FINALTERM  EXAMINATION

Spring 2010

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

 

 

 
 

 

 

 
 
 

 

 

 
 
 

 

 

Time: 90 min
 
M - 69
Question No: 1    ( M - 1 )    .
 Direct materials costs
Rs.70,000
Direct labor costs
30,000
Manufacturing overhead costs
60,000
conversion cost
?
 
 

 

       ► Rs. 20,000
 
       ► Rs.40, 000
       ► Rs.90, 000
       ► Rs.160, 000
   
Question No: 2    ( M - 1 )    .
 Sale proceeds of goods are an example of:
 
 

 

       ► Revenue expense
 
       ► Capital expense
       ► Capital receipt
       ► Revenue receipt
   
Question No: 3    ( M - 1 )    .
 Consider the following data:
Provision created in 2006
Rs. 2,500
Bad debts in 2007
Rs. 1,500
Sundry debtors on 31-12- 2007 were Rs. 40,000 and provision is created @ 5%.
Which journal entry is Correct for the provision for doubtful debts for the year 2007.
 
 

 

       ► Profit & Loss a/c Rs. 1,000 (Dr) & Provision for doubtful debts a/c Rs. 1,000 (Cr)
 
       ► Provision for doubtful debts a/c Rs. 1,000 (Dr) & Profit & Loss a/c Rs. 1,000 (Cr)
       ► Profit & Loss a/c Rs. 2,000 (Dr) & Provision for doubtful debts a/c Rs. 2,000 (Cr)
       ► Provision for doubtful debts a/c Rs. 2,000 (Dr) & Profit & Loss a/c Rs. 2,000 (Cr)
   
Question No: 4    ( M - 1 )    .
 Which of the following subsidiary book(s) is (are) maintained for debtors control account?
 
 

 

       ► Sales Day Book
 
       ► Sales Return
       ► Debtors Ledger
       ► All of the given options
 

 

 
 
Question No: 5    ( M - 1 )    .
 Which of the following account(s) will be affected, while rectifying the error of Carriage paid Rs.50 for the newly purchased machinery mistakenly debited to carriage account?
       ► Only machinery account
       ► Only carriage account
       ► Both carriage and machinery account
       ► Only cash account
   
Question No: 6    ( M - 1 )    .
 Which of the following account(s) will be affected, while rectifying the error of an amount Rs.200 received from Mr.”P” wrongly credited to Mr.”Q’s” account?
       ► Only Cash Account
       ► Only P’s account
       ► Only Q’s account
       ► Both of Mr. P's & Mr.Q's Account
   
Question No: 7    ( M - 1 )    .
 Which of the following accounts would be increased with a debit?
 
 

 

       ► Contributed Capital
 
       ► Retained Earnings
       ► Revenues
       ► Expenses
   
Question No: 8    ( M - 1 )    .
 Which of the following would NOT be considered as a component of 'cost' of stock?
 
 

 

       ► Salaries of selling staff
 
       ► Transportation inward costs
       ► Import duties
       ► Purchase price
   
Question No: 9    ( M - 1 )    .
 Which of the following are the owners of a company?
       ► Proprietors
       ► Partners
       ► Shareholders
       ► Managers
 

 

 
 
Question No: 10    ( M - 1 )    .
 If dividend is proposed by directors of the company @ 30% for the year, it will be calculated on:
 
 

 

       ► Capital Reserve
 
       ► Authorized share capital
       ► Paid up share capital 
       ► Share premium
   
Question No: 11    ( M - 1 )    .
 In which of the following interim dividend is treated?
 
 

 

       ► In profit and Loss account
 
       ► In profit and Loss appropriation account
       ► On the asset side of the Balance Sheet
       ► In trading account 
   
Question No: 12    ( M - 1 )    .
 Which of the following documents contains rules and regulations for internal management of the company?
 
 

 

       ► Memorandum of Association
 
       ► Articles of Association
       ► Prospectus
       ► Statutory Declaration
   
Question No: 13    ( M - 1 )    .
 When preparing a cash flow statement, which of the following would be classified as a financing activity?
 
 

 

       ► A new long-term loan taken out to finance the purchase of fixed assets
 
       ► Salaries paid
       ► Interest paid on a long-term bank loan
       ► The cost of purchasing a patent
 

 

 
 
Question No: 14    ( M - 1 )    .
 When opening stock is Rs. 50,000, closing stock Rs. 60,000 and cost of goods sold Rs. 220,000. What will be stock turnover ratio?
 
 

 

       ► 2 times
 
       ► 3 times
       ► 4 times
       ► 5 times
   
Question No: 15    ( M - 1 )    .
 What does a credit balance in a partner’s current account represent to a business?
 
 

 

       ► Current Assets
 
       ► Current Liability
       ► Long-term liability
       ► Share of profit
   
Question No: 16    ( M - 1 )    .
 Net Profit + Expenses= _________
 
 

 

       ► Liabilities
 
       ► Assets
       ► Capital
       ► Income
 

 

 
 
Question No: 17    ( M - 1 )    .
 What would be the value of 'cost of goods manufactured' if the total factory cost of the month is Rs. 6,000, opening work in process is Rs. 2,000 and the closing work in process is Rs. 2,500? 
 
 

 

       ► Rs. 5,500
 
       ► Rs. 8,000
       ► Rs. 4,500
       ► Rs. 8,500
   
Question No: 18    ( M - 1 )    .
 Particulars
Rs.
Direct materials costs
80,000
Direct labor costs
50,000
Manufacturing overhead costs
60,000
Prime cost
?
 
 

 

       ► Rs.130, 000
 
       ► Rs.110, 000
       ► Rs.140, 000
       ► Rs.190, 000 
   
Question No: 19    ( M - 1 )    .
 "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: 20    ( M - 1 )    .
 Which of the following account will be debited, when the labor cost is charged to production?
 
 

 

       ► Finished goods account
 
       ► Labor cost account
       ► Work in process account
       ► Factory over head account
   
Question No: 21    ( M - 1 )    .
 Stock account is debited and creditors account is credited, which of the following is reflecting the statement?
 
 

 

       ► Discount received
 
       ► Goods returned
       ► Purchase of goods on credit
       ► Payment of goods
 

 

 
 
Question No: 22    ( M - 1 )    .
 The financial year of Atif Brothers & Co. is closed on June 30, 2009. Total cash sales are Rs. 150,000, credit sales are Rs. 180,000 and total receipts are Rs. 250,000. Credit receipts will be:
       ► Rs. 150,000
       ► Rs. 100,000
       ► Rs. 220,000
       ► Rs. 280,000
   
Question No: 23    ( M - 1 )    .
 Which of the following is usually not an accrued expense?
       ► Interest payable
       ► Wages payable
       ► Taxes payable
       ► Notes payable
   
Question No: 24    ( M - 1 )    .
 Which of the following financial statements is generally prepared first?
       ► Income statement
       ► Balance sheet
       ► Statement of retained earnings
       ► Statement of cash flow
   
Question No: 25    ( M - 1 )    .
 Which of the following is known as an asset account?
       ► Gains
       ► Prepaid insurance
       ► Unearned revenue
       ► Accounts payable
   
Question No: 26    ( M - 1 )    .
 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: 27    ( M - 1 )    - Please choose vu zs one
 Mr. A & B entered into a partnership invested Rs.50,000 and Rs.65,000 with an equal share in profit or loss. Markup on drawings of Mr. A is Rs.1,500 and of Mr. B is Rs.1,800. The net income for the year is Rs.85,000. What will be the profit share of Mr. B?
       ► Rs.42,350
       ► Rs.44,150
       ► Rs.41,600
       ► Rs.40,850
   
Question No: 28    ( M - 1 )    .
 Which of the following statement is not true regarding the objective of statement of cash flows?
       ► It is helpful for decision making by management
       ► It is used for reporting the net profit of the period
       ► It can be used for estimations for cash flows in future
       ► It is used to determine the liquidity of the business 
   
Question No: 29    ( M - 1 )    .
 According to the statement of cash flows following are the examples of investing activities except:
       ► Sales of machinery
       ► Capital invested by the owners
       ► Purchase of building for the business use
       ► Cash received from the disposal of equipment
   
Question No: 30    ( M - 1 )    .
 Which of the following account would be credited in case of loss of goods by fire?
       ► Purchase account
       ► Sales account
       ► Loss by fire account
       ► Capital account
   
Question No: 31    ( M - 1 )    .
 Which of the following result would be shown if Gross Profit is greater than the Operating Expenses in profit and loss account?
       ► Net Profit
       ► Operating profit
       ► Net Loss
       ► Gross Loss
 

 

 
 
Question No: 32    ( M - 1 )    .
 Which of the following is/are NOT the example of intangible assets?
       ► Copyright
       ► Goodwill
       ► Patent
       ► Land
   
Question No: 33    ( M - 1 )    .
 If salaries expense is Rs. 2,500, purchases are Rs. 16,000 and rent (office building) is Rs. 300 during the year, what would be the total "General & administrative expenses"?
       ► Rs. 300
       ► Rs. 2,500
       ► Rs. 2,800
       ► Rs.18,800
   
Question No: 34    ( M - 1 )    .
 Which one of the following methods for inventory valuation is based on the assumption that the first merchandise purchased is the first merchandise sold?
       ► LIFO Method
       ► Weighted Average Method
       ► Specific Identification Method
       ► FIFO Method
   
Question No: 35    ( M - 1 )    .
 A machine, which was bought at a cost of Rs. 4,000, is not expected to have any residual value. If it is depreciated at a rate of 10% per annum using Straight line method, its net book value after two years will be:
       ► Rs. 3,200
       ► Rs. 800
       ► Rs. 3,600
       ► Rs. 3,240
   
Question No: 36    ( M - 1 )    .
 Particulars
Rs.
Written down value of asset at the time of sale
10,000
Original cost of asset
20,000
Depreciation expense during the year
700
Disposal value of asset
?
Loss on disposal of asset
1,000
 
 

 

       ► Rs. 9,000
 
       ► Rs. 19,000
       ► Rs. 8,300
       ► Rs.10,000
 

 

 
 
Question No: 37    ( M - 1 )    .
 Accounts receivables are shown in balance sheet at:
       ► Net realizable value
       ► Total amount
       ► Market value
       ► Residual value
   
Question No: 38    ( M - 1 )    .
 Which of the following is NOT included in Debtors Control Account?
 
 

 

       ► Cash sale
 
       ► Credit sale
       ► Bills receivable
       ► Discount allowed
   
Question No: 39    ( M - 1 )    .
 Which of the following would be shown on the credit side of creditors control account?
       ► Bills Receivable
       ► Return outwards
       ► Credit purchases
       ► Discount allowed
   
Question No: 40    ( M - 1 )    .
 Which of the following is INCORRECT about subsidiary account?
       ► It is not a summary account
       ► It reduces the burden of control account
       ► It provides detailed information about individual accounts
       ► It summarizes the total of related items from other accounts
   
Question No: 41    ( M - 1 )    .
 Which of the following would be occurred in a transaction, but will not be expensed until a future accounting period?
       ► Deferred cost
       ► Provision
       ► Unearned revenue
       ► Capital work in progress
   
Question No: 42    ( M - 1 )    .
 Deferred revenues will become revenue when they are:
       ► Unearned
       ► Earned
       ► Incurred
       ► Paid
   
Question No: 43    ( M - 1 )    .
 Which of the following can be utilized to issue bonus shares?
       ► Share premium
       ► Term finance certificates
       ► Bonds
       ► Debentures
 

 

 
 
Question No: 44    ( M - 1 )    .
 Which of the following is old name of Cash Flow Statement?
       ► Sources and Application of Funds
       ► Sources and Application of Liabilities
       ► Sources and Application of Activities
       ► Sources and Application of Income
   
Question No: 45    ( 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: 46    ( M - 1 )    .
 Which of the following is the CORRECT statement with respect to the liquidity and profitability?
       ► Liquidity and Profitability is the same thing
       ► The importance of Liquidity > The importance of Profitability
       ► The importance of Liquidity < The importance of Profitability
       ► The liquidity and profitability is not the same thing but both have equal importance
   
Question No: 47    ( M - 1 )    .
 A company ABC purchased an asset for Rs. 40,000, paying Rs. 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 an investing activity
       ► Rs. 30,000 cash outflow as an investing activity
       ► Rs. 10,000 cash inflow as an investing activity
       ► Rs. 70,000 cash inflow as an investing activity
   
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 )
 Briefly write down the steps for the formation of a Private Ltd Company.
 
 
 

 

1. Selection of the type of company.
 
 
 

 

2. Selection of name for the proposed company.
 
3. Apply for the Directors Identification Number (DIN) and Digital Signatures.
4. Drafting of Memorandum and Articles of Association.
5. Stamping, digitally signing and e-filing of various documents with the Registrar.
6. Payment of Fees.
7. Obtaining Certificate of Incorporation.
8. Preparation and filing of Prospectus/Statement in lieu of Prospectus and e-Form 19/20 (in case of public companies) for obtaining the certificate of commencement of business.
9. Obtaining Certificate of Commencement of business (in case of public limited companies).
   
Question No: 50    ( M - 3 )
 If:
·          Retain earning at the beginning      Rs. 1,000
·          Dividend paid                                              500
·          Retain earning at the end                        2,500
 
Then:
          You are required to prepare statement of Retain earnings to find the amount of Net income
 
 

 

   
 
Question No: 51    ( M - 5 )
a.       In trial balance at June 30, 2007 10% debentures are shown at Rs.75,000 and mark up on debentures are shown at Rs.3,750. Six months debenture mark up is to be accrued. What will be the amount of total mark up on debentures show in profit and loss account?
 
 

 

b.      From the following information calculate cost of goods sold.
 
Stock opening balance
Rs.56,950
Purchases
175,750
Stock closing balance
65,020
Carriage inward
5,200
Sales
245,500
 

 

 
 

 

 
 
 

 

   
 
Question No: 52    ( M - 5 )
 Information given in Trial balance:
c.      Plant and machinery Rs. 200,000
d.      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:
 
Ø      Calculate the amount of depreciation expense shown in profit and loss account.
Ø      Calculate the amount of fixed assets shown in balance sheet.
   
Question No: 53    ( M - 5 )
 XYZ Co. Ltd. had a paid up capital of Rs. 600,000 divided in 6,000 shares of Rs. 100 each. The company resolves to capitalize a part of reserve fund of Rs. 800,000 by issuing bonus shares. One bonus share is issued for every three shares held in the company. Bonus shares are to be issued at 25% premium.
 
Required:
Calculate the No. of Bonus shares and the amount of Bonus.