Investment Accounting - MCQs

Investment accounting is primarily concerned with:

• Managing employee payroll

• Recording the purchase and sale of shares and debentures

• Preparing bank reconciliation statements

• Valuing inventory

Investment in government securities is generally classified as:

• Fixed Assets

• Current Liabilities

• Current Assets

• Non-Current Investments

Interest on bonds or debentures is usually received:

• Monthly

• Quarterly

• Half-yearly

• Annually

Dividend on shares is recognized in the books of account when:

• It is declared

• It is received

• It is proposed

• Shares are purchased

If bonus shares are received, it will:

• Increase investment cost

• Decrease investment cost

• Not affect investment cost

• Be treated as income

Brokerage paid on purchase of investment is:

• Treated as revenue expense

• Deducted from investment value

• Added to the cost of investment

• Ignored

What is 'cum-interest' purchase of debentures?

• Includes accrued interest

• Excludes accrued interest

• No interest involved

• Only face value

In 'ex-interest' purchase of bonds, the buyer:

• Pays interest separately

• Receives accrued interest

• Does not pay accrued interest

• Pays full interest

Which of the following is not a type of investment?

• Equity Shares

• Fixed Deposits

• Debentures

• Capital Reserve

If the market value of an investment falls, it is:

• Ignored

• Shown as gain

• Adjusted in the Profit & Loss account

• Only disclosed in notes