ACC501 Final Term Current Solved Papers

ACC501 Current 11 Solved Finalterm Papers and · Important MCQS · Solved… · EXAMINATION

Q1. The accounting definition of income is:

1. Income = Current Assets

-Current Liabilities

1. Income = Fixed Assets -

Current Assets

1. Income = Revenues - Current Liabilities
2. Income = Revenues - Expenses pg 17

Correct answer: Income = Revenues - Expenses pg 17

Q2. What would be the capital spending for an organization who has purchased fixed assets of Rs. 200,000 and sold fixed assets of Rs. 45,000?

1. Rs. 245,000
2. Rs. 200,000
3. Rs.1 55 , 0 0 0
4. Rs. 45,000

Correct answer: Rs.1 55 , 0 0 0

20000045000=155000

Q3. Selected information from SNT Company's accounting records is as follows:

o Cash paid to retired common shares Rs. 15,000 o Proceeds from issuance of preferred shares Rs. 20,000 o Cash dividends paid Rs. 8,000 o Proceeds from sale of equipment Rs. 25,000 On its cash flow statement for the year, SNT Company should report net cash flow from financing activities as:

1. Rs. 3,000 net cash inflow
2. Rs. 3,000 net cash outflow
3. Rs. 8,000 net cash inflow
4. Rs. 8,000 net cash inflow

Correct answer: Rs. 8,000 net cash inflow

Q4. SNT Company has a current ratio of 3:2. Current Liabilities reported by the company are Rs. 30,000 . What would be the Net Working Capital for the company?

1. Rs. 45,000
2. Rs. 15,000
3. ( R s . 4 5 ,0 0 0 )
4. ( Rs. 15,000)

Correct answer: Rs. 15,000

Q5. Which of the following would not improve the current ratio?

1. Borrow short-term to finance additional fixed assets
2. Issue long-term debt to buy inventory
3. Sell common stock to reduce current liabilities
4. Sell fixed assets to reduce accounts payable

Correct answer: Issue long-term debt to buy inventory

Q6. Which of the following are incorporated into the calculation of the Du -Pont Identity?

I. Return on assets II. Equity Multiplier III. Total Assets Turnover IV. Profit Margin

1. I, II, and III only
2. I, III, and IV only
3. II, III and IV only pg 45
4. I, II, III, a n d IV

Correct answer: II, III and IV only pg 45

Q7. The concepts of present value and future value are:

1. Directly related to each other
2. Not related to each other
3. Proportionately related to each other
4. Inversely related to each other

Correct answer: Inversely related to each other

Q8. Which of the following is a special case of annuity, where the stream of cash flows continues forever?

1. Special Annuity
2. Ordinary Annuity
3. Annuity Due