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Volume 03
Accounting MCQs
Question No: 1

( Marks: 1 )

- Please choose one


An

accounting system is used by a business to:


Analyze transactions
Handle routine book-keeping tasks
Classify and summarize financial information
All

of the given options

Question No: 2

( Marks: 1 )

- Please choose one


The

assets which have a limited useful life are termed as:


Limited assets
Depreciateable assets
Unlimited assets
None of the given options
Question No: 3

( Marks: 1 )

- Please choose one

Accountancy covers which of the following area(s):


Book-keeping
Accounting
Auditing
All of the given options
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

Which of the following transaction have NO affect on stockholders' equity?


Purchase of land on credit
Dividends to stockholders
Net loss

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Investment in cash by stockholders
Question No: 6

( Marks: 1 )

- Please choose one

Which of the following account balance is shown on credit side of Trial Balance? (It is
assumed that all account balances are shown on normal balance)
Cash account
Furniture account
Vehicle account
Capital account
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

cost of moving plant and machinery to a new site will be treated as:
Revenue expense
Capital expense
Administrative expense
Operating expense
Question No: 9

( Marks: 1 )

- Please choose one

Which one of the following is NOT true about Capital Expenditure?


Creates future benefits
Incurred to acquire fixed assets
Incurred to increase the economic life of existing fixed assets
Reduce the profit of the concern
Question No: 10

( Marks: 1 )

- Please choose one

Consider the following:


Beginning inventory
First purchase
Second purchase
Third purchase
Sold

10 units @ Rs. 10 per unit


35 units @ Rs. 11 per unit
40 units @ Rs. 12 per unit
20 units @ Rs. 13 per unit
10 units @ 10
35 units @ 11

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40 units @ 12
Balance
20 units @ 13 = 260
Eighty-five 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.268
Question No: 11

( Marks: 1 )

- Please choose one

Consider the following inventory record:

Date
Jan. 2
Mar. 4
May 8
Nov. 3
De31

Item
Beginning inventory
Purchase
Purchase
Purchase
Merchandise available
Opening Stock
Add purchases
Total material available
for sale
Less closing **
Cost of good sold

Quantity
10
35
40
20
105

Cost/Unit
Rs.
10
11
12
13

Total
Rs.
100
385
480
260
1,225
100
1125
1225
320
905

Detail of 80 units sold


10 @ 10
35 @ 11
35 @ 12
now remaining are
5 units @ 12 = 60
20 units@ 13 =260
closing stock = 25 units and value = 320
80 units were sold, Use the FIFO method of inventory costing and determine the cost of
goods sold.
Rs. 1,225
Rs. 1,015
Rs. 965
Rs. 905

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Question No: 12

( Marks: 1 )

- Please choose one


If,

Cost of machine
= Rs.400, 000
Useful life
= 5 years
Residual value
= Rs.25, 000
The depreciation of machine per year using straight line method is?
= 400,000-25000 / 5 = 75000
Rs. 160,000
Rs. 96,000
Rs. 75,000
Rs. 57,600
Question No: 13

( Marks: 1 ) - Please choose one


Rs. 1,00,000
Cost of asset
Life of asset
5 years
Depreciation for each year
Rs. 15,000
Sale price after 5 years
Rs.50,000
Book value of Asset after 5 years
?

Asset year 1 = 100,000 - 15000 = 85000


Year 2
= 85000 - 15000 = 70000
Year 3
= 70000 15000 = 55000
Year 4
= 55000 15000 = 40000
Book value after year 5 = 40000 15000 = 25000
Rs.25, 000
Rs. 75,000
Rs. 15,000
Rs. 1, 00,000
Question No: 14

( Marks: 1 )

- Please choose one


A

decrease in value of a fixed asset due to age, wear and tear is known as:
Depreciation
Accumulated Depreciation
Appreciation
Written Down Value
Question No: 15

( Marks: 1 )

- Please choose one


In

balance sheet fixed assets are shown at:


Cost price
Market value
Fair value
Written down value (WDV)
Question No: 16

( Marks: 1 )

- Please choose one

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In
cost of goods sold statement, the cost of material consumed is equal to:
Opening raw material inventory + Purchases Ending raw material inventory
Opening raw material inventory - Purchases + Ending raw material inventory
Ending raw material inventory + Opening raw material inventory - Purchases
Ending raw material inventory + Opening raw material inventory + Purchases
Question No: 17

( Marks: 1 )

- Please choose one


Rs.
Particulars
Direct materials costs
80,000
Direct labor costs
50,000
Manufacturing overhead costs
60,000
Prime cost = dm + dl
130000

Rs.1 Rs.130, 000


Rs.110, 000
Rs.140, 000
Rs.190, 000
Question No: 18

( Marks: 1 )

- Please choose one

What would be the value of 'cost of goods manufactured' if the total factory cost of the
month is Rs. 6,000, opening work in process is Rs. 2,000 and the closing work in
process is Rs. 2,500?

Rs. 5,500
Rs. 8,000
Rs. 4,500
Rs. 8,500

Question No: 19

( Marks: 1 )

- Please choose one

Following are the inventories of Manufacturing Concern EXCEPT:


Raw material
Work in process
Finished goods
Merchandise inventory
Question No: 20

( Marks: 1 )

- Please choose one


If

cost of sales is Rs. 95,000, sales are Rs. 200,000 and operating expenses are Rs.
100,000. What will be the net result?
Rs. 5,000 Loss
Rs. 5, 000 Profit
Rs.1, 95,000 Profit
Rs.1, 95,000 Loss

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Question No: 21

( 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)
Cash account
Furniture account
Vehicle account
All of the given options
Question No: 22

( Marks: 1 )

- Please choose one


The

return of goods by a customer should be debited to:


Customers account
Sales return account
Goods account
Accounts receivable
Question No: 23

( Marks: 1 )

- Please choose one

Which of the following account will be credited in the books of ABC Co. Ltd., if furniture
is purchased on cash?
Furniture account
Cash account
Business account
Bank account
Question No: 24

( Marks: 1 )

- Please choose one

Which of the following account will be credited, If Mr. A started business with cash
Rs. 2, 00,000?
Capital account
Cash account
Mr. As account
Business account
Question No: 25

( 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: 26

( Marks: 1 )

- Please choose one

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Which of the following is NOT an item of a Balance Sheet?
Accounts Receivable
Accounts Payable
Sales Revenue
Marketable Securities
Question No: 27

( Marks: 1 )

- Please choose one

Accounts Receivable & Inventory are the examples of:


Liquid assets
Current assets
Fixed assets
Capital assets
Question No: 28

( 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: 29

( Marks: 1 )

- Please choose one

Which of the following summarizes the cash movements during a specified period?

Trading account
Profit & Loss account
Receipts & Payments account
Balance Sheet
Question No: 30

( Marks: 1 )

- Please choose one

Which of the following financial statement summarizes the profitability of an organization


for a particular period?
Balance Sheet
Trading and Profit & Loss account
Cash Flow Statement
Statement of Retained Earnings

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Question No: 31

( 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: 32

( Marks: 1 )

- Please choose one

Which of the following is CORRECT about the flow of recording a transaction?


Occurrence of event voucherJournalLedgerTrial Balanceprofit and
loss accountBalance Sheet
Occurrence of eventJournal voucher LedgerTrial Balanceprofit and
loss accountBalance Sheet
Occurrence of eventLedger voucherJournalTrial Balanceprofit and
loss accountBalance Sheet
Occurrence of eventTrial Balance voucherJournalLedgerprofit and
loss accountBalance Sheet

Question No: 33

( Marks: 1 )

- Please choose one

Which of the following is used to record financial transactions in chronological (day-today) order?
Voucher
General Journal
General Ledger
Trial balance
Question No: 34

( Marks: 1 )

- Please choose one

When a Liability is reduced or decreased, it is recorded on the:


Right or debit side of the account
Left or debit side of the account
Left or credit side of the account
Right or credit side of the account
Question No: 35

( Marks: 1 )

- Please choose one

What is the nature of an expense account?


Debit
Credit

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Revenue
None of the given options
Question No: 36

( Marks: 1 )

- Please choose one

Economic resources owned by a business and expected to benefit for the future
operations are called:
Expenses
Assets
Capital
Liabilities
Question No: 37

( Marks: 1 )

- Please choose one

Assets total Rs.50, 000 and Liabilities total Rs.10, 000. What is the equity of the
business?
Rs. 40, 000
Rs. 60, 000
Rs. 10,000
Rs. 50,000
Question No: 38

( Marks: 1 )

- Please choose one

An
expense incurred by the business for the purchase of land & building is an example of:
Capital Expense
Revenue Expense
Deferred Expense
Preliminary Expense
Question No: 39

( Marks: 1 )

- Please choose one

Which of the following is non- profit organization?


Sole proprietorship
Partnership
Limited company
Trust

journal
Particulars

Date
(Dr.)
(Cr.)
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Rs.
Rs.
2008 jan1

Cash account
Capital account
(owner invested cash )

50,000

jan.2 Furniture account


Cash account
(purchased furniture for
cash)

10,000

Jan.3 Purchases account


Cash account
(goods purchased for
cash)

30,000

Jan.5 Cash account


Sales account
(sold goods for cash)

40,000

Jan. 6 Salaries account


Cash account
(Salaried paid)

Question No: 40

50,000

( Marks: 1 )

10,000

30,000

40,000

5,000
5,000

- Please choose one


The

area of accounting concerned with reporting financial information to the interested


parties is called:
Cost Accounting
Financial Accounting
Management Accounting
Tax Accounting
Question No: 41

( Marks: 10 )

Prepare Cash and Capital Accounts with the help of given Journal entries.

CASH A/C (IN STATEMENT FORM)


Date

V.

Detail

Ref

Debit

Credit

Balance

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No
01/01/08
02/01/08
03/01/08
05/01/08
06/01/08

CAPITAL A/C
FURNITURE A/C
PURCHASES A/C
SALES A/C
SALARIES A/C
TOTAL

50000
0
0
40000
0
90000

0
10000
30000
0
5000
45000

50000 DR
40000 DR
10000 DR
50000 DR
45000 DR
45000 DR

MIDTERM EXAMINATION
Spring 2009
MGT101- Financial Accounting
Time: 60 min
Marks: 50
Student Info
StudentID:
Center:
ExamDate:
For Teacher's Use Only
Q No.
1
2

Marks
Q No.

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Marks
Q No.

Total

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Marks
Q No.

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

Marks
Q No.
Marks
Q No.
Marks

41

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Question 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 )

Cash book is a part of:

Voucher
General Journal
General Ledger
Trial Balance

- Please choose one

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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:

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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
Opening stock of raw material
Closing stock of raw material
Purchases of raw material during the
period
Cost of Material Consumed

Rs.
100,000
85,000
200, 000
?

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

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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
Life of asset
Depreciation for each year
Sale price after 5 years
Book value of Asset after 5 years

Rs. 1,00,000
5 years
Rs. 5,000
Rs.50,000
?

Rs.25, 000
Rs. 75,000
Rs. 15,000
Rs. 1, 00,000
Question No: 17

( Marks: 1 ) - Please choose one


Cost of asset
Life of asset
Depreciation for each year
Sale price after 5 years
Written down value of asset on 5th year
profit or loss on disposal of fixed assets

Rs. 1,00,000
5 years
Rs. 5,000
Rs.50,000
Rs.75,000
?

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
Life of asset
Depreciation for the each year
Sale price after 5 years
Written Down Value of Asset on 5th year
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

Rs. 1,00,000
5 years
Rs. 5,000
Rs.15,000
Rs. 75,000
?

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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
Owners 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

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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)

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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)

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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

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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.

MIDTERM EXAMINATION

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Spring 2009
MGT101- Financial Accounting (Session - 4)
Ref No: 564819
Time: 60 min
Marks: 50
Student Info
StudentID:
Center:

OPKST

ExamDate:

4/25/2009 12:00:00 AM

For Teacher's Use Only


Q No.
1
2

Marks
Q No.

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

Marks
Q No.
Marks
Q No.
Marks
Q No.
Marks
Q No.
Marks

41

Total

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Question No: 1

( Marks: 1 )

- Please choose one

Expenditures incurred annually are known as:


Revenue Expenditures
Capital Expenditures
Financial Expenditures
Operating Expenditures
Question No: 2

( Marks: 1 )

- Please choose one

Which one of the following is NOT true for Profit & Loss Account?
It shows whether a business has made a profit or loss over a financial year
It shows the financial performance of a business for the period
It shows revenues and expenses for the period
It is used to calculate surplus/deficit for a particular period
Question No: 3

( Marks: 1 )

- Please choose one

Which of the following is NOT a characteristic of Joint Stock Company?


Separate Legal Entity
Limited Liability
Easy Formation
Common Seal
Question No: 4

( Marks: 1 )

- Please choose one


Particulars
Opening written down value of machine
Cost of new machine purchased during the year
Depreciation during the year
Closing written down value (WDV) of machines

Rs.
Rs. 2,00,000
Rs. 50,000
Rs. 25,000
?

Rs. 2, 25,000
Rs. 2, 50,000
Rs. 2, 75,000
Rs. 75,000
Question No: 5

( Marks: 1 )

- Please choose one


The

assets which have a limited useful life are termed as:


Limited assets
Depreciate able assets
Unlimited assets
None of the given options
Question No: 6

( Marks: 1 )

- Please choose one

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Increase in an asset is recorded on the:
Left or credit side of the account
Right or debit side of the account
Left or debit side of the account
Right or credit side of the account
Question No: 7

( Marks: 1 )

- Please choose one

Which of the following particular is NOT included in the specimen of a Journal Voucher?
Name of organization
Bank receipt
Debit amount
Credit amount
Question No: 8

( Marks: 1 )

- Please choose one

When the process of production is completed, all the costs must be charged to:
Raw material account
Work in process account
Finished goods account
Merchandise account
Question No: 9

( Marks: 1 )

- Please choose one

While adjusting the cash balance of cash book, which of the following is NOT taken into
account.
Mistakes in the cash book
Mistakes in the pass book
Interest credited in the pass book but not entered in cash book
Interest debited in the pass book but not entered in cash book
Question No: 10

( Marks: 1 )

- Please choose one

Sale proceeds of goods are an example of:


Revenue expense
Capital expense
Capital receipt
Revenue receipt
Question No: 11

( Marks: 1 )

- Please choose one


The

cost of moving plant and machinery to a new site will be treated as:

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Revenue expense
Capital expense
Administrative expense
Operating expense
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-five 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.268
Question No: 13

( Marks: 1 )

- Please choose one


Particulars
Opening stock of raw material
Closing stock of raw material
Purchases of raw material during the
period
Cost of Material Consumed

Rs.
100,000
85,000
200, 000
?

Rs. 205,000
Rs. 215,000
Rs. 220,000
Rs. 225,000
Question No: 14

( Marks: 1 )

- Please choose one

Under the reducing balance method, deprecation is calculated on:


Scrap value of an asset
Original cost of an asset
Book value of an asset
Fair value of an asset
Question No: 15

( Marks: 1 )

- Please choose one


If,

Cost of machine= Rs.400, 000


Useful life = 5 years, Residual value= Rs.25, 000

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The depreciation of machine per year using straight line method is?
Rs. 160,000
Rs. 96,000
Rs. 75,000
Rs. 57,600
Question No: 16 ( Marks: 1 ) - Please choose one
Cost of asset
Life of asset
Depreciation for each year
Sale price after 5 years
Written down value of asset on 5th year
profit or loss on disposal of fixed assets

Rs. 1,00,000
5 years
Rs. 5,000
Rs.50,000
Rs.75,000
?

Rs.25, 000 loss


Rs. 75,000 loss
Rs. 15,000 profit
Rs. 1, 00,000 profit
Question No: 17

( Marks: 1 ) - Please choose one


Direct materials costs
Direct labor costs
Manufacturing overhead costs
conversion cost

Rs.70,000
30,000
60,000
?

Rs. 20,000
Rs.40, 000
Rs.90, 000
Rs.160, 000
Question No: 18

( Marks: 1 )

- Please choose one


Which of

the following is an example of direct materials cost?


Polish and finishing material for chair
A piece of wood for the production of chair
Production workers wages
Depreciation expenses
Question No: 19

( Marks: 1 )

- Please choose one

Which of the following account will be credited, when the goods are purchased on
cash?
Stock account
Cash account
Supplier account

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Work in process account
Question No: 20

( Marks: 1 )

- Please choose one

Following are the inventories of Manufacturing Concern EXCEPT:


Raw material
Work in process
Finished goods
Merchandise inventory
Question No: 21

( Marks: 1 )

- Please choose one


The

stock of manufacturing concern consists of:


Work in Process Inventory
Raw Materials Inventory
Finished Goods Inventory
All of the given options
Question No: 22

( Marks: 1 )

- Please choose one

Which of the following particulars are included in the specimen of a cash receipt
voucher?
1) Name of the organization
2) Cash code
3) Date of transaction
(1) & (2) only
(1) & (3) only
(2) & (3) only
(1), (2) & (3)
Question No: 23

( Marks: 1 )

- Please choose one

Which of the following financial statement DO NOT show the financial health of a
business at a specific date?
Profit and loss account
Balance sheet
Statement of financial position
All of the given options
Question No: 24

( Marks: 1 )

- Please choose one

If
the cost of sales is Rs. 95,000, sales are Rs. 100,000 and operating expenses are Rs.
200,000 during the year, what would be the net result?

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Loss of Rs. 1, 95,000
Profit of Rs. 1, 95,000
Profit of Rs 5,000
Loss of Rs 5,000
Question No: 25

( Marks: 1 )

- Please choose one


If

the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are
Rs.20,000 during the year. What would be the Net Profit?
Rs.15,000
Rs. 35,000
Rs. 55,000
Rs. 60,000
Question No: 26

( Marks: 1 )

- Please choose one


"Mr.

A collected cash from debtors", the journal entry for this transaction is:
Mr. "A" a/c Dr. and debtors a/c Cr.
Mr. "A" a/c Dr. and cash a/c Cr.
Cash a/c Dr. and debtors a/c Cr.
None of the given options
Question No: 27

( Marks: 1 )

- Please choose one

Which of the following account will be credited, if the goods are sold on credit to Mr.
Mahmood?
Cash account
Mr. Mahood account
Sales account
Purchases account
Question No: 28

( Marks: 1 )

- Please choose one

Electricity bill for the month is paid by Mr. Imran Rs. 325. What is the journal entry to
record this transaction?

Cash a/c Rs. 325 (Dr.) , Utilities Expense a/c Rs. 325 (Cr.)
Utilities Expense a/c Rs. 325 (Dr.), Cash a/c Rs. 325 (Cr.)
Accounts Receivable a/c Rs. 325 (Dr.), Utilities Expense a/c Rs. 325 (Cr.)
Utilities Expense a/c Rs. 325 (Dr.), Accounts Receivable a/c Rs. 325 (Cr.)
Question No: 29

( Marks: 1 )

- Please choose one

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Which of the following entry will be recorded in the books of accounts for the goods
returned to Mr. 'A'?

Purchases return account (Dr) and Trading account (Cr)


Mr. A/ creditor account (Dr) and purchases return account (Cr)
Purchases return account (Dr) and Mr. A / creditor account (Cr)
Mr. A/ creditor account (Dr) and Profit & Loss account (Cr)
Question No: 30

( Marks: 1 )

- Please choose one

Which of the following is NOT an example of Current Asset?


Bank Overdraft
Accounts Receivable
Notes Receivable
Prepaid Expenses
Question No: 31

( Marks: 1 )

- Please choose one

Which of the following is NOT an item of a Balance Sheet?


Accounts Receivable
Accounts Payable
Sales Revenue
Marketable Securities
Question No: 32

( Marks: 1 )

- Please choose one

Which of the following is NOT an example of intangible assets?


Franchise rights
Goodwill
Patents
Land
Question No: 33

( Marks: 1 )

- Please choose one

Which one of the following is NOT prepared by Non profit organizations?


Profit & Loss account
Income & Expenditure account
Receipts & Payments account
Balance Sheet
Question No: 34

( Marks: 1 )

- Please choose one

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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: 35

( 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: 36

( 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: 37

( Marks: 1 )

- Please choose one

Which of the following are the components of General Ledger?


1) Title of account
2) Amount of transaction
3) Date of transaction
(1) & (2) only
(2) & (3) only
(1) & (3) only
(1), (2) & (3)
Question No: 38

( 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: 39

( Marks: 1 )

- Please choose one

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Word Credit is derived from ______ language.
Latin
English
French
Chinese
Question No: 40

( Marks: 1 )

- Please choose one


Mr.

A sold goods for Rs. 3, 00,000 to Mr. B, Rs. 3, 00,000 will be treated as
_____________ for business.
Revenue
Net profit
Gross profit
Operating profit
Question No: 41

( Marks: 10 )

Briefly explain the features of Trial Balance.


We can define trail balance is a statement of all the open debit and credit items in
a double-entry ledger, made to test their equality whether it is correct or not.
As the definition indicate us we can easily removed error through trial balance

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MIDTERM EXAMINATION
Spring 2009
MGT101- Financial Accounting (Session - 6)
Ref No:
Time: 60 min
Marks: 50
Student Info
StudentID:
Center:

OPKST

ExamDate:

4/29/2009 12:00:00 AM

For Teacher's Use Only


Q No.
1
2

Marks
Q No.

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

Marks
Q No.
Marks
Q No.
Marks
Q No.
Marks
Q No.
Marks

41

Total

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Question No: 1

( Marks: 1 )

- Please choose one


Net

Profit + Expenses= _________


Liabilities
Assets
Capital
Income
Question No: 2

( Marks: 1 )

- Please choose one

Which of the following fixed asset is shown at cost rather than book value?
Machinery
Furniture
Vehicles
Land
Question No: 3

( Marks: 1 )

- Please choose one

Firms charge depreciation each year:


To ensure there is enough money in the firm to replace the asset
To spread the cost of the asset over its working life
To reduce the profit and thus reduce the dividends they can pay to share holders
Because the law states they must be reduced
Question No: 4

( Marks: 1 )

- Please choose one

Depreciation arises because of:


Fall in the market value of an asset
Fall in the value of money
Physical wear and tear
All of the given options
Question No: 5

( 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: 6

( Marks: 1 )

- Please choose one


Find

out the missing value of an Accounting Equation with the help of given data:
Total Assets
Accounts payable

Rs. 34,500
Rs. 1, 000

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Other liabilities

Rs. 11,500

Rs. 22,000 owners equity


Rs. 23, 000 owners equity
Rs. 24,000 owners equity
Rs. 46,000 owners equity
Question No: 7

( 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: 8

( Marks: 1 )

- Please choose one

While adjusting the cash balance of cash book, which of the following is NOT taken into
account.
Mistakes in the cash book
Mistakes in the pass book
Interest credited in the pass book but not entered in cash book
Interest debited in the pass book but not entered in cash book
Question No: 9

( 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: 10

( 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: 11

( Marks: 1 )

- Please choose one

Which one of the following is NOT true about Capital Expenditure?


Creates future benefits

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Incurred to acquire fixed assets
Incurred to increase the economic life of existing fixed assets
Reduce the profit of the concern
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-five 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.268
Question No: 13

( Marks: 1 )

- Please choose one

Consider the following inventory record:

Date
Jan. 2
Mar. 4
May 8
Nov. 3
De31

Item
Beginning inventory
Purchase
Purchase
Purchase
Merchandise available

Quantity
10
35
40
20
105

Cost/Unit
Rs.
10
11
12
13

Total
Rs.
100
385
480
260
1,225

80 units were sold, Use the FIFO method of inventory costing and determine the cost of goods
sold.
Rs. 1,225
Rs. 1,015
Rs. 965
Rs. 905
Question No: 14

( Marks: 1 ) - Please choose one


Cost of asset
Life of asset
Depreciation for each year
Sale price after 5 years
Written down value of asset on 5th year
profit or loss on disposal of fixed assets

Rs.25, 000 loss


Rs. 75,000 loss

Rs. 1,00,000
5 years
Rs. 5,000
Rs.50,000
Rs.75,000
?

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Rs. 15,000 profit
Rs. 1, 00,000 profit
Question No: 15

( Marks: 1 )

- Please choose one


The

products that are ready for sale are known as:


Raw material
Work in process
Finished goods
Closing stock
Question No: 16

( Marks: 1 ) - Please choose one

Which of the following account will be credited, when the goods are purchased on cash?
Stock account
Cash account
Supplier account
Work in process account
Question No: 17

( Marks: 1 ) - Please choose one

Partially completed products that are not yet ready for sale are known as:
Raw material
Work in process
Finished goods
Closing stock
Question No: 18

( Marks: 1 )

- Please choose one

Which of the following particulars are included in the specimen of a cash receipt voucher?
4) Name of the organization
5) Cash code
6) Date of transaction
(1) & (2) only
(1) & (3) only
(2) & (3) only
(1), (2) & (3)
Question No: 19

( Marks: 1 )

- Please choose one


In

which of the following condition a company will have positive working capital?
If current assets > current liabilities
If current Assets < current Liabilities

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If current assets = current liabilities
If current assets < current liabilities
Question No: 20

( Marks: 1 )

- Please choose one


The

return of goods by a customer should be debited to:


Customers account
Sales return account
Goods account
Accounts receivable
Question No: 21

( Marks: 1 )

- Please choose one

Which of the following account will be credited in the books of ABC Co. Ltd., if furniture is
purchased on cash?
Furniture account
Cash account
Business account
Bank account
Question No: 22

( Marks: 1 )

- Please choose one

Which of the following account will be credited in the books of XYZ Co. Ltd, if the business
purchased a vehicle though cheque?
Vehicle account
Cash account
Business account
Bank account
Question No: 23

( Marks: 1 )

- Please choose one

Identify the business transaction for given entry below.


Vehicle Account XXX (Dr.)
Bank Account
XXX (Cr.)
Paid for vehicle through cheque
Paid for vehicle through cash
Purchased vehicle on credit
None of the given options
Question No: 24

( Marks: 1 )

- Please choose one

Accrued expenses are the example of:


Current liabilities
Long term liabilities
Deferred costs
Capital expenses

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Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following item will appear on the Balance Sheet as current assets?
Prepaid expenses
Accrued expenses
Furniture and Equipment
Unearned revenue
Question No: 26

( 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: 27

( Marks: 1 )

- Please choose one

Which of the following organizations prepare Income & Expenditure account?


Public libraries
NGOs
Labor unions
All of the given options
Question No: 28

( Marks: 1 ) - Please choose one

Which of the following is NOT considered a part of financial statements?


General Ledger
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Question No: 29

( Marks: 1 ) - Please choose one

Which one of the following is NOT prepared by Non profit organizations?


Profit & Loss account
Income & Expenditure account
Receipts & Payments account
Balance Sheet
Question No: 30

( Marks: 1 ) - Please choose one

Which of the following financial statement summarizes the profitability of an organization for a
particular period?

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Balance Sheet
Trading and Profit & Loss account
Cash Flow Statement
Statement of Retained Earnings
Question No: 31

( Marks: 1 )

- Please choose one


The

process of transferring journal entry information to the ledger is called:


Journalizing
Posting
Balancing
Analyzing
Question No: 32

( Marks: 1 )

- Please choose one

Which of the following are the components of General Ledger?


4) Title of account
5) Amount of transaction
6) Date of transaction
(1) & (2) only
(2) & (3) only
(1) & (3) only
(1), (2) & (3)
Question No: 33

( Marks: 1 )

- Please choose one


The

original book of entry, in which all vouchers are first recorded, is called:
General Journal
General Ledger
Trial Balance
Balance Sheet
Question No: 34

( 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: 35

( Marks: 1 ) - Please choose one

Which of the following is CORRECT about the flow of recording a transaction?

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Occurrence of event voucherJournalLedgerTrial Balanceprofit and loss
accountBalance Sheet
Occurrence of eventJournal voucher LedgerTrial Balanceprofit and loss
accountBalance Sheet
Occurrence of eventLedger voucherJournalTrial Balanceprofit and loss
accountBalance Sheet
Occurrence of eventTrial Balance voucherJournalLedgerprofit and loss
accountBalance Sheet

Question No: 36

( Marks: 1 )

- Please choose one


An

Asset that is NOT physical in nature is called _________.


Intangible Asset
Liquid Asset
Current Asset
Fixed Asset
Question No: 37

( Marks: 1 )

- Please choose one

What is the nature of an expense account?


Debit
Credit
Revenue
None of the given options
Question No: 38

( Marks: 1 )

- Please choose one

Term "Credit" means_______ by the business.


Receiving of benefits
It has no effect on business
Providing of benefits
It depends upon items
Question No: 39

( Marks: 1 )

- Please choose one


We

can say that the business is in profit, when:


Assets exceed Expenditure
Assets exceed Liabilities
Income exceeds Expenditure
Income exceeds Liabilities
Question No: 40

( Marks: 1 )

- Please choose one

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An
organization operating with the objective of making profit from the sale of goods or services is
called:
Transaction
Business
Society
Trust
Question No: 41

( Marks: 10 )

State with reasons whether the following events are transactions to Mr. Afnans business
7) Mr. Afnan started business with Rs. 50,000.
8) Mr. Afnan bought furniture for Rs. 2,000 for business use.
9) Submitted a tender for goods worth Rs. 10,000.
10) Appointed a cashier on a salary of Rs. 2,000 per month.
11) Paid salary to cashier Rs. 2,000.
Use the following format to solve question.
Event
YES/NO
For example Mr. Bilal
Yes it is transaction
took away goods worth
Rs. 500 from the business
for his private use.

Reasons
It changes financial position
of business.

QUIZ
Mark the correct answer
(1)_____ courses help managers gain a better understanding of motivation, leadership, trust,
employee selection, performance appraisals, and training techniques.
Psychology
Sociology
Political science
Anthropology

In general, entrepreneurs are better able than managers in a traditional hierarchical

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organization to
lead.
organize.
respond to a changing environment.
respond to a static environment.

A construction supervisor site who sees an impending thunderstorm, tells workers to go home, and
secures the site is demonstrating
authority.
delegation.
accountability.
responsibility

_________ involves the delegation of decision-making and authority to lower levels in the
organization.
Decentralization
Departmentalization
Specialization
Centralization
(5)The belief that a firm's obligation goes beyond that required by law and economics, and
includes a pursuit of long-term goals that are good for society is known as
social responsiveness.
ethical responsibility.
social responsibility.
social obligation)

(7) The objective of TQM is to create an organization committed to continuous


_________
Improvement.
Development
Struggle
a&b

(8) The process of assigning authority and responsibility to ones subordinates to manage a project
is called

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centralization.su
pervision.

delegation.
specialization.
(8)One of the greatest effects of e-commerce is that
costs will be reduced.
customers will be empowered.
employees become more powerful.
computers will be less important.

(10)
Time -and- motion study introduced by
Henri Fayol
Fredrick W. Taylor
Frank and Lillian Gilberth
Adam Smith

(11) __________focused on the work or the job and how to do it better.


Scientific management
Bureaucratic management
Classical management
Administrative management
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QUIZ
Choose the correct option.
Strategic management entails all of the basic management functions:
Planning, organizing, leading, and controlling.
Motivation, efficiency, authority and effectiveness.
Planning, bossing, controlling, and organizing.
Making things happen, meeting the competition, organizing the people and
leading.

Which of the following is not a part of strategy formulation?


Identifying the mission and strategic goals.
Conducting competitive analysis.
Developing specific strategies.

Carrying strategic plans.

Planning involves two important elements:


Goals and plans.
Organizing and controlling.
Lead and plans.
Staffing and leading.

Strategic goals are concerned with :


Top level managers.
Middle level managers.
First-Line Managers.
Non-managerial Employees.

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(5) Tactical goals and plans typically involve time periods of _________.
1 year.

1 to 3 years.
3 to 5 years.
More than 5 years.

(6) ______________are those targets or future end results set by lower management that
address specific, measurable outcomes required from the lower levels.
Strategic goals.
Tactical goals.
Operational goals.
None of given options.

(7) MBO was first described by _________.


Peter Drucker.
Henry Minzberg.
Henri Fayol.
Fredrick W. Taylor.

(8) A__________ is a prescribed series of related steps to be taken under certain recurring
circumstances.
Procedure.
Plans.
Policy.
Project.

(9) Tactical plans tend to be_________ specific and concrete than strategic plans.
More.
Less.
Lower.
None of given options
(10)A mission statement is a __________declaration of the basic, unique
Narrow.

Broad.
Contracted.
None of given options.
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purpose.

QUIZ
Choose the most appropriate choice.

1. __________ is the degree to which followers perceives someone as honest,


competent, and able to inspire.
Credibility

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Trust
Integrity
Consistency

Women leaders tend to adopt a more ____________than men do.


Autocratic

Democratic
Directive
None of above mentioned

__________leadership is described as going beyond charisma with the ability to


create and articulate a realistic, credible, attractive vision of the future for an
organization or organizational unit that grows out of and improves on the present.
Charismatic
Transformational

Visionary

None of above mentioned

___________studied three leadership styles: autocratic, democratic, and laissezfaire.


Ohio State Studies
University of Michigan Studies

University of Iowa Studies


Hawthorne studies

5.When a divisional structure is superimposed over a functional structure, the type of


structure that results is called a _________organization.
functional
divisional

matrix

product

7. _________ would NOT be considered a source of position or legitimate power for


a manager.
The ability to give special monetary rewards to deserving subordinates

Possession of a charismatic personality


The ability to recommend disciplinary action for subordinates
Being a high-ranking executive in the company

8. The rights inherent in a managerial position to give orders and expect them to be
obeyed is known as:
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responsibility
span of control
authority
accountability

9. Power can be viewed as a three-dimensional concept. It includes functional and


hierarchical dimensions as well as a third dimension called:
influence.
legitimacy.
departmentalization.

centrality

10. An organization that groups activities according to women's footwear, men's


footwear, apparel, accessories, and leggings would use ___________
departmentalization.
functional

product

customer
geographic

11. One of the following is characteristic of Democratic Leaders:


Unilateral decisions
Involve group in decision making
Dictate work method
Participate only to answer question.
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QUIZ
1. Conceptual skills relate to a managers ability to:
Take a strategic view of how the part of the organization function.

Solve detailed problems in groups.

Correctly evaluate organizational problems.

Understand and interact effectively with others in the organization.

2. Which of the following statements about middle managers is not true?


Middle managers coordinate the work of supervisors.

Middle managers implement the objectives and plans of top management.


The number of middle managers in the most organizations is
increasing
Operatives can report directly to middle managers.

When the CEO of a large retail store chain decided to sell off or close some of the
locations that were not profitable, he was performing the management function referred to
as _________.
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Leading
Planning
Controlling
Organizing

5. -------------- involves cultivating a learning culture where organizational members


systematically gather knowledge and share it with others to achieve better performance.

Knowledge management
Learning Organization
Entrepreneurship
None of the given options

6. Mr. A. is a manager in a manufacturing company, he attempts to establish a culture of


quality affecting the attitudes and actions of every employee and relies on a workforce that
wants to improve quality. He focuses on establishing:
Total Quality Management

Knowledge management

Operations Management

Management of Information System

7. Ali is working in XYZ Company, he desires to get himself secure from crimes, company lay
offs and other adverse impacts. We can say that he fulfils the ---------------- need.
Self Actualization

Social need

Esteem

Safety

8. In -------------- theory management assumes that employees may be ambitious, selfmotivated, and anxious to accept greater responsibility, and exercise self-control, selfdirection, autonomy and empowerment.
Theory Y manager

Theory X manager

Theory Z manager

All of the above

9. ----------- involves the products, services, and other outcomes produced by the
organization.

Inputs
Transformation process
Outputs
Feed Back

10. ----------- is known as the father of scientific management.


Fredrick Winslow Taylor.

Max Weber

Peter Drucker

None of the given options

11. --------------- searches organization and its environment for opportunities and initiates
improvement projects to bring about changes.

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Disturbance handler
Liaison
Leader
Entrepreneur

12. Mr. A is a manager in Xyz Company. He gets his work done with and through other
people. He leads the employees motivates them and have a good interaction with
his employees, which of the following skills he has:
Technical Skills
Human Skills
Conceptual Skills
Decisional Skills
13. ---------------- is the final step in the decision-making process.
Implementing the decision
Evaluating the decision
Recognizing the decision
Evaluating the alternatives

14. A --------- is a series of interrelated sequential steps that can be used to respond to
a structural problem.
Policy
Rule
Well structured problems
Procedure

15. Mintzberg grouped the ten managerial roles into three primary headings. Which of
the following is not one of these headings?
interpersonal relationships
transfer of information
planning
decision making

16. Organizations that have a high potential of offering rival products or services are
called

Suppliers
Competitors
Clients
Customers

17. Mr. Zafar has undertaken a new business of leather bags investing
150,000; usually with some accountability of risk. We may call Mr. Zafar:
Manager
Leader
Competitor
Entrepreneur
17. ------------------- is achieved when the cost of producing a given output is
as low as possible.
Efficiency
Effectivenes
s

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Break
evenBoth A and
B

18. Set of the attitudes, experiences, beliefs and values of an organization is


called organizations
Strengths
Environment
Culture
Resources
19. Mr. X the HR manager of Star Mini Miners Club recruits labor with different skills for
different jobs. This approach is characteristic of
Equity
Impersonality
Division of labor
Discipline
20. In ABC Company, all the activities particularly those regarding decision-making, are
concentrated within a particular location and/or group. The company observes
Centralization
DecentralizationS
pan of control
Job Rotation

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QUIZ
1. Which of the following is not allowed in a brainstorming session?
Clear definition of the problem

Criticism of poor ideas


Large number of alternatives
Recording of all alternatives

2. Mr. A is the HR Manager of XYZ Company. He decided to terminate a group of employees


because their positions were no longer necessary in the organization. What will you say Mr. A
has decided for?
Restructuring
Turnover

Downsizing
Job Rotation

3. A job has high -------------- if workers are given substantial freedom, independence, and discretion
in scheduling the work and determining the procedures to be used in carrying it out.
Autonomy
Feed back
Skill Variety
Enlargement

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A ------------- Structure is well suited to organizations which have a single or dominant core
product because each subunit becomes extremely adept at performing its particular portion of the
process.
Divisional

Functional
Matrix
Both A and B

Which of the following has not contributed to the boundaryless organization?


Changes in technology
Complex and dynamic environments

Static environments
Increases in telecommunication

Managers will often not choose the decision alternative that rational decision making indicates to
be best because they have a vague feeling that another alternative will be better. Which of the
behavioral factors that influence decision-making does this behavior reflect?
Bounded rationality
Escalation of commitment

Intuition
Satisficing

------------ means that the two merging companies became history and a new firm is established
Acquisition

Merger
Joint Venture
Both A and B

------------- means only one company became history which is the acquired company while the
acquiring company remain.
Joint Venture
Merger

Acquisition
Both A and B
A ------------- takes as input an object or situation described by a set of properties, and outputs a
yes/no decision.
Decision Criteria
Decision Making Process

Decision Tree
None of the given options

Maslow's hierarchy of needs proposes that an individual begins by satisfying ----------- needs.
Self-actualization
Esteem

Physiological
Safety

Which element of structure refers to the continuous line of authority that extends from the highest
organizational levels to the lowest and clarifies who reports to whom?
Work specialization
Span of control
Centralization

Unity of command

For a manager to control or direct the work of an employee, the manager must have _____.

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Line authority
Responsibility
Referent power
Staff authority

14. Organizations that have developed the capacity to continuously adapt and change because their
members take an active role in identifying and resolving work-related issues are called _____
organizations.
Learning
Visionary
Community
Interdependent

15. Master Sofa Makers recently bought an upholstery firm, Fabulous Fabrics, in an effort to control
its inputs by becoming its own supplier. This is an example of -------------.
Concentration

Vertical integration
Horizontal integration
Diversification

15. When an organization is in several different businesses, these single businesses


are
independent and formulate their own strategies are often called _____.
Strategic business units
Monopolistic advantages
Quality controllers
Stars

that

17. Organizations using Porter's _____ strategy select a market segment in an industry and attempt
to exploit it rather than serve the broad market.
Cost leadership
Differentiation
Stuck in the middle

Focus

18. ----------- involves increasing----------.


Job enrichment; job variety
Job enlargement; job depth

Job enlargement; job scope


Job enrichment; job feedback

19. ---------- are an organization's objectives, and --------- are the documented ways that organizations
intend to meet those objectives.
Goals; plans
Stated goals; real goals
Standing plans; single-use plans
Specific plans; directional plans

20. Which of the following is NOT one of the characteristics of well-designed goals?
Goals should be written in terms of actions rather than outcomes.
Goals should be measurable and quantifiable.
Goals should be challenging but attainable.

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Goals should be communicated to all organizational members who need to know about
them.

Work specialization, departmentalization, chain of command, and span of control are ----------- f
an organization that managers may be able to change.
technologies
human resources
strategies

structural components
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QUIZ
(1)
When we classify managers according by their level in the organization they are
described as _______.
.Functional, staff and line managers

Top managers, middle managers and supervisors


High level and lower level managers
General Managers and administrative managers

(2) All of the following are primary management functions except _______.
Setting goals

Hiring employees
Monitoring activities
Motivating employees

(3) A manager is someone who


Actually performs the service or produces the product.
Works anonymously behind the scenes.
Sets the goals of the organization.
Who supervises the work of others.

(4) A manager who has a reputation for being open and honest and understands how to motivate
employees and customers is said to have good ________ skills.
Sales
Political
Interpersonal
Technical

(5) Which of the following is not the branch of quantitative management?


Operations Research
Project Management
Management Information System
Operations management

(6) The ____________ performs symbolic legal or social duties.


Figurehead
Monitor
Liaison
Leader

(7) The concept of organizational performance was analyzed by ___________

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Henry Mintzberg
.Peter Drucker
Adam Smith
Max Weber

(8)___________ examines the nature of things, particularly values and ethics.


Philosophy
Psychology
Anthropology
Sociology
(9)___________ Plans specify the details on how overall objectives are to be achieved.
Tactical
Strategic
Long term
Operational

(11) Vertical thinking is ___________ but only in one direction


Logical
Rational
Illogical
None of the above

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QUIZ
Choose the most appropriate option.
(1) The strategic management process is an/a _______________process.
Eight step
Eleven step
Twelve step
None of above

(2) MBO was first described by ______________.


Abraham Maslow
Peter Drucker
Fredrick W. Taylor
Adam Smith

(3) Corporate-level strategy is developed by ____________and the board of directors.


Top level manager
Middle level manager
Lower level manager
Non-manager

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An ________________is the purchase of all or part of one organization by another.
merger
Concentration
Acquisition
Joint venture

A _____________is a mean whereby an organization that is unable to pay its debts can seek court
protection from creditors and from certain contract obligations while it attempts to regain financial stability.
Bankruptcy
Divestiture
Harvest
Liquidation
6) The planning process can be used to promote ________in organizations.
Technology
Relation

Innovation
None of above

Tactical goals and plans typically involve time periods of ________years.


1 to 3
3 to 5
5 to 7
7 to 10

A __________involves attempting to develop products and services that is viewed as unique in


the industry.
Differentiation strategy
Focus strategy
Cost leadership strategy
Portfolio strategy

___________is the obligation or expectation to perform and carry out duties and achieve goals
related to a position.
Accountability
Authority

Responsibility
Liability

___________is a form of departmentalization that adopts parts of both functional and divisional
structures at the same level of management.
Hybrid structure
Divisional structure
Functional structure
Matrix structure

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QUIZ
1) The person most closely associated with bureaucratic management is
Adam Smith
Frederick Taylor
Frank Gilbreth
Max Weber

2) Which of the following characteristics is NOT related to bureaucratic management?


Short-term career commitment
Highly formal system of rules
Division of labor
Impersonality

3) An organization which relies on rules and has a set hierarchy of authority is using what type of
management?
Bureaucratic
Contingency
Administrative
Scientific

4) For his fast-food restaurant, Bob Stevens recruits labor with different skills for different
jobs. This approach is characteristic of
rationality
impersonality
division of labor
hierarchical structure

5) The divine right of kings is characteristic of what type of authority?


Traditional
Charismatic
Rational-legal
Neoclassical

6) An important emerging skill for future managers is


computer literacy
media management
international politics
human resources

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7) In what specific sequence do managers perform their functions to help achieve company
goals?
Controlling, planning, organizing, directing
Directing, controlling, planning, organizing
Organizing, directing, controlling, planning
Planning, organizing, directing, controlling

8) A regional vice president lets local store managers operate each store as if it were a separate
business. In this effort to better coordinate company human and material resources, the VP was
seeking to improve what managerial function?
Controlling
Directing
Organizing
Planning

9) Which managerial role is the simplest and most basic?


Decisional
Figurehead
Stakeholder
Spokesperson

10) Which of the following sets of managerial roles classify Mintzberg's ten most common
roles of managers?
Controlling, planning, and directing
Entrepreneurial, decisional, and logistical
Figurehead, monitor, and spokesperson
Interpersonal, informational, and decisional
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QUIZ
The greater the uncertainty, the more plans should be of the _____
variety.
long-term

short-term

intermediate in length
rigid

What types of goals produce higher levels of output?


goals of moderate difficulty
generalized goals such as "do your best"

specific, hard goals


easy goals
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(3) The importance of environmental scanning (outside of national security
agencies) was first recognized by firms in the _____ industry.
television
advertising
computer
life insurance

(4) Which of the following is not one of the grand strategies?


growth
stability
retrenchment
cost-leadership

(5) Strategy formulation involves__________.


Developing and evaluating a set of alternative strategies
Evaluating a set of alternative strategies and selecting the best
for each level

Selecting a strategy that will increase the level of operations


Completing a SWOT analysis

(6) The greatest number and concentration of managers in most


organizations can be found at the _____ level.
top manager
middle manager
district manager
First-line supervisor

(7) Managers in not-for-profit organizations, as opposed to profit-seeking


organizations, do not face a(n) _____ test for performance.
profit-maximizing
evaluation
employee accountability
management by objectives

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(8) When Gina Wright, Head of Plant Safety brought employees together to
discuss the fire safety procedures at the plant after the fire, she was
performing the following role:
Leader

Disturbance handler

Disseminator
Spokesperson

(10) Getting work done with a minimum effort, expense, or waste is the
definition of __________
management
planning

efficiency
effectiveness
(10) The utilitarian view of ethical behavior is that which provides_______.
the greatest good for the greatest number of people
respect and protects the individuals fundamental rights
fair and impartial enforcement of rules
protection of individual rights to free speech, privacy.
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QUIZ
Please choose the right option
An organizations ------------ is the organizations purpose or fundamental reason for existence.
Goal
Plan

Mission
Vision

In the brutal world of athlete endorsements, the two big sporting-apparel companies -- Reebok
and Adidas frequently go head to head. Adidas acquired Reebok in 2006 and combined with
each other as one organization, the process is called:
Acquisition
Divesture

Merger
Joint venture

ABC Company is unable to pay its debts and seek court protection from creditors and from
contract obligations while it attempts to regain its financial ability. The status of the organization
is:
Divesture
Harvest
Turnaround

Bankruptcy

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A firm pursuing --------------- attempts to gain a competitive advantage primarily by reducing its
economic costs below its competitors.
Differential strategy
Focus Strategy
Stability Strategy

Cost Leadership Strategy

Mr. Umar undertook a new business of providing internet fiber cables to corporations and homes
by investing Rs. 1000000 and assumes some accountability for the inherent risks. We can say
that Mr Umar is an
Entrepreneur
Intrapreneur
Innovator
Risk taker

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---------------is the downward transfer of formal authority from superior to subordinate. The
employee is empowered to act for the supervisor, while the supervisor remains
accountable for the outcome.
Accountability
Delegation
Authority
None of the given options
---------------is an environmental condition that offers significant prospects for
improving an organizations situation relative to competitors.
Threat
Weakness
Strength
Opportunity
All the organizations make --------------- that are also called large scale action plans for
interacting with the environment in order to achieve long-term goals.
Policies
Plans
Strategies
Rules
Mr. Amir is the Chief Executive officer of ABC Company. All of his subordinates
coordinate with him in order to achieve organizational goals. The type of coordination
they have with one an other is called:
Vertical Coordination
Horizontal Coordination
Flat coordination
All of the given options

In ABC Company, middle level managers are also given the authority
to give
their opinion in decision making process. It is called as:
Centralization
Decentralization
Span of control
Downsizing

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QUIZ
1. _____ teams rely on the use of information technology and a
strong

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commitment to the group instead of frequent personal exchange and
face-to-face meetings.
Virtual
Cross-functional
Transnational
Self-managed

High-performing teams have members who possess both technical


and _____ skills.
Managerial
Technological

Interpersonal

Nonconformity skills

A group that engages in collective work that requires joint effort


and generates a positive synergy is a ______.
Work group

Work team

Quality circle
Functional team

_____________ is/are the combination of psychological traits that


characterize a person.
Perceptions
Norms

Personality
Values
5. After having a very bad experience waiting on line for 3 hours at the
Motor Vehicles Bureau, Gretchen tells her father, In the future, I am
going to renew my license on the website and am never going back to
wait on that long line again. This is an example of which component
of an attitude?
The cognitive component
The affective component
The behavioral component
The conceptual component

7. Which of the following essentially attempts to determine


which

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applicant, if hired, will be successful?
Selection process
Human resource inventory report
Recruitment
Strategic human resource planning

8. _________ involves the delegation of decision-making and


authority to lower levels in the organization.
Decentralization
Departmentalization
Specialization
Centralization

9. ____________ is a potential disadvantage of the matrix


structure.
Inefficient use of scarce resources
Lack of flexibility
Conflict between product and functional managers
Development of cross-functional skills by employees

10. __________ is the ability to influence the behavior of other


people because of one's capacity to offer rewards or other
desirable outcomes.
Legitimate power
Expert power
Coercive power
Reward power

11. Martin is the physician who heads the Critical Care Unit at
Mercy Hospital, the most important roles that he performs
probably
__________ roles.
Monitor
Decisional
Figurehead
Disseminator
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