Practice Accounts Questions and Answers

• A company’s warehouse was damaged by fire after the balance sheet date but before the approval of accounts. Under Ind AS 10, this is:
• As per the Companies Act, 2013, CSR provisions are applicable if the company meets which of the following thresholds in any financial year?
• Under Walter’s model, if a firm’s return on investment (r) > cost of equity (ke), what should the firm do?
• If a firm’s interest coverage ratio falls from 6x to 2x over a year, it indicates:
• A company transfers semi-finished goods from Process 1 to Process 2. Normal loss in Process 1 is 10%. If 10,000 units are input and 8,800 units are transfe...
• IRR is the rate at which:
• If the auditor is unable to obtain sufficient audit evidence and the possible effect is material but not pervasive, what type of opinion is issued?
• A company announces a 1:4 rights issue at ₹50 per share when market price is ₹70. What is the value of right?
• Auditor notes that the company has accumulated losses exceeding net worth, but management claims recovery. What should auditor consider?
• A firm’s current ratio is 1.5:1 and quick ratio is 1.5:1. What does it suggest about inventory?
• A business availed ITC of ₹2 lakh on inputs used partly for personal purposes. What should it do?
• An auditor resigns from a listed company. Within how many days must they file Form ADT-3?
• A company buys a machine from the US at $50,000 when $1 = ₹70. On balance sheet date, $1 = ₹75. How is this change treated?
• An investment of ₹10 lakh yields ₹4L, ₹3L, ₹2L, ₹1L over four years. What is the payback period?
• In a manufacturing entity, the cost of abnormal waste is:
• Salaries of ₹1 lakh paid in April 2024 relate to March 2024. As per matching concept, when should this expense be recorded?
• X Ltd. forfeits shares for non-payment of final call. These are reissued at a discount. Where is the discount adjusted?
• Cost of equity is 15%, cost of debt is 10%, debt-equity ratio is 1:1, tax rate 30%. What is WACC?
• As per Companies Act, 2013, what is the minimum number of board meetings a company must hold in a year?
• A company incurred ₹1 lakh as preliminary expenses. How should it treat the amount under current Ind AS?
• A project has NPV of ₹5 lakh and standard deviation of cash flows is high. What does it indicate?
• A company manufactures two products, A and B. The contribution per unit for A is ₹50 and for B is ₹60. Each unit of A requires 4 machine hours, and B r...
• A firm has the following details: • Raw material holding: 25 days • WIP: 15 days • Finished goods: 20 days • Receivables: 30 days • Payables: 40 ...
• An enterprise consumes 25,600 units of a component annually. The order cost is ₹600 per order, and carrying cost is ₹12/unit/year. A supplier offers th...
• A company has Net Sales of ₹1,000 lakhs, Net Profit of ₹80 lakhs, Total Assets of ₹750 lakhs, and Equity of ₹250 lakhs. Calculate Return on Equity ...
• XYZ Ltd. reported a net profit of ₹120 lakhs for the year ended 31st March 2025. The depreciation for the year was ₹20 lakhs, and amortization of goodw...
• A factory has direct material cost of ₹2,40,000 and direct labour of ₹1,60,000 for a batch of 1,000 units. Factory overheads are absorbed at 75% of dir...
• The following balances are available for a company: Cash: ₹5L, Inventory: ₹12L, Debtors: ₹10L, Short-term investments: ₹3L Accounts payable: ₹8L,...
• Sales = ₹200 lakhs, Variable cost = ₹120 lakhs, Fixed cost = ₹30 lakhs Interest = ₹10 lakhs Calculate (i) Operating Leverage and (ii) Financial Lev...
• A company purchases machinery for ₹10 lakhs and incurs ₹1 lakh on its installation. The accountant records the total ₹11 lakhs under the fixed asset ...
• A company pays insurance premium of ₹24,000 for 12 months in advance in March 2025 for the period January 2025 to December 2025. The accountant records t...
• Which of the following scenarios correctly reflects the going concern assumption?
• A bill of ₹2,00,000 is drawn for 90 days and discounted at 10% p.a. Calculate the amount of discount and proceeds received. Assume 360 days in a year. ...
• A company has annual credit sales of ₹36 crore. Its trade receivables as on 31st March 2025 are ₹3.6 crore, of which ₹0.6 crore are more than 6 month...
• XYZ Ltd. buys software for ₹10 lakh, with a license period of 3 years. How should it treat this in books?
• A project has IRR of 14% and NPV of ₹5 lakhs at 10% cost of capital. If cost of capital rises to 16%, what will happen to NPV?
• ABC Ltd., a manufacturing company, undertook a series of transactions during the financial year 2024–25. It purchased a new plant worth ₹1,000 lakh and...
• XYZ Ltd. purchases raw materials for ₹5,00,000 and pays transportation charges of ₹50,000 and GST of ₹90,000. The GST is recoverable. What amount sho...
• Gamma Textiles Ltd. manufactures a single product with the following cost structure: • Selling Price per unit: ₹500 • Variable Cost per unit: ₹300 ...
• Omega Ltd. has idle capacity and receives a special export order for 2,000 units at ₹420 per unit. Normal price = ₹500. Unit variable cost = ₹350. Fi...