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Management Sciences 5307 MCQs [All-Courses]

Management Sciences focuses on the planning, organizing, leading, and controlling of resources to achieve organizational goals.This subject is highly important for competitive exams, academic study, and professional careers in the business and public sectors.

Which of the following is not true with regard to preparation of Profit & Loss Account?

A Profit & Loss Account is prepared for a certain period and hence it is an interim statement

B Profit & Loss Account does not disclose the effect of non-financial items

C Net Profits are ascertained on the basis of current costs

D Net Profits as disclosed by P&L Account is not absolute

Review Detailed Answer

Correct Answer: Profit & Loss Account is prepared for a certain period and hence it is an interim statement

Which of the following equations is correct?

A Gross Profit+ Sales+ Direct expenses+ Purchases+ Closing stock = Opening stock

B Gross Profit+ Sales+ Direct expenses+ Purchases- Closing stock = Opening Stock

C Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock = Sales

D Gross Profit – Opening Stock + Direct expenses + Purchases +Closing stock = Sales

Review Detailed Answer

Correct Answer: Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock = Sales

Which of the following shall not be deducted from net profit while calculating managerial remuneration?

A Loss on sale of undertaking

B Debts considered bad and written off

C Liability arising from a breach of contract

D Director‘s remuneration

Review Detailed Answer

Correct Answer: Director‘s remuneration

Gross Profit is equal to_________?

A Sales – Cost of goods sold

B Sales – Closing Stock + Purchases

C Opening Stock + Purchases – Closing Stock

D None of the above

Review Detailed Answer

Correct Answer: Sales – Cost of goods sold

Which of the following relationships is/are false?

A Net Profit = Gross Profit – Administration and Other expenses

B Net Profit = Gross Profit + Administration expenses and Other expenses

C Opening Stock + Purchases – Closing Stock = Cost of Sales

D Both B. and C. above

Review Detailed Answer

Correct Answer: Both B. and C. above

Prepaid expenses are valued on the Balance Sheet at

A Replacement cost

B Current cost

C Cost to acquire less accumulated amortization

D Cost less expired portion

Review Detailed Answer

Correct Answer: Cost less expired portion

Goods in stock worth 800 are destroyed by fire and the Insurance Co. is accepted the claim for 600. Adjustment would involve

A Debit of 800 to Trading Account and credit of 600 and 200 to insurance company and

B Deduct the 800 from closing stock in the Trading Account

C Credit insurance company for 600

D Debit of 600 and 200 to insurance company and Profit and Loss Account respectively and

Review Detailed Answer

Correct Answer: Debit of 600 and 200 to insurance company and Profit and Loss Account respectively and

Sundry debtors as per Trial Balance is 43,000 which includes 2,200 due from ‗H in respect of goods sent to him on approval basis, the cost price of which is 1,800. Rectification would involve:

A Adding 2,200 to closing stock

B Deducting 1,800 from closing stock and deducting 2,200 each from debtors and sales

C Adding 1,800 to closing stock and deducting 2,200 each from debtors and sales

D Deducting 1,800 from debtors

Review Detailed Answer

Correct Answer: Adding 1,800 to closing stock and deducting 2,200 each from debtors and sales

Which of the following entries is correct in respect of reserve for discounts on accounts payable?

A Debit P&L A/c and Credit Reserve for Discount on Accounts Payable A/c

B Debit Accounts Payable A/c and Credit P&L A/c

C Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c

D Debit Reserve for Discount on Accounts Payable A/c and credit Accounts Payable A/c

Review Detailed Answer

Correct Answer: Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c

The adjustment to be made for prepaid expenses is____________?

A Add prepaid expenses to respective expenses and show it as an asset

B Deduct prepaid expenses from respective expenses and show it as an asset

C Add prepaid expenses to respective expenses and show it as a liability

D Deduct prepaid expenses from respective expenses and show it as a liability

Review Detailed Answer

Correct Answer: Deduct prepaid expenses from respective expenses and show it as an asset

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Management Sciences 5307 MCQs [All-Courses]

All Topics 5307

All Topics 5307

Which of the following is not true with regard to preparation of Profit & Loss Account?

Which of the following equations is correct?

Which of the following shall not be deducted from net profit while calculating managerial remuneration?

Gross Profit is equal to_________?

Which of the following relationships is/are false?

Prepaid expenses are valued on the Balance Sheet at

Goods in stock worth 800 are destroyed by fire and the Insurance Co. is accepted the claim for 600. Adjustment would involve

Sundry debtors as per Trial Balance is 43,000 which includes 2,200 due from ‗H in respect of goods sent to him on approval basis, the cost price of which is 1,800. Rectification would involve:

Which of the following entries is correct in respect of reserve for discounts on accounts payable?

The adjustment to be made for prepaid expenses is____________?