Deck 33: Revenue Recognition and Expenditure Classification

Question 1

Revenue is generally recognised as being earned at that point of time when

A)sale is effected .
B)cash is received .
C)production is completed .
D)debts are collected

Answer 1

sale is effected .

Question 2

Which of the following is a revenue expenses

A)Raw material consumed .
B)Plant purchased .
C)Long term loan raised from bank.
D)Share Capital

Answer 2

Raw material consumed .

Question 3

Which of the following is a capital expenditure

A)Repair of plant and machinery .
B)Salary paid to workers .
C)Cost of stand by equipment.
D)Annual whitewash of the office building

Answer 3

Cost of stand by equipment.

Question 4

Which of these types of expenditure would not be treated as a Capital Expenditure

A)Acquisition of an Asset .
B)Extension of an Asset .
C)Improvement of the existing Asset .
D)Maintenance of the Asset

Question 5

Expenses of the following nature are treated as a Revenue expenses except -

A)Expenses for day to day running of the business .
B)Putting the new asset in working condition .
C)Depreciation .
D)Purchase of raw material

Question 6

Cash received from debtors would be deemed as ………… of funds.

A)No flow .
B)Sources .
C)Uses .
D)Gain

Question 7

Purchase day book records

A)All cash purchases .
B)All credit purchases .
C)Only credit purchase of raw material or goods purchased for resale .
D)All purchases

Question 8

Journal is also known by -

A)Memorandum A/c .
B)Kaccha books .
C)Books of original entry .
D)Proper books

Question 9

Generally the term fund is used to mean the difference between

A)Current assets and current liabilities .
B)Profit and loss A/C and Balance sheet .
C)Current assets and non-current liabilities .
D)Current liabilities and non-current liabilities

Question 10

The periodic total of purchase day book is posted to -

A)Creditors A/c .
B)Debtors A/c .
C)Purchase A/c .
D)None

Question 11

Which of these documents is not required for Bank Reconciliation

A)Bank column of Cash Book .
B)Bank Pass Book .
C)Bank Statement .
D)Trial Balance

Question 12

Which of these will not affect Bank and Cash balance

A)Cash received from X credited to Y.
B)Cheques issued to A but debited to B.
C)Cheques deposited and cleared on the same date .
D)All the three

Question 13

Which of these items are taken into consideration for preparation of adjusted Cash Book

A)Mistake in Cash Book .
B)Mistake in Pass Book .
C)Cheque issued but not presented for payment .
D)Cheques deposited but not cleared

Question 14

Credit balance as per Cash Book mean-

A)Surplus cash .
B)Bank overdraft .
C)Terms deposits with bank .
D)None of these

Question 15

Debit side of Bank Pass book corresponds to -

A)Credit side of Cash Book .
B)Debit side of Cash Book .
C)Debit side of Trial Balance
D)Credit side of Balance Sheet

Question 16

Difference in Bank Balance as per Pass Book and Cash Book may arise on account of

A)Cheque issued but not presented
B)Cheque issued but dishonoured
C)Cheque deposited and credited by bank
D)All of (a) and (b) above

Question 17

Which of the following statements is/are true?

A)When there are cheques deposited but not collected by the banker, overdraft balance as per Pass Book will be less than that as per Cash Book
B)When the payment side of the Cash Book is undercast, overdraft balance as per Cash Book will be more than overdraft balance as per Pass Book
C)When reconciliation is to be done with the extracts of the Cash Book and Pass Book relating to the same period, the transactions which do not figure in one of the extracts are to be noted
D)Bank interest debited in the Pass Book is to be added to Overdraft Balance as per Pass Book to arrive at the Overdraft balance as per Cash Book

Question 18

The Bank Reconciliation Statement is prepared

A)To rectify the mistakes in the Cash Book
B)To arrive at the Bank Balance
C)To arrive at the Cash Balance
D)To bring out the reasons for the difference between the Balance as per Cash Book and the

Question 19

Which of the following statements is false?

A)When the bank column of a Cash Book shows a credit balance, it means an amount is due to the bank
B)When Pass Book shows a debit balance, it means overdraft as per Pass Book
C)While preparing Bank Reconciliation Statement, cheques paid into bank but not yet cleared are deducted from the Debit balance as per Cash Book to arrive at the balance as per Pass Book
D)A Bank Reconciliation Statement is a part of Pass Book

Question 20

Which of the following statements is true?

A)Bank charges increase debit balance shown as per Bank Column of the Cash Book.
B)Bank charges increase debit balance as per Bank pass book.
C)A cash sale of a non-trading asset is recorded in the journal proper.
D)Cash discount allowed by the business will appear on the debit side of the debtor's account.

Question 21

Bank reconciliation is a statement prepared to reconcile-

A)Trial balance .
B)Cash book .
C)Bank A/c.
D)Cash as per cash book with bank balance as per bank pass book

Question 22

Bank reconciliation statement is a part of -

A)Cash book .
B)Trial balance .
C)Auditors report .
D)None of these

Question 23

Benefits of preparing Bank Reconciliation Statement includes -

A)It bring out any errors committed in preparation of Cash book / Bank Pass Book
B)Highlights under delay in clearance of cheques deposited but not credited
C)Help know actual bank balance .
D)All the three

Question 24

Debit balance as per bank pass book mean -

A)Surplus cash .
B)Bank Overdraft .
C)Terms deposits with bank .
D)None of these

Question 25

Which of the following is not a cause of difference in balance as per cash book and balance as per bank pass book-

A)Errors in cash book .
B)Errors in pass book .
C)Cheques deposited and cleared.
D)Cheques issued but not presented for payment