Accounting Questions & Answers - Free Online Practice

626.

In the head office ledger, the value of goods sent to the branch are____________

Debited to the branch current account

Debited to the head office current account

Credited to the head office current account

Credited to the branch current account

Correct answer is B

Branch current account is maintained in the head office books to record all transactions between the head office and the branch. This account is debited with the following:

i. Goods sent to branch

ii. Expenses of the branch paid by the head office

iii. Profit of the branch

627.

When goodwill is not retained in the business, the entries in the new partners books will be to debit______________

Goodwill account and credit partners capital account

Cash account and credit goodwill account

Goodwill account and credit cash account

Partners capital account and credit goodwill account

View answer & explanation

Correct answer is D

When goodwill is raised in the books at full value, the entry is

Dr Goodwill Account

Cr Old partners capital account (old ratio)

When the raised goodwill is written off, entry will be:

Dr All partners capital account

Cr Goodwill accounts

Note: goodwill written off includes new partners in the new profit sharing ratio

628.

The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as:

Call in advance

Call in arrears

Forfeiture

View answer & explanation

Correct answer is B

is the amount called by the company which is not paid by the shareholders before the due date fixed for payment

629.

The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the________

Accountant general

Finance minister

Auditor general

Permanent secretary

View answer & explanation

Correct answer is C

Appropriation is the amount that government reserves for a particular purpose. Public expenditure is the spending made by government of a country on collective needs

630.

When goods are sent to branch at cost plus mark up, it means that the branch should sell at____________

Price above or below the stipulated price

Any price but not below the transfer price

Cost price

A price that is equal to the mark up

View answer & explanation

Correct answer is A

Cost plus mark up is a pricing strategy in which the selling price is determined by adding a specific amount mark up to a product unit cost