- No data uploaded
- Instant results
CA Foundation Accounting & Finance Questions
Practise accounting & finance (finance) for the Chartered Accountancy Foundation Examination: 10 multiple-choice questions, each with the correct answer and a worked explanation. Click an option to check it, or “New questions” for another set.
Accounting & Finance practice
-
Q1.The CAPM expected return equals:
Show answer & explanation
Answer: D — Rf + β(Rm − Rf)
Capital Asset Pricing Model: risk-free rate + beta × market risk premium.
-
Q2.₹4,000 is invested at 4% compounded annually. What is it worth after 10 years?
Show answer & explanation
Answer: C — ₹5,921
FV = PV(1 + r)ⁿ = 4,000 × 1.04^10 = ₹5,921.
-
Q3.Working capital is:
Show answer & explanation
Answer: B — Current assets − current liabilities
Working capital = current assets − current liabilities.
-
Q4.What is the present value of ₹11,000 received in 6 years at a 4% discount rate?
Show answer & explanation
Answer: C — ₹8,693
PV = FV/(1 + r)ⁿ = 11,000 / 1.04^6 = ₹8,693.
-
Q5.Which statement shows a company’s cash inflows and outflows from operating, investing and financing activities?
Show answer & explanation
Answer: A — Cash flow statement
The cash flow statement groups cash flows into three activities.
-
Q6.Find the present value of ₹400 received at the end of each year for 6 years at 4%.
Show answer & explanation
Answer: D — ₹2,097
PV of an ordinary annuity = PMT × [1 − (1 + r)⁻ⁿ]/r = 400 × 5.2421 = ₹2,097.
-
Q7.Revenue is recognised under accrual accounting when:
Show answer & explanation
Answer: C — It is earned (performance obligation satisfied)
Under IFRS 15 / ASC 606 revenue is recognised as obligations are satisfied.
-
Q8.Find the present value of ₹2,000 received at the end of each year for 9 years at 5%.
Show answer & explanation
Answer: D — ₹14,216
PV of an ordinary annuity = PMT × [1 − (1 + r)⁻ⁿ]/r = 2,000 × 7.1078 = ₹14,216.
-
Q9.Under the accounting equation, Assets =
Show answer & explanation
Answer: A — Liabilities + Equity
Assets = Liabilities + Owners’ equity.
-
Q10.Find the compound interest on ₹14,000 at 5% per annum for 3 years, compounded annually.
Show answer & explanation
Answer: A — ₹2,206.75
A = P(1 + R/100)^T = 14,000 × 1.05^3 = 16,206.75; CI = A − P = ₹2,206.75.
How to approach accounting & finance questions
Master the accounting equation, the three financial statements and time value of money: FV = PV(1 + r)ⁿ, PV of an annuity = PMT × [1 − (1 + r)⁻ⁿ]/r. Ratios link the statements.
About CA Foundation
Chartered Accountancy Foundation Examination — conducted by Institute of Chartered Accountants of India (ICAI). The entry level of the CA course: accounting, business laws, quantitative aptitude and business economics.
Original practice questions written for this site in the style and difficulty of each exam’s syllabus. They are not past papers and the site is not affiliated with any exam body. Exam patterns, marking schemes and syllabi change — always check the latest official notification.
CA Foundation practice topics
| Topic | Section | Question source |
|---|---|---|
| Accounting & Finance | Finance | Calculated + question bank |
| Simple & Compound Interest | Quantitative aptitude | Calculated (new numbers every set) |
| Averages & Statistics | Quantitative aptitude | Calculated (new numbers every set) |
| Logical Reasoning | Reasoning | Calculated (new numbers every set) |
| Economy & Banking Awareness | General awareness | Question bank |