FINALTERM EXAMINATION
Spring 2010
MGT101- Financial Accounting (Session - 2)
Ref No:
Time: 90 min
Marks: 69
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| ExamDate: | 10 Aug 2010 |
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| 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 | 42 | 43 | 44 | 45 | 46 | 47 | 48 | |
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| Q No. | 49 | 50 | 51 | 52 | 53 | | | | |
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Question No: 1 ( Marks: 1 ) - Please choose one
Which of the following is correct according to the double entry system of book-keeping? ► Debit = Credit
► Debit > Credit
► Debit < Credit
► All of the given options
Question No: 2 ( 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: 3 ( 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: 4 ( 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: 5 ( Marks: 1 ) - Please choose one
| Particulars | Rs. |
| Opening written down value of machine | Rs. 2,00,000 |
| Cost of new machine purchased during the year | Rs. 50,000 |
| Depreciation during the year | Rs. 25,000 |
| Closing written down value (WDV) of machines | ? |
► Rs. 2, 25,000
► Rs. 2, 50,000
► Rs. 2, 75,000
► Rs. 75,000
Question No: 6 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ| Particulars | Rs. |
| Closing value of stock | 40,000 |
| Bad Debts (Given in trial balance) | 500 |
| Old provisions (Given in trial balance) | 700 |
| Sundry Debtors (Given in trial balance) | 44,500 |
| Provision for doubtful debts be increases by 5% | |
| What will be the amount of new provision | ? |
► Rs. 2,225
► Rs. 2,425
► Rs. 1,925
► Rs. 3,025
Question No: 7 ( Marks: 1 ) - Please choose one
Which of the following is a selling expense? ► Interest on deposits
► Any tax/freight is paid on purchases
► General salaries paid to laborers
► Tax & freight paid on sale
Question No: 8 ( Marks: 1 ) - Please choose one
Which account is increased with a debit and decreased with a credit? ► Cash
► Accounts Payable
► Contributed Capital
► Retained Earnings
Question No: 9 ( Marks: 1 ) - Please choose one
Which of the following journal entry will be recorded, if cash is drawn by a Proprietor? ► Proprietor’s drawings a/c (Dr.) and Cash a/c (Cr.)
► Cash a/c (Dr.) and Proprietor’s drawings a/c (Cr.)
► Proprietor’s Capital (Dr.) and Proprietor’s drawings a/c (Cr.)
► Proprietor’s drawings (Dr.) and Proprietor’s Capital a/c (Cr.)
Question No: 10 ( Marks: 1 ) - Please choose one
When the capitals are fixed, which of the following account will be debited for drawings made by a partner? ► Individual Partner’s Current Account
► Partner’s Cash Account
► Partner’s Bank Account
► Partners Capital Account
Question No: 11 ( Marks: 1 ) - Please choose one
Authorized share capital is also known as: ► Registered capital
► Issued capital
► Paid up capital
► Called up capital
Question No: 12 ( Marks: 1 ) - Please choose one
When goods are acquired from the supplier the gross cost of such goods is recorded in: ► Debtor Account
► Purchases Account
► Factory overhead account
► Sales Account
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following is NOT a cash inflow? ► Sale of fixed asset
► Issue of debentures
► Cash from business operation
► Purchase of fixed asset
Question No: 14 ( Marks: 1 ) - Please choose one
In cash flow statements, which of the following would appear as an inflow of cash? ► The repayments of a bank loan
► Dividend issue in the current year
► Money received as result of selling fixed assets
► The difference between the valuations of old and new fixed assets
Question No: 15 ( Marks: 1 ) - Please choose one
In cash flow statements, which of the following would appear as a cash outflow? ► The payments for purchases made during the year
► A decrease in trade debtors over the course of an accounting period
► Money received as a result of issuing new shares
► Money received as result of selling fixed assets
Question No: 16 ( Marks: 1 ) - Please choose one
When we close bad debt account, which of the following account is debited? ► Profit and loss account
► Bad debt account
► Debtor account
► Creditor account
Question No: 17 ( Marks: 1 ) - Please choose one
Subsidiary ledgers are maintained for: ► Debtors
► Creditors
► Stock
► All of the given options
Question No: 18 ( Marks: 1 ) - Please choose one
ABC Company received discount on its credit purchases, which of the following will be credited while entering in journal? ► Cash
► Discount received
► Creditors
► Bank
Question No: 19 ( Marks: 1 ) - Please choose one
Mr. Ali’s bank book shows a debit balance of Rs. 36,000. He deposited a cheque of Rs.15,000 but not yet collected by the bank. What will be the balance of bank statement? ► Rs. 21,000
► Rs. 51,000
► Rs. 36,000
► Rs. 15,000
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following indicates cash discount received? ► Discount in paying debt earlier
► Discount in receiving debt earlier
► Discount in purchasing huge goods
► Discount in selling huge goods
Question No: 21 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership invested Rs.50,000 and Rs.65,000 with an equal share in profit or loss. Markup on drawings of Mr. A is Rs.1,500 and of Mr. B is Rs.1,800. The net income for the year is Rs.85,000. What will be the profit share of Mr. B? ► Rs.42,350
► Rs.44,150
► Rs.41,600
► Rs.40,850
Question No: 22 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership invested Rs.50,000 and Rs.65,000 with an equal share in profit or loss. Markup on drawings of Mr. A is Rs.1,500 and of Mr. B is Rs.1,800. The net income for the year is Rs.85,000. What will be the amount of distributable profit? ► Rs.81,700
► Rs.88,300
► Rs.131,700
► Rs.146,700
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following value of the share is authorized by the memorandum of association? ► Par value
► Face value
► Nominal value
► All of the given options
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following statement is not true regarding the objective of statement of cash flows? ► It is helpful for decision making by management
► It is used for reporting the net profit of the period
► It can be used for estimations for cash flows in future
► It is used to determine the liquidity of the business
Question No: 25 ( Marks: 1 ) - Please choose one
Statement of cash flows helps the stakeholders to assess: ► Ability to pay cash dividends in the future
► All of the given options
► The ability to generate future cash flows
► The liquidity of the business
Question No: 26 ( Marks: 1 ) - Please choose one
According to the statement of cash flows following are the examples of investing activities except: ► Sales of machinery
► Capital invested by the owners
► Purchase of building for the business use
► Cash received from the disposal of equipment
Question No: 27 ( Marks: 1 ) - Please choose one
The cash book in book-keeping records: ► All cash and credit purchase of goods
► Only cash payments
► All receipts and payments in cash
► All cash and credit sale of goods
Question No: 28 ( Marks: 1 ) - Please choose one
What will be the effect of decrease in closing stock on gross profit? ► Gross profit increased
► Gross profit decreased
► No effect on Gross profit
► Gross profit will become positive
Question No: 29 ( Marks: 1 ) - Please choose one
If:· Direct Material Cost is Rs. 20,000
· Direct labour cost is Rs. 10,000
· Manufacturing Cost is Rs. 45,000
Then:
What is the amount of Factory Overhead?
► Rs. 15,000
► Rs. 30,000
► Rs. 35,000
► Rs. 25,000
Question No: 30 ( Marks: 1 ) - Please choose one
Which one of the following methods for inventory valuation may overstate the income during the periods of rising prices? ► Specific Identification Method
► FIFO Method
► LIFO Method
► Weighted Average Method
Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is NOT a method of calculating depreciation? ► Straight Line Method
► Written Down Value Method
► Diminishing Balance Method
► Specific Identification Method
Question No: 32 ( Marks: 1 ) - Please choose one
What is the treatment of Depreciation in accounting? ► Written in balance sheet under the head of fixed assets
► Charged to profit and loss account
► Written in balance sheet under the head of current assets
► Written in balance sheet under the head of liabilities
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following is TRUE? ► Gain on revaluation is credited to Revaluation Reserve Account.
► Gain on revaluation is debited to Revaluation Reserve Account.
► Gain on revaluation is credited to Profit & Loss Account.
► Gain on revaluation is debited to Profit & Loss Account.
Question No: 34 ( Marks: 1 ) - Please choose one
The loss on the sale of fixed assets is a: ► Normal loss
► Ordinary loss
► Capital loss
► Revenue loss
Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following is TRUE about capital receipt? ► It decreases value of property or increases value of liability
► It is shown in the income and expenditure account
► It is recurring in nature
► It is not shown in the statement of financial positions
Question No: 36 ( Marks: 1 ) - Please choose one
Which of the following is NOT included in Debtors Control Account? ► Cash sale
► Credit sale
► Bills receivable
► Discount allowed
Question No: 37 ( Marks: 1 ) - Please choose one
If cash sale is the missing figure, it can be ascertained by the construction of: ► Creditors Control Accounts
► Debtors Control Accounts
► Cash Account
► None of the given options
Question No: 38 ( Marks: 1 ) - Please choose one
Which of the following is/are the Classification of Current Assets? ► Cash Balance
► Loans and Advances
► Bank Balance
► All of the given options
Question No: 39 ( Marks: 1 ) - Please choose one
Depreciation expense is charged to which of the following head? ► Administrative expenses
► Selling expenses
► Cost of sales
► It depends on the nature of expense
Question No: 40 ( Marks: 1 ) - Please choose one
Inventory is always considered as: ► Current asset
► Current liability
► Long-term asset
► Stockholders' equity
Question No: 41 ( Marks: 1 ) - Please choose one
If:Ø Capital at the start Rs. 100,000
Ø Profit during the year Rs. 50,000
Ø Withdrawal during the year Rs. 25,000
What would be the closing balance of capital?
► Rs. 175,000
► Rs. 150,000
► Rs. 125,000
► Rs. 75,000
Question No: 42 ( Marks: 1 ) - Please choose one
Which of the following Legal Documents of a company contain(s) the rules and regulations framed for the internal management of the company? ► Memorandum of Association
► Articles of Association
► Both Memorandum of Association and Articles of Association
► Prospectus
Question No: 43 ( Marks: 1 ) - Please choose one
Which one of the following refers to the allotment of shares to the existing shareholders by capitalizing the reserves into additional capital? ► Reserve funds
► Accumulated profit
► Right issue
► Bonus issue
Question No: 44 ( Marks: 1 ) - Please choose one
When a share having a face value of Rs.100 issued at Rs.90 then which one of the following options is correct under this situation? ► Share issued at premium
► Share issued at discount
► Share issued at nominal value
► Share issued at market value
Question No: 45 ( Marks: 1 ) - Please choose one
The amount of share premium can be utilized EXCEPT: ► To write off preliminary expenses
► To meet the expenses of issue of shares
► To distribute among the shareholders
► To issue bonus shares
Question No: 46 ( Marks: 1 ) - Please choose one
A company pays cash to purchase the stock of another company in an unrelated industry. The cash outflow can be considered as an: ► Operating activity that will appear on the statement of cash flows
► Operating activity that will not appear on the statement of cash flows due to the fact of stock from a company in an unrelated industry
► Investing activity that will appear on the statement of cash flows
► Investing activity that will not appear on the statement of cash flows due to the fact of stock from a company in an unrelated industry
Question No: 47 ( Marks: 1 ) - Please choose one
Which of the following would be a suitable head for short term advances from customers in Balance Sheet? ► Current asset
► Intangible asset
► Tangible asset
► Current liability
Question No: 48 ( Marks: 1 ) - Please choose one
If there is a portion of long term loan of Rs. 30,000 payable in the current accounting period. Where it will be shown in financial statement? ► Current liability
► Long term liability
► Current asset
► Owner’s equity
Question No: 49 ( Marks: 3 )
Ø Rent expenses Rs. 20,000
Rent expenses Rs. 20,000Ø Insurance expenses Rs. 30,000
Ø Bad debts Rs. 35,000
In addition rent payable is Rs. 5,000; calculate the amount of operating expenses to be shown in profit and loss account.
Question No: 50 ( Marks: 3 )
If:Ø Retain earning at the beginning Rs. 1,000
Ø Dividend paid 500
Ø Retain earning at the end 2,500
Then:
You are required to prepare statement of Retain earnings to find the amount of Net income
Question No: 51 ( Marks: 5 )
Given the following data: Purchases Rs. 4,500, Returns outwards Rs.300, Returns inwards Rs.150, Carriage outwards Rs.830, Carriage inwards Rs.260, Opening stock Rs.935, and closing stock Rs. 1,100.
What would be the value of the cost of goods sold?
Question No: 52 ( Marks: 5 )
Mr. Bilal is a member of partnership firm. He drew some amounts from the business on following dates.Ø July Rs. 2,500
Ø November 1,500
Ø December 3,000
Ø March 5,000
All drawings were made on the 1st day of the month @ rate of 10 %. It is assumed that financial year starts at July 1st and ends on 30th June.
Required:
Calculate mark up on drawing.
Question No: 53 ( Marks: 5 )
| Particulars | Rs. |
| Raw Material - Opening Stock | 10,000 |
| Raw Material – Purchases | 2,000 |
| Raw Material - Closing Stock | 3,000 |
| Packing Material - Opening Stock | 4,000 |
| Packing Material – Purchases | 5,000 |
| Packing Material - Closing Stock | 6,000 |
Based on the above information you are required to calculate the following:
Ø Cost of Raw Material Consumed
Ø Cost of Packing Material Consumed
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