RATHNAVEL SUBRAMANIAM COLLEGE OF ARTS AND SCIENCE (AUTONOMOUS), SULUR SCHOOL OF COMMERCE M.

Com - 2011 BATCH CORPORATE ACCOUNTING SECTION - A UNIT- I 1. In the balance sheet of a limited company, assets are arranged in the order of a)Liquidity c) Neither of the two 2. Dividends are usually paid on a)authorized capital c) paid up capital b)Subscribed capital d)called up capital b)Permanence d) Either liquidity or performance

3.Goodwill is shown in assets side of the companys balance sheet under the heading of a) fixed assets c) Investments b)current assets d) miscellaneous expenditure

4.Advance payment of tax is in the nature of a)capital expense c)Prepaid expenses b)Revenue expenses d)Outstanding expenses

5. In the liabilities side of the companys balance sheet, calls in arrears is shown a) Under the heading reserves and surplus b) Under the heading current liabilities c) Under the heading secured loans

d) by subtracting the amount from the called up capital. 6. In the assets side of companys balance sheet, fictitious assets like discount on issue of debentures are shown under the heading a)fixed assets c) investments 7.Preliminary expenses are an example of a)fixed assets c)Fictitious asset b)current assets d)Investments b)current assets d)miscellaneous expenditure

8. In the liabilities side of the companys balance sheet forfeited shares a/c balance is shown a)under the heading Current liabilities c)under the heading Reserves &surplus 9.Dividends Profits do not include a)reservefund c)revaluation reserve b)P/L a/c Balance d)insurance fund. b)under the heading current unsecured loan d)by adding to the paid up capital.

10. In the Liabilities side of companys balance sheet, unclaimed dividend is shown under the heading a)share capital c)secured loans b)Current liabilities and provisions d)unsecured loans

11.The amount set aside to meet the loss of bad debts is a a)Reserve c)contingent liability b)Liability d)Provision

12. When the proposed dividend exceeds 20% of the paid up capital the percentages of profits to be transferred to reserve is a)10% c)5% b)7.5% d)2.5%
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14. Interim dividends is always shown a) In P/L a/c c)onhe assets side of the b/s b)in P&L appropriation a/c d)on the liabilities side

14.Debentures are shown in the B/S under the heading a)Unsecured loans c)secured loans b)current liabilities d)shared capital

15.The maximum remuneration payable to a part time director (without managing directors or whole time director ,or manager)should not exceed a)1% of the annual profits c) 5% of the annual profits 16.Goodwill is a)tangible asset c)Fictitious asset b)Intangible assets d)variable assets b) 3% of the annual profits d) 10% of the annual profits

17.Goodwill is shown in companys balance sheet under the head: a)Fixedassets c)Miscellaneous expenditure b)Investments d)CurrentAssets

18. The value of goodwill according to the simple profits method is: a) The product of current year profit and no of year b)the product of current years profit and no of year c)the product of average profits of the given years and no of years d)both a and b 19. Super profits is the difference between a)Capital employed and average capital employed b)average profits and normal profits

c)current year profit and last year profit d)average profit and total profit

20. The average return of similar concerns should be considered as: a)Average profits c)normal rate of return b)Expected rate of return d)outsiders return UNIT II 21. Every banking company is required to close its accounts on a) 31st December c) 30th June b) 31st march d) 30th September

22. The percentage of profit to be transferred to statements reserve by the Banking Company is a) 25% c) 20% b) 15% d) 10%

23. An asset which does not generate income to the banker is termed as a) Performing asset b) fixed assets

c) non performing assetsd) income received in advances 24. Rebate on bills discounted is a) An Accrued income c) a liability 25. A Non-banking asset is a) An investment b) An item of office appliances b) an item of income d) income received in advance

c) Any asset acquired from the debtors in satisfaction of claim d) Money at call and short notice 26. Provision for income tax is shown in the bank accounts under the head a) Borrowings b) other liabilities

c) Operating expenses

d) contingent liabilities

27. The heading other assets does not include a) Stationary and stamps c) Gold& silver b) interest accrued d) non banking assets

28. Demand drafts and telegraphic transfers are shown in the bank accounts under the Head a) Contingent liabilities c) Loans and advance b) bills payable d) borrowings in India

29. Letter of credit and endorsement are shown in the bank accounts under the head a) Bill payables c) Bills of collection b) contingent liabilities d) other assets

30. Building acquired in satisfaction of a claim and interest accrued but not due on Investing are shown in the banks balance sheet under the head a) Fixed assets c) Advance b) investment d) other assets.

31. Banking companies are governed by the Banking Regulation Act a) 1994 c) 1894 b) 1949 d) 1849

32. Banks in Indian are under the general supervision of the a) SBI c) ECGC b) DICGC d) RBI

33. The bases for recording banks transaction are the____ Prepare customers and sometimes by bank staff. a) Paper c) Slips d)other b) check

34. All appropriation of the profit is show in 4th part of

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a) P&L a\c c) Current a\c

b)Capital a\c d) other a/c

35. Acceptances, endorsement and other obligation are shown in banks balance Sheet under the head a) Contingent liabilities c) Other obligations b) contingent assets d) a or b

36. Lockers rent is show in the P&L a\c of a bank under the head a) Schedule 14b) income c) Expended d) interest

37. At present, the SLR for a banking company in India, as per the regulations of the RBI is a) 25%b) 15% c) 30% d) 45%

38. According to person regulations of the RBI, a banking company is to maintain a minimum of _______ Present as cash reserve over its time and demand liabilities. a) 10% b) 15% c) 5%d) 20%

39. Schedule 13 relates to _________ a) Interest earned c) Interest expended b) reserves and surplus d) a or c

40. Schedule 15 relates to ________ a) Interest expended c) Reserves and surplus b) Interest earned d) b or c

UNIT III 41. Insurance business in India is now regulated by the provisions of

a) The insurance Act 1938

b) The IRDA Act 1999

c) The banking Regulations Act 1949d) The Indian companies Act 1956 42. Number of Schedules to be prepared by the insurance companies for their financial statementis a) 26 Schedules c) 12 Schedules b) 10 Schedules d) 15 Schedules

43. In life insurance, the policy amount is payable a) After the death of the assured b) After the expiry of the policy period c) On death of the insured or on expiry of policy period whichever is earlier d) Only when the assured has incurred loss 44. In general insurance the policy amount is payable a) After the death of the insured b) After the expiry of the policy period c) Only when the loss occurs or the liability arises d) Only when the insured has attained a certain age 45. Claims paid by life insurance companies is shown in a) Schedules 1 c) Schedules 3 b) Schedules 2 d) Schedules 4

46. The Commission received from the re-insurer is called a) Commission on reinsurance accepted c) Commission on direct Business b) Commission on reinsurance ceded

d) all the above

47. The bonus which is to be paid on maturity of the policy along with the policy amount is known as a) Reversionary bonus b) Annual bonus c) Interim bonus d) Eventual bonus

48. The balance found in the Revenue account of life insurance companies is considered as a) Net profit/Net loss b) Surplus/Deficit
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c) Life Assurance Fund

d) Gross profit/Gross loss

49. The balance found in the Revenue Account of general Insurance Companies is treated as a) Provision for unexpired risk c) Operating Profit or loss from insurance business 50. The Commission paid by the re-insurer is known as a) Commission on direct business b) Commission on reinsurance ceded b) Net Profit/Net Loss d) Gross profit/Gross

c) Commission on reinsurance acceptedd) allthe above 51. A valuation of balance sheet is prepared by a) Joint Stock company c) Life insurance company b) Banking company d) General insurance company

52. Preliminary expenses incurred by life insurance companies is treated as a) Miscellaneous expenditure c) A fixed asset b) A deduction from paid up share capital d) an operating expense

53. Agents balance (Dr) is shown in the balance sheet of life insurance companies as a) Current liabilities c) Fixed assets b) other assets d) Borrowings

54. Appropriations, like interim dividend, proposed final divided in general insurance business are shown in a) Profit & loss approximations A/ C c) Profit & loss A/c b) Revenue A/c d) Trading A/c

55. The percentage of profit of life business to be distributed to policy holders is a) 95% b) 100% c) 50% d) 40%

56. Leasehold Ground Rents are shown in a) Revenue a/c c) Schedule & investments b) P&L a/c d) Schedule 9 loans

57. Every year, the accounting year of every insurance company is to end on a) 31st March c) 31st may b) 29th Feb d) 30th may

58. The life insurance revenue a/c does not disclose the_____ of the life business. a) Loss c) Profit b) Profit& loss d) a or c

59. The term surrender value is exclusively application only for______ a) Marine insurance c) re-insurance b) Life insurance d) Fire insurance

60. When an insurance company finds the risk heavy, part of the amount is insured with another insurance company .such a procedure is known as a) re-insurance c) a or b b) life insurance d) fire insurance

UNIT IV 61. A holding company is one which holds more than a) 2/3rd share capital of subsidiary company b) 50% of share capital of subsidiary company c) 75% of share capital of Government Company d) None of the above

62. A company in which more than 50% of shares are held by another company is termed as a) Holding company c) Government company b) subsidiary company d) public company

63. Profit earned by a subsidiary company up to the date acquisition of shares by the holding company are called a) Revenue profits c) Revaluation profit b) capital profits d) realization profits

64. Profit made by a subsidiary company after the date of purchase of shares by the holding company is known as a) Revaluation profits c) Realization profits 65. The term minority interest represents a) The shareholders holding 50% of shares in subsidiary Co b) The interest of the outside in the subsidiary Co c) The company which holds more than 51% in subsidiary Co d) all the above 66. The excess price paid by a holding company to acquire controlling interest in the subsidiary company is transferred to a) Capital reserve c) Revenue reserve b) goodwill A/c d) P & L a/c b) capital profits d) Revenue profits

67. To excess of the share in equity or net assets of the subsidiary over and above the price paid for the investment is shown as a) Capital reserve b) Revenue reserve 68. Unrealized profit included in stock is a) Deducted from stock in combined balance sheet b) Deducted from P&L a/c balance in combined balance sheet liabilities sides b) Cost of control d) good will

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c) Deducted from stock and P&L a/c balance in combined balance sheet d) Shown separately in assets side of CBS 69. Any loss or profit on revaluation of assets and outside liabilities is a) Treated as revenue profit/ loss b) Ignored in CBS c) Treat as capital profit/ loss and adjusted in the respective assets/liabilities in combined balance sheet d) Shown separately in liabilities side of CBS 70. Bonus shares issued out of post acquisition profits will a) Have no effect on CBS c) Decrease the total of assets side of CBS holding companys share of the bonus b) Decrease the revenue profits d) Increase the goodwill to the extent of the

71. A company should purchase more than____ share of another company in order to become holding company. a) 60% c) 50% b) 30% d) 10%

72. The profit included in the closing stock on the date of consolidation is known as a) Unrealized profit c) Realized profit b) profit d) revenue profit

73. Minority interest is shown on the ____ side of consolidated balance sheet a) Assets c) Capital b) liabilities d) drawing

74. A contingent liability is show on as a _____ in CBS a) Foot note c) Bonus share b) face value d) other

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75. While preparing a consolidated balance sheet investment of the holding company in the equity share of the subsidiary is replaced by the____ and ____ of the subsidiary. a) Assets, liabilities c) Capital, drawings b) profits & loss d) revenue and expenses

76. The Holding co. share of revenue profit of the subsidiary is added to____ a) Profit & loss A/c in consolidatedbalance sheet b) balance sheet c) Profit & loss d) income statement

77. Dividends paid out of capital profit must be credited to ___ a/c by the holding company a) Investment c) minority b) interest d) revalued

78. Interim dividend pertaining to pre-acquisition period is adjusted to a) Cost of control c) Capital b) goodwill d) revenue

79. Goods-in-transit and cash-in-transit should be entered on the ___ of the CBS a) Assets side b) Capital b) liabilities side d) a or c

80. Holding of the general public in the subsidiary company is called a) Minority interest c) Subsidiary b) cost or control d) good will

UNIT V 81. Inflation accounting is also known as a) Accounting for price level changes c) Standard accounting
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b) Decision accounting d) Historical accounting

82. In the historical accounting system COST represent a) Replacement costs c) Imputed costs b) current costs d) original costs

83. Which one of the following inventory valuation methods ensures as nearly as possible the matching of current costs with current revenue a) HIFO c) FIFO 84. Under CPP method assets presented at a) Historical costs adjusted for general price level changes b) Replacement cost c) Current cost d) Net realizable value 85. Operating gains represents a) The difference between sale price and replacement cost of the asset b) The difference between Historical cost and economic value of the asset c) The difference between Sale price and historical cost of the asset d) The difference between replacement cost and historical cost of the asset 86. The main objective of current cost accounting (CCA) method is a) To measure all values at constant rupees b) To find out the general purchasing power gain or loss c) To maintain the purchasing power of shareholders fund d) To maintain operating capability of the enterprises 87. Backlog depreciation is debited to a) Current Cost Reserve A/c c) CC P&L A/c b) HC P&L A/c d) Asset A/c b) LIFO d) simple average

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88. Cost of sales adjustment (COSA) calculate under CCA method is the difference between a) Opening stock under CCA method and closing stock under method b) Closing stock under CCA method and opening stock under HCA method c) Current cost of purchases and historic cost of purchases d) Cost of sales under CCA and cost of sales HCA 89. Monetary working capital adjustment (MWCA) is computed in order to provide for increase in monetary working capital necessitated by a) Price changes of inputs during the period b) Increase in all interest rates on borrowings c) Change in scale of operation d) Change in scale of output

90. The usual bases for the adjustments to the accounts caused by changing price levels are a) Use of index numbers b) Use of replacement costs

c) Use of index number and replacement costsd) all the above.

91. What is the name of the account showing profit or loss under double account system? a) Income & Expenditure A/c b) income statement c) Revenue A/c d) Net Revenue 92. What is the name of the account which shows profit & loss appropriation under double account system? a) Net revenue b) revenue A/c c) Income statement d) income & expenditure A/c 93. Under double account system on debentures is shown in a) Revenue A/c b) net revenue A/c c) Capital A/c d) general balance sheet 94. Under double account system, shares forfeited account is show in a) Credit side of revenue A/c b) credit side of net revenue A/c c) Credit side of capital d) liabilities side of general balance sheet 95. Under double account system depreciation is a) Debited to revenue A/c b) Debited to net revenue A/c c) Credited to the asset A/c d) Credited to depreciation fund A/c 96. Under double account system preliminary expenses is show on a) Debit side of revenue A/C b) Debit side of net revenue A/c
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c) Debit side of capital A/c d) Assets in the general balance sheet 97. Cost of license appears in a) General balance sheet b) Capitala/c c) Revenue A/c d) Net revenue A/c 98. When an asset is replaced, any amount realized on sale of old materials will be credited to a) Net Revenue A/c b) Revenue A/c c) Asset A/c d) Replacement A/c 99. Receipts and expenditure on capital account is also known as a) Net Revenue A/c b) Revenue A/c c) Capital A/c d) Asset A/c 100. Under double account system the income statement is sub-divided into______ and_______ a) Revenue A/c; Net Revenue A/c b) Asset A/c; Capital A/c c) Revenue: capital d) Assets; revenue

SECTION - B UNIT I 101. Under which heading will you classify the following items? a. Preliminary expenses b. unclaimed dividend c. bills of exchange

102. What do you understand by the terms Provisions, Reserves, Reserve fund, and capital reserves. 103. Practical problems for the computation of managerial remuneration. 104. Practical problems for the preparation of profit and loss appropriation account. 105. Practical problems for the preparation of profit and loss account 106. Explain the factors affecting valuation of goodwill. 107. What are methods of valuation of goodwill? 108. Practical problems for the computation of goodwill under average profit method. 109. What are the methods of valuation of shares? 110. Practical problems for the computation of value of shares underintrinsic value method.

UNIT II

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111. Explain the following terms (i) money at call and short notice, (ii) rebate on bills discounted (iii) cash credit (iv) letter of credit 112. How is the provision for bad and doubtful debts treated in profit and loss account? 113. Enumerate the details to be given in schedules relating to (i)Advances (ii) investments

114. Practical problems on Rebate on bills discounted. 115. Practical problems on provision of doubtful debts. 116. Practical problems on profit and loss account. 117. Practical problems on journal entries for rebate on bills discounted. 118. Practical problems on preparation of profit and loss account with unexpired discount. 119. Practical problems on standard assets, substandard assets, doubtful assets. 120. Practical problems on preparation of balance sheet.

UNIT III 121. What is valuation balance sheet? How it is prepared? 122. Explain the following items in insurance company: (i) annuities (ii) claims

123. How will you treat commission on reinsurance ceded and reinsurance accepted ? 124. Practical problems on preparation of revenue account of Life Insurance Company. 125 .Practical problems on preparation of revenue account of fire insurance company. 126. Practical problems on preparation of revenue account of marine insurance company. 127. Practical problems on preparation of life assurance fund. 128. Practical problems on preparation of revenue account and profit and loss account of LIC 129. Practical problems on preparation of balance sheet and life assurance fund. 130. Practical problems on preparation of revenue account and profit and loss account of marine insurance
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UNIT IV 131. What are the objectives of preparation of consolidation of financial statements? 132. Write short notes on Cost of control, minority interest. 133. Explain the different methods of consolidation. 134. Practical problems on computation of Minority interest 135. Practical problems on computation of cost of control or capital reserve. 136. Practical problems on computation of capital reserve and revenue reserve. 137. Practical problems on computation of pre acquisition losses. 138. Practical problems on treatment of unrealized profit. 139. Practical problems on revaluation of assets and liabilities 140. Practical problems on computation of capital reserve and unrealized profit.

UNIT V 141. Distinguish between holding gains and operating gains. 142. State the limitations of historical accounting. 143. What is current cost accounting? 144. Write short notes on backlog depreciation 145. What do you understand by the terms general and special price changes 146. Explain MWCA 147. What is meant by revaluation reserve? 148. What is corporate governance? 149. What are the objectives of human resource accounting? 150. What do you mean by double accounting system?

SECTION C UNIT I
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151. Practical Problems on preparation of final accounts. 152. Practical Problems on preparation of final accounts with managerial remuneration. 153. Practical Problems on computation of valuation of good will under super profit method. 154. Practical Problems on computation of good will under capitalization method. 155. Practical Problems on computation of value of shares

UNIT II 156. Write the format for the preparation of bank accounts. 157. Practical problems on computation of profit and loss account 158. Practical problems on computation of profit and loss account with rebate on bills discounted 159. Practical problems on computation of balance sheet 160. Practical problems on computation of profit and loss account and balance sheet

UNIT III 161. Write the specimen form of revenue account and profit and loss account of Life Insurance Company. 162. Practical problems on computation of profit and loss account of fire insurance company 163. Practical problems on computation of revenue account of marine insurance company 164. Practical problems on computation of profit and loss account and balance sheet of LIC. 165. Practical problems on computation of Revenue account profit and loss account and balance sheet of fire insurance company

UNIT IV 166. Practical problems on consolidation of balance sheet with computation of capital reserve and revenue reserve. 167. Practical problems on consolidation of balance sheet with computation of pre acquisition losses.
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168. Practical problems on consolidation of balance sheet with treatment of unrealized profit. 169. Practical problems on consolidation of balance sheet with revaluation of assets and liabilities 170. Practical problems on consolidation of balance sheet with computation of capital reserve and unrealized profit. UNIT V 171. What adjustments should you make to the historical cost profit for ascertainment of cost operating profits? 172. Distinguish between the historical, current cost and current purchasing power concepts of accounts. 173. State clearly the logic behind the computation of general price level gain or loss under CPP method. 174. Explain the method of maintain double accounting system. 175. Describe the procedure for recording inflation accounting

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