Financial Accounting MGT 101

  • Loss on the sale of plant and machinery should be written off against:
  • Sales premium account
  • Depreciation fund account
  • Sales account
  • Plant and machinery
  • What will be the effect on accounting equation if cash is received from a tenant as office rent?
  • Select correct option:
  • Increase cash and decrease equity
  • Increase cash and increase equity
  • Decrease cash and increase equity
  • Decrease cash and increase dividends
  • If, Cost of machine = Rs.400, 000 Useful life = 5 years Residual value = Rs.25, 000 Sale price = Rs.40, 000 Rate of depreciation = 40% What will be book value of machine after four years using straight line method?
  • Select correct option:
  • Rs.35, 000
  • Rs.40, 000
  • Rs.55, 000
  • Rs.75, 000
  • Which transaction will cause the balance in Terry's Cash Book to be greater than his Bank Statement balance?
  • Select correct option:
  • A cheque is drawn but not yet presented at the bank for payment
  • The bank has not notified Terry about a dishonored cheque
  • A credit transfer into Terry's Bank Account
  • A cheque payment of Rs.101 is recorded in the Cash Book as Rs.110
  • Debit signifies:
  • Increase in Asset account
  • Decrease in liability account
  • Decrease in capital account
  • All of the given options
  • The basic accounting principle/concept according to which business record must be kept separate from the personal records of the owner is known as:
  • Select correct option:
  • Going-concern concept
  • Separate entity principle
  • Realization principle
  • Objectivity principle
  • Expenditure incurred in acquiring the patent right for the business is an example of:
  • Select correct option:
  • Revenue expenditure
  • Capital expenditure
  • Deferred revenue expenditure
  • Administrative expenditure
  • The amount charged to depreciation goes on declining in:
  • Select correct option:
  • Depreciation fixed method
  • Annuity method
  • Written-down value method
  • Straight line depreciation method
  • Net Profit = Income - _____________
  • Select correct option:
  • Liabilities
  • Assets
  • Expenses
  • Capital
  • A Debtor Control Account is a part of:
  • Double Entry book keeping system
  • Single entry book keeping system
  • Cash accounting system

All of the given options

  • If a business purchases machinery for Rs. 50,000 on 31st January 2008 having life for 10 years, this expense will be realized ________ under the concept of accrual accounting.
  • Only for the year 2008
  • Only for the last day of 10th year
  • Over 10 years
  • Nothing can be said about it
  • In an account if debit side > credit side, the balance is known as the:
  • Negative Balance
  • Debit balance
  • Positive Balance
  • Credit balance

1. Which of the following account balance is shown on debit side of Trial Balance?

a. Capital account

b. Sundry creditors account

c. Accounts payable account

d. Sundry debtors account

2. If cost of sales is Rs. 95,000, income from sales Rs. 200,000 and operating expenses Rs. 300,000. What will be net result?

a. Rs.195,000 Losses

b. Rs.195,000 Profits

c. Rs.105,000 Profits

d. Rs.105,000 Losses

3. In which of the following statement opening stock is shown?

a. Profit and loss account

b. Balance sheet

c. Cash flow statement

d. Owner’s equity

4. Working capital Rs. 20,000, Current liabilities Rs. 30,000 and fixed assets Rs. 100,000; calculate current assets?

a. Rs. 10,000

b. Rs. 50,000

c. Rs. 110,000

d. Rs. 120,000

5. Which of the following content(s) is (are) included in the Cost of goods sold?

a. Opening stock

b. Purchases

c. Freight in

d. All of the given options

6. Which of the following Organization converts raw material into finished goods?

a. Trading concern

b. Manufacturing concern

c. Merchandising concern

d. Service concern

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

a. Production worker’s wages

b. Depreciation expenses

c. A piece of wood for the production of chair

d. Polish and finishing material for chair

9. What would be the value of Total Factory Cost, if cost of raw materials, direct labor costs, and manufacturing overhead costs are Rs.80,000, Rs.50,000, and Rs.60,000 respectively?

a. Rs.130, 000

b. Rs.110, 000

c. Rs.140, 000

d. Rs.190, 000

10. Which of the following assets are shown at written down value in Balance Sheet?

a. Current assets

b. Liquid assets

c. Floating assets

d. Fixed assets

11. An asset cost Rs. 50,000, has an estimated residual value of Rs.1, 500, and an estimated useful life of 5 years. What is the depreciation rate?

a. 20.0%

b. 25.0%

c. 35.5%

d. 50.4 %

12. Calculate depreciation of machine after first year by using diminishing balance method with the help of given data?

If, Cost of machine = Rs.400, 000

Useful life = 5 years

Residual value = Rs.25, 000

Sale price = Rs.40, 000

Rate of depreciation = 40%

a. Rs. 160,000

b. Rs. 11,840

c. Rs. 34,560

d. Rs. 34,860

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

a. It is added into current assets

b. It is deducted from material available for use

c. It becomes opening stock of next year

d. It increases the owner’s equity of business

14. In the cost of goods sold statement, Cost of direct material consumed + Direct Labor ___________

a. Conversion cost

b. Prime cost

c. Total factory cost

d. Cost of goods manufactured

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

a. Prime cost

b. Conversion cost

c. Sunk cost

d. Opportunity cost

16. In cost of goods sold statement the ‘total factory cost’ is equal to:

a. Cost of material consumed + Labor cost

b. Cost of material consumed + Conversion cost

c. Cost of material consumed + Total factory cost

d. Cost of material consumed + Factory overhead

17. Which of the following is (are) inventory valuation method(s)?

a. FIFO

b. LIFO

c. Weighted average

d. All of the given options

18. The cost of an incomplete fixed asset is transferred to _________ as on Balance Sheet date.

a. Capital account

b. Capital work in progress account

c. Relevant asset account

d. Owner's equity account

19. Under the straight line method of depreciation:

a. Amount of depreciation increases every year

b. Amount of depreciation remains constant for every year

c. Amount of depreciation decreases every year

d. None of the given options

20. Which of the following asset is NOT depreciated?

a. Factory Buildings

b. Office Equipment

c. Land

d. Plant & Machinery

Your browser may not support display of this image.
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

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

Bank Reconciliation Statement is prepared by:

► Bankers

► Accountant of the business

► Statutory auditor

► Manger

Bank Reconciliation Statement is:

► A memorandum statement

► A ledger account

► A part of cash book

► A part of journal

Expenditures incurred anually on renewal of patent are known as:

Revenue Expenditures

► Capital Expenditures

► Financial Expenditures

► Operating Expenditures

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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

Your browser may not support display of this image. Cost of asset Rs. 1,00,000
Life of asset 5 years
Depreciation for the each year Rs. 5,000
Sale price after 5 years Rs.15,000
Written Down Value of Asset on 5th year Rs. 75,000
Profit or loss on disposal of fixed asset ?

Rs. 60,000 loss

► Rs. 75,000 profit

► Rs. 25,000 loss

► Rs. 1, 00,000 profit

Which of the following account will be credited, when the goods are purchased on cash?

► Stock account

Cash account

► Supplier account

► Work in process account

If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs. 20,000 during the year, what would be the value of Gross Profit?

► Rs. 15,000

Rs. 35,000

► Rs. 55,000

► Rs. 60,000

If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs.20,000 during the year. What would be the Net Profit?

Rs.15,000

► Rs. 35,000

► Rs. 55,000

► Rs. 60,000

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

The amount of salary paid to Mr. Sohail should be debited to:

► Mr. Sohail account

Salaries account

► Cash account

► Drawings account

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

The unfavorable balance of Profit and Loss account should be:

► Added in liabilities

► Subtracted from current assets

► Subtracted from liabilities

Subtracted from capital

Which of the following is NOT an example of Current Asset?

Bank Overdraft

► Accounts Receivable

► Notes Receivable

► Prepaid Expenses

Which one of the following is NOT prepared by Non profit organizations?

Profit & Loss account

► Income & Expenditure account

► Receipts & Payments account

► Balance Sheet

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

Documentary evidence, in a specific format used to record the details of a transaction is known as:

► Account

Voucher

► Journal

► Ledger

A summarized record of transactions related to individuals or things is called a/an ___________.

Account

► Voucher

► Journal

► Trial balance

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

What will be the effect on accounting equation, when payment is made to the creditor of the business?

Decrease in an asset, decrease in a liability

► Increase in an asset, increase in a liability

► Decrease in an asset, decrease in owner's equity

► Increase in an asset, increase in owner's equity

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

Cost incurred for the maintenance of shop is considered as _________.

► Deferred expense

► Capital expense

► Revenue expense

► Preliminary expense

Mr.” A” sold goods for Rs. 3, 00,000 to Mr. “B”, Rs. 3, 00,000 will be treated as _____________ for business.

Revenue

► Net profit

► Gross profit

► Operating profit

Double entry accounting system includes:

► Accrual accounting only

► Cash accounting only

Both cash and accrual accounting

► None of the given options

Which of the following financial statement shows the financial health of an Organization at a stated period of time?

Balance sheet

Trading and Profit & Loss account

Cash Flow statement

Statement of retained earnings

The records that are kept for the individual asset, liability, equity, revenue, expense, and dividend components are known as:

Accounts

Vouchers

Journals

Statements

Revenue should be recognized or recorded when the goods are sold or services are rendered to the customer, this concept is known as:

Consistency concept

Realization Concept

Materiality concept

Matching concept

A record maintained which is measurable in the form of money, this concept of accounting is known as:

Matching concept

Consistency concept

Money measurement concept

Materiality concept

The cost of goods and services used up in the process of obtaining revenue is known as:

Revenue

Expense

Liability

Expenditure

Which of the following is an accounting system in which events are recorded as and when they occur?

Cash Accounting

Accrual Accounting

Both Accrual Accounting and Cash Accounting

None of the above

Recording of all financial transactions undertaken by an individual or organization is known as:

► Summarizing

Book-keeping

► Classification

► Interpreting

Any cheque drawn to creditor but not paid by bank will effect as follows:

► Cash book will show less balance & bank book will show more

► Cash book will show more balance & bank book will show less

► Cash book will show double balance

► Bank book will show double balance

If no distribution is made between capital and revenue expenditure then:

► The figure of debtors and creditors will be incorrect

► Cash or bank figure will be incorrect

Net profit will be incorrect

► Balance sheet will not balance

The Policy for charging depreciation is selected by:

► Manufacturer

► Trader

Management

► Accountant

The estimated value at which an asset is expected to be sold after the end of its useful life is called:

Residual value

Salvage Value

Scrap Value

All of the given options

Mr. “A” borrowed money from bank; this transaction involves which one of the following accounts:

Cash & Mr. A

Bank & Mr. A

Drawing & Mr. A

Cash & Bank

The beginning balance of Owner’s Equity was Rs.7,500. The dividends paid to stockholders were Rs.1,500. The ending balance of Owner’s Equity is Rs.5,000. What was the Net Income or Net Loss for the accounting period?

Net Loss of Rs. 1,000

Net Income of Rs. 1,000

Net Loss of Rs. 3,000

Net Income of Rs. 3,000

A company sold Rs. 400,000 of merchandise for cash and Rs.120,000 of merchandise to credit customers who will pay for the merchandise in a later time period. How much revenue should be reported on the income statement of the current time period under Cash Basis of Accounting?

Rs. 280,000

Rs. 520,000

Rs. 400,000

Rs. 120,000

Which one of the following statement is wrong about Current liabilities?

These are due within one year

These are short-term loans

A vague term for loans to be repaid by an enterprise after twelve months

In working capital, these are deducted from assets

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Particulars
Rs.
Opening written down value of machine 3,00,000
Cost of machine purchased during the year 50,000
Depreciation during the year 9,000
closing written down value (WDV) of the Machine ?

Opening + cost of machine during year – depreciation during year

3,00,000 + 50,000 – 9,000

► Rs. 3, 41,000

► Rs. 3, 50,000

► Rs. 3, 59,000

► Rs. 59,000

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Particulars
Rs.
Opening written down value of machine Rs. 2,00,000
Cost of new machine purchased during the year Rs. 50,000
Depreciation during the year Rs. 25,000
Closing written down value (WDV) of machines ?

Opening + cost of machine during year – depreciation during year

2,00,000 + 50,000 – 25,000

► Rs. 2, 25,000

► Rs. 2, 50,000

► Rs. 2, 75,000

► Rs. 75,000

Consider the following data:

Particulars Rs.
Assets 1,98,000
Owner's equity 95,000
Liabilities ?

► Rs. 49,000

► Rs. 55,000

► Rs. 1, 25,000

► Rs. 1, 03,000

Find out the missing value of an Accounting Equation with the help of given data:

Cash Rs. 22,500
Debtors Rs. 500
Total Assets Rs. 80, 385
Accounts payable Rs. 1,000
Total liabilities Rs. 20,000

► Rs. 60,385 owner’s equity

► Rs. 61,385 owner’s equity

► Rs. 99,885 owner’s equity

► Rs. 99,385 owner’s equity

Find out the missing value of an Accounting Equation with the help of given data:

Furniture Rs. 90,000
Cash Rs.1, 00, 000
Debtors Rs.10, 000
Other Assets Rs. 1,000
Owner’s equity Rs. 90, 000

► Rs. 2, 01,000 liabilities

► Rs. 1, 11, 000 liabilities

► Rs. 2, 90, 000 liabilities

► Rs. 2, 91, 000 liabilities

When the process of production is completed, all the costs must be charged to:

► Raw material account

► Work in process account

► Finished goods account

► Merchandise account

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

► Current assets

► Liquid assets

► Floating assets

► Fixed assets

Which of the following asset is NOT depreciated?

► Factory Buildings

► Office Equipment

► Plant & Machinery

► Land

The main goal of Bank Reconciliation Statement is to determine:

► If the discrepancy is due to error rather than timing

► If the discrepancy is due to timing rather than error

► If the discrepancy is due to error rather than amount

► If the discrepancy is due to amount rather than timing

Sale proceeds of goods are an example of:

► Revenue expense

► Capital expense

► Capital receipt

► Revenue receipt

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

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

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

80 units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.

► Rs. 1,225

► Rs. 1,015

► Rs. 965

► Rs. 905

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

Your browser may not support display of this image. 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

Your browser may not support display of this image. Cost of asset Rs. 1,00,000
Life of asset 5 years
Depreciation for each year Rs. 5,000
Sale price after 5 years Rs.50,000
Written down value of asset on 5th year Rs.75,000
profit or loss on disposal of fixed assets ?

► Rs.25, 000 loss

► Rs. 75,000 loss

► Rs. 15,000 profit

► Rs. 1, 00,000 profit

Your browser may not support display of this image. Cost of asset Rs. 1,00,000
Life of asset 5 years
Depreciation for the each year Rs. 5,000
Sale price after 5 years Rs.15,000
Written Down Value of Asset on 5th year Rs. 75,000
Profit or loss on disposal of fixed asset ?

► Rs. 60,000 loss

► Rs. 75,000 profit

► Rs. 25,000 loss

► Rs. 1, 00,000 profit

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

► Prime cost

► Conversion cost

► Sunk cost

► Opportunity cost

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

► Polish and finishing material for chair

► A piece of wood for the production of chair

► Production worker’s wages

► Depreciation expenses

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

Which of the following item appears in Trading Account of a business?

► Interest expenses

► Wages and salaries

► Depreciation expenses

► Discount Allowed

Which of the following is an alternate term which can be used for “Capital”?

► Liability

► Owner’s net worth

► Working capital

► Asset

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

If cost of sales is Rs. 95,000, sales are Rs. 200,000 and operating expenses are Rs. 100,000. What will be the net result?

► Rs. 5,000 Loss

► Rs. 5, 000 Profit

► Rs.1, 95,000 Profit

► Rs.1, 95,000 Loss

Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance)

► Cash account

► Furniture account

► Vehicle account

► All of the given options

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

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)

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

What type of expenses are paid out of Gross Profit?

► Selling Expenses

► General Expenses

► Financial Expenses

► All of the given options

While making Income & Expenditure account, Excess of income over expenses in a specified accounting period is called:

► Deficit

► Surplus

► Profit

► Loss

Which one of the following is NOT prepared by Non profit organizations?

► Profit & Loss account

► Income & Expenditure account

► Receipts & Payments account

► Balance Sheet

Which of the following financial statement summarizes the profitability of an organization for a particular period?

► Trading and Profit & Loss account

► Cash Flow Statement

► Statement of Retained Earnings

► Balance Sheet

Which of the following period is known as a fiscal Year of the Government of Pakistan?

► 1st January to 31st December

► 1st June to 31st May

► 1st July to 30th June

► 1st October to 30th September

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

Obligations to pay cash or un-earned incomes by the business are the:

► Assets

► Liabilities

► Equities

► Expenses

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

Word “Credit” is derived from ______ language.

► Latin

► English

► French

► Chinese

The basic accounting principle/concept according to which Business is independent from its owner(s) is known as:

► Separate Entity Concept

► Matching Concept

► Going Concern Concept

► Materiality Concept

Double entry accounting system includes:

► Accrual accounting only

► Cash accounting only

► Both cash and accrual accounting

► None of the given options

Debenture is also named as:

► Share

► Bond

► Equity

► Reserve

Capital is also termed as__________________.

► Reserve Capital

► Bond Capital

► Share Capital

► None of the given options

How many types of reservers?

► Two

► Three

► Four

► Five

"Goods sold to Mr. Salman for Rs. 6,000 have been forgotten to enter in books of accounts", is an example of:

► Error of principle

► Error of omission

► Error of commission

► Error of original entry

Transaction that has been completely forgotten to enter is called:

► Error of principle

► Error of omission

► Error of commission

► Error of original entry

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

The assets which have a limited useful life are termed as:

_ Limited assets

_ Depreciateable assets

_ Unlimited assets

_ None of the given options

Accountancy covers which of the following area(s):

_ Book-keeping

_ Accounting

_ Auditing

_ All of the given options

If a business pays rent in advance for 12 months, it will be treated as:

_ Prepaid expenses of business

_ Long term liability of business

_ Fixed assets of business

_ Current liability of business

Which of the following transaction have NO affect on stockholders' equity?

_ Purchase of land on credit

_ Dividends to stockholders

_ Net loss

_ Investment in cash by stockholders

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

If you start with cash book balance (Dr.), which of the following item will be deducted in Bank Reconciliation Statement?

_ Any cheque drawn to creditor but not paid by bank

_ Interest credited by the bank in pass book

_ Cheque deposited but not credited by the bank

_ Dividend collected by bank on behalf of the customer

The cost of moving plant and machinery to a new site will be treated as:

_ Revenue expense

_ Capital expense

_ Administrative expense

_ Operating expense

Which one of the following is NOT true about Capital Expenditure?

_ Creates future benefits

_ Incurred to acquire fixed assets

_ Incurred to increase the economic life of existing fixed assets

_ Reduce the profit of the concern

80 units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.

_ Rs. 1,225

_ Rs. 1,015

_ Rs. 965

_ Rs. 905

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?

= 400,000-25000 / 5 = 75000

_ Rs. 160,000

_ Rs. 96,000

_ Rs. 75,000

_ Rs. 57,600

A decrease in value of a fixed asset due to age, wear and tear is known as:

_ Depreciation

_ Accumulated Depreciation

_ Appreciation

_ Written Down Value

In balance sheet fixed assets are shown at:

_ Cost price

_ Market value

_ Fair value

_ Written down value (WDV)

1 ) - Please choose one

Particulars Rs.

Direct materials costs 80,000

Direct labor costs 50,000

Manufacturing overhead costs 60,000

Prime cost = dm + dl 130000

_ Rs.1 Rs.130, 000

_ Rs.110, 000

_ Rs.140, 000

_ Rs.190, 000

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

Following are the inventories of Manufacturing Concern EXCEPT:

_ Raw material

_ Work in process

_ Finished goods

_ Merchandise inventory

The return of goods by a customer should be debited to:

_ Customer’s account

_ Sales return account

_ Goods account

_ Accounts receivable

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

Which of the following account will be credited, If Mr. “A” started business with cash Rs. 2, 00,000?

_ Capital account

_ Cash account

_ Mr. A’s account

_ Business account

Which of the following journal entry will be recorded, if the goods are sold on credit to Mr. 'B'?

_ Mr. “B” / Accounts Receivable account (Dr) and Sales account (Cr)

_ Cash account (Dr) and sales account (Cr)

_ Sales account (Dr) and Mr. B / Accounts Receivable account (Cr)

_ Goods Sold account (Dr) and Mr. B / Accounts Receivable account (Cr)

Which of the following is NOT an item of a Balance Sheet?

_ Accounts Receivable

_ Accounts Payable

_ Sales Revenue

_ Marketable Securities

Accounts Receivable & Inventory are the examples of:

_ Liquid assets

_ Current assets

_ Fixed assets

_ Capital assets

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

Which of the following summarizes the cash movements during a specified period?

_ Trading account

_ Profit & Loss account

_ Receipts & Payments account

_ Balance Sheet

Which of the following financial statement summarizes the profitability of an organization for a particular period?

_ Balance Sheet

_ Trading and Profit & Loss account

_ Cash Flow Statement

_ Statement of Retained Earnings

In an account, if credit side <>

_ Negative Balance

_ Debit Balance

_ Positive Balance

_ Credit Balance

Which of the following is used to record financial transactions in chronological (day-to-day) order?

_ Voucher

_ General Journal

_ General Ledger

_ Trial balance

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

What is the nature of an expense account?

_ Debit

_ Credit

_ Revenue

_ None of the given options

Economic resources owned by a business and expected to benefit for the future operations are called:

_ Expenses

_ Assets

_ Capital

_ Liabilities

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

An expense incurred by the business for the purchase of land & building is an example of:

_ Capital Expense

_ Revenue Expense

_ Deferred Expense

_ Preliminary Expense

Which of the following is non- profit organization?

_ Sole proprietorship

_ Partnership

_ Limited company

_ Trust

The area of accounting concerned with reporting financial information to the interested parties is called:

_ Cost Accounting

_ Financial Accounting

_ Management Accounting

_ Tax Accounting

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

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

Following are the inventories of Manufacturing Concern EXCEPT:

► Raw material

► Work in process

► Finished goods

► Merchandise inventory

Which of the following is an alternate term which can be used for “Capital”?

► Liability

► Owner’s net worth

► Working capital

► Asset

In which of the following condition a company will have positive working capital?

► If current assets > current liabilities

► If current Assets <>

► If current assets = current liabilities

► If current assets < current liabilities

If salaries expense is Rs. 2,500, purchases are Rs. 16,000 and rent (office building) is Rs. 300 during the year, what would be the total of "general & administrative expenses"?

► Rs. 300

► Rs. 2,500

► Rs. 2,800

► Rs.18, 800

The amount brought by the proprietor in the business should be credited to:

► Cash account

► Capital account

► Drawings account

► Proprietor account

An asset on the balance sheet which is expected to be sold or used within one year is known as:

► Tangible asset

► Current asset

► Fixed asset

► Long term asset

Which one of the following is a type of General Ledger?

► Book of original entry

► ‘T’ Account

► Source document

► Day book

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 & Capital Account

► Cash & Expense Account

► Capital & Revenue Account

► Capital & Expense Account

Mr.” A” sold goods for Rs. 3, 00,000 to Mr. “B”, Rs. 3, 00,000 will be treated as _____________ for business.

► Revenue

► Net profit

► Gross profit

► Operating profit

when income exceeds expenses in a specific time period is known as:

► Savings

► Net profit

► Gross profit

► Operating profit

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

Which of the following is CORRECT for Doubtful Debt?

► It is shown in balance sheet

► It is a definite loss to the business

► It is not shown in balance sheet

► No provision is necessary for it

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)

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

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

Net Profit + Expenses= _________

► Liabilities

► Assets

► Capital

Income

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

è Depreciation

► Fluctuation

► None of the given options

The basic purpose of depreciation is to achieve the:

► Matching principle

è Dual aspect principle

► Separate entity concept

► Money measurement concept

If a business pays rent in advance for 12 months, it will be treated as:

è Prepaid expenses of business

► Long term liability of business

► Fixed assets of business

► Current liability of business

Cash book is a part of:

► Voucher

► General Journal

► General Ledger

è Trial Balance

Bank Reconciliation Statement is:

è A memorandum statement

► A ledger account

► A part of cash book

► A part of journal

If you start with cash book balance (Dr.), which of the following item will be deducted in Bank Reconciliation Statement?

► Any cheque drawn to creditor but not paid by bank

► Interest credited by the bank in pass book

è Cheque deposited but not credited by the bank

► Dividend collected by bank on behalf of the customer

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.

è Rs.7, 500

► Rs.7, 978

► Rs.8, 000

► Rs.8, 400

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

è Rs.320

The amount of depreciation charged on machinery will be debited to:

► Machinery account

è Depreciation account

► Cash account

► Capital account

In cost of goods sold statement the ‘total factory cost’ is equal to:

► Cost of material consumed + Labor cost

► Cost of material consumed + Conversion cost

► Cost of material consumed + Total factory cost

è Cost of material consumed + Factory overhead

Which of the following organization converts raw material into finished goods?

► Trading concern

è Manufacturing concern

► Merchandising concern

► Service concern

Which of the following item appears in Trading Account of a business?

► Interest expenses

è Wages and salaries

► Depreciation expenses

► Discount Allowed

Which of the following is an alternate term which can be used for “Capital”?

► Liability

È Owner’s net worth

► Working capital

► Asset

If salaries expense is Rs. 2,500, purchases are Rs. 16,000 and rent (office building) is Rs. 300 during the year, what would be the total of "general & administrative expenses"?

► Rs. 300

► Rs. 2,500

è Rs. 2,800

► Rs.18, 800

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

è Cash account

The amount brought by the proprietor in the business should be credited to:

► Cash account

è Capital account

► Drawings account

► Proprietor account

Which of the following account will be credited, if business sold goods for Rs.10,000 on credit?

► Cash account

è Sales account

► Accounts receivable account

► Purchases account

Which of the following account will be credited, if business purchased a vehicle on cash?

► Vehicle account

è Cash account

► Business account

► Bank account

Which of the following journal entry will be recorded, if the goods are sold on credit to Mr. 'B'?

è Mr. “B” / Accounts Receivable account (Dr) and Sales account (Cr)

► Cash account (Dr) and sales account (Cr)

► Sales account (Dr) and Mr. B / Accounts Receivable account (Cr)

► Goods Sold account (Dr) and Mr. B / Accounts Receivable account (Cr)

Accrued expenses are the example of:

è Current liabilities

► Long term liabilities

► Deferred costs

Which of the following is / are the particular/s of a cash book? (1) Date of transaction (2) Account title (3) Amount
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. 1 only
Your browser may not support display of this image. 1 & 2 only
Your browser may not support display of this image. 1 & 3 only
Your browser may not support display of this image. 1, 2 & 3

Find out the missing value of an Accounting Equation with the help of given data: Cash Rs.100, 000 Debtors Rs.10, 000 Other Assets Rs. 1,000 Owner’s equity Rs. 1, 000 Liabilities ?
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Rs. 12,000
Your browser may not support display of this image. Rs. 11,000
Your browser may not support display of this image. Rs. 110,000
Your browser may not support display of this image. Rs. 111,000

Debit signifies:
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Increase in Asset account
Your browser may not support display of this image. Decrease in liability account
Your browser may not support display of this image. Decrease in capital account
Your browser may not support display of this image. All of the given options

The process of transferring journal entry information to the ledger is called:
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Journalizing
Your browser may not support display of this image. Posting
Your browser may not support display of this image. Balancing
Your browser may not support display of this image. Analyzing

Which of the following is NOT correct?
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Decrease in Assets will be credit
Your browser may not support display of this image. Decrease in Liabilities will be debit
Your browser may not support display of this image. Decrease in Expenses will be credit
Your browser may not support display of this image. Decrease in Revenue will be credit

Office salaries, advertising and sales commissions are the examples of:
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Financial Expenses
Your browser may not support display of this image. Operating Expenses
Your browser may not support display of this image. Marketing Expenses
Your browser may not support display of this image. Direct Expenses

When income is reduced or decreased, that amount is recorded on:
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Right or debit side of the account
Your browser may not support display of this image. Left or debit side of the account
Your browser may not support display of this image. Left or credit side of the account
Your browser may not support display of this image. Right or credit side of the ccount

A Balance Sheet discloses the financial position of a firm:
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. For a certain given period
Your browser may not support display of this image. At a particular point of time
Your browser may not support display of this image. After the fixed date
Your browser may not support display of this image. None of the given options

Any expense that gives benefit for a period of less than twelve months is called ________.
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Your browser may not support display of this image. Capital Expense
Your browser may not support display of this image. Revenue Expense
Your browser may not support display of this image. Revenue Receipt
Your browser may not support display of this image. Deferred Expense

In case of Income and Expenditure account, Excess of income over expenses in a specified accounting period is called:
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Your browser may not support display of this image. Profit
Your browser may not support display of this image. Loss
Your browser may not support display of this image. Surplus
Your browser may not support display of this image. Deficit

While making Profit & Loss account, Excess of expenses over income in a specified accounting period is called:
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Your browser may not support display of this image. Profit
Your browser may not support display of this image. Loss
Your browser may not support display of this image. Surplus
Your browser may not support display of this image. Deficit

Which one of the following is NOT a feature of sole proprietorship business.
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Your browser may not support display of this image. Easy Formation
Your browser may not support display of this image. Easy Dissolution
Your browser may not support display of this image. Unlimited Liability
Your browser may not support display of this image. Separate Legal Entity

Find out the missing value of an Accounting Equation with the help of given data: Bank Rs. 22,500 Other assets Rs. 1,000 Creditors Rs. 8, 385 Other liabilities Rs. 9,000 Owner’s equity ?
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Rs. 6,115
Your browser may not support display of this image. Rs. 31,885
Your browser may not support display of this image. Rs. 17,385
Your browser may not support display of this image. Rs. 14,115

Which of the following is NOT correct?
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Decrease in Assets will be credit
Your browser may not support display of this image. Decrease in Liabilities will be debit
Your browser may not support display of this image. Decrease in Expenses will be debit
Your browser may not support display of this image. Decrease in Revenue will be debit

Which of the following is fiscal Year of Government of Pakistan?
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Your browser may not support display of this image. 1st January to 31st December
Your browser may not support display of this image. 1st June to 31st May
Your browser may not support display of this image. 1st July to 30th June
Your browser may not support display of this image. 1st October to 30th September

What should be credited, if rent paid in cash?
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Your browser may not support display of this image. Landlord’s account
Your browser may not support display of this image. Rent account
Your browser may not support display of this image. Cash account
Your browser may not support display of this image. Accounts receivable account

Consider the following data: Particulars Rs. Assets ? Owner's equity 35,000 Liabilities 90,000
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Your browser may not support display of this image. Rs. 35,000
Your browser may not support display of this image. Rs. 55,000
Your browser may not support display of this image. Rs. 1, 25,000
Your browser may not support display of this image. Rs. 1, 05,000

Which of the following is NOT correct?
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Decrease in Assets will be debit
Your browser may not support display of this image. Decrease in Liabilities will be debit
Your browser may not support display of this image. Decrease in Expenses will be credit
Your browser may not support display of this image. Decrease in Revenue will be debit

Normally single entry book keeping is followed by the:
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Your browser may not support display of this image. Small businesses only
Your browser may not support display of this image. Governments only
Your browser may not support display of this image. Large scale businesses only
Your browser may not support display of this image. Both Small businesses and Governments

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 Rs. 1,000 Bank Rs. 2,000 Debtors Rs. 500
Your browser may not support display of this image. Select correct option:
Your browser may not support display of this image. Rs. 102,885 other assets
Your browser may not support display of this image. Rs. 102,885 current liabilities
Your browser may not support display of this image. Rs. 99,885 current liabilities
Your browser may not support display of this image. Rs. 99,385 other assets

1. If Accumulated profit brought forward has credit nature, what will be its treatment?

a. It will be added in net profit for the year

b. It will be subtracted from the net profit for the year

c. It will be deducted from current Assets

d. It will be added in current assets

2. Fixed Assets at WDV + working capital =?

a. Total shareholders equity

b. Net capital employed

c. Long term loan

d. Current liability

5. Advances from customers are shown in which of the following heads in Balance Sheet?

a. Current Assets

b. Current liabilities

c. Fixed Assets

d. Long term liabilities

6. While preparing cash flow statements, the repayments of a loan during the year should be included under the heading of:

a. Operating activities

b. Financing activities

c. Investing activities

d. None of the given options

7. Which of the following statement is also known as a source and use statements?

a. Income Statements

b. Statement of Cash Flows

c. Balance Sheet

d. Statement of Retained Earnings

8. Calculate depreciation for the year.

Building at cost = Rs. 1, 00,000

Depreciation rate = 10%

a. Rs. 10,000

b. Rs. 1,000

c. Rs. 500

d. Rs. 0

9. Mr. A, Mr. B and Mr. C are three partners of a partnership firm. The profit sharing ratio is 2:3:5. If company has distributable profit of Rs. 4, 90,000, determine the profit of Mr. A.

a. Rs. 98,000

b. Rs. 1, 47,000

c. Rs. 2, 45,000

d. Rs. 3, 43,000

10. An example of financing activities in the context of cash flow statement is:

a. Fixed capital expenditure

b. Long-term deposit

c. Financial charges paid

d. Dividend paid

  1. If business purchases goods for resale purposes, such purchases are charged to _____________
  2. Expenses account
  3. Purchases account
  4. Sales account
  5. None of the given options
  6. The amount of resources supplied by the owner in business is called:
  7. Investments
  8. Assets
  9. Capital
  10. Reserves
  11. Excess of sales over cost of goods sold in an accounting period is termed as:
  12. Net Profit
  13. Gross Profit
  14. Retained earnings
  15. None of the given options
  16. At the end of the year, goods that are unsold are deducted from:
    1. Finished goods
    2. Closing stock
    3. Cost of goods sold
    4. Opening stock
  17. Conversion cost is:
  18. Total factory cost
  19. The cost incurred in converting raw material into finished goods
  20. The cost incurred in converting raw material into work in process
  21. None of the given options
  22. The cost of the asset after the expiry of its useful life is called___________
    1. Written down value
    1. Residual value
    2. Expired value
    3. None of the given options

When bank statement shows a debit balance, it means:

    1. Overdraft balance as per cash book
    2. Favorable balance as per cash book
    3. Un Favorable balance as per bank book
    4. None of the above
  1. Closing stock is credited in the:
    1. Balance sheet
    2. Profit & Loss account
    3. Cost of good sold statement
    4. None of the given option
  1. Depreciation of machinery will be shown in the profit & loss account under the head of:
    1. Selling expense
    2. Administrative Expenses
    3. Marketing expense
    4. Financial expense
  1. Assets and liabilities are presented in the balance sheet in the order of their:
    1. Life
    2. Classification
    3. Maturity
    4. None of the above
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