Final Accounts
- 1.
18% investment of Rs. 1,00,000 and interest received on investment Rs. 15,000 have been given in the trial balance for the period ended on 31.3.2006. The amount of interest outstanding in the final accounts will be
- A.
Rs.18,000
- B.
Rs.15,000
- C.
Rs.3,000
- D.
Nil
Correct Answer
C. Rs.3,000 -
- 2.
A building was purchased for Rs.4,00,000 on 1.04.2005. 31st March, 2006, its net realizable value was 5,00,000. The value of building to be shown in the books as on 31st March, 2006 will be
- A.
Cost price
- B.
Net realisable value
- C.
Cost or Net realisable value which ever is less
- D.
Cost or Net realisable value which ever is more
Correct Answer
A. Cost price -
- 3.
A building worth Rs. 10,00,000 is insured for Rs. 6,00,000. It is completely destroyed by fire. The loss to be admitted by the insurance company will be
- A.
Rs.10,00,000
- B.
Rs.6,00,000
- C.
Rs.8,00,000
- D.
None of the three
Correct Answer
B. Rs.6,00,000 -
- 4.
A club paid Subscription fees of Rs.1,800 out of which Rs.400 is prepaid.In such case
- A.
P&L A/c is debited with Rs.1400
- B.
Rs.400 is shown as current assets
- C.
Both (a)&(b)
- D.
None of the above
Correct Answer
C. Both (a)&(b) -
- 5.
A fire broke out on 30th March, 2006 in the godown of Mahesh stock of invoice value Rs.1,600 was destroyed. The goods are invoiced at 25% above cost. The insurance company admitted claim of 50% only. The insurancea claim will be:
- A.
Rs. 640
- B.
Rs. 600
- C.
Rs. 800
- D.
None of the above
Correct Answer
A. Rs. 640 -
- 6.
A manager gets 10% commission on sales. Cost price of goods sold is Rs.80,000 which he sold at a margin 20% on sale. Amount of commission will be
- A.
Rs.16,000
- B.
Rs.9,600
- C.
Rs.10,000
- D.
Rs.6,000
Correct Answer
C. Rs.10,000 -
- 7.
A manager gets 5 % commission on net profit after charging such commission.If gross profit is Rs.48,000 and expenses of indirect nature other than manager's commission are Rs.6,000.Commission amount will be __________.
- A.
Rs.2100
- B.
Rs.2000
- C.
Rs.2200
- D.
Rs.2400
Correct Answer
B. Rs.2000 -
- 8.
A manager gets 5% commission on net profit after charging such commission, gross profit Rs.58000 and expenses of indirect nature other than manager's commission are Rs.16000. Commission amount will be
- A.
Rs.2900
- B.
Rs.2000
- C.
Rs.1500
- D.
Rs.2200
Correct Answer
B. Rs.2000 -
- 9.
A manager gets 5% commission on sales, cost price of goods sold is Rs. 40,000 which he sells at a margin of 20% on sale. Manager Commission will be
- A.
Rs.2000
- B.
Rs.2500
- C.
Rs.2800
- D.
None of the three
Correct Answer
B. Rs.2500 -
- 10.
A new firm commenced business on 1st January, 2006 and purchased goods costing Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the gross profit earned by the firm?
- A.
Rs. 36,000
- B.
Rs. 30,000
- C.
Rs. 42,000
- D.
Rs. 38,000
Correct Answer
A. Rs. 36,000 -
- 11.
A new firm commenced business on Jan. 1, 2006 purchased goods costing Rs. 19,500 during the year.A sum of Rs. 400 was spent on carriage inward and Rs. 1000 on wages. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 25,000. What is the gross profit earned by the firm __________.
- A.
Rs. 16,100
- B.
Rs 18,200
- C.
Rs 20,000
- D.
Rs. 15,100
Correct Answer
A. Rs. 16,100 -
- 12.
A plant & machinery worth Rs.1,00,000 is insured for Rs.60,000. It is completely destroyed by fire. The loss to be admitted by the insurance company will be
- A.
Rs.1,00,000
- B.
Rs.1,60,000
- C.
Rs.40,000
- D.
Rs.60,000
Correct Answer
D. Rs.60,000 -
- 13.
A purchased a computer costing Rs. 10,000.00 repairing expenses Rs. 1,000.00 and miscellaneous expenses Rs. 500.00. He sold the computer at 20% margin on selling price. The sale value will be:
- A.
Rs.12,500.00
- B.
Rs.11,000.00
- C.
Rs. 15,000.00
- D.
Rs.14,375.00
Correct Answer
D. Rs.14,375.00 -
- 14.
A seller sells goods at a profit of 25% on sales. In a particular month, he sold goods costing 45,000. Sales price of goods will be
- A.
Rs.56,250
- B.
Rs.65,000
- C.
Rs.55,000
- D.
Rs.60,000
Correct Answer
D. Rs.60,000 -
- 15.
A started business on Jan1 with a capital of Rs. 40,000. On 31st Dec. his position was Creditors Rs. 4700, machinery Rs. 40,000, furniture Rs. 2,000, Debtors Rs. 1300, Cash Rs. 15,000.He made drawings @ Rs. 200 per month and Rs. 1000 which he brought on 1st Oct. in the business as further capital. Business profit will be
- A.
15,000
- B.
16,000
- C.
14,000
- D.
17,000
Correct Answer
A. 15,000 -
- 16.
A started business with Rs.20,000 cash and Rs. 11,000 stock. Cash sales & cash purchases were Rs. 10,000 & Rs. 5,000. Total sales and purchases amounted to Rs. 70,000 & Rs. 50,000. Outstanding creditors were Rs. 15,000 and Debtors Rs. 25,000. Expenses paid Rs. 17,000. Machine was purchased for Rs. 10,000 out of which Rs. 8000 has been paid. Cash in hand at the end of the year Rs.5,000 Trial Balance total will be_________
- A.
Rs.1,18,000
- B.
Rs.1,20,000
- C.
Rs.1,25,000
- D.
Rs.1,40,000
Correct Answer
A. Rs.1,18,000 -
- 17.
A trader sells goods at a profit of 25% on sale. In a particular month he sold goods costing Rs. 34,200 sale price of goods will be
- A.
Rs.45,000
- B.
Rs.45,600
- C.
Rs.45,500
- D.
Rs.42,000
Correct Answer
B. Rs.45,600 -
- 18.
A trader sells goods at a profit of 25% on sale. In a particular month, he sold goods costing Rs. 34,200. Rate of profit on cost will be
- A.
33 1/3 %
- B.
30 %
- C.
35 %
- D.
None of the three
Correct Answer
A. 33 1/3 % -
- 19.
A trial balance at 31st March contains the following information : 15% Loan Rs.30,000; Interest paid Rs.3,000; interest debited to the P & L A/c is
- A.
Rs.1,500
- B.
Rs.4,500
- C.
Rs.6,000
- D.
Nil
Correct Answer
B. Rs.4,500 -
- 20.
Accounts payable 60,000 Capital 1,00,000 Cash in hand 1,24,000 Prepaid expenses 2,000 Cash at Bank 2,90,000 inventories 1,60,000 Long Term Loan 3,00,000 Wages payable 1,20,000 Investments 20,000 Net profit 96,000 Bills receivable 80,000 Total of Balance Sheet will be
- A.
Rs.6,76,000
- B.
Rs.6,00,000
- C.
Rs. 6,80,000
- D.
None of the three
Correct Answer
A. Rs.6,76,000 -
- 21.
Adjustment entry for interest earned but not received will be
- A.
Dr. Cash A/c and Cr. Interest A/c
- B.
Dr. Accrued Interest A/c and Cr. Customer A/c
- C.
Dr. Accrued Interest A/c and Cr. Interest A/c
- D.
None of the above
Correct Answer
C. Dr. Accrued Interest A/c and Cr. Interest A/c -
- 22.
Advertisement expenditure of Rs.10,000 paid on 30.12.2006, the advertisement in respect of which has appeared in the magazines of January, 2007. This expenditure will be
- A.
Shown as 'expense' in the financial statements of the year ended 31st December, 2006.
- B.
Shown as 'liability' in the financial statements of the year ended 31st December, 2006.
- C.
Shown as prepaid expense in the financial statements of the year ended 31st December, 2006.
- D.
None of the three.
Correct Answer
C. Shown as prepaid expense in the financial statements of the year ended 31st December, 2006. -
- 23.
An inexperienced book-keeper has drawn up a trial balance for the year ended 30th June,2006 Dr. Cr. Provision for Doubtful Debts -Rs.200 ------ Bank overdraft - Rs.1654 ----- Capital - ---- Rs.4591 Creditors - ----- Rs.1637 Debtors - Rs.2983 ----- Discount received - Rs.252 ----- Discount allowed - ---- Rs.733 Drawings - Rs.1200 ----- Office furniture - Rs.2155 ----- General expenses - ---- Rs.829 Purchases - Rs.10923 ---- Return inward - --- Rs.330 Rent and Rates - Rs.314 ----- Salaries - Rs.2520 ----- Sales - ---- Rs.16882 Stock - Rs.2418 ---- Stationary - Rs.1175 ---- Provision for Depreciation on furniture - Rs.364 ---- Total ---------------- ------------- 26.158 250002 ------------------ ----------- Corrected trial balance will be
- A.
Rs.25,580
- B.
Rs.25,000
- C.
Rs.24,000
- D.
None of the three
Correct Answer
A. Rs.25,580 -
- 24.
B's trial balance contains the following information- Make provision at the end of the year Rs.10,000 Provision for bad debts at the beginning of the year Rs.4,000 Bad Debts Rs.6,000 .The amount to be debited to Profit & Loss A/c
- A.
Rs.20,000
- B.
Rs.8,000
- C.
Rs.12,000
- D.
NIL
Correct Answer
C. Rs.12,000 -
- 25.
B/R is a _________.
- A.
Current asset
- B.
Fixed asset
- C.
Tangible asset
- D.
Lntangible asset
Correct Answer
A. Current asset -
- 26.
Bank overdraft as per trial balance is Rs.1,60,000. Bank has allowed the customer to overdrew 80% of the hypothecated value of the stock. Hypothecation of stock has been done by the bank at 80% of the original closing stock value. The amount of closing stock is
- A.
Rs.2,00,000
- B.
Rs.2,50,000
- C.
Rs.1,02,400
- D.
Rs.1,28,000
Correct Answer
B. Rs.2,50,000 -
- 27.
Calculate gross profit if rate of gross profit is 25% on sales and cost of goods are Rs.1,80,000
- A.
Rs.60,000
- B.
Rs.36,000
- C.
Rs.45,000
- D.
Rs.30,000
Correct Answer
A. Rs.60,000 -
- 28.
Capital expenditures are recorded in the____________
- A.
Balance sheet
- B.
Profit and loss account
- C.
Trading account
- D.
Manufacturing account
Correct Answer
A. Balance sheet -
- 29.
Capital introduced by Mr, A on 01.04.05 Rs. 300,000, further capital introduced during the year was Rs. 50,000 in the mid of the year. Mr. A withdrew Rs. 2,000 on the first day of each month. Interest on drawings is charged @ 5%. Profit earned during the year was Rs. 20,000. Capital at the end of the financial year will be
- A.
Rs.3,45,350
- B.
Rs.3,95,000
- C.
Rs.3,46,000
- D.
None of the three
Correct Answer
A. Rs.3,45,350 -
- 30.
Capital introduced by Mr. A on 1.4.2006 Rs. 3,00,000; further capital introduced during the year was Rs. 50,000 in the mid of the year. Mr. A withdrew Rs. 2,000 per month and the profit earned during the year was Rs. 20,000. Capital as on 31.3.2006 was
- A.
Rs. 3,94,000
- B.
Rs 3,46,000
- C.
Rs. 2,94,000
- D.
None of the three
Correct Answer
B. Rs 3,46,000 -
- 31.
Capital introduced by Mr.A on 01.01.2005 Rs. 100000. Further capital introduced during the year was Rs. 50,000. Mr. A withdrew Rs. 200 per month on the last date of each month. Interest on drawings was charged @ 5%. Profit earned during the year was Rs. 10,000. Capital on 31.12.05 will be
- A.
Rs. 157545
- B.
Rs. 157000
- C.
Rs. 160000
- D.
Rs. 155000
Correct Answer
A. Rs. 157545 -
- 32.
Capital introduced in the beginning by Ram Rs. 16,080; further capital introduced during the year in the form of machinery Rs. 2000; personal expenses during the year - Drawings in cash Rs. 3,000 Life Insurance Premium Rs. 250 Closing capital Rs. 21,925 The amount of profit or loss for the year will be
- A.
Profit 7095
- B.
Profit 7085
- C.
Loss 5000
- D.
Loss 6000
Correct Answer
A. Profit 7095 -
- 33.
Capital introduced in the beginning by Shyam Rs.. 3,00,000; further capital introduced during the year Rs. 2,00,000; Drawing Rs. 1,500 per month and closing capital is Rs. 4,50,000. The amount of profit or loss for the year is
- A.
Loss of Rs. 32,000
- B.
Loss of Rs. 50,000
- C.
Profit of Rs. 32,000
- D.
Information is insufficient for any comment
Correct Answer
A. Loss of Rs. 32,000 -
- 34.
Capital on January 1, 2004 Rs.15,200, Capital on January 1, 2005 16,900, Drawings made during the year 4,800, Additional Capital introduced during the year 2,000. Profit of the firm will be
- A.
4,500
- B.
4,000
- C.
4,800
- D.
5,000
Correct Answer
A. 4,500 -
- 35.
Carriage inwards is debited to
- A.
Trading account.
- B.
Profit and loss account
- C.
Profit and loss appropriation account
- D.
Balance sheet
Correct Answer
A. Trading account. -
- 36.
Carriage outward is debited to
- A.
Trading Account
- B.
Profit and loss account
- C.
Profit and loss appropriations account
- D.
Balance sheet
Correct Answer
B. Profit and loss account -
- 37.
Closing entry for transferofNet profit Rs. 6300 to capital A/c will be options: Rs. Rs. (A) Capital A/c Dr 6300 To P&L A/c 6300 (B) P&L A/c Dr. 6300 To Capital A/c 6300 (C) Trading A/c Dr. 6300 To P&L A/c 6300 (D) None of the three
- A.
A
- B.
B
- C.
C
- D.
D
Correct Answer
B. B -
- 38.
Consider the following data pertaining to H Ltd. for the month of March 2005: Particulars As on March 01, 2005 (Rs.) As on March 31, 2005 (Rs.) Stock 1,80,000 90,000 The company made purchases amounting Rs. 3,30,000 on credit. During the month of March 2005, the company paid a sum of Rs.3,50,000 to the suppliers. The goods are sold at 25% above the cost. The sales for the month of March,2005 were
- A.
Rs.4,12,500
- B.
Rs.5,25,000
- C.
Rs.90,000
- D.
Rs.3,15,000
Correct Answer
B. Rs.5,25,000 -
- 39.
Consider the following items (1) Prepaid Salary (2) Accrued Interest (3) Loan (4) Bank overdraft Current Liability would include-
- A.
1,2,3,4
- B.
2,3,4
- C.
4,3,1
- D.
3,4
Correct Answer
D. 3,4 -
- 40.
Cost of goods sold can be calculated by ___________.
- A.
Trading account
- B.
Profit & loss account
- C.
Balance sheet
- D.
Name of the three
Correct Answer
A. Trading account -
- 41.
Cost of goods sold Rs. 70,800 Sales Rs. 1,30,200 Gross Profit will be
- A.
59400
- B.
59000
- C.
60000
- D.
None of the above
Correct Answer
A. 59400 -
- 42.
Cost of goods sold Rs.8,000. Closing stock Rs.3,000 opening stock Rs.2,500. Wages Rs.1000. Purchases will be
- A.
Rs.8,500
- B.
Rs.7,500
- C.
Rs.6,500
- D.
Rs.9,500
Correct Answer
B. Rs.7,500 -
- 43.
Depreciation on machinery in trial balance is recorded in_____________
- A.
Trading A/c
- B.
Profit & Loss A/c
- C.
Balance Sheet
- D.
None of the three
Correct Answer
B. Profit & Loss A/c -
- 44.
Difference of total of debit and credit side of the trial balance is transferred to
- A.
Suspense A/c
- B.
Difference A/c
- C.
P & LA/c
- D.
Trading A/c
Correct Answer
A. Suspense A/c -
- 45.
Drawing is a type of
- A.
Expenses
- B.
Withdrawal of capital
- C.
Income
- D.
None of the above
Correct Answer
B. Withdrawal of capital -
- 46.
Drawings are deducted from_________
- A.
Sales
- B.
Purchases
- C.
Expenses
- D.
Capital
Correct Answer
D. Capital -
- 47.
Financial position of the business is ascertained on the basis of:
- A.
Records prepared under bookkeeping process
- B.
Trial balance
- C.
Accounting report
- D.
None of the above
Correct Answer
A. Records prepared under bookkeeping process -
- 48.
Fixed assets are
- A.
Fictitious assets
- B.
Kept in the business for use over a long period
- C.
Meant for resale
- D.
Meant for conversion into cash as quickly as possible
Correct Answer
B. Kept in the business for use over a long period -
- 49.
Following are the details of position statement Closing Stock Rs.40,000 Drawings Rs.12,000 Net Profit Rs.18,000 Capital Rs.70,000 Debtors Rs.40,000 Cash at Bank Rs. 8,000 Creditors Rs. 30,000 Cash Rs.3,000 Depreciation provision Rs.4,000 Bills receivable Rs.5,000 Liabilities for expenses Rs.3,000 Bills payable Rs.3,000 Balance sheet total will be
- A.
Rs.1,16,000
- B.
Rs.1,15,000
- C.
Rs.1,20,000
- D.
Rs.1,25,000
Correct Answer
A. Rs.1,16,000 -
- 50.
Following are the extracts from the Trial Balance of a firm as on 31st December, 2005. Particulars Rs. Sundry debtors 30,000 Bad debts 5,000 Additional information: (i) After preparing the trial balance, it is learnt that a debtor, Mohan became insolvent and therefore, the entire amount of Rs.3,000 due from him was irrecoverable. (ii) 10% provision for bad and doubtful debts is generally created. The amount of provision for bad and doubtful debts to be charged to profit and loss account will be
- A.
Rs.3,000
- B.
Rs.2,700
- C.
Rs.2,500
- D.
None of the three
Correct Answer
B. Rs.2,700 -
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