Question No: 1 ( Marks: 1 ) - Please choose one
Which of the following is CORRECT regarding depreciation?
► It refers to the end life of an asset
► It refers to the increase in value of asset
► It is another name of Impairment
► It is a systematic allocation of depreciable amount of an asset over its estimated useful life
Question No: 2 ( 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: 3 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
Cash Rs. 22,500
Debtors Rs. 500
Total Assets Rs. 80, 385
Accounts payable Rs. 1,000
Total liabilities Rs. 20,000
► Rs. 60,385 owner’s equity
► Rs. 61,385 owner’s equity
► Rs. 99,885 owner’s equity
► Rs. 99,385 owner’s equity
Question No: 4 ( Marks: 1 ) - Please choose one
When the process of production is completed, all the costs must be charged to:
► Raw material account
► Work in process account
► Finished goods account
► Merchandise account
Question No: 5 ( Marks: 1 ) - Please choose one
Stock of Trading concern consists of:
► Raw material
► Work in process
► Merchandise inventory
► All of the given options
Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following asset is NOT depreciated?
► Factory Buildings
► Office Equipment
► Plant & Machinery
► Land
Question No: 7 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is prepared by:
► Bankers
► Accountant of the business
► Statutory auditor
► Manger
Question No: 8 ( Marks: 1 ) - Please choose one
A form that allow individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies is known as:
► Bank statement
► Income statement
► Financial statement
► Bank Reconciliation statement
Question No: 9 ( Marks: 1 ) - Please choose one
_________ is the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction.
► Present value
► Fair value
► Book value
► Residual value
Question No: 10 ( Marks: 1 ) - Please choose one
Particulars Rs.
Opening stock of raw material 100,000
Closing stock of raw material 85,000
Purchases of raw material during the period 200, 000
Cost of Material Consumed ?
► Rs. 205,000
► Rs. 215,000
► Rs. 220,000
► Rs. 225,000
Question No: 11 ( Marks: 1 ) - Please choose one
The amount of depreciation charged on machinery will be debited to:
► Machinery account
► Depreciation account
► Cash account
► Capital account
Question No: 12 ( Marks: 1 ) - Please choose one
An asset cost Rs. 50,000, has an estimated residual value of Rs.1, 500, and an estimated useful life of 8 years. What is the depreciation rate?
► 12.5%
► 20.0%
► 25.0%
► 35.5%
Question No: 13 ( 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: 14 ( Marks: 1 ) - Please choose one
In cost of goods sold statement the ‘total factory cost’ is equal to:
► Cost of material consumed + Labor cost
► Cost of material consumed + Conversion cost
► Cost of material consumed + Total factory cost
► Cost of material consumed + Factory overhead
Question No: 15 ( Marks: 1 ) - Please choose one
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
Question No: 16 ( 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: 17 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, when the goods are purchased on cash?
► Stock account
► Cash account
► Supplier account
► Work in process account
Question No: 18 ( Marks: 1 ) - Please choose one
The stock of manufacturing concern consists of:
► Work in Process Inventory
► Raw Materials Inventory
► Finished Goods Inventory
► All of the given options
Question No: 19 ( 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: 20 ( Marks: 1 ) - Please choose one
Which of the following item appears in Trading Account of a business?
► Interest expenses
► Wages and salaries
► Depreciation expenses
► Discount Allowed
Question No: 21 ( Marks: 1 ) - Please choose one
The difference between current Assets and current liabilities is known as:
► Working capital
► Opening stock
► Closing stock
► Owner’s equity
Question No: 22 ( Marks: 1 ) - Please choose one
In which of the following condition a company will have positive working capital?
► If current assets > current liabilities
► If current Assets < current Liabilities
► If current assets = current liabilities
► If current assets < current liabilities
Question No: 23 ( 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: 24 ( 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: 25 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, If Mr. “A” started business with cash
Rs. 2, 00,000?
► Capital account
► Cash account
► Mr. A’s account
► Business account
Question No: 26 ( Marks: 1 ) - Please choose one
Identify the business transaction for given entry below.
Vehicle Account XXX (Dr.)
Bank Account XXX (Cr.)
► Paid for vehicle through cheque
► Paid for vehicle through cash
► Purchased vehicle on credit
► None of the given options
Question No: 27 ( Marks: 1 ) - Please choose one
Mr. A provided the following information from his books of accounts 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 Mr. A’s total liabilities?
► Rs.200
► Rs. 900
► Rs. 1200
► Rs. 1700
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following is an example of business liability?
► Land
► Building
► Cash
► Capital
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following is/are the END product of accounting cycle?
► Financial Statements
► General Journal
► General Ledger
► Voucher
Question No: 30 ( 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: 31 ( Marks: 1 ) - Please choose one
The process of transferring journal entry information to the ledger is called:
► Journalizing
► Posting
► Balancing
► Analyzing
Question No: 32 ( Marks: 1 ) - Please choose one
What is the nature of an expense account?
► Debit
► Credit
► Revenue
► None of the given options
Question No: 33 ( Marks: 1 ) - Please choose one
Obligations to pay cash or un-earned incomes by the business are the:
► Expenses
► Assets
► Liabilities
► Equities
Question No: 34 ( 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 & Capital Account
► Cash & Expense Account
► Capital & Revenue Account
► Capital & Expense Account
Question No: 35 ( 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: 36 ( Marks: 1 ) - Please choose one
Which of the following is correct according to the double entry system of book-keeping?
► Debit = Credit
► Debit > Credit
► Debit < Credit
► All of the given options
Question No: 37 ( Marks: 1 ) - Please choose one
Income of the business includes:
► Cash sales only
► Credit sales only
► Credit purchases only
► Both cash sales and credit sales
Question No: 38 ( 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: 39 ( 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: 40 ( Marks: 1 ) - Please choose one
A business event which can be measured in terms of money and must be recorded in books of accounts is called:
► Condition
► Transaction
► Record
► Information
Question No: 41 ( Marks: 10 )
Show the effect of the following transactions upon the Accounting Equation.
2007 June1, Mr. Salman started business with cash Rs. 1,00,000
5, Purchased furniture for cash Rs. 4,000
6, Purchased goods for cash Rs. 25,000
10, Paid transportation on goods purchased Rs.1,000
12, Sold goods for cash Rs. 15,000, costing 11,000
15, Purchased goods on credit basis for Rs. 15,000
19, Sold goods to Rashid on credit basis for Rs. 8,000, costing Rs. 6,500
25, Received cash from Rashid Rs. 4,000
28, Cash paid to creditor Rs. 9,000
30, Paid rent and salaries for the month Rs. 4,000
