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(a) Unlimited liability (b) Mutual agency (c) Ease of the formation (d) Limited life
Paper 1 Answers
(1) Accounting principles are generally based on
(a) Practicability (b) Subjectivity (c) Convenience in recording
(2) Real accounts are related to
(a) Assets (b) Expense and incomes (c) Customers and creditor etc
(3) Rent paid to the land lord should be credited to
(a) Landlord Account (b) Rent account (c) Cash Account
4) In the event of dissolution of a partnership firm the provision for doubtful debts is
transferred to
(a) Realization Account (b) Partner capital accounts (c) sundry debtors Accounts
(5) A prospectus for share can be issued only by
(a) A public company (b) A private company (c) None of these.
(6) Preliminary expense is
(a) Current asset (b) Current Liability (c) Fictitious asset
(7) The valuation of closing stock is at
(a) Cost price (b) Market price
(c) Cost or Market price whichever is lower
(8) The master budget includes
(a) as income statement (b) a balance sheet (c) a cash budget (d)these all of these
(9) Cost volume profit analysis is the method used to estimate the impact on profit is of
changes in
(a) Unit variable cost (b) unit sales price (c) Sale volume (d) All of these
(10) In a manufacturing company product cost include
(a) Material cost only (b) Material and labour (c) Labour cost only (d) material labour and
overhead cost
(11) A liability in the amount of Rs 500 is paid in cash which of the fallowing is true
(a) Asset is increased and liability is decreased (b) Asset is increased and liability is
increased
(b) Asset is decreased and liability is decreased (b) Liability is decreased and owners
equity is increased
(12) Which one of the following account would usually have credit balance?
(a) Cash (b) Account payable (c) Equipment (d) Salaries expense
(13) A company collected one years rent in advance on October 1st ,1997 the entries Rs
1200 was credited to unearned revenue account the adjusting entry at the December
31,1997 year ended would include
(a) A debit to unearned revenue for Rs 300 (b) A debit to unearned revenue for Rs 900
(c) A credit to unearned revenue for Rs 300 (d) A debit to rent earned for Rs 900
(14) Net income plus operating expense is equal to
(a) Net sale (b) Cost of good available for sales (c) Cost of good sold (d) Gross profit
(15) When purchase merchandise is returned under a perpetual inventory system a credit
would be made to
(a) Inventory (b) Freight in (c) Purchases (d) Purchase return
(16) Which of the fallowing accounts would not be included in the computation of the cost of
goods sold
(a) Purchase returns (b) Freight in (c) Purchase discount lost (d) Purchase discounts
(17) Total manufacturing cost for a period includes all of the fallowing except
(a) Raw material used (b) Direct labour cost
(c) Cost of good completed (d) Factory overhead cost(18) Quick Asset includes which of
the fallowing
(a) Cash (b) Account receivable (c) Marketable securities (d) All of these (e) a &b
(19) When a small stock dividend is declared which of the fallowing accounts is credited
(a) Common stock (b) Dividend payable (c) Common stock dividend
distributable (d)Retained Earnings
(20) An advantages of the partnership from of business organization is its
(a) Unlimited liability (b) Mutual agency (c) Ease of the formation (d) Limited life
form of a organization (b) Usually provides limited liability to the partners (c) Has
unlimited life
(17) A corporate buy back or the repurchasing of share is
(a) An example of balance sheet restructuring (b) An excellent source of profit when the
firm stock is overpriced
(c) A method of reducing the debt to equity ratio (d) All of the above
(18) A statement of cash flows can be prepaid using a ful T account analysis This approch
(a) User a detail T accounts for each balance sheet account (b) Dividend the cash T
account into cash inflow and cash outflows (c) Classifies item into operating, investing
,financing (d) All the above are true
(19) If the beginning inventory of the finished good is 3000 units, planned sales are 25000
units and planned productions is 27000 units the inventory of finished goods on the
budgeted balance sheet would be
(a) 3000 (b) 1000 (c) 5000 (d) None of these
(20) If working capital increased during the period
(a) Current assets must be increased (b) Current liabilities must be decreased (c)
Source of working capital must have been greater than uses of working capital (d) User of
working capital must have been greater than sources of working capital
http://www.sbp.org.pk/bsd/2001/C36.htm
In terms of Section 34 of the Banking Companies Ordinance, 1962 the banks are required to
prepare their annual accounts in the forms set out in the Second Schedule to the said
Ordinance.
12. The following represent tangible assets and are shown in the
balance sheet as:
(a) People (b) Expenses (c) Revenue (d) Goodwill
It should be INtangible.
option a,b,c are irrelevant as they cannot be shown on Balance Sheet.