TEST PAPER 2 FUNDAMENTALS OF ACCOUNTING … Course Mock Test 2 and 3.pdfTEST PAPER – 2 FUNDAMENTALS OF ACCOUNTING Marks: ... Cost of machine is 20,000 and depreciation is charged

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TEST PAPER – 2

FUNDAMENTALS OF ACCOUNTING Marks: 60 Time: 1 Hour

[1] The value of inventory as on Apr 4 is Rs.1,60,000. The following transactions takes

place during Apr 1 to Apr 4. The value of stock sold is Rs.40,000. The mode of sale is as

follows:-

i) The damaged goods are sold for Rs.15,000, Sold at 25% below cost.

ii) The remaining goods are sold at cost plus 25%.

The value of stock as on 31st March is (Damaged goods valued at NRV) ______

a) Rs.2,00,000 b) Rs.1,95,000 c) Rs.2,05,000 d) Rs. 1,80,000

[2] The manager earned a commission of Rs.25,000, which is based on 10% of Net Profit. Sales is

Rs.3,50,000 more than purchases. No opening & closing stock. Find Indirect expenses

a) Rs.75,000 b) Rs.1,00,000 c) Rs.2,50,000 d) Can't calculate

[3] In which of these stages, assets are grouped as "Current" and "Non Current"

(a) Analysing

(b) Recording

(c) Classifying

(d) Interpretation

[4] Actual Cost or Market price whichever is less, is the generally accepted accounting principle

for the valuation of ____

(a) Fixed assets

(b) Current assets

(c) All assets

(d) Stock in trade

[5] Which concept holds that a transaction is to be recorded at the time it takes place & not when

the settlement takes place?

(a) Verifiable objective Concept

(b) Matching Concept

(c) Accrual Concept

(d) Revenue recognition concept

[6] The following are the advantages of Accounting Standards (AS) except:

(a) AS cannot override the statute

(b) AS reduces to a reasonable extent, confusing variations in the accounting treatments

(c) AS calls for disclosure beyond those required by law

(d) AS facilitates comparison of financial statements of companies

[7] Bill at Sight means

(a) No time for payment is mentioned in the bill

(b) The payment is to be made on demand at any time

(c) The payment is made after a particular time

(d) Both (a) and (b)

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[8] Consistency with reference to application of accounting procedures means

a) All companies in the same Industry should use identical accounting procedures

b) Income & assets have not been overstated

c) Accounting methods & procedures shall be followed uniformly year after year

d) Any accounting method can be followed as per convenience

[9] The total of debit and credit side of Mr. Amar as on 31st March, 2014 was Rs. 20,000 and Rs.

10,000 respectively. The difference was transferred to suspense A/c. On 4th April 2014, it was

found that the total of sales book was carried forward as 5,000 instead of 4,000. The balance of

suspense A/c after rectification of this error will be -

(a) Rs. 11,000 (b) Rs. 10,000

(c) Rs. 9,000 (d) Rs. 12,000

[10] In purchase book _____ is/are recorded:

(a) Only credit purchase of asset

(b) Only credit purchase of goods

(c) Only credit purchase of furniture

(d) All of the above

[11] "Goods destroyed by fire". This will be recorded

(a) In sales book

(b) In purchase return book

(c) In Journal Proper

(d) In sales return book

[12] At the end of the accounting year, all nominal accounts of ledger books are:

(a) Balanced and transferred to cash flow statement

(b) Not balanced and not transferred to P&L A/c

(c) Not balanced and transferred to P&L A/c

(d) Balanced but not transferred to P&L A/c

[13] If old machine is purchased for 5,000 & 500 spent on its repairs, such repairs should be

debited to____

(a) Repairs A/c

(b) Machine A/c

(c) Both (a) & (b)

(d) Either (a) or (b)

[14] Out of the following, the example of error of principle is ___

(a) Omitted to record sales in sales book 500

(b) Under total of purchase book 100

(c) Purchase of furniture 1000 was recorded in Purchase A/c

(d) All of the above

[15] Bank Balance shown in trial balance is

(a) Balance as per pass book

(b) Balance as per bank column of cash book

(c) Balance as per purchase book

(d) Balance as per cash column of cash book

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[16] Overdraft Bank balance as shown by cash book is 6000. A cheque for 10,400 was deposited

to bank but omitted in cash book. In the pass book the amount is wrongly entered in the

withdrawal column. Overdraft balance as per pass book is

(a) 16,400

(b) 16,000

(c) 15,000

(d) 13,050

[17] An amount of Rs. 6,000 due from Anshul, which had been written off as a bad debt in a

previous year, was unexpectedly recovered and had been posted to his personal account. The

rectification entry is:

a) Anshul A/c Dr. Rs. 6,000

To suspense A/c Rs. 6,000

b) Suspense A/c Dr. Rs. 6,000

To bad debts Recovered A/c Rs. 6,000

c) No entry will be made as there was no error in the entry

d) Anshul A/c Dr. Rs. 6,000

To bad debts Recovered A/c Rs. 6,000

[18] Consider the following tabular date pertaining to a company for the month of March. The sales

of the company during the month will be:

Particulars Rs

Opening stock 1,000

Closing stock 13,000

Purchase less returns 85,000

Gross Profit margin (On Sales) 20%

(a) 1,03,750

(b) 1,13,750

(c) 91,250

(d) 1,23,750

[19] Cost of machine is 20,000 and depreciation is charged at 10% by WDV method. At the end of

second year machine is sold for 18,000. Profit/Loss on sale of machine will be:

(a) 4000 (profit)

(b) 1800 (Profit)

(c) 4000 (Loss)

(d) 3600 (Loss)

[20] Original cost = 61,000, salvage value = 1000, useful life = 6 years. Depreciation for 3rd

year

under sum of digits method will be:

(a) 11,428.57

(b) 12,020.67

(c) 11,610.98

(d) 7,241.60

[21] An inexperienced accountant prepared the following Trial Balance. Find the balance of

Suspense A/c

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Particulars Debit Credit

Prov for Bad Debts 450 -

Bank O/d 1600 -

Capital - 5200

Drawings 200 -

Discount allowed - 800

Opening Stock 2950 -

(a) 3,300 Dr (b) 3,300 Cr (c) 3,500 Dr (d) 3,500 Cr

[22] Purpose of preparing manufacturing account is _____

(a) to know cost of production

(b) to know cost of goods sold

(c) to know profit on sale of manufactured goods

(d) to know loss on sale of manufactured goods

[23] Which is a representative personal account?

(a) Prepaid expenses

(b) Outstanding expense

(c) Accrued income

(d) All of the above

[24] If opening capital is 20,000, interest on investment is 30,000, drawings is Rs 10,000 and net

profit is 10,000 the amount of closing capital is _____

(a) 50,000

(b) 60,000

(c) 20,000

(d) 30,000

[25] If sales is 1,00,000, operating expenses 10,000 & cost of goods sold is 40,000 the gross

profit is ____

(a) 60,000

(b) 50,000

(c) 70,000

(d) 40,000

[26] If cost of goods sold is 20,000 and profit is 33.33% on Sales, then find Selling Price of goods

(a) 30,000 (b) 40,000

(c) 32,000 (d) 31,000

[27] Find out the total of Trial Balance as at 31-12-2011 from the following Ledger balances -

Capital Rs. 40,000, Purchases Rs. 36,000, Discount Rs. 1,200, Carriage Inwards Rs. 8,700,

Carriage Outwards Rs. 2,300, Sales Rs. 60,000, Returns Inwards Rs. 300, Returns Outwards

Rs. 700, Rent and Taxes Rs. 1,200, Plant and Machinery Rs. 10,700, Stock on 1-1-2011 Rs.

15,500, Sundry Debtors Rs. 20,200; Sundry Creditors Rs. 12,000; Commission Rs. 1,800, Cash

in hand Rs. 100, Cash at Bank Rs. 10,100, Motor Cycle Rs. 4,600

(a) Rs. 1,12,700 (b) Rs. 1,10,900 (c) Rs. 1,15,800 (d) Rs. 1,13,700

[28] Calculate cost of production from the following:

Opening stock of raw material 10,000

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Opening stock of WIP 5,000

Purchase of raw material 1,00,000

Closing stock of raw materials 10,000

Wages 5,000

Salary 3,000

(a) 1,20,000 (b) 1,30,000

(c) 1,10,000 (d) 1,00,000

[29] The beginning inventory of current year is overcast by 5,000 and closing inventory is

overcast by 12,000. Profit for the year will be ___

(a) 7,000 undercasted (b) 7,000 overcasted

(c) 17,000 undercasted (d) 17,000 overcasted

[30] Assets appearing in the book having no real value are known as:

(a) All of the under

(b) Intangible asset

(c) Fictitious asset

(d) Current asset

[31] If del-credere commission is given, abnormal loss will be recorded by _____

(a) Consignor

(b) Consignee

(c) Creditor

(d) None of these

[32] X sends goods of 10,000 and spends 2,000 as expenses towards sending of goods. 3/5th of

the goods were sold by consignee for Rs 6,000. Consignee incurred Rs 1,000 as non-selling and

Rs 500 as selling expenses. Calculate the value of consignment stock.

(a) 7,800 (b) 5,200 (c) 5,000 (d) 7,500

[33] A sent goods worth 5000 and spends 3,000 as expenses on sending. 1/5th of the goods were

destroyed in transit. Consignee incurred Rs 2,000 to transport the goods to his godown.

Calculate the value of abnormal loss.

(a) 1,000

(b) 600

(c) 1,600

(d) 2,000

[34] Dipesh sent out 100 boxes to Durg costing 200 each. Consignor’s expenses 4000 and

consignees expenses (non selling) 900 and selling expenses 500. 1/10th of the boxes were

lost in transit 2/3rd

of the boxes received were sold. Calculate the value of consignment stock.

(a) 7,000

(b) 7,500

(c) 8,000

(d) 8,500

[35] In which of the following situations is Stock Reserve created?

(a) When reserve is created for abnormal loss

(b) When some stock is kept reserved with consignor

(c) When goods are invoiced above cost

(d) All of the above

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[36] A & B started trading business, they invested 1,00,000 & 2,00,000 respectively as capital.

They purchased 1000 kgs of wheat at 5 and incurred purchase expense of 1000. They sold

800 kgs of wheat at 7 and incurred selling expenses of 2000. Calculate the value of closing

stock.

(a) 1500

(b) 1200

(c) 1000

(d) 2000

[37] Manoj & Ravi are partners in a Joint Venture sharing profits & losses in the proportion of 3:2.

Manoj supplies goods to the value of 60,000 & incurs expenses amounting to 6000. Ravi

supplies goods to the value of 16,000 and his expenses amounted to 3000. Ravi sold goods

on behalf of Joint Venture for 1,20,000 and was entitled to the commission of 5% on sales.

Ravi settles his account. How much amount will be paid by Ravi to Manoj?

(a) 87,200

(b) 62,100

(c) 97,450

(d) 83,400

[38] Identify among the following concepts, which one Joint Venture accounting does not follow:

(a) Cost Concept

(b) Accrual Concept

(c) Going Concern Concept

(d) All of the above

[39] Match the list I with II and select the correct answer-

List I List II

A. Compensating errors 1.Not recording a business transaction

B. Errors of Omission 2. Charging a Revenue item to capital

C. Errors of principle 3. Writing a debit item on the credit side and a credit

item on the debit side of equal amount

D. Errors of commission 4. Posting a correct amount to a wrong account

A B C D A B C D

(a) 3 1 4 2 (b) 2 1 4 3

(c) 3 1 2 4 (d) 2 1 3 4

[40] Mr. Girish’s acceptance for 4,000 which was endorsed over by Gautam to Ganpat was

dishonoured. Ganpat paid 100 as noting charges. The entries in books of Gautam will be:

(a) Girish A/c (debit) & Ganpat A/c (Credit)

(b) Girish A/c & Noting Charges A/c (debit) Ganpat A/c (Credit)

(c) Girish A/c & Noting Charges A/c (debit) B/R A/c (Credit)

(d) Girish A/c (debit) & B/R A/c (Credit)

[41] The due dates of bill if date of bill is 12th May, 14 and period of the bill is 90 days is

(a) 14th August, 14

(b) 15th August, 14

(c) 16th August, 14

(d) 13th August, 14

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[42] Noting charges are borne by:

(a) Payee

(b) Drawer

(c) Drawee

(d) Bank

[43] Goods costing 2,000 were given away as sales on approval. Half goods were returned by

customer & half were accepted at 20% profit on cost price. Calculate the value of goods

accepted by customer.

(a) 1,000

(b) 1,200

(c) 1,000

(d) 2,000

[44] When a partner is given guarantee by the other partners, loss on such guarantee will be borne

by ___

(a) All partners (b) All other partners (c) Partnership firm (d) Can't say

[45] Find goodwill of the firm using capitalization method from the following information:

Total Capital employed 80,00,000 Reasonable Return 10%, Profit for the year 12,00,000.

(a) 40 lacs

(b) 42 lacs

(c) 50 lacs

(d) 35 lacs

[46] On 1st January, 07 a firm had assets of 7,50,000. Its B/P amounted to 10,500 on that day and

B/R amounted to Rs 20,000. The reserves amounted to 62,500. What is the amount of Capital

employed:

(a) 7,39,500

(b) 7,51,500

(c) 6,97,000

(d) 6,77,000

[47] P, Q and R share profits and losses in the ratio of 3:2:1. P retires. His share is taken by Q and R

in the ratio of 2:3. Calculate the new profit sharing ratio?

(a) 3:7

(b) 7:3

(c) 23:25

(d) 8:7

[48] Preference shares are:

(a) Shares which are equal to equity shares but only difference being in voting rights

(b) Shares having preference to receive capital before debenture holders

(c) Shares having preference to receive capital and dividend before equity share holders

(d) Shares having preference in voting, dividend and capital repayment

[49] The document inviting offers from public to subscribe for the debentures or shares or deposits

of the body corporate is known as

(a) Debenture Certificate

(b) Share certificate

(c) Prospectus

(d) Long-term certificate

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[50] B Ltd. issued 1,000 shares but application has been received for 1,500 shares. A shareholder

who has applied for 150 shares will receive _____ shares if allotment has been made on pro-

rata basis:

(a) 150 (b) 200 (c) 100 (d) 1,000

[51] Mahesh sold goods worth 40,000 at 5% trade discount. Later on half of the goods were

retuned. The amount to be entered in Sales Return Book is:

(a) 18,000

(b) 19,000

(c) 20,000

(d) None of these

[52] Cash discount is allowed to:

(a) make collection of cash faster

(b) minimize possibility of bad debts

(c) decrease profits

(d) Both (a) and (b)

[53] A company issued 10,000 shares of 10 each at premium of 10% payable as follows:

On application 2.50, on allotment 5, On first and final call 3.50. A holder of 50 shares did

not pay first call and his shares were forfeited. Share Capital A/c will be debited by:

(a) 325 (b) 425 (c) 500 (d) 900

[54] Goodwill on basis of 5 year’s purchase of super profit is 1,00,000 and average profit is

50,000 and normal rate of return is 10%. Capital employed =

(a) 3,00,000

(b) 4,00,000

(c) 5,00,000

(d) None of these

[55] Sohan and Mohan entered into joint venture sharing profits and losses equally. Sohan

purchased 5000 metres of cotton at 50 per metre. Mohan purchased 1000 metres of polyester

at 60 per metre. Mohan sold 1000 metres of polyester at 70 per metre and Sohan sold 5000

metres of cotton at 60 per metre. The profit on venture will be:

(a) 50,000 (b) 70,000 (c) 80,000 (d) 60,000

[56] A Company forfeited 100 equity shares of 100 each issued at premium of 50% (to be paid at

the time of allotment) on which first call money of 30 per share was not received and final

call of 20 was yet to be made. These shares are subsequently reissued at 70 per share at 80

paid-up. The amount credited to Capital Reserve is:

(a) 4,000

(b) 2,000

(c) 3,000

(d) None of these

[57] X Ltd. issued 2,000 8% debentures of Rs 10 each at par, which are redeemable after 5 years at

a premium of 20%. The amount of loss on redemption of debentures to be written off every

year is equal to

(a) 1,000 (b) 4,000 (c) 2,000 (d) 800

[58] Calculate amount due from consignee:

Cash Sales 50,000

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Credit Sales 1,00,000

Commission at 10% in the nature of del-credere. Consignee Expenses amounted to 35,000

(a) 1,00,000 (b) 1,20,000 (c) 1,50,000 (d) 1,35,000

[59] A draws a bill on B of 1,00,000 for 3 months. On due date B requested for renewal for 4

months including interest @ 12% p.a. Amount of new bill =

(a) 1,03,000

(b) 1,00,000

(c) 1,07,000

(d) 1,04,000

[60] X, Y and Z are sharing profits & losses in the ratio of 5:3:2. W.e.f. 1st April 2015, they decide

to share future profits & losses in the ratio of 2:3:5. They also decide to record the effect of

following revaluations without affecting the book values of the assets & liabilities, by passing a

single adjusting entry. The necessary single adjusting entry is –

Particulars Book Figure Rs. Revalued Figure Rs.

Land & Building 60,000 90,000

Plant & Machinery 90,000 84,000

Trade Creditors 30,000 27,000

Outstanding Expenses 27,000 36,000

(a) Y's Capital A/c Dr.

To X's Capital A/c

9,000

9,000

(b) X's Capital A/c Dr.

To Z's Capital A/c

9,000

9,000

(c) Z’s Capital A/c Dr.

To X's Capital A/c

9,000

9,000

(d) X's Capital A/c Dr.

To Y's Capital A/c

9,000

9,000

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TEST PAPER – 3

FUNDAMENTALS OF ACCOUNTING Marks: 60 Time: 50 mins

[1] Hari charges 10% depreciation on plant and machinery. On 1st April 2014 he debited Rs. 7,520

paid on installation of plant and machinery to profit and loss account. At the time of preparing

final accounts on 31st March, 2015, due to this error:

(a) Net profit will decrease by Rs. 6,768 (b) Net profit will decrease by Rs. 7,520

(c) Net profit will decrease by Rs. 8,272 (d) Net profit will increase by Rs. 6,768

[2] All of the following are functions of Accounting except:

(a) Decision making (b) Measurement

(c) Forecasting (d) Ledger posting

[3] The information provided in the annual financial statements of an enterprise pertain to:

(a) Business Industry (b) Economy

(c) Individual business entity (d) None of the these

[4] Which of the following is not a transaction ?

(a) Goods are purchased on cash basis for 1,000

(b) Salaries paid for the month of May, 2014

(c) Land is purchased for 10 lacs

(d) An employee dismissed from the job

[5] Which of the following represents the accounting equation, Assets = Liabilities + Owner’s

equity:

(a) Income statement (b) Statement of cash flows

(c) Balance sheet (d) None of these

[6] When Debentures are issued as collateral security, Interest is paid

a) On amount of loan

b) On amount of debentures

c) No Interest is paid

d) Can't say

[7] During the life time of an entity, accounts prepare financial statements at arbitrary points of

time as per:

(a) Prudence

(b) Consistency

(c) Periodicity

(d) Matching

[8] Ram earned a profit of Rs. 1,40,000 for the year 2014-15. But at the time of audit, the auditor

found that Ram purchased a scooter on 1.09.14 for Rs. 20,000 and charged it as revenue

expenses. The auditor advised him to rectify the error now and to charge depreciation @ 15%

on scooter. The correct profit after rectification will be:

a) Rs. 1,57,000 b) Rs. 1,60,000 c) Rs. 1,40,000 d) Rs. 1,58,250

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[9] Accounting standards are:

(a) Basis for selection of accounting policy

(b) Set of broad accounting policies to be followed by an entity

(c) Basis for establishing and managing an entity

(d) All of these

[10] The determination of the amount of bad debts is an accounting:

(a) Policy (b) Estimate

(c) Parameter (d) None of these

[11] Accounting is basically concerned with:

(a) Forecasting (b) Measurement

(c) Management (d) None of these

[12] Which of the following is True?

(a) The going concern assumption holds that a business organization will be viewed as

continuing in operation indefinitely

(b) The going concern assumption is significant in relation to fixed assets

(c) The going concern assumption treats certain expenses incurred for the future periods as

assets

(d) All of these

[13] Which of the following Accounting Standard is not having the correct title?

(a) AS-2 valuation of inventories

(b) AS-6 Depreciation

(c) AS-9 Revenue Recognition

(d) AS-29 Provisions, contingent Liabilities and Contingent Assets

[14] In case of disclosure of accounting policies, the following fundamental accounting assumptions

may not be required to be stated if they are followed in the preparation of final accounts of a

company.

(a) Materiality and definite accounting period ----- 1

(b) Going concern and Consistency ----- 2

(c) Accrual basis of accounting ----- 3

(d) Conservatism and definite accounting period ----- 4

Select the correct answer using the codes given below:

a) 2 and 3

b) 1 and 4

c) 1, 2 and 3

d) 1, 2, 3 and 4

[15] A cooperative store having a turnover of 10 Lakhs and profit of 50,000 purchased locks

costing 300 for use in the shop. The accountant charged in the P & L A/c of current year but

the auditor raised an objection saying that it should be capitalized . On which one of the

following conventions could the accountant be defended?

(a) Disclosure

(b) Materiality

(c) Conservatism

(d) Consistency

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[16] Notes forming part of accounts of companies invariably display significant Accounting

Policies.

1. As per the requirement of SEBI guidelines for disclosure and investor protection.

2. Because it is a mandatory requirement under the Companies Act, 2013

3. As required by AS-1- Disclosure of accounting policies, which is mandatory.

4. As it is required under the listing agreement with the stock exchanges.

Which of the above statements are correct?

(a) 1, 2 and 3

(b) 2 and 3

(c) 2, 3 and 4

(d) 1 and 4

[17] Non Trading Income is/are

(a) Interest received

(b) Dividend received

(c) Commission received

(d) All of these

[18] Richie Ltd. had 3,000, 12% Redeemable, preference shares of 100 each, fully paid up. The

company issued 25,000 equity shares of 10 each at par and 1,000 14% debentures of 100

each. All amounts were received in full. The amount to be transferred to Capital Redemption

Reserve Account is:

(a) Nil

(b) 2,00,000

(c) 40,000

(d) 50,000

[19] G Ltd., purchased land and building from V Ltd., for a book value of 2,00,000. The

consideration was paid by issue of 12% Debentures of 100 each at a discount of 20%. The

debentures account is credited with:

(a) 2,60,000

(b) 2,50,000

(c) 2,00,000

(d) 1,60,000

[20] A Ltd. forfeited 1000 equity shares of 10 each, issued at par, for non payment of first call of

2 and second call of 3 per share. For recording this forfeiture, calls in arrear account will be

credited by:

(a) 4,000

(b) 1,000

(c) 5,000

(d) 10,000

[21] Followings are the information related to Great Ltd:

i) Equity share capital paid up 2,85,000

ii) Call-in advance 10,000

iii) Call in arrears 15,000 and

iv) Proposed dividend 20%.

The amount of dividend payable by Great Ltd. will be:

(a) 57,000

(b) 56,000

(c) 60,000

(d) 54,000

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[22] Neha Eletric Co., of Lucknow sent on consignment 1,000 electric fans of 400 each to Neelam

of Chennai. They paid 3,000 for carriage and 27,000 for freight and insurance. 50 fans were

destroyed in transit and 700 fans were sold by the consignee. Out of unsold fans, 150 fans are

damaged and its repair charges are estimated at 5,000. Ascertain the value of closing stock.

(a) 1,00,000

(b) 1,07,500

(c) 1,12,500

(d) 1,07,000

[23] The dispatch of goods on consignment is a sale by the consignor:

(a) True

(b) Partly True

(c) False

(d) None

[24] On receipt of advance from consignee, in consignor's books which account should be credited?

(a) Consignee

(b) Cash/Book

(c) Bills receivable

(d) Consignment

[25] Given that the value of furniture on 1.1.2014 is 8,000, furniture purchased during the year is

4,000, sale of furniture on no loss no profit basis is 2,000 and the furniture valued at 7,000

on 31.12.2014, the depreciation for the year 2014 will be:

(a) 1,000

(b) 3,000

(c) 5,000

(d) 7,000

[26] On January 1, 2015 there was a balance of 4,000 in the plant & machinery account. An

addition of 2,000 was made on July 1, 2015. Accounts were closed for the year on December

31, 2015. If depreciation was charged at 10% per annum, the balance in the plant and

machinery account on the closing date would be:

(a) 5,300

(b) 5,400

(c) 5,500

(d) 5,600

[27] Given: The cost, salvage and useful life of an asset is 10,000, 1,000 and 3 years respectively.

Find the amount of depreciation for the first year according to the sum of year’s digits method:

(a) 4,500 (b) 5,000 (c) 3,000 (d) 3,333

[28] Depreciable amount refers to the difference between historical cost and the market value of an

asset:

(a) True

(b) Partly true

(c) False

(d) None

[29] In case of annuity method, the interest is ____ to the asset:

(a) Debited (b) Credited (c) Either debited or credited (d) None of the above

[30] A started business on 1st April, 2014 with a capital of 25,000 and a loan of 12,500. Total

Assets & Liabilities at the end of 31st March 2015 amounted to 75,000 and 12,500

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respectively. He invested a further capital of 25,000 during the year and withdrew 7,500

during the relevant financial year. His closing capital and profit would respectively be

(a) 62,500 and 20,000

(b) 50,000 and 40,000

(c) 70,000 and 47,500

(d) 55,000 and 42,500

[31] Cost of goods sold 13,300; Gross profit 3,200; Net profit 700. What is the amount of sales

(a) 14,000

(b) 10,100

(c) 16,500

(d) 17,200

[32] What is the amount of Closing stock when Opening stock = 4,500 Purchases = 60,000;

Cost of goods sold = 54,000

(a) NIL

(b) 19,000

(c) 9,000

(d) 10,500

[33] Patterns and dies are the example of ________ assets

(a) Tangible

(b) Intangible

(c) Fictitious

(d) None

[34] Expenses are the outflow of assets or ________ in liabilities necessary to produce and distribute

goods and services:

(a) Increase

(b) Constant

(c) Decrease

(d) No effect

[35] ________ Assets would denote those that are very easily convertible into cash:

(a) Fixed

(b) Liquid

(c) Floating

(d) Current

[36] Expenditure on packing of goods which is require for the promotion of sales, is debited to:

(a) Trading Account

(b) Profit and Loss account

(c) Profit and Loss appropriation account

(d) Purchases account

[37] Specific identification method is best suited for enterprises dealing in few items of high cost.

(a) True

(b) Partly true

(c) False

(d) Partly False

[38] The cost of conversion of inventories include:

(a) Costs directly related to the units of production

(b) Systematic allocation of fixed and variable production overheads

(c) Selling and distribution costs

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(d) Both (a) and (b)

[39] Which of the following is not a selling and distribution expenses?

(a) Cost of running distribution van

(b) Salary of salesman

(c) Expenses of administration department

(d) None

[40] “Subscription collected in advance by a publisher” should be classified as:

(a) Accrued asset

(b) Outstanding liability

(c) Unearned income

(d) Prepaid expense

[41] Purchase of a car at a price of 15,000. Terms 3,000 in cash and the balance in 12 equal

installments. This results in:

(a) Increase in total assets

(b) Decrease in total assets

(c) No change in total assets

(d) Decrease in Liability

[42] If total sales during the year are 1,00,000; Cash sales 20,000 and outstanding debtors at end

of year 30,000, then Cash received from debtors during the year will be:

(a) 70,000

(b) 50,000

(c) 1,10,000

(d) 90,000

[43] A, B and C are partners sharing profits and losses in the ratio of 5:4:3. C retires and if A and B

share profits of C in the ratio 4:3, the new profit sharing ratio will be:

(a) 5:4

(b) 4:3

(c) 5:3

(d) 47:37

[44] Goods purchased for 2,00,000 were sold for 1,60,000. Margin 20% on sales. Closing stock

is

(a) 32,000 (b) 72,000 (c) 50,000 (d) None

[45] On April 1, 2006 Gargi invested capital of 60,000. She withdrew 5,000 on the first day of

each month. Interest on drawing is provided @ 20% p.a. The amount of interest on drawings

deducted from capital will be

(a) 6,000

(b) 12,000

(c) 6,500

(d) 1,000

[46] Rohit’s acceptance to Sumit for 15,000 was renewed at 6 months on the condition that

10,000 be paid in cash immediately and a new bill of 6 months will be drawn for the

remaining amount which will carry interest @ 10% p.a. Interest =

(a) 100

(b) 150

(c) 250

(d) 200

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[47] The unexpired portion of capital expenditure is

(a) An asset

(b) A liability

(c) An income

(d) An expense

[48] Goodwill is to be calculated at 1.5 years of purchase of average profit of last six years. Profit

earned during the first 3 years is 30,000, 20,000 and 20,000 and losses suffered of 5,000,

3,000 and 2,000 in the last 3 years. Goodwill be:

(a) 10,000

(b) 15,000

(c) 20,000

(d) 25,000

[49] Arjun purchased goods for 10,00,000 and sold 70% of the goods during the year ended 31st

December, 13. Market value of remaining goods was 2,00,000. He valued the closing stock at

the buying cost. He violates the concept of

(a) Periodically

(b) Money measurement

(c) Conservatism

(d) Cost

[50] There must be a gap of at least _____ month between two calls.

(a) 3 (b) 6 (c) 1 (d) 2

[51] Ram of Mumbai sends out certain goods at cost plus 25%. Invoice value of goods sent out is

20,000. 4/5th of the goods were sold by consignee at 17,600. Commission 2% upto invoice

value and 10% for the excess. Commission amount will be

(a) 320

(b) 400

(c) 520

(d) 480

[52] Bank O.D as per cash book 15,000, Cheques deposited not cleared 4,000, Cheques issued

but not cashed 6,000. Balance as per bank statement will be

(a) 13,000 (debit)

(b) 17,000 (credit)

(c) 13,000 (credit)

(d) 17,000 (debit)

[53] General Manager gets 10% commission on net profit after charging such commission. Gross

profit 70,000 and general expenses other than Manager Commission are 12,000.

Commission will be

(a) 5272.72

(b) 5,800

(c) 6072.72

(d) 5172.72

[54] X & Y entered into a J.V. X provides goods from his stock 20,000. He pays expenses

amounting to 20,000 to Z. Y incurs further expenses on carriage 3,000. He received cash for

sales 35,000. He also takes over goods to the value of 5,000. Y discounted the acceptance of

X of 5,000. The amount of remittance is:

(a) 38,500

(b) 43,500

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(c) 45,000

(d) 40,000

[55] Arti places an order to Anju for supply of certain goods yet to be manufactured. On receipt of

order, Anju purchases raw materials, employs workers, produced the goods and delivers them

to Arti. In this case sale will be presumed to have been made at the time of :

(a) Production of goods

(b) Delivery of goods

(c) Purchase of materials

(d) None

[56] A machinery has a WDV of 3,37,500 as on 1.1.08. It was purchased on 1.1.05. Depreciation

has been charged @ 25% per annum on WDV basis. Historical Cost of the machine is:

(a) 8,00,000

(b) 5,90,625

(c) 6,00,00

(d) 9,00,000

[57] Ankit, Anu and Anurag are partners sharing profits in the ratio of 4:3:2. On Retirement of Anu,

goodwill was valued at 90,000. Contribution of Ankit & Anurag to compensate Anu will be

(a) 20,000 & 10,000

(b) 10,000 & 20,000

(c) 15,000 & 15,000

(d) 10,800 & 18,200

[58] If average stock is 20,000 and Closing stock is 4,000 less than opening stock, then value of

closing stock will be:

(a) 16,000 (b) 18,000

(c) 20,000 (d) 22,000

[59] Sohan runs a Mega Mall. He renovates his shops to increase the space. An amount of 75,000

was incurred on renovation. Repairs & white wash also done in the existing space for 10,000.

Amount not to be charged to Profit & Loss will be:

(a) 75,000 (b) 10,000

(c) Nil (d) 85,000

[60] Ram of Rome sends out goods costing 1,00,000 to Amir of Australia. 3/5th of the goods were

sold by consignee for 70,000. Commission 2% on sales plus 20% of gross sales less all

commission as exceeds cost price. The amount of commission will be

(a) 2,900

(b) 3,333

(c) 2,833

(d) 2,800