TC

Accounting Quiz Q91–Q100

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Questions

Q91. Closing stock is recorded in the:

Answer: Both a & b

Solution: Closing stock appears in the Trading Account (as an adjustment to calculate gross profit) and is also shown as a current asset in the Balance Sheet at the period end.

Q92. Mining rights are:

Answer: Intangible Assets

Solution: Mining rights are non‑physical legal rights to extract minerals and are classified as intangible assets on the balance sheet.

Q93. Which of the following is written off every year from the profit of business?

Answer: Preliminary Expenses

Solution: Preliminary (incorporation) expenses are typically written off against profits over a number of years as a deferred revenue expenditure; goodwill and many intangible assets are amortized or tested for impairment as applicable.

Q94. Which of the following is a non free reserve?

Answer: Security premium reserve

Solution: Security premium (share premium) is a capital reserve and is generally non‑distributable (non‑free) for dividend purposes, unlike general or revenue reserves which are usually available for appropriation subject to law.

Q95. Decrease in the value of natural assets is:

Answer: Depletion

Solution: Depletion is the allocation of the cost of natural resources (mines, oil reserves, timber) as they are extracted or used up; depreciation applies to tangible fixed assets and amortization to intangible assets.

Q96. Depreciation is a process of:

Answer: Allocation

Solution: Depreciation is an allocation of the cost of a tangible fixed asset over its useful life; it spreads the asset's cost to the periods benefiting from its use rather than revaluing the asset each year.

Q97. Which of the following account is never reported in Income statement as Expense:

Answer: Dividend expense

Solution: Dividends are distributions of profit and are not treated as an expense in the income statement. Interest, income tax and depreciation are reported as expenses (or charges) in the Profit & Loss account.

Q98. Which of the account will appear in trial balance:

Answer: Both will appear

Solution: Trial balance lists all ledger balances (debit and credit) including expense accounts and appropriation accounts. Both income tax expense and dividend (dividend paid/declared) ledger balances will appear in the trial balance.

Q99. The account that records expenses, income, loss & profit is called:

Answer: Nominal Account

Solution: Nominal accounts record incomes, expenses, gains and losses and are closed to the Profit & Loss account at period end. Real accounts record assets/liabilities and personal accounts record persons/entities.

Q100. Higher inventory ratio indicates:

Answer: Both a & b are correct

Solution: A higher inventory turnover ratio means inventory is sold and replaced quickly (quick turnover) and generally reflects effective inventory management practices.

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