025/2023 - State Tax Officer

Question 1

Which of the following statement are INCORRECT?
I. Depreciation is a non-cash expenditure charged to P & L Account.
II. Assets = Equities is the basic accounting Equation.
III. Provisions are created through appropriation of profits.
IV. Capital profits will be treated as income in the Profit and Loss Account.

Accepted Answer

Statement III and IV

Answer

Statement I and II

Answer

Statement II and III

Answer

Statements II, III and IV

Question 2

Based on the following information, the balance as per Bank Pass Book will be :
Balance as per Cash Book Rs. 32,000, Interest on deposit only in the pass book Rs. 2,500, Bank Charges only in the pass book Rs. 150, Cheque issued to supplier but not yet presented for payment Rs. 15,000

Accepted Answer

49,350

Answer

19,350

Answer

44,650

Answer

14,350

Question 3

Which of the following statements are TRUE in respect of Cash Book?
I. Single column cash book is prepared under imprest system.
II. Contra Entries will appear in double column cash book.
III. Three column cash book will contain three amount columns (Cash, Bank and Discount)

Accepted Answer

Statements II and III are True

Answer

Statements I, II and III are True

Answer

Statements I and II are True

Answer

Statement II alone is True

Question 4

A sole trader keeping books under single entry provides the following details :
Opening capital Rs. 25,000, Closing capital Rs. 50,000, Drawings Rs. 10,000. Additional capital brought during the year Rs. 15,000
Profit of the sole trader is —————

Accepted Answer

20,000

Answer

50,000

Answer

30,000

Answer

No Profit No Loss

Question 5

Which of the following statements are TRUE about Limited Liability Partnership (LLP) in India :
I. LLPs are registered under the Partnership Act 1932
II. Liability of all the partners in an LLP are limited to their stake in the firm as that of shareholders of a company
III. Registration of LLPs are optional
IV. There is only joint liability for partners in an LLP (No Joint and Several liability)

Accepted Answer

Statements II and IV are True

Answer

Statements I and II are True

Answer

Statements II and III are True

Answer

Statements III and IV are True

Question 6

Which of the following is an INCORRECT statement in respect of the Joint and Several liability of Partners in a Firm :

Accepted Answer

Personal properties of partners are not liable for the debts of the firm and only the assets of the firm will be used to pay off the firm’s debts

Answer

Partners are collectively liable for the debts of the firm

Answer

Personal properties of individual partners are liable for the debts of’ the firm

Answer

Personal properties of an individual partner will be used to pay off the liabilities, if nothing is realisable from other partners

Question 7

A new partner is admitted in a Firm having two old partners with profit sharing ratio of 3:2. The new profit sharing ratio is agreed as 3:2:1. The sacrificing ratio of old partners are :

Accepted Answer

3:2

Answer

2:1

Answer

1:1

Answer

4:3

Question 8

Which of the following is UNTRUE about the Dissolution of a Firm :

Accepted Answer

All assets and liabilities are transferred to Revaluation Account

Answer

Realisation Account is prepared to find out profit or loss on realisation

Answer

Profit or Loss on realisation will be transferred to Partner’s Capital Account

Answer

Loan from a partner will be settled directly without transferring to Realisation Account

Question 9

Which of the following statements are FALSE?
I. In India, Equity Shares can be issued at a Discount
II. Reserve Capital is the amount of profit set aside to meet future contingencies
III. Balance in the forfeited shares account after reissue, shall be transferred to the Capital Reserve A/C

Accepted Answer

Statements I and II are False

Answer

Statement II alone is False

Answer

Statements II and III are False

Answer

Statements I, II, and III are False

Question 10

Which of the following statements are TRUE with respect to the Internal Reconstruction of a Company?
I. There will be a comprehensive overhauling of the financial position (assets and liabilities)
II. The existing company is liquidated and a new company is formed to take over the assets and liabilities
III. Paidup Share Capital is reduced and the same is used to write off accumulated losses
IV. Equity shareholders may surrender some portion of their shares, the amount of which will be used for the settlement of outside creditors

Accepted Answer

Statements I, III and IV are True

Answer

Statements I, II and III are True

Answer

Statements II, III and IV are True

Answer

Statements I , II, III and IV are True

Question 11

Which is FALSE with respect to the redemption of Debentures out of Profits?

Accepted Answer

Balance in the DRR after completing the redemption of all debentures can be transferred to Capital Reserve A/C

Answer

DRR should be created atleast 10% of the outstanding nominal value of debenture before commencing the redemption

Answer

DRR Investment should be made atleast 15% of the nominal value of debentures proposed to be redeemed during the current financial year

Answer

Retained Earnings can be used for creating DRR

Question 12

Which of the following is a WRONG Statement?

Accepted Answer

Under Subdivision of Shares, number of Equity Shares will decrease without decrease in the Share Capital

Answer

Subdivision of Shares means converting large denominated shares into small denominated shares

Answer

Consolidation of Shares means converting small denominated shares into large denominated shares

Answer

Under Consolidation of Shares, number of Equity Shares will decrease without decrease in the Share Capital

Question 13

Which of the following statements are TRUE?
I. Cost Accounting = Costing + Application of Cost Control Methods + Ascertainment of Profitability
II. Historical Costing aims at ascertaining actual cost whereas Standard Costing aims at cost control
III. Marginal Costing considers both Fixed Costs and Variable Cost for important decision making

Accepted Answer

Statements I and II are True

Answer

Statements I, II and III are True

Answer

Statements I and III are True

Answer

Statements I alone is True

Question 14

Direct Material is Rs.15,000, Direct Labour is Rs.20,000, Direct Expense is Rs.10,000, Overhead is Rs. 25,000
The Prime Cost is :

Accepted Answer

45,000

Answer

70,000

Answer

20,000

Answer

60,000

Question 15

EOQ is 1000 Units , Annual requirement is 12,000 Units Order Interval (POQ) is :

Accepted Answer

1 month or 30 days

Answer

12 months or 365 days

Answer

3 months or 90 days

Answer

1.5 months or 45 days

Challenge Yourself

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Mock Test

025/2023 - State Tax Officer