1. Find the closing stock from the following details.
Opening Stock ` 80,000, Purchases ` 1,40,000, Wages ` 60,000, Sales ` 3,20,000, GP on sales 25%
Correct : B. 40,000 ;
2. Sinking Fund is created for which of these purposes
Correct : D. All the three
3. Tick the correct statement
Correct : B. Balance Sheet is also known as a positional statement ;
4. A B C are three partners sharing profit and loss in the ration of 2:2:1, B recently obtained MBA degree from Oxford University, accordingly the partner decided to give him a guaranteed profit of ` 60,000. Find the share of profit of B if the firm made a net profit of ` 1,25,000 during 2012-13
Correct : A. 60,000 ;
5. A firm has a policy of changing depreciation on Plant and Machinery @ 10% under WDV Method. If the book value of Plant and Machinery was ` 81,000 on 31.03.2013. Find the original cost of the plant if the same was purchased on 01.04.2011
Correct : B. 1,00,000 ;
6. Closing Stock lying unsold with the consignee is valued at—
Correct : D. Least of cost or net realizable value
7. Goods lying with the consignee are shown as—
Correct : A. Closing Stock ;
8. Credit balance in Cash Book means—
Correct : A. Bank overdraft ;
9. AB are two partners in a firm, as per the terms of agreement partners drawing will carry interest @ 10%. If A has drawn funds from business as per the details given below. Find the interest for the year ended 31.12.2012 01.04.2012 ` 20,000 01.06.2012 ` 10,000 01.09.2012 ` 20,000
Correct : B. 2,750
10. ` 5,000 paid as local cartage on material purchased. However this amount was booked under
Miscellaneous Expenses A/c instead of on Carriage Inward. Due to this error net profit and loss will—
Correct : D. not be affected at all
11. If outside liabilities and owners‘ equity are added we get………
Correct : A. Total Liabilities ;
12. Business expenses excludes…
Correct : B. LIC premium on the life of proprietor ;
13. Goods received from other co-venturer is debited to ……
Correct : A. Joint Venture A/c ;
14. Which of these is not a function of Financial Accounting
Correct : B. To portray gloomy picture of the business in order to evade tax liabilities
15. Drawee is the person…..
Correct : C. Who accepts the bill of exchange ;
16. Accounting is a/ an –
Correct : B. Art ;
17. Trial Balance is prepared to….
Correct : B. To check arithmetic accuracy of A/cs ;
18. The term PBIT stands for:-
Correct : B. Profit before Interest and Tax ;
19. …… is a secret reserve usually created to provide for the loss by way of fluctuation in the value of investment
Correct : A. Investment Fluctuation Reserve ;
20. As per the Companies Act, 1956 which of these are allowed to create secret reserves in their books of
account
Correct : D. All the three
21. An increase in one liability may lead to
Correct : D. Either (a) or (b)
22. X draws a 3 months bill of exchange for ` 25,000 upon Y on 23-10-12. Find the due date of the bill.
Correct : C. 26-01-13 ;
23. A is entitled to 10% partner‘s commission before charging such commission. Find the commission
payable to A if the net profit before charging such commission amounted to ` 60,000
Correct : B. 6,000 ;
24. Over statement of sales may lead to-
Correct : A. Over statement of profit of current year;
25. When Bills Receivable is returned dishonoured by the drawee, which of these A/c is debited by the
drawee
Correct : C. BP A/c ;
26. A second hand truck was purchased for `75,000, `10,000 was spent on its repair, `2,000 to get the truck registered in the name of the firm and `1,000 as dealers commission. The capitalized value of truck will be-
Correct : A. 88,000 ;
27. Narrations are usually given at the end of
Correct : A. Each journal entry ;
28. Under which method of depreciation annual depreciation goes on decreasing
Correct : A. Reducing balance method ;
29. Choose the true statement-
Correct : A. Income and gain A/cs shows increase on credit side
30. Which of these is an example of accelerate method of depreciation
Correct : A. Written down value method ;
31. Which of these items will not be capitalized along with the Asset
Correct : B. Annual repair and maintenance ;
32. On the debit side of a Sales A/c entry can be for which of these reasons
Correct : C. Both ;
33. The term Imprest system is related to………
Correct : A. Petty cash ;
34. An office equipment is purchased on 1.1.12 for `1,10,000 having working life of 4 years at the end of which it is expected to have a scrap value of `10,000. Find the difference in depreciation as per Sum of years digit methods and reducing balance method (25% WDV) for the year ending on 31st December 12
Correct : C. 15,000 ;
35. M draw a 3 months bill of exchange of ` 20,000 on T on 1st April 07. On due date T paid ` 4,000 and requested M to draw another bill of exchange for 2 months. On the due date of second bill of exchange T is declared insolvement and a dividend of 25 paisa in a rupee is expedited to be realized from his assets. Find the amount receivable from T in respect of the outstanding bill of exchange
Correct : B. 4,000 ;
36. A sends goods costing ` 1,00,000 on consignment to yield a profit of 20% on cost. What is the invoice price
Correct : C. 1,20,000 ;
37. Under which method of depreciation annual depreciation fluctuate with the volume of production
Correct : B. Production Method ;
38. Who bears noting charges in case of dishonor of a bill of exchange.
Correct : B. Drawee ;
39. When the goods are returned by the customers within the specified time, they are recorded
Correct : B. Initially in the Sale or Return Day Book. Thereafter, in the Sale or Return Ledger
40. Long term assets being `3,00,000, current Assets `80,000, outside liabilities `1,20,000. Find owners
equity-
Correct : B. 2,60,000 ;
41. A merchant sends out his goods casually to his dealers on approval basis. All such transactions are, however, recorded as actual sales and are passed through the sales book. On 31st March, it was found that 100 articles at a sale price of ` 200 each sent on approval basis were recorded as actual sales at that price. The sale price was made at cost plus 25%. The amount of stock on approval will be amounting
Correct : A. 16,000.
42. In the Sale or Return Ledger
Correct : A. All the customers are individually debited and the sale or return account is credited with the periodical total of the Sale or Return Day Book,
43. All revenue receipts and expenditure are shown in –
Correct : B. Trading and Profit and Loss A/c ;
44. On 1st January 2013 X paid `120,000 being rent upto 31.12.2013. If the accounts are closed on
31.03.12. `90,000 will be shown as –
Correct : B. Prepaid rent / Expenses ;
45. Choose the true statement—
Correct : B. Accrued income represent income earned but not realized in cash
46. Which of these will cause change in working capital
Correct : C. Sale of office equipment for cash
47. Consider the following data pertaining to a firm: Credit balance as per bank column of cash book `13,000; Bank interest on overdraft appeared only in the pass book `2,600; Cheques deposited but not collected by the bank ` 5,000. The balance as per pass book is
Correct : A. 20,600 (Dr. balance) ;
48. Consider the following data pertaining to a company for the year 2011-2012 : Opening balance of sundry debtors ` 40,000; Credit sales `4,30,000; Cash sales ` 20,000; Cash collected from debtors `4,00,000; Closing balance of sundry debtors ` 50,000 The bad debts of the company during the year are
Correct : D. 20,000
49. The opening stock of a company is `60,000 and the closing stock is `70,000. If the purchases during
the year are `2,00,000 the cost of goods sold will be
Correct : C. 1,90,000 ;
50. The balance as per bank statement of a company is `12,000 (Dr.). The company deposited two cheques worth `9,500, out of which one cheque for `2,300 was dishonoured which was not entered in the cash book. The credit balance as per cash book is
Correct : D. 9,700
51. Which of the following is not a main column of sales or return journal?
Correct : D. Purchase column
52. Which of the following accounting treatments is/are true in respect of accrued commission appearing
on the debit side of a Trial Balance?
Correct : D. It is shown on the assets side of the Balance Sheet
53. If a bill is endorsed to a third party, the accounting entry in the books of the endorser, at the time of
endorsement involves
Correct : B. Debit Endorsee‘s Account
54. ————— is the date on which a bill falls due for payment
Correct : B. Maturity Date ;
55. Joint Venture is a partnership —
Correct : A. With no firm name ;
56. Depreciation amount of a fixed asset represents —
Correct : A. Historical cost less residual value ;
57. When benefit of a revenue expense extend beyond an accounting year, it is called
Correct : C. Deferred Revenue Expenditure;
58. The convention that states that the accounting practice should be followed consistently over the years
Correct : A. Consistency ;
59. Which of the following is a non-monetary asset?
Correct : D. Patents and Trademarks
60. Accounting for Fixed Assets is related to
Correct : C. AS 10 ;
61. The maximum amount beyond which a company is not allowed to raise funds, by issue of share is
Correct : D. Authorised Capital
62. Accounts dealing with transaction relating to persons or an organization is called
Correct : A. Personal Account ;
63. An account is said to have a debit balance if —
Correct : A. The amount of the debits exceeds the amount of the credits
64. Residual value is the —
Correct : B. value of the asset at the end of its useful life
65. The document listing the latest balances of all Real and Personal A/c in the ledger on a given date is known as —
Correct : B. Positional Statement ;
66. A sent some goods to B to be sold on consignment basis. 1/10 of the goods valued ` 25,000 were lost in transit. Find the value of goods sent of consignment basis —
Correct : A. 2,50,000 ;
67. A company sends its cars to dealers on 'sale or return' basis. All such transactions ire however treated like actual sales and are passed through the sales day book. Just before the end of the financial year, two cars which had cost ` 55,000 each have been sent on sale or return and have been debited to customers at ` 75,000 each, cost of goods lying with the customers will be
Correct : A. 1,10,000.
68. From the following details estimate the capital as on 31.03.2013, Capital as on 01.04.2012 ` 2,05,000.
Drawing ` 20,000, Profit during the year ` 25,000
Correct : C. 2,10,000 ;
69. Goods worth ` 10,000 were purchased by B on which the traders allowed ` 500 trade discount and
offer to give 5% cash discount if immediate payment is made. The Purchase A/c will be debited by —
Correct : D. 9,500
70. S issued cheque worth ` 35,000 in March 2013 out of which cheques worth ` 15,000 were presented for
payment after by 31st march, 2013. What amount should be added to balance as per pass book
Correct : A. 15,000 ;
71. Owing of the business are called —
Correct : A. Liabilities ;
72. ` 8,000 is spent of travelling expenses of the partner to a foreign trip for purchased of an asset to be used for the business is a/an —
Correct : A. Capital Expenditure ;
73. The Capital of X Ltd. was ` 55,000 as on 01.04.2012 which fell to ` 25,000 by the end of 31.03.2013. Find
the value of goods sent of consignment basis —
Correct : C. Both ;
74. A trader has credited certain items of sales on approval aggregating ` 60,000 to Sales Account. Of these, goods of the value of `16,000 have been returned and taken into stock at cost ` 8,000 though the record of return was omitted in the accounts. In respect of another parcel of ` 12,000 (cost being `6,000) the period of approval did not expire on the closing date. Cost of goods lying with customers should be
Correct : C. 6,000.
75. Cash sales will be recorded in —
Correct : B. Cash Book ;
76. Cost of goods sold excludes —
Correct : D. Salesmen Commission
77. From the following details find out the amount to be debited to Profit and Loss A/c as fresh provision for doubtful debts during 2012-13 Debtors ` 30,000 as on 31.03.2013; Bad debt during the year ` 1,500; Provision for bad debts as on 01.04.2012 ` 2,000; Provision for doubtful debts to be kept at 5% of total debtors
Correct : B. 1,000 ;
78. A of Assam sent goods costing ` 45,000 to K of Kolkata at cost plus 331/3%. 1/5 of the goods were lost
in transit and the remaining was sold at profit of 20% on invoice price. Find the value of sales —
Correct : C. 57,600 ;
79. Two primary qualitative characteristics of Financial Statements are —
Correct : B. Relevance and Reliability ;
80. Profit and loss on Depreciation Investment Fund A/c is transferred to —
Correct : A. Profit and Loss A/c ;
81. Which of these expenses does not result in cash outflow
Correct : A. Depreciation ;
82. AS 31 consulted to IAS –
Correct : B. 32 ;
83. Which of these term is not found in a Joint Venture business
Correct : A. Del Credere Commission ;
84. Going run concern concept is not followed in —
Correct : B. Joint Venture Accounting ;
85. Accounting Standard 1 requires the significant Accounting Policies to
Correct : A. Be suitable disclosed ;
86. To convert the accounts prepared on cash system of accounting into mercantile system of
accounting, which of these adjustments is not necessary
Correct : A. Reconciliation of cash with bank
87. Trade discount is given to
Correct : A. Boost sales ;
88. Which types of errors will effect net profit
Correct : A. Affecting Nominal Account ;
89. Raw material and components purchased and used at the time of installation of new Plant and
Machinery will be debited to
Correct : A. Plant and Machinery A/c ;
90. Under estimation of useful life of a depreciable asset will lead to —
Correct : B. Excess charging of depreciation every year ;
91. Which of these expenses are not included in valuation of closing stock lying with the consignee
Correct : C. Godown rent ;
92. X purchased a new plant and machinery for ` 50,000 on 01.01.2012. The machinery was received in the factory on 10.01.2012 and was installed and put to use on 18.01.2012. Depreciation on the plant and machinery will commence from
Correct : D. 18.01.2012
93. Under sales on return or approval basis, the ownership of goods is passed only
Correct : C. Both (a) and (b)
94. To obtain the amount of credit sales made during an accounting period, which account is generally
used in single entry and incomplete records?
Correct : C. Debtors Account ;
95. The receipts and payments account of a non-profit organization is a
Correct : B. Real Account ;
96. The capital of a non-profit organization is generally known as
Correct : B. Accumulated Fund ;
97. If an employee of the business files a legal suit on business, it is considered in the
books as
Correct : D. Contingent Liability
98. At the end of the accounting year the capital expenditures are shown in the
Correct : A. assets side of the Balance Sheet.
99. Which of the following is not a method of charging depreciation?
Correct : D. Asset's Life-cycle Method
100. If average inventory is `1,25,000 and closing inventory is `10,000 less than opening
inventory then the value of closing inventory will be