MCQ on Financial Statements Interpretation: Check the below Corporate and Management Accounting MCQ on Financial Statements Interpretation with Answers Pdf free download. Corporate and Management Accounting MCQ on Financial Statements Interpretation Questions for Corporate and Management Accounting with Answers were prepared based on the latest exam pattern. We have provided Corporate and Management Accounting MCQ on Financial Statements Interpretation with Answers to help students understand the concept very well. Students should practice CS Executive MCQ on Financial Statements Interpretation Questions with Answers based on the latest syllabus.

MCQ on Financial Statements Interpretation

1. The annual installment to depreciation fund for replacement of a fixed asset is
(A) Charge against profit
(B) An appropriation of profits
(C) Charge against the reserve
(D) Charge against cash

2. In_____, approach the assets are stated in the balance sheet in the order in which they can be easily converted into cash and the liabilities in the order in which they have to be paid off.
(A) Alphabetical order
(B) Permanence order
(C) Liquidity order
(D) None of the above

3. In_____, approach assets which are to be used for long-term in the business and are not meant to be sold are presented first and assets that are most liquid such as cash in hand, are presented at the bottom.
(A) Alphabetical order
(B) Permanence order
(C) Liquidity order
(D) None of the above

4. As per Section 198 of the Companies Act, 2013 while calculating net profit for managerial remuneration, if gross profit is the starting point then which of the following is allowed to deduct
(A) Loss of capital natures
(B) Voluntarily compensation
(C) Directors seating fee
(D) Super-tax on the income

5. ______ are those fixed assets that have fixed content, like coal in a coal mine; the value of the asset goes down as the contents are taken out.
(A) Intangible Assets
(B) Fictitious Assets
(C) Wasting Assets
(D) Floating Assets

6. If Net Profit is the starting point for the purpose of calculation of managerial remuneration then which of the following you will add:
(A) Ex-gratia payment to an employee
(B) Capital Profit
(C) Debenture trustee Remuneration
(D) Revenue profit on the sale of plant

7. Depreciation is a process of
(A) Valuation
(B) Allocation
(C) Reduction
(D) Appreciation

8. As per Section 198 of the Companies Act, 2013 while calculating net profit for managerial remuneration, if gross profit is the starting point then which of the following is allowed to deduct
(A) Contributions made u/s 181
(B) Actual bad debts written-off
(C) Liability arising from a breach of contract
(D) All of the above

9. _____ which can be immediately be converted into cash, such as Government Securities.
(A) Intangible Assets
(B) Fictitious Assets
(C) Wasting Assets
(D) Floating Assets

10. The arrangement of assets and liabilities in accordance with a particular order is known as of balance sheet.
(A) Tallying
(B) Marking
(C) Ruling
(D) Marshalling

11. Amortization applies to
(A) Current Assets
(B) Wasting Assets
(C) Intangible Assets
(D) Non-Current Assets

12. If Net Profit is the starting point for the purpose of calculation of managerial remuneration then which of the following you will deduct:
(A) Income Tax
(B) Capital Profits
(C) Compensation for breach of contract
(D) General expenses

13. The balance sheet gives information regarding the
(A) Results of operations for a particular period
(B) Financial position during a particular period
(C) Profit earning capacity for a particular period
(D) Financial position as on a particular date

14. Computers taken on hire by a business for a period of twelve months should be classified as
(A) Current assets
(B) Intangible assets
(C) Deferred revenue expenditure
(D) Not an asset

15. Which of the following statements is /are not correct?
(A) Provision for bad debts appears as a liability on the balance sheet
(B) The provision for bad debts is owed to the company
(C) Bad debts could be less than the provision for bad debts
(D) Bad debts could exceed the provision for bad debts

16. Which of the following expenses is not included in the acquisition cost of a plant and equipment?
(A) Cost of site preparation
(B) Delivery and handling charges
(C) Installation costs
(D) Financing costs incurred subsequent to the period after plant and equipment is put to use

17. In the case of downward revaluation of an asset which is for the first time, the account to be debited is
(A) Fixed Asset A/c
(B) Revaluation Reserve A/c
(C) Profit & Loss A/c
(D) General Reserve A/c

18. Revenues affect net income
(A) In the period during which they are earned
(B) In the period when they are collected
(C) In the period when they are accounted for
(D) Any of the above three which occur first

19. The depreciation fund method is also known as
(A) Redemption fund method
(B) Amortization fund method
(C) Sinking fund method
(D) All of the above

20. What do you understand when one refers to as “net book value” of a non-current asset?
(A) The cost of the asset
(B) The cost of the asset less amount expensed as depreciation in the current period
(C) The cost less accumulated depreciation up to the date of reporting
(D) The current worth of the asset

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By Team Learning Mantras