Sunday, January 06, 2013

BACHELOR'S PREPARATORY PROGRAMME (B.P.P.) - Term-End Examination June, 2011


PC0-01: PREPARATORY COURSE IN COMMERCE
Time: 2 flours Maximum Marks: 50
Note: All questions are compulsory. Each question carries one mark.
1. Which of the principles requires that the same accounting method should be used from one accounting year to another?
(1) Consistency (2) Materiality
(3) Conservatism (4) Matching
Ans: (1) Consistency

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

3. Which of the following is correct?
(1) Assets + Liabilities = Capital
(2) Assets —Liabilities = Capital
(3) Assets + Capital = Liabilities
(4) Assets + Liabilities = Capital
Ans: (2) Assets —Liabilities = Capital

4. The basic function of Financial Accounting is to:
(1) Record all the transactions
(2) Find out Gross Profit only
(3) Find out Net Profit only
(4) Record, classify, summarize and to interpret the business transactions in a systematic manner.
Ans: (4) Record, classify, summarize and to interpret the business transactions in a systematic manner.

5. Purchase of Building should be debited to:
(1) Equipment A/C (2) Buildings A/C
(3) Goods A/C (4) Capital A/C
Ans: (2) Buildings A/C

6. Goods sold to Amar on credit will be debited to:
(1) Sales A/C (2) Cash A/C
(3) Amar A/C (4) Purchases A/C
Ans: (3) Amar A/C

7. Which of the following account is not a personal account?
(1) Loan A/C (2) Capital A/C
(3) Shvam's A/C (4) Cash A/C
Ans: (4) Cash A/C

8. Almirah bought for Rs. 6,000 and paid there on cartage of Rs. 200. Almirah account will be debited by
(1) Rs. 6,000 (2) Rs. 200
(3) Rs. 6,200 (4) Rs. 5,800
Ans: (3) Rs. 6,200

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

10. Rs. 1,000 paid as Rent to Landlord should be debited to:
(1) Rent A/C (2) Cash A/C
(3) Landlord's A/C (4) Repair A/C
Ans: (1) Rent A/C

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

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

13. Prepaid expenses are:
(1) An asset (2) A liability
(3) A loss (4) A gain
Ans: (1) An asset

14. Which account is generally used for rectification of one sided errors?
(1) Cash A/C (2) Profit and loss A/C
(3) Trading A/C (4) Suspense A/C
Ans: (4) Suspense A/C

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

16. Commission received is credited to:
(1) Trading A/C (2) Profit and Loss Account
(3) Manufacturing A/C (4) Balance Sheet
Ans: (2) Profit and Loss Account

17. Bad debts will be charged to:
(1) Manufacturing A/C
(2) Profit and loss A/C
(3) Trading A/C
(4) Balance sheet
Ans: (2) Profit and loss A/C

18. Profit on sale of an asset will be credited to:
(1) Asset A/C (2) Suspense A/C
(3) Trading A/C (4) Profit and loss A/C
Ans: (4) Profit and loss A/C

19. Which of the following is not a current asset?
(1) Debtors (2) Stock (3) Loose tools (4) Cash
Ans: (3) Loose tools

20. Patents are:
(1) An intangible asset
(2) A tangible asset
(3) A current asset
(4) A fictitious asset
Ans: (1) An intangible asset

21. All direct expenses are shown in:
(1) Profit and loss A/C (2) Balance sheet
(3) Trading A/C (4) Profit and loss appropriation A/C
Ans: (3) Trading A/C

22. Manufacturing Account is prepared to find out:
(1) Gross profit (2) Net profit
(3) Net loss (4) Cost of goods produced
Ans: (4) Cost of goods produced
23. Bank Reconciliation statement is made by the:
(1) Auditor (2) Customers of the bank
(3) Bank (4) Creditors
Ans: (2) Customers of the bank

24. Discount received account has:
(1) A debit balance (2) A credit balance
(3) No balance (4) All of the above
Ans: (2) A credit balance

25. Cost of goods purchased is Rs. 28,000, Net sales Rs. 60,000 and closing stock is Rs. 15,000. The gross profit will be:
(1) Rs. 47,000 (2) Rs. 43,000
(3) Rs. 75,000 (4) Rs. 88,000
Ans: (1) Rs. 47,000

26. Purchase Returns Journal is also called:
(1) Invoice book (2) Purchase Journal
(3) Returns outwards Journal (4) Returns inwards Journal
Ans: (3) Returns outwards Journal

27. A cheque payable at the counter of the bank without identification is called:
(1) Bearer cheque (2) Specific cheque
(3) Order cheque (4) Crossed cheque
Ans: (1) Bearer cheque

28. Income received in advance 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

29. Trading account is prepared to find out:
(1) Cost of goods produced (2) Cost of goods sold
(3) Net profit /Net loss (4) Gross profit
Ans: (4) Gross profit

30. Contingent liability is shown:
(1) In Trading A/C (2) In Profit and Loss A/C
(3) In Balance sheet (4) Outside the Balance sheet as a foot note
Ans: (4) Outside the Balance sheet as a foot note

31. Depreciation on plant will be charged to:
(1) Trading account
(2) Profit and loss A/C
(3) Profit and loss appropriation A/C
(4) Manufacturing A/C
Ans: (3) Profit and loss appropriation A/C

32. Which of the following is current asset?
(1) Debtor (2) Prepaid expenses
(3) Cash in hand (4) All of the above
Ans: (4) All of the above

33. 'Wages and Salaries' are shown on the:
(1) Debit side of Trading A/C
(2) Credit side of Trading A/C
(3) Debit side of Profit and loss A/C
(4) Credit side of Profit and loss A/C
Ans: (1) Debit side of Trading A/C

34. Interest on drawings is shown on the:
(1) Debit side of Profit and Loss A/C
(2) Credit side of Profit and Loss A/C
(3) Debit side of Trading A/C
(4) Credit side of Trading A/C
Ans: (2) Credit side of Profit and Loss A/C

35. Bank overdraft is a:
(1) Current Asset
(2) Fixed Asset
(3) Short term liability
(4) Long term liability
Ans: (3) Short term liability

36. Gross Profit is equal to:
(1) Net Sales — cost of goods sold
(2) Opening Stock Purchases
(3) Net sales + cost of goods sold
(4) Opening stock + purchases closing stock
Ans: (1) Net Sales — cost of goods sold

37. Nominal accounts relate to:
(1) Assets only
(2) Expenses and losses only
(3) Incomes and gains only
(4) Incomes, gains, expenses and losses
Ans: (4) Incomes, gains, expenses and losses

38. Expenditure on purchase of items giving benefit for a period is called:
(1) Capital expenditure
(2) Revenue expenditure
(3) Revenue loss
(4) Deferred revenue expenditure
Ans: (2) Revenue expenditure

39. Which of the following statement is correct?
(1) Book keeping is the art of recording the business transaction only
(2) Bank account is a real account
(3) Purchases account is a nominal account
(4) Loan account is a personal account
Ans: (4) Loan account is a personal account

40. A business has liabilities of Rs. 1, 70,000 and owner's equity is Rs. 80,000. Its assets would be:
(1) 2, 00,000 (2) 90,000
(3) 1, 70,000 (4) 2, 50,000
Ans: (4) 2, 50,000

41. Rs. 10,000 received from Ram whose account was written off as bad debts in the previous year should be credited to:
(1) Ram's A/C
(2) Bad debts A/C
(3) Bad debts recovered A/C
(4) Cash A/C
Ans: (3) Bad debts recovered A/C

42. Donation received for a 'specific purpose' is a:
(1) Capital receipts
(2) Revenue receipts
(3) Capital expenditure
(4) Revenue expenditure
Ans: (1) Capital receipts

43. Purchases Book is undercast by Rs. 500 while rectifying this error the debit will be given to:
(1) Purchases A/C (2) Cash A/C
(3) Suspense A/C (4) Sales A/C
Ans: (1) Purchases A/C

44. Sales Tax collected is a:
(1) Fixed liability
(2) Current liability
(3) Contingent liability
(4) Current asset
Ans: (2) Current liability

45. Capital account is a:
(1) Personal A/C
(2) Real A/C
(3) Nominal A/C
(4) Real as well as Personal Account
Ans: (1) Personal A/C

46. The item given as adjustments will be shown in final accounts at:
(1) One place only (2) Two places
(3) Three places (4) four places
Ans: (2) Two places

47. Journal proper records:
(1) Cash received from debtors
(2) Sales returns
(3) Purchases returns
(4) The transactions which are not recorded in any of the special Journal.
Ans: (4) The transactions which are not recorded in any of the special Journal.

48. Trade discount is given to customers on:
(1) Cash purchases
(2) Credit purchases
(3) Credit sales
(4) Large scale purchases
Ans: (4) Large scale purchases

49. Selling and distribution expenses are transferred to:
(1) Trading A/C
(2) Profit and loss A/C
(3) Profit and loss appropriation A/C
(4) Manufacturing A/C
Ans: (2) Profit and loss A/C

50. Loan account is:
(1) A Nominal A/C
(2) A Real A/C
(3) An Asset A/C
(4) A Personal A/C
Ans: (4) A Personal A/C

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