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By Accounting Mcqs No Comments

Which of the following methods is not a practical way of realizing revenue?

A. Delivery method
B. Percentage-of-completion method
C. Production method
D. Moving average method

D. The following methods are the practical ways of realizing revenue applying the conservatism concept and realization concept and the A. Delivery method in case of sale of goods, B. Percentage-of-completion method in case of rendering of services and C. Production method in case of agriculture produce. Thus, these are the various ways of recognizing revenue and the methods adopted to recognize revenue. Moving average method D. is the method of valuing inventory and it is not the method adopted to recognize revenue. Thus, D. is the correct answer.

Related Mcqs:

  1. Which of the following is the practical implementation of the accounting equation?

    A. Cash flow statement
    B. Income statement
    C. Statement of changes in equity
    D. Statement of financial position

  2. In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?

    A. Straight-line method
    B. Written down value method
    C. Units-of-production method
    D. Sum-of-the years‘-digits method

  3. Which of the following should not be treated as revenue expenditure?

    A. Interest on loans and debentures
    B. Annual fire insurance premiums on Plant and Equipment
    C. Sales tax paid in connection with the purchase of office equipment
    D. Small expenditures on long- lived assets, such as ` 20 for a paper weight.

  4. Which of the following is not a deferred revenue expenditure?

    A. Expenses in connection with issue of equity shares
    B. Preoperative expenses
    C. Heavy advertising expenses to introduce a new product
    D. Legal expenses incurred in defending a suit for breach of contract to supply goods

  5. Which one of the following should be considered a revenue expenditure?

    A. 1000 paid for the execution of a new plant
    B. Loss of 10,000 incurred in increasing the sitting accommodation of a hotel
    C. Damage paid on account of breach of a contract to supply certain goods
    D. Repair to machinery purchased, second hand.

  6. Which of the following is a revenue expenses?

    A. Raw material consumed
    B. Plant purchased
    C. Long term loan raised from bank
    D. Share Capital

  7. Expenses of the following nature are treated as a Revenue expenses except__________?

    A. Expenses for day to day running of the business
    B. Putting the new asset in working condition
    C. Depreciation
    D. Purchase of raw material

  8. Revenue receipts are shown in___________?

    A. Balance Sheet
    B. Profit and Loss appropriation A/c
    C. Manufacturing A/c
    D. Trading and Profit and Loss A/c

  9. Revenue is generally recognized as being earned at that point of time when?

    A. sale is effected
    B. cash is received
    C. production is completed
    D. debts are collected

  10. During the accounting period, sales revenue is Rs. 25,000 and accounts receivable increases by Rs. 8,000. What will be the amount of cash received from customers for the period?

    A. Rs. 33,000
    B. Rs. 25,000
    C. Rs. 17,000
    D. Rs. 8,000

The correct answer to the question: "Which of the following methods is not a practical way of realizing revenue?" is "Moving average method".

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