Commerce MCQ Questions and Answers

A limited company makes a net profit of Rs. 2,00,000 after writing off preliminary expenses amounting to Rs. 20,000 and providing for depreciation on assets amounting to Rs. 40,000 and gain of Rs. 10,000 on sale of a piece of machinery. What are the funds from operation ?

Consider the following items that are disclosed in a statement of cash flows- 1. Cash flow from operating activities. 2. Cash flow from financing activities. 3. Closing cash and cash equivalents. 4. Cash from investing activities What is the correct chronological order of their disclosure of the above cash flows ?

Consider the following statements- A cash flow statement is generally prepared for 1. Ascertaining the net cash flows between two accounting periods. 2. Understanding the trends of cash flows between two accounting periods. 3. Short term cash planning of the business. Which of the statements given above are correct ?

Which of the following represents corporate sustainable reporting ?

Sometimes an auditor is called upon to review the operations of an enterprise for evaluating their cost-effectiveness. What is this kind of audit generally known as ?

Match List-I with List-II and select the correct answer using the code given below the Lists- List-I (Assets and Liabilities) (a) Current assets (b) Fixed assets (c) Deferred revenue expenditure (d) Current liabilities List II (Accepted Principles of Valuation) 1. To be valued at cost less depreciation 2. To be valued at cost or market price whichever is lower 3. To be valued at the maximum figure which might be incurred 4. To be written off within a reasonable period of time Codes : (a) (b) (c) (d)

Match List-I with List-II and select the correct answer using the code given below the Lists- List I (Type of Audit) (a)Statutory Audit (b) Management Audit (c) Cost Audit (d) Financial Audit List II (Explanation) 1. Judge the correctness of the financial statements and establish their reliability 2. Appraisal of performance of executives 3. Examination of past records 4. Verification of cost records Codes : (a) (b) (c) (d)

Match List-I with List-II and select the correct answer using the code given below the Lists- List-I (Technique of Auditing) (a) Vouching (b) Verification (c) Investigation (d) Valuation List-II (Explanation) 1. It is an enquiry into the value, ownership and title of assets 2. It is testing of the exact value of an asset on the basis of its utility 3. It is the verification of authority and authenticity of transactions as recorded in the books of accounts 4. It is an examination of accounts and records of a business concern with some special purpose Codes : (a) (b) (c) (d)

Consider the following statements- Internal check relates to 1. arrangement of duties of employees. 2. distribution of work in such a way that work of one employee is checked by other employee. 3. review of operations. Which of the statements given above is/are correct ?

21. Consider the following categories of documentary evidence from the point of view of the degree of their reliability. 1. Documentary evidence originating from and held by the entity. 2. Documentary evidence originating from third parties and held by the entity. 3. Documentary evidence originating from and held by the third party. 4. Documentary evidence originating from entity and held by the third party. Which one of the following is the correct order (high to low) of their degree of reliability ?