PC0-01:
PREPARATORY COURSE IN COMMERCE
Time:
2 Hours Maximum Marks: 50
Note:
All questions are compulsory. Each of questions carries one mark.
1. Recording Business
Transactions in accounts with the help of documents should be based on
(1) Single entry system
(2) Double entry system
(3) Verifiability and
objectivity of evidence
(4) Combination of single and double
entry system
Ans: (2) Double entry system
2. The prime function of
Accounting is to
(1) Record economic data
(2) Attain non-economic goals
(3) Provide the informational
base for action
(4) Classify and record business
transactions
Ans: (4) Classify and record
business transactions
3. Book-keeping is mainly
concerned with
(1) Recording of financial data
relating to an organisation
(z) Summarizing the recorded
data for external use
(3) Interpreting the data for
internal and external users
(4) Presenting the information
to the management
Ans: (1) Recording of financial
data relating to an organisation
4. Accounting principles are
generally based on
(1) Practicability
(2) Subjectivity
(3) Convenience in recording
(4) Objectivity
Ans: (1) Practicability
5. The concept of Conservatism
is applicable
(1) In providing for discount on
creditors
(2) While providing for
depreciation
(3) To charge bad and doubtful
debts
(4) In making the provision for
future losses
Ans: (4) In making the provision
for future losses
6. Cash Account is a/an
(1) Personal account
(2) Nominal account
(3) Real account
(4) Intangible asset
Ans: (3) Real account
7. Loan from Bank is a/an
(1) Personal account
(2) Real account
(3) Nominal account
(4) Asset
Ans: (1) Personal account
8. Purchase of goods is a
(1) Nominal account
(2) Personal account
(3) Real account
(4) Representative Personal
account
Ans: (3) Real account
9. Rent paid to landlord will be
credited
(1) Landlord account
(2) Cash account
(3) Rent account
(4) Drawing account
Ans: (2) Cash account
10. Real accounts are the
accounts which relate to
(1) Assets
(2) Expenses
(3) Losses
(4) Incomes
Ans: (1) Assets
11. Financial position of the
business means
(1) Position about profits and
losses
(2) Position about incomes and
expenses
(3) What the business owes to
others and what it owns at a given point of time
(4) Position about liquid funds
Ans: (3) What the business owes
to others and what it owns at a given point of time
12. Salary Outstanding account
is a
(1) Personal account (Natural)
(2) Real and Nominal account
(3) Nominal account
(4) Personal account
(Representative)
Ans: (4) Personal account
(Representative)
13. Trial Balance is prepared
(1) Before posting into the
ledger
(2) Before preparation of final
accounts
(3) After posting into the
ledger and balancing of accounts
(4) All of the above
Ans: (3) After posting into the
ledger and balancing of accounts
14. Posting will be done in the
(1) Journal
(2) Ledger
(3) Trial Balance
(4) Balance Sheet
Ans: (2) Ledger
15. Goods given as charity Would
be credited to
(1) Sales A/c
(2) Purchases A/c
(3) Charity A/c
(4) Cash A/c
Ans: (2) Purchases A/c
16. A Pass Book is a copy of
(1) Cash Book relating to bank
column
(2) Cash Book relating to cash
column
(3) Firm's receipts and payments
(4) A customer's account in the
bank's books
Ans: (4) A customer's account in
the bank's books
17. A Bank Reconciliation
Statement can be
(1) Cash Book only
(2) Pass Book only
(3) Either Cash Book or Pass
Book
(4) Neither Cash Book nor pass
Book
Ans: (3) Either Cash Book or Pass
Book
18. A Bank Reconciliation
Statement can be part of
(1) Part of Pass Book
(2) Part of Cash Book
(3) Statement prepared
(4) Final accounts
Ans:
19. Unfavourable bank balance
represents
(1) Credit balance in the Pass
Book
(2) Debit balance in the Cash
Book
(3) Debit balance in the Pass
Book
(4) AII of the above
Ans: (3) Debit balance in the
Pass Book
20. Suspense Account in the
Trial Balance will be entered in the
(1) Manufacturing account
(2) Trading account
(3) Profit and Loss account
(4) Balance Sheet
Ans: (4) Balance Sheet
21. Sale of old typewriter used
in office is credited to
(1) Sales A/c
(2) Cash A/c
(3) Capital A/c
(4) Typewriter A/c
Ans: (4) Typewriter A/c
22. Sales Tax collected is a
(1) Liability
(2) Asset
(3) Expense
(4) Loss
Ans: (1) Liability
23. Bank overdraft is a/an
(1) Liability
(2) Asset
(3) Revenue
(4) Expense
Ans: (1) Liability
24. Income tax payable is a
(1) Liability
(2) Asset
(3) Loss
(4) Expense
Ans: (1) Liability
25. Business includes
(1) Industry and commerce
(2) Trade and aids to trade
(3) Industry and aids to trade
(4) Commerce only
Ans: (1) Industry and commerce
26. Accounting is
(1) a systematic record of
business transactions in the books of accounts
(2) the science of measurement
of wealth
(3) the summary of accounting
information
(4) All of the above
Ans: (4) All of the above
27. A person who owes some
amount to the business is called a
(1 ) Debtor
(2) Creditor
(3) Owner
(4) Auditor
Ans: (1 ) Debtor
28. The final step of accounting
cycle is the preparation of
(1) Trial Balance
(2) Balance Sheet
(3) Trading and Profit &
Loss account
(4) Ledger
Ans: (2) Balance Sheet
29. Which of the following is a
Personal account ?
(1) Bakul A/c
(2) Loan from Rakesh A/c
(3) Salaries Outstanding A/c
(4) All of the above
Ans: (4) All of the above
30. Equity is the
(1) claims or right over the
assets of the firm
(2) anything which has economic
value
(3) amount earned through
business operations
(4) amount realised from goods
sold
Ans: (1) claims or right over the
assets of the firm
31. Excess of Revenue over
Expenses is
(1) Capital
(2) Loss
(3) Drawing
(4) Profit
Ans: (4) Profit
32. which of the following
transactions leads to Contra entry ?
(1) Deposited Rs. 10,000 in the
bank
(2) Received Rs. 4,000 from
Naresh
(3) Goods sold to Rakesh for
cash Rs. 1,000
(4) Goods purchased from Mohan
for cash Rs. 1,000
Ans: (1) Deposited Rs. 10,000 in
the bank
33. Returns Outward account is
overcast by Rs. 100. While rectifying this error the credit will be given to
(1) Suspense A,/c
(2) Returns Outward A/c
(3) Goods A/c
(4) Sales A/c
Ans: (1) Suspense A,/c
34. Depreciation on Fixed Assets
is treated as
(1) Capital expenditure
(2) Revenue receipt
(3) Deferred revenue expenditure
(4) Revenue loss
Ans: (4) Revenue loss
35. objective of preparing
Balance sheet is to ascertain
(1) Financial position of
business
(2) Net results of business
activities
(3) Arithmetical accuracy of the
transactions recorded
(4) Assets of the business
Ans: (1) Financial position of
business
36. Amount brought by the
proprietor, Ramesh, in the business should be credited to
(1) Cash A/c
(2) Capital A/c
(3) Ramesh A/c
(4) Drawing A/c
Ans: (2) Capital A/c
37. office equipment purchased
on credit will be recorded in
(1) Journal Proper
(2) Cash Book
(3) Sales Book
(4) Purchase Book
Ans: (1) Journal Proper
38' Which note is sent to the
customer when he returns the goods ?
(1) Debit Note
(2) Credit Note
(3) Promissory Note
(4) Cheque
Ans: (2) Credit Note
39. Amount realised from the
goods sold is called
( 1) Revenue
(2) Gain
(3) Equity
(4) Profit
Ans: ( 1) Revenue
40' While preparing a Bank
Reconciliation Statement, cheque sent for collection but not yet collected
should be added when balance is favourable as per
(1) Cash Book is taken as
starting point
(2) Purchase Book is taken as
starting point :
(3) Sales Book is taken as
starting point
(4) Pass Book is taken as
starting point
Ans: (4) Pass Book is taken as
starting point
41. Goods sold to Mahesh for
cash will be credited to
(1) Cash account
(2) Mahesh account
(3) Sales account
(4) Purchase account
Ans: (3) Sales account
42. Statement containing various
ledger balances is known as
(1) Trial Balance
(2) Bank Reconciliation
Statement
(3) Statement of Account
(4) Financial Statement
Ans: (1) Trial Balance
43. According to money
measurement concept, which transaction will be recorded in the books of the
account ?
(1) Health of manager
(2) Quality of goods
(3) Value of building
(4) Qualifications of employees
Ans: (3) Value of building
44. Revenue is said to be
realized when
(1) the sale is made
(2) goods are manufactured
(3) cash is received
(4) sale is made and cash is
received .
Ans: (1) the sale is made
45. Discount allowed on issue of
shares is an example of
(1) Capital loss
(2) Capital expenditure
(3) Revenue expenditure
(4) Deferred revenue expenditure
Ans: (4) Deferred revenue
expenditure
46. Repair incurred for using a
second-hand car purchased recently
(1) Capital expenditure
(2) Revenue expenditure
(3) Capital loss
(4) Deferred revenue expenditure
Ans: (1) Capital expenditure
47. Sales are equal to
(1) Cost of Goods Sold + Gross
Profit
(2) Cost of Goods Sold - Gross
Profit
(3) Gross Profit - Cost of Goods
Sold
(4) Cost of Goods Sold - Stock
Ans: (1) Cost of Goods Sold +
Gross Profit
48. Interest on drawings is
regarded as
(1) Expenditure for the business
(2) Loss for the business
(3) Gain for the business
(4) Liability for the business
Ans: (3) Gain for the business
49. Sales to Ram Rs. 450 posted
to his account as Rs. 550 would affect
(1) Sales account
(2) Ram's account
(3) Cash account
(4) Suspense account
Ans: (2) Ram's account
50. Which of the following accounts
is prepared to find out cost of production ?
(1) Manufacturing account
(2) Trading account
(3) Profit and Loss account
(4) Balance Sheet
Ans: (1) Manufacturing account