Top 250+ Solved Financial Accounting 2 MCQ Questions Answer
Q. If the firm stops making repayments and the goods or assets are taken away from them asa result, this is known as:
a. cancellation
b. forfeiture
c. repossession
d. annulment
Q. On the balance sheet of a company, the value of the asset bought through hire purchasewill appear as:
a. cost less depreciation to date less amount owing on hire purchase less interest owing
b. cost less amounts owing on hire purchase
c. cost less depreciation to date less amount owing on hire purchase
d. cost less depreciation to date
Q. The depreciation on an asset purchased through hire purchase should be:
a. should be straight line only
b. based on the cost price of the asset only
c. based on the total cost including interest
d. no depreciation should be provide until the final payment is made
Q. The interest charged on the hire purchase should appear in the profit and loss account inwhat manner?
a. the total interest levied should be divided equally over the total period the for purchase agreement
b. the interest charged in that period only should be included
c. interest should instead be capitalised on the balance sheet
d. interest should be apportioned in proportion to the repayment totals
Q. Ownership of goods under hire purchase agreement is transferred at the time of:
a. payment of down payment
b. payment of first instalment
c. payment of last instalment
d. none of the above
Q. Which of the following does not give a difference between a hire purchase and a normalpurchase?
a. timing of payment for asset
b. legal ownership of asset
c. quality of asset purchased
d. total cost of asset.
Q. The act of buying an asset without having to make full payment in the immediate futureis known as:
a. hire purchase
b. finance lease
c. operating lease
d. sale and leaseback
Q. The amount of interest is credited by the buyer to ________
a. hire purchase account
b. hire vendor account
c. interest account
d. cash account
Q. The depreciation in the books of buyer is charged on _________
a. hire purchase price
b. market price
c. total instalment amount
d. cash price
Q. Hirer charges depreciation on:
a. hire purchase price
b. cash price
c. lower of the two
d. none of these
Q. What is transferred to Hirer under hire purchase system:
a. ownership of assets
b. possession of asset
c. ownership and possession of asset
d. none of these
Q. The Sale of Goods Act is applicable in:
a. credit purchases
b. cash purchases
c. cash sales
d. none of these
Q. Under which system, ownership is transferred on payment of final installment
a. installment system
b. credit system
c. hire purchase system
d. cash system
Q. Under hire purchase system the buyer is called _________
a. buyer
b. hirer
c. hire vendor
d. debtor.