National University of Sciences and Technology (NUST)

School of Electrical Engineering and Computer Science

PRINCIPLES OF FINANCIAL ACCOUNTING (QUIZ 4)

TOTAL MARKS 10 TIME ALLOWED: TEN MINUTES DATE:

NAME _______________ROLL NO______ SECTION C MARKS OBTAINED: ________

 Which of the following statements is / are incorrect? (More than one answer is possible).
a) Manufacturers and Wholesalers cannot sell their products to merchandisers on account.
b) If credit terms are 2/10, n/30 it means full payment is due in 10 days from the buyer.
c) If credit terms are 2/10, n/30 it means full payment is due in 20 days from the buyer.
d) If credit terms are 3/10, n/30 it means buyer can obtain 3 % discount by paying within 10 days.
e) None of the above.

 Which of the following statements are correct? (More than one answer is possible).
a) A special journal is an accounting record or device designed to record a specific type of
Routine transaction quickly and efficiently.
b) Some special journal are maintained by hand and some are highly automated.
c) EPOS helps in recording sales transactions and related cost of Goods sold as quickly as the bar coded
merchandise can be passed over the scanner.
d) Accounting procedures used in Special journals are not the same as those used for recording the
transactions recorded in general journal.
e) All of the above.

 On Jan 1, 2018, M/s Akram departmental stores purchased 100 Cans -Tins (in 10ltrs packing) of DALDA cooking
oil from the DALDA Company. The terms of trade were 3/10, n/30. The cost of one can (Tin) was Rs. 8000. If
M/s Akram Departmental stores maintains perpetual inventory system and records at gross cost. The above will be
recorded in the books by ( More than one answer is possible):
a) Debiting Purchases A/c by Rs. 800,000 and crediting Purchase discount Lost by Rs.16000
b) Debiting Purchases A/c by Rs. 784,000 and crediting A/c Payable (DALDA) by Rs.784000.
c) Debiting Inventory A/c by Rs. 784,000 and crediting cash by Rs. 784,000.
d) Debiting Inventory Account by Rs.784, 000 and purchase discount lost by 16,000 and crediting A/c
Payable (DALDA) by Rs. 800,000.
e) None of the above.

 Two of the Electric Iron brands sold by CSD Stores are Philips) and the Murphy Richards
Philips (P) sells for Rs. 2500 piece, which results in a 35 % profit margin. Each Murphy Richard costs
Rs. 3000 and sells for Rs. 5000. Indicate all the correct answers.
a) The Rupees amount of gross profit is greater on the sale of a Murphy Richards than a Philip
b) The profit margin is higher on Murphy Richard) than on Philips.
c) CSD profits more by selling one Murphy Richard than by selling one Philips.
d) CSD profits more by selling Rs.20000 worth of Murphy Richards than Rs.20000 worth of Philips.

 . Which of the following statement is / are correct:

a) FIFO Method assumes that the units sold and units remaining in inventory are priced at the average per
unit Cost
b) The Specific identification method can be used only when the actual costs of individual units of
merchandise can be determined from accounting records.
c) The Average Cost Method is different from the moving average cost method of inventory costing.
d) The Gross Profit Method is difficult technique for estimating cost of goods sold and the amount of
inventory on hand.
e) None of the above
f) All of the above.