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Q.1 Which of the following practices is not in consonance with the convention of conservatism?

Creating provision for bad debts

Creating provision for discount on creditors

Creating provision for discount on debtors

Creating provision for tax

Q.2 Omission of paise and showing the round figures in financial statements is based on

Conservatism concept

Consistency concept

Materiality concept

Realisation concept

Q.3 Accounting does not record non-financial transactions because of:

Accrual concept

Cost concept

Continuity concept

Money measurement concept

Q.4 Which of these are is not a fundamental accounting assumption?

Going concern

Consistency

Conservatism

Accrual

Q.5 What is the Rectification Entry when Sale of Machinery recorded in the Sales Book is rectified after Final Account ?

Dr. Sales a/c & Cr. Machinery a/c

Dr. Machinery a/c & Cr. Sales a/c

Dr. Bank a/c & Cr. Machinery a/c

Dr. P & L Adjustment A/c & Cr. Machinery A/c

Q.6 Workmen Compensation Under Dispute' is an example of:

Contingent Liability

Contingent Asset

Current Liability

Current Asset

Q.7 When the total of trial balance is not reconciled, the account opened at this juncture is:

Trading Account

Suspense Account

Profit & Loss Account

None of these

Q.8 Which type of error occurs when credit sales is wrongly recorded in Purchase Day Book:

Error of Omission

Error of Commission

Compensatory Error

Error of Principle

Q.9 Purchases book records:

All cash purchase

All credit purchases

Credit purchases of goods in trade

None of the above

Q.10 Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation,
is termed as ________

Provision

Liability

Contingent liability

None of the above

Q.11 The debts written off as bad, if recovered subsequently are

Credited to Bad Debts Recovered Account

Credited to Debtors Account

Debited to Profit and Loss Account

None of the above


Q.12 Depreciation starts on a machine from the date:

It is purchased

It is put to use

It is installed

Any of above
q13. The adjustments to be made for prepaid expenses is:

Add prepaid expenses to respective expenses and show it as an asset

Deduct prepaid expenses from respective expenses and show it as an asset

Add prepaid expenses to respective expenses and show it as a liability

Deduct prepaid expenses from respective expenses and show it as a liability

q14 When closing inventory will be overstated it will result in:

Net income for the period to be overstated

Cost of goods sold to be understated

Both (1) and (2)

None of these
Q.15 Cost of goods sold is equal to:

Opening stock plus total purchases

Opening stock plus total purchases minus Closing Stock + Direct Costs

Closing stock plus total purchases

Opening stock minus total purchases plus closing stock

Q.16 What should be the treatment, when the due date falls on a Sudden holiday ?

The next following day is the due date

The preceding business day is the due date

Ignore 3 days of grace

There is no change in the due date, so payment is to be made on the day

Q.17 In case of del-credere commission provided by consignor to consignee, bad debts is a loss of __________________

Consignee

Consignor

Both consignor and consignee

Neither of the two

Q.18 In books of manufacturing concern, Opening Stock consists of:

Raw Materials

Work in Progress

Finished Goods

All of the above


Q.19 In which Financial Statements is Bad Debt shown if it appears in the Trial Balance?

Trading & Profit & Loss Account

Profit & Loss Account & Balance Sheet

Only Balance Sheet

Only Profit & Loss account


Q.20 Renewal of Bill means

Extending the tenure of the old bill

Extending the due date of the old bill

Issuance of new bill in place of old cancelled bill

Modification in the days of grace

Q.21 Q. 11 How is Abnormal Loss treated in the Consignment account ?

Total value is shown on the credit side

Value not recovered from the Insurance Co. is shown on the credit side

Value re recovered from the Insurance Co. is shown on the credit side

No Entry

Q.22 In arriving at adjusted cash balance which of the following is not taken into account:

Amount deposited by our customer directly in our account

Errors in the Cash Book

Errors in the Pass Book

All of these

Q.23 The following information is available from the books of Hari

Balance as per Pass Book on 30th November overdrawn Rs.10,000

Interest on Investment collected by Bankers on 30th Nov. Rs.955, entered in Cash Book on 4th Dec.

Cheque deposited for collection on 30th Nov. but returned dishonoured on 6th Dec. of Rs.945

Bankers have made mistake in balancing by showing overdrawn balance in excess by Rs.1,000 on 30th Nov., Which was
rectified in Bank Pass Book on 7th Dec. when notified.

In the above case, the balance in the Cash Book on 30th Nov is 1. Rs.11,080 (Debit)

2. Rs.11,080 (Credit)

3. Rs.9,100 (Debit)

4. Rs.9,010 (Credit)
Q.24 Proprietor (owner) is treated as creditor of business due to :

Periodicity concept

Materiality Principle

Entity Concept

Consistency concept

Q.25 What is the Journal Entry for Depreciation when Provision for Depreciation exits ?

Dr. Depreciation a/c & Cr. Asset a/c

Dr. P & L a/c & Cr. Depreciation a/c

Dr. Depreciation a/c & Cr. Provision for depreciation a/c

Dr. P & L a/c & Cr. Provision for Depreciation a/c


Q.26 Fixed assets and current assets are categorized as per concept of:

Separate entity

Going concern

Consistency

Time period

Q.27 AS 2 is on:

Disclosure of Accounting Policies

Valuation of Inventories

Revenue Recognition

Depreciation Accounting
Q.28 Ledger is also called -

Principal Book

Subsidiary Book

Day Book

Proper Book

Q.29 Which financial statement represents the accounting equation

ASSETS = LIABILITIES + OWNER'S EQUITY

Income Statement

Cash Flow Statement

Balance Sheet

Fund Flow Statement

Q.30 The beginning stock of the current year is overstated by Rs. 500 and closing stock is overstated by Rs. 1,200. The
Profit of the current Year will be :

Rs. 1,700 (overstated)

Rs. 1,200 (understated)

Rs. 1,700 (understated)

Rs. 700 (overstated)


Q.31 Which of the following is Depleted?

Land

Goodwill

Machinery

Coal mines
Q.32 Scrap value of an asset means the amount that it can fetch on sale at the _______ of its useful life:

Beginning

End

Middle

None

Q.33 Amount realized from the sale of securities (Investments) purchased earlier is an example of

Revenue Expenditure

Capital Receipt

Deferred Revenue Expenditure

Capital Expenditure

Q.34 Selection of an inappropriate accounting policy may lead to:

Understatement of Performance

Overstatement of Performance

Understatement or overstatement of financial position

None of the above


Q.35 Which account is to be credited when an endorsed cheque is dishonoured ?

Debtor

Bill Receivable

Endorsee

Payee
Q.36 What should be the treatment, when the due date is a public holiday ?

The next following day is the due date

The preceding business day is the due date

Ignore 3 days of grace

There is no change in the due date, so payment is to be made on the day

Q.37 In a Joint venture between A &B, A spent Rs.2,000 on freight Rs.1,000 as godown rent, & also raised a loan from
bank

of Rs.50,000 at 18 % p.a . Repayable after 1 month. B spent Rs.5,000 as selling expenses & he also raised a loan from
bank of Rs.1,50,000 at 18% repayable after 2 months. The total expenses of Joint Venture will be

will be

Rs.8,000

Rs.8,250

Rs.5,250

Rs.13,250

Q.38 A consignee sold goods costing Rs.50,000 at a profit of Rs.10,000. Out of total sales 30% was credit sale. As per
the agreement the consignee will get 5% ordinary commission, 2% del-credere commission on credit sales & 3% overriding commission on amount in excess of cost price. The amount of commission will be.

Rs. 3,660

Rs.3,840

Rs.4,500

Rs.3,100
Q.39 Goods costing Rs.1,20,000 were sent on consignment basis. These goods are invoiced to give a gross margin of
20% on invoice price . The amount of loading is :

Rs.24,000

Rs.30,000

Rs.20,000

None of the above

Q.40 X of Kolkata sends out goods costing Rs.1,00,000 to Y of Delhi. 3/5th of the goods were sold by consignee for
Rs.70,000. Commission 2% on sales plus 10% of gross sales less all commission exceeds cost price. The amount of
Commission will be:

Rs.2833

Rs.2900

Rs.3000

Rs.2181
Q.41 Journal Proper is called -

Principal Book

Subsidiary Book

Day Book

Proper Book
Q.42 If average stock is Rs. 20,000. Closing stock is Rs. 4,000 more than value of opening stock. Closing stock will be:

Rs. 16,000

Rs. 18,000

Rs. 20,000

Rs. 22,000

Q.43 What is the amount of purchase when opening stock = Rs.3,500 Closing Stock = Rs.1,500, Cost of goods sold =
Rs.22,000.

Rs.20,000

Rs.24,000

Rs.27,000

Rs.17,000
Q.44 The purpose of accommodation bill is:

To finance actual purchase or sale of goods

To facilitate trade transmission

When both parties are in need of funds

None of the above


Q.45 Commission provided by the consignor to the consignee to promote higher sale is known as:

Ordinary commission

Del credere commission

Over - riding commission

Special commission
q46 Fluctuating Capital Account is credited with:

Interest on Capital

Profit of the year

Remuneration to the partners

All of these
Q.47 JLP of the partner is a / an ___________ account:

Nominal

Personal

Representative Personal

Asset
Q.48 Brokerage on the issue of shares and debentures is a _____________ expenditure:

Revenue

Capital

Deferred Revenue

Partly capital partly revenue

Q.49 Security premium is shown under which head in the Balance Sheet.

Current Liabilities

Miscellaneous Expenditure

Reserves and Surplus

None of these
q 50. Discount on issue of debentures is a ___________

Revenue loss to be charged in the year of issue

Capital loss to be written off from capital reserve

Capital loss to be written off over the tenure of the debentures

Capital loss to be shown as goodwill