PC0-01: PREPARATORY COURSE IN COMMERCE
Time:
2 Hours Maximum Marks: 50
Note:
All questions are compulsory. Each of questions carries one mark.
1. The main
function of Financial Accounting is to:
(1) Record
all the transactions
(2) Record,
classify and summarize the business transactions
(3) Find out
Gross Profit only
(4) Find out
Net Profit only
Ans: (2)
Record, classify and summarize the business transactions
2. Purchases
made on credit not recorded would affect:
(1) Sales A/c
(2) Purchases A/c
(3)
Supplier's A/c (4) Purchase A/c and supplier's A/c
Ans: (4)
Purchase A/c and supplier's A/c
3. Which of
the following branches of accounting is concerned with measurement and control
of costs?
(1) Financial
Accounting (2) Cost Accounting
(3)
Management Accounting (4) Accountancy
Ans: (2)
Cost Accounting
4. Sohari
started business with a capital of Rs. 50000. He purchased goods from Mohan for
Rs. 10,000 on cash basis. His total assets would be.
(1) Rs.
50,000 (2) Rs. 40,000 (3) Rs. 60,000 (4) Rs. 30,000
Ans:
(1) Rs. 50,000
5. Sales Book
is meant for recording:
(1) Cash
sales (2) Credit sales of goods only
(3) Cash and
credit sales (4) All types of sales
Ans:
(2) Credit sales of goods only
6. Purchase
of goods from Ram on credit basis should be credited to:
(1) Ram's A/c
(2) Cash A/c (3) Sales A/c (4) Purchase A/c
Ans:
(1) Ram's A/c
7. Purchase
Returns Book is kept to record:
(1) credit
purchase of goods (2) returns of goods purchased
(3) credit
sales of goods (4) returns of goods sold
Ans: (2)
returns of goods purchased
8. The
balance of Petty Cash Book is:
(1) an
expense (2) an income (3) an asset (4) a liability
Ans:
(3) an asset
9. Which of the
following is a personal account?
(1) Loan's
A/c (2) Purchases A/c
(3)
Stationery A/c (4) Depreciation A/c
Ans:
(1) Loan's A/c
10. Rent
outstanding account is:
(1) Real
Account (2) Nominal Account
(3) Personal
Account (4) Real and Nominal Account
Ans:
(3) Personal Account
11. Personal
accounts are related to:
(1) assets
only (2) expenses only
(3) incomes
only (4) persons and Institutions
Ans:
(4) persons and Institutions
12. Rs.
10,000 paid as wages for erecting a machine, should be debited to:
(1) cash A/c
(2) repairs A/c (3) wages A/c (4) machine A/c
Ans:
(4) machine A/c
13. According
to which concept is the entity of the business treated separate from its owner?
(1) Going
concern concept (2) Dual aspect concept
(3) Business
entity concept (4) Cost concept
Ans:
(3) Business entity concept
14. Closing
stock is valued at
(1) market
price
(2) cost
price
(3) cost
price or market price whichever is lower
(4) cost
price or market price whichever is higher
Ans:
(3) cost price or market price whichever is lower
15. Narration
must be written
(1) for every
transaction entered in the Journal
(2) at the
time of classifying the transactions
(3) at the
time of preparing Trial Balance
(4) at the
time of preparing Balance Sheet
Ans:
(1) for every transaction entered in the Journal
16.
Journalizing is the process of recording the business transactions in the.
(1) Books of
prime entry (2) Petty cash books
(3) Trial
Balance (4) Balance Sheet
Ans:
(1) Books of prime entry
17. Amount
realized on account of goods sold is called:
(1) Income
(2) Revenue (3) Profit (4) Gain
Ans:
(2) Revenue
18. Posting
is done in the
(1) Ledger
(2) Trial Balance (3) Journal (4) Balance Sheet
Ans:
(1) Ledger
19. Profit
and loss account shows:
(1) Financial
position of a business
(2) Net
Profit net loss of a business
(3) Capital
employed in a business
(4) Accuracy
of ledger accounts
Ans:
(2) Net Profit net loss of a business
20. Prepaid
Insurance is:
(1) an income
for the business
(3) liability
for the business
(2) revenue
for the business
(4) an asset
for the business
Ans: (4)
an asset for the business
21.
Outstanding expenses given in trial balance appear on the:
(1) debit
side of trading A/c (2) debit side of Profit and Loss A/c
(3) liabilities
side of balance sheet (4) assets side of balance sheet
Ans:
(3) liabilities side of balance sheet
22. Expenses
paid in advance account is:
(1) a Real
A/c (2) a Nominal A/c
(3) a
Personal A/c (4) both Real and Nominal Accounts
Ans:
(3) a Personal A/c
23.
Contingent liability is shown:
(1) in
trading A/c (2) in profit and loss A/c
(3) in
manufacturing A/c (4) outside the balance sheet as footnote
Ans:
(4) outside the balance sheet as footnote
24. Which
account is used for rectification of one sided errors?
(1) capital
A/c (2) trading A/c
(3) suspense
A/c (4) bank A/c
Ans:
(3) suspense A/c
25. Cost of
sales is Rs. 90,000, Net Sales Rs. 1, 70,000 and cash Rs. 20,000. The gross
profit will be.
(1) Rs.
80,000 (2) Rs. 2, 60,000 (3) Rs. 90,000 (4) Rs. 1, 00,000
Ans:
(1) Rs. 80,000
26. Which one
of the following is included in balance sheet?
(1) closing
stock (2) wages
(3) opening
stock (4) contingent liabilities
Ans:
(1) closing stock
27. For real
accounts, the rule of debit and credit is:
(1) debit all
expenses and losses
(2) credit
all incomes and gains
(3) debit
what comes in and credit what goes out
(4) debit all
expenses and credit all incomes
Ans:
(3) debit what comes in and credit what goes out
28. Sales
Returns journal is also called:
(1) returns
inwards journal (2) returns outwards journal
(3) invoice
book (4) day book
Ans:
(1) returns inwards journal
29. If
customers are allowed discount, it will be treated as:
(1) loss (2)
income (3) revenue (4) liability
Ans:
(1) loss
30. Which of
the following is not entered in books of account?
(1) Cash
discount (2) Interest received
(3)
Commission received (4) Trade discount
Ans:
(4) Trade discount
31.
Preliminary expenses are the example of:
(1) capital
loss (2) revenue expenditure
(3) capital
expenditure (4) deferred revenue expenditure
Ans:
(4) deferred revenue expenditure
32. Trial
Balance is prepared with the help of:
(1) Journals
(2) Journal proper (3) Ledger (4) Balance sheet
Ans:
(3) Ledger
33. Petty
cash is used for payment of:
(1) contingent
liabilities (2) capital expenditure
(3) Welfare
to employees (4) small expenses like postage, stationery etc.
Ans:
(4) small expenses like postage, stationery etc.
34. Which of
the following items are charged to profit and loss A/c?
(1) Carriage
inwards (2) Carriage outwards
(3) Wages and
Salaries (4) Closing stock
Ans:
(2) Carriage outwards
35.
Depreciation arises from.
(1) fall in
value of money only
(2) physical
wear and tear of a fixed asset
(3) fall in
prices only
(4) fall in
market value of a fixed asset only
Ans:
(2) physical wear and tear of a fixed asset
36.
Depreciation on Plant and Machine given in Trial Balance is shown in:
(1) Balance
sheet (2) Profit and loss A/c
(3)
Manufacturing A/c (4) Trading A/c
Ans:
(2) Profit and loss A/c
37 Sales are
equal to:
(1) Cost of
goods sold+gross profit
(2) Lost of
goods sold - gross profit
(3) Gross
Profit - cost of goods sold
(4)
Purchasing+opening stock-closing stock
Ans:
(1) Cost of goods sold+gross profit
38. A
business has liabilities of Rs. 20,000 and owner's equity is Rs. 80,000. Its
assets would be.
(1) Rs.
80,000 (2) Rs. 20,000 (3) Rs. 60,000 (4) Rs. 1, 00,000
Ans:
(4) Rs. 1, 00,000
39. Which of
the following order of assets is according to the order of permanence?
(1) Stock,
machine, goodwill, debtors, cash
(2) Cash,
debtors, stock, machine, goodwill
(3) Cash,
debtors, goodwill, machine, stock
(4) Goodwill,
machine, stock, debtors, cash
Ans:
(4) Goodwill, machine, stock, debtors, cash
40.
Additional capital introduced is a
(1) Revenue
receipt (2) Revenue expenditure
(3) Capital
receipt (4) Capital profit
Ans:
(3) Capital receipt
41. Which one
of the following is an error of principle?
(1) Debited
to Anil instead of Amit
(2) A sale of
Rs. 50 was entered in books as Rs. 500
(3) Cash sales
of Rs. 200 was entered in Sales Book
(4) Repair of
Building of Rs. 20000 has been debited to Building A/c
Ans:
(4) Repair of Building of Rs. 20000 has been debited to Building A/c
42. Purchases
Book is undercast by Rs. 500 while rectifying this error, debit will be given to:
(1) Purchases
A/c (2) Cash A/c
(3) Suspense
A/c (4) Capital A/c
Ans:
(1) Purchases A/c
43. Good will
is a:
(1) Current
asset (2) Tangible asset
(3)
Intangible asset (4) Liquid asset
Ans:
(3) Intangible asset
44. Bank
overdraft is a:
(1) Current
liability (2) Long - term liability
(3) Current
asset (4) liquid asset
Ans:
(1) Current liability
45. All the
indirect expenses are shown in:
(1) Trading
A/c (2) Suspense A/c
(3)
Manufacturing A/c (4) Profit and Loss A/c
Ans:
(4) Profit and Loss A/c
46. Salaries
and wages are shown on the:
(1) debit
side of Manufacturing A/c
(2) debit
side of Trading A/c
(3) debit
side of suspense A/c
(4) debit
side of profit and loss A/c
Ans:
(4) debit side of profit and loss A/c
47. Income
tax paid is:
(1) a
liability (2) an asset (3) an expense (4) a capital loss
Ans:
(4) a capital loss
48. Which of
the following errors is revealed by Trial Balance?
(1) Posting
of wrong amount in one account
(2)
Compensating error
(3) Posting
an amount on the correct side but in the wrong account
(4) Treating
an expense as an asset.
Ans:
(1) Posting of wrong amount in one account
49. Interest
on drawings is:
(1) an
expenditure for the business
(2) an income
for the business
(3) an asset
for the business
(4) a
liability for the business
Ans:
(2) an income for the business
50. The
amount of accrued income given in Trial Balance will be shown in:
(1) Trading
A/c (2) Profit and Loss A/c
(3) Assets
side of Balance Sheet (4) Liability side of Balance Sheet
Ans:
(3) Assets side of Balance Sheet