Vous êtes sur la page 1sur 5

Mid Term Exam

Term 1, 2016
Managerial Accounting
PGDIE Section A & B
Time Duration: 40 Min Max: 40 Marks

Instructions:
Question A is short answer questions, total 10 marks.
Questions 1 -30 are MCQ, total 30 marks, no negative marking.
Mark your answer very clearly on the question paper only, and return it back before leaving the exam hall.
No separate answer sheet will be provided.
Use of scientific calculator is allowed.

A) On May 1, 2005 Mohan opened a photo copying business. He completed the following transactions during the month
of May:
1. Invested Rs 50000 in the business.
2. Purchased on account ink and paper rims for photo copying process Rs 20000.
3. Purchased on account the photo copying equipment Rs 50000.
4. Paid salaries for month of may for two assistants @ Rs 1000 each.
5. Received Rs 50000 as photo copying charges. Rs 20000 were still due on customers. Ink and Paper consumed for
the same Rs 15000.
6. Paid rent for shop Rs 2000.
7. Paid other expenses Rs 500.
8. Paid for the material purchased in transaction no 2.
9. Paid Rs 20000 for Photo Copying equipment purchased in transaction no 3.
10. Received Rs 1000 as interest.
11. Depreciate Equipment Rs 2000.

Prepare an Income statement and Balance Sheet for the month of May.

1
Multiple Choice Questions

1) We can say that the business is in profit, when:


A) Assets exceed Expenditure
B) Income exceeds Liabilities
C) Income exceeds Expenditure
D) Income exceeds Liabilities

2) According to the double entry system of accounting, an account that obtains benefit is:
A) Credit
B) Debit
C) Income
D) No need to show as accounting record

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


A) Left or credit side of the account
B) Right or debit side of the account
C) Right or credit side of the account
D) Left or debit side of the account

4) When Capital is increased by an amount, it is recorded on the:


A) Right or debit side of the account
B) Left or credit side of the account
C) Left or debit side of the account
D) Right or credit side of the account

5) What type of expenses are paid out of Gross Profit?


A) General Expenses
B) Financial Expenses

2
C) Selling Expenses
D) All of the given options

6) Which of the following shows summary of a company's financial position at a specific date?
A) Profit & Loss Account
B) Cash Flow Statement
C) Balance Sheet
D) Income & Expenditure Account

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


A) Franchise rights
B) Goodwill
C) Patents
D) Land

8) Which of the following is an example of business liability?


A) Land
B) Building
C) Cash
D) Creditors

9) The unfavorable balance of Profit and Loss account should be:


A) Added in liabilities
B) Subtracted from current assets
C) Subtracted from capital
D) Subtracted from liabilities

10) Purpose of Financial Accounting is to provide financial information to


a) Shareholders
b) Board Of Directors
c) Tax Authorities
d) All of these.

11) According to the Money Measurement concept, the following will be recorded in the books of accounts
a) Quality Control in Business
b) Commission Payable to salesmen
c) Extra profits made due to introduction of Budgetary Control System
d) All of these.

12) A provision is a
a) General Reserve
b) Pacific Reserve
c) Capital Reserve
d) None of these.

13) Which of the followings is Operating Expense?


a) Bad debts
b) Salary of General Manager
c) Expired Insurance
d) All of the above.

14) Rs.15000/-Custom duty paid on import of a machinery for modernization of a factory production during the current
year & Rs.5000/- paid as import duty on purchase of raw material. What is the amount of capital expenditure?
a. Rs.15000/-

3
b. Rs.5000/-
c. NIL
d. Rs.20000/-

15) In the case of sale on the consignment basis, revenue should be recognized on
a) When goods are received by the consignee
b)When advance payment is received against the consignment
c) When goods are sold by consignee to third party
d) When consignee has settled full & final payment relating to consignment.

16) In the case of service transactions, When performance consists of the execution of a single act, Revenue
recognition takes place by
A) Accrual
B) Proportionate Completion
C) Consistency
D) Completed Service Contract Method.

17) The debts Written off as Bad, if subsequently recovered are credited to
a. Debtors a/c
b. Sales a/c
c. P&L a/c
d. Bad Debts a/c

18) LIFO Inventory Method was used in 1st year, FIFO in 2nd year, Weighted Average Method in 3rd year, which
accounting principle is violated?
a. Cost
b. Consistency
c. Materiality
d. None.

19) What do you mean by the concept/principle of Materiality?


a. Application of same accounting method from one period to another
b. Relative size & importance of items
c. Inappropriate assumption of firm undergoing Bankruptcy
d. Normal basis of accounting of Assets

20) What do you mean by the concept/principle of Consistency?


a. Application of same accounting method from one period to another
b. Relative size & importance of items
c. Inappropriate assumption of firm undergoing Bankruptcy
d. Normal basis of accounting of Assets

21) Owners Equity stands for


a. Fixed Assets Less Fixed Liabilities
b. Fixed Assets Less Current Liabilities
c. Current Assets Less Fixed Liabilities
d. Total Assets Less Outside Liabilities.

22) X started business with capital of Rs.20000/- & purchased goods worth Rs. 2000/-on credit. It can be expressed
in Accounting Equation as
a. Rs.22000=Rs.20000+Rs.2000
b. Rs.20000=Rs.22000-Rs.2000
c. Rs.22000=Rs.22000+0
d. Rs.2000=Rs.22000-Rs.20000.

4
23) Gross Book value of Fixed Asset is its
1. Cost Less Depreciation
2. Historical Cost
3. Wear & Tear Cost
4. Fair Market Value.

24) Revenue from the sale of goods should be recognized when


a. Goods sold have been actually delivered
b. Payment for goods sold have been received
c. Property in the Goods has been transferred to the buyer & it is not unreasonable to expect collection
d. Any of the above.

25) A business has assets of Rs.44312 & Owners equity 12310, what is the amount of Liabilities?
a. Rs.31102
b. Rs.57522
c. Rs.44312
d. None of these.

26) Income earned, to be collected results in


a. Increase in capital & decrease in liability
b. Increase in capital & increase in liability
c. Increase in capital & increase in asset
d. Increase in capital, decrease in asset.

27) Net assets of the business on 1st Jan. & 31st Jan. are Rs.24000 & Rs.25500 respectively. If additional investment
by owner during Jan. are Rs.1000, What is the amt. of net income for Jan.?
a. Rs.1500
b. Rs.Rs.2500
c. Rs.500
d. None of these.

28) When excessive Dividends are distributed to shareholders, there is


a) Capital Appreciation
b) Capital Erosion
c) Capitalization
d) Capital Subscription.

29) Liabilities of business are Rs.11220/- & Owners Equity Rs.15000/-What will be the assets of the business?
a) Rs.1120
b) Rs.3780
c) Rs.15000
d) Rs.26220

30) A business has assets Rs. 55826/- & Owners Equity Rs.14150/- What is the amount of
Liabilities?
a) Rs.41676/-
b) Rs.57522/-
c) Rs.44312/-
d) None of these

Vous aimerez peut-être aussi