PC0-01: PREPARATORY COURSE IN COMMERCE
Time:
2 flours Maximum Marks: 50
Note:
All questions are compulsory. Each question carries one mark.
1. Which of
the principles requires that the same accounting method should be used from one
accounting year to another?
(1)
Consistency (2) Materiality
(3)
Conservatism (4) Matching
Ans: (1)
Consistency
2. Sales book
is meant for recording:
(1) All sales
(2) All types credit sales
(3) All cash
sales (4) Credit sales of merchandise only
Ans: (4)
Credit sales of merchandise only
3. Which of
the following is correct?
(1) Assets +
Liabilities = Capital
(2) Assets
—Liabilities = Capital
(3) Assets +
Capital = Liabilities
(4) Assets +
Liabilities = Capital
Ans: (2)
Assets —Liabilities = Capital
4. The basic
function of Financial Accounting is to:
(1) Record
all the transactions
(2) Find out
Gross Profit only
(3) Find out
Net Profit only
(4) Record,
classify, summarize and to interpret the business transactions in a systematic
manner.
Ans: (4)
Record, classify, summarize and to interpret the business transactions in a
systematic manner.
5. Purchase
of Building should be debited to:
(1) Equipment
A/C (2) Buildings A/C
(3) Goods A/C
(4) Capital A/C
Ans: (2)
Buildings A/C
6. Goods sold
to Amar on credit will be debited to:
(1) Sales A/C
(2) Cash A/C
(3) Amar A/C
(4) Purchases A/C
Ans: (3)
Amar A/C
7. Which of
the following account is not a personal account?
(1) Loan A/C
(2) Capital A/C
(3) Shvam's
A/C (4) Cash A/C
Ans: (4)
Cash A/C
8. Almirah
bought for Rs. 6,000 and paid there on cartage of Rs. 200. Almirah account will
be debited by
(1) Rs. 6,000
(2) Rs. 200
(3) Rs. 6,200
(4) Rs. 5,800
Ans: (3)
Rs. 6,200
9. Returns
Inwards Book is kept to record:
(1) Returns
of goods sold
(2) Credit
sales of goods
(3) Credit
purchases of goods
(4) Returns
of goods purchased
Ans: (1)
Returns of goods sold
10. Rs. 1,000
paid as Rent to Landlord should be debited to:
(1) Rent A/C
(2) Cash A/C
(3) Landlord's
A/C (4) Repair A/C
Ans: (1)
Rent A/C
11. Wages
outstanding account is a:
(1) Personal
A/C (2) Nominal A/C
(3) Real A/C
(4) Representative personal A/C
Ans: (4)
Representative personal A/C
12. Credit
balance of suspense A/C will be shown on:
(1) The debit
side of Trading A/C
(2) The
credit side of Trading A/C
(3) The
Assets side of Balance sheet
(4) The
liabilities side of Balance sheet
Ans: (4)
The liabilities side of Balance sheet
13. Prepaid
expenses are:
(1) An asset
(2) A liability
(3) A loss
(4) A gain
Ans: (1)
An asset
14. Which
account is generally used for rectification of one sided errors?
(1) Cash A/C
(2) Profit and loss A/C
(3) Trading
A/C (4) Suspense A/C
Ans: (4)
Suspense A/C
15. Business includes:
(1) Industry
and commerce
(2) Industry
and aids to trade
(3) Trade
only
(4) Trade and
aids to trade
Ans: (1)
Industry and commerce
16.
Commission received is credited to:
(1) Trading
A/C (2) Profit and Loss Account
(3)
Manufacturing A/C (4) Balance Sheet
Ans: (2)
Profit and Loss Account
17. Bad debts
will be charged to:
(1)
Manufacturing A/C
(2) Profit
and loss A/C
(3) Trading
A/C
(4) Balance
sheet
Ans: (2)
Profit and loss A/C
18. Profit on
sale of an asset will be credited to:
(1) Asset A/C
(2) Suspense A/C
(3) Trading
A/C (4) Profit and loss A/C
Ans: (4)
Profit and loss A/C
19. Which of
the following is not a current asset?
(1) Debtors
(2) Stock (3) Loose tools (4) Cash
Ans: (3)
Loose tools
20. Patents are:
(1) An
intangible asset
(2) A
tangible asset
(3) A current
asset
(4) A fictitious
asset
Ans: (1)
An intangible asset
21. All
direct expenses are shown in:
(1) Profit
and loss A/C (2) Balance sheet
(3) Trading
A/C (4) Profit and loss appropriation A/C
Ans: (3)
Trading A/C
22.
Manufacturing Account is prepared to find out:
(1) Gross
profit (2) Net profit
(3) Net loss
(4) Cost of goods produced
Ans: (4)
Cost of goods produced
23. Bank
Reconciliation statement is made by the:
(1) Auditor
(2) Customers of the bank
(3) Bank (4)
Creditors
Ans: (2) Customers of the bank
24. Discount
received account has:
(1) A debit
balance (2) A credit balance
(3) No
balance (4) All of the above
Ans: (2)
A credit balance
25. Cost of
goods purchased is Rs. 28,000, Net sales Rs. 60,000 and closing stock is Rs.
15,000. The gross profit will be:
(1) Rs.
47,000 (2) Rs. 43,000
(3) Rs.
75,000 (4) Rs. 88,000
Ans: (1)
Rs. 47,000
26. Purchase
Returns Journal is also called:
(1) Invoice
book (2) Purchase Journal
(3) Returns
outwards Journal (4) Returns inwards Journal
Ans: (3)
Returns outwards Journal
27. A cheque
payable at the counter of the bank without identification is called:
(1) Bearer
cheque (2) Specific cheque
(3) Order
cheque (4) Crossed cheque
Ans: (1)
Bearer cheque
28. Income
received in advance given in Trial Balance will be shown in:
(1) Trading
A/C (2) Profit and loss A/C
(3)
Manufacturing A/C (4) Balance sheet
Ans: (4)
Balance sheet
29. Trading
account is prepared to find out:
(1) Cost of
goods produced (2) Cost of goods sold
(3) Net
profit /Net loss (4) Gross profit
Ans: (4)
Gross profit
30.
Contingent liability is shown:
(1) In
Trading A/C (2) In Profit and Loss A/C
(3) In
Balance sheet (4) Outside the Balance sheet as a foot note
Ans: (4)
Outside the Balance sheet as a foot note
31.
Depreciation on plant will be charged to:
(1) Trading
account
(2) Profit
and loss A/C
(3) Profit
and loss appropriation A/C
(4)
Manufacturing A/C
Ans: (3)
Profit and loss appropriation A/C
32. Which of
the following is current asset?
(1) Debtor
(2) Prepaid expenses
(3) Cash in
hand (4) All of the above
Ans: (4)
All of the above
33. 'Wages
and Salaries' are shown on the:
(1) Debit
side of Trading A/C
(2) Credit
side of Trading A/C
(3) Debit
side of Profit and loss A/C
(4) Credit
side of Profit and loss A/C
Ans: (1)
Debit side of Trading A/C
34. Interest
on drawings is shown on the:
(1) Debit
side of Profit and Loss A/C
(2) Credit
side of Profit and Loss A/C
(3) Debit
side of Trading A/C
(4) Credit
side of Trading A/C
Ans: (2)
Credit side of Profit and Loss A/C
35. Bank
overdraft is a:
(1) Current
Asset
(2) Fixed
Asset
(3) Short
term liability
(4) Long term
liability
Ans: (3)
Short term liability
36. Gross
Profit is equal to:
(1) Net Sales
— cost of goods sold
(2) Opening
Stock Purchases
(3) Net sales
+ cost of goods sold
(4) Opening
stock + purchases closing stock
Ans: (1)
Net Sales — cost of goods sold
37. Nominal
accounts relate to:
(1) Assets
only
(2) Expenses
and losses only
(3) Incomes
and gains only
(4) Incomes,
gains, expenses and losses
Ans: (4)
Incomes, gains, expenses and losses
38.
Expenditure on purchase of items giving benefit for a period is called:
(1) Capital
expenditure
(2) Revenue
expenditure
(3) Revenue
loss
(4) Deferred
revenue expenditure
Ans: (2)
Revenue expenditure
39. Which of
the following statement is correct?
(1) Book
keeping is the art of recording the business transaction only
(2) Bank
account is a real account
(3) Purchases
account is a nominal account
(4) Loan
account is a personal account
Ans: (4)
Loan account is a personal account
40. A
business has liabilities of Rs. 1, 70,000 and owner's equity is Rs. 80,000. Its
assets would be:
(1) 2, 00,000
(2) 90,000
(3) 1, 70,000
(4) 2, 50,000
Ans: (4)
2, 50,000
41. Rs.
10,000 received from Ram whose account was written off as bad debts in the previous
year should be credited to:
(1) Ram's A/C
(2) Bad debts
A/C
(3) Bad debts
recovered A/C
(4) Cash A/C
Ans: (3)
Bad debts recovered A/C
42. Donation
received for a 'specific purpose' is a:
(1) Capital
receipts
(2) Revenue
receipts
(3) Capital
expenditure
(4) Revenue expenditure
Ans: (1)
Capital receipts
43. Purchases
Book is undercast by Rs. 500 while rectifying this error the debit will be given
to:
(1) Purchases
A/C (2) Cash A/C
(3) Suspense
A/C (4) Sales A/C
Ans: (1)
Purchases A/C
44. Sales Tax
collected is a:
(1) Fixed
liability
(2) Current
liability
(3)
Contingent liability
(4) Current
asset
Ans: (2)
Current liability
45. Capital
account is a:
(1) Personal
A/C
(2) Real A/C
(3) Nominal
A/C
(4) Real as
well as Personal Account
Ans: (1)
Personal A/C
46. The item given
as adjustments will be shown in final accounts at:
(1) One place
only (2) Two places
(3) Three
places (4) four places
Ans: (2)
Two places
47. Journal
proper records:
(1) Cash
received from debtors
(2) Sales
returns
(3) Purchases
returns
(4) The transactions
which are not recorded in any of the special Journal.
Ans: (4)
The transactions which are not recorded in any of the special Journal.
48. Trade
discount is given to customers on:
(1) Cash
purchases
(2) Credit
purchases
(3) Credit
sales
(4) Large
scale purchases
Ans: (4)
Large scale purchases
49. Selling
and distribution expenses are transferred to:
(1) Trading
A/C
(2) Profit
and loss A/C
(3) Profit
and loss appropriation A/C
(4)
Manufacturing A/C
Ans: (2)
Profit and loss A/C
50. Loan
account is:
(1) A Nominal
A/C
(2) A Real
A/C
(3) An Asset
A/C
(4) A
Personal A/C
Ans: (4)
A Personal A/C