Question 1

Selling expenses should be divided among the different departments on the basis of ______&#10;A)Sales&#10;B)Purchase&#10;C)Gross profit&#10;D)Net profit

Accepted Answer

Selling expenses are most accurately divided among different departments based on sales because these expenses are directly related to the selling activities of each department. The more sales a department generates, the more it typically incurs in selling expenses.

Question 2

Building expenses should be divided among the different departments according to the ______ by each departments&#10;A)Area occupied&#10;B)No of employees&#10;C)Direct wages&#10;D)Direct material

Accepted Answer

Building expenses are typically allocated based on the area occupied by each department, as it reflects the proportion of space utilized by each department within the building.

Question 3

Balance of trading account is a transfer to&#10;A)Balance sheet&#10;B)Trial balance&#10;C)Profit and loss account&#10;D)Income statement

Accepted Answer

The balance of the trading account is transferred to the Profit and Loss Account, where it is used to calculate the overall profit or loss of the business by adding or subtracting other incomes and expenses.

Question 4

Depreciation on machinery this transaction initially shown on&#10;A)Trading account&#10;B)Profit and loss account&#10;C)Balance sheet&#10;D)All of these

Accepted Answer

The answer of Depreciation on machinery this transaction initially shown...

Question 5

The expenses which have been incurred to bring the goods or making the goods ready for sales is called&#10;A)Administrative expenses&#10;B)Direct expenses&#10;C)Indirect expenses&#10;D)Revenue expenses

Accepted Answer

Direct expenses are costs that are directly associated with the production or purchase of goods, making them ready for sale. These can include materials, labor, and other expenses directly tied to the production process.

Question 6

Packing of goods for protecting the goods is debited in the&#10;A)Balance sheet&#10;B)Profit and loss account&#10;C)Trading account&#10;D)Trial balance

Accepted Answer

Packing of goods is considered a direct expense related to the sale of goods, and therefore, it is debited in the Trading Account, which reflects the direct costs associated with producing and selling goods.

Question 7

The balance of profit and loss account is called&#10;A)Net profit /loss&#10;B)Gross profit/ loss&#10;C)Working profit / loss&#10;D)Petty profit / loss

Accepted Answer

The balance of a profit and loss account, after accounting for all revenues and expenses, is referred to as Net Profit or Loss. This figure represents the company's financial performance over a specific period, indicating whether it has made a profit or incurred a loss after all financial activities have been considered.

Question 8

Carriage out expenses are come under&#10;A)Administrative expenses&#10;B)Financial expenses&#10;C)Manufacturing expenses&#10;D)Distribution expenses

Accepted Answer

Carriage out expenses are costs related to delivering goods to customers, thus they fall under distribution expenses.

Question 9

Mines, quarries etc are&#10;A)Fixed asset&#10;B)Fictitious asset&#10;C)Current asset&#10;D)Wasting asset

Accepted Answer

Mines, quarries, and similar assets are considered wasting assets because their value decreases over time as the resources are extracted.

Question 10

The final accounts , when adjustment entry is passed ,it affects the minimum ________&#10;A)One account&#10;B)Two account&#10;C)Three account&#10;D)Entire account

Accepted Answer

Adjustment entries in accounting typically affect at least two accounts because they are made to record changes that have not been captured by the system yet, adhering to the double-entry accounting principle.

Question 11

The closing stock will appear in trial balance at the&#10;A)Debit side&#10;B)Asset side&#10;C)Credit side&#10;D)None of these

Accepted Answer

The answer of The closing stock will appear in trial...

Question 12

Outstanding salary is shown on&#10;A)Balance sheet&#10;B)Trading account&#10;C)Suspense account&#10;D)Outstanding account

Accepted Answer

The answer of Outstanding salary is shown on&#10;A)Balance sheet&#10;B)Trading account&#10;C)Suspense...

Question 13

If closing stock appear on the trial balance it must have been ____&#10;A)Added to the purchase&#10;B)Added to the opening stock&#10;C)Deducted from the purchases&#10;D)Deducted from opening stock

Accepted Answer

The answer of If closing stock appear on the trial...

Question 14

Discount on purchase will be&#10;A)Debited to profit and loss account&#10;B)Credited to profit and loss account&#10;C)Deducted from purchases&#10;D)Added to purchases

Accepted Answer

The answer of Discount on purchase will be&#10;A)Debited to profit...

Question 15

Resources which are invested in permanent asset are called&#10;A)Investment&#10;B)Working capital&#10;C)Block capital&#10;D)Intangible capital

Accepted Answer

The answer of Resources which are invested in permanent asset...

Question 16

Sales is equal to&#10;A)Net income + expenses + cost of goods sold&#10;B)Gross profit + net income + expenses&#10;C)Gross profit + cost of goods sold + direct expenses&#10;D)Net income + direct expenses

Accepted Answer

The answer of Sales is equal to&#10;A)Net income + expenses...

Question 17

The premium paid on the life policy of the proprietor is debited to&#10;A)Profit and loss account&#10;B)Trading account&#10;C)Premium account&#10;D)Drawing account

Accepted Answer

The answer of The premium paid on the life policy...

Question 18

Expenses which have become due during the accounting period for which the final accounts have been prepared but have not yet been paid is called&#10;A)Accrued&#10;B)Outstanding&#10;C)Arrears&#10;D)Non over dues

Accepted Answer

The answer of Expenses which have become due during the...

Question 19

Balance sheet is a _______&#10;A)Ledger&#10;B)Account&#10;C)Statement&#10;D)Subsidiary book

Accepted Answer

The answer of Balance sheet is a _______&#10;A)Ledger&#10;B)Account&#10;C)Statement&#10;D)Subsidiary book...

Question 20

Income tax paid for the proprietor from the business is&#10;A)Debited in the income account&#10;B)Debited in the trading account&#10;C)Deducted from capital&#10;D)Deducted from profit

Accepted Answer

The answer of Income tax paid for the proprietor from...

Question 21

In the balance sheet of sole trader business , assets are managed in the order of&#10;A)Permanency&#10;B)Liquidity&#10;C)Priority&#10;D)Flexibility

Accepted Answer

The answer of In the balance sheet of sole trader...

Question 22

Under ______ system the buyer does not get ownership of goods immediately&#10;A)Installment&#10;B)HP&#10;C)Installment and HP&#10;D)None of these

Accepted Answer

The answer of Under ______ system the buyer does not...

Question 23

________ means the price at which the goods can be purchased by the hirer for ready cash&#10;A)HP price&#10;B)Installment price&#10;C)Cash price&#10;D)Down payment

Accepted Answer

The answer of ________ means the price at which the...

Question 24

_______ is the initial payment made at the time of signing the hire purchase agreement&#10;A)HP price&#10;B)Installment price&#10;C)Cash price&#10;D)Down payment

Accepted Answer

The answer of _______ is the initial payment made at...

Question 25

The difference between hire purchase price and the cash price is called ______&#10;A)Hire charges&#10;B)Cost of the asset&#10;C)Installment price&#10;D)Cash price

Accepted Answer

The answer of The difference between hire purchase price and...

Deck 27: Allocation of Selling Expenses Among Departments Based on Sales