Deck 2: Accounting and Insurance

Question 1

Interest on capital is calculated on which capital?

A)Opening Capital
B)Closing Capital
C)Closing Stock
D)Opening Stock

Answer 1

Opening Capital

Question 2

Which account is to be prepared to know Cash Purchase or Cash Sale?

A)Trading Account
B)Debtor's Account
C)Creditor's Account
D)Cash Account

Answer 2

Cash Account

Question 3

In popular single entry, following books are kept

A)Only cash book
B)Purchase and Sale Book
C)All Ledger A/c's in ledger
D)All subsidiary books

Answer 3

All subsidiary books

Question 4

Effect of dishonour of B/R is given

A)Only in the B/R account
B)In debtors A/c and B/R account
C)Only in the Debtors account
D)Only in the B/P account

Question 5

Creditors account is prepared to find out the -

A)Amount of Bills Payable
B)Amount of Bills Receivale
C)Amount of B/R dishonoured
D)Amount received against B/R

Question 6

Which account is to be prepared to find out sales on credit?

A)Profit and Loss Account
B)Income Expenditure Account
C)Debtors Account
D)Creditors Account

Question 7

Bad Debt Return is to be credited to which account?

A)Debtors Account
B)Creditors Account
C)Cash Account
D)None

Question 8

Generally, depreciation on fixed assets is calculated on which balance?

A)Opening
B)Closing
C)Only on additional
D)Amount realised on asset sold

Question 9

Why opening statement of affairs is prepared?

A)To find out Profit/Loss
B)To find out Cash
C)To find out assets
D)To find out opening balance of capital

Question 10

Total amount payable less its cash price is equal to -

A)Depreciation
B)Intrest
C)Market Price
D)Purchase Price

Question 11

Dipti has purchased one Machine on hire purchase agreement. The cash price of machine is Rs. 90000. The amount is to be paid on agreement Rs. 30000 and balance amount is paid by three equal annula instalments of Rs. 30000 each. Find out the intrest of third year.

A)Rs. 3000
B)Rs. 4000
C)Rs. 4500
D)Rs. 5000

Question 12

At the end of the year, the interest paid and depreciation charged are transferred to the____________   account

A)Asset
B)Profit and Loss
C)Purchaser
D)Seller

Question 13

Paid Rs. 7000 at the time of contract. Four annula instalments were paid respectively Rs. 7800 , Rs. 6200, Rs. 4700, Rs. 3300. Rate of intrest is 10% Find cash price.

A)Rs. 21000
B)Rs. 22000
C)Rs. 14800
D)Rs. 25000

Question 14

Interest is calculated on____________  under hire purchase agreement.

A)Cash Price
B)Hire purchase price
C)Balance of cash price outstanding at the beginning of instalment
D)None of these

Question 15

In case of Hire purchase, the depreciation is calculated on -

A)Hire purchase price
B)Contract Price
C)Cash price
D)None of the above

Question 16

According to hire purchase agreement Rs. 25000 is the down payment and Rs. 90000 is the total amount of three equal instalments inclusive of interest Rs. 15000. How much would be the cash price of the asset ?

A)Rs. 90000
B)Rs. 100000
C)Rs. 115000
D)Rs. 130000

Question 17

Fire insurance Provides cover for -

A)Tangible Assets
B)Intangible Assets
C)Fictitious Assets
D)Business Employees

Question 18

The Average Clause in a loss of profit policy prortects the -

A)Insured
B)Insurer
C)Workers
D)All of these

Question 19

Consequential loss policy indemnifies -

A)Capital Losses
B)Revenue Losses
C)Budgeted Losses
D)None of these

Question 20

Stock of goods destroyed by Fire Rs. 10000 Stock of goods salvaged Rs. 2000, Value of insurance policy Rs. 9000. There is an average clause in the policy, Then the Amount of claim is -

A)Rs. 9500
B)Rs. 5500
C)Rs. 7500
D)Rs. 2500

Question 21

If indemnity period is six months, Standard turnover Rs. 30000, Annual trunover Rs. 75000, Turnover during indemnity period Rs. 12000, then short sales will amount to -

A)Rs. 45000
B)Rs. 63000
C)Rs. 18000
D)Rs. 30000

Question 22

Opening stock Rs. 25000, Purchases Rs. 125000, Sales Rs. 150000, Goods salvaged Rrs. 10000 and Gross Profit is 50% on cost, then the cost of the goods burnt by fire is -

A)Rs. 40000
B)Rs. 50000
C)Rs. 10000
D)Rs. 60000

Question 23

Consequential loss policy for fire insurance gives insurance againest -

A)Stock Loss
B)Profit Loss
C)Assets Loss
D)Budgeted Loss

Question 24

Contract of Insurance is a contract between the trader and the insurance Company to -

A)Close down old firm
B)Start new business
C)Reconstruction of business
D)Compensate the loss suffered by the trader