FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting (Session - 4)
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1
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7
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8
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9
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10
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11
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12
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13
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14
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15
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16
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17
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25
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26
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27
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28
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29
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30
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31
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32
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33
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34
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35
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36
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37
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38
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39
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40
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41
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42
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43
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44
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45
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46
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47
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48
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Q No.
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49
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50
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51
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52
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53
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54
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55
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56
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Q No.
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57
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58
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59
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Question No: 1 ( Marks: 1 ) - Please choose one
The basic accounting principle/concept according to which Business is independent from its owner(s) is known as:
► Separate Entity Concept
► Matching Concept
► Going Concern Concept
► Materiality Concept
Question No: 2 ( Marks: 1 ) - Please choose one
Commercial Accounting is based on:
► Single entry book keeping
► Double entry book keeping
► Both single and double entry book keeping
► Cash basis of book keeping
Question No: 3 ( Marks: 1 ) - Please choose one
When Capital is increased by an amount, it is recorded on the:
► Left or credit side of the account
► Right or debit side of the account
► Left or debit side of the account
► Right or credit side of the account
Question No: 4 ( Marks: 1 ) - Please choose one
A summarized record of transactions related to individuals or things is called a/an ___________.
► Account
► Voucher
► Journal
► Trial balance
Question No: 5 ( Marks: 1 ) - Please choose one
A book, in which receipts and payments are recorded, is known as:
► Pass Book
► Cash Book
► Purchase Book
► Sales Book
Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following essentials are shown in Bank Book?
(1) Date of transaction
(2) Narration of transaction
(3) Cheque number
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Question No: 7 ( 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: 8 ( Marks: 1 ) - Please choose one
Which of the following organization converts raw material into finished goods?
► Trading concern
► Manufacturing concern
► Merchandising concern
► Service concern
Question No: 9 ( Marks: 1 ) - Please choose one
Partially completed products that are not yet ready for sale are known as:
► Raw material
► Work in process
► Finished goods
► Closing stock
Question No: 10 ( 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: 11 ( Marks: 1 ) - Please choose one
| Cost of asset |
Rs. 1,00,000
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Life of asset
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5 years
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Depreciation for each year
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Rs. 15,000
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Sale price after 5 years
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Rs.50,000
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Book value of Asset after 5 years
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?
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► Rs.25, 000
► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000
Question No: 12 ( 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: 13 ( Marks: 1 ) - Please choose one
Under the reducing balance method of depreciation:
► Amount of depreciation increases every year
► Amount of depreciation remains constant for every year
► Amount of depreciation decreases every year
► None of the given options
Question No: 14 ( Marks: 1 ) - Please choose one
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as:
► Appreciation
► Depreciation
► Fluctuation
► None of the given options
Question No: 15 ( Marks: 1 ) - Please choose one
When the Bank Statement balance is more than the Cash Book balance, it is because of:
► Unpresented cheques
► Unrecorded bank charges
► Uncredited cheques
► None of the given options
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following best describes unpresented cheques?
► Cheques received on behalf of the business by the bank
► Cheques drawn but yet to be recorded in the bank records
► Cheques issued by the bank not recorded in business records
► Cheques received but yet to be recorded in the bank records
Question No: 17 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
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Rs.
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Closing value of stock
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40,000
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Write off Bad debts (given in adjustments)
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2,400
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Sundry Debtors (given in trial balance)
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33,200
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Provision is created on Debtors at 5%
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Requirement: Identify the Total amount which will deduct from Sundry debtors.
► Rs. 460
► Rs. 2,400
► Rs. 1,540
► Rs. 3,940
Question No: 18 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ
Particulars
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Rs.
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Closing value of stock
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40,000
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Bad Debts (Given in trial balance)
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500
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Old provisions (Given in trial balance)
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800
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Sundry Debtors (Given in trial balance)
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44,500
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Provision for doubtful debts @ 5%
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Which amount of new provision will be deducted from Sundry Debtors
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► Rs. 2,225
► Rs. 2,525
► Rs. 1,925
► Rs. 3,025
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following is/are the item/s of a Control Account?
► Credit sale only
► Cash sale only
► Credit purchase only
► Both Credit sales and Credit purchase
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following is an item of a debtors control account?
► Cash sale
► Credit sales
► Credit purchase
► Cash purchases
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following is (are) included in Creditors Control Account?
► Discount received from supplier
► Credit purchases
► Bills payable
► All of the given options
Question No: 22 ( Marks: 1 ) - Please choose one
If provision is created for doubtful debts, which of the following entry will be passed to record bad debts in control account?
► Bade debts (Dr) and Debtors Control A/c (Cr)
► Provision for doubtful debts (Dr) and Debtors Control A/c (Cr)
► Provision for doubtful debts (Dr) and Debtors A/c (Cr)
► Debtors Control A/c (Dr) and Provision for doubtful debts (Cr)
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following entry is passed to record discount allowed in control account?
► Discount Allowed (Dr) and Debtors Control A/c (Cr)
► Discount Allowed (Dr) and Debtors A/c (Cr)
► Debtors Control A/c (Dr) and Discount Allowed (Cr)
► Debtors A/c (Dr) and Discount Allowed (Cr)
Question No: 24 ( Marks: 1 ) - Please choose one
It is supposed that on 31st December, 2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 10% of the sundry debtors are doubtful. Actual bad debts are Rs. 1600. What amount of new provision for doubtful debts will be credited in profit & loss account
► Rs. 3,600
► Rs. 4,000
► Rs. 1,600
► Rs. 2, 400
Question No: 25 ( Marks: 1 ) - Please choose one
The amount received; in excess of the face value of the shares is transferred to which of the following?
► Share capital account
► Right share
► Share premium account
► Share holder account
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is (are) NOT example(s) of distributable profit?
► None of the given options
► General reserve
► Accumulated profit and loss (credit balance)
► Revaluation reserves
Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following is a type of business formed under the Companies Ordinance 1984?
► Sole-Proprietorship
► Partnership
► Joint Stock Company
► All of the given options
Question No: 28 ( Marks: 1 ) - Please choose one
Current ratio may be increased by:
► Overstating current Assets
► Overstating current Liabilities
► Understating current Assets
► Understating current assets and overstating current liabilities
Question No: 29 ( Marks: 1 ) - Please choose one
The net income calculated in the income statement for the accounting period is reported on:
► Bank Statement
► Statement of retained earnings
► Statement of cash flows
► None of the given options
Question No: 30 ( Marks: 1 ) - Please choose one
The beginning balance of retained earnings was Rs. 7,500. The dividends paid to stockholders' were Rs.1, 500. The ending balance of retained earnings is Rs. 5,000. What was the net income or net loss for the accounting period?
► Net loss of Rs.1, 000
► Net income of Rs. 1,000
► Net loss of Rs. 2,000
► Net income of Rs. 2,500
Question No: 31 ( Marks: 1 ) - Please choose one
Which one of the following is another name of carrying cost of an asset?
► Book Value
► Residual Value
► Fair Value
► Break up Value
Question No: 32 ( Marks: 1 ) - Please choose one
"The owner of the business should be remunerated for his time spent in the business". This concept is known as:
► Inflation
► Money value of time
► Money measurement concept
► Realization concept
Question No: 33 ( Marks: 1 ) - Please choose one
Recovery of bad debts is treated as:
► Profit
► Revenue
► Expense
► Asset
Question No: 34 ( Marks: 1 ) - Please choose one
In which of the following case the bank cannot refuse the payment?
► Stale cheque
► Bearer cheque
► Insolvency of the customer
► Post dated cheque
Question No: 35 ( Marks: 1 ) - Please choose one
Receipts from debtors appear on the ___________ side of the individual debtors account.
► Left side or credit
► Left side or debit
► Right side or debit
► Right side or credit
Question No: 36 ( Marks: 1 ) - Please choose one
The total returns can be obtained from:
► Sales returns book
► Cash book
► Journal
► Sales day book
Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following account is the summary of all accounts of suppliers of goods?
► Creditor account
► Purchase day book
► Purchase return day book
► Purchase ledger control account
Question No: 38 ( Marks: 1 ) - Please choose one
Which of the following is decreased when an asset is converted into expense in adjustment?
► Revenue
► Net income
► Expense
► Liability
Question No: 39 ( Marks: 1 ) - Please choose one
Deferred revenues will become revenue when they are:
► Realized
► Earned
► Incurred
► Paid
Question No: 40 ( Marks: 1 ) - Please choose one
Expired costs in an accounting period should be reported on ____________ statement for that time period.
► Cash in flow
► Cash out flow
► Income
► Expense
Question No: 41 ( Marks: 1 ) - Please choose one
The weekly or biweekly compensation received by hourly-paid employees is called:
► Salary
► Wages
► Income
► Profit
Question No: 42 ( Marks: 1 ) - Please choose one
Which of the following is known as an asset account?
► Gains
► Prepaid insurance
► Unearned revenue
► Accounts payable
Question No: 43 ( Marks: 1 ) - Please choose one
Puget Sound Co. sold marketable securities Costing Rs.80,000 for Rs.92,000 cash. In the company’s income statement and statement of cash flows, respectively, this will appear as:
► A Rs.12,000 gain and a Rs.92,000 cash receipt
► A Rs.92,000 gain and a Rs.8,000 cash receipt
► A Rs.12,000 gain and a Rs.80,000 cash receipt
► A Rs.92,000 sale and a Rs.92,000 cash receipt
Question No: 44 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership invested Rs.65,000 and Rs.50,000 with an equal share in profit or loss. Markup on drawings of Mr. A is Rs.1,000 and of Mr. B is Rs.1,500. The net income for the year is Rs.55,000. What will be the amount of distributable profit?
► Rs.52,500
► Rs.56,000
► Rs.56,500
► Rs.57,500
Question No: 45 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,500 and of Mr. B is Rs.2,800. The net income for the year is Rs.95,000. What will be the amount of distributable profit?
► Rs.89,700
► Rs.92,500
► Rs.95,000
► Rs.100,300
Question No: 46 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,000 and markup on drawings of Mr. B is Rs.3,000. The net income for the year is Rs.50,000. What will be the profit share of Mr. B?
► Rs.22,500
► Rs.25,500
► Rs.51,000
► Rs.55,000
Question No: 47 ( Marks: 1 ) - Please choose one
Which of the following is quoted company?
► Private Limited Company
► Public Limited Company
► Listed company
► Non Listed Company
Question No: 48 ( Marks: 1 ) - Please choose one
Which of the following capital is taken up by the general public?
► Issued capital
► Subscribed capital
► Authorized capital
► Reserve capital
Question No: 49 ( Marks: 1 ) - Please choose one
Which of the following is known as the charter of the company?
► Prospectus
► Articles of association
► Memorandum of association
► None of the given options
Question No: 50 ( Marks: 1 ) - Please choose one
The value of a share as quoted on the stock exchange is known as:
► Book value
► Par value
► Market value
► Face value
Question No: 51 ( Marks: 1 ) - Please choose one
________ helps to identify the reasons for difference between the net income and net cash receipts and payment in the particular period.
► Bank reconciliation statement
► Cash book
► Statement of cash flows
► Receipts and payment account
Question No: 52 ( Marks: 1 ) - Please choose one
Which of the following ratio cannot be computed for a period in which the company incurs a net loss?
► Acid-test ratio
► Return on investment
► Price-earning ratio
► None of the given options
Question No: 53 ( Marks: 1 ) - Please choose one
Which of the following usually is least important as a measure of short-term liquidity?
► Quick ratio
► Debt ratio
► Current ratio
► Cash flows from operating activities
Question No: 54 ( Marks: 1 ) - Please choose one
The company ABC purchased an asset for Rs. 40,000, paying 30,000 in cash and issuing a long term note payable for remaining balance. The amount will be recorded in statement of cash flows as:
► Rs. 40,000 cash outflow as investing activity
► Rs. 30,000 cash outflow as investing activity
► Rs. 10,000 cash inflow as investing activity
► Rs. 70,000 cash inflow as investing activity
Question No: 55 ( Marks: 3 )
On January 31st the finished goods Inventory of XYZ Company was Rs 500,000. During the year, manual Cost of goods manufactured was Rs. 1,900,000, sales were Rs. 2,000,000 and cost of goods sold is 75% of sales.
Required: Calculate of cost of opening finished goods.
Question No: 56 ( Marks: 5 )
| Particulars |
Rs.
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Opening balance of debtors
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49,000
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Closing balance of debtors
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25,400
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Bills Receivable en-cashed during the year
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1,00,000
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Returns inwards during the year
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7,800
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Cash received from debtors
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8,400
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Cash sales
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70,000
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Bills receivable
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1,50,000
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Required: Calculate credit sales by preparing debtors account.
Question No: 57 ( Marks: 5 )
ABC, Inc had the following positive and negative cash flows during the year.
Positive cash flows:
Received from customers
Interest and dividends
Sale of plant asset
Issued stock
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Rs.250,000
50,000
350,000
500,000
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Negative cash flows:
Paid to suppliers and employees
Purchase of investments
Purchase of treasury stock
Payment of interest
Paid cash dividends
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130,000
40,000
35,000
20,000
50,000
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Determine the amount of cash provided by or used for operating activities.
Question No: 58 ( Marks: 10 )
Prepare Profit and Loss Account for the year ending 31st December 2007 from the Trial Balance and adjustments of MS Company given below:
Particulars
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Debit
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Credit
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Rs.
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Rs.
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Drawings
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14,000
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Capital Account
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80,000
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Opening Stock
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55,000
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Purchases
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485,000
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Sales
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610,000
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Sundry Debtors
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80,000
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Sundry Creditors
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60,500
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Sales Returns
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5,000
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Carriage Inwards
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6,000
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Salaries
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28,000
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Rent, Rates, Taxes
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15,000
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Insurance
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4,000
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Machinery
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50,000
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Furniture
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5,000
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Cash in hand
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3,500
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Total
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750,500
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750,500
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Adjustments:
v Depreciate machinery and furniture @20%p.a.
v Outstanding Salaries Rs. 2,000
v Insurance paid in advance Rs. 500
v Maintain @5% reserve for doubtful debts on debtors.
v Closing Stock was valued at Rs. 60,000
Question No: 59 ( Marks: 10 )
On 01-01-2007, the provision for doubtful debts a/c stood at Rs. 12,000 (credit balance). In 2007, the bad debts amounted to Rs. 10,000. The debtors on 31-12-2007 are amounted to Rs. 3, 20,000 and a provision for doubtful debt to be maintained @ 10%.
Required:
Prepare Bad Debts account and Provision for doubtful account. Also show how the items will appear in Profit and Loss account and Balance sheet as at 31-12-2007
(Show complete working where it is necessary)
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