TIME 1.15 HOURS (PAPER JUNE,2017)
STUDENT CAN CHECK THERE PROGRESS.
GOOD LUCK TO ALL OF THEM.
01. A businessman purchased goods for Rs. 25,00,000 and sold 80% of such goods
during the accounting year ended 31st March, 2009. The market value of the
remaining goods was Rs. 4,00,000. He valued the closing inventory at cost. He
violated the concept of
(a) Money measurement (b) Conservatism.
(c) Cost. (d) Periodicity.
02. A change in accounting policy is justified.
(a) To comply with accounting standard.
(b) To ensure more appropriate presentation of the financial statement of the enterprise.
(c) To comply with law
(d) All of the above.
03. Which of the following are not the advantage of accounting standard
(a) It reduce confusing variation in the accounting treatments used to prepare financial
statements.
(b) Some information’s are not required by law. To disclose standards May call for
disclosure beyond that required by law.
(c) Financial statements become comparable.
(d) It leads to confusion in deciding about the accounting policy.
04. Goods worth Rs. 2,000 were distributed as free samples in the market. The journal
entry will be__________
(a) Drawing Dr. 2,000
To Purchase A/c 2,000
(b) Sales A/c Dr. 2,000
To Cash A/c 2,000
(c) Advertisement A/c Dr. 2,000
To Purchase A/c 2,000
(d) No entry
05. Johny purchased goods of Rs.5,000 for cash at 20% trade discount and 5% cash
discount. Purchases A/c is to be debited by Rs.______
(a) 3,800 (b) 5,000
(c) 3,750 (d) 4,000
06. In the ledger an account shows credit balance at the end of the year. This balance is
shown as _____.
(a) To balance c/d on the debit side (b) By balance c/d on the credit side
(c) To balance b/d on the debit side (d) By balance b/d on the credit side
07. A purchase return of Rs.2,000 has been wrongly debited to sales Returns A/c. Due to
this error, in the trial balance_________.
(a) The total of debit balance will be Rs.2,000 more than the total of credit balances.
(b) The total of credit balances will be Rs.2,000 more than the total of debit balances.
(c) The total of debit balances will be Rs.4,000 more than the total of credit
balances.
(d) The total of credit balances will be Rs.4,000 more than the total of debit balances.
08. Stamps duty for the purchase of a property is debited to Legal Expenses A/c. This is
an error of _______________
(a) Commission (b) Omission
(c) Principle (d) Not an error
09. In the course of locating the reason for the difference in the trial balance, It has been
found that an amount received from a customer has been debited to his account and
a purchase from a supplier has been wrongly entered in the ledger as Rs. 17,720
instead of Rs.17,270. These errors may be classified as_______
(a) Errors of commission.
(b) Errors of omission .
(c) Errors of Principle
(d) Both errors of commission and omission.
10. A machinery was purchased for Rs. 1,00,000, Expenses incurred were – Brokerage
2% Repairs Rs. 1,500; Transport Rs. 3000; trial run Rs. 7,000; installation Rs. 4,500
After operating the machine for 11 months an amount of Rs. 8,000 was spent on
repairs. Cost of machinery to be debited to Machinery A/c will be Rs.
(a) 1,18,000 (b) 1,26,000
(c) 1,00,000 (d) 1,02,000
11. A company has filed a legal suit against competitive company claiming Rs. 5,00,000
for infringement of patent rights. The outcome of the legal suit is uncertain. The
claim may be treated as ________
(a) Income (b) Contingent Asset
(c) Provision (d) Contingent Liability
12. When outflow of economic resources to settle an obligation is not probable or the
amount expected to be paid to settle the liability cannot be measured with sufficient
reliability, it is called
(a) Provision (b) Contingent liability
(c) Secured Loan (d) Unsecured Loan
13. A Company deals in electronic goods (AC, fridge, TV.etc) Purchases to Ac and install
in its showroom. the expense will be record in.
(a) Drawing A/C (b) Purchase A/C
(c) Fixed A/C (d) P & L A/C
14. Bank Reconciliation is used to show the difference between the balance of____
(a) Cash columns of cash book & passbook
(b) Bank columns of cashbook & passbook
(c) Cash columns of cashbook & Bank columns of cash book
(d) None of the above
15. Debit balance as per Cash book of Axe Ltd. As on 31.03.2016 is Rs 2,000. Cheques
deposited but not cleared amounts to the Rs.100 and cheques issued but not
presented of Rs. 150. The bank allowed interest amounting Rs. 100 and collected
dividend Rs. 50 on behalf of Axe Ltd. Balance as per passbook should be
(a) Rs.1,700 (b) Rs. 2,000
(c) Rs. 2,100 (d) Rs. 2,200
16. Average inventory=Rs.30,000. Closing Inventory is Rs. 5,000 more than opening
inventory will be
(a) Rs.32,500 (b) Rs.35,000
(c) Rs.30,000 (d) Rs.60,000
17. Cost of an asset=Rs.2,00,000
Rate of depreciation=10% under WDV method
Value of the asset at the end of 2nd year will be Rs._______
(a) 1,80,000 (b) 1,62,000
(c) 1,48000 (d) 1,50,000
18. Depletion method of charging depreciation is adopted for which of the following
assets?
(a) Plant and machinery
(b) Wasting assets like mines and quarries
(c) Buildings
(d) Trademarks
19. If goods are sold but not delivered to the customer, they will be included in_________
(a) Closing inventory (b) Goods in transit
(c) Sales (d) Sales in returns
20. At the time of finalization of Financial Statements, Bad debts written of are to be
transferred to
(a) Provisions (b) Reserves
(c) Capital A/c (d) Profit & Loss A/c
21. From the following find out the correct equation
A=Opening inventory;
B=Purchases
C=Closing Inventory
D=Cost of Goods sold
(a) D-A=B+C (b) A+B=D-C
(c) A-C=D+B (d) A+B=C+D
22. Generals Manager gets 6% commission on net profit after charging such commission.
Gross profit Rs.60,000 and other indirect expenses other than manager’s
commission are Rs.7,000. Commission amount will be
(a) Rs.3,000 (b) Rs.3,396
(c) Rs.3,500 (d) None of the above
23. A decrease in provision for doubtful debts would result in:
(a) An increase in liabilities (b) A decrease in working capital
(c) A decrease in net profit (d) An increase in net profit
24. An amount of Rs. 68,000 was paid on 3/3/17 for advertisement in a newspaper. This
was published in the news paper on 3/4/17. This expenditure will be shown as______
(a) Liability in the balance sheet on 31/3/17
(b) Prepaid expenses on the assets side of balance sheet on 31/3/17
(c) An expenses in the profit and loss A/c for the year ended 31/3/17
(d) None of the above
25. Opening capital = Rs .5,00,000
Drawings = Rs. 1,20,000
Assets = Rs 8,50,000
Liabilities = Rs. 75,000
Closing capital & profit will be Rs.________
(a) 8,50,000 & 3,95,000 (b) 7,75,000 & 3,95000
(c) 7,75,000 & 1,55,000 (d) 8,50,000 & 3,55,000
26. While finalizing the current year’s profit, the company realized that there was an
error in the Valuation of closing Inventory of the previous year. in the previous year,
closing Inventory was valued more by Rs. 45,000. As a result
(a) Previous year’s profit is overstated and current year’s profit is also overstated
(b) Previous year’s profit is understated and current year’s profit is overstated
(c) Previous year’s profit is understated and current year’s profit is also understated
(d) Previous year’s profit is overstated and current year’s profit is understated
27. Decrease in the balance of trade receivables results in________________
(a) Increase in cash (b) Increase in liabilities
(c) Increase in capital (d) Increase in loan
28. If an individual asset is increased, there will be a corresponding
(a) Increase of another asset or increase of capital
(b) Decrease of another asset or increase of liability
(c) Decrease of specific liability or decrease of capital
(d) Increase of drawings and liability
29. A bill of Rs. 40,000 was discounted by P with his bank for Rs.39,000. At maturity, the
bill returned dishonoured, noting charges amounted to Rs.500. How much amount
will the bank deduct from P’s bank balance at the time of such dishonor?
(a) Rs.40,000 (b) Rs. 39,500
(c) Rs. 39,000 (d) Rs.40,500
30. X draws a bill on 1/04/16 for Rs.60,000 for 3 months. Y accepted it 8/04/16. The bill
was discounted on 2/05/16 @ 12%p.a. The amount of discount will be Rs.___________
(a) 1800 (b) 1200
(c) 600 (d) 1300
31. A draws a bill on B for Rs.1,00,000 for 3 months. The bill was discounted with bank at
15%p.a. Half of the proceeds are remitted to B. The amount received by B will be
Rs.____
(a) 33,334 (b) 25,000
(c) 50,000 (d) 48,125
32. While preparing BRS, Mr. X found that a bill of exchanges for Rs. 5,000 which was
discounted with bank was dishonoured and the bank paid noting charges of Rs. 100.
The entry required in the books of X will be___________
(a) Customer A/c Dr.5,100
To Bank A/c 5,100
(b) Customer A/c. Dr. 5,000
To Bank A/c 4,900
To bank charges A/c 100
(c) Customer A/c. Dr.5,000
Bank charges A/c Dr.100
To Bank A/c 5,100
(d) Customer A/c Dr.5,100
To Bank A/c 5,000
To bank charges A/c 100
33. If consignor draws a bill on consignee and discounted it with the banker, the
discounting charges will be debited in:
(a) General P/L A/c (b) Consignment A/c
(c) Consignee A/c (d) Trade Receivables A/c
34. Rishi of Kolkata consigned goods costing Rs.50,000 to Zenith of Mumbai at cost+ 20%
10% of the goods were lost in transit.70% of the goods received were sold at 15%
above invoice price. Amount of sales will be Rs.____?
(a) 37,800 (b) 39,600
(c) 43,470 (d) 44,370
35. Mr. X consigned 5,000 boxes of goods to Mr. Y @ Rs.250 each. He paid Freight
Rs.3,500 & insurance Rs. 1,500.Y paid expenses of Rs.5,000. He sold 3/5 of the
boxes@ Rs. 300 each. The remaining boxes were taken by Y at cost price. The value of
inventory taken by Y will be Rs._____
(a) 5,00,000 (b) 5,02,000
(c) 6,00,000 (d) None of the above
36. State which of the following statements is true?
(a) Memorandum Joint venture account is prepared to find out profit on venture.
(b) Memorandum joint venture account is prepared to find out amount due from co-
venture
(c) Memorandum Joint Venture Account is prepared when separate sets of books is
maintained
(d) In memorandum Joint Venture Account only one venture’s transactions are recoded.
37. Which of the following statements is not true?
(a) Joint venture is a going concern
(b) Joint venture is terminable in nature
(c) Joint venture does not follows accrual basis of accounting
(d) He co-venturers share the profit in agreed ratio
38. X and Y entered into a joint venture to underwrite the shares of K Ltd. at a
commission of 5%. K Ltd. made an issue of 1,00,000 equity shares of Rs.10 each. 90%
of the issue is subscribed by the public. The profit sharing between x and Y is 2:3. The
balance unsubscribed shares are purchased by X and Y in profit sharing ratio. How
shares are purchased by Y ?
(a) 4,000 (b) 6,000
(c) 10,000 (d) 90,000
39. Goods of Rs. 800 (sales price) sent on sale on approval basis were included in the
sales book. The profit included in the sales was 25% on cost. Inventory with the
party will increase our closing inventory by
(a) Rs. 600 (b) Rs. 640
(c) Rs. 680 (d) Rs. 700
40. Interest on capital will be paid to the partners if provided for in the agreement but
only from ________
(a) Current Year’s Profits. (b) Reserves.
(c) Accumulated Profits. (d) Goodwill
41. P & Q are the partners in a firm sharing profits and losses in the ratio 3:2 with
capitals of Rs. 1,50,000 and Rs. 1,00,000 respectively. They admitted R as a partner
with Rs. 90,000 as capital for 1/4th share in the profits of the firm. They adjust the
capitals of other partners according to R’s capital and his share in the business. How
much cash will be brought in by P?
(a) Rs. 8,000 (b) Rs. 9,000
(c) Rs. 12,000 (d) Rs. 10,000
42. Outgoing partner is compensated for parting with firm’s future profits in favour of
remaining partners. In what ratio do the remaining partners contribute to such
compensation amount?
(a) Gaining Ratio (b) Capital Ratio
(c) Sacrificing Ratio (d) Profit Sharing Ratio
43. Tom & Jerry are partners in a firm sharing the profits and losses in the ration of 3:2.
Tom’s capital Rs. 70,000 & Jerry’s capital RS. 50,000. They agreed to take Shiva as a
new partner for 1/5th share in future profits. Calculate the amount of capital to be
brought in by Shiva.
(a) Rs. 16,000 (b) Rs. 18,000
(c) Rs. 80,000 (d) Rs. 30,000
44. X,Y,& Z are partners in a firm sharing profits and losses in the ratio of 5:4:3. Z died on
30/09/16. Profit for the year 2016-17 was Rs. 40,000. What is the share of Z in the
profits of the firm till the date of his death?
(a) Rs. 6,000 (b) Rs. 5,000
(c) Rs. 4,500 (d) Nil
45. In case of death of a partner, the amount of JLP received by the firm will be
distributed _______
(a) To all the partners as per their old profit sharing ratio
(b) To the continuing partners as per their new profit sharing ratio
(c) To the continuing partners as per their sacrificing ratio
(d) To the continuing partners as per their gaining ratio
46. X & Y are partners in a firm sharing profits and losses in the ration of 3:2, Z was
admitted as a new partner for 1/5th share of the future profits. Z takes his entire
share from X only. The new profit sharing ration of X,Y & Z will be
(a) 12:8:4 (b) 2:2:1
(c) 1:1:1 (d) None of the above
47. Capital employed = Rs. 6,00,000
Average profit = Rs. 1,05,000
Normal rate of return = 15%
Value of goodwill under Capitalisation method will be Rs.
(a) 1,00,000 (b) 90,000
(c) 1,10,000 (d) None of these
48. A partnership firm maintains its accounts on calendar year basis. B, one of the three
partners died on 31/03/10. The profit of the firm for the year 2009 was Rs. 75,000
which was distributed among the partners equally. The share of B in the profits of
the firm till the date of his death on the basis of previous year’s profits will be Rs.
(a) 25,000 (b) 6,250
(c) 18,750 (d) 37,500
49. When shares are forfeited, the share capital A/c is debited with _________ and the share
forfeiture A/c is credited with___________
(a) Paid-up capital of shares Forfeited ;
called up capital of shares forfeited
(b) Called up capital of shares Forfeited;
calls in arrear of shares forfeited
(c) Called up capital of shares Forfeited;
Amount received on shares forfeited
(d) Calls in arrears of shares Forfeited;
Amount received on shares forfeited
50. When shares are issued to promoters for the services offered by them, the A/c that
will be debited with the nominal value of shares is_________
(a) Preliminary expenses (b) Good will
(c) Asset A/c (d) Share capital
51. Discount on issue of debentures is a ___________________
(a) Revenue loss to be charged in the year of issue
(b) Capital loss to be written off from capital reserve
(c) Capital loss to be written off over the tenure of the debentures
(d) Capital loss to be shown as goodwill
52. Which of the following can be utilized for redemption of preference shares?
(a) The proceeds of fresh issue of equity shares
(b) The proceeds of issue of debentures
(c) The proceeds of issue of fixed deposit
(d) All of the above
53. A Company issued 6,000, 10% debentures of Rs. 100 each at a discount of 10%
repayable after 5 years at a premium of 5%. Total loss on issue of debentures will be
Rs. _____
(a) 90,000 (b) 30,000
(c) 60,000 (d) 75,000
54. M/s VSI Ltd. forfeited 300 equity shares of Rs.10 each issued as per for non-payment
of Rs.4 per share by the holder. These shares are reissued at Rs.5 per share as fully
paid. What is the amount to be transferred to capital reserve A/c?
(a) Rs. 300 (b) Rs. 500
(c) Rs. 600 (d) Rs.800
55. A company has forfeited 3,000 equity shares of Rs. 10 each. For no-payment of Rs. 3
per share on which Rs. 9 called up. on forfeiture, Share capital A/c is debited by Rs.
_____________
(a) 27,000 (b) 30,000
(c) 22,000 (d) 9,000
56. if debentures are issued as collateral security the journal entry will be________________
(a) Debit Debenture Suspense A/c and Credit Debenture A/c
(b) Debit Cash A/c and Credit Loan A/c
(c) Debit Cash A/c and Credit Debentures A/c
(d) Debit Debenture Securities A/c & Credit Cash A/c
57. M/s X Ltd. took over the assets of Rs. 4,60,000 & liabilities of Rs. 30,000 of Rs. B Ltd.
for a purchase consideration of Rs. 4,40,000. The company issued 10% debentures of
Rs. 100 each at a premium of 10% towards the purchase consideration no. of
debentures issued will be________________
(a) 4,200 (b) 4,000
(c) 3,000 (d) 4,400
58. Preference shares of Rs. 4,00,000 were redeemed at a premium of 2% by the issue of
equity shares of Rs. 2,00,000 at a premium of 12%. The amount to be transferred to
CCR will be Rs. ______________
(a) 2,84,000 (b) 2,04,000
(c) 1,84,000 (d) 2,00,000
59. Capital at the end of the year Rs. 5,00,000 Drawings during the year Rs.50,000
Profit for the year Rs.1,00,000 .Interest on opening capital@10% per annum will be
(a) 50,000 (b) 5,50,000
(c) 45,000 (d) 55,000
60. Fluctuating Capital A/C is credited by _____
(a) Interest on Partner’s capital
(b) Partner’s share in Profit of the year
(c) Partner’s Salary or remuneration
(d) All of the above
STUDENT CAN CHECK THERE PROGRESS.
GOOD LUCK TO ALL OF THEM.
01. A businessman purchased goods for Rs. 25,00,000 and sold 80% of such goods
during the accounting year ended 31st March, 2009. The market value of the
remaining goods was Rs. 4,00,000. He valued the closing inventory at cost. He
violated the concept of
(a) Money measurement (b) Conservatism.
(c) Cost. (d) Periodicity.
02. A change in accounting policy is justified.
(a) To comply with accounting standard.
(b) To ensure more appropriate presentation of the financial statement of the enterprise.
(c) To comply with law
(d) All of the above.
03. Which of the following are not the advantage of accounting standard
(a) It reduce confusing variation in the accounting treatments used to prepare financial
statements.
(b) Some information’s are not required by law. To disclose standards May call for
disclosure beyond that required by law.
(c) Financial statements become comparable.
(d) It leads to confusion in deciding about the accounting policy.
04. Goods worth Rs. 2,000 were distributed as free samples in the market. The journal
entry will be__________
(a) Drawing Dr. 2,000
To Purchase A/c 2,000
(b) Sales A/c Dr. 2,000
To Cash A/c 2,000
(c) Advertisement A/c Dr. 2,000
To Purchase A/c 2,000
(d) No entry
05. Johny purchased goods of Rs.5,000 for cash at 20% trade discount and 5% cash
discount. Purchases A/c is to be debited by Rs.______
(a) 3,800 (b) 5,000
(c) 3,750 (d) 4,000
06. In the ledger an account shows credit balance at the end of the year. This balance is
shown as _____.
(a) To balance c/d on the debit side (b) By balance c/d on the credit side
(c) To balance b/d on the debit side (d) By balance b/d on the credit side
07. A purchase return of Rs.2,000 has been wrongly debited to sales Returns A/c. Due to
this error, in the trial balance_________.
(a) The total of debit balance will be Rs.2,000 more than the total of credit balances.
(b) The total of credit balances will be Rs.2,000 more than the total of debit balances.
(c) The total of debit balances will be Rs.4,000 more than the total of credit
balances.
(d) The total of credit balances will be Rs.4,000 more than the total of debit balances.
08. Stamps duty for the purchase of a property is debited to Legal Expenses A/c. This is
an error of _______________
(a) Commission (b) Omission
(c) Principle (d) Not an error
09. In the course of locating the reason for the difference in the trial balance, It has been
found that an amount received from a customer has been debited to his account and
a purchase from a supplier has been wrongly entered in the ledger as Rs. 17,720
instead of Rs.17,270. These errors may be classified as_______
(a) Errors of commission.
(b) Errors of omission .
(c) Errors of Principle
(d) Both errors of commission and omission.
10. A machinery was purchased for Rs. 1,00,000, Expenses incurred were – Brokerage
2% Repairs Rs. 1,500; Transport Rs. 3000; trial run Rs. 7,000; installation Rs. 4,500
After operating the machine for 11 months an amount of Rs. 8,000 was spent on
repairs. Cost of machinery to be debited to Machinery A/c will be Rs.
(a) 1,18,000 (b) 1,26,000
(c) 1,00,000 (d) 1,02,000
11. A company has filed a legal suit against competitive company claiming Rs. 5,00,000
for infringement of patent rights. The outcome of the legal suit is uncertain. The
claim may be treated as ________
(a) Income (b) Contingent Asset
(c) Provision (d) Contingent Liability
12. When outflow of economic resources to settle an obligation is not probable or the
amount expected to be paid to settle the liability cannot be measured with sufficient
reliability, it is called
(a) Provision (b) Contingent liability
(c) Secured Loan (d) Unsecured Loan
13. A Company deals in electronic goods (AC, fridge, TV.etc) Purchases to Ac and install
in its showroom. the expense will be record in.
(a) Drawing A/C (b) Purchase A/C
(c) Fixed A/C (d) P & L A/C
14. Bank Reconciliation is used to show the difference between the balance of____
(a) Cash columns of cash book & passbook
(b) Bank columns of cashbook & passbook
(c) Cash columns of cashbook & Bank columns of cash book
(d) None of the above
15. Debit balance as per Cash book of Axe Ltd. As on 31.03.2016 is Rs 2,000. Cheques
deposited but not cleared amounts to the Rs.100 and cheques issued but not
presented of Rs. 150. The bank allowed interest amounting Rs. 100 and collected
dividend Rs. 50 on behalf of Axe Ltd. Balance as per passbook should be
(a) Rs.1,700 (b) Rs. 2,000
(c) Rs. 2,100 (d) Rs. 2,200
16. Average inventory=Rs.30,000. Closing Inventory is Rs. 5,000 more than opening
inventory will be
(a) Rs.32,500 (b) Rs.35,000
(c) Rs.30,000 (d) Rs.60,000
17. Cost of an asset=Rs.2,00,000
Rate of depreciation=10% under WDV method
Value of the asset at the end of 2nd year will be Rs._______
(a) 1,80,000 (b) 1,62,000
(c) 1,48000 (d) 1,50,000
18. Depletion method of charging depreciation is adopted for which of the following
assets?
(a) Plant and machinery
(b) Wasting assets like mines and quarries
(c) Buildings
(d) Trademarks
19. If goods are sold but not delivered to the customer, they will be included in_________
(a) Closing inventory (b) Goods in transit
(c) Sales (d) Sales in returns
20. At the time of finalization of Financial Statements, Bad debts written of are to be
transferred to
(a) Provisions (b) Reserves
(c) Capital A/c (d) Profit & Loss A/c
21. From the following find out the correct equation
A=Opening inventory;
B=Purchases
C=Closing Inventory
D=Cost of Goods sold
(a) D-A=B+C (b) A+B=D-C
(c) A-C=D+B (d) A+B=C+D
22. Generals Manager gets 6% commission on net profit after charging such commission.
Gross profit Rs.60,000 and other indirect expenses other than manager’s
commission are Rs.7,000. Commission amount will be
(a) Rs.3,000 (b) Rs.3,396
(c) Rs.3,500 (d) None of the above
23. A decrease in provision for doubtful debts would result in:
(a) An increase in liabilities (b) A decrease in working capital
(c) A decrease in net profit (d) An increase in net profit
24. An amount of Rs. 68,000 was paid on 3/3/17 for advertisement in a newspaper. This
was published in the news paper on 3/4/17. This expenditure will be shown as______
(a) Liability in the balance sheet on 31/3/17
(b) Prepaid expenses on the assets side of balance sheet on 31/3/17
(c) An expenses in the profit and loss A/c for the year ended 31/3/17
(d) None of the above
25. Opening capital = Rs .5,00,000
Drawings = Rs. 1,20,000
Assets = Rs 8,50,000
Liabilities = Rs. 75,000
Closing capital & profit will be Rs.________
(a) 8,50,000 & 3,95,000 (b) 7,75,000 & 3,95000
(c) 7,75,000 & 1,55,000 (d) 8,50,000 & 3,55,000
26. While finalizing the current year’s profit, the company realized that there was an
error in the Valuation of closing Inventory of the previous year. in the previous year,
closing Inventory was valued more by Rs. 45,000. As a result
(a) Previous year’s profit is overstated and current year’s profit is also overstated
(b) Previous year’s profit is understated and current year’s profit is overstated
(c) Previous year’s profit is understated and current year’s profit is also understated
(d) Previous year’s profit is overstated and current year’s profit is understated
27. Decrease in the balance of trade receivables results in________________
(a) Increase in cash (b) Increase in liabilities
(c) Increase in capital (d) Increase in loan
28. If an individual asset is increased, there will be a corresponding
(a) Increase of another asset or increase of capital
(b) Decrease of another asset or increase of liability
(c) Decrease of specific liability or decrease of capital
(d) Increase of drawings and liability
29. A bill of Rs. 40,000 was discounted by P with his bank for Rs.39,000. At maturity, the
bill returned dishonoured, noting charges amounted to Rs.500. How much amount
will the bank deduct from P’s bank balance at the time of such dishonor?
(a) Rs.40,000 (b) Rs. 39,500
(c) Rs. 39,000 (d) Rs.40,500
30. X draws a bill on 1/04/16 for Rs.60,000 for 3 months. Y accepted it 8/04/16. The bill
was discounted on 2/05/16 @ 12%p.a. The amount of discount will be Rs.___________
(a) 1800 (b) 1200
(c) 600 (d) 1300
31. A draws a bill on B for Rs.1,00,000 for 3 months. The bill was discounted with bank at
15%p.a. Half of the proceeds are remitted to B. The amount received by B will be
Rs.____
(a) 33,334 (b) 25,000
(c) 50,000 (d) 48,125
32. While preparing BRS, Mr. X found that a bill of exchanges for Rs. 5,000 which was
discounted with bank was dishonoured and the bank paid noting charges of Rs. 100.
The entry required in the books of X will be___________
(a) Customer A/c Dr.5,100
To Bank A/c 5,100
(b) Customer A/c. Dr. 5,000
To Bank A/c 4,900
To bank charges A/c 100
(c) Customer A/c. Dr.5,000
Bank charges A/c Dr.100
To Bank A/c 5,100
(d) Customer A/c Dr.5,100
To Bank A/c 5,000
To bank charges A/c 100
33. If consignor draws a bill on consignee and discounted it with the banker, the
discounting charges will be debited in:
(a) General P/L A/c (b) Consignment A/c
(c) Consignee A/c (d) Trade Receivables A/c
34. Rishi of Kolkata consigned goods costing Rs.50,000 to Zenith of Mumbai at cost+ 20%
10% of the goods were lost in transit.70% of the goods received were sold at 15%
above invoice price. Amount of sales will be Rs.____?
(a) 37,800 (b) 39,600
(c) 43,470 (d) 44,370
35. Mr. X consigned 5,000 boxes of goods to Mr. Y @ Rs.250 each. He paid Freight
Rs.3,500 & insurance Rs. 1,500.Y paid expenses of Rs.5,000. He sold 3/5 of the
boxes@ Rs. 300 each. The remaining boxes were taken by Y at cost price. The value of
inventory taken by Y will be Rs._____
(a) 5,00,000 (b) 5,02,000
(c) 6,00,000 (d) None of the above
36. State which of the following statements is true?
(a) Memorandum Joint venture account is prepared to find out profit on venture.
(b) Memorandum joint venture account is prepared to find out amount due from co-
venture
(c) Memorandum Joint Venture Account is prepared when separate sets of books is
maintained
(d) In memorandum Joint Venture Account only one venture’s transactions are recoded.
37. Which of the following statements is not true?
(a) Joint venture is a going concern
(b) Joint venture is terminable in nature
(c) Joint venture does not follows accrual basis of accounting
(d) He co-venturers share the profit in agreed ratio
38. X and Y entered into a joint venture to underwrite the shares of K Ltd. at a
commission of 5%. K Ltd. made an issue of 1,00,000 equity shares of Rs.10 each. 90%
of the issue is subscribed by the public. The profit sharing between x and Y is 2:3. The
balance unsubscribed shares are purchased by X and Y in profit sharing ratio. How
shares are purchased by Y ?
(a) 4,000 (b) 6,000
(c) 10,000 (d) 90,000
39. Goods of Rs. 800 (sales price) sent on sale on approval basis were included in the
sales book. The profit included in the sales was 25% on cost. Inventory with the
party will increase our closing inventory by
(a) Rs. 600 (b) Rs. 640
(c) Rs. 680 (d) Rs. 700
40. Interest on capital will be paid to the partners if provided for in the agreement but
only from ________
(a) Current Year’s Profits. (b) Reserves.
(c) Accumulated Profits. (d) Goodwill
41. P & Q are the partners in a firm sharing profits and losses in the ratio 3:2 with
capitals of Rs. 1,50,000 and Rs. 1,00,000 respectively. They admitted R as a partner
with Rs. 90,000 as capital for 1/4th share in the profits of the firm. They adjust the
capitals of other partners according to R’s capital and his share in the business. How
much cash will be brought in by P?
(a) Rs. 8,000 (b) Rs. 9,000
(c) Rs. 12,000 (d) Rs. 10,000
42. Outgoing partner is compensated for parting with firm’s future profits in favour of
remaining partners. In what ratio do the remaining partners contribute to such
compensation amount?
(a) Gaining Ratio (b) Capital Ratio
(c) Sacrificing Ratio (d) Profit Sharing Ratio
43. Tom & Jerry are partners in a firm sharing the profits and losses in the ration of 3:2.
Tom’s capital Rs. 70,000 & Jerry’s capital RS. 50,000. They agreed to take Shiva as a
new partner for 1/5th share in future profits. Calculate the amount of capital to be
brought in by Shiva.
(a) Rs. 16,000 (b) Rs. 18,000
(c) Rs. 80,000 (d) Rs. 30,000
44. X,Y,& Z are partners in a firm sharing profits and losses in the ratio of 5:4:3. Z died on
30/09/16. Profit for the year 2016-17 was Rs. 40,000. What is the share of Z in the
profits of the firm till the date of his death?
(a) Rs. 6,000 (b) Rs. 5,000
(c) Rs. 4,500 (d) Nil
45. In case of death of a partner, the amount of JLP received by the firm will be
distributed _______
(a) To all the partners as per their old profit sharing ratio
(b) To the continuing partners as per their new profit sharing ratio
(c) To the continuing partners as per their sacrificing ratio
(d) To the continuing partners as per their gaining ratio
46. X & Y are partners in a firm sharing profits and losses in the ration of 3:2, Z was
admitted as a new partner for 1/5th share of the future profits. Z takes his entire
share from X only. The new profit sharing ration of X,Y & Z will be
(a) 12:8:4 (b) 2:2:1
(c) 1:1:1 (d) None of the above
47. Capital employed = Rs. 6,00,000
Average profit = Rs. 1,05,000
Normal rate of return = 15%
Value of goodwill under Capitalisation method will be Rs.
(a) 1,00,000 (b) 90,000
(c) 1,10,000 (d) None of these
48. A partnership firm maintains its accounts on calendar year basis. B, one of the three
partners died on 31/03/10. The profit of the firm for the year 2009 was Rs. 75,000
which was distributed among the partners equally. The share of B in the profits of
the firm till the date of his death on the basis of previous year’s profits will be Rs.
(a) 25,000 (b) 6,250
(c) 18,750 (d) 37,500
49. When shares are forfeited, the share capital A/c is debited with _________ and the share
forfeiture A/c is credited with___________
(a) Paid-up capital of shares Forfeited ;
called up capital of shares forfeited
(b) Called up capital of shares Forfeited;
calls in arrear of shares forfeited
(c) Called up capital of shares Forfeited;
Amount received on shares forfeited
(d) Calls in arrears of shares Forfeited;
Amount received on shares forfeited
50. When shares are issued to promoters for the services offered by them, the A/c that
will be debited with the nominal value of shares is_________
(a) Preliminary expenses (b) Good will
(c) Asset A/c (d) Share capital
51. Discount on issue of debentures is a ___________________
(a) Revenue loss to be charged in the year of issue
(b) Capital loss to be written off from capital reserve
(c) Capital loss to be written off over the tenure of the debentures
(d) Capital loss to be shown as goodwill
52. Which of the following can be utilized for redemption of preference shares?
(a) The proceeds of fresh issue of equity shares
(b) The proceeds of issue of debentures
(c) The proceeds of issue of fixed deposit
(d) All of the above
53. A Company issued 6,000, 10% debentures of Rs. 100 each at a discount of 10%
repayable after 5 years at a premium of 5%. Total loss on issue of debentures will be
Rs. _____
(a) 90,000 (b) 30,000
(c) 60,000 (d) 75,000
54. M/s VSI Ltd. forfeited 300 equity shares of Rs.10 each issued as per for non-payment
of Rs.4 per share by the holder. These shares are reissued at Rs.5 per share as fully
paid. What is the amount to be transferred to capital reserve A/c?
(a) Rs. 300 (b) Rs. 500
(c) Rs. 600 (d) Rs.800
55. A company has forfeited 3,000 equity shares of Rs. 10 each. For no-payment of Rs. 3
per share on which Rs. 9 called up. on forfeiture, Share capital A/c is debited by Rs.
_____________
(a) 27,000 (b) 30,000
(c) 22,000 (d) 9,000
56. if debentures are issued as collateral security the journal entry will be________________
(a) Debit Debenture Suspense A/c and Credit Debenture A/c
(b) Debit Cash A/c and Credit Loan A/c
(c) Debit Cash A/c and Credit Debentures A/c
(d) Debit Debenture Securities A/c & Credit Cash A/c
57. M/s X Ltd. took over the assets of Rs. 4,60,000 & liabilities of Rs. 30,000 of Rs. B Ltd.
for a purchase consideration of Rs. 4,40,000. The company issued 10% debentures of
Rs. 100 each at a premium of 10% towards the purchase consideration no. of
debentures issued will be________________
(a) 4,200 (b) 4,000
(c) 3,000 (d) 4,400
58. Preference shares of Rs. 4,00,000 were redeemed at a premium of 2% by the issue of
equity shares of Rs. 2,00,000 at a premium of 12%. The amount to be transferred to
CCR will be Rs. ______________
(a) 2,84,000 (b) 2,04,000
(c) 1,84,000 (d) 2,00,000
59. Capital at the end of the year Rs. 5,00,000 Drawings during the year Rs.50,000
Profit for the year Rs.1,00,000 .Interest on opening capital@10% per annum will be
(a) 50,000 (b) 5,50,000
(c) 45,000 (d) 55,000
60. Fluctuating Capital A/C is credited by _____
(a) Interest on Partner’s capital
(b) Partner’s share in Profit of the year
(c) Partner’s Salary or remuneration
(d) All of the above
No comments:
Post a Comment