Happy New Year 2012

MGT101 Latest Midterm paper

MGT101 Latest Midterm paper

Time :: 60 min Total Marks 40

Qno.1 Why we use financial accounting

Business need

Accounting need

Financial need

Managerial need



Qno.2 Which of the following shows a debit balance under normal circumstances?

Asset

Capital

Liability

Profit



Qno.3 Normally the practice of Book Keeping under Single Entry System is followed by:

Small businesses only

Governments only

Large scale businesses only

Both small businesses and governments



Qno.4 An accounting system is used by a business to:

Analyze transactions

Handle routine book-keeping tasks

Classify and summarize financial information

All of the given options



Qno.5 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



Qno.6 Which of the following is TRUE for Company’s negative working capital?

Current Asset > Current Liability

Current Asset = Current Liability

Current Asset < Current Liability

None of the given options







Qno.7 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





Qno.8 Which one of the following is NOT true about Capital Expenditure?

Creates future benefits

Incurred to acquire fixed assets

Incurred to increase the economic life of existing fixed assets

Reduce the profit of the concern



Qno.9 Consider the following:

Beginning inventory 10 units @ Rs. 10 per unit

First purchase 35 units @ Rs. 11 per unit

Second purchase 40 units @ Rs. 12 per unit

Third purchase 20 units @ Rs. 13 per unit

Sold 10 units @ 10

35 units @ 11

40 units @ 12

Eighty-five units were sold, what is the value of the ending inventory using the

FIFO method of inventory costing?

Rs.260

Rs.232

Rs.284

Rs.268



Qno.10 If, Cost of machine = Rs.400, 000

Useful life = 5 years

Residual value = Rs.25, 000

The depreciation of machine per year using straight line method is?

Rs. 160,000

Rs. 96,000

Rs. 75,000

Rs. 57,600



Qno.11 A decrease in value of a fixed asset due to age, wear and tear is known as:

Depreciation

Accumulated Depreciation

Appreciation

Written Down Value





Qno.11 Which of the following shows summary of a company's financial position at a

specific date?

Profit & Loss Account

Cash Flow Statement

Balance Sheet

Income & Expenditure Account





Qno.12 Which of the following item will appear on the Balance Sheet as current assets?

Prepaid expenses

Accrued expenses

Furniture and Equipment

Unearned revenue





Qno.13 which of the following entities is not profit oriented entity?

Sole - proprietorship

Partnership

Companies

Trust



Qno.14 Which concept of an accounting describes that for every debit there is a credit?

Dual aspect concept

Matching concept

Separate entity concept

Money measurement concept



Qno15 Which of the following is the act of recording each transaction in the Journal?

Journalizing

Posting

Folioing

Transferring



Qno.16 Which of the following account would be debited when direct material is

purchased on cash of Rs. 2,000?

Indirect material

FOH

Material/Stock

Cash







Qno.17 Which one of the following methods for inventory valuation may increase income

tax due during the period of inflation?

FIFO Method

Weighted Average Method

Specific Identification Method

LIFO Method



Qno.18 Which of the following is another name of salvage value?

Face value

Fair value

Break up value

Book value



Qno.19 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



Qno.20 If:

· Cost of machine = Rs.

· Useful life = 5 years

· Sale price at the end of

What will be the profit or loss?

Loss of Rs. 40,000

Profit of Rs. 40,000

Profit of Rs. 80,000

Loss of Rs. 80,000



Qno.21 The main goal of Bank Reconciliation Statement is to determine:

If the discrepancy is due to error rather than timing

If the discrepancy is due to timing rather than error

If the discrepancy is due to error rather than amount

If the discrepancy is due to amount rather than timing



Qno.22 Which of the following item appears in Trading Account of a business?

Interest expenses

Wages and salaries

Depreciation expenses

Discount Allowed







Qno.23 Which of the following journal entry will be recorded, if the goods are sold on credit to Mr. 'Been'?

Mr. “Been” / Accounts Receivable account (Dr) and Sales account (Cr)

Cash account (Dr) and sales account (Cr)

Sales account (Dr) and Mr. Been / Accounts Receivable account (Cr)

Goods Sold account (Dr) and Mr. Been / Accounts Receivable account (Cr)



Qno.24 Which of the following particulars are included in the specimen of a cash receipt

voucher?

1) Name of the organization

2) Cash code

3) Date of transaction

(1) & (2) only

(1) & (3) only

(2) & (3) only

(1), (2) & (3)



Qno.25Partially completed products that are not yet ready for sale are known as:

Raw material

Work in process

Finished goods

Closing stock



Qno.26 Which of the following organizations prepare Income & Expenditure account?

Public libraries

NGOs

Labor unions

All of the given options



Qno.27 Which of the following shows summary of a company's financial position at a specific

date?

Profit & Loss Account

Cash Flow Statement

Balance Sheet

Income & Expenditure Account



Qno.28 An informal accounting statement that lists the ledger account balances at a

point in time and compares the total of debit balances with the total of credit

balances is known as:

Income Statement

Balance Sheet

Trial Balance

Cash Book

Qno.29 If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses

are Rs.20,000 during the year. What would be the Net Profit?

Rs.15,000

Rs. 35,000

Rs. 55,000

Rs. 60,000





Qno.30 difference between journal voucher and payment voucher Marks3

Answer



Payment Voucher

The purpose of the payment vouchers is to provide a means for paying any taxes due on income which is not subject to withholding. This is to ensure that taxpayers are able to meet the statutory requirement that taxes due are paid periodically as income is received during the year.





Journal Voucher

A journal voucher is an integral part of the audit trail, and carries

(1) a serial number,

(2) transaction date,

(3) transaction amount,

(4) ledger account(s) affected,

(5) reference(s) to documentary evidence (such as invoices or receipts) supporting the entry,

(6) brief description of the transaction, and the

(7) signature(s) or initials of one or more authorized signatories. A journal is, in effect, a collection of 


financial data culled from journal voucher.