F.Y B.COM
SEMESTER - 1
FUNDAMENTALS OF ACCOUNTING - THEORY & PRACTICES
MCQS- JANUARY 2023
1. Which of the Following is not an example of intangible Asset?
A. Land
B. Goodwill
C. Patents
D. Trade mark and Copy Right
2. In trial balance, salary of Rs.60,000 was provided, whereas at the year end salary for two months is still unpaid. Calculate the amount of total salary to be debited in Profit & Loss A/c at the end of the year.
A. Rs.10,000
B. Rs.12,000
C. Rs.70,000
D. Rs.72,000
Calculation :-
---> Salary per month as given in the question: (10 months) = 60,000/10
=6000
---> Outstanding salary is: (unpaid for 2 months) = 6,000×2
=12,000
---> The amount to be debited to profit and loss a/c is:
---> 10 + 2 months = 12 months
= 60,000+12,000
= 72,000
---> A profit and loss statement is a record of a company's revenue and spending over a specific time period.
---> A profit and loss statement is also known as a P&L
3. Payment of GST is __________ for the business entities if Input Tax Credit is availed.
A. expense
B. income
C. both income and expense
D. neither income nor expense
4. Trial Balance of accounting year 2019- 2020 (i.e. from 01-04-2019 to 31-03-2020), It shows insurance amounting to Rs.6000 which includes a premium of Rs.3600 for a year ended on 30th September 2020. What amount of insurance will be debited in Profit & Loss A/c of that particular year?
A. Rs.6000
B. Rs.4200
C. Rs.3600
D. Rs.2400
Calculation :-
3600 premium is upto 30th sept 2020
Financial year 1-4-19 to 31-3-20
(Pre paid duration = 1-4-20 to 30-9-20 = 6 months
Step :-
Months = 12 prem = 3600
6 (?)
(3600×6) / 12 = 1800 (Pre paid)
Current year's insurance = 6000 - 1800
= 4200
5. Electronic Cash Ledger A/c is like Cash A/c and hence it is _________ in nature.
A. real
B. personal
C. Liability
D. nominal
6. Treatment of 'salaries to partner' would be:
A. Debit side of Profit & Loss Appropriation A/c and Credit side of the Current Account of partner
B. Credit side of Profit & Loss Appropriation A/c and Debit side of the Current Account of partner
C. Credit side of Trading A/c and Debit side of the Current Account of partner
D. Credit side of Profit & Loss Appropriation A/c and Credit side of the Current Account of partner
7. AB and XY are partners in partnership firm sharing profit and loss in the ratio of 7:3. As on 31.3.2020 the net profit of the firm is Rs. 15000 (not considered salary and interest on drawing of partners). Total salary of both partners is Rs. 8000 and interest on drawing is Rs. 9000 during the year. At the end of the year, net divisible profit for _
A. AB - Rs. 11,200, XY - Rs. 4800
B. AB - Rs. 9800, XY - Rs. 4200
C. AB - Rs. 4200, XY - Rs. 1800
D. AB - Rs. 16,800, XY - Rs. 7200
8. Wages paid during the year 2019-20: Rs.35000, Wages Outstanding for the year 2019-20: Rs.7000, Wages Prepaid for the year 2020-21: Rs.3000. Net Wages debited to Trading A/c for the year 2019-20 is __________.
A. Rs. 42000
B. Rs. 39000
C. Rs. 28000
D. RS. 38000
Calculation :-
Rs. 42,000
Because Wage of 2019-20 is Rs. 7,000
= Rs. 7000 + Rs. 35,000
= Rs. 42,000
9. Accounting is the __________ phase of an accounting system while Book keeping is the _______ phase of an accounting system.
A. classifying, summarizing
B. interpreting, communicating
C. summarizing, recording
D. recording, reporting
10. Which of the following account is considered as a representative personal account?
A. Mahesh's A/c
B. BSNL A/c
C. Drawing A/c
D. Building A/c
11. Which of the following equation is incorrect?
A. Assets - Capital = Liabilities
B. Liabilities + Assets = Capital
C. Liabilities + Capital = Assets
D. Assets - Liabilities -Capital
12. Which of the following statement is incorrect?
A. Misjudgement of revenue and capital items causes the error of principle.
B. Salary paid to employee is a transaction.
C. All transactions can be event but all events can't be transaction.
D. Disposal of Machinery A/c can't be classified into any account (i.e. real or nominal or personal)
13. As per Accounting Equation Approach, increase in capital is _______ and decrease in capital is _______.
A. debited, credited
B. credited, credited
C. debited, debited
D. credited, debited
14. A Journal is also known as _______.
A. Purchase day book
B. Book of duplicate entry
C. Book of original entry
D. Single entry system
15. Avinash of Ahmadabad has purchased goods of Rs. 2,00,000 from Rajesh of Rajkot and payment is made by cheque. 12% GST rate is applicable to this transaction, where CGST is 6% and SGST is 6%. Which other accounts will be debited along with Purchase A/c of Rs. 200,000 while passing journal entry?
A. CGST Output Receivable A/c Rs. 12,000 & SGST Output Receivable A/c Rs. 12,000
B. CGST Input Receivable A/c Rs. 12,000 & SGST Input Receivable A/c Rs. 12,000
C. CGST Input Receivable A/c Rs. 12,000 & SGST Output Receivable A/c Rs. 12,000
D. CGST Output Receivable A/c Rs. 12,000 & SGST Input Receivable A/c Rs. 12,000
16. CGST Input Receivable A/c, SGST Input Receivable A/c, CGST Output Payable A/c and SGST Output Payable A/c are classified into _______.
A. Personal A/c
B. Nominal A/C
C. Real A/c
D. Can't be classified in any A/c
17. Out of total closing stock, 10% of the goods, its market value increased by 35%, 35% of the goods, its market value decreased by 10%, 20% of the goods, its market value is Rs. 4,800, which is 20% more than the cost price and 5% of the goods, its market value decreased by 2.5%. Find out the value of closing stock.
A. Rs. 27,675
B. Rs. 19,275
C. Rs. 20,775
D. Rs. 28,725
18. Out of total closing stock, 10% of the goods, its market value decrease by 15%; 35% of the goods, its market value is increase by 10%; and 25% of the goods, its market value is Rs. 1200, which is 20% less than the cost price. Find out the value of closing stock to be shown in the Balance Sheet.
A. Rs. 5610
B. Rs. 5700
C. Rs. 6000
D. Rs. 7200
Calculation :-
First of all, we need to find the total cost value of closing stock.
As per the question, 25% of the stock's market value is Rs.1200 which is 20% less than the cost price.
So, the cost price of 25% stock is
= 1200×100/80
= Rs.1500
Rs.1200 is 20% less than cost price (100%) so, 80%
So, cost price of total closing stock
=Rs.1500 × 100/25
=Rs.6000
Now, as per AS-2, closing stock is to be shown in the balance sheet at cost or net realisable value / market value whichever is lower.
---> 10% of stock's market value is 15% lower than cost. So, we shall find market value of 10% stock.
Cost of 10% stock = 6000 × 10%
= 600
Market value of 10% stock = 600 × 85%
= 510
---> 35% stock's market value is 10% higher than it's cost. So, we will have to show it at cost itself. cost of 35% stock
= 6000 × 35%
=Rs.2100
---> 25% stock's market value is 20% lower than cost. So, we will have to show it at market value, which is clearly mentioned in the question i.e 1200
---> Remaining stock = 30%
Since, nothing is mentioned about this remaining portion of the stock, we may show it at it's cost value i.e. 6000 × 30%
= Rs.1800
Finally adding all the portions calculated till now, we get;
= Rs.510+Rs.2100+Rs.1200+Rs.1800
= Rs.5610
19. Under which convention of accounting, notes to accounts are shown after balance sheet in the financial statements?
A. Convention of Full Disclosure
B. Convention of Materiality
C. Convention of Conservatism/Prudence D. Convention of Consistency
20. Drawing Account is a _________ Account.
A. Real
B. Personal
C. Nominal
D. Notional
21. Wages paid Rs. 5,000 on purchase of furniture is ______.
A. Revenue Expenditure
B. Deferred Revenue Expenditure
C. Capital Expenditure
D. Added to Wages A/c
22. Instead of preparing separate accounts for items like calculators, staplers, paper punching machine and other stationery items, they all are grouped under one stationery expense account based on _________ concept/convention.
A. Dual Aspect
B. Consistency
C. Materiality
D. Business entity
23. From the following information, calculate net profit- Wages - Rs.24000, Carriage Inward -Rs.12000, Purchase- Rs.3,88,000, Closing Stock Rs.33,000, Sales- Rs.7,88,000, Salary- Rs.45,000, Finance Expenses - Rs. 3000, Advertisement Expense -Rs.6000,
Creditors -Rs.12000, Debtors- Rs. 13000.
A. Rs. 3,64,000
B. Rs. 4,49,950
C. Rs. 3,43,000
D. Rs. 3,98,000
24. Avinash of ahmadabad has purchased goods of Rs. 2,00,000 from Rocky of Mumbai and payment is made by cheque. 12% IGST rate is applicable to this transaction. Which other account will be debited along with Purchase A/c of Rs. 200,000 while passing journal entry?
A. Bank A/c 2,24,000
B. CGST Input Receivable A/c Rs. 24,000
C. IGST Input Receivable A/c Rs. 24,000
D. SGST Input Receivable A/c Rs. 12,000
25. What is the correct order in which the accounting transactions are recorded in the books?
A. Ledger, Trail Balance, Journal, Balance Sheet, Profit & Loss a/c
B. Journal, Subsidiary books, Ledger, Balance Sheet, Profit & Loss a/c
C. Journal, Ledger, Trail Balance, Profit & Loss a/c, Balance Sheet
D. Profit & Loss a/c, Ledger, Balance Sheet, Journal.
26. Debtors as per Trial Balance - Rs.47000, Bad Debts not yet provided - Rs. 2000, Provision for bad debts @ 5% on sundry debtor, Provision for discount on debtor @ 2% to be provided. Calculate the amount of provision for discount on debtors.
A. Rs.855
B. Rs.940
C. Rs.900
D. Rs.2250
Solution:
Debtors 47,000
Less: Bad Debts (2,000)
-------------
45,000
Less: Provision for
bad debts (2,250) (45,000*5%)
--------------
42,750
Provision for
discount on debtors 855 (42,750*2%)
The correct option is A (Rs.855)
27. Find out which of the following statements is/are correct?
Statement I 'A document in writing containing the terms of partnership as agreed by the partners is called Partnership Deed'.
Statement Il 'Going Concern Concept also provides the basis of charging depreciation on fixed assets'.
A. Only Statement I is correct
B. Only Statement Il is correct
C. Both Statements are Incorrect
D. Both Statements are correct
28. A debtor of Rs. 80,000 declared insolvent and liquidator has declared that 0.70 paisa will be paid against Re. 1 outstanding. Calculate the amount of bad debt.
A. Rs.24,000
B. Rs.48,000
C. Rs.56,000
D. Rs.80,000
29. Chirag and Deepali are partners in partnership firm without any agreement. Chirag has given a loan of Rs. 1,00,000 from the first day of the financial year to the firm. At the end of year loss was incurred in the business. Following interest would be paid to Chirag by the firm:
A. Rs. 10,000
B. Rs. 6,000
C. Rs. 5,000
D. Rs. 3,000
30. Cost of material consumed - Rs. 2,33,450, Factory Overheads - Rs.1,23,100, Closing WIP - Rs. 17500, Sales - Rs. 7,89,000. Calculate Gross Profit.
A. Rs. 4,14,950
B. Rs. 4,49,950
C. Rs. 4,32,450
D. Rs. 7,89,000
31. Cash invested by owner is called _________.
A. Assets
B. Liabilities
C. Capital
D. Loan
32. In a partnership firm, Ram withdraws Rs. 400 in the middle of each month while Rohan withdraws Rs. 300 at the end of each month during the year. Calculate the
interest on drawing @ 15% p.a.
A. Ram - Rs. 360, Rohan - Rs. 247.50
B. Ram - Rs. 60, Rohan - Rs. 45
C. Ram Rs. 720, Rohan - Rs. 540
D. Ram Rs. 312, Rohan - Rs. 270
33. Mr. AB is a partner in partnership firm. Mr. AB provides loan of Rs. 1,75,000 to the firm. Partnership deed has not been prepared by them. Calculate the amount of interest on loan.
A. Rs. 10,500
B. Rs. 17,500
C. Rs. 8,750
D. No interest should be charged
34. Which of the following is not the advantage of accounting?
A. It acts as reliable evidence
B. It provides control over assets
C. Difficult to conceal fraud & theft
D. The data is historical in nature
35. From the given information, calculate prime cost-Raw material consumed:
Rs.4,10,000/- Direct wages: Rs. 70,000/- Direct expenses: Rs.40,000/- Factory overhead: Rs. 50,000/-
A. Rs.1,10,000
B. Rs.5,20,000
C. Rs.5,70,000
D. Rs.1,60,000
Explanation:
Given: Raw material consumed: Rs.4,10,000/-
Direct wages: Rs.70,000/-
Direct expenses: Rs.40,000/-
Factory overhead: Rs. 50,000/-
Asked: Prime cost
Formula: Prime cost = All direct cost
Solution:
Prime cost is the cumulation of all the direct cost associated with the product, it does not includes fixed cost.
---> Prime cost = Direct material + direct wages + direct expenses.
---> Prime cost = 4,10,000+70,000+40,000 = Rs.5,20,000
---> Thus, the prime cost will be Rs.5,20,000.
