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Sunday, January 06, 2013

BACHELOR'S PREPARATORY PROGRAMME (B.P.P.) - Term-End Examination June, 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. The main function of Financial Accounting is to:
(1) Find out Gross Profit only
(2) Find out Net Profit only
(3) Record all the transactions
(4) Record, classify and summarize the business transactions in a significant and systematic manner.
Ans: (4) Record, classify and summarize the business transactions in a significant and systematic manner.

2. Purchases Book is meant for recording:
(1) All types of purchases (2) credit purchases of goods
(3) Cash purchases (4) both cash and credit purchases
Ans: (2) credit purchases of goods

3. An expenditure on Repairs of machinery was debited to machinery. What type of error is this?
(1) Errors of principle (2) errors of commission
(3) Errors of omission (4) compensatory error
Ans: (1) Errors of principle

4. Sales returns book is kept to record:
(1) Returns of goods sold
(2) Credit sales of goods
(3) Credit purchase of goods
(4) Returns of goods purchased
Ans: (1) Returns of goods sold

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

6. Rs. 1,000 paid as wages for establishment of a machine should be debited to:
(1) Machine A/c
(2) Cash A/c
(3) Wages A/c
(4) Establishment A/c
Ans: (1) Machine A/c

7. Trading account shows the:
(1) Net profit only
(2) Gross profit only
(3) Total of incomes only
(4) Total of expenses only
Ans: (2) Gross profit only

8. Wages outstanding account is:
(1) Real account
(2) Nominal account
(3) Representative personal account
(4) Both real and nominal account
Ans: (3) Representative personal account

9. Rent paid in advance is treated as:
(1) A loss (2) a gain
(3) An asset (4) a liability
Ans: (3) An asset

10. Credit balance of suspense A/c will be shown in:
(1) Debit side of trading A/c
(2) Credit side of trading A/c
(3) The asset side of balance sheet
(4) The liability side of balance sheet
Ans: (4) The liability side of balance sheet

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

12. Personal accounts are related to:
(1) Assets only (2) Liabilities only
(3) Expenses only (4) Debtors, creditors etc.
Ans: (4) Debtors, creditors etc.

13. Real accounts are related to:
(1) Assets (2) Expenses, losses and incomes
(3) Liabilities (4) Gains
Ans: (1) Assets

14. Nominal accounts are related to:
(1) Assets (2) Liabilities
(3) Debtors, creditors etc. (4) Expenses, losses, incomes and gains
Ans: (4) Expenses, losses, incomes and gains

15. Goods given away as donation would be credited to:
(1) Purchase A/c (2) Sales A/c
(3) Cash A/ c (4) Donation A/c
Ans: (1) Purchase A/c

16. What will be the amount of capital if cash is Rs. 5,000; furniture Rs. 12,000; stock, 30,000 and creditors Rs. 5,000?
(1) Rs. 42000 (2) Rs. 41000
(3) Rs. 52000 (4) Rs. 47000
Ans: (1) Rs. 42000

17. Rs. 4,000 received from Y whose account was written off as bad debts should be credited to:
(1) Y's A/c (2) Cash A/c
(3) Bad-debts A/c (4) Bad-debts recovered A/c
Ans: (4) Bad-debts recovered A/c

18. Which of the following is not a current asset?
(1) Prepaid expense (2) Cash at bank
(3) Closing stock (4) Goodwill
Ans: (4) Goodwill

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

20. Bank reconciliation statement can be prepared with the balance of which of the following book (s) as a starting point?
(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

21. Unfavourable bank balance refers to:
(1) Credit balance of the Cash Book
(2) Credit balance of the Pass Book
(3) Debit balance of the Cash Book
(4) Favourable balance of the Cash Book
Ans: (1) Credit balance of the Cash Book

22. Bank Reconciliation statement is prepared by:
(1) Auditor of the bank (2) Creditors
(3) Bank (4) Customers of the bank
Ans: (4) Customers of the bank

23. Sale of typewriter that has been used in office should be credited to:
(1) Sales A/c (2) Cash A/c
(3) Capital A/c (4) Typewriter A/c
Ans: (4) Typewriter A/c

24. Rent paid to Land lord Rs. 500 was credited to Rent A/c with Rs. 5,000. In the rectifying entry, Rent A/c will be debited with:
(1) Rs. 5000 (2) Rs. 500
(3) Rs. 5500 (4) Rs. 4500
Ans: (3) Rs. 5500

25. Purchased Goods from Y for Rs. 3,600 but it was credited to Y as Rs. 6300. In rectifying entry Y A/c will be debited with:
(1) Rs. 9900 (2) Rs. 2700
(3) Rs. 3600 (4) Rs. 6300
Ans: (2) Rs. 2700

26. Goods returned by Z for Rs. 4,200 were debited to Z as Rs. 2,400. In rectifying entry Z's A/c will be credited with:
(1) Rs. 1800 (2) Rs. 2400
(3) Rs. 4200 (4) Rs. 6600
Ans: (4) Rs. 6600

27. Goods sold to Ram for Rs. 640 was debited to in his A/c as Rs. 460. In the rectifying entry Ram's A/c will be debited with:
(1) Rs. 180 (2) Rs. 460
(3) Rs. 640 (4) Rs. 1100
Ans: (1) Rs. 180

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

29. Building is a:
(1) Current Asset (2) Tangible Fixed Asset
(3) Intangible Asset (4) Liability
Ans: (2) Tangible Fixed Asset

30. Bank overdraft is a:
(1) Current liability (2) Long-term liability
(3) Current asset (4) Fixed asset
Ans: (1) Current liability

31. Sales Returns Journal is also called:
(1) Day Book (2) Primary Book
(3) Invoice Book (4) Returns Inwards Journal
Ans: (4) Returns Inwards Journal

32. Profit and loss A/c is prepared to find out:
(1) Gross Profit (2) Capital
(3) Cost of Goods sold (4) Net profit/Net loss
Ans: (4) Net profit/Net loss

33. Trade marks are treated as a:
(1) Current asset (2) Fictitious asset
(3) Tangible asset (4) Intangible asset
Ans: (4) Intangible asset

34. Preliminary expenses are shown in balance sheet as a:
(1) Fixed asset
(2) Tangible asset
(3) Fictitious asset
(4) Intangible asset
Ans: (3) Fictitious asset

35. Posting will be done in the:
(1) Trial Balance
(2) Journal
(3) Ledger
(4) Trading A/c
Ans: (3) Ledger

36. Depreciation on building will be charged to:
(1) Trading A/c (2) Profit and loss A/c
(3) Manufacturing A/c (4) Profit and loss appropriation A/c
Ans: (2) Profit and loss A/c

37. Balance sheet is a statement containing the assets and liabilities of a business:
(1) On a particular date (2) On a particular period
(3) Both (1) and (2) (4) None of the above
Ans: (1) On a particular date

38. Revenue is said to be realized when:
(1) The sale is made (2) Goods is manufactured
(3) Cash is received (4) both (1) and (2)
Ans: (1) The sale is made

39. Underwriting commission is an example of:
(1) Capital expenditure (2) Capital loss
(3) Revenue expenditure (4) Deferred revenue expenditure
Ans: (4) Deferred revenue expenditure

40. 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) Gross profit + closing stock
Ans: (1) Cost of goods sold + gross profit

41. Which of the following account is prepared to find out the cost of production?
(1) Manufacturing A/c (2) Trading A/c
(3) Profit and loss A/c (4) Profit and loss appropriation A/c
Ans: (1) Manufacturing A/c

42. Which of the following transactions shall not be recorded in the books of a business unit?
(1) The manager appointed Ganesh as an assistant
(2) Purchased a machine for the factory.
(3) The proprietor took away same goods from his shop
(4) Paid wages to factory workers.
Ans: (1) The manager appointed Ganesh as an assistant

43. If the profit is 1/3rd of cost price, then it is:
(1) 1/4 the sale price (2) 1/3 the sale price
(3)1/2 of the sale price (4) 1/5 the sale price
Ans: (1) 1/4 the sale price

44. Interest on drawings is regarded as:
(1) Expenditure of the business
(2) Gain for the business
(3) Profit for the business
(4) Capital for the business
Ans: (2) Gain for the business

45. A firm pays its manager a commission @ 10% of profits arrived at after charging such commission. What will be the commission if the profits before charging such commission were Rs. 22,000?
(1) Rs. 2,000 (2) Rs. 2,200
(3) Rs. 2,445 (4) Rs. 1,100
Ans: (1) Rs. 2,000

46. Which of the following is deducted out of the current assets to arrive at the amount of liquid assets?
(1) Stock (2) Debtors
(3) B/R (4) Cash
Ans: (1) Stock

47. Rent and taxes 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: (3) Debit side of profit and loss A/c

48. Accrued income shown 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. Under which concept the firm should be considered as a continuing unit and not as one closing down:
(1) Legal aspect concept (2) Matching concept
(3) Going concern concept (4) Materiality concept
Ans: (3) Going concern concept

50. Capital on 1st January, 2008 was Rs. 50,000 on October 1, 2008 proprietor introduced further capital of Rs. 10,000. The interest at 5% is to be allowed on capital. The interest on capital for the year 2008 will be:
(1) Rs. 2625
(3) Rs. 2500
(2) Rs. 2750
(4) Rs. 3000
Ans: (1) Rs. 2625