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1. Which of the following is not considered a qualitative characteristic of accounting information?

Reliability Materiality Comparability Understandability

2. What type of accounting standards are IND-AS classified as?

Rule-based accounting standards Principle-based accounting standards A mix of rule-based and principle-based accounting standards None of the above

3. An increase in which of the following accounts will be recorded on the debit side?

Rent Received Account Building Account Bills Payable Account Capital Account

4. Trade discounts are deducted from gross sales. How is the sale recorded in the books of account?

At gross sales with trade discount separately At net sales invoice None of the above Any of (A) or (B)

5. Rebate is calculated for the period between which two dates?

Payment and maturity date Drawing and payment of bill Drawing and maturity date None of the above

6. Which of the following is not classified as an error of principle?

Purchase of machinery debited to Purchase Account Sale of old furniture credited to Sales Account Repairs on existing machinery debited to Machinery Account Cash received from Rana posted to Jana

7. How is income tax paid by a sole trader represented in the financial statements?

On the debit side of the Trading Account On the debit side of the Profit & Loss Account As a deduction from Capital in the Balance Sheet As an addition to Capital in the Balance Sheet

8. What type of lease is generally not cancellable and covers the full economic life of the asset?

Sale and lease back Operating lease Finance lease Economic lease

9. A charitable institution has 250 members with an annual subscription of 5,000 each. The subscription received during 2020-21 was ₹ 11,25,000, which included ₹ 65,000 and ₹ 25,000 for the years 2019-20 and 2021-22 respectively. What is the amount of outstanding subscription for the year 2020-21?

₹ 90,000 ₹ 1,25,000 ₹ 2,15,000 ₹ 1,90,000

10. X and Y are partners with capital amounts of ₹ 50,000 and ₹ 30,000 respectively. If the profits earned by the firm is ₹ 4,800, what will be the interest on capital for X and Y at a rate of 10% per annum?

₹ 5,000, ₹ 3,000 ₹ 3,000, ₹ 1,800 No interest will be paid to the partners None of the above

11. What class of account does the Consignment Account belong to?

Personal Account Real Account Representative Personal Account Nominal Account

12. When is a Memorandum Joint Venture Account prepared?

When a separate set of books is maintained for Joint Venture When each co-venturer keeps records of all transactions When each co-venturer keeps records of their own transactions only In all of the above cases

13. What is the primary purpose of preparing a Cash Flow Statement?

To show the profitability of the business To provide information about the cash inflows and outflows To summarize the financial position of the business To calculate the tax liability of the business

14. Which accounting principle requires that expenses be matched with revenues in the period in which they are incurred?

Revenue Recognition Principle Matching Principle Cost Principle Conservatism Principle

15. What is the effect of a purchase return on the financial statements?

Increases expenses Decreases liabilities Decreases inventory Decreases expenses

June 23 Financial Accounts Paper