Multiple Choice Questions (MCQ's) of Accounting

awaisaftab · 02-17-2009, 01:21 PM

Dear Danish

Your answer is perfectly correct.

Regards,

Awais Aftab

danishayub_76 · 02-18-2009, 08:12 PM

Difference Between Provision & Reserve?

faisal_ali · 02-19-2009, 03:21 AM

I just wanna reproduce few things.....
Capital Reserves are all those reservers which company generat from out side the trading activities...e.g. Issuance of Shares more than its nominal(par) value, up revaluation of fixed assest ......where as REVENUE rserve are generated or set aside from trading profit....like general reserves, assets replacement reserves, and retained profit........

awaisaftab · 02-19-2009, 02:16 PM

Dear Faisal,

You have mixed the capital reserve,revenue reserve and provisions with each other.

Regards,

Awais Aftab

danishayub_76 · 02-19-2009, 02:38 PM

Dear All.

My question is to differentiate provision and reserve. Or Both are same? Capital reserves and revenue reserves are afterall reserves and not provision.

awaisaftab · 02-19-2009, 06:24 PM

There is difference between provisions and reserves. Provisions are created for expected future expenses,loses or any other item chargeable to profit and loss account(Except Provision for tax)

Reserves are the part of owners or share holders equity. Reserves are created for for contigencies and un foreseen unfavourable circumstances (General Reserve & Contigencies Reserve. Some reserves are purely Capital nature for instance Share premium & capital reserve.

Capital Reserves
Share Premum
Capital Reserve
(Capital Profits

Revenue Reserves

Undistributed Profits or Credit balance of profit and loss account
General Reserves
Contigency Reserve

Funds

Some people also mix the concept of funds with reserves.

There is a big difference between funds and reserves. The funds represent the amount of cash keeps in reserve for a certain
purpose(s) but reserve does not show the cash amount reserve is only show accrual rather than cash

Example
Workers welfare Fund
Endowment Fund
(Ussualy created in Educational and charitable institutions

danishayub_76 · 02-19-2009, 07:52 PM

Thanks Dear.

awaisaftab · 02-25-2009, 04:29 PM

Which Budget is prepared first

a.Sales Budget
b.Cost Budget
c.Manufacturing Budget
d.Production Budget

maani · 02-25-2009, 05:07 PM

a. sales budget

awaisaftab · 02-25-2009, 05:29 PM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by maani
 a. sales budget
<hr height="1" noshade id="quote"></blockquote id="quote">

It is amazing to hear your reply to one of my post. Thanks

Your answer is correct.

Regards

Awais

awaisaftab · 02-25-2009, 05:36 PM

which types of accounts are most probably not maintained on the going concern basis
a.Joint Venture
b.Contract Account
c.Consignment Accounts
d.All of above

Pleas reply with comments

danishayub_76 · 02-25-2009, 06:21 PM

D. All of the above. (joint venture, consignments and contracts)
The reason behind it is that, the activity is definite and has clear ending/finishing date.

maani · 02-25-2009, 10:30 PM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by awaisaftab
 <blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by maani
 a. sales budget
<hr height="1" noshade id="quote"></blockquote id="quote">

It is amazing to hear your reply to one of my post. Thanks

Your answer is correct.

Regards

Awais
<hr height="1" noshade id="quote"></blockquote id="quote">

Awais! there is nothing personal between me n you....this is a good knowledge sharing topic, and why I will not reply to your posts?

kamranACA · 02-25-2009, 11:48 PM

Maani/Awais,

I appreciate maani's reply to your post. However, if production capacity is taken as a limitation factor keeping in view abundance of demand which always exceeds the supply/production, then how would we come to make the sales budget first of all?

Please throw light.

I feel one should conclude the limiting factor and start preparing budget with that perspective.

Regards,

KAMRAN.

awaisaftab · 02-26-2009, 04:22 PM

Kamran Bhayee

Usually the sales is taken as "Principle Budget Factor" rather than plant capacity. Here the management accountants assume that the Expected Sale cannot be so abnormal and the expected sales can be produced keeping fixed overhead almost constant.
Furthermore to streamline budgeting process all budgets should be prepared in sequential manner. First sales budget in prepared and then the required production determined after taking in consideration the inventories of work in progress and finished goods and after which production budget is prepared.

Regards,

Awais