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CBSE Questions for Class 11 Commerce Accountancy Financial Statements 1 Quiz 4 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Financial Statements 1
Quiz 4
On the income statement, the beginning inventory is added to the cost of goods purchased to yield the _________.
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0%
costs of goods sold
0%
cost of goods available for sale
0%
income from operations
0%
gross profit
Explanation
Cost of goods sold is calculated as:
Opening stock + Purchases - Closing stock
While calculating the cost of goods available for sale, opening inventory is added to the cost of goods purchased.
Beginning inventory plus the cost of goods purchased equals________.
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0%
cost of goods sold
0%
cost of goods available for sale
0%
net purchases
0%
total goods purchased
Under permanence order of balance sheet _________ a/c is shown first.
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0%
cash in hand
0%
cash in bank
0%
fixed deposit with bank
0%
goodwill
From the following estimate total sales to be shown in trading A/c. Cash sales Rs.20,000, Cash collection from debtors Rs.1,30,000, Bad debts during the year 15,Cash discount to debtors Rs.Debtors as on 31.01.2010 Rs.25,000 Debtors as a 31.12.2010 Rs.55,000
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0%
Rs.180,000
0%
Rs.200,000
0%
Rs.210,000
0%
Rs.190,000
A trading A/c excluded which of these A/c
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0%
Cash embezzlement A/c
0%
Wages and Salary A/c
0%
Returns inward A/c
0%
Opening stock
Explanation
Cash embezzlement is a loss of cash money hence it will decrease the cash and it will be recorded in Cash A/c. Hence, the correct option is A.
Under casting of the total of Sales A/c will affect .......
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0%
Gross profit and loss
0%
Debtors A/c
0%
Closing stock
0%
Working capital
Explanation
Gross profit = Net sales - Cost of goods sold
Hence, Gross profit is affected by the amount of sales. If the Amount of sales is undercast, amount of gross profit also become less.
Therefore, A is the correct option.
Which of these do not form part of closing stock
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0%
Work in progress
0%
Stores and spare parts
0%
Stock in transit
0%
office equipment
Explanation
Office equipment is a fixed asset which is shown as the asset side of the balance sheet.
Work in progress, store and stock in transit is the part of closing stock.
Work in process inventory is a current asset.
Spare parts are part of Inventory and not fixed cost only if a part significantly increases the life of the asset then we capitalize it into a fixed asset.
Hence d is the correct answer.
Total assets of a firm is Rs. 1,50,000, Capital amounted to Rs.70,000, total outside liabilities would be _________.
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0%
Rs.70,000
0%
Rs.80,000
0%
Rs.40,000
0%
Rs.20,000
Explanation
Accounting Equation can be defined as:
Owner's Capital + Outside Liabilities = Total Assets
by putting the available information:
Rs.70000 + Outsider liabilities = Rs.150000
Outsider
liabilities = Rs.150000 - Rs.70000
Outsiders liabilities = Rs.80000
Under permanence order of balance sheet _________ a/c is shown at the last.
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0%
cash in hand
0%
cash in bank
0%
FD with bank
0%
goodwill
Explanation
Assets and Liabilities are to be shown in the balance sheet either in permanency order or liquidity order. This is called marshaling of balance sheet.
Order of permanency is that where the assets and liabilities are shown as per their permanency in the business. For example, in assets side, fixed assets are show first staring from Goodwill, Land & Building, Plant & Machinery , Furniture and Fixtures and then current assets. In current assets also, cash in hand is the most liquid asset hence to be shown in the last.
Items of business operations does not include _________.
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0%
interest earned
0%
raw material expenses
0%
sales return
0%
depreciation on plant and machinery
Trade receivables does not include ________.
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0%
Owing by the proprietor on account of goods taken for personal use
0%
Customer in respect of goods which are sent on sale or return basis
0%
Both (A) and (B)
0%
None of the above
Explanation
Trade receivables includes only the balances due from the customers to whom goods is sold. This does not includes:
owing by the proprietor on account of goods taken for personal use as it is treated as drawings.
customers in respect of goods are sent on sale or return basis as there is no final sale has happened. Once the goods is actually sold than the amount will be part of trade receivables.
Which of these accounts are not closed in a Trading A/c
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0%
Sales A/c
0%
Purchase A/c
0%
Wages A/c
0%
Depreciation A/c
Explanation
Depreciation is a non-cash expense, therefore it cannot be shown under the trading account. Depreciation will be debited to the profit and loss A/c.
Which of these accounts is/are transferred to capital A/c
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0%
Drawing A/c
0%
Intrest on capital
0%
Profit or loss A/c
0%
All the three
Explanation
All the three
From the following details calculate the value of closing stock at the cost using adjusted selling price method.
(a) Gross purchases (excluding discount and sales tax) Rs. 320,000
(b) Trade discount @10%
(c) Sales tax 4%
(d) Freight and insurance Rs.8000
(e) Net sales Rs.360,000
(f) Closing stock at selling price Rs.20000
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0%
Rs. 17200
0%
Rs. 16200
0%
Rs. 18500
0%
Rs. 15900
From the following details calculate the value of closing stock at cost using adjusted selling price method
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0%
Gross purchases (excluding discount and sales tax) Rs 300000
0%
Trade discount @8%
0%
Sales tax 4%
0%
Freight and insurance Rs 10000
Calculate sales from the following
Opening stock Rs.50,000, closing stock Rs.40,000, purchases less returns Rs.190,000, gross profit on sales 25% of cost of goods sold
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0%
Rs.200,000
0%
Rs.250,000
0%
Rs.150,000
0%
Rs.190,000
Interest on the capital of the proprietor is shown in
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0%
Profit and Loss A/c
0%
Profit and Loss appropriation A/c
0%
Trading A/c
0%
General reserve A/c
Explanation
Interest on capital account is an appropriation. Appropriation means it is paid only and only if there is profit.
As Interest on capital is appropriation it will be shown in the debit side of profit and loss appropriation account.
Therefore, B is the correct option.
Which of these is an appropriation of profit...............
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0%
Provision for payment of bonus
0%
Provision for taxation
0%
Provision for dividend
0%
Provision for doubtful debts
Which of these items will appear in a manufacturing A/c
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0%
Power and steam A/c
0%
Salary and wages A/c
0%
Carriage outward
0%
Goodwill written off
Explanation
Power and steam a/c
are treated as an expense.
Power and steam a/c
are shown on the debit side of 'the manufacturing account because these are the expenses that directly contribute to the production or manufacturing of products that's why they are treated as direct expenses and debited in the Trading account.
Hence a is the correct answer.
All revenue receipts and expenditure are shown in..................
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0%
Balance sheet
0%
Trading and profit and loss A/c
0%
Cash flow statement
0%
Statement of affairs
A trade purchase of Rs.5500 from Y was passed through Sales Day book as Rs.550, What rectification entry would be passed if the mistake is detected before preparation of trading and profit and loss A/c
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0%
Sales A/c Dr. Rs.550, Purchase A/c Dr. Rs.5500, Y's A/c Cr. Rs.6050
0%
Profit and loss adjustment a/c Dr. Rs.6050, Y's A/c Cr. Rs.6050
0%
Sales A/c Dr. Rs.550, Purchase A/c Dr. Rs.5500, Suspense A/c Cr. Rs.6050
0%
None
Closing stock lying unsold with the consignee is valued at..............
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0%
Cost price
0%
Market price
0%
Realizable price
0%
Least of cost or net realizable value
Explanation
If all the goods are not sold by the Consignee within the accounting period, then the unsold stock is brought into account by the Consignor. As usual, the unsold stock in the hands of the consignee should be valued on cost price or market price whichever is less.
Therefore, D is the correct option.
Goods outward book is maintained to record
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0%
Returns of trading goods sold on credit basis
0%
Returns of all goods purchased
0%
Returns of trading goods purchased on credit
0%
Returns of capital goods
Explanation
The purchase returns book also known as returns outward book and is used to record the debit notes.
Goods returned to supplier denotes purchase return to supplier hence it is recorded in return outward account.
Hence c is the correct answer.
Carriage inward is shown in __________.
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0%
Trading A/c
0%
Profit and loss A/c
0%
Profit and loss appropriation A/c
0%
Profit and loss adjustment A/c
Explanation
Carriage inwards is the shipping and handling costs incurred by a company that is receiving goods from suppliers. The most appropriate accounting treatment of carriage inwards is to include it in the overhead cost pool that is allocated to the goods produced in an accounting period. Carriage inwards are the direct expenses.
Therefore, A is the correct option.
From $$2006-2009$$ the cost of living index has gone from $$110$$ to $$200$$ and at the same time the minimum wages of unskilled workers has gone up from Rs. $$3250$$ to Rs. $$5000$$ pm. Find the loss or gain to the workers in real terms.
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0%
loss Rs. $$454$$ pm
0%
gain Rs. $$454$$ pm
0%
gain Rs. $$1750$$ pm
0%
loss Rs. $$1750$$ pm
Which of these is not a monetary items?
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0%
Cash
0%
Accounts receivables
0%
Accounts payable
0%
Stock in trade
Explanation
A non-monetary item is subject to a change in value and cannot be quickly converted to cash. A factory or piece of equipment is a nonmonetary item because its value generally declines over time with usage. Inventory is also a non-monetary asset because it can become obsolete.
Therefore, D is the correct option.
Tick the false statement
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0%
Trading A/c shows cost of goods manufactured
0%
Profit and Loss A/c is prepared on Mercantile basis of Accounting
0%
Unexpired Insurance is a personal account
0%
Consistency concept facilitate inter firm comparison
Explanation
The trading account shows Gross Profit while Manufacturing Account shows the cost of goods sold which includes direct expenses. Manufacturing account deals with the raw material and work-in-progress while the trading account would deal with finished goods only.
Therefore, A is the correct option.
A firm has goods worth Rs. $$120,000$$ available for sale. If the firm intends to earn a profit of $$20\%$$ of total sales. What should be the total selling price of the goods available for sale.
What is $$\%$$ mark up on the cost.
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0%
$$20\%$$
0%
$$30\%$$
0%
$$25\%$$
0%
$$15\%$$
Explanation
Let us suppose ,cost price be Rs 100.
So, the Selling price = 100 + 25% of 100 = 125
Profit = 25
% of Profit on selling price = (25 * 100)/125 = 20%.
Hence, 25% on cost= 20% on sales.
Therefore, C is the correct option.
Computation of Net worth excludes __
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0%
Long term debts
0%
Equity share capital
0%
Preference share capital
0%
Reserves and surplus
Explanation
Net worth = Equity share capital + Preference share capital + Reserves and surplus
Hence the long term is the part of debt not the part of net worth.
So option a is the correct answer.
Cash discount allowed A/c is shown in....
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0%
Profit and loss A/c
0%
Trading A/c
0%
Sales day book
0%
Sales A/c
Explanation
Cash discount allowed is expense to the entity hence it will be shown on the debit side of profit and loss account.
Therefore, A is the correct option.
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Practice Class 11 Commerce Accountancy Quiz Questions and Answers
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