Mgt101 Mid Term Current Paper (Dec 2010)
Wednesday, December 01, 2010 Edit ThisQuestion No: 1 ( Marks: 1 ) - Please choose one
Net Profit + Expenses= _________
► Liabilities
► Assets
► Capital
► Income
Question No: 2 ( Marks: 1 ) - Please choose one
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as:
► Appreciation
► Depreciation
► Fluctuation
► None of the given options
Question No: 3 ( Marks: 1 ) - Please choose one
The basic purpose of depreciation is to achieve the:
► Matching principle
► Dual aspect principle
► Separate entity concept
► Money measurement concept
Question No: 4 ( Marks: 1 ) - Please choose one
If a business pays rent in advance for 12 months, it will be treated as:
► Prepaid expenses of business
► Long term liability of business
► Fixed assets of business
► Current liability of business
Question No: 5 ( Marks: 1 ) - Please choose one
Cash book is a part of:
► Voucher
► General Journal
► General Ledger
► Trial Balance
Question No: 6 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is:
► A memorandum statement
► A ledger account
► A part of cash book
► A part of journal
Question No: 7 ( Marks: 1 ) - Please choose one
If you start with cash book balance (Dr.), which of the following item will be deducted in Bank Reconciliation Statement?
► Any cheque drawn to creditor but not paid by bank
► Interest credited by the bank in pass book
► Cheque deposited but not credited by the bank
► Dividend collected by bank on behalf of the customer
Question No: 8 ( Marks: 1 ) - Please choose one
The main goal of Bank Reconciliation Statement is to determine:
► If the discrepancy is due to error rather than timing
► If the discrepancy is due to timing rather than error
► If the discrepancy is due to error rather than amount
► If the discrepancy is due to amount rather than timing
Question No: 9 ( Marks: 1 ) - Please choose one
Which one of the following is NOT true about revenue expenditure?
► These are the running expenses of the business
► They improve the financial position of the business
► They reduce the profit of the concern
► They do not appear in the balance sheet
Question No: 10 ( Marks: 1 ) - Please choose one
Under the reducing balance method of depreciation:
► Amount of depreciation increases every year
► Amount of depreciation remains constant for every year
► Amount of depreciation decreases every year
► None of the given options
Question No: 11 ( Marks: 1 ) - Please choose one
Consider the following inventory record:
| Date | Item | Quantity | Cost/Unit | Total |
| 2007Jan. 2 | Opening inventory | 100 | Rs.18.00 | Rs.1,800 |
| Mar. 4 | Purchase | 400 | 19.00 | 7,600 |
| May 8 | Purchase | 800 | 20.00 | 16,000 |
| Nov. 3 | Purchase | 500 | 21.00 | 10,500 |
Four hundred units are unsold, Use the FIFO method of inventory costing and determine the value assigned to the 400 units on hand at the end of the period.
► Rs.7, 500
► Rs.7, 978
► Rs.8, 000
► Rs.8, 400
Question No: 12 ( Marks: 1 ) - Please choose one
Consider the following:
| Beginning inventory | 10 units @ Rs. 10 per unit |
| First purchase | 35 units @ Rs. 11 per unit |
| Second purchase | 40 units @ Rs. 12 per unit |
| Third purchase | 20 units @ Rs. 13 per unit |
Eighty units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?
► Rs.260
► Rs.232
► Rs.284
► Rs.320
Question No: 13 ( Marks: 1 ) - Please choose one
| Particulars | Rs. |
| Opening stock of raw material | 100,000 |
| Closing stock of raw material | 85,000 |
| Purchases of raw material during the period | 200, 000 |
| Cost of Material Consumed | ? |
► Rs. 205,000
► Rs. 215,000
► Rs. 220,000
► Rs. 225,000
Question No: 14 ( Marks: 1 ) - Please choose one
The amount of depreciation charged on machinery will be debited to:
► Machinery account
► Depreciation account
► Cash account
► Capital account
Question No: 15 ( Marks: 1 ) - Please choose one
Under the straight line method of depreciation:
► Amount of depreciation increases every year
► Amount of depreciation remains constant for every year
► Amount of depreciation decreases every year
► None of the given options
Question No: 16 ( Marks: 1 ) - Please choose one
| Cost of asset | Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for each year | Rs. 5,000 |
| Sale price after 5 years | Rs.50,000 |
| Book value of Asset after 5 years | ? |
► Rs.25, 000
► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000
Question No: 17 ( Marks: 1 ) - Please choose one
| Cost of asset | Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for each year | Rs. 5,000 |
| Sale price after 5 years | Rs.50,000 |
| Written down value of asset on 5th year | Rs.75,000 |
| profit or loss on disposal of fixed assets | ? |
► Rs.25, 000 loss
► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profit
Question No: 18 ( Marks: 1 ) - Please choose one
| Cost of asset | Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for the each year | Rs. 5,000 |
| Sale price after 5 years | Rs.15,000 |
| Written Down Value of Asset on 5th year | Rs. 75,000 |
| Profit or loss on disposal of fixed asset | ? |
► Rs. 60,000 loss
► Rs. 75,000 profit
► Rs. 25,000 loss
► Rs. 1, 00,000 profit
Question No: 19 ( Marks: 1 ) - Please choose one
In cost of goods sold statement the 'total factory cost' is equal to:
► Cost of material consumed + Labor cost
► Cost of material consumed + Conversion cost
► Cost of material consumed + Total factory cost
► Cost of material consumed + Factory overhead
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following organization converts raw material into finished goods?
► Trading concern
► Manufacturing concern
► Merchandising concern
► Service concern
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following item appears in Trading Account of a business?
► Interest expenses
► Wages and salaries
► Depreciation expenses
► Discount Allowed
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following is an alternate term which can be used for "Capital"?
► Liability
► Owner's net worth
► Working capital
► Asset
Question No: 23 ( Marks: 1 ) - Please choose one
If salaries expense is Rs. 2,500, purchases are Rs. 16,000 and rent (office building) is Rs. 300 during the year, what would be the total of "general & administrative expenses"?
► Rs. 300
► Rs. 2,500
► Rs. 2,800
► Rs.18, 800
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance).
► Capital account
► Sundry creditors account
► Accounts payable account
► Cash account
Question No: 25 ( Marks: 1 ) - Please choose one
The amount brought by the proprietor in the business should be credited to:
► Cash account
► Capital account
► Drawings account
► Proprietor account
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business sold goods for Rs.10,000 on credit?
► Cash account
► Sales account
► Accounts receivable account
► Purchases account
Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business purchased a vehicle on cash?
► Vehicle account
► Cash account
► Business account
► Bank account
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following journal entry will be recorded, if the goods are sold on credit to Mr. 'B'?
► Mr. "B" / Accounts Receivable account (Dr) and Sales account (Cr)
► Cash account (Dr) and sales account (Cr)
► Sales account (Dr) and Mr. B / Accounts Receivable account (Cr)
► Goods Sold account (Dr) and Mr. B / Accounts Receivable account (Cr)
Question No: 29 ( Marks: 1 ) - Please choose one
Accrued expenses are the example of:
► Current liabilities
► Long term liabilities
► Deferred costs
► Capital expenses
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following shows summary of a company's financial position at a specific date?
► Profit & Loss Account
► Cash Flow Statement
► Balance Sheet
► Income & Expenditure Account
Question No: 31 ( Marks: 1 ) - Please choose one
What type of expenses are paid out of Gross Profit?
► Selling Expenses
► General Expenses
► Financial Expenses
► All of the given options
Question No: 32 ( Marks: 1 ) - Please choose one
An informal accounting statement that lists the ledger account balances at a point in time and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following essentials are shown in Bank Book?
(1) Date of transaction
(2) Narration of transaction
(3) Cheque number
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following book(s) is(are) a part of General Ledger?
► Cash Book
► Purchase Return Book
► Purchase Book
► All of the given options
Question No: 35 ( Marks: 1 ) - Please choose one
A book, in which receipts and payments are recorded, is known as:
► Pass Book
► Cash Book
► Purchase Book
► Sales Book
Question No: 36 ( Marks: 1 ) - Please choose one
In an account, if credit side < debit side then the balance is known as:
► Negative Balance
► Debit Balance
► Positive Balance
► Credit Balance
Question No: 37 ( Marks: 1 ) - Please choose one
Commercial Accounting is based on:
► Single entry book keeping
► Double entry book keeping
► Both single and double entry book keeping
► Cash basis of book keeping
Question No: 38 ( Marks: 1 ) - Please choose one
According to the double entry system of accounting, an account that obtains benefit is:
► Debit
► Credit
► Income
► No need to show as accounting record
Question No: 39 ( Marks: 1 ) - Please choose one
Which of the following is non- profit organization?
► Sole proprietorship
► Partnership
► Limited company
► Trust
Question No: 40 ( Marks: 1 ) - Please choose one
Mr. "A" sold goods to Mr. "B" for Rs. 3,000 on October 8, 2008 and Mr. "B" paid at the same time. It will be case of ______________ sales.
► Cash
► Credit
► Accrual based
► None of the given options
Question No: 41 ( Marks: 10 )
State with reasons whether the following items of expenditure are capital or revenue in nature.
1. Wages paid on the purchase of goods.
2. Carriage paid on goods purchased.
3. Transportation paid on purchase of machinery.
4. Octroi duty paid on machinery.
5. Octori duty paid on goods.
6. A second hand car was purchased for Rs. 7,000 and Rs, 5,000 were spent for its repair and overhauling.
7. Office building was whitewashed at a cost of Rs. 3,000.
8. A new machinery was purchased for Rs. 80,000 and a sum of Rs. 1,000 was spent on its installation and erection
9. Old furniture was repaired at a cost of Rs. 500.
10. Land was purchased for Rs. 1, 00,000 and Rs. 5,000 was paid for legal expenses.
