Sunday, January 06, 2013

BACHELOR'S PREPARATORY PROGRAMME (B.P.P.) - Term-End Examination December, 2007


PC0-01: PREPARATORY COURSE IN COMMERCE
Time: 2 Hours Maximum Marks: 50
Note: All questions are compulsory. Each of questions carries one mark.

1. Recording Business Transactions in accounts with the help of documents should be based on
(1) Single entry system
(2) Double entry system
(3) Verifiability and objectivity of evidence
(4) Combination of single and double entry system
Ans: (2) Double entry system

2. The prime function of Accounting is to
(1) Record economic data
(2) Attain non-economic goals
(3) Provide the informational base for action
(4) Classify and record business transactions
Ans: (4) Classify and record business transactions

3. Book-keeping is mainly concerned with
(1) Recording of financial data relating to an organisation
(z) Summarizing the recorded data for external use
(3) Interpreting the data for internal and external users
(4) Presenting the information to the management
Ans: (1) Recording of financial data relating to an organisation

4. Accounting principles are generally based on
(1) Practicability
(2) Subjectivity
(3) Convenience in recording
(4) Objectivity
Ans: (1) Practicability

5. The concept of Conservatism is applicable
(1) In providing for discount on creditors
(2) While providing for depreciation
(3) To charge bad and doubtful debts
(4) In making the provision for future losses
Ans: (4) In making the provision for future losses

6. Cash Account is a/an
(1) Personal account
(2) Nominal account
(3) Real account
(4) Intangible asset
Ans: (3) Real account

7. Loan from Bank is a/an
(1) Personal account
(2) Real account
(3) Nominal account
(4) Asset
Ans: (1) Personal account

8. Purchase of goods is a
(1) Nominal account
(2) Personal account
(3) Real account
(4) Representative Personal account
Ans: (3) Real account

9. Rent paid to landlord will be credited
(1) Landlord account
(2) Cash account
(3) Rent account
(4) Drawing account
Ans: (2) Cash account

10. Real accounts are the accounts which relate to
(1) Assets
(2) Expenses
(3) Losses
(4) Incomes
Ans: (1) Assets

11. Financial position of the business means
(1) Position about profits and losses
(2) Position about incomes and expenses
(3) What the business owes to others and what it owns at a given point of time
(4) Position about liquid funds
Ans: (3) What the business owes to others and what it owns at a given point of time

12. Salary Outstanding account is a
(1) Personal account (Natural)
(2) Real and Nominal account
(3) Nominal account
(4) Personal account (Representative)
Ans: (4) Personal account (Representative)

13. Trial Balance is prepared
(1) Before posting into the ledger
(2) Before preparation of final accounts
(3) After posting into the ledger and balancing of accounts
(4) All of the above
Ans: (3) After posting into the ledger and balancing of accounts

14. Posting will be done in the
(1) Journal
(2) Ledger
(3) Trial Balance
(4) Balance Sheet
Ans: (2) Ledger

15. Goods given as charity Would be credited to
(1) Sales A/c
(2) Purchases A/c
(3) Charity A/c
(4) Cash A/c
Ans: (2) Purchases A/c

16. A Pass Book is a copy of
(1) Cash Book relating to bank column
(2) Cash Book relating to cash column
(3) Firm's receipts and payments
(4) A customer's account in the bank's books
Ans: (4) A customer's account in the bank's books

17. A Bank Reconciliation Statement can be
(1) Cash Book only
(2) Pass Book only
(3) Either Cash Book or Pass Book
(4) Neither Cash Book nor pass Book
Ans: (3) Either Cash Book or Pass Book

18. A Bank Reconciliation Statement can be part of
(1) Part of Pass Book
(2) Part of Cash Book
(3) Statement prepared
(4) Final accounts
Ans:

19. Unfavourable bank balance represents
(1) Credit balance in the Pass Book
(2) Debit balance in the Cash Book
(3) Debit balance in the Pass Book
(4) AII of the above
Ans: (3) Debit balance in the Pass Book

20. Suspense Account in the Trial Balance will be entered in the
(1) Manufacturing account
(2) Trading account
(3) Profit and Loss account
(4) Balance Sheet
Ans: (4) Balance Sheet

21. Sale of old typewriter used in office is credited to
(1) Sales A/c
(2) Cash A/c
(3) Capital A/c
(4) Typewriter A/c
Ans: (4) Typewriter A/c

22. Sales Tax collected is a
(1) Liability
(2) Asset
(3) Expense
(4) Loss
Ans: (1) Liability

23. Bank overdraft is a/an
(1) Liability
(2) Asset
(3) Revenue
(4) Expense
Ans: (1) Liability

24. Income tax payable is a
(1) Liability
(2) Asset
(3) Loss
(4) Expense
Ans: (1) Liability

25. Business includes
(1) Industry and commerce
(2) Trade and aids to trade
(3) Industry and aids to trade
(4) Commerce only
Ans: (1) Industry and commerce

26. Accounting is
(1) a systematic record of business transactions in the books of accounts
(2) the science of measurement of wealth
(3) the summary of accounting information
(4) All of the above
Ans: (4) All of the above

27. A person who owes some amount to the business is called a
(1 ) Debtor
(2) Creditor
(3) Owner
(4) Auditor
Ans: (1 ) Debtor

28. The final step of accounting cycle is the preparation of
(1) Trial Balance
(2) Balance Sheet
(3) Trading and Profit & Loss account
(4) Ledger
Ans: (2) Balance Sheet

29. Which of the following is a Personal account ?
(1) Bakul A/c
(2) Loan from Rakesh A/c
(3) Salaries Outstanding A/c
(4) All of the above
Ans: (4) All of the above

30. Equity is the
(1) claims or right over the assets of the firm
(2) anything which has economic value
(3) amount earned through business operations
(4) amount realised from goods sold
Ans: (1) claims or right over the assets of the firm

31. Excess of Revenue over Expenses is
(1) Capital
(2) Loss
(3) Drawing
(4) Profit
Ans: (4) Profit

32. which of the following transactions leads to Contra entry ?
(1) Deposited Rs. 10,000 in the bank
(2) Received Rs. 4,000 from Naresh
(3) Goods sold to Rakesh for cash Rs. 1,000
(4) Goods purchased from Mohan for cash Rs. 1,000
Ans: (1) Deposited Rs. 10,000 in the bank

33. Returns Outward account is overcast by Rs. 100. While rectifying this error the credit will be given to
(1) Suspense A,/c
(2) Returns Outward A/c
(3) Goods A/c
(4) Sales A/c
Ans: (1) Suspense A,/c

34. Depreciation on Fixed Assets is treated as
(1) Capital expenditure
(2) Revenue receipt
(3) Deferred revenue expenditure
(4) Revenue loss
Ans: (4) Revenue loss

35. objective of preparing Balance sheet is to ascertain
(1) Financial position of business
(2) Net results of business activities
(3) Arithmetical accuracy of the transactions recorded
(4) Assets of the business
Ans: (1) Financial position of business

36. Amount brought by the proprietor, Ramesh, in the business should be credited to
(1) Cash A/c
(2) Capital A/c
(3) Ramesh A/c
(4) Drawing A/c
Ans: (2) Capital A/c

37. office equipment purchased on credit will be recorded in
(1) Journal Proper
(2) Cash Book
(3) Sales Book
(4) Purchase Book
Ans: (1) Journal Proper

38' Which note is sent to the customer when he returns the goods ?
(1) Debit Note
(2) Credit Note
(3) Promissory Note
(4) Cheque
Ans: (2) Credit Note

39. Amount realised from the goods sold is called
( 1) Revenue
(2) Gain
(3) Equity
(4) Profit
Ans: ( 1) Revenue

40' While preparing a Bank Reconciliation Statement, cheque sent for collection but not yet collected should be added when balance is favourable as per
(1) Cash Book is taken as starting point
(2) Purchase Book is taken as starting point :
(3) Sales Book is taken as starting point
(4) Pass Book is taken as starting point
Ans: (4) Pass Book is taken as starting point

41. Goods sold to Mahesh for cash will be credited to
(1) Cash account
(2) Mahesh account
(3) Sales account
(4) Purchase account
Ans: (3) Sales account

42. Statement containing various ledger balances is known as
(1) Trial Balance
(2) Bank Reconciliation Statement
(3) Statement of Account
(4) Financial Statement
Ans: (1) Trial Balance

43. According to money measurement concept, which transaction will be recorded in the books of the account ?
(1) Health of manager
(2) Quality of goods
(3) Value of building
(4) Qualifications of employees
Ans: (3) Value of building

44. Revenue is said to be realized when
(1) the sale is made
(2) goods are manufactured
(3) cash is received
(4) sale is made and cash is received .
Ans: (1) the sale is made

45. Discount allowed on issue of shares is an example of
(1) Capital loss
(2) Capital expenditure
(3) Revenue expenditure
(4) Deferred revenue expenditure
Ans: (4) Deferred revenue expenditure

46. Repair incurred for using a second-hand car purchased recently
(1) Capital expenditure
(2) Revenue expenditure
(3) Capital loss
(4) Deferred revenue expenditure
Ans: (1) Capital expenditure

47. Sales are equal to
(1) Cost of Goods Sold + Gross Profit
(2) Cost of Goods Sold - Gross Profit
(3) Gross Profit - Cost of Goods Sold
(4) Cost of Goods Sold - Stock
Ans: (1) Cost of Goods Sold + Gross Profit

48. Interest on drawings is regarded as
(1) Expenditure for the business
(2) Loss for the business
(3) Gain for the business
(4) Liability for the business
Ans: (3) Gain for the business

49. Sales to Ram Rs. 450 posted to his account as Rs. 550 would affect
(1) Sales account
(2) Ram's account
(3) Cash account
(4) Suspense account
Ans: (2) Ram's account

50. Which of the following accounts is prepared to find out cost of production ?
(1) Manufacturing account
(2) Trading account
(3) Profit and Loss account
(4) Balance Sheet
Ans: (1) Manufacturing account

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