1. Net Profit or Loss will be derived at _______ stage of accounting
a) Classifying
b) Interpretation
c) Recording
d) Summarising

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2. Which of the following is an event?
a) Sale of goods for Rs.5,000
b) Closing stock of worth Rs.4,000
c) Purchase of goods for Rs.8,000
d) Rent paid Rs.2,000

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1. The determination of expenses for an accounting period is based on the Principle of
a) Objectivity.
b) Materiality.
c) Matching.
d) Periodicity.

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2. The owner of a company included his personal medical expenses in the company’s income statement. Indicate the principle that is violated.
a) Cost principle
b) Conservatism
c) Disclosure
d) Entity Concept

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1. Change in Accounting estimate means:
a) Difference arising between certain parameters estimated earlier and re-estimated during the current period.
b) Difference arising between certain parameters estimated earlier and actual results achieved during current period.
c) Difference arising between certain parameters during the current period and actual results achieved during the previous period.
d) Both (a) and (b)

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2. Mohan purchased a machinery amounting Rs. 10,00,000 on 1^st April, 2001. On 31^st March, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.

The present value of machinery is 
a) Rs. 10,00,000.
b) Rs.20,00,000.
c) Rs.15,00,000.
d) Rs.12,00,000.

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1. Accounting policies refer to specific accounting
a) Principles.
b) Methods of applying those principles.
c) Both (a) and (b).
d) None of the above.

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2. Accounting policy for inventories of Xeta Enterprises states that inventories are valued at the lower of cost determined on weighted average basis or not realizable value. Which accounting principle in followed in adopting the above policy?
a) Materiality.
b) Prudence.
c) Substance over form.
d) All of above.

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1. IASB stands for:
a) Indian Accounting Standards Board
b) Indian accounting Standards Bulletin
c) International Accounting Standards Bulletin
d) International Accounting standards Boards

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2. The accounting standards are mandatory for:
a) Companies
b) Partnership Concerns
c) Charitable Organizations
d) Sole Proprietorship

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1. Outstanding Salary is a :
a) Real account
b) Personal account
c) Representative personal
d) Nominal account

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2. Bank overdraft account is a :
a) Personal account
b) Real account
c) Nominal account
d) Representative personal account

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1. Goods costing Rs. 5,000 given to a worker towards wages Rs. 5,000. Market price of goods is Rs. 6,000. Journal entry will be
a) Wages A/c Dr. Rs. 6,000
To Sales A/c Rs. 6,000
b) Wages A/c Dr. Rs. 5,000
To Purchases A/c Rs. 5,000
c) Wages A/c Dr. Rs. 5,000
To Cash A/c Rs. 5,000
d) None of the above

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2. The value of furniture on 1st April, 2008 is Rs. 80,000. Furniture purchased during the year was Rs. 40,000. During the year some furniture was sold at Rs. 15,000 and a loss of Rs. 5,000 occurred. The value of furniture on 31st March, 2009 was Rs. 70,000.
       Depreciation charged for the year 2008-09 will be :-
a) Rs. 50,000
b) Rs. 20,000
c) Rs. 30,000
d) Rs. 40,000

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1. Trial Balance under balance method is known as :
a) Gross Trial Balance
b) Net Trial Balance
c) Simple Trial balance
d) Trial Balance Appropriation

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2. After preparing the trial balance the accountant finds that the total of debit side is short by Rs. 1,500. This difference will be
a) Credited to suspense account
b) Debited to suspense account
c) Adjusted to any of the debit balance account
d) Adjusted to any of the debit balance account

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1. Total of Sales Book will be posted :
a) In Debit side of Sales Account
b) In Credit side of purchases account
c) In Credit side of Sales Account
d) In Debit side of Sales return account

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2. The Sales Book
a) Is a part of journal,
b) Is a part of the ledger,
c) Is a part of the balance sheet.
d) None of the above

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1. Brokerage on the issue of shares and debentures is a _______expenditure :
a) Revenue
b) Capital
c) Deferred Revenue
d) Partly capital partly revenue

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2. White washing expenses.
a) Capital expenditure
b) Revenue expenditure
c) Deferred revenue expenditure
d) None of the above

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1. What rate of commission is charged by the bank issuing the credit card :
a) 1% to 3%
b) 3% to 6%
c) 2% to 5%
d) 1% to 4%

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2. Cash book is a form of :
a) Trial Balance
b) Ledger
c) Journal
d) All of the above

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1. Which of the following is not a contingent liability?
a) Claims against enterprises not acknowledge as debts
b) Guarantees given in respect of the third parties
c) Liabilities in respect of bills dishonoured
d) Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.

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2. If an inflow of economic benefits is probable then a contingent asset is disclosed
a) In the financial statements.
b) In the report of the approving authority (Board of Directors in the case of a company, and the corresponding approving authority in the case of any other enterprise).
c) In the cash flow statement.
d) None of the above.

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1. Which method is used for “Sale on Approval” basis when the transactions are few in nature?
a) Multi Column Journal Method
b) Columnar Sale Day Book Method
c) Ordinary Sale Method
d) Separate Day Book Method

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2. On 31st December, 2011 goods sold at a sale price of Rs. 30,000 were lying with customer, Mohan to whom these goods were sold on ‘approval or return basis’ and recorded as actual sales. Since no consent was received from Mohan, the adjustment entry was made presuming goods were sent on approval at a profit of cost plus 20%. In the balance sheet, the Inventories with customer account will be shown at Rs.
a) 30,000.
b) 24,000.
c) 20,000.
d) 25,000.

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1. A second hand machinery is purchased for Rs. 10,000 the amount of Rs. 1,500 is spent on transportation and Rs. 1,200 is paid for installation. The amount debited to machinery account will be :
a) Rs. 10,000
b) Rs. 10,500
c) Rs. 11,500
d) Rs. 12,700

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2. Sale of old furniture is wrongly transferred to Sales Account. Which type of error is this ?
a) Error of Principle
b) Compensating Error
c) Error of Omission
d) Error of Commission

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1. If we take balance as per Pass book which of the following will be deducted to get balance as per cash book :
a) Interest given by bank
b) Interest charged by Bank
c) Cheque deposited but not cleared
d) payment made by bank under standing instructions

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2. The Cash book showed an overdraft of Rs.1,500 but the pass book made up to same date should that cheques of Rs. 100, Rs. 50 and Rs. 125 had not been presented for payment and a cheque of Rs. 400 had not been cleared. The balance as per the Cash Book will be:
a) Rs. 1,100
b) Rs. 1,625
c) Rs. 2,175
d) Rs. 1,375

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1. C Ltd. recorded the following information as on March 31,2011:
Stock as on April 01, 2010   Rs. 80,000
Purchases                          Rs.1,60,000
Sales                                 Rs.2,00,000
It is noticed that goods worth Rs.30,000 were destroyed due to fire. Against this, the insurance company accepted a claim of Rs. 20,000.
The company sells goods at cost plus 33 1/3%. The value of closing inventory, after taking into account the above transactions is,
a) Rs. 10,000
b) Rs. 30,000
c) Rs. 1,00,000
d) Rs. 60,000

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2. Following figures have been extracted from the books for the year ended 31st March, 2011:
(i) Cost of goods sold Rs. 35,000
(ii) Closing stock as on 31st March, 2011 Rs. 8,000
(ii) Closing stock as on 31st March, 2011 Rs. 8,000
(iii) Opening stock as on 1st April, 2010 Rs. 10,000
(iv) Purchase Return Rs. 5,000
What would be the amount of gross purchase for the year ended 31st March, 2011?
a) Rs. 33,000
b) Rs. 38,000
c) Rs. 28,000
d) Rs. 37,000

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1. Akhil Ltd. imported a machine on 01.07.2002 for Rs. 1,28,000, paid customs duty and freight Rs. 64,000 and incurred erection chares Rs. 48,000. Another local machinery costing Rs. 80,000 was purchased on 01.01.2003. on 01.07.2004, a portion of the imported machinery (value one-third) got out of order and was sold for Rs. 27,840. Another machinery was purchased to replace the same for Rs. 40,000. Depreciation is to be calculated at 20% p.a.
Profit /Loss on sale = _______.
a) 20,160 (Profit)
b) 19,600 (Profit )
c) 19,600 (loss)
d) 20,160 (loss)

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2. Original cost of an asset Rs. 2,52,000, Salvage value Rs. 12,000. Depreciation for 2nd year @ 10% p.a. under W.D.V method will be :
a) Rs. 21,600
b) Rs. 22,680
c) Rs. 30,000
d) Rs. 28,000

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1. Sundry Debtors on 31^st March, 2006 are Rs.55,200. Further Bad debts are Rs.200:
Provision for doubtful debts are to be made on debtors @ 5% and also provision of discount is to be made on debtors @ 2%. The amount of provision of discount in debtors will be:
a) Rs.1,045
b) Rs.2,750
c) Rs.1,100
d) Rs.2,760

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2.

	1st January Rs.	31st December Rs.
Stock of Raw Materials	17,400	18,100
Work in Progress	11,200	11,400
Stock of finished goods	41,500	40,700

During the year manufacturing overhead expenses amounted to Rs. 61,100, manufacturing wages to Rs. 40,400 and purchase of raw materials to Rs. 91,900. There were no other direct expenses.
The manufacturing cost of finished goods produced were:
a) Rs. 1,31,600
b) Rs. 1,93,300
c) Rs. 1,91,900
d) Rs. 1,92,500

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1. Rahim of Kolkata sends out goods of the invoice value Rs. 2,00,000 to Ram of Delhi at cost + 25%. The amount of loading will be:
a) Rs. 50,000
b) Rs. 40,000
c) Rs. 30,000
d) Rs. 60,000

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2. Account Sales includes:
a) Sales made
b) Stock left with consignee
c) Commission earned
d) All of above.

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1. A purchased goods costing 1,00,000. B sold the goods for Rs. 1,50,000. Profit sharing ratio between A and B equal. If same sets of books is maintained, what will be the final remittance?
a) B will remit Rs. 1,25,000 to A
b) B will remit Rs. 1,50,000 to A
c) A will remit Rs. 1,00,000 to B
d) B will remit Rs. 25,000 to A

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2. For opening Joint Bank account, in case of separate sets of books:
a) Venture A/c will be debited and Venturers A/c will be credited
b) Joint Bank A/c is debited and Venturers Capital A/c is credited
c) Joint Venture A/c is debited and Joint Bank A/c will be credited
d) Joint Bank A/c will be debited and Joint Venture A/c will be credited

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1. How long is the period of days of grace in cash of a bill:
a) Three days
b) Two days
c) Four days
d) One day

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2. Ram draws on Aslam a bill for Rs. 60,000 on 1.4.01 for 2 months. Aslam accepts the bill and sends it to Ram who gets it discounted for Rs. 58,800. Ram immediately remits Rs. 19,600 to Aslam. On due date, Ram being unable to remit the amount due accepts a bill for Rs. 84,000 for 2 months which is discounted by Aslam for Rs. 82,200. Aslam sends Rs. 14,800 to Ram out of the same. How much discount will be borne by Ram at the time of 14,800 remittances.
a) Rs.1,200
b) Rs.1,800
c) Rs.1,100
d) Rs.800

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1. What would be the profit sharing ratio if the partnership act is complied with?
a) As per agreement
b) Equally
c) In Capital Ratio
d) None of the above

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2. Guarantee given to a partner ‘A’ by the other partners ‘B & C’ means
a) In case of loss ‘A’ will not contribute towards that loss
b) In cash of insufficient profits ‘A’ will receive only the share of profit and not minimum guarantee amount
c) In case of loss or insufficient profits ‘A’ will withdraw the minimum guarantee amount
d) All of the above

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1. A and B are in partnership sharing profits and losses in the proportion of 3:1 respectively. On 1.4.2013 they admitted C into partnership on the following terms:
1. C to purchase one-third of the goodwill for Rs. 2,000 by paying cash.
2. Future profits and losses are to be shared by A, B and C equally
Set out the entry relating to the above arrangement in the firm’s journal:
a) Cash/Bank A/c Dr. 2,000
To A’s A/c 2,000
b) Cash Bank A/c Dr. 2,000
To Goodwill A/c 2,000
c) Cash/Bank A/c Dr. 2,000
B’s A/c Dr. 500
To A’s A/c 2,500
d) Cash/Bank A/c Dr. 2,000
To A’s A/c 1500
To B’s A/c 500

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2. Goodwill brought in by incoming partner in cash for joining in a partnership firm is taken away by the old partners in their ____________ratio.
a) Old Profit Sharing Ratio
b) New Profit Sharing Ratio
c) Sacrificing Ratio
d) Capital Ratio

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1. A and B are partners sharing profits and losses in the ratio of 3:2 (A’s Capital is Rs. 30,000 and B’s Capital is Rs. 15,000). They admitted C agreed to give 1/5th share of profits to him. How much C should bring in towards his capital?
a) Rs. 9,000
b) Rs. 12,000
c) Rs. 14,500
d) Rs. 11,250

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2. Which asset is compulsorily revalued at the time of admission of a partner?
a) Goodwill
b) Land and Building
c) Plant and Machinery
d) Urniture and Fittings.

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1. At the time of retirement of a partner, firm gets ……….from the insurance company against the Joint Life Policy taken jointly for all the partners
a) Policy Amount
b) Surrender Value
c) Policy Value for the retiring partner and Surrender Value for the rest.
d) Surrender Value for all the partners

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2. A, B and C are partners sharing profits and losses in the ratio of 1/2, 3/10 and 1/5. B retires from  the firm, A and C decide to share the future profits and losses in 3:2. Calculate gaining ratio:
a) 1:2
b) 3:2
c) 2:3
d) None

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1. How is the premium paid on the JLP of partners treated? It is ______ to the _______accounts:
a) Credited; Partner’s Current
b) credited; Profit & Loss
c) Debited; Partner’s Capital
d) Debited; Profit & Loss

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2. The amount due to the deceased partner is paid to his:
a) Father
b) Friends
c) Wife
d) Executors

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1. Which statement is issued before the issue of shares?
a) Prospectus
b) Memorandum of Association
c) Articles of Association
d) All of these

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2. Which of the following signifies the difference between par value and an issue price below par?
a) Securities premium
b) Discount on issue of shares
c) Calls in arrear
d) Calls in advance

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1. Interest on debentures is calculated on
a) Its face value
b) Its issue price
c) Its market price
d) Its redemption price

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2. Which of the following statement is false with respect to debentures?
a) A company can issue irredeemable debentures
b) A company can issue debentures for consideration other than cash
c) A company can issue debentures with voting rights
d) A company can busy its own debentures

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1. r>
2600000
The Board of Directors of the company decided to redeem the preference shares at a premium of 10%. In order to facilitate the redemption, the Board has taken the following decisions:
∗ To sell the investments for Rs. 4,00,000
∗ To issue sufficient equity shares at a premium of Rs. 2 per share to raise the balance of funds needed
&lowest; To maintain minimum bank balance of Rs. 50,000
The Board of Directors initiated the above course of action during the month of April, 2006 and redeemed all the preference shares.
Premium on issue of fresh equity shares =?
a) Rs. 55,000
b) Rs. 60,000
c) Rs. 65,000
d) Rs. 66,000

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2. According to section 78 of the Companies Act, the amount in the Securities Premium A/c cannot be used for the purpose of
a) Issue of fully paid bonus shares
b) Writing off losses of the company
c) Writing off preliminary expenses
d) Writing off commission of discount on issue of shares

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