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MGT101 Solved Final Term MCQs Mega File For Final Term Exam Preparation
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Mega file of MCQs
FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting
Solved by AMBER SHAHEEN
Question No: 1 ( Marks: 1 ) - Please choose one
Shares for which amount is paid by public are called ________ shares.
► Paid up
► Authorized
► Bonus share
► All are correct options
Question No: 2 ( 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: 3 ( Marks: 1 ) - Please choose one
An organization operating with the objective of making profit from the sale of goods or services is called:
► Transaction
► Business
► Society
► Trust
Question No: 4 ( 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: 5 ( Marks: 1 ) - Please choose one
Which of the following summarizes the cash movements during a specified period?
► Trading account
► Profit & Loss account
► Receipts & Payments account
► Balance Sheet
Question No: 6 ( 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: 7 ( Marks: 1 ) - Please choose one
Following are the inventories of Manufacturing Concern EXCEPT:
► Raw material
► Work in process
► Finished goods
► Merchandise inventory
Question No: 8 ( Marks: 1 ) - Please choose one
In cost of goods sold statement, the ‘cost of material consumed’ is equal to:
► Opening raw material inventory + Purchases – Ending raw material inventory
► Opening raw material inventory - Purchases + Ending raw material inventory
► Ending raw material inventory + Opening raw material inventory - Purchases
► Ending raw material inventory + Opening raw material inventory + Purchases
Question No: 9 ( Marks: 1 ) - Please choose one
If, Cost of machine = Rs.400, 000
Useful life = 5 years
Residual value = Rs.25, 000
The depreciation of machine per year using straight line method is?
► Rs. 160,000
► Rs. 96,000
► Rs. 75,000
► Rs. 57,600
Question No: 10 ( Marks: 1 ) - Please choose one
The Primary objective of providing depreciation is:
► To calculate true profit
► To show the asset on market value
► To reduce tax Burdon
► To provide funds for replacement
Question No: 11 ( 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: 12 ( Marks: 1 ) - Please choose one
Accounting is the language of:
► Business
► School
► Proprietor
► Management
Question No: 13 ( 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: 14 ( Marks: 1 ) - Please choose one
A Bank Reconciliation Statement is prepared to:
► Ascertain that the difference between the Cash Book balance and the Bank
Statement balance has been accounted for
► Correct errors in the Cash Book or errors in the Bank Statement
► Amend the balance of the Bank Statement of the firm
► Amend the balance in the Cash Book of the firm
Question No: 15 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be deducted from Sundry Debtors in Balance Sheet.
Particulars
Rs.
Bad debts (from trial balance)
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
800
► Rs. 400
► Rs. 800
► Rs. 2,000
► Rs. 2,400
Question No: 16 ( Marks: 1 ) - Please choose one
It is supposed that on 31-12-2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 5 % of the sundry debtors are doubtful. It is also suppose that during the year 2008 actual bad debts were Rs. 1,600. What entry will pass to create provision for doubtful debts?
► Profit & Loss a/c Rs. 2,000 (Dr) & Provision for doubtful debts a/c Rs. 2,000 (Cr)
► Provision for doubtful debts a/c Rs. 2,000 (Dr) & Profit & Loss a/c Rs. 2,000 (Cr)
► Provision for doubtful debts a/c Rs. 1,600 (Dr) & Profit & Loss a/c Rs. 1,600 (Cr)
► Profit & Loss a/c Rs. 1,600 (Dr) & Provision for doubtful debts a/c Rs. 1,600 (Cr)
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following is NOT based on the concept of double entry book keeping system?
► Subsidiary Ledgers
► Creditors Control Accounts
► Debtors Control Accounts
► All of the given options
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following is an item of a debtors control account?
► Cash sale
► Credit sales
► Credit purchase
► Cash purchases
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following is an item of a creditors control account?
► Cash purchases
► Cash sales
► Credit sales
► Credit purchase
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following is (are) benefit/s of subsidiary ledger accounts to business?
► It tells about customer attitude of payments
► It can be checked against the control account to pick up recording errors
► It tells about the complete history of transactions of business client
► All of the given options
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following rectifying entry will be recorded, if sales to Mr. “A” of Rs.336 have been debited to Mr. “B” account?
► A’s account (Dr.) and B’s account (Cr.)
► B’s account (Dr.) and A’s account (Cr.)
► Sales account (Dr.) and B’s account (cr.)
► B’s account (Dr.) and Sales account (Cr.)
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following item must be recorded in the adjusted Cash Book in order to bring it in line with the entries in the Bank Statement?
► Bank charges
► An error on the Bank Statement
► An uncredited deposit
► An unpresented cheque
Question No: 23 ( Marks: 1 ) - Please choose one
It is supposed that on 31st December, 2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 10% of the sundry debtors are doubtful. Actual bad debts are Rs. 1600. What amount of new provision for doubtful debts will be credited in profit & loss account
► Rs. 3,600
► Rs. 4,000
► Rs. 1,600
► Rs. 2, 400
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Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following is the first phase of the typical operating cycle?
► Sell goods and services to customers
► Purchase goods and services
► Receive cash from customers
► Pay cash to suppliers
Question No: 25 ( Marks: 1 ) - Please choose one
Which one of the following is TRUE about provisions?
► It is necessary to prepare for showing true picture of balance sheet
► It is a reduction from assets
► It is prepared for specific purposes
► All of the given options
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is/are NOT shown in balance sheet of sole proprietor?
► Fixed assets
► Current liabilities
► Profit sharing ratio
► Long term assets
Question No: 27 ( Marks: 1 ) - Please choose one
When closing stock is given in trial balance, then it will effect:
► Trading account only
► Balance sheet only
► Owner's equity only
► Both Trading account and Balance sheet
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following is (are) NOT example(s) of distributable profit?
► None of the given options
► General reserve
► Accumulated profit and loss (credit balance)
► Revaluation reserves
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following is NOT a cash inflow?
► Sale of fixed asset
► Issue of debentures
► Cash from business operation
► Purchase of fixed asset
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following business publishes the Financial Statements?
► Sole-Proprietorship
► Partnership
► Trust
► Public Limited Company
Question No: 31 ( Marks: 1 ) - Please choose one
Particulars
Nominal value of each share
Rs.10
No of shares issued
10,000 shares
Net profit
Rs. 20,000
Divined paid
10%
What is the EPS
?
► Rs. 1.00
► Rs. 2.00
► Rs. 3.00
► Rs. 4.00
Question No: 32 ( 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: 33 ( Marks: 1 ) - Please choose one
Which of the following transaction have NO affect on stockholders' equity?
► Purchase of building on credit
► Dividends to stockholders
► Net loss
► Investment in cash by stockholders
Question No: 34 ( Marks: 1 ) - Please choose one
In balance sheet fixed assets are shown at:
► Residual value
► Market value
► Fair value
► Written down value (WDV)
Question No: 35 ( Marks: 1 ) - Please choose one
Firms charge depreciation each year:
► To ensure that 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: 36 ( Marks: 1 ) - Please choose one
Which of the following is(are) CORRECT for Doubtful Debt?
► It is shown in balance sheet
► It is a definite loss to the business
► No provision is necessary for it
► All of the given option
Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following is not a cause of difference in balances as per pass book and cash book?
► Error in cash book
► Error in pass book
► Direct deposit
► Un credited cheques
Question No: 38 ( Marks: 1 ) - Please choose one
Stock account is debited and creditors account is credited, which of the following is reflecting the statement?
► Discount received
► Goods returned
► Purchase of goods on credit
► Payment of goods
Question No: 39 ( Marks: 1 ) - Please choose one
A bad debt affects the Balance Sheet because it is a (an):
► Liability
► Asset
► Expense
► Income
Question No: 40 ( Marks: 1 ) - Please choose one
The financial year of Atif Brothers & Co. is closed on June 30, 2009. Total cash sales are Rs. 150,000, credit sales are Rs. 180,000 and total receipts are Rs. 250,000. Credit receipts will be:
► Rs. 150,000
► Rs. 100,000
► Rs. 220,000
► Rs. 280,000
Question No: 41 ( Marks: 1 ) - Please choose one
Which of the following statement is correct? If a company fails to record estimated bad debts expense,
► Net realizable value is understated
► Expenses are understated
► Revenues are understated
► Receivables are understated
Question No: 42 ( Marks: 1 ) - Please choose one
In the heading of financial statement, ___________ is not required?
► Title of financial statement
► Name of the person who prepares financial statement
► Period for which financial statement is prepared
► Name of business entity
Question No: 43 ( Marks: 1 ) - Please choose one
Sunset tours has Rs.3,500 account receivable from the Del Mar Rotary. On January 20, the Rotary makes a partial payment of Rs.2,100 to Sunset Tours. The journal entry made on January 20 by Sunset Tours to record this transaction includes:
► A debit to the Cash Received account of Rs. 3,500
► A credit to the Accounts Receivable account of Rs.2,100
► A debit to the Cash account of Rs.1,400
► A debit to the Accounts Receivables account of Rs.1,400
Question No: 44 ( Marks: 1 ) - Please choose one
A and B entered in partnership in capital ratio of 2:3. They earned a profit of Rs.6,600 during the year. What will be the share of profit of Mr. B?
► Rs.1,320
► Rs.2,640
► Rs.3,960
► Rs.6,600
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Question No: 45 ( Marks: 1 ) - Please choose one
The amount of prepaid insurance that expired in the current accounting period should be reported as _____________.
► Prepaid insurance
► Insurance expense
► Insurance payable
► Insurance paid
Question No: 46 ( Marks: 1 ) - Please choose one
Unexpired costs are reported as:
► Revenues
► Expenses
► Assets
► Income
Question No: 47 ( Marks: 1 ) - Please choose one
Insurance premiums paid in advance but not yet expired are reported in which of the following account?
► Insurance payable
► Prepaid insurance
► Advance payment account
► Insurance expense
Question No: 48 ( Marks: 1 ) - Please choose one
Profits earned by partnerships compensate the owners for which of the following?
► Personal services rendered to the business
► Capital invested in the business
► Assuming the risks of ownership
► All of the given options
Question No: 49 ( Marks: 1 ) - Please choose one
Which of the following can be utilized to issue bonus shares?
► Reserves
► Debentures
► Share premium
► Term finance certificate
Question No: 50 ( Marks: 1 ) - Please choose one
Which of the following value of the share is authorized by the memorandum of association?
► Par value
► Face value
► Nominal value
► All of the given options
Question No: 51 ( Marks: 1 ) - Please choose one
All of the following have an effect on ‘operating activities’ while preparing the statement of cash flows except:
► Provision for doubtful debts
► Gain or loss on currency exchange rate
► Depreciation charged on fixed asset
► Amount received for disposal of a fixed asset
Question No: 52 ( Marks: 1 ) - Please choose one
According to the statement of cash flows following are the examples of investing activities except:
► Sales of machinery
► Capital invested by the owners
► Purchase of building for the business use
► Cash received from the disposal of equipment
Question No: 53 ( Marks: 1 ) - Please choose one
The financial statement that captures both the current operating result and the associated changes in the balance sheet is:
► Statement of retained earnings
► Statement of financial position
► Statement of cash flows
► Statement of changes in equity
Question No: 54 ( Marks: 1 ) - Please choose one
What is the reason that some short term creditors prefer quick ratio over current ratio as a measure of short-term liquidity?
► Short operating cycle of the company
► Long operating cycle of the company
► Liquidity is not affected by operating cycle
► It is the creditor’s choice
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Final term Paper
MGT101 financial accounting
Solved by AMBER SHAHEEN
Question No: 1 ( Marks: 1 ) - Please choose one
Which of the following business publishes the Financial Statements?
► Sole-Proprietorship
► Partnership
► Trust
► Public Limited Company
Question No: 2 ( Marks: 1 ) - Please choose one
Which financial statement show what a business owes at a particular point in time?
► A cash flow statement
► The bank statement for the business
► A balance sheet
► A statement of retained earnings
Question No: 3 ( Marks: 1 ) - Please choose one
The Balance Sheet item that represents the resources invested by the owner is known as:
► Accounts Receivable
► Cash
► Note Payable
► Owner's Equity
Question No: 4 ( Marks: 1 ) - Please choose one
Which of the following rectifying entry will be recorded, if sales to Mr. “A” of Rs.336 have been debited to Mr. “B” account?
► A’s account (Dr.) and B’s account (Cr.)
► B’s account (Dr.) and A’s account (Cr.)
► Sales account (Dr.) and B’s account (cr.)
► B’s account (Dr.) and Sales account (Cr.)
Question No: 5 ( Marks: 1 ) - Please choose one
If provision is created for doubtful debts, which of the following entry will be passed to record bad debts in control account?
► Bade debts (Dr) and Debtors Control A/c (Cr)
► Provision for doubtful debts (Dr) and Debtors Control A/c (Cr)
► Provision for doubtful debts (Dr) and Debtors A/c (Cr)
► Debtors Control A/c (Dr) and Provision for doubtful debts (Cr)
Question No: 6 ( Marks: 1 ) - Please choose one
The following balance and discrepancies were found on 31 March 2008:
Particulars
Rs.
Cash book balance (Dr)
5 000
Unpresented cheques
1 000
Uncredited cheques
500
The Bank Statement balance on 31 March 2008 should be:
► Rs. 5 500 (Dr)
► Rs. 5 500 (Cr)
► Rs. 4 500 (Dr)
► Rs. 4 500 (Cr)
Question No: 7 ( 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
Book value of Asset after 5 years
?
► Rs.25, 000
► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000
Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following shows summary of a company's financial position at a specific date?
► Profit & Loss Account
► Cash Flow Statement
► Balance Sheet
► Income & Expenditure Account
Question No: 9 ( Marks: 1 ) - Please choose one
Debenture is also named as:
► Share
► Bond
► Equity
► Reserve
Question No: 10 ( Marks: 1 ) - Please choose one
A company declares a cash dividend to be paid to its stockholders next month. The effect of the transaction is to:
► Decrease assets and liabilities.
► Increase assets and stockholders' equity.
► Decrease assets and stockholders' equity.
► Increase liabilities and decrease stockholders' equity.
Question No: 11 ( Marks: 1 ) - Please choose one
The net income calculated in the income statement for the accounting period is reported on:
► Bank Statement
► Statement of retained earnings
► Statement of cash flows
► None of the given options
Question No:12 ( Marks: 1 ) - Please choose one
Which of the following is the most important document of the company?
► Memorandum of Association
► Articles of Association
► Prospectus
► Annual Report
Question No: 13 ( Marks: 1 ) - Please choose one
Authorized share capital is also known as:
► Registered capital
► Issued capital
► Paid up capital
► Called up capital
Question No: 14 ( Marks: 1 ) - Please choose one
Consider the following table:
Financial statement item
Classification
A.
Inventory
Current asset
B.
Tangible assets
Non-current asset
C.
Accrued expenses
Current asset
D.
Bonds payable
Long-term liabilities
Identify the row above, showing an INCORRECT financial-statement classification?
► Row A
► Row B
► Row C
► Row D
Question No: 15 ( Marks: 1 ) - Please choose one
Goods purchased from “Mr. A” for Rs. 2,000 passed through the sales book. The rectification of error will result in:
► Increase of gross profit
► Decrease of gross profit
► Remains constant and no effect on net profit
► There is no relation between goods purchased and gross profit
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following entry will be recorded when the Bad Debts are recovered?
► Cash account (Dr.) & Bad Debts recovered account (Cr.)
► Accounts Receivable account (Dr.) & Bad Debts recovered account (Cr.)
► Bad debts recovered account (Dr.) and Profit & Loss account (Cr.)
► Provision for doubtful debts account (Dr.) & Cash account (Cr.)
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following would be deducted from Sundry Debtors in Balance Sheet?
► Bad debts (Trial balance item)
► Old provision for doubtful debts
► New provision for doubtful debts
► Both Bad debts (given in adjustment) and new provision for doubtful debts
Question No: 18 ( Marks: 1 ) - Please choose one
The amount received; in excess of the face value of the shares is transferred to which of the following?
► Share premium account
► Share holder account
► Share capital account
► Right share
Question No: 19 ( Marks: 1 ) - Please choose one
The maximum amount with which the company is registered is called:
► Authorized Share Capital
► Issued Share Capital
► Paid up capital
► Called up capital
Question No: 20 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
Rs.
Bad Debts (Given in trial balance)
500
Old provisions (Given in trial balance)
800
Sundry Debtors (Given in trial balance)
44,500
Provision for doubtful debts @ 5%
What will be the amount of new provision
?
► Rs. 2,225
► Rs. 2,525
► Rs. 1,925
► Rs. 3,025
Question No: 21 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
Rs.
Closing value of stock
40,000
Write off Bad debts (given in adjustments)
2,400
Sundry Debtors (given in trial balance)
33,200
Provision is created on Debtors at 5%
Requirement: Identify the Total amount which will deduct from Sundry debtors.
► Rs. 460
► Rs. 2,400
► Rs. 1,540
► Rs. 3,940
Question No: 22 ( 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: 23 ( Marks: 1 ) - Please choose one
Which of the following asset is NOT depreciated?
► Factory Buildings
► Office Equipment
► Plant & Machinery
► Land
Question No: 24 ( 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: 25 ( Marks: 1 ) - Please choose one
Accounts Receivable & Inventory are the examples of:
► Liquid assets
► Current assets
► Fixed assets
► Capital assets
Question No: 26 ( Marks: 1 ) - Please choose one
The Joint Stock Company is formed under the Companies Ordinance:
► 1984
► I884
► 1948
► 1965
Question No: 27 ( 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: 28 ( Marks: 1 ) - Please choose one
Which of the following can offer its share to general public at large?
► A private limited company
► A listed company
► A partnership firm
► A trust
Question No: 29 ( Marks: 1 ) - Please choose one
What would be the value of total factory cost, if the cost of material consumed during the month is Rs. 6,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 2,500?
► Rs. 6,000
► Rs. 8,000
► Rs. 4,500
► Rs. 10,500
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following is CORRECT?
► A cash inflow means increase total cash only
► A cash inflow means increase in cash equivalent only
► A cash inflow means increase in cash and decrease in cash equivalent
► A cash inflow means increase in both cash and cash equivalent
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FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting
Solved by AMBER SHAHEEN
Question No: 1 ( Marks: 1 ) - Please choose one
Shares for which amount is paid by public are called ________ shares.
► Paid up
► Authorized
► Bonus shares
► All are correct options
Question No: 2 ( Marks: 1 ) - Please choose one
Which of the following account/s will be affected under the rule of accrual accounting, when furniture is purchased on cash?
► Only Cash Account
► Only Furniture Account
► Cash & Furniture Account
► Only Purchases Account
Question No: 3 ( 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: 4 ( Marks: 1 ) - Please choose one
Which of the following shows summary of a company's financial position at a specific date?
► Profit & Loss Account
► Cash Flow Statement
► Balance Sheet
► Income & Expenditure Account
Question No: 5 ( Marks: 1 ) - Please choose one
Which of the following is NOT an example of intangible assets?
► Franchise rights
► Goodwill
► Patents
► Land
Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following account will be credited in the books of ABC Co. Ltd., if furniture is purchased on cash?
► Furniture account
► Cash account
► Business account
► Bank account
Question No: 7 ( 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: 8 ( Marks: 1 ) - Please choose one
Cost of Goods Sold = ?
► Beginning inventory + Purchases – Work in Process
► Beginning inventory + Purchases - Sales
► Beginning inventory + Purchases - Ending inventory
► Ending inventory + Purchases - Beginning Inventory
Question No: 9 ( 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: 10 ( Marks: 1 ) - Please choose one
In cost of goods sold statement the ‘cost of goods manufactured’ is equal to:
► Total factory cost + Opening work in process + Ending work in process
► Total factory cost + Opening work in process – Ending work in process
► Total factory cost - Opening work in process + Ending work in process
► Ending work in process +Total factory cost – Opening work in process
Question No: 11 ( Marks: 1 ) - Please choose one
Fixed assets are also called:
► Depreciable assets
► Current assets
► Liquid assets
► Floating assets
Question No: 12 ( 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: 13 ( Marks: 1 ) - Please choose one
Increase in an asset 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: 14 ( 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: 15 ( Marks: 1 ) - Please choose one
Consider the following data:
Particulars
Rs.
Assets
?
Owner's equity
1,50,000
Liabilities
1,00,000
► Rs. 49,000
► Rs. 55,000
► Rs. 50,000
► Rs. 2, 50,000
Question No: 16 ( 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: 17 ( Marks: 1 ) - Please choose one
A debit balance in the Bank Statement indicates:
► Cash at bank
► Bank overdraft
► Overpayment to creditors
► Cash in hand
Question No: 18 ( Marks: 1 ) - Please choose one
Bank Statement is a record of transactions between the bank and the holder of:
► A foreign currency account
► A current account
► A saving account
► All of the given options
Question No: 19 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be deducted from Sundry Debtors in Balance Sheet.
Particulars
Rs.
Bad debts (from trial balance)
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
800
► Rs. 400
► Rs. 800
► Rs. 2,000
► Rs. 2,400
Question No: 20 ( Marks: 1 ) - Please choose one
It is supposed that on 31-12-2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 5 % of the sundry debtors are doubtful. It is also suppose that during the year 2008 actual bad debts were Rs. 1,600. What entry will pass to create provision for doubtful debts?
► Profit & Loss a/c Rs. 2,000 (Dr) & Provision for doubtful debts a/c Rs. 2,000 (Cr)
► Provision for doubtful debts a/c Rs. 2,000 (Dr) & Profit & Loss a/c Rs. 2,000 (Cr)
► Provision for doubtful debts a/c Rs. 1,600 (Dr) & Profit & Loss a/c Rs. 1,600 (Cr)
► Profit & Loss a/c Rs. 1,600 (Dr) & Provision for doubtful debts a/c Rs. 1,600 (Cr)
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following is/are the item/s of a Control Account?
► Credit sale only
► Cash sale only
► Credit purchase only
► Both Credit sales and Credit purchase
Question No: 22 ( Marks: 1 ) - Please choose one
Control account tells about:
► Details of loyal clients
► Customer attitude of payments
► Complete history of transactions of business clients
► Picture collectively instead of individually
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of purchases return of Rs. 200 to “Mr.P” mistakenly entered in sales book?
► P’s account
► Purchases return account
► Sales account
► Purchases returns account and sales account
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of a purchase return of Rs.200 to Mr. “A” entered in sales book instead of purchase return book?
► A’s account only
► Sales account only
► Purchase returns account and sales account
► Purchases account only
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of an amount Rs.200 received from Mr.”P” wrongly credited to Mr.”Q’s” account?
► Only Cash Account
► Only P’s account
► Only Q’s account
► Both of Mr. P's & Mr.Q's Account
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following entry will be recorded, if a cheque deposited is dishonored by bank?
► Bank Account (Dr.) and Debtor's Account (Cr.)
► Debtor's Account (Dr.) and Bank Account (Cr.)
► Dishonored Cheque Account (Dr.) and Bank Account (Cr.)
► Creditor's Account (Dr.) and Bank Account (Cr.)
Question No: 27 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
Rs.
Closing value of stock
40,000
Write off Bad debts (given in adjustments)
2,400
Sundry Debtors (given in trial balance)
33,200
Provision is created on Debtors at 10%
Identify the Total amount deducted from Sundry debtors.
► Rs. 460
► Rs. 2,400
► Rs. 3,080
► Rs. 5,480
Question No: 28 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
Rs.
Closing value of stock
40,000
Bad Debts (Given in trial balance)
500
Old provisions (Given in trial balance)
700
Sundry Debtors (Given in trial balance)
44,500
Provision for doubtful debts be increases by 5%
What will be the amount of new provision
?
► Rs. 2,225
► Rs. 2,425
► Rs. 1,925
► Rs. 3,025
Question No: 29 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
Rs.
Bad Debts (Given in trial balance)
500
Old provisions (Given in trial balance)
700
Sundry Debtors (Given in trial balance)
44,800
If the Provision for doubtful debts has been increased by 5%, which amount of new provision will be shown in Profit & Loss Account?
► Rs. 2,240
► Rs. 2,425
► Rs. 1,925
► Rs. 3,025
Question No: 30 ( Marks: 1 ) - Please choose one
Wages paid to laborers working in the manufacturing department is treated as an expense of:
► Administrative expenses
► Selling expenses
► Marketing expenses
► Cost of goods sold
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following represents the relationship between persons who have agreed to share the profit of business carried on by all or any of them acting for all?
► Sole-ownership
► Private limited company
► Public limited company
► Partnership
Question No: 32 ( Marks: 1 ) - Please choose one
In Income Statement, both beginning inventory and ending inventory appear in the section of:
► Cost of good sold
► Indirect cost
► Selling cost
► Factory over head cost
Question No: 33 ( Marks: 1 ) - Please choose one
If dividend is proposed by directors of the company @ 30% for the year, it will be calculated on:
► Capital Reserve
► Authorized share capital
► Paid up share capital
► Share premium
Question No: 34 ( Marks: 1 ) - Please choose one
A company is said to have been registered when:
► It gets certificate of incorporation from registrar of Companies
► It gets certificate of commencement of business from registrar of Companies
► It actually starts its business
► It filed with the Registrar of Companies articles certain documents, like memorandum and articles of association
Question No: 35 ( Marks: 1 ) - Please choose one
6% Debentures Account Rs. 3, 00,000. What amount of interest on debentures should be shown in profit and loss account?
► Rs. 6,000
► Rs. 3, 00,000
► Rs. 18,000
► Rs. 3, 18,000
Question No: 36 ( Marks: 1 ) - Please choose one
What are the effects on financial statements, if provision for Income Tax to be made Rs. 12,000 is given in adjustment?
► It will be deducted in Income Statement only
► It will be treated as current liability in balance sheet only
► It will be treated as current asset in balance sheet only
► Both it will be deducted in income statement and it will be treated as current liability in balance sheet
Question No: 37 ( Marks: 1 ) - Please choose one
When the current Ratio is 2: 5 and the amount of Current Liabilities is Rs. 25,000. What will be the amount of Current Assets?
► Rs. 62,500
► Rs. 12,500
► Rs. 10,000
► Cannot be calculated with the help of given data
Question No: 38 ( Marks: 1 ) - Please choose one
Prepaid interest given in the Trial Balance will be treated as a (an):
► Asset
► Liability
► Revenue
► Deferred expense
Question No: 39 ( 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: 40 ( Marks: 1 ) - Please choose one
An overdraft will appear as:
► A debit balance in both the bank statement and the cash book
► A credit balance in the bank statement but as a debit balance in the cash book
► A credit balance in the cash book but as a debit balance in the bank statement
► A credit balance in both the bank statement and the cash book
Question No: 41 ( Marks: 1 ) - Please choose one
Recovery of bad debts is treated as:
► Profit
► Revenue
► Expense
► Asset
Question No: 42 ( Marks: 1 ) - Please choose one
The amount owed by debtors at the end of a month appears on the_________ side of the control account.
► Left side or debit
► Left side or credit
► Right side or debit
► Right side or credit
Question No: 43 ( Marks: 1 ) - Please choose one
The amount owed by debtors at the start of a month appears on the ___________ side of the individual debtors account.
► Left side or credit
► Left side or debit
► Right side or debit
► Right side or credit
Question No: 44 ( Marks: 1 ) - Please choose one
Ahmad Industries want to make payment to its supplier in the form of a pay order. The bank deducted Rs.160 as service charges without its knowledge. The error is known as:
► Error of commission
► Error of omission
► Error of original entry
► Error of principle
Question No: 45 ( Marks: 1 ) - Please choose one
Which of the given statement is CORRECT if both sides of trial balance are equal?
► It is proof that no transaction was completely omitted from the ledger during the posting process
► It is proof that the correct debit or credit balance has been computed for each account
► It is proof that the ledger is in balance
► It is proof that transactions have been correctly analyzed and recorded in the proper accounts
Question No: 46 ( Marks: 1 ) - Please choose one
Which of the following justifies when profit is earned?
► Assets exceed Expenditure
► Income exceeds Expenditure
► Cash Inflow exceeds Cash Outflow
► Income exceeds Liabilities
Question No: 47 ( Marks: 1 ) - Please choose one
In a partnership of Mr. A and Mr. B, the share of profit of Mr. A is Rs.75,375 and the share of profit of Mr. B is Rs. 25,125. What will be the ratio of their share?
► 1:2
► 2:3
► 3:2
► 3:1
Question No: 48 ( Marks: 1 ) - Please choose one
Income tax expense of Eden Corporation shows a debit balance of Rs.7,000 in its unadjusted trial balance and Rs.7,600 in adjusted trial balance. Which of the following account will be credited in adjusting entry?
► Income tax payable
► Prepaid income tax
► Income tax expense
► Income tax paid
Question No: 49 ( Marks: 1 ) - Please choose one
Sanders Construction sold a plant asset that originally cost Rs.80,000 for Rs.52,000 cash. If Sanders correctly reports a Rs.5,000 gain on this sale, the accumulated depreciation on the asset at the date of sale must have been:
► Rs.23,000
► Rs.28,000
► Rs.33,000
► Some other amount
Question No: 50 ( Marks: 1 ) - Please choose one
Which of the following is responsible to register the companies?
► State Bank of Pakistan
► Security and Exchange Commission of Pakistan
► Supreme Court
► Stock Exchange
Question No: 51 ( Marks: 1 ) - Please choose one
Which of the following can be utilized to set off any loss on revaluation?
► Capital reserve
► General reserve
► Revaluation reserve
► None of the given options
Question No: 52 ( Marks: 1 ) - Please choose one
Which of the following is known as the charter of the company?
► Prospectus
► Articles of association
► Memorandum of association
► None of the given options
Question No: 53 ( Marks: 1 ) - Please choose one
Statement of cash flows helps the stakeholders to assess:
► Ability to pay cash dividends in the future
► All of the given options
► The ability to generate future cash flows
► The liquidity of the business
Question No: 54 ( Marks: 1 ) - Please choose one
Short term investments in marketable securities and treasury bills that will mature within ninety days from the date of acquisition, must be classified as:
► Receivables
► Receipts from Capital
► Current and intangible assets
► Cash equivalents
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FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting
Solved by AMBER SHAHEEN
Question No: 1 - Please choose one
Shares for which amount is paid by public are called
______ shares.
► Paid up
► Authorized
► Bonus shares
► All are correct options
Question No: 2 - Please choose one
Which of the following is non- profit organization?
► Sole proprietorship
► Partnership
► Limited company
► Trust
Question No: 3 - 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: 4 - Please choose one
An Asset that is NOT physical in nature is called
► Intangible Asset
► Liquid Asset
► Current Asset
► Fixed Asset
Question No: 5 - 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: 6 - Please choose one
Accounts Receivable & Inventory are the examples of:
► Liquid assets
► Current assets
► Fixed assets
► Capital assets
Question No: 7 - Please choose one
Which of the following account will be credited in the books of XYZ Co. Ltd, if the business purchased a vehicle though cheque?
► Vehicle account
► Cash account
► Business account
► Bank account
Question No: 8 - 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: 9 - 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 /u> current liabilities
Question No: 10 - 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: 11 - Please choose one
In cost of goods sold statement, the ‘cost of material consumed’ is equal to:
► Opening raw material inventory + Purchases – Ending raw material inventory
► Opening raw material inventory - Purchases + Ending raw material inventory
► Ending raw material inventory + Opening raw material inventory - Purchases
► Ending raw material inventory + Opening raw material inventory + Purchases
Question No: 12 - Please choose one
What would be the value of total factory cost, if the cost of material consumed during the month is Rs. 6,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 2,500?
► Rs. 6,000
► Rs. 8,000
► Rs. 4,500
► Rs. 10,500
Question No: 13 - Please choose one
In cost of goods sold statement the ‘cost of goods manufactured’ is equal to:
► Total factory cost + Opening work in process + Ending work in process
► Total factory cost + Opening work in process – Ending work in process
► Total factory cost - Opening work in process + Ending work in process
► Ending work in process +Total factory cost – Opening work in process
Question No: 14 - 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: 15 - 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: 16 - 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: 17 - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
Cash
Rs.1, 00, 000
Debtors
Rs.10, 000
Other Assets
Rs. 1,000
Owner’s equity
Rs. 1, 000
► Rs. 12,000 liabilities
► Rs. 11,000 liabilities
► Rs. 1, 10,000 liabilities
► Rs. 1, 11,000 liabilities
Question No: 18 - Please choose one
Bank Statement is a record of transactions between the bank and the holder of
► A foreign currency account
► A current account
► A saving account
► All of the given options
Question No: 19 - Please choose one
Which of the following option is TRUE about the characteristic(s) of Bad Debt?
► It is a definite loss to the business
► It is not shown in Balance Sheet
► No provision is necessary for it
► All of the given options
Question No: 20 - Please choose one
Consider the following data and identify the amount which will be deducted from Sundry Debtors in Balance Sheet. ► Rs. 800
Particulars
Rs.
Bad debts (from trial balance)
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
800
► Rs. 400
► Rs. 800
► Rs. 2,000
► Rs. 2,400
Question No: 21 - Please choose one
Which of the following entry is passed to record discount allowed in control account?
► Discount Allowed (Dr) and Debtors Control A/c (Cr)
► Discount Allowed (Dr) and Debtors A/c (Cr)
► Debtors Control A/c (Dr) and Discount Allowed (Cr)
► Debtors A/c (Dr) and Discount Allowed (Cr)
Question No: 22 - Please choose one
Which of the following entry will be recorded, if a cheque deposited is dishonored by bank?
► Bank Account (Dr.) and Debtor's Account (Cr.)
► Debtor's Account (Dr.) and Bank Account (Cr.)
► Dishonored Cheque Account (Dr.) and Bank Account (Cr.)
► Creditor's Account (Dr.) and Bank Account (Cr.)
Question No: 23 - Please choose one
It is supposed that on 31st December, 2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 10% of the sundry debtors are doubtful. Actual bad debts are Rs. 1600. What amount of new provision for doubtful debts will be deducted from Sundry debtors?
► Rs. 3,600
► Rs. 4,000
► Rs. 1,600
► Rs. 2, 400
Question No: 24 - Please choose one
Which of the following is CORRECT if depreciation is given in trial balance?
► All of the given options are correct
► It means depreciation has already been deducted from concerned asset account
► It will be shown as an expense in income statement only
► It will not be deducted from concerned asset in Balance Sheet
Question No: 25 - Please choose one
The persons who sign articles and memorandum of the company and contribute in the initial share capital of the company are called:
► Subscribers
► Shareholders
► Managers
► Directors
Question No: 26 - Please choose one
Merchandise on hand at either the beginning or end of the reporting period is called_ _________.
► Raw material
► Cost of good sold
► Work in process
► Inventory
Question No: 27 - Please choose one
In which of the following auditor’s remuneration payable is shown?
► In balance sheet under the head of current liabilities only
► In balance sheet under the head of current assets only
► In income statement under the administrative expense only
► In both balance sheet under the head of current liabilities and income statement under the administrative expense
Question No: 28 - Please choose one
In which of the following interim dividend is treated?
► In profit and Loss account
► In profit and Loss appropriation account
► On the asset side of the Balance Sheet
► In trading account
Question No: 29 - Please choose one
Which of the following documents contains rules and regulations for internal management of the company
► Memorandum of Association
► Articles of Association
► Prospectus
► Statutory Declaration
Question No: 30 - Please choose one
Which of the following is NOT a cash inflow?
► Sale of fixed asset
► Issue of debentures
► Cash from business operation
► Purchase of fixed asset
Question No: 31 - Please choose one
In cash flow statements, which of the following would appear as a cash outflow?
► The payments for purchases made during the year
► A decrease in trade debtors over the course of an accounting period
► Money received as a result of issuing new shares
► Money received as result of selling fixed assets
Question No: 32 - Please choose one
Which of the following statement in NOT TRUE about the limited company form of business?
► The limited company form of business allows ownership of the business to be spread amongst many people
► Shareholders can appoint professionals
► Shareholders are personally liable for all the liabilities incurred by the business
► Regular filing of information about the affairs of the company is a legal requirement
Question No: 33 - Please choose one
What does a credit balance in a partner’s current account represent to a business?
► Current Assets
► Current Liability
► Long-term liability
► Share of profit
Question No: 34 - Please choose one
A company declares a cash dividend to be paid to its stockholders next month. The effect of the transaction is to:
► Decrease assets and liabilities.
► Increase assets and stockholders' equity.
► Decrease assets and stockholders' equity.
► Increase liabilities and decrease stockholders' equity.
Question No: 35 - Please choose one
An uncollectible account receivable is also termed as:
► Asset
► Uncollectible asset
► Uncollectible accounts expense
► None of the given options
Question No: 36 - Please choose one
Suppose a firm has 100 debtors, and each of them owes exactly Rs.150 at the start of June. During June each debtor has paid-off exactly Rs.100 on their account, either by cash or by cheque. What should be the revised total debtors figure?
► Rs. 5,000
► Rs. 9,850
► Rs. 25,000
► Rs. 14,900
Question No: 37 - Please choose one
Credit sales appear on the __________ side of the Debtors control account.
► Left side or credit
► Left side or debit
► Right side or debit
► Right side or credit
Question No: 38 - Please choose one
The financial year of Atif Brothers & Co. is closed on June 30, 2009. Total cash sales are Rs. 150,000, credit sales are Rs. 180,000 and total receipts are Rs. 250,000. Credit receipts will be:
► Rs. 150,000
► Rs. 100,000
► Rs. 220,000
► Rs. 280,000
Question No: 39 - Please choose one
Which of the following is usually not an accrued expense?
► Wages payable
► Taxes payable
► Notes payable
Question No: 40 - Please choose one
Which of the following is NOT a financial statement?
► Balance sheet
► Audit report
► Income statement
► Cash flow statement
Question No: 41 - Please choose one
Sunset tours has Rs.3,500 account receivable from the Del Mar Rotary. On January 20, the Rotary makes a partial payment of Rs.2,100 to Sunset Tours. The journal entry made on January 20 by Sunset Tours to record this transaction includes:
► A debit to the Cash Received account of Rs. 3,500
► A credit to the Accounts Receivable account of Rs.2,100
► A debit to the Cash account of Rs.1,400
► A debit to the Accounts Receivables account of Rs.1,400
Question No: 42 - Please choose one
A and B entered in partnership in capital ratio of 2:3. They earned a profit of Rs.6,600 during the year. What will be the share of profit of Mr. A?
► Rs.1,320
► Rs.2,640
► Rs.3,960
► Rs.6,600
Question No: 43 - Please choose one
Income tax expense of Eden Corporation shows a debit balance of Rs.7,000 in its unadjusted trial balance and Rs.7,600 in adjusted trial balance. Which of the following account will be debited in adjusting entry
► Income tax payable
► Prepaid income tax
► Income tax expense
► Income tax paid
Question No: 44 - Please choose one
Sanders Construction sold a plant asset that originally cost Rs.80,000 for Rs.52,000 cash. If Sanders correctly reports a Rs.5,000 gain on this sale, the accumulated depreciation on the asset at the date of sale must have been:
► Rs.23,000
► Rs.28,000
► Rs.33,000
► Some other amount
Question No: 45 - Please choose one
Mr. A & B entered into a partnership invested Rs.65,000 and Rs.50,000 with an equal share in profit or loss. Markup on drawings of Mr. A is Rs.1,000 and of Mr. B is Rs.1,500. The net income for the year is Rs.55,000. What will be the amount of distributable profit?
► Rs.52,500
► Rs.56,000
► Rs.56,500
► Rs.57,500
Question No: 46 - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,000 and markup on drawings of Mr. B is Rs.3,000. The net income for the year is Rs.50,000. What will be the profit share of Mr. A?
► Rs.22,500
► Rs.25,500
► Rs.27,500
► Rs.55,000
Question No: 47 - Please choose one
Which of the following is quoted company?
► Private Limited Company
► Public Limited Company
► Listed company
► Non Listed Company
Question No: 48 - Please choose one
Which of the following can be utilized to issue bonus shares?
► Reserves
► Debentures
► Share premium
► Term finance certificate
Question No: 49 - Please choose one
Which of the following can be utilized to set off any loss on revaluation?
► Capital reserve
► General reserve
► Revaluation reserve
► None of the given options
Question No: 50 - Please choose one
Which of the following capital is required for the registration of the company?
► Issued capital
► Subscribed capital
► Authorized capital
► Reserve capital
Question No: 51 - Please choose one
Which of the following capital is taken up by the general public?
► Issued capital
► Subscribed capital
► Authorized capital
► Reserve capital
Question No: 52 - Please choose one
According to the statement of cash flows following are the examples of investing activities except:
► Sales of machinery
► Capital invested by the owners
► Purchase of building for the business use
► Cash received from the disposal of equipment
Question No: 53 - Please choose one
The financial statement that captures both the current operating result and the associated changes in the balance sheet is:
► Statement of retained earnings
► Statement of financial position
► Statement of cash flows
► Statement of changes in equity
Question No: 54 - Please choose one
In statement of cash flows, all of the following items are considered as financing activity, except:
► Cash received from issuance of
► Cash received from issuance of bond
► Payment made for short term debts
► Collections on loans
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FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting
Solved by AMBER SHAHEEN
Question No: 1 ( 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: 2 ( Marks: 1 ) - Please choose one
What will be the effect on accounting equation, when payment is made to the creditor of the business?
► Increase in an asset, increase in owner's equity
► Increase in an asset, increase in a liability
► Decrease in an asset, decrease in owner's equity
► Decrease in an asset, decrease in a liability
Question No: 3 ( 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: 4 ( 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: 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 account will be credited, if business purchased a vehicle on cash?
► Vehicle account
► Cash account
► Business account
► Bank account
Question No: 7 ( 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: 8 ( 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: 9 ( Marks: 1 ) - Please choose one
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: 10 ( 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: 11 ( Marks: 1 ) - Please choose one
Which one of the following is NOT true about revaluation of fixed assets?
► Revaluation should be made after regular intervals
► Change in value should be permanent
► Only relevant asset should be revalued in the whole class of asset
► The profit or loss will be transferred to revaluation account
Question No: 12 ( Marks: 1 ) - Please choose one
A Bank Reconciliation Statement is prepared to:
► Ascertain that the difference between the Cash Book balance and the Bank
Statement balance has been accounted for
► Correct errors in the Cash Book or errors in the Bank Statement
► Amend the balance of the Bank Statement of the firm
► Amend the balance in the Cash Book of the firm
Question No: 13 ( Marks: 1 ) - Please choose one
Bank Statement is a record of transactions between the bank and the holder of:
► A foreign currency account
► A current account
► A saving account
► All of the given options
Question No: 14 ( Marks: 1 ) - Please choose one
Which one of the following transactions will cause the balance in Mr. Terry's Cash Book to be greater than his Bank Statement balance?
► A cheque is drawn but not yet presented at the bank for payment
► The bank has not yet notified to Mr. Terry about a dishonoured cheque
► A credit transfer into Terry's Bank Account
► A cheque payment of Rs.101 is recorded in the Cash Book as Rs.110
Question No: 15 ( Marks: 1 ) - Please choose one
Which of the following option is TRUE about the characteristic(s) of Bad Debt?
► It is a definite loss to the business
► It is not shown in Balance Sheet
► No provision is necessary for it
► All of the given options
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following account will be debited, when the bad debts are recovered?
► Bad debt recovered a/c
► Cash a/c
► Doubtful debts a/c
► Bad debts a/c
Question No: 17 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be shown in profit & loss account.
Particulars
Rs.
Bad debts
3,600
Provision for doubtful debts (old)
6,000
Current year’s provision (new)
1,500
► Rs. (5,100)
► Rs. 5,100
► Rs. (900)
► Rs. 900
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following rectifying entry will be recorded, if sales to Mr. “A” of Rs.336 have been debited to Mr. “B” account?
► A’s account (Dr.) and B’s account (Cr.)
► B’s account (Dr.) and A’s account (Cr.)
► Sales account (Dr.) and B’s account (cr.)
► B’s account (Dr.) and Sales account (Cr.)
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following item must be recorded in the adjusted Cash Book in order to bring it in line with the entries in the Bank Statement?
► Bank charges
► An error on the Bank Statement
► An uncredited deposit
► An unpresented cheque
Question No: 20 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be shown in profit & loss account.
Particulars
Rs.
Bad debts
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
1,000
► Rs. 600
► Rs. 1,600
► Rs. 2,000
► Rs. 2,600
Question No: 21 ( Marks: 1 ) - Please choose one
Which one of the following is TRUE about provisions?
► It is necessary to prepare for showing true picture of balance sheet
► It is a reduction from assets
► It is prepared for specific purposes
► All of the given options
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following is/are TRUE about the sole trader form of business?
► Sole traders do not need to consult accountants
► Sole traders must register the name of their business with the Registrar of Companies
► All of the given options
► A sole trader is liable to pay income tax on his/her earnings
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following is TRUE about the treatment of insurance paid in advance Rs. 13,000?
► It will be treated as an other income in Profit & Loss Account
► It will be treated as a current asset in Balance Sheet
► It will be treated as a current liability in Balance Sheet
► It will be treated as an accrued expense in Balance Sheet
Question No: 24 ( Marks: 1 ) - Please choose one
Rent receivable (given in trial balance) is an item of_____________.
► Balance Sheet
► Profit & Loss Account
► Trading Account
► Both Balance Sheet and Profit & Loss Account
Question No: 25 ( Marks: 1 ) - Please choose one
What will the effects on financial statements, if machinery is depreciated @ 10%?
► It will be treated as an expense in income statement only
► It will be subtracted from concerned asset only
► It will be treated as a current asset only
► It will be treated as an expense in income statement and subtracted from concerned assets in Balance Sheet
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is TRUE about a merchandising company?
► A merchandising company's business is to buy and sell products
► A merchandising company must use the perpetual system to account for merchandising inventory
► A merchandising company's business is to provide services
► A Sugar Mill is an example of a merchandising company
Question No: 27 ( Marks: 1 ) - Please choose one
Identify the selling expenses of manufacturing concern with the help of given data.
Particulars
Rs.
Salesman’s salary
70,000
Commission on sales
28,000
Carriage outward
10,000
Carriage inward
5,000
► Rs. 80,000
► Rs. 60,000
► Rs. 38,000
► Rs. 1, 08,000
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following statements is NOT TRUE about the partnership form of business?
► A partnership is a business run by two or more persons
► A partnership business is easy to set up
► Each partner is liable under the law for the actions of other partners
► In the absence of agreement, partners will be paid salaries
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following account will be credited when interest on capital is charged against the distribution of profit?
► Interest account
► Partner’s capital account
► Profit and Loss account
► Profit and loss appropriation account
Question No: 30 ( Marks: 1 ) - Please choose one
When preparing a cash flow statement, which of the following would be classified as a financing activity?
- ► A new long-term loan taken out to finance the purchase of fixed assets
- ► Salaries paid
- ► Interest paid on a long-term bank loan
- ► The cost of purchasing a patent
Question No: 31 ( Marks: 1 ) - Please choose one
When preparing cash flow statements, the repayments of a loan during the year should be included under which of the following heading?
► Operating activities
► Financing activities
► Investing activities
► None of the given options
Question No: 32 ( Marks: 1 ) - Please choose one
An example of financing activities in the context of cash flow statement is:
► Capital expenditures on purchase of fixed assets
► Long-term deposit
► Financial charges paid
► Dividend paid
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following business publishes the Financial Statements?
► Sole-Proprietorship
► Partnership
► Trust
► Public Limited Company
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the given Asset is Not included in the calculation acid test ratio?
► Stock
► Cash
► Debtors
► Bills Receivable
Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following ratio tells about “How a company would repays its loans”
► Mark up cover ratio
► Acid test ratio
► Current ratio
► Debt Equity ratio
Question No: 36 ( Marks: 1 ) - Please choose one
Rs.
Gross profit
50,000
Operating profit
42,000
Sales
250, 000
What is the amount of operating expenses
?
► Rs. 8,000
► Rs. 92,000
► Rs. 62,500
► Rs. 300,000
Question No: 37 ( Marks: 1 ) - Please choose one
Debenture is also named as:
► Share
► Bond
► Equity
► Reserve
Question No: 38 ( Marks: 1 ) - Please choose one
What is the treatment of Accumulated Depreciation in Balance Sheet?
► It may treated as a deficit
► It may treated as a surplus
► It may treated as a revenue
► None of the given options
Question No: 39 ( Marks: 1 ) - Please choose one
An accounting system is used by a business to:
► Analyze transactions
► Handle routine book-keeping tasks
► Classify and summarize financial information
► All of the given options
Question No: 40 ( Marks: 1 ) - Please choose one
Which one of the following vouchers is used to record the non-cash transactions?
► Journal Vouchers
► Receipt Vouchers
► Payment Vouchers
► Nominal Vouchers
Question No: 41 ( 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: 42 ( Marks: 1 ) - Please choose one
Particulars
Rs.
Direct materials costs
80,000
Direct labor costs
50,000
Manufacturing overhead costs
60,000
Prime cost
?
► Rs.130, 000
► Rs.110, 000
► Rs.140, 000
► Rs.190, 000
Question No: 43 ( Marks: 1 ) - Please choose one
When we close bad debts account, which of the following account is credited?
► Profit and loss account
► Bad debt account
► Debtor account
► Provision for bad debt account
Question No: 44 ( Marks: 1 ) - Please choose one
Which of the following statement is correct? If a company fails to record estimated bad debts expense,
► Net realizable value is understated
► Expenses are understated
► Revenues are understated
► Receivables are understated
Question No: 45 ( Marks: 1 ) - Please choose one
In a partnership of Mr. A and Mr. B, the share of profit of Mr. A is Rs.75,375 and the share of profit of Mr. B is Rs. 25,125. What will be the ratio of their share?
► 1:2
► 2:3
► 3:2
► 3:1
Question No: 46 ( Marks: 1 ) - Please choose one
Which of the following is the major benefit of a partnership over a sole proprietorship?
► Unlimited liability
► Single tax filing
► Difficult ownership resale
► Raising capital
Question No: 47 ( Marks: 1 ) - Please choose one
Which of the following is used to convert accounting information from the cash basis of accounting to the accrual basis of accounting?
► Ledger
► Journal entries
► Adjusted entries
► Trial balance
Question No: 48 ( Marks: 1 ) - Please choose one
Unexpired costs are reported as:
► Revenues
► Expenses
► Assets
► Income
Question No: 49 ( Marks: 1 ) - Please choose one
The weekly or biweekly compensation received by hourly-paid employees is called:
► Salary
► Wages
► Income
► Profit
Question No: 50 ( Marks: 1 ) - Please choose one
Income tax expense of Eden Corporation shows a debit balance of Rs.7,000 in its unadjusted trial balance and Rs.7,600 in adjusted trial balance. Which of the following account will be debited in adjusting entry?
► Income tax payable
► Prepaid income tax
► Income tax expense
► Income tax paid
Question No: 51 ( Marks: 1 ) - Please choose one
Which of the following capital is offered to the general public?
► Issued capital
► Subscribed capital
► Authorized capital
► Reserve capital
Question No: 52 ( Marks: 1 ) - Please choose one
Which of the following capital is taken up by the general public?
► Issued capital
► Subscribed capital
► Authorized capital
► Reserve capital
Question No: 53 ( Marks: 1 ) - Please choose one
With reference to the statement of cash flows the transactions involving production and delivering goods or providing services must be classified as:
► Business activities
► Operating activities
► Financing activities
► Investing activities
Question No: 54 ( Marks: 1 ) - Please choose one
According to the statement of cash flows following are the examples of investing activities except:
► Sales of machinery
► Capital invested by the owners
► Purchase of building for the business use
► Cash received from the disposal of equipment
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Permalink Reply by + M.Tariq Malik + on
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FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting
Solved by AMBER SHAHEEN
Question No: 1 ( Marks: 1 ) - Please choose one
Word “Credit” is derived from ______ language.
► Latin
► English
► French
► Chinese
Question No: 2 ( Marks: 1 ) - Please choose one
What is the nature of an expense account?
► Debit
► Credit
► Revenue
► None of the given options
Question No: 3 ( 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: 4 ( 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: 5 ( Marks: 1 ) - Please choose one
Which of the following organizations do NOT prepare Income & Expenditure account?
► Public limited companies
► Private limited companies
► Partnership firms
► All of the given options
Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following account will be credited in the books of XYZ Co. Ltd, if the business purchased a vehicle though cheque?
► Vehicle account
► Cash account
► Business account
► Bank account
Question No: 7 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs. 60,000, sales are Rs. 90,000 and operating expenses are Rs. 25,000 during the year. What would be the Net Profit?
► Rs. 5,000
► Rs. 25,000
► Rs. 55,000
► Rs. 60,000
Question No: 8 ( 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: 9 ( 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: 10 ( Marks: 1 ) - Please choose one
Which of the following particular is NOT included in the specimen of a Journal Voucher?
► Name of organization
► Bank receipt
► Debit amount
► Credit amount
Question No: 11 ( Marks: 1 ) - Please choose one
Accountancy covers which of the following area(s):
► Book-keeping
► Accounting
► Auditing
► All of the given options
Question No: 12 ( 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: 13 ( Marks: 1 ) - Please choose one
Which of the following account will be debited, when the bad debts are recovered?
► Bad debt recovered a/c
► Cash a/c
► Doubtful debts a/c
► Bad debts a/c
Question No: 14 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be shown in profit & loss account.
Particulars
Rs.
Bad debts
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
800
► Rs. 400
► Rs. 800
► Rs. 2,000
► Rs. 2,400
Question No: 15 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be shown in profit & loss account.
Particulars
Rs.
Bad debts
3,600
Provision for doubtful debts (old)
6,000
Current year’s provision (new)
1,500
► Rs. (5,100)
► Rs. 5,100
► Rs. (900)
► Rs. 900
Question No: 16 ( Marks: 1 ) - Please choose one
On which of the following system control accounts are based?
► Double entry book keeping system
► Single entry book keeping system
► Cash accounting system
► All of the given options
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following entry will be passed to record discount received in control account?
► Discount Received (Dr) and Creditors Control A/c (Cr)
► Discount Received (Dr) and Creditors A/c (Cr)
► Creditors Control A/c (Dr) and Discount Received (Cr)
► Creditors A/c (Dr) and Discount Received (Cr)
Question No: 18 ( Marks: 1 ) - Please choose one
A receipt of cash Rs. 10,000 from Mr. Bilal is recorded as Rs. 1,000. What amount will be adjusted in rectifying entry?
► Rs. 1,000
► Rs. 9,000
► Rs. 10,000
► Rs. 11,000
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following rectifying entry will be recorded, if sales to Mr. “A” of Rs.336 have been debited to Mr. “B” account?
► A’s account (Dr.) and B’s account (Cr.)
► B’s account (Dr.) and A’s account (Cr.)
► Sales account (Dr.) and B’s account (cr.)
► B’s account (Dr.) and Sales account (Cr.)
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of Sale to Mr.”A” Rs. 336 was not recorded at all?
► Only sales account
► Only A’s account
► Only cash account
► Both sales account and A’s account
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following item must be recorded in the adjusted Cash Book in order to bring it in line with the entries in the Bank Statement?
► Bank charges
► An error on the Bank Statement
► An uncredited deposit
► An unpresented cheque
Question No: 22 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be deducted from Sundry Debtors in Balance Sheet.
Particulars
Rs.
Bad debts (from trial balance)
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
1,000
► Rs. 600
► Rs. 1,000
► Rs. 2,000
► Rs. 2,600
Question No: 23 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
Rs.
Bad Debts (Given in trial balance)
500
Old provisions (Given in trial balance)
700
Sundry Debtors (Given in trial balance)
44,800
If the Provision for doubtful debts has been increased by 5%, which amount of new provision will be shown in Profit & Loss Account?
► Rs. 2,240
► Rs. 2,425
► Rs. 1,925
► Rs. 3,025
Question No: 24 ( Marks: 1 ) - Please choose one
The main objective of financial reporting is to provide:
► Essential information to internal users of financial reports.
► Useful economic information about the business to the external parties for sound financial decisions.
► Information to internal users about the cash position of the business.
► Information to the Securities Exchange Commission (SEC).
Question No: 25 ( Marks: 1 ) - Please choose one
A financial statement that indicates the success or failure of a business, over a period of time is called:
► A cash flow statement
► A retained earnings statement
► An income statement
► A balance sheet
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is/are NOT shown in balance sheet of sole proprietor?
► Fixed assets
► Current liabilities
► Profit sharing ratio
► Long term assets
Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following statement is TRUE about the Accounts receivable?
► Accounts receivable arises when a company buys goods or services from another party on credit
► Accounts receivable is a miscellaneous category that may include loans to employees
► Accounts receivable are more formal than notes receivable
► Accounts receivable are often called trade receivables
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following account will be debited when the interest on drawings is charged?
► Partner’s capital account
► Interest account
► Partner’s current account
► Profit & Loss account
Question No: 29 ( Marks: 1 ) - Please choose one
In case of fixed capital accounts, other transactions such as Drawings and Profit etc. are recorded in a separate account that is called ___________.
► Fixed Capital Account
► Current Account
► Fluctuating Capital Account
► Floating Capital Account
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following clause/s are discussed in Memorandum of Association of Companies?
► Name of company
► Place of registered office of company
► Objective of the company
► All of the given options
Question No: 31 ( Marks: 1 ) - Please choose one
Preliminary Expenses of the company may write off against:
► Share premium account
► Share holder account
► Debtors control account
► Creditor control account
Question No: 32 ( Marks: 1 ) - Please choose one
What are the effects on financial statements, if provision for Income Tax to be made Rs. 12,000 is given in adjustment?
► It will be deducted in Income Statement only
► It will be treated as current liability in balance sheet only
► It will be treated as current asset in balance sheet only
► Both it will be deducted in income statement and it will be treated as current liability in balance sheet
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following is NOT a cash inflow?
► Sale of fixed asset
► Issue of debentures
► Cash from business operation
► Purchase of fixed asset
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following statement in NOT TRUE about the limited company form of business?
► The limited company form of business allows ownership of the business to be spread amongst many people
► Shareholders can appoint professionals
► Shareholders are personally liable for all the liabilities incurred by the business
► Regular filing of information about the affairs of the company is a legal requirement
Question No: 35 ( Marks: 1 ) - Please choose one
If company has distributable profit is Rs. 4, 90,000. Profit sharing share ratio of Mr. A, Mr. B and Mr. C is 2:3:5 respectively what will be the Profit share for Mr. C in distributable profit.
► Rs. 98,000
► Rs. 1, 47,000
► Rs. 2, 45,000
► Rs. 3, 43,000
Question No: 36 ( Marks: 1 ) - Please choose one
What is the treatment of Accumulated Depreciation in Balance Sheet?
► It may treated as a deficit
► It may treated as a surplus
► It may treated as a revenue
► None of the given options
Question No: 37 ( Marks: 1 ) - Please choose one
According to the double entry system of book keeping, the investment of Rs.10, 000 in the business made by the owner will effect:
► Cash Account & Capital Account
► Cash Account & Expense Account
► Capital Account & Revenue Account
► Capital Account & Expense Account
Question No: 38 ( Marks: 1 ) - Please choose one
The return of goods by a customer should be debited to:
► Customer’s account
► Sales return account
► Goods account
► Accounts receivable account
Question No: 39 ( Marks: 1 ) - Please choose one
Expenditures incurred annually on renewal of patent are known as:
► Revenue Expenditures
► Capital Expenditures
► Deferred Expenditures
► None of the given options
Question No: 40 ( Marks: 1 ) - Please choose one
Debts that are not collectible and worthless to the creditor are known as:
► Doubtful debts
► Bad debts
► Provision for doubtful debts
► Loss
Question No: 41 ( Marks: 1 ) - Please choose one
ABC Company received discount on its credit purchases, which of the following will be debited while entering in journal?
► Cash
► Discount received
► Creditors
► Bank
Question No: 42 ( Marks: 1 ) - Please choose one
The amount owed by debtors at the start of a month appears on the ___________ side of the individual debtors account.
► Left side or credit
► Left side or debit
► Right side or debit
► Right side or credit
Question No: 43 ( Marks: 1 ) - Please choose one
Ahmad Industries want to make payment to its supplier in the form of a pay order. The bank deducted Rs.160 as service charges without its knowledge. The error is known as:
► Error of commission
► Error of omission
► Error of original entry
► Error of principle
Question No: 44 ( Marks: 1 ) - Please choose one
Which of the following accounts would never be reported in the income statement as an expense?
► Depreciation expense
► Income tax expense
► Interest expense
► Dividends expense
Question No: 45 ( Marks: 1 ) - Please choose one
In the heading of financial statement, ___________ is not required?
► Title of financial statement
► Name of the person who prepares financial statement
► Period for which financial statement is prepared
► Name of business entity
Question No: 46 ( Marks: 1 ) - Please choose one
In a partnership of Mr. A and Mr. B, the share of profit of Mr. A is Rs.75,375 and the share of profit of Mr. B is Rs. 25,125. What will be the ratio of their share?
► 1:2
► 2:3
► 3:2
► 3:1
Question No: 47 ( Marks: 1 ) - Please choose one
Which of the following is decreased when an asset is converted into expense in adjustment?
► Revenue
► Net income
► Expense
► Liability
Question No: 48 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,500 and markup on drawings of Mr. B is Rs.2,800. The net income for the year is Rs.95,000. What will be the amount of distributable profit?
► Rs.89,700
► Rs.94,700
► Rs.95,300
► Rs.100,300
Question No: 49 ( Marks: 1 ) - Please choose one
How many members can subscribe their names in memorandum of association for registration of public limited company?
► 2
► 3
► 5
► 7
Question No: 50 ( Marks: 1 ) - Please choose one
Which of the following is responsible to register the companies?
► State Bank of Pakistan
► Security and Exchange Commission of Pakistan
► Supreme Court
► Stock Exchange
Question No: 51 ( Marks: 1 ) - Please choose one
The amount of share premium can be utilized except:
► To write off preliminary expenses
► To meet the expenses of issue of shares
► To distribute among the share holders
► To issue bonus shares
Question No: 52 ( Marks: 1 ) - Please choose one
Which of the following capital is required for the registration of the company?
► Issued capital
► Subscribed capital
► Authorized capital
► Reserve capital
Question No: 53 ( Marks: 1 ) - Please choose one
Which of the following items of balance sheet are useful in evaluating a company’s liquidity?
► Current assets and other assets
► Current liabilities and current assets
► Current liabilities and plant and equipment
► Non current liabilities and other assets
Question No: 54 ( Marks: 1 ) - Please choose one
The company ABC purchased an asset for Rs. 40,000, paying 30,000 in cash and issuing a long term note payable for remaining balance. The amount will be recorded in statement of cash flows as:
► Rs. 40,000 cash outflow as investing activity
► Rs. 30,000 cash outflow as investing activity
► Rs. 10,000 cash inflow as investing activity
► Rs. 70,000 cash inflow as investing activity
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FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting
Solved by AMBER SHAHEEN
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
Term "Credit" means_______ by the business.
► Receiving of benefits
► It has no effect on business
► Providing of benefits
► It depends upon items
Question No: 3 ( 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: 4 ( 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: 5 ( 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: 6 ( Marks: 1 ) - Please choose one
Bank book is part of:
► Voucher
► General Journal
► General Ledger
► Trial Balance
Question No: 7 ( 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: 8 ( Marks: 1 ) - Please choose one
Which of the following shows summary of a company's financial position at a specific date?
► Profit & Loss Account
► Cash Flow Statement
► Balance Sheet
► Income & Expenditure Account
Question No: 9 ( Marks: 1 ) - Please choose one
Which of the following is NOT an example of intangible assets?
► Franchise rights
► Goodwill
► Patents
► Land
Question No: 10 ( Marks: 1 ) - Please choose one
Which of the following is an example of business liability?
► Land
► Building
► Cash
► Capital
Question No: 11 ( 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: 12 ( 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: 13 ( Marks: 1 ) - Please choose one
Interest on loan paid by business is an example of :
► Deferred expense
► Revenue expense
► Capital expense
► None of the given options
Question No: 14 ( 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: 15 ( Marks: 1 ) - Please choose one
Which of the following is NOT a function of bank reconciliation statement?
► To reconcile the difference between the cash book and the bank statement
► To check for errors in balance sheet
► To update omitted entries into the cash book
► To update omitted entries into the bank statement
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following entry will be recorded when the Bad Debts are recovered?
► Cash account (Dr.) & Bad Debts recovered account (Cr.)
► Accounts Receivable account (Dr.) & Bad Debts recovered account (Cr.)
► Bad debts recovered account (Dr.) and Profit & Loss account (Cr.)
► Provision for doubtful debts account (Dr.) & Cash account (Cr.)
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following subsidiary book(s) is (are) maintained for debtors control account?
► Sales Day Book
► Sales Return
► Debtors Ledger
► All of the given options
Question No: 18 ( Marks: 1 ) - Please choose one
Sales are calculated by adding:
► Cash sales and cash received from debtors
► Credit sales and cash received from debtors
► Cash sales and credit sales
► Cash ales and credit purchases
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following item will be shown on debit side of debtors account?
► Discount received
► Return inwards
► Discount allowed
► Credit sales
Question No: 20 ( Marks: 1 ) - Please choose one
Goods purchased from “Mr. A” for Rs. 2,000 passed through the sales book. The rectification of error will result in:
► Increase of gross profit
► Decrease of gross profit
► Remains constant and no effect on net profit
► There is no relation between goods purchased and gross profit
Question No: 21 ( Marks: 1 ) - Please choose one
Goods of Rs.1,000 purchased from Mr. “A” were recorded in sales book, the rectification of this error will:
► Increase the gross profit
► Reduce the gross profit
► Have no effect on gross Profit
► None of the given options
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following account will be credited when a typewriter is sold that has been used in the office?
► Cash Account
► Sales Account
► Purchase Account
► Office Equipment Account
Question No: 23 ( Marks: 1 ) - Please choose one
When one or both aspects of a transaction are recorded in the wrong class or category of account, this is called:
► Error of principle
► Error of omission
► Error of commission
► Error of original entry
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following item must be recorded in the adjusted Cash Book in order to bring it in line with the entries in the Bank Statement?
► Bank charges
► An error on the Bank Statement
► An uncredited deposit
► An unpresented cheque
Question No: 25 ( Marks: 1 ) - Please choose one
It is supposed that on 31st December, 2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 10% of the sundry debtors are doubtful. Actual bad debts are Rs. 1600. What amount of new provision for doubtful debts will be credited in profit & loss account
► Rs. 3,600
► Rs. 4,000
► Rs. 1,600
► Rs. 2, 400
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is an example of operating expense?
► Purchasing operating equipment
► Purchasing cleaning services
► Purchasing an investment in another company
► Purchasing a computer for the accounting office
Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following would NOT be considered as a component of 'cost' of stock?
► Salaries of selling staff
► Transportation inward costs
► Import duties
► Purchase price
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following will be debited, if cash is drawn by Proprietor?
► Proprietor’s drawings
► Proprietor’s cash
► Proprietor’s capital
► Proprietor’s income
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following is TRUE about the treatment of insurance paid in advance Rs. 13,000?
► It will be treated as an other income in Profit & Loss Account
► It will be treated as a current asset in Balance Sheet
► It will be treated as a current liability in Balance Sheet
► It will be treated as an accrued expense in Balance Sheet
Question No: 30 ( Marks: 1 ) - Please choose one
When closing stock is given in trial balance, then it will effect:
► Trading account only
► Balance sheet only
► Owner's equity only
► Both Trading account and Balance sheet
Question No: 31 ( Marks: 1 ) - Please choose one
Fixed Assets (WDV) + Working Capital =?
► Total assets employed
► Total liabilities
► Total assets
► Current assets
Question No: 32 ( Marks: 1 ) - Please choose one
Current accounts of the partners should be opened when the capitals are:
► Fixed
► Fluctuating
► Floating
► Normal
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following is (are) type(s) of Public Limited Companies?
► Listed company
► Non listed company
► Private limited company
► Both Listed Company and non listed company
Question No: 34 ( Marks: 1 ) - Please choose one
The charter of a company which defines the limitations and powers of the company is called:
► The memorandum of association
► Articles of association
► Statutory report
► Certificate of commencement
Question No: 35 ( Marks: 1 ) - Please choose one
Merchandise on hand at either the beginning or end of the reporting period is called__________.
► Raw material
► Cost of good sold
► Work in process
► Inventory
Question No: 36 ( Marks: 1 ) - Please choose one
The balance sheet reported a beginning balance of Rs. 20,000 in Accounts Receivable and an ending balance of Rs. 15,000. Credit Sales of Rs. 200,000 were made during the year. Using this information, compute cash collected from customers.
► Rs. 205,000
► Rs. 215,000
► Rs. 195,000
► Rs. 200,000
Question No: 37 ( Marks: 1 ) - Please choose one
Rs.
Gross profit
50,000
Operating profit
42,000
Sales
250, 000
What is the amount of operating expenses
?
► Rs. 8,000
► Rs. 92,000
► Rs. 62,500
► Rs. 300,000
Question No: 38 ( Marks: 1 ) - Please choose one
Particulars
Rs.
Debentures
1, 50, 000
Equity Capital
2, 00,000
General Reserve
90, 000
Accumulated profit
60,000
What is debt equity ratio
?
► 15: 20 (or 3:4)
► 15:24 (or 5: 8)
► 15:29
► 15:35 (or 3: 7)
Question No: 39 ( Marks: 1 ) - Please choose one
A company declares a cash dividend to be paid to its stockholders next month. The effect of the transaction is to:
► Decrease assets and liabilities.
► Increase assets and stockholders' equity.
► Decrease assets and stockholders' equity.
► Increase liabilities and decrease stockholders' equity.
Question No: 40 ( Marks: 1 ) - Please choose one
Particulars
Rs.
Direct materials costs
80,000
Direct labor costs
50,000
Manufacturing overhead costs
60,000
Prime cost
?
► Rs.130, 000
► Rs.110, 000
► Rs.140, 000
► Rs.190, 000
Question No: 41 ( 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. 5,000
► Rs. 7,000
► Rs. 8,000
Question No: 42 ( Marks: 1 ) - Please choose one
The amount owed by debtors at the end of a month appears on the_________ side of the control account.
► Left side or debit
► Left side or credit
► Right side or debit
► Right side or credit
Question No: 43 ( Marks: 1 ) - Please choose one
Which of the following is correct for an account has debit balance?
► The amount of the debits exceeds the amount of the credits
► There are more entries on the debit side than on the credit side
► Its normal balance is debit without regard to the amounts on the debit side
► The last entry of the accounting period was posted on the debit side
Question No: 44 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal share in profit or loss. The agreement provides that Mr. A will receive Rs.10,000 and Mr. B will receive Rs.8,000 as salary allowance. The net income for the year is Rs.85,000. What will be the total share of Mr. A?
► Rs.52,500
► Rs.42,500
► Rs.43,500
► Rs.50,500
Question No: 45 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership invested Rs.50,000 and Rs.65,000 with an equal share in profit or loss. Markup on drawings of Mr. A is Rs.1,500 and of Mr. B is Rs.1,800. The net income for the year is Rs.85,000. What will be the profit share of Mr. B?
► Rs.42,350
► Rs.44,150
► Rs.41,600
► Rs.40,850
Question No: 46 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,500 and markup on drawings of Mr. B is Rs.2,800. The net income for the year is Rs.95,000. What will be the amount of distributable profit?
► Rs.89,700
► Rs.94,700
► Rs.95,300
► Rs.100,300
Question No: 47 ( Marks: 1 ) - Please choose one
Which of the following can be distributed among the share holders?
► Capital reserve
► General reserve
► Revaluation reserve
► All of the given options
Question No: 48 ( Marks: 1 ) - Please choose one
Which of the following capital is taken up by the general public?
► Issued capital
► Subscribed capital
► Authorized capital
► Reserve capital
Question No: 49 ( Marks: 1 ) - Please choose one
All of the following have an effect on ‘operating activities’ while preparing the statement of cash flows except:
► Provision for doubtful debts
► Gain or loss on currency exchange rate
► Depreciation charged on fixed asset
► Amount received for disposal of a fixed asset
Question No: 50 ( Marks: 1 ) - Please choose one
Primary purpose of the cash flows statement is to provide the information about:
► Errors or discrepancies between cash book and income statement
► Receipt and payment of cash in the period
► Non cash adjustment that effect the income statement
► Cash paid to the customers and creditors of the business
Question No: 51 ( Marks: 1 ) - Please choose one
Which of the following financial statement is helpful for the investors and creditors to assess the cash and non cash aspects of operating, investing and financing transactions on an entity’s financial position?
► Balance Sheet
► Income Statement
► Statement of cash flows
► Statement of changes in equity
Question No: 52 ( Marks: 1 ) - Please choose one
According to the statement of cash flows following are the examples of investing activities except:
► Sales of machinery
► Capital invested by the owners
► Purchase of building for the business use
► Cash received from the disposal of equipment
Question No: 53 ( Marks: 1 ) - Please choose one
Which of the following items of balance sheet are useful in evaluating a company’s liquidity?
► Current assets and other assets
► Current liabilities and current assets
► Current liabilities and plant and equipment
► Non current liabilities and other assets
Question No: 54 ( Marks: 1 ) - Please choose one
Which of the following is measured by debt ratio?
► Short-term liquidity
► Creditors’ long term risk
► Short-term risk of the company
► All of the given options
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FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting
Solved by AMBER SHAHEEN
Question No: 1 ( Marks: 1 ) - Please choose one
Shares for which amount is paid by public are called ________ shares.
► Paid up
► Authorized
► Bonus shares
► All are correct options
Question No: 2 ( 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: 3 ( Marks: 1 ) - Please choose one
What is the nature of an expense account?
► Debit
► Credit
► Revenue
► None of the given options
Question No: 4 ( 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: 5 ( 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: 6 ( Marks: 1 ) - Please choose one
Which of the following organizations prepare Income & Expenditure account?
► Public libraries
► NGOs
► Labor unions
► All of the given options
Question No: 7 ( 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: 8 ( Marks: 1 ) - Please choose one
Which of the following entry will be recorded in the books of accounts for the goods returned to Mr. 'A'?
► Purchases return account (Dr) and Trading account (Cr)
► Mr.” A”/ creditor account (Dr) and purchases return account (Cr)
► Purchases return account (Dr) and Mr.” A” / creditor account (Cr)
► Mr.” A”/ creditor account (Dr) and Profit & Loss account (Cr)
Question No: 9 ( 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: 10 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs.1,00,000, sales are Rs. 300,000 and operating expenses Rs. 200,000 during the year. What would be the Gross Profit?
► Rs. 5,000
► Rs. 1, 00,000
► Rs.1, 05,000
► Rs. 2, 00,000
Question No: 11 ( Marks: 1 ) - Please choose one
Partially completed products that are not yet ready for sale are known as:
► Raw material
► Work in process
► Finished goods
► Closing stock
Question No: 12 ( Marks: 1 ) - Please choose one
In the cost of goods sold statement, Cost of direct material consumed + Direct labor=?
► Conversion cost
► Prime cost
► Total factory cost
► Cost of goods manufactured
Question No: 13 ( Marks: 1 ) - Please choose one
The Primary objective of providing depreciation is:
► To calculate true profit
► To show the asset on market value
► To reduce tax Burdon
► To provide funds for replacement
Question No: 14 ( 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: 15 ( 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: 16 ( Marks: 1 ) - Please choose one
In which of the following condition(s) DEBT is regarded as BAD.
► Bankruptcy of the debtor
► Disappearance of debtor’s business
► Failure of repeated attempt to collect the debt
► All of the given options
Question No: 17 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be shown in profit & loss account.
Particulars
Rs.
Bad debts
3,600
Provision for doubtful debts (old)
6,000
Current year’s provision (new)
1,500
► Rs. (5,100)
► Rs. 5,100
► Rs. (900)
► Rs. 900
Question No: 18 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
Rs.
Closing value of stock
40,000
Write off Bad debts (given in adjustments)
2,400
Sundry Debtors (given in trial balance)
33,200
Provision is created on Debtors at 5%
Requirement: Identify the Total amount which will deduct from Sundry debtors.
► Rs. 460
► Rs. 2,400
► Rs. 1,540
► Rs. 3,940
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of carriage charges, paid for a new plant purchased mistakenly debited to carriage account?
► Plant account
► Carriage account
► Both plant account and carriage account
► Trading account
Question No: 20 ( Marks: 1 ) - Please choose one
_____ are committed in those cases where proper distinction between revenue and capital items is not made.
► Error of principle
► Error of omission
► Error of commission
► Error of original entry
Question No: 21 ( Marks: 1 ) - Please choose one
A receipt of cash Rs. 10,000 from Mr. Bilal is recorded as Rs. 1,000. What amount will be adjusted in rectifying entry?
► Rs. 1,000
► Rs. 9,000
► Rs. 10,000
► Rs. 11,000
Question No: 22 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be shown in profit & loss account.
Particulars
Rs.
Bad debts
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
1,000
► Rs. 600
► Rs. 1,600
► Rs. 2,000
► Rs. 2,600
Question No: 23 ( Marks: 1 ) - Please choose one
The main objective of financial reporting is to provide:
► Essential information to internal users of financial reports.
► Useful economic information about the business to the external parties for sound financial decisions.
► Information to internal users about the cash position of the business.
► Information to the Securities Exchange Commission (SEC).
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following journal entry will be recorded, if cash is drawn by a Proprietor?
► Proprietor’s drawings a/c (Dr.) and Cash a/c (Cr.)
► Cash a/c (Dr.) and Proprietor’s drawings a/c (Cr.)
► Proprietor’s Capital (Dr.) and Proprietor’s drawings a/c (Cr.)
► Proprietor’s drawings (Dr.) and Proprietor’s Capital a/c (Cr.)
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following item will be shown on debit side of capital account of sole proprietor?
► Cash
► Drawings
► Debtors
► Profit
Question No: 26 ( Marks: 1 ) - Please choose one
When closing stock is given in trial balance, then it will effect:
► Trading account only
► Balance sheet only
► Owner's equity only
► Both Trading account and Balance sheet
Question No: 27 ( Marks: 1 ) - Please choose one
Fixed Assets (WDV) + Working Capital =?
► Total assets employed
► Total liabilities
► Total assets
► Current assets
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following account will be credited when interest on capital is charged against the distribution of profit?
► Interest account
► Partner’s capital account
► Profit and Loss account
► Profit and loss appropriation account
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following is(are) type(s) of capital account in partnership?
► Fixed Capital
► Current Capital
► Fluctuating Capital
► Both Fixed Capital and Fluctuating Capital
Question No: 30 ( Marks: 1 ) - Please choose one
In case of fixed capital accounts, other transactions such as Drawings and Profit etc. are recorded in a separate account that is called ___________.
► Fixed Capital Account
► Current Account
► Fluctuating Capital Account
► Floating Capital Account
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is (are) type(s) of Public Limited Companies?
► Listed company
► Non listed company
► Private limited company
► Both Listed Company and non listed company
Question No: 32 ( Marks: 1 ) - Please choose one
Which of the following clause/s are discussed in Memorandum of Association of Companies?
► Name of company
► Place of registered office of company
► Objective of the company
► All of the given options
Question No: 33 ( Marks: 1 ) - Please choose one
The amount received; in excess of the face value of the shares is transferred to which of the following?
► Share capital account
► Right share
► Share premium account
► Share holder account
Question No: 34 ( Marks: 1 ) - Please choose one
Preliminary Expenses of the company may write off against:
► Share premium account
► Share holder account
► Debtors control account
► Creditor control account
Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following account will be debited if shares issued against cash?
► Share premium account
► Cash account
► Share capital account
► Profit and loss account
Question No: 36 ( Marks: 1 ) - Please choose one
Which of the following is the most important document of the company?
► Memorandum of Association
► Articles of Association
► Prospectus
► Annual Report
Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following documents contains rules and regulations for internal management of the company?
► Memorandum of Association
► Articles of Association
► Prospectus
► Statutory Declaration
Question No: 38 ( Marks: 1 ) - Please choose one
How dividend declared is treated in the Balance Sheet of the company?
► Provision
► Current liability
► Reserves and surplus
► Current assets
Question No: 39 ( Marks: 1 ) - Please choose one
The primary purpose of preparing a cash flow statement for an entity is to provide information about:
► Its financial position at the end of an accounting period
► Its cash receipts and cash payments during an accounting period
► Its financial position at the start of an accounting period
► None of the given options
Question No: 40 ( Marks: 1 ) - Please choose one
In cash flow statements, which of the following would appear as an inflow of cash?
► The repayments of a bank loan
► Dividend issue in the current year
► Money received as result of selling fixed assets
► The difference between the valuations of old and new fixed assets
Question No: 41 ( Marks: 1 ) - Please choose one
Debenture is also named as:
► Share
► Bond
► Equity
► Reserve
Question No: 42 ( Marks: 1 ) - Please choose one
Prepaid interest given in the Trial Balance will be treated as a (an):
► Asset
► Liability
► Revenue
► Deferred expense
Question No: 43 ( Marks: 1 ) - Please choose one
Wages outstanding given in the trial balance will be treated as a (an):
► Asset
► Liability
► Revenue
► Deferred expense
Question No: 44 ( Marks: 1 ) - Please choose one
Which of the following fixed asset is normally appreciated with the passage of time?
► Land
► Vehicles
► Furniture
► Machinery
Question No: 45 ( Marks: 1 ) - Please choose one
Expenditures incurred annually on renewal of patent are known as:
► Revenue Expenditures
► Capital Expenditures
► Deferred Expenditures
► None of the given options
Question No: 46 ( Marks: 1 ) - Please choose one
Accounts receivables are shown in balance sheet at:
► Net realizable value
► Total collectible amount
► Current value
► Collected amount
Question No: 47 ( Marks: 1 ) - Please choose one
Stock account is credited and creditors account is debited, which of the following is reflecting the statement?
► Discount received
► Goods returned
► Purchase of goods on credit
► Payment of goods
Question No: 48 ( Marks: 1 ) - Please choose one
Mr. Ali’s bank book shows a debit balance of Rs. 36,000. He deposited a cheque of Rs.15,000 but not yet collected by the bank. What will be the balance of bank statement?
► Rs. 21,000
► Rs. 51,000
► Rs. 36,000
► Rs. 15,000
Question No: 49 ( Marks: 1 ) - Please choose one
We usually allow the customer to deduct a certain amount from the invoice value for prompt payment. In doing so we are granting a:
► Commission
► Allowance
► Discount
► Rebate
Question No: 50 ( Marks: 1 ) - Please choose one
Which of the following is NOT a financial statement?
► Balance sheet
► Audit report
► Income statement
► Cash flow statement
Question No: 51 ( Marks: 1 ) - Please choose one
In a partnership of Mr. X and Mr. Y, the share of profit of Mr. X is Rs.3,840 and the share of profit of Mr. Y is Rs. 5,760. What will be the ratio of their share?
► 1:2
► 2:3
► 3:2
► 2:1
Question No: 52 ( Marks: 1 ) - Please choose one
Interest expenses of Epler Corporation shows a debit balance of Rs.200 in its unadjusted trial balance and Rs.250 in adjusted trial balance. Which of the following account will be debited in adjusting entry?
► Interest expense
► Interest payable
► Prepaid interest
► Interest paid
Question No: 53 ( Marks: 1 ) - Please choose one
The amount of share premium can be utilized except:
► To write off preliminary expenses
► To meet the expenses of issue of shares
► To distribute among the share holders
► To issue bonus shares
Question No: 54 ( Marks: 1 ) - Please choose one
Which of the following ratio cannot be computed for a period in which the company incurs a net loss?
► Acid-test ratio
► Return on investment
► Price-earning ratio
► None of the given options
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FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting
Solved by AMBER SHAHEEN
Question No: 1 ( Marks: 1 ) - Please choose one
Liabilities of the members of the ________ is only limited to the capital introduce by member/s.
► Partnership
► Company
► Sole proprietorship
► None of the given options
Question No: 2 ( Marks: 1 ) - Please choose one
Term "Credit" means_______ by the business.
► Receiving of benefits
► It has no effect on business
► Providing of benefits
► It depends upon items
Question No: 3 ( 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: 4 ( 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: 5 ( Marks: 1 ) - Please choose one
Accounts Receivable & Inventory are the examples of:
► Liquid assets
► Current assets
► Fixed assets
► Capital assets
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
If the cost of sales is Rs. 60,000, sales are Rs. 90,000 and operating expenses are Rs. 25,000 during the year. What would be the Net Profit?
► Rs. 5,000
► Rs. 25,000
► Rs. 55,000
► Rs. 60,000
Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following statement is NOT true about the Journal voucher?
► Financial data is picked only from Journal vouchers to Journal
► These are used to record all transaction other than cash & bank
► These are used to make corrections or adjustments to previous Receipts
► Format of Journal voucher is different from other vouchers
Question No: 9 ( Marks: 1 ) - Please choose one
Which one of the following is CORRECT about the closing stock?
► It appears in the assets side of a balance sheet
► It decreases the value of cost of goods sold
► It becomes opening stock of next year
► All of the given option
Question No: 10 ( Marks: 1 ) - Please choose one
In the cost of goods sold statement, Cost of direct material consumed + Direct labor=?
► Conversion cost
► Prime cost
► Total factory cost
► Cost of goods manufactured
Question No: 11 ( Marks: 1 ) - Please choose one
Consider the following inventory record:
Date
Item
Quantity
Cost/Unit
Rs.
Total
Rs.
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. 992
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-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: 13 ( 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: 14 ( 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: 15 ( 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: 16 ( 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: 17 ( Marks: 1 ) - Please choose one
In which of the following condition(s) DEBT is regarded as BAD.
► Bankruptcy of the debtor
► Disappearance of debtor’s business
► Failure of repeated attempt to collect the debt
► All of the given options
Question No: 18 ( Marks: 1 ) - Please choose one
If Bad Debts written off are given in adjustment, then which of the following entry for bad debts written off is CORRECT?
► Bad debts a/c (Dr) and Trading a/c (Cr)
► Provision for Bad and Doubtful debts a/c (Dr) and Bad debts a/c(Cr)
► Bad debts a/c (Dr) and debtors a/c (Cr)
► Trading a/c (Dr) and Bad debts a/c (Cr)
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following is NOT based on the concept of double entry book keeping system?
► Subsidiary Ledgers
► Creditors Control Accounts
► Debtors Control Accounts
► All of the given options
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following is (are) benefit/s of subsidiary ledger accounts to business?
► It tells about customer attitude of payments
► It can be checked against the control account to pick up recording errors
► It tells about the complete history of transactions of business client
► All of the given options
Question No: 21 ( Marks: 1 ) - Please choose one
When one or both aspects of a transaction are recorded in the wrong class or category of account, this is called:
► Error of principle
► Error of omission
► Error of commission
► Error of original entry
Question No: 22 ( Marks: 1 ) - Please choose one
It is supposed that on 31st December, 2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 10% of the sundry debtors are doubtful. Actual bad debts are Rs. 1600. What amount of new provision for doubtful debts will be credited in profit & loss account
► Rs. 3,600
► Rs. 4,000
► Rs. 1,600
► Rs. 2, 400
Question No: 23 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
Rs.
Closing value of stock
40,000
Write off Bad debts (given in adjustments)
2,400
Sundry Debtors (given in trial balance)
33,200
Provision is created on Debtors at 10%
Identify the Total amount deducted from Sundry debtors.
► Rs. 460
► Rs. 2,400
► Rs. 3,080
► Rs. 5,480
Question No: 24 ( Marks: 1 ) - Please choose one
The figure of cash received from debtors can be located either from cash book or:
► Debtor’s Control Account
► Balance Sheet
► Profit & Loss Account
► Bills Payable Account
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following is a selling expense?
► Interest on deposits
► Any tax/freight is paid on purchases
► General salaries paid to laborers
► Tax & freight paid on sale
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following item will be shown on debit side of capital account of sole proprietor?
► Cash
► Drawings
► Debtors
► Profit
Question No: 27 ( Marks: 1 ) - Please choose one
Identify the selling expenses of manufacturing concern with the help of given data.
Particulars
Rs.
Salesman’s salary
70,000
Commission on sales
28,000
Carriage outward
10,000
Carriage inward
5,000
► Rs. 80,000
► Rs. 60,000
► Rs. 38,000
► Rs. 1, 08,000
Question No: 28 ( Marks: 1 ) - Please choose one
The income statement of the Limited company is also known as:
► Manufacturing account
► Profit and Loss account
► Profit and Loss Appropriation account
► Current Account
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following is the most important document of the company?
► Memorandum of Association
► Articles of Association
► Prospectus
► Annual Report
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following is (are) NOT example(s) of distributable profit?
► None of the given options
► General reserve
► Accumulated profit and loss (credit balance)
► Revaluation reserves
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is a common way to evaluate a company's performance?
► Compare this year's performance of the company to a prior year's performance of the company.
► Compare the company's performance to the industry's performance.
► Compare the company's performance to the performance of a competing company.
► All of the given options
Question No: 32 ( Marks: 1 ) - Please choose one
Current ratio may be increased by:
► Overstating current Assets
► Overstating current Liabilities
► Understating current Assets
► Understating current assets and overstating current liabilities
Question No: 33 ( Marks: 1 ) - Please choose one
If company has distributable profit is Rs. 4, 90,000. Profit sharing share ratio of Mr. A, Mr. B and Mr. C is 2:3:5 respectively what will be the Profit share for Mr. B in distributable profit.
► Rs. 98,000
► Rs. 1, 47,000
► Rs. 2, 45,000
► Rs. 3, 43,000
Question No: 34 ( Marks: 1 ) - Please choose one
Mr. B provided the following information at the end of the month:
Particulars
Rs.
Cash
100
Accounts Receivable
500
Accounts Payable
200
Bank Loans
1,000
Based on the information provided, what are the total assets of Mr. B?
► Rs.200
► Rs. 600
► Rs. 800
► Rs. 1,700
Question No: 35 ( Marks: 1 ) - Please choose one
An overdraft will appear as:
► A debit balance in both the bank statement and the cash book
► A credit balance in the bank statement but as a debit balance in the cash book
► A credit balance in the cash book but as a debit balance in the bank statement
► A credit balance in both the bank statement and the cash book
Question No: 36 ( Marks: 1 ) - Please choose one
When we close bad debt account, which of the following account is debited?
► Profit and loss account
► Bad debt account
► Debtor account
► Creditor account
Question No: 37 ( Marks: 1 ) - Please choose one
Payment is made of a company’s purchases on credit, which of the following is correct:
► Debit stock account and credit creditors account
► Debit creditors account and credit cash account
► Debit cash account and credit creditors account
► Debit stock account and credit cash account
Question No: 38 ( Marks: 1 ) - Please choose one
Suppose a firm has 200 debtors, and each of them owes exactly Rs. 150 at the start of June. What is the total amount owed by all debtors?
► Rs. 2,000
► Rs. 3,000
► Rs. 30,000
► Rs. 150,000
Question No: 39 ( Marks: 1 ) - Please choose one
The amount owed by debtors at the end of a month appears on the_________ side of the control account.
► Left side or debit
► Left side or credit
► Right side or debit
► Right side or credit
Question No: 40 ( Marks: 1 ) - Please choose one
We usually allow the customer to deduct a certain amount from the invoice value for prompt payment. In doing so we are granting a:
► Commission
► Allowance
► Discount
► Rebate
Question No: 41 ( Marks: 1 ) - Please choose one
Which of the following is decreased when an asset is converted into expense in adjustment?
► Revenue
► Net income
► Expense
► Liability
Question No: 42 ( Marks: 1 ) - Please choose one
Which of the following is increased when an asset is converted into expense in adjustment?
► Revenue
► Net income
► Expense
► Liability
Question No: 43 ( Marks: 1 ) - Please choose one
Accumulated depreciation is a ____________ account?
► Fixed asset
► Current asset
► Contra asset
► Liability
Question No: 44 ( Marks: 1 ) - Please choose one
Prepaid insurance will become an expense as the prepaid amount _________.
► Expires
► Adjust
► Paid
► Regulate
Question No: 45 ( Marks: 1 ) - Please choose one
Adjusting costs are reported as:
► Revenues
► Expenses
► Assets
► Net Income
Question No: 46 ( Marks: 1 ) - Please choose one
Insurance premiums paid in advance but not yet expired are reported in which of the following account?
► Insurance payable
► Prepaid insurance
► Advance payment account
► Insurance expense
Question No: 47 ( Marks: 1 ) - Please choose one
Profit and loss sharing in partnership must be based on which of the following:
► Service to the partnership
► Capital contribution
► Any profit-and-loss-sharing method partners desire
► A stated fraction
Question No: 48 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership invested Rs.50,000 and Rs.65,000 with an equal share in profit or loss. Markup on drawings of Mr. A is Rs.1,500 and of Mr. B is Rs.1,800. The net income for the year is Rs.85,000. What will be the profit share of Mr. B?
► Rs.42,350
► Rs.44,150
► Rs.41,600
► Rs.40,850
Question No: 49 ( Marks: 1 ) - Please choose one
Which of the following is quoted company?
► Private Limited Company
► Public Limited Company
► Listed company
► Non Listed Company
Question No: 50 ( Marks: 1 ) - Please choose one
For which of the following share premium can be utilized?
► To write off preliminary expenses
► To meet the expenses of issue of shares
► To issue bonus shares
► All of the given options
Question No: 51 ( Marks: 1 ) - Please choose one
Which of the following can be utilized to meet the expenses of issue of shares?
► Reserves
► Debentures
► Share premium
► Term finance certificate
Question No: 52 ( Marks: 1 ) - Please choose one
Which of the following capital is required for the registration of the company?
► Issued capital
► Subscribed capital
► Authorized capital
► Reserve capital
Question No: 53 ( Marks: 1 ) - Please choose one
The financial statement that captures both the current operating result and the associated changes in the balance sheet is:
► Statement of retained earnings
► Statement of financial position
► Statement of cash flows
► Statement of changes in equity
Question No: 54 ( Marks: 1 ) - Please choose one
Which of the following is measured by debt ratio?
► Short-term liquidity
► Creditors’ long term risk
► Short-term risk of the company
► All of the given options
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FINAL TERM PAPERS
2010
MGT101 FINANCIAL ACCOUNTING
Solved by AMBER SHAHEEN
Question No: 1 ( 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: 2 ( 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: 3 ( Marks: 1 ) - Please choose one
What will be the effect on accounting equation, when payment is made to the creditor of the business?
► Increase in an asset, increase in owner's equity
► Increase in an asset, increase in a liability
► Decrease in an asset, decrease in owner's equity
► Decrease in an asset, decrease in a liability
Question No: 4 ( 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: 5 ( 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: 6 ( 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: 7 ( 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: 8 ( 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: 9 ( 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: 10 ( 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: 11 ( Marks: 1 ) - Please choose one
What would be the value of total factory cost, if the cost of material consumed during the month is Rs. 6,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 2,500?
► Rs. 6,000
► Rs. 8,000
► Rs. 4,500
► Rs. 10,500
Question No: 12 ( Marks: 1 ) - Please choose one
In cost of goods sold statement the ‘cost of goods manufactured’ is equal to:
► Total factory cost + Opening work in process + Ending work in process
► Total factory cost + Opening work in process – Ending work in process
► Total factory cost - Opening work in process + Ending work in process
► Ending work in process +Total factory cost – Opening work in process
Question No: 13 ( 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: 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
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: 16 ( 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: 17 ( Marks: 1 ) - Please choose one
Which one of the following transactions will cause the balance in Mr. Terry's Cash Book to be greater than his Bank Statement balance?
► A cheque is drawn but not yet presented at the bank for payment
► The bank has not yet notified to Mr. Terry about a dishonoured cheque
► A credit transfer into Terry's Bank Account
► A cheque payment of Rs.101 is recorded in the Cash Book as Rs.110
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following account will be debited, when the bad debts are recovered?
► Bad debt recovered a/c
► Cash a/c
► Doubtful debts a/c
► Bad debts a/c
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following subsidiary book(s) is (are) maintained for debtors control account?
► Sales Day Book
► Sales Return
► Debtors Ledger
► All of the given options
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following is (are) benefit/s of subsidiary ledger accounts to business?
► It tells about customer attitude of payments
► It can be checked against the control account to pick up recording errors
► It tells about the complete history of transactions of business client
► All of the given options
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of sales to Rahim Rs. 336 posted to his account as Rs. 363?
► Sales account
► Rahim’s account
► Cash account
► Both sales and Rahim’s Account
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of sales to Rahim of Rs. 500 were omitted to record in books of accounts?
► Sales account
► Rahim’s account
► Cash account
► Both sales and Rahim’s Account
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of carriage charges, paid for a new plant purchased mistakenly debited to carriage account?
► Plant account
► Carriage account
► Both plant account and carriage account
► Trading account
Question No: 24 ( Marks: 1 ) - Please choose one
Goods purchased from “Mr. A” for Rs. 2,000 passed through the sales book. The rectification of error will result in:
► Increase of gross profit
► Decrease of gross profit
► Remains constant and no effect on net profit
► There is no relation between goods purchased and gross profit
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following entry will be recorded, if a cheque deposited is dishonored by bank?
► Bank Account (Dr.) and Debtor's Account (Cr.)
► Debtor's Account (Dr.) and Bank Account (Cr.)
► Dishonored Cheque Account (Dr.) and Bank Account (Cr.)
► Creditor's Account (Dr.) and Bank Account (Cr.)
Question No: 26 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be shown in profit & loss account.
Particulars
Rs.
Bad debts
3,500
Provision for doubtful debts (old)
6,000
Current year’s provision (new)
1,500
► Rs. (1,000)
► Rs. 1,000
► Rs. (5,000)
► Rs. 5,000
Question No: 27 ( Marks: 1 ) - Please choose one
The main objective of financial reporting is to provide:
► Essential information to internal users of financial reports.
► Useful economic information about the business to the external parties for sound financial decisions.
► Information to internal users about the cash position of the business.
► Information to the Securities Exchange Commission (SEC).
Question No: 28 ( Marks: 1 ) - Please choose one
Wages paid to laborers working in the manufacturing department is treated as an expense of:
► Administrative expenses
► Selling expenses
► Marketing expenses
► Cost of goods sold
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following would NOT be considered as a component of 'cost' of stock?
► Salaries of selling staff
► Transportation inward costs
► Import duties
► Purchase price
Question No: 30 ( Marks: 1 ) - Please choose one
General office expenses are charged to which of the following head:
► Administrative expenses
► Marketing expenses
► Selling expenses
► Financial expenses
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is (are) characteristic(s) of Reserve?
► Its amount is generally determined by the management on the basis of the amount of profit earned.
► It is shown on liabilities side of balance sheet
► It does not affect profit or loss, since it is created after ascertaining net profit
► All of the given options
Question No: 32 ( Marks: 1 ) - Please choose one
Which of the following is TRUE about the treatment of insurance paid in advance Rs. 13,000?
► It will be treated as an other income in Profit & Loss Account
► It will be treated as a current asset in Balance Sheet
► It will be treated as a current liability in Balance Sheet
► It will be treated as an accrued expense in Balance Sheet
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following statement is TRUE about the Accounts receivable?
► Accounts receivable arises when a company buys goods or services from another party on credit
► Accounts receivable is a miscellaneous category that may include loans to employees
► Accounts receivable are more formal than notes receivable
► Accounts receivable are often called trade receivables
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following is(are) type(s) of capital account in partnership?
► Fixed Capital
► Current Capital
► Fluctuating Capital
► Both Fixed Capital and Fluctuating Capital
Question No: 35 ( Marks: 1 ) - Please choose one
Preliminary Expenses of the company may write off against:
► Share premium account
► Share holder account
► Debtors control account
► Creditor control account
Question No: 36 ( Marks: 1 ) - Please choose one
Which of the following is (are) shown as notes to the accounts.
► Nature of the business of the company
► Accounting polices of the business
► Details and explanations of items given in Balance Sheet
► All of the given options
Question No: 37 ( Marks: 1 ) - Please choose one
An example of financing activities in the context of cash flow statement is:
► Capital expenditures on purchase of fixed assets
► Long-term deposit
► Financial charges paid
► Dividend paid
Question No: 38 ( Marks: 1 ) - Please choose one
What does a credit balance in a partner’s current account represent to a business?
► Current Assets
► Current Liability
► Long-term liability
► Share of profit
Question No: 39 ( Marks: 1 ) - Please choose one
If company has distributable profit is Rs. 4, 90,000. Profit sharing share ratio of Mr. A, Mr. B and Mr. C is 2:3:5 respectively what will be the Profit share for Mr. B in distributable profit.
► Rs. 98,000
► Rs. 1, 47,000
► Rs. 2, 45,000
► Rs. 3, 43,000
Question No: 40 ( Marks: 1 ) - Please choose one
If company has distributable profit is Rs. 4, 90,000. Profit sharing share ratio of Mr. A, Mr. B and Mr. C is 2:3:5 respectively what will be the Profit share for Mr. C in distributable profit.
► Rs. 98,000
► Rs. 1, 47,000
► Rs. 2, 45,000
► Rs. 3, 43,000
Question No: 41 ( Marks: 1 ) - Please choose one
ABC Company received discount on its credit purchases, which of the following will be credited while entering in journal?
► Cash
► Discount received
► Creditors
► Bank
Question No: 42 ( Marks: 1 ) - Please choose one
Suppose a firm has 200 debtors, and each of them owes exactly Rs. 150 at the start of June. What is the total amount owed by all debtors?
► Rs. 2,000
► Rs. 3,000
► Rs. 30,000
► Rs. 150,000
Question No: 43 ( Marks: 1 ) - Please choose one
Suppose a firm has 100 debtors, and each of them owes exactly Rs.150 at the start of June. During June each debtor has paid-off exactly Rs.100 on their account, either by cash or by cheque. What should be the revised total debtors figure?
► Rs. 5,000
► Rs. 9,850
► Rs. 25,000
► Rs. 14,900
Question No: 44 ( Marks: 1 ) - Please choose one
The total credit sales for the period will be obtained from:
► Sales returns day book
► Cash book
► Journal
► Sales day book
Question No: 45 ( Marks: 1 ) - Please choose one
Stockholder’s equity would not be affected by:
► Dividends to stockholders
► Net loss
► Purchase of land from the proceeds of bank loan
► Investments of cash by stockholders
Question No: 46 ( Marks: 1 ) - Please choose one
Which of the following is known as an asset account?
► Gains
► Prepaid insurance
► Unearned revenue
► Accounts payable
Question No: 47 ( Marks: 1 ) - Please choose one
Dillon Company sold marketable securities Costing Rs.60,000 for Rs.72,000 cash. In the company’s income statement and statement of cash flows, respectively, this will appear as:
► A Rs.72,000 gain and a Rs.6,000 cash receipt
► A Rs.12,000 gain and a Rs.72,000 cash receipt
► A Rs.12,000 gain and a Rs.60,000 cash receipt
► A Rs.72,000 sale and a Rs.72,000 cash receipt
Question No: 48 ( Marks: 1 ) - Please choose one
Profits earned by partnerships compensate the owners for which of the following?
► Personal services rendered to the business
► Capital invested in the business
► Assuming the risks of ownership
► All of the given options
Question No: 49 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal share in profit or loss. The agreement provides that Mr. A will receive Rs.10,000 and Mr. B will receive Rs.8,000 as salary allowance. The net income for the year is Rs.85,000. What will be the total share of Mr. A?
► Rs.52,500
► Rs.42,500
► Rs.43,500
► Rs.50,500
Question No: 50 ( Marks: 1 ) - Please choose one
How many members can subscribe their names in memorandum of association for registration of public limited company?
► 2
► 3
► 5
► 7
Question No: 51 ( Marks: 1 ) - Please choose one
Which of the following can be utilized to issue bonus shares?
► Reserves
► Debentures
► Share premium
► Term finance certificate
Question No: 52 ( Marks: 1 ) - Please choose one
Which of the following financial statement is helpful for the investors and creditors to assess the cash and non cash aspects of operating, investing and financing transactions on an entity’s financial position?
► Balance Sheet
► Income Statement
► Statement of cash flows
► Statement of changes in equity
Question No: 53 ( Marks: 1 ) - Please choose one
Which of the following is measured by debt ratio?
► Short-term liquidity
► Creditors’ long term risk
► Short-term risk of the company
► All of the given options
Question No: 54 ( Marks: 1 ) - Please choose one
In statement of cash flows, a payment of cash dividends is related to:
► Investing activity
► Financing activity
► Operating activity
► Cash flows from operations
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