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# COMMERCE CLASSES

## (A Complete Cell of Commerce Education

BHU/B.com/ACC/TP-1(Partnership)/2017 Since-2002
1. The profits of last five years are Rs. 75,000 Rs. 90,000, Rs. 80,000, Rs. 1,00,000 and Rs. 80,000.
Find the value of goodwill, If its calculated an average profits of last five years on the basis of 3
years of purchase
(a) Rs. 85,000 (b) Rs. 2,55,000 (c) Rs. 2,75,000 (d) Rs. 2,85,000
2. Capital employed in a business is Rs. 150000. Profits Rs. 50,000 and the normal rate of profit is
20%. The amount of goodwill as per capitalization method will be
(a) Rs. 2,00,000 (b) Rs. 1,50,000 (c) Rs. 3,00,000 (d) Rs. 1,00,000
3. X and Y are partners in a firm with capital of Rs. 18,000 and Rs. 20,000. Z was admitted for 1/3 rd
share in profits and brings Rs. 24,000 as capital, calculate the amount goodwill :
(a) Rs. 24,000 (b) Rs. 20,000 (c) Rs. 15,000 (d) Rs. 10,000
4. What do you mean by purchasing years ?
(a) No. of years in which goodwill is purchased (b) No. of years the goodwill is expected to remain
(c) Both of these (d) None of these
5. X and Y are sharing profits and losses in the ratio of 3 : 2. Z is admitted with 1/5 th share in profits of
the firm which he gets from X. Find out the New profit Sharing ratio?
(a) 12 : 8 : 5 (b) 8 : 12 : 5 (c) 2 : 2 : 1 (d) 2: 2 : 2
6. A and B are partner sharing profits and losses in the ratio 5:3. On admission, C brings Rs. 70,000
cash and Rs. 48,000 against goodwill. New profit sharing ratio between A, B, C is 7 : 5 : 4. The
sacrificing ratio among A and B is :
(a) 3 : 1 (b) 4: 7 (c) 5 : 4 (d) 2 : 1
7. A and B are partners. Sharing profits in the ratio of 7 ; 3. C is admitted as a new partner. A
surrenders 1/7 of his share and B surrenders 1/3 rd of his share in favour of C. The new profit
sharing ratio will be
(a) 6 : 2 : 2 (b) 4 : 1 : 1 (c) 3: 2 : 2 (d) None
8. X and Y share profits and losses in the ratio of 4:3. They admit Z in the firm with 3/7 share which
he gets 2/7 from X and 1/7 from Y. The new profit sharing ratio will be :
(a) 7 : 3 : 3 (b) 2 : 2 : 3 (c) 5 : 2 : 3 (d) 2 : 3 : 3
9. A and B are partners, sharing profits in the ratio of 5 : 3. They admit C with 1/5 share in profits,
which he acquires equally from both 1/10 form A and 1/10 from B. New profit sharing ratio will be
(a) 21 : 11 ; 8 (b) 20 : 10 : 4 (c) 15 : 10 : 5 (d) None
1
10. A, B, and C share profit and Losses in the ratio, of 3 ; 2 ; 1. D is admitted with 6 share which

## he gets entirely from A. New ratio will be :

1 1 1 1
(a)
: : : (b) 3 : 1 : 1 : 1 (c) 2 ; 2 : 2 : 1 (d) None
3 3 6 6
11. A,B,C are partners sharing profit in the ratio of 4 : 3 : 2, D is admitted for 2/9 th share of profit and
brings Rs. 30,000 as capital and 10,000 for his share of goodwill The new profit sharing ratio
between partners will be 3 : 2 : 2 : 2. Goodwill amount will be credited in the capital accounts of
(a) A only (b) A,B and C (equally) (c) A, and B (equally ) (d) A, and C (equally)
12. X and Y are partners sharing profits in the ratio of 3 ; 1. They admit Z as partners who pay s Rs.
4000 as goodwill, the new profit sharing ratio being 2: 1 ; 1 among X,Y,Z The amount of goodwill
will be credited to :
(a) X and Y as Rs. 3,000 and Rs. 1,000 (b) X only (c) Y only (d) None
13. Reserve appearing in the Balance sheet will be divided among partners during admission in
_______ Ratio
(a) Old (b) New (c) Sacrificing (d) Gaining
14. X and Y are partners sharing profits equally. Z was admitted for 1/7 th share. Calculate New Profit
Sharing Ratio.
(a) 2 : 3 : 1 (b) 3: 3 : 1 (c) 6 : 5 : 2 (d) 1 : 1 : 1
15. A, B, C, D are partners sharing their profit and losses equally. They change their profit sharing ratio
to 2 : 2 :1:1. How much will C sacrifice?
(a) 1/6 (b) 1/12 (c) 1/24 (d) None
16. X and Y shares profit /loss in the ratio of 5:3. Z admitted as partner for 1/5, which he is taking
equally from old partners. New profit sharing ratio is :
(a) 21 : 11 : 8 (b) 20 : 8 : 7 (c) 20 : 12 : 8 (d) 10 : 5 : 5
17. X,Y,Z are partners sharing profits in the ratio 3 : 4 : 3 Y retires, and X and Z share his profits in
equal ratio. Find the new ratio of X and Z.
(a) 1 : 2 (b) 2 : 1 (c) 3 : 1 (d) 1 : 1
18. X, Y, Z are equally partners in a firm. Z retires from the firm. the new profit sharing ratio between
X and Y is 1 : 2 Find the gaining ratio.
(a) 3 : 2 (b) 2 : 1 (c) 4 : 1 (d) Only B gains by 1/3
19. Hari, Roy and Prasad are partners in the ratio of 3 : 5 : 1 respectively. Roy wants to retire. His share
is being purchased by Prasad. What would be the new ratio of Hari and Prasad respectively?
(a) 1 : 2 (b) 2 : 1 (c) 3 : 5 (d) Equal
20. Following are essential elements of a partnership firm except :
(a) At least two persons (b) there is an agreement between all partners
(c) Equal share of profit and losses (d) Partnership agreement is for some business
21. In case of partnership the act of any partner is :
(a) Binding on all partners (b) Binding on that partner only
(b) Binding on all partners except that particular partners (d) None of these
22. Which of the following statement is true ?
(a) a minor cannot be admitted as partner
(b) a minor can be admitted as a partner, only into the benefits of the partnership
(c) a minor can be admitted as a partner but his rights and liabilities were same of adult partner
(d) none of the above
23. The relation of partner with the firm is that of :
(a) An Owner (b) An Agent (c) An Owner and an Agent (d) Manager
24. Interest on capital will be paid to the partners if provided for in the partnership deed but only out of
(a) Profits (b) Reserves (c) Accumulated Profits (d) Goodwill
25. P and Q are partners sharing profit in the ratio of 1 ; 2. R was manager who received the salary of
Rs. 10,000 p.m. in addition to commission of 10% on net profits after charging such commission.
Total remuneration to R amounted to Rs. 1,80,000. Profit for the year before charging salary and
commission was :
(a) Rs. 7,20,000 (b) Rs. 6,00,000 (c) Rs. 7,80,000 (d) Rs. 6,60,000
26. A and B are partners in a firm. They are entitled to interest on their capitals but the net profit was
not sufficient for this interest, then the net profits will be distributed among partners in :
(a) Agreed Ratio (b) Profit Sharing Ratio (c) Capital Ratio (d) Equally
27. The excess amount which the firm can get on selling its assets over and above the saleable value of
its assets is called :
(a) Surplus (b) Super profits (c) Reserve (d) Goodwill
28. The Goodwill of the firm is Not affected by :
(a) Location of the firm (b) Reputation of firm
(c) Better customer service (d) None of the above

29. Total Capital employed in the firm is Rs. 8,00,000, reasonable rate of return is 15% and Profit for
the year is Rs. 12,00,0000. The value of goodwill of the firm as per capitalization method would be
(a) Rs. 82,00,000 (b) Rs. 12,00,000
(c) Rs. 72,00,000 (d) Rs. 42,00,000
30. A firm earns Rs. 1,10,000. The normal rate of return is 10%. The assets to the firm amounted to Rs.
11,00,000 and liabilities to Rs. 1,00,000. Value of goodwill by capitalization of Average Actual
profits will be :
(a) Rs. 2,00,000 (b) Rs. 10,000 (c) Rs. 5,000 (d) Rs. 1,00,000
31. Any change in the relationship of existing partners which results in an end of the exiting agreement
and enforces making of a new agreement is called
(a) Revaluation of partnership (b) Reconstitution of partnership
(c) Realization of partnership (d) None of the above
32. Goodwill of a firm of A and B is valued at Rs. 30,000. It is appearing in the books at Rs. 12,000. C
is admitted for share. What amount he is supposed to bring for goodwill ?
(a) Rs. 3,000 (b) Rs. 4,500 (c) Rs. 7,500 (d) Rs. 10,500
33. A and B are in partnership sharing profits in the ratio fo 3 : 2. They take C as a new partner.
Goodwill of the firm is valued at Rs. 3,00,000 and C brings Rs. 30,000 is his share of goodwill in
cash which is entirely credited to the Capital Account of A. New profit sharing ratio will be :
(a) 3 : 2 : 1 (b) 6 : 3 : 1 (c) 5 : 4 : 1 (d) 4 : 5 : 1
34. X and Y are partners sharing profits in the ratio of 4 : 3. Z is admitted for 1/5 th share and he brings
in Rs. 1,40,000 as his share of goodwill in cash of which Rs. 1,20,000 is credited to X and
remaining amount to Y. New profit sharing ratio will be :
(a) 4 : 3 : 5 (b) 2 : 2 : 1 (c) 1 : 2 : 2 (d) 2 : 1 : 2
35. A, B C and D are partners. A and B share 2/3 rd of profits equally and C and D share remaining
profits in the ratio of 3 : 2. Find the profit sharing ratio of A, B, C and D.
(a) 5 : 5 : 3 : 2 (b) 7 : 7 : 6 : 4 (c) 2.5 : 2.5 : 8 : 6 (d) 3 : 9 : 8 : 3
36. A and B are partners sharing profits and losses I the ratio of 5 : 3. On admission, C brings Rs.
70,000 as cash and Rs. 43,000 against Goodwill . New profit ratio between A, B and C is 7 : 5 : 4.
The sacrificing ratio of A and B is :
(a) On a partners admission (b) On retirement of a partner
(c) On expiry of the period of partnership (d) On loss in partnership
37. Unrecorded liability, when paid on dissolution of a firm is debited to :
(a) 3:1 (b) 1 : 3 (c) 4 : 5 (d) 5 : 9
38. On dissolution, goodwill account is transferred to :
(a) In the Capital Accounts of Partners (b) On the credit of Cash Account
(c) On the Debit of Realisation Account (d) On the Credit of Realisation Account
39. At the time of dissolution of partnership firm, fictitious assets are transferred to :
(a) Capital Accounts of Partners (b) Realisation Account
(c) Cash Account (d) Partners Loan Account
40. Change in the existing agreement between the partners is called :
(a) Dissolution of Firm (b) Dissolution of Partnership
(c) Dissolution of Business (d) All of the above
41. In the Balance Sheet Total Debtors appear at Rs. 50,000 and Provision for Doubtful Debts appear at
Rs. 1,500. How much amount will be realised from Debtors, if bad amount to Rs. 10,000 and
remaining debtors are realised at a discount of 5%
(a) Rs. 38,000 (b) Rs. 36,500 (c) Rs. 36,575 (d) Rs. 39,500

42. P, Q and R have been sharing profits in the ratio of 8 : 5 : 3. P retires. Q takes 3/16 th share from P
and R takes 5/16th share from P and R takes 5/16th share from P. New profit sharing ratio will be :
(a) 1 : 1 (b) 10 : 6 (c) 9: 7 (d) 5 : 3
43. A, B and C are equal partners. C retires. He surrenders 3/5 th of his share in favour of A and 2/5th in
favour of B. New ratio will be :
(a) 3 : 2 (b) 8 : 7 (c) 7 : 8 (d) 2 : 3
44. In the Balance Sheet Total Debtors appear at Rs. 50,000 and Provision for Doubtful Debts appear at
Rs. 1,500. How much amount will be realised from Debtors, if bad amount to Rs. 10,000 and
remaining debtors are realised ata a discount of 5%
(a) Rs. 38,000 (b) Rs. 36,500 (c) Rs. 36,575 (d) Rs. 39,500

## 45. Gaining ratio is applied when:

(a) A partner is insolvent (b) A partner is admitted (c) A partner retires (d)
All of these
46. The Indian Partnership Act was passed in the year
a) 1921 b) 1932 c) 1951 d) 1961
47. Normally the partners enjoy right to
(a)Share profits b) Get interest on capital c) Receive salary d)
Get above al
48. On dissolution of a firm , all the assets are transferred to Realisation Account
at their
(a)written value (b) market value (c) book value (d) cost or market
value whichever is less
49. What is the nature of Goodwill?
(a) Dog Goodwill (b) Cat Goodwill (c) Rat Goodwill (d)
All of these
50. The Indian Partnership Act was come into force from the year:
(a) 1932 (b) 1940 (c) 1948 (d) 1956
51. In the absence of any partnership agreement, Profit & Losses are shared
among the partners:
(a) Equally (b) In the ratio of capital (c) In the ratio of loan given by them to the
firm(d) Either (a) or (b)
52. In the absence of any agreement, the partners are entitled to interest on the
the firm @ of:
(a) 5% (b) 7% (c) 6% (d) 8%
53. In the absence of any agreement, partners are entitled to:
(a) Share profit in Capital ratio (b) Interest on Capital
(c) Salary on Capital (d) Interest on loans and advances gain to
the firm
54. General Reserves at the time of admission of a new partner is transferred to:
(a) Capital A/c of partners (b) Trading A/c (c) P & L Adjustment (d)
Balance Sheet
55. A dormant partner participates
a management (b) liabilities (c) profit (d) duty

COMMERCE CLASSES
(A Complete Cell of Commerce Education)
(A CompleteCell of CommerceEducation)
B.com entrance/Accounts/MCQ/2017 Since-2002
1. As per AS-3, Cash Flow Statement is mandatory for
A) All enterprises
B) Companies listed on a stock exchange
C) Companies with a turnover of more than Rs 50 crores
a) Both A and B b) Both A and C c) Both C and B
2. which Enterprises need to prepare Cash Flow Statement only under indirect method-
a) listed b) unlisted c)registered d) all of above
3. In the case of financial enterprises, the cash flow resulting from interest and dividend received and
interest paid should be classified as cash flow from
a) Operating activities b) Financing activities
c) Investing activities d) None of the above
4. In case of other enterprises cash flow arising from interest paid should be classified as cash flow from
________ while dividends and interest received should be stated as cash flow from ____.
a) Operating activities, financing activities
b) Financing activities, investing activities
c) Investing activities, operating activities
d) None of the above
5. When a fixed asset is bought as hire purchase, interest element is classified under ______ and loan
element is classified under________.
a) Operating activities, financing activities b) Financing activities, investing activities
c) Investing activities, operating activities d) None of the above
6. Which of the following is not a cash inflow?
a) Decrease in debtors b) Issue of shares c) Decrease in creditors d) Sale of fixed assets
7. Which of the following is not a cash outflow?
a) Increase in Prepaid expenses b) Increase in debtors
c) Increase in stock d) Increase in creditors
8. Cash Flow Statement is prepared from
a) Profit and loss account b) Balance Sheet
c) Additional Information d) All of the above
9. Which of the following are cash flow from operating activities?
A) Cash Receipts from customers B) Cash Paid to Supplier and Employees
C) Purchase of fixed asset D) Sale of fixed assets
a) Both A and B b) Both A and C c) Both B and C d) Both C and D
10. While preparing Cash Flow Statement, non-cash items and non-operating items are not required to
a) Indirect method b) Direct method c) Both a & b d) None of the above
11. Cash flow from sales is calculated by
a) Cash sales + Cash Collections
b) Sales + Opening debtors+ Opening B/R Closing Debtors Closing B/R
c) Both a and b d) None of the above
12. Cash outflow on purchases is calculated by
a) Purchases + Opening Creditors + Opening B/P Closing Creditors-Closing B/P
b) Purchases + Opening Creditors - Closing Creditors +Closing B/P
c) Purchases - Opening Creditors - Opening B/P + Closing Creditors +Closing B/P
d) None of the above
13. In indirect method, net cash flow from operating activities is calculated on the basis of
a) Net Profit after tax b) Net profit before tax
c) Both a and b d) None of the above
14. Financing activities brings changes in
a) Size and composition of owners equities b) Borrowing of the enterprise
c) Both a and b d) None of the above
15. Given salary expenses Rs 40,000, Outstanding in the beginning of the year: Rs 5,000 and outstanding
at the end of the year Rs 10,000. Cash outflow on salary will be:
a) Rs 45,000 b) Rs 35000
c) Rs 55,000 d) Rs 15,000

Since-2002

16.
17.

## 16. Which of the following are methods of Financial Analysis? :

(a) Comparative statements (b) Common size statements
(c) both (a) and (b) above (d) (a) Only
17. Horizontal Analysis is in which
(a) The financial statement of different years compared
(b) Quantitative relationship among various items of a period is established
(c) To draw conclusions (d) All of the above
18. Horizontal Analysis can have two types
(a) External Analysis & Internal Analysis (b) Inter firm and Intra firm Analysis
(c) Both (a) and (b) (d) Only (b)
19. Which is the main technique of inter firm Analysis ?
(a) Fund Flow Statement (b) Break Even Analysis
(c) Ratio Analysis (d) Comparative Statement
20. An example of Cash Flow from operating activity is
(a) Interest paid on Term Deposits by a Bank (b) Issue of Preference Share Capital
(c) Purchase of Fixed Assets (d) Redemption Debentures
21. Example of Cash Flow from Investing Activity is :
(a) Purchase of material for cash (b) Issue of shares
(c) Repayment of Long-Term Loan (d) Sale of Investment by Non financial Enterprise
22. The source of cash is :
(a) Sale of Goods costing Rs. 12,000 for Rs. 15,000 (b) Cash withdraw from Bank
(c) Cash Deposited into Bank (d) None of the above
23. At the time of calculating operating profit which is to be added in Net Profit :
(a) Rent Received (b) Profit on sale of Building
(c) Increase in General Reserve (d) None of the above
24. Out of the following which one is not an application of Cash ?
(a) Increase in Stock (b) Increase in Trade Receivables
(c) Increase in Prepaid Insurance (d) Increase in Bills Payable
25. At the time of preparing of a Cash Flow Statement, the treatment of increase in Security Premium
Reserve will be :
(a) Cash flow from financing activity (b) Cash flow operating activities
(c) Cash flow from Investing activities (d) None of the above
26. What treatment will be done of bank Overdraft in a Cash Flow Statement :
(a) Cash flow from financing activities (b) Cash flow operating activities
(c) Cash flow investing activities (d) none of the above
27. Cash deposited into a Bank will be classified in which activity
(a) Cash flow from financing activities (b) Cash flow from operating activities
(c) Cash flow from investing activities (d) There is no cash flow.
28. Loan given by PNB will be classified as :
(a) Cash flow from financing activities (b) Cash flow operating activities
(c) Cash flow from investing activities (d) No cash flow
29. Which of the following items is treated as Cash Equivalents :
(a) Trade Receivables (b) Purchase of Land and Building
(c) Marketable Securities (d) None of the above
30. At the time of preparing a Cash Flow Statement, Divided paid by company will be classified s :
(a) Cash flow from financing activity (b) Cash flow from operating activity
(c) Cash flow from investing activity (d) None of the above

31. State the net amount of Source or Use Cash, if machinery having a book value of Rs. 20,000 is
sold at loss of Rs. 7,000
(a) Use Rs. 7,000 (b) Use Rs. 20,000 (c) Source Rs. 13,000 (d) None of the above
32. At the time of preparing a Cash Flow Statement, a payment of Interest on Debentures will be
treated as:
(a) Cash flow from investing activities (b) Cash flow from financing activities
(c) Cash flow operating activities (d) None of the above
33. At the time of preparing a Cash flow Statement, the interest received by a Finance Company is
classified as :
(a) Cash flow from investing activities (b) Cash flow from operating activities
(c) Cash flow from financing activities (d) Cash and Cash Equivalents
34. Cash from operating activities consists of
(a) Decrease in Current Assets (b) Increase in Current Assets
(c) Operating Profit (d) All of the above
35. An example of cash flow from operating activity is :
(a) Issue of Equity Shares (b) Purchase of Inventory for cash
(c) Purchase of Machinery (d) Purchase of Building -
36. Comparative Financial Statement means :
(a) to facilitate comparison for two or more years (b) to show financial position
(c) to compute profit or loss of two or more years (d) None of the above
37. Comparative Income Statement shows
(a) Increase or decrease in (b) Cost of Goods sold
(c) Gross Profit or Loss (d) All of the above
38. Under the Trend Ratio Method, one year is taken as
(a) Previous Year (b) Current year (c) Base year (d) None of the above
39. The most commonly used tools for financial analysis are :
(a) Common Size Statements (b) Accounting Ratios
(c) Comparative Statement (d) All of the above
40. Which of the following items is not a tool of analysis of financial statement
(a) Cash Flow Statement (b) Comparative Statement
(c) Statement of Affairs (d) Trend Analysis
41. Payment of Income Tax is treated as :
(a) Operating Expenses (b) Indirect Expenses
(c) Direct Expenses (d) None of the above
42. Fixed Assets of a company increase from Rs. 4,50,000 to Rs. 6,00,000. What will be the percentage
of change ?
(a) 33.33% (b) 20% (c) 40% (d) 30%
43. Common Size Statement are prepared :
(a) In the form of Percentage (b) In the form of Ratios
(c) In both (a) and (b) (d) None of the above

COMMERCE CLASSES
(A Complete Cell of Commerce Education)
BHU/B.com/ACC/TP-3(share & debenture/2017
Since-2002
1. Discount allowed on issues of shares is an example of
(a)Capital Expenditure b)Revenue Expenditure
c) Deferred Revenue Expenditure d) Capital Receipt
2. In India, a company is governed by this Act.
(a)Companies Act, 1948 b) Companies Act, 1951
c) Companies Act, 1956/2013 d) Companies Act, 1961
3. Which company is not required to hold a statutory meeting?
(a)Public Company b) Private Company c) Public & Private cos.
Both d) None
4. A prospectus is issued by the company to the public in general for
(a)Procuring Goods b) Raising Capital c) Selling Goods d) Making
Publicity
5. When shares are issued at premium amount may be utilized for
(a) issue of bonus shares (b) payment of dividend
(c) payment of operating expenses (d) redemption of debentures
6. Interim Dividend is shown in:
(a) Revenue A/c (b) Net Revenue A/c (c) Capital A/c
(d) None of these
7. Which of the following, does not come under the category of Artificial Persons
account?
(a) Firms Account (b) Companys Account (c) Persons Account (d) Educational
Institutions A/c
8. There must be a gap of at least ________ month between two calls:
(a) 3 (b) 6 (c) 1 (d) 2
9. Interest on debentures is calculated on:
(a) Purchase value of debentures (b) Market value of
debentures
(c) Face value of debentures (d) All of the above
10. Income tax in the case of a sole trader is treated as:
(a) Personal expenses (b) Debtors expenses (c) Business expenses (d)
None of these
11. The parties to joint venture are called:
(a) Friends (b) Principal and Agent (c) Partner (d) Co-ventures
12. Dividend is usually paid as a percentage of:
(a) Paid up capital (b) Called up capital (c) Authorized share capital (d)
Net profit
13. Preliminary expenses in connection with flotation of a new company is:
(a) Miscellaneous capital expenditure (b) Current assets (c) Fixed assets (d)
All of the above
14. As per table A of the companies Act, 1956. A company pays interest on call in
(a) 4% (b) 5% (c) 6% (d) 7%
15. As per table A of the companies Act, 1956. A company can charge interest on
calls in arrears @ of:
(a) 5% (b) 6% (c) 7% (d) 8%
16. Loss on issue of Debentures is generally written off in:
(a) 10 yrs. (b) 8 yrs. (c) Over the period of redemption (d)
15 yrs.
17. What can be maximum gap between two consecutive annual general
meetings of a company?
(a)12 month (b) 15 month (c) 18 month (d) 21
months
18. The minutes of a meeting are signed by the
a Chairman (b) secretary (c)director (d) managing director

## 19. A company secretary has liability-

(a) Contractual only (b) statutory only (c) civil only (d) both statutory and
contractual
20. The quorum of general meeting in the case of a public related company is
(a)2 members (b) 3 members (c) 4 members
(d) 5 members
21. Minutes of the meeting of the members of a company are to be confirmed by
(a)chairman of the same meeting (b) chairman of immediate next
meeting
(c)Chairman of the board of directors (d) as per the articles of
association.
22. Prospectus issues by a public company, limited by shares, when it issues
(a)bonus shares (b) right shares (c) shares to public (d) shares in conversion of
loans and debentures
23. Right of participation of a preference share holders implies the right to
participate in ---
(a) voting in general meetings (b) marginal decision
(c) issues of bonus shares (d) Surplus of assets at the time of liquidation of the
company
24. The outsiders dealing with the company with good faith have the right to
presume that the company
has duly completed all the formalities in a principle of ---
a good faith (b) indoor management (c) constructive notice (d) ultra
virus
25. The doctrine of ultra virus convers acts which are
(a) Beyond the power of secretary only (b) beyond the powers of directors only
(c) beyond the objects stated in Memorandum of association only (d) beyond
the power of CEO of
company only
26. Proxy is appointed by a shareholder to
a speak and vote at the meeting of shareholders (b) speak at the meeting of
the shareholders
(c) Vote at the meeting of shareholders (d) attend the meeting of shareholders
without right to speak and vote
27. N.R.I can now invest in the equity capital of an export oriented Indian company
up to
(a) 40% (b) 51% (c) 60% (d) 100%
28. Franking machine is used for
(a) Duplicating (b) stamp fixing (c) accounting work (d) punching
card
29. Which is recommended for a large size undertaking?
a pigeon hole file (b) spike file (c) vertical file (d) all of the
above
30. Share warrants to bearers can be issued against
(a) fully paid up shares in private company (b) fully paid up share in public
company
(c) any shares in private or Public company (d) debentures of public
company
31. A company can change its name by
(a) passing a special resolution (b) passing an ordinary resolution (c) getting
approval of the central government (d) passing a special resolution and thereafter
getting approval of the central government
32. Consumers cooperative store is set up by
a central government (b) state government (c) registrar of cooperative
societies (d) members
33. Planning function of management is performed by
a top management (b) middle management (c) lower management (d) all of
these
34. Unity of command is practiced in
(a)functional organization (b) staff organization (c)project organization (d) line
organization
35. A company offers to the public 20000 shares for subscription. The company
24000 shares. If the shares are allotted on pro-rata basis the application for
24000 share are to be
allotted as
(a) 5 shares for 6 shares applied (b) 4 shares for 5 share application
(c) 6 shares for every 7 share application (d) none

36. Gopi Ltd. Purchased land and building from Mohan Ltd. For a book value of Rs.
200000.
The consideration was paid by issue of 12% debentures of Rs. 100 each at a
discount of 20%.
The debenture account is credited with.
(a) Rs. 2,00,000 (b) 2,60,000(c)Rs. 2,50,000 (d) 1,40,000
37. Kapoor Ltd. Issued 7,50,000 , 12% debenture of Rs. 100 each at a premium of
10% payable Rs 40
on application and balance on allotment . Debentures are redeemable at par after
6 years. All money
due on allotment was called up received. The amount of premium will be
a (a) 3,00,00,000 (b) 75,00,000 (c) 2,25,00,000 (d) 7,50,00,000
38. A company forfeited 2,000 shares Rs. 10 each held by Mr. Mohan for non- payment
of allotment money
of Rs. 3 per shares. The called-up value per share was Rs. 8. On forfeiture, the
amount debited to
share capital will be
(a) 6,000 (b) 20,000 (c) 1,000 (d) 16,000
39. The company charge interest on calls in arrear at:
b (a) 5% (b) 10% (c) 15% (d)
20%
40. The maximum amount of capital that a company can raise is called:
(a) Authorized Capital (b) Subscribed Capital (c) Issued Capital (d) Called-up
Capital
COMMERCE CLASSES
(A Complete Cell of Commerce Education)
Since-2002
1. Stock, debtors and cash are examples of:
(a) Current assets (b) Current liabilities (c) Debentures (d)
Liquidity
2. ______are amount owing by a company which will have to be paid within 12 months:
(a) Fixed assets (b) Fixed liabilities (c) Current assets (d) Current
liabilities
3. A balance sheet is drawn up to give a financial picture of:
(a) Current assets (b) Liquidity (c) Fixed assets (d)
Liabilities
4. The term Accounts receivable includes:
(a) Sundry debtors (b) Bills receivables(c) Promissory notes (d) a &b
both
5. An undervaluation of previous years opening inventory will:
(a) Cause current years net income to be overstated (b) Cause previous years
net income under stated
(c) Cause previous years net income to be overstated (d) none of
these
6. The Trial balance of Rajesh Ltd. shows closing inventories of Rs.90000. It will be
recorded in:
(a) Profit & Loss A/c (b) Trading A/c (c) Balance sheet (d)
none of these
7. Returns Inward, appearing in the trial balance is deducted from:
(a) Purchases (b) Capital (c) Sales (d) none of
these
8. Drawing is deducted from:
(a) Capital (b) Sales (c) Purchases (d) none of
these
9. All the expenditures of revenue nature go to:
(a) Balance Sheet (b) Trading A/c (c) Profit & Loss A/c(d) Either (b) or
(c)
10. Bills receivable is a:
(a) Intangible fixed assets (b) Tangible fixed assets (c) Current assets (d)
Investment
11. The basic function of financial accounting is to:
(a) record all business transaction (b) interpret financial data.
(c) assist the management in performing function effectively (d) None of the above
12. Which of the Assets below are fixed?
(a) Carts (b) Cash (c) Furniture (d) Debtors
13. Carriage inwards is debited to:
(a) Trading A/c (b) P & L A/c (c) P & L Appropriation A/c (d)
Balance sheet
14. Outstanding Expenses are shown as:
(a) An Expense (b) An Income (c) A Liability (d)
An Asset
15. An example of Intangible Asset is:
(a) Goodwill (b) Debit Balance of Profit & Loss A/c
(c) Preliminary Expenses (d) Deferred Revenue Expenditure
16. Returns inward is debited to:
(a) P & L A/c (b) Balance sheet (c) Trading A/c (d) None of
these
17. Carriage outward is debited to:
(a) Balance sheet (b) P & L A/c (c) P & L Appropriation A/c (d) All of
these
18. Cost of goods sold can be calculated by:
(a) Balance sheet (b) Profit & Loss A/c (c) Trading A/c (d) P & L
Appropriation A/c
19. Goodwill is:
(a) An Investment (b) A Current Assets (c) An Intangible Fixed Assets (d) A
Tangible Fixed Assets

## 20. Unexpired rent given in trial balance is recorded in:

(a) Balance sheet (b) Trading A/c (c) Profit & Loss A/c(d) Either (b) or
(c)
21. At what price goods pending approval or return as on the last day of accounting
year are valued:
(a) Cost price (b) Selling price (c) Average price (d) Latest
price
22. Which of the following is a current asset ?
(a) Plant & Machinery (b) Land & Building (c) Debtors (d) Furniture
23. Which of the following is a fixed asset ?
(a) Cash (b) Building (c) Stock (d) Debtors
24. Capital expenditures are recorded in the:
(a) Trading A/c (b) P & L A/c (c) Balance sheet (d) All of the
above
25. Bad debts recovered account will be transferred to:
(a) Provision for doubtful debt A/c (b) P & L A/c (c) Bad debt A/c (d)
Debtors A/c
26. Goods distributed as free samples is debited to:
A/c
COMMERCE CLASSES
(A Complete Cell of Commerce Education)
BHU/B.com/ACC/TP-5(Ratio)/2017 Since-
2002

## 1. Higher debt equity ratio [ Debt

Equity ] result in

## (a) Lower financial risk (b) Higher degree of operating risk

(c) Higher EPS (d) Higher degree of financial risk
2. Borrowing @ 10% and the tax rate @ 30% means the after tax cost of debt is ________.
(a) 20% (b) 7% (c) 3% (d) 10%
3. Operating ratio from the following information is
Sale,20,000
Gross profit .. 20,000
Operating expenses 5,000
(a) 87.5% (b) 80% (c) 75% (d) 82%
4. Stock turnover ratio is 3 times Average stock is Rs. 20,000. Profit earned is 25% is cost. Then cost of
Goods sold is :
(a) Rs. 20,000 (b) Rs. 60,000 (c) Rs. 75,000 (d) None of the above
5. Current liabilities of a company area Rs. 3, 00,000. Its current ratio is 3: 1 and quick ratio is 1: 1.
Calculate the value of stock in trade.
(a) Rs. 9, 00,000 (b) Rs. 3, 00,000 (c) Rs. 6, 00,000 (d) None of
the above
6. If sales are Rs. 18,000, Gross Profit Rs. 5,000, Net Loss Rs. 1,000, the operating expenses will be?
(a) Rs. 4,000 (b) Rs. 6,000 (c) Rs. 13,000 (d) Rs. 17,000
7. Opening Stock Rs. 15,000 Purchases: Rs. 95,000 Closing Stock: Rs. 29,000 Gross profit 10% of
sales, the amount of sales will be?
(a) Rs. 60,000 (b) Rs. 72,000 (c) Rs. 80,000 (d) Rs. 90,000
8. If the debt equity ratio of a company is 2:1 then it can be understood that for every
(a) 2 rupees of equity there is 1 rupee of debt (b) 3 rupees of total assets there is 2 rupees
of debt
(c) 3 rupees Of total assets there is 1 rupee of debt (d) 2 rupees of total assets there is 1 rupee of
equity
9. An interest coverage ratio of 2.25 indicates that :
(a) EBT is 2.25 times the interest payable (b) EAT is 2.25 times the interest payable
(c) Retained earnings are 2.25 times the interest payable (d) EBIT is 2.25 times the interest payable
10. Current liabilities of a company are Rs. 1, 00,000 and its current ratio is 3:1. After this, company paid
Rs. 30,000 to its trade payables. The current ratio after this payment will be :
(A) 3:0.7 (b) 1:3 (C) 3:1 (d) 3.85:1
11. The ending balance of owners equity is Rs. 1, 02,000. During the year the owner contributed Rs.
15,000 and withdrew Rs. 6,000. If the firm had a net income of Rs. 13,000 for the year, what was the
beginning owners equity?
(a) Rs. 80,000 (b) Rs. 93,000 (c) Rs. 96, 000 (d) Rs. 89,000
12. What is liquid ratio when current Assets Rs. 20,000, Stock = Rs. 3,000, Prepaid Expenses Rs. 1,000
and working capital Rs. 16,800
(a) 5 (b) 2 (c) 4 ` (d) 3
13. The current ratio is 4.5: 1 and liquid ratio is 3:1 Stock is Rs. 3, 00,000 what are the current liabilities?
(a) Rs. 2, 50,000 (b) Rs. 2, 75,000 (c) Rs. 2, 00,000 (d) Rs. 1, 75,000
14. Opening stock was Rs. 29,000 Closing stock was Rs. 31,000. Sales amounted to Rs. 3, 00,000. Gross
profit was 25% on cost. What was the inventory Turnover Ratio?
(a) 6 times (b) 8 Times (C) 7 Times (d) 5 Times
15. Ratios provide a measure of a companys performance and conditions
(a)Definitive (b) Gross (c) Relative (d) Qualitative
16. . . Analysis involves the comparison of different firms financial ratio at the same
point of time
(a) Time-series (b) Cross-sectional (c) Marginal (d) Quantitative
17. . Analysis involves comparison of current to past performance and the
evaluation of developing Trends.
(a) Time- series (b) Cross-sectional (c) Marginal (d) Quantitative
18. Time series analysis is often used to
(a) Assess developing trends (b) Correct errors of judgment
(c) Reflect performance relative to some norms (d) Standardize results

19. An analysis in which the firms ratio values are compared to those of a key competitor or group
Of Competitors. Primarily to identify areas for improvement is called
(a) time-series analysis (b) Benchmarking (c) Combined analysis (d) None of the above
20. The ratios are primarily measures of return.
(a) Liquidity (b) activity (c) Debt (d) profitability
21. . The .. Of a business firm is measured by its ability to satisfy its short
term obligations as, they become due.
(a) Activity (b) liquidity (c) Debt (d) profitability
22. . .. Ratios are a measure of the speed with which various
accounts are converted into Sales or cash.
(a) Activity (b) Liquidity (c) Debt (d) Profitability
23. . The is useful in evaluating credit and collection policies.
(a) Average payment period (b) Current ratio
(c) Average collection period (d) Inventory turnover ratio

## 24. Net working capital is defined as

(a) Total assets less current ratio (b) The excess of current over current liabilities
(c) Current liabilities less current assets (d) Current ratio and average collection period
25. . The two basic measures of liquidity are
(a) Inventory turnover and current ratio (b) Current ratio and liquid ratio
(c) Gross profit margin and operating ratio (d) Current ratio and average collection period
26. The . Is measure of liquidity which excludes .. Generally the least liquid asset.
(a) Current ratio, accounts receivable (b) Liquid ratio, accounts receivable
(c) Current ratio, inventory (d) Liquid ratio, inventory
27. ABC. Co extends credit terms of 45 days to its customers. Its credit collection would be considered
poor if, Its average collection period was
(a) 30 days (b) 36 days (c) 40 days (d) 57 days
28. .. Are especially interested in the average payment period, since it provides them with a
sense of the bill paying patterns of the firm.
(a) Customers (b) Shareholders (c) Lenders and suppliers (d) Borrowers and buyers
29. If the inventory turnover is divided into 365, it becomes a measure of
(a) Revenue from operations efficiency (b) The average age of the inventory
(c) Revenue from operations turnover (d) The average collection period
30. The indicates the percentage of each sales rupee remaining after the firm has paid for
its Goods
(a) Net profit margin (b) Operating profit margin
(c) Gross profit margin (d) Earnings available to equity shareholders
COMMERCE CLASSES
(A Complete Cell of Commerce Education)
BHU/B.com/ACC/TP-6(Trial Balance,types of A/c,Provision, Reconcilation) /2017
Since-2002
1. Trial balance is the list of:
(a) Books (b) Accounts
(c) List of balance of account (d) none of these

## 2. The trial balance checks:

(a) Valuation of closing stock (b) Valuation of assets
(c) Valuation of liabilities (d) Arithmetical accuracy of books of
accounts

## 3. The following account will have debit balance?

(a) Loan to other Party (b) Capital A/c
(c) Outstanding salary (d) Reserve for doubtful debts

## 4. Which one of the following errors may be disclosed by a Trial Balance?

a) Errors in balancing of a ledger A/c
b) Errors of Principles c) Errors of Omission
d) Compensatory Errors

5. Difference of total of debit and credit side of the trial balance is transferred to:
(a) Suspense A/c (b) Difference A/c (c) P & L A/c (d) Trading A/c
6. The balance of Petty Cash Book is:
(a) An Assets (b) A Liability (c) An Income (d)
An Expenditure

## 7. Prepaid commission has a:

(a) Negative balance (b) Debit balance (c) Credit balance (d) None of
these

8. Trial Balance is a:
(a) Final A/c (b) Statement of day books (c) Subsidiary book (d) None
of these
9. Object of Preparing Trail Balance is _______:
(a) To check the arithmetic accuracy of accounts
(b) To check the accounting book in complete and total nature
(c) To find the economic condition of business (d) To get the information of
assets and liabilities
10. The balance of Petty Cash Book is
a) a liability b) an expense c) a gain d) an asset

## 11. Interest outstanding account is:

(a) Nominal A/c (b) Personal A/c (c) Real A/c (d) none
of these
12. Sales account is a:
(a) Real A/c (b) Personal A/c (c) Nominal A/c (d) none
of these
13. Capital account is a:
(a) Personal A/c (b) Real A/c (c) Nominal A/c (d) none
of these
14. Cash account is a
(a) Personal A/c (b) Nominal A/c (c) Real A/c (d) none
of these
15. Drawing account is a:
(a) Personal A/c (b) Real A/c (c) Nominal A/c (d) none
of these

## 16. Receipt and payment account is a:

(a) Real A/c (b) Personal A/c (c) Nominal A/c (d) none
of these
17. Income and expenditure account is a:
(a) Nominal A/c (b) Real A/c (c) Personal A/c (d) none
of these

## 18. Prepaid Insurance account is a:

(a) Nominal A/c (b) Personal A/c (c) Real A/c (d) none
of these

## 19.In case of Non-profit making organizations, this account / statement is not

prepared
a) Receipts & Payments A/c
b) Income & Expenditure A/c
c) Balance Sheet d) Profit & Loss A/c
20. Bad Debts Account is treated as
a) Personal A/c b) Real A/c c) Nominal A/c d) Suspense
A/c
21. Goods of Rs. 100, withdrawn by the owner for his private use, should be credited
to
a) Sales A/c b) Owners Drawings A/c c) Purchase A/c d) Suspense
A/c
22. Loss of goods by fire should be credited to
(a)Purchases A/c b) Loss of Goods by Fire A/c c) Sales/c d) Profit
and Loss A/c
23. Which of the following accounts
will invariably have a credit balance?
a) Current A/c of a proprietor (b) Account Receivable (c) Account Payable
d) Discount A/c
24. Joint Venture account is a:
(a) Nominal A/c (b) Personal A/c (c) Real A/c (d)
Dummy A/c

## 25. Cash Account is.

(a) Personal A/c (b) Real A/c (c) Nominal A/c (d) None
of these
26. Which of the following is not current asset?
a Bank (b)cash (c)goodwill (d) stock

## 27. Consignment A/c is:

(a) Personal A/c (b) Real A/c (c) Nominal A/c (d) Both
(a) & (b)

28. A provision is a:
(a) General Reserves (b) Specific Reserve (c) Capital Reserve (d)
Secret Reserve
92. Bank Reconciliation statement is a
a) Part of Cash Book b) Part of Bank Account c) Ledger Account d)
Statement separately prepared
30. A four months bill drawn on 1st January, 2007 will mature for payment on
a) 3rd May 2007 b) 4th May 2007 c) 5th May 2007 d) 6th May
2007
31. Secret Reserve will be shown in:
(a) P & L A/c (b) P & L Appropriation A/c (c) Balance Sheet (d) None of
these
(a) prevent debt becoming bad (b) obtain a true debtors figure for the
balance sheet
(c) even out actual bad debts incurring (d) encourage prompt payment of
debts by debtors
33. When drawing up a bank reconciliation statement if you start with a debit balance
as per the bank
statement, the unpresented cheques should be
(a) Not required to be adjusted (b) subtracted (c) added (d) none of the
above

COMMERCE CLASSES
(A Complete Cell of Commerce Education)
BHU/B.com/ACC/TP-7(Principle of Accounting)/2017
Since-2002
1. The abbreviation GAAP stands for:
(a). Generally accepted accounting policies (b) Generally accepted
accounting practices
(c) Generally accepted accounting principles (d) General accounts and
audit procedures.
2. Accounting principles are generally based on:
(a) Subjectivity (b) Practicability (c) Convenience in recording
(d) Imagination
3. The system of recording business transactions based on dual aspect concept is
called:
(a) Single entry system (b) Practicability (c) Double account system
(d) All of the above.
4. Under the money measurement concept, the following will be recorded in the
books of accounts of the business:
(a) Value of furniture (b) Quality of company goods
(c) Bad health of managing director (d) All of the above.
5. The concept of conservatism, when applied to balance sheet, results in:
(a) Understatement of assets (b) Overstatement of liabilities
(c) Understatement of liabilities (d) Overstatement of assets
6. The practice of appending notes regarding contingent liabilities in accounting
statement is in pursuance To:
(a) Convention of disclousure (b) Convention of consistency
(c) convention of conservatism (d) Concept of money measurement.
7. Recording business transaction on the basis of documents is to observe the
accounting
assumption of:
(a) Accounting equity (b) going concern (c) Money measurement
(d) Verifiable objectives.
8. Treatment of capital as liability observes the accounting assumption of:
(a) Separate entity (b) Revenue realization (c) Full disclosure (d)
Historic cost principle
9. Accounting period consists of:
(a) 12 months (b) 24months (c) 36months
(d) 48months
10) Accounting to the principle of matching cost and revenue, income of a
ascertained by
(a) Total receipts (b) Total payments
(c) Matching total sales and purchases (d) Matching revenues with the
11.According to the concept of conservatism, the stock in the trade is valued at:
(a) Cost price (b) Market price
(c)Cost or market price, whichever is lower (d)Cost or market price,
whichever is higher
12.The concept of conservation takes into account:
(a)All future losses but leaves all future profits (b)All future profits but
leaves all future losses
(c) All future profits and all future losses (d) All of the above.
13.The policy of anticipate no profit and provide for the possible losses arises
due to:
(a) Convention of disclosure . (b)Convention of
materialism
(c)Convention of consistency (d) Convention of
conservatism
14.Non- financial information is not recorded in accounts due to:
(a) Accrual concept (b) separate entity concept
(c) Dual aspect concept (d) Money measurement
concept.
15.According to the concept of money measurement the following will not be
recorded in the books of accounts.
(a).Simplicity o the general manager (b) death of the general manager
(c) (a) and (b)both (d)Gratuity paid to the general managers wife
after his death
16.Accounting to the concept of going concern a business is presumed to have:
(a) a limited life (b) a long life (c) a definite life (d) An
indefinite life
17.Realization concept implies realization of sale-revenue at:
(a) the receipt of an order (c) transfer of
ownership
(c) the receipt of cash from the customer (d) the
cancellation of an order
18.The concept according to which a fact or happening which cannot be expressed
in terms of money is inot recorded in the accounting books is called:
(a)Cost concept (b)Matching concept
(c) Realisation concept (d) Money
measurement concept
19.The term Expense denotes:
(a)Cost of services and things used for generating revenue
(b)Payment or the incurring of a debt for an asset
(c) Cost which fails to produce revenue (d) All of the above.
20.In case of gold and silver, revenue is recognized in the accounting period in
which it is:
(a)Sold (b) Delivered (c) mined (d) All of the above.
21. Accounting has certain norms to be observed by the accountants in recording of
transactions and
preparation of financial statement. These norms reduced the vagueness and
chances of
misunderstanding by harmonizing the varied accounting practices. These
norms are:
(a) Accounting standards (b) Accounting framework
(c) Accounting regulations (d) Accounting guidance notes

## 22. According to the Business Entity Concept

(a) transactions between the business and its owners are not recoded.
(b) transactions between the business and its owners are recorded considering them to be one single
entity.
(c) transactions between the business and its owners are recorded from the business point of view
(d) None of these
23. According to the Money Measurement Concept
(a) all transactions and events are recorded.
(b) all transactions and events which can be estimated in money terms are recorded in the books of
accounts
(c) all transactions and events which can be measured in money terms are recorded in the books
of accounts. (d) None of these
24. According to the Cost Concept
(a) assets are recorded at the value paid for acquiring them.
(b) assets are recorded by estimating the market value at the time of purchase.
(c) assets are recorded at lower of cost or market value (d) None of the above

## 25. According to the Going Concern Concept

(a) assets are recorded at cost and are depreciated over their useful life.
(b) assets are valued at their market value at the year end and are recorded in the books of accounts.
(c) assets are valued at their market value, recorded in the books and depreciation is
(d) None of the above
26. According to the Accrual Concept
(a) transactions and events are recorded in the books at the time of their settlement in cash.
(b) transactions and events are recorded in the books at the time when they are entered into.
(c) transactions and events may be recorded either at the time of the settlement or when they
are entered into. (d) None of the above.
27. According to the Convention of Consistency .
(a) accounting policies and practices once adopted should be consistently followed
(b) accounting policies and practices adopted my be changed as per the managements decision.
(c) accounting policies and practices one adopted can not be changed as per the management decision.
(d) None of the above
28. According to Going Concern Concept, a business is viewed as having
(a) a limited life (b) a very long life. (c) an indefinite life. (d) None of these

29. According to which of the following accounting concepts, even the proprietor of a business is treated
as creditor to the extent of his capital ?
(a) Money Measurement Concept (b) Dual Aspect Concept (c) Cost Concept (d)Business Entity Concept

30. According to which of the following concepts, in determining the net income from business, all
costs which are applicable to the revenue of the period should be charged against that revenue ?
(a) Matching Concept (b) Money Measurement Concept (c) Cost Concept (d)Dual Aspect Concept
31. Revenue is said to be realized
a) When the sales are made (b)When the goods are manufactured
When the goods are dispatched (d)When the payments are received
32. Fundamental accounting assumptions are:
(a) Consistency concept (b) Going concern concept (c) Accrual concept (d)
All of the above
33. In which area different accounting policies are adopted:
(a) Valuation of inventories (b) Valuation of investment (c) Depreciation
(d) All of the above
34. Advanced received from debtors is not taken as sale is based on:
(a) Conservatism concept (b) Accrual concept
(c) Money measurement concept (d) None of these
35. Liability for bill discounted is:
(a) Contingent Liability (b) Fixed Liability (c) Current Liability (d) None of
these
36. Economic life of an enterprise is split into periodic interval as per ------------
concept
(a) Materiality (b) periodically (c) accrual (d)
conservation
37. Profit and Loss A/c is prepared for the period of one year by the following:
(a) Periodicity concept (b) Business entity concept
(c) Accrual concept (d) None of these
38. Basic concept related to balance sheet are:
(a) Conservatism concept (b) Business entity concept (c) Going concern concept
(d) Both (a) and (b)

39. Inventories are valued at lower cost or net reliable value by applying the principle
of:
(a) Conservatism (b) Consistency (c) Materiality (d)
Disclosure

## 40. Book keeping is mainly concerned with

(a) recording financial data relating to business operations.
(b) designing for system recording, classifying and summarizing recorded data.
(c) interpreting data for internal and external users.
(d) All the above
COMMERCE CLASSES
(A Complete Cell of Commerce Education)
BHU/B.com/ACC/TP-8(Basic formula & terms)/2017
Since-2002
1. Which constitutes the most important element of cost?
(a) Material cost (b) Wages of workers (c) Depreciation of machinery (d)
Interest on loan
2. Cash book is a:
(a) Ledger (b) Journal (c) Ledger and Journal (d) none of
these
3. Return inward book is meant for recording the returns for:
(a) Goods sold on cash (b) Goods sold on credit only

## (c) Goods sold on cash and credit (d) none of these

4. An example of fixed asset is:
(a) Stock stored in a warehouse (b) Cash in a bank account
(c) Stock on the shelves of a shop (d) A computer in an office
5. Goods given as samples should Credited to:
none of these
6. An irrecoverable debt is called:
(a) Bad debt (b) Doubtful debt (c) Good debt (d) none
of these
7. The cash account always shows:
(a) Credit balance (b) Debit balance (c) Credit and Debit balance (d) Nil
balance
8. Income accrued is recorded in a:
(a) Cash book (b) Income book (c) Journal proper (d) Sales
book
9. Bank account may have:
(a) Debit balance (b) Credit balance (c) Both (a) and (b) (d) none of
these
10. When cash discount is allowed by creditor to the business debit is given to:
(a) Creditors A/c (b) Cash A/c (c) Discount A/c (d) none of
these
11. Noting charges are paid at the time of:
(a) Renewal of the bill (b) Retirement of the bill (c) Dishonour of the bill (d)
none of these
12. Purchase of Plant & Machinery on credit basis is recorded in:
(a) Cash book (b) Journal proper (c) Purchases (d)
Both (a) and (b)
13. Loss on issue of debentures is treated as:
(a) Miscellaneous capital expenditure (b) Current assets (c) Intangible assets (d)
Current liabilities
14. Credit balance in the ledger will be:
(a) A revenue or an asset n (b) A revenue or a liability(c) An expenses or an asset
(d) none of these
15. Gross profit is the difference between:
(a) Sales and CGS (b) Sales and total expenses (c) Sales and purchases (d)
none of these
16. On June 1, Sahil paid salary amounting Rs.20000. This is:
(a) A transaction (b) An event (c) Both (a) and (b) (d) none of
these
17. Which is the last step of accounting as a process of information ?
(a) Recording the transaction (b) Preparation of financial statement
(c) Communication of information (d) Analysis and interpretation of information
18. Transaction are posted into ledger Account from
(a) Vouchers. (b) Journal book. (c) None of these
19. Which of the following transaction will not be recorded in the books Accounts ?
(a) Purchased a LCD for personal use, paying the amount from personal bank account
(b) Purchased machinery for manufacture. (c) Purchased machinery for resale. (d) Paid salaries and wages.

## 20. Which of the following is/ are a sub-field (s) of accounting ?

(a) Financial Accounting (b) Cost Accounting (c) Management Accounting (d) All the Above

## 21. Which of the following is not an internal uses of financial statement ?

(a) Board of Directors (b) Managers (c) Employees (d) Lenders
22. which of the following will not be recorded in the books of Accounts?
(a) sales of goods (b) payment of salary (c) Quality of staff.
23.Lucas Paciolis, the founder of Book Keeping , was resident of
a) England b) France c) Italy d) Germany
24. Which one of the following is not a subject matter of Financial Accounting?
a) Analysis of Financial transactions (b)Recording of business transactions
Audit of books of accounts (d)Preparation of Financial statements
25. This book is known as the book of original entries
a) Cash Book b) Ledger c) Journal d) Subsidiary book
26.This does not come under the category of Artificial Persons account
a) Firms Account b) Companys Account c) Persons Account d)Education
Institutions account
27. The word Journal has been derived from
a) French b) Spanish c) Latin d) English
28.The Prime function of Financial Accounting is
a) Record economic data (b) Provide business information
Classifying and recording business transactions (d)Attain non-economic
goals
29.Which one of the following is not a personal Account?
a) Salary Outstanding Account b) Bank A/c c) Bad Debts Account d)
Proprietors A/c
30.A ledger book contains
a) Journal b) Accounts c) Subsidiary books d) Final Accounts
31.This item cannot be regarded as an item of Deferred Revenue Expenditure
a) Bulk purchase of Fixed Assets (b)Heavy Repairs
32.Which one of the following account is not a nominal account?
a) Salaries Account b) Outstanding Salaries A/c
c) Telephone Charges a/c d) Interest A/c
33. The Return of goods by a customer should be debited to
a) Customers A/c b) Sales Returns A/c c) Purchase Returns A/c d)
Goods A/c
34.The Purchase book is meant for recording
a) Credit purchases of goods (b)Cash purchases of goods
All purchases of goods (d)Purchases other than goods
35. Which one of the following is a Liquid Asset?
a) Land b) Building c) Bank Balance d) Machinery
36. Expenses do not include this
a) Salary b) Rent c) Repayment of borrowings d) Repairs
37. Goodwill of a business is regarded as
a) An asset b) An intangible asset c) A current asset d) A
fixed
38. Which one of the following is regarded as an artificial person?
a) Sole Trader b) Firm c) Joint Stock Company d)
Cooperative society
39. Expenditure incurred on extension or addition to an existing property is regarded
as
a) Revenue Expenditure b) Revenue Loss c) Capital Expenditure d)
Capital Loss
40. Receipts and Payment Account shows
a) Income and Expenditure (b) Balances of ledger Accounts
(c)Cash receipts and payments (d) Assets and Liabilities
41. Point out the correct equation:
a) Assets = Liabilities Capital (b)Assets = Liabilities + Capital
Liabilities = Assets + Capital (d) Capital = Assets + Capital
42. The Journal is a book of
(b) Only cash transactions (b) Original entries
(c )Credit sales and purchases (d)only credit transactions
43. Business refers to the human activity which is pursued with the object of making
a) Capital b) Wealth c) Profit d) Assets
44. Which one of the following is not a broad factor of Business Environment?
a) Economic b) Education c) Social d) Political
45. Excess of assets over liabilities represents
a) Net Profit b) Net Loss c) Capital d) Goodwill
46. Stock in trade is a
a) Current asset b) Fixed asset c ) Intangible asset d) Fictitious asset
47. Prepaid expenditure is shown as
a) an asset b) a liability c) an expense d) a
revenue
48. Average Due Date is a particular date when several debts due on different dates
are paid in
a) Installments b) One single amount c) Seperately
d) Periodically
49. Ledger is a principal book in which:
(a) All accounts are kept (b) Only Personal A/c are kept
(c) Only Real A/c are kept (d) Only Nominal A/c are kept
50. Withdrawal by the proprietor would:
(a) Reduce both assets and owners equity (b) Reduce assets and
increase liabilities
(c) Reduce owners equity and increases liabilities (d) Does not affect
Balance Sheet
51. Goods sold on credit are recorded in _______:
(a) Cash Book (b) Sales Book (c) Sales Return Book
(d) Journal
52. Single Entry System of accounting is:
(a) Best System (b) Scientific System (c) Most Popular system (d)
Incomplete System
53. The system of recording business transactions based on Dual aspect concept is
called:
(a) Double account system (b) Double entry system (c) Single entry
system (d) none of these
54. Sales day book is kept to record:
(a) Sales to fixed assets only (b) All sales both cash
and credit (c) Credit sales of merchandising (d) Cash sales
only
55. The long term creditors are interested in:
(a) Profitability of the company (b) Long term solvency of
the company
(c) Cash position of the company (d) both (a) & (b)
56. The total of purchases day book is posted periodically to the debit of:
(a) Sales book (b) Purchases account (c) Cash book (d)
Journal
57. Which stock valuation method best matches the CGS with current replacement cost
?
(a) Specific identification method (b) Weighted average method

## (c) LIFO (d) FIFO

58. Legal expenses incurred on a suit for breach of contract to supply goods is a:
(a) Capital expenditure (b) Deferred expenditure -
(c) Revenue expenditure (d) Both (a) and (c)
59. No Journal entry is required to be passed when there is:
(a) Loss by theft (b) Normal loss (c) Loss of bad debts (d)
Abnormal loss

## 60. Income includes:

(a) Income earned (b) Income received (c) Income receivable (d)
All of these
61. Total of sales book is posted periodically to credit of:
(a) Journal proper (b) Purchase book (c) Sales account (d) Cash book
62. Goods worth Rs. 7,000 given as charity should be credited to:
(a) Trustee A/c (b) Sales A/c (c) Purchases A/c (d)
Charity A/c
63. Freight charges paid on purchase of a new motor will be debited to:
(a) Carriage A/c (b) Motor A/c (c) Freight A/c (d)
Freight & Motor A/c
64. Capital expenditure provides benefit:
(a) Very short term (b) Long term (c) Short term (d)
All of the above
65. Which of the following is a non cash expense?
(a) Depreciation (b) Salary paid (c) Rent paid (d)
Carriage
66. Recovery of bad debt is a:
(a) Revenue expenditure (b) Revenue receipt
(c) Deferred revenue expenses (d) Capital receipt
67. The expired portion of capital expenditure is:
(a) An Asset (b) A Liability (c) An Income (d) An
Expense
68. Writing of transaction in the Ledger is called:
(a) Casting (b) Balancing (c) Posting (d) Journalizing
69. Municipal tax Rs. 6,000 under dispute is a:
(a) Contingent liability (b) Revenue expenditure (c) Current liabilities (d)
Current assets
70. In the Journal there are:
(a) 4 columns (b) 5 columns (c) 6 columns (d)
7 columns
71. In the Ledger there are:
(a) 5 columns (b) 6 columns (c) 7 columns (d)
8 columns
72. Sales to A of Rs. 600 not recorded in the books would affect:
(a) Sales A/c (b) As A/c (c) Cash A/c (d) Sales A/c & As A/c
73. The following error affect the trial balance:
(a) Error of partial omission (b) Error of principle (c) Error of complete
omission (d) All of these
74. Promissory note is prepared by:
(a) Drawer (b) Endorsee (c) Drawee (d) All of these
75. Valuation of inventory is dealt within:
(a) AS-2 (b) AS-3 (c) AS-4 (d)
AS-5
76. Consider the following items
(1) Prepaid salary (2) Accrued interest (3) Loan (4) Bank overdraft Current liability
would include ?
(a) 1,2,3,4 (b) 2,3,4 (c) 4,3,1 (d) 3,4
77. EOQ is used in
a inventory management (b) receivables management (c) cash management
(d) ration analysis
78. Money embezzled by an employee of a trader is
a capital expenditure (b) revenue expenditure (c) capital loss (d) revenue loss
79. Most popular system of accounting used in public utility concerned is
(a) Double entry system (b) double account system
(c) single entry system ` (d) government accounting system

80. 10,000 litres of oil were consigned to a wholesaler the cost being Rs.100 per litre by
incurring freight
Rs. 8,000. 10% of loss of oil unavoidable. 8,000 litres were sold by the consignee.
The remaining stock
of 1,000 litres will be valued at
(a) 1, 12,000(Pb) 1, 11,111 (c) 1, 00,800 (d) 1, 00,000
81. Purchases for cash:
(a) Increase liability (b) Decrease assets (c) No change in the total assets (d)
Increase assets
82. Trade discount allowed at the time of sale of good is:
(a) Recorded in journal (b) Not recorded in the books of
a/cs
(c) Recorded in cash book (d) Recorded in sales book
83. Which of the following is not an assets:
(a) P & L A/cs (cr. balance) (b) Inventory(c) Goodwill (d) Cash
84. Purchases of goods on credit:
(a) Increase liability (b) Decrease assets (c) Increase assets (d) Both
(a) and (c)
85. Under inflationary conditions, FIFO method will lead to:
(a) Lower profit (b) Higher profit (c) Higher sales (d) No
change in sales
86. Which of the following assets are to be valued at the lower of cost and net
realizable values:
(a) Sundry debtors (b) Long term investments (c) Goodwill (d) Stock
(inventories)
87. Which of the followings are fixed assets:
(a) Closing Inventory (b) FD in Bank (for 3 yrs.) (c) Prepaid Expenses (d)
Patents
88. Gross profit is equal to:
(a) Opening stock + purchases closing stock (b) Net profit
Expenses
(c) Sales closing stock + purchases (d) Sales CGS
89. Return Inwards books records
(a) Purchase returns (b) Credit sales returns (c) Cash sales returns (d)
both (a) & (b)
90. Contra entries are passed only when:
(a) Single column cash book is prepared (b) Double column cash book
is prepared
(c) Three column cash book is prepared (d) Petty cash book is
prepared
91. Sale or return day book is a:
(a) Personal A/c (b) Suspense A/c (c) Memorandum A/c (d)
Nominal A/c
92. Goodwill is a:
(a) Current Asset (b) Intangible Asset(c) Personal Asset (d) Tangible Asset
93. Prepaid insurance is
(a) Nominal A/c (b) Real A/c (c) Personal A/c (d) None of
these
94. Profit is a part of:
(a) Income (b) Owners capital (c) Assets (d) All of these
95. Journal is books of:
(a) All cash transactions only (b) All credit transactions only(c) Secondary
entry (d) Original entry
96. Balance of Petty Cash Book is posted to ledger:
(a) In the Bank A/c (b) In the Cash A/c (c) Nowhere (d) Both (a) and
(b)
97. Petty Cash is used for payment of:
(a) Salaries & wages of staff (b) For purchases of assets (c) Small expenses
(d) All of these
98. Interest on capital will be paid to the partners if provide for in the agreement but
only from:
(a) Goodwill (b) Current profit (c) Reserves & Surplus (d)
Accumulated profit

99. On 31st December, 2009 Ashok Ltd. purchased a machine from Mohan Ltd. for Rs.
175,000. This is:
(a) A transaction (b) An event
(c) None of these (d) A transactions as well as an
event
100. Ram Motors will debit purchases of Motor in:
(a) Motor A/c (b) Purchase A/c (c) General Expenses (d) None
of these
101. General Manager attended a meeting held abroad to develop market; meeting
was successful.
The expenses is in the nature of:
(a) Deferred revenue expenditure (b) Capital expenditure
(c) Revenue expenditure (d) None of these
102. Wages Rs. 1,000 payable to labour will be credited:
(a) Cash A/c (b) Labour A/c (c) Salary A/c (d) None of
these
103. Heavy amount spent for the advertisement of new company product is:
(a) Revenue expenditure (b) Deferred revenue expenditure
(c) Capital expenditure (d) Either (a) or (c)
104. Rs. 40,000 spent on repairs of newly purchased old machinery is debited to:
(a) Repairs A/c (b) Cash A/c (c) General Expenses A/c (d)
Machinery A/c
105. Double Entry System of Book keeping was first propounded by:
(a) Chanakya (b) Lee Iccocea (c) Luca Pacioli (d)
Confucious
106. Income and Expenditure Account includes figures related to:
(a) Previous Year (b) Current Year (c) Future Year (d) All of
these

## 107. A sum of Rs.50000 was spent on painting the new plant. It is a

(a) Revenue expenditure (b) Capital expenditure
(c) Deferred revenue expenditure (d) none of these
108. Stock should be out of godown in the sequence in which they arrive is based on:
(a) HIFO (b) FIFO (c) Weighted average (d)
LIFO
COMMERCE CLASSES
(A Complete Cell of Commerce Education)
BHU/B.com/ACC/TP-9(BRS,BOE,Depreciation)/2017
Since-2002
1. The term depletion is used in relation to:
(a) Fixed assets (b) Current assets (c) Wasting assets (d) Intangible
assets
2. _______is term used to describe the speed an asset can be turned in to cash:
(a) Appropriation (b) Debentures (c) Liquidity (d) Cumulation
3. The party who sends the goods for sales on fixed commission basis is known as:
(a) Drawer (b) Drawee (c) Payee (d) Consignor
4. Endorsement, discounting and collection of bills of exchange is made by:
(a) Debtors (b) Creditors (c) Drawee (d) Drawer
5. Under annuity method, interest is calculated on:
(a) Written down value (b) Original cost (c) Scrap value (d)
none of these
6. Which one of the following is not a negotiable instrument?
a) Bills of Exchange b) Promissory Notes
c) Cheques d) Currency Note
7. Which method of Depreciation is must suitable in the case of mineral deposits?
(a) Depletion Method (b) Revaluation Method (c) Annuity Method (d)
None of these
8. Machine Cost Rs.5500, Life 10 yrs, Residual Value Rs.5000, each years depreciation
according to Straight
Line Method would be:
(a) Rs.5000 (b) Rs.6000 (c) Rs.5500 (d) Rs.500
9. Under the Straight Line Method of charging depreciation, the amount of
depreciation
(a) increases every year b)decreases every year c) remains constant
d) not certain
10.The book value of a machine Rs. 20,000 . Two years later the book value is Rs
10,000. The straight line percentage rate of depreciation is
(a) 50% (b) 33% (c) 25% (d)20%
11. Rams A/C which should have been debited with Rs. 3000 has been wrongly
credited. It should be debited in the Rectifying entry with
a double amount (b) triple amount (c) same amount (d) half amount
12. Bills of Rs. 5,000 accepted by rajan was endorsed by Rohit to Raj on account of final
settlement of Rs. 5,200. The benefit of Rs. 200 earned by Rohit was
(a) Credited to discount received A/c by Rs. 200 (b) Debited to discount
allowed A/c by Rs. 200
(c) Credited to rebate A/c by Rs. 200 (d) None of the above
13. Credit balance as per passbook on 31.3.2010 is Rs. 22,000. cheques deposited but
not cleared amount to
Rs. 2,000 and cheques issued but not presented of Rs. 8,000. Balance as per
cashbook should be
(a) 32,000 (b) 16,000 (c) 28,000 (d) 18,000
14. Machinery costing Rs. 500,000 was purchased on 1.4.2008. The installation charges
amounting Rs. 20,000 were incurred. The depreciation at 10% per annum on straight
the method for the year ended 31.3.2010 will be
(a) 5, 00,000(b) 50,000 (c) 52,000 (d) 45,000
15. Diff. in bank balances as per bank pass book and cash pass book may arise on
account of:
(a) Cheque issued but not dishonoured (b) Direct payment by customer in
bank
(c) Cheque issued but not presented (d) All of the three
16. A bill of exchange is drawn on 1 January, 2010 payable after 3 months. The
maturity date of the bill is:
(a) 4th April, 2010 (b) 31st March, 2010 (c) 1st April, 2010 (d) None
of these
17. The noting charges levied on dishonour of an endorsed bill by the notary public are
to be finally
borne by:
(a) Holder of the bill (b) Drawer of the bill (c) Drawee (d) Either
(a) or (b)
18. Depreciation is a process of:
(a) Allocation of profit (b) Valuation of expenses (c) Segregation of profit (d)
Appropriation of profit
19. Bills receivable is
(a) Personal A/c (b) Real A/c (c) Nominal A/c (d) Both (a) &
(b)
20. Parties to Bills of exchange are:
(a) Drawer (b) Drawee (c) Payee (d) All of these
21. When a cheque received is returned dishonoured, it is recorded on:
(a) Bank column, Debit side (b) Bank column, Credit side (c) Cash column,
Credit side(d) None
22. Which of the following instrument is not a negotiable instrument ?
(a) Crossed cheque (b) Bills of exchange (c) Promissory note (d) Bearer
cheque
23. Depreciation is provided on:
(a) Fixed Assets (b) Current Assets (c) Liquid Assets (d)
Fictitious Assets
24. Under diminishing balance method, depreciation:
(a) Is constant every year (b) Increases every year (c) Decreases every year (d)
None of these
25.Depreciation on fixed assets is
a) Capital loss b) Revenue loss c) Deferred Revenue loss d) N