MCQ CMA FOUNDATION

TOPIC: BILLS OF EXCHANGE

1. Which of the following is not a required element of a bill of exchange as per the Negotiable Instruments Act,
1881?
a) It must be in writing b) It must be stamped
c) It must be an oral agreement d) It must contain an unconditional order

2. On 1-8-21, X draws a bill on Y for 30 days after sight The date of acceptance is 8-8-21. The due date of
the bill will be
a) 8.9.2021 b) 10.9.2021
c) 11.9.2021 d) 9.9.2021

3. Which of the following is true about a foreign bill of exchange?

a) It is payable only within India
b) It is used only in government transactions
c) It can be drawn or paid outside the country
d) It is drawn to settle domestic trade transactions

4. Which type of bill can be drawn and payable only within the same country?
a) Foreign Bill b) Inland Bill c) Usance Bill d) Documentary Bill

5. X Sold goods to Y for `30,00,00. ½ of the amount will be received in cash and the balance through a B/R for
what amount X should draw a bill Y
a) `1,50,000 b) `3,00,000 c) `1,00,000 d) `1,20,000

6. If the due date is a public holiday what will be the due date of the bill
a) following day b) preceding day c) the same day only d) one month later

7. What is the key difference between a trade bill and an accommodation bill?
a) A trade bill is always for a fixed period, while an accommodation bill is demand-based
b) A trade bill settles actual trade transactions, while an accommodation bill is issued without consideration
c) A trade bill is for international trade, while an accommodation bill is for local trade
d) A trade bill does not need to be signed, but an accommodation bill does

8. A bill that is drawn, accepted, or endorsed without any underlying trade transaction or consideration is
known as a:
a) Trade Bill b) Demand Bill c) Accommodation Bill d) Documentary Bill

9. Which of the following types of bills is payable upon demand and does not have a fixed payment date?
a) Usance Bill b) Demand Bill c) Inland Bill d) Foreign Bill

10. Date on which the payment of the bill is to be made

a) public holiday b) date of grace c) due date d) date of bill + 3 days

11. A person who endorses a bill is called

a) Drawer b) Drawee c) Bank d) Endorser
12. A bill of exchange is drawn on January 1, 2024, for a period of 90 days. What will be the due date of the bill,
considering the grace period?
a) April 1, 2024 b) April 2, 2024
c) March 31, 2024 d) April 4, 2024

13. X draws a bill on Y for ₹80,000 for three months. Y accepts the bill and returns it to X. X discounts the bill
with the bank at a discount of 10% p.a. What amount will X receive from the bank?
a) ₹78,000 b) ₹78,400 c) ₹78,500 d) ₹79,000

14. A bill of ₹60,000 is drawn by P on Q for two months and accepted. P discounts the bill after 15 days at 12%
p.a. What is the discount amount, and how much will P receive from the bank?
a) ₹1,200, ₹58,800 b) ₹1,000, ₹59,000
c) ₹1,180, ₹58,820 d) ₹1,100, ₹58,900

15. A bill of exchange worth ₹1,00,000 is dishonored on its due date. The bill was drawn by A on B. The notary
charges for dishonor are ₹500. What amount will B now owe A, including the notary charges?
a) ₹1,00,000 b) ₹1,00,500 c) ₹99,500 d) ₹1,01,000
 MCQ CMA FOUNDATION
TOPIC: CONSIGNMENT
1. Who bears the risk of loss or damage to goods until they are sold in a consignment arrangement?

a) Consignee b) Consignor c) Buyer d) Both Consignor and Consignee

2. What is the relationship between the consignor and the consignee in a consignment arrangement?

a) Buyer and Seller b) Agent and Principal c) Lender and Borrower d) Employer and Employee

3. Which document provides details of the goods sent by the consignor to the consignee?

a) Bill of Exchange b) Proforma Invoice c) Account Sales d) Debit Note

4. What is the term used for the price at which goods are sent by the consignor to the consignee, where the
consignee does not know the actual cost?

a) Market Price b) Invoice Price c) Cost Price d) Sale Price

5. On receipt of goods the consignee debits which of these accounts

a) Purchase Account b) Goods Account c) Consignors Account d) None of these

6. Goods of the invoice value of ` 2,40,000 sent out to consignee at 20% profit on cost the loading amount

will be

a) 40,000 b) 48,000 c) 50,000 d) none

7. Goods sent on consignment account is of the nature of

a) Personal Account b) Nominal Account c) Real Account d) Sales Account

8. In consignment, the expenses incurred by the consignee related to handling and selling goods are usually borne by
whom?

a) Buyer b) Consignee c) Consignor d) Both Consignor and Consignee

9.Which of the following statements is false regarding consignment?

a) Consignee can return unsold goods to the consignor

b) Consignee sends the Account Sales to the consignor

c) Consignee does not receive a commission for the sale of goods

d) Risk of goods remains with the consignor until they are sold
10. ABC Ltd. sent goods costing ₹1,00,000 to XYZ Ltd. on consignment. XYZ Ltd. incurred expenses of ₹5,000 for
transportation and ₹2,000 for storage. XYZ Ltd. sold 80% of the goods for ₹1,20,000. What is the value of the unsold
stock?

a) ₹20,000 b) ₹25,000 c) ₹19,600 d) ₹30,000

11.Goods costing ₹1,50,000 were sent on consignment by PQR Ltd. to a consignee, ABC Ltd., with a 20% markup on
cost. ABC Ltd. sold 60% of the goods for ₹1,10,000. What is the consignee's commission if he earns 5% on sales?

a) ₹5,500 b) ₹3,300 c) ₹4,400 d) ₹6,600

12. A consignor sends goods worth ₹1,00,000 to a consignee who incurs ₹4,000 in expenses and sells 50% of the
goods for ₹60,000. The consignee is entitled to a 10% commission on sales. What is the profit or loss on the
consignment?

a) ₹26,000 profit b) ₹24,000 profit c) ₹30,000 profit d) ₹20,000 loss

13. ABC Ltd. sent goods costing ₹1,00,000 to a consignee. During transit, goods worth ₹20,000 were lost, and the
consignee incurred ₹5,000 in unloading charges. If the consignee sold 60% of the remaining goods for ₹60,000, what
is the value of the goods unsold after accounting for the loss?

a) ₹30,000 b) ₹32,000 c) ₹40,000 d) ₹28,000

14. X sends out goods to Y, costing `1,50,000. Goods are to be sold at cost +33 1/3%. The consignor asked consignee
to pay an advance for an amount equivalent to 60% of sales value. The amount of advance will be

a) `1,20,000 b) `1,00,000 c) `1,50,000 d) None

15.ABC Ltd. sent goods worth ₹1,20,000 to a consignee. During transit, goods worth ₹12,000 were lost, and the
remaining goods were sold for ₹1,00,000. If the consignee is entitled to a commission of 5% on sales, what is the
total commission payable to the consignee?

a) ₹5,000 b) ₹6,000 c) ₹4,400 d) ₹5,500

16.X of Kanpur sends out 1000 boxes to Y Delhi costing ` 200 each at an invoice price of ` 220 each goods sent out on
consignment to be credited in general trading will be

a) 2,00,000 b) ` 2,40,000 c) ` 40,000 d) None

 MCQ CMA FOUNDATION
TOPIC: JOINT VENTURE

1. What is a joint venture?

a) A long-term business arrangement
b) A short-term business undertaking between two or more persons
c) A business with unlimited liability
d) A temporary association of partners for trading goods

2. Which of the following is not an example of a joint venture?

a) Construction of a dam
b) Opening a permanent retail shop
c) Producing a film
d) Buying and selling seasonal goods

3. How is the profit or loss shared in a joint venture?

a) Equally between the co-venturers
b) In an agreed ratio between the co-venturers
c) Fully by the person who invested the most
d) Shared only after all expenses are recovered by the principal co-venturer

4. Which of the following statements is true about the relationship between parties in a joint venture?
a) It is a relationship between a principal and an agent
b) It is a relationship between owners (co-venturers)
c) It is a legal partnership with unlimited liability
d) It requires the registration of a firm

5. In a joint venture, what happens when a co-venturer takes over unsold goods?
a) No entry is passed
b) A new joint venture is started
c) The co-venturer's account is debited, and the Joint Venture Account is credited
d) The goods are treated as a sale and accounted for in the Joint Bank Account

6. X and Y enter into a joint venture to sell rare paintings. X purchases a painting for ₹2,00,000, and Y
purchases another painting for ₹3,00,000. They agree to share profits and losses equally. They incur
the following expenses: framing ₹10,000, advertising ₹20,000, and auction fees ₹15,000. They sell
both paintings for ₹6,00,000. What is the total profit on the joint venture?
a) ₹2,45,000 b) ₹2,55,000
c) ₹2,50,000 d) ₹2,60,000

7. Two parties, M and N, enter into a joint venture to build a bridge. M contributes machinery worth
₹10,00,000, and N provides labor worth ₹5,00,000. They also jointly incur additional expenses
amounting to ₹2,00,000. They receive a contract payment of ₹20,00,000. If they agree to share
profits and losses in the ratio of their contributions, what will be M’s share of the profit?
a) ₹7,00,000 b) ₹8,00,000 c) ₹6,50,000 d) ₹6,00,000
8. Which of the following accounts are maintained in the joint venture when separate set of books are
maintained
a) Joint Bank A/c b) Joint Venture A/c c) Co-ventruer A/c d) All of these

9. A and B enter in to joint venture sharing profit and loss in the ratio 1:1 A purchased goods costing
`20,000. B sold the goods for `25,000. A is entitled to get 1% commission on purchase and B is
entitled to get 5% commission on sales the profit will be
a) `3,550 b) `3,600 c) `3,400 d) `3,800

10. What is the nature of joint venture with co-venture account

a) Nominal Account b) Real Account c) Personal Account d) None of these

11. Memorandum Joint Venture Account is

a) Personal Account b) Real Account c) Nominal Account d) None of the above

12. Joint venture account is of the nature of

a) Personal A/c b) Nominal A/c c) Real A/c d) Suspense A/c

13. Who are the participants in a joint venture called?

a) Partners
b) Consignees
c) Co-venturers
d) Agents
 MCQ CMA FOUNDATION
TOPIC: NON -PROFIT ORGANISATION
1. What is the primary objective of a Non-Profit Organization (NPO)?
a) To earn maximum profits
b) To serve the society and fulfill a social cause
c) To maximize shareholder value
d) To provide dividends to members

2. Which of the following is a common source of income for NPOs?

a) Sales revenue
b) Donations and grants
c) Shareholder investments
d) Interest from loans

3. Which financial statement is typically prepared by Non-Profit Organizations to show their financial
performance?
a) Profit and Loss Statement
b) Income and Expenditure Account
c) Cash Flow Statement
d) Balance Sheet

4. What is a "Surplus" in the context of an NPO?

a) The amount by which income exceeds expenses
b) The amount of funds owed to creditors
c) The total amount of donations received
d) The excess of expenses over income

5. In NPO accounting, what is the “Capital Fund” or “General Fund”?

a) A fund created by the sale of assets
b) The accumulated surplus of the organization
c) A fund representing the investment of shareholders
d) A fund representing long-term liabilities

6. What does the term "Accrual Basis of Accounting" mean for NPOs?
a) Recording income and expenses only when cash is received or paid
b) Recording income and expenses when they are incurred, regardless of cash flow
c) Recording income and expenses only at the end of the financial year
d) Not recording expenses until the cash is available

7. Why do NPOs maintain a "Receipts and Payments Account"?

a) To show the financial position at the end of the year
b) To record all cash transactions during the year
c) To calculate the net profit or loss
d) To evaluate the performance of the organization

8. The following information is extracted from the books of a Non-Profit Organization for the year ending 31st
March 2024:

Subscriptions received during the year: ₹25,000

Subscriptions outstanding at the beginning of the year: ₹3,000
Subscriptions outstanding at the end of the year: ₹2,000
Subscriptions received in advance at the beginning of the year: ₹1,500
Calculate the amount of subscriptions to be shown in the Income and Expenditure Account.
a) ₹24,500
b) ₹26,500
c) ₹28,000
d) ₹25,500

9. A sports club purchased sports equipment for ₹50,000 on 1st April 2022. Depreciation is charged at 10% per
annum on a straight-line basis. Calculate the depreciation expense to be shown in the Income and
Expenditure Account for the year ending 31st March 2024.
a) ₹5,000
b) ₹10,000
c) ₹7,500
d) ₹4,500

10. The Receipts and Payments Account of a charitable trust shows a payment of ₹15,000 for rent, which includes
₹3,000 for the last year. If the rent payable for the current year is ₹14,000, what is the amount of rent to be
shown in the Income and Expenditure Account for the current year?
a) ₹15,000
b) ₹12,000
c) ₹14,000
d) ₹16,000
Answer: c) ₹14,000

11. A library purchases books worth ₹20,000 during the year and sells old newspapers and magazines for ₹1,200.
If the books are to be capitalized and depreciation is charged at 20% per annum, what is the depreciation
expense for the books for the current year?
a) ₹4,000
b) ₹3,800
c) ₹2,000
d) ₹2,400

12. A Non-Profit Organization receives a donation of ₹30,000, which is to be used specifically for building
maintenance. The organization spends ₹18,000 on building repairs and maintenance during the year. What
amount will be carried forward as a specific fund at the end of the year?
a) ₹12,000
b) ₹18,000
c) ₹30,000
d) ₹48,000

13. A school’s Receipts and Payments Account shows fees received during the year as ₹60,000. The fees
outstanding at the end of the previous year were ₹5,000, and at the end of the current year, they are ₹7,000.
Calculate the amount of fees to be shown in the Income and Expenditure Account for the current year.
a) ₹62,000
b) ₹58,000
c) ₹55,000
d) ₹65,000

14. During the year, a cultural club received a legacy of ₹50,000. The club's policy is to treat all legacies as capital
receipts. How should this amount be shown in the financial statements?

a) As income in the Income and Expenditure Account

b) As an expense in the Income and Expenditure Account
c) As a capital receipt in the Balance Sheet
d) As a liability in the Balance Sheet
15. A Non-Profit Organization’s Income and Expenditure Account shows a surplus of ₹10,000. If the opening
balance of the Capital Fund was ₹50,000 and the organization received donations of ₹15,000 during the year,
what is the closing balance of the Capital Fund?

a) ₹65,000
b) ₹75,000
c) ₹85,000
d) ₹70,000

EXPLAIN WITH REASON THE FOLLOWING STATEMENT ARE CORRECT OR INCORRECT

1. NPOs aim to maximize profits for their members.

2. The Receipts and Payments Account of an NPO is prepared on an accrual basis.

3. An NPO can earn a surplus, which is reinvested into the organization.

4. Subscriptions received in advance are considered a liability for an NPO.

5. Donations given for a specific purpose are treated as revenue income.

6. The Income and Expenditure Account of an NPO is similar to a Profit and Loss Account of a for-profit
business.

7. The Capital Fund of an NPO is the equivalent of the owner’s equity in a for-profit business.

8. Assets donated to an NPO are recorded in the Income and Expenditure Account.

9. The Balance Sheet of an NPO includes both assets and liabilities.

10. Life membership fees are always treated as revenue income.

11. Depreciation is not charged on fixed assets owned by an NPO.

12.Outstanding expenses of an NPO are shown on the liabilities side of the Balance Sheet.

13.An NPO can distribute its surplus among its members.

14.The main sources of income for NPOs are donations, grants, and membership fees.

15.The Receipts and Payments Account records both cash and credit transactions.