SAS QUESTIONS

1. On 15.08.2011, X draws a bill on Y for 3 months for Rs.20, 000. 18th Nov. was a sudden holiday,
maturity date of the bill will be:
Ans: 19th Nov.
2. On 16.06.2011, X draws a bill on Y for Rs.25, 000 for 30 days. 19th July is a public holiday,
maturity date of the bill will be:
Ans: 18th July
3. On 01.01.2011, X draws a bill on Y for Rs.10, 000. At maturity Y request X to renew the bill for 2
month at 12% p.a. interest. Amount of interest will be:
Ans: Rs.200
4. On 01.01.2011, X draws a bill on Y for Rs.50, 000. At maturity, the bill returned dishonored as Y
become insolvent and 40 paisa per rupee is recovered from his estate. The amount recovered is:
Ans: Rs.20, 000
5. Which of the following instrument is not a negotiable instrument:
a. Bearer cheque
b. Promissory note
c. Bill of exchange
d. Account payee crossed cheque (ANS)

6. When the bill are to be produced to notary public:

Ans: At the time of dishonor of the bill
7. Which of the following statement is true:
a. Noting charge is an expense to be borne by drawer
b. Noting charge is an expense to be borne by drawee(ANS)
c. Noting charge is an expense to borne by payee
d. Noting charge is an expense to be borne by bank
8. Ram gets Ghosh’s acceptance for Rs.12, 000 discounted at 2 months at 12%.p.a. The amount of
discount will be:
Ans: Rs.240
9. Which of the following statement is true in case of a Foreign Company?
a) A company incorporated in India and has a place of business outside India.
b) A company incorporated outside India and has a place of business in India (ANS).
c) A company incorporated in India and has a place of business in India.
d) A company incorporated outside India and also has a place of business outside India

10. Public companies should have a minimum paid up capital of:

Ans: Rs. 5 lakhs
11. Which of the following statements is not a feature of a private company
a. Restricts the rights of members to transfer its shares.

b. Do not involve participation of public in general

 c. Prohibits any invitation to the public to subscribe its shares or debentures
d. Do not restrict on the number of its members to any limit (ANS).
12. Unexpired portion of capital expenditure is shown in -------(Balance Sheet)
13. The excess amount received over the par value of shares should be credited ------
ANS: Securities premium account
14. When shares are issued to promoters for the services offered by them, the account that will be
debited with the nominal value of shares is ----- (ANS: Goodwill account )
15. The directors of E Ltd made the final call of Rs. 30 per share on May 15,2011 indicating the last
date of payment of call money to be 31 May 2011. Mr. F holding 5000 shares paid the call
money on July 15,2011. If the company adopts Table A, the amount of interest on calls-in
arrears to be paid by Mr. F is Rs.----- (ANS:937.50)
16. Which type of the following shares have the right to receive dividends unpaid in prior years,
when earning become adequeate? (ANS:cumulative preference shares)
17. Which of the following statement is falso?
(a) Interest on calls-in-advance is paid from the date of receipt of advance to the date of
relevant call.
(b) Calls-in-advance are not entitled for any dividend.
(c) According to Table A, interest on calls in advance is paid @ 6% p.a.
(d) Payment of interest on call in advance is at the discretion of the company. (ANS)
18. T Ltd. Proposed to issue 6000 equity shares of Rs.100 each at a premium of 40%. The minimum
Amount of application money to be collected per share as per the Companies Act 1956 is ---
(ANS:Rs 5)
19. E. Ltd had allotted 10000 shares to the applicants of 14000 shares on pro rata basis. The amount
payable on application is Rs.2. Mr. F applied for 420 shares. The number of shares allotted and
the amount carried forward for adjustment against allotment money due from F (ANS: 300
shares and Rs. 240)
20. A company forfeited 2000 shares of Rs.10 each held by Mr. J for non-payment of allotment
money of Rs.4 per share. The called up value per share was Rs. 9 per share. On forfeiture, the
amount debited to share capital is -------- (ANS: Rs.18000 )
21. The maximum capital beyond which a company is not allowed to raise funds by issue of shares is
its ----(ANS: Authorised capital)
22. Capital reserves are credited out of -----(ANS: capital profits)

23. As per Revised Schedule VI of the Companies Act, 1956, under which of the following heads is
‘Premium on issue of preference shares’ shownin the Balance Sheet of a Company?
(a) Non-current assets (b) Debentures (c) Reserves and Surplus (ANS) (d) Current liabilities
and provision.
24. According to section 78 of the Companies Act, the amount in the Securities Premium account
cannot be used for the purpose of
(a) Issue of fully paid bonus shares
(b) Writing off losses of the Company (ANS)
 (c) Writing off preliminary expenses
(d) Writing off commission or discount on issue of shares
25. When balance as per Cash Book is the starting point, Dividend collected by bank is
(a) Added in the bank reconciliation statement
(b) Subtracted in the bank reconciliation statement
(c) Not required to be adjusted in the bank reconciliation statement
(d) None of the above
26. As per Trial Balance
Provision for doubtful debt as on 1.1.2009 Rs.990
Bad Debt written off in 2009 Rs. 1850
Debtors as on 31/12/2009 Rs. 30000
Other information:
Make a provision for bad debt @ 5% on debtors
Make provision for discount on debtors @ 2%
In this case amount of provision for doubtful debt is ---- and provision for discount on debts is ---
- and bad debt to be debited in P&L account is ----- ( Rs. 1500, Rs.570, Rs. 2360)
27. On 1st Jan.2009 Loose Tools A/c showed the balance of Rs.4320. On 31st Dec.2009 closing
balance of Loose Tools were RS. 4680. During the loose tools purchased for Rs.1440.
Depreciation of Loose Tools is Rs.-----(Rs.1080)
28. An item of purchase of RS. `151 was entered in the Purchase day book as Rs. 15 and posted to
suppliers account as 51. The rectifying entry is
Ans: Purchases A/c Dr. 136
To Suppliers A/c 100
To Suspense A/c 36
29. Goods purchased Rs. 3,00,000: Sales Rs.2,70,000: If margin is 20% on sales, closing stock is ------
(Rs.84000)
30. B Ltd. forfeited 500 shares of Rs. 10 each fully called up for nonpayment of first call of RS. 2 per
share. All these shares were reissued as fully paid up for Rs. 8 per share. Amount transferred to
capital reserve will be (Rs.3000)
31. A trader sells goods at a profit of 25% on sales. In a particular month he sold goods costing Rs.
34200. Rate of profit on cost will be (33.33%)
32. Present liability of uncertain amount, which can be measured reliably by using a substantial
degree of estimation, is termed as ---- (Provision)
33. A customer returning the goods purchased on credit may inform the seller by sending (Debit
note)
34. The term PBIT stands for ( Profit Before Tax and Interest)
35. Revenue is said to have earned when:
(a) Sales made (b) Cash received (c) goods are manufactured (d) when orders are received
36. Endowment fund received by a club is (Capital Receipt)
37. AS 10 deal with ( Fixed Assets)
38. As 30 deals with (Financial Investment Reinvestment measurement)
39. Which of these is an appropriation of profit
 (a)Provision for payment of bonus (b)Provision for depreciation (c)Provision for dividend

40. A change in Depreciation method under AS^ is treated as (change in accounting in policy)

41. AS 10 is not applicable to

(a) Natural resources (b) Livestock (c) Forest plantation (d) all of the above

42. IASB stands for (International Accounting Standard Board)

43. The Accounting standards are issued for the purpose of

(a) improving the reliability of financial statement

(b) Harmonising accounting policies

( c ) Elimination of non-comparability between financial statement

(e) All the three

44. Which of the following is a current liability

(a)Prepaid expenses (b)Trade mark (c) Discount on issue of shares (d) Outstanding expenses

45. Bad debt recovered is transferred to ( profit and loss account or bad debt recovered account)

DEPRECIATION

1). Depreciation is essentially an equitable allocation of the ------ over different periods during which the
asset is used by the firm. (Cost of a fixed asset)

2) Depreciation is calculated not only on the invoice price of the asset but also on the ------, if any.
(freight and installation charges less cash discounts)

3) The total amount of depreciation to be written off over the life of an asset is equal to the cost of the
asset less its ----- (Scrap)

4). Obsolescence and inadequacy are called the ------ factors causing, depreciation.(Economic)

5) Over or Under provision of depreciation is taken to ------- and as profit or ;loss at the time of
termination or sale of assets.(P&L)
6). The useful life of a depreciable asset for an enterprise may be ----- than its physical life. This is usually
because of such factors as obsolescence and inadequacy. (Shorter)

7). In the case of wasting assets the amount of charge determined on the basis of exhaustion of the
asset is known as ----- (Depletion)

8). When a reserve is invested in outside securities , it is known as ----- (Reserve fund )

9). Generally reserves can be utilized for declaring ------ subject to the restrictions imposed by the
Companies Act. (Dividend)

10). A secret reserve is one which is not disclosed by ----- (B.S.)

11). The normal accounting view is to ignore any appreciation in the value of assets as otherwise it
would lead to the contravening of accounting concept of ----- (Cost)

12).Depreciation is the process of ------ (Allocation of cost)

13). The excess of depreciation provided over actual depreciation of the asset is to be treated as -------
(Profit)

14). Profit prior to incorporation is an example of ------ (Capital reserve)

15). The appropriate method of depreciation to be adopted in the case of livestock is----- (appraisal
method)

16). Accelerated methods of depreciation are used because ------- ( The assets are more productive in
earlier

17). If the total charge of depreciation and maintenance are considered , the method which provides a
uniform charge is ----- (Diminishing balance method)

18). Reserve is the amount set apart from ---( Profit)

19). ------ is a charge on the revenue and is made to cover losses in the value of assets or for expenses
20. A trader takes a lease for 5 years for Rs,.5000. He decides to write off lease by annuity method
presuming the rate of interest at 5% p.a. The annuity table shows that annual amount necessary to write
off Re.1 in 5 years at 5% p.a. Re.0.230975. The annual depreciation and the book value in the beginning
of the 2nd year will be (1154.88, 4095.12)