MGT501 Mega Collection of MCQs Lecture wise

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Lecture 1

In accounting or business terms, any dealing between two persons involving money or a valuable
Barganing
Transaction
Exchange
Barter

Question

What is a Budget?
Plan of income
Plan of expenses
Plan of other financial operation
all of the given

Question

Trading one commodity or service for another commodity or service is called
Barter trading
Trading
Transactions
Exchange

Question

Which are type of Business Organizations?
Sole Proprietorship
Partnership
Joint Stock Company
all of above

Question

The simplest form of business organization, which is owned and controlled by one man is
Sole Proprietorship
Partnership
Legal Entity
Easy Dissolution

Question

Which is not feature of partnership
Ownership
Profit and Loss Distribution
Unlimited Liability
Transfer of Rights

Question

A company is an incorporated association of persons formed usually for the pursuit of some com
Partnership
Sole Proprietorship
Joint Stock Company
All of the given

Question

Which is feature of Joint Stock Company
Management
Unlimited Liability
Profit and Loss Distribution
Separate Legal Entity

Question

The maintenance of daily record of all financial transactions in such a manner that it would help
Book keeping
Financial accounting
Daily record
none of the above

Question

Budget is a plan of income, expenses & other financial operation for a future period.
True
False

Lecture 2

Question

Any event or item that cannot be translated in terms of money ———— in books of accounts.
is recorded
is not recorded
is recorded or not recorded

Question

Which is Commercial Organizations (Profit Oriented)
Sole proprietor
Trusts
Societies
NGO’s

Question

Which one of the following is Non-Commercial Organizations
Societies
Partnership
Limited companies
Sole proprietor

Question

Problems faced in maintaining Diary of Transactions
How will we come to know the income and expenses from various sources?
We know which product is selling better and which is not.
large data
goods sold on creditb

Question

Commercial Accounting is done through a system that is known as ——————–.
Single entry book keeping
Double entry book keeping
Both A & B

None of the given

Question

This system records only cash movement of transactions and that too up to the extent of recordin
transactions is——–
Cash accounting.
Single entry accounting
Double entry book keeping
A & B

Question

Whatever money or resources from ones’ own pocket are put in a business is referred to as——– Gain
Profit
Cpaital
Drawings

Question

———— is like a backbone of any business
Profit
Creditors
Capital/investment
Debts

Question

The main objective of a any business to earn ————-
maximum profit
minimum profit
decrease in creditors
selling goods

Question

The good reputation also has a value and becomes part of investment in business is ————– Goodwill
Resources
incone
none of above

Question

NGO’s TrustsSocieties are the example of ———-
Commercial Organizations
Non-Commercial Organizations
Goodwill
none of above

Question

Which accounting system records both aspects of transaction i.e. receipt or payment and source o
Double entry book keeping
Single entry book keeping
book keeping
A & B

Question

The system records only cash movement and that too up to the extent of recording one aspect of
Single entry accounting
Double entry book keeping/
Dairy record
Commercial accounting.

Question

The time of the proprietor or business persons spent on the business is also a business cost and m
business in addition to the profit
True
False

Question

Is Cash in Hand our Profit?
Yes
No

Lecture 3

Question

Which is the correct quation for calculation of profit
Cash Sale-Cash Payment + (Credit Sale+Credit Expense)
Cash Sale-Cash Payment – (Credit Sale-Credit Expense)
Cash Sale-Cash Payment + (Credit Sale-Credit Expense)
Cash Sale+Cash Payment + (Credit Sale-Credit Expense)

Question

The accounting system in which events are recorded when actual cash / cheque is received or pai
Accounting
Cash Accounting
Accrual Accounting
Dairy accounting

Question

The accounting system in which events are recorded as and when they occur
Cash Accounting
Accrual Accounting
Cash Accounting and Accrual Accounting
Diary Accounting

Question

The value of goods or services that a business charges from its customers
Cash
Account receivable
Income
Profit

Question

The costs incurred to earn revenue
Investment
Expenses
Liability
none of above

Question

The amount by which the income exceeds expenses in a specific time period.
Profit
Net Profit
Profit or Net Profit
Loss

Question

The formula for calculating net profit is
Net Profit = Income + Expenses
Net Profit =Expenses + income
Net Profit =Expenses – income
Net Profit = Income – Expenses

Question

Calculate net income Expenses 1200 sales 10000 Purchases 8000
10000
2000
800
8000

Question

Calculate net income Purchases 150000 Expenses 55000 Sales 200000
5000
145000
50000
(5000)

Question

The two main classes of expenses are —————
Capital and Revenue Expenses
Capital or Revenue Expenses
Capital and Revenue
none of above

Question

In accounting the expenses that provide benefit immediately are called
Capital Expenses
Revenue Expenses
Capital Expenses and Revenue Expenses
Revenue Expenses & Capital Expenses

Question

Those expenses whose benefit last for a longer period are called ——
Revenue Expenses
Both Capital and Revenue Expenses
Capital Expenses
none of them

Question

——————— are the debts and obligations of the business.
cash
Liabilities
creditor
all of above

Question

payment of utility bill is an example of ——
Capital and Revenue Expenses
Revenue Expenses
Capital Expenses
none of above

Question

cost of good will is a ———-
Capital and Revenue Expenses
Revenue Expenses
Capital Expenses
Capital or Revenue Expenses

Question

salaries of (last month) are not paid by the business
Liability

Capital and Revenue Expenses

Capital Expenses
furtre expenses

Lecture 3

Question

Teatment of the business independently from its owners is called the
independently business
separate business entity
business entity
none of them

Question

The accounting system that records both the aspects of transaction inbooks of accounts is called–

Single Entry Book-keeping
Double Entry Book-keeping
Single & Double Entry Book-keeping
all of above

Question

The account that receives the benefit is—–
Debit
Credit
cach
Debit and Credit

Question

the account that provides the benefit is
Debit
Debitor
Creditot
Credit

Question

Debit and Credit are two———- Words
English
French
Latin
none of above

Question

For every debit there is an equal credit.
Yes
No

Question

————– are the properties and possessions of the business.
Liabilities
Capital
Assets
all of above

Question

Assetcan be of ———– types
4
5
2
3

Question

Fixed Assets and Current Assets are the types of ——— assets
tangible
Intangible
both tangibleand Intangible

Question

Intangible Assets that have no physical existence
Yes
No

Lecture 5

Question

Right to receive money, Good will trade mark are the example of
Intangible Assets
tangible Assets
tangible and Intangible Assets
none of above

Question

Accounting Equation=
Assets = Capital – Liabilities
Assets = Capital + Liabilities
Assets =Liabilities – Capital
Assets – Capital + Liabilities

Question

Calculate Accounting equation from the following information Cash Rs.100,000 Building 50,000
Furniture 10,000 Vehicle 15,000 Creditor 75000
165000
175000
170000
180000

Question

Assets 14910 Capital 12710 What are the liabilities by using accounting equation
2200
2000
14910
3200

Question

Every debit has a
debit
debitor
Creditor
Credit

Question

The value of goods or services that a business charges from its customers
Income
profit
cash
all of above

Question

The excess of expenses over income in a specific period.
Profit
Profit & Loss
Loss
none of them

Question

Expenditure is the amount used during a particular period to acquire or improve long-term assets
equipment.
Capital Expenditure
Revenue Expenditure
Both Revenue and Capital Expenditure
none of them

Question

When an asset is created or purchased, value / benefit is transferred to that account, so it is—–
Credit
Debited
Creditor
Debit

Question

Increase in Asset is Debit
Yes
no

Question

Decrease in Asset is Credit
No
Yes

Question

Anything that transfers value to the business, and in turn creates a responsibility on part of the bu
Credit
Assets
Liability
Capital

Question

Increase in Liability is recorded on the
Debit
Credit
Debit or Credit
Debit and Credit

Question

When the business returns the benefit or repays the liability, the liability account benefits from th
Credit
Creditor
Debit
Debitor

Question

Decrease in Liability is
Debit
Debit & Credit
Debitor
Credit

Question

From Assetswe draw benefit for a —
Long time

Short time

only 1 year
During the accounting period

Lecture 6

Question

The benefit from expenses is
Long time
Short time
6 month
more then 2 year

Question

Increase in Expenditure is Debit recorded on the
Left side
Right Side
Both Left and Right Side
income

Question

Increase in Income is
Credit
Debit
Net income
income

Question

Decrease in Income is
loss
Credit
no profit
Dedit

Question

If the financial position of a business is change due to the happening of event that is called
Event
Monetary Event
movement
change

Question

———- is documentary evidence in a specific format that records the details of a transaction
Voucher
Bill
Ledger
Account

Question

At the top of Voucher their is
Payment
Name Of Company
Name Of Customer
Date

Question

Voucher include ———- account
4
3
2
5

Question

———- is used to record financial transactions in chronological (day-to-day) order.
General Journal
Voucher
paymentJournal
General

Question

The General Journal has Sides (account)
5
2
3
4

Question

General Ledger is also a called
Account
payment Account
Income Account
T Account

Question

————- Ledger is a book that keeps separate record for each account (Book of Accounts).
cash Ledger
income Ledger
General Ledger
payment Ledger

Question

General Ledger contain
Date of transaction
list of transcation
Voucher type
all of above

Question

—– is also called the Book of Original Entry or Day Book.
General Ledger
income Ledger
expenses Ledger
General Journal

Question

Usually the ledger is required to provide following information:
Ledger page number,
Voucher number
Amount of transaction
all of these

Lecture 7

Question

purchase of furniture (on account) is recorded on the side
Debit
Credit

Question

In ledgers the difference between the debit and the credit sides, known as
profit
loss
balance
net income

Question

The total of all balances on the Debit side is always equal to the total of all balances on the

expences
income
Credit
Creditor

Question

The Flow of Transactions

The Voucher >General Journal–>{ General Ledger & Cash/Bank Book } -> {Trial Balance & Balance Sheet }
The Voucher >General Journal–>{ General Ledger & Cash/Bank Book } -> {Trial Balance &
The Voucher >{ General Ledger & Cash/Bank Book } -> {Trial Balance & Profit & Loss Acc
General Journal–>{ General Ledger & Cash/Bank Book } -> {Trial Balance & Profit & Loss A

Question

Cash book and bank book are part of ———————

general journal
general ledger
Cash ledger
bank ledger

Question

All entries including payables and receivables are recorded in the

Account payables
Account receivable
general ledger
cash ledger

Question

All cash transactions (receipts and payments) are recorded in the

pass book
credit book
account receivable
Cash book

Question

Receipt from Sale of Assets is

Cash Flow From Operating Activities
Cash Flow From Investing Activities
A & B
none of above

Question

All bank transactions (receipts & payments) are recorded in the bank book

Question

The format of bank book is same as that of cash book except the column of

Date
cheque no.
Name
Account no

Question

Accounting period is any period for which a Financial Statements are

prepared
complated
record
both A & B

Question

The length of the accounting period can be anything between .

one day
one year
3 months
one day to one year

Question

In Pakistan, financial year starts from ————– and end on —————

1st of July , 30th of June.
15th of July , 30th of June.
1st of July , 1st of June.
31st of July , 30th of June.

Question

——————– can be made for a week or a month, depending upon the requirements of the com

Account
cash
Financial perid
Financial reports

Question

Debit and credit side of a ledger must be equal

equal
Unequal
equal or Unequal
none of above

Question

If debit side of a ledger is greater than credit side, the balance will be written on the credit side an

Debit Balance.
Credit Balance
Debit Balance Credit Balance

Lecture 8

both A & B

Question

credit side is greater than debit side, the balance will be written on the debit side. This balance is

Debit Balance
Credit Balance
Credit Balance & Debit Balance
none of them

Question

At the end of accounting period, a list of all ledger balances is prepared. This list is called

Cash Book
Ledger Balance
voucher Balance
Trial Balance

Question

A trial balance is usually prepared at the end of an accounting period and is used to see if addition to any of the balances.

Voucher balance
Trial Balance
Cash Balance
Trial Balance

Question

If any transaction is recorded in the wrong head e.g. if an expense is debited to an assets account detect that mistake too

Voucher balance
Credit
Trial balance
Debit balance

Question

Trial balance only shows the mathematical accuracy of the accounts.It is——- of Trial balance

Feature
Limitations
Advantage
both A & C

Question

—————– are the end product of the whole accounting process.

Cash book
pass book
Trail balance
Financial Statements

Question

—————– account is an account that summarizes the profitability of the organization for a sp
Trail balance
balance sheet
pass book
Profit & Loss Account

Question

Profit & Loss account has :
5 parts
2parts
3 parts
4 parts

Question

First part of Profit & Loss account is called
Expence portion
income portion
Trading account
both A & B

Question

in which part of Profit & Loss account Net Profit is calculated
3rd part
2nd part
1st pat
A & B

Question

To calculate the profit the formula is
expenses – income =Profit
expenses – income =Profit
Income – expenses=Profit
Income + expenses=Profit=

Question

calculate the profit expenses 1000, income 1400
400
100
1400
2400

Question

Expenses are Devided into ———- groups
3
4
2
5

Question

The cost incurred in purchasing or manufacturing the product.
Administration expenses
Selling expenses
Cost of goods sold
Financial expenses

Question

—————- are the expenses incurred in running a business effectively
Cost of goods sold
Administration expenses
Selling expenses
Financial expenses

Question

—————- are the expenses incurred directly in connection with the sale of goods

Lecture 9

Cost of goods sold
Administration expenses
Selling expenses
Financial expenses

Question

—————- are the interest paid on bank loan & charges deducted by bank.
General office expenses
Administrative expenses
Selling expenses
Financial expenses

Question

—————- are the interest paid on bank loan & charges deducted by bank.
General office expenses
Administrative expenses
Selling expenses
Financial expenses

Question

The formula of Gross profit is
Income (Sales) – Cost of sales
Income (Sales) – Admin expenses
Income (Sales) – Selling expenses
Income (Sales) + Cost of sales

Question

Calculations of Gross profit and Net profit
Income + cost of sales=Gross profit+ {Admin expenses ,Selling expenses,Financial expenses} =
Income – cost of sales=Gross profit- {Admin expenses,Selling expenses, Financial expenses} = N
Income – cost of sales=Gross profit+ {Admin expenses + Selling expenses + Financial expenses}
Income – cost of sales=Gross profit- {Admin expenses + Selling expenses – Financial expenses}

Question

Income should be recognized / recorded at the time when goods are
sold or services are purchased
sold or services are rendered
Expenses are incured
none of above

Question

Expenses – should be recognized / recorded when
expences incoming
benefit relating to that expense has been drawn
benefit would be drawn
benefit would be drawn in future

Question

Which is correct about Assets
(increase and decrease in asset is credit)
(increase in assets is debit and decrease in asset is credit)
(increase in assets is debit and decrease in asset is debit)
(increase in assets is credit and decrease in asset is debit)

Question

Which is correct about Liabilities
(Increase and decrease in liability is debit)
(Increase in liability is debit and decrease in liability is credit )
(Increase in liability is credit and decrease in liability is debit)
(Increase in liability is debit and decrease in liability is debit)

Question

———— Are the assets of permanent nature that a business acquires, such as plant, machinery,
etc.
Current Assets
Long Term Assets
Fixed Assets
Intangible assets

Question

—– assets of the business that are receivable after twelve months of the balance sheet date
Fixed Assets
Current Assets
Long Term Assets
Tangible Assets

Question

Debtors, closing stock & all accrued incomes are the examples of
Long Term Assets
Fixed Assets
Intangible assets
Current Assets

Question

Now if the business is managed successfully, then this return would be a Favorable figure (Profit
Yes
No

Question

Liabilities that will become payable after a period of more than one year of the balance sheet date
Long Term Liabilities
Short Term Liabilities
Mid Term Liabilities
Current Liabilities

Question

These are the obligations of the business that are payable within twelve months of the balance sh
Long Term Liabilities
Short Term Liabilities
Mid Term Liabilities
Current Liabilities

Question

If business has taken a loan from bank or any third person and it is payable after ten years, it will
Short Term Liabilities
Long Term Liabilities
Mid term Liabilities
Current Liabilities

Lecture 10

Question

which one of the following is Current Liabilities
Rent payble
Rent expenses
salary
service charges

Question

The year in which long term liability is to be paid back, long term liability is transferred to curren
that year
previous year
—
—

Question

—- Is a statement that shows the standing of the organization in Monetary Terms at a Specific TI
Profit & loss
Income statment
Balance Sheet
Trail balance

Question

Balance Sheet can be prepaired into — forms(types)
3
2
4
1

Question

In which statment both the Assest and Liabilities are equal at the end
Profit & Loss
Income Statment
Balance Sheet
A & B

Question

Balance Sheet can be prepaed is Report Form and also in
Account Form (T Form)
Credit Form
Debit Form
Favourable Form

Question

The Goods that business returned to the supplier is called
Total purchases
purchases
purchases return
purchases discount

Question

Purchase return are —— from purchases
Add
Less

–

Question

calculate net purchase (purchase returned 5000 purchases 100000 )
105000
95000
10000
none of above

Question

Fright, wages,Roality and Octry duty are the types of —–
Direct incone
Indirect expenses
Direct expenses
Indirect incone

Question

Direct expenese are add into the—-
Balnce Sheet
Income statment
Profit & Loss
Purchases Account

Question

Calculate Gross Profit from the following iofnrmation {purchases 15000 purchases returned 1000
7000
6000
5000
4000

Question

If the purchases exseed from the sales so the should be
Net profit
Net loss
Gross loss
Net sales

Question

Started business with Rs. 200,000 in cash.which is the correct enty in General Journal
cash (Dr) Profit (Cr)
cash (Dr) Income
cash (Dr) Owner Capital (Cr)
Owner Capital (Dr) cash (Cr)

Question

purchase furniture 2000 the enty in general is
Furniture (Dr) Asset (Cr)
Furniture (Cr) Cash (Dr)
Furniture (Dr) Cash (Cr)
Furniture (Cr) Asset (Dr)

Question

Increase in expenses will be always
Debit
Credit

Lecture 11

Question

Decreas in income is
loss
Credit
Debit
peofit

Question

decrease in expense will be
Profit
Balance
Credit
Debit

Question

Paid for vehicle Rs. 50,000 through cheque.
vehicle(Dr) expenses (Cr)
vehicle(Dr) cash (Cr)
cash(Dr) vehicle (Cr)
vehicle(Dr) bank (Cr)

Question

Sold goods for cash
Sales (Dr) cash (Cr)
Sales (Dr) Income (Cr)
Sales (Dr) profit (Cr)
cash (Dr) Sales (Cr)

Question

Returned goods from Mr. A.(on Credit)
Mr. A (Dr) Cash (Cr)
Mr. A (Dr) income (Cr)
Mr. A (Dr) Account receivable (Cr)
Account receivable (Dr) Mr. A (Cr)

Question

purchase land on Credit
Account payable (Dr) Land (Cr)
Account payable (Dr) Cash (Cr)
Land (Dr) Account payable (Cr)
Account payable (Dr) Account receiable (Cr)

Question

Paid cash to the creditors
Account payable (Dr) Cash (Cr)
Cash (Dr) Account receivable (Cr)
Cash (Cr)
Cash (Dr)

Question

Deposited cash in bank
Deposited (Dr) cash (Cr)
Deposited (Dr) cash (Cr)
cash (Dr) Bank (Cr)
Bank (Dr) cash (Cr)

Question

Paid Salaries through cheque
Salaries (Dr) cheque (Cr)
cheque (Cr) Salaries (Dr)
Salaries (Dr) cheque (Cr)
Salaries (Dr) Bank (Cr)

Question

Mr. B Paid through cheque
Mr. B (Dr) cheque (Cr)
cheque (Dr) Bank (Cr)
Bank (Dr) Bank Mr. B (Cr)
cash (Dr) cheque (Cr)

Question

Fixed assets reduse their value called
Income
Depreaction
long life
Loss
Question:
calculate the closing balance of cash by using followoing infromation cash 100000 paid rent 2000
purchaes furniture 25000 purchase vehicle 50000
78000
22000
32000
31000

Question

which one of them is fixed asset
Vehicle
Good
Right to receive money
cash

Question

Which one of the following is current asset
Account receivable
Furniture
Land
Account payable

Question

which one of the following is Intangible Assets
cash
Good will
Land
Furniture

Lecture 12

Question

bill payable is a
Capital
Assets
Debit
Laibility

Question

whivh one is long term laibility
Bank loan
bill payable
rent payable
insurance payable

Question

Increase in Income is
Debit
Credit

–

Question

closing balance of ledgers are transfer to
Balanse sheet
Income statment
Trail Balance
none of above

Question

Accounting equation formula is
Assets = Capital + Liabilities
Assets = Capital – Liabilities
Assets + Liabilities = Capital
Assets – Liabilities = Capital +

Question

Net value of current assets & current liabilities is called
Capital
Adational Capital
Working Capital
all of above

Question

Working capital formula is
Working Capital = Current Assets + Current Liabilities
Working Capital = Current Assets – Current Liabilities
Working Capital – Current Liabilities = Current Assets
Current Assets – Current Liabilities = Working Capital

Question

Calculate Working capital Current Assets 55000, Current Liabilities 35000, fixed asset5000, long
2000
20000
25000
35000

Question

—————- value of goods available to the business that are ready for sale
Assets
Price
Stock
none of above

Question

For accounting purposes, stock has types
3 types
4 types
2 types
5 types

Question

—————– is the value of goods available for sale in the beginning of an accounting year.
Opening stock
stock
cost of goods sold.
Closing stock

Question

Closing Stock of previous year is the opening stock in present year
previoos year
present year
cost of goods sold.
none of above

Question

The value of goods unsold at the end of accounting year
cost of goods sold.
Opening stock
Closing stock
all of above

Question

Which of the following are the contents of cost of goods sold are
Opening stock & closing stock
purchases
Freight/ carriage paid on purchases
all of them

Question

For the calculation of cost of goods sold formula is
Opening stock + purchases + Freight/ carriage paid on purchases – closing stock
Opening stock + purchases + Freight/ carriage paid on purchases + closing stock
Opening stock + purchases – Freight/ carriage paid on purchases – closing stock
Opening stock – purchases + Freight/ carriage paid on purchases – closing stock

Question

Net profit is added in the
Cash
Income statment
Trail balance
Capital

Lecture 13

Question

Closing stock is
Fixed asset
Intengable asset
current asset
all of above asset

Question

In Balance Sheet Depreciation is
deducted from the fixed asset.
added in the fixed asset.

Question

Drawing are the — of owner
Income
profit
expenses
none of above

Question

Drawings of owner is deducted from
profit
income statment
trail balance
capital

Question

which of the following is current liability
Utility bills
Salaries
Accrued expenses
Rent

Question

—– ——is the method of charging cost of fixed assets to the profit & loss account as an expen
income
good will
prepaid expenses
Depreciation

Question

Fixed Assets are those assets which have
Of long life
To be used in the business
Not bought with the main purpose of resale.
all of above

Question

—————- is the number of years in which a fixed asset is expected to be used.
Rolity
limit
Estimated life
carriege

Question

Any money taken out as drawings will reduce
assets
liability
Gross profit
capital

Question

In book keeping, voucher is the ———– document to record an entry.
2nd
3rd
1st
none of them

Question

Normally—————-types of vouchers are used
5
4
2
3

Question

—————voucher is used to record cash or bank receipt.
Receipt voucher
Payment voucher
Journal voucher
paid bill

Question

—————voucher is used to record transactions that do not affect cash or bank.
Cash Payment voucher
Journal Voucher
Bank Payment voucher
Payment voucher
Question:
if amount on the credit side is greater than that of amount on the debit side, the balance is shown
the
voucher payment
Debit Balance.
Credit Balance.
both B & C

Question

Credit balance when carried forward, is written on the—————-
credit side
Left side
debit side
Income side

Lecture 14

Question

Debit balance when carried forward, is written on the—————-
credit side
debit side
income side
profit

Question

Office equipment is sold for cash what will be the correct entry
equipment (Dr) cash (Cr)
equipment (Dr) accounstpayable (Cr)
equipment (Dr) sales (Cr)
cash (Dr) equipment (Cr)

Question

Accrued expenses are paid off.
Accrued expenses (Dr) cash (Cr)
cash (Dr) Accrued expenses (Cr)
expenses (Dr) cash (Cr)
expenses paid (Dr) Accrued expenses (Cr)

Question

—— voucher denotes Payment of cash.
Cash Payment voucher
Bank Payment voucher
Cash receipt voucher
Bank receipt voucher

Question

— voucher indicates receipt of cheque or demand draft.
Cash receipt voucher
Bank receipt voucher
Cash Payment voucher
Journal voucher

Question

—- voucher indicates payment by cheque or demand draft
Cash Payment voucher
Bank Payment voucher
Cash receipt voucher
Bank receipt voucher

Question

At the start of next accounting period, these balances are carried
paid
out
forward.
written

Question

—- it is written on the debit side because debit side of the cash account is greater then credit
balance
axess balance
carried out
carried forward

Question

every account has its specific ——–
Debit balance
Credit balance
Ledger account
none of above

Question

The closing balence of ledgers accouns are transfred to the
income statment
balance sheet
trail balance
all of above

Question

In the end of trail balance Debit and Credit are
not shown
always equal
un equal
none of them

Question

In trail balance every account has a specific
title
account
code
ledger

Question

Date is not required in
General journal
voucher
trail balance
Journal Voucher

Question

In tral balance all assets and expenses are written in
debit side
Right side
credit side
A & C

Question

laibilities are shown in —— of trail balance
credit side
debit side
left side
A & C

Question

If business purchases items for its own use (items that are not meant to be resold) such items are
Incone
Credit
Expenses
liability

Lecture 15

Question

rent, utility bill, and salaries paid are the example of
Purchases
sales
sales return
Expenses

Question

If business purchases items for resale purposes, such items are charged to – account
Income
Sales
Purchases
A & C

Question

Stock is the quantity of unsold goods lying with the organization.
Yes
No

Question

Stock is termed as
“the value of goods available to the business that are ready for sale
“the value of goods available to the business that are notready for sale
“the quantityof goods available to the business that are ready for sale
A & C

Question

An organization that converts raw material into finished product by putting it in a process is — manufacturing concern,
trading concern,
both A & C
none of them

Question

——- Purchases items for resale purposes.
trading concern,
manufacturing concern
non trading concern
A & B

Question

In manufacturing concern the stock has ——-
5 Types
2 Types
3 Types
4 Types

Question

Raw material, Work in process, Finished goods are the types of —
trading concern,
manufacturing concern,
–
–

Question

——— is the basic part of an item, which is processed to make a complete item
Work in process
Raw Material
Finished goods
none of above

Question

At the end of the year, some part of raw material remains under process. it is
Work in Process
Finished goods
Raw material
Material used

Lecture 16

Question

—- contain items that are ready for sale, but could not be sold at the end of accounting period
Work in process
Finished goods
Raw material
us ed material

Question

Stock Account is Debited with the Value of the Goods
sold
un sold
purcshsed
not purcshsed

Question

Raw Material,Work in Process, Finished Goods has also
Credit balance
Closing balance
opening balance
B & C

Question

Stock account is — with the Purchase Price of the Goods Sold / Issued for Production.
Returned
Debited
Credited
all of above

Question

In manufacturing concern, entries for stock Purchase
Stock Account (Dr) Cash/Supplier /Creditors Account (Cr)
puchases (Dr) Cash/Supplier /Creditors Account (Cr)
Cash/Supplier /Creditors Account (Dr) Stock Account (Cr)
none of above

Question

cost of goods sold is the value of goods unsold (goods stands for the items purchased for resale p
manufacturing concern,
trading concern,
non trading concern,
A & B

Question

In—–cost of goods sold is the value of raw material consumed plus any
trading concern,
non trading concern,
manufacturing concern
A & B

Question

Stock and cost of goods sold in manufacturing concern
A:
Raw Material Stock + Other Costs Accounts—->Work in Process Account–>Finished Goods Ac
Account
B:
Raw Material Stock – Other Costs Accounts—->Work in Process Account–>Finished Goods Ac
Account
C:
Raw Material Stock+Other Costs Accounts—->Work in Process Account–>Finished Goods Acc
Account
D:
Raw Material Stock+Other Costs Accounts—->Work in Process Account–>Finished Goods Acc
Account

Question

In manufacturing concern, Raw material stock is put into
profit & laoss
process
expenses
none of them

Question

——–is the value of goods available for sale in the beginning of an accounting period
stock
Opening stock
Closing stock
unsold stock

Question

— is the value of goods unsold at the end of the accounting period
Opening stock
stock
Closing stock
unsold stock

Question

If our suppliers use some other material in exchange of material returned enty will be
Raw Material Stock Account Debit Goods Return Account Credit
Goods Return Account Debit Goods Return Account Credit
Stock Material Account Debit Goods Return Account Credit
Goods Return Account Debit Stock Material Account Credit

Question

the formula for material used is
Raw material openin + Purchases + Raw material closing
Raw material openin + Purchases – Raw material closing
Raw material openin – Purchases + Raw material closing
Raw material openin – Purchases – Raw material closing

Question

prime cst is = ———–

material used + Other production costs
Other production costs + direct labor
material used + direct labor
material used – Other production costs

Question

sale is a not a part of
Cost of Goods Sold
Income
Income stat ment
none of above

Question

convesion cost is= –
Finished goods
material used + factory over head (F O H)
Finished goods + factory over head (F O H)
Direct labor + factory over head (F O H)

Question

Total Factory Cost is = ———-
Factory over head (FOH) + direct labour
Prime cost + direct labour
Prime cost – direct labour
Prime cost + Factory over head (FOH)

Question

Labor cost is charged to production entry
Work in process OR WIP Account + Labor Cost Account
Work in process OR WIP Account – Labor Cost Account
Work in process OR WIP Account Debit Labor Cost Account Credit
Labor Cost Account Debit Work in process OR WIP AccountCredit

Question

Other costs also charged to work in process entry will be
Work in process OR WIP Account Debit Labor Cost Account Credit
Other Costs Account Debit Labor Cost Account Credit
Labor Cost Account Other Debit Costs Account Credit
Work in process OR WIP Account Debit Other Costs Account Credit

Lecture 17

Question

work in process of charged to finished goods entry wiil be
Cost of Goods Sold Account Debit Work in process Account Credit
Finished Goods Account Debit Cost of Goods Sold Account Credit
Cost of Goods Sold Account Debit Finished Goods Account Credit
none of above

Question

Cost of Goods Manufactured =——-
Total Factory Cost – O/S of WIP – C/S of WIP
Total Factory Cost + O/S of WIP + C/S of WIP
Total Factory Cost – O/S of WIP + C/S of WIP
Total Factory Cost + O/S of WIP – C/S of WIP

Question

Cost of Good Sold = —
Cost of Goods Manufactured – O/S of Finished Goods – C/S of Finished Goods
Cost of Goods Manufactured + O/S of Finished Goods – C/S of Finished Goods
Cost of Goods Manufactured + O/S of Finished Goods + C/S of Finished Goods
Cost of Goods Manufactured + O/S of Finished Goods + C/S of Finished Goods

Question

—- are the other costs incurred in relation of manufacturing of goods.
Over Heads Costs
Total factory cost
Cost of goods sold
Direct Labor cost
Question:
cal culate material used by following information Raw material O/S Rs.150,000 Raw material C/
raw material Rs. 100,000
235000
135000

165000
265000
Question:
clculate total factory cost by following information Cost of Material Consumed 140,000 Factory
is 20000.
22000
220000
160000
200000
Question:
calculate Cost of Good Sold by given informaton Cost of Goods Manufactured 315,000 O/S of F
of Finished Goods 100000
435000
335000
235000
410000

Question

—- is used to keep the record of what has come in stock and what has gone out of it.
Number card
Stock card
pass
A & C

Question

Stock card has two parts Receipt & Issue
Yes
No

Question

Methods of Stock valuation era ——–
5
4

3
2

Question

(FIFO), (LIFO), and Weighted average are the Valuation of —
Labour
Expenses
Income
Stock

Question

(FIFO) means
First in first out
Last in first out
–
D:

Question

—— method is based on the assumption that the recently purchased merchandise is issued first.
First in first out (FIFO)
Last in first out (LIFO)
Weighted average
none of above

Question

—– Method is in use, the average cost of all units in inventory, is computed after every purchase
Last in first out (LIFO)
Weighted average method
First in first out (FIFO)
all of above
Question:
Calculate closing stock by using fifo method 01 Jan 10 units @ Rs. 150 per unit 02 Jan 20–, 15 u
Issues 05 Jan 20–, 10units
15 units @ Rs. 200
25 units @ Rs. 200
10 units @ Rs. 200
5 units @ Rs. 200

Lecture 18

Question:
Valuation of Stock by Weighted Average Method fo rgiven information May 7 Receipts 200 unit
units @ Rs. 60/unit Issues 150
200 units @ Rs. 50
150 units @ Rs. 50
200 units @ Rs. 200
200 units @ Rs.100

Question

Fixed assets are also called
long life
Intengable assest
Depreciable Assets
all of above

Question

—– is a process of charging the cost of fixed asset to profit & loss account
Stock valutiuon
good will
depreciation
Fright

Question

Total cost of the asset is divided by total number of estimated years is called depreciation for the
depreciation
depreciation for the month
depreciation for the year’
all of them

Question

Written down Value depreaction formula is
Original cost of fixed asset – Accumulated Depreciation
Original cost of fixed asset + Accumulated Depreciation
Original cost of fixed asset + use ful life of fixed asset

Accumulated Depreciation – Original cost of fixed asset

Question

—– Economic Life is the time period for machine is expected to operate efficiently.
Written down Value
Useful Life
Fixed Assets
Depreciation

Question

No depreciation is charged for
Building
Plant and Machinery
Land
Vehicles

Question

Journal entries for recording Depreciation
Debit: Depreciation Expenses Account Credit: Accumulated Depreciation Account
Debit: Accumulated Depreciation Account Credit: Accumulated Depreciation Account

Question

Depreciation for the year is charged int — accounts
4
1
2
3

Question

—– or Original cost method or Fixed installment method of Depreciation
Straight line method
Reducing balance method
Diminishing balance method
written down method.

Question

The 2nd name of written down method is
Original cost method
Fixed installment method
Reducing balance method or Diminishing balance method
Straight line method

Question

That fixed amount of Depreciation is charged every year in which of the following method
Reducing balance method
Straight line method or Original cost method or Fixed installment method
Diminishing balance method
written down method.

Question

Straight Line Method formula for Depreciation if
(cost + Residual value) / Expected useful life of the asset
(cost – Residual value) / Expected useful life of the asset
(cost – Residual value) + Expected useful life of the asset
(cost – Residual value) / Residual value

Question

—- Method the Depreciation amount is not same in every year
Reducing Balance Method
Straight Line Method
Fixed installment method
Original cost method
Question:
cCalculate depreciation with Straight line method Cost of an asset: Rs. 120,000 Expected life: Rs
20,000
15000 for 1 year
10000 for 1 year
30000 for 1 year
20000 for 1 year

Lecture 19

Question

Reducing Balance Method Depreciation is charged by fixed —
Amount
Year
%
none of above

Question

Depreciation expense account contains the depreciation of the
current year.
last year
next year
none of above

Question

Depreciation of assets can de recorded into heads of accounts
5
4
2
3

Question

Written down method depreaction is
WDV = Actual cost of fixed asset – Accumulated Depreciation.
WDV = Actual cost of fixed asset + Accumulated Depreciation.
WDV = Accumulated Depreciation – Actual cost of fixed asset .
WWDV = Accumulated Depreciation + Actual cost of fixed asset

Question

Depreaction can be recorded which of thew following head
Income statment
Depreciation Expense Account
Accumulated Depreciation Account
B & C

Question

Who selects the policy for charging depreciation.

The government of the business selects the policy for charging depreciation.
The management of the business selects the policy for charging depreciation.
The NGO’s of the business selects the policy for charging depreciation.
none of them

Question

Normally two policies are commonly used for depreaction of assets.
Depreciation on the basis of use
Depreciation on the basis of value of assets
In the year of purchase, full year’s depreciation is charged, where as, in the year of sale no deprec
A & C

Question

Entries for Recording Disposal asset is
Fixed Asset Disposal A/c (Dr) Fixed Asset Cost A/c (Cr)
Fixed Asset Disposal A/c (Dr) Purchasing Cost A/c (Cr)
Fixed Asset Cost A/c (Dr) Fixed Asset Disposal A/c (Cr)
Purchasing Cost A/c (Dr) Fixed Asset Disposal A/c (Cr)

Question

When asset is sold sale price in excess of the book value produces their is
no effect on account
loss
discount
profit

Question

Calculate the depreactio by folloing information Cost of asset Rs. 200,000 Life of the asset 5 yea
34000 per year
25000 per year
36000
32000

Question

Book value after five years depraction is 20,000 and its Sale price Rs. 30,000 so their is
10000 loss
no profit

10000 profit
30000 profit
Question:
If an asset is not completed at that time when balance sheet is prepared, all costs incurred on that
date are transferred to an account called
Income statment
Balance sheet
Trail balnce
Capital work in progress account
Question:
A machine is purchased for Rs. 200,000. Its useful life is estimated to be five years. Its residual v
years, it was sold for Rs. 20,000 by using straight line
15000 loss
10000 profit
no profit noloss
25000 profit
Question:
Calculation of depreciation(only two year) on the basis of reducing balance method Depreciation
asset 400,000.
160000
25600
256000
20000

Question

Bank charges is an example f – expenses
Admn
cash
Financial
Selling

Question

— is Selling expenses
Transportation/carriage of goods sold
Transportation/carriage of goods purchased
Sales return
buffer stock

Lecture 20

Question

For Payment to Creditors enty is
Supplier / Creditors account (Dr) purchases (Cr)
Supplier / Creditors account (Dr) cash
Purchases (Dr) Supplier / Creditors account (Cr)
No entry

Question

calculate total factory cost material used is 50000 direct labour is 25000 FOH (Applied 40% of d
75000
75060
85000
80000

Question

When any expense is incurred or paid, it is included in the Capital Work in Progress Account thr
Work in Progress Account (Dr) Cash (Cr)
Work in Progress Account (Dr) Cash/Bank/Payable Account (Cr)
Work in Progress Account (Dr) supplies (Cr)
Work in Progress Account (Dr) costof asset (Cr)
Question:
When an asset is completed and it is ready to work, all costs will transfer to the relevant asset acc
following entry
Work in Progress Account (Dr) Relevant asset account (Cr)
Work in Progress Account (Dr) Cash/Bank/Payable Account (Cr)
Relevant asset account (Dr) Capital work in progress account (Cr)
Work in Progress Account (Dr) Capital work in progress account (Cr)

Question

Fixed assets are purchased to be used for —period.
smaler
longer

medium
all of them
Question:
—- Cost is the original cost of the asset at which it was purchased plus additional costs incurred o
working condition.
Adational
Fixed
Maximum
Historical

Question

If an asset is revalued at higher cost than its original cost, the excess amount will be treated as
Sales
Profit
Net income
Income from asset

Question

land has no depreaction
Yes
No

Question:
Calculation of depreciation on the basis of reducing balance method value of asset 100000 Depre
years depreaction
26000
46000
20000
36000

Question

Once an asset has been fully depreciated,
no more depreciation should be recorded on it,
more depreciation should be recorded on it,

less depreciation should be recorded on it,
none of them

Question

—– is a systematic allocation of the cost of a depreciable asset to expense over its useful life.
Depreciable Assets
Written down value
Depreciation
Reducing Balance

Question

——— Method is based on the assumption that the first merchandise purchased is the first merch
FIFO
LIFO
Weighted average
Market value
Question:
As the current stock is valued at oldest prices, the current assets of the company have the oldest a
Characteristics
First in first out (FIFO)
Last in first out (LIFO)
Weighted average
All of them
Question:
As the current stock is valued at oldest prices, the current assets of the company have the oldest a
Characteristics of
Weighted average method
LIFO
FIFO
all of above

Question

Correct formul of (Straight line method)
(400,000 – 25,000)/5
(400,000 + 25,000)/5
(400,000 – 5 )/25,000
(25,000 +400,000)/5

Lecture 21

Question:
Calculation of depreciation basis of reducing balance method cost of asset 15000 rate of depreact
depreaction
3000
2850
2800
4000

Question

The value of asset could be higher or lower than its present book value due to inflationary condit
Value
Usage
Economy
all of these
Question:
—- Cost is the original cost of the asset at which it was purchased plus additional costs incurred o
working condition
Fixed
Variable
Book value
Historical
Question:
Once the asset is revalued to its market value, then its value has to be constantly monitored to ref
value
book value
market value

–

Question

—– is credited when asset is revalued at higher cost than its original cost,

Profit
Revaluation Reserve Account
Asset
Markete value

Question

If an asset is revalued at lower cost than its original value, the balance amount will be treated as l
revaluation of fixed assets
Fixed value
Markete value
all of them

Question

It is the value, at which an asset would bring to the management, when sold to a knowledgeable p
Revaluation
Book value
Markete Value
Fair Value

Question

Rules for Revaluation
Revaluation has to be carried out at regular intervals
Revaluation has to be carried out at fixed intervals
Whole class of asset has to be revalued
A & C

Question

—— are those expenses for which benefit is enjoyed for more than one accounting period
Fixed Expenses
Admn Expenses
Capital Expenses
Revenue Expenses

Question

—- are those expenses for which, the benefit is enjoyed within one accounting period.
Capital Expenses
Revenue Expenses

Marketing Expenses
sll of them

Question

Capital Expenditures are incurred in — way
5
6
4
2

Question

Asset is purchased is ——
Revenue Expenses
Capital Expenses
Purchase
all of these

Question

—- is also called business running expenses
Capital Expenses
Revenue Expenses
Marketing Expenses
Fixed Expenses

Question

All Capital Expenses are grouped in
Cost of goods sold
ledger
Profit & Loss
balance sheet

Question

All Revenue expenses are grouped in
Balance sheet
Cost of goods
Profit & Loss
all of above

Lecture 22

Question

—– does not occur again and again. It is non- recurring and irregular
Capital Expenditure
Revenue Expenditure
both of these
–

Question

—- reduces the profit of the concern.
Capital Expenditure
Revenue Expenditure

–

Question

— does not reduce the profit of the concern.
Capital Expenditure
Revenue Expenditure
Both of these

Question

—- expenditure improves the financial position of business
Icome
Capital Expenditure
Revenue Expenditure
none of them

Question

The revenue expenditure that provides benefit for more than one year is called
Capital Expenditure
Deffered Expenditure
Travling Expenditure
None of above

Question

—- are amounts that are paid in advance to a vender or creditor for goods and services.
Deffered Expenditure
Capital Expenditure
Revenue Expenditure
Prepaid Expenses

Question

Prepaid Expenses are
Deffered Expenditure
Incone
Current Asset
Non-Current Asset

Question

——– Normally a revenue expense, but when paid to bring an asset to its intended use then it is
Freight and Carriage
Repairs
Interest on Loan
Legal Charges

Question

———– are non-recurring and whose benefits are enjoyed over a long period are called
Capital Receipts
Revenue Receipts
Other Income
Income & expenditure

Question

Sale proceed of fixed assets is an example of fixed asset is –
Capital Receipts
Revenue Receipts
Cash
A & C
Question:
Receipts which are recurring by nature and which are available for meeting all day to day expens
known as ——

Lecture 23

Capital Receipts
Revenue Receipts
Other incone
all of these

Question

sale proceeds of goods is an example is
Capital Receipts
Revenue Receipts
–
–

Question

—- is the detail of transactions in one’s account provided by the bank.
Bank statement
Bank book
Bank voucher
Bank Statement

Question

At times, banks record transactions in our account without our knowledge like
bank charges
profit
tax
allof these

Question

A balance favorable to the customer is shown
without brackets
within brackets
–
–

Question

where a cheque is issued but it has not been presented in the account, such kind of cheques are ca

Presented Cheques
Unpresented Cheques
Lost Cheques
none of above

Question

Areceipt of a cheque that has not been cleared in the bank account ——
presented Cheques
Credited Cheques
Un-Credited Cheques
Unpresented Cheques

Question

Bank account is our asset therefore, it usually has a——
Negative
Dr
Cr
A & C

Question

Bank Statement which is a ledger account for bank normally has a ———–
(Dr) balance
(Cr) balance

Question

Bank Statement is———- therefore,a of our bank book/pass book
Dr
Cr
Mirror Image
none of these

Question

Bank Charges —– to our bank account
debited
credited

–

Question

Bank charges debited by bank
Yes
No

Question

If we have taken a loan from our bank it is
Bank loan
liability
overdraft
unerdraft

Question

Overdraft has ——— balance
No
Cr
Dr
A & B

Question

Interest credited by bank is our
liability
expense
loan
income
Question:
Bank/pass book and bank statement could be a mistake made by us in recording transactions Suc
making an adjusting entry through Journal Voucher, which is also called
Rrror
Bank Reconciliation Statement
Reconciliation Statement
Rectification of error

Lecture 24

Question

Outstanding cheque are ———- in bank/pass book
add
less
not shown
A & B

Question

we received cash Rs. 50,000 from a debtor and instead of Debiting the Cash we debited the Bank
Cash Account 50,000 (Dr) Bank Account 50,000 (Cr)
Creditors 50,000 (Dr) Cash Account 50,000 (Cr)
Cash Account 50,000 (Dr) Bank Account 50,000 (Cr)
Cash Account 50,000 (Dr) Creditors 50,000 (Cr)

Question

——– are the third persons/parties, who owe money from the business.
Business partner
Deboter
Customer
Creditors

Question

Creditors are —–
Fixed Assets
Current Assets
Long term Assets
Current liabilities
Question:
At times, we receive discounts from our creditors. This discount is either treated as income of the
the cost of
Income
Balance
Stock
Returned

Question

When an expense or other payable is accrued it is
current liability
Assets
Income
current assets

Question

———— is made when it is known that an expense will arise but the exact amount is not known
Accrual
Provision
Reserves
Good will

Question

Accounting Treatment of Provision
Relevant Expense Account (Dr) Provisions (Cr)
cash (Dr) Provisions (Cr)
Account payable (Dr) Provisions (Cr)
Provisions(Dr) Relevant Expense Account (Cr)

Question

Debtors is also called
Provisions
Stock
Receivables
none of them

Question

Receivables are the ——–
current assets
Fixed assets
long term assets
all of above

Question

When a debtor does not pay the amount due to him, it is said
Provision
Accrual
Debt
Bad Debts

Question

Bad Debts charged to the
Profit & loss
Cost of goods
Capital
Drawings

Question

Recording of Bad Debts
Bad Debts (Dr) Debtors a/c (Cr)
Drawings (Dr) Debtors a/c (Cr)
Bad Debts (Dr) Drawings (Dr)
Debtors a/c(Dr) Bad Debts (Cr)

Question

Debtors 100,000 Provision for Bad Debts 5,000 so the net receivable income is
100000
105000
95000
none of them

Question

Provision for bad debts are also ——- deboters
add
less
save
recorded

Question

1:In accounting accumulated depreciation is:
Select correct option:

Treated as a reserve
Treated as a contra asset
Treated as a surplus
Treated as an expense

Question

2: If cost of sales is Rs. 60,000, income from sales is Rs. 95,000 and operating expenses Rs.
25,000. Calculate net profit.
Select correct option:

Rs. 10,000
Rs. 35,000
Rs. 55,000
Rs. 60,000

95000-25000-60000=10000

Question

3:Which of the following is a debit entry on the Bank Statement that might not appear in the
Cash Book?
Select correct option:

A standing order
An uncredited cheque
A credit transfer

Question

Deboters are 15000 and the provision is 37% calculate net Deboters
15000
9400
11000
9450

Question

which one of them is current asset
cash
land
bill paid
advance income

An unpresented cheque

Question

4:A company is said to have been registered when:
Select correct option:

It filed with the Registrar of Companies articles certain documents, like memorandum and articles
of association
It gets certificate of incorporation from registrar of Companies
It gets certificate of commencement of business from registrar of Companies
It actually starts its business

Question

5: The term “Debit” is drived from____________ language.
Select correct option:

Latin
English
French
Chinese

Question

6: What will be debited, if business purchased Furniture on cash?
Select correct option:

Furniture account
Cash account
Business account
Bank account

Question

7:A transaction that has been recorded in wrong account of the same class instead of being
recorded in the right account, this is called:
Select correct option:

Error of Omission
Error of Commission
Error of Principle
Error of Original entry

Question

8:Unfavorable Bank Balance means:
Select correct option:

Credit balance in cash book
Credit balance in pass book
Debit balance in cash book
All of the given options

Question

9: Which of the following particular is NOT included in journal voucher?
Select correct option:

Name of organization
Bank receipt number
Debit amount
Credit amount

Question

10: In the cost of goods sold statement, Cost of direct material consumed + Direct labor=?

Select correct option:

Conversion cost
Prime cost
Total factory cost
Cost of goods manufactured

Question

11:Goods sold to Mr. Salman for RS. 6,000 have been forgotten to enter in books of accounts,
this is an example of:
Select correct option:

Error of Omission
Error of Commission
Error of Principle
Error of Original entry

Question

12: Goods sold to Mr. Naeem for Rs. 5,000 are wrongly recorded in sales journal at Rs. 500
and same amount is posted in Mr. Naeem’s account, this is an example of:
Select correct option:

Compensating errors
Error of Commission
Error of Principle
Error of Original entry

Question

13:Which of the following asset is NOT depreciated?
Select correct option:

Factory Buildings
Office Equipment
Plant & Machinery
Land

Question

14: Which of the following account summarizes the profitability of business for a specific
accounting period?
Select correct option:

Profit & Loss account
Cash flow statement
Receipt & Payment account
Balance Sheet

Question

15: A Bank Reconciliation Statement is prepared to:
Select correct option:

Ascertain that the difference between the Cash Book balance and the Bank Statement balance is
accounted for
Correct errors in the Cash Book or errors on the Bank Statement
Amend the balance of the Bank Statement of the firm
Amend the balance in the Cash Book of the firm

Question

16:Which of the following is (are) NOT shown in balance sheet of sole proprietor?
Select correct option:

Fixed assets
Current liabilities
Profit sharing ratio
Long term assets

Question

17:“Cash receipts from commission” will be shown under the head of _____________ in cash
flow statement.
Select correct option:

Financing activities
Operating activities
Investing activities
None of the Given

Question

18: Examples of cash flows from operating activities are:

• Cash receipt from sale of goods and rendering of services.
• Cash receipts from fees, commission and other revenues.
• Cash payments to suppliers for goods and services.
• Cash payments to and on behalf of the employees.
• Cash payments or refunds of income taxes.

Question

19: What will be debited, if Mohsin commenced business with cash?
Select correct option:

Cash account
Capital account
Drawings account
Proprietor account

Question

20:Discount allowed Rs. 93 to Ali has been recorded in the books of accounts as Rs. 39. To
rectify this error:
Select correct option:

Both accounts will be adjusted with Rs. 93
Both accounts will be adjusted with Rs. 54
Only Ali’ accounts will be adjusted with Rs. 54
Only Discount allowed account will be adjusted with Rs. 54

Question

The amount of owner’s equity in a business is affected by which of the following?
Select correct option:

The profitability of the business
Investments made in the business by the owner
The amount of dividends paid to stockholders
All of the given options