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This set of Financial Accounting 2 Multiple Choice Questions & Answers (MCQs) focuses on Financial Accounting 2 Set 4

Q1 | Branch Trading &Profit & Loss A/c is only a _________ account not forming part of thefull accounting system.
  • single
  • memorandum
  • capital
  • double
Q2 | In final account system, Branch Trading and Profit & Loss A/c is prepared at ________
  • invoice price
  • cost price
  • cost & invoice price
  • market price
Q3 | Under Final A/c system, the profit or loss made by the branch is determined by preparing
  • branch stock a/c
  • branch debtors a/c
  • branch adjustment a/c
  • branch trading & profit &loss a/c
Q4 | The Branch Account prepared under Final Account System is the nature of:
  • nominal account
  • real account
  • personal account
  • general account
Q5 | Dependent branch makes:
  • cash sales only
  • credit sales only
  • cash & credit sales
  • instalment sales
Q6 | All branch expenses such as rent, salary are paid by H.O in case of:
  • independent branch
  • local branch
  • dependent branch
  • foreign branch
Q7 | Branch Trading & Profit & Loss A/c is prepared to incorporate all _____
  • revenue items
  • capital items
  • asset items
  • past items
Q8 | The difference between goods sent by H.O. and received by branch is known as _______
  • goods in transit
  • goods in warehouse
  • goods in production
  • goods in godown
Q9 | The stock reserve for unrealised profit will be ________ to the H.O profit & Loss A/C
  • debited
  • credited
  • first credited then debited
  • not shown
Q10 | ____________ account is prepared to adjust the loads included in the value of openingstock and closing stock.
  • branch stock
  • branch adjustment
  • stock reserve
  • branch p&l
Q11 | ____________ account shows the shortage or surplus of stock.
  • branch adjustment
  • branch stock
  • goods sent to branch
  • branch p&l
Q12 | The profit included in surplus or shortage of stock is transferred to ______ account
  • branch stock
  • branch expenses
  • branch adjustment
  • branch p&l
Q13 | The balance of branch adjustment account is transferred to _________ account
  • branch stock
  • branch p&l
  • branch debtors
  • branch expenses
Q14 | An ordinary partnership business can have:
  • not more than 50 partners
  • not more than 20 partners.
  • any number of partners.
  • any number than 2 partners.
Q15 | In the absence of an agreement profit and loss are divided by partners in the ratio of:
  • capital
  • equally
  • time devoted by each partners
  • none of these.
Q16 | In the absence of an agreement, Interest on loan advanced by the partner to the firm isallowed at the rate of:
  • 6%
  • 5%
  • 12%
  • 9%
Q17 | Current accounts of the partners should be opened when the capitals are:
  • fluctuating
  • fixed
  • either fixed or fluctuating
  • none of these
Q18 | Investment in partnership is made by introducing:
  • cash
  • none – cash assets
  • cash or non – cash assets
  • none of these.
Q19 | Partnership is formed by the partners by:
  • written agreement
  • oral agreement
  • written or oral
  • none of these
Q20 | Any partner who investments in the business but does not take active part in the businessis:
  • secret partner
  • sleeping partner
  • active partner
  • nominal partner
Q21 | The written agreement of partnership is called:
  • partnership deed
  • articles of association
  • memorandum of association
  • certificate of incorporation
Q22 | Under fixed capital methods, profit will be credited to:
  • capital account
  • drawings
  • current a/c
  • profit & loss
Q23 | The members of partnership firm are individually called as:
  • director
  • investor
  • partner
  • manager
Q24 | Liability of partners in a partnership business is:
  • limited
  • un-limited
  • limited & unlimited
  • none of these
Q25 | Capital of the partners are maintained by:
  • fixed capital method
  • fluctuating capital methods
  • by any two above methods
  • none of them.