FINALTERM EXAMINATION
MGT101- Financial Accounting (Session - 3)
Question No: 1 ( M a r k s: 1 ) http://vuzs.net
Debenture is also named as:
► Share
► Bond
► Equity
► Reserve
Question No: 2 ( M a r k s: 1 ) http://vuzs.net
In which situation(s) Partnership is dissolved?
► In case of death of partner
► At the admission of new partner
► If any partner resigned from partnership
► All of the given options
Question No: 3 ( M a r k s: 1 ) http://vuzs.net
Particulars | Rs. |
Debentures | 1, 50, 000 |
Equity Capital | 2, 00,000 |
General Reserve | 90, 000 |
Accumulated profit | 60,000 |
What is debt equity ratio | ? |
► 15: 20 (or 3:4)
► 15:24 (or 5: 8)
► 15:29
► 15:35 (or 3: 7)
Question No: 4 ( M a r k s: 1 ) http://vuzs.net
Particulars | Rs. |
Share capital of Rs. 10 each | 1,000,000 |
Profit before tax | 150,000 |
Taxes | 10,000 |
Earning per share | = ? |
► Rs. 1.50 per share
► Rs. 1.40 per share
► Rs. 1.15 per share
► Rs. 1.25 per share
Question No: 5 ( M a r k s: 1 ) http://vuzs.net
In calculating earning per share (EPS), the net profit is divided by which of the following?
► Number of ordinary shares
► Number of preference shares
► Paid up capital
► Authorized capital
Question No: 6 ( M a r k s: 1 ) http://vuzs.net
Which of the following statement in NOT TRUE about the limited company form of business?
► The limited company form of business allows ownership of the business to be spread amongst many people
► Shareholders can appoint professionals
► Shareholders are personally liable for all the liabilities incurred by the business
► Regular filing of information about the affairs of the company is a legal requirement
Question No: 7 ( M a r k s: 1 ) http://vuzs.net
Which of the following is the most important document of the company?
► Memorandum of Association
► Articles of Association
► Prospectus
► Annual Report
Question No: 8 ( M a r k s: 1 ) http://vuzs.net
In which of the following interim dividend is treated?
► In profit and Loss account
► In profit and Loss appropriation account
► On the asset side of the Balance Sheet
► In trading account
Question No: 9 ( M a r k s: 1 ) http://vuzs.net
The income statement of the Limited company is also known as:
► Manufacturing account
► Profit and Loss account
► Profit and Loss Appropriation account
► Current Account
Question No: 10 ( M a r k s: 1 ) http://vuzs.net
In which of the following auditor’s remuneration payable is shown?
► In balance sheet under the head of current liabilities only
► In balance sheet under the head of current assets only
► In income statement under the administrative expense only
► In both balance sheet under the head of current liabilities and income statement under the administrative expense
Question No: 11 ( M a r k s: 1 ) http://vuzs.net
Preliminary Expenses of the company may write off against:
► Share premium account
► Share holder account
► Debtors control account
► Creditor control account
Question No: 12 ( M a r k s: 1 ) http://vuzs.net
The amount received; in excess of the face value of the shares is transferred to which of the following?
► Share premium account
► Share holder account
► Share capital account
► Right share
Question No: 13 ( M a r k s: 1 ) http://vuzs.net
The maximum amount with which the company is registered is called:
► Authorized Share Capital
► Issued Share Capital
► Paid up capital
► Called up capital
Question No: 14 ( M a r k s: 1 ) http://vuzs.net
When the capitals are fixed, which of the following account will be debited for drawings made by a partner?
► Individual Partner’s Current Account
► Partner’s Cash Account
► Partner’s Bank Account
► Partners Capital Account
Question No: 15 ( M a r k s: 1 ) http://vuzs.net
Which of the following is(are) type(s) of capital account in partnership?
► Fixed Capital
► Current Capital
► Fluctuating Capital
► Both Fixed Capital and Fluctuating Capital
Question No: 16 ( M a r k s: 1 ) http://vuzs.net
Current accounts of the partners should be opened when the capitals are:
► Normal
► Floating
► Fixed
► Fluctuating
Question No: 17 ( M a r k s: 1 ) http://vuzs.net
Identify the selling expenses of manufacturing concern with the help of given data.
Particulars | Rs. |
Salesman’s salary | 70,000 |
Commission on sales | 28,000 |
Carriage outward | 10,000 |
Carriage inward | 5,000 |
► Rs. 80,000
► Rs. 60,000
► Rs. 38,000
► Rs. 1, 08,000
Question No: 18 ( M a r k s: 1 ) http://vuzs.net
Fixed Assets (WDV) + Working Capital =?
► Total assets employed
► Total liabilities
► Total assets
► Current assets
Question No: 19 ( M a r k s: 1 ) http://vuzs.net
Which of the following is CORRECT if depreciation is given in trial balance?
► It means depreciation has already been deducted from concerned asset account
► It will be shown as an expense in income statement only
► It will not be deducted from concerned asset in Balance Sheet
► All of the given options are correct
Question No: 20 ( M a r k s: 1 ) http://vuzs.net
Which of the following journal entry will be recorded, if cash is drawn by a Proprietor?
► Proprietor’s drawings a/c (Dr.) and Cash a/c (Cr.)
► Cash a/c (Dr.) and Proprietor’s drawings a/c (Cr.)
► Proprietor’s Capital (Dr.) and Proprietor’s drawings a/c (Cr.)
► Proprietor’s drawings (Dr.) and Proprietor’s Capital a/c (Cr.)
Question No: 21 ( M a r k s: 1 ) http://vuzs.net
Which financial statement show what a business owes at a particular point in time?
► A cash flow statement
► The bank statement for the business
► A balance sheet
► A statement of retained earnings
Question No: 22 ( M a r k s: 1 ) http://vuzs.net
Which of the following is a selling expense?
► Any tax/freight is paid on purchases
► General salaries paid to laborers
► Tax & freight paid on sale
► Interest on deposits
Question No: 23 ( M a r k s: 1 ) http://vuzs.net
Which of the following would NOT be considered as a component of 'cost' of stock?
► Salaries of selling staff
► Transportation inward costs
► Import duties
► Purchase price
Question No: 24 ( M a r k s: 1 ) http://vuzs.net
Which of the following accounts would be increased with a debit?
► Contributed Capital
► Retained Earnings
► Revenues
► Expenses
Question No: 25 ( M a r k s: 1 ) http://vuzs.net
Consider the following data and identify the amount which will be shown in profit & loss account.
Particulars | Rs. |
Bad debts | 1,600 |
Provision for doubtful debts (old) | 2,000 |
Current year’s provision (new) | 1,000 |
► Rs. 600
► Rs. 1,600
► Rs. 2,000
► Rs. 2,600
Question No: 26 ( M a r k s: 1 ) http://vuzs.net
Which of the following account will be credited when a typewriter is sold that has been used in the office?
► Cash Account
► Sales Account
► Purchase Account
► Office Equipment Account
Question No: 27 ( M a r k s: 1 ) http://vuzs.net
A sum of Rs. 200 written off as bad debt now received credited to the account of debtor would:
► Increase the net profit by Rs.200
► Decrease the profit by Rs.200
► Remains constant and no effect on net profit
► There is no relation between debtor and profit
Question No: 28 ( M a r k s: 1 ) http://vuzs.net
Which of the following account(s) will be affected, while rectifying the error of sales to Rahim of Rs. 500 were omitted to record in books of accounts?
► Sales account
► Rahim’s account
► Cash account
► Both sales and Rahim’s Account
Question No: 29 ( M a r k s: 1 ) http://vuzs.net
If the provision for doubtful debts is not created, which of the following entry is passed to record the bad debts in control account?
► Bade debts (Dr) and Debtors Control A/c (Cr)
► Allowance for doubtful debts (Dr) and Debtors Control A/c (Cr)
► Allowance for doubtful debts (Dr) and Debtors A/c (Cr)
► Debtors Control A/c (Dr) and Allowance for doubtful debts (Cr)
Question No: 30 ( M a r k s: 1 ) http://vuzs.net
If Bad Debts written off are given in adjustment, then which of the following entry for bad debts written off is CORRECT?
► Bad debts a/c (Dr) and Trading a/c (Cr)
► Provision for Bad and Doubtful debts a/c (Dr) and Bad debts a/c(Cr)
► Bad debts a/c (Dr) and debtors a/c (Cr)
► Trading a/c (Dr) and Bad debts a/c (Cr)
Question No: 31 ( M a r k s: 1 ) http://vuzs.net
Following information are extracted from books of Mr. XYZ
Particulars | Rs. | |
Bad Debts (Given in trial balance) | 500 | |
Old provisions (Given in trial balance) | 800 | |
Sundry Debtors (Given in trial balance) | 44,500 | |
Provision for doubtful debts @ 5% | ||
What will be the amount of new provision | ? | |
► Rs. 2,225
► Rs. 2,525
► Rs. 1,925
► Rs. 3,025
Question No: 32 ( M a r k s: 1 ) http://vuzs.net
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 5% | |
Requirement: Identify the Total amount which will deduct from Sundry debtors.
► Rs. 460
► Rs. 2,400
► Rs. 1,540
► Rs. 3,940
Question No: 33 ( M a r k s: 1 ) http://vuzs.net
It is supposed that on 31st December, 2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 5 % of the sundry debtors are doubtful. Actual bad debts are Rs. 1600. What amount of new provision for doubtful debts will be credited in profit & loss account.
► Rs. 3,600
► Rs. 2,000
► Rs. 1,600
► Rs. 400
Question No: 34 ( M a r k s: 1 ) http://vuzs.net
Which of the following option is TRUE about the characteristic(s) of Bad Debt?
► It is a definite loss to the business
► It is not shown in Balance Sheet
► No provision is necessary for it
► All of the given options
Question No: 35 ( M a r k s: 1 ) http://vuzs.net
A debit balance in the Bank Statement indicates:
► Cash at bank
► Bank overdraft
► Overpayment to creditors
► Cash in hand
Question No: 36 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 37 ( M a r k s: 1 ) http://vuzs.net
Depreciable value of an asset is equal to:
► Cost + scrap value
► Cost + market price
► Cost – scrap value
► None of the given options
Question No: 38 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 39 ( M a r k s: 1 ) http://vuzs.net
Which of the following asset is NOT depreciated?
► Factory Buildings
► Office Equipment
► Plant & Machinery
► Land
Question No: 40 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 41 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 42 ( M a r k s: 1 ) http://vuzs.net
Expenditures incurred anually on renewal of patent are known as:
► Revenue Expenditures
► Capital Expenditures
► Financial Expenditures
► Operating Expenditures
Question No: 43 ( M a r k s: 1 ) http://vuzs.net
Which of the following is NOT a type of voucher?
► Journal Voucher
► Receipt Voucher
► Payment Voucher
► Drawings Voucher
Question No: 44 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 45 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 46 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 47 ( M a r k s: 1 ) http://vuzs.net
Accounts Receivable & Inventory are the examples of:
► Liquid assets
► Current assets
► Fixed assets
► Capital assets
Question No: 48 ( M a r k s: 1 ) http://vuzs.net
A summarized record of transactions related to individuals or things is called a/an ___________.
► Account
► Voucher
► Journal
► Trial balance
Question No: 49 ( M a r k s: 1 ) http://vuzs.net
When Capital is increased by an amount, it is recorded on the:
► Left or credit side of the account
► Right or debit side of the account
► Left or debit side of the account
► Right or credit side of the account
Question No: 50 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 51 ( M a r k s: 5 )
Calculate net income with the help of given date for the year end of 2007 and show complete working of Cost of Goods sold.
Raw material Stocks on 1-1-2007 | Rs. 30,000 |
Work in process on 1-1-2007 | 35,600 |
Finished Goods on 1-1-2007 | 35,400 |
Raw material Stocks 31-12-2007 | Rs. 31,000 |
Work in process 31-12-2007 | 25,000 |
Finished Goods 31-12-2007 | 53,900 |
Total factory Cost | 543,339 |
Additional data
v Other expenses for the year is Rs. 5,000.
v Operating expenses for the year Rs. 15,000
v Sale for the year Rs. 1,500,000
Solution:
Name of the Company
Income Statement
For the period of 2007
Particulars | Amount Rs | Amount Rs | ||
Sales Less Cost of Good Sold Gross Profit Less: Expenses: Other Expenses Operating expenses Net Income | 5000 15000 | 1500000 (534439)
(20000)
|
Working:
Calculate Cost of Good Sold:
Raw Material:
Opening Raw Material: 30000
- Closing Raw Material: 31000
Cost of Material Consumed: -1000
Conversion Cost:
Direct Labor: 0
FOH: 0
Total Factory Cost: 542339
Work in Process:
+Opening WIP: 35600
-Closing WIP: 25000
Cost of Goods Manufactured: 552939
Finish Goods:
+Opening FG: 35400
-Closing FG: 53900
Cost of Good Sold: 534439
Question No: 52 ( M a r k s: 10 )
Write down the at least ten distinguishing features of a limited company which differentiate it from sole proprietor business
Question No: 53 ( M a r k s: 10 )
On 01-01-2007, the provision for doubtful debts a/c stood at Rs. 12,000 (credit balance). In 2007, the bad debts amounted to Rs. 10,000. The debtors on 31-12-2007 are amounted to Rs. 3, 20,000 and a provision for doubtful debt to be maintained @ 10%.
Required:
Show Journal entries and necessary accounts. Also show how the items will appear in Profit and Loss account and Balance sheet
Solution:
Entry#1
Provision for Doubtful Debts 32000
Debtors Control Account 32000
Make Ledgers of each account
Debtors Account | |||||||
Debit Side | Credit Side | ||||||
Date | No. | Particulars | Dr. Rs. | Date | No. | Particulars | Cr. Rs. |
Balance | 32000 | Provision for doubtful debts | 32000 | ||||
32000 | 32000 | ||||||
Provision of Doubtful debts | |||||||
Debit Side | Credit Side | ||||||
Date | No. | Particulars | Dr. Rs. | Date | No. | Particulars | Cr. Rs. |
Debtors Account | 32000 | Balance | 32000 | ||||
32000 | 32000 | ||||||
And you people already know to show these accounts in P n L and Balance Sheet.
IN PL Account = 32000+10000-12000=30000 on Debit Side
In Balance Sheet
Debtors = 320000-32000-12000-276000
Question No: 54 ( M a r k s: 10 )
Following information is extracted from the books of Arfan Ltd as on December 31st, 2007.
Particulars | Cost | Depreciation rate | Accumulated Depreciation On 01-01-2007 |
Vehicles 01-01-2007 | 1,90,000 | 10% | 10,000 |
Building 01-01-2007 | 4,00,000 | 20% | 12,500 |
Furniture & Fixture 01-01-2007 | 4,15,000 | 15% | 34,500 |
Land 01-01-2007 | 1,58,000 | -- | --- |
You are required to calculate Written down value of each asset and show working of complete depreciation for the year ending on December 2007.
Particulars | Cost | Rate | Accumulated Depreciation | WDV | ||||||
|
| |||||||||
Vehicles |
| 10% |
| 161000 | ||||||
Building |
| 20% |
| 307500 | ||||||
Furniture |
| 15% |
| 318250 | ||||||
Land |
| 0 |
| 158000 | ||||||
Total |
|
| 944750 |
