FINALTERM  EXAMINATION

Spring 2010

MGT101- Financial Accounting (Session - 2)
Shared by Naveed iQbal
 

 

 

 
(Note:- Please comment at the bottom if you find any answer and try to give some reference in support of your answer)
 

 

 

 

 

Time: 90 min
 
M - 69
Question No: 1    ( M - 1 )    .
 We can say that the business is in profit, when:
       ► Assets exceed Expenditure
       ► Assets exceed Liabilities
       ► Income exceeds Expenditure
       ► Income exceeds Liabilities
   
Question No: 2    ( M - 1 )    .
 Which of the following organizations prepare Income & Expenditure account?
       ► Public libraries
       ► NGOs
       ► Labor unions
       ► All of the given options
   
Question No: 3    ( M - 1 )    .
 Which of the following statement isNOT TRUE about Current liabilities?
       ► These are due within one year
       ► These are short-term loans
       ► These are consist of all debts, payable after 12 months
       ► In working capital, these are deducted from current assets
 

 

Question No: 4    ( M - 1 )    .
 
 Which of the following particular is NOT included in the specimen of a payment voucher?
       ► Name of organization
       ► Cash payment amount
       ► Date of transaction
       ► Bank receipt
   
Question No: 5    ( M - 1 )    .
 Cost of asset
Rs. 1,00,000
Life of asset
5 years
Depreciation for each year
Rs. 15,000
Sale price after 5 years
Rs.50,000
Written down value of asset at the end of 5th year
Rs.25,000
Profit or loss on disposal of fixed assets
?
 
 

 

       ► Rs.25, 000 profit
 
       ► Rs. 75,000 loss
       ► Rs. 15,000 profit
       ► Rs. 1, 00,000 profit
   
Question No: 6    ( M - 1 )    .
 Bank Reconciliation Statement is prepared by:
       ► Bankers
       ► Accountant of the business
       ► Statutory auditor
       ► Manger
   
Question No: 7    ( M - 1 )    .
 Consider the following data:
 
 

 

Particulars
 
Rs.
Assets
?
Owner's equity
1,50,000
Liabilities
1,00,000
 
 

 

       ► Rs. 49,000
 
       ► Rs. 55,000
       ► Rs. 50,000
       ► Rs. 2, 50,000
   
Question No: 8    ( M - 1 )    .
 Which one of the following transactions will cause the balance in Mr. Terry's Cash Book to be greater than his Bank Statement balance?
       ► A cheque is drawn but not yet presented at the bank for payment
       ► The bank has not yet notified to Mr. Terry about a dishonoured cheque
       ► A credit transfer into Terry's Bank Account
       ► A cheque payment of Rs.101 is recorded in the Cash Book as Rs.110
   
Question No: 9    ( M - 1 )    .
 Following information are extracted from books of Mr. XYZ
 
 

 

Particulars
    
 
Rs.
Bad Debts (Given in trial balance)
500
Old provisions (Given in trial balance)
800
Sundry Debtors (Given in trial balance)
44,500
Provision for doubtful debts @ 5%
 
 
What will be the amount of new provision
 
?
 
 

 

       ► Rs. 3,025
 
       ► Rs. 2,225
       ► Rs. 2,525
       ► Rs. 1,925
   
Question No: 10    ( M - 1 )    .
 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)
800
Sundry Debtors (Given in trial balance)
44,500
Provision for doubtful debts @ 5%
 
 
Which amount of new provision will be deducted from Sundry Debtors
 
           ?
 
 

 

       ► Rs. 2,225
 
       ► Rs. 2,525
       ► Rs. 1,925
       ► Rs. 3,025
   
Question No: 11    ( M - 1 )    .
 Amount by which the purchaser (buyer) receives a reduction in price from the seller is known as:
       ► Expense
       ► Discount Allowed
       ► Discount Received
       ► Liability
   
Question No: 12    ( M - 1 )    .
 Which of the following item will be shown on debit side of debtors account?
       ► Discount received
       ► Return inwards
       ► Discount allowed
       ► Credit sales
   
Question No: 13    ( M - 1 )    .
 Sale of goods to Mr. Amir is wrongly debited to Umair A/c(debtor) instead of Amir A/c(debtor),  this is an example of:
       ► Error of principle
       ► Error of omission
       ► Error of commission
       ► Error of original entry
   
Question No: 14    ( M - 1 )    .
 Consider the following data and identify the amount which will be shown in profit & loss account.                               
Particulars
Rs.
Bad debts
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
1,000
 
       ► Rs. 600
       ► Rs. 1,600
       ► Rs. 2,000
       ► Rs. 2,600
   
Question No: 15    ( M - 1 )    .
 Which of the following is the first phase of the typical operating cycle?
       ► Sell goods and services to customers
       ► Purchase goods and services
       ► Receive cash from customers
       ► Pay cash to suppliers
   
Question No: 16    ( M - 1 )    .
 Which of the following are the owners of a company?
       ► Proprietors
       ► Partners
       ► Shareholders
       ► Managers
   
Question No: 17    ( M - 1 )    .
 A private limited company can commence its business:
       ► Immediately on receiving a certificate of incorporation
       ► Without receiving a certificate of incorporation
       ► Only when it receives certificate of commencement of business
       ► Only when it receives both, the certificate of incorporation as well as certificate of commencement of business
   
Question No: 18    ( M - 1 )    .
 Mr.” A” sold goods for Rs. 300,000 to Mr. “B”,   Rs. 300,000 will be treated as _____________ for business of Mr. "A".
       ► Revenue
       ► Net profit
       ► Gross profit
       ► Operating profit
   
Question No: 19    ( M - 1 )    .
 Stockholder’s equity would not be affected by:
       ► Dividends to stockholders
       ► Net loss
       ► Purchase of land from the proceeds of bank loan
       ► Investments of cash by stockholders
   
Question No: 20    ( M - 1 )    .
 Accumulated depreciation is a ____________ account?
       ► Fixed asset
       ► Current asset
       ► Contra asset
       ► Liability
   
Question No: 21    ( M - 1 )    .
 Mr. A & B entered into a partnership with an equal share in profit or loss. The agreement provides that Mr. A will receive Rs.10,000 and Mr. B will receive Rs.8,000 as salary allowance. The net income for the year is Rs.85,000. What will be the total share of Mr. B?
       ► Rs.52,500
       ► Rs.42,500
       ► Rs.41,500
       ► Rs.50,500
   
Question No: 22    ( M - 1 )    .
 Which of the following can be utilized to set off any loss on revaluation?
       ► Capital reserve
       ► General reserve
       ► Revaluation reserve
       ► None of the given options
   
Question No: 23    ( M - 1 )    .
 Which of the following capital is taken up by the general public?
       ► Issued capital
       ► Subscribed capital
       ► Authorized capital
       ► Reserve capital
   
Question No: 24    ( M - 1 )    .
 Which of the following is the excess of net sales over net cost of purchases including all expenses relating to purchases?
       ► Gross profit
       ► Operating profit
       ► Net profit
       ► Revenue
   
Question No: 25    ( M - 1 )    .
 Which of the following account would be debited when Rs.5, 000 were paid to vendor?
       ► Cash
       ► Voucher payable
       ► Sundry debtors
       ► Personal account of customer
   
Question No: 26    ( M - 1 )    .
 If:
·          Manufacturing Cost is Rs. 30,000
·          Opening Work in Process Inventory is Rs. 5,000
·          Closing Work in Process Inventory is Rs. 10,000
Then:
         What is the amount of Cost of Goods Manufactured?
       ► Rs. 35,000
       ► Rs. 25,000
       ► Rs. 15,000
       ► Rs. 20,000
   
Question No: 27    ( M - 1 )    .
 Which of the following do NOT represent the Cost of goods sold?
       ► Sales – Gross Profit
       ► Opening Stock + Purchases – Return Outwards – Closing Stock
       ► Cost of goods Manufactured + Opening Finished Goods Inventory – Closing Finished Goods Inventory
       ► Opening Stock + Purchases – Return Inwards – Closing Stock
   
Question No: 28    ( M - 1 )    .
 Particulars
Rs.
Opening written down value of machine
?
Cost of machine purchased during the year
50,000
Depreciation during the year
20,000
Closing written down value of the Machine
430,000
 
 

 

       ► Rs. 400,000
 
       ► Rs. 500,000
       ► Rs. 470,000
       ► Rs. 70,000
   
Question No: 29    ( M - 1 )    .
 Loss on revaluation account is charged to:
       ► Profit and loss account immediately
       ► Capital account
       ► Revaluation reserve account
       ► Liability account
   
Question No: 30    ( M - 1 )    .
 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. 1,600 given in trial balance. What is the amount of new provision for doubtful debts?
       ► Rs. 3,600
       ► Rs. 4,000
       ► Rs. 1,600
       ► Rs. 2, 400
   
Question No: 31    ( M - 1 )    .
 Which of the following is NOT included in Debtors Control Account?
       ► Cash sale
       ► Credit sale
       ► Bills receivable
       ► Discount allowed
   
Question No: 32    ( M - 1 )    .
 Which of the following would NOT be the Classification of Current Assets?
       ► Cash Balance
       ► Bank Balance
       ► Premises
       ► Marketable Securities
   
Question No: 33    ( M - 1 )    .
 The amount of owner's equity in a business is NOT affected by:
       ► Investment made in the business by the owner
       ► The profitability of the business
       ► The amount of dividends paid to stockholders
       ► Taking loan from financial institutions
   
Question No: 34    ( M - 1 )    .
 Which of the following item will be credited in capital account of sole proprietor?
       ► Cash
       ► Drawings
       ► Debtors
       ► Profit
   
Question No: 35    ( M - 1 )    .
 Which of the following is/are NOT included in the cost of goods sold?
       ► Discount allowed
       ► Marketing expenses
       ► All of the given options
       ► Indirect expenses
   
Question No: 36    ( M - 1 )    .
 What maximum number of shareholders is allowed to form a Private Limited Company?
       ► 20
       ► 50
       ► 10
       ► 07
    
Question No: 37    ( M - 1 )    .
 Which of the following is shown on the liability side of Balance Sheet?
       ► Discount on issue of shares a/c only
       ► Share capital a/c only
       ► Premium on issue of shares a/c only
       ► Both share capital and share premium a/c
   
Question No: 38    ( M - 1 )    .
 Which of the following is (are) type(s) of Public Limited Companies?
       ► Listed company
       ► Non listed company
       ► Private limited company
       ► Both listed company and non listed company
   
Question No: 39    ( M - 1 )    .
 Under which of the following Act/ Ordinance, a company is allowed to issue shares at a higher price than their face value.
       ► Companies ordinance 1984
       ► Contract act 1872
       ► Sales of goods act 1930
       ► None of the given options
   
Question No: 40    ( M - 1 )    .
 The statement of changes in equity basically shows the movement of:
       ► Share capital during the year
       ► General reserves during the year
       ► Share premium during the year
       ► All of the given options
   
Question No: 41    ( M - 1 )    .
 Which of the following is TRUE?
       ► Sale of equipment for cash is considered as inflow of cash
       ► Sale of equipment on account is considered as inflow of cash
       ► Purchases of equipment for cash is considered as inflow of cash
       ► Sale of equipment for cash is considered as outflow of cash
   
Question No: 42    ( M - 1 )    .
 Which of the following is TRUE with respect to the application of Cash Flow Statement?
       ► Purchase of equipment for cash is considered as inflow of cash
       ► Purchase of equipment on account is considered as outflow of cash
       ► Sale of equipment on credit is considered as outflow of cash
       ► Purchase of equipment for cash is considered as outflow of cash
   
Question No: 43    ( M - 1 )    .
 Which of the following is considered as inflow of cash?
       ► Re-purchase of shares
       ► Redemption of debentures
       ► Issuance of debentures
       ► Payment of dividend
   
Question No: 44    ( M - 1 )    .
 Which of the following is the new name of Sources and Application of Funds?
       ► Income Statement
       ► Cash Flow Statement
       ► Statement of Changes in Owners Equity
       ► Balance Sheet
   
Question No: 45    ( M - 1 )    .
 A corporation has retained earning of Rs. 100,000 and Rs. 150,000 for the year ended 2006 and 2007 respectively. The corporations had net profits after taxes of Rs. 80,000 in 2007. What will be the amount of dividend paid in the year 2007?
       ► Rs. 30,000
       ► Rs. 70,000
       ► Rs. 50,000
       ► Rs. 20,000
   
Question No: 46    ( M - 1 )    .
 If issuance of debentures against cash is Rs. 3,000 and repurchase of shares of Rs. 4,000 then which of the following is correct?
       ► Inflow of cash Rs. 7,000
       ► Outflow of cash Rs. 7,000
       ► Inflow of cash Rs. 1,000
       ► Outflow of cash Rs. 1,000
   
Question No: 47    ( M - 1 )    .
 In calculating earning per share (EPS), the net profit is divided by which of the following?
       ► Number of ordinary shares
       ► Number of preference shares
       ► Paid up capital
       ► Authorized capital
   
Question No: 48    ( M - 1 )    .
 Which of the given Asset is Not included in the calculation acid test ratio?
       ► Stock
       ► Cash
       ► Debtors
       ► Bills Receivable
   
Question No: 49    ( M - 3 )
 Mr. Ali is a partner in a partnership firm. He drew the following amounts during the financial year:
 
 

 

August 01
 
Rs. 3,000
October 01
Rs. 4,500
Required:
Calculate the markup on his drawings, if the rate of markup is 8% p.a. The period for the financial year is from 1st July to 30th June (12 months).
Draw amount in August : 3000    (11 months markup = 137)
Draw amount in October: 4500   (9 month 112.5)
   
Question No: 50    ( M - 3 )
 Write down the components of Cash Flow Statement.
   
Following are the components of Cash flow statement:-
1.      Cash Flow from Investing Activities
2.      Cash Flow from Operating Activities
3.      Cash Flow from Financing Activities
Question No: 51    ( M - 5 )
 Information given in Trial balance:
Ø      Plant and machinery Rs. 200,000
Ø      Furniture and fixtures Rs. 100,000
Information given in adjustment:
Ø      Charge 20% depreciation on Plant and machinery and 10 % on Furniture and fixture
Required:
1.      Calculate the amount of depreciation expense shown in profit and loss account.
2.      Calculate the amount of fixed assets shown in balance sheet.
   
Question No: 52    ( M - 5 )
 Write down the common contents of Memorandum of Association.
   
Following are the contents of Memorandum of Association
1.      Name of the company with the word Limited and last work of the name in case if public limited with parenthesis and the work Private Limited.
2.      Place of Registered office
3.      Objective of company
4.      Amount of share capital
5.      No subscriber of the company take less than one share
6.      Each subscriber of the memorandum shall write opposite ot his name the number of shares held by him.
Question No: 53    ( M - 5 )
 The following information is given about a company.
 
 

 

Particular
 
Rs.
Credit purchases
100,000
Gross profit
30,000
Cost of goods sold
120,000
Opening stock
29,000
Closing stock
31,000
Average creditors
16,000
Net profit
14,000
Net fixed assets
110,000
Net sales
150,000
 
From the above information, calculate the following ratios:
Ø      Net Profit Ratio
Ø      Creditors Turnover Ratio