Double entry book-keeping was introduced by Lucas Pacioli.
Funds Flow Statement and sources and application statement are synonymous.
Depreciation in spirit is similar to Depletion.
Balance Sheet is always prepared as on a specified date.
In Insurance, separate Profit and Loss Accounts are prepared for different types of insurance.
The number of partners in Pakistan can be fixed at 20.
Flexible budget changes with the volume of production.
Break Even can be calculated as FC / (TR – TC).
Quick Ratio can be computed as Quick Assets / Quick Liabilities.
In straight-line method of depreciation, the written down value of a fixed asset will be Rupee one.
Sales budget must be prepared based on sales forecasts of the market.
Consolidation of subsidiary accounts in the balance sheet of an unlisted Holding company is required.
Retained earnings are synonymous with accumulated profit and loss account.
The requirements of an audit report for a Banking Company in Pakistan are under the Banking Companies Ordinance, 1962.
Deferred Taxation is part of Owners Equity.
Investment Corporation of Pakistan follows open-end mutual funds.
Directors Report is mandatory for a limited Company in respect of financial report constituent.
Every limited Company in Pakistan is required by law to include Chairman’s Review along with financial reports.
Cash budget excludes non-cash items.
NGOs are legally required to prepare accounts in a prescribed manner under the law.
Fixed Cost never changes even if production capacity is doubled.
Conversion cost is Direct Labour + Material Cost.
Process Costing is relevant to Cement industry.
Operating Profit is profit after deducting normal operating expenses including depreciation.
A good Cost Accounting System enables management to increase productivity and rationalize cost structure.
Verification includes checking vouchers.
Stratified audit sample means items carefully selected from each group.
Internal Control is totally synonymous with Internal check.
Audit of a bank is generally conducted through Balance sheet audit.
An auditor is liable for his annual audit of accounts on Owners.
Income Tax is levied on Presumptive Income.
If a firm has paid super-tax, its partners may follow Pay income tax as required under the law.
A resident multinational company need not pay income tax, if it is caused under Double Taxation agreement.
Income Tax rates are the same for Limited Companies.
Super Tax on companies is in vogue in Pakistan.
Current Ratio is calculated as Current Assets / Current Liabilities.
Short-term loan can be described as If the period is less than one year.
A partnership, in today’s Pakistan, under the current law can have 50 partners.
Combination can be best described as Restructuring of Capital of a Company.
Sources of funds can be increased by Describing selling prices.
Books of original entry are called Journal.
For preparing balance sheets prepaid expenses are shown as part of Assets.
Unpaid and unrecorded expenses are called Accrued expenses.
Amount, cash, or other assets removed from business by owner is Drawings.
Under the diminishing balance method, depreciation amount is Expenditure.
Users of accounting information include Investors, Creditors, and the tax authorities.
The business form(s) in which the owner(s) is personally liable is Partnership and proprietorship.
The investment of personal assets by the owner Increases total assets and increases owner’s equity.
All of the following are forms of organizations except Retailer.
Economic resources of a business that are expected to be of benefit in the future are referred to as Assets.
An owner investment of land into the business would Increase owner’s equity.
A cash purchase of supplies would Have no effect on total assets.
An owner investment of each into the business would Increase assets.
The payment of rent each month for office space would Increase liabilities.
Real accounts are related to Assets.
Which one of the following accounts would usually have a debit balance? Cash.
Quick assets include which of the following? Cash and Accounts Receivable.
Net income plus operating expenses is equal to Gross profit.
The maximum number of partners in Pakistan can be fixed at 20.
Balance sheet is always prepared as on a specific date.
The measurable value of an alternative use of resources is referred to as An opportunity cost.
A quantitative expression of management objectives is a Budget.
A cost center is Any location or department which incurs cost.
At break-even point of 400 units sold, the 401 units sold will contribute to profit before income tax of Rs. 0.50.
In considering a special order situation that will enable a company to make use of currently idle capacity, which of the following cost will be irrelevant: Fixed Costs.
A fixed cost is Will not change in total because it is not related to changes in production.
Completion of a job results in DR finished goods … CR WIP.
Operating cost is often named as Selling plus administrative expenses.
Expenses such as rent and depreciation of a building are shared by several departments, these are Joint expenses.
If under applied FOH is closed to cost of goods sold, the journal entry is DR Cost of goods sold … CR FOH control.
Re-order level, based on the provided data, is 3900 units.
The time lag between indenting and receiving material is called Lead time.
A credit balance remaining in FOH Control account is called Over-applied overhead.
Direct material cost plus direct labour cost is called Prime cost.
Productivity means The ability to produce.
A segment of the business that generates both revenue and cost is called Profit Center.
Verification includes Checking vouchers.
Audit of a bank is generally conducted through Balance sheet audit.
Economic resources of a business that are expected to be of benefit in the future are referred to as Assets.
Short-term Loan can be best described as If the period is less than one year.
The maximum number of partners in a partnership firm set up in Pakistan under Partnership Act, 1932 is 20.
Preparation of final financial reports in Pakistan is governed under Companies Ordinance 1984.
Depreciation is based on the economic life of the asset.
Inventory turnover is calculated as Cost of Goods Sold/Closing Inventory.
A difference between a Worksheet and a Balance Sheet is that a Worksheet is a combination of results of profits and financial positions.
Deferred Revenue is a liability.
The preparation of an annual report of a firm is governed under the Partnership Act 1932.
Deferred Taxation amount should be treated as a foot note.
Return on Equity is calculated as Operating Profit x 100/Equity.
Current maturity of a long-term loan is a Long Term Liability.
Prime cost is calculated as Direct Labour + Direct Material.
Process Cost is very much applicable in the Pharmaceutical Industry.
The latest computation of variances of manufacturing overheads is in Three variance approaches.
Random sampling in auditing means Selection through scientific sampling approach.
Expenditure incurred in procuring machinery is an admissible expenditure for tax purposes.
Increase in income constitutes Inflows.
M & A stands for Mergers & Acquisitions.
An endowment insurance policy can be taken in respect of Life insurance.
Audit and special audit are the same In Banking Company.
