MIDTERM EXAMINATION

Spring 2010

MGT101- Financial Accounting (Session - 3)

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Time: 60 min

M - 47

Question No: 1 ( M - 1 ) .

Your browser may not support display of this image. Which of the following account/s will be affected under the rule of accrual accounting, when furniture is purchased on cash?

► Only Cash Account

► Only Furniture Account

► Cash & Furniture Account

► Only Purchases Account

Question No: 2 ( M - 1 ) .

Your browser may not support display of this image. Obligations to pay cash or un-earned incomes by the business are the:

► Expenses

► Assets

► Liabilities

► Equities

Question No: 3 ( M - 1 ) .

Your browser may not support display of this image. Which of the following is used to record financial transactions in chronological (day-to-day) order?

► Voucher

► General Journal

► General Ledger

► Trial balance

Question No: 4 ( M - 1 ) .

Your browser may not support display of this image. Which of the following financial statement summarizes the profitability of an organization for a particular period?

► Balance Sheet

► Trading and Profit & Loss account

► Cash Flow Statement

► Statement of Retained Earnings

Question No: 5 ( M - 1 ) .

Your browser may not support display of this image. While making Income & Expenditure account, Excess of income over expenses in a specified accounting period is called:

► Profit

► Loss

► Surplus

► Deficit


Question No: 6 ( M - 1 ) .

Your browser may not support display of this image. If the cost of sales is Rs. 60,000, sales are Rs. 90,000 and operating expenses are Rs. 25,000 during the year. What would be the Net Profit?

► Rs. 5,000

► Rs. 25,000

► Rs. 55,000

► Rs. 60,000

Question No: 7 ( M - 1 ) .

Your browser may not support display of this image. In which of the following condition a company will have positive working capital?

► If current assets > current liabilities

► If current Assets < current Liabilities

► If current assets = current liabilities

► If current assets < current liabilities

Question No: 8 ( M - 1 ) .

Your browser may not support display of this image. Which one of the following is CORRECT about the closing stock?

► It appears in the assets side of a balance sheet

► It decreases the value of cost of goods sold

► It becomes opening stock of next year

► All of the given option

Question No: 9 ( M - 1 ) .

Your browser may not support display of this image. In cost of goods sold statement the 'total factory cost' is equal to:

► Cost of material consumed + Labor cost

► Cost of material consumed + Conversion cost

► Cost of material consumed + Total factory cost

► Cost of material consumed + Factory overhead

Question No: 10 ( M - 1 ) .

Your browser may not support display of this image. Consider the following inventory record:
Date Item Quantity Cost/Unit Total
2007Jan. 2 Opening inventory 100 Rs.18.00 Rs.1,800
Mar. 4 Purchase 400 19.00 7,600
May 8 Purchase 800 20.00 16,000
Nov. 3 Purchase 500 21.00 10,500

Four hundred units are unsold, Use the FIFO method of inventory costing and determine the value assigned to the 400 units on hand at the end of the period.

► Rs.7, 500

► Rs.7, 978

► Rs.8, 000

► Rs.8, 400

Question No: 11 ( M - 1 ) .

Your browser may not support display of this image. Increase in an asset is recorded on the:

► Left or credit side of the account

► Right or debit side of the account

► Left or debit side of the account

► Right or credit side of the account

Question No: 12 ( M - 1 ) .

Your browser may not support display of this image. Which one of the following is NOT true about revaluation of fixed assets?

► Revaluation should be made after regular intervals

► Change in value should be permanent

► Only relevant asset should be revalued in the whole class of asset

► The profit or loss will be transferred to revaluation account

Question No: 13 ( M - 1 ) .
Your browser may not support display of this image.
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: 14 ( M - 1 ) .

Your browser may not support display of this image. What would be the value of conversion cost, if the cost of material consumed during the month is Rs. 5,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 1,000?

► Rs. 3,000

► Rs. 8,000

► Rs. 7,000

► Rs. 5,000

Question No: 15 ( M - 1 ) .

Your browser may not support display of this image. Which of the following is the recording phase of an accounting system?

► Financial Accounting

► Cost Accounting

► Management Accounting

► Book-keeping

Question No: 16 ( M - 1 ) .

Your browser may not support display of this image. Which of the following are the obligations or debts of the business?

► Withdrawals

► Expenses

► Assets

► Liabilities

Question No: 17 ( M - 1 ) .

Your browser may not support display of this image. The accounting equation is based on:

► Dual aspect concept

► Money measurement concept

► Going concern concept

► Separate entity concept

Question No: 18 ( M - 1 ) .

Your browser may not support display of this image. The book in which accounts are maintained is called:

► Day book

► Journal

► Ledger

► Sales book

Question No: 19 ( M - 1 ) .

Your browser may not support display of this image. Which one of the following is called the king of all books of account?

► The cash book

► Journal

► Ledger

► Trial balance

Question No: 20 ( M - 1 ) .

Your browser may not support display of this image. Any mistake in ledger can easily be detected with the help of:

► Journal

► Compound entry

► Single entry

► Memorandum entry

Question No: 21 ( M - 1 ) .

Your browser may not support display of this image. 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: 22 ( M - 1 ) .

Your browser may not support display of this image. Which of the following is a book of original entry in which all the vouchers are recorded at first?

► General Journal

► General Ledger

► Trial Balance

► Balance Sheet

Question No: 23 ( M - 1 ) .

Your browser may not support display of this image. The cash book in book-keeping records:

► All cash and credit purchase of goods

► Only cash payments

► All receipts and payments in cash

► All cash and credit sale of goods

Question No: 24 ( M - 1 ) .

Your browser may not support display of this image. Which of the following journal entry will be recorded, if the cash is deposited in the bank?

► Bank account (Dr) and Cash account (Cr)

► Cash account (Dr) and Bank account (Cr)

► Bank account (Dr) and Profit & Loss account (Cr)

► Cost of goods Sold account (Dr) and Bank account (Cr)

Question No: 25 ( M - 1 ) .

Your browser may not support display of this image. What is the best condition to finance a business?

► Fully financed from your own resource

► Fully relied on financial institutions

► Investment through own resources as well as rely on financial instructions

► None of the given options

Question No: 26 ( M - 1 ) .

Your browser may not support display of this image. Which of the following is/are the method(s) for calculating the cost of inventory?

► FIFO Method

► Weighted Average Method

► LIFO Method

► All of the given options

Question No: 27 ( M - 1 ) .

Your browser may not support display of this image. Which of the following account would be debited in case of depreciation charged to fixed assets?

► Accumulated depreciation - Fixes assets

► Fixed assets

► Depreciation expense

► Depletion

Question No: 28 ( M - 1 ) .

Your browser may not support display of this image. Depreciation of office building is charged to:

► Cost of Goods Sold

► Administrative Expenses

► Selling Expenses

► Financial expenses

Question No: 29 ( M - 1 ) .

Your browser may not support display of this image. Written down value of an asset = ----------------.

► Original cost - Accumulated depreciation

► Original cost - Appreciation

► Book value - Accumulated depreciation

► Original cost - Salvage value

Question No: 30 ( M - 1 ) .

Your browser may not support display of this image. If Original cost is Rs. 100,000; Depreciation rate is 20% p.a. using straight line method; what would be the value of accumulated depreciation at the end of 2nd year?

► Rs. 20,000

► Rs. 40,000

► Rs. 80,000

► Rs. 60,000

Question No: 31 ( M - 1 ) .

Your browser may not support display of this image. If:

* Cost of machine = Rs. 420,000
* Useful life = 5 years
* Residual value = Rs. 20,000
* Sale price at the end of 5th year = Rs. 40,000

What will be the profit or loss on disposal of machine using straight line method?

► Loss of Rs. 40,000

► Profit of Rs. 40,000

► Profit of Rs. 20,000

► Loss of Rs. 20,000

Question No: 32 ( M - 1 ) .

Your browser may not support display of this image. Which of the following is TRUE about the revaluation of fixed assets?

► Revaluation should be carried out at a regular interval

► Revaluation should be carried out at irregular interval

► Revaluation should be carried out by stakeholders

► Revaluation should be carried out by stockholders

Question No: 33 ( M - 1 ) .

Your browser may not support display of this image. Which of the following is/are TRUE about the revaluation of fixed assets?

► Revaluation should be carried out at a regular interval

► Revaluation should be carried out by an expert.

► The change in value should be permanent.

► All of the given options

Question No: 34 ( M - 1 ) .

Your browser may not support display of this image. Favourable balance of the cash book means:

► Credit balance in cash book

► Debit balance in pass book

► Debit balance in cash book

► Unfavorable balance in pass book

Question No: 35 ( M - 3 )

Your browser may not support display of this image. What do you know about the Profit or Loss on Disposal of a fixed asset in accounting?


Question No: 36 ( M - 5 )

Your browser may not support display of this image. If:

* Opening stock Rs. 40,000
* Purchases Rs. 60,000
* Return Inwards Rs. 10,000
* Wages Rs. 5,000
* Salaries Rs. 10,000
* Rent Rs. 10,000
* Closing Stock Rs. 20,000

Then:

Calculate the cost of goods sold for Trading concern.


Question No: 37 ( M - 5 )

Your browser may not support display of this image. Calculate Profit / (loss) on disposal of asset with the help of given data.

Cost of asset Rs. 100,000
Life of asset 5 years
Depreciation method Straight line
Residual value Rs. 20,000
Sale price after 5 years Rs. 25,000