MGT101 Solved MCQs

-------- are the third persons/parties, who owe money from the business.
                Business partner
                Debtor
                Customer

                Creditors
Creditors are -------
                Fixed Assets
                Current Assets
                Long term Assets
                Current liabilities
At times, we receive discounts from our creditors. This discount is either treated as
income of the business or as a reduction in the cost of
                Income
                Balance
                Stock
                Returned
When an expense or other payable is accrued it is
                current liability
                Assets
                Income
                current assets
------------ is made when it is known that an expense will arise but the exact amount is
not known.
                Accrual
                Provision
                Reserves
                Good will
Accounting Treatment of Provision
                Relevant Expense Account (Dr) Provisions (Cr)
                cash (Dr) Provisions (Cr)
                Account payable (Dr) Provisions (Cr)
                Provisions (Dr) Relevant Expense Account (Cr)
Debtors is also called
                Provisions
                Stock
                Receivables
                none of them
Receivables are the ----------
                current assets
                Fixed assets
                long term assets
                all of above
When a debtor does not pay the amount due to him, it is said
                Provision
                Accrual
                Debt
                Bad Debts
Bad Debts charged to the
                Profit & loss
                Cost of goods
                Capital
                Drawings
Recording of Bad Debts
                Bad Debts (Dr) Debtors a/c (Cr)
                Drawings (Dr) Debtors a/c (Cr)
                Bad Debts (Dr) Drawings (Dr)
                Debtors a/c(Dr) Bad Debts (Cr)
Debtors 100,000 Provision for Bad Debts 5,000 so the net receivable income is
                100000
                105000
                95000
                none of them
Provision for bad debts is also --------- deboters
                add
                less
                save
                recorded
Debtors are 15000 and the provision is 37% calculate net Debtors
                15000
                9400
                11000
                9450
which one of them is current asset
                cash
                land
                bill paid
                advance income
Sales Ledger Control Account is also called
                Debtors Control Account
                Creditors Control Account
                ---
                ---
In General Ledger one account is kept for all the -------- Creditors Control Account.
                Debtors Control Account,
                Creditors Control Account.
                --
                ---
List of debtors balances drawn up to the end of previous period is --------
                Opening balance of debtors
                Opening balance of account payable
                Closing Balance of debtors
                none of these
Opening balance of recorded on the ---------- side of Debtors Control Accounts
                Dr
                Cr
                --
                --
Credit Sales ---------- the debtors balance
                equal to
                decrease
                no effect on
                increase
Sales Return means
                customer returned the goods
                Supplier returned the goods
                Store returned the goods
                all of these
Cheques/Cash Received from the customer ------ the debter balance
                increased
                no affect
                decreased
                A & C
Which is the simple formula of calculating closing balance of deboter
                Opening balance + Credit Sales +(Sales Return + Cheques/Cash Received)=
                Opening balance + Credit Sales - (Sales Return - Cheques/Cash Received)=
                Opening balance - Credit Sales - (Sales Return + Cheques/Cash Received)=
                Opening balance + Credit Sales - (Sales Return + Cheques/Cash
Received)=
List of creditors balances drawn up to the end of previous period is ------------ balance of
creditor for this year
                Closing
                Opening
                --
 
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Credit Purchases shown on the ----------- side of Creditors Control Accounts

                Right
                Dr
                Cr
                A & C
Cheques/Cash Paid --- the creditor balance
                increase
                decrease
                ---
                ---
The formula for calculating closing balance of creditor is
                Opening balance + Credit Purchases - (Purchase Return- Cheques/Cash
Paid)
                Opening balance - Credit Purchases - (Purchase Return + Cheques/Cash
Paid)
                Opening balance + Credit Purchases + (Purchase Return + Cheques/Cash
Paid)
                Opening balance + Credit Purchases - (Purchase Return +
Cheques/Cash Paid)
calculate closing balance of deboter Opening Balance 50000 cash received 70000
Opening balance 30000 sale returned 2000
                72000
                80000
                8000
                32000
Prepare a Creditors Control Account from the following data Opening Balance 40000
Purchase Return 6000 Cheques and Cash paid 34000 Discounts received 2000 Total
Credit Purchases 32,000
                32000
                72000
                3000
                30000
Discounts received shown on------------ of Creditors Control Account
                Dr
                Cr
                --
                --
A number of books are opened in connection with control accounts to reduce the
volume of general ledger these books are called
                Purchase book
                Sales book
                Subsidiary Books
                A & C
Sale return is recorded on the ------ of Debtors control Account
                Debit Side
                Credit Side
                --
                ---
Discounts allowed is ------
                Income
                Good will
                Asset
                Expense
In Debtors control Account the Debit Side is greater then----
                Debtors control Account
                Credit Sales
                Credit Side
                Cheques and Cash received
Debtor 45,000, amount received ------- closing balance is 19825
                25175
                21752
                25751
                22751
Individual purchases are recorded in ------
                Purchase Journal / Purchase Day Book
                Purchase Return / Return outward Journal
                Creditors Ledger
                all of these
-------- ledger maintains record of individual creditors
                Purchase Journal / Purchase Day Book
                Purchase Return / Return outward Journal
                Creditors Ledger
                none of these
Purchase Return is recorded on the ------- side of creditor control account.
                Cr
                Dr
                --
                --
Bad Debts are ------- expenses
                General
                Financial
                Selling
                Administration
When the Provision for Bad Debts increases Debtors
                increased
                decreases
                remain constant
                none of these
Individual invoice wise sales are recorded in this Journal. This book serves as source
for all the recording of Credit sales.
                Sales Return / Return Inward
                Sales Journal / Sales Day Book
                Debtors Ledger
                none of above
Sales Return is recorded on the ------ of debtor acc
                Dr
                Cr
                -
                -
which one of them is current asset
                Insurance expenses
                prepaid expenses
                Rent expenses
                all of the following
which one is current liability?
                land
                income
                Debtor
                Creditors
which one is long term liability?
                creditors
                loan from mr A
                bank loan
                all of these
which one is liability?
                UN earned income
                furniture
                account receivable
                none of these

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Creditor account increase with

                credit
                credit sale
                credit purchase
                A & B`
Debtor account increase with
                Debit
                Credit
                Credit income
                Credit sale
Creditor control account decreased when
                Purchase Return
                Cheques / Cash paid
                Cheques / Cash received
                A & B
Debtors control account decreased with
                Opening balance of debtors
                Cheques / Cash Received
                Sales Return
                purchase Return
Discount allowed showed on the -------- of debtors control account
                Credit side
                Debit side
                --
                ---
sales return is also called
                return inward
                return outward
                return to supplier
                none of these
------ this ledger maintains record of individual creditors.
                Purchase Day Book
                Purchase Journal
                Creditors Ledger
                Return outward Journal
2nd name of Purchase Return is
                return to customer
                Creditors
                Purchases inward
                Return outward
----- this ledger maintains record of individual debtor.
                Debtors Ledger
                Sales Journal
                Sales Return
                Sales Day Book
extension of building is an example of ------- exp
                Revenue
                short
                Capital
                A & C
cost of good will is
                Capital exp
                value of good will
                goodwill exp
                prepaid exp
asset destroyed by fire is
                Admn
                financial loss
                Capital loss
                Revenue
rent not paid
                utility bill paid
                Income
                rent & Income
                advance rent paid
calculate closing balance of Creditor Opening Balance.5,000 Purchases for the month
70,00 return 1500 cash receive 6500
                4000
                8500
                12500
                7000
------ include both cash and credit receipts/payments.
                cash sales/purchases
                Credit sales/purchases
                Receipts/Payments
                none of above
Provision for doubtful debts has no effect on
                account receivable
                Control accounts.
                control account
                none of these
These errors in accounting require rectification. The procedure adopted to rectify errors
in financial accounting is called
                Rectification of error
                Rectification
                --
                --
 
               
different kinds of errors are
                6
                8
                5
                4
event occurred but we did not record it is ------ type of error
                Error of Commission
                Error of Omission
                Error of Original Entry
                Reversal of Entry
debited is credited and vice versa is an example of ------ error
                Error of Commission
                Error of Principle
                Error of Original Entry
                Reversal of Entry
The errors in which recording is in correct account but the figure is incorrect are called
                Reversal of Entry
                Error of Original Entry
                Error of Principle
                Error of Commission
The errors in which an entry is recorded in the wrong class of account is
                Error of Original Entry
                Reversal of Entry
                Error of Principle
                Error of Omission
A receipt of Rs. 50,000 from a debtor is recorded as Rs. 5,000 in his account is ---- error
                Reversal of Entry
                Error of Commission
                Error of Principle
                Error of Original Entry
Purchase of an asset for Rs. 50,000 is recorded in the expense account. is -----------
error
                Error of Principle
                Error of Original Entry
                Error of Omission
                Reversal of Entry
A payment of Rs. 10,000 made to Mr. D is recorded on the receipt side of the cash book
and credit is given to D's account. is ----- error
                Errors of Commission
                Error of Principle
                Error of Omission
                Reversal of Entry
Repair of vehicle worth of Rs. 5,000 was charged to asset account correct entry is
                Cash A/C (Dr) Bank A/C (Cr)
                Mr. A (Creditor) (Dr) Bank A/C (Cr)
                Mr. A (Creditor) (Dr) Bank A/C (Cr)
                Mr. A (Creditor) (Dr) Cash A/C (Cr)
Purchase of goods from Mr. B worth of Rs. 5,500 was recorded at Rs. 4,500. correct
entry is
                Purchase A/C (Dr) cash (Cr)
                Mr. B's A/C (Dr) cash (Cr)
                Purchase A/C (Dr) Mr. B's A/C (Cr)
                Purchase A/C (Dr) account payable
Profit & Loss Account has ------ parts
                2
                4
                5
                3
Sales Less: Cost of Goods Sold =
                Profit
                income
                Gross Profit
                none of them
Revenue is always in ------- acc
                Dr
                Cr
                Purchased
                none of these
------- is the cost incurred in purchasing or manufacturing the product
                Sales
                Gross Profit
                Cost of Goods Sold
                manufacturing expenses
Wages paid to employees for manufacturing of goods is ---------- expense
                Material
                Labor
                FOH
                all of these
------- includes revenue from indirect source of income, such as return on investment,
profit on PLS account etc.
                Other charges
                Other expenses
                Other sales
                Other Income
------- expenses are the expenses incurred in running a business effectively
                Cost of Goods Sold/
                Other
                Administrative
                General office
Administrative Expenses and Selling Expenses and Financial Expenses are present in
the
                financial statements
                balance sheet
                adjusting entries
                none of these
-------usually denotes remuneration paid to daily basis
                Salaries and Wages
                Wages
                Salaries
                B & C
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Salaries and benefits of sales and marketing staff become part of -----
                Administrative Expenses
                Selling Expenses
                Financial Expenses
                A & C
Salaries / wages paid to labor and supervisors/officers working for the manufacturing of
goods become a part of
                Administrative Expenses
                Selling Expenses
                Financial Expenses
                Cost of Goods Sold
Transportation/carriage of goods sold Tax/freight paid on sale is an example of ------
                Cost of Goods Sold.
                Selling Expenses
                Financial Expenses
                Administrative Expenses
Interest on loan, Bank charges are ----------
                Selling Expenses
                Administrative Expenses
                Financial Expenses
                none of these
------- are the assets of permanent nature that a business acquires, such as plant,
machinery, etc
                Fixed assets
                Current assets
                non Current assets
                B & C
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An expense that has a future benefit in excess of one year and recorded in a capital asset account
                Income Tax
                Capital Work In Progress
                Deferred Costs
                all of above