cost or Market Price whichever is lower
  4. Cost or Market Price whichever is higher

11. Which account is a summary of direct expenses and direct revenues:

  1. Trading and profit or loss account
  2. Profit or loss account
  3. Balance sheet
  4. Trading account

12. Net profit plus expenses is equal to: Purchases

  1. Cost of goods sold
  2. Purchases
  3. Gross profit
  4. Capital

13. If the gross profit is Rs.5, 000 and the net profit 35% of the gross profit then the expenses must be:

  1. 3250
  2. 1250
  3. 1750
  4. 3750

14. Position statement is similar

  1. Trial balance
  2. Balance sheet
  3. Financial Statement
  4. Bank Reconciliation Statement

15. If sales are Rs. 12000,Gross profit is 10% of sales and net profit is 5% of sales then expenses will:

  1. 1800
  2. 2400
  3. 4200
  4. 600

16. Drawings are deducted from:

  1. Sales
  2. Capital
  3. Income
  4. Expenses

17. Assets which have no physical existence are called:

  1. Tangible assets
  2. Liquid assets
  3. Fictitious Assets
  4. Intangible assets

18. An operating statement is similar to a

  1. Balance sheet
  2. Financial Statement
  3. Bank Reconciliation Statement
  4. Profit or loss statement

19. Stock in trade is a:

  1. Current asset
  2. Quick Asset
  3. Non-current asset
  4. Intangible asset

20. Assets which have no market value are called:

  1. Wasting assets
  2. Intangible assets
  3. Fictitious assets
  4. Tangible assets

21. Net sales are equal to sales minus

  1. Returns inward
  2. Cost of goods sold
  3. Returns outwards
  4. Carriage on sales

22. Goodwill, patent, copyright and tracks mark are:

  1. Wasting assets
  2. Fictitious assets
  3. Intangible assets
  4. Liquid assets

23. Debts which are repayable in the course of less than one year but more than one month are called:

  1. Quick liabilities
  2. Liquid liabilities
  3. Deferred liabilities
  4. Contingent liabilities

24. Expenses related to sale of goods are shown in:

  1. Trading account
  2. Profit or loss account
  3. Balance sheet
  4. Sales account

25. A balance sheet is a:

  1. Statement of income and expenditure
  2. Statement of debtors and creditors
  3. Financial statement of a business on a particular date
  4. Statement of profit earned by a business

26. Closing stock is recorded in:

  1. Income statement only
  2. Profit or loss account only
  3. Trading account only
  4. Trading account and balance sheet

27. A liability depends upon certain future event is called:

  1. Quick liability
  2. Current liability
  3. Contingent liability
  4. Quick liability

28. Marshalling of balance sheet means:

  1. Totaling of assets
  2. Totaling of liabilities
  3. Ordering of assets and liabilities
  4. Excess of assets over liabilities

29. Bank overdraft is an example of

  1. Deferred liability
  2. Liquid liability
  3. Current liability
  4. All of these

30. Income tax paid by a sole trader is shown on:

  1. Debit side of trading account
  2. Debit side of profit or loss account
  3. By way of deduction from capital in the balance sheet
  4. Credit side of trading account

31. If the profit is 25% of cost price then

  1. 20%
  2. 33-1/3%
  3. 66-1/3%
  4. 25%

32. Gross profit is credited to

  1. Trading account
  2. Profit or loss account
  3. Balance sheet
  4. None of these

33. Net profit is transferred to:

  1. Creditor’s account
  2. Capital account
  3. Drawing account
  4. Debtor’s account

34. It is a statement of assets, liabilities and owner’s equity on a particular date.

  1. Financial Statement
  2. Balance sheet
  3. Bank Reconciliation Statement
  4. None of these

35. Excess of assets over liabilities is called:

  1. Profit
  2. Expense
  3. Income
  4. Capital

36. All the expenses connected with the management of the business are called:

  1. Office expenses
  2. Financial expenses
  3. Selling expenses
  4. Other expenses

37. The method, under which the assets and liabilities are shown in Balance Sheet in the order of their permanence is called:

  1. Liquidity Preference method
  2. Mixed method
  3. Permanency preference method
  4. None of these

38. Permanence preference method is adopted by:

  1. Sole Tradership
  2. Joint Stock company
  3. Partnership
  4. None of these

39. The method under which assets and liabilities are shown in the order of their liquidity is called:

  1. Permanence preference method
  2. Mixed method
  3. Liquidity preference method
  4. Co-Operative societies

40. Liquidity preference method is usually adopted by:

  1. Joint Stock company
  2. Banks
  3. Sole Tradership and partnership
  4. Insurance companies

41. Assets, which have physical existence, are called:

  1. Tangible assets
  2. Quick assets
  3. Intangible assets
  4. Current assets

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