Self Exercise

1. An asset was purchased for Rs. 1,00,000 on which depreciation was provided @ 15% on S.L.M. method, the W.D.V. of the asset at the end of two years is (a) Rs. 70,000 (b) Rs. 80,000 (c) Rs. 35,000 (d) Rs. 15,000 2. Which financial statement represents the accounting equation, assets = Liabilities + Owners equity: (a) Income Statement (b) Statement of Cash flows (c) Balance Sheet (d) None of the above 3. The owner of the consignment stock is________ (a) Consignor (b) Consignee
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(c) Debtors (d) None 4. If the machinery costing Rs. 18,000 is sold after 2 years for Rs. 16,000 and the depreciation rate is 10% per annum on straight line method, then the profit or loss from the sale of machine is (a) Rs. 3,600 (profit) (b) Rs. 1600 (loss) (c) Rs. 1600 (profit) (d) No profit no loss 5. The expired portion of capital expenditure is shown in the financial statements as (a) As an income. (b) As an expense. (c) As an asset. (d) As a liability. 6. Gaining ratio is equal to: (a) Old ratio minus new ratio (b) New ratio minus old ratio (c) Old ratio plus capital ratio (d) None of the above
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7. Errors are ________ mistakes. (a) Intentional. (b) Unintentional. (c) Undetected. (d) None of the three 8. In case of no partnership deed, the provisions of which of the following are applicable: (a) Indian Contract Act, 1872 (b) Indian Partnership Act, 1932 (c) Companies Act, 1956 (d) None of these 9. The Companies Act, 1956 prohibits the issue of any preference share which is________________. (a) Non convertible (b) Non participating (c) Non redeemable (d) Non cumulative 10. Capital expenditures are recorded in the ________ (a) Balance sheet. (b) Profit and loss account. (c) Trading account.
(d) Manufacturing account.
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11. When the money received on application is to be adjusted at the time of allotment (partial allotment), then the account to be credited is: (a) Share capital a/c (b) Share allotment a/c (c) Share application a/c (d) None of the above 12. On 1.1.05 X draw a bill on Y for Rs 1,00,000. At maturity, the bill returned dishonoured as Y become insolvent and 40 paise per rupee is recovered from his estate. The amount recovered is: (a) 20,000 (b) Nil (c) 40,000 (d) 40 paise 13. . If The cost of the assets is Rs. 10,00,000 And the market value of the assets is Rs. 12,00,000. What would its value according to the accrual concept. (a) Rs. 10,00,000 (b) RS. 12,00,000
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 Rs. 22,00,000 (e) RS.2,00,000 14. The balance of salaries account is transferred: (a) In Trading account (b) In Balance Sheet (c) In Journal (d) In P&L account 15. If capital employed by a partnership firm is Rs.1,00,000 and its average profit is Rs.20,000 normal rate of return is 15%, the value of goodwill is: (a) Rs.30,000 (b) Rs.5,000 (c) Rs.1,33,333 (d) Rs.33,333 16. Goods costing Rs.1,80,000 sent to consignee to show a profit of 20% on invoice price. Invoice price of the goods is a) Rs.2,16,000 b) Rs.2,25,000 c) Rs.2,10,000 d) None of the above.

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17. . A businessman issued a cheque for Rs. 100 to his son for domestic expenses. It will be entered in three column cash book: (a) In Cr. side of cash column and Dr. side of bank column (b) In the Dr. side of cash column and Cr. side of bank column (c) In the Cr. side of cash column (d) In the Cr. side of bank column 18. Bank will enter the deposits and withdrawals of customers in: (a) Pay in slip of bank (b) Cash book (c) Pass book (d) Cheque book 19. Goods purchased Rs. 1,00,000. Sales Rs. 90,000. Margin 20 % on sales. Closing stock is (a) Rs. 10,000. (b) Rs. 25,000. (c) Rs. 28,000. (d) None of the above. 20. Credit side of the trial balance of Premchand & Brothers as on 31.3.07 was short by Rs. 10000 and it was kept in Suspense account.
6

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Subsequently it was found that the purchase returns journal on a particular date was cast short by Rs. 100. After rectification of the error, balance in Suspense account will be (a) Rs. 10000 (b) Rs. 9900 (c) Rs. 10100 (d) None of the above 21. The balance remaining in the petty cash book is a: (a) Assets (b) Liabilities (c) Gain (d) None of these 22. Revenue from sale of products, is generally, recognized in the period in which (a)Sale is made. (b)Cash is collected (c) Products are manufactured. (d) None of the above.

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23. The amount due to the retiring partner on account of goodwill is debited to the continuing partners in their __________. (a) Profit sharing ratio. (b) Sacrificing ratio. (c) Capital ratio. (d) Gaining ratio. 24. A machine was purchased for Rs. 50,000. The machine was depreciated @ 20% p.a. on W.D.V. Basis for 3 years. If the machine is sold at a value of Rs. 25,000, the profit or loss will be: (a) 600 profits (b) 5,000 profits (c) 1,000 loss (d) 600 loss 25. X draws a bill on Y for 3 months on 2 Feb., 2006. The due date of the bill is: (a) 5 May, 2006 (b) 4 May, 2006 (c) 3 May, 2006 (d) 2 May, 2006

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26. Gaining ratio is equal to: (a) Old ratio minus new ratio (b) New ratio minus old ratio (c) Old ratio plus capital ratio (d) None of the above 27. Whenever debentures are cancelled, any profit on cancellation is transferred to: (a) Profit and loss account (b) Sinking fund account (c) Capital redemption reserve account (d) Capital reserve account 28. The inventory method where the cost per unit is recomputed after every addition is known as: (a) First-in-First-out method (b) Specific identification method (c) Moving average method (d) None of these 29. Valuation of inventory is dealt within (a) AS-5 (b) AS-2
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(c) AS-3 (D) AS-4 30. Which of the following statements is true? (a) A credit balance in the passbook indicates excess of deposits over withdrawals (b) A trial balance will not tally if a transaction is omitted (c) A customer of whom goods have been sold on credit cannot avail himself of a cash discount (d) All of these

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