MCQExams
0:0:1
CBSE
JEE
NTSE
NEET
Practice
Homework
×
CBSE Questions for Class 10 Elements Of Book Keeping And Accountancy Final Accounts Quiz 3 - MCQExams.com
CBSE
Class 10 Elements Of Book Keeping And Accountancy
Final Accounts
Quiz 3
In computing the return on capital employed the profit figure to be taken into account is __________________.
Report Question
0%
Net profit after taxes + Interest
0%
Net profit after taxes and interest
0%
Net profit after taxes, interest and preference divided
0%
None of the above
Explanation
Net profit after taxes = Gross profit - Operating expenses - interest - taxes
As capital employed include debt.capital therefore interest is added to net profit after taxes
Interest is first deducted to calculate amount of taxes and then added back.
In Trading and Profit and Loss account, opening stock appears on the debit side because it forms the part of the cost of sales for the current accounting year.
Report Question
0%
True
0%
False
Explanation
closing
stock
minus
opening stock
gives you the cost of goods used from the
stock
in hand. That's
why opening stock
is
debited
and closing
stock
is credited - To give effect to how much
stock
is used during the year for the sales.
At the end of the year, balance of salary account is transferred to
________.
Report Question
0%
trading account
0%
balance sheet
0%
profit & loss account
0%
statement of affairs
Explanation
At the end of the financial year, all the nominal accounts are transferred to the trading and profit & loss account by passing the closing entries.
A salary account is an indirect expense that is transferred to the profit & loss account.
Stock of animals kept for sale is ___________.
Report Question
0%
Live stock
0%
Current liability
0%
Fixed expenses
0%
Capital expenses
Explanation
Live stock is the cattle, horses, poultry, sheep and small animals which are raised by the agricultural producer. When the animals are available and held for sale the farm accountant values such animals at selling price less estimated costs of disposal.
The amount paid to owner/author of book copyright for the use of book.
Report Question
0%
Royalty
0%
Copyright
0%
Income
0%
Loss
Goods lost by fire is debited to Goods A/c.
Report Question
0%
True
0%
False
Explanation
Goods lost by fire is a loss to the organization and to be debited to profit & loss account. Goods are moving out from the business. Hence, they need to be credited.
Accounting entry will be as under:
Profit & Loss A/c Dr.
To Goods A/c
Select the most appropriate alternative from those given below:
Opening Stock is entered in a Trading a/c on the _______ side.
Report Question
0%
credit
0%
debit
0%
Assets
0%
Liabilities
Explanation
Trading account is prepared to ascertain the profit earned by the firm through the trading activity. It is prepared by considering only direct expenses and incomes. Gross Profit/Loss depicts the direct profit/loss earned by the firm through business operations.
Trading Account
Particulars Amount Particulars Amount
To Opening Stock 10000 By Sales 30000
To Purchases 30000 By Closing Stock 10000
To Wages 5000 By Gross Loss 10000
To Direct Expenses
5000
--------------- ---------------
50000 50000
---------------- ----------------
Opening Stock is entered at the debt side of a trading account.
Wages A/c is transferred to _________ A/c.
Report Question
0%
Trading
0%
Profit and Loss
0%
Trial Balance
0%
Any of the above
Explanation
A trading account is a nominal account that is prepared at the end of the accounting year. All direct expenses are debited and direct incomes are credited to the trading account. Wages refer to remuneration paid to workers who are directly engaged in a factory for loading, unloading, and production of goods which is a direct expense and is debited to the trading account.
Select the most appropriate alternative from those given below:
Credit balance of Trading Account indicates ________ .
Report Question
0%
Gross Profit
0%
Gross Loss
0%
Net Loss
0%
Net Profit
Explanation
Gross Profit is a profit which is generated from direct business activity of the firm. Excess of income over expenditure in the trading account is called as gross profit.
Trading Account
Particulars Amount Particulars Amount
To Opening Stock 10000 By Sales 60000
To Purchases 35000 By Closing Stock 15000
To Wages 10000
To Direct Expenses 8000
To Gross Profit 12000
------------- ----------------
75000 75000
--------------- ------------------
Select the most appropriate alternative from those given below:
Debit balance of Trading Account means _________ .
Report Question
0%
Gross Loss
0%
Net Loss
0%
Net Profit
0%
Gross Profit
Explanation
A trading account is prepared to ascertain the profit/loss earned by the firm through the business activity. Trading account is prepared by considering only direct expenses and incomes. Gross Profit/loss depicts the direct profit/loss earned by the firm.
Trading Account
Particulars Amount Particulars Amount
To Opening Stock 10000 By Sales 30000
To Purchases 30000 By Closing Stock 10000
To Wages 5000 By Gross Loss 10000
To Direct Expenses
5000
--------------- ---------------
50000 50000
---------------- ----------------
Excess of debit (expenses) over credit (income) is a gross loss.
Select the most appropriate alternative from those given below:
All items of income are shown on the credit side of the _______ Account.
Report Question
0%
Balance Sheet
0%
Profit and Loss
0%
Manufacturing
0%
None of them
Explanation
All the indirect expenses and incomes are debited and credited to the profit and loss account, respectively, to arrive at the net profit/loss for the business. Like interest received, commission received, dividend received, sale of scrap, etc.
Select the most appropriate alternative from those given below:
Dividend received is transferred to credit side of ______ .
Report Question
0%
Trading Account
0%
Profit and Loss Account
0%
Goodwill Account
0%
None of these
Explanation
All the indirect expenses and incomes are debited and credited to the profit and loss account, respectively, to arrive at the net profit for the business.
Dividend received is an indirect income that is shown on the credit side of the profit & loss account.
Select the most appropriate alternative from those given below:
Carriage inward is debited to ________ Account.
Report Question
0%
Trading
0%
Profit and Loss
0%
Capital
0%
Drawings
Explanation
A trading account is prepared to ascertain the profit/loss earned by the firm through the business activity. It is prepared by considering only direct expenses. Gross Profit/Loss depicts the direct profit/loss earned by the firm.
Carriage inwards is a direct expense incurred for procuring the goods and is debited to the trading account.
Select the most appropriate alternative from those given below:
Discount earned is transferred to credit side of ______ .
Report Question
0%
Profit and Loss Account
0%
Trading Account
0%
Capital Account
0%
Balance Sheet
Explanation
All the indirect expenses and incomes are debited and credited to the profit and loss account, respectively, to arrive at the net profit for the business.
Discount earned is an indirect income that is shown on the credit side of the profit & loss account.
Select the most appropriate alternative from those given below:
Interest on loan taken is debited to ______ A/c.
Report Question
0%
Profit and Loss
0%
Trading
0%
Profit and Loss Appropriation
0%
Capital
Explanation
A profit and loss account is prepared to find out the net profit/loss earned by a firm in a financial year. All the indirect expenses are debited to the profit & loss account.
Interest on loan is an indirect expense and is debited to the profit & loss account.
Carriage is on goods purchased is shown in______________.
Report Question
0%
Profit and Loss A/c
0%
Trading A/c
0%
Balance sheet
0%
Suspense A/c
Explanation
Carriage inward refers to the transportation costs associated with the purchases of merchandise or other assets. Each type of carriage will be an expense and therefore will have a debit balance in the trial balance. These expenses are paid in respect of purchases made during the year and are debited to the trading account.
Trading a/c is____________.
Report Question
0%
nominal a/c
0%
real a/c
0%
personal a/c
0%
dummy a/c
Explanation
Nominal accounts are the accounts that report revenues, expenses, gains and losses. Nominal or temporary accounts are closed at the end of each accounting year. All expenses which related to either purchases or manufacturing of goods and debited to trading account are nominal accounts.
Trading a/c is prepared by the enterprise engaged in_______.
Report Question
0%
trading activities
0%
manufacturing activities
0%
mining activities
0%
overseas export-import
Explanation
At the end of every financial year, books of account of business are closed to prepare the financial statements. Financial statements consist of the following:
Manufacturing Account
Trading Account
Profit & Loss Account
Balance Sheet
Trading account is prepared to know the gross profit earned from the trading activity.
Trading a/c shows the________.
Report Question
0%
gross profit/gross loss
0%
cost of goods manufactured
0%
net profit
0%
work in progress
Explanation
Trading account shows the gross profit or gross loss during an accounting year. It's main components are sales, services rendered in the credit side of such sales or services rendered in the debit side. the trading account is prepared to know the gross profit or gross loss during the accounting period.
Trading a/c is prepared on ___________ basis.
Report Question
0%
accrual
0%
cash
0%
hybrid
0%
single entry
Explanation
At the end of financial year, books of account are closed to prepare the financial statement.
Financial statements are prepared on the basis of matching concept which defines that all the expenses and incomes of the particular accounting period should be recorded in the same financial year irrespective of the payment received/paid or not.
Hence, accrual system of accounting records all the transactions of the particular accounting period irrespective of the payment received/paid.
Trading account is prepared on accrual basis.
Purchase as per trading account excludes___________.
Report Question
0%
salary and wages
0%
postage stamps
0%
stationery stamps
0%
all the three
Explanation
Trading account is prepared to find out the gross profit earned by the firm by core trading business.
While preparing the trading account, only stock of traded goods is considered. Purchase of traded goods is only included in the calculation of trading account. Salary and wages paid
, postage stamps and stationery items to be excluded from the purchases while preparing the trading account.
State whether the following statements are True or False:
Credit balance of profit and loss account shows net profit.
Report Question
0%
True
0%
False
Explanation
This statement is true. In order to calculate the Profit and loss earned during a particular year, Profit and loss account is prepared. Debit side expenses are written and credit side income are written. If Credit side is greater than Debit side, it means income are more than expenses and balance shows net profit.
Which of these a/c is closed by transferring to debit side of Trading a/c?
Report Question
0%
Rent a/c
0%
Carriage inward
0%
Depreciation on plant
0%
Factory rent
Explanation
The carriage inward account is written off to the trading account at the end of accounting period. When the buyer sells the goods to his customer, he incurs further delivery charges. The cost is referred to as "carriage outward".
Rs 1500 being LIC premium of proprietor paid by the firm will be debited to ________________.
Report Question
0%
Income tax a/c
0%
Drawing a/c
0%
Profit and loss a/c
0%
None
Explanation
LIC premium is a personal liability of the proprietor. Hence, any amount paid or withdrawn from the business for personal purposes is to be debited to drawing account.
Which of these is part of opening stock in trading a/c?
Report Question
0%
Salary and wages
0%
Postage stamps
0%
Trading goods
0%
Stationery items
Explanation
At the end of every financial year, books of account of business are closed to prepare the financial statements. Financial statements consist of the following:
Manufacturing Account
Trading Account
Profit & Loss Account
Balance Sheet
Trading account is prepared to know the gross profit earned from the trading activity.
Opening stock of trading goods to be shown in debit side of trading account.
_________ is credited for goods lying with the customer as on the last day of the accounting year.
Report Question
0%
Customer A/c
0%
Trading A/c
0%
Profit and Loss A/c
0%
Manufacturing A/c
Purchases in trading A/c includes _______.
Report Question
0%
only cash purchases
0%
only credit purchases
0%
both cash and credit purchases
0%
purchase of fixed assets
Explanation
Cash purchases are recorded in cash book and credit purchases are recorded in purchase day book. Both i.e. cash and credit purchases are posted in purchase a/c in ledger. All purchases i.e. cash purchases and credit purchases are shown in trading account as purchases.
Another name given to trading and profit and loss a/c is _________.
Report Question
0%
income statement
0%
positional statement
0%
revenue statement
0%
none of the above
Explanation
Trading and profit and loss account is prepared to determine the profit earned or loss sustained by the business enterprise and during the accounting period. It is basically a summary of revenues and expenses of the business and calculates the net figure termed as profit or loss. As it accounts for the net income of the entity, another name given to trading and profit and loss account is income statement.
Gross profit/loss is calculated by comparing net sales and_________.
Report Question
0%
cost of production
0%
cost of sales
0%
cost of goods sold
0%
cost of purchase
Explanation
Gross profit is defined as the profit earned by the business from trading of goods. Trading account included the purchase and sale of traded goods only.
This can be defined as:
Gross Profit = Sales - Cost of good sold
Wages incurred for production of goods is shown in_______.
Report Question
0%
trading a/c
0%
profit and loss a/c
0%
assets a/c
0%
amortized
Explanation
Expense which are directly associated with the production or trading activity are treated as direct expenses and need to be debited to trading account.
Wages is a direct expense incurred for production of goods, to be shown in trading account.
0:0:1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
0
Answered
0
Not Answered
0
Not Visited
Correct : 0
Incorrect : 0
Report Question
×
What's an issue?
Question is wrong
Answer is wrong
Other Reason
Want to elaborate a bit more? (optional)
Practice Class 10 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
<
>
Support mcqexams.com by disabling your adblocker.
×
Please disable the adBlock and continue.
Thank you.
Reload page
