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Sunday, January 06, 2013

BACHELOR'S PREPARATORY PROGRAMME (B.P.P.) - Term-End Examination June, 2012


PC0-01: PREPARATORY COURSE IN COMMERCE
Time: 2 Hours Maximum Marks: 50
Note: All questions are compulsory, each of which carries one mark.
1. The concept of conservatism takes into account:
(1) All expected income but no losses
(2) All expected losses but no expected income
(3) No expected profits and losses
(4) All expected incomes and losses
Ans: (2) All expected losses but no expected income

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

3. Radha started business with Rs 2, 00,000. She purchased goods on credit from Krishan for Rs. 25,000. Her total assets will be:
(1) Rs. 2, 25,000 (2) Rs. 2, 00,000 (3) Rs. 1, 75,000 (4) Rs. 1, 50,000
Ans: (1) Rs. 2, 25,000

4. Commission outstanding account is a:
(1) Personal A/C (2) Nominal A/C
(3) Real A/C (4) Both personal and nominal A/C
Ans: (1) Personal A/C

5. Shruti purchased a building from her friend for Rs. 3, 00,000. Its market value is Rs. 4, 00,000. What amount will she record in her books?
(1) 4, 00,000 (2) 1, 00,000 (3) 3, 00,000 (4) 7, 00,000
Ans: (3) 3, 00,000

6. Nominal Accounts are related to:
(1) Liabilities only
(2) Expenses, incomes, losses and gains
(3) Assets only
(4) Expenses and losses only
Ans: (2) Expenses, incomes, losses and gains

7. Which of the following accounts normally shows a debit balance?
(1) A debtor's A/C (2) Purchases A/C
(3) Discount allowed A/C (4) All of the above
Ans: (4) All of the above

8. A system of advancing a fixed amount to the petty cashier periodically is called:
(1) Double entry system (2) Imprest system
(3) Single entry system (4) Hybrid system
Ans: (2) Imprest system

9. Single entry system of book - keeping is a system of:
(1) Incomplete records (2) Reliable records
(3) Providing true financial position (4) Helping in locating errors
Ans: (1) Incomplete records

10. Machine Purchased on cash should be debited to:
(1) Cash A/C (2) Goods A/C (3) Machine A/C (4) Furniture A/C
Ans: (3) Machine A/C

11. Which of the following accounts is a real account?
(1) Bank A/C (2) Cash A/C (3) Loan A/C (4) Capital A/C
Ans: (2) Cash A/C

12. The credit balance of a personal account indicates:
(1) Amount payable (2) Amount receivable
(3) cash at Bank (4) Cash in hand
Ans: (1) Amount payable

13. Which of the following is not entered in the books of account?
(1) Cash discount (2) Rent received
(3) Trade discount (4) commission received
Ans: (3) Trade discount

14. Which book is used for recording credit sales of goods?
(1) Cash Book (2) Sales Book
(3) Petty Cash Book (4) Purchases Book
Ans: (2) Sales Book

15. Opening stock is Rs. 50,000, Purchases are Rs. 30,000 and direct expenses are Rs. 20,000. The amount of closing stock is Rs. 10,000. Cost of sales will be:
(1) Rs. 50,000 (2) Rs. 80,000 (3) Rs. 90,000 (4) Rs. 70,000
Ans: (3) Rs. 90,000

16. Income received in advance appearing in Trial Balance will be shown in:
(1) Trading A/C (2) Profit and loss A/C
(3) Assets side of Balance Sheet (4) Liabilities side of Balance Sheet
Ans: (4) Liabilities side of Balance Sheet

17. Bad debts given in adjustments will be shown in:
(1) Profit and loss A/C only
(2) Balance sheet only
(3) Both trading A/C and Balance sheet
(4) Both Profit and loss A/C and Balance sheet
Ans: (4) Both Profit and loss A/C and Balance sheet

18. Goods returned worth Rs. 35,000 by Rohan and Co. were taken into stock for Rs. 3,500. It is an error of:
(1) Commission (2) Principle (3) Omission (4) Compensating
Ans: (1) Commission

19. The process of transferring the debit and credit balances from their respective accounts to a statement is termed as:
(1) Posting (2) Preparing a Trial Balance
(3) Journalising (4) Balancing
Ans: (2) Preparing a Trial Balance

20. Depreciation on furniture is charged to:
(1) Trading A/C (2) Manufacturing A/C
(3) Profit and loss A/C (4) Suspense A/C
Ans: (3) Profit and loss A/C

21. Sale of old newspapers will be recorded in:
(1) Liabilities side of Balance Sheet (2) Trading A/C
(3) Profit and loss A/C (4) Assets
Ans: (3) Profit and loss A/C

22. Sales tax is charged to:
(1) Trading A/C (2) Profit and loss A/C
(3) Manufacturing A/C (4) Balance Sheet
Ans: (2) Profit and loss A/C

23. Carriage inwards shown in Trial Balance will be recorded in:
(1) Trading A/C (2) Profit and loss A/C
(3) Assets side of Balance Sheet (4) Liabilities side of Balance Sheet
Ans: (1) Trading A/C

24. Small Donation received for general purpose is to be taken as:
(1) Capital receipts (2) Capital expenditure
(3) Revenue receipts (4) Revenue expenditure
Ans: (3) Revenue receipts

25. Bank Reconciliation Statement is prepared by:
(1) Debtors (2) Creditors
(3) Bank (4) Customers of the bank
Ans: (4) Customers of the bank

26. Bank overdraft reflects:
(1) Debit balance in the Pass Book
(2) Debit balance in the Cash Book
(3) Credit balance in the Pass Book
(4) No balance in the Pass Book
Ans: (1) Debit balance in the Pass Book

27. Goods sold to Mahesh for Rs. 715 were recorded in his account as Rs. 175. In the rectifying entry, Mahesh A/C will be debited with:
(1) Rs. 715 (2) Rs. 890 (3) Rs. 540 (4) Rs. 175
Ans: (3) Rs. 540

28. Fixed Assets do not include:
(1) Good will (2) Furniture (3) Prepaid expenses (4) Loose tools
Ans: (3) Prepaid expenses

29. Current liabilities do not include:
(1) Outstanding expenses (2) Proposed dividend
(3) Bank overdraft (4) Accrued income
Ans: (4) Accrued income

30. Purchase of goods from Vishnu on credit basis should be credited to:
(1) Purchases A/C (2) Sales A/C (3) Vishnu's A/C (4) Cash A/C
Ans: (3) Vishnu's A/C

31. Main objective of preparing a 'Journal' is:
(1) To journalise the cash transactions
(2) To prepare initial record of business transactions
(3) To make posting in the ledger
(4) To ascertain the financial position of the business
Ans: (2) To prepare initial record of business transactions

32. Cash given away as charity shall be debited to:
(1) Cash A/C (2) Purchases A/C
(3) Sales A/C (4) Charity A/C
Ans: (4) Charity A/C

33. Goods given away as charity shall be credited to:
(1) Charity A/C (2) Sales A/C
(3) Purchases A/C (4) Cash A/C
Ans: (3) Purchases A/C

34. If cash is Rs. 10,000, Land Rs. 2, 00,000, debtors Rs. 7,000 and creditors Rs. 17,000, the amount of capital would be:
(1) Rs. 2, 00,000 (2) Rs. 2, 34,000 (3) Rs. 2, 14,000 (4) Rs. 2, 17,000
Ans: (1) Rs. 2, 00,000

35. Rs. 6,000 received from Meera whose account was written off as bad debt in the previous year should be credited to:
(1) Meera's A/C (2) Bad debts A/C
(3) Provision for bad debts A/C (4) Bad debts recovered A/C
Ans: (4) Bad debts recovered A/C

36. Contra entry appears on both the sides of:
(1) Purchases Book (2) Sales Book
(3) Cash Book (4) Balance Sheet
Ans: (3) Cash Book

37. Effect of Salary paid on accounting equation shall be:
(1) Only cash will increase
(2) Only cash will decrease
(3) Only capital will decrease
(4) Cash and capital both will decrease
Ans: (4) Cash and capital both will decrease

38. Premium received on issue of shares is treated as a:
(1) Current Asset (2) Current liability
(3) Fixed Asset (4) Capital profit
Ans: (4) Capital profit

39. A copy of customer's A/C given by bank is called:
(1) Sales Book (2) Cash Book
(3) Pass Book (4) Cheque Book
Ans: (3) Pass Book

40. Manufacturing A/C is prepared to find out:
(1) Cost of goods sold (2) Cost of Goods Produced
(3) Net Profit (4) Net Loss
Ans: (2) Cost of Goods Produced

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

42. Expenditures paid in advance will be shown in Balance Sheet as:
(1) Fixed asset (2) Current asset
(3) current liability (4) Long term liability
Ans: (2) Current asset

43. Sales Returns Journal is also called:
(1) Sales Journal (2) Invoice Book
(3) Return Inwards Journal (4) Return Outwards Journal
Ans: (3) Return Inwards Journal

44. Which of the following is not a liquid asset?
(1) Cash (2) Bank Balance (3) Closing Stock (4) Short Term Securities
Ans: (3) Closing Stock

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

46. Cost of goods purchased is Rs. 80,000, Net sales are Rs. 1, 00,000 and closing stock is Rs. 20,000. The gross profit would be:
(1) Rs. 20,000 (2) Rs. 40,000 (3) Rs. 80,000 (4) Rs. 1, 00,000
Ans: (2) Rs. 40,000

47. Sales are equal to:
(1) Cost of goods sold + grosses profit
(2) Cost of goods sold — gross profit
(3) Opening stock + purchases — closing stock
(4) Opening stock + gross profit
Ans: (1) Cost of goods sold + grosses profit

48. Brokerage / Commission received are shown on the:
(1) Debit side of Trading A/C (2) Credit side of P and L A/C
(3) Asset side of Balance Sheet (4) Liabilities side of Balance Sheet
Ans: (2) Credit side of P and L A/C

49. Revenue is said to be realized when:
(1) Cash is received
(2) The sale is made
(3) Goods are manufactured
(4) Offer to sale is made
Ans: (2) The sale is made

50. A firm pays commission to its manager @ 10%. Of profits arrived at after charging such commission. What will be the amount of commission if the profits before charging such commission were Rs. 22,000?
(1) Rs. 2,200 (2) Rs. 1,100 (3) Rs. 2,000 (4) Rs. 1,000
Ans: (3) Rs. 2,000