Q1. Choose the correct answer.

1X10=10
1. Which of the following discloses the financial position of the business?

(A)Trading account (B)Profit or loss account (C)Profit or loss appropriation account (D)Balance sheet

2. Profit or loss appropriation account is not prepared in the case of:

(A) Partnership (B)Joint stock company (C)Sole trader-ship (D)Pattern-ship at will

3. It is a statement of assets, liabilities and owner’s equity on a particular date:

(A)Financial statement (B)Balance sheet (C)Bank reconciliation statement (D)None of these

4. If the closing stock appears in the balance it is taken only to the:

(A)Profit or loss a/c (B)Trading a/c (C)Balance sheet (D)Final a/c

5. A statement, which is prepared to ascertain the net income or net loss for a specific accounting period is called:

(A)Position statement (B)Statement of condition (C)Financial statement (D)Bank reconciliation statement

6. The amount by which the revenue for a particular period of time exceed from expenses incurred to generate them
is called:

(A)Gross income (B)Net income (C)Revenue (D)Expenses

7. Allowance for doubtful debts normally has a:

(A)Debit balance (B)Credit balance (C)Both debit & credit balance (D)None of these

8. An expenditure, which is incurred to increase the profit earning capacity of a business concern, is called:

(A)Deferred expenditure (B)Current expenditure (C)Capital expenditure (D)Recurring expenditure

9. A revenue expenditure, the benefit of which is not confined to one accounting year is called:

(A)Non- current expenditure(B)Revenue expenditure (C)Future expenditure (D)Deferred expenditure

10. An expenditure, which increases the utility or productive capacity of an asset is treated as:

(A)Revenue expenditure (B)Capital expenditure (C)Deferred expenditure (D)None of these

Q2. Write short answers of the following questions. 2X15=30

1. Show the complete “Accounting cycle”.
2. Which assets are called “Intangible assets”?
3. Define “Contingent liabilities”.
4. Define Liquid or Quick liabilities?
5. What are the prepaid expenses?
6. What is accrued revenue?
7. Differentiate between “Normal loss” & “Abnormal loss”.
8. What is meant by income statement?
9. What is a balance sheet?
10. What do you mean by financial statement?
11. What do you mean by capital expenditure?
12. Describe the revenue expenditures?
13. Define deferred revenue expenditures?
14. What is meant by compensating errors?
15. What is a suspense account?