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Sunday, January 06, 2013

BACHELOR'S PREPARATORY PROGRAMME (B.P.P.) - Term-End Examination December, 2010


PCO-01: PREPARATORY COURSE IN COMMERCE
Time: 2 Hours Maximum Marks: 50
Note: All questions are compulsory, each of which carries one mark.
1. Which of the following equations is correct?
(1) Capital = Assets — Liabilities (2) Capital = Assets + Liabilities
(3) Assets = Capital x Liabilities (4) Liabilities = Assets + Capital
Ans: (1) Capital = Assets — Liabilities

2. The concept of conservatism takes into account:
(1) All expected incomes and losses
(2) All expected losses but no expected incomes
(3) All expected incomes but no losses
(4) No expected profits and losses
Ans: (2) All expected losses but no expected incomes

3. Buying and selling activity is called:
(1) Commerce (2) Trade (3) Business (4) Industry
Ans: (2) Trade

4. Book- Keeping is:
(1) Identifying, measuring, recording and classifying business transactions
(2) Analysing the business transactions
(3) Classifying the business transactions only
(4) Interpreting the business transactions only
Ans: (1) Identifying, measuring, recording and classifying business transactions

5. Purchase book is meant for recording:
(1) All types of credit purchases
(3) All cash purchases
(2) All types of purchases
(4) Credit purchases of merchandise only
Ans: (4) Credit purchases of merchandise only

6. Sales of goods to Anil for cash should be debited to:
(1) Goods A/C (2) Cash A/C (3) Sales A/C (4) Anil's A/C
Ans: (2) Cash A/C

7. Which of the following statements is false?
(1) Process of journalising is called posting.
(2) Capital account is a personal account.
(3) Ledger is the principal book of entry.
(4) Goodwill account is a real account.
Ans: (3) Ledger is the principal book of entry.

8. The debit balance of a nominal account shows:
(1) Gross profit (2) Net profit
(3) Gains, incomes etc. (4) Expenses, losses etc.
Ans: (4) Expenses, losses etc.

9. An example of representative personal account is:
(1) Wages (2) Salary
(3) Prepaid expenses (4) Cash
Ans: (3) Prepaid expenses

10. Single entry system of book- keeping is a:
(1) System of incomplete records
(2) System of reliable records
(3) System of providing true financial position
(4) System of helping in locating errors.
Ans: (1) System of incomplete records


11. Furniture purchased should be debited to:
(1) Goods A/C (2) Premises A/C
(3) Furniture A/C (4) Equipment A/C
Ans: (3) Furniture A/C

12. Which of the following account is a nominal account?
(1) Capital A/C (2) Ram's A/C
(3) Vehicle A/C (4) Wages A/C
Ans: (4) Wages A/C

13. Ledger folio is the column in:
(1) Cash book (2) Journal
(3) Sales book (4) all of the above
Ans: (4) all of the above

14. The debit balance of a personal account indicates:
(1) Amount receivable (2) Amount payable
(3) Cash in hand (4) Cash at bank
Ans: (1) Amount receivable

15. Which of the following errors shall affect the trial balance?
(1) Error of principle (2) Compensatory errors
(3) Error of complete omission (4) Error of partial omission
Ans: (4) Error of partial omission

16. Returns outwards Book is kept to record:
(1) Credit purchases of goods
(3) Returns of goods sold
(2) Credit sales of goods
(4) Returns of goods purchased
Ans: (4) Returns of goods purchased

17. Prepaid insurance is:
(1) A liability (2) An asset (3) A gain (4) A loss
Ans: (2) An asset

18. The balance of petty cash book is:
(1) An income (2) A liability (3) an expense (4) an asset
Ans: (4) an asset

19. Closing stock is valued at:
(1) Cost price or market price whichever is less
(2) Cost price
(3) Market price
(4) Cost price or market price whichever is more
Ans: (1) Cost price or market price whichever is less

20. Profit and loss account shows:
(1) Accuracy of Ledger accounts (2) Capital employed in a business
(3) Financial position of a business (4) Profit earned by a business
Ans: (4) Profit earned by a business

21. Rent outstanding account is:
(1) Personal A/C (2) Real A/C
(3) Nominal A/C (4) Representative personal A/C
Ans: (4) Representative personal A/C

22. Which of the following will not be shown in balance sheet?
(1) Machinery (2) Contingent liability
(3) Debtors (4) Closing stock
Ans: (2) Contingent liability

23. Debit balance of suspense A/C will be shown on:
(1) The credit side of Trading A/C
(2) The debit side of Trading A/C
(3) The liabilities side of Balance sheet
(4) The Assets side of Balance sheet
Ans: (4) The Assets side of Balance sheet

24. All transactions are recorded first in the journal, therefore, it is called book of:
(1) Original entries (2) Adjustment entries
(3) Closing entries (4) Transfer entries
Ans: (1) Original entries

25. Impersonal accounts mean:
(1) Only Real accounts
(2) Personal accounts
(3) Only Nominal accounts
(4) Real and Nominal accounts
Ans: (4) Real and Nominal accounts

26. Trial Balance includes:
(1) Only Real accounts
(2) Real, Personal and Nominal accounts
(3) Only Personal accounts
(4) Only Nominal accounts
Ans: (2) Real, Personal and Nominal accounts

27. Discount Allowed accounts have:
(1) A debit balance
(2) A credit balance
(3) No balance
(4) Both the balance i.e. debit balance and credit balance
Ans: (1) A debit balance

28. Which of the following will increase by a credit entry?
(1) Bank overdraft (2) Goodwill
(3) Purchases (4) Sales returns
Ans: (1) Bank overdraft

29. The term book of prime entry is normally used for:
(1) Ledger (2) Journal
(3) Sales Book (4) Purchases Book
Ans: (2) Journal

30. Which of the following is not entered in the books of accounts?
(1) Cash discount (2) Commission received
(3) Interest received (4) Trade discount
Ans: (4) Trade discount

31. Preliminary expenses are an example of:
(1) Capital expenditure (2) Revenue expenditure
(3) Deferred Revenue expenditure (4) Capital loss
Ans: (3) Deferred Revenue expenditure

32. Repairs of office building will be shown in:
(1) Manufacturing A/C (2) Trading A/C
(3) Profit and Loss A/C (4) Balance sheet
Ans: (3) Profit and Loss A/C

33. Which of the following items are not charged to Profit and Loss account?
(1) Carriage inwards (2) Carriage outwards
(3) Bad-debts (4) Depreciation on furniture
Ans: (1) Carriage inwards

34. Depreciation on machinery is shown in:
(1) Manufacturing A/C (2) Trading A/C
(3) Profit and Loss A/C (4) Balance sheet
Ans: (3) Profit and Loss A/C

35. Cost of goods sold is:
(1) Cost of goods produced + Opening stock — Closing stock
(2) Sales + Closing stock — Opening stock
(3) Sales — Closing stock + Opening stock
(4) Purchases — Opening stock + Closing stock
Ans: (1) Cost of goods produced + Opening stock — Closing stock

36. If purchases are Rs. 42,300; sales Rs.67, 450; wages Rs.12, 000; opening stock Rs.10, 550; And closing stock Rs.12, 000; the Gross Profit would be:
(1) Rs.15, 100 (2) Rs.14, 800 (3) Rs.14, 300 (4) Rs.14, 600
Ans: (4) Rs.14, 600

37. Additional money brought into business by the proprietor is a
(1) Capital receipt (2) Revenue receipt
(3) Capital profit (4) Revenue profit
Ans: (1) Capital receipt

38. Balance sheet is a statement containing the assets and liabilities of a firm.
(1) On a particular date (2) For a particular period
(3) During a particular period (4) In the form of an accounts
Ans: (1) On a particular date

39. Payment by cheque should be debited to:
(1) Cheque A/C (2) Cash A/C
(3) Customer's A/C (4) Bank A/C
Ans: (4) Bank A/C

40. A promissory note is written by the:
(1) Buyer (2) Seller
(3) Bank (4) All of the above
Ans: (1) Buyer

41. Credit purchase of furniture will be recorded in:
(1) Cash book (2) Purchases Journal
(3) Sales Journal (4) Journal proper
Ans: (4) Journal proper

42. Cash discount is given to the customers on:
(1) Bulk purchases (2) Cash purchases
(3) Payment before due date (4) Credit purchases
Ans: (3) Payment before due date

43. The packing expenses are shown on the:
(1) Debit side of profit and loss A/C
(2) Debit side of trading A/C
(3) Debit side of manufacturing A/C
(4) Liabilities side of the balance sheet
Ans: (1) Debit side of profit and loss A/C

44. Which of the following items is debited to trading account?
(1) Wages and salaries (2) Salaries and wages
(3) Salaries (4) Bonus to employees
Ans: (1) Wages and salaries

45. Income tax payable is:
(1) A liability (2) A loss
(3) An Asset (4) an expense
Ans: (1) A liability

46. Bank overdraft is a:
(1) Current Asset (2) Current Liability
(3) Fixed Asset (4) Fixed Liability
Ans: (2) Current Liability
47. Interest on drawings is:
(1) Expenditure for the business (2) Loss for the business
(3) Gain for the business (4) Receipt for the business
Ans: (3) Gain for the business

48. Outstanding expenses given in trial balance will be shown in:
(1) Trading A/C (2) Profit and Loss A/C
(3) Manufacturing A/C (4) Balance sheet
Ans: (4) Balance sheet

49. A balance sheet shows:
(1) Only Current Assets
(2) Only Current Liabilities
(3) Only Fixed Assets and Fixed Liabilities
(4) All Assets and All Liabilities
Ans: (4) All Assets and All Liabilities

50. Balance of profit and loss account reflects:
(1) Gross Profit
(3) Net Profit
(2) Gross Loss
(4) Net Profit or Net Loss
Ans: (4) Net Profit or Net Loss