self exercises

7/28/2019 Self Exercises

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Self Exercise

1. An asset was purchased for Rs. 1,00,000 onwhich depreciation was provided @ 15% on

S.L.M. method, the W.D.V. of the asset at the end

of two years is

(a) Rs. 70,000

(b) Rs. 80,000(c) Rs. 35,000

(d) Rs. 15,000

2. Which financial statement represents theaccounting equation,

assets = Liabilities + Owners equity:

(a) Income Statement

(b) Statement of Cash flows

(c) Balance Sheet

(d) None of the above

3. The owner of the consignment stock is________(a) Consignor

(b) Consignee


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(c) Debtors

(d) None

4. If the machinery costing Rs. 18,000 is sold after2 years for Rs. 16,000 and the depreciation rate is

10% per annum on straight line method, then

the profit or loss from the sale of machine is

(a) Rs. 3,600 (profit)

(b) Rs. 1600 (loss)

(c) Rs. 1600 (profit)

(d) No profit no loss

5. The expired portion of capital expenditure isshown in the financial statements as

(a)As an income.(b)As an expense.(c)As an asset.(d)As a liability.6. Gaining ratio is equal to:(a) Old ratio minus new ratio

(b) New ratio minus old ratio

(c) Old ratio plus capital ratio



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7. Errors are ________ mistakes.(a)Intentional.(b)Unintentional.(c)Undetected.(d)None of the three

8. In case of no partnership deed, the provisions ofwhich of the following are applicable:(a) Indian Contract Act, 1872

(b) Indian Partnership Act, 1932

(c) Companies Act, 1956

(d) None of these

9.

The Companies Act, 1956 prohibits the issue ofany preference share which is________________.

(a) Non convertible

(b) Non participating

(c) Non redeemable

(d) Non cumulative

10.Capital expenditures are recorded in the ________(a)Balance sheet.(b)Profit and loss account.(c)Trading account.(d) Manufacturing account.


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11.When the money received on application is to beadjusted at the time of allotment (partial

allotment), then the account to be credited is:(a) Share capital a/c

(b) Share allotment a/c

(c) Share application a/c


12.On 1.1.05 X draw a bill on Y for Rs 1,00,000. Atmaturity, the bill returned dishonoured as Y

become insolvent and 40 paise per rupee is

recovered from his estate. The amount

recovered is:

(a)20,000(b)Nil(c)40,000(d)40 paise

13.. If The cost of the assets is Rs. 10,00,000 And themarket value of the assets is Rs. 12,00,000. What

would its value according to the accrual concept.

(a) Rs. 10,00,000

(b) RS. 12,00,000


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Rs. 22,00,000

(e)RS.2,00,00014.The balance of salaries account is transferred:

(a) In Trading account

(b) In Balance Sheet

(c) In Journal

(d) In P&L account

15.If capital employed by a partnership firm isRs.1,00,000 and its average profit is Rs.20,000

normal rate of return is 15%, the value of

goodwill is:

(a)Rs.30,000(b)Rs.5,000

(c)Rs.1,33,333(d)Rs.33,333

16.Goods costing Rs.1,80,000 sent to consignee toshow a profit of 20% on invoice price.Invoice price of the goods is

a) Rs.2,16,000b) Rs.2,25,000c) Rs.2,10,000d) None of the above.


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17.. A businessman issued a cheque for Rs. 100 tohis son for domestic expenses. It will be entered

in three column cash book:

(a) In Cr. side of cash column and Dr. side of

bank column

(b) In the Dr. side of cash column and Cr. side of

bank column

(c) In the Cr. side of cash column

(d) In the Cr. side of bank column

18.Bank will enter the deposits and withdrawals ofcustomers in:

(a) Pay in slip of bank

(b) Cash book

(c) Pass book(d) Cheque book

19.Goods purchased Rs. 1,00,000. Sales Rs. 90,000.Margin 20 % on sales. Closing stock is

(a) Rs. 10,000.

(b) Rs. 25,000.

(c) Rs. 28,000.(d) None of the above.

20.Credit side of the trial balance of Premchand &Brothers as on 31.3.07 was short by Rs. 10000

and it was kept in Suspense account.


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Subsequently it was found that the purchase

returns journal on a particular date was cast

short by Rs. 100. After rectification of the error,balance in Suspense account will be

(a) Rs. 10000

(b) Rs. 9900

(c) Rs. 10100


21.The balance remaining in the petty cash book isa:

(a) Assets

(b) Liabilities

(c) Gain(d) None of these

22.Revenue from sale of products, is generally,recognized in the period in which

(a)Sale is made.

(b)Cash is collected(c) Products are manufactured.

(d) None of the above.


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23.The amount due to the retiring partner onaccount of goodwill is debited to the continuing

partners in their __________.

(a) Profit sharing ratio.

(b) Sacrificing ratio.

(c) Capital ratio.

(d) Gaining ratio.

24.A machine was purchased for Rs. 50,000. Themachine was depreciated @ 20% p.a. on W.D.V.

Basis for 3 years. If the machine is sold at a

value of Rs. 25,000, the profit or loss will be:

(a) 600 profits

(b) 5,000 profits

(c) 1,000 loss

(d) 600 loss

25.X draws a bill on Y for 3 months on 2 Feb., 2006.The due date of the bill is:

(a) 5 May, 2006

(b) 4 May, 2006

(c) 3 May, 2006

(d) 2 May, 2006


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26.Gaining ratio is equal to:(a) Old ratio minus new ratio(b) New ratio minus old ratio

(c) Old ratio plus capital ratio


27.Whenever debentures are cancelled, any profiton cancellation is transferred to:

(a) Profit and loss account

(b) Sinking fund account

(c) Capital redemption reserve account

(d) Capital reserve account

28.The inventory method where the cost per unit isrecomputed after every addition is known as:

(a) First-in-First-out method

(b) Specific identification method

(c) Moving average method

(d) None of these

29.Valuation of inventory is dealt within(a) AS-5

(b) AS-2


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(c) AS-3

(D) AS-4

30.Which of the following statements is true?(a) A credit balance in the passbook indicates

excess of deposits over withdrawals

(b) A trial balance will not tally if a transaction

is omitted

(c) A customer of whom goods have been sold

on credit cannot avail himself of a cash discount

(d) All of these

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