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d) Gross profit

16) C. I. F. price meansa) Carriage, Insurance and Freight

b) Cost, Insurance and Freightc) Cost, Indent and Fixation

d) Cost, Insurance and fixation

17) Depreciation is charged at a fixed percentage on the value at which theassets stands in the book at the

beginning of every year.a) Revaluation method

b) Fund methodc) Written down methodd) Annuity method

18) Sale of old furniture with Rs. 10,000.The journal entry for this isa) Cash _ _ _ A/c Dr. 10,000

To furniture A/c 10,000b) Purchase_ _ A/c Dr. 10,000

To Cash A/c 10,000c) Cash _ _ A/c Dr. 10,000

To Purchase A/c 10,000d) Furniture A/c Dr. 10,000

To Cash A/c 10,000

19) Depreciation is provided ona) Current liabilities

b) Total assetsc) Current assetsd) Fixed assets

20) The capital required for maintainingroutine operationsa) Long term capital

b) Short term capitalc) Working capitald) Fixed capital

21) The book, which is required to bemaintained by a company under Companies Act 1956a) Copy book

b) Audit reportc) Audit note book d) Statutory book

22) An inflow of economic benefitsa) Liabilities b) Net profitc) Expenses

d) Income

23) The account shows the distributions of partnership profit among partnersa) Profit and loss approximation

account

b) Profit and loss accountc) Trading and profit and loss accountd) Double entry system of booking

keeping

24) The account kept a side for a knownliability of which the account cannot

be determined with substantialaccuracya) Reserve

b) Provision

c) Capital reserved) Profit

25) Loan obtained against hypothecationof an asseta) Unsecured loan

b) Long term loanc) Secured loand) Medium term loan

26) Every debit entry will have acorresponding credit entry. It is calleda) Single entry system of book

keeping b) Double entry system of book

keepingc) Balance sheetd) Profit & loss account

27) Bank reconciliation statement is prepared bya) Customer

b) Director c) Manager d) Clerk

28) Dividend will be paid first toa) Debenture holders

b) Preference shareholdersc) Auditorsd) Directors

29) The total of the sales book is posted tothe credit of thea) Purchase book

b) Sales return book

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c) Purchase return book d) Sales book

30) The date on which a bill becomes payable is calleda) Last date

b) Discounting datec) Time barred dated) Due date

31) A formal record of particular type of transactiona) Cost accounting

b) Financial Accountingc) Accountd) Accounting

32) Preference shareholders enjoy privilege over equity shareholders inrespect of a) Dividend

b) Lossc) Interestd) Gross profit

33) Depreciation is arise froma) Financial burden

b) Fall in the value moneyc) Passage of timed) Increase in the cost of asset

34) The accounting equation is satisfied bya) Capital = Loan + Assets

b) Liabilities = Net assetsc) Capital = Net assetsd) Capital = Assets + Liabilities

35) Owners’ investment in a companya) Issued share capital

b) Equity share capitalc) Authorised share capitald) Preference share capital

36) The document prepared to record allcash and bank receiptsa) Receipt voucher

b) Journal voucher c) Cash voucher d) Payment voucher

37) The profit to the shareholder on their investment isa) Profit

b) Dividendc) Net profitd) Remuneration

38) The term J, F. stands for a) Journal Folio

b) Job Folioc) Joint Fittingd) Job Finance

39) The report, which discloses certainvital statutory and non-statutoryinformationa) Auditor’s report

b) Directors reportc) Managers Reportd) Financial Report

40) F O B meansa) Free On Board

b) Free On Boxc) First On Boxd) First On Bail

PART –B

41) 250 packets hair oil costing Rs. 50 per packet purchased . Its total cost isequal toa) Rs. 12,500

b) Rs. 7,500c) Rs. 10,000d) Rs. 9,500

42) Capital introduced in the business, journal entry for this isa) Capital --- A/c Dr.

To Cash A/c b) Cash --- A/c Dr.

To Capital A/cc) Cash --- A/c Dr.

To Bank A/cd) Bank--- A/c Dr.

To cash A/c

43) Purchased furniture for Rs. 1,00,000.Two elements area) Furniture and purchases

b) Purchases and furniture

c) Furniture and cashd) Cash and furniture

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44) The two most important causes of difference between passbook andcashbook isa) 1) Bank charges not yet intimated

2) Cheques dishonoured but notintimated

b) 1) Cash bookdamaged2) Pass book lostc) Pass book damaged and mutilatedd) 1) Cheque lost

2) Pass book damaged

45) Cash received from Ram Rs. 650 wasdebited in his account. Therectification entry isa) Ram’s --- A/c Dr. 1300

To Suspense 1300

b) Suspense --- A/c Dr. 650To Ram’s A/c 650

c) Ram’s --- A/c Dr. 650To Suspense A/c 650

d) Suspense A/c Dr. 1300To Ram’s A/c 1300

46) Mr. A purchased 200 copies of textbooks. The selling price of eachcopy was Rs. 100. Later Mr. Areturned 10 copies of textbooks

because of defective printing. Now thetotal cost of returned booksa) Rs. 120

b) Rs. 1000c) Rs. 1400d) Rs. 1500

47) Both assets and owner’s equity(capital) would be increased bya) Proprietor’s withdrawals

b) Purchasing building on creditc) Retained earningsd) Purchasing of building for cash

48) Purchase of Govt. securities for cashwoulda) Reduce assets

b) Increase assetsc) Increase Liabilitiesd) Keep assets unchanged

49) Mr. X sells goods at cost plus 60%.The total sales were 32,000. The cost price of goods isa) Rs. 20,000

b) Rs. 16,000c) Rs. 34,000d) Rs. 25,000

50) If the profits of all the company is rs.10,00,000. the net remuneration

payable to director isa) Rs. 1,00,000 b) Rs. 1,10,000c) Rs. 1,20,000d) Rs. 90,000

51) If the cost of the machine is Rs. 50,000and depreciation to be written off at therate of 10% per annum. Under reducing balance method, what would

be the depreciation to be written off

during the second year a) Rs. 4,000

b) Rs. 5,000c) Rs. 4,500d) Rs. 4,250

52) Commission paid Rs. 2000 has been posted to salary account. Therectification entry will bea) Commission A/c Dr. 2000

To Salary A/c 2000 b) Salary A/c Dr. 2000

To commission A/c 2000c) Rent A/c Dr. 2000

To commission A/c 2000d) Cash A/c Dr. 2000

To Salary A/c 2000

53)On 31 st December 1999 Bank balanceas per cashbook of Suresh stood at Rs.4,320. On scrutinizing Bank accountwith the Bank passbook the cashier find that Bank interest of Rs. 50appearing in the passbook are not yetrecorded in the cashbook. Now Bank

balance as per passbook isa) Rs. 4320

b) Rs. 4420c) Rs. 4370d) Rs. 4270

54) _______ records all residual

transactionsa) Cash book b) Journal proper c) Ledger book

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d) None of the above

55) 50 packets of Tea powder costing Rs.27.50 per packet purchased. Its totalcosta) Rs. 1357

b) Rs. 1600c) Rs. 1500d) Rs. 1375

56) Mr. X purchased goods worth Rs.2,00,000. The supplier charges 10%sales tax. The purchase price will bea) Rs. 2,20,000

b) Rs. 1,80,000c) Rs. 1,90,000d) Rs. 2,00,000

57) If a company purchased a machine for Rs. 50,000 the useful life of machineryis 10 years and in value is rs. 5000. therate of depreciation when themanagement wants to depreciate it bystraight line methoda) 12%

b) 10%c) 9%d) 11%

58) Paid salary Rs. 400 to Mr. x for Journal entry isa) Salary ---- A/c Dr

To X’s A/c b) X’s --- A/c Dr.

To Salary A/cc) Salary--- A/c Dr.

To Cash A/cd) Cash --- A/c Dr.

To Salary A/c

59) If an expense on major repairs of machinery purchased second hand has

been debited to repairs account. Itinvokesa) An Error of Commission

b) An Error of Principlec) An Error of Omissiond) No Error

60) The following two are the statutory books to be maintained bya a companyunder different sections of theCompanies Act 1956

a) 1) Mintues Book 2) Purchase Daybook

b) 1) Register of shareholders2) Register of Debentures

c) 1) Sales book 2) Purchase book

d) 1) Purchase return book 2) Sales return book

PART –C

Problem No. 1On 31 st December 1999, the cashbook of Mr. x showed an over drawn bank balanceof Rs. 234 on comparing his cashbook with the bank passbook. He finds that:

a) A cheque for Rs. 50 sent to Mr. Y

had been entered in the cashcolumn of the cashbook

b) The bank column on the receiptsside of the cashbook was found to

be under cast by Rs. 20

61) Bank balance as passbook from theabove Problem No. 1a) Rs. 117

b) Rs. 269c) Rs. 264d) Rs. 246

62) Total Bank overdraft as per cashbook from the above Problem No. 1a) Rs. 234

b) Rs. 245c) Rs. 284d) Rs. 264

Q. no. : 63 – 64

Problem No. 2On 1 st March 2000 Mr. K drew 2 months

bill on Mr. L for Rs. 2000 and latter accepted the same on the due date the billwas dishonoured.

63) The due date for the bill isa) May 5 th

b) May 4 th

c) May 3 rd

d) May 7th

64) Journal entry in the books of Mr. K for the recipt of bill

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a) Bills receivable A/c Dr.To L’s A/c

b) K’s A/cTo Bills Receivable A/c

c) Bills Payable A/cTo K’s A/c

d) Bills Receivable A/cTo K’s A/c

Q. No. 65 – 69Problem No. 3:On 1 st Jan 1996 Sri Shankar purchasedmachinery for Rs. 6000 and spent Rs. 500for transport and Rs. 1000 for installation.On 36-6-1998 sold a part of machinerycosting Rs. 1500 for Rs. 1050. On thesame date he bought new machinery for

Rs. 1800. Every year, depreciation wascharged at 10% per annum on the originalcost method

65) What is the value of machinery as on31/12/1998 as per Problem No. 3?a) Rs. 8685

b) Rs. 10000c) Rs. 6000d) Rs. 6500

66) What is the total depreciation in thefirst year as per Problem No. 3?a) Rs. 600

b) Rs. 650c) Rs. 750d) Rs. 700

67) What is the net loss from the sale of the machinery as per Problem 3?a) Rs. 90

b) Rs. 60c) Rs. 70d) Rs. 75

68) What is the net depreciation chargedon the new machinery as on 31-12-1998 as per Problem 3?a) Rs. 72

b) Rs. 45c) Rs. 90d) Rs. 75

69) What is the selling price of machineryas per problem 3?a) Rs. 1200

b) Rs. 1050c) Rs. 1100d) Rs. 1300

Q. No. : 70 – 75Problem No. 4:

The Following is the Trial Balance of SriShiva Kumar as on 31 st December 2000Particulars Dr (Rs.) Cr

(Rs.)Capital 42500Drawings 3750Stock on 1 st Jan 1999 6000Purchases and Sales 43000 85000Returns 1000 500Discount 250 350Income Tax 350Commission 500Office Salary 8650Office Rent 1000Advertising 850Debtors / Creditors 42500 15000Reserve for doubtfuldebt

1500

ManufacturingWages

4300

Bills Receivable /

payable

2500 2500

Carriage 300Machinery 20000Motor Van 3500Land and Building 5000Office Expenses 750Cash at Bank 3000Cash in Hand 1150Total 147850 147850

Other Adjustments1. Sock on 31 st Dec. 2000 – Rs. 50002. Debt worth Rs. 1000 should be writtenoff as bad3. Depreciate machinery by 5% and motor van by 15%4. Reserve for bad and doubtful debtsshould be increased by Rs. 3005. Commission accured but not receivedRs. 2506. Goods worth Rs. 250 were used by the

proprietor for his personal use.7. On 20 th Dec 2000 a fire broke out in theshop and goods worth Rs. 1000 werecompletely destroyed. The insurance

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company accepted it claim for Rs. 750only and paid the amount on 1 st Jan 2001

70) What is the total amount of sales returnas per Problem No. 4?a) Rs. 1000

b) Rs. 500c) Rs. 2000d) Rs. 1500

71) What is the Gross profit as per Problem No. 4?a) Rs. 38150

b) Rs. 37150c) Rs. 38950d) Rs. 37010

72) What is the total amount of commission credited to Profit and LossAccount as per Problem No. 4?a) Rs. 500

b) Rs. 250c) Rs. 750d) Rs. 650

73) What is the total amount of depreciation charged to Profit and LossAccounts per Problem No. 4?a) Rs. 1525

b) Rs. 1255c) Rs. 2155d) Rs. 2551

74) What is the net profit as per Problem No. 4?a) Rs. 23765

b) Rs. 23567c) Rs. 32567d) Rs. 23675

75) What is total discount debited to Profitand Loss Account as per Problem No.4?a) Rs. 350

b) Rs. 530c) Rs. 250d) Rs. 520

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