Accounting :An introduction
Unit 1 meaning and scope of accounting
I 2008 - June
[1] Financial statements users
include
(a) Shareholders
(b) Government
(c) Vendors
(d) All of the above
[2] Which of these is not available in
the Financial Statements. of a
Company?
(a) Total Sales
(b) Total Profit & Loss
(c) Capital
(d) Cost of Production
I 2009 - June I
[3] ~ 5000 paid as rent : of office
premises is an/a ____ _
(a) Event
(b) Transaction
(c) Both
(d) None.
[4] Which of the following is correct?
Owner's Equity is:
(a) (Current Asset + Fixed Asset)
+ (Current Liabilities + Long
term Liabilities)
(b) (Current Asset + Fixed Asset)
- (Current Liabilities + Long
term Liabilities) . holds true for?
(c) (Current Asset - Fixed Asset)
- (Current Liabilities + Long
term Liabillties)
(d) None of the above.
[5] If owner's capital is ~ 50,000
liability is ~ 30,000 and fixed assets
is ~ 70,000, then what is the value
of current assets?
Page 1 of 137
I (a) ~ 10,000
(b) ~ 40,000
(c) ~ 80,000
(d) ~ 1,00,000
I 2012 - June c I
[6] Net Profit or Loss will be derived at
__ stage of accounting
(a) Classifying
(b) Interpretation
(c) Recording
(d) Summarising
[7] Which one of the following is not a
main objective of accounting?
(a) Systematic recording of the
transaction
(b) Ascertainment of
profitability of the business.
the
(c) Ascertainment of the financial
position of the business.
(d) Solving tax disputes with tax
authorities
[8] At the end of the financial year, Mr.
X earns a profit of ~ 57,000 in his
business. This is
(a) a transaction
(b) an event
(c) a transaction as well as an
event
(d) neither a transaction nor an
event
I 2013 - June
[9] Which of the following is an event?
(a) Sale of goods for ~ 5,000
(b) Closing stock of worth ~ 4,000
(c) Purchase of goods for ~ 8,000
(d) Rent paid ~ 2,000
(a) Book
Keeping
(b)
Accounting
I 2013 - December (c)
Classifying
I [10] Accounting has universal appli-
cation for recording
(d) Summarising
and events and presenting suitable I 2015 - June
information for decision making
(a) Entries
(b) Transactions [14] All items relating to fixed assets are
(c) Data put at one place while. all items
(d) Figures. relating to current assets are put at
another place. Which procedural
I 2014 - June I stage of the accounting is being
referred?
[11] was the root of financial
(a) Communicating
accounting system:
(b) Analysing
(a) Social accounting
(c) tnterpretinq
(b) Stewardship accounting (d) Recording
(c) Management accounting
(d) Responsibility accounting
[15] Government raises funds through
taxes and spends on various
[12] Interpreting Financial Statements
development activities. The deficit
means:
or surplus at the end of accounting
(a) Methodical classification of the
year is:
data given in the financial
(a) A transaction
statements.
(b) An event
(b) Preparation and presentation
(c) A transaction as well as an
of the classified data in a
event.
manner useful to the users
(d) Neither transaction nor an
of financial statements.
event.
(c) Systematic analysis of the
recorded data so as to put [16] "Substance of any transaction
information in usable form. should be considered while
(d) Explaining the meaning and recording them and not only the
significance of the relationship legal form." Is the statement which
I of analysis of accounting
data: (a) Substance over form.
(b) Disclosure of accounting
I 2014 - December I . policies.
[13] The process of recording financial (c) Both (a) and (b).
data along with the preparation of (d) None of the three.
trial balance are covered under-
 Answer
1(d) 2(d] 3(b) 4(b) 5(a) 6(d) 7(d) 8(b)
9(b)10(b)11(b)12(d)13(a)14(b)15(b)16(a)17(c)18(a)19(b)20{d}

[17] Financial position of the business is

ascertained on the basis of:
(a) Records prepared under book .
keeping process.
(b) Trial balance.
(c) Accounting Reports.
(d) None of the above.
[18] On March 31 st, 2016, after sale of
goods worth ~ 45,000, business-
man is left with the closing
inventory of ~ 20,000. This is:
(a) an event
(b) a transaction
(c) a transaction as well as an
event
(d) neither a transaction nor an
event.
2016 - December I
[19] BOD, government, lender,suppliers, customers, managers,
investors, partners. From the
above identify the external and
internal stakeholders.
(a) Internal: BOD, lender, suppliers, manager, partners
External: Investor, customers, government
(b) Internal: BOD, managers, partners
External: Investor ':'--customer,
government, lender, supplier
(c) Internal: BOD, lenders External: Suppliers,
managers,partners, investors, customers, and using
financial information reporting
(d) internal ;BOD;partners ; external supplierts : manager customer

[20] Payment made to suppliers of goods may be classified as __ .

(a) An event
(b) A transaction
(c) A transaction as well as anevent
(d) Neither a transaction nor an event

Page 2 of 137
Unit 2: accounting consepts ,principles and

conventions

I 2008 - June I.
[1] Omission of paise and showing the
round figures in financial state-
ments is based on:
(a) Conservatism concept
(b) Consistency concept
(c) Materiality concept
(d) Realization concept
[2] Accounting does not record non-
financial transactions because of:
(a) Accrual concept
(b) Cost concept
(c) Continuity concept
(d) Money Measurement concept

[3] The adjustments to be made for

prepaid expenses is:
(a) Add prepaid expenses to
respective expenses and show
it as an asset
(b) Deduct prepaid expenses from
respective expenses and show
it as an asset
(c) Add prepaid expenses to
respective expenses and show
it as a liability
(d) Deduct prepaid expenses from
respective expenses and show
it as a liability

Page 3 of 137
[4] Which of these is not a funda- [9] Guru Ltd. purchased a machinery [14] What is the effect on the Net [19] Outstanding expenses is included
mental accounting assumption? for ~ 10 lakhs. Installation charges= Assets if cash is received from in Profit & Loss Alc at the year end
(a) Going concern ~ 20,000. Market value ~ 12 lakhs. debtors of ~ 50,000? according to which concept ______ _
(b) Consistency Company valued the machine at (a) Increase (a) Matching
(c) Conservatism market price at the end of the year (b) Decrease (b) . Full disclosure
(d) Accrual at ~ 12 lakhs which concept is (c) No Change (c) Accrual
[5] Fixed assets and Current assets violated? (d) None of these (d) Going Concern
are categorized as per concept of: (a) Cost Concept [15] Proprietor (owner) is treated as
(a) Separate entity (b) Realization Concept creditor of business due to: I 2009 - December I
(b) Going concern (c) Matching Concept (a) Periodicity concept [20] What is the objective of conser-
(c) Consistency (d) Accrual Concept (b) Materiality Principle
[10] Cash of ~ 2,000 is withdrawn for vatism?
(d) Time period (c) Entity concept
personal expenses. This will be (a) Take all incomes and losses
(d) Consistency concept
(b) Anticipate losses but not
I 2008 - December I debited to which account:
I 2009 - June I profits
(a) Drawings Alc
(b) Creditors Alc (c) Take all losses
[6] The obligations of an enterprise [16] Provision for discount is made due
(c) Capital Alc (d) None of the above
other than owner's fund are known to concept of: .
(d) Cash Alc [21] Contingent liabilities are shown in
as: (a) Conservatism
[11] Estimated selling price less footnote of Balance Sheet as per
(a) Assets (b) Matching
estimated cost of sales is which concept?
(b) Liabilities (c) Both (a) and (b)
(a) Net Realisable Value (a) Materiality
(c) Capital (d) Materiality
(b) Cost of purchase (b) Disclosure
(d) None of these [17] The three fundamental accounting
(c) Cost of goods sold (c) Realization
[7] Which concept requires that those assumptions are -
(d) None. (d) Dual Aspect
transactions which can be (i) Accrual
[12] Unpaid expenses are: [22] Which of the following does not
expressed in terms of money should (ii) Conservatism
(a) Outstanding Liabilities follow Dual Aspect?
be recorded in books of account? (iii) Going Concern
(b) Prepaid expenses (a) Increase in one asset,
(a) Business Entity (iv) Consistency decrease in other.
(b) Dual Aspect (c) Unaccrued expenses (v) Matching (b) Increase in both asset and
(c) Money measurement (d) All of these (a) (ii), (iii) and (iv) liability
(d) None of these [13] In the accounting period, according (b) (i), (iii) and (iv) (c) Decrease in one asset,
[8] An asset was purchased for to which concept, cost incurred to (c) (ii), (iv) and (v) decrease in other
~ 6,60,000. Cash was paid acquire an asset is shown in the (d) (iii), (iv) and (v) (d) Increase in one asset & capital
~ 1,20,000 and for the balance a Balance Sheet. [18] Debtors - ~ 50,000. A provision for [23] The Rule of "Lower of Cost or
bill was drawn for 60 days. What (a) Business Concept bad debt is created @ 5%
(b) Realization Concept . Market Value" is based on which
will be the effect on fixed assets? according to which concept? concept?
(a) ~ 1,20,000 (c) Cost Concept (a) Conservatism (a) Dual Aspect
(b) ~ 5,40,000 (d) Accounting Period Concept (b) Matching
(b) Conservatism
(c) ~ 6,60,000 . (c) Accrual
(c) Disclosure
(d) Nil (d) Dual Aspect
(d) Prudence

Page 4 of 137
 2010 - June
[24] According to which concept the
owner of an enterprise pays the
"interest on drawings"?
(a) Accrual concept
(b) Conservative concept
(c) Entity concept
(d) Dual Aspect concept
[25] If market value of closing inventory
is reduced below cost prices, which
of the following concepts will playa
role?
(a) Materiality concept
(b) Business Entity concept
(c) Realisation concept
(d) Consistency concept
[26] Cost concept basically recognizes
(a) Fair Market Value
(b) Historical Cost
(c) Realisable Value
(d) Replacement Cost
I 2010 - December I
[27] A trader started retail business.
During the year he sold goods
worth ~ 60,000 for ~ 1,20,000 out of
which only ~ 1,00,000 was
collected during the year. He had a
closing stock of ~ 10,000. His other
business expenses for the period
were ~ 20,000 out of which ~ 5,000
Jt was outstanding at year end His
total profit for the year 2008-09 as .
per the terms of accrual concept
was:
Page 5 of 137
I (a) ~ 30,000
(b) ~ 40,000
(c) ~ 45,060
(d) ~ 20,000
[28] As per Accrual Concept, which of
the following is not true?
(a) Revenue - Expense = Profit
(b) Revenue - Profit = Expense
(c) Sales - Gross Profit = Revenue
(d) Revenue = Profit + Expenses.
[29] If nothing is written in the financial
statements about the three
fundamental assumptions, then it
could be pressured that:
(a) They have not been followed.
(b) They have been followed.
(c) They have been followed to
some extent.
(d) None of the above.
[30] Rosa pays ~ 1200 on 01.06.2009
towards yearly subscription (July'
01 2009 to June' 30 2010) of a
newspaper. It means she has to
make adjustment of __ for
finalization of accounts for the year
ended 31.3.10.
(a) ~ 300 as prepaid
(b) ~ 300 as outstanding
(c) ~ 200 as prepaid
(d) ~ 200 as outstanding.
I 2011 - June
[31] Matching concept is based on:
Revenue - _ = Profit.
(a) Liability
(b) Expense
(c) Asset
(d) . None of these
[32] According to the prudence concept,
closing stock be valued at cost or
____ whichever is less.
(a) market price
(b) accounting price
(c) standard price
(d) net realizable value
I 2011 - December
[33] Small items like Stapler, Calculator,
etc. are not shown in books as
Fixed Assets although they are
used in business for long period
due to:-
(a) Consistency Concept
(b) Materialiy Concept
(c) Accrual Concept
(d) Cost Concept
[34] Business enterprise is a separate
identity apart from' its owner.
Accountant should treat a business
as distinct from its owner. This
concept is known as:
(a) Money Measurement Concept
(b) Matching Concept
(c) Entity Concept
(d) Dual Aspect Concept.
[35] XYZ Ltd. follows the written down
value method for depreciating
I machinery year after year due to
(a) consistency
(b) convenience
(c) comparability
(d) conservatism
[36] X of Delhi purchased a machinery
from Yof Chennai for ~ 10,00,000.
He paid freight of ~ 2,00,000 and
excise duty of ~ 1,00,000. He used
the machinery in his business. At
the end of the year he charged
depreciation ~ 1,50,000. The
market value of the machine was
I estimated at ~ 15,00,000. At what
value the machinery should be
shown in the balance sheet at the
yearend?
(a) ~ 13,00,000
(b) ~ 13,50,000
(c) ~ 11,50,000
(d) ~ 15,00,000
[37] Human resources can't be shown
in Balance Sheet because of
_____ concept.
(a) realization
(b) conservatism
(c) going concern
(d) money measurement.
[38] The policy of "anticipate no profit
and provide for all possible losses"
arises due to convention of
(a) Consistency
(b) Disclosure
(c) Conservation
(d) Matching
I 2012 - June I
[39] "For every debit there is an
equivalent credit" this statement
demonstrates:
(a) Matching concept
(b) Cost concept
(c) Money Measurement concept
(d) Dual aspect concept
[40] The comparison of the financial
statement of one accounting period
with that of another accounting
period is possible only when __
concept is followed.
(a) Cost
(b) Consistency
(c) Going concern
(d) Materiality
12012 - December
[41] The concept means
that similar items in a set of
accounts should be given similar
accounting treatment and it should
be applied for one' period after
another:
(a) Going concern
(b) Prudence
(c) Consistency
(d) Materiality.
[42] Matching concept means:
(a) Assets equal to liabilities plus
capital
(b) Transactions are recorded at
actual cost
(c) Anticipate no profits but
recognize all losses
(d) Expenses should be matched
with the revenue of the
period
2013 - June
[43] Proprietor's personal travelling
expenses are not to be charged in
business accounts. It is due to
____ concept.
Page 6 of 137
(a) materiality
(b) conservatism
(c) going concern
(d) entity
[44] As per basic accounting Equation
Assets = Capital + liabilities which
of the following equation will be
true if Ram starts a business with
~ 5,50,000 &then buy goods worth
~ 1,50,000 from Madan on credit?
I (a) ~ 7,00,000 = ~ 5,50,000
+ ~ 1,50,000
(b) ~ 7,00,000 = f 6,50,000
- ~ 50,000
(c) ~ 5,50,000 = ~ 5,00,000
+ ~ 50,000
(d) ~ 5,50,000 = ~ 7,00,000
- ~ 1,50,000
[45] To achieve comparability of the
financial statements of an
enterprise, the same accounting
policies should be followed from
one period to another period due to
____ concept.
(a) materiality
(b) consistency
(c) conservatism
(d) going concern
[46] Which accounting concept makes a
distinction between the receipt of
cash and the right to receive the
cash?
(a) Money measurement concept
(b) Going concern concept
(c) Realisation concept
(d) Accrual concept
[47] ACE Traders purchased goods for
~ 30,00,000 and sold 70% of such
goods during the accounting year
ended 315tMarch, 2012. The
market value of the remaining
goods was ~ 6,00,000. ACE
Traders valued the closing stock at
~ 6,00,000 and not at ~ 9,00,000
due to concept of _________ .
(a) money measurement
(b) periodicity
(c) cost
(d) conservatism
2013 - December I income measurement and
[48] If owner's equity of a business are
~ 90,000 and profits are of ~ 60,000
for the year calculate total assets of
the business:-
(a) ~ 1,50,000
(b) ~ 1,20,000
(c) .~ 30,000
(d) ~ 1,70,000.
[49] If nothing is written in the financial
statements about the fundamental
accounting assumptions, then it
could be presumed that:-
(a) they have not been followed
(b) they have been followed
\ (c) hey have been followed to
some extent
(d) none of the above.
(50) The proprietor of a business is
treated as a creditor for capital
introduced by him, according to:-
(a) Money Measurement Concept
(b) Cost Concept
(c) Entity Concept
(d) Dual Aspect Concept.
[51] Which is the accounting concept
that requires the practice of
crediting closing stock in the
trading account?
(a) Cost
(b) Realisation
(c) Going concern
(d) Matching.
2014 - June I
[52] Which concepts work together for
recognition of assets and liabilities?
(a) Cost, going Concern and
Realization
(b) Cost, Accrual and Matching
(c) Accrual, Matching and
Periodicity
(d) Going Concern, Periodicity
and Realization
[53] Gyan received ~ 5,000 advance
from a customer. He showed this
amount as his income, which
Accounting Concept is not
followed?
(a) Money Measurement
(b) Accrual
(c) Consistency
(d) Conservatism
[54] A businessman purchased goods
for 25,00,000 and sold 70% of
such goods during the accounting
ye~ ar ended on 31.3.2014. The
market value of remaining goods'
was ~ 5,00,000. He valued the
closing stock at ~ 5,00,000 and not
at ~ 7,50,000 due to:
 (a) Money Measurement
(b) Conservatism
(c) Cost
(d) Periodicity
I ~014 - December
[55] Which accounting concepts give
the valuation criteria?
(a) Going Concern, Realization
and cost
(b) Going Concern, Cost and Dual
aspect
(c) Cost, Conservatism and Dual
aspect
(d) Realization Conservatism and
Going Concern
[56] A firm has reported a profit of
t1,47,000 at the end of the
financial year after taking into
consideration the following
amount:
(i) The cost of an asset of
t 23,000 has been taken as an
expense.
(ii) The partner anticipated a profit
of t 12,000 on the future sale
of a car shown as an asset in
his books.
(iii) Salary of t 7,000 payable in
the financial year has not been
taken into account.
(iv) An asset of t 85,000 was
purchased for t 75,000 and
was recorded in the books as
t 85,000.
Page 7 of 137
What is the correct amount of profit
to be reported in the books?
(a) t 1,47,000
(b) t 1,51,000
(c) t 1,63,000
I (d) t 1,41,000
[57] Mr. Z sold goods worth t 75,500 in
the ordinary course of business. He
has, t 50,000 in cash and t 25,500
as account receivables as at 31 st
March, 2014. Which concept of
accounting is being followed?
(a) Going Concern Concept
(b) Cost Concept
(c) Accrual Concept
(d) Money Measurement Concept
I 2015 - June
[58] Mr. Z purchased goods for
t20,00,000 and sold 4/51h of the
goods for t 22,00,000 of which
he received t 20,00,000 in cash.
He incurred expenses amounting
to t 2,50,000 during the year. For
that year he counted net profit as
t 1,50,000. Which of the accounting
concept was violated by him?
(a) Entity -
(b) Period
(c) Conservatism
(d) Accrual
I 2015 - December
[59] Simon purchased goods
t20,00,000 and sold 4/5th of the
goods amounting t 21,00,000 and
net expenses amounting t3,OO,000
during the year 2015. He counted
net profit as t 2,00,000. Which ot
the accounting concept was
followed by him?
(a) Matching
(b) Periodicity
(c) Entity
(d) Conservatism.
[60] shows profit of t 6,00,000 for the
year ended 31.3.2015. The figure
has been arrived at after charging
I following against revenue:
(i) Purchase of Car on 28.3.2015
for use in business t 1,30,000
and treated as vehicle
expenses.
(ii) Omitting to record unpaid
electricity bills for Feb and
March 2015 t1 0,000 per month.
The correct profit for the year
ended 315t March, 2015 will be:
(a) t 6,40,000
(b) t 7,80,000
(c) t 7,10,000
(d) t5,10,000
[61] Which of the following is correct:
(a) Liabilities = Capital + Asset
(b) Capital = Assets + Liabilities
(c) Capital = Assets - Liabilities
(d) Assets = Liabilities - Capital
I [62] A Trader purchased 100 mobiles
@ t 10,000 each and sold 90
for mobiles during the accounting year
ended 3151 March, 2015. The
marketing value of the remaining
mobiles was t 90,000. He valued
the closing inventories at cost. He
had violated the concept of:
(a) Periodicity Concept
(b) Money Measurement Concept
(c) Cost Concept
(d) Conservatism Concept
12016 - June I
[63] Sohan purchased goods for
t 18,00,000 and sold 4/5th of the
goods amounting t 21,60,000 and
met expenses amounting
t 3,00,000 during the year, 2015.
He counted net profit as
t 4,20,000. Which of the following
accounting concepts was followed
by him?
(a) Entity
(b) Periodicity
(c) Matching
(d) Conservatism.
[64] A businessman purchased goods
for t 25,00,000 and sold 70% of
such goods during the year ended
31.3.2016. The market value of the
remaining goods was t 5,00,000.
He valued the closing stock at
t 5,00,000 and not at t 7,50,000
due to:
(a) Money measurement
(b) Conservatism
(c) Cost
(d) Periodicity
 aaaaaaa
[65] The golden rule of current asset the closing inventory at cost. He [72] Guarantee given in respect of the [74] Economic life of an enterprise is
valuation- 'cost or market price' violated concept of third parties is ______ . split into the periodic interval as
whichever is lower, originated from accounting (a) Contingent liability per __ concept.
the concept of: (a) periodicity (b) Current liability (a) Money measurement
(a) Consistency (b) cost (c) Contingent assets (b) Matching
(b) Conservatism (c) conservatism ,(d) Provision (c) Periodicity
(c) Accrual (d) money measurement [73] A person is having inventory of (d) Accrual
(d) Going Concern. [69] From the following, find out the cost of ~ 1,00,000. Its market [75 ] Which one of the following is not
correct equation, if A = Opening value as on 31s1 March, 2017 is the fundamental accounting
I 2016 - December I . Stock; B = Purchases; C = Closing ~ 80,000. He valued the inventory . assumption?
Stock D = Cost of Goods Sold. at ~ 1,00,000. In during so, which (a) Going concern
[66] The convention of conservatism
(a) D - A = B + C of the concept was voilated by (b) Prudence
when applied to the Balance
(b) A + B = D - C him? (c) Consistency
Sheet, results in: (c) A - C:, D + B (a) ·Money measurement (d) Accrual
(a) Understatement of Assets (d) A + B = C + D (b) Cost
(b) Understatement of liabilities [70] If an asset is increased, there will (c) Conservation
(c) Overstatement of Capital be a corresponding: aa (d) Periodicity
(d) Overstatement of Assets (a) Decrease of specific liability or
decrease of capital
I 2017 - June I (b) Increase of another asset or
increase of capital
[67] X started a business on 1 st (c)· Decrease of another asset or
January, 2016 with capital of ~ increase of llability
5,00,000. On 31 st December, 2016 (d) Increase of drawings and
his books shows total assets and liability.
total liabilities ~ 8,50,000 and
~ 75,000 respectively. He withdrew I 2017 - December I
~ 1,20,000 during the year. His
closing capital and profit would be: [71] _______ principle requires that the
same accounting method should
(a) ~ 8,50,000 and ~ 3,80,000
be followed from one accounting
(b) ~ 7,75,000 and ~ 3,95,000
period to the next.
(c) ~ 7,75,000 and ~ 1,55,000
(a) Conservatism
(d) ~ 8,50,000 and ~ 4,70,000
(b) Consistency
[68] A trader purchased goods for
(c) Business entity
~ 20,00,000 and sold 70% of such
(d) Money measurement
goods during the accounting year.
The market value of the remaining
goods was ~ 5,50,000. He valued

Page 8 of 137
 I Answer I 1.

1 (c) 2. (d) 3. (b)

4 (c) 5. (b) 6. (b) 7. (c)
8. (c) 9. (a) 10. (a) 11 (a)
12. (a) 13. (c) 14. (c) 15. (c)
16. (a)
20. (b)
17. (b)
21 (b)
18. (a)
22. (c)
19. (c)
23. (b).
---1
24. (c) 25. (c) 26. (b) 27. (a)
28. (b) 29. (c) 30 (b) 31 (a) .
32. (b) 33 (d) 34 (b) 35 (c)
36. (a) 37 (c) 38 (d) 39 (c)
40. (d) 41 (b) 42 (c) 43 (d)
44. (d) 45. (a) 46 (b) 47. (d)
48. (d) 49. (a) 50 (b) 51 (c)
52. (d) 53. (c) 54. (d) 55 (b)
56 (a) 57. (b) 58. (a) 59. (d)
60. (a) 61. (c) 62. (9) 63. (d)
64. (c) 65 (b) 66. (b) 67 (a)
68. (b) 69. (c) 70. (d) 71. (c)
72. (b) 73. (a) 74 (c) 75. (c)

26

Page 9 of 137
 fsffdfhudhidf

UNIT: 4 – Accounting policies
I 2007 - February
[2] Accounting Policies:
(a) Are prescribed by AS 1
(b) Are laid down by Law
(c) Are same for all concerns
(d) Change from concern to
concern
12007 May
[3] Which of the following is one of the
major considerations governing the
selection and application of
accounting policy:
(a) Prudence
(b) Materiality
(c) Substance over form
(d) All of the above
I 2007 - August
[4] Accounting principles and policies
are to be standardised to achieve:
(a) Transparency
(b) Consistency
(c) Comparability
(d) All of these
I 2007 - Novembe~ I
1 2008 February
[6] As per AS 1 disclosure should form
part of:
(a) The Final Accounts
(b) The Auditor's Report
I (c) The Director's Report
(d) The Books of Accounts
I 2008 - June
[7] Selection of an inappropriate
accounting policy may lead to :
(a) Understatement of Performance
I (b) Overstatement of Performance
(c) Understatement or Overstate-
ment of Financial Position
(d) None of the above
1 2010 - December
[8] Selection of appropriate accounting
policies is not based on:
(a) Prudence
I (b) Substance over form
(c) Amount involved
(d) Materiality.
[9] Which of the following is not an
example of change in accounting
policy?
(a) Change in method of providing
depreciation on fixed assets.
(b) Change in the method of
providing inventory valuation.
I 12013 - June
[10] The area wherein different
accounting policies can be adopted
are:
(a) Valuation of inventories
(b) Retirement benefits
(c) Treatment of goodwill
(d) All of the above.
I are not important to the
I 2015 - June
I 2017 - June
[11] An enterprise has adopted a wrong
accounting treatment for valuation
of spares and tools. However,
proper disclosures are being made
in financial statements?
(a) The disclosure has the effect
of rectifying the - incorrect
I valuation.
I Answer
1. (d) 2. (d)
5. (a) 6. (a)
9. (c) 10. (d)
I 2006 - November
I (b) This wrong treatment will not
effect true and fair view of
financial statements.
(c) This disclosure cannot rectify
a wrong or inappropriate
treatment adopted by the
enterprise.
(d) Wrong treatment has no
relevance as spares and tools
I enterprise.
I
[12] A change in accounting policy is
justified:
(a) To comply with law.
(b) To ensure more appropriate
presentation of the financial
statement of the enterprise.
(c) To comply with accounting
standard.
(d) All of the above.
I
3. (d) 4. (d)
7. (c) 8. (c)
11. (c) 12. (d)
I
\"l

(c) Adopting double Entry system [1] A change in Accounting Policy

[5] Which is not an example of an
of accounting in place of isjustified to :
accounting policy: Single Entry. (a) Comply with Accounting Standard
(a) Going Concern (d) Change in method of valuation (b) Comply with Law
(b) Valuation of Fixed Assets of Investments.
(c) Ensure more
(c) Treatment of Retirement appropriate
Benefits presentation of
(d) Valuation of Inventories finanacial statment
..... (d) All of the above
•

Page 10 of 137

2006 - November
[1] In Accounting Money is the:
(a) Measurement Value
(b) Scale of Measurement
(c) Scale of Soc1al Measurement
(d) Store of Value
Page 11 of 137
12007 May (c) Differences arising between
certain parameters estimated
1[3] Gross Book Value of a Fixed Asset earlier and actual results
is its: achieved during the currerit
(a) Cost less depreciation period
(b) Historical Cost (d) Both (b) and (c)
(c) Fair Market value
(d) Realizable value I 2008 - February !
I[6] There are
I 2007 - August . I accepted measurement
generally
bases or
[4] ABC Ltd. purchased a building by valuation principles:
paying ~ 50,00,000 as on pI April, (a) two
2000. On 151April, 2007 it found (b) three
that it would cost ~1 ,50,00,000 to (c) four
purchase the similar building. This (d) five
value of ~1 ,50,00,000 is known as
: .2008 - June
(a) Historical Cost
(b) Realizable value 1[7] All of the following are valuation
(c) Curr.ent Cost principles except:
(d) Present Cost (a) Historical cost
1 2007 - November 1 (b) Present value
(c) Future value
[5] Change in accounting estimate
(d) Realizable value
means:
(a) Differences arising between 12012 - June I
certain parameters re-
estimated during the current [8] Historical cost concept requires the
period and actual results recording of an asset:
achieved during the current (a) At its Cost Value
I I 2Q07 February I period
(b) Differences arising between
(b) At its Market value
(c) At its Net Realisable value
certain parameters estimated (d) At its Replacement cost
[2] Money is a measurement scale
earlier and re-estimated
and has a universal denomination: during the current period
(a) True
• (b) Partly True
(c) False
(d) Can't Say
33
2.
3.
I 2014 - June
[9] Change in Accounting estimate
means:
(a) Difference arising between
certain parameters estimated
earlier and re- estimated
during the current period.
(b) Difference arising between
certain parameters estimated
earlier and actual results
achieved during current
period.
(c) Differences arising between
certain parameters during the
current period and actual
results achieved during the
previous period.
(d) Both (a) and (b).
I Answer
1. (b) 2. (c)
5. (d) 6. (c)
9. (d) 10.(d)
Page 12 of 137
I I 2015 - June I
[10] Change in accounting estimate
means:
(a) Difference arises between
certain parameters estimated
earlier and re-estimated during
the current period.
(b) Difference arises between
certain parameters estimated
earlier and actual result
achieved during the current
period.
(c) Difference arises between
certain parameters re-
estimated during the current
period and actual result
achieved during the current
period.
(d) Both (a) and (b).
I .
3. (b) 4. (c)
7. (c) 8. (a)

CHAPTER:2
Unit-1-Basic accounting
procedures- Journal Entries
I 1 2008 - June I
Page 13 of 137
[12] ~ 1500 withdrawn for personal use 12010 - June I
should be debited to ___ _ [18] Discount is allowed by Arun to
(a) expense account
Varun. Which of the following
(b) purchases account
(c) sales account should be the course of action in
(d) drawings account the books of Arun?
[13] Narration is given along with (a) Credit Varun Alc and debit
journal entry: Discount Allowed Alc
. (a) To signify the impact of entry (b) Debit Varun Alc and credit
on profitability Discount Received Alc
I 2008 - February I (b) To disclose the profit or loss of
the transaction.
(c) Credit Arun Alc and debit Dis-
count Allowed Alc
[9] The rule regarding PERSONAL (c) To give a precise explanation (d)· Debit Arun Alc and credit Dis-
for proper understanding of count Received Alc
ACCOUNT is: the entry. [19] Recovery of bad debts written off
(a) Debit what comes in, credit . (d) To secretly understanding the previously will be?
what goes out. inner meaning of entries. (a) Credited to debtors Alc
(b) Debit all expenses and losses, [14] Same as Q7 [Aug. 07] (b) Adjusted against provision for
credit all incomes and gains
(c) Debit the receiver, credit the
I 2009 - December I doubtful debts
(c) Debited to debtors Alc
r giver [15] In case of a debt becoming bad
(d) Credited to Profit and Loss Alc
(d) None and doubtful, the amount is
credited to ? I 2010 - December I
.(a) bad debts alc
[10] The Rule 'Debit all expenses & (b) creditors [20] ~ 5,000 received from Ram on
losses and Credit all incomes & (c) debtors alc 1.1.09 for the old furniture sold to
gains' relates to: (d) capital alc. him on 1.06.08 which of the
(a) Personal Account [16] Proprietor's Account is ______ _ following entry should be passed
(b) Real Account account. for recording the transaction in the
(c) Nominal Account (a) real books of accounts
(d) None of these (b). nominal (a) Cash Alc Dr. 5,000
(c) personal To Furniture Alc 5,000
I 2009 - June I (d) none of these (b) Cash Alc Dr. 5,000
[17] Purchase of second-hand To Suspense Alc 5,000
[11] Unexpired expense is _________ _
computer on credit by a cloth (c) Cash Ale Dr. 5,000
account. merchant will be recorded in:
(a) real To Bad-debts recov-
(a) Journal ered Alc $,000
(b) nominal (b) Cash Book
(c) personal (d) Cash Alc Dr. 5,000
(c) Purchase Book . To Ram Alc 5,000
(d) representative Personal (d) None of the above
[21] 'A' owed ~ 25,000 to 'B' 'A'
becomes insolvent. 'B' got A's
computer valuing ~ 11,500 in his [24] Journal and Subsidiary books in
[30] If wages are paid for construction
full settlement. Journal Entry will be which transactions and events are
first recorded are known as: of business premises,
passed in the books of 'B'. Nc is credited and Nc is
(a) Purchase Nc Dr. 11,500 (a) Secondary Books. [35] X is a dealer of electrical" goods
(b) Memorandum Books. debited.
ToA 11,500 (such as Refrigerator, Washing
(c) Primary Books. (a) wages, cash Machines, Televisions etc.). He
(b) Computer Dr. 11,500
Bad-debts Dr. 13,500 (d) Principal Books. (b) premises, cash purchased two Air Conditioners
To A 25,000 [25] Goods given as charity credited to: (c) cash, wages and installed in his showroom.
(c) Computer Nc Dr.25,000 (a) Charity Nc (d) cash, premises In the books of X, the cost of
To A 25,000 (b) Purchase Nc [31] MIS Stationery Mart will debit air conditioner would be debited in:
(d) Computer Nc Dr. 11,500 (c) Drawings Nc purchase of stationery to (a) Drawings Account
Purchases Nc Dr. 13,500 (d) Sales Nc (b) Capital Account
To A 25,000 (a) stationery account (c) Fixed asset account
[22] Provision for bad-debts as on (b) general expenses account (d) Purchase account
1.4.08 ~ 1,000, during the year [26] Capital Account is a ________ (c) purchase account [36] Which of the following is not an
2008-09 there were no bad-debts (a) real alc (d) stock account example of nominal account?
and debtors as on 31.3.09 were (b) personal alc [32] Value of goods drawn by proprietor
~ 90,000. Provision for bad-debts (a) Outstanding liability account.
(c) nominal alc should be credited to:
required @ 1 % which of the (b) Salary account
(d) none of these (a) Capital Account .
following journal Entry will be (c) Interest paid account
[27] Same as Q 15 [Dec. 09] (b) Sales Account
passed on 31.3.09? (d) Interest received account.
[28] Same as Q 23 [Dec. 10] (c) Drawings Account [37] A diamond ring worth ~ 1,00,000
(a) P &L Nc Dr. 100
To Provision for (d) Purchases Account was stolen from the shop of Mis
doubtful debts 100 [33] "Machinery sold for ~ 30,000 on Shine Jewellers during the
(b) Provision for credit." In which subsidiary book accounting year 2011-12.
doubtful debts Dr. 100 I 2011 - December I this transaction will be recorded? Insurance claim of ~ 60,000 was
To P/L Nc 100 [29] The debt written off as bad, (a) Sales Register admitted by the insurance
(c) P &L Nc Dr. 900 sUbsequently collected by (b) Cash Book company but not disbursed up to
To Provision for proprietor in his personal capacity (c) Journal the end of the accounting year. In
doubtful debts 900 and kept by him. What is (d) No Entry will be made. this regard no entry was passed in
(d) No entry will be passed. [34] Which of the following is not a real the books of accounts. The correct
accounting treatment for this
[23] "Debit the receiver and credit the account? journal entry for preparing the final
giver" is the golden rule for which transaction? (a) Cash account
(a) Debit - Drawings Nc &Credit accounts for the year ended 31 st
type of account? (b) Investment account
- Debtors Nc March 2012, would be:
(a) Real Nc (c) Outstanding rent account
(b) Personal Nc (b) Debit - Cash Nc &Credit- (d) Purchases account
(c) Nominal Nc Bad debts Recovered Nc
(d) None of these. (c) Debit - Drawings Nc &Credit
Bad debts Recovered Nc
(d) Simply ignore the transaction.

Page 14 of 137
 [46] Changes in the capital account of a
(a) Profit &Loss alc
To Purchases alc
Dr. 1,00,000
1,00,000
I 2011 - June I I 2012 - December I proprietor may occur due to:
(b) Insurance claim (a) Profits earned
\ [43] Rent of proprietor's house paid
Receivable alc Dr. 60,000 [40] X Purchased land for ~ 10,00,000. (b) Losses incurred
from business account by cash will:
Loss by theft alc Dr. 40,000 He gave a cheque of ~ 2,00,000 (c) Capital introduced
(a) Decrease the profit
To Purchases alc 1,00,000 and accepts a bill of ~ 8,00,000 due (d) Any of the above
(b) Increase the profit
(c) Profit &Loss alc Dr. 40,000 after 60 days. As a result:
Insurance claim (a) Total assets increased by
(c) Reduce the capital of business
(d) Reduce the cash as well as
I 2016 - June I
receivable alc Dr. 60,000 ~ 10,00,000 &total liabilities capital ot business
decreased by ~ 10,00,000. [SO] Morning Tours has a ~ 70,000
To Purchase alc 1,00,000
(b) Total assets increased by Account receivable from Rahul. On
(d) Insurance claim
~ 8,00,000 &total liabilities January 20, 2015 Rahul makes a
Receivable alc Dr. 60,000 partial payment of ~50,OOO to
Insurance company decreased by ~ 8,00,000. I 2013 - December I Sunset Tours. The journal entry
alc Dr. 40,000 (c) Total assets increased by
[44] Fixed assets are held by business made on January 20, 2015 by
To Purchases alc 1,00,000 ~ 8,00,000 &total liabilities
Morning Tours to record the above
increased by ~ 8,00,000. organization for ___________ .
[38] A Furniture dealer during the transaction includes:
(d) Total assets increased by (a) conversion into cash
financial year 2010-11, sold (a) A credit to the cash received
furniture of ~ 25,000 to Mr. Sunil on ~ 10,00,000 &total liabilities (b) generating income
account of ~ 50,000.
cash basis. In the books of dealer increased by ~ 10,00,000. (c) resale
(b) A credit to Accounts
____ account will be debited (d) none of the above.
receivable Account of
[45] Mr. X purchased a computer for
and _________ account will be
credited.
2012 - June I ~ 60,000 by making a down
t 50,000.
(c) A debit to cash account of
(a) cash, fixed assets payment of ~ 10,000 and balance
~ 20,000.
[41] Debit the expenses or losses, ~ 50,000 signing the agreement
(b) cash, furniture (d) A debit to Accounts receivable
credit all incomes' and gains, is the of bills payable due in 50 days. As
(c) cash, sales of ~ 20,000
rule for: a result of these transactions.
(d) cash, Sunil's
(a) Real Account (a) Total assets increased by
[39] ~ 1,500 received from Ram which
were written off as bad-debts
(b) Personal Account
(c) Nominal Account
~ 50,000 with the corres- I 2016 - December I
ponding increase in liability
earlier. To record this receipt, cash
(d) All of the above ~ 50,000
account will be debited and
[42] Goods are distributed as free (b) Total assets increased by [51] Consider the following statements
account will be credited.
samples worth ~ 50,000 for ~ 50,000 and identify the wrong statement:
(a) Ram's advertisement purpose. Which of (c) Total assets increased by (a) All real and personal accounts
(b) bad - debts the following journal entry would be ~ 60,000 with the corres- are transferred to Balance
. (c) bad - debt recovered passed: ponding increase in liability by Sheet.
(d) sales (a) Advertisement Ale Dr 50,000 ~ 50,000 (b) Nominal accounts are
To Purehases Ale 50,000 transferred to P & L Account.
(d) Total assets increased by
(b) Purehases Ale Dr 50,000
~ 60,000 with the corres- (c) Each account is opened
To Advertisement AIr:, 50,000
(e) Advertisement Ale Dr 50,000 ponding increase in liability by separately in ledger.
To Sales Ale 50,000 ~ 60,000 (d) Rent is a personal account,
(d) None of the above outstanding rent is nominal
account.

Page 15 of 137
2017 -June I

[52] Mr. X a dealer in electronic goods

(such as refrigerators, air
conditioners, washing machines, [55] Pre-paid Insurance Premium
Account is a ________ .
ANSWERI
televisions, etc.). He purchased
(a) Real Account 1. (a) 2. (b) 3. (a) 4. (c)
two air conditioners and installed in
(b) Nominal Account 5. (d) 6. (a) 7. (c) 8. (c) ,
his showrooms. In the books of 'X',
(c) Representative Personal
9. (c) 10. (c) 11. (d) 12. (d)
the cost of these 'two air
Account 13. (c) 14. (c) 15. (c) 16. (c)
conditioners will be debited to: , 17. (a) 18. (a) 19. (d) 20. (d)
(a) Purchases Nc (d) Artificial Personal Account
21. (b) 22. (b) 23. (b) 24. (c)
(b) Fixed Asset Alc 25. (b) 26. (b) 27. (c) 28. (b)
,(c) Drawing Alc 29. (c) 30. (d) 31. (c) 32. (d)
(d) Capital Alc [56] If during the year, the assets are
33. (c) 34. (c) 35. (c) 36. (a)
[53] Decrease in amount of trade increased by ~ 1,00,000 and
37. (c) 38. (c) 39. (c) 40. (c)
receivables results in liabilities are decreased by
41. (c) 42. (a) 43. (d) 44. (b)
(a) increase in cash
'~ 50,000. Owner's equity will be (a) 45. (a) 46. (d)
Increased by ~ 1,50,000
(b) increase in liabilities 50. (b) 51. (d) 52. (b)
(b) Increased by ~ 50,000 53. (a) 54. (b) 55. (c) 56. (b)
(c) increase in capital
(c) Decreased by ~ 1,50,000
(d) increase in loan. ,
(d) Decreased by ~ 50,000
[2017 December I

[54] Goods of worth ~ 4,000 was

purchased from Mr. Jalan. He
allowed 5% trade discount. Cash
discount of ~ 100 was also allowed
for quick payment. Purchases Alc
will be debited by _________ '
(a) ~ 4,000
(b) ~ 3,800
(c) ~3,700
(d) ~ 3,900

Page 16 of 137
 UNIT2 : Ledger

[16] The value of furniture on 1 st April, [21] If the owner withdraws amount
2008 is ~ 80,000. Furniture from the business for personal use,
purchased during the year was then which Nc is to be debited?
[13] A I 2009 - June I ~ 40,000. During the year some . (a) Capital Nc
furniture was sold at ~ 15,000 and (b) Drawings Nc
[12] Purchase Return Account always
a loss of ~ 5,000 occurred. The (c) Owners Nc
shows a ______ balance. I 2010 - December I value of furniture on 31 st March, '(d) None of these.
I 2008 - June (a) debit [15] What will be the total 2009 was ~ 70,000. [22] Which of the following is a real
(b) credit
sales of the year 2008-09 for A Depreciation charged for the account?
(c) either (a) or (b)
Limited, if they provided following year 2008-09 will be: (a) Building Nc
[10] Cash account is a (d) none
(a) ~ 50,000 (b) Capital Nc
(a) Personal opened an account with ~ 5,000 information:
(b) ~ 20,000 (c) Rent Nc
account on 3/12109. He deposited ~ 1,000 Cash saJes ~ 80,000
(c) ~ 30,000 (d) All of these.
(b) Real on 7/12109. He withdraw ~2,000 on Cash collected from
(d) ~ 40,000
account 15/12109 and deposited a cheque debtors ~ 1,50,000 [23] Same as Q 17 [Dec 10]
of ~ 10,000 on 20/12109. What is Bad debts during the [17] Credit balance of ledger is
(c) Nominal [24] What will be the Journal Entry
account the balance on 31/12109? year ~ 10,000 when goods purchased are
Debtor at 1 st April, (a) a revenue or an asset
(d) None of (a) ~ 18,000 returned?
2008 ~ 15,000 (b) a revenue or a liability
the above. (b) ~ 14,000 (a) Creditors Nc Dr.
(c) an expense or an asset
[11] The next step after (c) ~ 4,000 Debtor at 31st March, To Purchase Return Nc
(d) an expense or a liability.
preparation of (d) None 2009 ~ 10,000 (b) Purchase Return Nc Dr.
[18] Which of the following statement is
Ledger is the preparation (a) ~ 2,35,000 To Creditors Nc
of __ : I 2009 - December I b) ~ 2,30,000 correct?
(a) All Entries except cash (c) Creditors Nc Dr.
(a) trial balance (c) ~ 2,40,000 To SalesNc
[14] Which of the following is known (d) ~ 2,25,000 transactions can be recorded
(b) final accounts (d) None of these.
as through Journal.
(c) cash flow
(b) Ledger is a part of subsidiary
statement
(d) balance
"Principal Books of Accounts"?
(a) Ledger book .. I 2011 - December I
(b) Journal (c) Purchase book records all the
sheet [25] After recording the transactions
(c) Trial Balance purchases whether cash or
. credit. and' events in journal and
(d) BalanceSheet
(d) Bank column of cash book subsidiary books, they will be
always has debit balance. transferred to:
[19] Same as Q 10 [June 08] (a) Profit and Loss Account
(b) Balance Sheet
I 2011 - June I (c) Ledger
(d) Memorandum Books
[20] Same as Q 10 [June 08]

Page 17 of 137
I 2012 - June '>I 2013 - June
I 2014 - December I
[26] From the following details, find out
credit sales during the financial [32] At the end of the accounting year
[29] Goods costing ~ 5,000 given to a
year 2010 - 2011: worker towards wages ~ 5,000. all the nominal accounts of the
1 . Opening balance of sundry Market price of goods is ~ 6,000. ledger book are:
debtors on 1.4.10~ 12,000. Journal entry will be (a) Balanced but not transferred to
2. Bills receivable accepted by (a) Wages Ale Dr. ~ 6,000 profit and loss account
customer ~ 13,000. To Sales Ale ~ 6,000 - (b) Not balanced and also the
3. Closing balance of Sundry . (b) Wages Ale Dr. ~ 5,000 balance is not transferred to
Debtors on 31.3.11 ~ 14,000. . To Purchases Ale ~ 5,000 the profit and loss account
4. Cash received from debtors (c) Wages Ale Dr. ~5,000 (c) Balanced and the balance is
during the year ~ 38,400. To Cash Ale ~ 5,000 transferred to the balance
(a) ~ 39,400 (d) None of the above sheet
(b) ~ 27,000 [30] X purchased goods on 90 days (d) Not balanced and their
(c) ~ 65,400 credit from Y worth ~ 20,000. Y has balance is transferred to the
(d) ~ 53,400 given a trade discount of ~ 1,000 profit and loss account.
on the same. Since Y also offered
I 2012 - December I a cash discount of ~ 500, if
2015 - June
[27] From the following 'information payment is made within 30 days, X
ascertain the closing balance of avails the cash discount and paid [33] Salary payable to employees
the dues to Y. At the end of the ~ 50,000 is credited to ________ _
debtors:
. year the goods purchases from Y (a) cash alc
Opening balance of debtors
remain unsold and included in the (b) salary alc
~ 32,600; total sales ~ 1,03,000; stock. The value of such goods
cash collected from debtors (c) outstanding salary alc
would be: (d) none of the above.
~ 70,000; sales return ~ 1,500; (a) ~ 20,000
discount on purchases ~ 1 ,200; (b) ~ 19,500
cash sales ~ 43,000; bad debts (c) ~ 19,000 I 2015 - December I
~ 700:
(d) ~ 18,500
(a) ~ 19,200
(b) ~ 20,400 [34] Opening debtor ~ 15,000
2013 - December
(c) ~ 63,400 Bad debts during the year ~ 14,000
(d) ~ '21 ,900 Cash received from debtors ~1
[28] Furniture of book value of ~ 20,000 [31] 'A' purchased a computer having ,60,000
was sold for ~ 6,000 and new MRP of ~ 60,000 for ~ 45,000 and Closing debtor ~ 7,000
furniture of ~ 20,000 was was offered a cash discount of Total Sales will be:
purchased. Amount debited ~ 9,000. At what percentage he got (a) ~ 1,81,000
towards purchase of new furniture trade discount on MR~ before (b) ~ 1,66,000
will be: getting cash discount? (c) ~ 1,74,000
(a) 15% (d) ~ 1,60,000
(b) 10%
(a) ~ 14,000
(c) 7'/2%
(b) ~ 29,000
(d) 25%.
(c) ~ 5,000
(d) ~ 20,000

Page 18 of 137
 1
12016 - June I
[35] Journal and ledger records
transactions in:
. (a) A chronological order only.
(b) An analytical order
chronological order respectively.
and I Answer I
(c) A chronological order and 1. (b) 2. (a) 3. (d) 4. (b)
analytical order respectively. 5. (a) 6 (d) 7. (a) 8. (b)
(d) An analytical order only. 9. (c) 1 O. (b) 11. (a) 12. (b)
13. (b) 14. (a) 15. (a) 16. (c)
17. (b) 18. (a) 19. (b) 20. (b)
21. (b) 22. (a) 23. (b) 24. (a)
[36] Which of the following statement is 25. (c) 26. (d) . 27. (b) 28. (d)
29. (b) 30. (c) 31. (d) 32. (d)
incorrect?
33. (c) 34. (b) 35. (c) 36. (d)
(a) All personal and real account
37. (a)
ultimately show balances
(b) The balances of nominal
accounts are transferred tc .
profit and loss account
(c) Separate account is opened in
ledger books for each account
(d) Rent is a personal account but
outstanding rent is a nominal
account.

2017 - June
[37] At the end of the year, a ledger
account has credit balance. The
credit balance of the ledger is
written as:
(a) "To Balance c/d" on the debit
side
(b) "By Balance c/d" on the credit
side
(c) "To Balance bid" on the debit
side
(d) "By Balance bid" on the credit
side.
o

Page 19 of 137
 1.
2.
.
.
Creditors 12,960 Rent 14,670

UNIT: 3 –TRIAL BALANCE

Purchases 92,670 Opening
Stock 12,060
Sales 1,16,850 loans
payable 56,000

I 2008 - June Interest

paid
Returns
2,310 Inward 27,430
[8] Trial Balance is prepared on: (a) ~ 1,65,160
(a) End of the year [14] Which of the following will not amounted to ~ 15,000 an'd bad
(b) ~ 1,65,370
(b) A particular date . affect the agreement of Trial debts written off were ~ 10,000.
(c) ~1,37,730
(c) For the period ending_ Balance? Goods sold on credit were:
(a) ~ 2,55,000 (d) None of the above
(d) Both "a" and "b" (a) An amount of purchase of 10,000
(b) ~ 2,45,000 [21] Agreement of Trial Balance is not a
I 2008 - December recorded in cr. Alc
(c) ~ 2,95,000 ___ proof of accuracy.
as ~ 1,000
[9] Balances of the Accounts are (d) ~ 2,75,000 (a) submissive
(b) Customer account debited with
transferred to: (b) inclusive
the amount of cash received
(a) Trial Balance
(c) An Entry of debit of ~ 1,000
I 2013 - December I (c) exhaustive
(b) Trading Account 1/
1 (d) conclusive
was credit with twice the
(c) Profit &Loss Account r:: [18] Salaries paid ~ 4,500 is shown in
amount. 2014 - December
(d) Balance Sheet credit side of trial balance. In the
[10] A list which contains balances of (d) An Entry posted twice in the
total of trial balance the debit side [22] Trial Balance is a statement which
accounts to know whether the .debit ledger.
will be short by ________ _ shows the or the of all the accounts.
and credit balances are matched. [15] Bhandari's trial balance was (a) short by ~ 4,500
showing difference of ~ 5,000 (a) opening balances, closing
(a) Balance Sheet (b) excess by ~ 4,500
(debit side exceeds). While balances
(b) Day Book (c) 'short by ~ 9,000
checking of total sales register, he (b) debit balances, credit balances
(c) Journal (d) excess by ~ 9,000.
found that the total is over-cast by (c) positive balances, negative
(d) Trial.Balance
[11] Which of the following is not a ~ 2,000. After correction in sales balances
register w~at would be the [19]ascertain the arithmetical accuracy (d) balances, totals .
process in the preparation of a Trial
difference in his trial balance. of posting and balancing [23] Ledger balances of MIs Nagarjun
Balance?
(a) Recording (a) Debit side exceeds by ~ 7,000 (a) Cash Book traders are as follows: Capital
(b) Summarizing (b) Debit side exceeds by ~ 5,000 (b) Journal ~9,00,000, Computer ~1 ,30,000,
(c) Classifying (c) Debit side exceeds by ~ 3,000 (c) Trial Balance Machinery ~4,50,000, office
(d) Interpretation (d) Credit side exceeds by ~ 3,000 (d) Bank Reconciliation Statement
[16] Closing stock in the trial balance furniture ~1 ,50,000, Investments
[12] Which of the following in Trial ~3,00,000, salaries ~2,10,000 sales
implies that. 2014 – June
Balance is contradictory to . each ~16,OO,000, postage ~1 ,20,000,
(a) It is already adjusted in the [20] Find out the total of Debit side 'of
other? ___________ .
opening stock. freight. ~1 ,21,000, Purchases
(a) inventory and drawings the Trial Balance from the following
(b) It is adjusted in Sales Alc. ~9, 15,000, Rent ~28,000, cash in
(b) sales and purchase return
(c) It is adjusted in the Purchase list of balances extracted from the hand N8,000, Bank overdraft
(c) carriage inward and outward
Alc. ~20,000, Creditor ~1 ,00,000,
(d) trade receivable and liability books of Mr. Yoshin as on 318t
(d) None of these. Debtor ~1 ,48,000. The total of Trial
2009 - June 2013 -: June March, 2014
Balance will be:
[13] Trial Balance creates [17] Opening and Closing Balance of (a) ~ 26,40,000
Particulars Amount Particulars Arrount '
accuracy. Debtors Alc were ~30,000 and (~) . (~) (b) ~ 24,99,000
(a) principle Capital 2,00,000 Discount
40,000 respectively yash collected allowed 820
(c) ~ 26,20,000
(b) arithmetical
Page 20 of 137 (d) ~ 25,72,000
Debtors 15,200 Discount
(c) clerical from the debtors during the year
received 1 ,030
(d) none. was ~ 2,40,000. Discount allowed
2010 - December to debtors for timely payment
 [28] The trial balance is prepared for: (a) ~ 16,00,000 [33] Agreement of Trial Balance
2015 June
(a) Locating clerical errors (b) ~ 16,95,000 ensures arithmetical accuracy, but
[25] same as que 8 (b) Locating errors of principle (c) ~ 14,50,000 is not a proof of accuracy.
. (c) Locating errors of omission (d) ~ 15,00,000 (a) submissive
[26] A suspense account facilitates the (d) All of the above. (b) inclusive
2016 - December
preparation of even the has not (c) exhaustive
been tallied.
2015 - December [31] Suspense Account is used to (d) conclusive
(a) trial balance, financial rectify those errors which have
statements
[29] Ram started business with ~1 0,000 been located: 12017 - June I
Cash and ~ 2,000 turnlture. Sales (a) Before preparation of Trial
(b) ledger, trial balance
amounted to ~ 50,000 including Balance [34] If a purchase return of ~ 2,000 has
(c) trial balance, ledger
~5,000 cash sales. ~ '10,000 Sales (b) After preparation of Trial been wrongly posted to the debit
(d) financial statements, trial
were outstanding at the end of the Balance the sales returns account,. but has
balance.
year. Purchase amounted to (c) Before or after preparation of correctly been entered in· the
~30,000 including ~ 10,000 cash Trial Balance suppliers account, the total of the
[27] 2000 received by way of
purchases ~ 15,000 has been paid (d) After preparation of Final trial balance would show:
commission and entered correctly
to suppliers. Expenses paid during Accounts. (a) The debit side to be ~ 2,000
in cash book, is posted to the debit
the year ~ 19,300. Trial Balance [32] Which of the following errors is not more than the credit side
side of the commission account. In
total will be: revealed by the trial balance? (b) The debit side to be.~ 4,000
the trial balance:
(a) ~ 67,000 (a) Wrong amount entered in the more than the credit side
(a) The debit total will be more by
(b) ~ 57,000 books of original entry. (c) The credit side to be ~. 2,000
~ 2000 than the credit total.
(c) ~ 62,000 (b) Wrong amount entered in the more than the debit side
(b) The debit total will be more by
(d) ~ 49,300 sides bill. (d) The credit side to be ~ 4,000
~ 4000 than the credit total.
(c) wrong amount entered in the books more than the debit side.
(c) The credit total will be more by 2016 - June
~ 4000. d) All of the above
(d) The credit total will be more by [30] Given below are the ledger
~ 2000. [24] All the following statements ale
balances of a professional firm:
Capital ~ 4,00,000, Computer correct except _______ _
~ 25,000, Air Conditioner and (a) trial balance is a statement not
Furniture ~ 1,00,000, Fixed an account.
deposits ~ 2,00,000, Salaries (b) trial balance is always
~ B,OO,OOO, Fees received prepared at the end of the
~ 12,00,000. Travelling expenses financial year.
~ 1,50,000, Rent and office (c) agreement of Trial Balance is
not a conclusive proof of
expenses ~ 2,40,000, Cash
accuracy.
Balances ~ 1,BO,000, Bank
(d) trial balance will tally even if an
Overdraft ~ 95,000. The total of the entry is posted twice in the
Trial Balance will be: ledger
ANSWERS. 1. (d) 2. (a) 3. (c) 4. (c)
5. (b) 6. (b) 7. (d) B. (b)
9. (a) 10. (d) 11. (d) 12. (d)
13. (b) 14. (d) 15. (a) 16. (c)
17. (d) 1B. (c) 19. (c) 20. (a)
21. (d) 22. (b) 23. (c) 24. (b)
Page 21 of 137 25. (b) 26. (d)- 27. (b) 2B. (a)
29. (a) 30. (b) 31. (b) 32. (d)
33. (d) 34. (b)
 3.
UNIT 4 : SUBSIDIARY BOOKS
I 2008 - June I
[1] A note sent by buyer on return of
goods is:
(a) Debit Note
(b) Credit Note 1(b) 2(d) 3(d)
(c) Return Note
(d) None

I 2009 - June I
[2] Which of the following' is not a
subsidiary book?
(a) Sales Book
(b) Purchases Book
(c) Cash Book
(d) BIR Book.
[3] Purchase of furniture on credit
should be recorded in __
(a) purchase book
(b) sales book
(c) cash bok I
(d) journal

Page 22 of 137

2008 - June I
[8] Double entry in Cash Book is
completed when:
(a) Salaries are paid by cheque
(b) Withdrawal of money from
bank for personal use
(c) Deposited cash into bank
(d) None of these
(
I 2008 -. December I
[9] Imprest amount - ~ 500. What will
be the amount of re-imbursement if
following expenses were incurred
by the petty cashier during the
month-Telephone = ~ 150, Tiffin
= ~ 50, small Repairs = ~ 30
general expenses = ~ 100.
(a) 300 .
(b) 170
(c) 330
(d) 270
I 2009 - June I
[10] Interest received of ~ 100 was
recorded as interest paid. What will
be the effect on cash balance?
(a) Cash will reduce by 100.
(b) Cash will increase by 200.
(c) Cash will reduce by 200.
(d) No effect on cash balance.
I 2009 - December I
[11] In three column Cash BOOk, when
does contra entry occurs?
(a) Withdrawal of cash from bank
(b) Payment to creditors
(c) Withdrawal of cash from bank
for personal use
(d) . All of the above
Page 23 of 137
UNIT 5 :CASH BOOK
[12] What will be journal entry when
cash is withdrawn from bank for
personal use?
(a) Drawings Alc debit, Bank Alc
credit
(b) Cash Alc debit, Bank Nc
credit
(c) Bank Alc debit, Drawings Alc
credit
(d) Bank Alc debit, Capital Alc
credit
I 2010 - June .
[13] Rent due for the month of March
will appear of the cash book.
(a) on the receipt side
(b) on the payment side
(c) as a Contra Entry
(d) nowhere
[14] Where two aspects of a transaction
are posted in the Cash BOOk, such
an entry is called
(a) Double Entry
(b) Debit Entry
(c) Credit Entry
(d) Contra Entry
2011 - December
[15] Rent due for the month of March
will appear in the Cash book.
(a) on the receipt side
(b) on the payment side
(c) as a contra entry
(d) no where
[16] Postage stamps purchased for ~ 30
by business. This transaction will
be recorded in:
(a) Purchase book
(b) Cash Book
(c) Petty Cash Book
(d) Journal
2013 - December I
[17] Petty cash may be used to pay
(a) The expenses relating to
postage and conveyance.
(b) Salary to administrative staff
(c) For the purchase of furniture
and fixtures
(d) For the purchase of raw
material.
2014 - June
[18] While balancing three column cash
book, the discount columns are:
(a) Totaled but not adjusted
(b) Totaled and also adjusted -
(c) Totaled but not balanced
(d) Balanced but not totaled
2014 - December IS
[19] The Balance on the. debit side of
the bank column in Cash Book
indicates
(a) total amount withdrawn from
the Bank
(b) Total amount deposited in the
Bank
(c) Cash at Bank
(d) Bank overdraft
2016 - December 2017 - December

[20] When two aspects in one [21] Cash book is a type of __ but
transaction are recorded in the treated as a __ of accounts.
Cash Book itself, it is called: (a) subsidiary book, principle
(a) Debit entry book
(b) Double entry (b) principle book, subsidiary
(c) Single entry book
(d) Contra entry (c) subsidiary book, subsidiary
book
(d) principle book, principle book

I Answer I
1. (c) 2. (b) 3. (d) 4. (a)
5. (d) 6. (a) 7. (b) 8. (c)
9. (c) 10. (c) 11. (a) 12. (a)
13. (d) 14. (d) 15. (d) 16. (c)
17. (a) 18. (c) 19. (d) 20. (d)
21. (a)

Page 24 of 137
 2008 - June
[13] Brokerage on the issue of shares
and debentures is a expenditure:
(a) revenue
(b) capital
(c) deferred revenue
(d) partly capital partly revenue
[14] What is the difference between
deferred revenue expenditure and
prepaid expenses?
(a) Accounting treatment
(b) Estimation of amount
(c) Benefit for more than. one
accounting period
(d) Nature of expenditure
2008 - December1
[15] Machinery was - purchased for
~ 10,000 and ~ 500 paid as wages
for erection of machinery? The
account that should be debited is:
(a) WagesNc
(b) Machinery Nc
(c) Repairs Nc
(d) None
1 2009 - December
[16] An old machinery is purchased for
~ 10,000. Installation charges of
~ 1,000 were incurred. Repairs to
the old machinery = ~ 7,000
Repairs Account will be debited by:
(a) ~ 7,000
[19] Medium term loan obtained from
(b) ~ 8,000
(c) Nil
(d) None of the above
[20] If repairs of { 100 are done on a
Page 25 of 137
2010 - June 1
[17] X Limited spent ~ 10,00,000
towards construction of office
building. It also spent 50,000
towards construction of temporary
store and used the store for
building construction purpose. On
completion of building construction
the store was dismantled and the
. materials were sold for { 20,000.
Mr. A, a supervisor was paid
{60,000 as his salary during the
period of construction and he
devoted 2J3,d of his time for the
building construction, The
capitalized cost of office bUilding\. [23] 'A' purchased a Car on 1.06.2010
was:
(a) {1 0,00,000
(b) {11,10,000
(c) {10,90,000
(d) {1 0,70,000
12011 - June 1
[18] A truck was purchased and after
sometime, the name of the
company was painted on it for
advertisement purpose for { 1,000/-
this is:
(a) Capital Expenditure
(b) Deferred Revenue Expendtture such repairs are:-
(c) Revenue Expenditure
(d) None.
bank . for augmenting· working
capital is:
(a) Revenue Expenditure
(b) Capital Expenditure
(c) Revenue Receipt
(d) Capital Receipt.
machinery then which account will
be debited?
(a) Machinery Nc
(b) Repairs Nc
(c) Capital Nc
(d) . Wages Nc.
[21] Heavy advertisement expenditure
should be treated as:
(a) Deferred Reveroo Experx:fllure
(b) Revenue expenditure
(c) Capital Expenditure
(d) None of these.
\
\
I 2011 - December I \
[22] Deferred Revenue Expenditure to
the extent of not written off, is
shown in Balance Sheet under the
head:- ,
(a) Miscellaneous Expenditure
(b) Capital
(c) Current Liabilities
(d) Fixed Assets.
for ~ 5,60,000 and incurred
~ 25,000 for repairs, etc. He paid
~ 10,000 as insurance, ~ 1,500 for
petrol. What amount should be
debited to Car Alc?
(a) ~ 5,60,000
(b) ~ 5,96,500
(c) ~ 5,95,000
(d) ~ 5,85,000
[24] XYZ Limited has a house for 3
years. It used it as guest house.
Now it incurred an expenditure for
~ ~,;u,uuG TOr repairing the roof of
this house. Expenses incurred on
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Deferred Revenue Expenditure
(d) None of the above.
. [25] Which of the following Expenses
will not be included in the
acquisition of plant?
(a) Purchase Price of Plant
(b) Installation Expenses
(c) Annual Maintenance charges (d) Delivery charges of the plant.
2012 - December
[26] A new machine was purchased in
Delhi and brought to Jaipur factory
site for installation. The machine
was damaged during transit and
repair expenses were incurred
amounting to ~ 20,000. Such repair
will be treated as:
(a) Capital expenditure
(b) Revenue expenses
(c) Deferred revenue expenditure
(d) Reserves"
[27] Revenue Expenditure wrongly
recorded as Capital Expenditure
will result in:
(a) Overstatement of net profit
and understatement of assets
(b) Overstatement of net profit
and overstatement of assets
(c) Understatement of net profit
and overstatement of assets
(d) Understatement of net profit
and understatement of assets
2013 - June
[28] Which of the following statement is
false?
(a) Expenses in connection with
obtaining a licence for running
the Cinema is Capital expenditure
(b) Heavy advertisement expenses
to introduce a new product is
deferred revenue expenditure
(c) 'Cost of construction of building
including cost of temporary huts
for storing building materials is
capital expenditure
(d) The cost of Rings and Pistons
of an engine changed increase its fuel efficiencyiis
revenue expendit

Page 26 of 137
[29] Expenditure incurred of ~ 20,000
for trial run of a newly installed
machinery would be:
(a) Preliminary expenditure
(b) Capital expenditure
(c) Revenue expenditure
(d) Deferred revenue expenditure
I 2013 - December I
[30] Amount spent on increasing the
seating capacity in cinema hall is:-
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Deferred Revenue Expenditure
(d) None of the above.
[31] Renewal fee for patent is a:
(a) Capital expenditure
(b) Revenue expenditure
(c) Deferred revenue expenditure
(d) Development expenditure
2014-June I (d) not an expenditure
[32] Shivam purchased an old building
for ~ 50 lakhs. He demolished the
building for the purpose of
constructing shopping mall on the
same site. Demolition cost was. ~1
lakh. Construction cost of the mall
was"~ 35 lakhs, He inaugurated it
and the inauguration cost was
~ 50,000 Capital Expenditure was:
(a) ~ 86,00,000
(b) ~ 86,50,000
(c) ~ 85,00,000
(d) ~ 85,50,000
I 2014 - December I
[33] Rohit is in real estate business. On
6thJune, 2014 he sold a penthouse
for ~ 4 crores (costing ~ 3.5 crores),
The amount realised is a
•
Page 27 of 137
(a) Capital receipt and profit
should be transferred to
capital reserve.
(b) Revenue receipt and profit
should be transferred to
Profit
and Loss Alc.
(c) Capital receipt and profit
should be transferred to
Profit
and Loss Alc.
(d) Revenue receipt and profit
should be transferred to
General Reserve Alc.
[34] Deepawali advance given to .
employees is _________ "
(a) capital expenditure
(b) revenue expenditure
(c) deferred revenue expenditure
2015 - June
[35] The total of discount column on the
, debit side of the cash book is,
posted in the:
(a) Debit side of discount received
account
(b) Credit side of discount
received account
(c) Debit side of discount allowed
account
(d) Credit side of discount allowed
account.
I 2015 - December I
[36] If repairs cost is ~ 30,000, white
wash expenses are ~ 5,000, cost of
extension of building is ~ 3,00,000
and cost of improvement in
electrical wiring system is ~ 30,000.
 The amount of Revenue
expenditure will be:
(a) f 65,000
(b) f 35,000
(c) f 3,65,000
(d) f 3,35,000
[37] The unexpired portion of capital
expenditure is shown in the
financial statements:
(a) As an asset
(b) As an income
(c) As a liability
(d) As an expense.
[38] Legal expenses incurred
defending a suit for breach of
contract to supply goods is a:
(a) Revenue expenditure
(b) Capital expenditure
(c) Deferred revenue expenditure
(d) None of above.
[39] Money spent to reduce
. working/revenue expanses is:
(a) Revenue Expenditure
(b) Deferred Revenue Expenditure
(c) Capital Expenditure
(d) None of above.
2016 - June
[40] If repair cost is f 30,000,
whitewash expenses are '{ 6,000,
cost of extension of building is
.f 3,00,000 and cost of
improvement in electrical wiring
system is f 22,800, the amount of
expense is:
(a) '{ 3,58,800
(b) f 52,800
(c) f 36,000
(d) '{ 58,800
in [41] Insurance claim received on
account of machinery damaged by
fire: •
(a) Capital receipt.
(b) Revenue receipt.
(c) Capital expenditure.
(d) Business expenditure.

Answer 7
1. (a) 2. (c) 3. (c) 4. (a)
5. (d) 6. (a) 7. (b) . 8. (a)
9. (a) 10. (a) 11. (a) 12. (c)
13. (c) 14. (b) 15 .. (b) 16. (c)
17. (d) 18. (c) 19. (d) 20. (b)
21. (a) 22. (a) 23. (b) 24. (c)
25. (c) 26. (b) 27. (b) 28. (d)
'29. (b) . 30. (a) 3.1. (b) 32. (a)
33. (b) 34. (d) 35. (c) , 36. (b)
37. (a) 38. (a) 39. (c) 40(a)
41. (a) .

Page 28 of 137

2008 - June
[7'Workmen Compensation under
Dispute' is an example of:
(a) Contingent Liability
(b) Contingent Asset
(c) Current Liability
(d) Current Asset
2008 - December
[8J Bill discounted with a bank is __ "
(a) contingent liability
(b) current liability
(c) current Asset
(d) none of these
2010 - June I acknowledge as debts
[9] Which of the following is not a
contingent liability?
(a) Claims against the firm not
acknowledged as debts.
(b) Guarantees given in respect of
third parties.
(c) Amount due to trade creditors
which is not disputed.
(d) Bills discounted from bank.
I 2011 - June I
[10] Income tax demand, disputed by a
company is ______ .
(a) contingent liability
(b) current liability
(c) long term liability
(d) none of these.
[11J Contingent liability if becomes
probable then it is _______ _
(a) provided for in the books of Nc
(b) provided in Director's report
(c) shown in notes to accounts
(d) none of these.
Page 29 of 137
2011 - December
[12] appear as a footnote
below the balance sheet.
(a) fictitious assets
(b) contingent liabilities
(c) current liabilities
(d) current assets
2013 - June
•
[13] Which of the following is not a
contingent liability?
(a) Claims against enterprises not
(b) Guarantees given in respect of
the third parties "
(c) Liabilities in respect of bills
dishonoured
(d) Penalty imposed by Excise
officer for violation of a
provision
of the Central Excise Act.
2014-June
[14] Which of the following is not a
difference between a provision and
contingent liability?
(a) A provision meets
recognition criteria whereas a
contingent liability fails to meet
the same.
(b) Provision is a present liability
of uncertain amount whereas
contingent liability is a possible
obligation which arises from
past event:
(c) Provision can't be measured
whereas contingent liability
can be accurately measured.
(d) None of the above.
UNIT: 7 Contingent asset and
contingent liabilities
2014"- December I
[15] In which of the following cases,
accounting estimates are !'leeded?
(a) Employee benefit obligations
(b) Impairment of losses
(c) Inventory obsolescence
(d) All of the above.
[16]A contingent asset is
(a) Usually disclosed in the"
Financial Statements
(b) Usually disclosed in the notes
to accounts
(c) Usually disclosed in the report
of the approving authority
(d) Not disclosed any where
2015 - December
[17]Present liability of uncertain
amount, which can be measured
reliably by uSing a substantial
degree of estimation is termed as:
(a) Provisions
(b) Liability
(c) Contingent Liability
(d) Contingent Assets
the
2017 - June
[18] When outflow of resources to settle
the obligation is not probable or the
amount expected to be paid to
settle the liability cannot be
measured with sufficient reliability,
it is called
(a) provision
(b) contingent liability
(c) secured loan
(d) unsecured loan
 ...

Answer
1. (a) 2. (a) 3. (a) 4. (a)
5. (d) 6. (c) 7. (a) B. (a)
9. (c) 10 (a) 11. (a) 12. (b)
13. (d) 14. (c) 15. (d) 16. (c)
17. (a) 1B. (b)

Page 30 of 137
 UNIT 8 ------RECTIFICATION OF ERRORS
2008 - June
[15] When the total of trial balance is
not reconciled, the account opened
at this juncture is :
. (a) Trading Account
(b) Suspense account
(c) Profit & Loss account
(d) . None of these
[16] Which type of error occurs when
credit sales is wrongly posted to
Purchase Day Book:
(a) Error of omission
(b) Error of commission
(c) Compensatory error
(d) Error of principle
2008 - December
[17] A purchase of computer was
debited to Office Expenditure
Account. This is an error of :
(a) Commission
(b) Omission
(c) Principle
(d) Compensatory Error.
Page 31 of 137
2009 -June I 2009 - December I
[21] Sale of old furniture is wrongly
[18] What will be the effect when return
inward is wrongly entered as return transferred to Sales Account.
outward? .
Which type of error is this?
(a) Gross Profit is increased
(a) Error of Principle
by ~ 100.
(b) Compensating Error
(b) Gross Profit is decreased (c) Error of Omission
by ~ 100. (d) Error of Commission
. (c) Gross Profit is increased [22] Sales for ~ 5,000 was entered as
by ~ 200. - purchase. The effect of this error
(d) Gross Profit is decreased will be:
by ~ 200. (a) G.P. will increase by ~ 5,000
[19] Total of sales book was (b) G.P. will decrease by ~ 5,000
understated by ~ 200. Rectification (c) G.P. will decrease by ~ 10,000
entry will be : (d) G.P. will increase by ~ 10,000
(a) Sales Nc Debit, Suspense Nc
Credit
(b) Suspense Nc Debit, Sales Nc 2010 - June I
Credit
(c) Debtor Nc Debit, Sales Nc
[23] A trial balance will not balance if
Credit
(a) A correct entry is posted twice
(d) Sales Nc Debit, Debtors Nc
(b) ~ 5,000 received from Harish
Credit
'is posted in the credit side of
[20] Sale of old furniture is erroneously
Hari
entered in sales book. Rectification
(c) Sales on credit basis is
entry will be:
credited to sales account and
(a) Debit Sales Nc, Credit Furn-
debited in cash account.
iture Nc
(d) Goods of ~ 2,500 returned to
(b) Debit Furniture Nc, Credit
Ram is added into the
SalesNc
purchases
(c) Debit Debtor Nc, Credit
[24] A Cloth merchant purchased
Furniture Nc
furniture- and recorded in purchase
(d) Debit Sales Nc, Credit Debtor
day book. It is error of
Nc
(a) Omission
(b) Principle
(c) Compensation
(d) Commission

[25] Credit sale of ~ 10,000 made to
Sallu was passed through
purchase book. The proper entry
for rectification was the following:
(a) Sallu Nc Dr. 10,000
To Sales Nc 10,000
(b) Sallu Nc Dr. 20,000
To Purchases Nc 20,000
(c). Sallu Nc Dr. 20,000
To Sales Nc 10,000
To Purchases Nc 10,000
(d) None of the above
[26] A new machine was purchased for
~ 1,00,000 but the amount was
wrongly posted to Furniture
account as ~ 10,000 and cash
received from debtors ~ 11,200
. was omitted to be posted to ledger.
The difference in Trial balance due
to such error will be:
(a) ~ 90,000~
(b) ~ 78,800
(c) ~ 1,01,200
(d) ~ 1,11,200
2010:- December I To Bank BIR Nc
[27] An amount of ~ 8,765 paid to M
was debited to N's alc. The
rectification of the error will-
(a) Increase the net profit
(b) Decrease the net profit
(c) Increase the assets
(d) Have no effect on the net profit
[28] Ram earned a profit of ~ 1,40,000
for the year 2008-09. But at the
time of audit, the auditor found that
Ram purchased a scooter on
1.4.08 for ~ 20,000 and charged it
Page 32 of 137
as revenue expenses. The auditor
advised him to rectify the error now
and to charge depreciation @ 15%
on scooter. The correct profit after
rectification will be:
(a) ~ 1,57,000
(b) ~·1,60,000
(c) ~ 1,40,000
(d) ~ 1,17,000.
[29] 'A' sold goods to 'B' on credit for
~ 15,000 but debited to 'C' instead
of 'B'. The entry would affect:
(a) Trial Balance
(b) Individual Ledgers
(c) Balance Sheet
(d) Total Debtors
[30] Bill accepted by Govinda was
discounted with the bank for
~ 2000. On the due date the bill
was dishonoured. However, there
is e.rror of Omission towards Bills
dishonoured. Journal Entry for
rectification will be:
(a) BIR Nc Dr.
To Bank Nc
(b) Govinda's Nc Dr.
(c) Govinda's Nc Dr.
To Bank Nc
(d) Bank Nc Dr.
ToBIR Nc
[31] Error relating to fundamental
aspect of accounting is known as.
(a) Error of Principle
(b) Error of Omission
(c) Error of Commission
(d) Compensating Error.
2011 - June
[32] Goods purchased of ~ 100 from N
was not recorded at all. What will
be its effect on the trial Balance?
(a) Will tally
(b) Will not tally
(c) Will have no affect
(d) None of these.
I 2011 - December I
[33] Goods purchased from Keshav
~ 13,500 has been recorded as
~ 13,000 in Purchase Book. The
error in this entry is:
(a) Error of Principle
(b) Compensating Error
(c) Error of Commission
(d) Error of Omission.
[34] ~ 1,000 received as interest, shown
as.mterest paid in cash book. Due
to this error the cash balance will
be effected by:
(a) ~ 2,000
(b) ~ 1,000
(c) ~ 4,000
(d) None of the above,
[35] If One of the cars purchased by a
car dealer is used for business
purpose and has been debited to
goods for resale Alc, then the
rectification entry will be:
(a) Debit Drawings Alc and Credit
Purchases Alc
(b) Debit office Expenses Alc and
Credit Motor Car Alc
(c) Debit Motor Car A/,c and Credit
Purchases Alc
(d) Debit Motor Car Alc and Credit
Sales Alc
Page 33 of 137
transaction he passed the following [41] Which type of error occurs when
2012 - June journal entry : credit sale is wrongly posted to
Car account Dr. 5,00,000 purchases book?
[36] Which of the following errors will
To Cash account 5,00,000 (a) Error of commission
not be revealed by trial balance at the (b) Error of omission
What will be the journal entry to
end of the year? . rectify the above journal entry as (c) Compensatory Error
already passed by him? . (d) Error of Principle
(a) Purchase day book was over
cast by ~ 100 (a) Drawing Alc Dr. 5,00,000
(b) Purchase of ~ 100 in cash was To Cash Alc
(b) Drawing Alc Dr. 5,00,000
5,00,000 2013 - June I
debited to purchase account
but· omitted to be entered in To Car 'Alc 5,00,000
[42] On scrutiny, an accountant found
cash book. (c) Car Alc Dr. 5,00,000
that
(c) Sales day book was undercast To Drawing Ale 5,00,eOo
(d) Cash Ale Dr, 5,00,000
(i) Bad debts recovery of ~ 500
by ~ 500 was credited to debtors Alc
(d) Purchase of material for ~ 300 To Car Ale 5,00,000
wrongly
used for installation of [39] If· purchase of gOOds amounting
(ii) Bank charges of ~ 50 was
machinery was debited to ~ 500 has been wrongly posted to
wrongly entered twice in Bank
purchase account instead of credit side of purchase account.
Book
The difference in the Trial Balance
machinery account. (iii) Purchase return of ~ 100 was
would be:
[37] Hari charges 10% depreciation on omitted to be entered in the
(a) ~ 500
plant and machinery. On 1 st AprIl (b) ~ 250
books of Alc.
2011 he debited ~ 7,520 paid on (c) ~ 1,000 What will be the net effect in profit
installation of plant and machinery (d) ~ 1,500 after above rectification?
to profit and loss account. At the (a) Increase ~ 650
time of preparing final accounts on (b) Increase ~ 350
31"t March, 2012 due to this error, I 2012 - December 1 (c) Decrease ~ 650
(a) Net Profit will decrease. by (d) Increase ~ 550
~ 6,768 [40] Goods worth ~ 750 were
[43] Old office furniture sold to Sethi for
(b) Net Profit will decrease by purchased from S &Co. but while ~ 2,000 was entered in the Sales
~ 7,520 posting wrong debit was given to R Book. The book value of furniture
(c) Net Profit will decrease by &Co. The total of credit side of the . sold was ~ 2,500.
~ 8,272 trial . balance was ~ 43,750. Rectification entry would be:
(d) Net Profit will increase by Assuming that this is the only error, (a) Sales Ale Dr. ~ 2,000
~ 6,768 the total of the debit side of the trial To Furniture Ale ~ 2,000
[38] Mr. Ravi Shankar Iyer is carrying balance was: (b) Furniture Ale Dr. ~ 2,500
sole proprietorship business. On (a) ~ 43,750 To Loss on sales Ale 500
To Sales Ale 2,000
the occasion of his daughter's (b) ~ 44,500
marriage he bought a car for (c) ~ 43,000 (c) Sales Nc Dr. ~ 2,000
~ 5,00,000 to gift it to his son-in- (d) ~ 45,250 Losson sale of
furniture ~500
law. To record the above
To Furniture Nc 2,500
(d) Sethi's Nc Dr • ~ 2,000
To Furniture Nc ~ 2,000
 \

I 2014 - June I 1 . Purchase of a cycle was (d) Customer Nc Or.1,526

L Which of the following mentioned
[44] debited to conveyance To Profit &Loss Adjustment Nc 126
o error will not affect the Trial [47] The following errors were detected To Suspense Nc 1,400
account ~ 3,000. Fixed
s Balance?· in the books of Shreay Ltd. while assets [51] If a purchase return of ~ 3,500 has
s been wrongly posted to the debit of
(a)oPurchase book was under cost preparing the final accounts: are depreciated at 10%
n by ~ 5,000 (i) A Cheque received for ~ 3,100 depreciation. the sales Returns Account, but has
s (b) White washing charges from Franc &Co. was 2. A credit purchase of goods been correctly entered in the
a ~ 10,000 were debited to dishonoured and debited from Mr. X for ~ 2,500 entered supplier's account, the total of
l Building Account. to (a) The trial balance would show
as sale.
(c)eCredit sales of ~ 2,000 to P discount account 3. Beceipt of cash from Mr. A the debit side to be ~
F
u
was correctly recorded in (ii) The sales account has been was posted to the account of 3,500
r sales book but not posted totalled short by ~ 23,000 Mr. 8 ~ 1,500. more than the credit side.
n in (iii) Goods' of ~ 1,200 returned by (b) The debit side of the trial
What will be the effect on Capital
i P's account. Kumar &Sons were balance will be ~ 7,000
Account of Mr. Rai after rectifying
(d)t Cash paid to Brij Bihari ~ 500 included more
u above mistakes?
was debited to Brij in stock but no entry was than the credit side.
r Bhushan's (a) His capital will be debited by
e made in the books. (c) The trial balance would show
account by ~ 5,000. ~ 2,300.
N After rectifying above mistakes, net the credit side to be ~
(b) His capital will be credited by 3,500
c profit will.
I 2013 -' December I (a) Increase by ~ 24,900
~ 2,300. more than the debit side.
(c) His capital will be debited by (d) The credit side of the trial
2 Rectification entries are first
[45]
(b) Decrease by ~ 24,900 ~ 2,700.
(c) Not change balance will be ~ 7,000
, recorded in _______ _ (d) His capital will be debited by more
5 (a) ledger (d) Increase by ~ 23,700 ~ 3,800.
0
than the debit side.
(b) subsidiary books [48] Which type of error can occur while
(
0
(c) journal proper posting the journal entries in the [2015 - December I 2016 - June I
d (d) trial balance. ledger? [52] ~ 18,000 received from tenant for
[50] A Sale of ~ 637 was entered in
) [46] Wages ~'500 paid for installation of (A) Error of Principle rent and entered correctly in the
S
sales book as ~ 763 and posted to
a new machine was wrongly (8) Error of Commission
e the credit of the customer. This cash book. It is posted to the debit
posted to wages account instead of (C) Error of Partial Omission
t of the rent account. In the trial
. machinery account. It is an error of (D) Error of Complete Omission error carried to next accounting
h
i (a) Commission (a) (A), (8), (C) and (D) period. You are required to give balance:
' (b) Principle (b) (8), (C) and (D) journal entry to rectify the error is (a) The debit total will be greater
s
(c) Omission (c) (A), (C) and (D) by ~ 36,000 than the
N next accounting period. credit
(d) Clerical nature. (d) (A), (8) and (D)
c (a) Profit &Loss Adjustment Nc Dr. 126
total.
D Suspense Nc Or.1,400
r
I 2015 - June I To Customer Nc 1,526 (b) The debit total will be greater
. (b) Profit &Loss Adjustment Nc Dr. 126 by ~ 18,000 than the credit
• [49] On Examination of old books of Mr. Customers Nc Or.1 ,400 total.
~ Rai's firm, a Chartered Accountant To Suspense Nc 1,526 (c) Subject to other entries being
2 found the following mistakes: (c) Suspense Nc Or.1,526 correct the totai will agree.
To Profit &Loss adjustment Nc 126 (d) None of the above.
To Customer Nc 1,400

Page 34 of 137
[53] An error can be deleted at any of I 2017 - December I I Answer ,.
the following stages:
[56] . An amount received from a
(a) Before preparation of Trial
Balance customer has been debited to his 18. (c) 15. (b) 16. (b)
(b) After extracting trial balance account. The error may be 22. (c) 17. (c) 19. (b) 20. (a)
but before the Final Accounts classified as ________ . 25(c) 21. (a)) 23. (d) 24. (b)
26. (b) 29. (b) 27. (d) 28. (a)
are drawn (a) errors of principal
30. (c) 33. (c) 31. (c) 29(b)
(c) After the Final Accounts i.e. in (b) errors of omisslon
31. (a) 37. (a) 35. (c) 32. (a)
the next accounting period (c) errors of commission
33.(d) 41. (a) 39. (c) 36. (d)
(d) All of the above. (d) compensating errors 34. (a) 43. (c)
45. (c) 40. (d)
[57] If sales return of ~ 2,000 has been 38. (b) 47. (a)
49. (a) 44. (b)
2017 - June I wrongly posted to the credit side of 42. (a) 53. (d) 51. (b) 48. (b)
[54] Stamp duty on property purchased the purchase returns account, but 46. (b) 57. (d) 55. (a) 52. (a)
has correctly posted in customer 50. (b) 56. (c)
has been debited to "Legal
account, the total of the trial ·54. (b)
Expenses" account by the balance would show
accountant. Whicn type of error (a) The debit side to be ~ 4,000
has been committed? more than the credit side
(a) Error of Commission (b) The debit side to be ~ 2,000
(b) Error of Principle more than the credit side
(c) Error of Commission (c) The credit side to be { 2,000
(d) It is not an error at all. more than the debit side .
[55] In the course of locating the reason (d) The credit side to be ~ 4,000
of differences in trial balance, it has more than the debit side.
been found that an amount
received from a customer has been
debited to his account and
purchase from a supplier has been
wrongly entered in the ledger as
~ 17,720 instead of ~ 17,270.
These errors may be classified as:
(a) Errors of commission
(b) Errors of omission
(c) Both error of omission and
commission
(d) Errors of principle.

Page 35 of 137

Chapter 3 : bank
reconciliation
statement
2008 – June
[16] Credit balance as per
Cash Book ~ 10,000
Bank charged interest ~ 150
Cheques issued but not
presented for payment ~ 2,500
Balance as per Pass Book will
be:
(a) ~ 7,650
(b) ~ 12,350
(c) ~ 12,650
(d) None of these
[17] When overdraft as per Cash book
is the starting point, a cheque of
~ 500 deposited into bank but not
recorded in cash book will be:
(a) Added by ~ 500
(b) Deducted by ~ 500
(c) Added by ~ 1,000
(d) Deducted by ~ 1,000
Page 36 of 137
[18] Overdraft as per Cash book
means:
(a) Credit balance in the cash
book
(b) Credit balances in the bank
column of the cash book
(c) Decrease in Liability
(d) None
2008 - December
[19] If balance as per Pass Book is the
starting point, then uncollected
cheques are:
(a) Added in BAS
(b) Subtracted in BAS
(c) Ignored while preparing BAS
(d) None of these
I 2009 - June
[20] Same as Q 1 [Nov. 06]
[21] Balance as per pass book ~ 20,000
~ 4,000 were directly deposited by
a customer into the bank. Then the
balance as per cash book is:
(a) ~ 24,000
(b) ~ 18,000
(c) ~ 16,000
(d) ~ 22,000
I 2009 - December I
[22] The balance as per Cash Book is
~ 10,000 Cheques for ~ 2,000 were
issued but not presented for
payment. What would be the
balance as per Pass Book?
(a) ~ 10,000
(b) ~ 2,000
(c) ~ 12,000
(d) None of the above
[23] The balance as per Cash Book
. (overdraft) is ~ 1,500. Cheques for
~ 400 were deposited but were not
collected. The cheques issued but
not presented were ~ 1 00, ~ 125,
~ 50. Balance as per Pass Book is:
(a) ~ 1,100
(b) ~ 1,625
(c) ~ 2,175
(d) .~ 1,375
[24] If the balance as per Pass Book is
the starting point, so the treatment
of undercasting of receipt side of
Cash Book will be:
(a) Added
(b) Deducted
(c) No treatment
(d) None of these
[25] The payment side of Cash Book is
undercast by ~ 250. If the starting
point of BAS is the Overdraft
Balance as per Pass Book, then
what would be the treatment to
reach to Overdraft Balance of Cash
Book?
(a) Add 250
(b) Less 250
(c) Add 500
(d) Less 500
2010 - June I
[26] Bank Overdraft as per cash book is
~ 10,500. Interest debited by bank
~ 3,500 for which advice was not
received by account holder.
Cheques deposited but not
credited by bank ~ 7,500. Cheques
issued but not yet presented
~ 9,500. What is the Overdraft
amount as per Pass Book?
 (a) ~ 12,000
(b) ~ 16,000
(c) ~ 5,000
(d) ~ 9,000
I 2010 - December I
[27] On 31.3.09 the balance of the
cash book is ~ 7,074 (credit) and
Balance as per Bank statement is
~ 3,159 (debit). On scrutiny it was
found that the difference was due
to cheques issued but yet not
presented for payment. The Bank
Balance as on 31.3.09 to be shown
in Balance Sheet as:
(a) As Bank Overdraft ~ 3,159
(b) As Cash at Bank ~ 7,074
(c) As Bank Overdraft ~ 7,074
(d) As Cash at Bank ~ 3,159
[28] Favourable balance as per Cash
Book ~ 5,000. Debit side of Cash
Book under cast by ~ 2,000.
Cheque deposited into bank ~ 3000
dishonoured but no entry for
dishonour is made in cash book.
Balance as per Pass Book is:
(a) ~ 4,000
(b) ~ 10,000
(c) ~ 6,000
(d) None of the above.
[29] A trader issued cheques worth
~ 7,800 out of which cheques
worth ~ 6,500 only presented into
bank then on reconciling the Cash
Book with the Pass Book, the'
amount to be added will be:
(a) ~ 1,300
(b) ~ 7,800
(c) ~ 6,500
(d) ~14,300
Page 37 of 137
I 2012 - June
[30] Debit balance as per cash book of
ABC Enterprises as on 31"t March,
2012 was ~ 1,500. Cheques
deposited but not cleared amount
to ~ 100. Cheques issued but not
presented amounts to ~ 150.
The bank allowed interest
amounting to ~ 50 and collected
dividend ~ 50 on behalf of ABC
Enterprises. Balance as per Pass
Book as on 31 st March 2012,
should be:
(a) ~ 1,600
(b) ~ 1,450
(c) ~ 1,850
(d) ~ 1,650
[31] When over draft as per cash book
is the starting paint, a cheque of
~ 5,500 was deposited in bank and
duly credited by bank, but not
recorded in cash book,
____ in bank reconciliation
statement
(a) ~ 5,500 will be added
(b) ~ 5,500 will be deducted
(c) ~ 11,000 will be added
(d) ~ 11,000 will be deducted.
2012 - December
[32] On at= March, 2011, the bank
statement of Mis Smile Traders
showed a credit balance of
~ 10,585. However, during the year
the following entries were not
found in the cash book of the firm:
(1) The bank had debited ~ 35 per
month as bank charges
(2) Quarterly interest was credited to the
account amounts
respectively ~ 25,42 39and
57
The balance of bank account as
per the Cash Book of the firm as
on 31"t March, 2011 was:
(a) ~ 10,547
(b) ~ 10,713
(c) ~ 10,328
(d) ~ 10,842
[33] Bank overdraft as per Cash Book
on 31"t May, 2011 was ~ 8,720.
Cheques deposited on 28th May
but not credited until 31 st May
amounted to ~ 690. These were
credited on 4th June, 2011. Bank
overdraft as per Pass Book is
(a) ~ 8,054
(b) ~ 8,030
(c) ~ 9,410
(d) ~ 9,366
[34] Bank column of a cash book of a
trader shows a credit balance of
~ 7,900, and the bank -statement
shows a debit balance of ~ 10,300
on a particular date after payments
made by the bank as per the
standing orders. In the statement
of affairs, the bank balance will be
shown on:
(a) Assets side ~ 7,900
(b) Liabilities side ~ 10,300
(c) Liabilities side ~ 2,400
(d) Assets side ~ 10,300
[35] The bank charged ~ 1,000 as bank
charges to a client and
communicates the same to him.
The accountant records it in the
bank account in books. Later on
the bank realizes that the Charges
were wrongly charged and
reverses the same, but forgot to
communicate the same to the
client. If the accountant is starting
with the bank balance as per bank
account in books, what will be the
treatment in Bank Reconciliation
statement to arrive at balance as
per Bank statement:
(a) Reduce ~ 1,000
(b) Add ~ 1,000
(c) Add ~ 2,000
(d) No treatment
[36] An amount of ~ 5,000 debited twice
in pass book, to prepare Bank
Reconciliation Statement, when
overdraft as per the cash book in
the startinq point:
(a) ~ 5,000 will be deducted
(b) ~ 5,000 will be added
(c) ~ 10,000 will be deducted
(d) ~ 10,000 will be added
I 2013 - June
[37] The overdraft as per cash book of
Mr. X is ~ 20,500. One of the
customer of Mr. X residing in
Mumbai directly remitted ~ 50,000
into Mr. X's account, about which
Mr. X was not aware. One of the
cheques deposited into bank for ~
25,000 was returned unpaid and
the advice in this regard is yet to be
received by Mr. X. The balance as
per Pass book was:
(a) ~ 4,500 credit.
(b) ~ 4,500 overdraft
(c) ~ 45,500 credit
(d) None of the above.
[38] While preparing bank reconciliation
statement with favourable balance
as per cash book which of the
following will not be added?
(a) Cheques deposited but not
cleared
(b) Cheques issued but not
presented to bank
(c) Cheques directly deposited in
bank by a customer
(d) Overcasting of Cr. side of the
bank account in cash book.
[39] ABC Co. has issued a cheque to its
suppliers for an amount of
~ 10,000, but the accountant of the
company by error has recorded the
payment as ~ 1,000. This error can
be primarily identified on preparing
. (a) profit and loss account
(b) trial balance
(c) bank book
(d) bank reconciliation statement
2013 December
[40] The credit balance as per pass
book of Mr. X was ~ 65,600.'
Cheques issued but not presented
for payment ~ 75,800. Cheques
deposited by one of the customers
of the bank but wrongly credited in
Mr. X account ~ 20,600. The
balance as per cash book will be:-
(a) ~ 30,800 Debit
(b) ~ 30,800 overdraft
(c) ~ 1,20,800 Debit
(d) ~ 10,400 overdraft.
Page 38 of 137
[41] On 31.3.13, the balance of the
bank book is ~ 7,074 (Credit) and
balance as per bank statement is
~ 3,159 (Debit). On scrutiny, it was
found that the difference was due
to cheques issued but yet not
presented for payment. The bank
balance as on 31.3.13 will be
shown in the Balance Sheet as:
(a) As Bank Overdraft ~ 3,159
(b) As Cash at Bank ~ 7,674
(c) As Bank Overdraft ~ 7,074
(d) As Cash at Bank ~ 3,159.
[42] For preparing Bank Reconciliation
statement, the documents!
statements required are:
(a) Cash column of cash book
and bank statement
(b) Bank column of cash book and
bank statement
(c) Bank and cash column of the
cash book
(d) Bank statement
I 2014:- June
[43] The cash book showed an
overdraft of ~ 2,000 as cash at
bank but the pass book upto the .
same date showed that cheques of
~ 1 00, ~ 150 and ~ 175 have not
been presented for payments; and
the cheque of ~ 600 deposited into
account has not been cleared. The
overdraft as per pass book will be:
(a) ~2,150
(b) ~ 2,175
(c) ~ 1,475
(d) ~ 1,925
[44] From the following particulars,
ascertain the balance as per Cash
Book as on 30th April 2014:
a. Bank Overdraft as
per Pass Book ~ 26,500
b. Cheques recorded
in Cash Book but
not sent to bank for
collection ~11 ,000
c. Payments received
from customers
directly by bank ~ 4,700
d. Bills of ~ 4,000
(discounted with the
bank) dishonoured
on 20th April and
Noting charges paid
by bank ~ 200
(a) ~ 28,600 Overdraft
(b) .~ 6,600 Overdraft
(c) ~ 16,000 Overdraft
(d) ~ 46,400 Overdraft
1 2014 - December 1
[45] Anuj presented four cheques -
~ 23,000, ~ 21 ,000, ~ 16,000 and
~ 14,000 with the bank on 27th
March, 2014. Out of these cheques
amounting ~ 16,000 cleared on 30th
March, 2014. Cheques amounting
to ~ 23,000 and ~ 14,000 were
shown in the pass book in the
month of April 2014. Cheque of
~ 21,000 was unsigned, so it was
returned back. Which of these
cheques would be taken in Bank
Reconciliation Statement?
(a) ~ 23,000, ~ 21,000 and
~ 14,000
(b) ~ 23,000, ~ 21 ,000, ~ 16,000
and ~ 14,000 .
(c) ~ 23,000, and ~ 14,000
(d) ~21,OOO
[46] The cash book showed an
overdraft of ~ 15,000, but the pass
book made upto the same date
showed that cheques of ~ 1,000,
~ 500 and ~ 1 ,250 respectively had
not been presented for payment
and the cheque of ~ 4,000 paid into
account had not been cleared. The
bank has been given standing
instructions of payment of premium
of ~ 1,500 directly to insurance
company and bank has collected
~ 250 as dividend .. The balance as
per the pass book will be:
(a) ~ 17,500 Dr.
(b) ~ 16,250 Dr.
(c) ~ 18,000 Dr.
(d) f18,750 Dr.
2015 - June
[47] A Bank Reconciliation Statement is
a part of:
(a) Bank Accounts
(b) Cash Book
(c) Part of accounting reports
(d) None of the above.
[48] The Cash Book showed a credit
balance of ~ 9,000, but the pass
book made up to the same date
revealed that a cheque of ~ 2,000
had not been presented for
payment and the cheque of ~ 3,000
paid into account had not' been
cleared. The balance as per the
pass book will be:
4. Chapter 3 - Bank Reconciliation Statement CPT Scanner: Fundamentals of Accounting (Paper 1)
l
(
(a) ~ 14,000 (a) ~ 2,000
(b) ~. 8,000 2016 - June (b) ~ 2,150
(c) ~ 4,000 (c) ~ 1,475
(d) ~ 10,000. [53] A Bank Reconciliation Statement is (d) n,925
[49] Balance as per Cash Book on 31st ] a:
December, 2014 ~ 8,560: [51]When overdraft as per Cash Book (a) Part of Financial Statements 2017 - June I
1. On . 18thDecember 2014 the is the starting point, then wrong (b) Part of Bank Account
debit balance of ~ 1,700 as on debit in the pass book will be - (c) Part of Cash Book [57] A Bank Reconciliation Statement is
the previous day, was brought (a) Deducted in the Bank (d) None of the above. prepared to know the causes for
forward as credit balance. Reconciliation Statement. [54] The Cash Book showed an the difference between:
2. One out going cheque of ~ 500 (b) No effect in the Bank Overdraft of ~ 4,500 but the pass (a) The balance as per cash
was recorded twice in the Reconciliation Statement. book made upto the same day column of Cash Book and
Cash Book. (c) Added in the Bank showed that cheques of ~ 300, the
3.· A cheque of ~ 250 issued on Reconciliation Statement. ~ 150 and ~ 375 respectively had Pass Book.
25thDecember, 2014, was (d) None of the above. not been presented to the bank for (b) The balance as per bank
not [52] The Cash Book. of Mr. Mistake payment and the cheques of column of Cash Book and
Singh shows ~ 7,000 as the
, recorded in the bank
column. balance at bank as on 31"t October
2015. When reconciled for the
~ 1,200 paid into account had not
been cleared. The balance as per
the
Pass Book.
~ 4. Dividend of ~ 250 collected by pass book will be: (c) The balance as per bank
I, the bank and ~ 100 month, you find that it does not (a) ~ 3,300 Dr. column of Cash Book and
subscription paid by the bank agree with the balance as per the (b) ~ 6,525 Dr. balance as per cash
were not recorded is the Cash Bank Pass Book. Find out the (c) ~ 4,875 Dr. column of
Book. balance as per Pass Book after (d) ~ 4,125 Dr. Cash Book.
~ considering the following [55] Credit balance in the bank Pass (d) None of the above.
Balance as per the Pass Book.
discrepancies: _ Book represents__ (for the
I (a) ~ 12,360 Cr.
1 . On 15thOctober 2015 the
[58] Debit balance as per Cash Book of
1 (b) ~ 10,660 Cr. account holder). AXE Limited as on 31.03.2016 is
debit balance of ~ 2,000 (a) asset ~ 2,000. Cheques deposited but
(c) ~ 12,610 Cr.
~ (d) ~ 7,260 Cr.
as on the previous day, was (b) liability not cleared amounts to ~ 100 and
\ brought forward as credit (c) provision cheques issued but not presented
I 2015 - December balance in Cash Book. (d) reserve of ~ 150. The bank allowed interest
2. On 18thOctober 2015 the amounting ~ 100 and collected
\
{ [50] Bank overdraft as per payment side of the Cash I· 2016 - December dividend ~ 50 on behalf of AXE
I . Cash Book ~ 12,500 Book was under cast by [56] 0.0. balance as per Pass-Book is Limited. Balance as per Pass Book
Cheque deposited but ~1 ,000. should be:
~ 2,175. It was found that cheque
not credited ~ 2,000 3. A cheque for ~ 500 issued on (a) ~·1,700
of ~ 1 00, ~ 150, ~ 175 which are
Cheque issued but 25thOctober, 2015 was not (b) ~ 2,000
taken in the bank column. issued but not presented till the
not presented ~ 5,000 (c) ~2;100
Overdraft as per bank statement (Cheque cleared from bank date and a cheque of ~ 600 (d) ~ 2,200
will be: before 31"t October, 2015) deposited in account but have not
(a) ~ 15,500 (a) ~ 7,500 been cleared, then Cash Book
(b) ~ 12,500 (b) ~ 8,500 0.0. balance is:
(c) ~ 9,500 (c) ~ 9,500
(d) None of above. (d) ~ 10,500

Page 39 of 137
I 2017 - December I
[59] When debit balance as per Cash
Book is the starting point, cheques
deposited but not cleared are
. (a) Added in Bank Reconciliation
Statement
(b) Substracted in Bank
Reconciliation Statement
(c) Not required to be adjusted in
the Bank Reconciliation
Statement
(d) None of the above.

Answer

17. (b) 18. (b) 19. (a) 16. (a)

21. (c) 22. (c) 23. (b) 20. (d)
25. (b) 26. (a) 27. (c) 24. (b)
29. (a) 30. (d) 31. (b) 28. (a)
33. (c) 34. (b) 35. (b) 32. (d)
37. (a) 38. (a) 39. (d) 36. (b)
41. (c) 42. (b) 43. (b) 40. (b)
45. (c) 46. (a) 47. (d) 44. (c)
49. (a) 50. (c) 51. (c) 48. (d)
53. (d) 54. (c) 55. (a) 52. (c)
57. (b) 58. (d) 59. (b) 56. (a)

Page 40 of 137
 .'

[23] AS - 2 Prescribes the use of which (a) ~ 97,500 (a) ~ 5,000

method of stock valuation? (b) ~ 1,00,000 (b) ~ 1,000
(a) FIFO (c) ~ 1,17,500
(c) ~ 1,250
CHAPTER 4 INVENTORIES
(b) LIFO (d) ~ 1,10,000
(d) ~ 6,250
(c) Weighted Average Cost [28] Stock on 15th April, 2008 is
~ 50,000. Purchases made in 2nd [32] Cost of Goods Sold =,
(d) Both (a) and (c) above (a) Opening Stock + Purchases _
[24] If Gross profit is 1,00,000 and G.P. week is ~ 2000, sales made in 2nd
week is ~ 12,000 Gross Profit on Closing Stock
Ratio is 25%. Find the value of
Sales Sales is 25%. Closing stock as on (b) Opening Stock - Sales +
(a) 1,00,000 31"t March, 2008 will be: Closing Stock
(b) 2,00,000 (a) ~ 75,000 (c) Opening Stock - Purchases +
(c) 4,00,000 (b) ~ 57,000 Closing stock
(d) 5,00,000 (c) ~ 60,000 (d) None of these
(d) ~ 50,000 [33] Opening Stock = ~ 6,000
Opening Stock 40,000 [29] What is the amount of purchase Closing Stock = ~ 8,000
Closing Stock 50,000 when opening stock = ~ 3,500
Cost of Goods Sold = ~ 87,000
Purchases 5,50,000 clos\ng stock = ~ 1,500, Cost of
Calculate the value of Purchases?
Return outward 5,000 goods sold = ~ 22,000.
(a) ~ 1,01,000
Return inward 20,000 (a) ~ 20,000 (b) ~ 89,000
. Carriage inward 5,000 (b) ~ 24,000 (c) ~ 73,000
If gross profit is 20% of sales, the (c) ~ 27,000 (d) ~ 85,000
gross sales will be: (d) ~ 17,000
2008 - June I (a) ~ 6,95,000
(b) ~ 6,75,000 I 2009 - June I 2010 - JuneI
[34] The opening stock is overstated by
(c) ~ 5,40,000 [30] In conditions of inflation, which
[21] If average stock is ~ 20,000. (d) ~ 6,68,750 ~ 10,000 and closing stock is
Closing stock is ~ 4,000 more than method will lead to the lowest value
understated by ~ 15,000. The
value of opening stock. Closing
stock will be:
I 2008 - December I of stock?
(a) FIFO
impact of these on net profit for the
current year is:
(a) ~ 16,000 [26] Closing Stock is: (b) LIFO
(a) ~ 5,000 overstated
(b) ~ 18,000 (a) Opening Stock + Purchases - (c) Average price method
(d) Weighted average pricing (b) ~ 25,000 overstated
(c) ~ 20,000 Sales
(d) ~ 22,000 method. (c) ~25,000 understated
(b) Purchases -Sales
[22] Which method matches current (d) ~ 5,000 understated
(c) Opening Stock-Sales
cost with current revenue? [35] The revised Accounting Standard-2
(d) Opening Stock + Sales
(a) LIFO - Purchases
I 2009 - December , (Valuation of Inventories) permits
which of the following method for
(b) FIFO [27] Purchases = ~ 1,10,000, Return [31] Calculate Closing Stock using
(c) Weighted Average computation of cost of Inventory?
outward ~ 10,000. Goods given
FIFO Method: Units Rate (a) Last in First Out
(d) Simple Average. away as charity = ~ 1,500. Goods
distributed as sample = ~ 1,000. Particulars 100 ~ 50 (b) Standard Cost Method
What is the amount of net Opening 50 .~ (c) First in First Out
purchases? Stock 125 40 (d) None of the above
Purchases
Issue

Page 41 of 137
 )

36] When closing stock represents the ~ 50,000 was not actually received [43] If cost of goods sold is ~ 80,700, (a) ~ 1,30,000
March,
latest purchased goods, then the before April 20. Cost of goods held opening stock ~ 5,800 and closing (b) ~ 1,45,000
2011 ~
stock has been issued under at god own on March 31 was: stock ~ 6,000, then the amount of (c) ~ 1, 54,000
8,000
(a) LIFO Method (a) ~ 2,00,000 purchase will be: (d) ~ 1,06,000
(b) FIFO Method (b) ~ 2,50,000 (a) ~ 80,500 [48] If closlnq stock is undervalued by
(c) Average Cost Method . (c) 1,75,000 (b) ~ 74,900 ~ 10,000 and opening stock is
(d) Weighted Average Method. (d) ~ 2,25,000 (c) ~ 74,700 overvalued by ~ 10,000, then the
[37] Four Washing Machines are in (d) ~ 80,900 impact on the gross profit of the
stock with a dealer I 2010 - December I 2011 - June I business would be:
(a) Gross Profit undervalued by
Model A Model B· Model C Model 0
15000 230000 22500 00‫סס‬ [44] Find the value of closing stock: ~ 10,000
[40] If the closing stock is increased by
ABC 0 (b) Gross Profit overstated by
~ 5,000 and Gross Profit rate is Historical ~ 10,000
Cost 10%, then: cost: 20,000 18,000 24,000 25,000
Realizabl (c) Gross Profit undervalued by
(a) Gross Profit will be increased NRV: 18,000 24,000 23,000 26,000
e
(a) 93,000 ~ 20,000
Value 13,500 22,000 20,500 32,500 by ~ 5,000
(b) 83,000 (d) There will be no impact on
Find out the value of stock for (b) Gross Profit will be decreased
(c) 84,000 gross profit
balance sheet as per AS-2 by ~ 5,000
(d) 1,08,000. [49] A manufacturer purchased an item
(a) ~ 88,500 (c) Gross Profit will be increased
[45] Same as Q 22 [June 08] of raw material in the month of
(b) ~ 87,500 by ~ 500
[46] Openinq stock 300 units at December as detailed below:
(c) ~ 92,000 (d) Gross Profit will be decreased Date Unit Price (~) Per unit
~ 8,00,000 purchases 300 units at
(d) ~ 84,000 by ~ 500. 151 Dec 500 50
~ 8,50,000 sold 500 units.
[38] The success of Perpetual Inventory [41] Same as Q 2 [Nov. 06] 151h Dec 200 60
Find closing stock using weighted
System depends upon: [42] At the time 01 stock taking average method. 281h Dec 300 70
(a) Placing order for materials on conducted on 31 st March, 2009, Material was issued on 291h
(a) ~ 3,00,000
regular intervals. there were contain goods costing December, 2011, 600 units as per
(b) ~ 2,75,000
(b) Exercising control over the ~ 1,000 that were lying in stock in LIFO Method. Closing stock as on
(c) ~ 2,50,000
issue of materials. . the godown. These goods were 3151 December, 2011 would be:
(d) None of these.
billed for ~ 1,200 on March 15, (a) ~ 38,000
(c) Recording the receipts and
2009. What should be included for
issue of materials immediately
calculating inventory for the year 2012 - June I (b) ~ 27,000
(c) ~ 31,000
after transaction.
ended on 31.3.2009? (d) ~ 20,000
(d) Recording the receipt of
(a) Exclude the goods from
materials at fixed intervals. [47] Calculate the amount of gross
calculating Inventory.
[39] X & Company, a furniture dealer, profit:
due to some business problem
(b) Include the goods in Inventory ~ 24,000
Opening stock ~ 15,000
I 2012 - December I
could take physical stock taking on at sales price ~ 1,200. [50] Following figures have been
Closing stock - ~ 6,00,000
April 20 and arrived at the cost at (c) Include the goods inventory at extracted from the books for the
Sales - ~ 4,55,000
~ 5,25,000. Between April 01 and cost price ~ 1,000.' year ended 3151 March, 2011 :
Cost of goods sold
April 20 firm even though (d) None of the above. (i) Cost of goods sold ~ 35,000
purchased goods worth ~ 3,25,000 (ii) Closing stock as on 315t
including credit purchases of
~ 75,000 only goods costing

Page 42 of 137
 [59] Opening Stock
Goods available for
Sales
(iii) Opening stock as on 151 April, constant at 25%, the value of [56] Mr. X took physical stock of his Sales ~ 50,000
201 0 ~ 10,000 closing stock as on 31"1 March inventory on April 20 and the value Gross Profit
(iv) Purchase Return ~ 5,000 would be: of stock of cost was ~ 1,60,000. The closing stock will ~ 1,60,000
What would be the amount of (a) ~ 20,000 Between April 01 and April 20 he be: ~ 1,60,000
gross purchases for the year (b) ~ 1,20,000 sold goods worth { 40,000 as (a) NIL 30%
ended 3151 March, 2011? (c) ~ 60,000 detailed below: (b) ~ 48,000
(a) ~ 33',000 (d) ~ 1;00,000 (i) Damaged goods sold for ~ (c) ~ 98,000
(b) ~ 38,000 [53] From the following information 15,000 at a loss of 20% to (d) None of the above
(c) ~ 28,000 provided by Mis xyz, calculate the cost Study the following table and
(d) ~ 37,000 value of inventory (ii) Balance goods sold were 25% Question No, 60 and 61 :
Item No. of Cost Market price profits to cost. answer
I 2013 - June I No
1
units per unit
14 100
per unit
120
The damaged goods to be valued
at net realizable value and other Dale I Receipts I Issue Balance
2 15 50 40 stock to be valued at cost. On this Units _ I Amount I UMs I Amount Unil Amount
[51] Mr. A, a dealer of construction 00;,;;;
3 20 20 20 14.14 1,000 12,000
basis, the value of closing stock as 8.4.14 5501 6.600 450 I 5.400
material, due to unavoidable (a) ~ 2,830 on March 31 was 13.4.14 I 1.1001 11,000
25,4.14 300 3,900
reasons took physical stock of (b) ~ 2,680 (a) ~ 2,00,000 28.4.14 I I 1.650 I 17.700
inventories on 111h April. The cost (c) ~ 2,550 (b) ~ 1,95,000
of stock was ~ 4,20,000 (including (d) ~ 2,400 [60] The method of pricing the issue
(c) ~ 2,05,000 which you consider to have been
goods received on consignment). [54] Opening stock 400 units @ ~ 20
(d) None of these.
The dealer received goods costing per unit. Purchases 200 units @ adopted for the issue of material is:
[57] The opening stock is overstated by
~ 1,00,000 in March for sale on ~ 25 per unit and issued 250 units. (a) FIFO
~ 10,000 & closing stock is (b) LIFO
consignment basis. 20% of the Find out the value of closing stock understated by ~ 15,000. The
goods had been sold before 31"1 by LIFO method. (c) Weighted Average
impact of these on net profit for the (d) None of the above
March and 60% between 151 April & (a) ~ 8,750 current year is.
101h April. What was the cost of (b) ~ 7,000 [61] The quantity and value of closing
(a) ~ 5,000 overstated stock on the basis of valuation
stock as at 31"1 March? (c) ~ 8,000
(b) ~ 25,000 overstated adopted is:
(a) ~ 3,20,000 (d) ~7,500
(b) ~ 4,00,000 (c) ~ 25,000 understated (a) 200 units; ~ 2,195
(c) ~ 3,40,000 (d) ~ 5,000 understated
(b) 200 units; ~ 2,400
(d) ~ 3,60,000 I 2013· December-] (c) 200 units; ~ 2,600
[52] Sterling limited revealed the
following information as on 3151 [55] Net realizable value is: I 2014 - June I (d) Can't be ascertained from
given data.
March 2013:- (a) estimated selling price
[58] Which of the following is an [62] If average stock is ~ 14,000,
Stock as on April 01, 2012 ~ 1,60,000 (b) estimated cost price plus
Purchases during the year ~ 3,20,000 exception to Non-historical cost closing stock is ~ 3,000 more than
marketing cost opening stock then value of closing
Sales during the year ~ 4,00,000 (c) estimated selling price less method of valuation?
The goods worth ~ 60,000 (a) Standard Cost stock will be:
cost incurred in order to make (a) ~ 15,500
were destroyed due to floods. (b) Adjusted Selling Price
the sale (b) ~15,000
Against the claim the insurance (c) Latest Purchase Price
(d) estimated selling price plus (c) ~ 11,000
company accepted a claim of (d) Weighted Average Price
cost incurred in order to make (d) ~ 12,500
~ 40,000. The company's gross the sale
profit on sales has remained

Page 43 of 137
 13-14: (b) Inventory control is not (c) This system Using the information given above,
Cost of goods available for sale ~ 1,00.000
Total Sales ~ 80,000 possible information about provides compute the amount of cost of
[ Opening Inventory of goods ~ 20,000 (c) It is a costlier method and cost of goods inventory goods sold for the month of June
6 Gross Profit Margin 25% (d) In this method, cost of Goods particular date. using LIFO principle:
sold at a
3 Closing inventory of goods for the Sold includes loss of goods. (a) ~ 31,50,000
(d) It is a costlier
] year 2013-14 was. [66] Kanika traders close their books of (b) ~ 27,00,000
method in
C (a) ~ 80,000 accounts on 31"1 March every year. (c) ~ 33,60,000
comparison to periodic
o (b) ~ 60,000 As stores manager was on leave (d) ~ 31,80,000
inventory system.
n (c) ~ 40,000 inventory taking was done on t= [69] Mis X, Y and Z are in retail
s (d) ~ 36,000 April, 2014. On this date, cost of business, following information are I 2015 - December I
i [64] Gee Ltd. follows perpetual goods in godown was ~ 44,500. obtained from their records for the
d inventory system. On March 31s1 During 1 st April, 2014 to 71h April, [71] Mis Moon Ltd. given the following
year ended 31 st March, 2014.
e 2014, the company took physical 2014 sales were ~ 1,76,000, Goods received from suppliers ~ 18,00,000
r inventory verification and found the Purchases ~ 1,12,000. Purchase (Subject to trade discount & taxes) Opening Stock ~ 50,000
t value of inventory as per records returns ~ 8,630. Sales return ~ Trade discount 3% and sales tax @ 11 %
Purchases ~ 1,40,000
h different from the value as per the 4,200. Gross Profit earned during
Packaging and transportation charges ~ 80,000
physical inventory due to: Sales during the year ~ 25,00,000 1
e the year was 25% on cost. Sales price of closing stock ~ 4,00,000 Sales (at cost plus 33 - % ) ~1,80,000
f Goods purchased for ~ 10,000 Calculate the value of inventory as 3
Find out the historical cost of
o were received and included in the on 31 SI March, 2014. Goods cost worth ~ 25,000
inventories using adjusted selling
l physical inventory but no entry (a) ~ 78,570 destroyed due to fire during the
price method
l were made in the books. Goods (b) ~ 69,980 year and a claim of ~ 15,000
(a) ~ 2,14,320
o costing ~ 30,000 were sold and (c) ~ 1,12,930 accepted by insurance. The value
(b) ~ 2,78,360
w entered in the books but the goods (d) ~ 10,430 of the closing inventory at the end
(c) ~3,10,000
i are yet to be delivered. [67] method is a non of the year will be:
(d) ~ 3,05,460
n Goods worth ~ 5,000 are returned historical cost method of inventory (a) ~ 15,000
[70] Indian oil is a bulk distributor of
g to the supplier but is omitted to be valuation also known as retail (b) ~ 30,000
petrol, a periodic inventory of petrol
f recorded. If the inventory is valued inventory method. (c) ~ 35,000
on hand is taken when the books
o in the books at ~ 1,50,000, the (a) Latest Purchase Price (d) ~ 40,000
are closed at the end of each
r value of the physical inventory is:- (b) Adjusted Selling Price [72] From the following information of a
month. The following summary of
R (a) ~ 1,11,000 (c) Standard Cost retail business, find but the cost of
information is available for the
a (b) ~ 1,89,000 (d) Average Purchase Price inventories, applying adjusted
month:
m (c) ~ 1,85,000
Sales ~ 37,80,000
C (d) ~ 1,59,000
o [65] Periodic inventory system has all
I 2015 - June I General Administration cost ~ 1,00,000 "
Goods received from supplier
Opening stock and expenses
~ 7,00,000
NIL
Opening inventory: 100000 litres @
. the following limitations except [68] FOllowing are the features of ~12 per litre ~ 12,00,000 Sales during the year ~ 8,00,000
f (a) Physical inventory taking is perpetual inventory system except: Purchases (including freight Sales price of closing ~ 2,00,000
o required more than once a inventories
(a) Inventory control can be inward):
r year. (a) ~ 2,00,000
exercised under this system. June 1 2,00,000 litres @ ~ 11.40 per liter
t June 30 1,00,000 lttres @ ~ 12.12 per liter (b) ~ 1,70,000
(b) Inventory can be determined
h June 30 Closing inventory 1,30,000 liters (c) ~ 1,50,000
without affecting the
e (d) ~ 1,40,000
operations of the business ..
y
e
a
r
2
0
Page 44 of 137
 I CPT Scanner: Fundamentals of Accounting (Paper 1)

[73] From the following one is not a You are required to ascertain the (a) ~14,735 [80] G. Ltd., a dealer insecond hand
basic feature of the "PERPETUAL" value of physical stock at cost on (b) ~14,300 bikes has the following five
inventory system: 31 st December, 2015 from the (c) ~ 15,100 Vehicles of different models and
(a) It is based on book records. following· information regarding (d) ~15,000 makes in their inventory at the end
(b) This system determines period from 1 st January, 2016 to 9 [78] Sales for the year ended 31"1 of the financial year 2015-16.
inventory and takes cost of January, 2016. March, 2016 amounted to Bike Passion Bajaj Rajdoot Splendor Royal
Enfield
goods sold as residual figure. Sale of goods amounted to ~ 10,00,000. Sales included goods Cost (t) 45,000 57,500 1,37,500 50,000 1,05,000
(c) Closing inventory includes loss ~ 48,000 of which goods of a sale sold to Mr. A for ~ 50,000 at a NRV(~) 47,600 77,500 1,32,500 62,500 1,00,000
of goods as all unsold value of ~ 5,000 had not been gross profit of 20% on cost. Such The value of inventory included in
goods delivered at the time of verification goods are still lying in the godown the Balance Sheet of the company
are assumed to be an and goods of a sale value of at buyer risk. Therefore, such as on March 31, 2016 was:
inventory. ~ 3,000 had been delivered on goods should be treated as part of: (a) ~ 3,81,250
(d) Inventory can be determined 29.12.2015. (a) Sales (b) ~ 3,95,000
without effecting the The rate of gross profit was 25% (b) Closing inventory (c) ~ 3,85,000
operations of the business. on the cost price. (c) Goods in (d) ~ 4,35,000
transit
[74] The Axe Company, a whole seller
(a) ~ 1,02,000
(b) ~ 40,000 (d) Sales Return. ~ I 2016 - December I
estimates the following for the [79] Consider the 7,50,000
(c) ~ 30,000 [81] Which method is exception to non-
indicated months following the 22,50,000
(d) ~ 1,00,000
lSeptember,2015 October, 2015 information historical cost method?
[76] The amount of purchase will be if
~ ~ pertaining to G & Sons as on (a) Adjusted Selling Price
opening inventory ~ 23,200
Opening 5,36,000 6,42,500 March 31 sl, 2016. (b) Latest Purchase Price
Cost of goods sold is ~ 3,22,800
Inventory Particulars (c) Standard Cost
Credit Sales 8,40,000 9,60,000 Closing inventory ~ 24,0OO (d) Weighted Average
Opening inventory
Cash Sales 12,24,000 12,44,000 (a) ~ 3,22,000
Purchases during [82] Average stock is ~ 28,000, closing
Selling price is 20% more than the (b) ~ 2,99,000
year 2015-16 stock is ~ 6,000 more than the
purchase price. (c) ~ 2,98,800
Sales during the year 25,00,000 opening stock, the closing stock is
Value of inventories purchased in (d) ~ 3,23,600 2015-16
September, 2015 is :- [77] From the following data, find out As per physical inventory taken on (a) ~ 31,000
(a) ~ 17,20,000 the gross profit under the weighted March 31, 2016 the closing' (b) ~15,500
(b) ~ 18,26,500 average method of inventory inventory was ~ 10,45,000. Gross (c) ~ 12,200
(c) ~ 17,57,100 valuation: (d) ~ 12,000
Profit on sales has remained
(d) ~ 20,25,900 1"1 January Inventory 1 000 units @ [83] Cost of physical inventory on
constant at 25%. The management
~ 4 each 15.4.16 was ~ 3,00,000 .. Sales.
I 2016 ~June I 31"1 January Purchases 1100 units
of the firm suspects that some
amounting to ~ 1,00,000 and
inventory might have been taken
@ ~ 5 each purchases worth ~ 50,000 were
away by a new employee. The
[75] Veeru makes up his annual 251h February Purchases 1300 made between 31.3.16 and
estimated cost of missing inventory
accounts to 31"1 December each units @ ~ 6 each 15.4.16. Goods are sold at 20%
on the close of the financial year
year. He was unable to take stock Sales for the period, 3000 units @ profit on sales. Value of inventory
and the cost of goods sold during
of physical inventory till January 9, 10/- each as on 31.3.16 is:
the year respectively are:
2016 on which date the physical (a) ~ 1,32,500 and ~ 18,75,000
stock at cost was valued at (b) ~ 1,05,000 and ~ 19,55,000
~ 70,000. (c) ~ 87,500 and ~ 23,00,000
(d) ~ 80,000 and ~ 18,75,000.

Page 45 of 137

(a) ~ 3,50,000
(b) ~ 2,70,000
(c) ~ 3,00,000
(d) ~ 3,30,000
[84] From the following data MIs Jeep
Ltd. find out the profit under the
weighted average method of
inventory valuation 1 SI January
Inventory 1000 units @ 4 each 2nd
January Purchases 1200 units @ 5
each sale for the period is 2000
units @ 8 per unit.
(a) ~ 16,000
(b) ~ 9,000
(c) ~ 7,000
(d) ~ 6,909
[85] The cost of inventory on 20 April
2016 was computed at ~ 5,25,000.
The purchase of goods from April
1, 2016 to 20lh April, 2016 were
~ 3,25,000, which include cash
purchase of ~ 75,000 and goods
costing ~ 50,000 not yet received.
The value of closing stock for year
- ended March 31, 2016 would be:
(a) ~ 2,00,000
(b) ~ 2,50,000
(c) ~ 3,25,000
(d) ~ 5,60,000
2017-June
[86] While finalizing the current year's
profit, Roshni observed that in the
previous year, closing inventory
was valued more by ~ 45,000. As a
result:
Page 46 of 137
(a) Previous year's profit is
overstated .and current year's
profit is also overstated.
(b) Previous year's profit
understated and current year's
profit is overstated.
(c) Previous year's profit is
understated and current year's
profit is also understated.
(d) Previous year's profit
overstated and current year's
profit is understated.
[87] Sales of a company included
goods sold to MIs ABC for ~ 60,000
at a profit of 25% on cost. Such
goods are still lying in the godown
of the company at buyer's rlsk
Such goods should be treated as
partof __ .
(a) closing inventory
(b) goods in transit
(c) sales return
(d) sales
[88] If average inventory is ~ 30,000
and closing inventory is ~ 5,000
more than the opening inventory.
The value of closing inventory will
be:
(a) ~ 32,500
(b) ~ 35,000
(c) ~ 30,000
I (d) ~ 60,000
I 2017 - December
[89] Calculate the cost of closing
inventories using adjusted selling
price method sales during the
period - ~ 4,00,000; closing
)
inventory at selling price - (a) ~ 4,20,000
~ 1,00,000; Opening "Inventory - (b) ~ 6,10,000
NIL; Cost of Purchase (c) ~ 5,90,000
is ~ 4,00,000. (d) ~ 6,30,000
(a) ~ 80,000 [92] The opening inventory of a trader
as on 01.04.2016 was ~ 70,000.
(b) ~ 1,00,000
This includes a slow moving item
(c) ~ 1,20,000 which was written off by ~ 2,000
(d) None of the above having purchase price of ~1 0,000.
[90] R sons apprehends that there has Such item was sold in 2016-17 for
is
been some inventory missing. The ~ 9,000. Barring the transaction
following information for the year relating to the item, gross profit
earned during the 2016-17 was
2016-17 is available:
20% on sales. Total sales and"
Opening Inventory ~ 2,00,000;
purchases for the year 2016-17
Purchases during the year
was ~ 5,09,000 and ~ 3,78,000
~ 4,00,000; Sales during the year
respectively. Ascertain the value
~ 5,20,000. As per. physical af inventories as on 31.03.2017.
inventory taken on 31"1 March
(a) ~ 44,000
2017, the stock was tound to be of (b) ~ 38,000
(c) ~ 40,000
cost of ~ 1,55,000. Gross profit on
(d) ~ 42,000
cost has been constant at 2.5%.
The estimated cost of missing
[93] While finalizing the current years
inventory will be
profit, it has been found that there
(a) ~ 55,000 was a casting error in valuation of
(b) ~ 75,000 closing inventory of the previous
(c) ~ 29,000 year. The closing inventory was
(d) ~ 25,000 valued more by ~ 10,000. This
[91] P Limited, deals in second-hand error results
cars and has the following 4 (a) Previous year's profit is
vehicles of different models in their understated and current
year's profit is
Inventory at the end of the financial
overstated.
Car
year 2016-17
Datsun Fiat Esteem Indica (b) Previous year's profit is
Cost (~) 95,000 1,20,000 2,65,000 1,30,000
I Net 1,05,000 1,15,000 2,50,000 1,40,000
overstatedand current year's
profit is understated.
realisable
value (c) Previous year's profit is
understated and current
The value of inventory to be
year's profit is also
included in balance sheet of the
understated
company as on 31"1 March, 2017
d) Previous year's profit is
would be
overstated and current year's
profit is also overstated.
• Answer

21. (d) 22. (a)

25. (a) 23. (d)
26. (a)
27. (a) 24. (c)
29. (a) 30. (b)
31. (b) 28. (b)
33. (b) 34. (c)
35. (c) 32. (a)
37. (d) 38. (c)
39. (b) 36. (b)
41. (a) 42. (a)
43. (d) 40. (a)
45. (a) 46. (b)
47. (b) 44. (c)
49. (d) 50. (b)
51. (b) 48. (c)
53. (d) 54. (b)
55. (c) 52. (b)
57. (c) 58. (d)
59. (b) 56. (b)
61. (c) 62. (a)
63. (c) 60. (a)
65. (d) 66. (a)
67. (b)" 64. (c)
69. (b) 70. (a)
71. (b) 68. (c)
73. (b) 74. (b)
75. (a) 72. (d)
77. (a) 78. (a)
79. (d) 76. (d)
81. (d) 82. (a)
83. (d) 80. (b)
85. (b) 86 (d)
87. (d) 84. (d)
89. (a) 90. (c)
91. (c) 88. (a)
93. (b)
92. (b)

Page 47 of 137
2008 june
(c) Loss ~ 2,406 [28] A purchased a mine for ~ 2,50,000 Repairs of ~ 6,000 was made after
I
[21 ] Cost of a machine = ~ 1,12,500 (d) Loss ~ 3,219 minerals in the mine were expected 6 months from the date of
Salvage value = ~ 10,500 [24] Cost of machinery ~ 2,52,000 to be 5,00,000 tonnes. In the first purchase. Calculate depreciation
Useful Life = 5 Years Salvage value ~ 12,000 year, 50,000 tonnes of minerals (a) ~ 5,600
Deprecation for the last year using Useful life 6 years were used. What is the depre- (b) ~ 4,800
the Sum of digits method will be: Annual depreciation under straight ciation for the first year? (c) ~ 5,000
(a) ~ 6,800 line method will be: (a) ~ 20,000 . (d) None
(b) ~ 20,400 (a) ~ 42,000 (b) ~ 25,000 [32] Which method of depreciation is
(c) ~ 34,000 (b) ~ 40,000 (c) ~ 30,000 suitable when expenditure on
(d) ~ 27,200 (c) ~ 15,000 (d) ~ 35,000 repairs and maintenance,
[22] Depreciation starts on a machine (d) ~ 28,000 [29] Original cost = ~ 1,00,000, Life = 5 increases as the . machine grows
from the date: [25] Which of the following is Depleted? years, Expected salvage value old?
(a) It is purchased (a) Land = ~ 2,000. Rate of depreciation (a) Reducing balance method
(b) It is put to use (b) Goodwill p.a. =? 4 (b) Straight line method
(c) It is installed (c) Machinery (a) 19.6% (c) Machine hour rate method
(d) Any of above (d) Coal Mines (b) 20% (d) Sinking fund Method.
[23] A trader purchased a machinery for (c) 19.8%
~ 10,000 in Jan 2004. Depreciation I 2008 - December I (d) 20.8% I 2009 - December I
is charged @ 25% diminishing [26] A machine was purchased on 1 st [33] A machinery is purchased for
balance. At the end of third year it
April, 2007 for ~ 5,00,000 and pt
I 2009 - June I ~ 10,000. On 18t April, 2005.
was sold for ~ 1,000. Profit or Loss Depreciation @ 10% p.a. is
on sale of machine will be: October, 2007 for ~ 2,00,000. [30] Price of the computer = ~ 50,000
provided. Calculate the amount of
(a) Profit ~ 2,400 Calculate depreciation @ 20% p.a Residual value = ~ 10,000
(b) Profit ~ 2,300 Hours worked for the year = 6000 difference in depreciation as per
on written down value method for
hrs. .. SLM and WDV basis in the year
the year ending 31 st March, 2008.
Estimated life of computer 2006-07.
(a) ~ 1,00,000
= 20,000 hrs. (a) ~ 1,000
(b) ~ 1,40,000
Calculate the amount of (b) ~ 100
(c) ~ 40,000
depreciation (c) NIL
(d) ~ 1,20,000
(a) ~ 15,000 (d) ~ 200
[27] A machinery is depreciated by
(b) ~ 12,000 [34] A mine was. taken on lease for
~ 2,000 every year. Which method
(c) ~ 20,000 ~ 2,00,00,000. Its total production
is being used to calculate
(d) ~ 24,000 capacity is 4,00,000 mt. What will
depreciation?
[31] A machine was purchased for be the depreciation in 2007 if it
(a) Written Down value method
~ 50,000. Installation expenses produced 30,000 m.t. in 2007?
(b) Straight line method
amounted to ~ 2,000 wages of (a) ~ 10 lacs
(c) Sum of Years Digit method
~ 4,000 were paid on installation.' (b) ~ 15 lacs
(d) None of these .
The scrap value at the end of its (c) ~ 50 lacs
useful life of 10 years is ~ 6,000. (d) None of these

Page 48 of 137
 )
[35] A machine is purchased for [38] __ method of depreciation [41] 'A' purchased a computer on 1.4.06 [45] Original cost of an asset is ~ 1 lacs,
~ 1,00,000. Installation charges of takes into account the element of for ~ 60,000. He purchased WDV = ~ 40,000, sold for ~
~ 10,000 were incurred. interest on capital outlay and seeks another 90,000.
Depreciation @ 10% was provided to write off the value of the asset as computer on 1.10.07 for ~ 40,000. What will be the profit on its sale?
on Straight Line Basis. The well as the interest lost over the life He charges depreciation @ 20% (a) Loss of ~ 50,000
machine was sold for ~ 60,000 of the asset: p.a. on straight line method. What (b) Profit of ~ 60,000
after (a) Sum of year's digits will be closing balance of (c) Profit of ~ 50,000
5 years. Calculate the profit or loss . (b) Annuity computers as on 31.3.09? (d) Loss of ~ 10,000 -
on sale of machine. (c) Sinking Fund (a) ~ 40,000 [46] A machine was bought at a cost of
(a) ~ 5,000 Loss (d) Straight line (b) ~ 64,000 ~ 5 lacs on 1.1.02. During its life of
(b) ~ 5,000 Profit [39] If the rate of depreciation is same (c) ~ 52,000 10 years, it will be depreciated on
(c) ~ 60,000 Profit then the amount of depreciation (d) ~ 48,000 SLM basis. On 31.12.08, the
(d) ~ 40,000 Loss under Straight Line Method vis-a- [42] Depreciation is to be calculated machine was sold for t 50,000.
vis Written Down Value Method will from the date of: Find out the profiVloss?
2010 - June I be: (a) Asset put to use (a) Loss of ~ 1,50,000
(a) Equal in all years (b) Purchase order of asset (b) Loss of ~ 1,00,000
[36] Which of the following is the (b) Equal in first year but higher in (c) Receipt of asset at business (c) Profit of ~ 1,00,000
meaning of entry stated . in the subsequent years. premise (d) Profit of ~ 1,50,000.
Machinery Nc (c) Equal in the first year but (d) Invoice of Assets.
Dr. Machinery Alc (2008-09)
. Date Particulars Amount Date Particular Amount
Cr
lower in subsequent years . I 2011 - December I
. (~) (~)
(d) Lower in the first year but
equal in subsequent years.
2011 - June I [47] X purchased a machinery on
31/3/09 To Depreci·
ation Ale 4.000 [43] According to the Income Tax Act, 01.04.2008 for ~ 5,00,000.
(a) Depreciation provided at the 2010-December which method of Charging Depreciatlon is charged at WDV at
year end ~ 4,000. depreciation is provided? the rate of 10% p.a. The written
(b) Depreciation provided [40] Vijay Traders purchased Car on down value of the machinery for
1.4.08 for ~ 3,00,000. They are (a) Reducing Balance Method
reversed to the extent of the year ending 3pt March, 2011
charging depreciation on written (b) Sinking Fund
t 4,000. will be:
Down Value method. On 31.3.09 (c) Annuity Method
(c) Machinery appreciated by (a) t 4,50,000
they sold the Car for ~ 1,65,000 (d) Straight Line Method.
t 4,000. (b) t 4,05,000
and incurred a loss of ~ 75,000. [44] Which method of depreciation is
(d) None of the above. (c) ~ 3,54,500
The rate of depreciation p.a. is: effective if repairs and maint-
[37] Depletion method of depreciation is (d) ~ 3,64,500
(a) 10% enance cost of an asset increases
normally applied in case of __ as it grows old:
[48] In case of reducing balance
assets. (b) 15% method of charging depreciation,
(c) 20% (a) Straight Line Method
(a) intangible depreciation is charged on the:
(d) 25% (b) Sinking Fund
(b) tangible (a) Original Cost
(c) Annuity
(c) wasting (b) Original Cost less Scrap value
(d) Reducing Balance.
(d) current (c) Market Value
(d) Written Down Value

Page 49 of 137
2012 - June (a) ~ 1,50,000 [54] A company purchased a machine Year Hours
(b) t 1,20,000 on 1/4/00 at t 3,10,000. Its working 1-2 (p.a.)
(c) ~ 1,00,000 life is estimated to be 15 years and 3-6
[49] A machine was acquired on April 1 ,
1 1500
the residual value is estimated as 7-10
2010 at a cost of t 14,400 and (d) t 80,000 1000
~ 10,000. The company charged Depreciatio year
expenses of installation were [52] Following data pertaining to B 750
depreciation on straight line basis n
t 1,600. It is expected that its total limited are available: would be: for the third
useful life will be 8,000 hours. Cost of second hand plant till 31/3/10. On 1/4/10,. the
(a) t 30,000
During the year 2010 - 11 it worked t 1,80,000 technology expert recommend that
(b) ~ 37,500
for 2,500 hours. The depreciation Cost of repairing the plant t 20,000 the asset may be used for another
10 years. Residual value of the (c) ~ 40,000
for the year ending 31'1 March Wages paid for installation of the (d) ~ 45,000
2011 will be: plant t 5,000 machine remains unchanged.
What would be the amount of [57] ABC printers purchased a machine
(a) t 3,200 Fire insurance premium paid for for ~ 1,00,000, on pI April, 2010.
annual depreciation from the
(b) t 4,500 the plant t 2,000 On 151 October, 2010 an another
accounting year 2010-11 following
(c) t 5,000 The amount to be debited to plant machine of ~ 50,000 was
the relevant accounting standard:
(d) t 6,250 account will be: purchased. Depreciation was
(a) t 10,000
[50] A machine was purchased at a (a) t 1,80,000 provided annually 10% p.a. by
(b) t 20,000
cost of t 5,30,000. Depreciation (b) t 2,00,000 fixed installment method. Find out
(c) ~ 11,000
was charged at 10% p.a. instead of (c) ~ 2,05,000 the balance of machine account on
(d) ~ 21,000
25% p.a. What would be the (d) t 2,07,000 31'1 March 2012
rectification entry to correct this (a) ~ 1,37,500
error? 2012 - December I 2013 - June I
(b) ~ 1,22,500
(a) Debit Profit & Loss alc (c) ~ 1,35,000
t 79,500, Credit Provision for [53] Estimated useful life of a [55] Cost of the machinery is t 60,000.
They charge depreciation @20% (d) ~ 1,20,000
depreciation alc t 79,500 machinery is 5 yrs. Depreciation
(b) Debit. Provision for depre- written off in second year under on SLM method. In 2nd year, they 1 2013 - December I
ciation alc t 26,500 sum of years digit method would decided to change the method,
and [58] If depreciation rate is equal, the
(c) Debit Profit & Loss Account be: amount of depreciation in SLM
(a) 4/15 adopt WDV method @20%. If
~ 26,500, Credit provision method as compared to WDV
(b) 3115 the
(d) Debit Provision for dep alc method will be _______ _
(c) 2115 machine was sold for ~ 30,000
t79,500, Cr. P/L Account (a) equal in first year but will be
(d) 1/15 at
~ 79,500 lesser in remaining year.
the end of the third year,
[51] Rate of depreciation under written (b) less in first year but will be
calculate
down value method is 15% p.a. more in remaining years.
the amount of loss on the sale
Cost of the' machinery is (c) equal in first year but will be
of
~ 10,00,000. Residual value at the more in remaining years.
machinery.
end of useful life is ~ 20,000. (d) less in first year but will be
(a) Loss ~ 4,720
Depreciation for the first year will equal in remaining years.
(b) Loss ~ 4,560
be- (c) Loss ~ 720
(d) Loss ~ 560.
[56] A machine purchased for
~ 5,00,000 has an estimated
working life of 10,000 hours, scrap
value estimated ~ 1,00,000. Their
anticipated pattern of' working
Page 50 of 137 hours is as follows:

[59] Where a machine
products of uniform size, the
of depreciation is
applied:-
(a) machine hour method
(b) sinking Fund method
(c) annuity method
(d) production units.
[60] A depreciable asset may 'suffer
obsolescence due to:-
(a) Passage of time
(b) Wear and tear
(c) Technological Changes
(d) None of the above.
[61] method shall be .
efficient, if repairs and
maintenance cost of an asset
1 increases as it grows older:-
(a) Straight Line
(b) Reducing Balance
(c) Sinking Fund
(d) Annuity.
[62] Which of the following is the
meaning of entry stated in the
machinery Alc?
Machine Alc 2012-13) Cr.
(a) Profit on sale of machinery
transferred to Profit & Loss
Alc
(b) Machinery of ~ 5,000 sold
(c) Machinery of ~ 5,000
Purchased
(d) Loss on sale of machinery
transferred to Profit & Loss
Alc.
Page 51 of 137
produces 20174 juneI
[63] A Machine is purchased for
~ 2,50,000 on 1.1.2010. It can
produce 30,000 units during its
useful life and its estimated scrap
value is ~ 10,000. Pattern of
production over the next 4 year is
as follows:
2010-6,250 units, 2011-2,275 unit
2012-12,000 units 2013-3,452
units. The WDV of the machine
after 3rd year will be:
(a) ~ 85,800
(b) ~1,54,200
(c) ~58,158
(d) ~ 1,91,816
[64] Cost of Machine ~ 1,00,000, scrap
value ~ 10,000 and life is 4 years.
What will be amount of
depreciation according to sum of
years digits method in the 3,d year?
(a) ~ 40,000
(b) ~ 27,000
Amount
(c) ~ 9,000
(~)
(d) ~ 18,000
[65] Machinery has a life of 4 years. If it
is depreciated by the Reducing
Balance Method, at the end of 4
years, its book value is 24% of its
Original Cost. The rate of
depreciation applied is:
(a) 24%
(b) 26%
(c) 30%
(d) 32%
: (b) Only (II) above
CPT Scanner: Fundamentals of Accounting (Paper 1)
(a) Sinking Fund Method
(b) Annuity Method
(c) Production Units Method
(d) Depletion Method
1 2014 - December
[67] On August 1, 2011 Key Travels
Ltd. bought five trucks costing
~ 12,00,000 each. The company
expected to fetch a scrap value of
25% of the cost price of the
vehicles after ten years. The
vehicles were depreciated under
the fixed instalments method upto
March 31, 2014. The rate of
depreciation charged upto March
31, 2014. Was:-
(a) 10.0%
(b) 9.0%
(c) 8.5%
(d) 7.5%
[68] Which of the following statements
are false?
I.The term 'depreciation',
'depletion' and 'amortization'
convey the same meaning.
II. Provision for depreciation Alc
is debited when provision for
depreciation Alc is created.
C. The main purpose of charging
the profit and loss alc with the
amount of depreciation is to
spread the cost of an asset
over its useful life for the'
purpose of income deter-
mination.
(a) Only (I) above
(c) Only (III) above
(d) All (I), (II) and (III) above.
[69] The amount of depreciation
under straight line
method.
(a) remains fixed for all year
(b) decreases every year
I (c) revalued every year
(d) increases every year
[70] Mis Daga & Co. installed a
machinery for ~ 5,00,000 on
01.01.2007. They were charging
depreciation on straight line basis
taking useful life of the machine as
10 years. In December 2013 they
found that the machine became
obsolete and could not be used.
The machine can fetch only
~ 50,000. The loss of ~ _______ _
due to obsolescence is ______ _
(a) 1,50,000; capital
(b) 1,00,000; revenue
(c) 1,00,000; capital
(d) 1,50,000; revenue
1 2015 - June ,I
[71] The book value of an asset on 1-4-
14 is ~ 80,000. The asset is sold on
31-12-2014 ~ 60,000. If the rate of
depreciation is 15% WDV, what is
the profit or loss on sale of the
asset?
(a) ~ 12,500
(b) ~ 11,000
(c) ~ 11,250
(d) ~12,OOO
[72] During 2014-15, Gee Ltd.
purchased a printing machinery
and made the following payments
in relation to it:
 ~ ~
Cost as per suppliers 6,30,00
list 0
Less: agreed discount 30.000 6,00,000
Delivery charges
Erection charges
Annual maintenance
charges
Additional spares to increase
capacity of the machine
Annual Insurance Premium
Assume Depreciation @ 10% p.a.
WDV, depreciation tor 3rd year is:
(a) ~ 51,840
(b) ~ 54,270
(c) ~ 50,295
(d) ~ 57,105
[73] The portion of the acquisition cost
of the asset, yet to be allocated is
known as:
(a) Written down value
(b) Accumulated value
(c) Realisable value
(d) Salvage value.
[74] Determine the amount of
depreciation
charged during the year 2013-14
from the following information:
During 2010-11, Machinery
purchase cost ~ 10,00,000.
Useful life: 5 years
Salvage value : 1 0%
Method of depreciation: Sum of
year's digits method.
(a) ~ 60,000
(b) ~ 1,80,000
(c) ~ 2,40,000
(d) ~ 1,20,000
2015 - December I [71] Cost of the plant ~ 4,00,000 scrap Depreciation for the 1 st year will
value ~ 40,000 and useful life 4 be
[75] A Firm purchased machinery for years. What will be amount of (a) ~ 1,50,000
15,00 ~1 0 lakhs. The machine was depreciation according to sum of (b) ~ 1,20,000
0 depreciated @ 15% p.a. under years digits method in the first (c) ~ 1,00,000
15,00 year? (d) ~ 80,000
0
WDV. After 4 years the firm
25,00 decides to char,ge the method of (a) ~ 90,000
40,000
0
10,000
depreciation to SLM @ 10% with . (b) ~ 1,44,000 2016 - June I
retrospective effect. What will be (c) ~ 1,00,000
(d) ~ 2,40,000
the journal entry for the excess
[78] Under this method, the annual [80] A machine was purchased on
depreciation charged amounted
~ 77,994? charge for depreciation decreases 1.4.12 for ~ 15,00,000 with scrap
from year to year, so that the value of ~ 40,000 at the end of its
(a) Depreciation Alc Dr.77,994
earlier year suffer to the benefit of
To Machinery Alc 77,994 useful life. Depreciation was
the later year. Also, under this provided @ 15% p.a. on
(b) Machinery Alc Dr.77,994
To Depreciation Alc 77,994 method, the value of asset can diminishing balance method. On 1s1
never be completely extinguished. July, 2015, the machinery got
(c) Profit & Loss Alc Dr.77,994
The other advantage of this damaged and was disposed off for
To Machinery Alc 77,994
method is that the total charge to ~ 9,04,385. As a result of this there
(d) Machinery Ale Dr.77,994
revenue is uniform, when, the will be:
To Profit & Loss Alc 77,994
depreciation is high, repairs are (a) Profit of ~ 17,742
[76] S & Sons purchased a machinery
negligible, and as the repairs (b). Loss oH 17,742
on 151 April; 2015 for ~ 5,60,000.
increase, the burden of (c) Profit of ~ 16,803
The scrap value in ten years time is
expected to be ~ 42,000. What is depreciation gets lesser and lesser. (d) Loss of ~ 16,803
This method of depreciation is: [81] A plant was purchased on 1.4.2010
the rate of depreciation on original
(a) Sinking fund method for ~ 3,50,000 The useful life was
cost, if the depreciation is written
(b) Annuity method five year and the scrap value was
off by equal instalments every 31 st
March? (c) Straight line method ~ 50,000. The rate of depreciation
(a) 10% (d) Written Down value method under SLM will be:
(b) 9% [79] Rate of Depreciation under the (a) 17.14%
written down value method @ 15% (b) 20%
(c) 9.5%
priginal Cost of the ~10,00,000 (c) 16%
(d) 9.25%
machine (d) 18%
[82] Which of the following statements
Residual Value at the end ~ 2,00,000 is! are false?
Iof useful life (I) The term 'depreciation';
'depletion' and 'amortisation'
convey the same meaning
(II) Provision for depreciation Alc
is debited when provision for
depreciation Alc is created

Page 52 of 137

(III) The main purpose of charging
the Profit and Loss
Account
with the amount of
depreciation is to spread
the
cost of an asset over its
useful
life for the purpose of
income
determination.
(a) Only (I) above ..
(b) Only (II) above.
(c) Only (III) above.
(d) All of the above.
I 2016 - December
[83] Cost of machinery ~ 60,000. They
charged depreciation @ 20% on
SLM method. In 2nd year they
decided to change method and
adopt WDV methid @ 20%. If
machine was sold for ~ 30,000 at
the end of 31d year, calculate the
amount of loss.
(a) Loss ~ 4,720
(b) Loss ~ 4,560
(c) Loss ~ 720
(d) Loss ~ 560
[84] A new machinery was purchased
by X Ltd. on 151 January, 2013. It
was depreciated as per WDV @
15%. Its opening. WDV . as on
1.1.2016 was ~ 3,68,475. Now the
company wants to change the
method of depreciation to 1 0%
SLM. The Original Cost of
machinery is __ .
(a) ~ 4,33,500
(b) ~ 5,10,000
(c) ~ 6,00,000
(d) ~ 7,05,882
Page 53 of 137
[85] Insurance claim received. on
account of machinery completely
damaged by fire. This will be:
(a) Revenue Receipt
(b) Casual Receipt
(c) Deferred Revenue Receipt
(d) None of the above.
[86] The assets which were earlier
revalued upward and new revalued
downward, to the extent of earlier
upward revaluation amount should
be:
(a) Credited to Revaluation
Reserve Alc
(b) Debited to Revaluation
I Reserve Alc
(c) Credited to P&L Alc
(d) Debited to P&L Alc
I 2017 - June I
[87] A second hand machine was
purchased for ~ 1,00,000 through
broker who charged 2% brokerage.
It was brought to factory after
incurring transportation cost of ~
1,500. It was repaired at a cost of ~
3,000 and then installed at a cost
of ~ 4,500. Trial run cost was ~
7,000. The commercial production
began and continued upto 11
months at the end of which, this
machine was again repaired at a
cost of ~ 8,000. The amount to be
debited to the machinery alc will
be:
(a) ~ 1,18,000
(b) ~ 1,26,000
(c) ~ 1,19,000
(d) ~ 1',16,000
)
[88] Original cost of the asset
~ 2,00,000. If rate of depreciation IS
10% per annum under WDV
method, what would be the value
of asset at the end of 2nd year?
(a) ~ 1,53,900
(b) ~ 1,62,000
(c) ~ 1,52,000
(d) ~ 1,80,000
[89] For charging depreciation, on
which of the following assets, the
depletion method is adopted?
(a) Plant and Machinery
(b) Wasting assets like mines and
quarries
(c) Buildings
(d) Trademark.
2017 - December
[90] The book value of the asset as on
pt April, 2016 was ~ 70,000.
Depreciation is to be charged on
the asset @ 10% under WDV
method. On pt August, 2017, the
asset was sold for ~ 60,000.
Calculate protit/loss on the sale of
the asset.
(a) ~ 3,000 profit
(b) ~ 3,000 loss
(c) ~ 900 profit
(d) ~ 900 loss
[91] A . machine was purchased for
~ 3,00,000 having an estimated
total working of ~ 28,000 hours.
The scrap value is estimated to be
~ 20,000 and anticipated pattern of
distribution of effective hours is as
follows:
Year
1 - 3 3,000 hours per year
4 - 6 2,600 hours per year
7 - 10 2,800 hours per year
In 8th year, the depreciation to be
charged will be:
(a) ~ 28,000
(b) ~ 26,000
(c) ~ 30,000
(d) ~ 19,286
[92] Depreciation on asset is provided
with the objective of
(a) To accumulate funds for the
replacement of assets
(b) To ascertain true cost of
production
(c) To present true and fair view
of the financial position
(d) All of the above.
I [93] Which of the following expenses
is not included in the acquisition
cost of a machinery?
(a) Cost of site preparation
(b) Delivery and handling
Charges
(c) Installation costs
(d) Fire insurance premium
[94] Machinery costing ~ 6,00,000 was
purchased on 15t April, 2012. The
installation charges amounted to
~ 20,0001-. The salvage value is
estimated to be ~ 10,0001-. The
useful life of machinery is 1
years.
°
Depreciation on straight line
method for the year ending on 3pt
March, 2017 will be
(a) ~ 61,000
(b) ~ 60,000
(c) ~ 62,000
(d) ~ 59,000
 Answer
21. (a) 22. (b) 23. (d) 24. (b)
25. (d) 26. (d) 27. (b) 28. (b)
29. (a) 30. (b) 31. (c) 32. (a)
33. (b) 34. (b) 35. (b) 36. (b)
37. (c) 38. (b) 39. (b) 40. (c)
41. (c) 42. (a) 43. (a) 44. (d)
45. (c) 46. (b) 47. (d) 48. (d)
49. (c) 50. (a) 51. (a) 52. (c)
53. (a) 54. (a) 55. (c) 56. (c)
57. (b) 58. (c) 59. (d) 60. (c)
61. (b) 62. (d) 63. (a) 64. (d)
69. (a) 70. (b) 71. (b) 72. (b)
73. (a) 74. (d) 75. (d) 76. (d)
77. (b) 78. (d) 79. (a) 80. (a)
81. (a) 82. (b) 83. (c) 84. (c)
85. (d) 86. (b) 87. (a) 88. (b)
89. (b) 90. (d) 91. (a) 92. (d)
93. (d) 94. (a)

Page 54 of 137
 [7] Opening balance of debtors is (a) 33 %
[2] Opening debtors =3,000 ~ 35,000 Cash Received from (b) 20 %
Credit Sales = 80,000 Debtors is ~ 30,000 Cash sales is (c) 40 %
Cash received . from ~ 20,000 which is 20% of total (d) 50 %
debtors sales. BfR Received for ~ 40,000 [11] Sales =.~ 3,00,000; G.P. on sales
= 60,000 and discount allowed is 1 % of cash is 20 % Purchases = ~ 2,40,000;
Closing collection. Opening stock = ~ 20,000 Find
Debtors? Find the closing debtors. closing stock.
(a) ~ 30,000 (a) ~ 15,300 (a) ~ 20,000
(b) ~ 32,000 (b) ~ 44,700 (b) ~ 24,000
(c) ~23,000 . (c) ~ 64,700 (c) ~ 16,000
[3]
capital
loan
for (d)
Afrom
drawings
the
amount ~~his
person
ofof
year 20,000
50,000
isstarted
9,000. and
relativea~business
.~ , 0,000
closing What he
willtakes
5,000.
and
capital? with
beProfit
the (d) ~ 35,700 (d) ~ 12,000
(a) ~ 60,000 [8] Opening Balance of cash = [12] At the end of Trial Balance, the
(b) ~ 51.,000 ~ 4,000, Closing balance = ~ 7000, following adjustments are given
(c) ~ 56,000 Payment to creditors = ~ 80,000, stock destroyed - ~ 20,000
(d) ~ 46,000 BIP matured = ~ 6000, BIR Insurance claim received ~ 16,000.
[4] Cost of goods sold = ~ 15,00,000, discounted = ~ 9,000, Sundry The effect of the above
Gross Profit = 20% on sales expenses = ~ 3,000, Drawings = adiustments will be shown in:
Calculate the amount of sales. ~12,000 (a) Tra~ing Account
[1] The balance in books of X, a sole
(a) ~ 18,25,000 What is the amount received from (b) Profit and Loss Account
proprietor were:
(b) ~ 18,75,000 debtors? (c) Balance Sheet
Opening Stock ~ 17,000, Purchase
(c) ~ 18,50,000 (d) All of the above.
~ 52,000, Wages ~ 46,500 Fuel (a) ~ 95,000
(d) ~ 19,00,000 [13] A surplus of revenue over its cost
~ 15,000. sates ' ~ 1,45,000 and (b) ~ 1,01,000
[5] Full claim accepted by Insurance is known as _____ of business.
Closing Stock ~ 25,000 whose Net (c) ~ 83,000
Company ori the loss of goods by . (a) capital
Realizable value was ~ 28,000 Find (d) ~ 91,000
fire is credited to ________ . (b) profit
the Gross profit:
(a) ~ 39,500
(a) trading alc I 2009 - June ,
I (c) asset
(b) pll alc (d) none
(b) ~ 42,500
(c) insurance company [9] ________ is a summary of all assets
(c) ~ 54,500 [14] Net profit before the following
(d) none. and liabilities on a particular date.
(d) ~ 57,000 adjustments = ~ 1,80,000
[6] Closing Stock of previous year is (a) Trial Balance Outstanding Salary ....... = ~ 10,000
overvalued by ~ 50,000. Due to (b) Profit and Loss Account Prepaid insurance ........= ~ 13,000
this: . (c) Balance Sheet Calculate profit after adjustments.
(a) Previous year's profit is (d) Funds Flow Statement
(a) ~ 1,77,000
overstated and current year's [10] If the profit is 25% on sales, then
(b) ~ 1,83,000
profit is understated. what percentage of profit is on (c) ~ 2,03,000
(b) Previous year's profit is cost? (d) none of the above.
understated and current year's
profit is overstated.
(c) Previous years profit is
overstated and current year's
profit is overstated.
(d) Previous year's profit is
understated and current year's
profit is understated.
I 2008 - December
Page 55 of 137
 (c) Insurance for Stock of [23] Postal Expenses Account is shown
[15] Find out the corrected net profit; [28] At the end of the year 2008-09, the
Finished Goods in:
Profit before taking into account ledger of a firm shows following
(a) P & L Alc
following adjustments was (d) Carriage Inward balances, . prepare their balance
(b) Trading Alc
~ 7,00,000 [19] There was a stock of ~ 5,500 out of sheet-
(c) Balance Sheet ~ 2,00,000
(i) ~ 1,00,000 spent on purchase which stock of ~ 500 was burnt due Capital
(d)· Manufacturing Alc
of motor car for business to fire and was disposed : off for Net profit for the year
[24] Prepaid Expense of Financial Year
purpose, treated as expense . ~ 200. Remaining goods were sold 2008-09 ~ 1,50,000
relate with:
in ·Profit & Loss Alc. at 25% above cost price. Find net Provision for Taxes ~ 75,000
(a) Previous Financial Year
(ii) ~ 15,000 p.m. rent outstanding profit. Liabilities ~ 1,00,000
(b) Following Financial Year
for the month of February and (a) ~ 250 Advance Tax Paid ~ 60,000
(c) Current Financial Year
March not taken into account - (b) ~ 200 Sundry Assets ~ 4,65,000
(d) None balance sheet
(a) n,70,000 (c). ~ 575 The total of the
[25] Opening Capital :: ~ 5,00,000
(b) ~ 7,85,000 (d) ~ 950 would be
Profits during the year e ~ 1,00,000
(c) ~ 6,15,000 [20] It profit is 25% as cost price then (a) ~ 4,65,000
Calculate the Average Capital of
(d) ~ 6,30,000 the profit on sale price will be: (b) ~ 5,25,000
the year.
[16] Sales = ~ 11,000, G.P. = 1/10th on (a) 20% (a) ~ 5,50,000
(c) ~ 5,65,000
cost closing stock before these (b) 30% (d) ~ 5,10,000
(b) ~ 3,00,000
Adjustments ~ 1,00,000 closing (c) 33 1/3"/. [29] On 31 sl March, 2009 Ram has loan
(c) ~ 9,167
stock after adjustment of sales will (d) 40% of ~ 50,000 and trade creditors of
(d) ~ 50,000
be - [21] If Purchases Account is not ~ 80,000, Fixed assets of ~ 72,000,
[26] Goods in Transit but not taken in
(a) ~1,10,000 credited in case of goods lost in Stock ~ 90,000 and cash in hand
Closing Stock will be credited to:
(b) ~ 90,000 transit then which account can be ~ 60,000. If he had started
(a) Purchase Alc or Trading Alc
(c) ~ 89,000 credited? business on April 1, 2008 with
(b) Supplier Alc capital of ~ 50,000. Compute profit
(d) None (a) Goods Lost in Transit Account (c) . Goods in Transit Alc
(b). Purchase Return Account earned by Ram for year 2008-09:
[17] Bad debt recovered of ~ 2000 (d) Cash Alc (a) ~ 92,000
which were previously written off as (c) Trading Account
(b) ~ 42,000
bad debt will be credited to __ (d) Sales Account
Alc [22] Opening Stock = ~50,000
2010 - June I (c) ~ 1,74,000
(a) bad debt alc [27] The manager of a firm is entitled to (d) ~ 52,000
Purchases = ~ 1,00,000
(b) debtor alc Purchase Return = ~ 29,000 a commission of 10% on net profit [30] The Gross Profit for the year
(c) bad debt recovered alc Sales » ~ 2,00,000. after his commission. If the net ending 31.03.2009 is ~ 1750,
(d) suspense alc profit of the firm before Charging Carriage Inward is ~ 150, Bad
Find the Gross Profit
Debts is ~ 120, Proprietors Pers-
(a) ~ 1,21,000 commission is ~ 4,40,000, the
I 2009 - December I (b) ~ 79,000 amount of manager's commission
onal Expenses is ~ 750 Carriage
Outward is ~ 175. The amount of
(c) ~ 21,000 will be: Net Profit will be
[18] Selling and distribution expenses (d) None of the above (a) ~ 44,000 (a) ~1455
does not comprise of: (b) ~ 40,000 (b) ~ 1305
(a) Godown Rent (c) ~ 37,000 (c) ~ 555
(b) Bad Debts (d) ~ 33,000 (d) ~ 705

Page 56 of 137
5.

[31] Calculate the value of closing stock [34] Total Debtors on 31.12.2009 were Rate of Gross Profit on sales 12,}o and prepaid expenses account will be
from the following: ~ 48,000 before writing off bad- The value of stock as on 1.04.09 credited.
Opening stock ~ 60,000 debts but after allowing discounts. was:
Purchases ~ 90,000 During the year bad-debts (a) ~ 5,70,000
Sales ~ 1,20,000 amounted to ~ 2,000 and discount (b) ~ 4,90,000 [35] At the end of the financial year
Gross Profit on cost 33 1/3%. Due allowed were ~ 100. It is the firm's (c) ~ 5,30,000 accourits receivable has a balance
to fire, stock costing ~ 15,000 policy to maintain a provision of 5% (d) None of the above. of ~ 1,00,000 and Provision tor.the
destroyed and jnsurance claim was against bad and doubtful debts. [33] Which of the following statement is bad & doubtful debts provided
accepted for ~ 5000 . Find out the amount of provision for not true- amounting to ~ 7,000. Net
(a) ~ 40,000 Bad and Doubtful debts as, on (a) Actual bad-debts are not realizable value of the accounts
(b) ~ 45,000 31.12.09: adjusted against the receivable is:
(c) ~ 55,000 (a) ~ 2400 provision (a) ~ 7000
(d) ~ 60,000 (b) ~ 2305 for bad-debts alc. (b) ~ 1,07,000
[32] Salaries paid in cash ~ 2,00,000. It (c) ~ 2300 (b) Bad-debts could be more than (c) ~ 93,000
includes previous year's (d) ~ 2000 provision for bad-debts (d) ~ 1,00,000
outstanding ~ 10,000 and salary [35] What will be the treatment of (c) Bad-debts could be less than [36] Baba's Balance sheet as at 31st
paid in advance for the next year "accrued income" if appearing in provision for bad-debts March, 2008 shows ~ 6,800 as rent
~ 20,000. Salary outstanding for the the Trial Balance: (d) Provision for bad-debts is payable. His cash book shows total
year is ~ 15,000. Salary of __ (a) It will be shown on the assets side as shown as a liability in the payment towards Rent ~ 50,000
shall be debited in the profit and current assets in the balance sheet. ' balance sheet or may be during the year ending 31st March
loss account. (b) It will be shown on the liability deducted from the debtors 2009 Rent payable as at 31 st
(a) ~ 2,25,000 side as current liability in the in March, 2009 is ~ 5000. Which of
(b) ~ 1,85,000 balance sheet. the balance sheet. the following amount should go to
(c) ~ 2,05,000 (c) It will be shown on the debit [34] What will be the treatment of pre- his Profit & Loss Nc as rent.
(d) ~ 1,75,000 side of trading account as an expense. paid expenses if adjustment of it is (a) ~ 61,800
[33] The fixed asset of a company is (d) It will be shown on the credit appearing outside the Trial (b) ~ 48,200
double of the current assets and side of profit and loss account Balance? (c) ~ 55,000
half of capital. If the current assets as an income. (a) Prepaid Expenses account will (d) ~ 6,800
are ~ 3,00,000 and investment
~ 4,00,000, calculate the current
I 2010 - December I be . debited and respective expenses
account will be credited.
[37] For calculation of current ratio
liabilities assuming that there are [34] Transactions of Aruna Limited for which of the following is relevant:
,(b) Respective expense account
no other items in the balance theperiod 1.4.09 to 10.04.09 are will be debited and prepaid (a) Current Assets Fixed Liabilities
sheet. as follows. expenses 'account will be credited. (b) Current Assets CurrentLiabilities
(a) ~ 2,00,000 Direct Expenses (c) Prepaid expenses account will (c) Fixed Asset Fixed Liabilities
~ 80,000
(b) ~ 1,00,000 Sales be debited and profit andloss (d) Fixed Liabilities Current Liabilities
~ 7,50,000
(c) ~ 3,00,000 Purchases ~ 4,50,000 account will be credited.
(d) ~ 4,00,000 Stock as on 10.4.09 ~ 3,60,000 (d) Profit and Loss account will be debited

Page 57 of 137
Page 58 of 137
 I 2011 - June I I 2011 - December I (a) '{ 5,400 2012 - June I
(b) '{ 5,500 (52] The following details are available
[38] Which one is correct? [43] Bills payable is shown on the (c) '{ 5,625
(a) Goodwill is a fictitious asset . liability side of the Balance Sheet (d) '{ 6,600 from the books of a sole trader:
(b) Closing stock is a wasting asset under the head: [48] Working Capital means Particulars As on As on
(c) Preliminary expense is a (a) Provisions (a) Current Assets - Current 3113110 ('{) 31/3/11 (~)
current asset (b) Current Liabilities liabilities Opening stock 30,000 35,000
(d) Patent is an intangible asset. (b) Fixed Assets - Current Assets Purchases 3,25,000 4,20,000
'(c) Secured Loans
{ [39] Work-in-progress is shown in the (d) Reserves and Surplus. (c) Fixed Assets - Fixed liabilities
. Sales 4,00,000 5,00,000
(d) Fixed liabilities - Current If the gross profit ratio remains
Balance Sheet under which head? [44] The provision for discount on
unchanged, the closing stock as on
(a) Share Capital debtors is calculated on debtors: liabilities
31/3112 will be
(b) Current Asset (a) Before deducting the provision [49] Which of the following statement is
(a) 35,000
(c) Fixed Asset for doubtful debts not correct?
(b) 50,000
(d) Current Liability. (b) After deducting the provision (a) Goodwill is an intangible asset.
(c) 55,000
[40] Units produced 5,000 @ 20/- Direct for doubtful debts (b) Sundry debtors are current.
(d) 60,000
Expenses - '{ 5,000 4151h of the (c) Before deducting the actual assets ...
(53] If opening stock is '{ 69,500,

i units were sold .@ 25/- per unit.

What will be the profit?
(a) 20,000
(b) 16,000
(c) Nil
(d) None of these.
[41] Insurance . Premium
annually '( 2,400 from pI Jan. What
will be the openihg entry on 1 SI
April if books are closed on 31s1
March.
(a) Prepaid Insurance Nc
To Insurance Nc
(b) Insurance Nc
To Prepaid
Insurance Nc
(c) Prepaid Insurance Nc
To Suspense Nc
(d) None of these.
[42] Sales = + Gross Profit.
(a) Cost of goods sold
(b) Purchases
(c) Opening stock
(d) None of these.'
. bad debts and the provision
(d) After adding the actual bad-
debts.
(c) Loose tools are tangible fixed
assets.
(d) Outstanding Expenses are'
closing . stock is '{ 83,500, sales
less return is '{ 1,60,000 and
purchases is ~ 1 ,10,000. The
[45] If Depreciation is Excess charged current assets.
Gross Profit margin on Sales would
by '{ 500 and closing stock is under [50] Prepaid Expenses '( 1,000, shown
be?
valued by '{ 500 the net profit will in Trial Balance, will appear in
(a) 35%
provided be due to these errors.
(b) 40%
(a) understated by '{ 500 (a) liability side of balance sheet (c) 30%
(b) overstated by '{ 1,000 (b) Dr. side of profit & loss account (d) 45%
(c) understated by '{ 1,000 (c) Dr. side of profit and loss (54] A sole trader has computed a net
(d) unaffected. appropriation alc profit of ~ 56,750. After that he
Dr. 600 (46] Goods purchased '{ 90,000, sales (d) asset side of balance sheet. found the following mistakes in the
600 '{ 80,000, Margin 20% on sales,
[51] Profit or loss on sale of fixed assets books of accounts: Discount
Dr. 600 closing stock will be
is transferred to: received of ~ 580 and discount
(a) '{ 8,000
600 (a) Profit and Loss Nc D allowed of ~ 665 have been
(b) '{ 10,000
Dr. 2,400 (b) Capital Reserve Nc recorded on the wrong sides of the
(c) ~ 20,000
2,400 (c) Revaluation.Reserve Nc discount received and' discount
(d) ~ 26,000
(d) Capital Nc allowed accounts.
[47] Goods worth ~ 5,000 were supplied
What would be the actual rief profit
to Mr. X at an invoice price of 20%
of trader?
above Cost and allowed trade
discount at 10% on invoice price.
At what price were the goods sold
to X?

Page 59 of 137
 (a) ~ 56,580
(b) ~ 56,665
(c). ~ 56,835
(d) ~ 56,920
[55] An item of furniture was destroyed
by fire whose cost was ~ 18,000
against which a claim of ~ 12,000
was accepted by the insurance
company. The depreciation
provision up to date of fire was
~ 2,700. What amount to be
recorded in account as loss by fire?
(a) ~ 6,000
(b) ~ 15,300
(c) ~ 3,300
(d) ~ 18,000
[56] Rent paid on 1st October 2010 for
the period 1 st October, 2010 to 30th
September 2011 was ~ 12,000 and
rent paid on 1 st October 2011 for
the period'pt October 2011 to 30th
September, 2012 was ~ 18,000.
Amount of rent in the Profit and
Loss account for the year ended
31 st March, 2012 would be
(a) ~ 12,000
. (b) ~ 18,000
(c) ~ 15,000·
(d) ~ 16,500
[57] X sold goods to Y at a profit of 10%
on cost, and Y sold the goods to Z
at a profit of 20% on sale value. If
the cost of goods to X is ~ 50,000,
then at what value Y has sold the
goods to Z?
(a) ~ 65,000
(b) ~ 66,000
(c) ~ 68,750
(d) ~ 69,450
Page 60 of 137
[58] A trial balance shows sundry'
debtors as ~ 80,000. Information
outside the trial balance (i) Bad -
debts ~ 2,000 (ii) Make a provision
for doubtful debts on debtor @ 5%.
The amount of provision for
doubtful debts will be:
(a) ~ 4,100
(b) ~ 4,000
(c) ~ 3,900
(d) ~ 4,200
I 2012 - December . I
[59] On 3pt March, 2011, the books of
Ajit showed a net profit of ~ 84,000.
Later it was discovered that the
closing stock was over valued, by
~ 4,000 and the discount received
of ~ 1 ,500 was treated as an
expense. What was the correct net
profit of Ajit ?
(a) ~ 81,500
(b) ~ 83,000
(c) ~ 89,500
(d) ~ 91,000
[60] Mr. X forgot to record following
transactions while preparing his
final account for the year ended
3pt March, 2011 :
Outstanding Expenses ~ 20,000
Prepaid Insurance ~ 2,000
Interest receivable
on investment (accrued) ~ 3,000
Drawings ~ 6,000
The total change in his profit for the
year after recording the above
would be:
(al) Decreased by ~ 21,000
(b) Increased by ~ 21,000
(c) Increased by ~ 15,000
(d) Decreased by ~ 15,000
[61] From the following information,
calculate the cost of raw material
consumed:
(~)
Purchase of raw material 80,000
Opening Stock :-5000
Raw Material 12000
Work in progress8500
Finished goods 12400
Closing Stock :-
Raw Material 6350
Work in Progress 4500
Finished goods
(a) ~ 82,500
(b) ~ 78,250
(c) ~ 78,650
(d) ~ 82,250
[62] Return Inwards are deducted from
(a) purchases
(b) sales
(c) return outwards
(d) closing stock
[63] An increase in the provision for
doubtful debts would result in
____ in working capital and
____ in net profit:
(a) increase, decrease
(b) increase, increase
(c) decrease, increase
(d) decrease, decrease
[64] A company has paid salary
amounting to ~ 50,000 to Mr. A on
March 25, 2011. Mr. A deposited
the cheque of salary on April 03,
2011 in his bank account. What
adjustment should be made by
company at the time of preparing
final account:
(a) No entry will be passed
(b) Bank Alc, Dr
To Outstanding Salary Alc
(c) Salary Nc Dr
To Outstanding Salary Alc
(d) Bank Alc Dr
To A's Nc
[65] The opening stock is understated
by ~ 20,000 and closing stock is
overstated by ~ 25,000. The net
profit for the current year is
___ by __ :
(a) overstated by ~ 5,000
(b) overstated by ~ 45,000
(c) understated by ~ 5,000
. (d) understated by ~ 45,000
[66] The following details relate to a
trading concern for the year 2010.
Opening stock ~ 4,000. Purchases
and Sales during the year ~ 36,000
and ~ 35,000 respectively. Profit on
Sales is 20% uniformity throughout
the year. 50% of the closing stock
was found to be obsolete and
estimated to fetch only 50% of
cost. The value for the closinq
stock at the end of the year will be:
(a) ~ 9,000
(b) ~12,000
(c) ~ 6,000
(d) nO,500
2013 - June (a) ~ 3,00,000 ~ 2,700. What amount of loss by 3. Bank loan for three years
(b) ~ 2,95,000 fire will be transferred to Profit, & 4.Preliminary expenses
[67] Proprietor used the rented building (c) ~ 3,05,000 LossNc? (a) All of the above
both for business purpose and as (d) ~ 3,10,000 (a) ~ 3,300 (b) 1 & 2
well for personal purpose equally. [70] Goods worth ~ 10,000 was (b) ~ 1,300 (c) 2 & 3
The rent paid during the year for destroyed by fire and insurance (c) ~1,700 (d) 3 & 4.
the building was ~ 1,32,000 company admitted the claim of (d) ~ 900 . [76] The manager earns a commission
debited 60%. The accounting entry for [73] Mr. A invest ~ 10,00,000 to start a of ~ 25,000 which is based on
to Rent expenses in the books of .above transaction would be: cloth business on 1 SI April, 2011. 1 0% of the net profit. If the sales
the business. One month rent is (a) Loss by Fire ale Dr. ~ 10,000 During the year he purchases is ~ 3,50,000 higher than
still outstanding. Liability of the To Purchase ale ~ 4,000 goods of ~ 7,10,000 and his sales purchases. Find out the direct +
business for outstanding rent is: To Insurance Co. ale ~ 6,000 for the year was ~ 8,42,000. He indirect expenses incurred during
(a) ~ 11,000 (b) Loss by Fire ale Dr. ~ 10,000
pays shop rent for the financial the year. There is no opening or
To Purchase ale ~ 6,000
(b) ~ 12,000 year 2011-12 ~ 20,000 and other closing stock.
To Insurance Co, ale ~ 4,000
(c) ~ 5,500 (c) Loss by Fire ale Dr. ~ 6,000 expenses ~ 75,000 and finds that (a) ~ 75,000 ,
(d) ~ 6,000 Insurance Co, ale Dr. ~ 4,000 he has goods worth ~ 45,000 in (b) ~ 1,00,000
[68] From the following information; To Purchase 'ale ~ 10,000 hand. What would be the gross (c) ~ 3,50,000
calculate the purchases made (d) Loss by Fire ale Dr ~ 4,000 profit for the year ended 31 st (d) Not ascertainable
during the year 2012-13 Insurance Co. ale Dr. ~ 6,000 March, 2012? [77] On March 31, 2013, Prepaid
Opening stock ~ 1,50,000 To Purchase ale ~ 10,000 (a) ~ 1,02,000
[71] At the end of the financial year
Expenses Nc (2012-13)
Cash Sales ~ 1,20,000 (b) ~ 82,000 Shows a closing balance of
Credit Sales ~ 2,30,000 2011-12 the gross profit of Ram's (c) ~1,77,000
business is ~ 1,75,000. During the ~ 5,000. It means
Closing Stock Nil (d) ~ 1,57,000 (a) Expenses transferred from
Selling price is 125% of cost price year carriage inward ~ 15,000,
Barn's personal expenses ~ 75,000 ,'2013 - December previous year for
(a) ~ 1,50,000 accounting
and carriage outward ~ 17,500 [74] State which of the following state
(b) ~ 1,40,000 in current year.
were paid by Ram. Bad debts for
(c) ~ 1,30,000 ment is false: (b) Expenses transferred to next
the year were ~ 12,000. The net
(d) ~ 1,20,000 (a) Assets can be arranged in year for accounting in
profit earned by Ram for the year
[69] Calculate amount of Salary debited accordance with their that or
2011-12 would be:
to profit and loss Nc for the year liquidity future years.
(a) ~ 1,45,500
ending 31.03.2013 (b) Balance sheet can be (c) Expenses transferred to next
(b) ~ 1,30,500
Salary outstanding presented vertically year for accounting in
(c) ~ 55,500
31.03.2012 (c) Intangible asset is not an that
(d) ~ 70,500
Salary outstanding as on asset year only.
~ 25,000 [72] Goods costing ~ 4,000 having
31.03.2013 (d) Trading account discloses (d) Expenses to be transferred to
as on normal sales value of ~ 6,000 were
Prepaid Salary on gross profit. , Profit & Loss Nc of
~ 10,000 destroyed by the fire. The scrap
31.03.2012 [75] Which of the following are current current year.
worth ~ 400 was taken over by
~ 10,000 assets? [78] "Bill Discounted ~ 10,000" Above
Insurance Company. Insurance
Salary paid in cash during 1. ' Accounts receivable item will a,ppear in ______ _
Company accepted a final claim of
the year ~ 3,00,000 2. Salary paid in advance (a) foot notes to balance sheet
(b) asset side of balance sheet
(c) liability side of balance sheet
(d) Dr. side of profit & loss alc.
Page 61 of 137
[79] Which of the following is not a
"Miscellaneous Expenditure" shown
in assets side of Balance Sheet?
(a) Preliminary Expenses
(b) Amount Spent on Research
and Development
(c) Brokerage an issue of shares
and Debentures
(d) Goodwill not written off.
[80] In Profit and Loss Account, the
selling and distribution expenses
wilf not include:
(a) Commission to Sales Agent
(b) Packing Expenses
(c) Legal Expenses
(d) Advertisement Expenses
[81] A provision for depreciation is
created by debiting ________ _
(a) machinery account
(b) profit & loss account
(c) profit & loss appropriation
account
(d) none of the above
2014 - June I
[82] From the following information,
you are required to calculate the
amount which will be debited to
the Profit and Loss Account for
the period ending on 31.3.2014.
Provision for Doubtful debts as on
1.4.13 ~ 800
Debtors as on 31.3.14 ~ 40,000
Bad debts ~ 2,000
Bad debts are to be written off
and provision for Doubtful debts is
to be created @ 5% of the
Debtors.
Page 62 of 137
(a)'~3,100
(b) ~ 4,000
(c) ~ 3,200
(d) ~ 3,900
[83] By products are generally valued
at ....... '" if their costs cannot be
separately identifiable.
(a) cost of main product
(b) cost of main product or net realizable
value whicheveris less
(c) net realizable value
(d) production cost
[84] Loss on sale of Machinery is
credited to .......... account.
(<1) machinery
(b) profit and loss
(c) depreciation
(d) depreciation fund
[85] In Journal, the entries which
pertain to outstanding expenses, .
prepaid expenses or depreciation
are called:
(a) Adjusting Entries
(b) Rectification Entries
(c) Transfer Entries
(d) Closing Entries
[86] Which of the following can't be
described as provision?
(a) Appropriation made
payment of taxes still to be
assessed.
(b) Amount set aside for writing
off bad-debts
(c) Amount set aside for any
unknown liability
(d) Amount retained' for any
known liability of Which
amount cannot be
ascertained
with substantial accuracy.
[87] Cost of physical stock on 15.4.14
was ~ 3,00,000. Sales amounting
~1,OO,000 and purchases worth
~ 50,000 were held between
31.3.14 and 15.4.14. Goods are
sold at a profit of 20% on sales.
Value of Inventory as on 31.3.14:
(a). ~ 3,50,000
(b) ~ 2,70,000
(c) ~ 3,00,000
(d) ~ 3,30,000
·2014 - December
[88] On pt April, 2013 Rakesh started
cloth business with ~ 1,20,000
and took loan of ~ 50,000 from
Ramesh for new business. During
the year, he earned a profit of
~ 20,000, introduced' further
capital of ~ 30,000 and withdrew
~ 10,000 for personal use. He
repaid ~ 10,000 to Ramesh on
3pt October 2013. On 3pt March,
2014, the total Assets were
~ 2,30,000 and total outside
liabilities were ~ __ -'-_
(a) 70,000
for (b) 80,000
(c) 30,000
(d) 40,000
[89] Arrange the following assets in
the order of permanence: (i) Cash
at Bank (ii) Patent (iii) Trade
receivables (iv) Machinery.
Correct order will be:-
(a) (i), (ii), (iii), (iv)
(b) (ii), (iv), (iii), (i)
(c) (ii), (iii), (iv), (i)
(d) (i), (iii), (iv), (i)
[90] Which of the following statement
is incorrect?
(a) Reserve is an appropriation of
profits
(b) Reserves are of two types:
Capital and Revenue
(c) "An appropriation made for
payment of taxes still to be.
as~essed"is an example of
reserve.
(d) Provisions that ultimately
prove to be in excess of
I amounts required are reserve.
[91] Goods worth ~ 50,000 were stolen
from godown of Mis' Ganpati &
Sons on 20th March, 2014.
Insurance claim of ~ 40,000 was
admitted but not paid by the
insurance company till 3pt March,
2014. So accountant of Mis
Ganpati & Sons didn't pass any
entry in the books of accounts. The
correct journal entry to be passed
on 3pt March, 2014 is:-
(a) Profit & Loss alc Dr. 50.000
To Purchases a/c 50.000
(b) Insurance claim receivable alc Dr. 40,000
Loss by theft alc Dr. 10,000
To Purchases alc 50,000
(c) Loss by theft alc Dr. 50,000
To Purchases alc 50,000
(d) Insurance claim receivable alcDr. 40,000
Profit and Loss Mc Dr. 10,000
To Sales Mc 50,000
[92] Compute Gross Profit from the
following particulars>
Opening Stock - ~ 84,000,
Purchases less returns
~ 5,76,000, Wages - ~ 1,23,000,
Freight Inwards - ~ 57,000, Freight
Outwards - ~ 63,000, Salaries -
~ 1,52,000, Commission on
Purchases - ~ 25,000, Sales
~ 9,54,000 and Closing Stock -
~ 1,78,000.
 (a) ~ 2,67,000 [95] A decrease in provision for
(b) 204000 doubtful debts would result in:
(c) 52000 (a) An increase in net profit
(b) An increase in net working
(d) 292000
capital
[93] In the Books of Mohanlal & Sons, on 1 st April 2013 Provision for
(c) A decrease in net profit
doubtful debts existed at ~ 15,000. On 31"t March, 2014 Debtors were
(d) Both (a) and (b).
~ 6,00,000 and Bad debts ~ 20,000. Provision for doubtful
debts is to be created @ 8% on Debtors. Compute the amount to
[96] Simpson Ltd.'s Profit and Loss
be debited in Profit and Loss account.
Account for the year ended
(a) ~ 51,400 March, 31"t 2015, includes the (b) ~ 53,400
(c) ~ 46,400 following information. (d) ~31,400
~
1.Depreciation 84,500
2.Bad debts written off
[94] Same as que.82 (b) ~8,63,400; ~ 75,400 Respect-
25,000 ively
3. Increase in provision for [98] On pt Jan, 2014 provrsion for
doubtful debts (c) ~ 8,69,800; ~ 74,000 respect-
doubtful debts existed at ~ ively
22,000 17,500. Trade receivables on (d) ~ 8,63,400; ~ 74,000 respect-
4.Proposed dividend 31.12.14 were ~ 3,50,000, bad ively
debts totalled ~ 20,000. It is
73,200
[100] The capital of a sole trade
required to write off bad debts
5. Retained profit for the year1 and create a provision equal to would
,22,000 change as a result of:
5% of the trade receivables
6.Liability for tax (a) Commission received
balance. Compute the amount to
26,400 be debited to the Profit and Loss (b) Furniture purchased on
Account: credit
What amount (a) ~ 17,500 (c) Purchase of raw materials
(b) ~ 16,500 (d) Payment received from a
should be (c) ~ 20,000 debtor
transferred to (i) provisions (ii) (d) ~ 19,000
reserves (iii) neither related to [99]Sera & Co. employs a team of
provisions nor reserves? eight workers who were paid @
(a) (i) 1,06,500 (ii) 1,22,000 ~8,000 p.m. each in the year
(iii) 1,24,600 ending December 31 st 2013. At
(b) (i) 1,57,900 (ii) 1,95,200 the start of 2014, the company
increased salary by 10%. On
(iii) Nil
July 1, 2014 two trainees were
hired on salary @ ~ 2500 p.m.
'
each. The workforce are paid
(c) (i) 1,32,900 (ii) 1,95,200 (iii)
salary on the first working day of
25,000
each month, one month in
(d) (i) 1,32,900 (ii) 1,22,000 (iii)
arrears.
98,200
Calculate amount actually paid
[97] Mr. Y gives the following
as salaries during 2014 and
information for the year ended
outstanding salaries on 31"t
31.3.15
Inventory
Purchases
Selling as. onExpenses
Manufacturing
Expenses
Administration
Financial 1.4.14
ChargesSales December
(a) ~ 7,99,400;
ively 2014: Respect-
~.80,400

Page 63 of 137
2015 - December I [105] On pI April, 2014 provrsron for
[101] Income tax paid by the sole
proprietor from business bank
account is debited to:
(a) Income tax account
(b) Bank account
(c) Capital account
(d) Not to be shown in the
business books.
[102] Manufacturing account
prepared to:
(a) Ascertain the profit or loss on
the goods produced.
(b) Ascertain the cost of the
manufactured goods.
(c) Show the sale proceeds from
the goods produced
during the
year.
(d) Both (b) and (c)
[103] Interest is calculated on ______ _
of securities.
(a) market value
(b) purchase value
(c) face value
(d) none of above.
[104] Trade discount allowed at the time
of sale of goods is:
(a) Recorded in Cash Book
(b) Not recorded in books of
Accounts
(c) Recorded in Journal
(d) Recorded in Sales Book.
Page 64 of 137
doubtful debts existed at ~ 15,000.
Trade receivables on :31 st March,
2015 were ~ 5,50,000 bad-debts
totalled ~ 35,000 (not yet written
off). It is required to write off the
bad-debts and create a provision
equal to 5% of the trade
receivables balance. What
additional amount would be debited
to the Profit and Loss Account?
is
(a) ~ 47,500
(b) ~ 45,750
(c) ~10,750
(d) ~ 13,250
[106] Goods worth ~ 12,000 taken by
proprietor for personal use should
be credited to:
(a) Sales Account
(b) Drawings Account
(c) Expenses Account
. (d) Purchases Account
2016 - June
[107] Rohan's trial balance contains the
following information:
Discount received ~ 1,000
Provision for discount
on creditor ~1 ,600
It is desired to maintain a
provision for discount on creditors
at ~ 1,100. The amount to be
credited to P/L Alc is:
(a) ~ 500
(b) ~ 3,500
(c) ~ 1,000
(d) n,500
[108] f 10,000 received from Smith [112] Neeru started her business with
whose account was written off as capital of '{ 45,000 on pI January,
a bad debt should be credited to: 2016. Interest on capital ~ 2,000
(a) Bad debts recovered account and interest on drawings '{ 5,000
(b) Smith Account were appearing in the Profit and
(c) Cash Account Loss Alc for the year ended 3181
(d) Bad- debts Account December, 2015. Neeru withdrew
[109] A business entity has assets of
'{ 14,000 (Net) during the year
~ 3,06,000 secured loans of
and profit earned during the year
~ 1,00,000 and unsecured loans
amounted to '{ 15,000.
of ~ 60,000; contingent liability
Her capital on 31s1 December,
~ 1,46,000; owner's equity in this
2016 is:
case will be:
(a) ~ 67,000
(a) ~ 1,00,000
(b) ~ 43,000
(b) ~ 3,06,000 (c) ~ 45,000
(c) f 1,46,000 (d) '{ 47,000
(d) NIL· [113] A decrease in proviston for
[110] Opening Stock '{ 4,08,000
doubtful debts would result in
Cash Sales ~ 2,00,000 (a) An increase in liabilities.
Total Sales ~ 17,00,000 (b) A· decrease in working
Selling price is 125% of the capital.
purchase price (c) A decrease in net profit.
I Th,e .cost of goods sold will (d) An increase in net profit.
be: [141] Consider the following date
pertaining to Ha] Ltd. for the
(a) ~ 15,60,000
month of March 2016:
(b) ~ 14,02,500
Particulars
(c) ~ 12,75,000
Opening inventory
(d) '{ 13,60,000
Closing inventory
[111] Stock of '{ 50,000 is damaged by
Purchases
fire. It was fully covered by
Return outwards
insurance. Accounting entry is:
Return inwards
(a) Stoek Ale Dr. ~ 50,000
To Trading Ale ~ 50,000 Carriage inwards
(b) P&L Ale Dr. ~ 50,000
To Trading Ale ~ 50,000
(e) Trading Ale Dr. ~ 50,000
To Insuranee elaim Ale
~ 50,000
(d) Insuranee claim Ale Dr. ~ 50,000
To Trading Ale ~ 50,000
 [114] If the gross profit is 20% on (b) It will be recorded on the (a) provisions
(a) ~ 3,100
net liability side as a current (b) reserves
(b) ~ 4,000
sales, the gross sales for the liability in the Balance Sheet (c) capital account
(c) ~ 3,200
month of March 2016 is: (c) It will be recorded on debit (d) profit and loss account
(d) ~ 3,900
(a) ~ 3,47,500 side of the Trading Account [125] A manager get 6% commission
[122] Goods purchased costing
(b) ~ 3,37,500 as an expense on net profit alter charging such
~ 60,000 and cash paid ~ 45,000
(c) ~ 2,70,000 (d) It will be recorded on credit commission. Gross profit is
after receipt of cash discount of
(d) ~ 3,34,375 side of Profit & Loss Nc as ~ 60,000 and expenses of
12016 - December I an Income.
~ 9,000. What is the percentage
of trade .discount received
indirect nature other than
[115] Calculate the amount of salary [119] Fixed assets are twice the managers commission are
debited to P&L Nc for the year current assets and half the ~ 7,000. Commission amount will
(a) 15%
ending 31.3.16. Salary capital. The current assets are be:
(b) 10%
~ 3,00,000 and investments are (a) ~ 3,000
outstanding as on 31.3.15 - (c) 71/2%
~ 4,00,000. Then the current (b) ~ 3,396
~ 25,000. Salary outstanding as (d) 25%
liability recorded in Balance (c) ~ 3,180
on 31.3.16 - ~ 10,000. Prepaid [123] After rectification of following
Sheet will be: (d) None of the above.
salary as on 31.3.15 - ~ 10,000. errors, effect on Net Profit will be:
\ (a) ~ 2,00,000 [125] A decrease in the provision for
Salary paid in cash during the (b) ~1,00,000
1. A cheque dishonoured of
doubtful debts would result in:
(c) ~ 3,00,000 ~ 3,100 debited to discount
year - ~ 3,00,000. (a) A decrease in net profit
(a) ~ 3,00,000 (d) ~ 4,00,000 Nc
(b) An increase in net profit
(b) ~ 3,05,000 [120] In journal entries which pertain to 2. Sales book undercast by
(c) An increase in liabilities
(c) ~ 2,95,000 outstanding entries, prepaid ~ 23,000
(d) A decrease in current assets.
(d) ~ 3,10,000 entries, depreciation entries, are 3. A customer returned goods
[126] Johny purchased goods worth
[116] X sold goods to Y at cost 1 0% called: of the value of ~ 1 ,200; ~ 5,000 for cash less ,20% trade
profit. Y sold goods to Z at 20% (a) Adjustment entry included in the stock but not discount and 5% cash discount.
profit on sales. If cost of the (b) Rectification entry recorded: How much amount is to be
goods to X is ~ 50,000. What is (c) Transfer entries (a) Increased by ~ 24,900 debited in purchase Nc in the
the cost of the goods to Z? (d) Closing entries. (b) Decreased by ~ 24,900 books of Johny?
(a) ~ 66,000 [121] From the following information (c) Increased by ~ 23,700 (a) ~ 3,800
(b) ~ 68,750 find the amount to be debited to (d) No effect. (b) ~ 5,000
(c) ~ 65,000 P&L Nc for the period ending (c) ~ 3,750
(d) ~ 69,450 31.03.16: Provision for doubtful I 2017 - June , (d) ~ 4,000
[117] Accounting treatment for debts ~ 800 (as on 1.4.16). [124] At the time of finalisation if
"Accrued Incomes": Debtor's on 31.03.16 f" 40,000. financial Statements, Bad-debts (a) ~ 12,500
(a) It will be recorded on assets Bad debts ~ 2,000. Bad debts to written off are to be transferred to (b) ~ 13,500
side as a current asset in be written off and provision for (c) ~ 11,500
25% on cost.. 0 is entitled to a
the Balance Sheet doubtful debts is to be created
commission of ~ 25 per radio sold
@ 5% on debtor.
plus 20% 1)f gross sale proceeds
as exceeds an amount calculated
[118] J of Jaipur sends 500 radios @ @ 20% profit on cost. Calculate
\ ~ 200 each to 0 of Delhi. All the commission.
radios are sold by 0 at a profit of
Page 65 of 137
efg

(c) Insurance for Stock of [44] Postal Expenses Account is shown

in:
[49] At the end of the year 2008-09, the
Finished Goods ledger of a firm shows following
(a) P & L Alc
(d) Carriage Inward balances, . prepare their balance
(b) Trading Alc
[40] There was a stock of ~ 5,500 out of sheet-
(c) Balance Sheet ~ 2,00,000
which stock of ~ 500 was burnt due Capital
(d)· Manufacturing Alc
to fire and was disposed : off for Net profit for the year
[45] Prepaid Expense of Financial Year
. ~ 200. Remaining goods were sold 2008-09 ~ 1,50,000
relate with:
at 25% above cost price. Find net Provision for Taxes ~ 75,000
(a) Previous Financial Year
profit. Liabilities ~ 1,00,000
(b) Following Financial Year
(a) ~ 250 Advance Tax Paid ~ 60,000
(c) Current Financial Year
(b) ~ 200 Sundry Assets ~ 4,65,000
(d) None balance sheet
(c). ~ 575 The total of the
[46] Opening Capital :: ~ 5,00,000
(d) ~ 950 would be
Profits during the year e ~ 1,00,000
[41] It profit is 25% as cost price then (a) ~ 4,65,000
Calculate the Average Capital of
the profit on sale price will be: (b) ~ 5,25,000
the year.
(a) 20% (c) ~ 5,65,000
(a) ~ 5,50,000
(b) 30% (d) ~ 5,10,000
(b) ~ 3,00,000
(c) 33 1/3"/. [50] On 31 sl March, 2009 Ram has loan
(c) ~ 9,167
(d) 40% of ~ 50,000 and trade creditors of
(d) ~ 50,000
[42] If Purchases Account is not ~ 80,000, Fixed assets of ~ 72,000,
[47] Goods in Transit but not taken in
credited in case of goods lost in Stock ~ 90,000 and cash in hand
Closing Stock will be credited to:
transit then which account can be ~ 60,000. If he had started
(a) Purchase Alc or Trading Alc
credited? business on April 1, 2008 with
(b) Supplier Alc capital of ~ 50,000. Compute profit
(a) Goods Lost in Transit Account (c) . Goods in Transit Alc
(b). Purchase Return Account earned by Ram for year 2008-09:
(d) Cash Alc (a) ~ 92,000
(c) Trading Account
(b) ~ 42,000
(d) Sales Account
[43] Opening Stock = ~50,000
12010 - June I (c) ~ 1,74,000
[48] The manager of a firm is entitled to (d) ~ 52,000
Purchases = ~ 1,00,000
Purchase Return = ~ 29,000 a commission of 10% on net profit [51] The Gross Profit for the year
Sales » ~ 2,00,000. after his commission. If the net ending 31.03.2009 is ~ 1750,
profit of the firm before Charging Carriage Inward is ~ 150, Bad
Find the Gross Profit
Debts is ~ 120, Proprietors Pers-
(a) ~ 1,21,000 commission is ~ 4,40,000, the
onal Expenses is ~ 750 Carriage
(b) ~ 79,000 amount of manager's commission
Outward is ~ 175. The amount of
(c) ~ 21,000 will be: Net Profit will be
[39] Selling and distribution expenses (d) None of the above (a) ~ 44,000 (a) ~1455
does not comprise of: (b) ~ 40,000 (b) ~ 1305
(a) Godown Rent (c) ~ 37,000 (c) ~ 555
(b) Bad Debts (d) ~ 33,000 (d) ~ 705

Page 66 of 137
6.

[52] Calculate the value of closing stock [55] Total Debtors on 31.12.2009 were Stock as on 10.4.09 Rate of Gross Profit on sales 12,}o
from the following: ~ 48,000 before writing off bad- The value of stock as on 1.04.09
Opening stock ~ 60,000 debts but after allowing discounts. was:
Purchases ~ 90,000 During the year bad-debts (a) ~ 5,70,000
Sales ~ 1,20,000 amounted to ~ 2,000 and discount (b) ~ 4,90,000
Gross Profit on cost 33 1/3%. Due allowed were ~ 100. It is the firm's (c) ~ 5,30,000
to fire, stock costing ~ 15,000 policy to maintain a provision of 5% (d) None of the above.
destroyed and jnsurance claim was against bad and doubtful debts. [58] Which of the following statement is
accepted for ~ 5000 . Find out the amount of provision for not true-
(a) ~ 40,000 Bad and Doubtful debts as, on (a) Actual bad-debts are not
(b) ~ 45,000 31.12.09: adjusted against the
(c) ~ 55,000 (a) ~ 2400 provision
(d) ~ 60,000 (b) ~ 2305 for bad-debts alc.
[53] Salaries paid in cash ~ 2,00,000. It (c) ~ 2300 (b) Bad-debts could be more than
includes previous year's (d) ~ 2000 provision for bad-debts
outstanding ~ 10,000 and salary [56] What will be the treatment of (c) Bad-debts could be less than
paid in advance for the next year "accrued income" if appearing in provision for bad-debts
~ 20,000. Salary outstanding for the the Trial Balance: (d) Provision for bad-debts is
year is ~ 15,000. Salary of __ (a) It will be shown on the assets side as shown as a liability in the
shall be debited in the profit and current assets in the balance sheet. ' balance sheet or may be
loss account. (b) It will be shown on the liability deducted from the debtors
(a) ~ 2,25,000 side as current liability in the in
(b) ~ 1,85,000 balance sheet. the balance sheet.
(c) ~ 2,05,000 (c) It will be shown on the debit [59] What will be the treatment of pre-
(d) ~ 1,75,000 side of trading account as an expense. paid expenses if adjustment of it is
[54] The fixed asset of a company is (d) It will be shown on the credit appearing outside the Trial
double of the current assets and side of profit and loss account Balance?
half of capital. If the current assets as an income. (a) Prepaid Expenses account will
are ~ 3,00,000 and investment
~ 4,00,000, calculate the current
I 2010 - December I ~ 80,000
be . debited and respective expenses
account will be credited.
liabilities assuming that there are [57] Transactions of Aruna ~ 7,50,000 ,(b) Respective expense account
no other items in the balance Limited fortheperiod 1.4.09 to ~ 4,50,000 will be debited and prepaid
sheet. 10.04.09 are ~ 3,60,000 expenses 'account will be credited.
(a) ~ 2,00,000 as follows. (c) Prepaid expenses account will
(b) ~ 1,00,000 Direct Expenses be debited and profit andloss
(c) ~ 3,00,000 Sales account will be credited.
(d) ~ 4,00,000 Purchases (d) Profit and Loss account will be debited

Page 67 of 137
and prepaid expenses account will be [60] At the end of the financial year
credited. accourits receivable has a balance
of ~ 1,00,000 and Provision tor.the
bad & doubtful debts provided
amounting to ~ 7,000. Net
realizable value of the accounts
receivable is:
(a) ~ 7000
(b) ~ 1,07,000
(c) ~ 93,000
(d) ~ 1,00,000
[61] Baba's Balance sheet as at 31st
March, 2008 shows ~ 6,800 as rent
payable. His cash book shows total
payment towards Rent ~ 50,000
during the year ending 31st March
2009 Rent payable as at 31 st
March, 2009 is ~ 5000. Which of
the following amount should go to
his Profit & Loss Nc as rent.
(a) ~ 61,800
(b) ~ 48,200
(c) ~ 55,000
(d) ~ 6,800
[62] For calculation of current ratio
which of the following is relevant:
(a) Current Assets Fixed Liabilities
(b) Current Assets CurrentLiabilities
(c) Fixed Asset Fixed Liabilities
(d) Fixed Liabilities Current Liabilities.

Page 68 of 137
 I 2011 - June I I 2011 - December I (a) '{ 5,400 12012 - June I
(b) '{ 5,500 (77] The following details are available
[63] Which one is correct? [68] Bills payable is shown on the (c) '{ 5,625
(a) Goodwill is a fictitious asset . liability side of the Balance Sheet (d) '{ 6,600 from the books of a sole trader:
(b) Closing stock is a wasting asset under the head: [73] Working Capital means Particulars As on As on
(c) Preliminary expense is a (a) Provisions (a) Current Assets - Current 3113110 ('{) 31/3/11 (~)
current asset (b) Current Liabilities liabilities Opening stock 30,000 35,000
(d) Patent is an intangible asset. (b) Fixed Assets - Current Assets Purchases 3,25,000 4,20,000
'(c) Secured Loans
{ [64] Work-in-progress is shown in the (d) Reserves and Surplus. (c) Fixed Assets - Fixed liabilities
. Sales 4,00,000 5,00,000
Balance Sheet under which head? (d) Fixed liabilities - Current If the gross profit ratio remains
[69] The provision for discount on
(a) Share Capital unchanged, the closing stock as on
debtors is calculated on debtors: liabilities
(b) Current Asset 31/3112 will be
(a) Before deducting the provision [74] Which of the following statement is
(c) Fixed Asset (a) 35,000
for doubtful debts not correct?
(d) Current Liability. (b) 50,000
(b) After deducting the provision (a) Goodwill is an intangible asset.
[65] Units produced 5,000 @ 20/- Direct (c) 55,000
for doubtful debts (b) Sundry debtors are current.
Expenses - '{ 5,000 4151hof the (d) 60,000
(c) Before deducting the actual assets ...
(78] If opening stock is '{ 69,500,

i units were sold .@ 25/- per unit.

What will be the profit?
(a) 20,000
. bad debts and the provision
(d) After adding the actual bad-
debts.
(c) Loose tools are tangible fixed
assets.
(d) Outstanding Expenses are'
closing . stock is '{ 83,500, sales
less return is '{ 1,60,000 and
purchases is ~ 1 ,10,000. The
(b) 16,000 [70] If Depreciation is Excess charged current assets.
(c) Nil Gross Profit margin on Sales would
by '{ 500 and closing stock is under [75] Prepaid Expenses '( 1,000, shown
(d) None of these. be?
valued by '{ 500 the net profit will in Trial Balance, will appear in
[66] Insurance . Premium provided (a) 35%
be due to these errors.
annually '( 2,400 from pI Jan. What
(b) 40%
(a) understated by '{ 500 (a) liability side of balance sheet
will be the openihg entry on 1 SI (c) 30%
(b) overstated by '{ 1,000 (b) Dr. side of profit & loss account
April if books are closed on 31s1 (d) 45%
(c) understated by '{ 1,000 (c) Dr. side of profit and loss
March. (79] A sole trader has computed a net
(d) unaffected. appropriation alc
(a) Prepaid Insurance Nc profit of ~ 56,750. After that he
Dr. 600 (71] Goods purchased '{ 90,000, sales (d) asset side of balance sheet.
To Insurance Nc found the following mistakes in the
600 '{ 80,000, Margin 20% on sales,
(b) Insurance Nc [76] Profit or loss on sale of fixed assets books of accounts: Discount
Dr. 600 closing stock will be
To Prepaid is transferred to: received of ~ 580 and discount
(a) '{ 8,000
Insurance Nc 600 (a) Profit and Loss Nc D allowed of ~ 665 have been
(b) '{ 10,000
(c) Prepaid Insurance Nc Dr. 2,400 (b) Capital Reserve Nc recorded on the wrong sides of the
(c) ~ 20,000
To Suspense Nc 2,400 (c) Revaluation.Reserve Nc discount received and' discount
(d) None of these. (d) ~ 26,000
(d) Capital Nc allowed accounts.
(67] Sales = + Gross Profit. [72] Goods worth ~ 5,000 were supplied
What would be the actual rief profit
(a) Cost of goods sold to Mr. X at an invoice price of 20%
of trader?
(b) Purchases above Cost and allowed trade
(c) Opening stock discount at 10% on invoice price.
(d) None of these.' At what price were the goods sold
to X?

Page 69 of 137
 (a) ~ 56,580
(b) ~ 56,665
(c). ~ 56,835
(d) ~ 56,920
[80] An item of furniture was destroyed
by fire whose cost was ~ 18,000
against which a claim of ~ 12,000
was accepted by the insurance
company. The depreciation
provision up to date of fire was
~ 2,700. What amount to be
recorded in account as loss by fire?
(a) ~ 6,000
(b) ~ 15,300
(c) ~ 3,300
(d) ~ 18,000
[81] Rent paid on 1st October 2010 for
the period 1 st October, 2010 to 30th
September 2011 was ~ 12,000 and
rent paid on 1 st October 2011 for
the period'pt October 2011 to 30th
September, 2012 was ~ 18,000.
Amount of rent in the Profit and
Loss account for the year ended
31 st March, 2012 would be
(a) ~ 12,000
. (b) ~ 18,000
(c) ~ 15,000·
(d) ~ 16,500
[82] X sold goods to Y at a profit of 10%
on cost, and Y sold the goods to Z
at a profit of 20% on sale value. If
the cost of goods to X is ~ 50,000,
then at what value Y has sold the
goods to Z?
(a) ~ 65,000
(b) ~ 66,000
(c) ~ 68,750
(d) ~ 69,450
Page 70 of 137
[83] A trial balance shows sundry'
debtors as ~ 80,000. Information
outside the trial balance (i) Bad -
debts ~ 2,000 (ii) Make a provision
for doubtful debts on debtor @ 5%.
The amount of provision for
doubtful debts will be:
(a) ~ 4,100
(b) ~ 4,000
(c) ~ 3,900
(d) ~ 4,200
I 2012 - December . I
[84] On 3pt March, 2011, the books of
Ajit showed a net profit of ~ 84,000.
Later it was discovered that the
closing stock was over valued, by
~ 4,000 and the discount received
of ~ 1 ,500 was treated as an
expense. What was the correct net
profit of Ajit ?
(a) ~ 81,500
(b) ~ 83,000
(c) ~ 89,500
(d) ~ 91,000
[85] Mr. X forgot to record following
transactions while preparing his
final account for the year ended
3pt March, 2011 :
Outstanding Expenses ~ 20,000
Prepaid Insurance ~ 2,000
Interest receivable
on investment (accrued) ~ 3,000
Drawings ~ 6,000
The total change in his profit for the
year after recording the above
would be:
(al) Decreased by ~ 21,000
(b) Increased by ~ 21,000
(c) Increased by ~ 15,000
(d) Decreased by ~ 15,000
[86] From the following information,
calculate the cost of raw material
consumed:
(~)
Purchase of raw material 80,000
Opening Stock :-5000
Raw Material 12000
Work in progress8500
Finished goods 12400
Closing Stock :-
Raw Material 6350
Work in Progress 4500
Finished goods
(a) ~ 82,500
(b) ~ 78,250
(c) ~ 78,650
(d) ~ 82,250
[87] Return Inwards are deducted from
(a) purchases
(b) sales
(c) return outwards
(d) closing stock
[88] An increase in the provision for
doubtful debts would result in
____ in working capital and
____ in net profit:
(a) increase, decrease
(b) increase, increase
(c) decrease, increase
(d) decrease, decrease
[89] A company has paid salary
amounting to ~ 50,000 to Mr. A on
March 25, 2011. Mr. A deposited
the cheque of salary on April 03,
2011 in his bank account. What
adjustment should be made by
company at the time of preparing
final account:
(a) No entry will be passed
(b) Bank Alc, Dr
To Outstanding Salary Alc
(c) Salary Nc Dr
To Outstanding Salary Alc
(d) Bank Alc Dr
To A's Nc
[90] The opening stock is understated
by ~ 20,000 and closing stock is
overstated by ~ 25,000. The net
profit for the current year is
___ by __ :
(a) overstated by ~ 5,000
(b) overstated by ~ 45,000
(c) understated by ~ 5,000
. (d) understated by ~ 45,000
[91] The following details relate to a
trading concern for the year 2010.
Opening stock ~ 4,000. Purchases
and Sales during the year ~ 36,000
and ~ 35,000 respectively. Profit on
Sales is 20% uniformity throughout
the year. 50% of the closing stock
was found to be obsolete and
estimated to fetch only 50% of
cost. The value for the closinq
stock at the end of the year will be:
(a) ~ 9,000
(b) ~12,000
(c) ~ 6,000
(d) nO,500
12013 - June (a) ~ 3,00,000 ~ 2,700. What amount of loss by 5. Bank loan for three years
(b) ~ 2,95,000 fire will be transferred to Profit, & 6.Preliminary expenses
(c) ~ 3,05,000 LossNc? (a) All of the above
1
(d) ~ 3,10,000 (a) ~ 3,300 (b) 1 &2
[95] Goods worth ~ 10,000 was (b) ~ 1,300 (c) 2 &3
[92] Proprietor used the rented building
both for business purpose and as destroyed by fire and insurance (c) ~1,700 (d) 3 &4.
well for personal purpose equally. company admitted the claim of (d) ~ 900 . [101] The manager earns a commission
The rent paid during the year for 60%. The accounting entry for [98] Mr. A invest ~ 10,00,000 to start a of ~ 25,000 which is based on
the building was ~ 1,32,000 .above transaction would be: cloth business on 1 SI April, 2011. 1 0% of the net profit. If the sales
(a) Loss by Fire ale Dr. ~ 10,000 During the year he purchases is ~ 3,50,000 higher than
debited
To Purchase ale ~ 4,000 goods of ~ 7,10,000 and his sales purchases. Find out the direct +
to Rent expenses in the books of To Insurance Co. ale ~ 6,000
the business. One month rent is for the year was ~ 8,42,000. He indirect expenses incurred during
(b) Loss by Fire ale Dr. ~ 10,000
still outstanding. Liability of the pays shop rent for the financial the year. There is no opening or
To Purchase ale ~ 6,000
business for outstanding rent is: To Insurance Co, ale ~ 4,000 year 2011-12 ~ 20,000 and other closing stock.
(a) ~ 11,000 (c) Loss by Fire ale Dr. ~ 6,000 expenses ~ 75,000 and finds that (a) ~ 75,000 ,
(b) ~ 12,000 Insurance Co, ale Dr. ~ 4,000 he has goods worth ~ 45,000 in (b) ~ 1,00,000
To Purchase 'ale ~ 10,000 hand. What would be the gross (c) ~ 3,50,000
(c) ~ 5,500
(d) Loss by Fire ale Dr ~ 4,000 profit for the year ended 31 st (d) Not ascertainable
(d) ~ 6,000 Insurance Co. ale Dr. ~ 6,000 March, 2012? [102] On March 31, 2013, Prepaid
[93] From the following information; To Purchase ale ~ 10,000 (a) ~ 1,02,000 Expenses Nc (2012-13)
calculate the purchases made [96] At the end of the financial year
during the year 2012-13 (b) ~ 82,000 Shows a closing balance of
2011-12 the gross profit of Ram's (c) ~1,77,000
Opening stock ~ 1,50,000 business is ~ 1,75,000. During the ~ 5,000. It means
(d) ~ 1,57,000 (a) Expenses transferred from
Cash Sales ~ 1,20,000 year carriage inward ~ 15,000,
Credit Sales ~ 2,30,000 Barn's personal expenses ~ 75,000 ,'2013 - December I previous year for
Closing Stock Nil and carriage outward ~ 17,500 [99] State which of the following state accounting
Selling price is 125% of cost price were paid by Ram. Bad debts for in current year.
ment is false: (b) Expenses transferred to next
(a) ~ 1,50,000 the year were ~ 12,000. The net
(b) ~ 1,40,000 (a) Assets can be arranged in year for accounting in
profit earned by Ram for the year
(c) ~ 1,30,000 accordance with their that or
2011-12 would be:
(d) ~ 1,20,000 liquidity future years.
(a) ~ 1,45,500
[94] Calculate amount of Salary debited
(b) Balance sheet can be (c) Expenses transferred to next
(b) ~ 1,30,500
to profit and loss Nc presented vertically year for accounting in
(c) ~ 55,500
for the year (c) Intangible asset is not an that
as on (d) ~ 70,500
ending 31.03.2013 asset year only.
~ 25,000 [97] Goods costing ~ 4,000 having
Salary outstanding as on normal sales value of ~ 6,000 were (d) Trading account discloses (d) Expenses to be transferred to
31.03.2012 destroyed by the fire. The scrap gross profit. , Profit &Loss Nc of
~ 10,000 [100] Which of the following are current
Salary outstanding worth ~ 400 was taken over by current year.
31.03.2013 Insurance Company. Insurance assets? [103]"Bill Discounted ~ 10,000" Above
Prepaid Salary on Company accepteda final claim of 1. ' Accounts receivable item will a,ppear in _______ _
31.03.2012 ~ 10,000 2. Salary paid in advance (a) foot notes to balance sheet
Salary paid in cash during (b) asset side of balance sheet
the year ~ 3,00,000 (c) liability side of balance sheet
(d) Dr. side of profit &loss alc.
Page 71 of 137
[104] Which of the following is not a
"Miscellaneous Expenditure" shown
in assets side of Balance Sheet?
(a) Preliminary Expenses
(b) Amount Spent on Research
and Development
(c) Brokerage an issue of shares
and Debentures
(d) Goodwill not written off.
[105] In Profit and Loss Account, the
selling and distribution expenses
wilf not include:
(a) Commission to Sales Agent
(b) Packing Expenses
(c) Legal Expenses
(d) Advertisement Expenses
[106] A provision for depreciation is
created by debiting ________ _
(a) machinery account
(b) profit & loss account
(c) profit & loss appropriation
account
(d) none of the above
12014 - June
[107] From the following information,
you are required to calculate the
amount which will be debited to
the Profit and Loss Account for
the period ending on 31.3.2014.
Provision for Doubtful debts as on
1.4.13 ~ 800
Debtors as on 31.3.14 ~ 40,000
Bad debts ~ 2,000
Bad debts are to be written off
and provision for Doubtful debts is
to be created @ 5% of the
Debtors.
Page 72 of 137
(a)'~3,100
(b) ~ 4,000
(c) ~ 3,200
(d) ~ 3,900
[108] By products are generally valued
at ....... '" if their costs cannot be
separately identifiable.
(a) cost of main product
(b) cost of main product or net
realizable value whichever
is
less
(c) net realizable value
(d) production cost
[109] Loss on sale of Machinery is
credited to .......... account.
(<1) machinery
(b) profit and loss
(c) depreciation
(d) depreciation fund
[110] In Journal, the entries which
pertain to outstanding expenses, .
prepaid expenses or depreciation
are called:
I (a) Adjusting Entries
(b) Rectification Entries
(c) Transfer Entries
(d) Closing Entries
[111] Which of the following can't be
described as provision?
(a) Appropriation made
payment of taxes still to be
assessed.
(b) Amount set aside for writing
off bad-debts
(c) Amount set aside for any
unknown liability
(d) Amount retained' for any
known liability of Which
amount cannot be
ascertained
with substantial accuracy.
[112] Cost of physical stock on 15.4.14
was ~ 3,00,000. Sales amounting
~1,OO,000 and purchases worth
~ 50,000 were held between
31.3.14 and 15.4.14. Goods are
sold at a profit of 20% on sales.
Value of Inventory as on 31.3.14:
(a). ~ 3,50,000
(b) ~ 2,70,000
(c) ~ 3,00,000
(d) ~ 3,30,000
·12014 - December
[113] On pt April, 2013 Rakesh started
cloth business with ~ 1,20,000
and took loan of ~ 50,000 from
Ramesh for new business. During
the year, he earned a profit of
~ 20,000, introduced' further
capital of ~ 30,000 and withdrew
~ 10,000 for personal use. He
repaid ~ 10,000 to Ramesh on
3pt October 2013. On 3pt March,
2014, the total Assets were
~ 2,30,000 and total outside
liabilities were ~ __ -'-_
(a) 70,000
(b) 80,000
(c) 30,000
for (d) 40,000
[114] Arrange the following assets in
the order of permanence: (i) Cash
at Bank (ii) Patent (iii) Trade
receivables (iv) Machinery.
Correct order will be:-
(a) (i), (ii), (iii), (iv)
(b) (ii), (iv), (iii), (i)
(c) (ii), (iii), (iv), (i)
(d) (i), (iii), (iv), (i)
[115] Which of the following statement
is incorrect?
(a) Reserve is an appropriation of
profits
(b) Reserves are of two types:
Capital and Revenue
(c) "An appropriation made for
payment of taxes still to be.
as~essed"is an example of
reserve.
(d) Provisions that ultimately
prove to be in excess of
I amounts required are reserve.
[116] Goods worth ~ 50,000 were stolen
from godown of Mis' Ganpati &
Sons on 20th March, 2014.
Insurance claim of ~ 40,000 was
admitted but not paid by the
insurance company till 3pt March,
2014. So accountant of Mis
Ganpati & Sons didn't pass any
entry in the books of accounts. The
correct journal entry to be passed
on 3pt March, 2014 is:-
(a) Profit & Loss alc Dr. 50.000
To Purchases a/c 50.000
(b) Insurance claim receivable alc Dr. 40,000
Loss by theft alc Dr. 10,000
To Purchases alc 50,000
(c) Loss by theft alc Dr. 50,000
To Purchases alc 50,000
(d) Insurance claim receivable alcDr. 40,000
Profit and Loss Mc Dr. 10,000
To Sales Mc 50,000
[117] Compute Gross Profit from the
following particulars>
Opening Stock - ~ 84,000,
Purchases less returns
~ 5,76,000, Wages - ~ 1,23,000,
Freight Inwards - ~ 57,000, Freight
Outwards - ~ 63,000, Salaries -
~ 1,52,000, Commission on
 [120]

Purchases - ~ 25,000, Sales A decrease in provision for ~

~ 9,54,000 and Closing Stock - doubtful debts would result in: 1,60,500
Inventory as on 1.4.14
~ 1,78,000. (a) An increase in net profit 4,80,000
Purchases . 75,000
(a) ~ 2,67,000 (b) An increase in net working
capital Manufacturing Expenses 33,000
(b) ~ 2,04,000
(c) A decrease in net profit Selling Expenses 18,000
(c) ~ 52,000
(d) Both (a) and (b). Administration Expenses 6,000
(d) ~ 2,92,000
[121] Simpson Ltd.'s Profit and Loss 7,00,000
[118] In the Books of Mohanlal & Sons, Financial Charges
on 1 st April 2013 Provision for Account for the year ended
March, 31"t 2015, includes the Sales
doubtful debts existed at ~ 15,000.
On 31"t March, 2014 Debtors were following information.
~
~ 6,00,000 and Bad debts 4.Depreciation
~ 20,000. Provision for doubtful
debts is to be created @ 8% on 84,500
Debtors. Compute the amount to 5.Bad debts written off
be debited in Profit and Loss
25,000
account. 6. Increase in provision for
(a) ~ 51,400
(b) ~ 53,400 doubtful debts
(c) ~ 46,400
22,000
(d) ~31,400 7.Proposed dividend
12015 - June I 73,200
[119] From the following details 8. Retained profit for the year1
calculate net sales to be shown in ,22,000
9.Liability for tax
trading and profit and loss alc.
Total sales ~ 2,10,000 includes the 26,400
following:
(i) Credit Sales of ~ 65,000 What amount
(ii) Goods sent to consignee
should be
~ 25,000
transferred to (i) provisions (ii)
(iii) Sale of old office equipment
reserves (iii) neither related to
~ 5,000 provisions nor reserves?
(iv) Goods sent on sale or return (a) (i) 1,06,500 (ii) 1,22,000
basis ~ 10,000 (iii) 1,24,600
(a) ~1,70,000 (b) (i) 1,57,900 (ii) 1,95,200
(b) ~ 1,85,000
(c) ~ 1,65,000 (iii) Nil
(d) ~ 1,45,000
'
(c) (i) 1,32,900 (ii) 1,95,200 (iii)
25,000
(d) (i) 1,32,900 (ii) 1,22,000 (iii)
98,200
[122]
Page 73 of 137
Mr. Y gives the following
information for the year ended
31.3.15
 Gross Profit is 20% on sales. (a) ~ 7,99,400; ~.80,400 o .
Compute the net profit of Mr. Y for Respect- r
[127] As per Trial Balance:
the year: ively y
April 1 st 2013 Provision for ~ 1,000'
(a) ~ 8,000 (b) ~8,63,400; ~ 75,400 (
doubtful debts
(b) ~ 89,000 b
Respect- March 31st 2014Bad debts ~ 2,000
)
(c) ~ 83,000 ively March 31"t 2014Sundry Debtors ~ 30,600
(d) ~ 1,01,000 (c) ~ 8,69,800; ~ 74,000 Additional information:
S
[123] On pt Jan, 2014 provrsion for respect- (i) Further bad debts ~ 600.
a
doubtful debts existed at ~ ively (ii) Make a provision for doubtful
l
17,500. Trade receivables on (d) ~ 8,63,400; ~ 74,000 debts @ 5% on sundry
e
31.12.14 were ~ 3,50,000, bad respect- debtors.
s
debts totalled ~ 20,000. It is ively (iii) Make a provision for discount
required to write off bad debts on sundry debtors @ 2%.
[125] The capital of a sole r
and create a provision equal to
trader would e
5% of the trade receivables
change as a result t
balance. Compute the amount to
of: u
be debited to the Profit and Loss
(a) Commission r
Account:
n
(a) ~ 17,500 received
(
(b) ~ 16,500 (b) Furniture
c
(c) ~ 20,000 purchased on
)
(d) ~ 19,000 credit
[124] Sera & Co. employs a team of (c) Purchase of G
eight workers who were paid @ raw materials o
~8,000 p.m. each in the year (d) Payment received o
ending December 31 st 2013. At from a d
the start of 2014, the company debtor. s
increased salary by 10%. On [126] Sales for the year
July 1, 2014 two trainees were ended 31 st i
hired on salary @ ~ 2500 p.m. March, 2015 n
each. The workforce are paid amounted to
salary on the first working day of ~12,00,000. Sales t
each month, one month in included goods r
arrears. sold to X for ~ a
Calculate amount actually paid 1,00,000 at a profit n
as salaries during 2014 and of 20% on cost. s
outstanding salaries on 31"t Such goods are i
December 2014: lying in the godown t
at the buyer's (
risk. d
Therefore, such )
goods should be
S
treated as part of:
a
(a)
l
Closin
g e
invent s

Page 74 of 137
 Provision for discount on sundry
debtor will be:
(a) ~ 612
(b) ~ 600
(c) ~ 570
(d) ~ 560
1 2015 - December I equal to 5% of the trade
[128] Income tax paid by the sole
proprietor from business bank
account is debited to:
(a) Income tax account
(b) Bank account
(c) Capital account
(d) Not to be shown in the
business books.
[129] Manufacturing account
prepared to:
(a) Ascertain the profit or loss on
the goods produced.
(b) Ascertain the cost of the
manufactured goods.
(c) Show the sale proceeds from
the goods produced
during the
year.
(d) Both (b) and (c)
[130] Interest is calculated on ______ _
of securities.
(a) market value
(b) purchase value
(c) face value
(d) none of above.
[131] Trade discount allowed at the time
of sale of goods is:
(a) Recorded in Cash Book
(b) Not recorded in books of
Accounts
(c) Recorded in Journal
(d) Recorded in Sales Book.
Page 75 of 137
[132] On pI April, 2014 provrsron for
doubtful debts existed at ~ 15,000.
Trade receivables on :31 st March,
2015 were ~ 5,50,000 bad-debts
totalled ~ 35,000 (not yet written
off). It is required to write off the
bad-debts and create a provision
receivables balance. What
additional amount would be debited
to the Profit and Loss Account?
(a) ~ 47,500
(b) ~ 45,750
(c) ~10,750
(d) ~ 13,250
[133] Goods worth ~ 12,000 taken by
proprietor for personal use should
is
be credited to:
(a) Sales Account
(b) Drawings Account
(c) Expenses Account
. (d) Purchases Account
12016 - June
[134] Rohan's trial balance contains the
following information:
Discount received ~ 1,000
Provision for discount
on creditor ~1 ,600
It is desired to maintain a
provision for discount on creditors
at ~ 1,100. The amount to be
credited to P/L Alc is:
(a) ~ 500
(b) ~ 3,500
(c) ~ 1,000
(d) n,500
[135] f 10,000 received from Smith [139] Neeru started her business with
whose account was written off as capital of '{ 45,000 on pI January,
a bad debt should be credited to: 2016. Interest on capital ~ 2,000
(a) Bad debts recovered account and interest on drawings '{ 5,000
(b) Smith Account were appearing in the Profit and
(c) Cash Account Loss Alc for the year ended 3181
(d) Bad- debts Account
[136] A business entity has assets of
December, 2015. Neeru withdrew
'{ 14,000 (Net) during the year
~ 3,06,000 secured loans of and profit earned during the year
~ 1,00,000 and unsecured loans amounted to '{ 15,000.
of ~ 60,000; contingent liability Her capital on 31s1 December,
~ 1,46,000; owner's equity in this 2016 is:
case will be: (a) ~ 67,000
(a) ~ 1,00,000 (b) ~ 43,000
(b) ~ 3,06,000
(c) ~ 45,000
(c) f 1,46,000
(d) '{ 47,000
(d) NIL· [140] A decrease in proviston for
[137] Opening Stock '{ 4,08,000 doubtful debts would result in
Cash Sales ~ 2,00,000 (a) An increase in liabilities.
Total Sales ~ 17,00,000 (b) A· decrease in working
Selling price is 125% of the capital.
purchase price (c) A decrease in net profit.
I Th,e .cost of goods sold will (d) An increase in net profit.
be: [141] Consider the following date
pertaining to Ha] Ltd. for the
(a) ~ 15,60,000 '"
(b) ~ 14,02,500
month of March 2016: ,
15,000
Particulars
(c) ~ 12,75,000 20,000
Opening inventory
(d) '{ 13,60,000 2,80,000
Closing inventory
[138] Stock of '{ 50,000 is damaged by 7,500
Purchases
fire. It was fully covered by 10,000
Return outwards
insurance. Accounting entry is: 2,500
Return inwards
(a) Stoek Ale Dr. ~ 50,000
Carriage inwards
To Trading Ale ~ 50,000
(b) P&L Ale Dr. ~ 50,000
To Trading Ale ~ 50,000
(e) Trading Ale Dr. ~ 50,000
To Insuranee elaim Ale
~ 50,000
(d) Insuranee claim Ale Dr. ~ 50,000
To Trading Ale ~ 50,000
 If the gross profit is 20% on net
sales, the gross sales for the
month of March 2016 is:
(a) ~ 3,47,500
(b) ~ 3,37,500
(c) ~ 2,70,000
(d) ~ 3,34,375
12016 - December I an Income.
\ [142] Calculate the amount of salary
debited to P&L Nc for the year
ending 31.3.16. Salary
outstanding as on 31.3.15 -
~ 25,000. Salary outstanding as
on 31.3.16 - ~ 10,000. Prepaid
\salary as on 31.3.15 - ~ 10,000.
Salary paid in cash during the
year - ~ 3,00,000.
(a) ~ 3,00,000
(b) ~ 3,05,000
(c) ~ 2,95,000
(d) ~ 3,10,000
[143] X sold goods to Y at cost 1 0%
profit. Y sold goods to Z at 20%
profit on sales. If cost of the
goods to X is ~ 50,000. What is
the cost of the goods to Z?
(a) ~ 66,000
(b) ~ 68,750
(c) ~ 65,000
(d) ~ 69,450
[144] Accounting treatment for
"Accrued Incomes":
(a) It will be recorded on assets
side as a current asset in
the Balance Sheet
[25] J of Jaipur sends 500 radios @
~ 200 each to 0 of Delhi. All the
radios are sold by 0 at a profit of
Page 76 of 137
(b) It will be recorded on the
liability side as a current
liability in the Balance Sheet
(c) It will be recorded on debit
side of the Trading Account
as an expense
(d) It will be recorded on credit
side of Profit & Loss Nc as
[145] Fixed assets are twice the
current assets and half the
capital. The current assets are
~ 3,00,000 and investments are
~ 4,00,000. Then the current
liability recorded in Balance
Sheet will be:
(a) ~ 2,00,000
(b) ~1,00,000
(c) ~ 3,00,000
(d) ~ 4,00,000
[146] In journal entries which pertain to
outstanding entries, prepaid
entries, depreciation entries, are
called:
(a) Adjustment entry
(b) Rectification entry
(c) Transfer entries
(d) Closing entries.
[147] From the following information
find the amount to be debited to
P&L Nc for the period ending
31.03.16: Provision for doubtful
debts ~ 800 (as on 1.4.16).
Debtor's on 31.03.16 f" 40,000.
Bad debts ~ 2,000. Bad debts to
be written off and provision for
doubtful debts is to be created
@ 5% on debtor.
25% on cost.. 0 is entitled to a
commission of ~ 25 per radio sold
plus 20% 1)f gross sale proceeds
(a) provisions
(a) ~ 3,100
(b) reserves
(b) ~ 4,000
(c) capital account
(c) ~ 3,200
(d) profit and loss account
(d) ~ 3,900
[151] A manager get 6% commission
[148] Goods purchased costing
on net profit alter charging such
~ 60,000 and cash paid ~ 45,000
commission. Gross profit is
after receipt of cash discount of
~ 60,000 and expenses of
~ 9,000. What is the percentage
of trade .discount received
indirect nature other than
managers commission are
~ 7,000. Commission amount will
(a) 15%
be:
(b) 10%
(a) ~ 3,000
(c) 71/2%
(b) ~ 3,396
(d) 25%
(c) ~ 3,180
[149] After rectification of following
(d) None of the above.
errors, effect on Net Profit will be:
[152] A decrease in the provision for
4. A cheque dishonoured of
doubtful debts would result in:
~ 3,100 debited to discount
(a) A decrease in net profit
Nc
(b) An increase in net profit
5. Sales book undercast by
(c) An increase in liabilities
~ 23,000
(d) A decrease in current assets.
6. A customer returned goods
[153] Johny purchased goods worth
of the value of ~ 1 ,200; ~ 5,000 for cash less ,20% trade
included in the stock but not discount and 5% cash discount.
recorded: How much amount is to be
(a) Increased by ~ 24,900 debited in purchase Nc in the
(b) Decreased by ~ 24,900 books of Johny?
(c) Increased by ~ 23,700 (a) ~ 3,800
(d) No effect. (b) ~ 5,000
(c) ~ 3,750
I 2017 - June , (d) ~ 4,000
[150] At the time of finalisation if
Financial Statements, Bad-debts (d) ~ 10,500
written off are to be transferred to I 2009 - June I
as exceeds an amount calculated
[26] Same as Q 1 [Nov. 06]
@ 20% profit on cost. Calculate
.
commission.
(a) ~ 12,500
(b) ~ 13,500
(c) ~ 11,500
I onsignment, but 15% of the goods [34] Del credere commission is fixed in [37] Mr. A sold goods amounting to
2 were lost in transit. Such loss will terms of percentage say '1 0% and ~ 30,000 (cost of goods ~ 24,000)
be borne by: . credit sales and cash sale are received on consignment, during
0
(a) Consignee ~ 10,000 and ~ 5,000 respectively. the month of April, 2009. Half of the
0 (b) Consignor Amount of del-credere commission sales was on credit. He is entitled
9 (c) Both (a) and (b) will be? for 5% .commission on sales. In
(d) Insurance company (a) ~1,OOO. addition to that he is also entitled
-
[31] Who is owner of the unsold stock (b) ~ 1,500 for 2% del credere commission.
D (c) ~ 500 What is the total amount of
left with the consignee?
e (a) Consignee (d) None of the above commission due to Mr. A for the
c (b) Consignor [35] X sends out 400 bags costing month of April, 2009 ?
(c) Co-venturer ~ 200 each to Y. Sales are to be (a) ~ 4,000
e
(d) Both (a) and (b) made at cost +45%. X draws a bill (b) ~ 1,500
m [32] The Consignor sends _ along , on Y for an amount equivalent to (c) ~ 1,800
b . with the consigned goods to the 60% of sales value. The amount (d) ~ 2,100
e consignee. of
r
(a) account sales bill will be: I 2011 - June
,(b) proforma invoiee (a) ~ 69,600
I (c) both (b) ~ 60,300
[ (d) none (c) ~ 61,250 I
3 (d) ~ 63,000

0
12010 - June I 1 2010 - December I [38] Commission is given
to consignee for his hardwork in
[33] X consigned goods to Y costing
]- [36] Goods costing ~ 1,00,000, Invoice ihtroducing a new product in the
~ 30,000 at cost plus 25%. These
market.
X goods are to be sold at invoice Price ~ 1,20,000, send to
(a) del credere
s value plus 10%. Y sold a part of the consignee. Goods sold by
(b) extra salary
goods for ~ 33,000. What will be consignee for ~ 96,000 at Invoice
e (c) over riding commission
the, value of stock lying with Y that Price. Consignee is entitled toa
n (d) commission on total sales.
will be shown by X at the closing of commission of 5% to cost price of
[39] If stock is left with consignee at the
d accounts? sale made and 1 0% additional
end of the year, then it will be
s (a) ~ 8,250 commission on difference of
credited to ?
(b) ~ 6,000 invoice price and cost price of sale
g (a) P/L alc
made. Amount of commission
(c) ~ 7,500 (b) . consignment Nc
o payable to theconsiqnee will be :-
(d) ~ 8,000 (c) trading alc
o (a) ~ 4,000
(d) none of these.
d (b) ~ 5,600
(c) ~ 1,600
s
(d) ~ 9,600.
t
o
Y
o
n
c

Page 77 of 137
1 2011 - December 1
[40] The revenue for the transaction of
consignment sales is recognized-
(a) When the goods are sold to
customers by consignee.
(b) When the goods are sent to
consignee.
(c) When the advance against
delivery is received
consignor.
(d) When consignor receives the
payment from consignee.
[41] X Ltd. sends 5,000 bags of cement
on consignment to Y Ltd. The Cost
per ~ag is ~ 40. The Carriage
Inward in ~ 25,000. It is estimated
that the normal loss rate is 1 0%.
Calculate the cost per bag?
(a) ~ 45
(b) ~ 45.50
(c) ~ 50.00
(d) ~ 40.00
[42] The balances of "goods sent on
consignment accounf' is transferred
to:-
(a) Trading Account
(b) Profit and Loss Account
(c) Consignment Account
(d) Consignee's Account
12012 - June I expenses amounted to ~ 4,000.
[43] S of Surat sent goods costing
~ 3,00,000 to C of Chennai at cost +
20%. Ha~ of the goods sent were sold
by C at 10% above the invoice value.
The sales value of goods will be
Page 78 of 137
(a) ~ 1,98,000 [47] Mr. X paid commission to his 12013 - June I
(b) ~ 1,50,000 consignee Y, ~ 25,000 which was [51J Goods sent on consignment at cost
(c) ~1,80,OOO @ 5% on sales affected by him. of ~ 50,000. 1/4th of the goods lost
(d) ~1,65,OOO Goods were sold by Mr. Y at a
in transit and claim received
1 2012 - December 1 profit of 25% on cost. Stock in
~ 10,000. The amount of abnormal
hand on 31/3/11 is ~ 50,000 at
[44] Radhika sent goods worth cost. So, cost of goods sent by Mr. loss to be transferred to General P
~ 1,20,000 on consignment. to X is: & L account is:
Sarika. 1/81hof the goods were lost (a) ~ 4,50,000 (a) ~ 12,500
by in transit. No claim was receivable (b) ~ 75,000 (b) ~ 10,000
for the same. Sarika sold 2/3 of the (c) ~ 5,50,000 (c) ~ 2,500
goods received for ~ 1,00,000. (d) ~ 6,00,000 (d) None of the above.
What was the cost of the goods [48] Overriding commission 'is given by [52] Del-credere commission is given for:
lying with Sarika? consignor to consignee in order to (a) Sales at higher price than
(a) ~ 29,000 specified.
(b) ~ 35,000 (a) to encourage the consignee to (b) Speeding up the collection.
(c)' ~ 29,167 overcome bad-debts (c) Covering the risk of bad debts.
(d) ~ 40,000 (b) to encourage the consignee to (d) Prompt payment from
[45] When the del-credere commission promote the sales at a consignee.
is allowed by consignor to price [53] At the time of valuation of unsold
consignee, abnormal loss will be higher than the specified stock on consignment, which of the
borne by: selling price following expenses will not be
(a) Consignor (c) to sell the goods sent by included?
(b) Consignee consignor (a) Insurance of warehouse of
(c) Both, consignor and consignee (d) to sell and take care of goods consigner
in equal proportion. sent by consignor to (b) Carriage
(d) Neither consignor nor consignee (c) Loading expenses
consignee. [49] A loss which is natural and (d) Octroi
[46] 1000 kgs of vegetables were unavoidable is called: [54] P of Punjab sent goods costing
consigned at ~ 18,000 and freight (a) Abnormal Loss ~ 6,00,000 to A of Aligarh. Goods
(b) Normal Loss were to be sold at cost plus
During the transit there is a normal (c) Contingent Loss
33:'%. The consignee had to
loss of 40 kg. If 800 kgs were sold, (d) None of these.
3
what will ue the value of stock at [50] Periodical statement sent by
send advance to the consigner at a
the end? consignee to consignor is known
fixed percentage of sales value and
(a) ~ 2,880 as _________ ,
A sent accordingly ~ 4,80,000.
(b) ~ 3,000 (a) performa invoice
What is the percentage of such
(c) ~ 3,520 (b) , account sale
advance on sales value?
(d) ~ 3,667 (c) bill of exchange
(d) hundi
 (a) 60%
(b) 50%
(C) 45%
(d) 40%
[ 2013 - December I
[55] Del-Credere commission is fixed in
terms of percentage say 10%. The
credit sales is of ~ 1,00,000 and
cash sales is of ~ 50,000, amount
of del-credere commission will be:-
(a) ~ 10,000
(b) ~15,000
(c) ~ 5,000
(d) None of the above.
[56] Overriding commission is a
commission:
(a) Based on fixed percentage of
the gross sales proceeds
made by the consignee
(b) Based on fixed percentage of
. the cash sales made by
the
consignee
(c) An extra commission to
promote sales of higher price
than specified
(d) A commission on credit sales
for protection from bad
debts
[2014 - June
(57] Yojan Kumar consigned goods of
~1 ,00,000 at an invoice price of
20% above the cost to Singham
Kumar. Consignee is entitled for
5% commission on total sales up to
invoice, 20%·commission on sale
proceeds in excess of invoice price
Page 79 of 137
and 2% del credere commission on
credit sales. Singham Kumar
sold 25% goods for cash at
~ 40,000; 50% goods at ~ 70,000
on credit and kept 1 0% goods at
invoice price for himself. Calculate
the commission payable to
Singham Kumar.
(a) ~ 10,500
(b) ~ 9,900
(c) ~10,200
(d) None of the above
[58] In absence of any agreement in
consignment business the loss of
goods by fire in consignees.
godown is borne by:
(a) Consignor
(b) Consignee
(c) Shared by both consignor and
consignee
(d) Insurance company
[59] On 1.1.2014, Amit of Varanasi
consigned goods of the value of
~ 50,000 to Sumit of Chennai. Amit
paid ~ 2,500 as freight and ~ 1,500
for insurance. During transit, 1/10th
of the goods were totally destroyed
by fire. 1/9th of the remaining goods
were again destroyed by fire in
godown. On 1.4.2014 half of the
original goods were sold for
I ~ 30,000. You are required to
ascertain the stock:
(a) ~ 15,000
(b) ~ 24,000
(c) ~16,200
(d) ~ 20,000
I 2014 - December
[60] Goods sent on consignment by
Kumar to Suresh. Invoice value of
goods sent is ~ 6,00,000 at cost +
25% profit 1/4th of the goods were
lost in transit. Insurance claim
received ~ 72,000. The amount of
abnormal loss to be transferred to
General Profit and Loss Nc will be:
(a) ~ 40,500
(b) ~ 48,000
(c) ~ 1,20,000
(d) ~ 1,50,000
I 2015 - June
[61] R of Dwarka sends out certain
goods at cost + 25%. Invoice value
of goods sent out ~ 2,00,000. 4/5th
of the goods were sold by
consignee at ~ 1,76,000.
Commission 2% upto invoice value
and 10% of any surplus above
invoice value. The amount of
commission will be:
(a) ~ 4,800
(b) ~ 5,200
(c) ~ 3,200
(d) ~ 1,600
[62] 5,000 metres of cloth sent out on
consignment at the invoice price of
~ 30 per metre which were
purchased by consignor at the cost
price of ~ 20 per metre.
Consignor's expenses ~ 5,500.
Consignee's expenses ~ 2,000.
Consignee sold 4,000 metres ~ 40
per metre. Consignee is entitled to
I a commission of 5% on total sales
proceeds plus a further 20% of any
surplus above ~ 30 per metre.
Owing to a fall in market price, the
inventories of cloth in hand is to be
reduced by 10%. What will be the
profit on consignment?
(a) ~ 54,500
(b) ~ 63,500
(c) ~ 56,490
(d) ~ 55,490
[63] D of Delhi sent out goods on
consignment so as to show a profit
of 20% on invoice price. 1/5th of the
goods were lost in transit. The cost
I of goods lost is ~ 60,000. The
invoice value of goods sent out
was:
(a) ~ 3,75,000
(b) ~ 3,60,000
(c) ~ 3,50,000
(d) ~ 3,00,000
I 2015 - December I
[64] Munnabhai of Mumbai send out
certain goods to Chunky of
Chennai at cost + 25%. 3/4th of the
goods received by Chunky is sold
at ~ 1,98,000 at 10% above invoice
price. Cost value of goods send out
is:
(a) ~ 2,40,000
(b) ~ 1,44,000
(c) ~ 1,80,000
(d) ~ 1,92,000
 [65] Over-riding Commission
generally calculated on:
(a) Credit Sales
(b) Total sales excluding invoice
value/cost
(c) Cash sales only
(d) Both on Credit and Cash Sale
[66] 1000 kgs of bananas
consigned to a wholesaler, nhe cost
being ~ 8 per kg, plus ~ 925 of
freight. It is considered that a loss
of 15% is umavoldable: Tlhe cost
per kg of banana will be:
(a) ~ 9.41
(b) ~ io.so
(c) ~ 10.00
(d) ~ 8.925
[67] Gautam of Goa consigned goods
for the value of ~ 74,500 to Rama
of Rameshwaram and paid freight
etc. of ~ 7,[)00. He drew a bill on
Rama for 31 months after date for
~25,500 as an advance against
consignmernt and discournted the
bill - for ~ 24,500. Further he'
received Account Sales showing
that, part oi the goods had realized
gross ~ 83,500 and t\hat his-
expenses and commission
amounted to ~ 2,5QOand ~ 6,000
respectively. The inventory unsold
was valued at ~ 27,500. Ce»nsignee
wants to rremit a draft for the
amount due. The amount of draft
will be:-
Page 80 of 137
is (a) ~ 56,500 [71] Goods sent out on consignment fire in godown. Half of the
(b) ~ 55,500 ~ 2,00,000. Consignor's expenses remaining goods were sold
(c) ~ 50,500 ~ 5,000. Consignee's expenses ~ 30,000. Freight and Insurance
(d) ~ 49,500 ~ 2,000. Cash sales ~ 1,00,000. paid by consignor f 2,500 and
Credit sales ~ 1,10,000. f 1,500 respectively. Calculate
12016 - June I Consignment inventories ~ 40,000. closing stock.
Ordinary commission payable to (a) f 24,000
are [68] If Del-credere commission is consignee ~ 3,000. Del-credere (b) f 21,600
'allowed for bad - debt, consignee commission ~ 2,000. The amount . (c) f 20,000
will debit the bad - debt, amount to: irrecoverable from customer (d) None of the above.
(a) Commission earned Nc ~ 2,000. What will be the profit on
(b) Consignor Nc consignment?
12017 - June I
(c) Trade ReceivableNc (a) ~ 38,000
(d) General Tra<:ling Nc [75] Mukesh purchased 5000 bags of
(b) ~ 40,000
[69] X consigned goods costing wheat costing f 250 each and sent
(c) ~ 36,000
them to Manoj on consignment
~ 1,50,000 to Y of Navi Mumbai at (d) ~ 43,000
basis. Carriage f 1,500 and
cost plus 25%. 1/10th goods are
lost in transit. Y sold 3/5th of the 1 2016 - December I Insurance expense f 3,500 were
paid by Mukesh. 3/5th of the stock
remaining goods at 10% above
[72] If Del-Credere Commission is were sold by Manoj at f 300 per
invoice price. The amount of sales
allowed for bad-debts, consignee bag. Remaining stock was taken
will be:
will debit the bad-debts amount to: over by Manoj at cost. The amount
(a) ~ 1,85,625
(a) Commission earned Nc of stock taken over will be:
(b) ~ 1,01,250
(b) General P/L Nc (a) f 5,00,000
(c) ~ 1,23,750
(c) Trade receivables Nc (b) ~ 12,55,000
(d) ~ 1,11 ,375
(d) Consignor Nc (c) ~ 5,02,000
. [70] Roy of Chennai sends goods (d) ~ 5,51,000
[73] Consignment Account is a
costing ~ 2,00,000 to Sai of Delhi.
account and [76] Rishi of Kolkata sent out goods
3/5th of the goods were sold by
consignee account is the nature of costing ~ 50,000 to Zenith of
consignee for ~ 1,40,000.
Mumbai at cost + 20%. 10% of the
Commission 2'10 on sales plus 20% (a) nominal, real
goods were lost in transit. 70% of
of gross sale less all commission (b) real, nominal
the goods received are sold at 15%
as exceeds cost price. The amount (c) nominal, personal
above invoice price. The amount of
of commission will be: (d) artificial, personal. sales value will be _________ '
(a) ~ 5,666 [74] Goods sent on consignment (a) ~ 37,800
(b) ~ 5,800 ~ 50,000. During transit 1/1 Oth of (b) ~ 39,600
(c) ~ 6,000 goods were destroyed by fire later, (c) ~ 43,470
(d) ~ 5,600 1/9th of the goods received by (d) f 44,370
consignee were also destroyed by
 [77] If consigner draws a bill on
consignee and discounted it with
[79] Mehta consigns 1,000 shirts
costing ~ 400 each to Khaitan.
I Answer J
the banker, the discounting Mehta pays ~ 20,000 for packaging 1. (b) 2. (a) 3. (d) 4. (a)
charges will be debited in: and freight. Khaitan sells 900 shirts 5. (b) 6. (b) 7. (a) 8. (a)
(a) Trade Debtors Account at ~ 500 each and incurs ~ 15,000 9.' (b) 10. (a) 11. (b) 12. (b)
(b) Consignment Account as selling expenses. The value of 13. (b) 14. (a) 15. (b)
(c). Consignee'S Account 16. (d)
consignment inventories will be: 17: (b) 18. (c) 19. (a) 20. (b)
(d) General Profit & Loss Account. (a) ~ 42,000 21. (a) 22. (a) 23. (a) 24. (a)
(b) ~ 43,500 25. (b) 26. (b) 27. (d) 28. (b)
I 2017 - December I (c) ~ 40,000 29. (b) 30. (b) 31. (b) 32. (b)
[78] MN of Mumbai sent out goods on (d) None of the above 33. (b) 34. (b) 35. (a) 36. (b)
[80] 8asu of Kolkata sends 600 boxes 37. (d) 38. (c) 39. (b)
consignment costing ~ 4,00,000 to 40. (a)
to Tewari of Delhi costing ~ 250 41. (c) 42. (c) 43. (a)
OR of Delhi. Commission. to be
44. (b)
each. Consignors expenses were 45. (a) 46. (d) 47. (a)
I 48. (b)
paid 2% on sales + 3% on sales, ~ 3,000. 1/61hof the boxes were 49. (b) 50. (b) 51. (c) 52. (c)
as del-credere commission. The 53. (a) 54. (a) 55. (b)
goods in transit. 3/51hof the goods 56. (c)
57. (d) 58. (a) 59. (c)
entire goods were sold by the received by the consignee were 60. (b)
61. (a) 62. (d) 63. (a)
consignee for ~ 5,00,000. However, sold by him. The cost of goods still 64. (d)
65. (b) 66. (b) 67. (d)
I in transit will be 68. (a)
the consignee could recover only ~ 69. (d) 70. (a) 71. (a)
' (a) ~ 25,000 72. (a)
4,92,000 from the trade 73. (c) 74. (b) 75. (c)
(b) ~ 25,500 76. (c)
receivables.The amount of 77. (b) 78. (b) 79. (a) 80. (a)
(c) ~ 38,250
commission to be transferred to
(d) ~ 37,500
Profit and Loss Nc by OR will be

(a) ~ 25,000
~ (b) ~ 17,000
\
(c) ~ 20,000
(d) .~ 33,000
o

Page 81 of 137
(
UNIT 2: [22] Which of the following is incorrect?
joint
b (a) Joint Venture is not based on
going concern.
)
venture
W (b) Joint Venture can be formed
h with minor.
e
n
e
I a - June 1
2008 (a) ~ 35,500
[16]c A and B enter into a joint venture (b) ~ 36,000
h
sharing profits and losses equally. (c) ~ 34,000
c
A bought 5000 Kg of rice @ (d) ~ 38,000
o
~ 25/Kg. B bought 1000 Kg of
- @ ~ 30/Kg. A sold 1000 Kg
wheat I 2009 - June 1
of wheat
v @ ~ 35/Kg and B sold
5000 [20] A and B entered into a joint
e Kg of rice @ ~ 30/ Kg. The
profit
n on venture will be : venture. They agreed to share
t (a) ~ 55,000 profits and losses equally. A
u (b) ~ 50,000 purchased goods worth ~ 16,000.
r (c) ~ 60,000
e (d) ~ 30,000 Goods of ~ 4,000 were destroyed
[17] rFollowing are the characteristics of by fire. Insurance claim of ~ 3,000
k joint venture except: is received. B sold the rest of the
e (a) No common firm name
goods for ~ 20,000. A and B share
e (b) Contribution of funds
p (c) Sharing a/profits/losses profits equally A's share of profits
s (d) None of these is:
[18] rWhich of the following methods of
(a) ~ 4,000
e valuation of closing stock is
(b) f 3,000
c followed in joint venture accou-
(c) ~ 3,500
o nting?
r (a) Net realizable value (d) None
d (b) Cost price [21] A and Bentered into joint venture.
(c) Least of cost or Net realizable A supplied goods worth ~ 7,000
value and incurred expenses of ~ 300. B
(d) None of these sold the goods for ~ 10,000 and
incurred expenses of f 500. What
I 2008 - December I is the amount of final remittance?
[19] Karim and Rahim enter a joint. (a) ~ 8,400
venture sharing profits in 2:1. (b) ~ 7,900
(c) ~ 8,900
Karim purchases goods of
(d) None of these.
~ 2,00,000 ·and Rahim sells goods
of ~ 2,50,000. Karim gets t% I 2009 - December
commission on purchase and
Rahim gets 5% commission on
sales. Find profit on joint venture.
I
Page 82 of 137

(c) A bill of exchange is a
negotiable instrument.
(d) Nothing charges are the
expenses of drawee.
[23] Same as a 6 [Feb. 07]
[24] A and B entered into a Joint
Venture. A bought goods for
~ 6,00,000. He sold 80% of the
goods for ~ 5,60,000 and took the
remaining goods at cost less 20%.
Find the amount of profit.
(a) ~ 56,000
(b) ~ 60,000
(c) ~ 70,000
(d) None
[25] When Memorandum Joint Venture
Method is followed. In Books of X,
"Joint Venture with Y NC" will be
credited with __ , for amount
received by X.
(a) y
(b) sales
(c) debtor
(d) cash
12012-June
1 [32] A & B has started a joint venture
[26] A &B started a joint venture. After
the sales the unsold stock worth
~ 15,000 was taken over by B at a
cost of ~ 20,000. The amount to be
credited to Joint venture Account
will be?
(a) ~ 20,000
(b) ~ 15,000
(c) ~ 5,000
. (d) ~ 35,000
Page 83 of 137
[27] X and Y entered into a joint venture
to sell 1,000 bags of wheat costing
~ 200 each. X paid ~ 2,000 for
freight and ~ 3,000 for insurance.
4/51hof the bags were sold by Y at
~ 250 each bag. Remaining stock
was taken over by Y at cost. The
amount of the stock taken over by
Y will be-
(a) ~ 40,000
(b) ~ 45,000
(c) ~ 41,000
(d) ~ 50,000
[28] Tinku and Bunty enter into a joint
venture to share profits. and losses
equally. Tinku supplied 200
Refrigerators costing ~ 2,00,000 to
Bunty incurring freight charges
~ 10,000. Bunty sold 140
Refrigerators for ~ 2,40,000. He
took over 10 refrigerators himself.
The profit &loss on joint venture
will be:
(a) Loss ~ 40,000
(b) Profit ~ 30,000
(c) Frofit ~ 40,000
(d) Profit ~ 40,500
1 2012 - December
1 ~25,000 and ~ 50,000 respectively.
[29] In case of Joint Venture, a minor:
(a) Can be a co-venturer for the
benefit of the venture.
(b) Can be a co-venturer if all
other co-venturers agree.
(c) Can be a co-venturer if
permitted by the competent
authority.
(d) Cannot be a co-venturer
Fundame
Scanner:
CPT
ntals
Accountin
1)
g of
(Paper
12013 - June
[30] A and B entered in a joint venture
and decided to share profits and
losses equally.
A supplied goods worth ~ 7,000
and incurred expenses of ~ 300. B
sold the goods for ~ 10,000 and
incurred expenses of ~ 500. What.
will be the amount of the final
remittance to be send by B to A?
(a) ~ 7,900
(b) ~ 5,200
(c) ~ 8,400
(d) ~ 8,800
[31] Which of the following statement is
true?
(a) Co-venturers always shares
profits and losses equally.
(b) Number of co-venturers can
never be more than two.
(c) The relationship between co-
venturers is principal & agent.
(d) Co-venturers may contribute
funds for running tl ,e venture.
. I 2013 - December
for purchase and sale of garments.
Initial capital contribution was
There is no written agreement
about share of profit/loss amongst
them. They purchased garments
worth ~ 50,000 and sold for ~
75,000. The profit of ~ 25,000
shared by them as:-
(a) ~ 8,333 and ~ 16,667
(b) ~ 10,000 and ~ 15,000
(c) ~ 12,500 and ~ 12,500
(d) ~ 20,000 and ~ 5,000.
[33] Karthik and Dhoni enter into a joint
venture sharing profit and loss in
the ratio of 2 : 1. Karthik purchased
the goods costing ~ 2,00,000.
Dhoni sold the goods for
~ 2,50,000. Karthik is entitled to get
1 % commission on purchase and
,
Dhoni is entitled to get 5%
commission on sales. The profit on
venture will be:-
(a) ~ 35,500
(b) ~ 36,000 •.
(c) ~ 34,000
(d) ~ 38,000.
[34] The minimum number of co-
venture will be atleast _________ _
in joint venture business.
(a) 2
(b) 5
(c) 7
(d) 4
I [35] Which of the following is true?
(a) Co-ventures always shares
profit equally
(b) Number of co-ventures can
never be more thanjwo
(c) The relationship between co-
ventures is principal & agent
(d) Co-ventures· may contribute
funds for running the venture
[36] C and D enter into a joint venture
to share profit in the ratio 5: 3.
Apart from the profit, D is entitled to
a commission of 5% of net profit
after charging such commission. If
 net profit of joint venture is ~33,600
before charging such
commission. What will be share
profit of C and D:
(a) C will get profit ~ 19,950 and D
~ 11,970
(b) C will get profit~ 20,000 and D
~ 12,000
(c) C will get profit ~ 21,000 and D
~ 12,600
(d) C will get profit ~ 21,600 and D
~ 12,000
12014 - June
1 Credit Machinery Nc
[37] Aastha and Shivani entered into a
Joint venture sharing profits and
losses in the ratio 2: 1. Aastha
purchased goods costing ~ 30,000.
Shivani sold the goods for ~40,000.
Aastha was entitled to get 1 %
Commission on purchase and
Shivani . was entitled for 5%
Commission on sales. Aastha's
and Shivani's share in profit on
venture would be:
(a) ~1 ,467 and ~ 733 respectively
(b) ~ 5,133 and ~ 2,567
respectively
(c) ~ 4,400 and ~ 2,200
respectively
(d) ~ 3,667 and ~ 1,833
respectively.
[38] In case of Joint Venture business,
the method of accounting to be
followed is decided by: .
(a) Separate act for Joint Venture
(b) Accounting Standard
(c) Co-ventures as per their
convenience
(d) ICAI
[39] In case of Joint Venture, for
purchase of machinery from Joint
Bank alc, in case separate set of
books are maintained, the correct
journal entry will be:
(a) Debit Machinery Nc and
Credit Joint Bank Nc
(b) Debit Joint Venture Nc and.
Credit Joint Bank Nc
(c) Debit Machinery Nc and
Credit Venture's Capital Nc
(d) Debit Joint Venture Nc and
1 2014 - December 1
[40] Mohit and Rohit entered into a joint
venture sharing profits and losses
in the ratio 2 : 1 respectively. Mohit
purchased goods costing
~2,00,000 and incurred ~ 15,000
as freight and sent it to Rohit. Rohit
purchased goods to the value of
~56,000 and incurred expenses
amounting to ~ 5,000. Rohit sold
the' goods on behalf of the joint
venture and realized ~ 4,00,000.
He was entitled to 10%
commission on sales. How much
amount will Rohit pay to Mohit as
final settlement?
(a) .~ 1,85,000
(b) ~ 2,71,000
(c) ~ 3} 11,000
(d) ~ 2,99,000
[41] When the record of transactions
relating to joint venture are made in
the books of one venturer, then the
venturer recording the transactions,
records his share of investment by
(a) debiting cash ale
(b) crediting cash ale
(c) crediting his personal ale
(d) no entry required.
12015 - June
1 transactions himself.
[42] A and B were partners in joint
venture sharing profit and losses in
proportion of 3 : 2. A supplies
goods to the value of ~ 60,000 and
incurs expenses amounting
~ 6,000. B supplies to the value of
~ 14,000 and his expenses
amounted ~ 1,000. B sells goods
on behalf of the joint venture and
realises ~ 1,00,000. B is entitled to
a commission of 5% on sales. B
settles his account by a bank draft.
Find out the profit on venture.
(a) ~ 14,400
(b) ~14,000
(c) ~ 13,000
(d) ~ 13,200
[43] In a joint venture X contrihutes
~ 25,000 and Y contributes
~ 50,000. Goods are purchased for
.~ 56,000. Expenses amount to
~ 4,000, sales amount to ~ 70,000,
the remaining goods costing
~ 3,000 were taken over by Y at an
agreed price of ~ 2,000. X and Y
share profit and losses in ratio of
1 :2 respectively. as a final
settlement, how much X will
receive?
(a) ~ 29,333
12015 - December
[44] Memorandum joint venture account
J is prepared:
(a) When each co-venture keeps
records of all the joint venture
(b) When separate set of joint
venture books is prepared.
(c) When each co-venture keeps
records of their own joint
venture transaction.
(d) None of the above.
[45].Raj and Simran enter into a joint
venture to sell silk, sharing profits
and losses equally. Raj provides
silk from his inventory ~ 1,00,000.
He pays expenses amounting
~1 0,000. Simran incurs further
expenses on carriage ~ 10,000.
She received cash on sale of silk
~1 ,50,000. She also takes over
goods to the value of ~ 20,000.
Profit on venture will be:
(a) ~ 30,000
(b) ~ 40,000
(c) ~ 50,000
. (d) ~ 60,000
(b) ~ 30,000
(c) ~ 25,000
(d) ~ 29,000

Page 84 of 137
5.
[46] X and Y enter into a joint venture
sharing profits and losses equally.
X purchased 1,000 kg. of sugar @
'{ 25 per kg. Brokerage paid ,{1 ,000
and carriage paid '{ 500. Y sold
950 kg. of sugar @ ~ 32 per kg.
Balance sugar was taken over by Y
at cost. The value of sugar taken
over to be recorded in joint venture
will be
(a) '{ 1,325
(b) '{ 1,250
(c) '{ 1,300
(d) '{ 1,275
12016 - June
[47] A minor can join as a co-ventures
in a joint venture business:
(a) Yes, if accepted by all co-
ventures
(b) Yes, if accepted by competent
authority
(c) Cannot become co-ventures
(d) Yes, for the benefit of joint
venture.
[48] Aar and Ear were partners in 11 joint
venture sharing profits and losses
in the ratio of 4/5thana 1 15th
respectively. Aar supplies goods to
the value of '{ 50,000 and his
expenses amount to '{ 5,400. Bar
supplies goods to the value of
'{ 14,000 and his expenses amount
to '{ 800. Bar sells goods on behalf
of the joint venture and realises
'{ 92,000. Bar is entitled to a
commission of 5% on sales. Bar
Page 85 of 137
settles his account by bank draft.
What will be the final remittance?
(a) Bar will remit '{ 69,160 to Aar
(b) Aar will remit '{ 69,160 to Bar
(c) Aar will remit '{ 69,000 to Bar
(d) Bar will remit '{ 69,000 to Aar.
1 2016 - December
Question 49 and 50 are based on the
case given below:
A and B enter into a J.V. in ratio of 2 : 3.
A bought goods worth '{ 36,000 and
sent half to B. B purchased goods worth
'{ 22,500 and sent '{ 9,000 worth to A. .
Goods costing '{ 3,000 with A were
destroyed by fire, insurance claim was
received for 50%. All the goods were
sold at mark-up of 25% on cost.
Expenses borne by both were to the
tune of '{ 5,000.
[49] Sales made by A and B
respectively will be:
(a) '{ 30,000; '{ 39,375
(b) '{ 40,500; '{ 39,375
(c) '{ 40,500; '{ 35,625
(d) '{ 41,250; '{ 24,375
[50] Profit for the venture will be:
(a) '{ 7,000
(b) '{ 7,375
(c) '{ 8,875
(d) Long'{ 1,500
[51] Which of the following terms are
not true with regard to Joint
Venture business?
(a) Account Sales
(b) Account Current
(c) Del-Credere Commission
(d) All of the above.
1 2017 - June
[52] Which of the following statement is
true?
(a) Memorandum joint venture
account is prepared to find out
amount due from co-venturer.
1 (b) In memorandum joint venture
account only one venturer's
transaction is recorded.
(c) Memorandum joint venture
account is prepared to find
out
profit on venture.
(d) Memorandum joint venture
account is prepared when
separate set of books is
maintained for joint venture.
[53] Which of the following statements
is not true?
(a) Joint Venture is a going
concern.
(b) Joint Venture is terminable in
nature.
(c) Joint Venture does not follow
accrual basis of accounting
if
lasts for less than a year.
(d) The Co-venturer shares the
profit in agreed ratio. . supplies goods worth '{ 17,000 and
[54] Ram and Rahim entered into a joint
venture to underwrite the equity
shares of Mis Antony Ltd. @ 5%
underwriting commission. Mis
Antony Ltd. made a public issue of
1,00,000 equity shares of '{ 10
each. 90% of the issue was
subscribed by the public. The profit
sharing ratio between Ram and
Rahim is 2:3. The balance shares
not subscribed by the public are to
be purchased by Ram and Rahim
in profit sharing ratio. How many
shares are to be purchased by
1
Rahim?
(a) 4,000 shares
(b) 2,000 shares
(c) 6,000 shares
(d) 3,000 shares.
12017 - December
[55] P and Q enter into joint venture
sharing profits and losses equally.
. P purchased 5000 units @ 30
each. Q sold 4800 units @ 50
each. Balance units were taken
over by Q at '{ 5,000. P is entitled
to get 2% commission on
purchase
and Q is entitled to get 1 %
commission on saies. Q's share of
profit on venture will be _______ .
(a) '{ 44,800
(b) '{ 45,300
(c) '{ 42,500
(d) '{ 47,500
[56] Mukesh and Vi mal were partners in
a joint venture sharing profits and
losses in the ratio 2:1. Mukesh
supplies goods worth '{ 36,000 and
incurs freight for '{ 3,900. Vi mal
Vi mal incurs expenses amounting
to '{ 3,000. Vimal sells goods on
behalf of joint venture and realizes
'{ 65,000. Vimal settles his account
by remittance of cheque of __
to Mukesh.
(a) '{ 43,300
(b) '{ 39,900
(c) '{ 42,000
(d) '{ 37,500
 I
I Answer I
1. (a) 2. (0) 3. (d) 4. (a)
5. (d) 6. (c) '7. (d) 8. (a)
9. (d) 10. (0) 11. (a) 12. (b)
13. (a) 14. (c) 15. (d) 16. (d)
17. (d) 18. (d) 19. (a) 20. (0)
21. (a) 22. (b) 23. (c) 24. (a)
25. (d) 26. (a) 27. (c) 28. (d)
29. (d) 30. (c) 31. (d) 32. (c)
33. (a) 34. (a) 35. (d) 36. (b)
37. (b) . 38. (c) 39. (b) \ 40. (b)
41. (b) 42. (b) 43. (d) 44. (c)
45. (c) 46. (a) 47. (c) 48. (a)
49. (a) 50. (b) 51. (d) 52. (c)
53. (a) 54. (c) 55. (a) 56. (a)

Page 86 of 137
 6.
UNIT 3 : BILL OF EXCHANGE AND PROMISSORY NOTES

[1] If due date of a bill is a public

holiday then it's due date will be: -
(a) Following day 1 -
(b) Preceding day
(c) Same day
(d) One month later

[2] On 1.1.05 X draws a bill on Y for

~ 20,000. At maturity, Y requests X
to renew the bill for 2 months @
12% p.a. interest. Amount of
interest will be:
(a) ~ 400
(b) ~ 300
(c) ~ 360
(d) ~ 380

178

Page 87 of 137
 )

[3] On 1.8.05 X draws a bill on Y "for amount of deficiency to recorded [12] A promissory note is drawn by [15] The purpose of Accommodation bill
30 days after sight". The date of on insolvency in books of B will be: in favour of his __ : is
acceptance is 8.8.05. The due date (a) '{ 20,200 (a) drawer, drawee (a) To finance actual purchase or
of the bill will be: (b) '{ 30,300 (b) maker, payee sale of goods
(a) 8.9.05 (c) ,{19,800 (c) payer, payee (b) To facilitate trade transmission
(b) " 10.9.05 (d) '{ 19,000 (d) drawer, payee (c) When both parties are in need
(c) 11.9.05 [8] On 1.3.2006 X draws a bill on Y for [13] On pI January 2006, Vimal sold of funds
(d) 9.9.05 3 months for '{ 20,000 on 4.5.2006 goods worth '{ 20,000 to Renu and (d) None of above
Y pays the bill to X at 12% drew a bill on Renu for 3 months.
I 2007 - February I discount, the Amount of discount Renu accepted the bill and I 2008 - February I
will be: returned it to Vimal who discounted [16] Preeti accepted a 90 days bill of
[4] Bill Receivable account is a: (a). '{ 200 the bill with, ban"k on 41h February
(a) Nominal account '{ 10,000 drawn by Jeet on
(b) ,{400 2006 @ 15% p.a. The discounting
(b) Personal account charges will be: . 5.2.2006. On 13.3.2006 Preeti
(c) '{ 600
(c) Real account (d) '{ 100 (a) '{ 3,000 wished to retire" the bill. Jeet
(d) None [9] How long is the period of days of (b) '{ 750 offered rebate @ 12% p.a. What is
[5] The Noting changes levied on grace in case of a bill: (c) '{ 500 the amount of rebate?
-dishonour "of an endorsed bill by (a) Three days (d) None (a) ~150
the Notary Public are to be borne (b) Two days (b) '{ 187
by: (c) Four days [14] On pI January Shilpa owes
"(c) ~184
(a) Drawer of the bill . '{ 10,000 and accepts a 3 months.
(d) One day (d)
(b) Holder of the bill bill for the amount. On the date of
[10] A promissory note does not None
(c) Endorser of the bill maturity Shilpa was not able to
require: [17] Bill receivable endorsed are
(d) Person responsible for meet the bill. She pays '{ 4000 and
(a) Noting debited to:
dishonour asks to draw another bill for three
(b) Discounting months for the balance amount (a) Debtors Alc
[6] A bill of exchange is' drawn on pI
(c) Acceptance with interest @ 15% p.a. The
April 2003 payable after 3 months. (b) Creditors Alc
(d) None of the above amount of interest will be:
The due date of the bill is: (c) Bills payable Alc
(a) 181April 2003 (a) '{ 200 (d) Bills receivable Alc
[11] Mohan drew a bill on Shyam for
(b) 30lh June 2003 (b) '{ 225 [18] On 1.6.07 X draws a bill on Y for
'{ 50,000 for 3 months. Proceeds
(c) 181July 2003 (c)'{ 500 '{ 25,000. At maturity Y request X to
are to be shared equally. Mohan
(d) 4th July, 2003 (d) ~ 900 accept ~ 5,000 in cash and noting
got the bill discounted @ 12% p.a.
charges incurred ~ 100 and for the
and remits required proceeds to
2007 August I Shyam. The amount of such
balance X draw a bill on Y for 2
months at 12% p.a. Interest
[7] A draws a bill on B for '{ 50,000 for remittance will be:
amount will be :
3 months. At maturity, the bill (a) '{ 24,250
(a) ~ 410
returned dishonoured noting (b) '{ 25,000
(b) ~ 420
charges '{ 500. 40 paise in a rupee (c) '{ 16,167
(c) '{ 440
is recovered from B's estate. The (d) '{ 32,333
(d) ~ 400

Page 88 of 137
 12008 - June
[19] On 1.1.2005 X draws a bill on Y for
~ 30,000 for 3 months. At maturity
Y requests X to accept ~ 10,000 in
cash and for balance to draw a
fresh bill for 2 months together with
12% p.a. interest, amount of
interest will be:
(a) ~ 400
(b) ~ 600
(c) ~ 480
(d) ~ 760
[20] Endorsement of bill means:
(a) Transfer of right on the bill
from the drawee to the
creditors
(b) Transfer of righf on the bill
from the creditors to the
drawee
(c) Transfer of right on the bill
from the drawer to the
creditors
(d) Transfer of right on the bill
from the creditors to the
drawer
I 2008 - December
[21] On 15t April, A sold goods worth
~ 10,000 to B. B drew a bill for 3,
months. A discounted the bill from
the bank at 15% p.a. then the
amount received on account of bill
will be:
(a) ~ 10,000
(b) ~ 9,625
(c) ~ 9,000
(d) . ~ 8,500
Page 89 of 137
I [22] Which account is to be credited [27] A bill of ~ 12,500 drawn by Shyam (a) ~ 5,150
when an endorsed cheque is is accepted by Ram &Shyam ,gets (b) ~4,140
dishonoured? IT'S discounted @ 12% p.a. due 3 (c) ~ 4,120
(a) Debtor months hence. The discounting (d) ~ 5,440
(b) Bill Receivable charges borne by Shyam is: [31] A draws a bill for ~ 20,000 for 3
(c) Endorsee- (a) ~ 375 months on 1.1.09. Bill was
(d) Payee (b) ~ 1,500 discounted with a banker who
[23] A draws a bill of ~ 50,000 and B (c) ~ 250 charged ~ 100 as discounting
accepts it. After this, B becomes (d) ~ 1,000 charges. At maturity the bill
insolvent and only 40' paisa in a [28] A draws a bill for ~ 15,000 which is returned dishonoured. With what
rupee could be recovered. What is accepted by B. They agree to amount will the bank alc be
the amount that can be recovered? share the proceeds in the ratio of credited in the books of A?
(a) ~ 20,000 . 3: 2. A discounts the bill with the (a) ~ 19,000
(b) ~ 35,000 bank at 10% p.a., maturity 2 (b) ~ 20,000
(c) ~ 30,000 months. What amount will be (c) ~ 20,100
(d) None remitted by A to B after discounting (d) ~ 19,900
[24] A promissory note is an instrument the bill?
in writing containing an ________ _ (a) ~ 6,000 I 2009 ..:. Dece~ber I
undertaking. (b) ~ 7,500
[32] When a bill is renewed, then entry
(a) conditional (c) ~ 5,900
(b) unconditional (d) ~ 7,375 will be:
(c) both (a) &(b) (a) No entry will be passed
(d) either (a) or (b) I 2009 - June I (b) Entries for cancellation of old
[25] Dishonour of a bill is recorded in bill and renewal of bill
(a) Cash Book [29] Ram drew a bill on Shyam on 15th (c) Entry for renewal of bill
(b) , Sales Book April, 09 Shyam accepted the (d) None of these
(c) Purchase Book same on 17th April, 09 for 30 days [33] If a machine is purchased for
I (d) Bills Receivable Book after sight. What will be the due
date of the bill?
~ 5,00,000 on 15t April, 2002 on
[26] If the bill is accepted and the hire-purchase basis. What is the
amount is given before the due (a) 18th May, 09 average due date, if amount is
date (i.e. maturity), then the bill is (b) 15th May' 09 repaid . in 5 yearly annual
said to be: (c) 20th May, 09 installments starting from pt April,
(a) Cancelled (d) 17th May, 09 2003. .
(b) Accepted [30] X draws a bill on Y for ~ 5,000 for 3 (a) 1.4.05
(c) Retired months. Before the due date Y (b) 1.4.04
(d) Dishonour sends 1/5th of the amount to X. Y (c) 1.4.03
requested X to draw a new bill tor (d) 1.4.07
the balance amount plus interest @
12% p.a. for 3 month. Find the
amount of the new bill?
 -
[34] A draws a bill for ~ 10,000 on B for
2 months. He gets it discounted
from bank @ 12%. They agreed to
share the proceeds equally.
How much amount is received by
A?
(a) ~ 5,000
(b) ~ 4,900
(c) ~ 4,000
(d) None of the above
[35] In case of sudden holiday, maturity
date falls on:
(a) Next following day
(b) Previous day
(c) On the same day
(d) None of the above
[36] A bill not paid by drawee on due
date is called _________ .
(a) noting of bill
(b) dishonour of bill
(c) renewal of bill
(d) discounting of bill
12010-June
[37] Which of the following statements
is not true?
(a) Noting charges are expenses
of drawer
(b) The bill of exchange must
contain an order to pay
(c) The dr~wer and payee can be
same person
(d) A bill of exchange can be
endorsed (i.e. passed on to
another person).
Page 90 of 137
[38] A draws bill of exchange on B for
~ 1~,000 for 3 months on 12th May
2008. What will be the due date?
(a) 15th August, 2008
(b) 14th August, 2008
(c) 16th August, 2008
(d) 12th August, 2008
[39] Kumar draws a bill on Rajat for
~ 50,000 for mutual accomm-
odation in the ratio of 3:2. Rajat
accepted the bill. Kumar got it
discounted for ~ 47,500. How much
money should Kumar remit to
Rajat?
(a) ~ 28,500
(b) ~ 19,000
(c) ~ 30,000
(d) ~ 20,000
[40] Who is the acceptor of "Bill of
Exchange"?
(a) Debtor
(b) Creditor
(c) Selle.r
I (d) None of the above
[41] "Bills payable discounted in cash
by Creditor" will be shown in
(a) Journal
(b) Ledger
(c) Bank book
(d) No entry required
[42] Ihdian Currency is a
(a) Bill of Exchange
(b) Cheque
(c) Promissory Note
(d) Bank Draft
1 2010 - December
1 A' draws a bill on 'B', but 'B' did not
[43]
accept the same. Which of the
following journal entry should be
passed in the books of 'A'.
(a) Bills Receivable Alc
ToB
~) B
To Bills payable Alc
(c) B
To Bills Receivable Alc
(d) No entry will be required!
passed
[44] A draws a bill on B for ~ 30,000. A
wants to endorse it to C in
settlement· of· ~ 35,000 at 2%
discount with the help of B's
acceptance and balance in cash.
How much cash A will pay to C?
(a) ~ 4,300
(b) ~ 4,000
(c) ~ 4,100
(d) ~ 5,000
[45] "Liability on account of bills
discounted with Ban'c" will be
treated as:
(a) Not a liability
(b) Current liability
(c) Deferred liability
(d) Contingent liability
12011 -June
[46] B drew a bill of ~ 10,000 for 2
months on A for mutual
accommodation. It was decided
that the proceeds will be shared
equally amongst them. How much
amount will be received by A if the
bill was discounted @ 12% pa?
(a) 9,800
(b) 5,000
(c) 5,100
(d) 4,900.
Dr. [47] If a bill is drawn on pt Jan, and
accepted on 8thJan. What will be
D~ the due date of the bill if the term
of
Dr. the bill is 30 days after sight?
(a) 71hJanuary
(b) 10th February
(c) 11 th February
(d) None
[48] If a cheque is dishonoured, then
the entry. will be passed in
(a) bank book
(b) b/r book
(c) sales book
(d) purchase book.
[49] Rahim draws a bills on Ram. Ram
accepts the bill. Rahim endorse the
bill to Salim. In books of Rahim
which account is to be debited at
the time of such endorsement?
(a) Ram
(b) Rahim
(c) Salim
(d) None
[50] If a firm usually receives a number
of promissory notes, it would be
I convenient to record the
transaction in a seperate book
called
(a) bill receivable book
(b) journal
(c) purchase book
(d) sales book.
 1 2011 - December I 1 2012 - June 1 I 2012 - December [63] A has discounted a 3 month's bill
[56] When a bill of exchange is @ 10% p.a. from bank and given
1 In case of "Bill at Sight", days of
[59] credit of ~ 11,700 on due date the
endorsed by the drawer to his
grace are: bill was dishonoured and a notary
[51] Liability for the bill discounted is a creditor and is dishonoured by charge of ~ 50 paid by the bank.
(a) One day
drawee at the time of maturity. The amount by which the A's
(b) Two days
(a) short term liability What will be the journal entry in account will be debited by the bank
(c) Three days
(b) long term liability books of the drawer? (a) ~ 13,050
(d) Nil
(c) current liability (a) Drawee Nc Dr. (b) ~ 11,050
[60] On 15/4/2011, Ram draws a
(d) contingent liability To Bill Receivable Nc bill on Shyam. Shyam accepts the (c) ~ 12,050
[52] When the drawee becomes (b) Drawee Nc Dr. same for 1 Month and Ram (d) ~ 12,250
insolvent, the amount not ultimately To Creditors Nc endorses the bill to Vijay. What will [64] Mr. X accepts a bill of ~ 5,000
paid to the drawer will be credited (c) Bill Heceivable Nc Dr. be the entry regarding drawn by Mr. Y for mutual
in the books of drawee to: To Creditor Nc endorsement in the books of accommodation. They decide to
(a) Profit and Loss Account Shyam? distribute the proceed in the ratio of
(d) None of above.
(b) Sundry Creditors Account (a) Vijay Nc Dr 1 : 4. The bill was discounted for
[57] A drew an accommodation bill on B
(c) Deficiency Account To Bills Payable Nc ~ 4,900. The amount of discount
for 3 months. Proceeds were to be
(d) None of the above. (b) Bills Payable Nc Dr borne by Mr. Y would be:
shared equally. A got the bill
[53] P sold goods to Q for ~ 2,00,000. Q To Vijay's Ac (a) ~ 100
discounted at 12% p.a. and
paid cash ~ 60,000. P allowed 2% remitted the proceeds of ~ 48,500 (c) Ram's Nc Dr (b) ~ 60
discount on balance and Q to B. The total amount of the bill (c) ~ 80
To Bills Payable Nc
requested to draw a bill for the was- (d) ~ 40
(d) No entry will be passed
balance amount. The amount of
(a) ~ 1,00,000 [61] When a bill is endorsed, credit
I 2013 - December I
the bill will be __________ .
(b) ~ 97,000 is given to: [65] Retirement of bill means
(a) ~ 1,96,000
(c) ~ 1,10,000 (a) Bill Receivable Nc (a) Discounting of bill
(b) ~ 1,37,200
(d) ~ 98,000 (b) Endorsee's Nc (b) Dishonour of bill
(c) ~ 1,40,000
[58] A drew a bill on B. A endorsed this (c) Acceptor's Nc (c) Renewal of bill
(d) ~ 1,36,000 bill to C in settlement of his debt (d) None of the above (d) Payment of bill before
54] Bill was drawn for ~ 10,000 on 12th amounting to ~ 35,000 at 2% maturity.
May. Term of the Bill was three
months. The due date of the bill
discount and paid ~ 5,000 in cash.
What will be the amount of the bill
12013 - June I [66] On pt April Mr. A sold goods worth
~ 10,000 to Mr. B and drew a bill on
will drawn on B? [62] A bill of exchange is drawn by Mr. him at three months for the
be _--:- ______ . (a) ~ 30,000 Mehesh on Mr. Mohan for ~ 10,000 amount. Mr. B accepted the bill and
(a) 12th August (b) ~ 29,700 on 30thJanuary, 2012 for one returned it to Mr. A who discounted
(b) 14th August month. The due date of the bill the bill with the bank @ 15% p.a.
(c) ~ 29,300
(c) 15thAugust would be: The amount of discount to be
(d) ~ 30,700
(d) 13thAugust (a) 29thFebruary, 2012 charged as expense is:-
[55] 'Bills payable discounted in cash by (b) 2ndMarch, 2012 (a) ~ 125
creditor'. In the books of drawee (b) ~ 250
(c) 3'd March, 2012
this transaction will be recorded (c) ~ 375
(d) 4th March, 2012
in:- (d) ~ Nil.
(a) Journal
(b) Ledger
(c) Bank Book
(d) No Entry is required to be made

Page 91 of 137
 Scanner:
zCPT
Accountin
tals
Fundamen
of 1)
g (Paper
[67] Which of the following option (a) Bills payable Alc Dr. 20,000 [73] Neelam sold goods to Dhiman for the interest rebate i.e. discount
(besides retaining the bill, till due To Bank Alc 20,000 ~ 40,000 on 1.5.2014. On the being ~ 500. Before the due date
date) are available to the holder for (b) Bills payable Alc Dr. 20,000 same of the renewed bill Beeta becomes
dealing with a Bill of Exchange? To Bank Alc 18,200 day, she drew on him a bill for the insolvent and only 60 paise in a
(a) Send the bill to Bank for To discount Alc 1,800 amount for 3 months, which rupee can be recovered from his
collection (c) Bills payable Alc Dr.18:200 Dhiman duly accepted. Neelam got estate. How muoh bad debts will
(b) Get the bill discounted with a Discount Alc D~. 1,800 the bill discounted with her bank. be recorded in books of Alpha?
bank or other person To Bank Alc 20,000 Before the due date, Dhiman (a) ~ 8,240
(d) Bills payable Alc Dr. 20,000 became insolvent. Later, his estate
(c) Endorsing the bill to a creditor (b) ~ 12,360
To Bank Alc 19,850 could pay only 40% of the amount
(d) All of the above (c) ~ 20,600
To Discount Alc 150 due. (d) ~ 20,000
[70] The purpose of accommodation bill
12014-June I is:
What will be the amount of [76] Bill at sight means the instalment
deficiency in the books of Dhiman? in the bill is payable at _____ ~.
(a) To facilitate trade transmission (a) ~ 32,000 (a) no time for payment is
[68] Which of the following statements
(b) To finance actual purchase or (b) ~ 22,000
are true with regard to Promissory mentioned
sale of goods (c) ~ 24,000
notes? (b) the payment is made on
(c) When both parties are in need (d) ~ 20,000
(i) It should be properly stamped. demand basis
of funds [74] Which .of the following is not an
(ii) The Promise to' pay must be (c) the payment is made at
conditional. . (d) None of the above example of Foreign bill? anytime
(iii) The payee must sign the I 2014 - December I (a) A bill drawn outside India and (d) both (a) and (b)
promissory note. made payable in India. [77] A bill of exchange matures on 16th
[71] Manu's acceptance to Rishi
(iv) It should not be made payable (b) A bill drawn inside India on a July. Suddenly a bank strike is
~ 12,000 is retired two months person resident outside
to bearer. declared on this date. Next day is
before the due date at a discount of India
(v) The sum payable must be Sunday. Bill will mature on:
10% p.a. In the books of Rishi, the made payable outside
certain. (a) 17th July
journal entry will be. India.
The correct alternative is: (a) Cash ale Dr. 10,800
(b) 15th July
(a) (i), (iii), (iv) and (v) Discount ale Dr. 1,200 (c) A bill drawn outside India and (c) 18th July
(b) (i), (iv) and (v) To Bills Receivable ale 12,000 made payable outside India (d) 16th July
(b) Manu's ale Dr. 10,800
(c) (ii), (iii) and (iv) Discount ale Dr. 1,200
(d) None of the above. [78] When the business sends goods
(d) (ii), (iv) and (v) To Bills Receivable ale 12,000 casually on sales or return basis,
[69] Nutan draws a bill of exchange for (c) Cas.h ale
Discount alc
Dr. 11,800
Dr. 200
12015-June I the journal entry when goods are
~ 20,000 on 1 st Feb 2014, due for To Bills Receivable alc
accepted at involce- price will be:
payment after 2 months on Divam. 12,000 [75] Alpha draws, bill of exchange on (a) Trade receivables/ Customer's Nc... Dr.
Divam accepts the bill of exchange (d) Manu's alc Dr. 11,800 1.01.2015 for ~ 20,000 and .To SalesNc
Discount alc Dr. 200 ~ 30,000 respectively. The bill of (b) Sales Nc...... Dr.
on 4th March 2014, Divam retires To Bills Receivable alc To Trade receivables/Customer's Nc
the bill of exchange at a discount of 12,000 exchange for ~ 20,000 is for 2 (c) Sales Nc... Dr.
9% p.a. The Journal Entry at the [72] In bill of exchange, the term of a months, while the latter one is for 3 To Trading Nc ...
. time of retirement of the bill in the commences from the months. These bills are accepted (d) No entry.
books of Divam will be: date of acceptance of the bill. by Beeta. On 4.03.2015 Beeta
(a) bill after date requests to Alpha to renew the first
(b) bill after sight bill with interest at 18% p.a. for a
(c) bill at sight period of 2 months. Alpha agrees
(d) none of the above. to same. On 20.03.2015 Beeta
retires the acceptance for ~ 30,000

Page 92 of 137
I 2015 - December I (a) 12.08.2015 I 2016 - December I (a) ~ 33,334
(b) 15.08.2015 (b) ~ 42,500
(c) 16.08.2015
[86] Bills of Exchange before
[79] Z Ltd. issued 4000 10% (c) ~ 50,000
(d) 14.08.2015 acceptance is called as:
preference shares of ~ 100 each at (d) ~ 48,125
(a) Draft
par, which are redeemable at a [90] A bill of ~ 40,000 was discounted
(b) Bills receivable
premium of 10%. For the purpose
of redemption, the company
I 2016 - June I (c) Cheques by P with the banker for ~ 39,000.
(d) Bills payable At maturity, the bill returned
issued 3000 equity shares of ~ 100 dishonoured, noting charges ~
[83] A bill drawn and accepted for [87] Mr. X accepts a bill of ~ 50,000
each at a premium of 20% per 500. How much amount will the
share. At the time of redemption of mutual help is known as _____ _ drawn by Mr. Y for mutual
bill. accommodaticn. They decide to banker deduct from P's bank
preference shares, the amount to
(a) accommodation distribute the proceed in the ratio balance for such dishonoured bill?
be transferred by the company to
(b) ordinary of 1 :4. The bill was discounted with (a) ~ 40,000
the Capital Redemption Reserve
(c) retired the bankers for ~ 49,000. The (b) ~ 39,000
Account will be:
(d) cancelled amount of discount borne by Mr. Y (c) ~ 39,500
(a) ~ 1,00,000
[84] Mr. Sobby sold goods worth would be: (d) ~ 40,500
(b) ~ 80,000
(c) ~ 4,00,000 ~ 50,000 to Mr. Dobby. Dobby (a) ~ 600 [91] While preparing a Bank
(d) ~ 4,40,000 immediately accepted a bill on (b) ~ 1,000 Reconciliation Statement. Mr. X
1.02.2016 payable after 2 months. (c) ~ 800 has observed that a bill of
[80] Kiran sells goods for ~ 1,00,000 to
Sobby discounted the bill @ 18% (d) ~ 400 exchange for ~ 5,000, which was
Hari on 15tJanuary, 2014 and on
p.a. on 15.02.2016. On the due discounted by him with his bank,
the same day draws a bill on Hari
for three months for the amount. date Dobby failed to discharge the ·12017-June I was dishonoured and the bank
paid ~ 100 noting charges in this
Hari accepts it and returns it to bill. Later on Dobby became
insolvent and 50 paise is' connection. Which of the following
Kiran, who .discounts it on 4th [88] Jatin draws a bill on Lalit for
recovered entry is required to be made in the
January, 2014 with his bank at ~ 60,000 for 3 months on
from Dobby estate. How much books of Mr. X?
. 10% p.a. The discounting charges 01.04.2016 which was accepted
amount of bad debt will be (a) Customer Nc Dr. ~ 5,100
are: by Lalit on 2.4.16. On 02.05.2016,
recorded in the books of Sobby. To Bank Nc < 5,100
(a) ~ 2,500 Jatin, 'got this bill discounted at (b) Customer Nc Dr. ~ 5,000
(b) ~ 3,000 (a) ~ 25,000
(b) ~ 18,874
12% rate. The amount of discount To Bank Nc <4,900
(c) ~ 10,000 will be:' To Bank Charges Nc < 100
(d) ~ Nil (c) ~ 23,374 (c) Customer Nc
(a) ~ 1 ;600 Dr. ~ 5,000
[81]' Noting charges is an Expense to (d) ~ 27,300 Bank Charges Nc Dr. ~ 100
(b) ~ 1,200
be borne by: [85] On 1.1.2016, X draws a bill on Y To BankNc <5,100
(c) ~ 600
(a) Drawer "for 30 days after sight". The date (d) Customer Nc Dr. ~ 5,100
(d) ~ 800
(b) Drawee of acceptance is 8.1.2016. The To Bank Nc < 5,000
maturity date of the bill will be: [89] A drew a bill on B for ~ 1,00,000 To Bank Charges Nc <100
(c) . Payee for 3 months. Proceeds are to be
(d) Bank (a) 8.2.2016
(b) 10.2.2016 shared equally. A got the bill
[82] On 12.05.2015, Axe draws a bill discounted at 15% and remits half
(c) 11.2.2016
on Zed for ~ 25,000 for 3 months, proceeds to B. The amount of
maturity date of the bill will be: (d) 9.2.2016
such remittance will be

Page 93 of 137
I 2017 - December I [95] Gauri dr.aws a bill on Mita for
~ 7,500 f6:>r mutual accommodation
I Answer I
[92] P draws a bill on Q for ~ 28,000 on in the ratlio 2:1. Mita accepted the 1. (b) 2. (a) 3. (b) 4. (b)
15.02.2017 for 30 days. Mr. Q bill and returned to Gauri got it 5. (d) 6 .. (d) 7. (b) 8. (a)
accepted the bill on 18.02.2017. discount~d at ~ 7,400 and remitted 9. (a) 10. (c) 11. (a) 12. (b)
What would be the maturity date of 1/3,d proo:eeds to Mita. At the time 13. (c) 14. (b) 15. (c) 16. (b)
the bill? of maturrity, how much amount 17. (b) )8. (d) 19. (a) 20. (c)
(a) 18.03.2017 Gauri shPuld remit to Mita to pay 21.(b) 22. (c) 23. (a) 24. (b)
(b) 23.03.2017 off the bill? 25. (d) 26. (c) 27. (a) 28. (c)
(c) 21.03.2017 (a) ~ 4,8134 29. (c) 30. (c) 31. (b) 32. (b)
(d) None of the above. (b) ~ 4,8150 33. 34. (b) 35. (a) 36. (b)
(c) ~ 5,~00 (a) 38. (b) 39. (b) 40. (a)
[93] The purpose of accommodation
(d) n,&OO 37. (a) 42. (c) 43. (d) 44. (a)
bill is
[96] K accep,ed a bill for ~ 45,000 41. (d) 46. (d) 47. (b) 48. (a)
(a) To finance actual purchase or 45. (d) 50. (a) 51. (d)
drawn by' G.G endorsed the bill to 52. (c)
sale of goods 49. (c) 54. (b) 55. (d) 56. (b)
(b) To facilitate trade transaction S. Be/ore' the due date of the bill, K
53. (b) 58. (c) 59. (d) 60. (d)
(c) When both parties are in need become insolvent and as a
57. (a) 62. (c) 63. (c) 64. (c)
of funds consequ9lnce, the bill is
61. (a) 66. (c) 67. (d) 68. (b)
(d) None of the above dlshonoured on due date. Which of
65. (d) 70. (c) 71. (c) 72. (b)
[94] A bill of ~ 15,000 was discounted the follol,Ning account should be 74. (d) 75. (a)
69. (d) 76. (d)
by Shyam with the bank for credited in the books of 13 to 73. (c) 78. (d) 79. (a) 80. (a)
~ 14,900. At maturity, the bill record th@ dishonour of the bill? 77. (a) 82. (d) 83. (a) 84. (a)
returned dishonoured, noting (a) Bills payable account 81. (b) 86 -. 87. (c) 88. (b)
charges ~ 50. How much amount (b) Bills receivable account 85. (b) (a) 91. (a) 92. (b)
will be debited in Shyam's bank (c) K's (jccount 89. (d) 90. (d) 95. (c) 96. (d)
account by the bank at the time of (d) S's (jccount 93. (c) 94. (d)
such dishonour?
(a) ~ 14,950
(b) ~ 15,000
(c) ~ 14,900
(d) ~15,050

'At

Page 94 of 137
 7.
I
I 2008 - February I
[7] What is the objective behind selling
goods on approval basis:
(a) For introducing a new product
in the market
(b) For pushing up sales
(c) To capture a larger share in
the market
(d) All of these

I 2008 - June I
[8] Memorandum records of sale on
approval is a part of:
(a) Management Accounts
(b) Financial Accounts
(c) Cost Accounts
(b) None of the above

I 2009 - December I
[9] Sales = ~ 1,06,000
Sales Return = ~ 6,000
Out of ~ 1,06,000 goods costing
~ 10,000 were sent on approval for
~ 12,000 which have not been
approved yet.

193

Page 95 of 137
 Calculate Net
Sales.
(a) ~ 1,00,000
(b) ~ 88,000
(c) ~ 1,12,000
(d) ~ 18,000
[11] Mr. X sends the goods costing
~ 55,000 on approval basis. Goods
of ~ 5,000 were damaged in transit
and claim of ~ 3,000 was received.
The amount of goods sent on
approval to Mr. Y is:
(a) ~ 57,000
(b) ~ 53,000
(c) ~ 52,000
(d) ~ 50,000
I 2010 - December I
[12] A sent some goods costing ~ 3,500
at a profit of 25% on sale or return
basis. B returned goods amounting
to ~ 800 at Invoice value. At the
end of the accounting period on
March 31 st 2009, the remaining
Page 96 of 137
goods were neither returned nor
approved by B. The stock on
approval will be shown in B/S as:
(a) ~ 2,900
(b) ~ 2,700
(c) ~ 2,025
(d) ~ 3,500
1 2012 - June I (a) ~ 3,35,000
[13]Goods sold on "Sale or Return
basis" as on 315t March 2011
amounted to ~ 1,50,000 for which
no confirmation was yet received.
How much amount shall be added
to closing stock, if goods are sold
1
at cost pluS33-%?
3 been accepted. 30% of the goods
(a) ~ 1,12,500
(b) ~ 1,50,000
(c) ~ 37,500
(d) ~ 1,00,000
I 2012 - December I
[14] A trader sends out qoods is
customer on approval and credits
them to sales amount. On 315t
March, 2011, sundry debtors
includes an amount of ~ 5,000 for
goods sent on approval basis for which
no confirmation was received till year
end. These goods were sent out at a
cost +25%. Physical stock taken on
315t March, 2011 amounted to
~ 50,000. The amount of stock
appearing is Balance Sheet would be:
(a) ~ 45,000
(b) ~ 50,000
(c) ~ 53,750
(d) ~ 54,000
[15] Cash Sale of ~ 50,000, Credit Sale
of ~ 3,50,000, Sales Return
~ 25,000 out of Sales of
~ 3,50,000, goods costing ~ 40,000
were sent on approval for ~ 50,000
which has not been approved yet.
Calculate the net sales:
(b) ~ 3,75,000
(c) ~ 3,40,000
(d) ~ 3,25,000
I 2013 - June I at a profit 20~ on sales or approval
P6] Goods costing ~ 1,00,000 sent to
. customer on sales or return 9asis
at a price of cost plus 30%. During
the year 50% of the good have
returned and the balance goods
were lying with customer at year
end and the specified time limit for
approval is yet to expire. Amount of
total stock to be shown in the
balance sheet would be:
(a) ~ 20,000
(b) ~ 30,000
(c) ~ 50,000
(d) ~ 1,00,000
I 2013 - December I Half of these goods were returned
[17] A company sells motor bikes on
"Sale or return basis". All such
transactions are however treated
like actual sales and are passed
through the sales book. Just before
the end of the financial year, two
motor bikes costing ~55,OOO each
have been sent on "Sale or Return
basis" and have been debited to
customers at U5,000 each, cost of
goods lying with the customers will
be:
(a) ~ 1,10,000
(b) ~ 55,000
(c) ~ 75,000
(d) ~ 1,50,000
12014 - June I
[18] X sent some goods costing ~ 3,500
basis. Y returned goods costing
~ 800. At the end of the year 2013
the remaining goods were neither
returned nor approved. The closinq
stock to be shown in Balance
Sheet will be:
(a) ~ 2,700
(b) ~ 2,000
(c) ~ 2,700 less 25% of 2,700
(d) ~ 3,500
2014 - December I
[19] During the month of June 2014,
sales were ~ 1,36,000, which
include goods worth ~ 32,000 sent
on approval.
before 30th June, but no intimation
is available regarding the
remaining goods. Goods are sold
at cost plus 25%. However, goods
costing ~24,000 had been sold for
~12,000. Calculate cost of normal
sales.
t
~
~
(a) ~ 73,600
(b) ~ 80,000
(c) ~ 1,08,800
(d) . ~ 99,200
[20] When goods are frequently sold on
approval or return basis, _____ _
is prepared.
(a) sales or Return Journal with
four columns
(b) sales or Return Ledger with
three columns
(c) sales or Return Day Book with
two columns
(d) none of the above.
[21] A trader has credited certain items
of sales on approval aggregating
~ 60,000 to Sales Account of these
goods of the value of ~ 16,000
have been returned and taken into
inventorles at cost ~ 8,000 though
the record of return was omitted in
the accounts. In respect of another
parcel of ~'12, 000 (cost being
~ 6,000) the period of approval did
not expire on the closing date. Cost
of goods lying with customers
should be:
(a) ~ 12,000
(b) ~ 54,000
(c) ~ 6,000
(d) None of the above.
1 2015 - June
[22] Elle Ltd. sends out punching
machine costing ~ 200 each to their
customer on sales or return basis.
All such transactions are however
treated as actual sales and are
Page 97 of 137
passed through sales book. Just
before the end of the financial year
i.e. on December 27, 2014 300
such punching machines were sent
out at an invoice price of ~ 280
each, out of which only 90 such
machines are accepted by the
customers at ~ 250 each, and as to
the rest. no report is forthcoming.
What will be the total effect on
sales?
. (a) Sales will be reduced by
~ 61,500
(b) Sales will be increased by
~ 61,500
(c) No effect on sales
(d) Sales will be increased by
~ 32,500.
1 2015 - December
[23] On 31"t March, 2015 goods at a
'sale price of ~ 60,000 were lying
with customer whom these goods
were sold on "sale or return basis"
and goods sold recorded as actual
sales. Since no consent has been
received from customer, what will
be the amount of inventories with
customer sent on approval at a
profit of cost plus 20% and present
market value is 10% less than cost
1 price?
(a) ~ 50,000
(b) ~ 45,000
(c) ~ 43,200
(d) ~ 40,500
I 2016 - June 1
[24] Under sale or return on approval
basis, when transactions are few,
the seller, while sending the goods,
treats them as:
(a) An ordinary sale but no entry
is passed in books.
(b) An ordinary sale and entry for
normal sale is passed in the
books.
(c) Abnormal sale and no entry is
passed.
(d) None of the above.
[25] A sent some, goods costing
~ 35,000 at a profit of 25% on sales
to B on sale or return basis. B
returned goods costing ~ 8,000. At·
the end of the accounting period
i.e. on 31 st December, 2015, the
I remaining goods were neither
returned nor were approved by
him. The inventories on approval
will be shown in the Balance Sheet
at what value?
(a) ~ 20,OQO
(b) ~ 27,000
(c) 27,000 less 25% of 27,000
(d) 35,000
1 2016 - December
12017 –June I
[27] Goods of ~ 800 (Sales Price) sent
on approval basis, were included in
the Sales Book but approval has
not been received. The profit
included in the sales was at 25%
on cost. At the time of year end
while closing the books stock will
increase by:
(a) ~ 600
(b) ~ 480
(c) ~ 640
(d) ~ 580
[28] At the end of the year,the balance
of trade debtors was ~ 1,20,000
which included ~ 8,000 goods sent
on approval. The specified time
limit for approval was yet to expire.
Goods were sent on sale or return
basis at cost + 25%. What would
be the value' of inventories with
customers on sale or return to be
shown in Trading Account?
I (a) ~ 6,000
(b) ~ 6,200
(c) ~ 6,400
(d) None of the above.
12017 - December I 30%. Market price of such goods
as on 31.03.2017 is 5% less than
the cost price. In the Balance Sheet
[29] Under sale or return on approval
as on 31.03.2017, the inventories
basis, the ownership of goods is
with Customer Account will be
passed only. shown at
(a) When the buyer gives his (a) ~ 5,000
approval (b) ~ 4,750
(b) If the goods are not returned (c) ~ 6,500
within specified time (d) ~ 6,175
(c) Both (a) and (b) above
(d) None of the above
[30] On 31.03.2017, Goods sent on sale
or return basis amounting to
~ 6,500 were lying with the
customer, date of return has not yet
expired. Goods were sent on
approval at a price of cost plus

I
1. (c) 2. (c) 3. (b) 4. (d)
5. (b) 6. (c) 7. (d) 8. (d)
9. (b) 10. (a) 11. (d) 12. (a)
13. (a) 14. (d) 15. (d) 16. (a)
17. (a) 18. (a) 19. (a) 20. (a) r
21. (c) 22. (a) 23. (b) 24. (b)
25. (b) 26. (d) 27. (c) 28. (c)
29. (c) 30. (b) tI

Page 98 of 137

1 2008 - February 1
[8] Ram and Mohan, are partner's.
They draw for private use ~ 6,000
and ~ 4,000 respectively. Interest is
changeable @ 6 percent per
annum on drawings. What is the
interest?
(a) Ram ~ 180 and Mohan ~ 120
(b) Ram ~ 360 and Mohan ~ 240
(c) Ram ~ 30 and Mohan ~ 20
(d) None
[9] As per Section 37 of the Indian
Partnership Act, 1932, the
executors would be entitled at their
choice to the interest calculated
from the date of death till the date
of payment on the final amount due
to the deceased partner at _____ _
%p.a. :
(a) 7
(b) 4
(c) 6
(d) 12
[10] Interest on Partners capital is :
(a) An expenditure
(b) An appropriation
(c) A gain
(d) None of these
Page 99 of 137
1 2008 - June
PARTNERSHIP
1 2009 - June
[11] A and 8 are partners having capital
of ~ 50,000 and ~ 60,000
respectively. Interest on capital is
given @ 5% p.a. Profits for the
year before appropriation is ~ 4,600
provide interest on capital out of
profits. Interest allocated to
partners is:
(a) ~ 3,000 and ~ 2,500
(b) ~ 2,090 and ~ 2,509
(c) ~ 2,500 and ~ 2,091
(d) ~ 600 and ~ 300
[12] If there is no partnership deed then
interest on capital will be charged
at ....... p.a.
(a) 6%
(b) 8 %
(c) 9 %
(d) NIL
1 2009 - December
13] Interest on Drawings is:
1(a) Debited to P/L Alc
(b) Credited to P/L Alc
(c) Debited to Capital Alc
(d) None
I 12010 - June I
[14] A. 8. C are partners in a partner
ship firm. During the F.Y. 2008-09
firm earned profit amounting to ~
18,000. They distributed the profit
in the ratio of 2:2:1. But there is no
partnership deed of the firm.
Necessary adjustment entry will be:
(a) P &L Adjustment Alc
Dr. 18,000
To A's Capital Alc 7,200
To 8's Capital Alc 7,200
To cs Capital Alc 3,600
(b) P &L Adjustment Alc
Dr. 18,000
To A's Capital Alc 6,000
To B's Capital Alc 6,000
To cs Capital Alc 6,000
(c) A's Capital Alc Dr. 1,200
8's Capital Alc Dr. 1,200
To C's Capital Alc 2,400
(d) None of the above
 (a) No entry charged during the year ~ 2,000. If
(b) Liabili'ty Nc debit, partner's total drawings were ~ 20,000, the
I 2010 - December I Capital credit amount of profit transferred to his
(c) Partner's Capital Nc debit, capital account by the firm would
[16] Profit or loss on revaluation is Liability credit be:
shared among the old partners (d) None of these. (a) ~ 1,00,000
in __ ratio. I 2011 - December I (b) ~ 1,20,000
(c) ~ 1,22,000
(a) old profit sharing
(b) new profit sharing (d) ~ 1,12,000
[21] 'Salary ~ 5,000 paid to partner'.
(c) capital
(d) equal
The above item will appear in I 2012 - December I.
12011-June I (a) notes to accounts
[28] X and Yare partners. Given below
(b) revaluation alc
is detail of items appearing in the
[17] In the presence of an agreement, (c) profit and loss appropriation
Appropriation
interest on capital is to be provided alc
from ?
Account. x y
(d) trading alc (~ (~ )
Particulars
(a) profits [22] A partner has given a loan of ) 1,80
(b) capital ~ 50,000 to the firm. He wants Interest on capital 1,600 0
(c) partner's personally interest @ 15% per annum on his Interest on drawing 500 400
loan. There was no agreement or Remuneration to partners 3,00
(d) none of these.
2,000 0
[18] In the absence of an agreement, partnership deed between them.
Share of profit after
interest to be allowed on partner's The partner _______ _
Appropriation 8,000 12,000
capital is ? (a) is entitled for interest" @ 15%
What was the net profit before
(a) 8% (b) is not entitled for any interest
appropriation?
(b) 9% (c) will be given interest @ 6%
(a) ~ 17,500
(c) 6% (d) will be given interest @ 10%
(b) ~ 22,500
(d) None of these. [23] In the absence of any deed of
(a) 1/24 (c) ~ 27,500
[19] Interest on drawings is treated as: partnership -
(b) 1/12 (d) ~ 29,300
(a) Revenue (a) Only working partners are
(c) 1/10 [29] Subject to contract between the
(b) Expense entitled to Salary.
(d) 1/6 partners, interest on capital is to be
(c) Liability (b) Partners are entitled for provided out of profits only. In case
commission @ 6% of the net
(d) None of these.
[20] A partnership firm consisted of profits of the firm.
I 2012 - June I of insufficient profits (i.e. net profit
less than the amount of interest on
three partners A, S, C. If A pays (c) Partners contributing highest capital), the amount of profit is
~ 10,000 against the liability of the capital is entitled for interest [27] If opening capital of a partner in the
distributed:
firm from his private funds, then on capital @ 6% p.a. firm is ~ 1,00,000 and closing
(a) In equal ratio
what will be the entry in the books (d) Interest at the rate of 6% is to capital is ~ 2,00,000. Interest on
(b) In profit sharing ratio
of the firm? be allowed on a partner's loan capital allowed during the year
~ 10,000 and interest on drawings (c) In capital ratio
to the firm. (d) Restricted to 6% of partner's
capital

Page 100 of 137


12013 - June I (c) Equally
[30] A, Band C are partners sharing
profit and losses equally and A
paid liability of ~ 10,000 out of his
private funds. How will you record
this in the books of the firm?
(a) No entry will be made in the
books to the firm.
(b) A's capital Ale Dr. ( 10,000
To Cash Ale ( 10,000
(c) Liability Ale Dr. (10,000
To A's Capital Ale ~ 10,000
(d) Liability Ale Dr. (10,000
To Cash Ale ~ 10,000
[31] Aryan and Gauri were partner in a
firm sharing profits and losses in
the ratio of 2 : 1. Their capital was
~ 90,000 and ~ 60,000
respectively.
They were entitled for interest on
capital @ 12% p.a. The firm earned
a profit of ~ 84,000 after allowing
interest on capitals. Profits will be
distributed among them will be:
(a) ~ 44,000; ~ 22,000
(b) ~ 56,000; ~ 28,000
(c) ~ 50,400; ~ 33,600
(d) ~ 39,600; ~ 26,400
12014 - June 1
[32] In a partnership firm, in case of
insufficient profit i.e. net profit less
than the amount of interest on
capital, the amount of profit is
distributed:
(a) In the profit sharing ratio
(b) In the ratio of capital
Page 101 of 137
(d) None of the above.
[33] Kapur and Sharma are partners in
a partnership firm. Calculate the
interest on drawings made by
Kapur and Sharma @10% p.a. for
the year ending 31 st December
2013. If, Kapur withdrew f 2,000
per month in the beginning
whereas Sharma withdrew same
amount at the end of every month.
(a) Kapur - f 2,400, Sharma
f 2,400
(b) Kapur - ~ 1,100, Sharma -
~ 1,300
(c) Kapur - ~ 1,200, Sharma -
~ 1,200
(d) Kapur - ~ 1,300, Sharma -
~ 1,100
[34] When partnership deed is not
registered a partnership firm is
(a) Deemed 'to be an illegal
association and is disallowed
to carry on business.
(b) Allowed to carryon business
subject to payment of penalty.
(c) Allowed to carry on business
subject to certain disabilities.
(d) Allowed to carryon business
only with the special
permission of the registrar of
firms.
1
I 2014 - December 1
[35] Karan, Bittoo and Shravan are
partners in a partnership firm.
Karan withdraws ~ 5,000 per month
in the beginning whereas Sittoo
and Shravan withdrew ~ 2,000 and
~ 3,000 respectively at the end of
every month. Calculate the interest
on drawings of Karan, BiUoo and
Shravan @ 10% p.a. for the year
ending on 31st March, 2014.
(a) Karan - ~ 6,000, BiUoo
~ 2,400, Shravan - ~ 3,600
(b) Karan - ~ 2,750, Bittoo -
~ 1,300, Shravan - ~ 1,950
(c) Karan - ~ 3,000, Bittoo -
~ 1,200, Shravan - ~ 1,800
(d) Karan - ~ 3,250, Blttoo -
~ 1,100, Shravan - ~ 1,650
[36] In the absence ot ' proper
agreement, representatives of
deceased partner are entitled to
receive
(a) Profits till date, Goodwill, Joint
Life Policy, Interest on Capital
and Share in revalued assets
and liabilities.
(b) Profit till date, Goodwill, Joint
Life POlicy, Capital and Share
in revalued assets and
liabilities.
(c) Capital, Goodwill, Joint Life
Policy, Interest on Capital and
Share in revalued assets and
liabilities.
(d) Profits till date, Goodwill,
Capital, Interest an Capital
and Share in revalued Assets
and Liabilities.
12015 - June I
[37] X and Yare partners sharing
profits and losses in the ratio of
their effective capital, had
~ 1,00,000 and ~ 60,000
respectively in their Capital
Account as on 1 st Jan, 2014.
X introduced a further capital of
~ 10,000 on pt April, 2014 and
another ~ 5,000 on pt July, 2014.
On 30111Sep, 2014 X withdrew
~ 40,000.
On 1st July, 2014 Y introduced
further capital of ~ 30,000. The
partners drew the following
amounts in anticipation of profits:
X drew ~ 1000 p.m. at the end of
each month and Y withdrew
~ 1,000 on 30th June, 2014 and
~ 5,000 on 1st Sept, 2014. Date of
closing 31.12.2014. Calculate profit
and loss ratio on the basis of their
effective capital:
(a) 1: 1
(b) 4:3
(c) 2: 3
(d) 5: 3
[38] In the absence of "Partnership
deed" partners are entitled to
(a) interest on capital
(b) interest on loans
(c) profit share in capital ratio
(d) salary
1 2015 December
[39] X, Y and Z are partners in a firm. At
the time of division of profit for the
year there were dispute between
the partners. Profits before interest
on partners loan was ~ 6000. Y
determined interest @ 24% p.a. on
his loan of ~ 80,000. There was no
agreement on this point. Calculate
the amount payable to X, Y and Z
respectively.
(a) ~ 2,000 to each partner
(b) Loss of ~ 4,400 for X and Z
and Y will take home ~ 14,800
(c) ~ 400 for X, ~ 5,200 for Y and
~ 400 for Z
(d) ~ 2,400 for each partner.
[40] Suraj, Gulab and Kamal are
partners in a firm. They have no
agreement in respect of profit
sharing ratio and interest on
capital. Suraj who has contributed
maximum capital demands interest
on capital @ 10% p.a. and the
share of profit in the capital ratio.
But Gulab and Karnal do not agree.
In that case how shall you settle
the case?
(a) Interest on capital will be
payable @ 10% p.a. and
share in profits distributed
equally.
(b) Interest on capital will be
payable @ 6% p.a. and share
in profits distributed equally.
Page 102 of 137
1 (c) Interest on capital will be
payable @ 6% p.a. and share
in profits distributed in capital
ratio.
(d) No interest on capital will be
payable and share in profits
distributed equally.
[41] Shukh and Shanti are partners with
the capital of ~ 50,000 and
~30,OOO
respectively. The profit earned by
the firm is ~ 6000. Interest payable
on capital is 10% p.a. subject to the
provisions of Partnership Act. Find
the interest on capital for both the
partners.
(a) ~ 5000 and ~ 3000
(b) ~ 3000 and ~ 3000
(c) ~ 3750 and ~ 2250
(d) ~ 3000 and ~ 1800
12016 - June
1[42] Net profit of Ex Ltd. before allowing
remuneration and commission to
Mehta, the Manager was
~ 7,02,000. Mehta was entitled to a
monthly remuneration of ~ 6,000
plus a commission of 5% of net
profits after changing remuneration
and such commission. Find out the
total amount payable to Mehta.
(a) ~ 72,000
(b) ~ 1,02,000
(c) ~ 30,000
(d) ~ 6,000
12017 - June
[43] At the end of the year 2016-17,
Aman's capital was ~ 5,00,000.
The profit for the year was
~ 1,00,000. During the year he had
drawn ~ 50,000 from the business
for personal use. The interest on
opening capital @ 10% for the year
should be:
(a) ~ 50,000
(b) ~ 5,50,000
(c) ~ 45,000
(d) ~ 55,000
[44] Interest on Capital will be paid to
the partners if provided for in the
agreement but only from ______ .
(a) reserves
(b) accumulated profits
(c) goodwill
(d) current profits
[45] Fluctuating capital account is
credited with ____ _
(a) interest on capital
(b) profit for the year
(c) salaries or remuneration of the
partners
(d) all of the above
1 1 2017 - December ]
[46] John and Deepak are partners in a
firm. The firm's reported profit for
the year 2016-17 is ~ 14,200.
Deepak claimed interest @ 12%
p.a. on his loan of ~ 70,000 to the
firm. However, there was no written
agreement. Find out the amount
payable to John and Deepak.
(a) John ~ 5,000 and Deepak
~ 9,200
(b) John ~ 2,900 and Deepak
~ 11,300
(c) John ~ 7,100 and Deepak
~ 7,100
(d) None of the above
[47] Ram and Karim are partners with
the capital of ~ 60,000 and
~ 50,000 respectively. As per
Partnership Agreement, they are
entitled to interest on capital @12%
per annum. Find the interest on
capital for both the partners when
the profits earned by the firms is
~ 9,240
(a) Ram ~ 7,200 and Karim
~ 6,000
(b) Ram ~ 3,600 and Karim
~ 3,000
(c) Ram ~ 4,620 and Karim
~ 4,620
(d) Ram ~ 5,040 and Karim
~ 4,200
 I Answer
·1
1. (b) 2. (a) 3. (c) 4. (d)
5. (a) 6. (a) 7. (d) 8. (a)
9. (c) 10. (b) 11. (b) 12. (d)
13. (c) 14. (c) 15. (d) 16. (a)
17. (a) 18. (d) 19. (a) 20. (b)
21. (c) 22. (c) 23. (d) 24. (c)
25. (c) 26. (b) 27. (d) 28. (c)
29. (c) 30. (c) 31. (b) 32. (b)
~.~ M.~ ~.~) M.~
37. (b) 38. (b) 39. (c) 40. (d)
41. (c) 42. (b) 43. (c) 44. (d)
45. (d) 46. (a) 47. (d) .

Page 103 of 137

 Unit: 2 - Treatment of Goodwill in Partnership ...

I 2008 -'June I
[14] A firm earned net profits during last
3 years:
2004 ~ 17,000
200S ~ 20,000
2006 ~ 23,000
The Capital employed ~ 80,000.
Return on capital employed 1S%.
Calculate the value of goodwill on
the basis of two years purchase of
average super profits earned:
(a) ~ 16,000
(b) ~ 20,000
(c) ~ 30,000
(d) ~ 40,000
[15] Same as Q 9 [Aug. 07]

I 2008 - December I
[16] Profits of last three years were
~ 6,000, ~ 13,000 and ~ 8,000.
Calculate goodwill for two years of
purchase,
(a) ~ 81,000
(b) ~ 27,000
(c) ~ 9,000
(d) ~ 18,000

Page 104 of 137

 [17] An asset which is not fictitious but appears in 8/S. Which accounts (a) ~ 69,600 [27] A and 8 together are sharing 213'd
intangible in nature, having will be affected if they decide to (b) ~ 1,48,000 of the profits of the firm. C and D
realizable value __ write off goodwill immediately? (c) ~ 4,40,000 are sharing profits in the ratio of 3 :
(a) machinery (a) A Ale and 8 Alc (d) ~ 48,000 2. Find the ratio of A : 8 : C : D :
(b) building (b) A Alc and C Alc (a) 4: 3: 3: 2
(c) furniture (c) 8 Alc and CAlc. 2012 - December (b) 7: 7: 6: 4
(d) goodwill (d) None (c) 2.5: 2.5 : 3: 2
[21] What does not affect the goodwill [24] Sacrificing ratio is used to (d) 5: 5: 3: 2
1 2009 - June 1 of the firm?
distribute on admission
·[18] When there is no Goodwill Account
(a) 8etter customer's service
of a new partner: I 2013 - June I
(b) Location of firms (a) goodwill
in the books and goodwill is raised, (c) Personal reputation
[28] A and 8 share profits and losses in
(b) reserves
__ account will be debited. (d) None of these. (c) profits on revaluation the ratio 2: 1.
(a) partner's capital alc
(b) goodwill alc 1 2011 - December I (d) unrecorded assets
[25] On the admission of a new partner,
C is admitted with 1/4th share in
profits
(c) cash alc
(d) reserve alc [22;1 Which of the following statement is it is decided that goodwill of the C acquired 3/4thof his share in
firm be valued at 2 years purchase profits from A and 1/4th of his share
false?
1 2010 - December I (a) Partnership deed in the mutual
of average profits for the past 3
years which amounted to ~ 8,620,
from 8. New profit and loss sharing
ratio will be:
[19] Ravi and Suraj are partners having agreement between partners.
~ 9,430 and ~ 11,800 respectively. (a) 2: 1 : 1
the profit sharing ratio 3:2 in a firm. (b) The liability of all the partners is
The value of goodwill is: (b) 23:13:12
They admitted Tarun in partnership jointly and severally unlimited
(a) ~ 19,500 (c) 3: 1 : 1
(c) In the absence of partnership
and new profit sharing ratio of Ravi, (b) ~ 19,900 (d) 1: 1 : 1
agreement, partners share
Suraj and Tarun was decided at profits in capital ratio. (c) ~ 10,000 [29] Rohan and Sohan are partner, in a
2:2:1 respectively. Tarun brings in (d) Profit and Loss appropriation (d) None of the above firm sharing profit and losses in the
~ 30,000 as goodwill. What would account is prepared to [26] X and Yare partners sharing ratio of 3 : 1, A new partner Mohan
be the share of Ravi in goodwill? show profits and losses in the ratio of is admitted and he brings ~ 40,000
the distribution of profits 3 : 1. They admit Z as a partner as goodwill. New profit sharing
(a) ~ 30,000
among who pays ~ 4,000 a goodwill. The after admission is equal. The
(b) ~ 18,000'
partners. new profit sharing ratio being 2 : 1 : amount of goodwill to be shared by
(c) ~ 6000
(d) None of the above 1. The goodwill will be credited to: old partners as :-
I 2012 - June I (a) V's capital Alc by ~ 4,000 (a) Equally ~ 20,000 each
12011 -June I (b) X's capital Alc by ~ 4,000 (b) Rohan ~ 30,000 and Sohan
[20] If old ratio between A & 8 is 1: 1 & [23] What would be the amount of (c) X's capital Alc by ~ 3,000 and ~ 10,000
new ratio between A, 8 & C is 4:3:2 actual average profit if goodwill is V's capital Alc by ~ 1,00l) (c) Rohan ~ 40,000 and Sohan
Recorded Good will of ~ 90,000 valued ~ 98,000 at 5 years (d) No adjustment will be made ~ Nil
purchase of super profit, normal (d) Rohan will receive ~ 50,000
rate of return is 10% and average and Sohan will pay to
capital employed is ~ 5,00,000 ? Rohan
~ 10,000.

Page 105 of 137

[30] The total capital of a partnership
firm is ~ 6,00,000 and annual
average profits of the firm are
~ 1,50,000. The normal rate of
return in the business is considered
at 20%. Find out the value of the
goodwill at 3 years purchase of
super profit. ,
(a) ~ 60,000
(b) ~ 90,000
(c) ~ 75,000
(d) ~ 50,000
[31] Capital employed by M/s POR is ~
5,00,000. Rate of normal profit is
20%. Past four year's profits were
as follows:
Year .Profit (~)
1 1,20,000
2 1,80,000
3 1,50,000
4 2,00,000
Calculate value of goodwill at 2
years purchase using super profit
method:
(a) ~ 3,25,000
(b) ~ 1,62,500
(c) ~ 3,12,500
(d) ~ 1,25,000
I 2013 - December
[32] A and B are equal partners. They
admit C as a partner with 1 17th
share. What is the new profit
sharing ratio of A and B?
(a) 617: 1/7
(b) 317: 3/7
(c) 4/7: 217
(d) 217: 417
rate of interest on investment 10%;
rate of risk return on capital
invested 2%, Remuneration of
alternative employment of the
proprietor (if not engaged in
business) ~ 60,000 p.a. calculate
Page 106 of 137
1 2014 - June I (c) All partner's capital account (b) Goodwill not brought will be
will be credited by .~ 1,20,000 adjusted to the extent of
[33] A and B are in partnership sharing in profit sharing ratio. ~ 5,000 in sacrificing ratio
profits and losses in the proportion (c) (A) and (B) both
(d) None of the above.
of 3:1 respectively. On 1.4.2013 [35] When Goodwill is withdrawn by the (d) Neither (A) nor (B)
they admitted C into partnership on Partners ...... account is credited. [38] Mary and Lary were partners
the following terms: (a) cash sharing profits and losses in ratio of
(i) C to purchase one-third of the (b) partner's capital 5 : 3. Mary was admitted to the
goodwill for ~ 2,000 by paying (c) partner's loan firm. Mary gave 1i4'h of her Share
and Lary gave 1/1 oth of her share
cash. (d) goodwill
to Harry.
(ii) Future profits and losses are [36] Neeraj and Gopi are partners in a
firm with capitals of ~ 5,00,000 New profit sharing ratio would be:
to be shared by A, Band C
each. They admit Champak as a (a) 20:15:9
equally.
partner with 1 14th share in the (b) 13: 8 : 9
Set out the entry relating to the
profits of the firm. Champak brings (c) 75: 48 : 37
above arrangement in the firm's
~ 8,00,000. The Profit and Loss (d) None of the above
journal:
Account showed a credit balance
(a) Cash/Bank Alc Dr. 2,000 [39] A partnership firm earns profit of
To A's Alc 2,000 of ~ 4,00,000 as on the date of ~ 3,72,000 during the financial year
(b) Cash/Bank Alc Dr. 2,000 admission. The value of hidden 2013-14. The normal rate of return
goodwill is: in the same industry is 12%. The
To Goodwill Alc 2,000
(a) ~ 14,00,000 value of total assets (Excluding
(c) Cash/Bank Alc Dr. 2,000
(b) ~ 18,00,000 goodwill) and total liabilities are
B's Alc Dr. 500
(c) ~ 10,00,000· ~ 68 lacs and ~ 42 lacs
To A's Alc 2,500
(d) Nil respectively. Compute the value of
(d) Cash/Bank Alc Dr. 2,000
goodwill of the firm according to the
To A's Alc 1500
To B's Alc 500 I 2014 - December I capitalization of goodwill method.
[34] Radha, Seeta and .Laxmi were (a) ~ 5,00,000
(b) ~ 3,12,000
partners sharing profits and losses [37] A and B are partners sharing profit
in the ratio of 2:3:5. Seeta retired and loss in the ratio of 3 : 2. They (c) ~ 60,000
I on 1 st June, 2013 and Goodwill of take C as the new partner who is (d) ~ 2,67,360
the firm is to valued at ~1 ,20,000 supposed to bring ~ 35,000 against
on that date, Goodwill alc is to be capital and ~ 15,000 against 12015 - June I
raised. What will be the treatment goodwill. New profit sharing ratio is
for goodwill? 1 : 1 : 1. C is able to bring ~ 45,000 [40] The profits and losses of Mr.
(a) Revaluation account will be only. How this will be treated in the Rathore for the last year are 2011-
credited by ~ 1,20,000. books of the firm? 12 profit ~ 4,00,000; 2012-13 profit
(b) Seeta's Capital Alc will be (a) A and B will share goodwill ~ 3,60,000; 2013-14 Loss ~ 60,000;
credited by ~ 36,000. brought by C as ~ 8,000, 2014-15 Profit ~ 5,00,000; capital
~ 2,000. invested ~ 15,00,000. The market
the value of goodwill on the basis
(c) ~ 6,00,000 (a) 3: 2 : 1
of 5 year's purchase of super profit
(d) ~ 3,00,000 (b) 9: 8: 3
of the business based on the
[41] X and Yare in partnership sharing (c) 9: 7: 5
average profits of the last four
profits and losses in the ratio of (d) 9: 6: 5
years:
3:2. They admitted Z as 1f.I partner.
(a) ~ 4,50,000
(b) ~ 7,50,000 Find out new ratio. I 2015 - December I

[
[54] Capital employed by a partnership
firm is ~ 6,00,000, Its average profit
is ~ 1,12,000. Normal rate of return
is 14%. Find out the value of the
goodwill of the firm by using
capitalisation method.
(a) ~ 2,00,000
(b) ~ 1,00,000 .
(c) ~ 50,000
(d) ~ 28,000
42] K, Land M are partners. The
relative profit sharing ratio between
K and L is 3 : 2 and between Land
M is also.s : 2. Find out the profit
sharing ratio between K, Land M.
(a) 9: 6: 6
(b) 9: 6: 3
(c) 9: 6: 2
(d) 9: 6: 4
[43] A, Band C are partners sharing
profits in the ratio of 8 : 6 : 4. D is
admitted for 4/18thshare of profits
and he brings ~ 30,000 as his
Page 107 of 137
. capital and 10,000 for his share
of
goodwill. The new profit sharing
ratio between partners will be 6
: 4:
4 : 4. Goodwill amount will be
credited in capital accounts of:
(a) A only
(b) A, Band C (Equally)
(c) A and B (Equally)
(d) A and C (Equally)
I 2016 - June
[44] Find the goodwill of the firm using
capitalisation method from the
following information ..
Total capital employed in the firm
~ 4,00,000. Reasonable Rate of
Return 15%
Profit for the year ~ 6,00,000.
(a) ~41,00,000
(b) ~ 6,00,000
(c) ~ 36,00,000
(d) ~ 21,00,000
[45] A and B are partner in a firm with
capital of ~ 5,00,000 each. They
admit 'C' as a partner with 1/4th
share in the profits of the firm. C
brings ~ 8,00,000. The Profit and
Loss Account showed a Credit
Balance of ~ 4,00,000 as on the
date of admission. The value of
hidden goodwill will be:
(a) ~ 14,00,000
(b) ~ 18,00,000
(c) ~ 10,00,000
(d) None of above.
[46] Pee and Que share profits and
losses in the ratio of 5:3. They
admit A as for 1/5thshare of profit.
The ratio of sacrifice is:
(a) 5:3
(b) 4:3
(c) 1 :1
(d) 3:5-
I 2016 - December
[47] Akash and Vikas are partners with
I capitals of ~ 60,000 each. Mukesh
is admitted and he brings ~ 80,000
as capital and gets 1/51hshare in
the firm. What is the inherent
goodwill?
(a) None
(b) ~ 2,00,000
(c) ~ 40,000
(d) ~ 4,00,000
[48] A ana B share profits in the ratio of
2 : 3. C joined the firm A gives 1I3'd
of his share, while B gives 1/4th of
his share in favour of C. What is
the new profit sharing ratio?
(a) 17:27:37
(b) 12: 27 : 17
. (c) 17:27:17
. (d) None of the above.
[49] A,B,C and D are partners sharing
profits & losses equally. After one
year they decided to share profits
in the ratio of 2 : 2 : 1 : 1. D's
sacrifice is:
(a) 1/24
(b) 1/12
(c) 1/10
(d) 1/6
[50] A, Band C are partners sharing
profits in the ratio 2 : 2 : 1. On
retirement of B, Goodwill was
valued at ~ 30,000. Find the
contribution of A &C to compensate
B.
(a) ~ 20,000 and ~ 10,000
(b) ~ 8,000 and ~ 4,000
(c) ~ 10,000 and ~ 20,000
I (d) ~ 4,000 and ~ 8,000
[51] Radha and Gopi are partners with
~ 5,00,000 capital each. They
admitted Champa for 1/4Jhshare
with ~ 8,00,000 capital. The P&L
credit balance is ~ 4,00,000. Find
the amount of hidden goodwill:
(a) ~ 10,00,000
(b) ~ 12,00,000
(c) ~ 8,00,000
(d) ~ 16,00,000
I 2017 - June . I
[52] Capital employed by a partnership
firm is ~ 6,00,000. Its average profit
is ~ 1,05,000. Normal rate of return
is 15%. Find the goodwill of the
firm using capitalization method.
(a) ~ 1,00,000
(b) ~ 90,000
(c) ~ 1,10,000
(d) None of the above.
I 2017 - December I
[53] Goodwill brought in by incoming
new partner is shared by the old
partners in their __ ratio.
(a) Old Profit Sharing
(b) New Profit Sharing
(c) Sacrificing
(d) Gaining
 1. (b) 2. (d) 3. (a) 4. (d)
A 5. (d)
9. (c)
6. (b).
10. (b)
7. (b)
11. (d)
8. (b)
12. (a)
13. (a) 14. (a) 15. (c) 16. (d)
n 17. (d)
21. (d)
18. (b)
22. (c)
19. (a)
23. (a)
20. (a)
24. (a)
s 25. (b)
29. (d)
26. (b)
30. (b)
27. (d)
31. (d)
28. (b)
32. (b)
33. (c) 34. (c) 35. (a) 36. (b)
w 37. (c)
41. (d)
38. (d)
42. (d)
39. (a)
43. (c)
40. (d)
44. (c)
e 45. (c)
49. (b)
46. (a)
50. (b)
47. (b)
51. (a)
48. (b)
52. (a)
53. (c) 54. (a)
r \')

Page 108 of 137

Unit: 3 Admission of New Partner

[18] A, B, C are equal partners, they I 2008 - December I [25] A and B are partners C is admitted
wanted to change the profit sharing [21] Reserve appearing in the Balance with 1 15th share C brings
ratio into 4 : 3 : 2. They raised the sheet will be divided among '{ 1,20,000 as his share towards
goodwill to '{ 90,000 but want to capital. The total networth of the
partners during admission in __
write it off immediately. The firm is:
effected accounts will be : ratio. (a) '{ 1,00,000
(a) C's Capital Alc Dr. 10,000 (a) old (b) '{ 4,00,000
To A's Capital Ale 10,000 (b) new (c) '{ 1,20,000
(b) B's Capital Alc Dr. 10,000 (c) sacrificing (d) '{ 6,00,000
To A's Capital Ale 1 0,000 (d) gaining [26] A and B share profits in the ratio of
(c) C's Capital Alc Dr. 10,000 [22] X and Yare partners sharing 3:2. A's capital is '{ 48,000 B's
To B's Capital Alc 10,000 profits equally. Z was admitted for capital is '{ 32,000. C is admitted
(d) A's Capital Ale . Dr. 10,000 1/7th share. Calculate New Profit for 1/5th share in profits. What is
To C's Capital Ale 10,000 Sharing Ratio. the amount of capital which C
[19] A, B, C are partners sharing profits (a) 2:3:1 should bring?
in ratio of 3 : 2 : 1. They agree to (b) 3:3:1 (a) '{ 20,000
admit D into the firm. A, B, and C (c) 6:5:2 (b) '{ 16,000
agreed to give 1/3 rd, 1/6th, 1/9th (d) 1:1:1 (c) '{ 1,00,000
share of their profit. The share of [23] A, B, C, D are partners sharing (d) '{ 64,000
profit of D will be: their profits and losses equally.
(a) 1/10 They Change their profit sharing I 2009 - December I
(b) 13/54 ratio to 2: 2 : 1 : 1. How much will
(c) 12154 C sacrifice? [27] A and B share profits in the ratio of
(d) 10/55 (a) 1/6 3:4. C was admitted for 1/5th
[20] A and B are partners sharing (b) 1/12 share. Calculate the new profit
I 2008 - June I profits and losses in ratio of 3: 2. (c) 1/24 sharing ratio.
A's Capital is '{ 30,000 (d) None (a) 3:4:1
B's Capital is '{ 15,000 (b) 12:16:7
[17] Rand S are partners sharing
profits in the rario of 5 : 3. T joins They admit C and agreed to give I 2009 - June I (c) 16:12:7
the firm. R gives 1/4 th of his share 1 15th share of profits to him. (d) None of these
and S gives, 1/5 th of his share to How much C should being in [24] A and B share profits equally. They [28] A and B carry on business and
the new partner. Find out new towards his Capital? admit C with 1/7th share. The new share profits and losses in the ratio
ratio: (a) '{ 9,000 profit sharing ratio of A and B is of 3:2. Their respective capitals are
(a) 75: 48 : 37 (b) '{ 12,000 (a) 4/7, 1/7 . '{ 1,20,000 and '{ 54,000. C is
(b) 45: 32 : 27 (c) '{ 14,500 (b) 3/7,3/7 admitted for 1/3rdshare in profit
(c) 13: 7: 4 (d) ,{11,250 (c) 217,2/7 and brings '{ 75,000 as his share of
(d) None (d) None capital. Capitals of A and B to be
adjusted according to C's share.
Calculate the amount refunded to
A.

Page 109 of 137

-,----------~-----------
(a) ~ 30,000
r (b) ~ 32,000
( (c) ~ 15,000
(d) ~ 28,000
[29] On account of admission, the
assets are revalued and liabilities
. are reassessed in ________ Account.
(a) partner's capital alc
(b) revaluation alc
(c) realisation alc
(d) balance sheet
[30] The opening balance of Partner's
Capital Account is credited with:
(a) Interest on Capital
(b) Interest on Drawings
(c) Drawings
(d) Share in Loss
! 2010 - December !
[31] X and Y shares profit I 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
!2011-June !
[32] A and B are partners C is admitted
with a guarantee profit of ~ 10,000
from A with a new profit sharing
ratio of 3:2:1. Profit for the year
2009-10 is ~ 1,20,000. How much
profit C will get?
(a) ~ 10,000
(b) ~ 20,000
(c) ~ 30,000
(d) None of these.
Page 110 of 137
I 2011 - December
[33] On the admission of new partner,
which one of the following lying in
the balance sheet should . be
transferred to the capital accounts
of the old partners in the old profit
sharing ratio?
(a) Bank Overdraft
(b) General Reserve
(c) Bill payable
(d) Outstanding Expenses.
[34] Which account will be prepared at
the time of admission of a new
partner for giving effect of
revaluation of assets and liabilities
without changing the value of
assets and liabilities of old Balance
Sheet?
(a) P & L Adjustment Alc
(b) Revaluation Alc
(c) Memorandum Revaluation Alc
(d) Realisation Alc
12012 - June
[35] Sacrificing Ratio is computed at the
time of :-- __ -:.
(a) retirement of a partner
(b) admission of a partner
(c) insolvency ora partner
,(d) death of a partner.
[36] Rahul and Bajaj are partners
sharing profit and loss in the ratio
of 1 : 2. Birla is admitted in
partnership for 1/2 share of profit
and their new profit sharing ratio is
1 : 2: 3.
)
I Their sacrificing ratio will be: (a) 17:26:17
(a) 1: 3 (b) 75:38:37
(b) 2; 1 (c) 16:27:17
(c) 3: 1 (d) None of these
(d) 1: 2 [40] At the time of admission of a
I 2012 - December I partner in a firm, the journal entry
. for an unrecorded investment of
[37] A and B are partners sharing profit ~ 30,000 will be :
and loss in the ratio of 5 : 3. C is (a) Revaluation Ale Dr. 30,000
To Unrecorded Investment Ale 30,000
admitted and on the date of
(b) Unrecorded Investment Ale Dr. 30,000
admission brings in cash ~ 70,000 To Revaluation Ale 30,000
as capital and ~ 48,000 as (c) Partner's Capital Ale Dr. 30,000
goodwill. New profit sharing ratio of To Unrecorded Investment Ale 30,000
A, Band Care 7 : 5 : 4. The (d) Unrecorded Investment Ale Dr.30,000
To Partner's Capital Ale 30,000
sacrificing ratio amongst A and S
[41] If an asset was earlier revalued
would be'
upward and then later on it was
(a) 1: 3
(b) 3: 1 revalued downward, then the
(c) 5: 4 downfall to the extent of earlier
(d) 3: 5 appreciation is:
(a) Credited to Revaluation
I 2013 - December I Reserve Account
(b) Debited to Revaluation
[38] Which asset is compulsorily
I revalued at the time of admission
Reserve Account
(c) Credited to Profit and Loss
of a partner? Account
(a) Goodwill (d) Debited to Profit and Loss
(b) Land and Building Account
(c) Plant and Machinery [42] A and B are partners sharing
(d) Furniture and Fittings. profits in the ratio of 5:3. They
I 2014 - June ! admitted C for 1 15th share of profits,
[39] Angola and Rangoli are partners for which he paid ~ 1,20,000
sharing profits and losses in the against capital and ~ 60,000
ratio of 2:3. Mangola joins the firm, against goodwill. Find the capital
balances for each partner taking
Angola gives 1/3rdof his share and
C's Capital as base capital:
Rangoli gives . 1 14th of her share to
(a) 3,00,000: 1,20,000: 1,20,000
Mangola. The new profit sharing
(b) 3,00,000: 1,20,000: 1,80,000
ratio will be : (c) 3,00,000: 1,80,000: 1,20,000
(d) 3,00,000: 1,80,000: 1,80,000
 1

1 2014 - December (a) ~ 50,000 [48] X and Yare in partnership sharing (a) ~ 24,000
(b) ~ 45,000 profits and losses at the ratio 3:2. (b) ~ 80,000
[43] Depreciation fund at the time of (c) ~ 36,000 They take Z as a new partner for (e) ~ 18,000
admission of a partner is: (d) None of the three. 1/5thshare in profit. Z will receive (d) t 30,000
(a) Not to be transferred his share of profit from X only. New
anywhere I 2015 -December _uul profit sharing ratio will be __ I 2017 - December I
(b) Transferred to old partners (a) 12:8:5·
capital account in old [46] P and Q are partner, sharing profits [50] On admission of a partner,
in the ratio 7 : 2. They admit R with (b) 2: 2 : 1
profit unrecorded stock of ~ 10,000 and
1/5thshare in profits which he (c) 2: 1 : 1
sharing ratio unrecorded liability of claim, against
acquires equally from both i.e. (d) 1: 1 : 1
(c) Transferred to Profit &Loss the firm of ~ 5,000 will be recorded
Appropriation Alc 1/10thfrom P and 1/1 Oth from Q. [ 49] Tom and Jerry are partners sharing
in
(d) Transferred to old partner's Now, profit sharing ratio will be: profits and losses in the ratio of 3:2
(a) Capital Alc
capital Alc in sacrificing (a) 61: 11 : 18 (Tom's capital is ~ 70,000 and
Jerry's capital is ~ 50,000). They (b) Realisation Ale
ratio. (b) 11: 61 :. 18
admitted Shiva and agreed to give (c) Revaluation Ale
(c) 18: 11 : 61 (d) Profit and Loss Appropriation
12015 - June I (d) None of the above. 1/5thshare of profits to him. How
much Shiva should bring in Ale
[44] Amit and Ani! are partners of a I 2017 - June I towards his capital?
partnership firm sharing profits in
the ratio of 5 : 3 with capital of [47] P and Q are the partners in a firm AAA
~ 2,50,000 and ~ 2,00,000 sharing profits and losses in the
. respectively. Atul was admitted on -ratio 3:2 with capitals of ~ 1,50,000 ANSWER 1(C)2. (d) 3. (a) 4. (c)
the following terms, Atul would pay and ~ 1,00,000 respectively. They 5. (b) 6. (a) 7. (c) 8. (b)
~ 50,000 as capital and ~ 16,000 as admitted R as a partner with 9. (a) 10. (b) 11. (a) 12. (c)
goodwill for 1/5thshare of profit. ~ 90,000 as capital for 1/4th share 13. (a) 14. (a) 15. (b) 16. (b)
Find the balance of capital in profits of the firm. They adjust 17. (a) 18. (d) 19. (b) 20. (d)
accounts after admission of Atul: the capitals of other : partners 21. (a) 22. (b) 23. (b) 24. (b)
according to R's capital and his 25. (d) 26. (a) 27. (b) 28. (a)
(a) ~ 2,60,000; ~ 2,06,000; ~ 50,000
share in the business. How much 29. (b) 30. (a) 31. (a) 32. (b)
(b) ~ 2,20,000; ~ 1 ,82,000; ~ 66,000·
cash will be brought by P? 33. (b) 34. (c) 35. (b) 36. (d)
(c) ~ 2,92,500; ~ 2,25,500; ~ 50,000
(a) ~ 8,000 37. (b) 38. (a) 39. (c) 40. (b)
(d) ~ 2,82,500; ~ 2, 19,500; ~66,000.
(b) ~ 9,000 41. (b) 42. (c) 43. (a) 44. (a)
[45] X and Yare partners sharing (c) ~10,000 45. (a) 46. (a) 47. {d) 48. (b)
profits and losses in the ratio of
(d) ~ 12,000 49. (d) 50. (c)
2:1. Their capital on 3pt March,
2014 was ~ 1,05,000 and ~ 75,000 '4-
respectively. Z was admitted as a
new partner on April 1 st, 2014 for
1 15thshare. He contributes
~ 20,000 as goodWill. He brings his
capital in profit shannq ratio. What
will be his share of capital? .

Page 111 of 137

 1 2008 - December I 2010 - December 1
[11] X, Y ,Z are partners sharing profits
in the ratio 3:4:3 Y retires, and X
I 2008 - February I and Z share his profits in equal
[8] A, B, and C are partners with ratio. Find the new ratio of X and Z.
capitals of ~ 1 ,00,000, ~ 75,000 (a) 1:2
(b) 2:1
and ~ 50,000. On C's retirement his
(c) 3:1
share is acquired by A and B in the . (d) 1:1
ratio of 6 : 4. Gaining ratio will be :
1 2009 - June I
(a) 3: 2
(b) 2: 2 [12] X, Y, Z are equal partners in a firm.
(c) 2: 3 Z retires from the firm. The new
(d) None profit sharing ratio between X and
[9] At the time of retirement of a Y is 1:2 Find the gaining ratio.
partner, firm gets __ from the (a) 3:2
insurance company against the (b) 2:1
joint life policy taken jointly for all (c) 4:1
the partners: (d) Only B gains by 1/3
(a) policy value for the retiring
partner and surrender value 2010 - June
for the rest
(b) surrender value [13] A, Band C were partners in a firm
(c) policy amount sharing profits and losses in the
(d) none of these ratio of 2:2:1. The capital balances
of A, Band C are ~ 50,000,
2008 - June I ~ 50,000 and ~ 25,000 respectively.
B declared to retire from the firm on
[10] A, Band C are partners sharing 151 April, 2008. Balance in reserve
profits equally. A retires and . on the date was ~ 15,000. If
goodwill appearing in the books at goodwill of the firm was valued as
~ 3000 is valued at ~ 6000. A will ~ 30,000 and profit on revaluation
get credit of:
(a) ~ 2,000
was ~ 7,050, then what amount will
be transferred to the loan account
(b) ~ 3,000 of B.
(c) ~ 500 (a) ~ 70,820
(d) ~ 1,000 (b) ~ 50,820
(c) ~ 25,820
(d) ~ 20,820
Page 112 of 137
[14] 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
2011 -June
[15] When the goodwill is raised at its
full value and written off at
retirement of a partner, the
remaining partners share goodwill
in
(a) old profit sharing Ratio
·1 (b) new profit sharing Ratio
(c) gaining Ratio
(d) equally.
[16] If the firm gets dissolved due to
retirement of one the partners, then
what amount of JLP will be credited
in partner's capital Alc?
(a) Maturity value
(b) Surrender value
(c) Policy value
(d) None of these.
2012 - June I
[17] P, 0 and R were partners sharing
profit and losses in the ratio of
2 : 2 : 1 'respectively, with the
balance of capital ~ 75,000,
~ 50,000 and ~ 25,000 respecti-
vely on 151April 2011. 0 decided to
retire from the firm on 3151March
2012. On that day the balance in
the reserve account was ~ 12,000.
If the goodwill of the firm was
valued as ~ 30,000 and profit on
revaluation was ~ 10,000, then
what amount would be transferred
to the loan account of O?
(a) ~ 70,800
(b) ~ 95,800
(c) ~ 60,400
(d) ~ 35,400
I
I 2012 - December I
[18] A, Band C are partners in a firm
sharing profits and losses in the
ratio of 5 : 3 : 2 respectively. The
balance of capital is ~ 50,000 for A
and B each and ~ 40,000 for C. B
declares to retire from the tirm. The
goodwill of the firm is valued at
~ 30,000 and profit on revaluation
of assets is ~ 5,000. The firm also
has a balance in the reserve
account for ~ 15,000 on that date.
What amount will be payable to B?
(a) ~ 15,000
(b) ~ 55,000
(c) ~ 65,000
(d) ~ 75,000
2013 - June I
[19] A, Band C were partners sharing
profits and losses in the ratio of 3 :
2 : 1. On 151April, 2011 B retired
and the new profit sharing ratio
between A and C decided to 3·: 2.

On 31StMarch, 2011, there were
reserves of firm ~ 24,000. This
reserve will be divided among
partners as:
(a) A - ~ 8,000, B - ~ 12,000, C -
~ 4,000
(b) A - ~ 4,000, B - ~ 8,000, C-
~. 12,000
(c) A - ~ 12,000, B - ~ 8,000, C -
• ~ 4,000
(d) A - ~ 10,000, B - ~ 10,000,
C - ~4,000
2013":' December
[20] Under the premium
paid is treated as' an ordinary
expense and joint life policy does
not appear as an asset in the
Balance ,Sheet of the firm:
(a) ordinary business expense
method
(b) surrender value method
(c) joint life policy reserve method
(d) sinking fund method,
2014 - December
[21] Andy, Tom and Bob were partners
sharing profits and losses in the
ratio 2 : 2 : 1. Tom died on 1st
February, 2014. The firm had taken
insurance policies· on the lives of
the partner, premium being
charged to Profit and Loss Alc
every years. The policy amount
and surrender value as on 1st
February, 2014 were as f?"ows:-
Page 113 of 137
Policy holder Policy Amount (f) Surrender
Value (f)
Andy 5 Lacs 50,000
Tom 7 Lacs 70,000
Bob 4 Lacs 40,000
Amount payable to Tom's legal
representatives regarding insura-
nce policies would be:
\ (a) ~ 7,00,000
,
(b) .~ 2,88,000
(c) ~ 6,40,000
(d) ~3,16,000
[22] A, Band C were partners in a firm
sharing profit and loss in the ratio
of 3 : 2 : 1 respectively. A retired
and firm received the Joint Life
Policy as ~ 1 ,52,500 appearing in
the balance sheet at ~ 1,80,000.
Joint Life Policy is credited and
cash debited with ~ 1,52,500, what
will be the treatment for the
balance of Joint Life Policy?
(a) Credited to partner's current
account in profit sharing ratio
I
(b) Debited to revaluation account
(c) Debited to partner's current
account in profit sharing ratio.
(d) Either (b) or (c)
12015 - June
[23] X, Y and Z take a Joint Life Policy.
After 3 years, Z retires from the
firm. Old profit sharing ratio is 3 : 2:
1. After retirement X and Y decide
to share profits equally. They had
taken a Joint Life Policy of
~ 5,00,000 with a surrender value
of ~ 40,000. What will be the
r 1)
treatment in the partner's capital
account on receiving the JLP
amount if JLP account is
maintained at surrender value in
the books of the fimi?
(a) ~ 5,00,000 credited to all the
partners in their old ratio.
(b) ~ 4,00,000 credited to all the
partners in their old ratio.
(c) ~ 40,000 credited to all the
partners in their old ratio.
(d) None of the above.
12016 - June 1
[24] Rohit, Amit and Sumit were
partners sharing profits and losses
in the ratio of 2:1 :1. Rohit died on
30thSeptember, 2015. The firm
had taken out a Joint Life Policy of
~ 1,00,000. Besides, the partner
had severally insured their lives for
~ 50,000 each, the premium in
respect of which being changed to
Profit and Loss Account of the firm.
The surrender value of the poncies
were 30% of the face value.
Ascertain Rohit's share in the Joint
Life Policy profits:
(a) ~ 37,500
(b) ~ 1,80,000
(c) ~1,15,000
I (d) ~ 90,000
I 2016 - December
[25] A, B, and C are partners in a firm,
sharing profits and losses, in ratio.
of 5:3:2 respectively. The balance
of capital is ~ 50,000 for A and B
each and 40,000 for C , 'B' decided
to retire from firm. The goodwill of
firm is valued at ~ 30,000 and profit
on revaluation of assets at ~ 5,000.
The firm· also has a balance in
reserve Alc for ~ 15,000 as on that
date, What amount will be payable
to B?
(a) ~ 45,000
(b) ~ 65,000
(c) ~ 55,000
(d) ~ 75,000
[26] P, Q and R are partners in a firm
with capitals of ~ 50,000, ~ 30,000
and ~ 25,000 respectively, sharing
profits and losses in ratio of 2:2:1.
General reserve ~ 15,000. Goodwill
~ 30,000, revaluation profit ~ 7,050.
Q is retiring from the firm amount
payable to Q is:
(a) ~ 70,820
(b) ~ 50,820
(c) ~ 25,820
(d) ~ 20,820
I 2017 - June I
[27] Outgoing partner is compensated
for parting with firm's future profits
in favour of the remaining partners .
The remaining partners contribute
to such compensation amount in
(a) Profit sharing ratio
(b) Capital ratio
(c) Gaining ratio
(d) Sacrificing ratio
 I 2017 - December
[28] At the time of retirement of a
partner, firm gets __ from his
insurance company against the
Joint Life Policy taken for all the
partners.
(a) Policy amount
(b) Surrender value
(c) Policy value for the retiring
partner and surrender value
for the rest
(d) Surrender value for all the
partners
I [29] R, Sand T are partners sharing
profits and losses in the proportion
of 3 : 2 : 1. S retired and the new
profit and loss sharing ratio of R
and T would be 3:2. The reserves
of the firm ~ 15,000 will be divided
amongst the partners R,S and T as.
(a) ~ 2,500, ~ 5,000, ~ 7,500
(b) ~ 7,500, ~ 5,000, ~ 2,500
(c) ~ 5,000, ~ 7,500, ~ 2,500
(d) ~ 2,500, ~ 7,500, ~ 5,000

I' Answer
I
1. (a) 2. (b) 3. (a) 4. (a)
5. (b) 6. (d) 7. (a) 8. (a)
9. (b) 10. (d) 11. (d) 12. (d)
13. (a) 14. (a) 15. (c) 16. (b)
17. (a) 18. (c) 19. (c) 20. (a)
21. (d) 22. (d) 23. «(j) 24. (d)
25. (b) 26. (b) 27. (c) 28. (b)
29. (b)

'&)

Page 114 of 137

3. UNIT 5 DEATH OF PARTNER
1 2008 - June I (a) {1,05,OOO; { 70,000; { 35,000
[9] A, B, C are partners sharing profits
and loss in 5 : 3 : 2. The firm's
balance sheet as on 31.3.2007
shows Reserve Balance of
{25,OOO. Profit of the last year
{ 50,000. Joint Life policy of
{ 10,00,000, Fixed, assets of
{12,OO,OOO. On 1st June C died
and on same date assets were
revalued. The executors of C will
get along with capital:
(a) Share in Joint life policy
(b) Share in Reserves
(c) Proportionate share of profit
upto the date of death
(d) All of the above
I 2008 - December
[10] Joint Life Policy amount received
by a firm is distributed in ______ .
(a) opening capital ratio
(b) closing capital ratio
(c) old profit sharing ratio of
partners
(d) new ratio of partners
I 2009December
[11] A, Band C are partners sharing
profits in the ratio of 3:2:1. They
had a Joint Life POlicy of
{3,OO,OOO. Surrender value of JLP
in Balance Sheet is {90,OOO. C
dies. What is share of each partner
in JLP?
Page 115 of 137
(b) {45,OOO; {30,OOO; { 15,000
(c) e i.so.ooo. { 1,00,000; { 50,000
(d) {1,95,OOO; { 1,30,000; { 65,000
12010 - June I
[12] X,Y and Z are the partners sharing
profits in the ratio of 7:5:4. On 30th
June, 2008 Z died and profits for
the year ending 3pt March, 2009
were { 2,40,000. How much share
in profits for the period pt April
2008 to 30th June 2008 will be
credited to Z's account assuming
the profit occurred evenly
throughout the year?
I (a) {60,OOO
(b) {15,OOO
(c) {20,OOO
(d) NIL
I 2010 - December I
[13] At the time of death of a partner
firm gets __ from the insurance
company of the Joint Life Policy
taken jointly for all the partners.
(a) policy value
(b) surrender value
(c) policy value for the dead partner
(d) surrender value for all the
partners.
12011 -June
[14] If a partner dies, then JLP will be
reckoned at .
(a) surrender value
(b) maturity value
(c) policy value
(d) none
. 2011 - December I I 2015 - December J 12017 -June I
[22] X, Y and Z are the partners sharing
[18] On the death of a partner, his
profits in the ratio 5:4:3. Z died on
[15] In case of death of a partner, share executor is paid the share of profits [21] On the death of a partner, the
30thSeptember, 2016. Profits for
of goodwill of deceased partner, of the deceased partner for the amount of Joint Life Policy should
the aCcounting year 2016-17 is
will be borne by the remaining be credited to the capital accounts
relevant period. This payment is ~ 40,000. How much share in
partners in: of:
recorded in Profit and Loss profits for the period from pt April,
(a) Sacrificing Ratio (a) Remaining partners equally.
2016 to 30thSeptember, 2016 will
(b) Gaining Ratio ___ Account: (b) All partners including the
the executors of Z would be
(c) Old Profit Sharing Ratio (a) suspense deceased partner in their
entitled? Assuming profits earned
(d) Net Profit Sharing Ratio (b) adjustment capital ratio. evenly during the year:
(c) appropriation (c) Remaining partners in the new (a) ~ 6,000
2013 - June I (d) reserve. profit sharing ratio. (b) ~ 5,000
(d) All partners including the (c) ~ 4,500
[16] J, K and L were equal partners in a I 2016 - December I deceased partner in their profit (d) NIL.
firm. The firm has taken individual sharing ratio.
life policy of ~ 50,000 for each [19] A, B, C partners sharing profits in
partner. J died on 5thMarch 2011. the ratio of 7 : 5 : 4. The profits of
The surrender value was ~ 2,000
for each policy on the date of death
the firm for the year ended
31.3.2016 were estimated as
I Answer I
of J. The amount payable to J in ~ 2,40,000. C died on 30thJune
respective potictes would be 2016. What is share of C in profits 1. (b) 2. (a) 3 .. (d) 4. (b)
. of financial year 2015-16? 5. (b) 6. (d) 7. (c) 8. (d)
(a) ~ 17,000 (a) ~ 15,000
9. (d) 10. (c) 11. (a) 12. (b)
(b) ~ 18,000 13. (a) 14. (b) 15. (b) 16. (b)
. (b) ~ 18,000
(c) ~ 50,000 17. (c) 18. (a) 19. (a) 20. (b)
(c) ~ 24,000
(d) ~ 54,000
21. (d) 22. (b)
(d) ~ 20,000
[20] The amount received on maturity
1201: - June I from the Insurance Company on
Joint Life Policy of partners in
[17] On the death of a partner, his excess of its surrender value, if
any, should be credited to partners: '0
executor is paid the share of profits
of the dying partner for the relevant (a) Equally
period. This payment is recorded in (b) In their profit sharing ratio
Profit and Loss (c) In the ratio of capitals
account. (d) None of the above.
(a) adjustment
(b) appropriation
(c) suspense
(d) reserve

Page 116 of 137

1.

• COMPANY
ACCOUNT
CHAPTER9

• INTRODUCTION TO
COMPANY ACCOUNT
UNIT1

Page 117 of 137

3.
2.
.

I 2008 - June I 1 2008 - December I [8] Equity shareholders are __ of a

[4] _. __ and __ of Schedule VI [5] Equity - ~ 90,000, Liability -
of Companies Act, 1956, deals with ~ 60,000 Profit of the year
presentation of Profit &Loss ~ 20,000, Find rotal Assets.
(a) ~ 170,000
Account and Balance Sheet:
(b) ~ 150,000
(a) Part I and Part II
(c) ~ 110,000
(b) Part I and Section 210
(d) ~ 80,000
(c) Part II and Section 211
Current Liabilities
(d) Part II and Part I
I 2009 - June I
[6] A _______ is an artificial person
created by law with a perpetual
succession and a common seal.
(a) company
(b) partnership firm
(c) sole proprietorship
(d) hindu undivided family
I 2009 - December I
[7] Equity shareholders have a right to:
(a) Vote
(b) 20% dividend
(c). Have preference
redemption
(d) All of the above
company.
[12] Reserve capital means:
(a) The part of subscribed
. (a) bankers uncalled capital
(b) . (b) Accumulated Profits
creditors (c) The part of Capital Reserve
(c) (d) The part of Capital
debtors
Redemption Reserve
(d)
[Not relevant as per Companies
owners Act, 2013]
12010 - June I [13] As per the Companies Act only
[9] According to Company Act, 1956, preference shares, which are
redeemable within __ can be
Balance sheet of a company is
issued:
prepared as per (a) 24 years
(a) Part II of Schedule VI
(b) 30 years
(b) Part I of Schedule VI (c) 25 years
(c) Part II of Schedule VII
(d) 20 years
(d) Part I of Schedule VII
[updated as per Companies Act, 12010-December I
2013]
According to Company Act, 2013,
[14] Balance amount in the share
forfeiture would be shown in the
Balance sheet of a company is
balance sheet under the head of
prepared as per
(a) Part II of Schedule III
on (a) share capital
(b) Part I of Schedule. III
(b) reserves and surplus
(c) Part II of Schedule IV
(c) current liabilities
(d) Part I of Schedule IV
(d) secured loans
[10] The Reserve which is created for a
particular purpose and which is a
charge against revenue is called
I 2011 - June I
(a) Capital Reserve [15] As per the Companies Act, a
(b) General Reserve
(c) Secret Reserve company cannot proceed to allot
(d) Specific Reserve shares unless ______ is received.
[11] Premium received on issue of (a) minimum subscription
shares are shown under the head (b) allotment money
in Balance Sheet: (c) application money
(a) reserve and surplus (d) . call money.
(b) current liabilities and
provisions
(c) share capital
(d) contingent liabilities

Page 118 of 137

 [16] Capital Reserve is created out of: [19] A Public Co. can have a minimum i 2015-June I 12015 - December I
(a) Capital Profit of members:
(b) Revenue Profit (a) any number [23] Which of the following is false for [25] Financial statement as per Section
(c) Capital Receipt (b) seven • "Small Company" as per 2(40) of the Companies Act 2013,
(d) Revenue Receipt (c) twenty Companies Act 2013? inter-alia not includes:
(d) fifty. (a) Paid up capital of small
(a) A Balance Sheet as at the end
12012 - June I company is less than ~ 50 lakh
of the financial year.
12013 - June I (b) A public company can be a
{b) A profit and loss account or in
[17] A Limited provides you the small company
[20] In the company's balance sheet, the case of a company
following information, (c) Turnover of small company is
Equity sham capital unclaimed dividend should be less than ~ 20 crores. carrying on any activity not for
called up ~ 4, 00,000 shown under which of the following (d) A small company is not profit, an income and
Calls in advance ~ 25,000 heads ________ . required to prepare cash flow Expenditure account for the
Calls in arrears ~ 40,000 (a) reserves and surplus statement as part of financial financial year.
The amount of paid up capital to be (b) current liabilities statements. (c) Fund flow statement for the
shown in the Balance Sheet of A (c) unsecured loans [24] Z Ltd. whose financial statements financial year:
Limited will be? (d) miscellaneous expenditure comply with accounting standards, (d) A statement of changes in
(a) ~ 3,35,000 as prescribed under section 133 of equity, if applicable.
(b) ~ 3,85,000 I 2013 - December Companies Act, 2013, cannot
(c) ~ 3,60,000 apply the securities premium I 2616 - December
(d) ~ 4,25,000 amount for the purpose of:
[21] Which of the following is not the
1 feature of a company? (a) To provide for the purchase of .1[26] The maximum number of partner is
I 2012 - December I (a) Separate legal entity its own shares. mentioned in:-
(b) Perpetual Existence (b) To provide for the issue of fully (a) Companies Act
[18] Final accounts of a company are (c) Incorporated association paid up bonus shares. (b) Partnership Act
prepared according to ________ _ (d) No separation between (c) To write off commission and (c) Limited Liability Partnership
of Companies Act, 1956: discounts on issue of shares
management and ownership. Act
(a) Schedule IV and debentures.
(b) Schedule V (d) None of the above.
(d) To write off continuous losses
(c) Schedule VI 12014 - June I of the company. [27] 1 . Balance Sheet
(d) SChedule VII 2. Cash Flow
[updated as per Companies Act, [22] Unless otherwise stated a 3. Trial Balance
2013) preference share is always 4. P&L Nc
Final accounts of a company are deemed to be: Financial statements which are
prepared according to ________ _ (a) Cumulative, Participating and presented to outsiders are:
of Companies Act, 2013: Convertible (a) Only 3 : 1, 2 and 3
(a) Schedule IV (b) Cumulative, Non-participating
(b) Only3:1,2and4
(b) Schedule V and Non-Convertible
(c) . Non-Cumulative, Participating (c) Only 2: 1 and 4
(c) Schedule III (d) All 4 : 1, 2, 3 and 4
(d) Schedule VI and Non-Convertible
(d) Non-Cumulative, Non-Partici-
pating and Convertible.

Page 119 of 137

I Answer 4.

I
1. (d) 2. (d) 3. (a) 4. (d)
5. (a) 6. (a) 7. (a) 8. (d)
9. (b) 10. (d) 11. (a) 12. (a)
13. (d) 14. (a) 15. (a) 16. (a)
17. (c) 18. (c) 19. (b) 20. (b)
21. (d) 22. (b) 23. (b) 24. (d)
25. (c) 26. (a) 27. (b)

Page 120 of 137

 Issue, Forfeiture and Re-Issue of
Unit: 2
Shares

I 2008 - June I
[1] The minimum subscription as
prescribed by SEBI against the
entire issue is:
(a) 95%
(b) 90%
(c) 5%
(d) None
[2] FOllowing are the information
related to G Ltd.:
(i) Equity share capital paid up
'{ 2,85,000
(ii) Calls in advance '{. 10,000
(iii) Calls in arrear '{ 15,000
(iv) Proposed dividend 20 %
The amount of dividend payable:
(a) '{ 57,000
(b) '{ 54,000
(c) '{ 56,000
(d) '{ 60,000
[3] X was issued 100 shares of '{ 10
each at a premium of '{ 1, he paid
application money and allotment
money which in total amounted to
'{ 5 (excluding premium) and failed

Page 121 of 137


to pay the balance .caf money of
~ 5. Find the maximum discount
that can be given at the time
reissue of shares:
(a) ~ 4 per share
(b) ~ 5 per share
(c) ~ 2 per share
(d) ~ 6 per share
I 2008- December
$
[4] Securities Premiums Account is
shown in the balance sheet under
(a) Re'serves & Surplus
(b) Miscellaneous Expenditure
(c) Current Liabilities
(d) None of the above.
[5] A purchased a Machinery for
n ,SO,OOO for which he is paying
shares of ~ 100 each at 10%
discount. How many shares will he
give as consideration?
(a) 2,500
(b) 2,000
(c) 1,800
(d) 3,000
[The question is not relevant as per
Companies Act, 2013]
[6] Mr. X, a holder of 10,000 shares for
~ 10 each has paid ~ 3 on
application and f 3 on allotment.
He did not pay f2 on first call. His
shares are forfeited subsequently
after first call. Share capital will be
debited by _____ _
(a) f 85,000
(b) f 1,00,000
(c) f 80,000
(d) ~ 60,000
Page 122 of 137
[7] X Ltd. Allotted 10,000 shares to the
applicants of 14,000 shares on
prorata basis. 0 applied for 840
shares. What is the number of
shares allotted to him? If
application money is @ f2 then
what will be his amount transferred
to further calls. ___________ .
I (a) 600 shares, f 480
(b) 840 shares, Nil
(c) 600 shares, Nil
(d) 840 shares, f 1,200.
1 2009 - June I called at beginning
[8] Right shares are issued to:
(a) Promoters for the services
(b) Holders of convertible deben-
tures
(c) Existing shareholders
(d) All of the above.
[9] A company issued 20,000 prefer-
. ence shares at the rate of f 100
each at 5 % premium and
2,00,000
equity shares at the rate f 10 each
at 10% premium. What is the net
amount of securities premium?
(a) f 1,00,000
(b) f 2,00,000
(c) f 2,40,000
(d) f 3,00,000
[10] Share premium is utilized for this
purpose:
(a) For raising goodwill
(b) For, premium payable on
redemption of preference
share
(c) For writing of capital losses.
(d) For paying dividend.
.
[11] X purchased the running business
of A for f 60,000. In place of cash
he discharged the ' purchase
consideration by issue of equity
shares of f 1 0 each at 20%
premium. Find the number of
shares to be issued?
(a) 6,000
(b) 7,500
(c) 5,000
(d) 8,000
[12] Reserve share capital means:
(a) part of authorised capital to be
(b) portion of uncalled capital to
be called only at liquidation
(c) over subscribed capital
(d) under subscribed capital
[13] When full amount is due on any
call but it is not received, then the
shortfall is debited to -
(a) Calls in advance
(b) Calls in arrear
(c) Share capital
(d) Suspense account
I 2009 - December I the purchase consideration:
[14] The difference between Subscribed
Capital and Called-up ·Capital is
called:
(a) Calls-in-arrear
(b) Calls-in-advance
(c) Uncalled capital
(d) None of the above
[15] A company issued 5,000 shares of
f 10 each at 20% premium payable
as follows: Application - f 2,
AliotmenH 5 (including premium)
and First and Final Call-~ 5.
A holder of 200 shares failed to pay
the First and Final Call. His shares
were forfeited. Calculate the
amount to be credited to Share
Forfeiture Account.
(a) f 1,000
(b) f 1,400
(c) f 400
(d) None of these
[16) At the time of forfeiture, Share
Capital Account is debited with:
(a) Face Value
(b) Nominal Value
(c) Paid-up Value
(d) Called-up Value
[17] Which statement is issued before
the issue of shares?
(a) Prospectus
(b) Memorandum of Association
(c) 'Articles of Association
(d) All of these
12010 - June I
[18] A Ltd., acquired assets worth
f 11,25,000 from B. Ltd., by issue
of equity shares of f 100 at
premium of 25%. The number of
shares to be issued by A Ltd., for
(a) 9000 shares
(b) 11250 shares
(c) 14063 shares
(d) 7500 shares
[19] Which of the following should be
deducted from the share capital to
,
find out paid up capital of a
Company?
(a) Calls-in-advance
(b) Calls-in-arrear
(c) Share forfeiture
(d) Discount on issue of shares
[20] Z &Co. forfeited 100 shares of ~ 10
each for non-payment of final call
of ~ 2 per shares. All shares were
re-issued at ~ 9 per share. What
amount will be transferred to
Capital Reserve Alc?
(a) ~ 700
(b) ~ 800
(c) ~ 900
(d) nooo
[21] If a share of ~ 10 on which ~ 8 has
been paid up is forfeited, it can be
re-issued at the minimum price of:
(a) ~ 10 per share
(b) ~ 8 per share
(c) ~ 5 per share
(d) ~ 2 per share
I 2010 - December I
[22] Securities Premium can be used by
the company.
(a) To adjust Loss on Revaluation
of Assets
(b) To Issue fully paid Bonus
shares
(c) To Pay dividend
(d) To Adjust Trading Loss.
[23] Uma being the holder of 1000
shares of ~ 20 each issued at 10%
discount, failed to .pay allotment
money of ~ 8 and final call money
of ~ 4. The director decided to
forfeit the shares. At the time of
forfeiture, discount on Issue of
shares AlC will be-
(a) Credited by ~ 1,000
(b) Debited by ~ 2,000
(c) Credited by ~ 2,000
(d) Not affected.
Page 123 of 137
[The question is not relevant as per
Companies Act, 2013)
[24] Supreme Ltd. has allotted 5000
shares to the applicants of 7500
shares on pro-rata basis. The
amount on application is ~ 3 per
share. M applied for 600 shares.
The number of shares allotted to M
will be __ and the amount carried
forward for adjustment against
allotment money from M will
be __ .
(a) 200 shares; ~ 200
(b) 300 shares; ~ 300
(c) 400 shares; ~ 600
(d) 150 shares; ~ 450
[25] A company forfeited 2000 shares
of ~ 10 each (which were issued at
par) held by Mr. John for non-
payment of allotment money of ~ 4
per share. The called up value per
share was ~ 9. On forfeiture, the
amount debited to share capital will
be ___ _
(a) ~ 10,000
(b) ~ 8,000
(c) ~ 2,000
(d) ~ 18,000
I 2011 - June
[26] Calls in advance are shown under
which head of the Balance Sheet?
(a) Addition to Share Capital
(b) Separately under Head Share
Capital
(c) Current Liability
(d) Fixed Liability.
[27] Loss on issue of shares is shown
under which head in the Balance
Sheet?
(a) Current Assets
(b) Miscellaneous Expenditure
(c) Reserves &Surplus
(d) Current Liabilities.
[The question is not relevant as per
Companies Act, 2013)
[28] When shares are issued at a
premium and the amount is already
received by company. Later on,
when such shares are forfeited:
(a) Premium Alc should be debited
(b) Premium Alc should be
credited
(c) Premium Alc is not affected.
(d) None of these.
[29] Shares of a company can be
issued at __ ?
(a) premium
(b) discount
(c) par
(d) any of these.
[updated as per Companies
Act, 2013]
Shares of a company can be
issued at __ ?
I (a) premium
(b) par
(c) both (a) &(b)
(d) any of these.
[30] Issue of Bonus Share implies.
(a) Dividend payment
(b) Raising of fixed capital
(c) Reserves and surplus
(d) Working capital being raised.
[31] When shares are issued to prom-
oters which account is debited?
(a) Goodwill
(b) Premium
(c) Promoters
(d) Share Capital.
I 2011 - December I
[32] X Ltd. purchased the business of A
Ltd. for ~ 60,000. It was payable in
shares of ~ 10 each at a premium
of 20%. The number of shares to
be issued by X Ltd. to discharge
purchase consideration will be:-
(a) 8,000 shares
(b) 7,500 shares
(c) 6,000 shares
(d) 5,000 shares
[33] The profit remaining after issue of
forfeited shares, in share forfeiture
account will be transferred to
(a) profit and loss account
(b) share capital account
(c) general reserve account
(d) capital reserve account
[34] When shares are issued for
purchase of assets,
should be credited.
(a) . Vendor's Alc
(b) Sundry Assets Alc
(c) Share Capital Alc
(d) Bank Alc
[35] If vendor's are issued 1,00,000 fully
paid equity shares of ~ 10 each in
consideration of net assets of
~ 12,00,000. The balance of
~ 2,00,000 will be credited to:-

(a) Capital Reserve Nc
(b) Goodwill Nc
(c) Vendor's Nc
(d) Profit and Loss Nc
[36] Balance in share Forfeiture Nc is
shown in Balance Sheet under:
(a) Share Capital Nc
(b) Reserves and Surplus Nc
(c) Current Liabilities
(d) Provisions.
12012 - June I (d) Paid up capital is equal to
[37] Which of the following account is
affected, wherr shares are issued
to promoters?
(a) Preliminary expenses account
(b) Share premium account
(c) Goodwill account
(d) Promoters personal account
[38] The power of forfeiture of share is
exercised by-
(a) Promoters of the company
(b) Directors as per rules and
regulations provided in the
Articles of Association
(c) The shareholders at 'Annual
General Meeting
(d) The Government
[39] B Limited has issued its shares of
~ 10 each at a discount of ~ 2 per
share. Ram holding 100 shares
could not pay final call of ~ 5 per
share. His shares were forfeited.
Later on the company decided to
re-issue these shares. Maximum
amount of loss per share on such
re-issue could be:
(a) ~ 5
(b) ~ 2
(c) ~ 7
(d) t 13
[The question is not relevant as per
Companies Act, 2013]
Page 124 of 137
[40] Which of the following statement is
false?
(a) Issued capital can never be
more than the authorized
capital
(b) In the case of under-
subscription issued capital is
. less than subscribed capital
(c) Uncalled capital may be
converted in to reserve capital
called up capital less calls in
arrears
[41] When shares are forfeited, share
capital account is debited by:
(a) Nominal values of shares
(b) Paid - up amount of shares
(c) Called - up amount of shares
(d) Forfeited amount
1 2012 - December I
[42] X Limited allotted 25,000 equity
shares to the applicants of 36,000
shares for ~ 10 each on pro-rata
basis. A applied for 1,800 equity
shares. Shares allotted to him are
and he had paid an
application money of ~ 5 per share.
_ is the excess amount
received that can be utilized
towards allotment money:
(a) 1500 shares, ~ 1,500
(b) 1350 shares, ~ 2,250
(c) 1250 shares, t 2,750
(d) 1050 shares, ~ 3,750
[43] A company forfeited 1000 shares
of ~ 10 each on which ~ 6,000 have
been received. Forfeited shares
were re-issued for t 7,000. The
amount of capital reserve would
be:
.
(a) ~ 1,000
(b) ~ 3,000
(c) ~ 4,000
(d) ~ 6,000
[43] According to Companies Act, 1956,
interest on calls in arrear and calls
in advance can be charged and
provided, the maximum rates for
which are:
(a) 4% p.a. and 5% p.a.
(b) 5% p.a. and 4% p.a.
(c) 6% p.a. and 7% p.a.
(d) 5% p.a. and 6% p.a.
[updated as per Companies
Act, 2013]
According to Companies Act, 2013,
interest on calls in arrear and calls
in advance can be charged and
provided, the maximum rates for
which are:
(a) 16% p.a. and 10% p.a.
(b) 10% p.a. and 16% p.a.
(c) 12% p.a. and 10% p.a.
(d) 10% p.a, and 12% p.a.
[44] A company is permitted to issue
shares at a discount if at least
must have elapsed
since the company was entitled to
commence the business:
(a) three years
(b) two years
(c) one year
(d) six months
[The question is not relevant as per
Companies Act, 2013]
[45] Discount on issue of shares is
presented on the side
of the company's balance sheet
under the head _______ _
(a) assets, fixed assets
(b) assets, current assets
(c) Liabilities, Current Liabilities
(d) Assets, Miscellaneous Expen-
diture
[The question is not relevant as per
Companies Act, 2013]
[46] Calls in arrear is shown in Balance
Sheet as _______ _
(a) deduction from called up
capital
(b) addition to paid up capital
(c) addition to issued capital
(d) deduction from issued capital
[47] When equity shares are issued to
the promoters in consideration of
their services provided by them,
:-:-_---:-_ Nc should be debited:
(a) equity share capital
(b) general reserve
(c) promoters
(d) goodwill
[48] Krishi Ltd. issued 1,50,000 shares
of ~ 100 each at a discount of 10%.
Mr Ram to whom 300 shares were
allotted, failed to pay the final call
of ~ 30 per share and hence, all his
shares were forfeited. At the time
,of forfeiture of shares, what
amount will be transferred to
shares forfeited account?
(a) t 9,000
(b) ~ 18,000
(c) ~ 21,000
(d) ~ 27,000
[The question is not relevant as per
Companies Act, 2013] .
[49] Discount on re-issue of shares
forfeited cannot exceed the
(a) 50% of face value
(b) face value
(c) 50% of amount forfeited
(d) amount forfeited

12013 - June
[50] The director's of E limited made a
final call of ~ 50 per share on 151
August, 2012 indicating the last
date of payment of call money to
be 3151 August, 2012.
Mr. White holding 5,000 shares
paid the call money on October 15,
2012. If the company adopts Table
A the amount of interest on calls in
arrears to be paid
(a) ~ 3,125
(b) ~ 1,562.50
(c) ~ 1,875
(d) n,500
[updated as per Companies
Act, 2013]
The director's of E limited made a
final call of ~ 50 per share on 151
August, 2012 indicating the last
date of payment of call money to
be 31"1 August, 2012.
Mr. White holding 5,000 shares
paid the call money on October 15,
2012. If the company' adopts Table
F the amount of interest on calls in
arrears to be paid
(a) ~ 3,125
(b) ~ 1,562.50
(c) ~ 1,875
(d) ~ 1,500
[51] Zee Limited allotted 10,000 shares
to the applicants of 14,000 shares
on a pro-rata basis.
The amount payable on application
is ~ 2 per share P, a shareholder
was allotted 300 shares.
The number of shares he applied
for was __________ .
Page 125 of 137
I (a) 420 shares
(b) 300 shares
(c) 350 shares
(d) 400 shares
[52] Tee Limited forfeited 500 shares of
~ 20 each issued at 5% discount
for non-payment of allotment and
final call money of ~ s: and ~ 5
respectively. Amount credited to
share forfeiture alc' will be
(a) ~ 3,500
(b) ~ 2,500
(c) ~ 3,000
(d) ~ 4,000
[The question is not relevant as per
Companies Act, 2013]
[53] On 1.1.2011. X Co. Ltd decided to
forfeit 800 equity shares of ~ 10
each due to non-payment of
second and final call of ~ 5. On
1.3.2011, company re-issued 400
forfeited shares at ~ 7 as fully paid.
What will be the amount to be
transferred to capital reserve
account?
(a) ~ 1,600
(b) ~ 2,800
(c) ~ 800
(d) ~ 1,200
[54] Krishi Ltd. Issued 1,50,000 shares
of ~ 100 each at a discount of 10%.
Mr. Ram to whom 300 shares were
allotted, failed to pay the final call
~ 30 per share and hence, all his
shares were forfeited. At the time
of forfeiture of shares, what amount
will be transferred to Shares
Forfeiture Account?
.
(a) ~ 9,000
(b) ~ 18,000
(c) ~ 21,000
(d) ~ 27,000
[The question is not relevant as per
Companies Act, 2013]
I 2013 - December
[55] A company Ltd. by shares before
commencement of business, can
issue its shares at discount.
This is:
(a) Possible
(b) Not Possible
(c) Possible if permitted by stock
exchange
(d) Possible if shareholders
approve.
[56] Uma is the holder of 1000 shares
of ~ 20 each issued at 1 0%
discount. She failed to. pay
allotment money of ~ 8 and final
call money of ~ 4. The directors
decided to forfeit the shares. At the
time of forfeiture, discount on issue
of shares Alc will be:-
(a) Credited by ~ 1,000
(b) Debited by ~ 2,000
(c) Credited by ~ 2,000
(d) Not affected.
[The question is not relevant as per
Companies Act, 2013]
[57] Supreme Ltd. has allotted
5,000 shares to the applicants
of 7500 shares on pro-rata basis.
The amount on application is ~ 3
per share. M applied for 600
shares. The number of shares
allotted to M will
_____ and the amount
to be carry forward for
adjustment against allotment
money from M will be _----
(a) 200 shares; ~ 200
(b) 300 shares; ~ 300
(c) 400 shares; ~ 600
(d) 150 shares; ~ 450.
I [58] Which of the following share capital
is not shown in the Balance Sheet:-
(a) Subscribed share capital
(b) Un-issued share capital
(c) Authorized share capital
(d) Paid up share capital.
[59] Underwriting Commission will not
be paid on account of shares taken
by:
(a) Promoters
(b) Employees
(c) Directors
(d) All of the above
12014 - June I
[60] Max Ltd. forfeited 300 shares of
~ 10 each, fully called-up, for non-
payment of final call money of ~ 4
per share. These were
subsequently re-issued by the
company for ~ 12 per share as fully
paid up. Amount of share forfeiture
alc to be transferred to capital
reserve is:
(a) ~ 2,400
(b) ~ 3,000
(c) ~ 1,800
(d) ~ 3,600
[61] The subscribed share capital of
SAI Ltd. is ~ 80,00,000 of ~ 100
each. There· were no calls .: in-
arrear till the final call was made.
be The final call made was paid on
77,500 shares and the total amount

5. of Calls-in - arrear amounted to
~ 67,500. The amount of final call
per share made was.
(a) ~ 20
(b) ~ 25
(c) ~ 62.50
(d) ~ 27
[62] According to Companies Act, 1956
the application money must be
atleast......... of the face value of
shares whereas as per SEBI
guidelines application money must
not be less than ........... of the issue
price.
(a) 5%,25%
(b) 25%,5%
(c) '5%,5%
(d) 25%,25%
~
[updated as per Companies
Act, 2013]
According to Companies Act, 2013
the application money must be
atleast......... of the face value of
shares whereas as per SEBI
guidelines application money must
not be less than ........... of the issue
price.
(a) 5%,25%
(b) 25%,5%
(c) 5%,5%
(d) 25%,25%
[63] Zebra Ltd. invites applications for
subscriptions to 50,000 shares for
, which ~ 2 per share is to be paid on
applications. Applications were
received for 80,000 shares and
shares were allotted on pro-rata
basis to applicants of 70,000
shares. If the Excess application
money is refunded, how much
Shareholders holding 5000 shares
did not pay first call and their
shares were forfeited, 3000 of
which were re-issued as fully paid
up at ~ 8 per share. The amount to
be transferred to capital reserve
will be:
Page 126 of 137
money will be refunded to Mr. Lion
who has been allotted 200 shares?
(a) ~ 100
(b) ~ 160
(c) ~ 240
(d) ~ 80
I 2014 - December
[64) A company has both
cumulative preference shares of
~ 3,00,000 of ~ 100 each and
equity share capital of ~ 6,00,000
of ~ 10 each. If dividend decla-
ration totalled ~ 15,000 and
~ 25,000 in the year 2012-13 and
2013-14 respectively, the dividend
allocated to the equity share-
holders in the year 2013-14 =
(a) ~ 4,000
(b) ~ 7,000
(c) ~11,OOO
(d) ~ 15,000
[65] The subscribed share capital of
Shri Ltd. is ~ 90,00,000 of ~ 100
each. There were no calls in arrear
till the final call was made. The final
call was paid on ~ 85,000 shares.
The calls in arrear amounted to
~ 1,25,000. The final call per share
(a) ~ 25
(b) ~ 7.80
(c) ~20
(d) ~ 125
[66] The director of K Ltd. made the
final call of ~ 20 per share on
September 15, 2014 indicating the
last date for payment of call money
to be September 30, 2014. Mr. F
holding 8000 shares paid the call
money on November 15, 2014.
~
.
If the company adopts Table A, the (a) ~ 6,000
interest on calls In arrear to be paid (b) ~ 68,100
by Mr. F =? (c) ~6,810
(a) ~ 800 (d) ~8,610
(b) ~ 2,000 [69] When shares are issued to
(6) ~ 1,200 promoters for services offered by
(d) ~ 1,333 them, the account that will be
[67] When shares are forfeited, share debited with the nominal value of
1 capital alc is debited with ______ . shares is ________ _
(a) nominal value of shares (a) cash/bank account
6% (b) paid up value of shares
(b) goodwill account
(c) called up value of shares (c) preliminary expenses account
(d) forfeited amount. (d) none of the above
[70] Which of the following statement
12015 - June 1
is false?
[68] Consider the following data (a) Loss on re-issue should not
pertaining to H Ltd. as on March exceed the amount forfeited.
31,2014. (b) When shares are re-issued at
Share Capital a loss, such loss is debited to
Issued, Subscribed, Called up forfeited shares account.
(20,000 Shares of ~ 100 each) ~ 20,00,000 (c) If loss on re-issue is less than
Calls in arrears ~ 10,000
the amount forfeited the
Profit and Loss account (Cr.) as on
surplus should be transferred
April, 2013 ~ 67,000
Profit for the year ~ 1,90,610 to capital reserve.
The Company wants to create (d) If the re-issued amount and
a Debenture, Redemption forfeited amount (taken
Reserve and to transfer ~ together) exceeds the face
50,000 every year out of value of the shares re-issued,
profits to redeem the the excess amount is always
debentures. credited to Securities Premium
The Company declared Account.
[71] X Ltd. makes an issue of 1,00,000
dividend 10% dlvldend,
equity shares of ~ 10 each,
The Balance of Profit and Loss
payable as follows:
Appropriation Account
transferred to Balance Sheet On Application ~
after effecting the above On Allotment 5
transactions? On First and final ~ 2.5
call ~ 2.5
 [74] The Securities Premium amount
may be utilized by a company for:
(a) Writing off any loss on sale of
fixed assets
(b) Writing off any loss of
Revenue nature
(c) Payment of dividends
(d) Writing off the expenses on
the issue of debentures.
12016 - June J Share forfeiture Nc Dr. ~ 300
[75] As per SEBI guidelines, on issue
of shares, the application money
should not be less than:
(a) 2.5% of nominal value of
shares
I 2015 – DecembeR (b) 2.5% of issue price of shares
[72] Following information pertains to (c) 25% of nominal value of
X Ltd.: shares
(d) 25% of issue price of shares
Equity share capital
[76] The subscribed capital of S Ltd. is
called up
~ 80,00,000 of ~ 1001- each.
Calls in arrear
There were no Calls-in-arrear till
Calls in advance
Proposed dividend the final call was made. The final
The amount of dividend call made was paid on 77,500
will be: shares. The Calls-in-arrear'
(a) ~ 22,625 amounted to ~ 67,500. The
(b) ~ 23,000 amount of final call per share will
(c) ~ 22,875 be:
(a) ~ 27
(d) None of the above.
(b) ~ 25
[73] Aelu Ltd. reissued 4000 shares
(c) ~ 42.50
(Face value ~ 10 each), which were
(d) ~ 20
forfeited by crediting. share
[77] 100 shares of ~ 101- each fully
forfeiture account by ~ 6,000.
These shares were re-issued @ ~ 9 called up forfeited for non-
per share. The amount to· be payment of final call of ~ 4.
transferred to Capital Reserve Assuming the forfeited shares
Account will be: were subsequently re-issued as
(a) ~ 3,000
(b) ~ 2,000
(c) ~ 1,000
(d) Nil.
Page 127 of 137
fully paid up @ ~ 7.00 per share,
what is the entry for re-issue of
forfeited shares.
(a) Bank Nc Dr. ~ 700
To Share capital Nc ~ 700
(b) Bank Nc Dr. ~ 700
To Shares forfeited Nc ~ 700
(c) Share fOrfeited Nc Dr. ~ 700
To Share capital Nc ~ 700
(d) Bank Nc· Dr. ~ 700
To Share capital Nc ~ 1,000
[78] Reserve share capital refers to:
(a) that part of the issued share
capital, which is reserved for
promoters
(b) the portion of issue price of
shares which a company has
demanded from shareholder
(c) the portion of called up
capital which is paid by the
shareholder
(d) portion of the uncalled capital
which a company
decides to
call only in case of
winding
up.
[79] Oye Ltd. issued 10,000 equity
shares of ~ 100 each at a
premium of ~ 20. The money is
payable as ~ 30 (including
premium) on application f 50 on
allotment ~ 20 on first call and
~ 20 on second and final call. The
Co. received applications for
15,000 shares and the allotment
was made pro-rata. H, the holder
of 400 shares failed to pay
allotment money. On his
subsequent feature to pay first
call money the Co. forfeited his
shares.
The amount to be transferred to
share forfeiture account at the
time of forfeiting the shares will
be:
(a) ~ 12,000
(b) ~ 32,000
(c) ~ Nil
(d) ~ 10,000
1201!) - December I
[80] A company has a subscribed
capital of ~ 80,00,000 in shares of
~ 1001- each. There are no calls-
in-arrear till the final call. The
payment on final call was received
for 77,500 shares. The amount of
calls-in-arrear is ~ 67,500.Then
the amount of final call is:-
(a) ~ 25
(b) ~ 27
(c) ~ 20
(d) ~ 65.20
[81] JAR Ltd. forfeited 300 shares of
~ 10 each fully called up for non-
payment of final call money of ~ 4
per share. These shares are
subsequently re-issued for ~ 12
per share as fully paid up. What
amount should be transferred to
capital reserve?
(a) ~ 2,400
(b) ~ 3,000
(c) ~ 1,800
(d) ~ 3,600

[82] Zorra Ltd. Invites applications for
50000 shares on which ~ 2 per
share is payable on applications.
Applications were received for
80000 shares and 70000 shares
are allotted on pro-rata basis.
How much application money will
be adjusted to allotment in case
of Mr. Adi who has been allotted
200 shares?
(a) ~100
(b) ~160
(c) ~ 240
(d) ~ 80
[83] Reserve capital means ________ _
(a) part of subscribed but
uncalled capital
(b) accumulated profits
(c) a part of capital reserve
(d) a part of capital redemption
reserve.
[84] Which of the following statement
is false?
(a) Issued capital can never be
more than authorized capital.
(b) In case of under subscription,
issued capital will be less
than the subscribed capital.
(c) Uncalled capital may be
converted into reserve
capital.
(d) Paid up capital is equal to
called up capital less
calls-in-
arrear.
[85] Rishu Ltd. made allotment of
25000 shares to the applicants of
36000 shares on pro-rata basis.
Mr. A had applied for 1800 shares
and ~ 5 on application then how
Page 128 of 137
many shares are allotted to him
and how much surplus amount is
carried forward for allotment?
(a) 1800 shares; ~ Nil
(b) 1250 shares; ~ 2,750
(c) 1800 shares; ~ 2,750
(d) 1250 shares; ~ Nil
I 2017 - June I
[86] When shares are forfeited, the
share capital account is debited
with and the share
forfeiture account is credited with
(a) Called up capital of shares
forfeited; Amount received on
, shares forfeited.
(b) Calls in arrear of shares
forfeited; Amount received
on
shares forfeited.
(c) Called up capital of shares
forfeited; Calls in arrear of
shares forfeited.
(d) Paid up capital of shares
forfeited; Called up capital
of
shares forfeited.
[87] A company forfeited 3000 Equity
Shares of ~ 10 each (which were
issued at par) held by Mr. B for
non-payment of allotment money
of ~ 3 per share. The called up
value per share was ~ 9. On
forfeiture, the amount debited to
Equity Share Capital account will
be __
(a) ~ 27,000
(b) ~ 12,000
(c) ~ 30,000
(d) ~ 9,000
per 1)
[88] When shares are issued to
promoters for the services offered
by them, the account that will be
debited with the nominal value of
shares is
(a) goodwill account
(b) preliminary expenses account
(c) capital reserve account
(d) current assets account
[89] Mis. Rivers Ltd. forfeited 300
equity shares of ~ 10 each issued
at par for non payment of ~ 4 per
share by the holder: The forfeited
shares are reissued at ~ 5 per
share. How much amount is to be
transferred to Capital Reserve
Account?
(a) ~ 300
(b) ~ 500
(c) ~ 600
(d) ~ 800
I 2017 - December
[90] 100 shares of nominal value of
~ 10 each (which were issued at
par) have - been forfeited, upon
. which ~ 5 per share was paid up
and transferred to forfeited
shares
account. Afterwards, 70
shares
were re-issued at ~ 7 per
share,
paid up as ~ 10 per share.
How
much amount is to be
transferred
to Capital Reserve?
(a) ~ 350
(b) ~ 490
(c) ~ 140
(d) ~ 150
[91] T Limited issued 15,000. equity
shares of ~ 10 each. The called
up value per share was ~ 8. The
company forfeited 250 shares of
Mr. S for non-payment of 1 SI call
money of ~ 3 per share. He paid ~
5 for application money and
allotment money. On forfeiture,
the share capital account will be
(a) Debited by ~ 1,250
(b) Debited by ~ 2,000
(c) Credited by ~ 2,000
(d) Debited by ~ 25,000
[92] Small Limited. issued 30,000
equity shares of ~ 100 each at
par payable as ~ 50 on
application, ~ 30 on allotment and
balance on first call. The
I applications were received for
50,000 shares and 30,000 shares
were allotted. Excess money
received on application was
refunded after adjustment of
allotment money. 500 shares
were forfeited in respect of which
first call money was not received.
The above is the case of
(a) Oversubscription
(b) Pro rata allotment
(c) Forfeiture of shares
(d) All of the above
 )

[93] A company by passing a special [94] Bijey ltd. issued 5,000 equity I I
resolution may decide that a shares of ~ 1 o each at a premium "
certain portion of its subscribed of 20%. Amount payable on
uncalled capital shall not be shares was ~ 5 on application 3. (b) 1 (b) 5 (b)
called up except in the event of (including premium), ~ 4 on 7(c) 4. (a) 8. (c)
winding up of the company. Such allotment and ~ 3 on final call. 10 (d) 7.(a) 13(c)
portion of the uncalled capital is The company forfeited 1 00 2. (a) 14. (b) 12 (b) 15(a)
called ---:---:-=- shares allotted to Mr. A who 6. (c) . 17(a) 18(c) 19(b)
(a) Capital Reserve failed to pay allotment money and 9. (b) 21. (d) 22. (a) 20. (c)
(b) Reserve Capital call money. What is the amount to 23. (d) 54. (d) 24. (b) 25 (b)
(c) Unissued Capital be credited to Forfeited Shares 16(a) 26. (b) 27. (c) 28 (die)
(d) Calls in Arrears 22(c) 32. 29(c) 30. (a) 31. (d)
Account?
(a) ~ 500 (d) 33. (c) 34(a) 35. (a)
(b) ~ 400 36. (c) 37. (b) 38. (a) 39. (b)
(c) ~ 1,000 40(c) 41. (c) 42 (b) 43(d)
(d) ~ 300 44. (c) 45. (d) 46(a) 47(d)
48(b) 49. (d) 50. (b/a) 51. (a)
52(b) 53(c) 54 (b) 55 (b)
56(c) 57(c) .58(b) 59. (d)
60. (c) 61. (d) 62(a) 63 (b)
64. (a) 65(a) 66(b) 67 (c)
68(d) 69(b) 70. (d) 71.(a)
72.(a)10 73. (b) 74. (d) 75(d)
76.(a) 77. (d) 78(d) 79.(d)
80.(b) 81 (c) 82. (b) .83(a)
84 (b) 85. (b) 86. (a) 87 (a)
88.(a) 89. (a) 90. (c) 94(c)
91.(d) 92. (b) 93. (d)

Page 129 of 137

 I 2012 - June 1 2013 - June (a) 13,125 shares
(b) 5,625 shares
[5] Which of the following statement is
1[8] In case of redemption option of (c) 13,750 shares
true? preference shares is out of the (d) 5,000 shares
(a) Only fully paid up preference fresh issue of equity shares, which
shares can be redeemed. of the following account will be 2014 - December
(b) Partly paid up preference
I
2008 - June
shares can be redeemed by
credited? [11] ~ 9,00,000 preference shares are
(a) Capital reserve account
[1] Redeemable preference shares company. to be redeemed by issue of 3,000
(b) Equity share capital account
must be redeemed within: (c) A company can issue equity shares, face value ~ 100
(c) Current liabilities and pro-
(a) 5 years preference shares with voting
visions account each for ~ 140 each. Capital
(b) 10 years rights.
(d) Capital redemption reserve Redemption Reserve' is to be
(c) 15 years (d) A company cannot redeem its
preference shares at a account
(d) 20 years Credited by:
premium.
2009 - December [6] A company issued 10,000 equity
I 2013 - December (a) ~ 4,80,000
(b) ~ 1,20,000
shares of ~ 10 each at a premium (c) ~ 4,20,000
[2] Preference Shares can be issued [9] Preference shares cannot be
of 20% for the redemption of
for a maximum period of : 1 redeemed unless they are:- (d) ~ 6,00,000
15,000 preference share of ~ 10
(a) 20 years
(a) Partly paid up [12] Securities Premium Nc Cannot be
(b) 24 years each. If the company had sufficient used by the company in:-
profit, the amount transferred to (b) Fully paid up
(c) 25 years (a) Writing off the preliminary
capital redemption reserve would (c) Transferred
(d) . None of these (d) Re-issued. expenses
be :-
2011 - June (a) ~ 50,000
(b) ~ 1,00,000 12014 - June I
(b) Providing for the premium
payable on the redemption of
preference shares
t
[3] ~ 5,00,000 prefererice shares are (c) ~ 1,50,000 (c) Financing redemption of
to be redeemed by issue of 2,000 (d) ~ 30,000 [10] Ajay Ltd. decides to redeem 10,000 preference shares
Equity Shares @ 1 00 ~. each for 2012 - December Preference Shares of ~ 10 each at (d) Issuing of Bonus Shares.
~125 each, then CRR is to be [7] X Ltd. had 5,000 12% Redeemable 10% premium. Balance in Profit
created by what amount? Preference Shares of ~ 100 each. and Loss alc is ~ 65,000 and in 12015 - JuneI
(a) 3,00,000 The company decided to redeem Securities Premium alc is ~ 5,000. [13] As per the Companies Act, 2013
(b) 2,50,000 You are required to calculate the
them by issuing equity shares of only preference shares which are
(c) 2,00,000 minim am number of equity shares
~ 100 each @ a premium of 25%. redeemable within can
(d) 5,00,000. of ~ 10 each to be issued for the
The member of equity shares to be
[4] In case of issue of shares, amount purpose of redemption, if minimum be issued.
issued are:
received above par value is equity shares are to be re-issued it (a) 20 years
(a) 4000 shares
credited to which account? means maximum CRR is to be (b) 25 years
(b) 5000 shares
(a) Security Premium Nc created: (c) 30 years
(c) 4480 shares
(b) Discount Nc (d) 15 years
(d) 5600 shares
(c) Share tortelture Nc
(d) None of these.

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 f.

12015-December
[14] The Board of Directors of a
company decides to issue
minimum number of equity shares
of ~ 8 each to redeem 45000
preference shares of ~ 10 each.
The maximum amount of divisible
profits available for redemption is
~ 2,50,550. Number of shares
required to be issued by a
company to ensure that provisions
of Section 55 are not varied. Also
determine the number of shares, if
the company decides to issue
shares in multiples of ~ 50 only.
(a) 24,931 and 24,950
(b) 24,931 and 24,900
(c) 24,932 and 24,950
(d) 25,000 and 25,000
2016 - June
[15] Which of the following can be
utilised for redemption
I redemption WYE Ltd. issued 5,000
equity shares of ~ 10 each at a
premium of 20%. The amount to be
transferred to Capital Redemption
Reserve at the time of/edemption
will be.
(a) ~ 23,000
(b) ~ 40,000
(c) ~ 50,000
(d) ~ 33,000
[17] When preference shares are
redeemed out of distributable
profits, an amount equal to the
nominal value of shares redeemed
out of disiributable profits should
be transferred to:
(a) Capital Reserve Account
(b) Capital Redemption Reserve
Account
(c) General Reserve Account
(d) Contingency Reserve Account.
I 2016 - December
of [18] If preference shares are redeemed
[19] Which of the following redeemable [21] Which of the following can be
preference shares of ~ 10.00 each utilized for redemption of
are eligible for redemption? preference shares?
(a) On which application and (a) The proceeds of issue of fixed
allotment money of ~ 5.00 deposit.
per (b) The proceeds of issue of
share has been paid debentures.
(b) On which ~ 7.50 per share has (c) The proceeds of fresh issue of
been paid equity shares.
(c) On which ~ 10.00 has been (d) All of the above.
paid
(d) All of the above. I 2017 - December I
12017 - June I [22] Preference shares amounting to
~ 3,00,000 are. redeemed at a
[20] Preference shares amounting to premium of 5%, by issue of equity
~ 4,00,000 are redeemed at a shares amounting to ~ 2,00,000 at
premium of 2%, by issue of equity a premium of 10%. How much
shares amounting to ~ 2,00,000 at amount is to be transferred to
a premium of 12%. The amount to Capital Redemption Reserve?
be transferred to Capital (a) ~ 3,00,000
Redemption Reserve iS (b) ~ 2,00,000
(a) 2,24,000 (b) (c) ~ 1,00,000
1,84,000(C)204000(D)200000 (d) ~ 2,10,000

Answer
preference shares? out of the fresh issue for equity
(a) The proceeds of fresh issue of shares, which account will be
equity shares. credited?
(b) The proceeds of fresh issue of (a) Capital reserve account
debentures. (b) Capital redemption reserve I 3. (a) 10. (a)
1. (d)
5. (a)
2. (a)
6. (a)
(c) The proceeds of fresh issue of account
fixed deposit. (c) Preference share capital
(d) All of the above. account 7. (b) 8. (b) 9. (b) 10. (d)
[16] WYE Ltd. redeemed 1,000 10% (d) Equity share capital account
preference shares of ~ 1 00 each at I
a premium of ~ 10 per share. It had
a balance of ~ 50,000 in general 11. (d) 12. (c) 13. (a) 14. (c)
reserve and ~ 27,000 in profit and
loss account. For the purpose of

15. (a) 16. (c) 17. (b) 18. (d)

19. (c) 20. (d) 21. (c) 22. (c)

Page 131 of 137

 UNIT4 : ISSUE OF
DEBENTURE 1 2009 - June I In the balance sheet of a [11] Interest Payable on debentures is
[5] 6000 debentures were discharged Company, Debentures are shown (a) An appropriation of profit of the
under the head: company.
by issulnq Equity Shares of ~ 10
(a) Secured Loans (b) A Charge against profits of the
each at 20 % premium. Find the company.
(b) Unsecured Loans
number of shares issued. (c) Reserves and Surplus (c) Transferred to Sinking Fund Nc
(a) 50,000 (d) Non-Current liabilities. (d) Treated as Miscellaneous
[1] W.hen Debentures are issued as (b) 60,000 Expenditure to be shown in
Collateral Security, which entry has (c) 5,000 I 2010 - December I Balance ·Sheet.
to be passed : (d) 6,000
(a) Debenture Suspense Nc Dr. [9] T Ltd. purchased land &building
2012 june I
To Debentures Nc 1 2009 - December I from U Ltd. for a value of
(b) No entry has to be made [6] A company issued 1,00,000 12% ~ 2,00,000. The consideration was [12] Which of the following statement is
(c) Either (a) or (b) true:
1 (d)
2008 - june
None I debentures of ~ 100 each.
Calculate the amount of interest on
paid by issue of 12% debentures of
~ 100 each at a discount of 20%. (a) Debenture can be issued at a
~ [2] Deep Ltd. issued 1,00,000 7%
The debentures account will be premium, but equity shares
I Debentures of ~ 100 each at a
discount of 4% redeemable after 5
debentures.
(a) ~ 12,000 credited with: cannot be issued at a
. premium.
(b) ~ 1,20,'000 (a) ~ 2,00,000
years at a premium of 6%. Loss on (b) ~ 2,50,000 (b) Debenture holders are owners
(c) ~ 12,00,000 of a company, but equity share
issue of debentures is : (d) None of these (c) ~ 2,40,000
holders are creditors of a
(a) ~ 10,00,000 (d) ~ 1,60,000
company.
(b) ~ 6,00,000 12010 - June I I 2011 - DecemberI (c) Debenture interest is a charge
(c) ~ 16,00,000 against profit, but equity
(d) ~ 4,00,000 [7] Debenture holders are called dividend is an appropriation of
[10] Loss on issue of debentures is
___ 01 the Company profit.
I 2008 - June I (a) creditors
treated as ____ _
(a)' miscellanous expenditure (d) Debenture interest varies from
(b) debtors (b) tangible assets year to year but equity shares
[3] When debentures are issued' as
(c) owners (c) current liabilities dividend is at same rate every
collateral security, interest is paid
(d) bankers (d) current assets. year.
on:
[8] In the balance sheet of a [updated as per Companies [13] On 31s1 MarCh, 2012, H limited
(a) Nominal value of debentures
Company, Debentures are shown Act, 2013] issued 7% debentures of t 100
(b) Face value of debentures
under the head: Loss on issue of debentures is each at a discount of 20%. Such
(c) Discounted value of
(a) Secured Loans treated as ____ _ loss on issue of debentures will be
debentures
(b) UnsecuredLoans (a) miscellaneous expenditure treated as-
(d) No interest is paid.
(c) Reserves and Surplus (b) tangible assets (a) Intangible Asset
(d) Current liabilities. (b) Current Asset
I 2008 - December I [updated as per Companies
(c) non-current liabilities
(d) non-current assets. (c) Current liability
Act, 2013] (d) Miscellaneous expenditure.

[4) Same as [june 8 Q2]

Page 132 of 137

6.
[updated as per Companies
Act, 2013]
On 31"1 March, 2012, H limited
issued 7% debentures of ~ 100
each at a discount of 20%. Such
loss on issue of debentures will be
treated as-
(a) Intangible Asset
(b) Non-Current Asset
(c) Non-Current liability
(d) Miscellaneous expenditure.
[14] If debentures of ~ 4,70,000 are
issued for the consideration of
~ 5,00,000, then balance ~ 30,000
will be credited to :
(a) Profit and Loss account
(b) Goodwill account
(c) General reserve account
(d) Capital reserve account
[15] When debentures are issued as
collateral security:
(a) A fixed amount is paid as
interest
(b) Interest is paid on face value
of debentures
(c) Interest is paid on issue price
of debentures.
(d) No interest will be paid
[16] When debentures are issued at a
discount and are redeemable at a
premium. Which of the following
account is debited at the time of
issue of debentures?
(a) Debenture Account
(b) Premium on redemption of
debentures account
(c) Discount on Issue
Debentures Account
(d) Capital Reserve Account
Page 133 of 137
[17] Zee Limited purchased a plant from 1 2013 - December I (c) A company can buy its own
Dee Limited for book value of debentures
~ 4,50,000. The consideration was [20] In case of a Balance Sheet of a (d) They can be issued in lien of
paid by issue of 15% debentures of company, debentures are shown dividends
~ 100 each at a discount of 10%. under the head:-
The debenture account will be (a) Secured loans 12014 - June I
credited by (b) Share capital [23] When debentures are issued as
(a) ~ 4,00,000 (c) Reserves and Surplus
collateral security for a loan then,
(b) ~ 4,50,000 (d) Current liabilities.
such debenture holders are entitled
(c) ~ 5,00,000 [updated as per Companies
Act, 2013] for:
(d) ~ 5,75,000
In case of a Balance Sheet of a (a) Interest on the amount of loan
12013 - June I company, debentures are shown (b) Interest on the amount of
[18] 5,000, 12% debentures of ~ 100 under the head:- debentures
each issued as collateral security. (a) Secured loans (c) No interest amount
(b) Share capital (d) Either (a) or (b)
To record this transaction which of ,
the following entry will be passed? (c) Reserves and Surplus
(d) Non-Current liabilities.
I 2014 - DecemberI
(a) Debit cash account and credit
[21] Ram limited has issued 15% [24] Premium on redemption of
debentures account
debentures of ~ 20,00,000 at a
(b) Debit debentures suspense debenture account appearing in the
discount of 10% on April 1, 2012.
account· and credit balance sheet, is _______ '
The company pays interest half-
debentures (a) a real account
account. yearly on June 30 and Dec 31 (b) a nominal account - income
(c) Debit debentures suspense every year. On March 31, 2013 the (c) a personal account
account and credit cash amount. shown as "interest accrued (d) a nominal account - expend~ure
account. but not yet due" in the Balance [25] On Jan 1, 2014, Y Ltd. obtains a
(d) No entry is required to be Sheet will be:- loan from ICIDBI' Bank of
passed in the books of the (a) ~ 2,25,000 ~ 10,00,000 at the interest rate of
company. (b), ~ 1,00,000 12.5% p.a., giving as collateral
[19] Which of the following statement is (c) ~ 75,000 security of ~ 15,00,000, 14% first
false with respect to debentures? (d) ~ 3,00,000. mortgage debentures. ICIDBI Bank
(a) A company can issue [22] Which of the following is not correct is entitled to interest on:
irredeemable debentures
in respect of debentures: no,oo,OOO
(a)
(b) A company can issue (a) They can be issued for cash (b) ~ 15,00,000
debentures for consideration (b) They can be issued for (c) . Both on ~ 10,00,000 and
other than cash consideration other than cash
~ 15,00,000
of (c) A company can issue
(d) None of the above.
debentures with voting rights
(d) A company can buy its own
debentures
 [26] Swastik Ltd. issued 50,000, 12%
debentures of ~ 100 each at a
premium of 10% which are
redeemable after 1 0 years at a
premium of 20%. The loss on
redemption of debenture to be
written off every year is:
(a) ~ 75,000
(b) ~ 60,000
(c) ~ 25,000
(d) ~ 1,00,000
I 201.5 - June
[27] HDFC Ltd. issues 10,000, 12%
Debentures of ~ 100 each at ~ 94
on pt January, 2010. Under the
terms of issue, 1/5thof the
Debentures are annually redeemed
by drawings, the first redemption
occurring on 31stDecember, 2010.
Calculate the amount of discount to
be written off in the year 2013.
(a) ~ 8,000
(b) ~ 16,000
(c) ~ 20,000
(d) ~ 12,000
[28] Premium on redemption of
debentures account appearing in
the balance sheet is _______ .
(a) a personal account
(b) a real account
(c) a nominal account-Income'
(d) a nominal account-Expense
Page 134 of 137
I 2015 - December
[29] Discount on issue of debenture is
a:
(a) Capital loss to be written off
from capital reserve
(b) Revenue loss to be charged in
the year of issue
(c) Capital loss to be shown as
goodwill
(d) Capital loss to be written off
over the tenure of the
I debentures.
[30] A company issued ~ 30,000, 15%
debentures at a discount of 10%,
redeemable after 15 'years at a
premium of 5%. Loss on issue of
debentures will be:
(a) ~ 3,000
(b) n,500
(c) ~ 4,500
(d) None of above.
[31] Tomato Limited purchased
machinery from Potato Limited for
a book value of ~ 10,00,000. The
consideration was paid by issue of
10% debentures of ~ 100 each at a
premium of 25%. The debenture
account was credited with.
(a) ~ 12,50,000
(b) ~ 12,00,000
(c) ~ 10,00,000
(d) ~ 8,00,000
I 12016-June·
[32] Debentures can be
I. Mortgage
Debentures
Simple Debentures
II. Registered. Debentures or
Bearer Debentures
III. Redeemable Debentures or
Irredeemable Debentures .
IV. Convertible Debentures or
Non-Convertible Debentures.
(a) Both I and II above
(b) Both I and III above
(c) Both II and III above
(d) All of above
[33] Amit and Anil are partners of a
partnership firm sharing profits in
the ratio of 5 : 3 with capitals of
~ 2,50,000 and ~ 2,00,000
respectively. Atul was admitted on
the following terms. Atul would pay
~ 50,000 as capital and ~ 16,000 as
goodwill for 1/1 oth share of profit.
Find the balance of capital
accounts after admission of Atul.
(a) ~ 2,60,000; ~ 2,06,000; ~ NIL
(b) ~ 2,20,000; ~ 1,82,000; ~
66,000.
(c) ~ 2,92,500; ~ 2,25,000;
~ 50,000
(d) ~ 3,82,500; ~ 2,19,500;
~ 66,000
[34] Debenture Interest:
(a) accrues only in case of profits
.(b) is payable out of post-tax
profits
(c) accrues in case of loans or
inadequate profits
(d) is payable before the payment
of any dividend on shares.
I I 2016 - DecemberI
[35] When debentures are issued as
collateral security for a loan then
such debenture holders are entitled
or to:
(a) Interest on the amount of loan
(b) Interest on the amount of
debenture
(c) No interest amount
(d) None of the above.
[36] WWW Ltd. issued 20,000, 8%
debentures of ~ 101- each at par,
which are redeemable after 5 years
at a premium of 20%. The amount
of loss on redemption of
debentures to be written off every
year will be __
(a) ~ 40,000
(b) ~ 10,000
(c) ~ 20,000
(d) .. ~ 8,000
[37]Debentureholders are of
the Company.
(a) debtors
(b) creditors
(c) vendee
(d) part owners
2017 - June I
[38] MIs X Ltd. took over assets of
. ~ .4,60,000 and liabilities of
r ~ 30,000 of MIs B Ltd., for a
purchase consideration of
~ 4,40,000. MIs X Ltd. paid the
purchase consideration by issuing
10% debentures of ~ 100 each at
10% prerrgurn. X Ltd. will issue
---_.
 (a) ~ 4,200 debentures I 2017 - December I I Answer I r
(b) ~ 4,000 debentures
(c) ~3,800 debentures [42] Which of the following statement is
(d) ~ 4,400 debentures false?
[39] Discount on issue of debenture is a (a) Equity is owner's stake and 1(c)
the debenture is a debt 2. (a) 4. (d) 5. (a)
(a) Revenue loss to be charged in (b) Rate of interest on debenture
3. (d)
6. (c) 8 (aid) 9 (b)
the year of issue. 7. (a)
is fixed 10(aid) 12. (c) 13. (dIb)
(b) Capital loss to be shown as 11. (b)
(c) Debenture holders get 14. (d) 16. (c) 17(c)
goodwill. 15, (d)
preferential treatment over the 18. (b) 19. (c) 20(aid) 21. (c)
(c) Capital loss to be written off equity share holders at the 22. (d) 23. (a) 24. (c) 25. (a)
from Capital Reserve. _ time of liquidation 26. (d) 27. (a) 28. (a) 29. (d)
(d) Capital loss to be written off (d) Interest on debentures is an
30. (c) 31. (d) 32. (d) 31. (a)
over the tenure of debentures. appropriation of profits
34. (d) 35. (a) 36. (d) 37. (b)
[40] A company issued 6,000, 10% [43} L T limited purchased land and 39. (d)
debentures of ~ '100 each at a 38. (b) 40. (a) 41. (a)
building from AS limited for a 43. (b)
discount of 10% which are 42(d) 44. (c)
consideration of ~ 22,00,000. The
redeemable at a premium of 5%. consideration was paid by issue of
What is the amount of loss on 12% debentures of ~ 100 each at a
issue 01.6,000 debentures? premium of 10%. The debenture
(a) ~ 90,000 account was credited with ______ .
(b) ~ 30,000 (a) ~ 22,00,000
(c) ~ 60,000 (b) ~ 20,00,000
(d) ~ 75,000 (c) ~ 24,20,000
[41] When debentures are issued as (d) t 25,20,000.
collateral security, the final entry for [44] Loss on issue of debentures is a
. recording the collateral debentures
in the book is: (a) Revenue loss to be Charged in.
(a) Debit Debenture Suspense the year of issue
Account and' Credit (b) Capital loss to be written off
Debentures Account. from capital reserves
(b) Debit Cash account and Credit (c) Capital loss to be written off
the loan account for which over the tenure of debentures
security is given. (d) Capital loss to be shown as
(c) Credit Debentures Account goodwill
and Debit Cash Account.
(d) Debit Debentures Suspense
Account and Credit Cash
Account.

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Page 136 of 137
 BEST OF LUCK
FROM: KINSHUK INSTITUTE

BY: JATIN DEMBLA

Compiled By : SURBHI JAIN

Page 137 of 137