MGT-101 NO 3

1. An Asset that is NOT physical in nature is called _________.

Intangible Asset

Liquid Asset

Current Asset

Fixed Asset

2. Word “Credit” is derived from ______ language.

Latin

English

French

Chinese

3. The stock of manufacturing concern consists of:

Work in Process Inventory

Raw Materials Inventory

Finished Goods Inventory

All of the given options

4. 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

5. Gross Profit > Operating Expenses=?

Net Profit

Cost of Goods Sold

Net Loss

Gross Loss

6. Following are the inventories of Manufacturing Concern EXCEPT:

Raw material

Work in process

Finished goods

Merchandise inventory

7. 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

8. The products that are ready for sale are known as:

Raw material

Work in process

Finished goods

Closing stock

9. 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

10. We can say that the business is in profit, when:

Assets exceed Expenditure

Assets exceed Liabilities

Income exceeds Expenditure

Income exceeds Liabilities

11. Which of the following is CORRECT about the flow of recording a transaction?

Occurrence of event – voucher—Journal—Ledger—Trial Balance—profit and loss account—Balance Sheet

Occurrence of event—Journal – voucher —Ledger—Trial Balance—profit and loss account—Balance Sheet

Occurrence of event—Ledger – voucher—Journal—Trial Balance—profit and loss account—Balance Sheet

Occurrence of event—Trial Balance – voucher—Journal—Ledger—profit and loss account—Balance Sheet

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

Profit

Loss

Surplus

Deficit

13. The favorable balance of Profit and Loss account should be:

Added in liabilities

Subtracted from current assets

Subtracted from liabilities

Added in capital

14. Accrued expenses are the example of:

Current liabilities

Long term liabilities

Deferred costs

Capital expenses

15. Which of the following particular is NOT included in the specimen of a payment voucher?

Name of organization

Cash payment amount

Date of transaction

Bank receipt

16. 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

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

Deferred expense

Capital expense

Revenue expense

Preliminary expense

18. According to the double entry system of accounting, an account that obtains benefit is:

Debit

Credit

Income

No need to show as accounting record

19. Bank book is part of:

Voucher

General Journal

General Ledger

Trial Balance

20. 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

21. In an account, if credit side < debit side then the balance is known as:

Negative Balance

Debit Balance

Positive Balance

Credit Balance

22. 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

MGT-101 No 3