Practice Accounts Questions and Answers

• 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....
• X Ltd. and Y Ltd. amalgamate to form a new company Z Ltd. X Ltd.’s assets are ₹50 lakh, liabilities ₹20 lakh. Y Ltd.’s assets are ₹30 lakh, liabi...
• Input = 10,000 units @ ₹20/unit, Normal loss = 10%, Scrap value = ₹2/unit. What is cost per unit of output assuming no abnormal loss?
• In a manufacturing company, budgeted production is 10,000 units and budgeted fixed overheads are ₹5,00,000. If actual output is 12,000 units, what is the...
• A company issued ₹10 lakh equity, redeemed ₹5 lakh debentures, paid dividend ₹2 lakh. Received interest ₹1 lakh. What is net cash from financing?
• Annual Lettable Value = ₹3,60,000 Municipal Taxes = ₹30,000 Interest on Housing Loan = ₹2,50,000 Compute taxable income under head "House Property"....
• A company incurs heavy advertising expenditure of ₹2 crore in launching a new product. It wishes to defer the expense over 4 years. As per accounting sta...
• In a textile mill, cotton passes through spinning, weaving, and dyeing departments. Loss occurs at each stage. Which costing method is best suited?
• The standard cost of labour for 1 unit is 2 hours at ₹50 per hour. Actual production is 100 units and actual labour cost is ₹11,000 for 200 hours. What...
• ABC Ltd. has current assets of ₹8 lakh and current liabilities of ₹5 lakh. It wants to maintain a current ratio of 2:1. How much current liability shou...
• According to Modigliani-Miller theory, if a firm’s investment policy is fixed, how does dividend decision affect the value of the firm?
• A company reported a net profit of ₹10 lakh. During the year, depreciation was ₹4 lakh, accounts receivable increased by ₹2 lakh, inventory decreased...
• Project A has cash flows of ₹-10 lakh (initial), ₹3L, ₹4L, ₹5L over 3 years. Project B has the same initial investment but generates ₹6L, ₹4L, ...
• A company has current liabilities of ₹5 lakh and current assets of ₹6 lakh. Inventory is ₹2 lakh. What is the quick ratio?
• A company issues 10,000 shares at ₹100 each at a premium of ₹20. ₹80 (including premium) is received on application. How is the premium accounted?
• A company has Net Sales = ₹80 lakh, Cost of Goods Sold = ₹60 lakh, Inventory = ₹15 lakh. What is Inventory Turnover Ratio?
• A company invests in listed equity shares held for trading purposes. As per Ind AS 109, how should these be measured?
• A project has an expected NPV of ₹5 crore, a standard deviation of ₹2 crore, and a coefficient of variation of 0.4. If the company has another project ...
• A construction company signs a ₹50 crore contract for building a bridge over 5 years. It recognizes revenue based on the percentage-of-completion method....
• Company A absorbs Company B. Purchase consideration is settled partly in cash and partly in shares. Which accounting method is used if the takeover is in t...
• A company has fixed costs of ₹10 lakh, variable cost per unit ₹50, and selling price per unit ₹75. If sales units are 60,000. Compute margin of safet...
• Depreciation of ₹5 lakh is added back while calculating cash flows from operations under the indirect method. Why?
• According to the Companies Act, 2013, every listed company must constitute an Audit Committee. Which of the following is not a role of this committee?
• A company’s debt-to-equity ratio is 3:1, and it faces a high interest burden. What does this suggest about the financial structure?
• In a manufacturing company, which of the following best represents a preventive control?
• A company takes office space on a 5-year lease. As per Ind AS 116, what should be recognized in books at commencement?
• In a job order company, factory overheads are allocated using machine hours. Actual overhead = ₹5 lakh, standard overhead based on actual hours = ₹6 la...
• If an entity revalues its land upward and this is the first time revaluation is being done, how is the increase treated under Ind AS 16?
• A company has an actual sales of ₹25 crore vs. a budget of ₹30 crore. Costs were below budget by ₹2 crore. What does this imply?
• While auditing cash payments, an auditor examines supporting documents like invoices, payment vouchers, and authorizations. This process is called:
• Parent Co. holds 80% in Subsidiary Co. The subsidiary reports profit of ₹10 lakh. What is the amount of minority interest in the consolidated P&L?
• In variance analysis, which variance helps management identify whether quantity of materials used is efficient?
• A company chooses not to record a small calculator worth ₹500 as a fixed asset. Which concept is being applied?
• According to the Net Income Approach, what happens to the firm’s value as debt increases?
• As per Companies Act, 2013, how long can an individual auditor be appointed in a listed company?
• A trader opts for GST Composition Scheme and has total turnover of ₹1.2 crore. What is the GST rate applicable?
• Which of the following leads to de-recognition of PPE under Ind AS 16?
• A firm has a current ratio of 2:1 and quick ratio of 1.2:1. Its inventory is valued at ₹4 lakh. What is the amount of current liabilities?
• As per Schedule III of Companies Act, which of the following is not shown under ‘Other Current Liabilities’?
• A company purchases machinery worth ₹10 lakh and puts it to use on 1st December. What will be the depreciation rate and amount for the year under the Inc...