EXAMINATION
Fall
2019
MGT101- Financial Accounting
Question No: 1
( Marks: 1 ) - Please choose
one
The expenses that give benefit
for a period of more than twelve months are called ________.
► Capital expenses
► Revenue expenses
► Preliminary expenses
► None of the given options
Question No: 2
( Marks: 1 ) - Please choose
one
An expense incurred by the
business for the purchase of land & building is an example of:
► Capital Expense
► Revenue Expense
► Deferred Expense
► Preliminary Expense
Question No: 3
( Marks: 1 ) - Please choose
one
Income of the business
includes:
► Cash sales only
► Credit sales only
► Credit purchases only
► Both cash sales and credit sales
Question No: 4
( Marks: 1 ) - Please choose
one
The basic accounting
principle/concept according to which Business is independent from its owner(s)
is known as:
► Separate Entity Concept
► Matching Concept
► Going Concern Concept
► Materiality Concept
Question No: 5 ( Marks: 1 ) - Please choose one
Commercial Accounting is based
on:
► Single entry book keeping
► Double entry book keeping
► Both single and double entry book
keeping
► Cash basis of book keeping
Question No: 6 ( Marks: 1 ) - Please choose one
Obligations to pay cash or
un-earned incomes by the business are the:
►
Expenses
►
Assets
► Liabilities
►
Equities
Question No: 7
( Marks: 1 ) - Please choose
one
What would be the affect on the
components of the accounting equation, if goods are purchased on cash?
►
Increase in cash and decrease in equity
► Increase in cash and increase in goods
► Increase in goods and decrease in cash
► Increase in equipment and increase in
equity
Question No: 8
( Marks: 1 ) - Please choose
one
When Capital is increased by an
amount, it is recorded on the:
► Left or credit side of the account
► Right or debit side of the account
►
Left or debit side of the account
► Right or credit side of the account
Question No: 9
( Marks: 1 ) - Please choose
one
Which of the following is also
called "The original book of entry"?
► General Journal
► General Ledger
► Trial Balance
► Profit and Loss Account
Question No: 10
( Marks: 1 ) - Please choose
one
An informal accounting
statement that lists the ledger account balances at a point in time and
compares the total of debit balances with the total of credit balances is known
as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Question No: 11
( Marks: 1 ) - Please choose
one
Which of the following is CORRECT for Trading account?
► It inculdes cost of goods sold
and all the direct expenses related to sales
► It inculdes cost of goods sold and all
the indirect expenses related to sales
► It inculdes cost of goods sold and all
the direct and indirect expenses
► It inculdes cost of goods sold and all
the direct and selling, administrative expenses
Question No: 12
( Marks: 1 ) - Please choose
one
Which one of the following is NOT prepared by Non profit
organizations?
► Profit & Loss account
► Income & Expenditure
account
► Receipts & Payments account
► Balance Sheet
Question No: 13
( Marks: 1 ) - Please choose
one
Which of the following is an
example of a Current liability?
►
Closing inventory
►
Opening inventory
► Petty
cash
► Bank overdraft
Question No: 14
( Marks: 1 ) - Please choose
one
Identify the business
transaction for given entry below.
Vehicle Account XXX
(Dr.)
Bank
Account XXX (Cr.)
► Paid for vehicle through cheque
► Paid
for vehicle through cash
►
Purchased vehicle on credit
► None of the
given options
Question No: 15
( Marks: 1 ) - Please choose
one
"Mr. “A” collected cash from debtors", the journal entry for this transaction is:
► Mr. "A" a/c Dr. and debtors
a/c Cr.
► Mr. "A" a/c Dr. and cash a/c Cr.
► Cash a/c Dr. and debtors a/c Cr.
► None of the given options
Question No: 16
( Marks: 1 ) - Please choose
one
Which of the following is an
alternate term which can be used for “Capital”?
►
Liability
► Owner’s net worth
► Working
capital
► Asset
Question No: 17
( Marks: 1 ) - Please choose
one
Which of the following
organization converts raw material into finished goods?
► Trading concern
► Manufacturing concern
► Merchandising
concern
► Service
concern
Question No: 18
( Marks: 1 ) - Please choose
one
The stock of manufacturing
concern consists of:
► Work in Process Inventory
► Raw Materials Inventory
► Finished Goods Inventory
► All of the given options
Question No: 19
( Marks: 1 ) - Please choose
one
| Direct materials costs |
Rs.70,000
|
Direct labor costs
|
30,000
|
Manufacturing overhead costs
|
60,000
|
conversion cost
|
?
|
► Rs.
20,000
►
Rs.40, 000
►
Rs.90, 000
► Rs.160, 000
Question No: 20
( Marks: 1 ) - Please choose
one
In balance sheet fixed assets
are shown at:
► Cost price
►
Market value
► Fair value
► Written down value (WDV)
Question No: 21
( Marks: 1 ) - Please choose
one
| Cost of asset |
Rs. 1,00,000
|
Life of asset
|
5 years
|
Depreciation for each year
|
Rs. 5,000
|
Rs.50,000
|
|
Written down value of asset on 5th year
|
Rs.75,000
|
profit or loss on disposal of fixed assets
|
?
|
► Rs.25, 000 loss
► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profit
Question No: 22
( Marks: 1 ) - Please choose
one
| Cost of asset |
Rs. 1,00,000
|
Life of asset
|
5 years
|
Depreciation for each year
|
Rs. 15,000
|
Rs.50,000
|
|
Book value of Asset after 5 years
|
?
|
► Rs.25, 000
► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000
Question No: 23
( Marks: 1 ) - Please choose
one
If you start with cash book
balance (Dr.), which of the following
item will be deducted in Bank Reconciliation Statement?
► Any cheque drawn to creditor but not paid by bank
► Interest credited by the bank in pass
book
► Cheque
deposited but not credited by the bank
► Dividend collected by bank on behalf of
the customer
Question No: 24
( Marks: 1 ) - Please choose
one
If you start with cash book
favorable balance in Bank Reconciliation Statement, which item will be added?
► Cheque deposited but not credited by the bank
► Cheques omitted to be deposited into
bank
► Any amount
directly collected by bank on behalf of customer but not recorded in cash book
► Debit side of
cash book was overcast
Question No: 25
( Marks: 1 ) - Please choose
one
Bank Reconciliation Statement
is:
► A memorandum statement
► A ledger account
► A part of cash book
► A part of journal
Question No: 26
( Marks: 1 ) - Please choose
one
Bank Reconciliation Statement
is prepared by:
► Bankers
► Accountant of the business
► Statutory auditor
► Manger
Question No: 27
( Marks: 1 ) - Please choose
one
Stock of Trading concern
consists of:
► Raw material
► Work in process
► Merchandise inventory
► All of the given options
Question No: 28
( Marks: 1 ) - Please choose
one
When the process of production
is completed, all the costs must be charged to:
► Raw material account
► Work in process account
► Finished goods account
► Merchandise account
Question No: 29
( Marks: 1 ) - Please choose
one
Which of the following account
balance is shown on credit side of Trial Balance? (It is assumed that all
account balances are shown on normal balance)
► Cash account
► Furniture account
► Vehicle account
► Capital account
Question No: 30
( Marks: 1 ) - Please choose
one
If a business pays rent in
advance for 12 months, it will be treated as:
► Prepaid expenses of business
► Long term liability of business
► Fixed assets of business
► Current liability of business
Question No: 31
( Marks: 1 ) - Please choose
one
Accountancy covers which of the
following area(s):
► Book-keeping
►
Accounting
► Auditing
► All of the given options
Question No: 32
( Marks: 1 ) - Please choose
one
The assets which have a limited
useful life are termed as:
► Limited assets
► Depreciateable assets
► Unlimited assets
► None of the given options
Question No: 33
( Marks: 1 ) - Please choose
one
Depreciable value of an asset
is equal to:
► Cost + scrap value
►
Cost + market price
► Cost – scrap value
► None of the given options
Question No: 34
( Marks: 1 ) - Please choose
one
Which one of the following is
equal to the carrying cost of an asset?
► Original cost minus Accumulated depreciation
►
Original cost plus Accumulated depreciation
►
Original cost minus Residual value
►
Written down value minus Accumulated depreciation
Question No: 35
( Marks: 1 ) - Please choose
one
Which one of the following is
another name of carrying cost of an asset?
► Book Value
►
Residual Value
► Fair
Value
► Break
up Value
Question No: 36
( Marks: 1 ) - Please choose
one
Which of the following fixed
asset is shown at cost rather than book value?
►
Machinery
►
Furniture
►
Vehicles
► Land
Question No: 37
( Marks: 1 ) - Please choose
one
Which of the following statement is the detail
of transaction in one’s account provided by the bank?
► Bank statement
► Bank reconciliation statement
► Income
statement
► Financial
statement
Question No: 38
( Marks: 1 ) - Please choose
one
When income exceeds expenses in
a specific time period is known as:
► Savings
► Net profit
► Gross profit
► Operating
profit
Question No: 39
( Marks: 1 ) - Please choose
one
An asset cost Rs. 50,000, has
an estimated residual value of Rs.1, 500, and an estimated useful life of 8
years. What is the depreciation rate under reducing balance method?
► 11.5%
► 20.0%
► 25.0%
► 35.5%
Question No: 40
( Marks: 1 ) - Please choose
one
Mr.” A” sold goods for Rs.
300,000 to Mr. “B”, Rs. 300,000 will be
treated as _____________ for business of Mr. "A".
► Revenue
► Net profit
► Gross profit
► Operating profit
Question No: 41
( Marks: 10 )
Differentiate between capital and revenue
expenditure.
The
best difference can be described as follows :
No business can run without money or
resources being invested therein.
Whatever money or resources from ones’
own pocket are put in a business is referred to as capital. Capital is the
investment of the Owner in the business.
This capital or investment must earn a
return or profit on its use even if it is coming out of ones’ pocket. This return is also
known as
profit. So no capital
should be without a profit or a return. Also, no Capital even if coming from the business owner can
be without cost. It is the day to day
expenses whose benefit is drawn immediately. For example, salary of the
employee,
rent of the building,.
Revenue Expenditure is the cost of
resources consumed or used up in the process of generating revenue,generally
referred to as expenses.