Deck 42: Accounting: Interest, Bill, Partnership Agreement,insurance, Contingent Liability, and Business Resources

Question 1

Interest received in advance account is a

A)Nominal Account
B)Real Account
C)Artificial Personal Account
D)Representative Personal Account

Answer 1

Representative Personal Account

Question 2

Shiva draws a bill on Sanat on 25th October, 2018 for 90 days, the maturity date of the bill will be

A)27th January, 2019
B)26th January, 2019
C)25th January, 2019
D)28th January, 2019

Answer 2

25th January, 2019

Question 3

Peeru and Simu entered in the business of buy and sale of food grain for a period of one year and sharing the profit in the ratio of 3:2, this agreement is a

A)Partnership
B)Consignment
C)Joint-venture
D)Lease

Answer 3

Joint-venture

Question 4

At the end of the year 2017-18, Prepaid Insurance Premium `7,500 appeared in the Trial Balance, it will be shown

A)only in Profit & Loss Account.
B)only in Balance Sheet.
C)both in Profit & Loss Account and in Balance Sheet.
D)not in Both in Profit & Loss Account and in Balance Sheet.

Question 5

Contingent Liability would appear

A)on the liabilities side of the Balance Sheet.
B)on the assets side of the Balance Sheet.
C)as a note in the Balance Sheet.
D)None of the above

Question 6

Debtors Ledger Adjustment Account is opened in the

A)Debtors Ledger
B)Creditors Ledger
C)General Ledger
D)Both Creditors Ledger and General Ledger

Question 7

Generally sacrifice ratio is concerned with the situation of

A)Admission of a new partner
B)Retirement of a partner
C)Dissolution of firm
D)Conversion of firm into company

Question 8

KCS purchased a machine from JPS on hire purchase system, whose cash price was `8,64,000. ` 2,16,000 being paid on delivery and balance in three annual instalments of `2,88,000 each. The amount of interest included in first installment would be

A)72,000
B)57,600
C)1,08,000
D)36,000

Question 9

Which of the following is a resource owned by the business with the purpose of using it for generating future profits?

A)Loan from Bank
B)Owner's Capital
C)Trade Mark
D)All of the above

Question 10

Chandu & Co.'s Account is a

A)Real Account
B)Nominal Account
C)Representative Personal Account
D)Artificial Personal Accounts

Question 11

Purchase of a laptop for office use wrongly debited to Purchase Account. It is an error of

A)Omission
B)Commission
C)Principle
D)Misposting

Question 12

Which of the following term is most suitable for writing off Patent?

A)Depletion
B)Amortization
C)Depreciation
D)All of the above

Question 13

Memorandum Joint Venture Account is prepared when

A)the separate set of books is maintained for Joint Venture.
B)each Co-venturer keeps records of all transactions.
C)each Co-venturer keeps records of their own transactions only.
D)All of the above cases

Question 14

Which of the following commission is allowed by the consignor to the consignee to encourage the consignee for putting-up hard work in introducing new product in the market?

A)Del-credere Commission
B)Over-riding Commission
C)Hard work Commission
D)Ordinary Commission

Question 15

If Ram's acceptance which was endorsed by us in favour of Saleem is dishonoured, then the amount will be debited in our books to

A)Saleem
B)Ram
C)Bills Receivable Account
D)None of the above

Question 16

In case of a Club, the excess of expenditure over income is called as

A)Surplus
B)Deficit
C)Capital Fund
D)Investment in Fixed Assets

Question 17

A Charitable Institution has 250 members with a annual subscription of `5,000 each. The subscription received during 2018-19 were `11,25,000, which include ` 65,000 and `25,000 for the years of 2017-18 and 2019-20 respectively. Amount of outstanding subscription for the 2018-19 will be

A)90,000
B)1,25,000
C)2,15,000
D)1,90,000

Question 18

The following are details of closing stock items in Aarvi Limited: Items Historical Cost (` in Lakh) Net Realizable Value (` in Lakh) (a) 30 27 (b) 15 18 (c) 35 35 (d) 40 45 The value of Closing Stock will be

A)120 Lakh
B)125 Lakh
C)117 Lakh
D)128 Lakh

Question 19

When stock is valued at cost in one accounting period and at lower of cost and Net realizable value in another accounting period

A)Prudence Principle conflicts with Consistency Principle.
B)Matching Principle conflicts with Consistency principle.
C)Consistency Principle conflicts with Accounting Period Assumption.
D)None of the above

Question 20

Materiality Principle is an exception to the

A)Consistency principle
B)Full disclosure Principle
C)Accounting Period Assumption
D)Prudence Principle

Question 21

In a Cash Book Debit balance of `112 brought forward as credit balance of ` 121, while preparing a Bank Reconciliation Statement taking the balance as per Cash Book as the starting point:

A)112 to be added
B)121 to be added
C)233 to be added
D)112 to be subtracted

Question 22

______________ represents a potential obligation that could be created depending on the outcome of an event.

A)Internal Liability
B)Current Liability
C)Contingent Liability
D)Non-current Liability

Question 23

Opening Debtors, Collection from Debtors and Discount Allowed were `3,15,000. `18,30,000 and `35,000 respectively. If the closing debtors were 20% of credit sales of the period then closing debtors and credit sales would be

A)3,51,667 and`17,58,333
B)3,63,333 and `18,16,667
C)3,87,500 and `19,37,500
D)3,10,000 and `15,50,000

Question 24

Following information is given ` Opening Stock 2,13,000 Purchase 16,55,000 Sales 21,32,000 Carriage Inwards 32,500 Carriage Outwards 38,600 Return Inwards 38,000 If the rate of gross profit is 25% on cost then value of closing stock will be

A)2,57,800
B)1,94,900
C)2,25,300
D)3,30,000

Question 25

Provision for Doubtful Debt on 1st April, 2018 was `21,500. During the year 2018 - 19 the Bad-debt and Recovery of Bad-debt were ` 10,500 and ` 2,100 respectively. The Sundry Debtors on 31st March, 2019 were `2,25,000. Provision is to be made @ 5% on Debtors. If on 31st March, 2019, there was additional Bad-debt of ` 2,500 then Provision for doubtful-debt will be

A)debited to Profit & Loss Account by `11,250.
B)debited to Profit & Loss Account by `2,625.
C)debited to Profit & Loss Account by `3,000.
D)debited to Profit & Loss Account by `900.

Question 26

A and B enter into a joint venture sharing profit and losses in the ratio of 3:2. A purchased goods costing `2,00,000. B sold 95% goods for ` 2,50,000. A is entitled to get 1% commission on purchase and B is entitled to get 5% commission on sales. A drew a bill on B for an amount equivalent to 80% of original cost of goods. A got it discounted at `1,50,000. What is A's share of profit?

A)15,300
B)21,300
C)18,900
D)None of the above

Question 27

On 31st March, 2018 (`) On 31st March, 2019 (`) Subscription Outstanding 55,000 72,000 Subscription Received in Advance 31,000 37,000 The amount of subscription received during the year 2018-19 would be

A)6,36,000
B)6,02,000
C)6,14,000
D)6,48,000

Question 28

_______________ is prepared at the end of the accounting period to show the financial position o f business

A)Profit & low account
B)Balance sheet
C)Trail balanc

Question 29

Payment of monthly rent to land cord is

A)Economic event
B)Non-economic event
C)None of thes

Question 30

_____________is the original form of accounting

A)Financial accounting
B)Cost accounting
C)Management accountin

Question 31

_____________is an example of fixed asset

A)Receivable
B)Stock
C)Land & building

Question 32

The term _________denotes the cost of services and things used for earning revenue

A)Income
B)Expense
C)Los

Question 33

A person who owes money to the business is a __________

A)Debtor
B)Creditor
C)Investo

Question 34

A _________ is a person to whom business owes money

A)Creditor
B)Debtor
C)proprieto

Question 35

___________denote goods brought for sale.

A)Sales
B)Purchase
C)Expense

Question 36

________________ is an example of wasting asset

A)Mines
B)Land
C)Closing stoc

Question 37

Asset acquired for long period of time in the business is known as ___________

A)Fixed asset
B)Current asset
C)Fictitious asse

Question 38

Things which are purchased by the business for resale are called________

A)Purchase
B)Sale
C)Liabilit

Question 39

____________ expenditure is increased to maintain the business or to keep the assets in good working condition

A)Revenue
B)Capital
C)Both of ther

Question 40

______________ is the major source of revenue of any business

A)Purchase
B)Sale
C)Interes

Question 41

_______________ represent the amount invested by the owner into business.

A)Capital
B)Revenue
C)Asse

Question 42

A___________ transaction is one where in items are exchanged for other items

A)Cash
B)Credit
C)Barte

Question 43

___________ is not a tangible asset

A)Goodwill
B)Land
C)Closing stoc

Question 44

According to _________ concept it is assumed that the business will last for long time

A)Accounting entity
B)Going concern
C)Accounting perio

Question 45

Accounting is concerned with

A)Monetary
B)Non- monetary
C)Monetary & Nonmonetar

Question 46

Transaction& events not capable of being expressed in terms of money are not to be recorded in accounting due to

A)Going concern
B)Accounting entity
C)Money measuremen

Question 47

Income is measured on the basics of

A)Entity concept
B)Accounting period concept
C)Going concern concep

Question 48

The policy of anticipate no profit and provide for all possible losses is followed due to

A)Conservation concept
B)Consistency concept
C)Cost concep

Question 49

In every business transaction at least ______parties are involved

A)Two
B)Three
C)Fou

Question 50

Accounts receivable normally has ________ balance

A)Credit
B)Debit
C)Negativ

Question 51

Financial statements are the part of _________

A)Book- keeping
B)Accounting
C)None of the abov

Question 52

Bank account is a _________

A)Personal accounting
B)Real account
C)Nominal accoun

Question 53

Cost of goods old can be calculated by:

A)Balance sheet
B)Profit& loss account
C)Trading accoun

Question 54

Capital expenditure are recorded in the __________

A)Balance sheet
B)Profit & loss account
C)Trading accoun

Question 55

Nominal accounts are related to

A)Assets& liability
B)Expenses & losses
C)Debtors & creditor

Question 56

Sales journal is used for recording

A)Cash sales
B)Credit sales
C)Total sal

Question 57

Trading account is a ____________account

A)Real
B)Nominal
C)Persona

Question 58

Closing stock is valued at ____________

A)Market price
B)Cost price
C)Cost price or market price whichever is les

Question 59

Balance sheet is an ______________

A)Statement
B)Account
C)Bot

Question 60

Wages paid on for the erection of machinery is debited to

A)Machinery accounting
B)Wage accounting
C)Cash accountin

Question 61

Income tax is debited to ________________

A)Profit and loss account
B)Cash accounting
C)Drawings accoun

Question 62

Goods taken by the proprietor for personal is shown as a deduction from_____________

A)Sales
B)Capital
C)Purchas

Question 63

Asset that can be converted into cash within a year are called _________asset

A)Current
B)Fixed asset
C)Wasting asse

Question 64

Balance sheet is prepared for a ____________

A)Period
B)On a particular date
C)Entire life of busines

Question 65

Income received in advance is an ___________

A)Asset
B)Liability
C)Expense

Question 66

If goods are destroyed by fire , the total value of loss is __________ to trading account.

A)Debited
B)Credited
C)Not take

Question 67

Provision for account on creditors has a _________________balance

A)Debit
B)Credit
C)None of thes

Question 68

Income earned but not received to known as _______________ income

A)Accrued
B)Prepaid
C)Nomina

Question 69

Prepaid expense is _________ to the business

A)Asset
B)Liability
C)Expense

Question 70

Withdrawing more amount from bank than the deposit in the account is termed as____

A)Fixed deposit
B)Current deposit
C)overdraf

Question 71

Income of overdraft, pass book will show __________balance

A)Debit
B)Credit
C)None of thes

Question 72

Cash book shows ___________balance when there is an O.D.

A)Debit
B)Credit
C)None of thes

Question 73

When bank charge incurred, overdraft will be __________________________

A)increased
B)decreased
C)no charg

Question 74

__________________ balance in cash book indicate deposit balance

A)Credit
B)Debit
C)Any balanc

Question 75

Special journal are also called________________

A)Journal
B)Ledger
C)Day boo

Question 76

Cash book is a ____________

A)Journal
B)Ledger
C)Journal & ledge

Question 77

All cash purchases are entered in the _____________book

A)Cash
B)Purchase
C)Journal prope

Question 78

Discount columns in the cash book are

A)Totaled
B)Balanced
C)Not show

Question 79

The book that records small payment.

A)Single column
B)Double column
C)Petty cash boo

Question 80

A petty cash book is usually kept under system

A)Mercantile
B)Cash system
C)Import syste