On This Page
This set of Financial Accounting 2 Multiple Choice Questions & Answers (MCQs) focuses on Financial Accounting 2 Set 7
Q1 | At the time of dissolution all the assets of firm are transferred to the realization A/c:
- market value
- book value
- cost value
- bale value
Q2 | Balance of realization A/c is transferred to the capital A/c of the partners in:
- capital ratio
- profit sharing ratio
- interest ratio
- equally
Q3 | The decision is Garner Vs Murray was given in:
- 1904
- 1905
- 1933
- 1804
Q4 | When an asset is acquired on hire purchase system, the asset account is debited with_______ of the assets in the books of the hire purchaser.
- hire purchase price
- cash price
- instalment price
- none of these
Q5 | If the firm stops making repayments and the goods or assets are taken away from them asa result, this is known as:
- cancellation
- forfeiture
- repossession
- annulment
Q6 | On the balance sheet of a company, the value of the asset bought through hire purchasewill appear as:
- cost less depreciation to date less amount owing on hire purchase less interest owing
- cost less amounts owing on hire purchase
- cost less depreciation to date less amount owing on hire purchase
- cost less depreciation to date
Q7 | The depreciation on an asset purchased through hire purchase should be:
- should be straight line only
- based on the cost price of the asset only
- based on the total cost including interest
- no depreciation should be provide until the final payment is made
Q8 | The interest charged on the hire purchase should appear in the profit and loss account inwhat manner?
- the total interest levied should be divided equally over the total period the for purchase agreement
- the interest charged in that period only should be included
- interest should instead be capitalised on the balance sheet
- interest should be apportioned in proportion to the repayment totals
Q9 | Ownership of goods under hire purchase agreement is transferred at the time of:
- payment of down payment
- payment of first instalment
- payment of last instalment
- none of the above
Q10 | Which of the following does not give a difference between a hire purchase and a normalpurchase?
- timing of payment for asset
- legal ownership of asset
- quality of asset purchased
- total cost of asset.
Q11 | The act of buying an asset without having to make full payment in the immediate futureis known as:
- hire purchase
- finance lease
- operating lease
- sale and leaseback
Q12 | The amount of interest is credited by the buyer to ________
- hire purchase account
- hire vendor account
- interest account
- cash account
Q13 | The depreciation in the books of buyer is charged on _________
- hire purchase price
- market price
- total instalment amount
- cash price
Q14 | Hirer charges depreciation on:
- hire purchase price
- cash price
- lower of the two
- none of these
Q15 | What is transferred to Hirer under hire purchase system:
- ownership of assets
- possession of asset
- ownership and possession of asset
- none of these
Q16 | Hire Purchase Act is passed in the year
- 1932
- 1956
- 1972
- 1872
Q17 | The Sale of Goods Act is applicable in:
- credit purchases
- cash purchases
- cash sales
- none of these
Q18 | Under which system, ownership is transferred on payment of final installment
- installment system
- credit system
- hire purchase system
- cash system
Q19 | Under hire purchase system the buyer is called _________
- buyer
- hirer
- hire vendor
- debtor.
Q20 | Under hire purchase system who has the right of sell __________
- buyer
- hirer
- hire vendor
- debtor
Q21 | Under hire purchase system, the agreement can be _________
- renewed
- registered
- terminated
- endorsed.
Q22 | Installment system is governed by _______
- hire purchase act
- sale of goods act
- installment act
- properties registration act
Q23 | Under hire purchase system, the retail price of the articles is called ________
- mrp
- wholesale price
- retail price
- cash price
Q24 | The advance amount under hire purchase system is called __________
- cash price
- retail price
- interest
- down payment
Q25 | Under hire purchase system, interest is calculated on _______
- cash price
- hire purchase price
- mrp
- outstanding balance.