Tag: principles of double entry system

Questions Related to principles of double entry system

 If a company is registered on the basis of fictitious names, its incorporation is invalid.

book keeping and accountancy principles of double entry system objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

  1. True

  2. False

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Correct Option: B
Explanation:

The certificate of incorporation once issued, is a conclusive evidence of the existence of the company even if there were deficiencies in the formalities.

Even when company get registered with illegal object with any fictitious name, the birth of the company cannot be questioned only remedy is to wind off.

Number of purchase orders for each year is multiplied to relevant ordering cost for each purchase order to calculate _________________.

book keeping and accountancy principles of double entry system objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

  1. annual irrelevant ordering costs

  2. annual relevant carrying costs

  3. annual relevant ordering costs

  4. annual irrelevant carrying costs

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Correct Option: C

Other factors held constant, but lesser project liquidity is because of ______________.

book keeping and accountancy principles of double entry system objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

  1. Shorter payback period

  2. Greater payback period

  3. Less project return

  4. Greater project return

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Correct Option: B
Explanation:

Other factors held constant, but lesser project liquidity is because of greater payback period. Payback period in capital budgeting refers to the period of time required to recoup the funds expended in an investment, or to reach the break-even point.

Personal Account relates to  ____________.

book keeping and accountancy principles of double entry system objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

  1. Persons

  2. All artificial and natural persons

  3. Representative Personal Accounts

  4. All of the above

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Correct Option: D

What is the validity of the registration certificate?

book keeping and accountancy principles of double entry system objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

  1. One year

  2. Valid till it is cancelled.

  3. No validity

  4. Five years

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Correct Option: B