Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: AccountingTotal Number of Question: 40Time: 41 MinutesPlease check your email after completion of test for result.All the best... Name Phone No Email State 1. Which of the following is the fundamental accounting equation? Assets = Liabilities - Owner’s Equity Assets = Liabilities + Owner’s Equity Liabilities = Assets + Owner’s Equity Assets = Liabilities + Revenue None 2. The main objective of financial accounting is to: Determine profits Prepare financial statements Help in tax filing Assist in managerial decision-making None 3. Which accounting concept dictates that revenues and expenses should be matched in the same period? Consistency concept Accrual concept Matching concept Prudence concept None 4. In double-entry bookkeeping, every transaction affects at least: One account Two accounts Three accounts Four accounts None 5. Which of the following is a non-current liability? Accounts payable Bank overdraft Long-term loan Short-term borrowings None 6. he term “owner’s equity” refers to: The value of assets owned by the business The claims of the creditors The net worth of the business The profits of the business None 7. Which of the following financial statements is prepared to assess the financial position of a business? Income statement Balance sheet Cash flow statement Statement of retained earnings None 8. The "accrual" basis of accounting recognizes revenue when: Cash is received Goods are sold or services are provided Payment is due Profit is earned None 9. Which of the following is not an example of a current liability? Bank loan due within 6 months Accounts payable Wages payable Mortgage payable after 5 years None 10. Which of the following is an example of an intangible asset? Cash Land Goodwill Machinery None 11. Which of the following is debited when goods are sold on credit? Accounts receivable Sales Inventory Bank None 12. When a company issues shares at a premium, the entry to record the transaction will be: Debit Bank, Credit Share Capital Debit Share Capital, Credit Bank Debit Bank, Credit Share Capital and Securities Premium Debit Share Capital and Securities Premium, Credit Bank None 13. What is the treatment of bad debts in accounting? Debit bad debts to income statement Debit bad debts to accounts payable Credit bad debts to income statement Credit bad debts to accounts receivable None 14. A business pays ₹5,000 as rent for office space. The journal entry would be: Debit Rent Expense ₹5,000, Credit Cash ₹5,000 Debit Cash ₹5,000, Credit Rent Expense ₹5,000 Debit Rent Expense ₹5,000, Credit Accounts Payable ₹5,000 Debit Accounts Payable ₹5,000, Credit Cash ₹5,000 None 15. If a company buys machinery for ₹100,000 on credit, the correct journal entry is: Debit Machinery ₹100,000, Credit Accounts Payable ₹100,000 Debit Machinery ₹100,000, Credit Cash ₹100,000 Debit Accounts Receivable ₹100,000, Credit Machinery ₹100,000 Debit Cash ₹100,000, Credit Machinery ₹100,000 None 16. A sale of ₹10,000 was made on credit. The entry for this transaction would be: Debit Sales ₹10,000, Credit Accounts Receivable ₹10,000 Debit Accounts Receivable ₹10,000, Credit Sales ₹10,000 Debit Accounts Payable ₹10,000, Credit Sales ₹10,000 Debit Bank ₹10,000, Credit Sales ₹10,000 None 17. If a business borrows ₹50,000 from a bank, the journal entry would be: Debit Cash ₹50,000, Credit Bank Loan ₹50,000 Debit Bank Loan ₹50,000, Credit Cash ₹50,000 Debit Bank Loan ₹50,000, Credit Capital ₹50,000 None 18. Which of the following is an example of a non-operating income item? Sales Revenue Interest Income Cost of Goods Sold Advertising Expenses None 19. Which of the following transactions will affect the cash flow from financing activities? Sale of machinery Issuance of shares Payment of wages Purchase of inventory None 20. Which of the following is NOT an accounting journal entry? Debit Sales, Credit Cash Debit Rent Expense, Credit Cash Debit Machinery, Credit Accounts Payable Debit Income, Credit Dividends None 21. Which method of depreciation assumes that the asset will lose value evenly over its useful life? Declining balance method Sum-of-the-years'-digits method Straight-line method Unit of production method None 22. Which of the following is NOT a reason for creating provisions in accounting? To account for future liabilities To prepare for uncertain future expenses To reduce taxable income To maintain liquidity None 23. Which of the following is true regarding accumulated depreciation? It is shown as a liability on the balance sheet It is deducted from the value of assets on the balance sheet It is added to the asset value It is an operating expense on the income statement None 24. A company creates a reserve for bad debts. What effect does it have on the financial statements? Increases net income Reduces total liabilities Increases total assets Reduces net income and total assets None 25. The provision for depreciation on assets is made to: Accumulate cash for future replacement of assets Reflect the actual market value of assets Account for the gradual loss of value of assets Avoid income tax None 26. Which of the following is an example of a current liability? Long-term loans Accrued expenses Share capital Goodwil None 27. Which of the following is NOT an example of a reserve? General reserve Investment reserve Contingency reserve Capital reserve None 28. Depreciation on revalued assets is charged: To the profit and loss account To the revaluation surplus To accumulated depreciation To the capital account None 29. Under which accounting method is depreciation calculated based on the asset’s usage? Straight-line method Declining balance method Sum-of-the-years'-digits method Unit of production method None 30. Which of the following is true about the ‘matching principle’ in accounting? Revenues are recorded when earned, irrespective of cash flow Expenses are matched with the revenue they help generate Income tax is matched with the profit for the year Revenues are recorded when cash is received None 31. In a partnership, profits and losses are shared according to: The partnership agreement The capital ratio The salary and interest ratio The number of partners None 32. When a company issues shares at a premium, the premium is credited to: Share capital o Profit and loss account Securities premium account Reserves and surplus None 33. Which of the following is NOT a characteristic of a joint stock company? Separate legal entity Limited liability Unlimited life Easy transferability of shares None 34. Which of the following is correct regarding the distribution of profits in a partnership? Profits are always shared equally Profits are shared based on capital contribution Profits are shared based on the partnership agreement Profits are shared based on workload None 35. The issue of bonus shares by a company will: Increase the capital of the company Increase the retained earnings of the company Increase the number of outstanding shares without affecting the total equity Decrease the number of shares None 36. In a partnership, if there is no partnership deed, profits are shared: Equally between all partners Based on the capital contribution of each partner Based on the work contributed by each partner Based on the seniority of each partner None 37. A company’s authorized share capital is: The total capital raised from shareholders The amount the company is legally allowed to issue The amount paid by shareholders The company’s net worth None 38. In case of the liquidation of a partnership firm, who gets paid first? Partners Creditors Government taxes Shareholders None 39. Which of the following is a feature of a company’s capital? Shareholders are responsible for paying off the company's debts Capital is raised through the sale of shares Capital can be withdrawn by shareholders at any time Shareholders' liability is unlimited None 40. A partnership firm’s capital is contributed in the form of: Cash only Assets only Both cash and assets Cash, assets, and goodwill None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test.Look out for results and future opportunities.Stay Connected !! Your quiz time is about to finish. Few seconds left. 1 2 3 4 Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
