MIDTERM EXAMINATION
Fall 2008
MGT101- Financial Accounting (Session - 2)
Question No: 1 ( Marks: 1 ) - Please choose one
|
| Rs. |
| Opening written down value of machine | 1,00,000 |
| Cost of new machine purchased during the year | 50,000 |
| Depreciation during the year | 21,000 |
| Closing written down value (WDV) | ? |
► Rs. 1, 29,000
► Rs. 1, 50,000
► Rs. 1, 21,000
► Rs. 71,000
Question No: 2 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
| Owner’s equity | Rs. 22,500 |
| Total Liabilities | Rs. 80, 385 |
| Cash in hand | Rs. 1,000 |
| Cash at bank | Rs. 2,000 |
| Debtors | Rs. 500 |
► Rs. 1, 02,885 other assets
► Rs. 1, 02,885 other liabilities
► Rs. 99,885 current liabilities
► Rs. 99,385 other assets
Question No: 3 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is prepared by:
► Bankers
► Accountant of the business
► Statutory auditor
► Manger
Question No: 4 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is:
► A memorandum statement
► A ledger account
► A part of cash book
► A part of journal
Question No: 5 ( Marks: 1 ) - Please choose one
Expenditures incurred anually on renewal of patent are known as:
► Revenue Expenditures
► Capital Expenditures
► Financial Expenditures
► Operating Expenditures
Question No: 6 ( Marks: 1 ) - Please choose one
|
| Rs. |
| Opening stock of raw material | 100,000 |
| Closing stock of raw material | 85,000 |
| Purchases of raw material during the period | 200, 000 |
| Cost of Material Consumed | ? |
► Rs. 205,000
► Rs. 215,000
► Rs. 220,000
► Rs. 225,000
Question No: 7 ( Marks: 1 ) - Please choose one
|
| Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for the each year | Rs. 5,000 |
| Sale price after 5 years | Rs.15,000 |
| Written Down Value of Asset on 5th year | Rs. 75,000 |
| Profit or loss on disposal of fixed asset | ? |
► Rs. 60,000 loss
► Rs. 75,000 profit
► Rs. 25,000 loss
► Rs. 1, 00,000 profit
Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, when the goods are purchased on cash?
► Stock account
► Cash account
► Supplier account
► Work in process account
Question No: 9 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs. 20,000 during the year, what would be the value of Gross Profit?
► Rs. 15,000
► Rs. 35,000
► Rs. 55,000
► Rs. 60,000
Question No: 10 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs.20,000 during the year. What would be the Net Profit?
► Rs.15,000
► Rs. 35,000
► Rs. 55,000
► Rs. 60,000
Question No: 11 ( Marks: 1 ) - Please choose one
Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance).
► Capital account
► Sundry creditors account
► Accounts payable account
► Cash account
Question No: 12 ( Marks: 1 ) - Please choose one
The amount of salary paid to Mr. Sohail should be debited to:
► Mr. Sohail account
► Salaries account
► Cash account
► Drawings account
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business bought goods on credit from Mr. Ali?
► Purchases account
► Mr. Ali account
► Cash account
► Sales account
Question No: 14 ( Marks: 1 ) - Please choose one
The unfavorable balance of Profit and Loss account should be:
► Added in liabilities
► Subtracted from current assets
► Subtracted from liabilities
► Subtracted from capital
Question No: 15 ( Marks: 1 ) - Please choose one
Which of the following is NOT an example of Current Asset?
► Bank Overdraft
► Accounts Receivable
► Notes Receivable
► Prepaid Expenses
Question No: 16 ( Marks: 1 ) - Please choose one
Which one of the following is NOT prepared by Non profit organizations?
► Profit & Loss account
► Income & Expenditure account
► Receipts & Payments account
► Balance Sheet
Question No: 17 ( Marks: 1 ) - Please choose one
An informal accounting statement that lists the ledger account balances at a point in time and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Question No: 18 ( Marks: 1 ) - Please choose one
Documentary evidence, in a specific format used to record the details of a transaction is known as:
► Account
► Voucher
► Journal
► Ledger
Question No: 19 ( Marks: 1 ) - Please choose one
A summarized record of transactions related to individuals or things is called a/an ___________.
► Account
► Voucher
► Journal
► Trial balance
Question No: 20 ( Marks: 1 ) - Please choose one
When a Liability is reduced or decreased, it is recorded on the:
► Right or debit side of the account
► Left or debit side of the account
► Left or credit side of the account
► Right or credit side of the account
Question No: 21 ( Marks: 1 ) - Please choose one
What will be the effect on accounting equation, when payment is made to the creditor of the business?
► Decrease in an asset, decrease in a liability
► Increase in an asset, increase in a liability
► Decrease in an asset, decrease in owner's equity
► Increase in an asset, increase in owner's equity
Question No: 22 ( Marks: 1 ) - Please choose one
Commercial Accounting is based on:
► Single entry book keeping
► Double entry book keeping
► Both single and double entry book keeping
► Cash basis of book keeping
Question No: 23 ( Marks: 1 ) - Please choose one
Cost incurred for the maintenance of shop is considered as _________.
► Deferred expense
► Capital expense
► Revenue expense
► Preliminary expense
Question No: 24 ( Marks: 1 ) - Please choose one
Mr.” A” sold goods for Rs. 3, 00,000 to Mr. “B”, Rs. 3, 00,000 will be treated as _____________ for business.
► Revenue
► Net profit
► Gross profit
► Operating profit
Question No: 25 ( Marks: 1 ) - Please choose one
Double entry accounting system includes:
► Accrual accounting only
► Cash accounting only
► Both cash and accrual accounting
► None of the given options
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following financial statement shows the financial health of an Organization at a stated period of time?
► Balance sheet
► Trading and Profit & Loss account
► Cash Flow statement
► Statement of retained earnings
Question No: 27 ( Marks: 1 ) - Please choose one
The records that are kept for the individual asset, liability, equity, revenue, expense, and dividend components are known as:
► Accounts
► Vouchers
► Journals
► Statements
Question No: 28 ( Marks: 1 ) - Please choose one
Revenue should be recognized or recorded when the goods are sold or services are rendered to the customer, this concept is known as:
► Consistency concept
► Realization Concept
► Materiality concept
► Matching concept
Question No: 29 ( Marks: 1 ) - Please choose one
A record maintained which is measurable in the form of money, this concept of accounting is known as:
► Matching concept
► Consistency concept
► Money measurement concept
► Materiality concept
Question No: 30 ( Marks: 1 ) - Please choose one
The cost of goods and services used up in the process of obtaining revenue is known as:
► Revenue
► Expense
► Liability
► Expenditure
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is an accounting system in which events are recorded as and when they occur?
► Cash Accounting
► Accrual Accounting
► Both Accrual Accounting and Cash Accounting
► None of the above
Question No: 32 ( Marks: 1 ) - Please choose one
Recording of all financial transactions undertaken by an individual or organization is known as:
► Summarizing
► Book-keeping
► Classification
► Interpreting
Question No: 33 ( Marks: 1 ) - Please choose one
Any cheque drawn to creditor but not paid by bank will effect as follows:
► Cash book will show less balance & bank book will show more
► Cash book will show more balance & bank book will show less
► Cash book will show double balance
► Bank book will show double balance
Question No: 34 ( Marks: 1 ) - Please choose one
If no distribution is made between capital and revenue expenditure then:
► The figure of debtors and creditors will be incorrect
► Cash or bank figure will be incorrect
► Net profit will be incorrect
► Balance sheet will not balance
Question No: 35 ( Marks: 1 ) - Please choose one
The Policy for charging depreciation is selected by:
► Manufacturer
► Trader
► Management
► Accountant
Question No: 36 ( Marks: 1 ) - Please choose one
The estimated value at which an asset is expected to be sold after the end of its useful life is called:
► Residual value
► Salvage Value
► Scrap Value
► All of the given options
Question No: 37 ( Marks: 1 ) - Please choose one
Mr. “A” borrowed money from bank; this transaction involves which one of the following accounts:
► Cash & Mr. A
► Bank & Mr. A
► Drawing & Mr. A
► Cash & Bank
Question No: 38 ( Marks: 1 ) - Please choose one
The beginning balance of Owner’s Equity was Rs.7,500. The dividends paid to stockholders were Rs.1,500. The ending balance of Owner’s Equity is Rs.5,000. What was the Net Income or Net Loss for the accounting period?
► Net Loss of Rs. 1,000
► Net Income of Rs. 1,000
► Net Loss of Rs. 3,000
► Net Income of Rs. 3,000
Question No: 39 ( Marks: 1 ) - Please choose one
A company sold Rs. 400,000 of merchandise for cash and Rs.120,000 of merchandise to credit customers who will pay for the merchandise in a later time period. How much revenue should be reported on the income statement of the current time period under Cash Basis of Accounting?
► Rs. 280,000
► Rs. 520,000
► Rs. 400,000
► Rs. 120,000
Question No: 40 ( Marks: 1 ) - Please choose one
Which one of the following statement is wrong about Current liabilities?
► These are due within one year
► These are short-term loans
► A vague term for loans to be repaid by an enterprise after twelve months
► In working capital, these are deducted from assets
Question No: 41 ( Marks: 10 )
Calculate depreciation of the asset for five years by using written down value method. Also show accumulated depreciation.
| Cost of the asset | Rs. 1,20,000 |
| Depreciation Rate | 10% |
| Expected Life | 5 years |
ANSWER
| YR | Written down value method | RS | Accumulated depreciation |
| 1 | cost | 120,000 |
|
|
| Depreciation @ 10%... 10%*120,000 | 12,000 | 12,000 |
|
| WDV… 120,000-12,000 | 108,000 |
|
| 2 | Dep @ 10%... 10%*108000 | 10,800 | 22800 |
|
| WDV= 108,000-10,800 | 97,200 |
|
| 3 | Dep @ 10%... 10%*97,200 | 9,720 | 32520 |
|
| WDV= 97,200-9,720 | 87,480 |
|
| 4 | Dep @ 10%...10%*87,480 | 8,748 | 41,268 |
|
| WDV=87,480-8,748 | 78,732 |
|
| 5 | Dep @ 10%...10%*78,732 | 7873.2 | 49,141.2 |
|
| WDV=78,732-7873.2 | 70858.8 |
|
MIDTERM EXAMINATION
Fall 2008
MGT101- Financial Accounting (Session - 2)
Question No: 1 ( Marks: 1 ) - Please choose one
|
| Rs. |
| Opening written down value of machine | 1,00,000 |
| Cost of new machine purchased during the year | 50,000 |
| Depreciation during the year | 21,000 |
| Closing written down value (WDV) | ? |
► Rs. 1, 29,000
► Rs. 1, 50,000
► Rs. 1, 21,000
► Rs. 71,000
Question No: 2 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
| Owner’s equity | Rs. 22,500 |
| Total Liabilities | Rs. 80, 385 |
| Cash in hand | Rs. 1,000 |
| Cash at bank | Rs. 2,000 |
| Debtors | Rs. 500 |
► Rs. 1, 02,885 other assets
► Rs. 1, 02,885 other liabilities
► Rs. 99,885 current liabilities
► Rs. 99,385 other assets
Question No: 3 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is prepared by:
► Bankers
► Accountant of the business
► Statutory auditor
► Manger
Question No: 4 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is:
► A memorandum statement
► A ledger account
► A part of cash book
► A part of journal
Question No: 5 ( Marks: 1 ) - Please choose one
Expenditures incurred anually on renewal of patent are known as:
► Revenue Expenditures
► Capital Expenditures
► Financial Expenditures
► Operating Expenditures
Question No: 6 ( Marks: 1 ) - Please choose one
|
| Rs. |
| Opening stock of raw material | 100,000 |
| Closing stock of raw material | 85,000 |
| Purchases of raw material during the period | 200, 000 |
| Cost of Material Consumed | ? |
► Rs. 205,000
► Rs. 215,000
► Rs. 220,000
► Rs. 225,000
Question No: 7 ( Marks: 1 ) - Please choose one
|
| Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for the each year | Rs. 5,000 |
| Sale price after 5 years | Rs.15,000 |
| Written Down Value of Asset on 5th year | Rs. 75,000 |
| Profit or loss on disposal of fixed asset | ? |
► Rs. 60,000 loss
► Rs. 75,000 profit
► Rs. 25,000 loss
► Rs. 1, 00,000 profit
Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, when the goods are purchased on cash?
► Stock account
► Cash account
► Supplier account
► Work in process account
Question No: 9 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs. 20,000 during the year, what would be the value of Gross Profit?
► Rs. 15,000
► Rs. 35,000
► Rs. 55,000
► Rs. 60,000
Question No: 10 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs.20,000 during the year. What would be the Net Profit?
► Rs.15,000
► Rs. 35,000
► Rs. 55,000
► Rs. 60,000
Question No: 11 ( Marks: 1 ) - Please choose one
Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance).
► Capital account
► Sundry creditors account
► Accounts payable account
► Cash account
Question No: 12 ( Marks: 1 ) - Please choose one
The amount of salary paid to Mr. Sohail should be debited to:
► Mr. Sohail account
► Salaries account
► Cash account
► Drawings account
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business bought goods on credit from Mr. Ali?
► Purchases account
► Mr. Ali account
► Cash account
► Sales account
Question No: 14 ( Marks: 1 ) - Please choose one
The unfavorable balance of Profit and Loss account should be:
► Added in liabilities
► Subtracted from current assets
► Subtracted from liabilities
► Subtracted from capital
Question No: 15 ( Marks: 1 ) - Please choose one
Which of the following is NOT an example of Current Asset?
► Bank Overdraft
► Accounts Receivable
► Notes Receivable
► Prepaid Expenses
Question No: 16 ( Marks: 1 ) - Please choose one
Which one of the following is NOT prepared by Non profit organizations?
► Profit & Loss account
► Income & Expenditure account
► Receipts & Payments account
► Balance Sheet
Question No: 17 ( Marks: 1 ) - Please choose one
An informal accounting statement that lists the ledger account balances at a point in time and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Question No: 18 ( Marks: 1 ) - Please choose one
Documentary evidence, in a specific format used to record the details of a transaction is known as:
► Account
► Voucher
► Journal
► Ledger
Question No: 19 ( Marks: 1 ) - Please choose one
A summarized record of transactions related to individuals or things is called a/an ___________.
► Account
► Voucher
► Journal
► Trial balance
Question No: 20 ( Marks: 1 ) - Please choose one
When a Liability is reduced or decreased, it is recorded on the:
► Right or debit side of the account
► Left or debit side of the account
► Left or credit side of the account
► Right or credit side of the account
Question No: 21 ( Marks: 1 ) - Please choose one
What will be the effect on accounting equation, when payment is made to the creditor of the business?
► Decrease in an asset, decrease in a liability
► Increase in an asset, increase in a liability
► Decrease in an asset, decrease in owner's equity
► Increase in an asset, increase in owner's equity
Question No: 22 ( Marks: 1 ) - Please choose one
Commercial Accounting is based on:
► Single entry book keeping
► Double entry book keeping
► Both single and double entry book keeping
► Cash basis of book keeping
Question No: 23 ( Marks: 1 ) - Please choose one
Cost incurred for the maintenance of shop is considered as _________.
► Deferred expense
► Capital expense
► Revenue expense
► Preliminary expense
Question No: 24 ( Marks: 1 ) - Please choose one
Mr.” A” sold goods for Rs. 3, 00,000 to Mr. “B”, Rs. 3, 00,000 will be treated as _____________ for business.
► Revenue
► Net profit
► Gross profit
► Operating profit
Question No: 25 ( Marks: 1 ) - Please choose one
Double entry accounting system includes:
► Accrual accounting only
► Cash accounting only
► Both cash and accrual accounting
► None of the given options
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following financial statement shows the financial health of an Organization at a stated period of time?
► Balance sheet
► Trading and Profit & Loss account
► Cash Flow statement
► Statement of retained earnings
Question No: 27 ( Marks: 1 ) - Please choose one
The records that are kept for the individual asset, liability, equity, revenue, expense, and dividend components are known as:
► Accounts
► Vouchers
► Journals
► Statements
Question No: 28 ( Marks: 1 ) - Please choose one
Revenue should be recognized or recorded when the goods are sold or services are rendered to the customer, this concept is known as:
► Consistency concept
► Realization Concept
► Materiality concept
► Matching concept
Question No: 29 ( Marks: 1 ) - Please choose one
A record maintained which is measurable in the form of money, this concept of accounting is known as:
► Matching concept
► Consistency concept
► Money measurement concept
► Materiality concept
Question No: 30 ( Marks: 1 ) - Please choose one
The cost of goods and services used up in the process of obtaining revenue is known as:
► Revenue
► Expense
► Liability
► Expenditure
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is an accounting system in which events are recorded as and when they occur?
► Cash Accounting
► Accrual Accounting
► Both Accrual Accounting and Cash Accounting
► None of the above
Question No: 32 ( Marks: 1 ) - Please choose one
Recording of all financial transactions undertaken by an individual or organization is known as:
► Summarizing
► Book-keeping
► Classification
► Interpreting
Question No: 33 ( Marks: 1 ) - Please choose one
Any cheque drawn to creditor but not paid by bank will effect as follows:
► Cash book will show less balance & bank book will show more
► Cash book will show more balance & bank book will show less
► Cash book will show double balance
► Bank book will show double balance
Question No: 34 ( Marks: 1 ) - Please choose one
If no distribution is made between capital and revenue expenditure then:
► The figure of debtors and creditors will be incorrect
► Cash or bank figure will be incorrect
► Net profit will be incorrect
► Balance sheet will not balance
Question No: 35 ( Marks: 1 ) - Please choose one
The Policy for charging depreciation is selected by:
► Manufacturer
► Trader
► Management
► Accountant
Question No: 36 ( Marks: 1 ) - Please choose one
The estimated value at which an asset is expected to be sold after the end of its useful life is called:
► Residual value
► Salvage Value
► Scrap Value
► All of the given options
Question No: 37 ( Marks: 1 ) - Please choose one
Mr. “A” borrowed money from bank; this transaction involves which one of the following accounts:
► Cash & Mr. A
► Bank & Mr. A
► Drawing & Mr. A
► Cash & Bank
Question No: 38 ( Marks: 1 ) - Please choose one
The beginning balance of Owner’s Equity was Rs.7,500. The dividends paid to stockholders were Rs.1,500. The ending balance of Owner’s Equity is Rs.5,000. What was the Net Income or Net Loss for the accounting period?
► Net Loss of Rs. 1,000
► Net Income of Rs. 1,000
► Net Loss of Rs. 3,000
► Net Income of Rs. 3,000
Question No: 39 ( Marks: 1 ) - Please choose one
A company sold Rs. 400,000 of merchandise for cash and Rs.120,000 of merchandise to credit customers who will pay for the merchandise in a later time period. How much revenue should be reported on the income statement of the current time period under Cash Basis of Accounting?
► Rs. 280,000
► Rs. 520,000
► Rs. 400,000
► Rs. 120,000
Question No: 40 ( Marks: 1 ) - Please choose one
Which one of the following statement is wrong about Current liabilities?
► These are due within one year
► These are short-term loans
► A vague term for loans to be repaid by an enterprise after twelve months
► In working capital, these are deducted from assets
Question No: 41 ( Marks: 10 )
Calculate depreciation of the asset for five years by using written down value method. Also show accumulated depreciation.
| Cost of the asset | Rs. 1,20,000 |
| Depreciation Rate | 10% |
| Expected Life | 5 years |
ANSWER
| YR | Written down value method | RS | Accumulated depreciation |
| 1 | cost | 120,000 |
|
|
| Depreciation @ 10%... 10%*120,000 | 12,000 | 12,000 |
|
| WDV… 120,000-12,000 | 108,000 |
|
| 2 | Dep @ 10%... 10%*108000 | 10,800 | 22800 |
|
| WDV= 108,000-10,800 | 97,200 |
|
| 3 | Dep @ 10%... 10%*97,200 | 9,720 | 32520 |
|
| WDV= 97,200-9,720 | 87,480 |
|
| 4 | Dep @ 10%...10%*87,480 | 8,748 | 41,268 |
|
| WDV=87,480-8,748 | 78,732 |
|
| 5 | Dep @ 10%...10%*78,732 | 7873.2 | 49,141.2 |
|
| WDV=78,732-7873.2 | 70858.8 |
|
Question No: 1 ( Marks: 1 ) - Please choose one
The expenses that give benefit for a period of more than twelve months are called ________.
► Capital expenses
► Revenue expenses
► Preliminary expenses
► None of the given options
Question No: 2 ( Marks: 1 ) - Please choose one
An expense incurred by the business for the purchase of land & building is an example of:
► Capital Expense
► Revenue Expense
► Deferred Expense
► Preliminary Expense
Question No: 3 ( Marks: 1 ) - Please choose one
Income of the business includes:
► Cash sales only
► Credit sales only
► Credit purchases only
► Both cash sales and credit sales
Question No: 4 ( Marks: 1 ) - Please choose one
The basic accounting principle/concept according to which Business is independent from its owner(s) is known as:
► Separate Entity Concept
► Matching Concept
► Going Concern Concept
► Materiality Concept
Question No: 5 ( Marks: 1 ) - Please choose one
Commercial Accounting is based on:
► Single entry book keeping
► Double entry book keeping
► Both single and double entry book keeping
► Cash basis of book keeping
Question No: 6 ( Marks: 1 ) - Please choose one
Obligations to pay cash or un-earned incomes by the business are the:
► Expenses
► Assets
► Liabilities
► Equities
Question No: 7 ( Marks: 1 ) - Please choose one
What would be the affect on the components of the accounting equation, if goods are purchased on cash?
► Increase in cash and decrease in equity
► Increase in cash and increase in goods
► Increase in goods and decrease in cash
► Increase in equipment and increase in equity
Question No: 8 ( Marks: 1 ) - Please choose one
When Capital is increased by an amount, it is recorded on the:
► Left or credit side of the account
► Right or debit side of the account
► Left or debit side of the account
► Right or credit side of the account
Question No: 9 ( Marks: 1 ) - Please choose one
Which of the following is also called "The original book of entry"?
► General Journal
► General Ledger
► Trial Balance
► Profit and Loss Account
Question No: 10 ( Marks: 1 ) - Please choose one
An informal accounting statement that lists the ledger account balances at a point in time and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Question No: 11 ( Marks: 1 ) - Please choose one
Which of the following is CORRECT for Trading account?
► It inculdes cost of goods sold and all the direct expenses related to sales
► It inculdes cost of goods sold and all the indirect expenses related to sales
► It inculdes cost of goods sold and all the direct and indirect expenses
► It inculdes cost of goods sold and all the direct and selling, administrative expenses
Question No: 12 ( Marks: 1 ) - Please choose one
Which one of the following is NOT prepared by Non profit organizations?
► Profit & Loss account
► Income & Expenditure account
► Receipts & Payments account
► Balance Sheet
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following is an example of a Current liability?
► Closing inventory
► Opening inventory
► Petty cash
► Bank overdraft
Question No: 14 ( Marks: 1 ) - Please choose one
Identify the business transaction for given entry below.
Vehicle Account XXX (Dr.)
Bank Account XXX (Cr.)
► Paid for vehicle through cheque
► Paid for vehicle through cash
► Purchased vehicle on credit
► None of the given options
Question No: 15 ( Marks: 1 ) - Please choose one
"Mr. “A” collected cash from debtors", the journal entry for this transaction is:
► Mr. "A" a/c Dr. and debtors a/c Cr.
► Mr. "A" a/c Dr. and cash a/c Cr.
► Cash a/c Dr. and debtors a/c Cr.
► None of the given options
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following is an alternate term which can be used for “Capital”?
► Liability
► Owner’s net worth
► Working capital
► Asset
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following organization converts raw material into finished goods?
► Trading concern
► Manufacturing concern
► Merchandising concern
► Service concern
Question No: 18 ( Marks: 1 ) - Please choose one
The stock of manufacturing concern consists of:
► Work in Process Inventory
► Raw Materials Inventory
► Finished Goods Inventory
► All of the given options
Question No: 19 ( Marks: 1 ) - Please choose one
|
| Rs.70,000 |
| Direct labor costs | 30,000 |
| Manufacturing overhead costs | 60,000 |
| conversion cost | ? |
► Rs. 20,000
► Rs.40, 000
► Rs.90, 000
► Rs.160, 000
Question No: 20 ( Marks: 1 ) - Please choose one
In balance sheet fixed assets are shown at:
► Cost price
► Market value
► Fair value
► Written down value (WDV)
Question No: 21 ( Marks: 1 ) - Please choose one
|
| Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for each year | Rs. 5,000 |
| Sale price after 5 years | Rs.50,000 |
| Written down value of asset on 5th year | Rs.75,000 |
| profit or loss on disposal of fixed assets | ? |
► Rs.25, 000 loss
► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profit
Question No: 22 ( Marks: 1 ) - Please choose one
|
| Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for each year | Rs. 15,000 |
| Sale price after 5 years | Rs.50,000 |
| Book value of Asset after 5 years | ? |
► Rs.25, 000
► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000
Question No: 23 ( Marks: 1 ) - Please choose one
If you start with cash book balance (Dr.), which of the following item will be deducted in Bank Reconciliation Statement?
► Any cheque drawn to creditor but not paid by bank
► Interest credited by the bank in pass book
► Cheque deposited but not credited by the bank
► Dividend collected by bank on behalf of the customer
Question No: 24 ( Marks: 1 ) - Please choose one
If you start with cash book favorable balance in Bank Reconciliation Statement, which item will be added?
► Cheque deposited but not credited by the bank
► Cheques omitted to be deposited into bank
► Any amount directly collected by bank on behalf of customer but not recorded in cash book
► Debit side of cash book was overcast
Question No: 25 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is:
► A memorandum statement
► A ledger account
► A part of cash book
► A part of journal
Question No: 26 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is prepared by:
► Bankers
► Accountant of the business
► Statutory auditor
► Manger
Question No: 27 ( Marks: 1 ) - Please choose one
Stock of Trading concern consists of:
► Raw material
► Work in process
► Merchandise inventory
► All of the given options
Question No: 28 ( Marks: 1 ) - Please choose one
When the process of production is completed, all the costs must be charged to:
► Raw material account
► Work in process account
► Finished goods account
► Merchandise account
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following account balance is shown on credit side of Trial Balance? (It is assumed that all account balances are shown on normal balance)
► Cash account
► Furniture account
► Vehicle account
► Capital account
Question No: 30 ( Marks: 1 ) - Please choose one
If a business pays rent in advance for 12 months, it will be treated as:
► Prepaid expenses of business
► Long term liability of business
► Fixed assets of business
► Current liability of business
Question No: 31 ( Marks: 1 ) - Please choose one
Accountancy covers which of the following area(s):
► Book-keeping
► Accounting
► Auditing
► All of the given options
Question No: 32 ( Marks: 1 ) - Please choose one
The assets which have a limited useful life are termed as:
► Limited assets
► Depreciateable assets
► Unlimited assets
► None of the given options
Question No: 33 ( Marks: 1 ) - Please choose one
Depreciable value of an asset is equal to:
► Cost + scrap value
► Cost + market price
► Cost – scrap value
► None of the given options
Question No: 34 ( Marks: 1 ) - Please choose one
Which one of the following is equal to the carrying cost of an asset?
► Original cost minus Accumulated depreciation
► Original cost plus Accumulated depreciation
► Original cost minus Residual value
► Written down value minus Accumulated depreciation
Question No: 35 ( Marks: 1 ) - Please choose one
Which one of the following is another name of carrying cost of an asset?
► Book Value
► Residual Value
► Fair Value
► Break up Value
Question No: 36 ( Marks: 1 ) - Please choose one
Which of the following fixed asset is shown at cost rather than book value?
► Machinery
► Furniture
► Vehicles
► Land
Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following statement is the detail of transaction in one’s account provided by the bank?
► Bank statement
► Bank reconciliation statement
► Income statement
► Financial statement
Question No: 38 ( Marks: 1 ) - Please choose one
When income exceeds expenses in a specific time period is known as:
► Savings
► Net profit
► Gross profit
► Operating profit
Question No: 39 ( Marks: 1 ) - Please choose one
An asset cost Rs. 50,000, has an estimated residual value of Rs.1, 500, and an estimated useful life of 8 years. What is the depreciation rate under reducing balance method?
► 11.5%
► 20.0%
► 25.0%
► 35.5%
Question No: 40 ( Marks: 1 ) - Please choose one
Mr.” A” sold goods for Rs. 300,000 to Mr. “B”, Rs. 300,000 will be treated as _____________ for business of Mr. "A".
► Revenue
► Net profit
► Gross profit
► Operating profit
Question No: 41 ( Marks: 10 )
Differentiate between capital and revenue expenditure.
The best difference can be described as follows :
No business can run without money or resources being invested therein.
Whatever money or resources from ones’ own pocket are put in a business is referred to as capital. Capital is the investment of the Owner in the business.
This capital or investment must earn a return or profit on its use even if it is coming out of ones’ pocket. This return is also known as profit. So no capital should be without a profit or a return. Also, no Capital even if coming from the business owner can be without cost. It is the day to day expenses whose benefit is drawn immediately. For example, salary of the employee, rent of the building,.
Revenue Expenditure is the cost of resources consumed or used up in the process of generating revenue,generally referred to as expenses.
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