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. The concept that states income is recognized when it is earned, not when it is received, is called: Accrual concept Realization concept Matching concept Consistency concept None 2. The concept that expenses are matched with revenue is known as: Prudence concept Matching concept Accrual concept Business entity concept None 3. Which accounting principle ensures that only actual, verifiable transactions are recorded? Prudence principle Accrual principle Historical cost principle Substance over form principle None 4. The assumption that the business will continue to operate indefinitely unless there is evidence to the contrary is known as: Going concern concept Consistency concept Prudence concept Business entity concept None 5. If an error is made while recording a transaction in the wrong account, which of the following is true? It is a compensating error It it is a clerical error It is an error of omission It is an error of commission None 6. If a sale of ₹10,000 is omitted from the sales book, the rectifying entry would be: Debit Sales; Credit Cash Debit Accounts Receivable; Credit Sales Debit Purchases; Credit Sales Debit Sales; Credit Accounts Receivabl None 7. The balance sheet is a statement of: Financial position Cash flows Profit and loss Owner’s equity None 8. Which of the following accounts does not appear in the profit and loss account? Rent Purchases Drawings Depreciation None 9. In the financial statements of a company, which of the following is not shown as a current liability? Accounts payable Short-term loans Bank overdraft Share capital None 10. Which of the following methods of depreciation results in the same amount of depreciation expense every year? Straight-line method Written-down value method Annuity method Units-of-production method None 11. Depreciation is a charge to: Gross profit Capital Profit and loss account Asset value None 12. Under the written-down value method, depreciation is calculated on: Original cost of the asset The net book value of the asset The market value of the asset None of the above None 13. Under which method is the inventory valued at the most recent purchase cost? FIFO LIFO Weighted average Specific identification None 14. The term ‘net realizable value’ refers to: Cost of goods sold Sale price of inventory less the cost to sell it Purchase price of inventory None of the above None 15. The closing stock is valued at: Cost or market value, whichever is higher Cost or market value, whichever is lower Cost only Market value only None 16. The division of profits in a partnership is done according to the: Capital ratio Profit-sharing ratio Working ratio Investment ratio None 17. The amount of goodwill is calculated as the: Average profit method Super profit method Both of the above None of the above None 18. In case of a partnership dissolution, the balance in the capital accounts is: Distributed among partners according to their profit-sharing ratio Adjusted against liabilities Transferred to a new partner’s account Ignored None 19. Which of the following is not a feature of a non-profit organization? Profit generation Social welfare Limited liability Membership-based structure None 20. Donations for specific purposes are treated as: Revenue income Capital receipts Liabilities Assets None 21. The amount of outstanding expenses at the end of the accounting period is treated as: Liability Asset Income Expense None 22. A cash flow statement reports the flow of cash and cash equivalents in and out of the business under which of the following categories? Operating activities Investing activities Financing activities All of the above None 23. Which of the following is not a source of business capital? Loans from banks Capital invested by owners Revenue generated by the sale of goods or services Borrowings from creditors None 24. The term ‘bookkeeping’ refers to: The recording of financial transactions The preparation of financial statements The analysis of financial data The preparation of tax returns None 25. A trial balance is used to: Prepare the balance sheet Check the mathematical accuracy of accounts Calculate net profit Prepare journal entries None 26. The current ratio is calculated as: Current assets / Current liabilities Current liabilities / Current assets Long-term liabilities / Current assets Net profit / Shareholders’ equity None 27. The formula for calculating return on equity (ROE) is: Net profit / Shareholders’ equity Net profit / Total assets Net profit / Capital employed Operating profit / Shareholders’ equity None 28. A high quick ratio indicates: High liquidity Low liquidity High solvency Low solvency None 29. A contingent liability is: A liability that is certain A potential liability dependent on future events A liability that is always recorded in financial statements D. A liability that is not reported in financial statements A liability that is not reported in financial statements None 30. Which of the following does not affect a company’s equity? Profit earned during the year Payments to creditors Issuance of shares Dividends declared None 31. Errors of omission occur when: A transaction is recorded in the wrong account A transaction is recorded partially or not recorded at all A transaction is recorded in the correct account but in the wrong amount . None of the above None 32. An error that does not affect the trial balance is known as: Compensating error Clerical error Error of omission Principle error None 33. When a bill of exchange is discounted with a bank, it is shown as: Current liability Liability for discounting Current asset Income None 34. A promissory note is: A promise to pay a specified amount of money A form of bill of exchange Used for debt collection A type of cash receip None 35. A company adopts the revaluation method of accounting for fixed assets. This affects: Only the balance sheet Only the profit and loss account Both the profit and loss account and balance sheet Neither the profit and loss account nor the balance sheet None 36. A bank overdraft is classified as: Asset Liability Expense Income None 37. Cash discounts are given to: Encourage early payment Reduce the cost of goods sold Increase sales . None of the above None 38. Which of the following is not shown in the cash flow statement? Purchase of fixed assets Payment of dividends Borrowings from banks Depreciation None 39. Which of the following is not a contingent liability? Bills discounted Guarantees Provision for doubtful debts Claims under litigation None 40. Cash withdrawn for personal use is recorded as: Debit Cash; Credit Drawings Debit Drawings; Credit Cash Debit Drawings; Credit Capital Debit Capital; Credit Drawings 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!
