MGT101 Financial Accounting - Mid Term

41 Questions | Total Attempts: 349

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Accounting Quizzes & Trivia

VU MGT101 Financial Accounting - Mid Term (2009) Comments are appreciated


Questions and Answers
  • 1. 
     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) ?
    • A. 

      Rs. 1, 29,000

    • B. 

      Rs. 1, 50,000

    • C. 

      Rs. 1, 21,000

    • D. 

      Rs. 71,000

  • 2. 
    • A. 

      Rs. 1, 02,885 other assets

    • B. 

      Rs. 1, 02,885 other liabilities

    • C. 

      Rs. 99,885 current liabilities

    • D. 

      Rs. 99,385 other assets

  • 3. 
    Bank Reconciliation Statement is prepared by:
    • A. 

      Bankers

    • B. 

      Accountant of the business

    • C. 

      Statutory auditor

    • D. 

      Manger

  • 4. 
    Bank Reconciliation Statement is:
    • A. 

      A memorandum statement

    • B. 

      A ledger account

    • C. 

      A part of cash book

    • D. 

      A part of journal

  • 5. 
    Expenditures incurred annually on renewal of patent are known as:
    • A. 

      Revenue Expenditures

    • B. 

      Capital Expenditures

    • C. 

      Financial Expenditures

    • D. 

      Operating Expenditures

  • 6. 
     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 ?
    • A. 

      Rs. 205,000

    • B. 

      Rs. 215,000

    • C. 

      Rs. 220,000

    • D. 

      Rs. 225,000

  • 7. 
     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 ?
    • A. 

      Rs. 60,000 loss

    • B. 

      Rs. 75,000 profit

    • C. 

      Rs. 25,000 loss

    • D. 

      Rs. 1, 00,000 profit

  • 8. 
    Which of the following account will be credited, when the goods are purchased on cash?
    • A. 

      Stock account

    • B. 

      Cash account

    • C. 

      Supplier account

    • D. 

      Work in process account

  • 9. 
    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?
    • A. 

      Rs. 15,000

    • B. 

      Rs. 35,000

    • C. 

      Rs. 55,000

    • D. 

      Rs. 60,000

  • 10. 
    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?
    • A. 

      Rs.15,000

    • B. 

      Rs. 35,000

    • C. 

      Rs. 55,000

    • D. 

      Rs. 60,000

  • 11. 
    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).
    • A. 

      Capital account

    • B. 

      Sundry creditors account

    • C. 

      Accounts payable account

    • D. 

      Cash account

  • 12. 
    The amount of salary paid to Mr. Sohail should be debited to:
    • A. 

      Mr. Sohail account

    • B. 

      Salaries account

    • C. 

      Cash account

    • D. 

      Drawings account

  • 13. 
    Which of the following account will be credited, if business bought goods on credit from Mr. Ali?
    • A. 

      Purchases account

    • B. 

      Mr. Ali account

    • C. 

      Cash account

    • D. 

      Sales account

  • 14. 
    The unfavorable balance of Profit and Loss account should be:
    • A. 

      Added in liabilities

    • B. 

      Subtracted from current assets

    • C. 

      Subtracted from liabilities

    • D. 

      Subtracted from capital

  • 15. 
    Which of the following is NOT an example of Current Asset?
    • A. 

      Bank Overdraft

    • B. 

      Accounts Receivable

    • C. 

      Notes Receivable

    • D. 

      Prepaid Expenses

  • 16. 
    Which one of the following is NOT prepared by Non profit organizations?
    • A. 

      Profit & Loss account

    • B. 

      Income & Expenditure account

    • C. 

      Receipts & Payments account

    • D. 

      Balance Sheet

  • 17. 
    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:
    • A. 

      Income Statement

    • B. 

      Balance Sheet

    • C. 

      Trial Balance

    • D. 

      Cash Book

  • 18. 
    Documentary evidence, in a specific format used to record the details of a transaction is known as:
    • A. 

      Account

    • B. 

      Voucher

    • C. 

      Journal

    • D. 

      Ledger

  • 19. 
    Summarized record of transactions related to individuals or things is called a/an  ___________.
    • A. 

      Account

    • B. 

      Voucher

    • C. 

      Journal

    • D. 

      Trial balance

  • 20. 
    When a Liability is reduced or decreased, it is recorded on the:
    • A. 

      Right or debit side of the account

    • B. 

      Left or debit side of the account

    • C. 

      Left or credit side of the account

    • D. 

      Right or credit side of the account

  • 21. 
    What will be the effect on accounting equation, when payment is made to the creditor of the business?
    • A. 

      Decrease in an asset, decrease in a liability

    • B. 

      Increase in an asset, increase in a liability

    • C. 

      Decrease in an asset, decrease in owner's equity

    • D. 

      Increase in an asset, increase in owner's equity

  • 22. 
    Commercial Accounting is based on:
    • A. 

      Single entry book keeping

    • B. 

      Double entry book keeping

    • C. 

      Both single and double entry book keeping

    • D. 

      Cash basis of book keeping

  • 23. 
    Cost incurred for the maintenance of shop is considered as _________.
    • A. 

      Deferred expense

    • B. 

      Capital expense

    • C. 

      Revenue expense

    • D. 

      Preliminary expense

  • 24. 
    Mr.” A” sold goods for Rs. 3, 00,000 to Mr. “B”,   Rs. 3, 00,000 will be treated as _____________ for business.
    • A. 

      Revenue

    • B. 

      Net profit

    • C. 

      Gross profit

    • D. 

      Operating profit

  • 25. 
    Double entry accounting system includes:
    • A. 

      Accrual accounting only

    • B. 

      Cash accounting only

    • C. 

      Both cash and accrual accounting

    • D. 

      None of the given options

  • 26. 
    Which of the following financial statement shows the financial health of an Organization at a stated period of time?
    • A. 

      Balance sheet

    • B. 

      Trading and Profit & Loss account

    • C. 

      Cash Flow statement

    • D. 

      Statement of retained earnings

  • 27. 
    The records that are kept for the individual asset, liability, equity, revenue, expense, and dividend components are known as:
    • A. 

      Accounts

    • B. 

      Vouchers

    • C. 

      Journals

    • D. 

      Statements

  • 28. 
    Revenue should be recognized or recorded when the goods are sold or services are rendered to the customer, this concept is known as:
    • A. 

      Consistency concept

    • B. 

      Realization Concept

    • C. 

      Materiality concept

    • D. 

      Matching concept

  • 29. 
    Record maintained which is measurable in the form of money, this concept of accounting is known as:
    • A. 

      Matching concept

    • B. 

      Consistency concept

    • C. 

      Money measurement concept

    • D. 

      Materiality concept

  • 30. 
    The cost of goods and services used up in the process of obtaining revenue is known as:
    • A. 

      Revenue

    • B. 

      Expense

    • C. 

      Liability

    • D. 

      Expenditure

  • 31. 
    Which of the following is an accounting system in which events are recorded as and when they occur?
    • A. 

      Cash Accounting

    • B. 

      Accrual Accounting

    • C. 

      Both Accrual Accounting and Cash Accounting

    • D. 

      None of the above

  • 32. 
    Recording of all financial transactions undertaken by an individual or organization is known as:
    • A. 

      Summarizing

    • B. 

      Book-keeping

    • C. 

      Classification

    • D. 

      Interpreting

  • 33. 
    Any cheque drawn to creditor but not paid by bank will effect as follows:
    • A. 

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

    • B. 

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

    • C. 

      Cash book will show double balance

    • D. 

      Bank book will show double balance

  • 34. 
    If no distribution is made between capital and revenue expenditure then:
    • A. 

      The figure of debtors and creditors will be incorrect

    • B. 

      Cash or bank figure will be incorrect

    • C. 

      Net profit will be incorrect

    • D. 

      Balance sheet will not balance

  • 35. 
    The Policy for charging depreciation is selected by:
    • A. 

      Manufacturer

    • B. 

      Trader

    • C. 

      Management

    • D. 

      Accountant

  • 36. 
    The estimated value at which an asset is expected to be sold after the end of its useful life is called:
    • A. 

      Residual value

    • B. 

      Salvage Value

    • C. 

      Scrap Value

    • D. 

      All of the given options

  • 37. 
    Mr. “A” borrowed money from bank; this transaction involves which one of the following accounts:
    • A. 

      Cash & Mr. A

    • B. 

      Bank & Mr. A

    • C. 

      Drawing & Mr. A

    • D. 

      Cash & Bank

  • 38. 
    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?
    • A. 

      Net Loss of Rs. 1,000

    • B. 

      Net Income of Rs. 1,000

    • C. 

      Net Loss of Rs. 3,000

    • D. 

      Net Income of Rs. 3,000

  • 39. 
    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?
    • A. 

      Rs. 280,000

    • B. 

      Rs. 520,000

    • C. 

      Rs. 400,000

    • D. 

      Rs. 120,000

  • 40. 
    Which one of the following statement is wrong about Current liabilities?
    • A. 

      These are due within one year

    • B. 

      These are short-term loans

    • C. 

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

    • D. 

      In working capital, these are deducted from assets

  • 41. 
    Calculate depreciation of the asset for five years by using written down value method. Also show accumulated depreciation.   Cost of the asset Rs. 1,20,000 Depreciation Rate 10% Expected Life 5 years