Prepared by:
Prince Ali
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MIDTERM EXAMINATION
2nd dec 2009
MGT101- Financial Accounting
Question No: 1 ( Marks: 1 ) - Please choose one
Depreciation arises because of:
► Fall in the market value of an asset
► Fall in the value of money
► Physical wear and tear
► All of the given options
Question No: 2 ( Marks: 1 ) - Please choose one
Consider the following:
Beginning inventory 10 units @ Rs. 10 per unit
First purchase 35 units @ Rs. 11 per unit
Second purchase 40 units @ Rs. 12 per unit
Third purchase 20 units @ Rs. 13 per unit
Eighty-five units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?
► Rs.260
► Rs.232
► Rs.284
► Rs.268
Question No: 3 ( 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: 4 ( Marks: 1 ) - Please choose one
Which of the following statement is NOT TRUE about Current liabilities?
► These are due within one year
► These are short-term loans
► These are consist of all debts, payable after 12 months
► In working capital, these are deducted from current assets
Question No: 5 ( Marks: 1 ) - Please choose one
Which of the following essentials are shown in Bank Book?
(1) Date of transaction
(2) Narration of transaction
(3) Cheque number
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Question No: 6 ( 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: 7 ( Marks: 1 ) - Please choose one
Particulars Rs.
Opening stock of raw material 100,000
Closing stock of raw material 80,000
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: 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 Net Profit?
► Rs.15,000
► Rs. 35,000
► Rs. 55,000
► Rs. 60,000
Question No: 10 ( 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: 11 ( 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: 12 ( 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: 13 ( 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: 14 ( 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: 15 ( 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: 16 ( Marks: 1 ) - Please choose one
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as:
► Appreciation
► Depreciation
► Fluctuation
► None of the given options
Question No: 17 ( Marks: 1 ) - Please choose one
Under the reducing balance method of depreciation:
► Amount of depreciation increases every year
► Amount of depreciation remains constant for every year
► Amount of depreciation decreases every year
► None of the given options
Question No: 18 ( Marks: 1 ) - Please choose one
Consider the following:
Beginning inventory 10 units @ Rs. 10 per unit
First purchase 35 units @ Rs. 11 per unit
Second purchase 40 units @ Rs. 12 per unit
Third purchase 20 units @ Rs. 13 per unit
Eighty units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?
► Rs.260
► Rs.232
► Rs.284
► Rs.320
Question No: 19 ( Marks: 1 ) - Please choose one
Cost of asset Rs. 1,00,000
Life of asset 5 years
Depreciation for each year Rs. 5,000
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: 20 ( Marks: 1 ) - Please choose one
In cost of goods sold statement the ‘total factory cost’ is equal to:
► Cost of material consumed + Labor cost
► Cost of material consumed + Conversion cost
► Cost of material consumed + Total factory cost
► Cost of material consumed + Factory overhead
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Question No: 21 ( 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).
► Cash Account
► Furniture Account
► Motor Account
► All of the above
Question No: 22 ( Marks: 1 ) - Please choose one Which of the following account will be credited, if business sold goods for Rs.10,000 on credit?
► Cash account
► Sales account
► Accounts receivable account
► Purchases account
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Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business purchased a vehicle on cash?
► Vehicle account
► Cash account
► Business account
► Bank account
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following essentials are shown in Bank Book?
(1) Date of transaction
(2) Narration of transaction
(3) Cheque number
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Question No: 25 ( 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: 26 ( Marks: 1 ) - Please choose one
Particulars Rs.
Opening written down value of machine Rs. 2,00,000
Cost of new machine purchased during the year Rs. 50,000
Depreciation during the year Rs. 25,000
Closing written down value (WDV) of machines ?
► Rs. 2, 25,000
► Rs. 2, 50,000
► Rs. 2, 75,000
► Rs. 75,000
Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following is an example of direct materials cost?
► Polish and finishing material for chair
► A piece of wood for the production of chair
► Production worker’s wages
► Depreciation expenses
Question No: 28 ( 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: 29 ( Marks: 1 ) - Please choose one
Following are the inventories of Manufacturing Concern EXCEPT:
► Raw material
► Work in process
► Finished goods
► Merchandise inventory
Question No: 30 ( Marks: 1 ) - Please choose one
Word “Credit” is derived from ______ language.
► Latin
► English
► French
► Chinese
Question No: 31 ( Marks: 1 ) - Please choose one
Consider the following inventory record:
Date Item Quantity Cost/UnitRs. TotalRs.
Jan. 2 Beginning inventory 10 10 100
Mar. 4 Purchase 35 11 385
May 8 Purchase 40 12 480
Nov. 3 Purchase 20 13 260
De31 Merchandise available 105 1,225
85 units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.
► Rs. 1,225
► Rs. 1,015
► Rs. 965
► Rs. 905
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
The cost of moving plant and machinery to a new site will be treated as:
► Revenue expense
► Capital expense
► Administrative expense
► Operating expense
Question No: 33 ( Marks: 1 ) - Please choose one
A decrease in value of a fixed asset due to age, wear and tear is known as:
► Depreciation
► Accumulated Depreciation
► Appreciation
► Written Down Value
Question No: 34 ( Marks: 1 ) - Please choose one
What would be the value of 'cost of goods manufactured' if the total factory cost of the month is Rs. 6,000, opening work in process is Rs. 2,000 and the closing work in process is Rs. 2,500?
► Rs. 5,500
► Rs. 8,000
► Rs. 4,500
► Rs. 8,500
Question No: 35 ( Marks: 1 ) - Please choose one
The area of accounting concerned with reporting financial information to the interested parties is called:
► Cost Accounting
► Financial Accounting
► Management Accounting
► Tax Accounting
Question No: 36 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
Cash Rs. 22,500
Debtors Rs. 500
Total Assets Rs. 80, 385
Accounts payable Rs. 1,000
Total liabilities Rs. 20,000
► Rs. 60,385 owner’s equity
► Rs. 61,385 owner’s equity
► Rs. 99,885 owner’s equity
► Rs. 99,385 owner’s equity
Question No: 41 ( Marks: 10 )
Show the effect of the following transactions upon the Accounting Equation.
2007 June1, Mr. Salman started business with cash Rs. 1,00,000
5, Purchased furniture for cash Rs. 4,000
6, Purchased goods for cash Rs. 25,000
10, Paid transportation on goods purchased Rs.1,000
12, Sold goods for cash Rs. 15,000, costing 11,000
15, Purchased goods on credit basis for Rs. 15,000
19, Sold goods to Rashid on credit basis for Rs. 8,000, costing Rs. 6,500
25, Received cash from Rashid Rs. 4,000
28, Cash paid to creditor Rs. 9,000
30, Paid rent and salaries for the month Rs. 4,000
Question No: 1 ( Marks: 1 ) - Please choose one
We can say that the business is in profit, when:
► Assets exceed Expenditure
► Assets exceed Liabilities
► Income exceeds Expenditure
► Income exceeds Liabilities
Question No: 2 ( 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: 3 ( Marks: 1 ) - Please choose one
If a business purchases machinery for Rs. 30,000 on 31st January 2008 having life of 10 years, this expense will be realized ___________ under the concept of accrual accounting.
► For the year 2008 only
► For the last day of 10th year only
► Over 10 years
► Nothing can be said about it
Question No: 4 ( Marks: 1 ) - Please choose one
Word “Credit” is derived from ______ language.
► Latin
► English
► French
► Chinese
Question No: 5 ( Marks: 1 ) - Please choose one
According to the double entry system of accounting, an account that obtains benefit is:
► Debit
► Credit
► Income
► No need to show as accounting record
Question No: 6 ( Marks: 1 ) - Please choose one
An Asset that is NOT physical in nature is called _________.
► Intangible Asset
► Liquid Asset
► Current Asset
► Fixed Asset
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
Which of the following is CORRECT about the flow of recording a transaction?
► Occurrence of event – voucher—Journal—Ledger—Trial Balance—profit and loss account—Balance Sheet
► Occurrence of event—Journal – voucher —Ledger—Trial Balance—profit and loss account—Balance Sheet
► Occurrence of event—Ledger – voucher—Journal—Trial Balance—profit and loss account—Balance Sheet
► Occurrence of event—Trial Balance – voucher—Journal—Ledger—profit and loss account—Balance Sheet
Question No: 9 ( Marks: 1 ) - Please choose one
In an account, if credit side < debit side then the balance is known as: ► Negative Balance ► Debit Balance ► Positive Balance ► Credit Balance Question No: 10 ( Marks: 1 ) - Please choose one Bank book is part of: ► Voucher ► General Journal ► General Ledger ► Trial Balance Question No: 11 ( Marks: 1 ) - Please choose one While making Income & Expenditure account, Excess of income over expenses in a specified accounting period is called: ► Profit ► Loss ► Surplus ► Deficit Question No: 12 ( Marks: 1 ) - Please choose one Gross Profit > Operating Expenses=?
► Net Profit
► Cost of Goods Sold
► Net Loss
► Gross Loss
Question No: 13 ( Marks: 1 ) - Please choose one
Accrued expenses are the example of:
► Current liabilities
► Long term liabilities
► Deferred costs
► Capital expenses
Question No: 14 ( Marks: 1 ) - Please choose one
The favorable balance of Profit and Loss account should be:
► Added in liabilities
► Subtracted from current assets
► Subtracted from liabilities
► Added in capital
Question No: 15 ( 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: 16 ( Marks: 1 ) - Please choose one
Which of the following financial statement DO NOT show the financial health of a business at a specific date?
► Profit and loss account
► Balance sheet
► Statement of financial position
► All of the given options
Question No: 17 ( Marks: 1 ) - Please choose one
In which of the following condition a company will have positive working capital?
► If current assets > current liabilities
► If current Assets < current Liabilities
► If current assets = current liabilities
► If current assets < current liabilities
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following particular is NOT included in the specimen of a payment voucher?
► Name of organization
► Cash payment amount
► Date of transaction
► Bank receipt
Question No: 19 ( 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: 20 ( Marks: 1 ) - Please choose one
Following are the inventories of Manufacturing Concern EXCEPT:
► Raw material
► Work in process
► Finished goods
► Merchandise inventory
Question No: 21 ( Marks: 1 ) - Please choose one
The products that are ready for sale are known as:
► Raw material
► Work in process
► Finished goods
► Closing stock
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following is an example of direct materials cost?
► Polish and finishing material for chair
► A piece of wood for the production of chair
► Production worker’s wages
► Depreciation expenses
Question No: 23 ( Marks: 1 ) - Please choose one
The total of all costs incurred to convert raw material into finished goods is known as:
► Prime cost
► Conversion cost
► Sunk cost
► Opportunity cost
Question No: 24 ( 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: 25 ( Marks: 1 ) - Please choose one
A decrease in value of a fixed asset due to age, wear and tear is known as:
► Depreciation
► Accumulated Depreciation
► Appreciation
► Written Down Value
Question No: 26 ( Marks: 1 ) - Please choose one
Cost of asset Rs. 1,00,000
Life of asset 5 years
Depreciation for each year Rs. 15,000
Sale price after 5 years Rs.50,000
Written down value of asset at the end of 5th year Rs.25,000
Profit or loss on disposal of fixed assets ?
► Rs.25, 000 profit
► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profit
Question No: 27 ( Marks: 1 ) - Please choose one
All the costs incurred on the incomplete assets up to the balance sheet date must be transferred to:
► Capital account
► Capital work in progress account
► Relevant asset account
► Owner's equity account
Question No: 28 ( Marks: 1 ) - Please choose one
Consider the following inventory record:
Date Item Quantity Cost/UnitRs. TotalRs.
Jan. 2 Beginning inventory 10 10 100
Mar. 4 Purchase 35 11 385
May 8 Purchase 40 12 480
Nov. 3 Purchase 20 13 260
De31 Merchandise available 105 1,225
80 units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.
► Rs. 1,225
► Rs. 1,015
► Rs. 965
► Rs. 905
Question No: 29 ( Marks: 1 ) - Please choose one
Consider the following inventory record:
Date Item Quantity Cost/Unit Total
2007Jan. 2 Opening inventory 100 Rs.18.00 Rs.1,800
Mar. 4 Purchase 400 19.00 7,600
May 8 Purchase 800 20.00 16,000
Nov. 3 Purchase 500 21.00 10,500
Four hundred units are unsold, Use the FIFO method of inventory costing and determine the value assigned to the 400 units on hand at the end of the period.
► Rs.7, 500
► Rs.7, 978
► Rs.8, 000
► Rs.8, 400
Question No: 30 ( 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: 31 ( Marks: 1 ) - Please choose one
Which of the following asset is NOT depreciated?
► Factory Buildings
► Office Equipment
► Plant & Machinery
► Land
Question No: 32 ( Marks: 1 ) - Please choose one
The basic purpose of depreciation is to achieve the:
► Matching principle
► Dual aspect principle
► Separate entity concept
► Money measurement concept
Question No: 33 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
Cash Rs. 22,500
Debtors Rs. 500
Total Assets Rs. 80, 385
Accounts payable Rs. 1,000
Total liabilities Rs. 20,000
► Rs. 82,385 owner’s equity
► Rs. 61,385 owner’s equity
► Rs. 99,885 owner’s equity
► Rs. 99,385 owner’s equity
Question No: 34 ( Marks: 1 ) - Please choose one
Firms charge depreciation each year:
► To ensure there is enough money in the firm to replace the asset
► To spread the cost of the asset over its working life
► To reduce the profit and thus reduce the dividends they can pay to share holders
► Because the law states they must be reduced
Question No: 35 ( Marks: 1 ) - Please choose one
Consider the following data:
Particulars Rs.
Assets 8,20,000
Owner's equity 3,80,000
Liabilities ?
► Rs. 1, 98,000
► Rs. 49,000
► Rs. 55,000
► Rs. 4, 40,000
Question No: 36 ( 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: 37 ( Marks: 1 ) - Please choose one
An estimate of the income and expenses needed to carry out business plans for a fiscal year is known as:
► Budgeting
► Costing
► Management
► Auditing
Question No: 38 ( Marks: 1 ) - Please choose one
Unfavorable balance of the cash book means:
► Credit balance in cash book
► Credit balance in pass book
► Debit balance in cash book
► All of the given options
Question No: 39 ( Marks: 1 ) - Please choose one
Net Profit + Expenses= _________
► Liabilities
► Assets
► Capital
► Income
Question No: 40 ( Marks: 1 ) - Please choose one
What would be the value of conversion cost, if the cost of material consumed during the month is Rs. 5,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 1,000?
► Rs. 3,000
► Rs. 8,000
► Rs. 7,000
► Rs. 5,000
Question No: 41 ( Marks: 10 )
The following are some of the causes of difference between the Cash Book and the Pass Book balances. If you start with the Cash Book (Dr.) balance in Bank Reconciliation Statement, will you add them or deduct?
Particulars Add/Less
1. Cheques issued but yet not paid by bank. less
2. Cheques deposited but not credited by bank. less
3. Amount directly deposited into bank by a customer but not recorded in the Cash Book. add
4. Dividend collected by bank but not entered in Cash Book. add
5. Insurance premium paid by bank but not recorded in Cash Book. less
6. Cheque deposited but no entry was made in Cash Book. add
7. Bank charges debited by bank but not credited in the Cash Book less
8. Interest on overdraft debited by bank but not recorded in Cash Book. less
9. Cheque issued but wrongly debited in Cash Book less
10. Interest credited by bank but not recorded in cash book add
Question No: 1 ( Marks: 1 ) - Please choose one
Particulars Rs.
Opening written down value of machine 3,00,000
Cost of machine purchased during the year 50,000
Depreciation during the year 9,000
closing written down value (WDV) of the Machine ?
► Rs. 3, 41,000
► Rs. 3, 50,000
► Rs. 3, 59,000
► Rs. 59,000
Question No: 2 ( Marks: 1 ) - Please choose one
Particulars Rs.
Opening written down value of machine Rs. 2,00,000
Cost of new machine purchased during the year Rs. 50,000
Depreciation during the year Rs. 25,000
Closing written down value (WDV) of machines ?
► Rs. 2, 25,000
► Rs. 2, 50,000
► Rs. 2, 75,000
► Rs. 75,000
Question No: 3 ( Marks: 1 ) - Please choose one
Consider the following data:
Particulars Rs.
Assets 1,98,000
Owner's equity 95,000
Liabilities ?
► Rs. 49,000
► Rs. 55,000
► Rs. 1, 25,000
► Rs. 1, 03,000
Question No: 4 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
Cash Rs. 22,500
Debtors Rs. 500
Total Assets Rs. 80, 385
Accounts payable Rs. 1,000
Total liabilities Rs. 20,000
► Rs. 60,385 owner’s equity
► Rs. 61,385 owner’s equity
► Rs. 99,885 owner’s equity
► Rs. 99,385 owner’s equity
Question No: 5 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
Furniture Rs. 90,000
Cash Rs.1, 00, 000
Debtors Rs.10, 000
Other Assets Rs. 1,000
Owner’s equity Rs. 90, 000
► Rs. 2, 01,000 liabilities
► Rs. 1, 11, 000 liabilities
► Rs. 2, 90, 000 liabilities
► Rs. 2, 91, 000 liabilities
Question No: 6 ( 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: 7 ( Marks: 1 ) - Please choose one
Which of the following assets are shown at written down value in balance sheet?
► Current assets
► Liquid assets
► Floating assets
► Fixed assets
Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following asset is NOT depreciated?
► Factory Buildings
► Office Equipment
► Plant & Machinery
► Land
Question No: 9 ( Marks: 1 ) - Please choose one
The main goal of Bank Reconciliation Statement is to determine:
► If the discrepancy is due to error rather than timing
► If the discrepancy is due to timing rather than error
► If the discrepancy is due to error rather than amount
► If the discrepancy is due to amount rather than timing
Question No: 10 ( Marks: 1 ) - Please choose one
Sale proceeds of goods are an example of:
► Revenue expense
► Capital expense
► Capital receipt
► Revenue receipt
Question No: 11 ( Marks: 1 ) - Please choose one
Which one of the following is NOT true about revenue expenditure?
► These are the running expenses of the business
► They improve the financial position of the business
► They reduce the profit of the concern
► They do not appear in the balance sheet
Question No: 12 ( Marks: 1 ) - Please choose one
Consider the following:
Beginning inventory 10 units @ Rs. 10 per unit
First purchase 35 units @ Rs. 11 per unit
Second purchase 40 units @ Rs. 12 per unit
Third purchase 20 units @ Rs. 13 per unit
Eighty units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?
► Rs.260
► Rs.232
► Rs.284
► Rs.320
Question No: 13 ( Marks: 1 ) - Please choose one
Consider the following inventory record:
Date Item Quantity Cost/UnitRs. TotalRs.
Jan. 2 Beginning inventory 10 10 100
Mar. 4 Purchase 35 11 385
May 8 Purchase 40 12 480
Nov. 3 Purchase 20 13 260
De31 Merchandise available 105 1,225
80 units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.
► Rs. 1,225
► Rs. 1,015
► Rs. 965
► Rs. 905
Question No: 14 ( Marks: 1 ) - Please choose one
If, Cost of machine = Rs.400, 000
Useful life = 5 years
Rate of depreciation= 40%
The book value of machine after one years using diminishing balance method is ?
► Rs.86, 400
► Rs. 1, 44,000
► Rs. 2, 40,000
► Rs. 51,840
Question No: 15 ( Marks: 1 ) - Please choose one
Cost of asset Rs. 1,00,000
Life of asset 5 years
Depreciation for each year Rs. 5,000
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: 16 ( Marks: 1 ) - Please choose one
Cost of asset 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: 17 ( Marks: 1 ) - Please choose one
Cost of asset 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: 18 ( Marks: 1 ) - Please choose one
The total of all costs incurred to convert raw material into finished goods is known as:
► Prime cost
► Conversion cost
► Sunk cost
► Opportunity cost
Question No: 19 ( Marks: 1 ) - Please choose one
WhicWhich of the following is an example of direct materials cost?
► Polish and finishing material for chair
► A piece of wood for the production of chair
► Production worker’s wages
► Depreciation expenses
Question No: 20 ( Marks: 1 ) - Please choose one
If the working capital and the current assets of company XYZ are Rs. 5,000 and Rs.15,000 respectively, calculate the current liabilities.
► Rs. 5,000
► Rs. 10,000
► Rs. 15,000
► Rs. 20,000
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following item appears in Trading Account of a business?
► Interest expenses
► Wages and salaries
► Depreciation expenses
► Discount Allowed
Question No: 22 ( 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: 23 ( Marks: 1 ) - Please choose one
Which of the following financial statement DO NOT show the financial health of a business at a specific date?
► Profit and loss account
► Balance sheet
► Statement of financial position
► All of the given options
Question No: 24 ( Marks: 1 ) - Please choose one
If cost of sales is Rs. 95,000, sales are Rs. 200,000 and operating expenses are Rs. 100,000. What will be the net result?
► Rs. 5,000 Loss
► Rs. 5, 000 Profit
► Rs.1, 95,000 Profit
► Rs.1, 95,000 Loss
Question No: 25 ( 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)
► Cash account
► Furniture account
► Vehicle account
► All of the given options
Question No: 26 ( 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: 27 ( Marks: 1 ) - Please choose one
Which of the following journal entry will be recorded, if the payment of furniture purchased is made through cheque?
► Furniture account (Dr) and Bank account (Cr)
► Furniture account (Dr) and Profit & Loss account (Cr)
► Furniture account (Dr) and Cash account (Cr)
► Cash account (Dr) and Furniture account (Cr)
Question No: 28 ( Marks: 1 ) - Please choose one
Which one of the following statement is CORRECT about Long term liabilities?
► These are due within one year
► These are consist of all debts, payable after 12 months
► In working capital, these are deducted from current assets
► All of the given options
Question No: 29 ( Marks: 1 ) - Please choose one
What type of expenses are paid out of Gross Profit?
► Selling Expenses
► General Expenses
► Financial Expenses
► All of the given options
Question No: 30 ( Marks: 1 ) - Please choose one
While making Income & Expenditure account, Excess of income over expenses in a specified accounting period is called:
► Deficit
► Surplus
► Profit
► Loss
Question No: 31 ( 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: 32 ( Marks: 1 ) - Please choose one
Which of the following financial statement summarizes the profitability of an organization for a particular period?
► Trading and Profit & Loss account
► Cash Flow Statement
► Statement of Retained Earnings
► Balance Sheet
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following period is known as a fiscal Year of the Government of Pakistan?
► 1st January to 31st December
► 1st June to 31st May
► 1st July to 30th June
► 1st October to 30th September
Question No: 34 ( 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: 35 ( Marks: 1 ) - Please choose one
Obligations to pay cash or un-earned incomes by the business are the:
► Assets
► Liabilities
► Equities
► Expenses
Question No: 36 ( 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: 37 ( Marks: 1 ) - Please choose one
Word “Credit” is derived from ______ language.
► Latin
► English
► French
► Chinese
Question No: 38 ( 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: 39 ( 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: 40 ( Marks: 1 ) - Please choose one
An accounting system is used by a business to:
► Analyze transactions
► Handle routine book-keeping tasks
► Structure information
► All of the given options
Question No: 41 ( Marks: 10 )
Record the following transactions in the General Journal.
Date: Transactions
Jan 1, 2007 Mr. Asghar started business with cash Rs. 1, 00,000.
Jan 2, 2007 Opened bank account with amount Rs. 50,000.
Jan 4, 2007 Purchased goods for cash Rs. 15,000.
Jan 9, 2007 Payment made to Karachi store (Creditor) Rs. 15,000 by cheque.
Jan14, 2007 Goods returned to Karachi store worth Rs. 1,500.
Jan22, 2007 Goods sold for cash Rs. 2,000.
DR
Bank account 50,000
Purchased goods for cash Rs. 15,000
Payment made to Karachi store (Creditor) Rs. 15,000 by cheque
Goods returned to Karachi store worth Rs. 1,500
Credit balance 20500
Cr
Mr. Asghar started business with cash Rs. 1, 00,000
Goods sold for cash Rs. 2,000.
Question No: 1 ( Marks: 1 ) - Please choose one
Particulars 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
Particulars 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
Cost of asset 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
Particulars 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: 2 ( 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: 3 ( 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: 4 ( 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: 5 ( 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: 6 ( 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: 7 ( 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: 8 ( 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: 9 ( 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: 10 ( 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: 11 ( 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: 12 ( 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: 13 ( 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: 14 ( 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: 15 ( 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: 16 ( 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: 17 ( 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: 18 ( 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: 19 ( Marks: 1 ) - Please choose one
Consider the following:
Beginning inventory 10 units @ Rs. 10 per unit
First purchase 35 units @ Rs. 11 per unit
Second purchase 40 units @ Rs. 12 per unit
Third purchase 20 units @ Rs. 13 per unit
Eighty-five units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?
► Rs.260
► Rs.232
► Rs.284
► Rs.268
Question No: 20 ( Marks: 1 ) - Please choose one
Cost of asset Rs. 1,00,000
Life of asset 5 years
Depreciation for each year Rs. 15,000
Sale price after 5 years Rs.50,000
Written down value of asset at the end of 5th year Rs.25,000
Profit or loss on disposal of fixed assets ?
► Rs.25, 000 profit
► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profit
Question No: 21 ( Marks: 1 ) - Please choose one
What would be the value of conversion cost, if the cost of material consumed during the month is Rs. 5,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 1,000?
► Rs. 3,000
► Rs. 8,000
► Rs. 7,000
► Rs. 5,000
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following statement is TRUE about the positive working capital of a company?
► It shows sound position of a company
► It shows that company has sufficient current assets to meet current liabilities
► It shows that current assets are greater than current liabilities
► All of the given options
Question No: 23 ( 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: 24 ( 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: 25 ( Marks: 1 ) - Please choose one
Assets total Rs.50, 000 and Liabilities total Rs.10, 000. What is the equity of the business?
► Rs. 40, 000
► Rs. 60, 000
► Rs. 10,000
► Rs. 50,000
Question No: 26 ( 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: 27 ( Marks: 1 ) - Please choose one
Net Profit =? - Expenses
► Liabilities
► Assets
► Capital
► Income
Question No: 28 ( 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: 7 ( 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: 9 ( Marks: 1 ) - Please choose one
Which one of the following is NOT true about Capital Expenditure?
► Creates future benefits
► Incurred to acquire fixed assets
► Incurred to increase the economic life of existing fixed assets
► Reduce the profit of the concern
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, If Mr. “A” started business with cash
Rs. 2, 00,000?
► Capital account
► Cash account
► Mr. A’s account
► Business account
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is NOT an item of a Balance Sheet?
► Accounts Receivable
► Accounts Payable
► Sales Revenue
► Marketable Securities
Question No: 27 ( Marks: 1 ) - Please choose one
Accounts Receivable & Inventory are the examples of:
► Liquid assets
► Current assets
► Fixed assets
► Capital assets
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following is used to record financial transactions in chronological (day-to-day) order?
► Voucher
► General Journal
► General Ledger
► Trial balance
Question No: 29 ( Marks: 1 ) - Please choose one
The basic purpose of depreciation is to achieve the:
► Matching principle
► Dual aspect principle
► Separate entity concept
► Money measurement concept
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
Cash book is a part of:
► Voucher
► General Journal
► General Ledger
► Trial Balance
Question No: 32 ( Marks: 1 ) - Please choose one
In cost of goods sold statement the ‘total factory cost’ is equal to:
► Cost of material consumed + Labor cost
► Cost of material consumed + Conversion cost
► Cost of material consumed + Total factory cost
► Cost of material consumed + Factory overhead
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business sold goods for Rs.10,000 on credit?
► Cash account
► Sales account
► Accounts receivable account
► Purchases account
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business purchased a vehicle on cash?
► Vehicle account
► Cash account
► Business account
► Bank account
Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following book(s) is(are) a part of General Ledger?
► Cash Book
► Purchase Return Book
► Purchase Book
► All of the given options
Question No: 36 ( Marks: 1 ) - Please choose one
A book, in which receipts and payments are recorded, is known as:
► Pass Book
► Cash Book
► Purchase Book
► Sales Book
Question No: 37 ( 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: 38 ( 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: 39 ( 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: 40 ( Marks: 1 ) - Please choose one
“Electricity bill for the month is paid by Mr. Imran Rs. 325”. What is the journal entry to record this transaction?
► Cash a/c Rs. 325 (Dr.) , Utilities Expense a/c Rs. 325 (Cr.)
► Utilities Expense a/c Rs. 325 (Dr.), Cash a/c Rs. 325 (Cr.)
► Accounts Receivable a/c Rs. 325 (Dr.), Utilities Expense a/c Rs. 325 (Cr.)
► Utilities Expense a/c Rs. 325 (Dr.), Accounts Receivable a/c Rs. 325 (Cr.)
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
