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MGT101 Financial Accounting Quiz No 2 Solution and Discussion Spring 2014 Due Date: May 30, 2014

Hello Vustudents,

MGT101 Financial Accounting Quiz No.02 will open on May 28, 2014 and the last date of taking quiz is "May 30, 2014"

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Replies to This Discussion

1. The total of all costs incurred to convert raw material into finished goods is known as:

Prime cost
Conversion cost
Sunk cost
Opportunity cost

2. 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

3. Which one of the following cannot be classified as Revenue Income?

Goods sold for cash
Goods sold on credit
Income from the sale of services
Income from the sale of fixed assets


4. From the given particulars, calculate the rate of depreciation under the diminishing balance method of depreciation: Cost of Asset = Rs. 2,000 Residual Value = Rs. 400 Useful Life = 4 years

42 %
30 %
27 %
33 %

5. Which of the following is the main objective of charging depreciation?

To show the true financial position in the balance sheet
To provide funds for replacement of fixed assets
To allocate true profit
To reduce tax burden


6. A manufacturing concern has Raw material of worth Rs. 100,000, Direct Labor Rs. 75,000 and Factory Overhead Rs. 50,000. The amount of Conversion cost will be:

Rs. 150,000
Rs. 175,000
Rs. 125,000
Rs. 225,000


7. Which of the following particular is NOT included in journal voucher?

Name of organization
Bank receipt number
Debit amount
Credit amount

1. Conversion cost
2. All of the given options
3. Income from the sale of fixed assets
4. Not Sure
5. To show the true financial position in the balance sheet
6. Rs. 225,000
7. Debit amount

8. Which of the following is a FIRST product of accounting cycle?

Voucher
General Journal
Financial Statements

9. What is the next step to Journalizing in Accounting cycle?

Recording
Posting
Balancing
Analyzing

10. The entry of raw material issued to production units is:

Debit: Raw material A/c Credit: Work in process A/c
Debit: Work in process A/c Credit: Finished goods A/c
Debit: Work in process A/c Credit: Factory overhead A/c
Debit: Work in process A/c Credit: Material Stock A/c


11. Which one of the following is INCORRECT about closing Stock?

It is added into current assets
It is deducted from Material available for use
It becomes opening stock of next year
It reduces the resources of business

12. In the cost of goods sold statement, the sum of labor cost and the factory over head is known as:

Conversion cost
Prime cost
Total factory cost
Cost of goods manufactured

13. Which of the following assets are shown at written down value in balance sheet?

Current assets
Liquid assets
Floating assets
Fixed assets

14. Which of the following is the example of Current Assert?

Land
building
stock
Capital

8. Financial Statement
9. Posting
10. Debit: Work in process A/c Credit: Material Stock A/c
11. It reduces the resources of business
12. Conversion cost
13. Fixed assets
14. building

-> Quiz No.2

1. _______ is the basic part of an item, which is processed to make a complete item:

Factory overhead
Raw material
Finished goods
Work in process


2. Which of the following is the main cause of depreciation?

Fall in the market value of money
Fall in the market value of an asset
None of the above


3. What will be debited, if business bought goods on credit from Mr. Ali?

Purchases account
Mr. Ali account
Cash account
Sales account

4. A book that keeps separate record for each account is known as:

Trial Balance
Voucher
General Journa
General Ledger


5. Loss on the sale of plant and machinery should be written off against:

Sales premium account
Depreciation fund account
Sales account
Plant and machinery

6. What will be debited, if business purchased Furniture on cash?

Furniture account
Cash account
Business account
Bank account

7. 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 option

8. An accounting system is used by a business to:

Analyze transactions
Handle routine bookkeeping tasks
Structure information
All of the given options

9. A manufacturing concern has Raw material of worth Rs. 100,000, Direct Labor Rs. 75,000 and Factory Overhead Rs. 50,000. The amount of Prime cost will be:

Rs. 150,000
Rs. 175,000

10. Find out the Owner's equitt,apart of an Accounting Equation with the help of given data: Cash Rs. 22,500 Debtors Rs. 50,000 Total assets Rs. missing Accounts payable Rs. 30,000 Total liabilities+ owner equity Rs. missing

Owner's equity =42,500
Owner's equity =45,200
Owner's equity =42,520
None of the above

1. Raw material
2. Fall in the market value of an asset
3. Purchases account
4. General Ledger
5. Plant and machinery
6. Furniture account
7. Depreciation
8. All of the given options
9. Rs. 125,000
10. Owner's equity =42,500

11. ABC co. has a capital of Rs. 100,000, Long Term Liabilities Rs. 50,000, net profit during the year Rs. 15,000 and the amount of total assets is Rs 175,000. What will be the amount of Current Liabilities?

Rs. 20,000
Rs. 150,000
Rs. 10,000
Rs. 25,000


12. Which one of the following statement is CORRECT about Long term liabilities?

These are due within one year
These are short-term loans
Consist of all bank debts payable more than 12 months
In working capital, these are deducted from assets


12. From the given particulars, calculate the rate of depreciation under the fixed installment method of depreciation: Cost of Asset = Rs. 2,000 Residual Value = Rs. 400 Useful Life = 4 years

20 %
30 %
25%
33%


13. Franchise rights, goodwill and patents are the examples of:

Liquid assets
Tangible assets
Intangible assets

14. Partial Payment of loan from bank is made Rs 50000. The effects of this transaction are:

Decrease in Asset Increase in Asset
Decrease in Liability Increase in Asset
Decrease in Liability Increase in Expense


15. The proper classification of inventory account is:

Assets
Expenses
Revenues


16. _________ is the art of recording, classifying and summarizing the transactions and events of a business and interpreting the results thereof.

Accounting
Management
Auditing


17. A company’s merchandise, raw materials, and finished and unfinished products which have not yet been sold are known as:

Sales
Purchases
Inventory
Work in process


18. he total of all costs incurred to convert raw material into finished goods is known as:

Prime cost
Conversion cost
Sunk cost
Opportunity cost

19. Which of the following is NOT considered a part of financial statements?

General Journal
Balance Sheet
Profit and Loss account
None of the given options


>> Quiz 2 Finished

11. Rs. 10,000
12. Consist of all bank debts payable more than 12 months
12. 20 %
13. Intangible assets
15. Decrease in Liability Increase in Expense
16. Accounting
17. Inventory
18. Conversion cost
19. General Journal

1. After the expiry of useful life of fixed asset the process of selling that asset is called as ____________

Salvage Value of Fixed Asset
Disposal of Fixed Asset
Useful life of Fixed Asset
Accumulated Depreciation of Fixed Asset

2. The journal entry to record purchase of furniture on credit would include a: Select correct option:

Credit to furniture A/c
Credit to Payables A/c
Credit to Receivables A/c

3. Commercial Accounting is done through a system that is known as: Select correct option:

Single entry system of Accounting
Accrual system of Accounting
Double Entry system of Accounting
Cash system of Accounting


4. An accounting system in which risk of fraud or its non discovery is less is known as: Select correct option:

Double Entry Accounting system
Single Entry Accounting system
cash System of Accounting
Accrual Accounting system

5. A business event which can be measured in terms of money and must be recorded in books of accounts is called: Select correct option:

Condition
Transaction
Record

answer kon sa hain... not marked

1. Accumulated Depreciation of Fixed Asset
2. Credit to Payables A/c
3. Double Entry system of Accounting
4. Double Entry Accounting system
5. Transaction

MGT101 Quiz No 2 | Date: May 29, 2014 : Time : 12 :00 PM

1. Consider the following data: Particulars Rs. Assets 1,05,000 Owner's equity 70,000 Liabilities ?

Rs. 35,000
Rs. 1, 75,000
Rs. 7, 35,000
Rs. 1, 05,000


2. Which of the following is an example of direct materials cost?

Production worker’s wages
Depreciation expenses
A piece of wood for the production of chair
Polish and finishing material for chair


3. According to diminishing balance method of charging depreciation:

The amount of depreciation remains constant every year
The rate percent as well as amount reduces every year
The amount of depreciation reduces year to year

4. Which of the following account balance/s is/are shown on credit side of Trial Balance? (It is assumed that all account balances are shown on normal balance) Select correct option:

Capital account
Sundry creditors account
Accounts payable account
All of the given options

5. Which of the following is a FIRST product of accounting cycle?

Voucher
General Journal
General Ledger
Financial Statements


6. For every debit there must be a credit with an equal amount. This is also called as: Select correct option:

Separate Entity Concept
Single Entry Book-Keeping
Matching Concept
Dual Aspect Concept

7. Depreciation arises because of:

Fall in the market value of an asset
Fall in the value of money
All of the given options


8. Capital work in progress is shown separately in the balance sheet under the head of___________.

Assets
Capital
Current Liabilities'
Long term Liabilities

9. Cost of goods sold + ending finished goods – opening finished goods=? Select correct option:


Total factory cost
Cost of goods manufactured
Prime cost
Conversion cost


10. If debit side of a ledger is greater than credit side, the balance will be called as: Select correct option:


Debit Balance
credit Balance
Excess Balance
None

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