| Post Name | Divisional Accounts Officer Paper I -Kerala State Electricity Board Ltd |
|---|---|
| Question Paper Code | 119/2025/OL |
| Category Code | 192/2024 |
| Date of Test | 30 October 2025 |
| Exam Type | Online Examination |
| Total Questions | 100 |
1
Mr. A started a business with Rs. 10,00,000 of his personal savings. He also paid his son's school fees of Rs. 50,000 from the business account. As per accounting principles, how should this transaction be treated in the business books?
Answer
C. Recorded as drawings, reducing owner's capital
2
A company prepares its ļ¬nancial statements every year from 1st April to 31st March, even though the business is expected to continue indeļ¬nitely. Which accounting assumption justiļ¬es dividing the life of the business into such reporting intervals?
Answer
C. Periodicity Concept
3
A company consistently follows FIFO method of stock valuation. In the current year, it decides to shift to Weighted Average method for better presentation. Which principle should it comply with while making this change?
Answer
B. Full Disclosure
4
A machine costing Rs. 5,00,000 has a resale market value of Rs. 6,00,000, but the company continues to record it at purchase price minus depreciation. Which concept is being followed?
Answer
B. Cost Concept
5
A ļ¬rm has a pending court case. If it loses, it may have to pay Rs. 50,00,000. The outcome is uncertain and will be decided next year. As per accounting conventions and standards, how should this be treated in the current year's ļ¬nancial statements?
Answer
C. Disclose the possible liability in the Notes to Accounts, without adjusting the Proļ¬t and Loss Account
6
A business has invested in shares worth Rs. 2,00,000. By year-end their market value fall to Rs. 1,50,000. The accountant wants to show them at cost in the Balance Sheet, but the auditor insists on showing at lower of cost or market price. Which principle is the auditor applying?
Answer
C. Conservatism
7
Company X decides not to disclose a small loss of Rs. 5,000 in its notes to accounts, arguing that it is insigniļ¬cant compared to turnover of Rs. 50 crore. Which principle justiļ¬es this action, and does it violate any other principle?
Answer
A. Justiļ¬ed by Materiality, not a violation
8
A company spends Rs. 2,00,000 on repainting and repairing its old machinery. The expenditure does not improve the eļ¬ciency or life of the machinery, but it helps to keep the asset in usable condition. How should this expenditure be treated in the books of accounts?
Answer
B. Charge it to the proļ¬t and loss account
9
A company spends Rs. 15,00,000 on an aggressive advertisement campaign to launch a new product, and management expects the beneļ¬t to last for three years. As per current accounting standards (Ind AS/IAS), how should this expenditure be treated?
Answer
C. Charged entirely to the Statement of Proļ¬t and Loss in the year of incurrence
10
Assertion (A) : A company replaces the roof of its factory at a cost of Rs. 4,00,000 and the replacement increases the building's remaining useful life by 10 years; the cost should be capitalised. Reason (R) : Subsequent expenditure on property, plant and equipment is capitalised when it is probable that future economic beneļ¬ts will ļ¬ow to the entity and the cost can be measured reliably. Choose the correct option based on A and R:
Answer
A. Both A and R are true, and R is the correct explanation of A
11
Which of the following is the capital receipt but not capital proļ¬t?
Answer
D. Loan taken from bank
12
A company sells an old machine for Rs. 12,00,000; its original cost was Rs. 10,00,000 and accumulated depreciation till the date of sale was Rs. 7,00,000. Assertion (A) : The proļ¬t on sale of the machine can be transferred to General Reserve and treated as a free reserve. Reason (R) : Any gain realised in cash from disposal of ļ¬xed assets is a capital proļ¬t, and all capital proļ¬ts are automatically eligible to be distributed as dividends or transferred to free reserves. Choose the correct option based on A and R:
Answer
C. A is true but R is false
13
A company incurs the following expenses in a year: 1. Rs. 5,00,000 spent on extensive repairs of machinery, increasing its life by 5 years 2. Rs. 3,00,000 spent on legal fees for acquiring a new building. 3. Rs. 4,00,000 paid as damages for breach of contract Which of the following is the correct classiļ¬cation?
Answer
A. 1. Capital Expenditure 2. Capital Expenditure 3. Capital loss
14
A warehouse (book value Rs. 40,00,000) is destroyed by ļ¬re; insurance claim admitted is Rs. 55,00,000, payable next year. How should this be treated?
Answer
D. Write oļ¬ asset at Rs. 40,00,000 record claim receivable Rs. 55,00,000, and recognise Rs. 15,00,000 proļ¬t as capital proļ¬t on realisation
15
Debit means:
Answer
D. An increase in asset
16
On purchase of a machine, the company paid Rs. 2000 as erection charges of machine. For recording this
Answer
B. Machinery account is debited
17
Patent account is an example for:
Answer
B. Real account
18
Vimal has to pay Rs. 50,000 to Venu's enterprise. He got a discount of Rs. 1000 for immediate payment of the amount within ten days. This is an example of
Answer
A. Cash discount
19
Among the following accounts which has a credit balance?
Answer
D. Return Outward
20
____________ is also known as Invoice book.
Answer
C. Purchase day book
21
A purchased goods worth Rs. 2500 from B and later identiļ¬ed that some items are of low quality and returned goods worth Rs. 800 to B. The document prepared and send by A along with the goods returned is called:
Answer
A. Debit Note
22
While preparing trial balance Akhil noticed a diļ¬erence of Rs. 2000. The diļ¬erence shall be transferred to
Answer
C. Suspense Account
23
Opening entries are recorded in
Answer
D. Journal Proper
24
Total drawings from drawings account is transferred to Capital Account. The entry passed for this transfer is called:
Answer
C. Transfer entry
25
Identify a contra entry:
Answer
A. Withdrew Rs. 1000 from the bank
26
A credit purchase of the amount of Rs. 8,000 made from Soorya has been wrongly recorded by debiting Soorya's account. This is an example of
Answer
A. Error of commission
27
The purchase of a new furniture of Rs. 30,000 is wrongly recorded as oļ¬ce expense. This can be rectiļ¬ed by
Answer
B. Crediting oļ¬ce expense
28
Imprest system is used for maintaining
Answer
C. Petty cash book
29
Which Indian Accounting Standard formerly dealt exclusively with Depreciation Accounting before convergence with Ind AS?
Answer
B. AS 6
30
Under the Written Down Value (Diminishing Balance) method, depreciation is calculated on:
Answer
B. Book value at beginning of year
31
As per Ind AS 16, change in method of depreciation should be treated as:
Answer
B. Change in accounting estimate
32
Depreciation is a
Answer
B. Revenue Expenditure
33
The method of depreciation most suited for assets whose loss of value is based on their actual production is:
Answer
B. Units of Production
34
As per Income Tax Act, which methods are allowed for computing depreciation?
Answer
B. Written Down Value and Straight Line
35
The main purpose of providing for depreciation in accounts is to:
Answer
B. To spread the cost of asset over their useful life
36
Which of these causes the cash book to show a higher balance than the passbook?
Answer
A. Bank charges not entered in the cash book
37
When reconciling starting with an overdraft as per passbook, which item is subtracted to compute the cash book overdraft?
Answer
Question Cancelled
38
Which item is always added to the passbook balance, while preparing bank reconciliation statement?
Answer
Question Cancelled
39
NSF (not suļ¬cient funds) cheques returned by the bank lead to:
Answer
B. Decrease in cash book balance
40
Which error will not cause a diļ¬erence between cash book and passbook balance?
Answer
C. Error of posting in the sales day book
41
When starting reconciliation with credit balance as per cash book, which item must be added?
Answer
D. Cheques issued but not yet presented
42
The customer always prepares her bank reconciliation statement with her cash book balance. If the bank debits customer account for charges not yet recorded in the cash book, this should be:
Answer
B. Deducted from cash book balance
43
Which of the following schedules of Companies Act, 2013 speciļ¬es the form and contents of ļ¬nancial statements of a company?
Answer
C. Schedule III
44
Which of the following statement is/are correct with regard to proposed dividend? i. Proposed dividend is treated as a contingent liability. ii. proposed dividend of the previous year will be accounted in the current year after it is approved by the shareholders in their Annual General Meeting. iii. The approved proposed dividend is shown as deduction from Reserves and Surplus in the current year's balance sheet.
Answer
D. All of the above i, ii and iii
45
Share application money pending allotment (not refundable) is shown in Balance Sheet as ____________.
Answer
C. A separate line item under Equities and Liabilities
46
Interest paid on security deposits in the case of a non-ļ¬nancial enterprise is a cash ļ¬ow from which of the following categories?
Answer
C. Cash ļ¬ow from ļ¬nancing activities
47
Calls paid in advance are shown under which of the following head?
Answer
A. Current Liabilities
48
Advance given for the procurement of ļ¬xed asset is a ____________.
Answer
A. Long term advance
49
Which of the following statement is/are correct? i. Share Options Outstanding Account is coming under Reserve and Surplus. ii. Deferred tax liability is a current liability iii. Appropriation of proļ¬t is reļ¬ected in the statement of Proļ¬t and Loss
Answer
A. Only i
50
Which of the following sections of the Companies Act, 2013 speciļ¬es that a company with one or more subsidiaries or associate companies shall prepare a consolidated ļ¬nancial statement of the company and of all subsidiaries and associate companies in the prescribed form?
Answer
C. Section 129(3)
51
State True or False based on Accounting Standard I (Disclosure of Accounting Policies) Statement A : Any change in the accounting policies which has a material eļ¬ect in the current period or in later periods should be disclosed. Statement B : If such amount is not ascertainable wholly or in part, the fact need not to be disclosed.
Answer
C. Only A is correct
52
As per Accounting Standard 20 (Earnings Per Share) basic earnings per share is obtaining by dividing act proļ¬t attributable to equity shareholders with:
Answer
D. Weighted average number of equity shares outstanding during the period
53
Cash ļ¬ow statement is helpful for the used in which the following area:
Answer
D. All the above
54
As per accounting standards 2 (Valuation of Inventory) Work in Progress is valued at:
Answer
A. Lower of cost or net realizable value
55
The treatment of cost of right shares while valuing investments
Answer
A. Added to the cost of investments
56
Identify the correct statement to sale and lease back of operating lease where selling price at fair market value:
Answer
B. Proļ¬t or loss should recognise immediately
57
As per accounting standards 38 (Intangible Asset) identify intangible asset:
Answer
C. All of these
58
Identify the model used to value the investment property:
Answer
B. Cost Model
59
"A liability which can be measured only by using substantial degree of execution" - The statement deļ¬nes:
Answer
B. Provision
60
State True or False: Statement A : Exchange diļ¬erences on forward exchange contract should be recognised in the statement of proļ¬t and loss in the reporting period in which the exchange rates change. Statement B : Any proļ¬t or loss arising on cancellation or renewal of such a forward exchange contract should not be recognised as income or as expense for the period.
Answer
C. Only A is correct
61
Which of the following method is used for the recognition of revenue from service transactions?
Answer
C. Both 1 and 2
62
A group of contracts should be treated as a single construction contract when
Answer
B. Contracts are so closely interrelated that they form a single project with overall proļ¬t margin
63
While calculating borrowing cost exchange diļ¬erences on foreign currency borrowings are treated as borrowing costs up to:
Answer
A. The diļ¬erence between interest on local and foreign borrowings
64
On sale of an asset which was revalued upwards, how will you treat the Revaluation Reserve?
Answer
B. Revaluation Reserve Credited to Retained Earnings
65
Which of the following is not considered as Consolidated Financial Statements?
Answer
C. All of these
66
As per AS 4 (Contingencies and Events occurring after the Balance Sheet Date), Select the correct statement related to contingent gains.
Answer
C. Not recognised until virtually certain
67
Change in useful life of an asset resulting in revised depreciation is an example of:
Answer
B. Change in accounting estimate
68
While preparing Balance Sheet, deferred tax assets and liabilities are shown:
Answer
D. Separately from current assets and liabilities
69
Comparative Balance Sheet for interim reports are prepared by taking:
Answer
A. End of current interim period and immediately preceding ļ¬nancial year
70
As per Accounting Standard 2 (Valuation of Inventories) Abnormal wastage of materials and labour should be
Answer
B. Transferred to Proļ¬t and Loss A/c
71
Which of the following is true? i. Financial accounting draws information from cost accounting. ii. Financial accounting and cost accounting reveals ļ¬nancial position of the ļ¬rm as on a particular date. iii. Principle for valuing stock is based on the Net Realizable Value in cost accounting.
Answer
C. Only iii
72
The purpose of job analysis is to: i. Determine tasks which comprises the job. ii. Determine duties and responsibilities of a job. iii. Determine the relative worth of a job within an organization
Answer
D. i and ii
73
System of wage payment where workers do not get any reward for time saved i. Time wage ii. Piece rate iii. Time wage and Piece rate
Answer
A. i Only
74
Which of the following belongs to variable overhead? i. Spoilage ii. Lubricants iii. Idle time
Answer
D. i, ii and iii
75
Which of the following is not an inventory carrying cost? i. Cost of obsolescence ii. Insurance iii. Storage cost
Answer
D. None of the above
76
Basis of apportionment of crĆØche expenses is:
Answer
C. Number of female workers
77
Which of the following is true regarding ABC analysis? i. Used for selective material control ii. Used for control of spare parts iii. Measures the cost signiļ¬cance of materials
Answer
B. i and iii
78
The main objective of motion study is i. To determine the proper time to complete the job ii. To determine the best way of performing an operation iii. To ļ¬x the standard time to do each operation
Answer
B. ii only
79
The incidence of selling and distribution overhead depends on i. Distance of market ii. Extent of competition iii. Terms of sales
Answer
D. All the above i, ii and iii
80
Overhead cost is the aggregate of i. Direct material, direct labour and indirect expenses ii. Indirect material, indirect labour and direct expenses iii. Indirect material, indirect labour and indirect expenses
Answer
C. iii only
81
Under absorption happens when i. A pre-determined rate is used based on budgeted overhead ii. The amount absorbed is less than the amount incurred iii. Actual expenses exceed the estimates
Answer
D. All the above i, ii and iii
82
Which of the following is an example for normal idle time?
Answer
D. All of the above
83
Statement : Prime cost consists of all direct costs incurred in production: Assertion : Factory overhead is a direct cost and should be included in prime cost.
Answer
B. Statement is true but assertion is false
84
In preparing cost sheet, Administrative expenses are added to:
Answer
B. Works cost
85
Which of the following statements about carriage inward on raw materials are True? I. It is treated as direct material cost II. It increases the cost of raw materials III. It is included in prime cost calculation IV. It is classiļ¬ed as factory overhead
Answer
A. I, II and III only
86
Depreciation on Plant and Machinery used in production should be included in:
Answer
C. Factory overheads
87
Assertion A : Depreciation on factory machinery should be classiļ¬ed as ļ¬xed factory overhead in cost sheet preparation. Reason R : Depreciation does not vary with the level of production and remains constant over the accounting period. Which evaluation is correct regarding overhead classiļ¬cation?
Answer
B. A is correct, R is incorrect - depreciation can vary with production
88
While preparing a cash budget, which of the following items should be excluded? I. Depreciation on ļ¬xed assets II. Provision for bad debts III. Proposed dividend payment IV. Amortization of Intangible assets V. Unrealized gains on investments
Answer
B. I, II, IV and V only
89
The primary objective of budgetary control is to:
Answer
C. Plan and control business operations
90
Rolling budgets are most suitable for:
Answer
B. Volatile and uncertain business environments
91
Choose the correct option based on the given statements: Statement I: Flexible budgets adjust automatically with changes in activity levels. Statement II : Flexible budgets are prepared after the budget period ends.
Answer
C. Statement I is true, Statement II is false
92
Choose the correct option based on the given statements: Statement I: Master budget includes both operating and ļ¬nancial budgets Statement II: Master budget is prepared before ļ¬nancial budgets
Answer
B. Statement I is true, Statement II is false
93
Choose the correct option based on assertion and reason analysis: Assertion A: Programme budgeting is most suitable for proļ¬t-oriented organizations. Reason R: Programme budgeting focuses on achieving speciļ¬c objectives and outcomes.
Answer
D. A false, but R is true
94
Activity-Based Budgeting (ABB) is an extension of:
Answer
B. Activity-Based Costing (ABC)
95
Choose the correct option based on assertion and reason analysis: Assertion A: Master budget should be prepared before functional budgets. Reason R: Master budget provides the framework for all other budgets
Answer
D. A is false, but R is true
96
Rule 3 of Cost Records and Audit Rules, 2014 speciļ¬es maintenance of cost records. Which of the following scenarios would require Mandatory compliance? I. A pharmaceutical company with turnover of Rs. 40 crores manufacturing bulk drugs II. A steel company with turnover of Rs. 80 crores engaged in manufacturing of iron and steel III. A cement company with turnover Rs. 45 crores, producing ordinary Portland cement IV. An electricity distribution company with turnover of Rs. 200 crores.
Answer
A. I, II and III only
97
Cost audit report shall be signed by:
Answer
A. Cost auditor only
98
Choose the correct option based on the given statements : Statement I : Cost auditor independence requires no business relationship with the company. Statement II: Cost auditor can hold securities in the company subject to certain limits.
Answer
B. Statement I is true, Statement II is false
99
Assertion A: Cost audit is not applicable to government companies. Reason R : Government companies have diļ¬erent regulatory frameworks and oversight mechanism.
Answer
D. A is false, but R is true
100
Statement I: Cost audit is applicable to all manufacturing activities of a covered company. Statement II: Service activities are excluded from cost audit scope.
Answer
D. Both Statements are false
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