Deck 50: Accounting Arrangements and Operations for Branches

Question 1

Up to the trial balance, the accounting arrangements for a foreign branch are exactly the same as for any

A)Dependent branch
B)Independent branch
C)Both a and b
D)None of the above

Answer 1

Independent branch

Question 2

Under debtors system depreciation on fixed asset is________ _______

A)credited to branch A/c
B)debited to branch A/c
C)not shown in branch A/c
D)shown in debtors A/c

Answer 2

not shown in branch A/c

Question 3

Dependent branch makes :

A)Cash sales only
B)Credit sales only
C)Cash & Credit sales
D)Instalment sales

Answer 3

Cash & Credit sales

Question 4

Branch which donot maintain its own set of books is__________.

A)Dependent branch
B)Independent branch
C)Foreign branch
D)Local branch

Question 5

An independent branch

A)Receives the goods from the head office
B)Purchases the goods from outside parties
C)Receives goods from both head office and outside parties
D)None of the above

Question 6

The Head office account in the books of branch is debited with

A)Cash sent to the head office and goods returned to the head office
B)Cash and goods received from the head office
C)Head office expenses allocated to branch by the head office
D)None of the above

Question 7

The adjustment entry for goods in transit is passed in the books of

A)Either the branch or the head office
B)Branch as well as Head office
C)Only Branch account.
D)Only Branch account

Question 8

For depreciation on fixed assets, whose accounts are maintained by the head office, the head office

A)Debit Fixed assets account and credit Branch account
B)Debit Branch account and credit Fixed assets account
C)Debit Branch account only
D)Credit fixed assets.

Question 9

In case of inter-branch transactions, each branch

A)Opens separate accounts for other branches
B)Passes no entry
C)May treat such transactions as the transactions with the Head office
D)All the above

Question 10

The Head Office Account maintained by the branch is of the nature of

A)Real Account
B)Personal Account
C)Nominal Account
D)None of the above

Question 11

Branches are divided into

A)Dependent
B)Independent
C)Foreign
D)All the above

Question 12

Debtors system of keeping branch accounts are generally

A)Branch fairly small in size
B)Branch big in size
C)Branch with multiple transactions
D)All the above

Question 13

Branches may be classified into ________.

A)Inland branches and foreign branches
B)Account branches and proper branch
C)Main branch and subordinate branch
D)None of these

Question 14

Capital investments for the branches are made by

A)State office
B)Central office
C)Head office
D)None of these.

Question 15

Branches not keeping full system of accounting is called________.

A)Independent branches
B)Partial branches
C)Dependent branches
D)None of these

Question 16

It is a system of finding out the profit made by a head office at a branch by preparing an account called_______.

A)Profit &loss a/c
B)Trading a/c
C)Branch a/c
D)None of these.

Question 17

__________Account is prepared with a view to ascertain the gross profit of branch.

A)Branch account
B)Branch adjustment a/c
C)Branch expense a/c
D)None of these.

Question 18

Transaction between branches are called__________.

A)Inter? branch transactions
B)Branch transaction
C)Internal transaction
D)None of these.

Question 19

_________ represents goods sent by head office to the branch or by the branch to the head office but not received by other

A)Goods in transit
B)Cash in transit
C)Barter transit
D)None of these.

Question 20

HO sends goods to branch at 20% profit on invoice price, therefore the percentage of profit on cost comes to -

A)15%
B)25%
C)33.33%
D)20%

Question 21

Under stock and debtors system, which of the following accounts is prepared with a view to ascertain Gross Profit of the Branch?

A)Branch Adjustment Account
B)Branch Profit and Loss Account
C)Branch Expenses Account
D)Goods Sent to Branch Account

Question 22

Under Debtors' system, credit sales are

A)Debited to Branch Account
B)Credited to Branch Account
C)Debited to Branch Debtors Account
D)None of the Above

Question 23

Branches may be classified into

A)Account branches and proper branch
B)Main branch and subordinate branch
C)Inland branches and foreign branches
D)None of the Above

Question 24

Transaction between branches are called

A)Branch transaction
B)Inter branch transaction
C)Internal transaction
D)None of these

Question 25

The main reasons of keeping branch accounts

A)to find out the profit or loss of each branch for the accounting period
B)to ascertain the financial position of each branch at the end of the accounting year
C)to evaluate the progress and performance of each branch
D)All of these

Question 26

Profit generated from the branch is transferred to

A)Branch profit and loss account
B)General profit and loss account
C)Branch expenses account
D)None of these

Question 27

The price of goods sent by head office to branch at a price higher than cost price is called

A)Actual price
B)Unloaded price
C)Invoice price
D)None of these

Question 28

Branches not keeping full system of accounting is called

A)Independent branches
B)Partial branches
C)Dependent branches
D)None of these

Question 29

Which of the following is source of cash?

A)Cash deposited into Bank
B)Cash withdrawn from Bank
C)Sale of Goods costing ?10,000 for ?8,000
D)Sale of marketable securities for cash.

Question 30

Which of the following is not source of cash?

A)Issue of shares
B)Purchase of Machinery
C)Sale of Asset
D)Dividend received

Question 31

Which of the following is not application of cash?

A)Increase in Debtors
B)Increase in Inventory
C)Increase in Bills Payable
D)Increase in Prepaid Expenses

Question 32

While calculating cash flow from operating activities which will be deducted:

A)Decrease in Prepaid Expenses
B)Increase in Trade Payables
C)Increase in Trade Receivables
D)Decrease in Trade Receivables

Question 33

An example of cash flow from investing activity is :

A)Issue of debenture
B)Repayment of long-term loan
C)Purchase of raw materials for cash
D)Sale of investment by non-financial enterprise.

Question 34

An Example of cash flow from financing activity is :

A)Payment of dividend
B)Receipt of dividend on investment
C)Cash received from customer
D)Purchase of fixed asset

Question 35

Which of the following is not an activity listed in the statement of cash flows?

A)Financing activities
B)Operating activities
C)Funding activities
D)Investing activities

Question 36

Which of the following is not a cash outflow?

A)Increase in creditors
B)Increase in debtors
C)Increase in stock
D)Increase in bills receivable

Question 37

Cash flow statement is prepared from

A)Balance sheet
B)Profit and loss A/C
C)Additional information
D)All of these

Question 38

Depreciation on fixed assets implies

A)an application of funds
B)a sources of fund
C)no flow of funds
D)none of these

Question 39

Fund flow refers to changes in

A)application
B)sources
C)both a. and b.
D)working capital

Question 40

Which one of the following concepts is used as fund in the preparation of funds flow statement?

A)Current Assets
B)Working Capital
C)Cash
D)All financial resources

Question 41

If the provision for income tax for 2013 is Rs.30,000 and for 2014 is Rs.40,000. and income tax of Rs.25,000 is paid during the year 2014 in respect of year 2013, the amount of to be debited to the Profit and Loss Adjustment Account as "Provision for Income Tax" to find out "Funds from Operation" will be

A)Rs.35,000
B)Rs.45,000
C)Rs.15,000
D)Rs.25,000

Question 42

In the funds flow statement, item of preliminary expenses written off during the year is:

A)Added to net profit
B)Subtracted from net profit
C)An application of working capital
D)None of the above

Question 43

Which of the following items will affect the flow of funds?

A)A transaction affecting both non - current accounts
B)A transaction affecting both current accounts
C)A transaction affecting current and non- current accounts
D)None of the above

Question 44

Cash from operations is equal to

A)Net profit plus decrease in current assets
B)Net profit plus decrease in current liabilities
C)Net profit plus bonus paid in the form of fully paid bonus shares
D)None of the above

Question 45

Increase in the amount of prepaid expenses results in

A)Increase in cash
B)Decrease in cash
C)No change in cash
D)None of the above

Question 46

Cash flow statement is based upon

A)Accrual basis of accounting
B)Cash basis of accounting
C)Both a and b
D)None of the above

Question 47

Increase in the amount of creditors results in

A)Decrease in cash
B)Increase in cash
C)No change in cash
D)None of the above

Question 48

Funds Flow Statement is also known as

A)Statement of Funds Flow
B)Statement of Sources and Application of Funds
C)Statement of Sources and Uses of Funds
D)All of the above

Question 49

Which of the following transactions result in flow of funds?

A)Cash paid to creditors
B)Payment of bills payable
C)Issue of shares
D)Cash collected from debtors

Question 50

Which of the following transactions do not result in flow of funds?

A)Raising short term loans
B)Sale of fixed assets
C)Repayment of long term loans
D)Redemption of Debentures

Question 51

Redemption of preference share capital is shown in

A)Sources of funds
B)Application of funds
C)Funds from operation
D)All of the above

Question 52

ncrease in debtors causes ______________ in working capital.

A)Increase
B)Decrease
C)No change
D)None of the above

Question 53

Cash flow statement is based on _________ basis of accounting.

A)cash
B)accrual
C)direct
D)indirect

Question 54

Purchase of new machinery is shown in

A)Cash flow from Operating Activities
B)Cash flow from Financing Activities
C)Cash flow from Investing Activities
D)All of the above

Question 55

Depreciation is _________ from/to net profit in calculating funds from operation.

A)added
B)deducted
C)divided
D)all of the above

Question 56

Cash payment to suppliers for goods and services are classified as cash flow from ____________ activities.

A)operating
B)financing
C)investing
D)all of the above.

Question 57

Cash from operating activities consists of:

A)Operating Profit
B)Decrease/Increase in Current Assets
C)Decrease/Increase in Current Assets.
D)All of the Above

Question 58

Cash from Operating activities will decrease due to :

A)Increase in Current Assets
B)Decrease in Current Liabilities
C)Neither of the two
D)Both (a) and (b) above

Question 59

Buy back of equity shares should be recorded in the final cash flow statement under:

A)Investing activities
B)Financing activities
C)Operation activities
D)Any of the above

Question 60

Cash flow statement is based on past records, so it is______in nature.

A)historical
B)future item
C)past
D)none of these

Question 61

Funds Flow Statement is also known as_______.

A)Statement of Funds Flow
B)Statement of Sources and Application of Funds
C)Statement of Sources and Uses of Funds
D)All of the above

Question 62

A statement prepared in the form of report.

A)Fund flow
B)Cash flow
C)Ratio
D)Balance sheet

Question 63

Interest on fixed deposit received by enterprise is shown in the Cash Flow Statement under

A)Operating Activities
B)Investing Activities
C)Financing Activities
D)All of the Above

Question 64

Which item comes under financing activities in cash flow statement?

A)Redemption of Preference Share
B)Issue of Preference Share
C)Dividend Paid
D)All the above

Question 65

Payment to creditors would result in

A)Source of funds
B)Application of funds
C)Neither source or application of funds
D)Both source and application of funds

Question 66

Which of the following resulted in flow of funds?

A)Payment to Creditors
B)Redemption of Debentures
C)Cash received from Debtors
D)All of the above

Question 67

Collection from debtors would result in

A)Source of funds
B)Application of funds
C)Neither source or application of funds
D)None of these

Question 68

Which of the following are applications of funds?

A)Payment of dividend on share capital
B)Payment of tax
C)Increase in working capital
D)All of the above