Practice Accounts Questions and Answers

• A company issues 1,00,000 equity shares of ₹10 each at a premium of ₹5, payable as ₹5 on application, ₹5 on allotment (including premium), and ₹5...
• In the merger of X Ltd. and Y Ltd., it is decided that the amalgamation will be in the nature of a merger (as per AS-14). Which of the following conditions...
• Holding Ltd. owns 80% shares of Subsidiary Ltd. As on the date of consolidation, the subsidiary has reserves of ₹5 lakh, including ₹2 lakh earned befor...
• Under Ind AS 115, a construction company enters into a contract to build a dam over 4 years. Revenue is recognized over time based on cost incurred to date...
• A company purchases machinery for ₹10 lakh. Estimated dismantling cost after 5 years is ₹1 lakh. The dismantling obligation is present as per contract....
• In a processing unit, 1,000 units are introduced in Process A. 100 units are normal loss, and 50 units are abnormal loss. Cost incurred is ₹10,000. What ...
• A firm has a current ratio of 2.5 and quick ratio of 1.2. Its current liabilities are ₹4 lakh. What is the value of inventory?
• A manufacturing company prepares a flexible budget for its production costs. At 60% capacity, its total cost is ₹6,00,000, including ₹2,40,000 fixed co...
• A company purchased machinery worth ₹5 lakh during the year and repaid a long-term loan of ₹3 lakh. It generated ₹12 lakh from operations. What is th...
• An investor deposits ₹50,000 in an account offering 8% compound interest annually. What will be the maturity value after 3 years?
• A company has ₹10 lakh in equity and ₹10 lakh in 10% debt. EBIT is ₹4 lakh and tax rate is 30%. What is the financial leverage?
• A project requires ₹4 lakh initial investment and yields ₹1 lakh annually for 5 years. If the cost of capital is 10%, what is the Net Present Value (NP...
• A firm evaluates two projects with identical expected cash flows, but Project A has higher variability. If the firm is risk-averse, what would be its decis...
• Mr. Arjun earns ₹12 lakh as salary and has invested ₹1.5 lakh in PPF. He also pays ₹30,000 as health insurance premium for himself and ₹50,000 for ...
• As per the Companies Act, 2013, which of the following companies must appoint a full-time Company Secretary?
• A company purchased land in 2010 for ₹10 lakh. In 2025, its market value rose to ₹60 lakh. However, the company continues to record it at ₹10 lakh. W...
• A firm wants to classify its expenses by nature (salaries, depreciation, rent, etc.) in its Income Statement. According to Schedule III of Companies Act, w...
• XYZ Ltd. plans a buyback of 10 lakh equity shares at ₹200 each. Face value is ₹10. The company will use reserves for this. What impact will it have on ...
• Parent Ltd. owns 80% of Subsidiary Ltd. The subsidiary reports a profit of ₹10 lakh during the year. How much of this profit should be added to consolida...
• According to Ind AS 16, if the cost of dismantling a plant in future is ₹5 lakh, and there's a present obligation, how should this be treated?
• A company measures its financial asset at amortised cost. It earns fixed interest and has no intention to sell before maturity. Which Ind AS permits this m...
• A company expected material cost to be ₹50 per unit for 1,000 units. Actual cost was ₹55 per unit for 950 units. What is the material cost variance?
• A firm has current assets of ₹8 lakh and current liabilities of ₹5 lakh. If it collects ₹1 lakh from debtors and uses it to pay creditors, what happe...
• According to the Modigliani-Miller (MM) theory (ignoring taxes), what is the impact of debt on the value of a firm?
• According to Walter’s Model, a firm with high return on investment (RoI) and low cost of capital should:
• A company sets a standard cost of ₹50 per unit. Actual cost was ₹55 per unit for 1,000 units. The material price variance was ₹3,000 (A) and usage va...
• A factory produces a product with selling price ₹500, variable cost ₹300 and fixed cost ₹9,00,000. Due to market conditions, price is reduced by 10%....
• A private company wants to issue shares to selected individuals through a private placement. Which section of the Companies Act, 2013 governs this process?
• A firm has increasing profits but declining cash flows. The management claims business is doing well. What should an analyst examine to validate the claim?
• Company A and Company B merge to form Company AB. Assets and liabilities are taken over at book value, and shareholders of both companies continue to have ...
• ABC Ltd. offers its existing shareholders the right to buy one share for every four held at ₹100 when the current market price is ₹150. What is the the...
• A software firm enters a contract for software license, customization, and after-sales support. Revenue is recognized over time for customization but at a ...
• Company signs a ₹12 crore contract to deliver a software + annual maintenance for 3 years. Software is delivered in year 1 (₹8 Cr value), rest allocate...
• The net profit as per cost accounts is ₹2,00,000, but financial accounts show ₹1,80,000. Upon examination, over-absorption of overheads by ₹20,000 is...
• In an organization, the actual sales were ₹10 lakh while the budgeted sales were ₹12 lakh. The cost was ₹6 lakh vs budgeted cost of ₹7 lakh. What i...
• ABC Ltd. issues debentures worth ₹5 lakh and uses ₹3 lakh of it to purchase fixed assets. What is the net effect on funds from operations in the fund f...
• What will be the future value of ₹50,000 invested today for 3 years at a compound annual interest rate of 10%?
• A project has three outcomes: best case ₹20L, base case ₹15L, worst case ₹10L. If the probability of each is 1/3, what is the expected NPV?
• Under Companies Act, 2013, a company can declare dividend from:
• H Ltd owns 80% of S Ltd. S Ltd made a profit of ₹10 lakh this year. There are unrealized profits in closing stock of ₹1 lakh due to inter-company sale....