Tag: accounting equation and business transactions

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Multiple choice book keeping and accountancy accounting equation and business transactions meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

"For the financial year ended as on March 31, 20XX the figures extracted from the balance sheet of Xerox Limited as under: Opening Stock Rs 29, 000; Purchases Rs 2, 42, 000; Sales Rs 3, 20, 000; Gross Profit 25% of Sales. Stock Turnover Ratio will be".

  1. 8 times

  2. 6 times

  3. 9 times

  4. 10 times
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Gross Profit = 25% of 3,20,000 = 80,000. Cost of Goods Sold (COGS) = Sales - Gross Profit = 3,20,000 - 80,000 = 2,40,000. Average Stock = (Opening Stock + Closing Stock) / 2. Assuming Closing Stock is not provided, we use the opening stock as a proxy or check the calculation: COGS / Average Stock = 2,40,000 / 30,000 (approx) = 8.

Multiple choice book keeping and accountancy accounting equation and business transactions meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

The liability of the shareholders of a public limited company is limited to the extent of ________________.

  1. Par value of the share

  2. Paid up value of the shares

  3. Market price of the shares

  4. Intrinsic value of the shares
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In a company limited by shares, the liability of each shareholder is restricted to the unpaid amount on the shares they hold, which is the paid-up value concept.

Multiple choice book keeping and accountancy accounting equation and business transactions meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

Left side of balance sheet states the ______________.

  1. appreciated earnings

  2. liabilities

  3. assets

  4. stocks earnings
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In standard accounting format, a balance sheet is divided into two sides: assets are listed on the left side, while liabilities and owner equity are listed on the right side.