Indian Accounting and Taxation Test
What
effect will the sale of an office typewriter (book value: Rs 2,000, sale price:
Rs 1,000) have on the current ratio of a company?
a. Current
ratio will reduce
b. Current
ratio will improve
c. Current
ratio will remain the same'
Calculate
the value of stock of a company from the following information:
1. Current Assets = Rs 52000
2. Prepaid Expenses = Rs 1250
3. Current Liabilities = Rs 36725
4. Liquid Ratio = 1.36:1
a. Rs
2054
b. Rs
804
c. Rs
14025
d. Rs
11971
The
debtors turnover ratio of a company is equal to its net credit sales divided by
its _____________ accounts receivable.
a. net
b. gross
c. average
d. current
The
Dividend Distribution Tax is levied by the Central government on the _____________.
a. shareholders
of a company
b. employees
of a company
c. company
paying dividends
d. debenture
holders of a company
State
whether the below given statement is true or false.
Generally
1% VAT (value added tax) is applied on the sale of books and journals.
a. True
b. False
c. Can't
say
TUVW
Ltd. manufactures plastic mugs. Use the following details to calculate the
quantity variance for this company.
1. Direct material included in one mug: 3 Kg
2. Standard cost of direct material: Rs 2.5
per kg.
3. Total production: 250 mugs
4. Actual material used in total production:
900 kg
a. Rs
300
b. Rs
325
c. Rs
375
d. Rs
400
e. Rs
475
Calculate
the current ratio of a company using the following information.
1. Fixed Assets = Rs 82000
2. Shareholder's Fund = Rs 820000
3. Investments = Rs 780000
4. Total Assets = Rs 1980000
5. Long-term Liabilities = Rs 188000
a. 1.15
: 1
b. 2.15
: 1
c. 2 :
1
d. 1.25
: 1
For
small manufacturers, the duty payable at fixed rates on the basis of factors
such as the scale of operation, size of machines, etc., is classified under the
_____________ Scheme by the Central government.
a. Compounded
Levy
b. Tax
Return Preparers
c. Capital
Gains Account
M/s.
DEF & Co. have a credit balance of Rs 1,00,000 in their Allowance for
Doubtful Accounts. It is estimated that out of its Rs 56,00,000 of accounts
receivable, Rs 1,28,000 will be uncollectible. What will be the adjusting entry
to Bad Debts Expense account?
a. Debit
of Rs 2,28,000
b. Credit
of Rs 2,28,000
c. Debit
of Rs 28,000
d. Credit
of Rs 28,000
Calculate
the direct labour rate variance for LKG Ltd. if it needed 2,567 hours of work
and paid Rs 29 an hour in place of the originally planned Rs 25 an hour.
a. Rs
74,443
b. Rs
10,268
c. Rs
12,268
d. Rs
64,175
e. Rs
1,38,618
From
the following information, calculate the value of the current assets of the
company:
1. Current liabilities = Rs 5,50,000
2. Sales = Rs 36,00,000
3. Gross profit ratio = 25% of sales
4. Stock turnover ratio = 4 times
5. Quick ratio = 0.75
6. Closing stock = Rs 45,000 more than the
opening stock
a. Rs
10,00,000
b. Rs
10,10,000
c. Rs
11,00,000
d. Rs
11,10,000
e. Rs
11,01,000
What
would be the value of custom duty in Indian currency, if a consignment is
imported by air and has an FOB (Free on Board) price of US $4250, including
freight of US $100 and insurance of US $80? It is given that exchange rate is
Rs 65.50/$; custom duty is charged at 20% on assessable value; landing charges
are at 1% of CIF (Cost, Insurance, and Freight) value; and education cess is
3%.
a. Rs
4,474.3
b. Rs
58,613.3
c. Rs
60,371.7
d. Rs
72,568.9
Generally
Accepted Auditing Standards, commonly known as GAAS, states three General
Standards for auditors with regard to their competence, ____________, and
professional care with their work.
a. supervision
b. creativity
c. experience
d. independence
The
interest earned on current investments by ABC Company will appear under which
section of its profit and loss account?
a. Expenditure
section
b. Income
section
c. Profit/loss
section
d. Appropriations
section
Mrs
A received a diamond necklace worth Rs 600000 from her mother as a gift.
Considering Section 56(2)(vi) of the Income Tax Act, 1961, will it be a taxable
amount in Mrs A's income?
a. Yes
b. No
State
whether the below given statement is True or False?
As
per Rule 4 of the Export of Services Rules, 2005, all taxable services can be
exported without the payment of Service Tax.
a. True
b. False
Calculate
the total taxable income under the "Income from Other Sources"
heading for Mr X. It is given that Surcharge, Collection charges, and TDS (Tax
Deducted at Source) are nil.
1. Salary: Rs 7,20,000 p.a.
2. Dividend on shares: Rs 18,000 p.a.
3. Cash prize from winning a crossword
puzzle: Rs 15,000
4. Profits from his freelance business: Rs
85,000 p.a.
5. Interest on debentures: Rs 25,000 p.a.
6. Rent of plot for farm house: Rs 45,000
p.a.
a. Rs
1,88,000
b. Rs
90,800
c. Rs
1,25,000
d. Rs
70,000
e. Rs
1,03,000
CBA
Limited, a manufacturing company, has reserved some cash for the construction
of a factory. It will be reported in the balance sheet under the heading _____________.
a. Cash
in hand
b. Investments
c. Reserves
d. Plant
e. Current
Liabilities
Calculate
the interest coverage ratio from the following information.
1. Net Profit after tax: Rs 2,25,000
2. Interest rate on long-term debt (of Rs
25,00,000): 13.5%
3. Tax rate: 50%
a. 1.2:1
b. 1.3:1
c. 2.3:1
d. 2.4:1
Service
tax is a/an _____________.
a. direct
tax collected by the central government
b. direct
tax collected by the state government
c. indirect
tax collected by the central government
d. indirect
tax collected by the state government
Calculate
the quick ratio from the following information of a company:
Stock: Rs 20,000
Cash: Rs 20,000
Debtors: Rs 20,000
Creditors: Rs 40,000
Bills Receivable: Rs 12,000
Bills Payable: Rs 30,000
Advance Tax: Rs 3,000
Bank Overdraft: Rs 3,000
a. 1:2
b. 1:1.5
c. 1:0.75
d. 1:1.40
Use
the following details to calculate the return on investment for a company.
Equity Share Capital (Rs 10): Rs 32,00,000
Current Liabilities: Rs 16,00,000
Preference Share Capital @12%: Rs 6,00,000
Discount on Shares: Rs 9,000
General Reserve: Rs 13,78,000
Fixed Assets: Rs 85,50,000
10% Debentures: Rs 10,00,000
Current Assets: Rs 7,25,000
Net Profit After Tax: Rs 12,50,000
Tax Amount: Rs 5,50,000
a. 40.1%
b. 31.2%
c. 30.8%
d. 22.5%
e. 19.8%
Use
the following information in order to calculate the accounts receivable
turnover for the Year 2013 for a company XYZ Limited.
Net sales for 2012: Rs 18,95,520
Net sales for 2013: Rs 22,25,600
Accounts receivable, ending balance for 2012:
Rs 4,65,000
Accounts receivable, ending balance for 2013:
Rs 5,64,500
a. 3.32
times
b. 3.6
times
c. 4.32
times
d. 4.62
times
Calculate
the retained earnings as of December 31, 2013 for a company HIJ Limited, using
the following information.
1. Dividends declared and paid: Rs 21,50,000
2. Retained earnings, as of January 1, 2013:
Rs 78,70,000
3. Total tax: Rs 8,24,520
4. Accounts receivable: Rs 75,540
5. Total income before income taxes: Rs
49,53,000
6. Treasury stock: Rs 25,000
a. Rs
99,29,020
b. Rs
98,53,480
c. Rs
98,48,480
d. Rs
98,23,020
From
the information given below, calculate the net profit ratio of a company.
1. Credit sales = Rs 85,00,000
2. Indirect expenses = Rs 1,00,000
3. Gross profit ratio = 40%
4. Cash sales = 20% of the total sales
a. 38.75%
b. 39.06%
c. 40.9%
d. 42.5%
Calculate
the taxable income of Mr A using the following information(all figures are
given on annual basis).
1. Salary: Rs 5,00,000
2. Subscription to units of a mutual
fund(notified u/s 10[23D]): Rs 25,000
3. Lottery prize: Rs 5,000
4. Sold gold ring: Rs 25,000
a. Rs
5,65,000
b. Rs
5,30,000
c. Rs
5,35,000
d. Rs
5,40,000
e. Rs
5,55,000
Audit
Risk = Inherent Risk * Control Risk * _____________.
a. Residual
Risk
b. Material
Misstatement Risk
c. Detection
Risk
d. Business
Risk
According
to The Bombay Stamp Act, 1958, stamp duty is charged as follows:
Rs 5
Lakhs to Rs 10 Lakhs: Rs 8,750 + 6% of the amount above Rs 5 Lakhs.
The
registration fees is 1% of the market value. Mr B bought a flat for residential
purpose for Rs 6.5 Lakhs (market value) in Navi Mumbai. How much stamp duty
will he pay to the Navi Mumbai Municipal Corporation?
a. Rs
39,000
b. Rs
47,750
c. Rs
24,250
d. Rs
44,250
An
individual paid Rs 35,000 and Rs 45,000 as income taxes in the years 2010 and
2011, respectively. What kind of tax is he facing if his income was Rs 3,50,000
in 2010, and Rs 4,50,000 in 2011?
a. Progressive
tax
b. Regressive
tax
c. Proportional
tax
Which
of the following is true about tax levied on agricultural income in India?
a. Agricultural
income tax is collected by state government.
b. Agricultural
income tax is collected by the central government.
c. Agricultural
income tax is collected by Panchayats.
d. Agricultural
income is exempted from taxation.
e. Rate
of tax on agricultural income is lowest in India.
This
question is based upon the figure shown below
Carefully
look at the balance sheet of XYZ Enterprises as on 31st December, 2012 given in
the image.
Calculate
the Acid Test Ratio, the Stock to Working Capital Ratio, and the Proprietary
Ratio?
a. 4.66:1
& 2:3 & 0.46:1
b. 4.43:1
& 3:2 & 0.55:1
c. 4.63:1
& 1:3 & 0.55:1
d. 4.66:1
& 3:2 & 0.46:1
Compute
the net VAT payable by M/s. ABC & Co. for the period ending March 31, 2013
based on the given information.
Inputs Procured:
1. Raw material @ nil VAT: Rs 8000
2. Raw material @ 2% VAT: Rs 10000
Output:
1. Intrastate sale of finished goods @ 4% VAT
: Rs 20000
(Goods produced from raw material @ nil VAT
rate procured as inputs)
2. Exempted sale : Rs 10000
(Goods produced from raw material procured @
2% VAT to the extent of 50%)
3. Sale of finished goods intrastate @ 15%
VAT: Rs 30000
4. Intrastate sale of raw material purchased
@ 2% VAT: Rs 5000
a. Rs
5400
b. Rs
5300
c. Rs
5200
d. Rs
5100
The
re-structured version of MODVAT is known as_____________.
a. EU
VAT
b. Sales
Tax
c. Ad
Valorem Tax
d. CENVAT
Calculate
the stock turnover ratio using the following information:
Opening Stock Rs. 15,000
Wages Rs. 12,000
Closing Stock Rs. 11,000
Sales Rs. 40,000
Purchases Rs. 23,000
Carriage Inwards Rs. 3,000.
a. 3.00
times
b. 3.25
times
c. 3.50
times
d. 3.23
times
Consider
the following data of a firm:
Interest charges: Rs 20,000,000
Sales: Rs 65,000,000
Tax rate: 40%
Net profit margin: 8%
Which
of the following represents the firm's times interest earned ratio?
a. 1.50
approx.
b. 1.34
approx.
c. 1.43
approx.
d. 1.60
approx.
The
collection of income tax is administered by which authority in India?
a. Comptroller
and Auditor General of India
b. Central
Board of Direct Taxes
c. Central
Board of Excise and Customs
d. Reserve
Bank of India
The
tax on goods purchased by a dealer for use in the manufacturing, processing,
packaging or storing of other goods, any other use in business, or for re-sale
is called _____________.
a. general
sales tax
b. input
tax
c. output
tax
d. capital
gains
Mr A
is a dealer who purchased goods worth Rs 2,00,000 (exclusive of VAT). He
incurred Rs 25,000 on the goods and sold them at a profit of Rs
10,000. Given that the rate of VAT on purchases and sales is 4%, calculate the
chargeable invoice value and payable tax under VAT.
a. Rs
2,40,000 & Rs 1,250
b. Rs
2,50,000 & Rs 1,200
c. Rs
2,44,400 & Rs 1,400
d. Rs
2,40,000 & Rs 1,100
The
tax levied on a commodity according to its value is called _____________.
a. specific
tax
b. proportional
tax
c. customs
duty
d. ad
valorem tax
e. commodity
tax
Income
earned by an assessee through dividend received from a foreign company is
taxable as _____________.
a. Income
from Business or Profession
b. Income
from Other Sources
c. Capital
Gains
d. Salary