MGT101 Mid Term Solved Past Paper

MIDTERM  EXAMINATION

Fall 2009

MGT101- Financial Accounting (Session - 3)

Ref No: 1048092

Time: 60 min

Marks: 50

Student Info
StudentID:
Center:
ExamDate:	12/19/2009 12:00:00 AM

For Teacher's Use Only
Q No.	1	2	3	4	5	6	7	8	Total
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Q No.	9	10	11	12	13	14	15	16
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Q No.	17	18	19	20	21	22	23	24
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Q No.	25	26	27	28	29	30	31	32
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Q No.	33	34	35	36	37	38	39	40
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Q No.	41
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Question No: 1    ( 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: 2    ( Marks: 1 )    - Please choose one

 Cost incurred for the maintenance of shop is considered as _________.

       ► Deferred expense

       ► Capital expense

       ► Revenue expense

       ► Preliminary expense

   

Question No: 3    ( Marks: 1 )    - Please choose one

 If a business purchases machinery for Rs. 30,000 on 31st January 2008 having life of 10 years, this expense will be realized ___________ under the concept of accrual accounting.

       ► For the year 2008 only

       ► For the last day of 10^th year only

       ► Over 10 years

       ► Nothing can be said about it

   

Question No: 4    ( Marks: 1 )    - Please choose one

 Word “Credit” is derived from ______ language.

       ► Latin

       ► English

       ► French

       ► Chinese

   

Question No: 5    ( 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: 6    ( 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: 7    ( Marks: 1 )    - Please choose one

 What would be the affect on the components of the accounting equation, if goods are purchased on cash? 

       ► Increase in cash and decrease in equity

       ► Increase in cash and increase in goods

       ► Increase in goods and decrease in cash

       ► Increase in equipment and increase in equity

   

Question No: 8    ( Marks: 1 )    - Please choose one

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

       ► Occurrence of event – voucher—Journal—Ledger—Trial Balance—profit and loss account—Balance Sheet 

       ► Occurrence of event—Journal – voucher —Ledger—Trial Balance—profit and loss account—Balance Sheet

       ► Occurrence of event—Ledger – voucher—Journal—Trial Balance—profit and loss account—Balance Sheet 

       ► Occurrence of event—Trial Balance – voucher—Journal—Ledger—profit and loss account—Balance Sheet 

   

Question No: 9    ( 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: 10    ( Marks: 1 )    - Please choose one

 Bank book is part of:

       ► Voucher

       ► General Journal

       ► General Ledger

       ► Trial Balance

   

Question No: 11    ( Marks: 1 )    - Please choose one

 While making Income & Expenditure account, Excess of income over expenses in a specified accounting period is called:

       ► Profit

       ► Loss

       ► Surplus

       ► Deficit

   

Question No: 12    ( Marks: 1 )    - Please choose one

 Gross Profit > Operating Expenses=?

       ► Net Profit

       ► Cost of Goods Sold

       ► Net Loss

       ► Gross Loss

   

Question No: 13    ( Marks: 1 )    - Please choose one

 Accrued expenses are the example of:

       ► Current liabilities

       ► Long term liabilities

       ► Deferred costs

       ► Capital expenses

   

Question No: 14    ( Marks: 1 )    - Please choose one

 The favorable balance of Profit and Loss account should be:

       ► Added in liabilities

       ► Subtracted from current assets

       ► Subtracted from liabilities

       ► Added in capital

   

Question No: 15    ( 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: 16    ( 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: 17    ( 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

       ► If current assets = current liabilities

       ► If current assets < current liabilities

   

Question No: 18    ( Marks: 1 )    - Please choose one

 Which of the following particular is NOT included in the specimen of a payment voucher?

       ► Name of organization

       ► Cash payment amount

       ► Date of transaction

       ► Bank receipt

   

Question No: 19    ( 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: 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 products that are ready for sale are known as:

       ► Raw material

       ► Work in process

       ► Finished goods

       ► Closing stock 

   

Question No: 22    ( 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 worker’s wages

       ► Depreciation expenses

   

Question No: 23    ( Marks: 1 )    - Please choose one

 The total of all costs incurred to convert raw material into finished goods is known as:

       ► Prime cost

       ► Conversion cost

       ► Sunk cost

       ► Opportunity cost

   

Question No: 24    ( 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: 25    ( 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: 26    ( Marks: 1 )    - Please choose one

Cost of asset	Rs. 1,00,000
Life of asset	5 years
Depreciation for each year	Rs. 15,000
Sale price after 5 years	Rs.50,000
Written down value of asset at the end of 5th year	Rs.25,000
Profit or loss on disposal of fixed assets	?

       ► Rs.25, 000 profit

       ► Rs. 75,000 loss

       ► Rs. 15,000 profit

       ► Rs. 1, 00,000 profit

   

Question No: 27    ( Marks: 1 )    - Please choose one

 All the costs incurred on the incomplete assets up to the balance sheet date must be transferred to:

       ► Capital account

       ► Capital work in progress account

       ► Relevant asset account

       ► Owner's equity account

   

Question No: 28    ( Marks: 1 )    - Please choose one

          Consider the following inventory record:

Date	Item	Quantity	Cost/Unit Rs.	Total Rs.
Jan. 2	Beginning inventory	10	10	100
Mar. 4	Purchase	35	11	385
May 8	Purchase	40	12	480
Nov. 3	Purchase	20	13	260
De31	Merchandise available	105		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: 29    ( Marks: 1 )    - Please choose one

          Consider the following inventory record:

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: 30    ( 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: 31    ( Marks: 1 )    - Please choose one

 Which of the following asset is NOT depreciated?

       ► Factory Buildings

       ► Office Equipment

       ► Plant & Machinery

       ► Land

   

Question No: 32    ( 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: 33    ( Marks: 1 )    - Please choose one

 Find out the missing value of an Accounting Equation with the help of given data:

Cash	Rs. 22,500
Debtors	Rs. 500
Total Assets	Rs. 80, 385
Accounts payable	Rs. 1,000
Total liabilities	Rs. 20,000

       ► Rs. 82,385 owner’s equity 

       ► Rs. 61,385 owner’s equity 

       ► Rs. 99,885 owner’s equity                 

       ► Rs.  99,385 owner’s equity

   

Question No: 34    ( 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: 35    ( Marks: 1 )    - Please choose one

 Consider the following data:

Particulars	Rs.
Assets	8,20,000
Owner's equity	3,80,000
Liabilities	?

       ► Rs. 1, 98,000

       ► Rs. 49,000

       ► Rs. 55,000

       ► Rs. 4, 40,000

   

Question No: 36    ( Marks: 1 )    - Please choose one

 Which one of the following is equal to the carrying cost of an asset?

       ► Original cost minus Accumulated depreciation

       ► Original cost plus Accumulated depreciation

       ► Original cost minus Residual value

       ► Written down value minus Accumulated depreciation

   

Question No: 37    ( Marks: 1 )    - Please choose one

 An estimate of the income and expenses needed to carry out business plans for a fiscal year is known as:

       ► Budgeting

       ► Costing

       ► Management

       ► Auditing

   

Question No: 38    ( Marks: 1 )    - Please choose one

 Unfavorable balance of the cash book means:

       ► Credit balance in cash book

       ► Credit balance in pass book

       ► Debit balance in cash book

       ► All of the given options

   

Question No: 39    ( Marks: 1 )    - Please choose one

 Net Profit + Expenses= _________

       ► Liabilities

       ► Assets

       ► Capital

       ► Income

   

Question No: 40    ( Marks: 1 )    - Please choose one

 What would be the value of conversion cost, if the cost of material consumed during the month is Rs. 5,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 1,000? 

       ► Rs. 3,000

       ► Rs. 8,000

       ► Rs. 7,000

       ► Rs. 5,000

   

Question No: 41    ( Marks: 10 )

 The following are some of the causes of difference between the Cash Book and the Pass Book balances. If you start with the Cash Book (Dr.) balance in Bank Reconciliation Statement, will you add them or deduct?

Particulars	Add/Less
1.      Cheques issued but yet not paid by bank.	less
2.      Cheques deposited but not credited by bank.	less
3.      Amount directly deposited into bank by a customer but not recorded in the Cash Book.	add
4.      Dividend collected by bank but not entered in Cash Book.	add
5.      Insurance premium paid by bank but not recorded in Cash Book.	less
6.      Cheque deposited but no entry was made in Cash Book.	add
7.      Bank charges debited by bank but not credited in the Cash Book	less
8.      Interest on overdraft debited by bank but not recorded in Cash Book.	less
9.      Cheque issued but wrongly debited in Cash Book	less
10. Interest credited by bank but not recorded in cash book	add