MGT401 Objective File For Final Term

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Midterm Examination MGT401 – Financial Accounting II
Q. 01: Which of the following type of the business is governed under the Partnership
Act 1932 in Pakistan?
 Sole-Proprietorship
 Partnership
 Limited Companies
 Unlimited Companies
Q. 02: Which of the following is/are not example of current liability?
 Sundry Debtors
 Debentures
 Loan given to Mr. A for shorter period
 All of the given options
Q. 03: Which of the following are the resources controlled by the entity as a result of
a past event from which future economic benefits are expected to flow to the entity?
 Assets
 Gains
 Liabilities
 Expenses
Q. 04: All of the following are the assets of the firm except
 A building owned by the firm

 Goods in transit
 Money owed to the firm by it’s debtors
 Money which the firm has borrowed and has not yet been repaid.
Q. 05: Which of the following is related to the qualitative characteristics that make
financial information useful?
 Reliability only
 Relevancy only
 Both Reliability and Relevancy
 Comparability
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Q. 06: Which of the following statement is true regarding Going Concern Concept?
 The Business is profitable

 The assets of the Business are valued at Market Value
 The business will continue until the Directors decide to close it
 The Business will continue its working
Q. 07: Under which of the following assumptions, the Financial Statements are to be
prepared?
 Future Assumptions
 Past Assumptions
 Accrual Basis and Going Concern Basis
 Accrual Basis Assumption only
Q. 08: Which one of the following is not a physical asset?
 Term Finance Certificates

 Loan Agreements
 Trade Receivables
 Goodwill
Q. 09: Which one of the following is not the example of Financial Instruments?
 Share Capital
 Loans Payable
 Debentures
 Inventories
Q. 10: The firm uses diminishing balance method for calculating Depreciation. The
vehicle costing 20,000 was sold after two years. The sale resulted neither in loss or
profit. What was the sale price of the Vehicle?
 7,200
 12,000
 12,800
 16,000
Q. 11: Which of the following is/are not included in the disclosure requirement of
Trade Debts with respect to the Companies Ordinance 1984?
 Amount due in respect of goods sold

 Amount due in respect of services rendered
 Amount due in respect of other contractual obligation
 Amount due which are in nature of loans or advances.
Q. 12: A firm has two categories of stock. The cost and Net Realizable Value (NRV)
of each is as follows:
Cost NRV
Category 1 Rs. 35,000 Rs. 22,000
Category 2 Rs. 22,000 Rs. 25,000
What amount will be disclosed.
 44,000
 47,000
 57,000
 60,000
Q. 13: Which of the following method is suitable for calculating the cost of inventory
when actual costs of individual units of merchandise can be determined from the
accounting records?
 FIFO Method
 LIFO Method
 Weighted Average Method
 Specific Identification Method
Q. 14: Which of the following authority regulates/governs the functioning of

Companies?
 Securities & Exchange Commission of Pakistan

 Federal Government
 Ministry of Finance
 All of the Given Options
Q. 15: Which of the following is true about the meeting of Directors?
 The quorum for a meeting of Directors of a listed company should not less
than 1/3 of their members or four which is greater.
 The quorum for a meeting of Directors of a listed company should not less than
1/3 of their members or four which is lesser.
1/2 of their members or four which is greater.
1/2 of their members or four which is lesser.
Q. 16: Which of the following is true about the Companies Limited by shares?
 Company has limited shares to offer
 Shareholders of the Company are limited
 Liability of Shareholders is limited
 Liability of Shareholders is unlimited
Q. 17: Proper Books of Accounts are kept by every company under which of the
following section of Companies Ordinance 1984?
 230
 233
 184
 110
Q. 18: Which of the following is not attributable to the Property Plant &
Equipment?
 Costs of site preparation

 Administration and other general overhead costs
 Initial delivery and handling charges
 Installation and Assembly cost
Q. 19: Which of the following expenditure can not be capitalized?
 Initial Composition Cost

 Cost of adding Air conditioner to the Computer Room
 Cost of Adding extra RAM to Computer
 New tyres placed on a motor car
Q. 20: ABC (Pvt) Limited is engaged in production of an asset. The production

started on July 31, 2007. The Production completed on July 31, 2008. The works
manager checked the asset and required some minor modifications. These
modifications were completed on August 30, 2008. The Asset was delivered to
Works Manager on September 10, 2008. The production started from such asset on
October 01, 2008. When should capitalization cease?
 July 31, 2007

 July 31, 2008
 August 30, 2008
 October 01, 2008
Q. 21: Which of the following is an identifiable non-monetary asset without physical

substance?
 Tangible Asset
 Intangible Asset
 Floating Asset
 Circulating Asset
Q. 22: Which of the following is the application of research findings or other

knowledge to a plan design for the production of new or substantially improved
material, devices products, processes, systems or services before the start of
commercial production or use?
 Applied Research
 Business Research
 Development
 Accounting
Q. 23: Which of the following is an example of Intangible Asset?
 Preliminary Expenses
 Copy rights
 Investments
 Discounts on issue of shares
Q. 24: Which of the following statement is true under the Cost method for
recognition of investments in associated companies?
 Any distribution of profits by the investee company is recorded as an income

 Any distribution of profits by the investee company is recorded as an expense
 Any distribution of profits by the investor company is recorded as an income
 Any distribution of profits by the investor company is recorded as an expense
Q. 25: Which of the following IAS is related to Financial Instruments Disclosure

and Presentation?
 IAS 27
 IAS 28
 IAS 31
 IAS 32
Q. 26: Which of the following is related to IAS 31?
 Consolidated and Separate Financial Statements

 Interest in Joint Venture
 Financial Instruments Disclosure and Presentation
 Financial Instruments Recognition and Measurement
Q. 27: Which of the following is true with respect to the disclosure requirement of
Investment in Associate?
 Explanations when investments are less than 20% are accounted for by the equity
method or when investments of more than 20% are not accounted for by the equity
method.
method or when investments of more than 10% are not accounted for by the
equity method.
equity method.
equity method.
Q. 28: Which of the following is true with respect to the Disclosure requirement in
Consolidated Financial Statements?
 The nature of relationship between the parent and subsidiary when the
parent does not own, directly or indirectly through subsidiaries, more than
1/2 of the voting power
 The nature of relationship between the parent and subsidiary when the parent does
not own, directly or indirectly through subsidiaries, more than 1/3 of the voting
power
power
power
Q. 29: (Marks 3)
If:
 Cost of investment Rs. 17,401,095
 Company’s share in loss of subsidiary Rs. 3,129,441
Then:
How would you disclose this matter in notes to the accounts for the year
2008?
Answer:
We will disclose this matter in notes to the accounts for the year 2008 as follows:
Investment in Subsidiary:
Cost of Investment Rs. 17,401,095

Company’s share in loss of subsidiary Rs. 3,129,441
Net Investment Rs. 14,271654
Q. 30: (marks 3)
What items are included in Notes to the accounts of Stock In Trade?
Answer:
The following items may be included in Notes to the Accounts of Stock in Trade:
 The Accounting Policy adopted

 Method of Stock Valuation
 Net Realizable Value Concept method
 Cost Method
Q. 31: (Marks 5)
What do you know about the Bad Debts and Doubtful debts? What factors
determine the debts are bad?
Answer:
Doubtful Debts:
Such debts which have been doubted that those debts are not recoverable are recorded in
the head of Doubtful Debts.
Bad Debts:
Such debts which are not receivables conformingly, are recorded as Bad debts and are
written off in the current period as an expense.
Factors that determine bad debts are:
 The debtor has been shifted to foreign forever

 The debtor has been bankrupted
 The debtor has been escaped without any intimation
Q. 32: (Marks 5)
Define Current Liabilities. What heads should be included in Current Liabilities?
Answer:
Current Liabilities:
The current liabilities are all of such liabilities which are expected to be paid within on
accounting or period or within 12 months period.
Heads of Current Liabilities:
Mainly the current liabilities are classified into following categories:

 Trade Payables
 Interest Payables
 Accrued Expenses
 Short term Borrowings
 Current portion of long term liabilities
 Others (to be specified)
MGT401 Mega Quiz File For Final Term By
Innocent Prince
Innocentprince47@gmail.com
Question # 1: Which of the following type of the business is governed under the
Partnership Act 1932 in Pakistan?
Sole-Proprietorship
Partnership
Limited Companies
Unlimited Companies
Question # 2: Which of the following is/are not example of current liability?

Sundry Debtors
Debentures
Loan given to Mr. A for shorter period
All of the given options
Question # 3: All of the following are the assets of the firm except
A building owned by the firm
Goods in transit
Money owed to the firm by its debtors
Money which the firm has borrowed and has not yet been repaid
Question # 4: Which of the following is related to the qualitative characteristics that

make financial information useful?
Reliability only
Relevancy only
Both Reliability and Relevancy
Comparability
Question # 5: Which of the following statement is true regarding Going Concern

Concept?
The Business is profitable
The assets of the Business are valued at Market Value
The business will continue until the Directors decide to close it
The Business will continue its working
Question # 6: Under which of the following assumptions, the Financial Statements

are to be prepared?
Future Assumptions
Past Assumptions
Accrual Basis and Going Concern Basis
Accrual Basis Assumption only
Question # 7: Which one of the following is not a physical asset?
Term Finance Certificates
Loan Agreements
Trade Receivables
Goodwill
Question # 8: Which one of the following is not the example of Financial

Instruments?
Share Capital
Loans Payable
Debentures
Inventories
Question # 9: The firm uses diminishing balance method for calculating

Depreciation. The vehicle costing 20,000 was sold after two years. The sale resulted
neither in loss or profit. What was the sale price of the Vehicle?
7,200
12,000
12,800
16,000
Question # 10: Which of the following is/are not included in the disclosure
requirement of Trade Debts with respect to the Companies Ordinance 1984?
Amount due in respect of goods sold
Amount due in respect of services rendered
Amount due in respect of other contractual obligation
Amount due which are in nature of loans or advances
Question # 11: A firm has two categories of stock. The cost and Net Realizable Value
(NRV) of each is as follows:
Cost NRV
Category 1 Rs. 35,000 Rs. 22,000
Category 2 Rs. 22,000 Rs. 25,000
What amount will be disclosed?
44,000
47,000
57,000
60,000
Question # 12: Which of the following method is suitable for calculating the cost of
inventory?
When actual costs of individual units of merchandise can be determined from the
accounting records?
FIFO Method
LIFO Method
Weighted Average Method
Specific Identification Method
Question # 13: Which of the following authority regulates/governs the functioning of

Companies?
Securities & Exchange Commission of Pakistan
Federal Government
Ministry of Finance
All of the Given Options
Question # 14: Which of the following is true about the meeting of Directors?
The quorum for a meeting of Directors of a listed company should not less than 1/3
of their members or four which is greater.
The quorum for a meeting of Directors of a listed company should not less than 1/3 of
their members or four which is lesser.
their members or four which is greater.
their members or four which is lesser.
Question # 15: Which of the following is true about the Companies Limited by
shares?
Company has limited shares to offer
Shareholders of the Company are limited
Liability of Shareholders is limited
Liability of Shareholders is unlimited
Question # 16: Proper Books of Accounts are kept by every company under which
of the following section of Companies Ordinance 1984?
230
233
184
110
Question # 17: Which of the following is not attributable to the Property Plant &
Equipment?
Costs of site preparation
Administration and other general overhead costs
Initial delivery and handling charges
Installation and Assembly cost
Question # 18: ABC (Pvt) Limited is engaged in production of an asset. The

production started on July 31, 2007. The Production completed on July 31, 2008.
The works manager checked the asset and required some minor modifications.
These modifications were completed on August 30, 2008. The Asset was delivered to
Works Manager on September 10, 2008. The production started from such asset on
October 01, 2008. When should capitalization cease?
July 31, 2007
July 31, 2008
August 30, 2008
October 01, 2008
Question # 19: Which of the following is an identifiable non-monetary asset without

physical substance?
Tangible Asset
Intangible Asset
Floating Asset
Circulating Asset
Question # 20: Which of the following is an example of Intangible Asset?

Preliminary Expenses
Copy rights
Investments
Discounts on issue of shares
Question # 21: Which of the following statement is true under the Cost method for
recognition of investments in associated companies?
Any distribution of profits by the investee company is recorded as an income
Any distribution of profits by the investee company is recorded as an expense
Any distribution of profits by the investor company is recorded as an income
Any distribution of profits by the investor company is recorded as an expense
Question # 22: Which of the following IAS is related to Financial Instruments

Disclosure and Presentation?
IAS 27
IAS 28
IAS 31
IAS 32
Question # 23: Which of the following is true with respect to the disclosure
requirement of Investment in Associate?
Explanations when investments are less than 20% are accounted for by the equity method
or when investments of more than 20% are not accounted for by the equity method.
Question # 24: Which of the following is true with respect to the Disclosure
requirement in Consolidated Financial Statements?
The nature of relationship between the parent and subsidiary when the parent does
power
The nature of relationship between the parent and subsidiary when the parent does not
own, directly or indirectly through subsidiaries, more than 1/3 of the voting power
Question # 25: Which of the following option is/are TRUE with respect to the
Disclosure requirement for intangible assets acquired by the way of Government
grants?
Select correct option:
The fair value initially recognized
Disclosure for carrying amount
Disclosure for the amount of commitments for acquisition of intangible assets
Question # 26: Which of the following is the ability to govern the financial and
operating policies of an enterprise so as to obtain from its activities?
Control
Significant Influence
Direct Subsidiary
Indirect Subsidiary
Question # 27: Which one of the following methods for inventory valuation is NOT
suitable for homogeneous units?
FIFO Method
LIFO Method
Question # 28: Which of the following meeting is held once in the life of a company?
Statutory Meeting
Annual General Meeting
Extraordinary Meeting
Board Meeting
Question # 29: Which of the following business is formed by the approval of

Ministry of Interior?
Money Exchange Company
Non Banking Finance Corporation
Security Services Providing Company
Corporate Brokerage House
Question # 30: The closing balance of inventory will be if: Opening inventory will
Rs.1, 000, purchases will Rs.10, 000 and cost of sales will Rs.10,500.
Rs. 1,000
Rs. 500
Rs. 1,500
Rs. 950
Question # 31: Which of the following IAS deals with the Borrowing Costs?
IAS 23
IAS 07
IAS 01
IAS 16
Question # 32: On which certificate, the birth date of a company is mentioned?

Certificate of Corporation
Certificate of Incorporation
Certificate of Quality
Certificate of Excellence
Question # 33: Who sign the Articles of Association (AOA) of a company?

Managers of the company
Employees of the company
Sponsors of the company
Question # 34: Which of the following is NOT the method of stock valuation?
FIFO Method
Straight Line Method
Question # 35: Which one of the following is a method of stock valuation?

Diminishing Balance Method
Written Down Value Method
Sum of Year Digit Method
Question # 36: In case of calling Extraordinary General Meeting (EOGM), at least

how much voting right is required by any director or share holder of a company
according to Companies Ordinance 1984?
5% voting rights
10% voting rights
15% voting rights
20% voting rights
Question # 37: LIFO means?

Last-In-First-Out
Large Integrated Financial Organization
The Last-In-First-Out method of approximating the cost of stock
None of the given options
Question # 38: In relation to the valuation of inventory, net realizable value means:
The expected selling price less disposal costs less the cost of completion
The expected selling price of the inventory
The replacement cost of the inventory
The market price of the inventory
Ref: http://en.wikipedia.org/wiki/Net_realizable_value
Question # 39: Which of the following is the amount for which an asset could be
exchanged between knowledgeable, willing parties in an arm’s length transaction?
Depreciable Amount
Fair Value (page 78)
Cost
Carrying Amount
Question # 40: When we see the capital with Production capacity or operating
capability of the enterprise then it called:
The financial concept of capital maintenance (page 104)
The physical concept of capital maintenance
Both physical and financial concept of capital maintenance
Neither physical nor financial concept of capital maintenance
Question # 41: Which of the following IAS deals with the Intangible Assets?
IAS 38 page 162
IAS 23
IAS 01
IAS 16
Question # 42: Which of the following is original and planned investigation

undertaken with the prospect of gaining new scientific or technical knowledge and
understanding?
Research
Development
Audit
Accounting
Reference: http://www.vuzs.net/mcqs/354-mcqs-mgt401-financial-accounting-
ii/4738-mgt401-quiz-chapter-1-22-shared-and-solved-by-tahira-
yasmeen.html#v=onepage&q=is%20original%20and%20planned%20investigation
%20undertaken%20with%20the%20prospect%20of%20gaining%20new%20scien
tific%20or%20technical%20knowledge%20and%20understanding&f=false
Question # 43: Which of the following is NOT an accounting concept?

Prudence
Going concern
Depreciation
Matching
Question # 44: Which of the following is/are example(s) of research activities?

Activities aimed at obtaining new knowledge
The search, evaluation, final selection and application of research findings
The search for alternatives
All of the given options page 37
Question # 45: Which of the following is an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale?
Qualifying Asset page 31
Outstanding Asset
Tangible Asset
Intangible Asset
Question # 46: Which of the following asset is NOT an example of Tangible Fixed
Assets?
Patent rights
Furniture
Vehicles
Machinery
Question # 47: Which of the following is/are the physical asset(s)?
Loan Agreements
Trade Receivables
Question # 48: Which of the following statement shows the movement of cash
inflows and outflows?
►Income statement
►Balance Sheet
►Statement of Owner's equity
►Cash Flows Statement
Question # 49: Which of the following is an example of current liability?

►Bank Overdraft
►Stock
►Goodwill
►A loan repayable in two years
Question # 50: Which of the following is a component of current liabilities?

►Assets subject to finance lease
►Debentures
►Provision for Taxation
►Loans taken for more than five years
Question # 50: A damage claim of Rs.15 million for breach of contract has been
served on the Company. The Company legal counsel is of the view that it is possible
that the damages will be awarded to the plaintiff. However, the amount of damages
can not be reasonable estimated. What accounting treatment would be made in this
regards?
►A provision will be made for damages
►Damages will be disclosed as contingent liabilities not sure
►Damages will be treated as accrued income
►No treatment will be taken
Question # 52: Where shares are purchased at a price above the face value, the
difference shall be charged to:
►Share Premium Account
►Share Discount Account
►Distributable Profit Account
►Un-distributable Profit Account
Question # 53: In case of operating lease, an asset is recorded in the books of lessee
at which of the following value?
►Faire value
►Present value
►Market value
►Not recorded at any value
Question # 54: Which of the following IAS covers the Debentures?

►IAS 32 only
►IAS 39 only
►Both IAS 32 and IAS 39
►IAS 17
Question # 55: Which of the following events are indicative of conditions that arose
after Balance Sheet date?
►Adjusting events after balance sheet date
►Adjusting events before balance sheet date
►Non - adjusting events after balance sheet date
►Non - adjusting events before balance sheet date
Question # 56: Which of the following is/are the event/s after the balance sheet date
with respect to IAS 10?
►Adjusting events only
►Non-adjusting events only
►Both Adjusting and Non-adjusting events
►None of the given options
Question # 57: With respect to IAS 10, major purchases of assets, classification of
assets as held for sale, other disposal of assets, or expropriation of major assets by
Govt. are considered as which of the following?
►Adjusting Events
►Non-Adjusting Events
►Bogus Events
►Contingent Events
Question # 58: With respect to IAS 10, sale of inventory after the balance sheet date
below its cost and also below its net realizable value (inventory was measured at net
realizable value on the balance sheet date) is considered as which of the following?
►Adjusting Event not sure
►Non-Adjusting Event
►Bogus Event
►Contingent Event
Question # 59: Which of the following is a possible asset that arises from past events
and whose existence will be confirmed only by the occurrence of one or more
uncertain future events not wholly within the control of the entity?
►Contingent asset
►Fixed asset
►Current asset
►Floating asset
Question # 60: Which of the following is/are related to the IAS-37?

►Contingent Assets
►Contingent Liabilities
►Both Contingent Assets and Contingent Liabilities
►Inventory
Question # 62: An equity instrument that is subordinate to all other classes of equity
instruments is:
►Ordinary share
►Potential ordinary share
►Warrants
►Options
Question # 63: Which of the following is/are Financial Instruments that give the
holder, the right to purchase ordinary shares?
►Equity shares
►Potential ordinary shares
►Warrants or Options
►Preference shares
Question #64: Which of the following is widely used by investors as a measure of

Company performance in comparing the results of A Company over a period of
time?
►Earning Per Share
►Balance Sheet
►Cash Flow Statement
►Notes to the accounts
Question # 66: Which of the following is included in the Equity Section of the
Balance Sheet?
►Share capital
►Long term financing
►Deferred cost
►Liability against assets subject to finance lease
Question # 67: Which of the following is NOT considered as expense by their

function with respect to IAS 01?
►Cost of goods sold
►Distribution costs
►Administrative expenses
►Transportation costs
Question # 69: An electricity accrual of Rs. 375 was treated as prepayment in
preparing a trader’s profit and loss account. As a result his profit was:
►Understated by Rs. 750
►Overstated by Rs. 750
►Understated by Rs. 375 not sure
►Overstated by Rs. 375
Question # 70: If A Limited Company entered into a contract with Pakistan Leasing
Company to acquire an asset with down payment of Rs.30, 000, semi-annual
payment of Rs. 50,000 and the lease term is 2 years. The lessee guaranteed the lessor
to purchase the asset at the end of lease term at Rs. 10,000 which is estimated
residual value. Then what is the amount of Minimum Lease Payment with respect to
the lessee?
►Rs. 130,000
►Rs. 220,000 not sure
►Rs. 230,000
►Rs. 240,000
Question # 72: What will be the purchase source at the time of re-purchase of
shares?
► The purchase shall be in cash and out of the distributable profits.
► The purchase shall be in cash and out of the un-distributable profits.
► The purchase shall be in credit and out of the distributable profits.
► The purchase shall be in cash and out of the Revaluation surplus profits.
Question # 73: Which of the followings item(s) must be disclosed on the face of
income statement according to IAS-1?
► Revenue
► Results of operating activities
► All of the given options
► Finance costs
Question # 74: Which of the following is the combined account for showing both
result of business, i.e., gross and net profits?
► Trading and profit and loss account
► Profit and loss appropriation account
► Income statement
► None of the given options
Question # 75: The goods are written off when:

► These are completely damaged
► These are stolen
► These are destroyed by fire
► All of the given options
Question # 76: Which of the following bases, stock should be valued according to
IAS-2?
► Cost
► Higher of cost or net realizable value
► Lower of cost or net realizable value
► Net realizable value
Question # 77: Proper Books of Accounts are kept by every company under which
of the following sections of the Companies Ordinance 1984?
►Section 230
Ref: http://finosys.com/company/sections/Sec230.htm
Question # 78: Which of the following item may be included in a Balance Sheet at
more than its historical cost?
►Good will
►Land
►Research expenditures
►Work in progress
Ref: http://en.wikipedia.org/wiki/Historical_cost
Question # 79: Written down value of an asset = --------------

Original cost – Accumulated depreciation
Original cost – Appreciation
Book value – Accumulated depreciation
Original cost – Salvage value
Question # 80: Which of the following entities is not profit oriented entity?
Sole - proprietorship
Partnership
Companies
Foundations
Question # 81: All of the following are Fixed assets EXCEPT:

Machinery
Freehold land
Leasehold land
Marketable securities
Question # 82: A Partnership firm has a maximum ____ numbers of partners.

20
15
10
02
Question # 83: Which of the following is NOT the Classification of Current
Assets with respect to the Companies Ordinance 1984?
Stock
General Stores
Spare parts
Bank over draft
Question # 84: Which one of the following is related to IAS 32 & 39?
Property, Plant & Equipment
Inventory
Financial Statements
Financial Instruments
Question # 85: IAS-16 deals with:

Property, Plant and Equipment
Cash Flow Statement
Presentation of Financial Statements
Earning per share
Question # 86: Which of the following meeting is held once in the life of a
company?
Statutory Meeting
Board Meeting
Question # 87: Which of the following is NOT a Qualifying Asset?

Power plan being in the process of manufacture
Inventories requiring a substantial period for manufacturing
Special order for a special inventory that will be manufactured in 5 months
Asset ready for use

undertaken with the prospect of gaining new scientific or technical
knowledge and understanding?
Research
Development
Audit
Accounting
IAS 38
IAS 23
IAS 01
IAS 16
Question # 90: Which of the following is/are the type(s) of stock for
manufacturing concerns?
Raw Material
Work in Process
Finished Goods


Machinery
Freehold land
Leasehold land
Question # 93: Which of the following schedule provides disclosure

requirements for Listed Companies under Companies Ordinance 1984?
4th schedule
5th schedule
6th schedule
2nd schedule
Question # 94: Which of the following investment are recorded using Cost
Method?
Investments made for longer period
Investments made for shorter period page 43
Investments made for shorter and longer period
Question # 95: An enterprise would be the subsidiary of another enterprise if

that investor enterprise can control the subsidiary represents:
Subsidiary Companies
Holding Companies
Public Limited Companies
Private Limited Companies
Question # 96: Which of the following is NOT the method of stock valuation?
FIFO Method
Question # 97: Which of the following IAS is related to the Consolidated and
Separate Financial Statements?
IAS 27
IAS 28
IAS 31
IAS 32

Question # 99: Which of the following is the application of research findings

or other knowledge to a plan or design for the production of new or
substantially improved materials, devices, products, processes, systems or
services before the start of commercial production or use?
Applied research
Development
Business research
Accounting
Question # 100: What is the treatment of Depreciation in accounting?

Treated as a reserve
Treated as an expense
Treated as a surplus
Treated as a Liability
Question # 101: Which of the following is/are example(s) of development

activities?
The design of tools, jigs, moulds and dies involving new technology
The design, construction and testing of pre-production or pre-use prototypes and
Models the design, construction and operation of a pilot plant
Question # 102: Which of the following is/are the method(s) for calculating
the cost of inventory?
FIFO Method
Question # 103: Partnership firm has a maximum ____ numbers of partners.

20
15
10
02
Question # 104: Which of the following may consist of more than 20 persons
in case of partnership?
Firms of Lawyers
Firms of Doctors
Firms of Associates
Question # 105: Which one of the following is related to the Allowed

Alternative Treatment for an investment in jointly controlled entities?
Proportionate Consolidation Method
Equity Method
Question # 106: IAS-16 deals with:

Cash Flow Statement
Earning per share
Question # 107: Companies are registered under:

Partnership Act 1932
Companies Ordinance 1984
Partnership Agreement
Income Tax Ordinance 1979
Question # 108: To the Allowed Alternative Treatment, Which of the

following method is used for stock valuation?
FIFO Method
LIFO Method page 48
IAS 23
IAS 07
IAS 01
IAS 16
Question # 110: Which one of the following is the type of stock for trading
concerns?
Raw Material
Work in Process
Finished Goods
Stock in Trade
Question # 111: What is the meeting requirement for the directors of a Public
Limited Company?
At least once in each quarter
At least once in each month
At least once in each year
At least once in each week
Question # 112: Which of the following represent(s) the Prime Cost?

Direct Material Cost + Direct Labor Cost
Total Factory Cost – Factory Overheads
Conversion Cost – Factory Overheads + Direct Material Costs
Question # 113: Which of the following is/are example(s) of development

activities?
models
IAS 38
IAS 23
IAS 01
IAS 16
Question # 115: Which of the following is the Classification of Current Assets

with respect to the Companies Ordinance 1984?
Building
Land
Premises
Marketable Securities
Question # 116: Which of the following is/are example(s) of research

activities?
Question # 117: Which one of the following type(s) of information is(are)

available in 4th and 5th schedule of the Companies Ordinance 1984?
Definitions and general requirements for preparation and presentation of financial
statements
Requirements for Balance Sheet
Requirements for Profit and Loss Account
Question # 118: Which one of the following IAS is related to the Interest in
Joint Venture?
IAS 27
IAS 28
IAS 31
IAS 32
Question # 119: Which of the following investments are recorded using

Equity Method?
Investments made for shorter period
Question # 120: Which one of the following is(are) recorded under the Equity
section of the Balance Sheet?
Share Premium
Reserves
Accumulated Profit
Question # 121: Concept of Related Parties is defined in:

IAS
Both Companies Ordinance 1984 and IAS
Neither in Companies Ordinance 1984 nor in IAS
Question # 122: Which one of the following is NOT recorded under Equity
Share Premium
Share Capital
Accumulated Profit
Dividend Payable

Question # 124: Which of the following is the Classification of Current Assets
with respect to the Companies Ordinance 1984?
Building
Land
Premises
Question # 125: Which of the following is NOT the method of stock

valuation?
FIFO Method
Question # 126: Which of the following section of the Companies Ordinance

1984 deals with Revaluation of Fixed Assets?
Section 235
Section 236
Section 237
Section 238
Question # 127: Preparation and presentation of Financial Statements are

governed by:
International Accounting Standards
International Financial Reporting Standards
Question # 128: Partnership firms are registered under which of the

following?
Question # 129: Written down value of an asset = ----------------

Question # 130: Which of the following IAS affect(s) the recognition,

presentation and discourse of fixed assets in financial statements?
IAS 01
IAS 16
IAS 23
Question # 131: Which of the following methodology is adopted for the

valuation of investments in associated companies?
Equity Method
At cost or Under IAS 39
At amortized cost
At fair value
Question # 132: Which of the following is the ability to govern the financial
and operating policies of an enterprise so as to obtain from its activities?
Control
Direct Subsidiary
Indirect Subsidiary
Question # 133: Which of the following IAS deals with the Associated
Companies?
IAS 27
IAS 28
IAS 01
IAS 07
Question # 134: Which of the following IAS deals with the Associated
Companies?
Purchases of assets financed through issue of debentures
Assets that are not currently in use because of excess capacity
Assets not currently undergoing activities necessary to prepare for intended use
Assets intended for sale or use that are produced as discrete projects
Question # 135: Which of the following is an asset that necessarily takes a

substantial period of time to get ready for its intended use or sale?
Qualifying Asset
Outstanding Asset
Tangible Asset
Intangible Asset
Question # 136: Which of the following investments are recorded using

Equity Method?
Question # 137: If Original cost is Rs. 100,000; Depreciation rate is 20% p.a.
using straight line method; what will be the value of accumulated
depreciation at the end of 2nd year?
Rs. 20,000
Rs. 40,000
Rs. 80,000
Rs. 60,000
Question # 138: Concept of Related Parties is defined in:

IAS
Question # 139: Which one of the following is related to the IAS 39?
Consolidated and Separate Financial Statements
Interest in Joint Venture
Financial Instruments Disclosure and Presentation
Financial Instruments Recognition and Measurement
Question # 140: Which of the following IAS affect(s) the recognition,

presentation and discourse of fixed assets in financial statements?
IAS 01
IAS 16
IAS 23
Question # 141: Which of the following is an example of Capital Expenditure?

Wages paid on the purchases of goods
Carriage paid on the purchases of goods
Transportation paid on machinery purchased
Octori duty paid on goods

Equity Method
At amortized cost
At fair value
Question # 143: In case an item of property, plant and equipment is

exchanged for similar asset of the enterprise, the cost of the new asset is
measured at the --------------of the old asset.
Carrying value
Fair value
Future value
Salvage Value

Question # 145: Which of the following costs can be capitalized?

Question # 146: Which one of the following is(are) NOT recorded under
Current Liabilities section of the Balance Sheet?
Debentures
Deferred Taxation
Obligation under Finance Lease
Question # 147: Which of the following is the deduction or allowance allowed

by a creditor to a debtor?
Trade Discount
Cash Discount
Purchases return
Sales return
Question # 148: The term “Significant Influence” refers to the:

Ability to participate but not to control financial and management affairs of
the enterprise
Ability to participate and control financial and management affairs of the
enterprise
Neither to control nor to participate in financial affairs of the enterprise
Question # 149: Which of the following asset is not an example of Intangible

Fixed Assets?
Vehicles
Good Will
Copyrights
Trade Marks and Designs
Question # 150: Which of the following is a rebate or allowance from the

scheduled price granted by the seller to the buyer?
Trade Discount
Cash Discount
Purchases return
Sales return
Question # 151: Which of the following entities is profit oriented entity?

NGOs
Trust
Societies
Question # 152: Which of the following is/are the Classification of Current

Cash Balance
Loans and Advances
Bank Balance
All of the given
Question # 153: Which of the following is INCORRECT with respect to

Perpetual Inventory System?
Receipt of inventory is debited to Stock Account
Issuance of inventory is credited to Stock Account and Debited to Material
Consumption
Account
Receipt of inventory is debited to Purchase Account
Material Consumption Account becomes the part of Trading Account
Question # 154: Which of the following statement is/are INCORRECT under

the Cost Method for recognition of investment in associated companies?
The carrying amount of the investment is increased or decreased to reorganize
the investor’s share of profits or losses of the investee after the date of
acquisition

Cash Balance
Bank Balance
Premises
Question # 156: What is the treatment of Accumulated Depreciation in

accounting?
Treated as a contra asset
Question # 157: According to the Prudence concept, Stock should be

included in Balance Sheet at:
Cost
Its net Realizable value
Lower of its total cost or its total net realizable value
Higher of its total
Question # 158: Which one of the following is NOT the component of cost?
Import duties
Installation costs
Cost of site preparation
Transportation outwards
Question # 159: What is the treatment of Depreciation in accounting?

Question # 160: Which one of the following is related to the Benchmark

Treatment for an investment in jointly controlled entities?
Equity Method
LIFO Method
Question # 161: Which of the following is/are NOT the example(s) of Financial
Asset?
Minority interest
Sale of goods
Purchases of goods
Question # 162: Which one of the following is a fixed asset?

Cash in hand
Advanced payment
Closing stock
Leasehold vehicle
Question # 163: Which of the following is an example of Capital Expenditure?

Machinery
Freehold land
Leasehold land
IAS 23
IAS 07
IAS 01
IAS 16
Question # 166: Which of the following is INCORRECT with respect to

Perpetual Inventory System?
Issuance of inventory is credited to Stock Account and Debited to Material
Consumption Account

Stock
Cash Balance
Finished Goods
Question # 168: Which of the following is an identifiable non-monetary asset

without physical substance?
Tangible Asset
Intangible Asset
Floating Asset
Circulating Asset
Question # 169: Which of the following represent(s) the Cost of goods sold?
Sales – Gross Profit
Opening Stock + Purchases – Closing Stock
Cost of goods Manufactured + Opening Finished Goods Inventory – Closing
Finished Goods Inventory
Question # 170: Which of the following is(are) example(s) of Borrowing

costs?
Interest on bank overdrafts
Interest on short-term borrowings
Interest on long-term borrowings
Question # 171: If the holding company owns more then 50% but less then
100% shares of the subsidiary company then the subsidiary type will be
termed as:
Partially owned subsidiary
Wholly owned subsidiary
Direct subsidiary
Indirect subsidiary

Direct Material Cost + Direct Labor
Cost Total Factory Cost – Factory Overheads
Question # 173: If stock valuation method is changed every year by the firm,
which concept the firm has violated?
The materiality concept
The consistency concept
The prudence concept
The going concern concept
Question # 174: Which one of the following is TRUE with respect to “FIFO” in
inventory valuation?
First-In-First-Out
First-In-Freight-Out
Freight-In-First-Out
Freight-In-Freight-Out
Question # 175: Concept of Related Parties is defined in
IAS
Question # 176: What is the meeting requirement for the directors of a Public
Limited Company?
Question # 177: Companies are registered under:


Equity Method
At amortized cost
At fair value
Question # 179: Which of the following is/are the physical asset(s)?

Loan Agreements
Trade Receivables
Control
Direct Subsidiary
Indirect Subsidiary
governed by:
Question # 183: Which one of the following is NOT recorded under of Equity
section the Balance Sheet?
Share Premium
Share Capital
Accumulated Profit
Dividend Payable
Question # 184: Which of the following is the amount for which an asset
could be exchanged between knowledgeable, willing parties in an arm’s
length transaction?
Depreciable Amount
Fair Value
Cost
Carrying Amount

undertaken with the prospect of gaining new scientific or technical
knowledge and understanding?
Research
Development
Audit
Accounting
Question # 186: Under which of the following methods for inventory

valuation, costs of earliest purchases assumed still to be in inventory?
FIFO Method
LIFO Method

Cash Balance
Loans and Advances
Bank Balance
Question # 188: Which of the following is the type of business owned by one
person?
Sole-Proprietorship
Partnership
Public Limited Company
Unlimited Company
Question # 189: Which one of the following is the example of non-profit

oriented organization?
NGO’s
Trusts
Societies
Question # 190: Annual General Meeting (AGM) is required to be held within

_________ of incorporation.
06 months
12 months
15 months
18 months
Question #191: In the first step of formation of A Company the availability of

name is checked from SECP, that is at least two companies with same
name can registered.
True
False
Question # 192: An increase in economic benefits during the accounting

period in the form of increase of assets and decrease in liabilities is termed
as Expenses.
True
False
Question # 193: In IAS 23 Qualifying asset is an asset that necessarily takes

a substantial period of time to get ready for its intended use.
True
False
Question # 194: Cash discounts are usually received on bulk purchase and
are agreed at the time of negotiation of cost. The cost of inventory is
recorded net of these discounts.
True
False
Question # 195: Generally there are two types of discounts; ____Trade____ and
____Cash_____
Question # 196: A contractual arrangement whereby, two or more parties
undertake, an economic activity which is subject to joint control is called
____Joint Venture_____
Question # 197: ____share holders’ equity_____ is the net balance of the total
assets of the business less third party’s liabilities.
Question # 198: _____qualifying_____ is an asset that necessarily takes a

substantial period of time to get ready for its intended use.
Question # 199: In case of a single member company _______ person(s) is

(are) required to be nominated to takeover the company in case of a death
of the member.
One
Two
Three
Four
Question #200: Company should be termed as a __________ of another

company if other company holds more than 50% of its shares or has the
power to appoint more than 50% of its directors.
Associated
Subsidiary
Joint Venture
Question # 201: Directors or shareholders having ______ voting power can

call for Extraordinary
General Meetings (EOGM).
10%
15%
20%
25%
Question # 202: Quality control during commercial production cost Rs.

10,000/- will be charged to:
Research expenses
Development cost
Profit and Loss account
Question # 203: Which one of the following is an example of Conversion

Cost?
Labor and factory overheads
Labor and work in process
Work in process and finished goods
Factory overhead and work in progress
Question # 204: Which of the followings are among the non-current assets?
Tangible and intangible assets
Operating assets
Financial assets of a along term nature
Question # 205: Movement of capital issued and reserves are presented

through which of the following statement?
Cash flow statement
Statement of changes in equity
Income statement
Balance sheet
Question # 206: A maximum limit of the amount of the capital that a company
can issue is mentioned in the Memorandum of Association and Article of
Association of the company is called:
Authorized capital
Issued capital
Subscribed capital
Paid up capital
Question # 207: Cost of inventories will consist of which of the following

costs?
Purchase cost
Costs of conversion
Installation costs
Question # 208: Cash discounts are received on early payment of the

outstanding amount. These discounts are conditional and are not reduced
from the value of the inventory.
True
False
Question # 209: In the rare cases of conflict between an IAS and the
Framework, the Framework will prevail.
True
False
Question # 210: Current assets will also include marketable securities if they
are expected to be realized within twelve months of the Balance Sheet date.
True
False
Question # 211: Significant influence is the ability to participate and to
control the financial and management affairs of the enterprise.
True
False
Question # 212: International Accounting Standards (IAS) are issued by

International Accounting Standard Board (IASB).
True
False
Question # 213: Contingent assets are:

Recognized as asset in the balance sheet
Disclosed in the financial statements
Any of the given options depending upon certain condition
Question # 214: A reduction of share capital can be effected through an

ordinary resolution.
True
False
Question # 215: According to IAS 2 Inventories are assets that are not held
for sale in the ordinary course of business.
True
False
Question # 216: Which assets are specifically excluded from Financial

Assets?
Investments
Prepaid Expenses
Physical Assets
Both (b) and (c)
Question # 217: A supplier sends you a statement showing a balance

outstanding of Rs. 14,350.
Your own records show a balance outstanding of Rs. 14,500/-
The supplier sent an invoice for Rs. 150 which you have not yet received.
The supplier has allowed you Rs. 150 cash discount which you had omitted
to enter in your ledgers
You have paid the supplier Rs. 150 which he has not yet accounted for
You have returned goods worth Rs. 150 which the supplier has not yet
accounted for
Question # 218: Contingent liabilities are:

Possible obligation that arises from past events and whose existence will
be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the entity
Liabilities to pay for goods or services that have been received or supplied and
have been invoiced or formally agreed with the supplier
Both (a) and (b)
Question # 219: Accounting policy once selected can never be changed.

True
False
Question # 220: Minimum Lease Payments are:

The lease rentals payable by the lessee to the lesser
The contingent rent payable by lessee
All the payments that the lessee can be required to pay to the lesser
Question # 221: IAS 23, "Borrowing Cost" requires capitalization of

borrowing cost as a benchmark treatment.
False
True
Question # 222: Liquidity is:

Excess of income over expenditure
Income generating capability of the business
Ability of a business to pay its debts in time
Excess of expenditure over income
Question # 223: A revaluation loss is charged to profit and loss account in

the period in which the revaluation is carried out.
True
False
Question # 224: In case of tangible non-current assets, if a policy of

revaluation is adopted for the first time, then this is treated as:
No change in Accounting Policy under IAS 8
A change in Accounting Policy
A revaluation under IAS 16 Property, Plant and Equipment
Question # 225: Right shares are issued when accumulated profit is being
capitalized by the issuance of shares.
1. True
2. False
Question # 226: _________Net Realized Value_________ is the estimated
selling price in the ordinary course of business less the estimated cost of
completion and the estimated cost necessary to make the sale.
Question # 227: Liquidity is defined as:

1. Excess of income over expenditures
2. Income generating capability of the business
3. Ability of a business to pay its debts in time
4. Excess of expenditures over income
Question # 228: If an entity declares dividends to the holders of equity

instruments after the balance sheet date, the entity shall not recognize
those dividends as a :
1. Equity
2. Deferred Liability
3. Liability
4. Asset
Ref:
http://docs.google.com/viewer?a=v&q=cache:XMUl3epcawQJ:app1.hkicpa.org.h
k/ebook/HKSA_Members_Handbook_Master/volumeII/hkas10.pdf+&hl=en&pid=
bl&srcid=ADGEESivnfEpwDZ6thyO4V4jSJWzF4SpcI2cOREL6fTfVxGfKACoLRo
wJpAmZgmjtxrZOkW6Ca6Cq9p_FxDu1OcVt0BgDtFUys6YKTV3pgug3xOqqiJX
EgOxdfmx5DRXrsUy-XIDWeD&sig=AHIEtbRW-7EEkfm6qngBAftJgYMwQIfBtg
Question # 229: The information as to profitability is provided by the balance

sheet of the entity.
1. True
2. False
Question # 230: Under IAS 33 ____________Earning Per Share__________is

widely used by investors as a measure of a company’s performance.
Question # 231: Which of the following asset is specifically excluded from

Financial Assets?
1. Investments
2. Prepaid Expenses
3. Physical Assets
4. Both Prepaid Expenses & Physical Assets
Question # 232: Lease accounting is regulated by ___which was introduced

because of abuses in the use of lease accounting by companies.
1. IAS 17
2. IAS 12
3. IAS 39
4. IAS 32
undertake, an economic activity which is subject to join control, is called
Subsidiary Companies.
1. True
2. False
Question # 234: Which of the following is a present obligation of the entity

arising from a past event the settlement of which is expected to result in an
outflow from the entity of resources embodying economic benefits?
Asset
Income
Expense
Liability
Question # 235: Which of the following types of business enjoys greater

freedom and flexibility in making business decisions according to the
economic conditions?
Private Limited Company
Sole-proprietorship
Partnership
Question # 236: Proper Books of Accounts are kept by every company under
which of the following sections of the Companies Ordinance 1984?
Section 230
Section 233
Section 184
Section 110
Question # 237: Which of the following information must be disclosed in

case of loan and advances to subsidiary companies?
The name of each borrower
Amount of loans and advances
The terms of loan and the particulars of collateral security held
Question # 238: Which one of the following is an example of Financial Asset?

Inventories
Patent rights
Goodwill
Accounts receivable
Question # 239: Mr. Jason invested Rs. 100,000 in bank as bonds for nine
months. At the end of the year, this invested amount will be shown in
Balance Sheet under the head of:
Fixed Assets
Current Asset
Current Liabilities
Long Term Liabilities
Question # 240: Which of the following represents the Financial Information

presented in the financial statements relating to the assets and incomes
should not be overstated.
Consistency
Profit
Materiality
Prudence
Question # 241: Which of the following statement shows the movement of

cash inflows and outflows?
Income Statement
Balance Sheet
Statement of Owner's equity
Cash Flows Statement
Question # 242: Which of the following is an example of current liability?

Bank Overdraft
Stock
Goodwill
A loan repayable in two years
Question # 243: Which of the following is a component of current liabilities?

Assets subject to finance lease
Debentures
Provision for Taxation
Loans taken for more than five years
Question # 244: A damage claim of Rs.15 million for breach of contract has
been served on the Company. The Company legal counsel is of the view
that it is possible that the damages will be awarded to the plaintiff.
However, the amount of damages can not be reasonable estimated. What
accounting treatment would be made in this regards?
A provision will be made for damages
Damages will be disclosed as contingent liabilities
Damages will be treated as accrued income
No treatment will be taken
Question # 245: Which of the following term represents the amount of share
capital collected from the shareholders on application of shares?
Registered Capital
Subscribed Capital
Nominal Capital
Paid up capital
Question # 246: Where shares are purchased at a price above the face value,
the difference shall be charged to:
Share Premium Account
Share Discount Account
Distributable Profit Account
Un-distributable Profit Account
Question # 247: In case of operating lease, an asset is recorded in the books

of lessee at which of the following value?
Faire value
Present value
Market value
Not recorded at any value
Question # 248: Which of the following IAS covers the Debentures?

IAS 32 only
IAS 39 only
Both IAS 32 and IAS 39
IAS 17
Question # 249: Which of the following events are indicative of conditions

that arose after Balance Sheet date?
Adjusting events after balance sheet date
Adjusting events before balance sheet date
Non - adjusting events after balance sheet date
Non - adjusting events before balance sheet date
Question # 250: Which of the following is/are the event/s after the balance
sheet date with respect to IAS 10?
Adjusting events only
Non-adjusting events only
Both Adjusting and Non-adjusting events
Question # 251: Which of the following is a possible asset that arises from
past events and whose existence will be confirmed only by the occurrence
of one or more uncertain future events not wholly within the control of the
entity?
Contingent asset
Fixed asset
Current asset
Floating asset
Question # 252: Which of the following is/are related to the IAS-37?

Contingent Assets
Contingent Liabilities
Both Contingent Assets and Contingent Liabilities
Inventory
Question # 253: Which of the following is the example of Certain Liabilities?

Creditors against supplies
Accruals against expenses
Provision against expected losses
Provision against expected profits
Question # 254: An equity instrument that is subordinate to all other classes

of equity instruments is:
Ordinary share
Potential ordinary share
Warrants
Options
Question # 255: Which of the following is/are Financial Instruments that give
the holder, the right to purchase ordinary shares?
Equity shares
Potential ordinary shares
Warrants or Options (IAS 33)
Preference shares
Question #256: Which of the following is widely used by investors as a measure of

Company performance in comparing the results of A Company over a period of
time?
Earning Per Share
Balance Sheet
Cash Flow Statement
Notes to the accounts
Question # 257: Which of the following represents the Equity?

Share capital + accumulated profit + General Reserves
Share capital + Accumulated profit - General reserves
Share capital - Accumulated profit - General reserves
Accumulated profit - General reserves
Question # 258: Which of the following is included in the Equity Section of

the Balance Sheet?
Share capital
Long term financing
Deferred cost
Liability against assets subject to finance lease
Question # 259: Which of the following is NOT considered as expense by
their function with respect to IAS 01?
Cost of goods sold
Distribution costs
Administrative expenses
Transportation costs
Question # 260: Which of the following is TRUE?

Gross profit - Operating expenses = Operating profit
Cost of sales + Operating expenses = Operating profit
Cost of sales - Operating expenses = Net profit
Cost of sales - Operating expenses = Gross profit
Question # 261: An electricity accrual of Rs. 375 was treated as prepayment

in preparing a trader's profit and loss account. As a result his profit was:
Understated by Rs. 750
Overstated by Rs. 750
Question # 262: Which of the following is the correct formula to find the
Present Value? Where
FV = Future Value, r = Interest rate and n = Time period
FV (1 + r)-n
FV (1 + r) n
FV (1 - r)-n
FV (1 x r)-n
Question # 263:. If you plan to save Rs. 5,000 with a bank at an interest rate
of 8%, what will be the worth of your amount after 4 years if bank offers
simple interest?
Rs. 5,400
Rs. 5,900
Rs. 6,600
Rs. 6,802
Question # 264: What will be the purchase source at the time of re-purchase
of shares?
The purchase shall be in cash and out of the distributable profits.
The purchase shall be in cash and out of the un-distributable profits.
The purchase shall be in credit and out of the distributable profits.
The purchase shall be in cash and out of the Revaluation surplus profits.
Question # 265: Which of the followings item(s) must be disclosed on the

face of income statement according to IAS-1?
Revenue
Results of operating activities
Finance costs
Question # 266: Which of the following is the combined account for showing
both result of business, i.e., gross and net profits?
Trading and profit and loss account
Profit and loss appropriation account
Income statement
Question # 267: The goods are written off when:

These are completely damaged
These are stolen
These are destroyed by fire
Question # 268: Which of the following bases, stock should be valued

according to IAS-2?
Cost
Higher of cost or net realizable value
Lower of cost or net realizable value
Net realizable value
Question # 269: Which of the following business is formed by the approval of

Stock Exchange?
Trade organization u/s 42 of the Companies ordinance 1984
Corporate Brockage House
Question # 270: Which of the following fixed asset is shown at cost rather at
book value?
Machinery
Furniture
Vehicles
Land
Question # 271: Which of the following is NOT related to the qualitative

characteristics that make financial information useful?
Reliability only
Relevancy only
Understandability
Question # 272: Which one of the following is the concept of the capital
maintenance?
Financial capital maintenance
Physical capital maintenance
Both Physical and Financial capital maintenance
Question # 273: If the closing balance is lower than the difference of the
opening balance and depreciation for the Year, it shows:
An addition of fixed assets has been taken place
A disposal of fixed assets
Fixed assets are installed under finance lease
Question # 274: Which of the following item may be included in a Balance

Sheet at more than its historical cost?
Good will
Land
Research expenditures
Work in progress
Question # 275: The valuation of stock at lower of its cost or net realizable
value is an application of:
The accrual concept
Question # 276: Contribution to Research foundation amounting to Rs.

100,000/- Whether it is:
Development cost
Development cost & capitalized
Research expenses
Question # 277: Which of the following are the examples of research

activities?
Search, evaluation, final selection and application of research findings
Search for alternatives
Question # 278: There are ______ methods for recognition of investment in

associated companies:
One
Two
Three
Four
Question # 279: __________ is the estimated selling price in the ordinary

course of business less the estimated cost necessary to make the sale.
Carrying value
Market value
Question # 280: Cost of inventories will consist, which of the following costs:
Purchase
Costs of Conversion
Other costs incurred in bringing the inventories to their location and condition
Question # 281: Cost of the inventory is calculated with which of the

following method:
First in First Out (FIFO) & Last in First Out (LIFO)
Specific identification of cost
Weighted Average
Question # 282: The table shows information relating to end of year stock
According to IAS 2, what is the value of stock at the balance sheet date?
Rs. 90,000/-
Rs. 80,000/-
Rs. 100,000/-
Rs. 70,000/-
Question # 283: Conversion cost includes:

Question # 284: The cost of inventories of a service provider consists of

which of the following:
Labor
Other costs of personnel directly engaged in providing the service
Labor and other costs relating to sales
Question # 285: Which of the following is the disadvantage of modified

schedules and alternative workplace?
• Freedom in professional and personal life
• Adds more Job satisfaction
• Complicated coordination
• Suitable for self starter who require little direct supervision
Question # 286: Revenue expenditure is likely to benefit:

• Future period
• Current + future period
• Current period
• Past period
Question # 287: Net investment in the lease is:

• Residual value
• MLP + URV
• P.V of G.I
• None
Question # 288: Which item may be included in Balance Sheet at more than
historical cost?
• Land and Building
• Work in progress
• Goodwill
• Research expenditure
Question # 289: What is material?

• Item that could influence economic decision of users
• It depends on size and nature of them
• Both economic decision of users & size and nature of them
• None of the given options
Question # 290: As a result of a product break through, it has been determined that
manufacturing equipment previously depreciated over 15 years should be
depreciated over 20 years whether it is:
• Changes in accounting policy
• Prior period error
• Changes in accounting estimate
Question # 291: Example of change in accounting estimates is the followings:

• Bad Debts
• Inventory obsolescence
• Warranty obligations
• All of the given options
Question # 292: Imran & Co made a profit for the year of Rs. 56,250 after accounting
for depreciation Rs. 3,750. During the year, fixed assets were purchased for 24,000
debtors increased by Rs. 3,000, stock decreased by Rs. 5,400 and creditors increased
by Rs. 1,050. The increase in cash and bank during the year was:
• Rs. 39,450
• Rs. 15,950
• Rs. 14,650
• Rs. 17,150
Question # 293: Khan & Co. reported a profit of Rs. 30,000 for the year, after
charging the following:
Depreciation Rs. 5,000
Loss on sale of assts Rs. 2,000
During the year there was a decrease in working capital of Rs. 1,000. What was the net cash
flowgenerated from operations?
• Rs. 12,000
• Rs. 38,000
• Rs. 20,000
• Rs. 25,000
Question # 294: Which of the following is not a cash flow in a cash flow statement?
• A right issue
• A depreciation charge
• Proceeds on the sale of a fixed asset
• Corporation tax paid
Question # 295: A cash flow statement provides information that enables user to
evaluate:
• Changes in net assets
• Financial structure
• Amounts and timing of cash flows
Question # 296: The accounting entity or separate entity concept means.

• That each branch of the business should be treated as a separate accounting
entity.
• That each line of business should be treated as a separate accounting entity.
• That business should be treated as an entity separate from its owners.
• None of the above
Ans: That business should be treated as an entity separate from its
owners.
This concept implies that the activities of a business are to be treated as
separate from the non-business activities of its owners.
The items recorded in the books of business are therefore restricted to the
transactions of the business. The only time that the personal resources of the
owners will affect the books of business when introduce new capital into the
business or take out profits from it.
Question # 297: You are running a small business. You have obtained a
personal loan from the bank that you intend to use for renovation of your
own house.
The loan would be classified as:
• Long term liability of the business
• Short term liability of the business
• Any one of the above depending upon the term of the loan
Ans: None of the above.
Following the separate entity concept only those transactions will be recorded in
the books of the business that relate to the business. A personal loan of the
owner will not be recorded in the books of the business at all.
Question # 298: Assets and liabilities are classified into current and non-
current on the basis of:
• Their expected life or repayment term.
• The amount spent or payable i.e. on the basis of materiality.
• Judgment of the individual
• All of the above
Ans. Their expected life or repayment term.
In case of assets the major classification of the assets includes Non-current
assets and Current Assets, whereas in case of liabilities the major classifications
are:
Ø Equity,
Ø Non-Current Liabilities
Ø and Current Liabilities
All these classifications are based on the expected life of the asset or the
repayment term, there value of the judgment of the individual do not affect their
classification
Question # 299: Which of the following statements best defines the term
“Useful life of an asset”?
• It is the time period after which the asset becomes useless.
• It is the time period after which the organization sells the asset.
• It is the time period after which maintaining the asset is not viable economically.
Ans: It is the time period after which maintaining the asset is not viable
economically.
Useful life of an asset is defined as the number of years over which an enterprise
expects to use an asset. OR The number of production or similar units expected
to be obtained from an asset. This means that the enterprise would like to use
the asset as long as it is economically feasible for the enterpriser to operate the
asset. Economic feasibility means that the asset is giving more output than the
cost incurred to operate it.
Question # 300: What is depreciation?

• Market value of an asset reduces with the passage of time. This reduction is
called depreciation.
• Systematic allocation of depreciable amount of an asset over its useful life
• It is the cost of maintaining an asset.
• All of the above
Ans: Systematic allocation of depreciable amount of an asset over its
useful life.
Depreciation is a charge for using the asset or spreading its cost of purchase
over the life of the asset and is calculated by distributing the cost of the asset
over its useful life.
Question # 301: The consideration that would have to be paid if same or an

equivalent asset is acquired. Such kind of consideration is called:
• Current cost
• Periodic cost
• Fixed Cost
• Semi-annual cost
Question # 302: _______________ is the undiscounted amounts of cash or

cash equivalents expected to be paid to satisfy the liabilities in the normal
course of business.
• Settlement value
• Realizable value
• Residual value
Question # 303: Which of the following is a tool of measuring financial

position of an entity?
• Balance sheet
• Income statement
• Cash flow statement
• All of above
Question # 304: ___________ are included in the cost on inventories only to

the extent that they are incurred in bringing the inventories to their present
location and condition.
• Other costs
• Installation cost
• Transportation cost
• Carrying cost
Question # 305: In perpetual Inventory systems inventory is recorded as:
Receipt of inventory is debited to purchases account.
No recording is made for individual issue in the General Ledger.
Receipt of inventory is credited to Stock Account.
Issues are Credited to Stock Account and Debited to Material Consumption
Account.
Question # 306: Which of the following is not a component of financial

statement?
• Balance sheet and Income statement
• Statement of changes in equity
• Cash flow statement
Question # 307: Cash discounts are received on early payment of the

outstanding amount.
These discounts are:
• Non conditional and reduce from the value of the inventory.
• Conditional and reduce from the value of the inventory.
• Non conditional and are not reduced from the value of the inventory.
• Conditional and are not reduced from the value of the inventory.
Question # 308: Stores and spares are valued at:

• Cost value
• Market value
• Cost or market whichever is less
• Cost or market whichever is greater
Question # 309: Stores and spares include items which may result in
_____________ but are not distinguishable.
• Revenue expenditure
• Fixed capital expenditure
• Both capital and revenue expenditure
Question # 310: The cost of inventories may not be recoverable if:

• Those inventories are damaged
• They have become wholly or partially obsolete
• Their selling price has declined
• All of above
Question # 311: IAS 1 suggests certain order for notes to the financial
statements. This will assist users when comparing the statements of
different entities. By applying above statement, which of the following does
not include in IAS
Statement of compliance with IAS’s
Statement of the measurement basis and accounting policies applied
Other disclosures
Question # 312: Revenue shall be measured at ____________of the

consideration received or receivable.
• Fair value
• Cost value
• Discount value
Question # 313: Depreciation, maintenance, rent, utilities and management

costs of administrative offices are charged to:
• Administrative cost
• Distribution Costs
• Finance Costs
• Cost of Goods Sold
Question # 314:. Under IAS 28 investment in associates is recorded using

which of the following method?
Equity method
Cost & Equity method
Cost method
Question # 315: IAS 36 “Impairment of Assets” defines that recognition of

gains / losses is always due to ________ of the assets:
• Change in Fair value
• Addition of assets
• Deletion of assets
• Depreciation
Question # 316: Distribution costs are expenses that are directly related to:
• Selling the products of the entity
• Mark up paid on loans and leases
• Administration and management of the business
Question # 317: An entity shall present a statement of changes in equity,

showing which of the following on the face of the statement:
• Profit or loss for the period
• Total income and expense for the period
• Total amounts attributable to equity holders of the parent and to minority
interest
Question # 318: Other operating income includes which of the following:

• Income from financial assets
• Income from investments in debts, loans, advances and receivables to each
related party
• Income from assets other than financial assets
Question # 319: Under which of the following circumstances provision might

not be recognized?
• The board agreed a detailed closure plan on 20 December 20X9 and details
were given to customers and employees.
• A Company is obliged to incur clean up costs for environmental damage
(That has already been caused)
• A Company intends to carry out future expenditure to operate in a
particular way in the future.
Question # 320: Cost of goods sold includes which of the following:

• Sales and distribution costs
• Depreciation, maintenance, rent and utilities
• Direct labor cost
• Advertisement costs
Question # 321: Management shall use its judgment in developing and

applying an accounting policy that results in information that is:
a) Relevant to the economic decision making needs of the user
b) Reliable, in that the financial statements & Neutral
c) Complete in all material respects & Prudent
d) All of the given options
Question # 322: Accounting policies should be applied consistently for ____

transactions.
a) Similar
b) Divergent
c) Contradictory
d) Conflicting
Question # 323: Cash Flow Statement means:

a) A statement shows the movement in cash resources of the business
b) The statement shows the sources from which business generated cash and its
application.
c) A statement analyses operating, investing and financing activities of the
business
Question # 324: Ahmed & Co. issued shares how would a bonus issue of
shares affect a cash flow statement:
a) It would reduce cash flow from operations
b) It would have no effect on cash flow
c) It would increase cash flow from investing activities
d) It would increase cash flow from financing activities
Question # 325: Cash flow from operating activities are generally derived
from the principal of ________ of the business:
a) Revenue producing activities
b) Capital producing activities
c) Cash receipts & payment activities
d) Cash receipts & payment from owner activities
Question # 326: At the time of inception of lease, in cash flow statement,

Asset and
Liability is recorded in Balance Sheet. However in case of cash flows:
a) Only payment of Lease Rentals is shown as outflow
b) Both payment of finance lease & Lease Rentals is shown as outflow
c) Only payment of Lease Rentals is shown as inflow
d) Only payment of finance charge is shown as outflow
Question # 327: Which of the following statement would be considered as

out flow, in the outflow statement?
a) The difference between the old and new valuations in the case of the
revaluation of fixed assets
b) Proceeds as a result of selling fixed assets
c) The depreciation charge for the current year
d) The repayment of a bank loan
Question # 328: Imran & Co. changed LIFO method to FIFO method to valuate
for its finished goods inventory. Whether it is:
a) Change in accounting estimates
b) Prior period errors
c) Change in accounting policy
d) None of the given options
Question # 329: Which of the following is an example of change in

accounting estimates:
a) Bad debts
b) Inventory obsolescence
c) Warranty obligations
d) All of the above
Question # 330: A prior period shall be corrected by:

a) Retrospective restatement
b) Prospective application
c) Shall not be corrected
d) None of the above
Question # 331: Reporting Inventory at the lower of cost or market value is a

departure from the accounting principle of:
a) Full disclosure
b) Historical cost
c) Consistency
d) Conservatism
Control
Direct Subsidiary
Indirect Subsidiary

governed by:
Question # 335: Which one of the following is NOT recorded under of Equity
section the Balance Sheet?
Share Premium
Share Capital
Accumulated Profit
Dividend Payable
Question # 336: Which of the following is the amount for which an asset
could be exchanged between knowledgeable, willing parties in an arm’s
length transaction?
Depreciable Amount
Fair Value
Cost
Carrying Amount
Question # 337: Which of the following IAS deals with Inventories?

IAS 38
IAS 23
IAS 02
IAS 16
Question # 338: Under which of the following methods for inventory

valuation, costs of earliest purchases assumed still to be in inventory?
FIFO Method
LIFO Method

Cash Balance
Loans and Advances
Bank Balance
Question # 340: Which of the following is the type of business owned by one
person?
Sole-Proprietorship
Partnership
Unlimited Company
Question # 341: Fair presentation means:

Application of Companies Ordinance, 1984
Income Tax Ordinance, 2001
IAS with additional disclosure
Question # 342: Rendering of services, revenue associated with the

transaction can be estimated reliably when, which of the following
conditions are satisfied:
The amount of revenue cannot be measured reliably
It is doubtful that economic benefits associated with the transaction will flow to
the entity
The stage of completion of the transaction at the balance sheet date can be
measured reliably
The cost incurred for the transaction and the cost to complete the transaction
cannot be measured reliably
Question # 343: The stock sheet for the previous year was incorrectly
undercasted by Rs. 200,000, whether it is:
Changes in accounting policy
Change in accounting estimate
Prior period error
Question # 344: Inventories are carried in the books of accounts according to

the methods of valuation given in:
IAS 28
IAS 2
IAS 4
IAS 29
Question # 345: A public company is required to file a _____________with

SECP before allotment of shares.
Prospectus
Statement in lieu of prospectus
Articles of Association
Question # 346: According to the International Accounting Standards any

decrease in the value of goodwill is made with the help of:
Amortization
Impairment
Depreciation
Question # 347: Contingent assets are:

Question # 348: Which assets are specifically excluded from Financial

Assets?
Investments
Prepaid Expenses
Physical Assets
Both (b) and (c)
Question # 349: A supplier sends you a statement showing a balance

outstanding of Rs. 14,350.
The supplier has allowed you Rs. 150 cash discount which you had omitted
to enter in your ledgers
You have returned goods worth Rs. 150 which the supplier has not yet
accounted for
Question # 350: Contingent liabilities are:

Possible obligation that arises from past events and whose existence will
be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the entity
Liabilities to pay for goods or services that have been received or supplied and
have been invoiced or formally agreed with the supplier
Both (a) and (b)
Question # 351: Minimum Lease Payments are:

The lease rentals payable by the lessee to the lesser
The contingent rent payable by lessee
All the payments that the lessee can be required to pay to the lesser
Question # 352: Discount allowed on issue of shares is:

Shown as reduction in share capital
Written off as expense
Charged to share premium account
Both (a) and (b)
Both (b) and (c)
Question # 353: The historical cost convention:

Fails to take account of changing price levels over time
Records only past transactions
Values all assets at their cost to the business, without any adjustment for
depreciation
Has been replaced in accounting records by a system of current cost
accounting
Question # 354: Liquidity is:

Excess of income over expenditure
Income generating capability of the business
Ability of a business to pay its debts in time
Excess of expenditure over income
Question # 355: The issue of the shares at discount must be authorized by

resolution passed in ____________of the company and must be sanctioned
by the Commission.
1. General Meeting
2. Extra Ordinary Meeting
3. Statutory Meeting
4. None of the given options
Question # 356: Property, plant and equipment are carried in the books of
accounts in accordance with the requirements of :
1. IAS 2
2. IAS 4
3. IAS 16
4. IAS 28
Question # 357: If the closing balance is lower than the difference of the
opening balance and depreciation for the Year, it shows:
1. An addition of fixed assets has been taken place
2. A disposal of fixed assets
3. Fixed assets are installed under finance lease
Question # 358: In case of tangible non-current assets, if a policy of

revaluation is adopted for the first time, then this is treated as:
1. No change in Accounting Policy under IAS 8
2. A change in Accounting Policy
3. A revaluation under IAS 16 Property, Plant and Equipment
Question # 359: Liquidity is defined as:

Question # 360: If an entity declares dividends to the holders of equity

instruments after the balance sheet date, the entity shall not recognize
those dividends as a :
1. Equity
3. Liability
4. Asset
Question # 361: Which of the following asset is specifically excluded from

Financial Assets?
1. Investments
2. Prepaid Expenses
3. Physical Assets
Question # 362: Lease accounting is regulated by __________which was
introduced because of abuses in the use of lease accounting by
companies.
1. IAS 17
2. IAS 12
3. IAS 39
4. IAS 32
Question # 363: The issue of the shares at discount must be authorized by

resolution passed in _______________of the company and must be
sanctioned by the Commission.
1. General Meeting
Question # 364: Property, plant and equipment are carried in the books of
accounts in accordance with the requirements of:
1. IAS 2
2. IAS 4
3. IAS 16
4. IAS 28
Question # 365: Issuance of shares at discount is the inverse of:

Issuance of Bonus
Issuance at Premium
Right Shares Issue
Further Issue
Question # 366: A private company is not required to issue a _________ as it

is prohibited by its articles from inviting general public to subscribe for its
shares.
Cash flow statement
Prospectus
Income statement
Balance sheet
Question # 367: Risks and rewards associated with the ownership related to:
Finance Lease
Operating Lease
Hire Purchase Agreement
Installments
Question # 368: Minimum lease payment (MLP) includes from lesser point of
view:
Total payment
Residual value guaranteed by lessee
Party related to him or third party
Question # 369: In operating lease, rental expenses should be charged to:

Balance sheet
Profit and loss account
Income of lessee
Question # 370: Fair presentation means:

Question # 371: Rendering of services, revenue associated with the

transaction can be estimated reliably when, which of the following
conditions are satisfied:
the entity
measured reliably
Question # 372: Which transaction will cause an increase in capital

employed:
Receipt of payment from account receivables in cash
Increasing the provision for bad debts
Receipt of a loan
Disposal of a fixed asset for more than its book value
Question # 373: Income statement formats based on classification of:

Expenses
Incomes
Revenues
Question # 374: Preliminary expenses are an example of:

Revenue expenditure
Deferred revenue expenditure
Capital expenditure
Question # 375: The stock sheet for the previous year was incorrectly
undercasted by Rs. 200,000, whether it is:
Prior period error
Question # 376: An example of cash flows from operating activities is:

Cash receipt from sale of goods and rendering of services
Cash payment to acquire property plant and equipment
Proceed from short term financing
Cash payment and receipt from acquisition and disposal other long term assets
Question # 377: Inventories are carried in the books of accounts according to

the methods of valuation given in:
IAS 28
IAS 2
IAS 4
IAS 29
Question # 378: A public company is required to file a _____________with

SECP before allotment of shares.
Prospectus
Question # 379: According to the International Accounting Standards any

decrease in the value of goodwill is made with the help of:
Amortization
Impairment
Depreciation
Question # 380: Which one of the following is the example of non-profit

oriented organization?
NGO’s
Trusts
Societies
Question # 381: Annual General Meeting (AGM) is required to be held within

_________ of incorporation.
06 months
12 months
15 months
18 months
Question # 382: The amount by which the carrying amount of an asset

exceeds its recoverable amount is called as:
Impairment loss
Residual value
Depreciation
Fair value
Question # 383: Which of the following are the examples of development

activities?
Design, construction and testing of pre-production models
Design of tools, jigs moulds dies, involving new technology
Design, construction and operation of pilot plant
Question # 384: Investments made for long term in associated companies, is

recorded using _______method of recognition and shown separately in the
balance sheet as long-term
Assets
Equity
Cost
Both Cost and Equity
Question # 385: Costs of purchase of Inventories comprising which of the

following:
Purchase price
Import duties and other taxes
Transport less trade discount, rebate and other similar amounts
Question # 386: under Benchmark Treatment IAS-2, does not recommend the
following method of stock valuation for incorporating its value in financial
statement.
FIFO method
The weighted average cost method
LIFO method

undertake, an economic activity which is subject to joint control is called
________.
Joint Venture
Associated Companies
Question # 388: An intangible asset with indefinite useful life shall:

Be amortized using straight line method
Not to be amortized
Be amortized using reducing balance method
Either be amortized using straight line method OR be amortized using reducing
balance method
Question # 389: A complete set of financial statement includes which of the

followings:
A Balance sheet and Income statement
A statement of changes in financial position
Notes, other statements and explanatory material
Question # 390: There is no concept of capital in:

Sole proprietorship
NGO’s / NPO’s
Partnership
Question # 391: The surplus arising from revaluation of fixed assets of an

entity is shown:
Separately in the balance sheet
As indirect income in income statement
Added in the fixed asset
Question # 392: A Company uses FIFO method to evaluate its stock. The
information for the stock is as follows:
• Opening stock was 10 units at 2 each.
• Purchases were 30 units at Rs. 3 each, and
• Then issues of 12 units were made, followed by issues of 8 units.
Closing stock is valued at:
Rs. 50
Rs. 58
Rs. 60
Rs. 70
Question # 393: The capital maintenance concept implies that:

The capital of a business should be kept intact by not paying out dividends.
A business should invest its profits in the purchase of capital assets.
Fixed assets should be properly maintained.
Profit is earned only if the value of an organization’s net assets or its
Operating capability has increased during the accounting period.
Question # 394: The cost of inventories of a service provider does not
consist of:
Costs of personnel directly engaged in providing the service
Supervisory personnel
Attributable overheads
Labor and other costs relating to sales
Question # 395: Statuary Meeting is required to be held within:

3 to 6 months
1 to 3 months
6 to 9 months
9 to 12 months
Question # 396: Goodwill is most appropriately classified as:

A fixed asset
An intangible asset
A fictitious liability
A semi-fixed asset
Question # 397: If a Company purchased an Asset for Rs.20, 000. The

estimated useful life of asset is ten years. After five years the Book Value of
the Asset will be: (using straight line method of depreciation and no
residual value)
16,000
10,000
8,000
5,000
20000 – {(20000/10)*5} = 10000
Question # 398: A complete set of financial statements include:

A balance sheet
A statement of changes in financial position & Notes, other statements and
explanatory material
An income statement
Question # 399: The main aim of accounting is to:

Maintain ledger accounts for every transaction.
Provide financial information to users of such information.
Produce a Trial balance.
Record every financial transaction individually.
Question # 400: In case of a single member company _______ person(s) is

(are) required to be nominated to takeover the company in case of a death
of the member.
One
Two
Three
Four
Question #401: Company should be termed as a __________ of another

company if other company holds more than 50% of its shares or has the
power to appoint more than 50% of its directors.
Associated
Subsidiary
Joint Venture
Question # 402: Directors or shareholders having ______ voting power can

call for Extraordinary General Meetings (EOGM).
10%
15%
20%
25%
Question # 403: Quality control during commercial production cost Rs.

10,000/- will be charged to:
Research expenses
Development cost
Question # 404: Which one of the following is an example of Conversion

Cost?
Question # 405: Which of the followings are among the non-current assets?
Operating assets
Question # 406: Which one of the following is the concept of the capital
maintenance?
Question # 407: Movement of capital issued and reserves are presented
through which of the following statement?
Cash flow statement
Income statement
Balance sheet
Question # 408: A maximum limit of the amount of the capital that a company
can issue is mentioned in the Memorandum of Association and Article of
Association of the company is called:
Authorized capital
Issued capital
Subscribed capital
Paid up capital
Question # 409: Cost of inventories will consist of which of the following

costs?
Purchase cost
Costs of conversion
Installation costs
Question # 410: A person who acquires shares in a Company is known as a:

Director
Shareholder
Partner
Manager
Question # 411: The amount of the issued share capital of a company is:
Always equal to the amount of its authorized share capital
Equal to the amount of its issued preference share capital
 Equal to the reserves of the company
 None of the given options
Question # 412: Contingent liabilities are written in Balance Sheet as:

Long Term Deposits
 Current Liabilities
 Long Term Loans
 Foot Notes
Question # 413: Which of the following is NOT an example of current

liability?
 Bank overdraft
 Loan given to Mr. A for shorter period
 Accounts Payable
 Loan received form Mr. B for shorter period
Question # 414: Which one of the following is the present obligation of the
entity as a result of past even from which future economic benefits are
expected to flow to the entity?
 Asset
 Gain
 Liability
 Expense
Question # 415: Which of the following is an increase in the future economic

benefits related to an increase in an asset or a decrease of a liability that
can be measured reliably?
 Equity
 Income
 Liability
 Expense
Question # 416: Which of the following is TRUE with respect to the Prudence
concept?
 Financial Information presented in the financial statements relating to the assets
and incomes should not be overstated and relating to liabilities and expenses
should not be understated.
liabilities, expenses and incomes should not be overstated.
liabilities, expenses and incomes should not be understated.
 Financial Information presented in the financial statements relating to the
assets and incomes should not be understated and relating to liabilities
and expenses should not be overstated.
Question # 417: The accruals concept:

 Applies to revenue and expenses only
 Applies to assets and liabilities only
 Applies to revenue, expenses, assets and liabilities
 Is not a fundamental accounting concept
Question # 418: Which of the following is TRUE with respect to the

disclosure requirements of Trade Debts?
 Provision for doubtful debts is deducted from the doubtful debts
 Doubtful debts is deducted from the Provision for doubtful debts
 Doubtful debts and its Provision is shown separately as asset
 Provision for doubtful debts is not taken into consideration
Question # 419: Trade debts secured are to be shown in the balance sheet
under the head of:
 Non Current Assets
 Current Assets
 Capital
Question # 420: Which of the following is NOT the type of Market Risk?
 Price Risk
 Liquidity Risk
 Interest Rate Risk
 Currency Risk
Question # 421: Which one of the following is NOT an example of Financial

Instruments?
 Inventories
 Loans payable
 Share capital
 Debentures
Question # 422: Which of the following IAS mainly covers Financial

Instruments of other long term investments?
 IAS 27 & 32
 IAS 28 & 39
 IAS 32 & 39
 IAS 31 & 32
Question # 423: Which one of the following is related to the IAS 27?
 Consolidated and Separate Financial Statements
 Interest in Joint Venture
 Financial Instruments Disclosure and Presentation
 Financial Instruments Recognition and Measurement
Question # 424: A fixed asset cost Rs. 8,000; it is sold for Rs. 4,800. At the
date of its disposal, its net book value is Rs. 3,000. What is the profit or
loss on disposal?
 Profit Rs. 3,200
 Loss Rs. 3,200
 Loss Rs. 1,800
Question # 425: A firm depreciated its fixed assets purchased on January 01,
1993 at the rate of 25% per annum using the reducing balance method. If
the total depreciation charged on these assets up to 31st December, 1995
was Rs. 23,125, their net book value at that date was:
 Rs. 16,875
 Rs. 17,500
 Rs. 7,708
 Rs. 10,000
(23125/0.75) – 23125 = 7708

 Stock
 General Stores
 Spare parts
 Fixture
Question # 427: Which one of the following methods for inventory valuation
is most conservative method during periods of rising prices?
 FIFO Method
 Weighted Average Method
 Specific Identification Method
 LIFO Method
Question # 428: According to the Allowed Alternative Treatment, Which of

the following method is used for stock valuation?
 FIFO Method
 LIFO Method
Question # 429: Which of the following information must be disclosed in

case of loan and advances to subsidiary companies?
 The name of each borrower
 Amount of loans and advances
 The terms of loan and the particulars of collateral security held
 All of the given options
Question # 430: Which of the following is (are) related with the IAS 23?
 Qualifying Assets
 Amount to be capitalized
 Capitalization period
 All of the given options Page 30
Question # 431: Revaluation of asset is conducted by:

 Directors
 Shareholders
 Managers
 Professional Qualified Value’s
Question # 432: Which one of the following subsequent expenditure can be

capitalized?
 Modification of an item of Plant to extend its useful life or capacity
 Expenditure on repairs and maintenance of Property Plant and Equipment that is
made to restore or maintain the economic benefit from it
 New tires placed on a motor car
None of the given options
Question # 433: Which of the following asset is recorded in Balance Sheet

under the heading of Current Assets?
 Furniture
 Deferred Cost
 Land
 Prepayments
Question # 434: If the holding company owns100% shares of the subsidiary

company then the subsidiary type will be termed as:
 Partially Owned Subsidiary
 Wholly Owned Subsidiary
 Direct Subsidiary
 Indirect Subsidiary
Question # 435: Which of the following IAS deals with the term Significant
Influence in associate companies?
 IAS 07
 IAS 27
 IAS 28
 IAS 01
Question # 436: Which of the following sections of the Companies Ordinance

1984 is related to the Annual General Meeting?
 Section 160
 Section 158
 Section 159
 Section 157
Question # 437: Which of the following types of business can maintain the
secrecy in all business matters?
 Sole-proprietorship
 Partnership
 Public Limited Company
 Private Limited Company
Question # 438: Which of the following types of business has the burden of
unlimited liability?
 Single Member Company
Question # 439: Which of the following refers to the relation between persons
who have agreed to share the profits of a business carried on by all or any
of them acting for all?
 Sole – proprietorship
Partnership
Company
Trust
MGT401 Mega Quiz File By
Innocent Prince
Innocentprince47@gmail.com
Insurance paid in advance would be treated in the Balance sheet as:
Non current asset
Current asset
Intangible asset
Deferred expense
According to the section 95A of the Companies ordinance 1984, which of the
following statement is correct?
Creditors are not entitled to object repurchase
Creditors are entitled to object repurchase fully
Creditors are entitled to object repurchase partially
Company is not required to maintain a capital repurchase reserve
Which of the following represents that the shares are issued at a price below
the face value?
Share issued at premium
Share issued at discount
Share issued at par value
Share issued at nominal value
Which of the following is (are) related with the IAS 23?

Qualifying Assets
Amount to be capitalized related to the Borrowing cost
Capitalization period related to the Borrowing cost
Which of the following is recorded under Long Term Liabilities section of the
Balance Sheet?
Debentures
Creditors
Dividend Payable
Which of the following represents the claims of the owners against the assets
of the business?
Assets
Expenses
Owner’s Equity
Income
Which of the following represents the total par value of shares offered to the
general public for contribution?
Registered Capital
Issued Capital
Subscribed Capital
Paid up Capital
Which of the following represents that total par value of shares which is taken
up by the public out of total issued capital?
Registered Capital
Subscribed Capital
Reserve Capital
Called up Capital
Section 95A of the Companies ordinance 1984 is applied on which of the

following companies?
Listed companies only
None listed companies only
Private companies only
All companies
Which of the following represents the objective of the financial statements?

To provide the information about the business objectives
To provide the information about the business liabilities
To provide the information about the business assets
To provide the information about the financial position, Financial performance
and Changes in financial position
Which of the following section of the Companies ordinance 1984 refers to the
share issued at discount?
Section 83
Section 84
Section 85
Section 86
According to the Prudence concept, Stock should be included in Balance

Sheet at:
Cost
Lower of its total cost or its total net realizable value
Higher of its total cost or its total net realizable value
Which of the following IAS deals with Subsidiary Companies?

IAS 27
IAS 28
IAS 01
IAS 07
Which one the following risk will arise when financial instruments fluctuate
due to changes in foreign exchange rates?
Credit Risk
Cash Flow Risk
Liquidity Risk
Which of the following is an artificial person recognized by law?

Limited company
Partnership
Sole-proprietorship
Trust
Why do businesses charge depreciation on their fixed assets?

To ensure that sufficient cash is available to replace the assets
To show the realizable value of the assets in the Balance Sheet
To spread the cost of the assets over their estimated useful life
To show when the assets must be replaced
Which of the following is/are Non-Current Liabilities according to the 4th

schedule clause 8(A) of the Companies Ordinance 1984?
Long term financing
Debentures
Deferred liabilities
Which of the following is a fall in the value of an asset so that its recoverable
amount is now less than its carrying value in the balance sheet?
Impairment
Depreciation
Accumulated Deprecation
Carrying Value
According to the section 95A of the Companies ordinance 1984, which of the
Which of the following represents that total par value of shares which is taken
up by the public out of total issued capital?
Registered Capital
Subscribed Capital
Reserve Capital
Called up Capital
Which of the following represents that the shares are issued at a price below
the face value?
Revaluation of asset is conducted by:

Directors
Shareholders
Managers
Professional Qualified Valuers

Qualifying Assets
Which of the following clause of Companies Ordinance 1984 told that the
Non-current liabilities shall be classified under appropriate subheads?
Clause 8(A)
Clause 8(B)
Clause 8(C)
Clause 9(B)
A legal obligation is that which is derived from:

A contract
Legislation
Other operation of law
Which of the following IAS covers the treatment of Finance Lease?

IAS 17
IAS 18
IAS 33
IAS 01
Which of the following is the direct cost of manufacturing the goods that were
sold by the entity during the reporting period?
Cost of Goods Sold
Revenue
Asset
Liability
Which of the following is/are included in the cost of goods sold?

Cost of materials used
Direct labour cost
Factory cost
Which of the following is a possible asset that arises from past events and
whose existence will be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of the
entity?
Contingent asset
Fixed asset
Current asset
Floating asset
Which of the following refers to any notice, circular, advertisement, or any

other invitation to the public for subscription of any shares or debentures of a
company?
Prospectus
Articles of association
Memorandum of association
Which of the following is old name of Cash Flow Statement?

Sources and Application of Funds
Sources and Application of Liabilities
Sources and Application of Activities
Sources and Application of Income
Which of the following is considered as Non-cash item?
Amortization
Accruals
Prepaid expenses
Outstanding expenses
Which of the following is/are the event/s after the balance sheet date with
respect to IAS 10?
All are the types of the financial statements according to IAS-1 except:
Balance sheet
Director’s report
Notes to the financial statements
An enterprise would be the subsidiary of another enterprise if that investor

enterprise can control the subsidiary represents:
Holding Companies
Which of the following is charged to revenue in leasing?

Repair and maintenance
Material renewals
Addition or extension of assets
Premium given for lease
With respect to IAS 10, a major business takeover after the balance sheet
Date or disposing of a major subsidiary is considered as which of the
following?
Adjusting Event
Non-Adjusting Event
Bogus Event
Contingent Event
Which is/are not the objectives of financial statements according to Iamb’s

Framework?
Provide information about the financial performance, position, and changes in
financial position of an entity which is useful for wide range of users of financial
statements in making economic decisions
Prepare and present income statement, balance sheet, statement of changes in
equity and cash flow statement
Prepare all financial statements in accordance with applicable Accounting Standards
and
Interpretations
Both (b) & (c)
Which of the following is TRUE with respect to the Operating Lease?

A lease is classified as an operating lease if it not transfers substantially all
the risks and rewards incident to ownership
A lease is classified as an operating lease if it transfers substantially all the risks and
rewards incident to ownership
A lease is classified as an operating lease if it transfers substantially 49%% of the
risks and rewards incident to ownership
A lease is classified as an operating lease if it transfers substantially 50% of the risks
and rewards incident to ownership
Depreciation is:
A systematic allocation of depreciable amount of an asset over its estimated
useful life
The end life of an asset
The increase in value of asset
Another name of Impairment
Which of the following IAS covers the retrospective restatements of prior

period errors?
IAS 8
IAS 7
IAS 16
IAS 18
With respect to IAS 10, business announcing a plan to discontinue an

operation after the balance sheet date is considered as which of the following?
Adjusting Event
Non-Adjusting Event
Bogus Event
Contingent Event
Which of the fallowing is TRUE with respect to Liability?

It is a present obligation of the entity arising from a past event the settlement
of which is expected to result in an outflow from the entity of resources
embodying economic benefits.
It is a past obligation of the entity arising from a future event the settlement of which
is expected to result in an outflow from the entity of resources embodying economic
benefits.
It is a present obligation of the entity arising from a past event the settlement of
which is expected to result in an inflow from the entity of resources embodying
economic benefits.
It is not a present obligation of the entity arising from a past event the settlement of
which is expected to result in an outflow from the entity of resources embodying
economic benefits.
Which type of lease is normally not long term and transfers all the risks and
rewards of ownership?
Finance lease
Operating lease
Sale & lease back
The financial charges calculated at the interest rates implicit in the lease and
are charged to:
Balance sheet
Notes to the account
Which of the following TRUE with respect to Provision?

It is a liability of uncertain timing or amount?
It is a liability of certain timing or amount?
It is an asset of uncertain timing or amount?
It is an income of uncertain timing or amount?
Funds contributed by the owner to run a business are called:

Assets
Expenses
Capital
Running Finance Loans
In 3 years you are to receive Rs. 5,000. If the interest rate were to suddenly
increase, the present value of that future amount to you would:
Fall
Rise
Remain same
Which of the following is the gross inflow of economic benefits during the period arising
in the course of ordinary activities of an entity when those inflows result in increases in
equity, other than increases relating to contributions from equity participants?
Revenue
Expense
Asset
Liability
Which of the following is charged to revenue in leasing?

Material renewals
Which of the following TRUE with respect to Provision?

Which of the following is TRUE with respect to the measurement of Revenue – IAS18?
Revenue shall be measured at the fair value of the consideration received or receivable
Revenue shall be measured at the future value of the consideration received or receivable
Revenue shall be measured at the discounted value of the consideration received or
receivable
Revenue shall not be measured at the fair value of the consideration received or receivable
Which of the following guide an entity to change the accounting policy?

The application of an accounting policy for transactions, other events or conditions
that differ in substance from those previously occurring
The application of a new accounting policy for transactions, other events or
conditions that did not occur previously or were immaterial
If the change is required by a standard or an interpretation
Which of the following asset is recorded in Balance Sheet under the heading
of Current Assets?
Furniture
Deferred Cost
Land
Prepayments
Under which of the following methods for inventory valuation, inventory is
valued at most recent costs?
FIFO Method
LIFO Method
Which one of the following methods for inventory valuation is based on the
assumption that the most recently purchased merchandise to be sold first?
FIFO Method
LIFO Method
Which of the following is the Classification of Current Assets with respect to

the Companies Ordinance 1984?
Fixture
Bank overdraft
Premises
Spare parts
Which of the following IAS mainly covers Financial Instruments of other long
term investments?
IAS 27 & 32
IAS 28 & 39
AS 32 & 39
IAS 31 & 32
Which of the following is/are shown under the heading of Stock-in-Trade in

Balance Sheet?
Raw Materials
Work in Process
Finished Goods
Which of the following is an agreement whereby the lesser conveys to the

lessee in return for a payment or series of payments, the right to use an asset
for an agreed period of time?
A lease
Hire purchase
Installment
Trading on credit basis
A prior period error shall be corrected by:

Retrospective restatement
Prospective application
Shall not be corrected
Costing
Which of the following is NOT included in the Equity Section of the Balance
Sheet?
Current portion of long term liability
Paid up capital
Reserves
Un-appropriated profit
Which of the following is included in the Current Assets Section of the Balance
Sheet?
Stores and Spares
Reserves
Un-appropriated profit
Debentures
Which of the following is TRUE with respect to the measurement of Revenue –

IAS 18?
Revenue shall be measured at the fair value of the consideration received or
receivable
Revenue shall be measured at the future value of the consideration received or
receivable
Revenue shall be measured at the discounted value of the consideration received or
receivable
Revenue shall not be measured at the fair value of the consideration received or
receivable
All of the followings are included in Minimum Lease Payment EXCEPT:

Initial payment
All lease rentals
Any amount that is guaranteed to be paid during or at the end of the lease term
Insurance paid by lesser and recovered from lessee
The present value should be substantially equal to the fair value of the asset.
Which of the following represents the best meaning of “substantially equal
under finance lease”?
Generally 90 % or more is considered to be substantially equal
Generally 90% or lower is considered to be substantially equal
Generally 50% is considered to be substantially equal
Generally Less than 50% is considered to be substantially equal
What single investment, made today, earning 10% annual interest, will be
worth Rs. 2,420 at the end of 2nd year?
Rs. 2,928
Rs. 420
Rs. 484
Rs. 2,000
Deferred Tax can be the example of?

Current Liabilities
Long term Murabaha
Long term deposits
Deferred Liabilities
Which of the following lease payments should be apportioned?

Finance charges
Capital charges
Revenue charges
Finance charge and the reduction of the outstanding liability
How the fair value will be considered when the flow of cash or cash equivalent
is deferred?
Considered be less than the nominal amount of cash received or receivable
Considered be more than the nominal amount of cash received or receivable
Considered be less than the expected amount of cash received or receivable
Which of the following is the classification of expense by their functions with

respect to IAS-01?
Cost of distribution
Purchase of material
Depreciation
Which of the following is/are the source/s for the issuance of bonus shares?
Share premium account
Revenue reserve
What would be the present value of Rs. 8,500 to be received after 8 years at a
discount rate of 10 percent?
Rs. 3,965
Rs. 7,992
Rs. 15,300
Rs. 18,221
Here n = 8
i = 10% p.a
FV= Rs. 8500
PV = FV / (1 + i)^n
PV = 8500 / (1+10%)^8
PV = 8500 / (1.1)^8
PV = 8500 / 2.144
PV = Rs. 3964.55
Which of the following is the example of Administrative Cost?

Depreciation
Advertising cost
Mark up on loan
Service charges of bank
Which of the following represents the meaning of turnover in accounting?

Gross sale
Total profit
Total output
Total investment
Ordinary shares are also called:

Common shares
Common stock
Equity shares
If you plan to save Rs. 5,000 with a bank at an interest rate of 8%, what will be
the worth of your amount after 4 years if interest is compounded annually?
Rs. 5,400
Rs. 5,900
Rs. 6,600
Rs. 6,802
Here
n=4
i = 8% p.a
PV= Rs. 5000
FV = PV(1 + i)^n
FV = 5000 (1+8%)^4
FV = 5000 (1.08)^4
FV = 5000(1.36)
FV = Rs. 6800
What would be the present value of Rs. 17,000 to be received after 8 years at a
discount rate of 10 percent?
Rs. 7,931
Rs. 15,981
Rs. 30,600
Rs. 36,441
n=8
i=10%
f.v=17000
PV = FV / (1 + i)^n
pv=17000/(1+10%)^8
7930
Depreciation calculation which is at a lesser amount for every following

period:
Reducing balance method
Straight line method
Sum of digit method
Output method
How many types of possible format are provided by IAS-1 for income
statement?
Two types of possible formats
Three types of possible formats
Four types of possible formats
Five types of possible formats
What are the basic three key elements used to decide whether an intangible-
fixed asset should be recognized in the accounts?
Control, identifiably & economic benefits
Control, marketability & materiality
Completion of development, control & identifiably
Which of the following is INCORRECT for equity of a Public Limited Company?

Equity = Total Assets – Total Liabilities
Equity = Share Capital + General Reserves + Revenue Reserves
Equity = Share Capital + Reserves
Equity = Share Premium + Reserves
Which of the following is/are TRUE about the Draft Financial Statements?
Draft statements are prepared by the accounts department
Draft statements are audited by the external auditors
Draft statements are put in front of the Board of Directors for approval
Which of the following can also be a called shareholders fund?

Paid up capital
Called up capital
Subscribed capital
Equity
Which of the following is/are considered as expense by their nature with respect to IAS
01?
Advertising costs
Depreciation expenses
Amortization expenses
Which of the following is/are NOT the example(s) of current liability?

Sundry Debtors /trade debtors
Debentures
Which of the following is NOT considered as Non-cash item?

Depreciation
Amortization
Depletion
Stock
Which of the following is considered as inflow of cash?

Re-purchase of shares
Redemption of debentures
Issuance of debentures
Payment of dividend
Which of the following is NOT considered as expense by their nature with

respect to IAS 01?
Employees benefits costs
Cost of goods sold
Which of the following IAS covers the Debentures?

IAS 32 only
IAS 39 only
IAS 17
Which of the following is TRUE if the amount is transferred to General

Reserves?
Reserves will be increased
Retain earnings will be decreased
No effect on total equity
Which of the following is adjusted as working capital change in operating

activities section of a cash flow statement?
Decrease in trade receivable
Repayment of dividend
Payment of goodwill
Investment in associated companies
Which of the following reflects the TRUE description of “Probable” with
respect to IAS-37?
Future events are likely to occur.
The chance of the future event occurring is more than remote but less than likely.
The chance of future events occurring is slight.
Product guarantee or undertaking given by the seller to the buyer to compensate for
any deficiency of quantity, quality or performance specification of a product
Which of the following is TRUE with respect to the application of Cash Flow
Statement?
Sale of equipment for cash is considered as inflow of cash
Sale of equipment on account is considered as inflow of cash
Sale of equipment on credit is considered as inflow of cash
Sale of equipment for cash is considered as outflow of cash
Intention to complete development, economic benefits & identifiably
Which of the following is NOT the Classification of Current Assets with respect to the
Companies Ordinance 1984?
Cash Balance
Bank Balance
Premises
Written down value of an asset = --------------

Which of the following entities is not profit oriented entity?

Partnership
Companies
Foundations
Which of the following is NOT the Classification of Current Assets with respect to the
Stock
General Stores
Spare parts
Bank over draft
Which of the following meeting is held once in the life of a company?

Statutory Meeting
Board Meeting
Which of the following is NOT a Qualifying Asset?

Asset ready for use
Which of the following is/are the type(s) of stock for manufacturing concerns?
Raw Material
Work in Process
Finished Goods
Which one of the following is a method of stock valuation?

Which of the following investment are recorded using Cost Method?

An enterprise would be the subsidiary of another enterprise if that investor enterprise

can control the subsidiary represents:
Holding Companies
Which of the following is NOT the method of stock valuation?

FIFO Method
Which of the following is/are the method(s) for calculating the cost of inventory?
FIFO Method

Qualifying Assets
Partnership firm has a maximum ____ numbers of partners.

20
15
10
02
Which of the following sections of the Companies Ordinance 1984 is related to the
Annual General Meeting?
Section 157
Section 158
Section 159
Section 160
Which of the following may consist of more than 20 persons in case of partnership?
Firms of Lawyers
Firms of Doctors
Firms of Associates
Which one of the following is related to the Allowed Alternative Treatment for an
investment in jointly controlled entities?
Equity Method
IAS-16 deals with:
Cash Flow Statement
Earning per share
Companies are registered under:

Which of the following business is formed by the approval of Stock Exchange?

To the Allowed Alternative Treatment, Which of the following method is used for stock
valuation?
FIFO Method
LIFO Method
Which one of the following is the type of stock for trading concerns?
Raw Material
Work in Process
Finished Goods
Stock in Trade
What is the meeting requirement for the directors of a Public Limited Company?
Which of the following is/are example(s) of development activities?

The design, construction and testing of pre-production or pre-use prototypes and models
The design, construction and operation of a pilot plant
Which of the following IAS deals with the Intangible Assets?

IAS 38
IAS 23
IAS 01
IAS 16
Which one of the following type(s) of information is(are) available in 4th and 5th
schedule of the Companies Ordinance 1984?
Definitions and general requirements for preparation and presentation of financial statements
Which one of the following IAS is related to the Interest in Joint Venture?
IAS 27
IAS 28
IAS 31
IAS 32
Which of the following methodology is adopted for the valuation of investments in

associated companies?
Equity Method
At amortized cost
At fair value
In case an item of property, plant and equipment is exchanged for similar asset of the
enterprise, the cost of the new asset is measured at the -------------- of the old asset.
Carrying value
Fair value
Future value
Salvage Value
Which of the following represent(s) the Prime Cost?

Direct Material Cost + Direct Labour Cost
The term “Significant Influence” refers to the:

Ability to participate but not to control financial and management affairs of the
enterprise
Ability to participate and control financial and management affairs of the enterprise
Which of the following is a rebate or allowance from the scheduled price granted by the
seller to the buyer?
Trade Discount
Cash Discount
Purchases return
Sales return
Which of the following entities is profit oriented entity?

NGOs
Trust
Societies
What is the treatment of Accumulated Depreciation in accounting?

Which of the following IAS deals with Inventories?

IAS 38
IAS 23
IAS 02
IAS 16
What is the treatment of Depreciation in accounting?

Which one of the following is related to the Benchmark Treatment for an investment in
jointly controlled entities?
Equity Method
LIFO Method
Which of the following is/are not the example(s) of financial Asset?

Minority interest
Sale of goods
Purchases of goods
Which one of the following is a fixed asset?

Cash in hand
Advanced payment
Closing stock
Leasehold vehicle
Which of the following is an example of Capital Expenditure?

Which of the following represent(s) the Cost of goods sold?

Cost of goods Manufactured + Opening Finished Goods Inventory – Closing Finished
Goods Inventory
Which of the following is(are) example(s) of Borrowing costs?

Which of the following is the ability to govern the financial and operating policies of an
enterprise so as to obtain from its activities?
Control
Direct Subsidiary
Indirect Subsidiary
Which of the following IAS deals with the Associated Companies?

IAS 27
IAS 28
IAS 01
IAS 07
Which of the following fixed asset is shown at cost rather at book value?
Machinery
Furniture
Vehicles
Land
Which of the following is the deduction or allowance allowed by a creditor to a debtor?

Trade Discount
Cash Discount
Purchases return
Sales return
Which of the following costs can be capitalized?

Which of the following is an asset that necessarily takes a substantial period of time to
get ready for its intended use or sale?
Qualifying Asset
Outstanding Asset
Tangible Asset
Intangible Asset
Which of the following investments are recorded using Equity Method?

Which of the following business is formed by the approval of State Bank of Pakistan?
Corporate Blockage House
If Original cost is Rs. 100,000; Depreciation rate is 20% p.a. using straight line method;
what will be the value of accumulated depreciation at the end of 2nd year?
Rs.20, 000
Rs. 40,000
Rs. 80,000
Rs. 60,000
Concept of related parties is defined in:

IAS
Which one of the following is related to the IAS 39?

Which of the following is TRUE with respect to the disclosure requirements of Trade
Debts?
Doubtful debts is deducted from the Provision for doubtful debts
Doubtful debts and its Provision is shown separately as asset
Provision for doubtful debts is not taken into consideration
Which of the following IAS deals with the Borrowing Costs?
IAS 23
IAS 07
IAS 01
IAS 16
If: •Manufacturing Cost is Rs. 30,000 •Opening Work in Process Inventory is Rs.
5,000 •Closing Work in Process Inventory is Rs. 10,000 Then: What is the amount of
Cost of Goods Manufactured?
Rs. 35,000
Rs. 25,000
Rs. 15,000
Rs. 20,000
Which of the following is/are the physical asset(s)?

Loan Agreements
Trade Receivables
Which of the following methodology is adopted for the valuation of investments held to
maturity?
Proportionate Consolidation or Equity Method
At amortized cost
At fair value
Carrying value
Fair value
Future value
Salvage Value
All of the following are Fixed assets EXCEPT:

Machinery
Freehold land
Leasehold land
If the holding company owns more then 50% but less then 100% shares of the
subsidiary company then the subsidiary type will be termed as:
Direct subsidiary
Indirect subsidiary
Which of the following is NOT related to the qualitative characteristics that make
Reliability only
Relevancy only
Understandability
Which of the following sections of the Companies Ordinance 1984 is related to the
Statutory Meeting?
Section 157
Section 158
Section 159
Section 160
Under which of the following assumptions, the Financial Statements are to be

prepared?
Future assumption
Past assumption
Accrual basis and Going concern assumptions
Accrual basis assumption only
Which one of the following type(s) of information is (are) available in 4th and 5th
Definitions and general requirements for preparation and presentation of financial statements
Which of the following IAS deals with Revaluation of Assets?

IAS 16
IAS 07
IAS 01
IAS 23
If the holding company owns marginally less than 100% shares of the subsidiary
Partially Owned Subsidiary
Wholly Owned Subsidiary
Virtually Wholly Owned Subsidiary
Indirect Subsidiary
Which of the following is/are the Classification of Current Assets with respect to the
Cash Balance
Loans and Advances
Bank Balance
Which one of the following is NOT recorded under Equity section of the Balance Sheet?
Share Premium
Share Capital
Accumulated Profit
Dividend Payable
Preparation and presentation of Financial Statements are governed by:

Which one of the following methods for inventory valuation is NOT suitable for
homogeneous units?
FIFO Method
LIFO Method
Which of the following is the application of research findings or other knowledge to a

plan or design for the production of new or substantially improved materials, devices,
products, processes, systems or services before the start of commercial production or
use?
Applied research
Development
Business research
Accounting
Which of the following is NOT the type of Market Risk?

Price Risk
Liquidity Risk
Interest Rate Risk
Currency Risk
Which one of the following is related to IAS 32 & 39?

Inventory
Which one of the following is NOT the component of cost?

Import duties
Installation costs
Which of the following is the type of business owned by one person?

Sole-Proprietorship
Partnership
Unlimited Company
Which one of the following is(are) recorded under the Equity section of the Balance
Sheet?
Share Premium
Reserves
Accumulated Profit
According to the Allowed Alternative Treatment, Which of the following method is used
for stock valuation?
FIFO Method
LIFO Method
Which of the following asset is not an example of Intangible Fixed Assets?

Vehicles
Good Will
Copyrights
Which of the following represents the Qualifying Asset?

Inventory routinely manufactured
Asset ready for use
Manufacturing plants
A Private limited company can be formed at least by:

2 members
3 members
1 member
07 members
Which one of the following is an example of Financial Asset?

Inventories
Patent rights
Goodwill
Accounts receivable
Which of the following option is/are TRUE with respect to the Disclosure requirement
for intangible assets acquired by the way of Government grants?
If stock valuation method is changed every year by the firm, which concept the firm has
violated?
Which of the following is an example of Revenue Expenditure?

A second-hand car was purchases for Rs. 7,000 and Rs. 5,000 were spent for his repairs and
overhauling
An additional room was constructed at a cost of Rs. 15,000
Which of the following sections of Companies Ordinance 1984 are related to the Non
Profit oriented entities?
Section 42
Section 43
Section 44
Section 45
Which of the following may result for an inability to sell a financial asset quickly at
close to its fair value?
Price Risk
Liquidity Risk
Interest Rate Risk
Currency Risk
Which of the following schedule of the Company Ordinance 1984 is related to the
classification of intangible assets?
4th schedule
5th schedule
6th schedule
2nd schedule
The closing stock will be shown under the head of _______ in Balance Sheet.
Non current Assets
Current Assets
Intangible Assets
Tangible Assets
Which of the following is another name for Authorized Capital of a company?

Nominal Capital
Issued Capital
Subscribed Capital
Paid up Capital
Which of the following is/are excluded from Financial Assets?

Physical Assets
Inventories
Prepaid expenses
Which of the following IAS is related to the Consolidated and Separate Financial
Statements?
IAS 27
IAS 28
IAS 31
IAS 32
Which of the following is the Classification of Current Assets with respect to the
Building
Land
Premises
Which of the following statement shows the financial position of the business?
Income Statement
Balance Sheet
According to the Benchmark Treatment, Which of the following method is used for
stock valuation?
FIFO Method or LIFO Method
LIFO Method
FIFO or Weighted Average Method
If the holding company owns100% shares of the subsidiary company then the
subsidiary type will be termed as:
Direct Subsidiary
Indirect Subsidiary
Under which of the following methods for inventory valuation, costs of earliest
purchases assumed still to be in inventory?
FIFO Method
LIFO Method
What is the maximum number of shareholders allowed for a Public Limited Company?
20
50
10
Unlimited
Which of the following is/are equal to “Capital”?

Net Assets
Assets – Liabilities
Net worth of the firm
Which of the following is the amount for which an asset could be exchanged between
knowledgeable, willing parties in an arm’s length transaction?
Depreciable Amount
Fair Value
Cost
Carrying Amount
Which of the following asset is NOT an example of Tangible Fixed Assets?

Patent rights
Furniture
Vehicles
Machinery
Which of the following schedule provides disclosure requirements for Listed Companies
under Companies Ordinance 1984?
4th schedule
5th schedule
6th schedule
2nd schedule
Which one of the following schedule provides disclosure requirements for Non-Listed
Companies under Companies Ordinance 1984?
4th schedule
5th schedule
6th schedule
2nd schedule
Carrying value
Fair value
Future value
Salvage value
Which of the following is NOT an accounting concept?

Prudence
Going concern
Depreciation
Matching
Depreciation is:
A systematic allocation of depreciable amount of an asset over its estimated useful life
REF: http://en.wikipedia.org/wiki/Depreciation
Which of the following statement shows the financial position of the business?
Income Statement
Balance Sheet
When we see the capital with Production capacity or operating capability of the
enterprise then it called:
The financial concept of capital maintenance
Which of the following is/are example(s) of research activities?

Which one of the following is(are) NOT recorded under Current Liabilities section of
the Balance Sheet?
Debentures
Deferred Taxation
Obligation under Finance Lease
Which of the following section of the Companies Ordinance 1984 deals with
Revaluation of Fixed Assets?
Section 235
Section 236
Section 237
Section 238
Which of the following IAS affect(s) the recognition, presentation and discourse of fixed
assets in financial statements?
IAS 01
IAS 16
IAS 23
Which of the following statement is/are INCORRECT under the Equity Method
for recognition of investment in associated companies?
He carrying amount of the investment is increased or decreased to reorganize the
distributor’s share of profits or losses of the investee after the date of acquisition
The carrying amount of the investment is increased or decreased to
reorganize the investor’s share of profits or losses of the investee before the
date of acquisition
Ref:
http://books.google.com/books?id=MDiZQCSBENMC&pg=PA526&lpg=PA526&dq=d
epletion+is+non+cash+item?&source=bl&ots=2Kz3qt1cfX&sig=oxz7chA22eDrrTVIfV
jFcLj8-
Mw&hl=en&ei=tY0QTsaTLYjKsgabqK22BQ&sa=X&oi=book_result&ct=result&resnu
m=1&ved=0CBsQ6AEwAA#v=onepage&q&f=false
If an item that meets the definition of an element is recognized:

When it is possible that any future economic benefit linked with the item will flow to
or from the entity.
When the element has cost or worth that can be measured reliably
When entity obtains control of the rights or obligations linked with the item.
When there is probable that any future economic benefit linked with the item
will flow to or from the entity and the item has a cost or worth that can be
measured reliably
Ref:
http://books.google.com/books?id=MDiZQCSBENMC&pg=PA526&lpg=PA526&
dq=depletion+is+non+cash+item?&source=bl&ots=2Kz3qt1cfX&sig=oxz7chA2
2eDrrTVIfVjFcLj8-
Mw&hl=en&ei=tY0QTsaTLYjKsgabqK22BQ&sa=X&oi=book_result&ct=result&r
esnum=1&ved=0CBsQ6AEwAA#v=onepage&q&f=false
Ahmad & Co. changed LIFO method to FIFO method to account for its finished
goods inventory. Whether it is:
Change in accounting policy
Prior period error
Irrelevant item with respect to IAS-08
Ref:
jFcLj8-
Which of the following is not required to disclose as additional information

when an entity decides to present its income statement on the basis of
“Function of Expense” method?
Depreciation expense
Director’s remuneration
Employees’ benefits expense
Amortization expense
Ref:
jFcLj8-
Cash flow statement is designed to assist users in assessing all of the

following except:
Capability of the company to remain solvent
Company’s profitability
Major source of cash receipts & payments during the period
Provide reason why net cash flow from operating activities fluctuate from net income
Ref:
jFcLj8-
Which of the following organizations are required to issue a prospectus for

raising capital?
Public limited companies
Private limited companies
Partnership firms
Sole traders
Ref:
jFcLj8-
If issuance of debentures against cash is Rs. 3,000 and repurchase of shares

of Rs. 4,000 then which of the following is correct?
Inflow of cash Rs. 7,000
Outflow of cash Rs. 7,000
Ref:
2eDrrTVIfVjFcLj8-
How many types of financial statements exist according to IAS-1?

5
4
3
6
Ref:
http://books.google.com/books?id=MDiZQCSBENMC&pg=PA526&lpg=PA526&dq=deplet
ion+is+non+cash+item?&source=bl&ots=2Kz3qt1cfX&sig=oxz7chA22eDrrTVIfVjFcLj8-
Mw&hl=en&ei=tY0QTsaTLYjKsgabqK22BQ&sa=X&oi=book_result&ct=result&resnum=
1&ved=0CBsQ6AEwAA#v=onepage&q&f=false
Which of the following is NOT related to the qualitative characteristics that make
Reliability only
Relevancy only
Understandability
None of the given
Which of the following is TRUE about the changes due to issuance of bonus shares?
Decrease in reserves and surpluses
Increase in reserves and surpluses
Increase in working capital
Decrease in working capital
Ref:
http://books.google.com/books?id=MDiZQCSBENMC&pg=PA526&lpg=PA526&dq=deplet
ion+is+non+cash+item?&source=bl&ots=2Kz3qt1cfX&sig=oxz7chA22eDrrTVIfVjFcLj8-
Mw&hl=en&ei=tY0QTsaTLYjKsgabqK22BQ&sa=X&oi=book_result&ct=result&resnum=
1&ved=0CBsQ6AEwAA#v=onepage&q&f=false
Which of the following is TRUE about the meeting of directors?

The quorum for a meeting of directors of listed company shall not be less than
1/3 of their member or four whichever is greater.
The quorum for a meeting of directors of listed company shall not be less than 1/3 of
their member or four whichever is lower.
their member or four whichever is lower.
their member or four whichever is greater.
Ref:
jFcLj8-
Which one of the following expenditure cannot be capitalized?

Initial composition cost
Cost of adding air conditioner to the computer room
Cost of adding extra RAM to computer
New tires placed on a motor car
Ref:
2eDrrTVIfVjFcLj8-
Which of the following is an example of research activities with respect to

Intangible Assets?
models
Ref:
jFcLj8-
Under which of the following circumstance(s), Trade Discount is granted?

When selling to a fellow trader
When the buyer is an old customer
When sales are made in bulk
2eDrrTVIfVjFcLj8-
If a manufacturer gives warranties at the time of sale to the purchaser of its

products, under the terms of the contract for sale the manufacturer undertakes
to make good, by repair or replacement, manufacturing defects that become
apparent within three years from the date of sale. On past experience, it is
probable (i.e. more probable than not) that there will be some claims under the
warranties. Then which of the following is TRUE with respect to IAS-37?
It gives rise to legal obligation.
It gives rise to constructive obligation.
It does not give rise to legal obligation.
It removes the legal obligation.
Ref:
jFcLj8-
A furnace has a lining that needs to be replaced every 5 years for technical
reasons. At the balance sheet date, the lining has been in use for 3 years.
Which of the following is TRUE with respect to IAS-37?
There is no present obligation
It gives rise to legal obligation.
It gives rise to constructive obligation.
Ref:
2eDrrTVIfVjFcLj8-
Which of the following is TRUE with respect to the issuance of shares?

Equity will be increased only
Share capital will be increased only
Both share capital and equity will be increased
Retain earning will be increased
Ref:
jFcLj8-

Inventory valuation under periodic and perpetual methods is the same under FIFO
Inventory valuation under periodic and perpetual methods is the same under Moving
Average Method
In period of rising prices FIFO method gives the lowest net profit compared to LIFO
method
In period of rising prices FIFO method gives the highest net profit compared to
LIFO method
Ref:
2eDrrTVIfVjFcLj8-
Which of the following statement is correct for Finance Lease?

The present value should be substantially equal the fair value of the asset
The present value should always greater than the fair value of the asset
The present value should always less than the fair value of the asset
There is no relationship between the present value and fair value of asset
Ref:
jFcLj8-
Debt Instruments issued for a long term by governments, financial institutions

and companies for rising long term loans are called?
Options
Debentures
Shares
Securities
Ref:
jFcLj8-
Which of the following is the basis for the recognition of revenue?

Interest shall be recognized using effective interest method as set out in IAS39
Which of the following is original and planned investigation undertaken with the
prospect of gaining new scientific or technical knowledge and understanding?
Research
Development
Audit
Accounting
Changed with the DEMO VERSION of CAD-KAS PDF-Editor (http://www.cadkas.com).
++ ংƸ̵Ӝ̵Ʒ♥NAive eNiGmAƸ̵Ӝ̵Ʒ ং
vustudents.ning
Mgt 401 final term quiz File
Lec 1 to 45
August 4 2010
1.
Insurance paid in advance would be treated in the Balance sheet as:
Non current asset

Current asset
Intangible asset
Deferred expense
Changed with the2. According
DEMO VERSIONto the section 95A
of CAD-KAS of the Companies
PDF-Editor ordinance 1984, which of the
(http://www.cadkas.com).

3. Which of the following clause of Companies Ordinance 1984 told that the
long term loans shall be classified as secured and unsecured?
Clause 8(A)
Clause 8(B)
Clause 8(C)
Clause 9(B)
4. Which of the following represents that the shares are issued at a price below
the face value?



5. Revaluation of asset is conducted by:

Directors
Shareholders
Managers
6. Which of the following is (are) related with the IAS 23?

Qualifying Assets
7. Which of the following is recorded under Long Term Liabilities section of the
Balance Sheet?
Debentures
Creditors
Dividend Payable
8. What is the maximum number of shareholders allowed for a Public Limited

Company?
20
50
10
Unlimited
Non-current liabilities shall be classified under appropriate subheads?
Clause 8(A)
Clause 8(B)
Clause 8(C)

10. Which of the following represents the claims of the owners against the
assets of the business?
Assets
Expenses
Owner’s Equity
Income
11. A Private limited company can be formed at least by:

2 members
3 members
1 member
07 members
12. Which of the following represents the total par value of shares offered to the
general public for contribution?
Registered Capital
Issued
Changed with the DEMO Capital of CAD-KAS PDF-Editor (http://www.cadkas.com).
VERSION
Subscribed Capital
Paid up Capital
13. Which of the following represents that total par value of shares which is
taken up by the public out of total issued capital?
Registered Capital
Subscribed Capital
Reserve Capital
Called up Capital
14. Section 95A of the Companies ordinance 1984 is applied on which of the
following companies?
Listed companies only

Non listed companies only
Private companies only
All companies
15. Which of the following represents the objective of the financial statements?
To provide the information about the business objectives

To provide the information about the business liabilities
To provide the information about the business assets
To provide the information about the Financial position, Financial performance and
Changes in financial position
16. Which of the following section of the Companies ordinance 1984 refers to the
share issued at discount?
Section 83
Section 84
Changed with the DEMO85VERSION of CAD-KAS PDF-Editor (http://www.cadkas.com).
Section
Section 86
17. According to the Prudence concept, Stock should be included in Balance

Sheet at:
Cost
Lower of its total cost Or its total net realizable value
Higher of its total cost Or its total net realizable value
18. Which of the following IAS deals with Subsidiary Companies?

IAS 27
IAS 28
IAS 01
IAS 07

19.
Which one the following risk will arise when financial instruments fluctuate
due to changes in foreign exchange rates?
Credit Risk
Cash Flow Risk
Liquidity Risk
20.
Which of the following is an artificial person recognized by law?
Limited company
Partnership
Sole-proprietorship
Trust
21.
Why do businesses charge depreciation on their fixed assets?
To ensure that sufficient cash is available to replace the assets
To show the realizable value of the assets in the Balance Sheet
Changed with the DEMO VERSION
To spread of CAD-KAS
the cost PDF-Editor
of the assets (http://www.cadkas.com).
over their estimated useful life
To show when the assets must be replaced
Mgt 401 final term quiz
22. Which of the following is/are Non-Current Liabilities according to the 4th
schedule clause 8(A) of the Companies Ordinance 1984?
Long term financing

Debentures
Deferred liabilities
23. Which of the following is a fall in the value of an asset so that its recoverable
amount is now less than its carrying value in the balance sheet?
Impairment
Depreciation
Accumulated Deprecation
Carrying Value

24. Insurance paid in advance would be treated in the Balance sheet as:
Non current asset

Current asset
Intangible asset
Deferred expense
25. According to the section 95A of the Companies ordinance 1984, which of the

26. What is the treatment of Accumulated Depreciation in accounting?

Treated
Changed with the DEMO as an expense
VERSION of CAD-KAS PDF-Editor (http://www.cadkas.com).
long term loans shall be classified as secured and unsecured?
Clause 8(A)
Clause 8(B)
Clause 8(C)
Clause 9(B)
28. Which of the following represents that total par value of shares which is
taken up by the public out of total issued capital?
Registered Capital
Subscribed Capital
Reserve Capital
Called up Capital
29. Which of the following represents that the shares are issued at a price below
the face value?



Directors
Shareholders
Managers
Qualifying Assets
Non-current
Changed with the DEMO VERSION liabilities shall PDF-Editor
of CAD-KAS be classified under appropriate subheads?
Clause 8(A)
Clause 8(B)
Clause 8(C)
Clause 9(B)
33. A legal obligation is that which is derived from:

A contract
A legislation
Other operation of law
34. Which of the following IAS covers the treatment of Finance Lease?
IAS 17
IAS 18

IAS 33
IAS 01
35. Which of the following is the direct cost of manufacturing the goods that
were sold by the entity during the reporting period?
Cost of Goods Sold

Revenue
Asset
Liability
36. Which of the following is/are included in the cost of goods sold?
Cost of materials used

Direct labour cost
Factory cost
37. Which of the following is a possible asset that arises from past events and
whose existence will be confirmed only by the occurrence or non-occurrence
of one or more of CAD-KAS
uncertain PDF-Editor
future events (http://www.cadkas.com).
not wholly within the control of the
entity?
Contingent asset
Fixed asset
Current asset
Floating asset
38. Which of the following refers to any notice, circular, advertisement, or any
other invitation to the public for subscription of any shares or debentures of
a company?
Prospectus
Articles of association
Memorandum of association
39. Which of the following is old name of Cash Flow Statement?


Sources and Application of Funds

Sources and Application of Liabilities
Sources and Application of Activities
Sources and Application of Income
40. Which of the following is considered as Non-cash item?

Amortization
Accruals
Prepaid expenses
Outstanding expenses
41. Which of the following is/are the event/s after the balance sheet date with
respect to IAS 10?

Changed with the DEMO
NoneVERSION of options
of the given CAD-KAS PDF-Editor (http://www.cadkas.com).
42. All are the types of the financial statements according to IAS-1 except:
Balance sheet
Director’s report
Notes to the financial statements
43. An enterprise would be the subsidiary of another enterprise if that investor

enterprise can
44. control the subsidiary represents:

Holding Companies

45. Which of the following is charged to revenue in leasing?

Material renewals
46. With respect to IAS 10, a major business takeover after the balance sheet
date
47. or disposing of a major subsidiary is considered as which of the following?
Adjusting Event
Non-Adjusting Event
Bogus Event
Contingent Event
48. Which is/are Not the objectives of financial statements according to IASB’s
Framework?
Provide information about the financial performance, position, and changes in financial
position of an entity which is useful for wide range of users of financial statements in
making economic decisions
Prepare and present income statement, balance sheet, statement of changes in equity
and
cash flow statement
Prepare all financial statements in accordance with applicable Accounting Standards

and
Interpretations
Both (b) & (c)
49. Which of the following is the gross inflow of economic benefits during the
period arising
50. in the course of ordinary activities of an entity when those inflows result in
increases
51. in equity, other than increases relating to contributions from equity
participants?
Revenue

Expense
Asset
Liability
52. Which of the following is TRUE with respect to the Operating Lease?
A lease is classified as an operating lease if it not transfers substantially all the
risks and rewards incident to ownership
A lease is classified as an operating lease if it transfers substantially all the risks and
rewards incident to ownership
A lease is classified as an operating lease if it transfers substantially 49%% of the risks
A lease is classified as an operating lease if it transfers substantially 50% of the risks
53. Depreciation is:

A systematic allocation of depreciable amount of an asset over its estimated
useful life
54. Preparation and presentation of Financial Statements are governed by:

55. Which of the following IAS covers the retrospective restatements of prior
period errors?
IAS 8
IAS 7
IAS 16
IAS 18
56. With respect to IAS 10, business announcing a plan to discontinue an

operation after the balance sheet date is considered as which of the
following?

Adjusting Event
Non-Adjusting Event
Bogus Event
Contingent Event
57. Which of the fallowing is TRUE with respect to Liability?

It is a present obligation of the entity arising from a past event the settlement
of which is expected to result in an outflow from the entity of resources
embodying economic benefits.
It is a past obligation of the entity arising from a future event the settlement of
economic benefits.
It is a present obligation of the entity arising from a past event the settlement of
which is expected to result in an inflow from the entity of resources embodying
economic benefits.
It is not a present obligation of the entity arising from a past event the settlement of
economic benefits.
Changed with the58.

DEMOWhich type of lease
VERSION is normally
of CAD-KAS Not long
PDF-Editor term and transfers all the risks and
rewards of ownership?
Finance lease
Operating lease
Sale & lease back
59. The financial charges calculated at the interest rates implicit in the lease and
are charged to:

Balance sheet
Notes to the account
60. Which of the following IAS deals with Inventories?

IAS 38

IAS 23
IAS 02
IAS 16
61. Which of the following TRUE with respect to Provision?


62. Funds contributed by the owner to run a business are called:

Assets
Expenses
Capital
Running Finance Loans

63. In 3 years you are to receive Rs. 5,000. If the interest rate were to suddenly
increase, the present value of that future amount to you would:
Fall
Rise
Remain same
Non of the given options
64. Which of the following IAS deals with Revaluation of Assets?

IAS 16
IAS 07
IAS 01
IAS 23
65. Which of the following is the gross inflow of economic benefits during the period
arising in the course of ordinary activities of an entity when those inflows result in
increases in equity, other than increases relating to contributions from equity
participants?

Revenue
Expense
Asset
Liability
66. Which of the following is charged to revenue in leasing?


Material renewals
67. Which of the following TRUE with respect to Provision?


68. Which of the following is TRUE with respect to the measurement of Revenue – IAS
18?
Revenue shall be measured at the fair value of the consideration received or receivable
Revenue shall be measured at the future value of the consideration received or receivable
Revenue shall be measured at the discounted value of the consideration received or receivable
Revenue shall not be measured at the fair value of the consideration received or receivable
69. Which of the following guide an entity to change the accounting policy?
?á The application of an accounting policy for transactions, other events or

conditions that differ in substance from those previously occurring
?á The application of a new accounting policy for transactions, other events or

conditions that did not occur previously or were immaterial
?á If the change is required by a standard or an interpretation

?á All of the given options
Question No: 03
70. Which of the following asset is recorded in Balance Sheet under the heading
of Current Assets?
?á Furniture
?á Deferred Cost
?á Land
?á Prepayments
Question No: 05
71. What cost should be charged to the equipment if:
• Equipment was purchased for Rs. 34,000;
• Costs were incurred on the date of purchase:
o Loss on sale of old equipment Rs. 4,000;
o Installation costs Rs. 3,000; and Breaking-in costs Rs. 500
?á Equipment should be charged with Rs. 37,500
Question No: 09
72. Under which of the following methods for inventory valuation, inventory is
valued at most recent costs?

?á FIFO Method
?á LIFO Method
?á Weighted Average Method
?á Specific Identification Method
Question No: 10
73. Which one of the following methods for inventory valuation is based on the
assumption that the most recently purchased merchandise to be sold first?
?á FIFO Method
?á LIFO Method
?á Weighted Average Method
?á Specific Identification Method

Question No: 11
74. Which of the following is the Classification of Current Assets with respect to
?á Fixture
?á Bank overdraft
?á Premises
?á Spare parts
Question No: 12
75. Which of the following IAS mainly covers Financial Instruments of other long
term investments?
?á IAS 27 & 32
?á IAS 28 & 39

?á IAS 32 & 39
?á IAS 31 & 32
Question No: 13
76. Which of the following is/are shown under the heading of Stock-in-Trade in
Balance Sheet?
?á Raw Materials
?á Work in Process
?á Finished Goods
77. Which of the following is an agreement whereby the lessor conveys to the
lessee in return for a payment or series of payments, the right to use an
assetVERSION of CAD-KAS
for an agreed PDF-Editor
period of time? (http://www.cadkas.com).
?á A lease
?á Hire purchase
?á Installment
?á Trading on credit basis
Question No: 24
78. A prior period error shall be corrected by:
?á Retrospective restatement

?á Prospective application
?á Shall not be corrected
?á Costing
Question No: 25
79. Which of the following is NOT included in the Equity Section of the Balance
Sheet?
?á Current portion of long term liability
?á Paid up capital
?á Reserves
?á Un-appropriated profit
Question No: 26
80. Which of the following is included in the Current Assets Section of the
Balance Sheet?
?á Stores and Spares
?á Reserves
?á Un-appropriated profit
?á Debentures
Question No: 27
Question No: 28
81. Which of the following is TRUE with respect to the measurement of Revenue
– IAS 18?
?á Revenue shall be measured at the fair value of the consideration received

or receivable
?á Revenue shall be measured at the future value of the consideration received or

receivable

?á Revenue shall be measured at the discounted value of the consideration

received or receivable
?á Revenue shall not be measured at the fair value of the consideration received or
receivable
Question No: 29
82. All of the followings are included in Minimum Lease Payment EXCEPT:
?á Initial payment
?á All lease rentals
?á Any amount that is guaranteed to be paid during or at the end of the lease term
?á Insurance paid by lessor and recovered from lessee
Question No: 30
Question No: 31
83. The present value should be substantially equal to the fair value of the asset.
Which of CAD-KAS
of the following PDF-Editor
represents (http://www.cadkas.com).
the best meaning of “substantially equal
under finance lease”?
?á Generally 90 % or more is considered to be substantially equal
?á Generally 90% or lower is considered to be substantially equal
?á Generally 50% is considered to be substantially equal
?á Generally Less than 50% is considered to be substantially equal
84. What single investment, made today, earning 10% annual interest, will be
worth Rs. 2,420 at the end of 2nd year?
?á Rs. 2,928
?á Rs. 420
?á Rs. 484
?á Rs. 2,000

Question No: 35
85. Deferred Tax can be the example of?
?á Current Liabilities
?á Long term Murabaha
?á Long term deposits
?á Deferred Liabilities
Question No: 36
Question No: 37
86. Which of the following lease payments should be apportioned?

?á Finance of CAD-KAS PDF-Editor (http://www.cadkas.com).
charges
?á Capital charges
?á Revenue charges
?á Finance charge and the reduction of the outstanding liability
Question No: 38
87. How the fair value will be considered when the flow of cash or cash
equivalent is deferred?
?á Considered be less than the nominal amount of cash received or receivable
?á Considered be more than the nominal amount of cash received or receivable
?á Considered be less than the expected amount of cash received or receivable
?á None of the given options

88. Which of the following is the classification of expense by their functions

with respect to IAS-01?
Cost of distribution
Depreciation
89. Which of the following is/are the source/s for the issuance of bonus
shares?

Share premium account
Revenue reserve
90. What would be the present value of Rs. 8,500 to be received after 8 years at
a discount rate of 10 percent?
Rs. 3,965
Rs. 7,992
Changed with the DEMORs.VERSION
15,300 of CAD-KAS PDF-Editor (http://www.cadkas.com).
Rs. 18,221
Here n = 8
i = 10% p.a
FV= Rs. 8500
PV = FV / (1 + i)^n
PV = 8500 / (1+10%)^8
PV = 8500 / (1.1)^8
PV = 8500 / 2.144
PV = Rs. 3964.55
91. Which of the following is the example of Administrative Cost?

Depreciation
Advertising cost
Mark up on loan
Service charges of bank
92. Which of the following represents the meaning of turnover in accounting?
Gross sale
Total profit
Total output

Total investment
93. Ordinary shares are also called:
?á Common shares
?á Common stock
?á Equity shares
94. If you plan to save Rs. 5,000 with a bank at an interest rate of 8%, what will
be the worth of your amount after 4 years if interest is compounded
annually?
?á Rs. 5,400
?á Rs. 5,900
?á Rs. 6,600
?á Rs. 6,802
Here
n=4
i = 8% p.a
PV= Rs. 5000
FV = PV(1 + i)^n
FV = 5000 (1+8%)^4
FV = 5000 (1.08)^4
FV = 5000(1.36)
FV = Rs. 6800
95. What would be the present value of Rs. 17,000 to be received after 8 years at
a discount rate of 10 percent?
?á Rs. 7,931
?á Rs. 15,981
?á Rs. 30,600
?á Rs. 36,441
n=8

i=10%
f.v=17000
PV = FV / (1 + i)^n
pv=17000/(1+10%)^8
7930
96. Depreciation calculation which is at a lesser amount for every following

period:
?á Reducing balance method
?á Straight line method
?á Sum of digit method
?á Output method
97. How many types of possible format are provided by IAS-1 for income
statement?
?á Two types of possible formats

?á Three types of possible formats
?á Four types of possible formats
?á Five types of possible formats

98. What are the basic three key elements used to decide whether an
intangible-fixed asset should be recognized in the accounts?441132 You
are advised to go through Lec# 8 for this concept.
Control, identifiably & economic benefits
Control, marketability & materiality
Completion of development, control & identifiably
99. Which of the following is INCORRECT for equity of a Public Limited

Company? Select correct option:
Equity = Total Assets – Total Liabilities

Equity = Share Capital + General Reserves + Revenue Reserves
Equity = Share Capital + Reserves
Equity = Share Premium + Reserves
100. Which of the following is/are TRUE about the Draft Financial
Statements? 41125

Draft statements are prepared by the accounts department

Draft statements are audited by the external auditors
Draft statements are put in front of the Board of Directors for approval
101. Which of the following can also be a called shareholders fund?

441127
Paid up capital
Called up capital
Subscribed capital
Equity
102. Which of the following is/are considered as expense by their nature with respect to
IAS 01?
Advertising costs
Depreciation expenses
Amortization expenses
Which of the following is/are NOT the example(s) of current liability?
Sundry Debtors /trade debtors

Debentures
103. Which of the following is NOT considered as Non-cash item? 441119

Depreciation
Amortization
Depletion
Stock
104. Which of the following is considered as inflow of cash?
Re-purchase of shares
Redemption of debentures
Issuance of debentures
Payment of dividend

105. Which of the following is NOT considered as expense by their nature

with respect to IAS 01?
Employees benefits costs
Cost of goods sold
106. Which of the following IAS covers the Debentures?
?á IAS 32 only
?á IAS 39 only
?á Both IAS 32 and IAS 39
?á IAS 17
107. Which of the following is TRUE if the amount is transferred to General

Reserves?

?á Reserves will be increased
?á Retain earnings will be decreased
?á No effect on total equity
Unsolved question for final terms
Mgt401 Unsolved Questio
108. Which of the following statement is/are INCORRECT under the Equity
Method for recognition of investment in associated companies?

the distributor’s share of profits or losses of the investee after the date of
acquisition


the investor’s share of profits or losses of the investee before the date of
acquisition
109. If an item that meets the definition of an element is recognized:

When it is possible that any future economic benefit linked with the item will flow
to or from the entity.
When the element has cost or worth that can be measured reliably
When entity obtains control of the rights or obligations linked with the item.
When there is probable that any future economic benefit linked with the item will
flow to or from the entity and the item has a cost or worth that can be measured
reliably
110. Which of the following is adjusted as working capital change in

operating activities section of a cash flow statement?
Decrease of CAD-KAS
in trade PDF-Editor (http://www.cadkas.com).
receivable
Repayment of dividend
Payment of goodwill
Investment in associated companies
111. Which of the following reflects the TRUE description of “Probable”

with respect to IAS-37?
Future events are likely to occur.

The chance of the future event occurring is more than remote but less than
likely.
The chance of future events occurring is slight.
Product guarantee or undertaking given by the seller to the buyer to compensate
for any deficiency of quantity, quality or performance specification of a product.
112. Which of the following is TRUE with respect to the application of

Cash Flow Statement?
Sale of equipment for cash is considered as inflow of cash
Sale of equipment on account is considered as inflow of cash

Sale of equipment on credit is considered as inflow of cash

Sale of equipment for cash is considered as outflow of cash
Intention to complete development, economic benefits & identifiably
113. Ahmad & Co. changed LIFO method to FIFO method to account for
its finished goods
inventory. Whether it is:
Change in accounting policy
Prior period error
Irrelevant item with respect to IAS-08
114. Which of the following is not required to disclose as additional

information when an entity decides to present its income statement on the
basis of “Function of Expense” method?
Depreciation expense
Director’s remuneration
Employees’ benefits expense
Amortization expense
115. VERSION of CAD-KAS PDF-Editor (http://www.cadkas.com).
116. Cash flow statement is designed to assist users in assessing all of

the following except:
Capability of the company to remain solvent
Company’s profitability
Major source of cash receipts & payments during the period

Provide reason why net cash flow from operating activities fluctuate from net
income
117. Which of the following organizations are required to issue a

prospectus for raising capital? 441134 You are advised to go through Lec# 25
Public limited companies

Private limited companies

Partnership firms
Sole traders
118. If issuance of debentures against cash is Rs. 3,000 and repurchase

of shares of Rs. 4,000 then which of the following is correct?

119. How many types of financial statements exist according to IAS-1?

5
4
3
6
120. Which of the following is NOT related to the qualitative characteristics that make
financial information useful? 441135 You are advised to go through Lec# 4 &
33.
Select VERSION
correct option: of CAD-KAS PDF-Editor (http://www.cadkas.com).
Reliability only
Relevancy only
Understandability
121. Which of the following is TRUE about the changes due to issuance of bonus
shares?
Decrease in reserves and surpluses

Increase in reserves and surpluses
Increase in working capital
Decrease in working capital
122. Which of the following is TRUE about the

meeting of directors?
?á The quorum for a meeting of directors of listed company shall not be less than

1/3 of their member or four whichever is lower.
1/2 of their member or four whichever is lower.
123. Which one of the following expenditure

cannot be capitalized? 441136 You are advised to go through Lec # 19 & 20.
?á Initial composition cost
?á Cost of adding air conditioner to the computer room
?á Cost of adding extra RAM to computer
?á New tires placed on a motor car

124.
Which of the following is an example of research activities with respect to
Intangible Assets?
?á Activities aimed at obtaining new knowledge
?á The design of tools, jigs, moulds and dies involving new technology
?á The design, construction and testing of pre-production or pre-use prototypes and

models
?á The design, construction and operation of a pilot plant
125. Under which of the following

circumstance(s), Trade Discount is granted?
?á When selling to a fellow trader
?á When the buyer is an old customer
?á When sales are made in bulk
126. If a manufacturer gives warranties at the time of sale to the purchaser of its
products, under the terms of the contract for sale the manufacturer

undertakes to make good, by repair or replacement, manufacturing defects

that become apparent within three years from the date of sale. On past
experience, it is probable (i.e. more probable than not) that there will be
some claims under the warranties. Then which of the following is TRUE with
respect to IAS-37?
?á It gives rise to legal obligation.
?á It gives rise to constructive obligation.
?á It does not give rise to legal obligation.
?á It removes the legal obligation.

127.
A furnace has a lining that needs to be replaced every 5 years for technical
reasons. At the balance sheet date, the lining has been in use for 3 years.
?á There is no present obligation
?á It gives rise to legal obligation.

?á It gives rise to constructive obligation.
?á None of the given options
Question No: 21
Question No: 22
128. Which of the following is TRUE with respect to the issuance of shares?
?á Equity will be increased only
?á Share capital will be increased only
?á Both share capital and equity will be increased
?á Retain earning will be increased
Question No: 23
129. Which of the following is TRUE with respect to IAS-02?

?á Inventory valuation under periodic and perpetual methods is the same under
FIFO
?á Inventory valuation under periodic and perpetual methods is the same under
Moving Average Method
?á In period of rising prices FIFO method gives the Lowest net profit compared to
LIFO method
?á In period of rising prices FIFO method gives the highest net profit compared to
LIFO method
130. Which of the following statement is correct for Finance Lease?
?á The present value should be substantially equal the fair value of the asset
?á The present value should always greater than the fair value of the asset
?á The present value should always less than the fair value of the asset
?á There of CAD-KAS
is no relationship PDF-Editor
between (http://www.cadkas.com).
the present value and fair value of asset
131. Debt Instruments issued for a long term by governments, financial

institutions and companies for raising long term loans are called?
?á Options
?á Debentures
?á Shares
?á Securities




Made by: Armaan Makhani
MGT 401 Quizzes

Before Midterm Lec 1 to 18
14 to 24th may, 2010
1. Which of the following is NOT the Classification of Current Assets with respect to
Cash Balance
Bank Balance
Premises
2. Written down value of an asset = --------------



3. Which of the following entities is not profit oriented entity?

Partnership
Companies
Foundations
4. All of the following are Fixed assets EXCEPT:

Machinery
Freehold land
Leasehold land
5. AVERSION
Changed with the DEMO Partnershipoffirm has a maximum
CAD-KAS ____
PDF-Editor numbers of partners.
20
15
10
02
6. Question # 6 of 15 ( Start time: 04:59:10 PM ) Total Marks: 1

Which of the following is NOT the Classification of Current Assets with respect to
Stock
General Stores
Spare parts
Bank over draft

Which of the following IAS deals with Inventories?
IAS 38
IAS 23

IAS 02
IAS 16
8. Which one of the following is related to IAS 32 & 39?


Inventory
9.
Question # 9 of 15 ( Start time: 05:02:58 PM ) Total Marks: 1
IAS-16 deals with:

Cash Flow Statement
Earning per share
10. Which of the following meeting is held once in the life of a company?
Changed with the DEMOSelect correctofoption:
VERSION CAD-KAS PDF-Editor (http://www.cadkas.com).
Statutory Meeting
Board Meeting

Which of the following is NOT a Qualifying Asset?

Asset ready for use

Which of the following is original and planned investigation undertaken with the

Research
Development
Audit
Accounting
13. Which of the following IAS deals with the Intangible Assets?
IAS 38
IAS 23
IAS 01
IAS 16

Which of the following is/are the type(s) of stock for manufacturing concerns?
Raw Material
Work in Process
Finished Goods

Which
Changed with the DEMO oneVERSION
of the following is a method
of CAD-KAS of stock valuation?
PDF-Editor (http://www.cadkas.com).


Machinery
Freehold land
Leasehold land
15. Which of the following schedule provides disclosure requirements for Listed
4th schedule
5th schedule

6th schedule
2nd schedule
16. Which of the following investment are recorded using Cost Method?


Holding Companies
18. Which of the following is NOT the method of stock valuation?

Changed with the DEMOFIFO
VERSION
Methodof CAD-KAS PDF-Editor (http://www.cadkas.com).
19. Which of the following IAS is related to the Consolidated and Separate Financial
Statements?
IAS 27
IAS 28
IAS 31
IAS 32



20. Which of the following is the application of research findings or other knowledge
to a plan or design for the production of new or substantially improved materials,
devices, products, processes, systems or services before the start of commercial
production or use?
Applied research
Development
Business research
Accounting
21. What is the treatment of Depreciation in accounting?
22. Which of the following is/are example(s) of development activities?

Changed with the DEMOmodels
23. Which of the following is/are the method(s) for calculating the cost of inventory?
FIFO Method
Qualifying Assets
25. Partnership firm has a maximum ____ numbers of partners.


20
15
10
02
26. Which of the following sections of the Companies Ordinance 1984 is related to the
Annual General Meeting?
Section 157
Section 158
Section 159
Section 160
27. Which of the following may consist of more than 20 persons in case of
partnership?
Firms of Lawyers
Firms of Doctors
Firms of Associates
Changed with the DEMOAll
VERSION of options
of the given CAD-KAS PDF-Editor (http://www.cadkas.com).
Mgt 401 quiz 3 May 13, 2010 before Midterm
28. Which one of the following is related to the Allowed Alternative Treatment for an
Equity Method
IAS-16 deals with:


Cash Flow Statement
Earning per share

29. Companies are registered under:


30. Which of the following business is formed by the approval of Stock Exchange?

31. to the Allowed Alternative Treatment, Which of the following method is used for
stock valuation?
FIFO Method
LIFO Method
Changed with the DEMOSpecific
VERSION of CAD-KAS
Identification PDF-Editor (http://www.cadkas.com).
Method
32. ijeeb191: Which of the following IAS deals with the Borrowing Costs?
IAS 23
IAS 07
IAS 01
IAS 16
33. ijeeb191: Which one of the following is the type of stock for trading concerns?
Raw Material
Work in Process
Finished Goods
Stock in Trade
me: d
34. ijeeb191: What is the meeting requirement for the directors of a Public Limited
Company?


35. ijeeb191: of the following represent(s) the Prime Cost?


36. ijeeb191: Which of the following is/are example(s) of development activities?

models

37. ijeeb191: of CAD-KAS
Which PDF-Editor
of the following (http://www.cadkas.com).
IAS deals with the Intangible Assets?
IAS 38
IAS 23
IAS 01
IAS 16
38. ijeeb191: Which of the following is the Classification of Current Assets with
respect to the Companies Ordinance 1984?
Building
Land
Premises
39. ijeeb191: Which of the following is/are example(s) of research activities?

ijeeb191: Activities aimed at obtaining new knowledge

40. ijeeb191: Which one of the following type(s) of information is(are) available in 4th
and 5th schedule of the Companies Ordinance 1984?

statements
41. ijeeb191: Which one of the following IAS is related to the Interest in Joint
Venture?
IAS 27
IAS 28
IAS 31
IAS 32

42. Which of the of CAD-KAS
following PDF-Editor
fixed (http://www.cadkas.com).
asset is shown at cost rather at book value?
Machinery
Furniture
Vehicles
Land
43. Which of the following is an example of Capital Expenditure

44. Which of the following methodology is adopted for the valuation of investments in
associated companies?
Equity Method
At cost orUnder IAS 39
At amortized cost
At fair value
:
45. In case an item of property, plant and equipment is exchanged for similar asset of
the enterprise, the cost of the new asset is measured at the -------------- of the old
asset.

Carrying value
Fair value
Future value
Salvage Value
46. Which of the following represent(s) the Prime Cost?

47. Which of the following costs can be capitalized?

48. Which one of the following is(are) NOT recorded under Current Liabilities section
of the Balance Sheet?
Debentures
Deferred Taxation
Obligation of CAD-KAS
Under Finance Lease PDF-Editor (http://www.cadkas.com).
49. Which of the following is the deduction or allowance allowed by a creditor to a

debtor?
Trade Discount
Cash Discount
Purchases return
Sales return
50. The term “Significant Influence” refers to the:
Ability to participate but not to control financial and management affairs of the enterprise
Qiiz 5 and 6
51. Which of the following is a rebate or allowance from the scheduled price granted
by the seller to the buyer?

Trade Discount
Cash Discount
Purchases return
Sales return
52. Which of the following entities is profit oriented entity?

NGOs
Trust
Societies
53. Which of the following is/are the Classification of Current Assets with respect to
Cash Balance
Loans and Advances
Bank Balance
All of the given

sehrishnaz90: wah armaan quick service
: experince
IAS 38
IAS 23
IAS 02
56. Which one of the following is NOT the component of cost?
Import duties
Installation costs

58. Which one of the following is related to the Benchmark Treatment for an

Equity Method
LIFO Method
59. Which of the following is/are NOT the example(s) of Financial Asset?
Minority interest
Sale of goods
Purchases of goods
60. Which one of the following is a fixed asset?
Cash in hand
Advanced payment
Closing stock
Leasehold vehicle
61. Which of the following is an example of Capital Expenditure?

Machinery
Freehold land
Leasehold land
63. Which of the following IAS deals with the Borrowing Costs?
IAS 23
IAS 07
IAS 01
IAS 16

IAS 23
IAS 07
IAS 01
IAS 16
65. Which of the following is INCORRECT with respect to Perpetual Inventory

System?

Issuance of inventory is Credited to Stock Account and Debited to Material
Consumption Account
Stock
Cash Balance
Changed with the DEMOFinished
VERSION Goodsof CAD-KAS PDF-Editor (http://www.cadkas.com).
67. : Which of the following is an identifiable non-monetary asset without physical

substance?
Tangible Asset
Intangible Asset
Floating Asset
Circulating Asset
68. : Which of the following represent(s) the Cost of goods sold?

Cost of goods Manufactured + Opening Finished Goods Inventory – Closing Finished
Goods Inventory
69. Which of the following is(are) example(s) of Borrowing costs?



Mgt 401 quiz 7

70. Which of the following is the ability to govern the financial and operating policies
of an enterprise so as to obtain from its activities?
Control
Direct Subsidiary
Indirect Subsidiary

System?
Issuance of inventory is Credited to Stock Account and Debited to Material Consumption
Account
72. Which of the following IAS deals with the Associated Companies?
Changed with theIAS
DEMO
27 VERSION of CAD-KAS PDF-Editor (http://www.cadkas.com).
IAS 28
IAS 01
IAS 07
73. Which of the following fixed asset is shown at cost rather at book value?
Machinery
Furniture
Vehicles
Land

debtor?
Trade Discount
Cash Discount
Purchases return
Sales return


!~Mishel~!: 1??
76. 8:52 PM Which of the following is an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale?
Qualifying Asset
Outstanding Asset
Tangible Asset
Intangible Asset
77. Which of the following investments are recorded using Equity Method?
78. Which of the following business is formed by the approval of State Bank of
Pakistan?
79. If Original cost is Rs. 100,000; Depreciation rate is 20% p.a. using straight line
method; what will be the value of accumulated depreciation at the end of 2nd
year?
Rs.20,000
Rs. 40,000
Rs. 80,000
Rs. 60,000
80. Concept of Related Parties is defined in:

IAS
81. Which one of the following is related to the IAS 39?


82. Which of the following IAS affect(s) the recognition, presentation and discourse of
fixed assets in financial statements?
IAS 01
IAS 16
IAS 23
financial managment2 lec 1 to 18 quiz file
83. Which of the following is TRUE with respect to the disclosure requirements of
Trade Debts?
Doubtful debts is deducted from the Provision for doubtful debts

Doubtful debts and its Provision is shown separately as asset
Provision for doubtful debts is not taken into consideration
IAS 23
IAS 07
IAS 01
IAS 16
85. If:VERSION of CAD-KAS
•Manufacturing PDF-Editor
Cost is Rs. (http://www.cadkas.com).
30,000 •Opening Work in Process Inventory is Rs.
5,000 •Closing Work in Process Inventory is Rs. 10,000 Then: What is the amount
of Cost of Goods Manufactured?
Rs. 35,000
Rs. 25,000
Rs. 15,000
Rs. 20,000
86. Which of the following is/are the physical asset(s)?

Loan Agreements
Trade Receivables
87. Which of the following methodology is adopted for the valuation of investments
held to maturity?
Proportionate Consolidation or Equity Method


At amortized cost
At fair value
the enterprise, the cost of the new asset is measured at the -------------- of the old
asset.
Carrying value
Fair value
Future value
Salvage Value

Machinery
Freehold land
Leasehold land
90. If the holding company owns more then 50% but less then 100% shares of the
Direct subsidiary
Indirect subsidiary
Reliability only
Relevancy only
Understandability
92. 5:57 PM Which of the following sections of the Companies Ordinance 1984 is
related to the Statutory Meeting?
Section 157
Section 158
Section 159
Section 160

93. Which of the following sections of the Companies Ordinance 1984 is related to the
Statutory Meeting?
Section 157
Section 158
Section 159
Section 160
94. Under which of the following assumptions, the Financial Statements are to be
prepared?
Future assumption
Past assumption
Accrual basis and Going concern assumptions
Accrual basis assumption only
95. What will be the Book value of asset if its Original cost is Rs. 100,000;
Accumulated depreciation is Rs. 40,000; and Depreciation for the year is Rs.
20,000?
Changed with the DEMORs. VERSION
140,000 of CAD-KAS PDF-Editor (http://www.cadkas.com).
Rs. 160,000
Rs. 80,000
Rs. 60,000
96. Which one of the following type(s) of information is(are) available in 4th and 5th

statements
97. Which of the following is an example of Revenue Expenditure?


A second-hand car was purchases for Rs. 7,000 and Rs. 5,000 were spent for his repairs
and overhauling

98. Which of the following IAS deals with Revaluation of Assets?

IAS 16
IAS 07
IAS 01
IAS 23
99. If the holding company owns marginally less than 100% shares of the subsidiary

Virtually Wholly Owned Subsidiary
Indirect Subsidiary
100. Which of the following is/are the Classification of Current Assets with
Cash Balance
Changed with the DEMOLoans
and Advances
Bank Balance
101. 6:20 Which of the following is NOT a Qualifying Asset?


Asset ready for use
102. 6:21 If the holding company owns more then 50% but less then 100% shares
of the subsidiary company then the subsidiary type will be termed as:

Direct Subsidiary
Indirect Subsidiary
103. Which one of the following is NOT recorded under Equity section of the
Balance Sheet?

Share Premium
Share Capital
Accumulated Profit
Dividend Payable

105. Which of the following is NOT the Classification of Current Assets with
Cash Balance
Bank Balance
Premises
106. Which one of the following methods for inventory valuation is NOT suitable
for homogeneous units?
FIFO Method
LIFO Method
107. Which of the following is the application of research findings or other

knowledge to a plan or design for the production of new or substantially improved
materials, devices, products, processes, systems or services before the start of
commercial production or use?
Applied research
Development
Business research
Accounting

108. Which of the following is NOT the type of Market Risk?

Price Risk
Liquidity Risk
Interest Rate Risk
Currency Risk
109. Which of the following is original and planned investigation undertaken with
the prospect of gaining new scientific or technical knowledge and understanding?
Research
Development
Audit
Accounting
110. 6:31 Which one of the following is related to IAS 32 & 39?

Changed with the DEMOInventory

Import duties
Installation costs
112. Which of the following is the type of business owned by one person?
Sole-Proprietorship
Partnership
Unlimited Company

113. Which one of the following is(are) recorded under the Equity section of the
Balance Sheet?
Share Premium
Reserves
Accumulated Profit
114. According to the Allowed Alternative Treatment, Which of the following

method is used for stock valuation?
FIFO Method
LIFO Method
115. Which of the following asset is not an example of Intangible Fixed Assets?
Vehicles
Good Will
Copyrights
Changed with the DEMOTrade
VERSION of CAD-KAS
Marks and Designs PDF-Editor (http://www.cadkas.com).
116. Which of the following represents the Qualifying Asset?

Inventory routinely manufactured

Asset ready for use
Manufacturing plants
117. A Private limited company can be formed at least by:

2 members
3 members
1 member
07 members
118. Which one of the following is an example of Financial Asset?

Inventories
Patent rights

Goodwill
Accounts receivable
119. Which of the following option is/are TRUE with respect to the Disclosure
requirement for intangible assets acquired by the way of Government grants?

120. If stock valuation method is changed every year by the firm, which concept
the firm has violated?

121. Which of the following is an example of Revenue Expenditure?

Changed with the DEMOSelect
VERSION
correctofoption:
CAD-KAS PDF-Editor (http://www.cadkas.com).

A second-hand car was purchases for Rs. 7,000 and Rs. 5,000 were spent for his repairs and
overhauling

Which of the following sections of Companies Ordinance 1984 are related to the Non
Profit oriented entities?
Section 42
Section 43
Section 44
Section 45
123. Which of the following may result for an inability to sell a financial asset
quickly at close to its fair value?
Price Risk

Liquidity Risk
Interest Rate Risk
Currency Risk
124. Which of the following schedule of the Company Ordinance 1984 is related to
the classification of intangible assets?
4th schedule
5th schedule
6th schedule
2nd schedule
125. The closing stock will be shown under the head of _______ in Balance Sheet.
Non current Assets

Current Assets
Intangible Assets
Tangible Assets
126. Which of the following is another name for Authorized Capital of a

Changed with the DEMOcompany?
Nominal Capital
Issued Capital
Subscribed Capital
Paid up Capital
127. Which of the following is/are excluded from Financial Assets?

Physical Assets
Inventories
Prepaid expenses
128. Which of the following IAS is related to the Consolidated and Separate
Financial Statements?
IAS 27
IAS 28
IAS 31
IAS 32

Building
Land
Premises
130. Which of the following statement shows the financial position of the
business?
Income Statement
Balance Sheet
131. According to the Benchmark Treatment, Which of the following method is

used for stock valuation?
FIFO Method or LIFO Method
LIFO Method
FIFO or Weighted Average Method
132. If the holding company owns100% shares of the subsidiary company then
the subsidiary type will be termed as:
Direct Subsidiary
Indirect Subsidiary
133. Under which of the following methods for inventory valuation, costs of
earliest purchases assumed still to be in inventory?
FIFO Method
LIFO Method
134. What is the maximum number of shareholders allowed for a Public Limited
Company?
20
50

10
Unlimited
135. Which of the following is/are equal to “Capital”?

Net Assets
Assets – Liabilities
Net worth of the firm
136. Which of the following is the amount for which an asset could be exchanged
between knowledgeable, willing parties in an arm’s length transaction?
Depreciable Amount
Fair Value
Cost
Carrying Amount
2
137. Which of the following asset is NOT an example of Tangible Fixed Assets?
Patent rights
Furniture
Vehicles
Machinery
4th schedule
5th schedule
6th schedule
2nd schedule
139. Which one of the following schedule provides disclosure requirements for
Non-Listed Companies under Companies Ordinance 1984?
4th schedule
5th schedule
6th schedule
2nd schedule
140. in case an item of property, plant and equipment is exchanged for similar
asset of the enterprise, the cost of the new asset is measured at the -------------- of
the old asset.
Carrying value
Fair value

Future value
Salvage
value
141. Which of the following is NOT an accounting concept?

Prudence
Going concern
Depreciation
Matching
142. Depreciation is:

A systematic allocation of depreciable amount of an asset over its estimated useful life
143. Which of the following statement shows the financial position of the
business?
Income Statement
Balance Sheet
144. Which of the following represents the interest and other costs incurred by an
entity in connection with the borrowing of funds?
Loan
Interest on borrowed money paid during the period
Outstanding interest on borrowed money
Borrowing Costs
145. When we see the capital with Production capacity or operating capability of
the enterprise then it called:
The financial concept of capital maintenance
146. Which of the following is/are example(s) of research activities?


147. which one of the following is(are) NOT recorded under Current Liabilities
Debentures
Deferred Taxation
Obligation Under Finance Lease
148. Which of the following section of the Companies Ordinance 1984 deals with
Section 235
Section 236
Section 237
Section 238
149. Which of the following IAS affect(s) the recognition, presentation and
discourse of fixed assets in financial statements?
IAS 01
IAS 16
IAS 23

1. Which of the following is NOT the Classification of Current Assets with respect
to the Companies Ordinance 1984?
Cash Balance
Bank Balance
Premises
2. Written down value of an asset = --------------

3. Which of the following entities is not profit oriented entity?
Partnership
Companies
Foundations
Machinery
Freehold land
Leasehold land
5. A Partnership firm has a maximum ____ numbers of partners.

Page No. 2/80
20 mgt211 page 23
15
10
02
Stock
General Stores
Spare parts
Bank over draft
IAS 38
IAS 23
IAS 02
IAS 16
8. Which one of the following is related to IAS 32 & 39?

Inventory
9. IAS-16 deals with:

Cash Flow Statement
Earning per share
10. Which of the following meeting is held once in the life of a company?vuzs
Statutory Meeting
Board Meeting
Page No. 3/80
11. Which of the following is NOT a Qualifying Asset?

Asset ready for use
12. Which of the following is original and planned investigation undertaken with the
Research
Development
Audit
Accounting
IAS 38
IAS 23
IAS 01
IAS 16
14. Which of the following is/are the type(s) of stock for manufacturing concerns?
Raw Material
Work in Process
Finished Goods
15. Which one of the following is a method of stock valuation?


Page No. 4/80
Machinery
Freehold land
Leasehold land
4th schedule
5th schedule
6th schedule
2nd schedule
18. Which of the following investment are recorded using Cost Method?

Investments made for shorter period page 43

Holding Companies
FIFO Method
21. Which of the following IAS is related to the Consolidated and Separate Financial
Statements?
Page No. 5/80
IAS 27
IAS 28
IAS 31
IAS 32
22. Which one of the following is a method of stock valuation?

23. Which of the following is the application of research findings or other knowledge
to a plan or design for the production of new or substantially improved materials,
devices, products, processes, systems or services before the start of commercial
production or use?
Applied research
Development
Business research
Accounting
models
26. Which of the following is/are the method(s) for calculating the cost of inventory?
vuzs
Page No. 6/80
FIFO Method
Qualifying Assets
28. Partnership firm has a maximum ____ numbers of partners.
20
15
10
02
29. Which of the following sections of the Companies Ordinance 1984 is related to
the Annual General Meeting?
Section 157
Section 158
Section 159
Section 160
30. Which of the following may consist of more than 20 persons in case of
partnership?
Firms of Lawyers
Firms of Doctors
Firms of Associates
31. Which one of the following is related to the Allowed Alternative Treatment for an
Equity Method
Page No. 7/80

32. IAS-16 deals with:

Cash Flow Statement
Earning per share

34. To the Allowed Alternative Treatment, Which of the following method is

used for stock valuation?
FIFO Method
LIFO Method page 48
IAS 23
IAS 07
IAS 01
IAS 16
36. Which one of the following is the type of stock for trading concerns?
Raw Material
Work in Process
Finished Goods
Stock in Trade
Page No. 8/80
37. What is the meeting requirement for the directors of a Public Limited
Company?


models
IAS 38
IAS 23
IAS 01
IAS 16
Building
Land
Premises
Page No. 9/80
42. Which of the following is/are example(s) of research activities?

43. Which one of the following type(s) of information is(are) available in 4th and
5th schedule of the Companies Ordinance 1984?

statements
44. Which one of the following IAS is related to the Interest in Joint Venture?
IAS 27
IAS 28
IAS 31
IAS 32
46. Which one of the following is(are) recorded under the Equity section of the
Balance Sheet?
Share Premium
Reserves
Accumulated Profit
Page No. 10/80
IAS
48. Which one of the following is NOT recorded under Equity section of the Balance
Sheet?
Share Premium
Share Capital
Accumulated Profit
Dividend Payable
50. Which one of the following is(are) NOT recorded under Current Liabilities
Debentures
Deferred Taxation

Page No. 11/80
51. Which of the following is the Classification of Current Assets with respect to the
Building
Land
Premises
FIFO Method
53. Which of the following section of the Companies Ordinance 1984 deals with
Section 235
Section 236
Section 237
Section 238
55. Partnership firms are registered under which of the following?

Page No. 12/80
56. Written down value of an asset = ----------------
57. Which of the following IAS affect(s) the recognition, presentation and discourse
of fixed assets in financial statements?
IAS 01
IAS 16
IAS 23

in associated companies?
Equity Method
At amortized cost
At fair value
Trade Discount
Cash Discount
Page No. 13/80
Purchases return
Sales return
Control
Direct Subsidiary
Indirect Subsidiary

System?
Account
62. Which of the following IAS deals with the Associated Companies?
IAS 27
IAS 28
IAS 01
IAS 07

debtor?
Trade Discount
Cash Discount
Purchases return
Sales return

65. Which of the following is an asset that necessarily takes a substantial period of
time to get ready for its intended use or sale?
Qualifying Asset
Outstanding Asset
Tangible Asset
Intangible Asset
Page No. 14/80
67. If Original cost is Rs. 100,000; Depreciation rate is 20% p.a. using straight line
method; what will be the value of accumulated depreciation at the end of 2nd
year?
Rs. 20,000
Rs. 40,000
Rs. 80,000
Rs. 60,000

IAS

70. Which of the following IAS affect(s) the recognition, presentation and discourse
of fixed assets in financial statements?
IAS 01
IAS 16
IAS 23

Equity Method
Page No. 15/80
At amortized cost
At fair value
the enterprise, the cost of the new asset is measured at the --------------of the old
asset.
Carrying value
Fair value
Future value
Salvage Value


76. Which one of the following is(are) NOT recorded under Current Liabilities
Debentures
Deferred Taxation

debtor?
Trade Discount
Cash Discount
Purchases return
Sales return
78. The term “Significant Influence” refers to the:

Ability to participate but not to control financial and management affairs of the
enterprise
79. Which of the following asset is not an example of Intangible Fixed Assets?
Page No. 16/80
Vehicles
Good Will
Copyrights
Trade Discount
Cash Discount
Purchases return
Sales return
81. Which of the following entities is profit oriented entity?

NGOs
Trust
Societies
Cash Balance
Loans and Advances
Bank Balance
All of the given

System?
Account
84. Which of the following statement is/are INCORRECT under the Cost Method for
recognition of investment in associated companies?
The carrying amount of the investment is increased or decreased to reorganize the
investor’s share of profits or losses of the investee after the date of acquisition
Cash Balance
Bank Balance
Page No. 17/80
Premises

87. According to the Prudence concept, Stock should be included in Balance Sheet at:
Cost
Lower of its total cost Or its total net realizable value
Higher of its total

IAS 38
IAS 23
IAS 02
IAS 16

Import duties
Installation costs

91. Which one of the following is related to the Benchmark Treatment for an
Equity Method
LIFO Method
92. Which of the following is/are NOT the example(s) of Financial Asset?
Page No. 18/80
Minority interest
Sale of goods
Purchases of goods
93. Which one of the following is a fixed asset?

Cash in hand
Advanced payment
Closing stock
Leasehold vehicle


Machinery
Freehold land
Leasehold land
IAS 23
IAS 07
IAS 01
IAS 16

System?
Issuance of inventory is Credited to Stock Account and Debited to Material
Consumption Account
Page No. 19/80
Stock
Cash Balance
Finished Goods
99. Which of the following is an identifiable non-monetary asset without physical

substance?
Tangible Asset
Intangible Asset
Floating Asset
Circulating Asset
100. Which of the following represent(s) the Cost of goods sold?

Cost of goods Manufactured + Opening Finished Goods Inventory – Closing
Finished Goods Inventory
101. Which of the following is(are) example(s) of Borrowing costs?

102. If the holding company owns more then 50% but less then 100% shares of the
Direct subsidiary
Indirect subsidiary

Direct Material Cost + Direct Labor
Cost Total Factory Cost – Factory Overheads
104. If stock valuation method is changed every year by the firm, which concept the
firm has violated?
Page No. 20/80

105. Which one of the following is TRUE with respect to “FIFO” in inventory
valuation?
First-In-First-Out
First-In-Freight-Out
Freight-In-First-Out
Freight-In-Freight-Out
106. Concept of Related Parties is defined in

IAS
107. What is the meeting requirement for the directors of a Public Limited Company?

Equity Method
At amortized cost
At fair value
110. Which of the following is/are the physical asset(s)?

Loan Agreements
Trade Receivables
Control
Page No. 21/80
Direct Subsidiary
Indirect Subsidiary
firm has violated?
114. Which one of the following is NOT recorded under of Equity section the Balance
Sheet?
Share Premium
Share Capital
Accumulated Profit
Dividend Payable
Depreciable Amount
Fair Value
Cost
Carrying Amount
Page No. 22/80

IAS 38
IAS 23
IAS 02
IAS 16
Research
Development
Audit
Accounting
118. Under which of the following methods for inventory valuation, costs of earliest
FIFO Method
LIFO Method
Cash Balance
Loans and Advances
Bank Balance
Sole-Proprietorship
Partnership
Unlimited Company
121. Which one of the following is the example of non-profit oriented organization:
Page No. 23/80
NGO’s
Trusts
Societies
122. Annual General Meeting (AGM) is required to be held within _________ of

incorporation.
06 months
12 months
15 months
18 months
123. The amount by which the carrying amount of an asset exceeds its recoverable
amount is called as:
Impairment loss
Residual value
Depreciation
Fair value
124. Which of the following are the examples of development activities?

Design, construction and operation of pilot plan
125. Investments made for long term in associated companies, is recorded using
_______method of recognition and shown separately in the balance sheet as long-
term assets.
Equity
Cost
Page No. 24/80
126. Costs of purchase of Inventories comprising which of the following:
Purchase price
127. Under Benchmark Treatment IAS-2, does not recommend the following method
of stock valuation for incorporating its value in financial statement.
FIFO method
LIFO method
128. A contractual arrangement whereby, two or more parties undertake, an economic

activity which is subject to joint control is called ________.
Joint Venture
129. A complete set of financial statement includes which of the followings:

Page No. 25/80
130. In the first step of formation of a Company the availability of name is checked
from SECP, that is at least two companies with same name can registered.
True
False
131. An increase in economic benefits during the accounting period in the form of
increase of assets and decrease in liabilities is termed as Expenses.
True
False
132. In IAS 23 Qualifying asset is an asset that necessarily takes a substantial period of
time to get ready for its intended use.
True
False
133. Cash discounts are usually received on bulk purchase and are agreed at the time of
negotiation of cost. The cost of inventory is recorded net of these discounts.
True
False
134. Generally there are two types of discounts; ____Trade____ and ____Cash_____
.
135. There is no concept of capital in:

Sole proprietorship
NGO’s / NPO’s
Partnership

activity which is subject to joint control is called ____Joint Venture_____
137. The surplus arising from revaluation of fixed assets of an entity is shown:
Separately in the balance sheet.
Page No. 26/80

138. A Company uses FIFO method to evaluate its stock. The information for the stock
is as follows:
Opening stock was 10 units at 2 each.
Purchases were 30 units at Rs. 3 each, and
Then issues of 12 units were made, followed by issues of 8 units. Closing stock is valued
at:
Rs. 50
Rs. 58
Rs. 60
Rs. 70
139. ____share holders’ equity_____ is the net balance of the total assets of the
business less third party’s liabilities.
140. _____qualifying_____ is an asset that necessarily takes a substantial period of

time to get ready for its intended use.
141. Statuary Meeting is required to be held within:

3 to 6 months
1 to 3 months
6 to 9 months
9 to 12 months
142. Goodwill is most appropriately classified as:

A fixed asset
An intangible asset
A semi-fixed asset
143. If a Company purchased an Asset for Rs.20, 000. The estimated useful life of
asset is ten years. After five years the Book Value of the Asset will be: (using
straight line method of depreciation and no residual value)
Page No. 27/80
16,000
10,000
8,000
5,000
144. The main aim of accounting is to:

145. In case of a single member company _______ person(s) is (are) required to be

nominated to takeover the company in case of a death of the member.
One
Two
Three
Four
146. Company should be termed as a __________ of another company if other

company holds more than 50% of its shares or has the power to appoint more than
50% of its directors.
Associated
Subsidiary
Joint Venture
147. Directors or shareholders having ______ voting power can call for Extraordinary
10%
15%
20%
Page No. 28/80
25%
148. Quality control during commercial production cost Rs. 10,000/- will be charged
to: v uzs
Research expenses
Development cost
149. Which one of the following is an example of Conversion Cost?
Labour and factory overheads
Labour and work in process
150. Which of the followings are among the non-current assets?

Operating assets
151. Movement of capital issued and reserves are presented through which of the
following statement?
Cash flow statement
Income statement
Balance sheet
Page No. 29/80
152. A maximum limit of the amount of the capital that a company can issue is
mentioned in the Memorandum of Association and Article of Association of the
company is called:
Authorized capital
Issued capital
Subscribed capital
Paid up capital
153. Cost of inventories will consist of which of the following costs?
Purchase cost
Costs of conversion
Installation costs
154. Cash discounts are received on early payment of the outstanding amount. These
discounts are conditional and are not reduced from the value of the inventory.
True
False
155. In the rare cases of conflict between an IAS and the Framework, the Framework
will prevail.
True
False
156. Current assets will also include marketable securities if they are expected to be
realized within twelve months of the Balance Sheet date.
True
False
157. Significant influence is the ability to participate and to control the financial and
management affairs of the enterprise.
Page No. 30/80
True
False
158. International Accounting Standards (IAS) are issued by International Accounting

Standard Board (IASB).
True
False
159. Contingent assets are:

160. A reduction of share capital can be effected through an ordinary resolution.

True
False
161. According to IAS 2 Inventories are assets that are not held for sale in the ordinary
course of business.
True
False
162. Which assets are specifically excluded from Financial Assets:
a: Investments
b: Prepaid Expenses
c: Physical Assets
d: Both (b) and (c)
163. A supplier sends you a statement showing a balance outstanding of Rs. 14,350.
The supplier has allowed you Rs. 150 cash discount which you had omitted to enter
in your ledgers
You have returned goods worth Rs. 150 which the supplier has not yet accounted for
Page No. 31/80
164. Contingent liabilities are:
a: possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the entity
b: liabilities to pay for goods or services that have been received or supplied and have
been invoiced or formally agreed with the supplier
Both (a) and (b)
165. Accounting policy once selected can never be changed.
True
False
166. Minimum Lease Payments are:
o The lease rentals payable by the lessee to the lessor

o The contingent rent payable by lessee
o All the payments that the lessee can be required to pay to the lessor
o None of the given options.
167. IAS 23, "Borrowing Cost" requires capitalization of borrowing cost as a

benchmark treatment.
False
True
168. Liquidity is:
o Excess of income over expenditure

o Income generating capability of the business
o Ability of a business to pay its debts in time
o Excess of expenditure over income
Page No. 32/80
169. A revaluation loss is charged to profit and loss account in the period in which the
revaluation is carried out.
o True
o False
170. In case of tangible non-current assets, if a policy of revaluation is adopted for the
first time, then this is treated as:

171. Right shares are issued when accumulated profit is being capitalized by the
issuance of shares.
1. True
2. False
172. _________Net Realized Value_________ is the estimated selling price in the

ordinary course of business less the estimated cost of completion and the
estimated cost necessary to make the sale.
173. Liquidity is defined as:

174. If an entity declares dividends to the holders of equity instruments after the
balance sheet date, the entity shall not recognize those dividends as a :
1. Equity
3. Liability
4. Asset
Ref:
http://docs.google.com/viewer?a=v&q=cache:XMUl3epcawQJ:app1.hkicpa.org.hk/ebook
Page No. 33/80
/HKSA_Members_Handbook_Master/volumeII/hkas10.pdf+&hl=en&pid=bl&srcid=AD
GEESivnfEpwDZ6thyO4V4jSJWzF4SpcI2cOREL6fTfVxGfKACoLRowJpAmZgmjtxrZ
OkW6Ca6Cq9p_FxDu1OcV-
t0BgDtFUys6YKTV3pgug3xOqqiJXEgOxdfmx5DRXrsUy-XIDWeD&sig=AHIEtbRW-
7EEkfm6qngBAftJgYMwQIfBtg
175. The information as to profitability is provided by the balance sheet of the entity.
1. True
2. False
176. Under IAS 33 ____________Earning Per Share__________is widely used by

investors as a measure of a company’s performance.
Which of the following asset is specifically excluded from Financial Assets:

1. Investments
2. Prepaid Expenses
3. Physical Assets
177. Lease accounting is regulated by __________which was introduced because of

abuses in the use of lease accounting by companies.
1. IAS 17
2. IAS 12
3. IAS 39
4. IAS 32

activity which is subject to join control, is called Subsidiary Companies.
1. True
2. False
179. Which of the following is a present obligation of the entity arising from a past
event the settlement of which is expected to result in an outflow from the entity of
resources embodying economic benefits?
Asset
Page No. 34/80
Income
Expense
Liability
180. Which of the following types of business enjoys greater freedom and flexibility
in making business decisions according to the economic conditions?
Private Limited Company
Sole-proprietorship
Partnership
181. Proper Books of Accounts are kept by every company under which of the
following sections of the Companies Ordinance 1984?
Section 230
Section 233
Section 184
Section 110
182. Which of the following information must be disclosed in case of loan and
advances to subsidiary companies?
The name of each borrower

Page No. 35/80
Amount of loans and advances
The terms of loan and the particulars of collateral security held
183. Which one of the following is an example of Financial Asset?
Inventories
Patent rights
Goodwill
Accounts receivable
184. Mr. Jason invested Rs. 100,000 in bank as bonds for nine months. At the end of
the year, this invested amount will be shown in Balance Sheet under the head of:
Fixed Assets
Current Asset
Current Liabilities
Long Term Liabilities
185. Which of the following represents the Financial Information presented in the
financial statements relating to the assets and incomes should not be overstated.
Page No. 36/80
Consistency
Profit
Materiality
Prudence
186. Which of the following statement shows the movement of cash inflows and
outflows?
Income Statement
Balance Sheet
187. Which of the following is an example of current liability?
Bank Overdraft
Stock
Goodwill
A loan repayable in two years
188. Which of the following is a component of current liabilities?
Assets subject to finance lease

Page No. 37/80
Debentures
Loans taken for more than five years
189. A damage claim of Rs.15 million for breach of contract has been served on the
Company. The Company legal counsel is of the view that it is possible that the
damages will be awarded to the plaintiff. However, the amount of damages can
not be reasonable estimated. What accounting treatment would be made in this
regards?
A provision will be made for damages
Damages will be disclosed as contingent liabilities
Damages will be treated as accrued income
No treatment will be taken
190. Which of the following term represents the amount of share capital collected
from the shareholders on application of shares?
Registered Capital
Subscribed Capital
Nominal Capital
Paid up capital
191. Where shares are purchased at a price above the face value, the difference shall
be charged to:
Page No. 38/80
Share Premium Account
Share Discount Account
Distributable Profit Account
Un-distributable Profit Account
192. In case of operating lease, an asset is recorded in the books of lessee at which of
the following value?
Faire value
Present value
Market value
Not recorded at any value
193. Which of the following IAS covers the Debentures?
IAS 32 only
IAS 39 only
IAS 17
194. Which of the following events are indicative of conditions that arose after
Balance Sheet date?
Adjusting events after balance sheet date

Page No. 39/80
Adjusting events before balance sheet date
Non - adjusting events after balance sheet date
Non - adjusting events before balance sheet date
195. Which of the following is/are the event/s after the balance sheet date with
respect to IAS 10?
196. Which of the following is a possible asset that arises from past events and whose
existence will be confirmed only by the occurrence of one or more uncertain
future events not wholly within the control of the entity?
Contingent asset
Fixed asset
Current asset
Floating asset
197. Which of the following is/are related to the IAS-37?
Contingent Assets
Contingent Liabilities
Page No. 40/80
Both Contingent Assets and Contingent Liabilities
Inventory
198. Which of the following is the example of Certain Liabilities?
Creditors against supplies
Accruals against expenses
Provision against expected losses
Provision against expected profits
199. An equity instrument that is subordinate to all other classes of equity instruments
is:
Ordinary share
Potential ordinary share
Warrants
Options
200. Which of the following is/are Financial Instruments that give the holder, the
right to purchase ordinary shares?
Equity shares
Potential ordinary shares
Warrants or Options (IAS 33)

Page No. 41/80
Preference shares
201. Which of the following is widely used by investors as a measure of Company

performance in comparing the results of a Company over a period of time?
Earning Per Share
Balance Sheet
Cash Flow Statement
Notes to the accounts
202. Which of the following represents the Equity?
Share capital + Accumulated profit + General reserves
Share capital + Accumulated profit - General reserves
Share capital - Accumulated profit - General reserves
Accumulated profit - General reserves
203. Which of the following is included in the Equity Section of the Balance Sheet?
Share capital
Long term financing
Deferred cost
Liability against assets subject to finance lease

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204. Which of the following is NOT considered as expense by their function with
respect to IAS 01?
Cost of goods sold
Distribution costs
Administrative expenses
205. Which of the following is TRUE?
Gross profit - Operating expenses = Operating profit
Cost of sales + Operating expenses = Operating profit
Cost of sales - Operating expenses = Net profit
Cost of sales - Operating expenses = Gross profit
206. An electricity accrual of Rs. 375 was treated as prepayment in preparing a

trader's profit and loss account. As a result his profit was:

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207. Which of the following is the correct formula to find the Present Value? Where
FV = Future Value, r = Interest rate and n = Time period
FV(1 + r)-n
FV (1 + r)n
FV(1 - r)-n
FV(1 x r)-n
208. If you plan to save Rs. 5,000 with a bank at an interest rate of 8%, what will be
the worth of your amount after 4 years if bank offers simple interest?
Rs. 5,400
Rs. 5,900
Rs. 6,600
Rs. 6,802
209. What will be the purchase source at the time of re-purchase of shares?
The purchase shall be in cash and out of the distributable profits.
The purchase shall be in cash and out of the un-distributable profits.
The purchase shall be in credit and out of the distributable profits.
The purchase shall be in cash and out of the Revaluation surplus profits.
210. Which of the followings item(s) must be disclosed on the face of income
statement according to IAS-1?
Page No. 44/80
Revenue
Results of operating activities
Finance costs
211. Which of the following is the combined account for showing both result of
business, i.e., gross and net profits?
Trading and profit and loss account
Income statement
212. The goods are written off when:
These are completely damaged
These are stolen
These are destroyed by fire
213. Which of the following bases, stock should be valued according to IAS-2?
Cost
Higher of cost or net realizable value
Lower of cost or net realizable value

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214. Which of the following business is formed by the approval of Stock Exchange?

215. Which of the following fixed asset is shown at cost rather at book value?
Machinery
Furniture
Vehicles
Land
Reliability only
Relevancy only
Understandability
217. An intangible asset with indefinite useful life shall:
Not to be amortized
Either be amortized using straight line method OR be amortized using reducing balance
method
218. The capital maintenance concept implies that:

Profit is earned only if the value of an organization’s net assets or its operating
capability has increased during the accounting period.
219. The cost of inventories of a service provider does not consist of:
Page No. 46/80

Attributable overheads.
Labour and other costs relating to sales
220. Which one of the following is the concept of the capital maintenance?

221. If the closing balance is lower than the difference of the opening balance and
depreciation for the Year, it shows:
An addition of fixed assets has been taken place

A disposal of fixed assets
Fixed assets are installed under finance lease
222. Which of the following item may be included in a Balance Sheet at more than its
historical cost?
Good will
Land
Research expenditures
Work in progress
223. The valuation of stock at lower of its cost or net realizable value is an
application of:
The accrual concept

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224. Contribution to Research foundation amounting to Rs. 100,000/- Whether

it is:
a) Development cost
b) Development cost & capitalized
c) Research expenses
225. Which of the following are the examples of research activities?
a) Activities aimed at obtaining new knowledge

b) Search, evaluation, final selection and application of research
findings
c) Search for alternatives
226. There are ______ methods for recognition of investment in associated

companies:
e) One
f) Two
g) Three
h) Four
227. __________ is the estimated selling price in the ordinary course of business
less the estimated cost necessary to make the sale.
a) Net realizable value

b) Carrying value
c) Market value
228. Cost of inventories will consist, which of the following costs:
a) Purchase
b) Costs of Conversion
c) Other costs incurred in bringing the inventories to their location and
condition
229. Cost of the inventory is calculated with which of the following method:
a) First in First Out (FIFO) & Last in First Out (LIFO)

Page No. 48/80
b) Specific identification of cost

c) Weighted Average
230. The table shows information relating to end of year stock:

Particulars Rs.
Cost 100,000/-
Realizable value 90,000/-
Cost of selling 10,000/-
Replacement cost 70,000/-
According to IAS 2, what is the value of stock at the balance sheet date?
i) Rs. 90,000/-
j) Rs. 80,000/-
k) Rs. 100,000/-
l) Rs. 70,000/-
231. Conversion cost includes:
a) Labour and factory overheads

b) Labour and work in process
c) Work in process and finished goods
d) Factory overhead and work in progress
232. The cost of inventories of a service provider consists of which of the

following:
a) Labour
b) Other costs of personnel directly engaged in providing the service
c) Labour and other costs relating to sales
233. Which of the following is the disadvantage of modified schedules and alternative
workplace?
 Freedom in professional and personal life
 Adds more Job satisfaction
 Complicated coordination
 Suitable for self starter who require little direct supervision
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234. Revenue expenditure is likely to benefit:

 Future period
 Current + future period
 Current period
 Past period
235. Net investment in the lease is:
 Residual value
 MLP + URV
 P.V of G.I
 None
236. Which item may be included in Balance Sheet at more than historical cost?
 Land and Building
 Work in progress
 Goodwill
 Research expenditure
237. What is material?
 Item that could influence economic decision of users
 It depends on size and nature of them
 Both economic decision of users & size and nature of them
 None of the given options
238. As a result of a product break through, it has been determined that manufacturing
equipment previously depreciated over 15 years should be depreciated over 20 years
whether it is:
 Changes in accounting policy
 Prior period error
 Changes in accounting estimate
239. Example of change in accounting estimates are the followings:
 Bad Debts
 Inventory obsolescence
 Warranty obligations
240. Imran & Co made a profit for the year of Rs. 56,250 after accounting for
depreciation Rs. 3,750. During the year, fixed assets were purchased for 24,000
debtors increased by Rs. 3,000, stock decreased by Rs. 5,400 and creditors increased
by Rs. 1,050.
The increase in cash and bank during the year was:
 Rs. 39,450
 Rs. 15,950
 Rs. 14,650
 Rs. 17,150
241. Khan & Co. reported a profit of Rs. 30,000 for the year, after charging the following:
Depreciation Rs. 5,000
Page No. 50/80
Loss on sale of assts Rs. 2,000

During the year there was a decrease in working capital of Rs. 1,000. What was the
net cash flow generated from operations?
 Rs. 12,000
 Rs. 38,000
 Rs. 20,000
 Rs. 25,000
242. Which of the following is not a cash flow in a cash flow statement?
 A right issue
 A depreciation charge
 Proceeds on the sale of a fixed asset
 Corporation tax paid
243. A cash flow statement provides information that enables user to evaluate:
 Changes in net assets
 Financial structure
 Amounts and timing of cash flows
244. The accounting entity or separate entity concept means.
 That each branch of the business should be treated as a separate

accounting entity.
 That each line of business should be treated as a separate accounting
entity.
 That business should be treated as an entity separate from its owners.
 None of the above.
Ans: That business should be treated as an entity separate from its owners.
This concept implies that the activities of a business are to be treated as separate
from the non-business activities of its owners.
The items recorded in the books of business are therefore restricted to the
transactions of the business. The only time that the personal resources of the
owners will affect the books of business when introduce new capital into the
business or take out profits from it.
245. You are running a small business. You have obtained a personal loan
from the bank that you intend to use for renovation of your own house.
The loan would be classified as:
 Long term liability of the business.

Page No. 51/80
 Short term liability of the business.

 Any one of the above depending upon the term of the loan.
Ans: None of the above.
Following the separate entity concept only those transactions will be recorded in
the books of the business that relate to the business. A personal loan of the owner
will not be recorded in the books of the business at all.
246. Assets and liabilities are classified into current and non-current on the
basis of:
 Their expected life or repayment term.

 The amount spent or payable i.e. on the basis of materiality.
 Judgement of the individual.
 All of the above.
Ans. Their expected life or repayment term.
In case of assets the major classification of the assets include Non-current assets
and Current Assets, whereas in case of liabilities the major classifications are:
 Equity,
 Non-Current Liabilities
 and Current Liabilities.
All these classifications are based on the expected life of the asset or the
repayment term, there value of the judgement of the individual do not affect
their classification
247. Which of the following statements best defines the term “Useful life of
an asset”?
 It is the time period after which the asset becomes useless.

 It is the time period after which the organization sells the asset.
 It is the time period after which maintaining the asset is not viable
economically.
Page No. 52/80
Ans: It is the time period after which maintaining the asset is not viable
economically.
Useful life of an asset is defined as the number of years over which an enterprise
expects to use an asset. OR The number of production or similar units expected
to be obtained from an asset. This means that the enterprise would like to use the
asset as long as it is economically feasible for the enterpriser to operate the asset.
Economic feasibility means that the asset is giving more output than the cost
incurred to operate it.
248. What is depreciation?

 Market value of an asset reduces with the passage of time. This reduction
is called depreciation.
 Systematic allocation of depreciable amount of an asset over its useful life.
 It is the cost of maintaining an asset.
 All of the above.
Ans: Systematic allocation of depreciable amount of an asset over its useful

life.
Depreciation is a charge for using the asset or spreading its cost of purchase over
the life of the asset and is calculated by distributing the cost of the asset over its
useful life.
249. The consideration that would have to be paid if same or an equivalent

asset is acquired. Such kind of consideration is called:
 Current cost
 Periodic cost
 Fixed Cost
 Semi-annual cost
250. _______________ is the undiscounted amounts of cash or cash equivalents

expected to be paid to satisfy the liabilities in the normal course of
business.
Page No. 53/80
 Settlement value
 Realizable value
 Residual value
251. Which of the following is a tool of measuring financial position of an

entity?
 Balance sheet
 Income statement
 Cash flow statement
 All of above
252. ___________ are included in the cost on inventories only to the extent that
they are incurred in bringing the inventories to their present location and
condition.
 Other costs
 Installation cost
 Transportation cost
 Carrying cost
253. In perpetual Inventory systems inventory is recorded as:
 Receipt of inventory is debited to purchases account.

 No recording is made for individual issue in the General Ledger.
 Receipt of inventory is credited to Stock Account.
 Issues are Credited to Stock Account and Debited to Material Consumption
Account.
254. Which of the following is not a component of financial statement?
 Balance sheet and Income statement

 Statement of changes in equity
 Cash flow statement
Page No. 54/80
 None of the above
255. Cash discounts are received on early payment of the outstanding amount.
These discounts are:
 Non conditional and reduce from the value of the inventory.

 Conditional and reduce from the value of the inventory.
 Non conditional and are not reduced from the value of the inventory.
 Conditional and are not reduced from the value of the inventory.
256. Stores and spares are valued at:
 Cost value
 Market value
 Cost or market whichever is less
 Cost or market whichever is greater
257. Stores and spares include items which may result in _____________ but
are not distinguishable.
 Revenue expenditure
 Fixed capital expenditure
 Both capital and revenue expenditure
 None of the above
258. The cost of inventories may not be recoverable if:
 Those inventories are damaged

 They have become wholly or partially obsolete
 Their selling price has declined
 All of above
259. IAS 1 suggests certain order for notes to the financial statements. This will
assist users when comparing the statements of different entities. By
applying above statement, which of the following does not include in IAS
o Statement of compliance with IAS’s

o Statement of the measurement basis and accounting policies
applied
o Other disclosures
o None of the given options
Page No. 55/80
260. Revenue shall be measured at ____________of the consideration received

or receivable.
 Fair value
 Cost value
 Discount value
261. Depreciation, maintenance, rent, utilities and management costs of

administrative offices are charged to:
 Administrative cost
 Distribution Costs
 Finance Costs
 Cost of Goods Sold
262. Under IAS 28 investment in associates is recorded using which of the

following method?
 Equity method
 Cost & Equity method
 Cost method
263. IAS 36 “Impairment of Assets” defines that recognition of gains / losses is

always due to ________ of the assets:
 Change in Fair value

 Addition of assets
 Deletion of assets
 Depreciation
264. Distribution costs are expenses that are directly related to:
 Selling the products of the entity

 Mark up paid on loans and leases
 Administration and management of the business.
Page No. 56/80
265. An entity shall present a statement of changes in equity, showing which of

the following on the face of the statement:
 Profit or loss for the period

 Total income and expense for the period
 Total amounts attributable to equity holders of the parent and to
minority interest
266. Other operating income, includes which of the following:
 Income from financial assets

 Income from investments in debts, loans, advances and receivables to
each related party
 Income from assets other than financial assets
267. Under which of the following circumstances provision might not be

recognized?
 The board agreed a detailed closure plan on 20 December 20X9 and details
were given to customers and employees.
 A company is obliged to incur clean up costs for environmental damage
(that has already been caused)
 A company intends to carry out future expenditure to operate in a
particular way in the future.
268. Cost of goods sold includes which of the following:
 Sales and distribution costs

 Depreciation, maintenance, rent and utilities
 Direct labour cost
 Advertisement costs
269. Management shall use its judgment in developing and applying an

accounting policy that results in information that is:
a) Relevant to the economic decision making needs of the user

b) Reliable, in that the financial statements & Neutral
c) Complete in all material respects & Prudent
Page No. 57/80
270. Accounting policies should be applied consistently for __________

transactions.
a) Similar
b) Divergent
c) Contradictory
d) Conflicting
271. Cash Flow Statement means:
a) A statement shows the movement in cash resources of the business

b) The statement shows the sources from which business generated cash
and its application.
c) A statement analyses operating, investing and financing activities of
the business
272. Ahmed & Co. issued shares how would a bonus issue of shares affect a
cash flow statement:
a) It would reduce cash flow from operations

b) It would have no effect on cash flow
c) It would increase cash flow from investing activities
d) It would increase cash flow from financing activities
273. Cash flow from operating activities are generally derived from the
principal of ________ of the business:
a) Revenue producing activities

b) Capital producing activities
c) Cash receipts & payment activities
d) Cash receipts & payment from owner activities
274. At the time of inception of lease, in cash flow statement, Asset and
Liability is recorded in Balance Sheet. However in case of cash flows:
a) Only payment of Lease Rentals is shown as outflow

b) Both payment of finance lease & Lease Rentals is shown as outflow
c) Only payment of Lease Rentals is shown as inflow
d) Only payment of finance charge is shown as outflow
Page No. 58/80
275. Which of the following statement would be considered as out flow, in the
outflow statement?
a) The difference between the old and new valuations in the case of the
revaluation of fixed assets
b) Proceeds as a result of selling fixed assets
c) The depreciation charge for the current year
d) The repayment of a bank loan
276. Imran & Co. changed LIFO method to FIFO method to valuate for its
finished goods inventory. Whether it is:
a) Change in accounting estimates

b) Prior period errors
c) Change in accounting policy
277. Which of the following is an example of change in accounting estimates:
a) Bad debts
b) Inventory obsolescence
c) Warranty obligations
d) All of the above
278. A prior period shall be corrected by:
a) Retrospective restatement
b) Prospective application
c) Shall not be corrected
d) None of the above
279. Reporting Inventory at the lower of cost or market value is a departure

from the accounting principle of:
a) Full disclosure
b) Historical cost
c) Consistency
d) Conservatism
Page No. 59/80
Control
Direct Subsidiary
Indirect Subsidiary
firm has violated?

283. Which one of the following is NOT recorded under of Equity section the Balance
Sheet?
Share Premium
Share Capital
Accumulated Profit
Dividend Payable
Depreciable Amount
Fair Value
Cost
Carrying Amount

IAS 38
IAS 23
IAS 02
IAS 16
Page No. 60/80
Research
Development
Audit
Accounting
287. Under which of the following methods for inventory valuation, costs of earliest
FIFO Method
LIFO Method
Cash Balance
Loans and Advances
Bank Balance
Sole-Proprietorship
Page No. 61/80
Partnership
Unlimited Company
290. Issuance of shares at discount is the inverse of:
Issuance of Bonus
Issuance at Premium
Right Shares Issue
Further Issue
291. A private company is not required to issue a _________ as it is prohibited by its

articles from inviting general public to subscribe for its shares.
Cash flow statement

Prospectus
Income statement
Balance sheet
292. Risks and rewards associated with the ownership related to:
Finance Lease
Operating Lease
Installments
293. Minimum lease payment(MLP) includes from lessor point of view:
Total payment
Page No. 62/80
294. In operating lease, rental expenses should be charged to:
Balance sheet
Income of lessee
295. Fair presentation means:

296. Rendering of services, revenue associated with the transaction can be estimated
reliably when, which of the following conditions are satisfied:
the entity
measured reliably
297. Which transaction will cause an increase in capital employed:

Receipt of a loan
298. Income statement formats based on classification of:
Expenses
Incomes
Revenues
Page No. 63/80
299. Preliminary expenses are an example of:
Revenue expenditure
Capital expenditure
300. The stock sheet for the previous year was incorrectly undercasted by Rs. 200,000,
whether it is:

Prior period error
301. An example of cash flows from operating activities is:

302. Inventories are carried in the books of accounts according to the methods of
valuation given in:
IAS 28
IAS 2
IAS 4
IAS 29
303. A public company is required to file a _____________with SECP before

allotment of shares.
Prospectus
Page No. 64/80
304. According to the International Accounting Standards any decrease in the value of
goodwill is made with the help of:
Amortization
Impairment
Depreciation
305. Contingent assets are:

306. Which assets are specifically excluded from Financial Assets:

a: Investments
b: Prepaid Expenses
c: Physical Assets
d: Both (b) and (c)
307. A supplier sends you a statement showing a balance outstanding of Rs. 14,350.
o The supplier sent an invoice for Rs. 150 which you have not yet received.
o The supplier has allowed you Rs. 150 cash discount which you had omitted to
enter in your ledgers
o You have paid the supplier Rs. 150 which he has not yet accounted for
o You have returned goods worth Rs. 150 which the supplier has not yet accounted for
308. Contingent liabilities are:

o a: possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the entity
o b: liabilities to pay for goods or services that have been received or supplied and have
been invoiced or formally agreed with the supplier
o Both (a) and (b)
o None of the given options

o The capital of a business should be kept intact by not paying out dividends.
o A business should invest its profits in the purchase of capital assets.
o Fixed assets should be properly maintained.
Page No. 65/80
o Profit is earned only if the value of an organization's net assets or its operating
capability has increased during the accounting period.
310. Minimum Lease Payments are:

o The lease rentals payable by the lessee to the lessor
o The contingent rent payable by lessee
o All the payments that the lessee can be required to pay to the lessor
o None of the given options.
311. Stock is valued using FIFO. Opening stock was 10 units at 2 each. Purchases were
30 units at Rs. 3 each, then issues of 12 units were made, followed by issues of 8
units. Closing stock is valued at:
58
50
70
60
312. Discount allowed on issue of shares is:

o a: Shown as reduction in share capital.
o b: Written off as expense
o c: Charged to share premium account
Both (a) and (b)

Both (b) and (c)
313. The historical cost convention:

o Fails to take account of changing price levels over time.
o Records only past transactions.
o Values all assets at their cost to the business, without any adjustment for depreciation.
o Has been replaced in accounting records by a system of current cost accounting.
314. Liquidity is:

o Excess of income over expenditure
o Income generating capability of the business
o Ability of a business to pay its debts in time
o Excess of expenditure over income
315. The issue of the shares at discount must be authorized by resolution passed in
_______________of the company and must be sanctioned by the Commission.
1. General Meeting
Page No. 66/80
316. Property, plant and equipment are carried in the books of accounts in accordance
with the requirements of :
1. IAS 2
2. IAS 4
3. IAS 16
4. IAS 28
317. If the closing balance is lower than the difference of the opening balance and
depreciation for the Year, it shows:
1. An addition of fixed assets has been taken place
2. A disposal of fixed assets
3. Fixed assets are installed under finance lease
318. In case of tangible non-current assets, if a policy of revaluation is adopted for the
first time, then this is treated as:
319. Liquidity is defined as:

320. If an entity declares dividends to the holders of equity instruments after the
balance sheet date, the entity shall not recognize those dividends as a :
1. Equity
3. Liability
4. Asset
321. Which of the following asset is specifically excluded from Financial Assets:
1. Investments
2. Prepaid Expenses
3. Physical Assets
322. Lease accounting is regulated by __________which was introduced because of

abuses in the use of lease accounting by companies.
1. IAS 17
Page No. 67/80
2. IAS 12
3. IAS 39
4. IAS 32
323. The issue of the shares at discount must be authorized by resolution passed in
_______________of the company and must be sanctioned by the Commission.
1. General Meeting
324. Property, plant and equipment are carried in the books of accounts in accordance
with the requirements of :
1. IAS 2
2. IAS 4
3. IAS 16
4. IAS 28
325. Issuance of shares at discount is the inverse of:
Issuance of Bonus
Issuance at Premium
Right Shares Issue
Further Issue
326. A private company is not required to issue a _________ as it is prohibited by its

articles from inviting general public to subscribe for its shares.
Cash flow statement

Prospectus
Income statement
Balance sheet
327. Risks and rewards associated with the ownership related to:
Finance Lease
Operating Lease
Installments
328. Minimum lease payment(MLP) includes from lessor point of view:

Page No. 68/80
Total payment
329. In operating lease, rental expenses should be charged to:
Balance sheet
Income of lessee
330. Fair presentation means:

331. Rendering of services, revenue associated with the transaction can be estimated
reliably when, which of the following conditions are satisfied:
the entity
measured reliably
332. Which transaction will cause an increase in capital employed:

Page No. 69/80

Receipt of a loan
333. Income statement formats based on classification of:
Expenses
Incomes
Revenues
334. Preliminary expenses are an example of:
Revenue expenditure
Capital expenditure
335. The stock sheet for the previous year was incorrectly undercasted by Rs. 200,000,
whether it is:

Prior period error
336. An example of cash flows from operating activities is:

337. Inventories are carried in the books of accounts according to the methods of
valuation given in:
Page No. 70/80
IAS 28
IAS 2
IAS 4
IAS 29
338. A public company is required to file a _____________with SECP before

allotment of shares.
Prospectus
339. According to the International Accounting Standards any decrease in the value of
goodwill is made with the help of:
Amortization
Impairment
Depreciation
340. Which one of the following is the example of non-profit oriented organization:
NGO’s
Trusts
Societies
341. Annual General Meeting (AGM) is required to be held within _________ of

incorporation.
06 months
12 months
15 months
18 months
342. The amount by which the carrying amount of an asset exceeds its recoverable
amount is called as:
Impairment loss
Residual value
Depreciation
Fair value
343. Which of the following are the examples of development activities?

Page No. 71/80
Design, construction and operation of pilot plant

344. Investments made for long term in associated companies, is recorded using
_______method of recognition and shown separately in the balance sheet as long-
term assets. vu Z s
Equity
Cost
345. Costs of purchase of Inventories comprising which of the following:

Purchase price
346. Under Benchmark Treatment IAS-2, does not recommend the following method
of stock valuation for incorporating its value in financial statement.
FIFO method
LIFO method

activity which is subject to joint control is called ________.
Joint Venture
348. An intangible asset with indefinite useful life shall:

Not to be amortized
Either be amortized using straight line method OR be amortized using reducing balance
method
349. A complete set of financial statement includes which of the followings:

350. There is no concept of capital in:

Sole proprietorship
Page No. 72/80
NGO’s / NPO’s
Partnership
351. The surplus arising from revaluation of fixed assets of an entity is shown:
Separately in the balance sheet.
352. A Company uses FIFO method to evaluate its stock. The information for the stock
is
as follows:
• Opening stock was 10 units at 2 each.
• Purchases were 30 units at Rs. 3 each, and
• Then issues of 12 units were made, followed by issues of 8 units.
Closing stock is valued at:
Rs. 50
Rs. 58
Rs. 60
Rs. 70

Profit is earned only if the value of an organization’s net assets or its
operating capability has increased during the accounting period.
354. The cost of inventories of a service provider does not consist of:
Attributable overheads.
Labour and other costs relating to sales
355. Statuary Meeting is required to be held within:

3 to 6 months
1 to 3 months
6 to 9 months
9 to 12 months
356. Goodwill is most appropriately classified as:

A fixed asset
An intangible asset
A semi-fixed asset
Page No. 73/80
357. If a Company purchased an Asset for Rs.20, 000. The estimated useful life of
asset is ten years. After five years the Book Value of the Asset will be: (using
straight line method of depreciation and no residual value)
16,000
10,000
8,000
5,000
20000 – {(20000/10)*5} = 10000
358. A complete set of financial statements include:

A balance sheet
A statement of changes in financial position & Notes, other statements and
explanatory material.
An income statement
All of the given options.
359. The main aim of accounting is to:

360. In case of a single member company _______ person(s) is (are) required to be

nominated to takeover the company in case of a death of the member.
One
Two
Three
Four
361. Company should be termed as a __________ of another company if other

company holds more than 50% of its shares or has the power to appoint more than
50% of its directors.
Associated
Subsidiary
Joint Venture
362. Directors or shareholders having ______ voting power can call for Extraordinary
10%
15%
Page No. 74/80
20%
25%
363. Quality control during commercial production cost Rs. 10,000/- will be charged
to:
Research expenses
Development cost
364. Which one of the following is an example of Conversion Cost?
Labour and factory overheads

Labour and work in process
365. Which of the followings are among the non-current assets?

Operating assets
366. Which one of the following is the concept of the capital maintenance?

367. Movement of capital issued and reserves are presented through which of the
following statement?
Cash flow statement

Income statement
Balance sheet
Page No. 75/80
368. A maximum limit of the amount of the capital that a company can issue is
mentioned in the Memorandum of Association and Article of Association of the
company is called:
Authorized capital
Issued capital
Subscribed capital
Paid up capital
369. Cost of inventories will consist of which of the following costs?
Purchase cost
Costs of conversion
Installation costs
370. A person who acquires shares in a Company is known as a:

Director
Shareholder
Partner
Manager
371. The amount of the issued share capital of a company is:

Always equal to the amount of its authorized share capital
Equal to the amount of its issued preference share capital
 Equal to the reserves of the company
372. Contingent liabilities are written in Balance Sheet as:

Long Term Deposits
 Long Term Loans
 Foot Notes
373. Which of the following is NOT an example of current liability?

 Bank overdraft
 Loan given to Mr. A for shorter period
 Accounts Payable
 Loan received form Mr. B for shorter period
Page No. 76/80
374. Which one of the following is the present obligation of the entity as a result of
past even from which future economic benefits are expected to flow to the entity?
 Asset
 Gain
 Liability
 Expense
375. Which of the following is an increase in the future economic benefits related to an
increase in an asset or a decrease of a liability that can be measured reliably?
 Equity
 Income
 Liability
 Expense
376. Which of the following is TRUE with respect to the Prudence concept?
 Financial Information presented in the financial statements relating to the assets and
incomes should not be overstated and relating to liabilities and expenses should not be
understated.
liabilities, expenses and incomes should not be overstated.
liabilities, expenses and incomes should not be understated.
and incomes should not be understated and relating to liabilities and expenses
should not be overstated.
377. The accruals concept:

 Applies to revenue and expenses only
 Applies to assets and liabilities only
 Applies to revenue, expenses, assets and liabilities
 Is not a fundamental accounting concept
378. Which of the following is TRUE with respect to the disclosure requirements
of Trade Debts?
 Provision for doubtful debts is deducted from the doubtful debts
 Doubtful debts is deducted from the Provision for doubtful debts
 Doubtful debts and its Provision is shown separately as asset
 Provision for doubtful debts is not taken into consideration
379. Trade debts secured are to be shown in the balance sheet under the head of:
 Non Current Assets
Page No. 77/80
 Current Assets
 Capital
380. Which of the following is NOT the type of Market Risk?

 Price Risk
 Liquidity Risk
 Interest Rate Risk
 Currency Risk
381. Which one of the following is NOT an example of Financial Instruments?

 Inventories
 Loans payable
 Share capital
 Debentures
382. Which of the following IAS mainly covers Financial Instruments of other long
term investments?
 IAS 27 & 32
 IAS 28 & 39
 IAS 32 & 39
 IAS 31 & 32

 Consolidated and Separate Financial Statements
 Interest in Joint Venture
 Financial Instruments Disclosure and Presentation
 Financial Instruments Recognition and Measurement
384. A fixed asset cost Rs. 8,000; it is sold for Rs. 4,800. At the date of its disposal,
its net book value is Rs. 3,000. What is the profit or loss on disposal?
 Loss Rs. 3,200
 Loss Rs. 1,800
Page No. 78/80
385. A firm depreciated its fixed assets purchased on January 01, 1993 at the rate of
25% per annum using the reducing balance method. If the total depreciation
charged on these assets up to 31st December, 1995 was Rs. 23,125, their net book
value at that date was:
 Rs. 16,875
 Rs. 17,500
 Rs. 7,708
 Rs. 10,000
(23125/0.75) – 23125 = 7708
 Stock
 General Stores
 Spare parts
 Fixture
387. Which one of the following methods for inventory valuation is most conservative
method during periods of rising prices?
 FIFO Method
 LIFO Method
388. According to the Allowed Alternative Treatment, Which of the following

method is used for stock valuation?
 FIFO Method
 LIFO Method
389. Which of the following information must be disclosed in case of loan and
advances to subsidiary companies?
 The name of each borrower
 Amount of loans and advances
 The terms of loan and the particulars of collateral security held
Page No. 79/80
390. Which of the following is(are) related with the IAS 23?
 Qualifying Assets
 Amount to be capitalized
 Capitalization period
 Directors
 Shareholders
 Managers
 Professional Qualified Valuers
392. Which one of the following subsequent expenditure can be capitalized?
 Modification of an item of Plant to extend its useful life or capacity

 Expenditure on repairs and maintenance of Property Plant and Equipment that is made to
restore or maintain the economic benefit from it
 New tires placed on a motor car
393. Which of the following asset is recorded in Balance Sheet under the heading of
Current Assets?
 Furniture
 Deferred Cost
 Land
 Prepayments
394. If the holding company owns100% shares of the subsidiary company then the
subsidiary type will be termed as:
 Partially Owned Subsidiary
 Wholly Owned Subsidiary
 Direct Subsidiary
 Indirect Subsidiary
Page No. 80/80
395. Which of the following IAS deals with the term Significant Influence in
associate companies?
 IAS 07
 IAS 27
 IAS 28
 IAS 01
396. Which of the following sections of the Companies Ordinance 1984 is related to
the Annual General Meeting?
 Section 160
 Section 158
 Section 159
 Section 157
397. Which of the following types of business can maintain the secrecy in all business
matters?
 Partnership
398. Which of the following types of business has the burden of unlimited liability?

 Single Member Company
399. Which of the following refers to the relation between persons who have agreed
to share the profits of a business carried on by all or any of them acting for all?
 Sole - proprietorship
 Partnership
 Company
 Trust
*~END~*

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Midterm Examination MGT401 – Financial Accounting II

Q. 02: Which of the following is/are not example of current liability?

 A building owned by the firm

 The Business is profitable

Q. 08: Which one of the following is not a physical asset?

 Term Finance Certificates

 Amount due in respect of goods sold

What amount will be disclosed.

Q. 14: Which of the following authority regulates/governs the functioning of

 Securities & Exchange Commission of Pakistan

Q. 15: Which of the following is true about the meeting of Directors?

 Costs of site preparation

Q. 19: Which of the following expenditure can not be capitalized?

 Initial Composition Cost

Q. 20: ABC (Pvt) Limited is engaged in production of an asset. The production

 July 31, 2007

Q. 21: Which of the following is an identifiable non-monetary asset without physical

Q. 22: Which of the following is the application of research findings or other

Q. 23: Which of the following is an example of Intangible Asset?

 Any distribution of profits by the investee company is recorded as an income

Q. 25: Which of the following IAS is related to Financial Instruments Disclosure

Q. 26: Which of the following is related to IAS 31?

 Consolidated and Separate Financial Statements

Cost of Investment Rs. 17,401,095

 The Accounting Policy adopted

Factors that determine bad debts are:

 The debtor has been shifted to foreign forever

Heads of Current Liabilities:

Mainly the current liabilities are classified into following categories:

Question # 2: Which of the following is/are not example of current liability?

Question # 4: Which of the following is related to the qualitative characteristics that

Question # 5: Which of the following statement is true regarding Going Concern

Question # 6: Under which of the following assumptions, the Financial Statements

Question # 8: Which one of the following is not the example of Financial

Question # 9: The firm uses diminishing balance method for calculating

Question # 13: Which of the following authority regulates/governs the functioning of

Question # 18: ABC (Pvt) Limited is engaged in production of an asset. The

Question # 19: Which of the following is an identifiable non-monetary asset without

Question # 20: Which of the following is an example of Intangible Asset?

Question # 22: Which of the following IAS is related to Financial Instruments

Question # 29: Which of the following business is formed by the approval of

Question # 32: On which certificate, the birth date of a company is mentioned?

Question # 33: Who sign the Articles of Association (AOA) of a company?

Question # 35: Which one of the following is a method of stock valuation?

Question # 36: In case of calling Extraordinary General Meeting (EOGM), at least

Question # 37: LIFO means?

Question # 42: Which of the following is original and planned investigation

Question # 43: Which of the following is NOT an accounting concept?

Question # 44: Which of the following is/are example(s) of research activities?

Question # 49: Which of the following is an example of current liability?

Question # 50: Which of the following is a component of current liabilities?

Question # 54: Which of the following IAS covers the Debentures?

Question # 60: Which of the following is/are related to the IAS-37?

Question #64: Which of the following is widely used by investors as a measure of

Question # 67: Which of the following is NOT considered as expense by their

Question # 75: The goods are written off when:

Question # 79: Written down value of an asset = --------------

Question # 81: All of the following are Fixed assets EXCEPT: