MCQ Question for Jan2015

1.A new machine was purchased in Delhi and brought to Jaipur factory site for installation. The machine was damaged during transit and repair expenses were incurred amounting to Rs.20,000. Such repair will be treated as :
(a) Capital expenditure
(b) Revenue expenses
(c) Deferred revenue expenditure
(d) Reserves

2.A cheque for Rs.500 received from Yuvraj & Co. was dishonoured and debited to Discount Account. Due to rectification of this error, net profit will :

(a) Decrease by Rs.1,000
(b) Increase by Rs.500
(c) Increase by Rs.1,000
(d) No change

3.The beginning stock of the current year is overstated by Rs.500 and closing stock is overstated by Rs.1200. Effect on profit :

(a) Rs.1700 (overstated)
(b) Rs.1200 (understated)
(c) Rs.1700 (understated)
(d) Rs.700 (overstated)


4.What will be the effect when return inward is wrongly entered as return outward ?

(a) Gross Profit is increased by 100.
(b) Gross Profit is decreased by 100.
(c) Gross Profit is increased by 200.
(d) Gross Profit is decreased by 200.

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Answer :1b,2b,3d,4c