A 'Secret Reserve' is created by: MCQ with Answer and Explanation

Question
A 'Secret Reserve' is created by:
A. Undervaluation of assets or overstatement of liabilities
B. Only banks
C. Disclosure in notes
D. Overstatement of assets
Answer: Option A
Solution (By JKSSB Mock Tests)
Secret reserve is created by showing lower profits, like undervaluing stock or overstating provision, not disclosed in balance sheet.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1
The gross profit ratio is 25%. If sales are ₹4,00,000, what is the cost of goods sold?
A. ₹5,00,000
B. ₹3,00,000
C. ₹1,00,000
D. ₹4,00,000
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Gross Profit = 25% of 4,00,000 = ₹1,00,000. COGS = Sales - Gross Profit = 4,00,000 - 1,00,000 = ₹3,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
A firm's average profit is ₹1,20,000, normal rate 10%, capital employed ₹8,00,000. Goodwill by capitalisation of average profit method will be: (Capitalised value of average profit less net assets)
A. ₹2,00,000
B. ₹12,00,000
C. ₹4,00,000
D. ₹8,00,000
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Capitalised value = 1,20,000 / 10% = 12,00,000. Goodwill = 12,00,000 - 8,00,000 = 4,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'FASB' is the accounting standard-setting body of:
A. United Kingdom
B. India
C. Japan
D. United States
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Financial Accounting Standards Board (FASB) sets US GAAP.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Explore All Accountancy and Book Keeping MCQs
Today's Top Topics
Accountancy and Book Keeping 1861 Statistics 1318
Explore Subjects
Accountancy and Statistics 3179 Economy GK 2220 English 15164 Computer 5279 Current Affairs 575
Practice Mix
Which of the following is an indirect tax in India?
The valve between the left atrium and left ventricle is the:
A person faces north. He turns 45° left, then 90° right, then 45° left. Which direction is he facing?
Under the Income Tax Act, the 'TDS' on the sale of an immovable property (other than agricultural land) by a resident is governed by which section, and what is the rate?
In 'Piecemeal Distribution' during dissolution, the first priority for payment of outside liabilities is: