Accountancy/Book Keeping 3

Accountancy

1. Debit means: 10. According to which of the following concepts even

A. Decrease in asset the owner of the business who provides capital treated
B. Increase in liability as a creditor of the business?
C. An entry on the left hand side of an account A. Entity concept
D. Moderate increase in liability B. Cost concept
C. Money measurement concept
2. Drawings account is related to:
D. Convention of disclosure
A. Nominal account
B. Personal account 11. In book-keeping posting means:
C. Real account A. to record the transactions from the journal to
D. Company drawings account ledger
B. to record the transactions in the journal
3. Which of the following is related to nominal account?
C. to record the transactions in the subsidiary books
A. Bank account
D. to record the transactions in the cash book
B. Commission account
C. Furniture account 12. The basic rule of book-keeping, debit the receiver
D. Interest received account and credit the giver is applicable to:
A. nominal account B. real account
4. Goodwill account is related to:
C. personal account D. drawing account
A. Nominal account B. Personal account
C. Real account D. Tangible account 13. Goods of the value of ` 1500 taken by the proprietor
for his personal use should be debited to:
5. Prepaid insurance is:
A. drawing account B. sales account
A. Nominal account B. Personal account
C. purchases account D. stock account
C. Real account D. Prepaid account
14. Goods destroyed by fire should be credited to:
6. According to the going concern concept, a business A. purchases account
entity is assumed to have: B. sales account
A. a long life B. a very short life C. loss of goods by fire account
C. an indefinite life D. a medium life D. insurance account
7. Contingent liability is shown in the balance sheet 15. The credit balance of bank account indicates:
because of: A. amount payable by the bank
A. Convention of consistency B. amount payable to the bank
B. Convention of materiality C. cash at bank
C. Convention of disclosure D. loan from bank
D. Convention of adventure
16. Which of the following accounts will invariably have
8. Revenue is considered as being earned when: a debit balance?
A. cash is received A. Bank account
B. production is done B. Accounts receivable account
C. sale is effected C. Accounts payable account
D. purchase is done D. Loan account
9. Accounting does not record non-financial transactions 17. Which of the following accounts will invariably have
because of: a credit balance?
A. Entity concept A. Discount account
B. Accrual concept B. Account payable account
C. Measurement concept C. Cash account
D. Double entry concept D. Purchases account
18. Which of the following accounts have only credit B. deducted to the balance as per cash book to arrive
balance? at the balance as per pass book
A. Accounts payable account C. divided to the balance as per cash book to arrive
B. Salaries outstanding account at the balance as per pass book
C. Reserve fund account D. multiplied to the balance as per cash book to
D. All of the above accounts arrive at the balance as per pass book
19. Which of the following accounts may have a debit or 28. Errors which affect one account can be ............
credit balance? A. errors of omission B. errors of principle
A. Discount received account C. errors of posting D. errors of commission
B. Sales account 29. Errors of carry forward from one year to another year
C. Trade expenses account affect ................ .
D. Loan account A. personal account
20. Which of the following books should be used to B. real account
record purchase of furniture on credit? C. nominal account
A. Cash book B. Journal proper D. both personal and real account
C. Purchases book D. Sales book 30. Which of the following errors is an error of omission?
21. Which of the following accounts is increased by debit A. Sale of ` 800 was written in the purchase journal
entries? B. Wages paid to Sohan have been debited to his
A. Machinery account account
B. Purchases return account C. The total of sales journal has not posted to the
C. Discount received account sales account
D. Commission received account D. The total of sales journal has posted to the sales
account
22. The credit balance in the bank account is:
A. an asset B. a liability 31. Which of the following errors in an error of principle?
C. an expense D. contingent liability A. ` 1000 received from Ganesh has been debited to
his account
23. Returns outward book makes a record of: B. Purchase of ` 3000 has been entered in the sales
A. goods returned to the suppliers journal
B. goods returned to customers C. Repairs to machinery have been debited to
C. goods returned to proprietor machinery account
D. goods returned to neighbours D. Repairs to scooter have been debited to repairs
24. Cash book prepared on imprest system is: account
A. two column cash book 32. Error of commission do not allow ............ .
B. cash book A. correct totalling of the balance sheet
C. petty cash book B. correct totalling of the trial balance
D. purchase book C. the trial balance to agree
25. The statement sent along with purchase return is: D. correct totalling of the day book
A. credit note B. bills payable book 33. Assets are held for the purpose of ............... .
C. debit note D. purchases return book A. earning revenue B. resale
26. A bank reconciliation statement is prepared by C. conversion into cash D. personal purpose
................. . 34. Stock is valued at ................. .
A. customer of the bank A. cost price
B. bank B. market price
C. Reserve Bank of India C. cost of market price whichever is lower
D. Either B or C D. odd price
27. While preparing bank reconciliation statement, 35. Unearned income account is.............. .
cheques paid into bank but not yet cleared are A. Asset
..................... . B. Liability
A. added to the balance as per cash book to arrive C. Expense
at the balance as per pass book D. Income received in advance
36. Depreciation is provided on ................. . 46. Noting charges account is debited by ......... .
A. fixed assets B. outward charges A. the presenter of bill
C. current assets D. intangible assets B. the discounting banker
C. the acceptor
37. Heavy advertising to launch a new product is a
................. . D. the endorser
A. capital expenditure 47. While discounting the bill, debit should be given to
B. revenue expenditure .................. .
C. deferred revenue expenditure A. bank account
D. other expenditure B. bill receivable account
38. Accounts receivable includes ................. . C. acceptor’s account
D. cash account
A. sundry debtors B. bill receivable
C. promissory note D. all of the above 48. Cancelling the original bill and drawing a fresh
acceptance is known as ............... .
39. Provision for bad debts is calculated on ................... .
A. Retiring under rebate
A. Creditors B. Sales
C. Purchases D. Debtors B. Renewal
C. Discounting
40. An example of revenue expenditure is .................. . D. Bill sent to bank for collection
A. Purchase of land
49. At the time of endorsement of a bill, the drawer credits
B. Salaries
.................. .
C. Lease
D. Purchase of buildings A. the drawee
B. endorsee personal account
41. When a bill is drawn by A on B, it is debited in the C. bills receivable account
books of A to ................ . D. bills for collection account
A. Cash account
50. When a bill is discharged, the acceptor debits
B. B’s account
C. Bills Receivable account .................... .
A. Creditor’s account
D. Bills Payable account
B. Cash account
42. When a bill drawn by A on B (and retained till the C. Bills payable account
date of maturity is dishonoured on the due date), it D. Bills receivable account
is debited (in the books of A) to .................. .
A. Bill Receivable Account 51. Base date is otherwise called as ............... .
A. zero date B. leave date
B. B’s Account
C. working days D. grace days
C. Bills Payable Account
D. Cash Account 52. Average due date can be called as............ .
A. mean due date B. median due date
43. When a bill drawn by A and B endorsed to C is
dishonoured on the due date, it is credited in the C. mode due date D. zero date
books of A to .............. . 53. Account current is a journal is .............. .
A. Bank account A. True B. False
B. Bills receivable account C. Partly true D. Partly false
C. Bank for collection of bills account
54. Which is the accounting concept that requires the
D. C’s account practice of crediting closing stock to the trading
44. When a bill is drawn by A on B and before the date account?
of maturity, B becomes insolvent then in the books A. Going concern B. Cost
of A it is debited to ......... C. Realization D. Matching
A. Bills receivable account
55. Assets in the balance sheet are shown at cost less
B. Bank account depreciation rather than their replacement cost because
C. B’s account
of the accounting convention .................. .
D. Bank for collection of bills
A. going concern
45. Bills are drawn by ................ . B. matching
A. Creditors B. Debtors C. realization
C. Agent D. Brokers D. money measurement
56. According to money measurement concept, which one 65. The excess of current assets over current liabilities is
of the following will be recorded in the books of called ............... .
accounts .................. . A. Net tangible worth B. Networth
A. excellent morale of workers C. Gross working capital D. Net working capital
B. quality control in the business
66. The discount column of a triple column cash book
C. managing ability of the manager
records ................ .
D. cost of machinery
A. trade discount B. cash discount
57. Contingent liability appears as a footnote in the C. quantity discount D. seasonal discount
balance sheet. This is in accordance with the
67. Journal proper is issued to record ............... .
accounting principle of ............... .
A. all purchases of goods
A. Consistency B. Disclosure
B. all sales of goods
C. Materiality D. Conservatism
C. all business expenses paid in cash
58. The policy to anticipate no profit and provide for all D. all adjusting and rectification entries
possible losses arises due to convention of ..................
68. Which one of the following entry is not recorded in
A. Consistency B. Disclosure
the residuary journal?
C. Matching D. Conservatism
A. Opening entry B. Closing entry
59. Revenue is generally recognised being earned at the C. Adjustment entry D. Credit sales
point of time when ............... .
69. When furniture is sold for cash, the entry should be
A. sale is effected
made in .................. .
B. cash is received
C. production is completed A. sales book B. cash book
D. goods are delivered C. journal D. petty cash book

60. Which one of the following arrangements represents 70. Which one of the following is an example of personal
the order of liquidity? account?
A. Cash, Bills Receivable, Stock, Debtors A. Capital account B. Building account
B. Cash, Bills Receivable, Debtors, Stock C. Cash account D. Investment account
C. Cash, Stock, Bills Receivable, Debtors 71. The appropriate book to record credit purchase of
D. Cash, Debtors, Bills Receivable, Stock machinery is ................. .
61. Balance sheet is prepared primarily with the following A. purchases book B. journal
group in view of ............... . C. cash book D. petty cash book
A. Owners B. Creditors 72. Bills payable book is a ................ .
C. Government D. Management A. subsidiary book B. principal book
62. Which one of the following is an example of an C. ledger D. memorandum book
intangible asset? 73. The balance of the petty cash book is ...........
A. Preliminary expenses A. an asset B. a liability
B. Discount on issue of debentures C. an income D. an expenditure
C. Investments
D. Copyrights 74. Sales A/c Dr To Trading A/c Is an example of ................
A. closing entry B. adjusting entry
63. Both assets and owners equity would be increased by C. opening entry D. transaction entry
................. .
A. capital brought in 75. The balance of cash account indicates ...........
B. purchase of an asset on credit A. net income for the period
C. payment of creditors B. net loss for the period
D. proprietors drawings C. net worth of the business
D. net cash on hand
64. If a companies tangible networth is a positive amount,
it indicates: 76. The process of transferring the credit and debit items
A. the probability of the company form a journal to their respective accounts in the
B. the liquidity of the company ledger is termed as ........... .
C. the solvency of the company A. Balancing B. Invoicing
D. Both A and B C. Double entry D. Posting
77. Which account is generally used for rectification of 84. Bank Reconciliation statement is ............ .
errors? A. ledger account
A. Memorandum account B. part of the cash book
B. Suspense account C. a separate statement
C. Rectification account D. a sub division of the journal
D. Adjustment account
85. A Cheque received and paid into the bank on the
78. Which one of the following errors is an error of same day is recorded in the ............ .
principle? A. cash column of the cash book
A. Debiting repairs account instead of furniture B. bank column of the cash book
account C. both the cash and bank columns of the book
B. Sale of ` 200 entered in the books as ` 2000 D. the credit balance as per pass book
C. Cash sale of ` 500 wrongly entered in sales book
D. Purchase transaction entered in purchases return 86. The payment side of the cash book is undercast by
book ` 200. When overdraft as per pass book is the
starting point, to get the overdraft as per cash book
79. Which one of the following error will affect the ................... .
agreement of the trial balance? A. ` 200 will be deducted
A. A sale of ` 20 to Ram entered in the sales book B. ` 200 will be added
as ` 200 C. ` 400 will be added
B. Purchase of ` 500 credited to Ram instead of D. ` 400 will be deducted
Shyam
C. Sale returns of ` 1000 correctly entered in the 87. Which one of the following is not taken into account
sales returns book but posted to the debit of in adjusting the cash balance?
Sundar A. Mistakes in the cash book
D. Cash sale of furniture credited to sales account B. Mistakes in the pass book
C. Bank charges debited in pass book
80. Preparation of trial balance helps in the deduction of D. Interest and dividend credited in pass book
................ .
A. error of principle 88. An amount of ` 1000 is debited twice in the pass
B. compensating errors book. When overdraft as per the cash book is the
C. errors of whole omission starting point .................... .
D. clerical errors A. ` 1000 will be deducted
B. ` 1000 will be added
81. Errors of principle arise when .................. . C. ` 2000 will be deducted
A. proper distinction is not made between capital D. ` 2000 will be added
and revenue.
B. there is an omission of transaction 89. Amount spent on advertisement campaign, the
C. wrong amounts are entered in the subsidiary books benefit of which is likely to last for three years, is
D. transactions are entered in the wrong subsidiary .....................
books A. capital expenditure
B. deferred revenue expenditure
82. Goods worth ` 200 returned by Mohan were taken
C. revenue expenditure
into stock, but no entry was passed, is an error of
D. deferred capital expenditure
..................... .
A. Commission 90. Revenue expenditure is intended to benefit .................
B. Principle A. current period
C. Omission B. future period
D. Compensatory C. past period
D. both A and B
83. The main purpose of preparing a bank reconciliation
statement is .................. . 91. The distinction between capital and revenue is
A. to know the bank balance necessary for the preparation of ............... .
B. to compare the entries in the cash and pass books A. fund flow statement
C. to correct the cash after comparing with pass books B. receipts and payment account
D. to reconcile cash balance as per pass book with C. final accounts
the balance in the pass book D. cash flow statement
92. Any expenditure incurred in order to reduce the 100. If payment is made on the average due date it results
operating expenses is ................ . in ............... .
A. capital expenditure A. loss of interest to the creditor
B. revenue expenditure B. loss of interest to the debtor
C. deferred revenue expenditure C. no loss of interest to either of them
D. promotional expenditure D. loss of interest to both the creditor and debtor
93. Wages paid for erection of machinery are debited to 101. Overcasting of purchases journal would affect
................ . ..................... .
A. Wages account A. Sales account B. Purchase account
B. Machinery account C. Suppliers account D. Sales returns account
C. Profit and loss account
D. Deferred wages account 102. Sales to Benson ` 500 posted to his account as ` 50
would affect .................. .
94. Premium received on issue of shares is a .................... A. Sales account B. Bensons account
A. capital receipt C. Cash account D. Purchases account
B. revenue receipt
C. deferred capital receipt 103. Sales to Mr. Gill recorded in purchase journal would
D. deferred revenue receipt affect ................... .
A. Sales account
95. Amount paid for acquiring goodwill is ................ .
B. Sales account, purchases account and Mr. Gill’s
A. revenue expenditure
account
B. deferred revenue expenditure
C. Purchases account and sales account
C. capital expenditure
D. Journal proper
D. deferred capital expenditure
104. Purchases made on credit not recorded at all would
96. Where separate set of books are maintained, the ledger
affect ................. .
accounts required are ................ .
A. Purchases account
A. Memorandum joint venture and joint venture
account with the other party B. Suppliers account
B. Joint venture account and the personal account of C. Purchases account and suppliers account
the other party D. Wages account
C. Joint bank account, co-venturer capital accounts 105. Journal Proper is meant for recording .............. .
and joint bank account A. credit purchase of fixed assets
D. Joint bank account and joint venture account B. return of goods
with the other party C. all such transactions for which no special journal
97. When A advances money to B in the course of joint has been kept by the business
venture then A debits such money to ................... . D. supply of goods
A. Joint bank account 106. Purchase journal is kept to record .............. .
B. Joint venture account A. cash sales B. credit sales of assets
C. B’s personal account C. credit sales of goods D. credit purchases
D. Expenses account
107. A credit sale of goods to Shiva should be debited to
98. The account current method in which the days are ................... .
calculated from the date of transaction to the A. Sales account B. Goods account
commencement date is known as ................ . C. Shiva account D. Purchase account
A. Forward method
B. Epoch method 108. A sale of goods to Vidhya for cash should be debited
C. Daily balance method to ................ .
D. Backward method A. Vidhya’s account B. Cash account
C. Sale of goods account D. Purchases account
99. The method of current account usually employed by
the banker is known as ........... 109. The preparation of a Trial balance helps in ..................
A. Daily balance method A. locating errors in principle
B. Red ink interest B. locating errors of omission
C. Current account C. locating clerical errors
D. Product method D. locating compensatory errors
110. A Cheque received and deposited in the bank on the 119. Which one of the following is capital expenditure?
same day is recorded in the ............. . A. Cost of advertisement
A. cash column of the cash book B. Purchase of a delivery van
B. bank column of the cash book C. Purchase of raw material
C. credited in the cash book D. Purchase of machine oil
D. debited in the cash book 120. Which one of the following is treated as revenue
111. Insurance unexposed account is a ............... . expenditure?
A. Real account A. Cost incurred for a new exit as required under the
local bodies by laws
B. Personal account
B. Interest paid on loan during the construction of
C. Nominal account
works
D. Representative account
C. Cost of pulling down an old building
112. Petty cash may be used to pay .................... . D. A dealer in purchasing sewing machines and spent
A. the expenses relating to postage and conveyance some money on the repairs
B. salaries and wages to the final staff 121. Expenditure incurred on research is an example of
C. for the purchase of furniture and fittings ................ .
D. other recurring expenses A. capital expenditure
113. Which item is shown on the debit side of a trial B. revenue expenditure
balance? C. deferred revenue expenditure
A. Rent outstanding D. partly capital expenditure
B. Prepaid expenses 122. Payment of compensation to a worker who has been
C. Purchases returns discharged from service is a ......... .
D. Excess of income over expenses by the firm A. capital expenditure
B. revenue expenditure
114. Purchases for office furniture on account is recorded
C. deferred revenue expenditure
in .............. . D. partly capital expenditure
A. general journal B. cash book
C. purchases book D. sales book 123. Which English alphabet is similar to the shape of an
account?
115. What does GAAP represents? A. I B. T
A. Generally Accepted Audit Procedure C. H D. Y
B. Generally Accepted Accounting Principles
124. How many sides does an account have?
C. General Agreement on Audit Principles
A. One B. Two
D. General Agreement on Accounting Principles
C. Three D. Four
116. Any donation received for a specific purpose is a
125. The ................ in a ledger helps in locating the accounts
................ . contained in it.
A. liability B. assets A. folio B. pages
C. revenue receipts D. capital receipts C. serial numbers D. part numbers
117. Expenditure incurred by a publisher for acquiring 126. Ledger is also called ................. .
copyrights is a ................. . A. principal book of accounts
A. capital expenditure B. cash books
B. reserve expenditure C. subsidiary books
C. deferred reserve expenditure D. petty cash book
D. capital receipts 127. Purchase of Typewriter would result in ........... of fund.
118. Which one of the following should be considered as A. Change B. Application
revenue expenditure? C. Service D. No flow
A. ` 1000 paid for the execution of a new plant 128. The following items are shown in profit and loss
B. Loss of ` 10000 incurred in increasing the sitting appropriation account as ................. .
accommodation of hotel A. Dividend declared
C. Damage paid on account of breach of a contract B. Discount on issue of shares
to supply certain goods C. Non-operating expenses
D. Repairs to machinery purchased D. Current assets
(2715) Accountancy—2
129. The assets of a business can be classified as ................... . 138. In case of retirement of a partner, the partner’s loan
A. only fixed assets account would be shown
B. only current assets A. in his capital account
C. fixed and current assets B. in his wife’s loan account
D. fictitious assets C. in his loan account
130. If the rate of gross profit is 25% on cost by goods sold D. in the total amount due to him
and the sales are ` 200000, the amount of profit will 139. As per Garner V Murray Rule, the loss resulting from
be ................. . a partner’s insolvency is borne by other partners in
A. ` 50000 B. ` 40000 A. equal ratio
C. ` 45000 D. ` 65000 B. their capital ratio
C. their profit sharing ratio
131. The balance sheet is a ................. of the assets, liabilities
D. 3 : 1 ratio
and capital of a concern as on particular date.
A. Statement B. Document 140. The movement of securities from one stock exchange
C. Picture D. Balance to another with the object of reaping a profit from the
132. A gross profit is transferred to the ............... side of the disparity in share prices is called
profit and loss account. A. Averaging B. Arbitraging
C. Back wardation D. Forward trading
A. Debit B. Credit
C. Current D. Asset 141. The balance left in the capital accounts on dissolution
of a firm is transferred to
133. If net profits are ` 30,000 and expenses not resulting
A. Realisation Account
in the application of fund are ` 10,000, then the
B. Profit and loss Account
funds from operation will be
C. Bank Account
A. ` 30,000 B. ` 40,000
C. ` 10,000 D. ` 20,000 D. None of these
142. A cartel is a combination firms
134. Cost of goods purchased for resale is an example of
A. Capital expenditure A. Which are functioning in a particular industry
B. Whose combined assets are worth more than 90%
B. Revenue expenditure
of total assets of the industry
C. Deferred revenue expenditure
C. Who control major chunk of the market
D. None of these
D. Whose combined profits are enormous
135. Which one of the following is treated as revenue
143. The following items are shown in profit and loss
expenditure?
appropriation account:
A. Cost incurred for a new exit as required under the
A. Dividend declared
local bodies by laws
B. Discount on issue of shares
B. Interest paid on loan during the construction of
C. Non-operating expenses
works
D. Current assets
C. Cost of pulling down an old building
D. A dealer in purchasing sewing machines and spent 144. The take over of a company in which most of the
some money on the repairs purchase price is paid with borrowed money is referred
to as
136. Expenditure incurred on research is an example of
A. hostile takeover B. illegal takeover
................... .
C. lever aged buy-out D. management buy-out
A. capital expenditure
B. revenue expenditure 145. One of the major difficulties in improving the
C. deferred revenue expenditure industrial efficiency in enterprises is
D. partly capital expenditure A. low investment
B. low productivity
137. Payment of compensation to a worker who has been
C. ineffective marketing
discharged from service is a ................ .
D. poor inventory control
A. capital expenditure
B. revenue expenditure 146. In life insurance,the risk insured is
C. deferred revenue expenditure A. certain to occur and also the timing of its
D. partly capital expenditure occurrence is known
 B. certain to occur,but its timing of occurrence is not 157. Excess of income over expenditure is shown on the
known ........... side of income and expenditure account.
C. not certain to occur and also the timming of its A. Credit B. Debit
occurrence is not known C. Upper D. Lower
D. not likely to occur 158. Income and expenditure account is prepared by ..............
147. The loss on the sale of old furniture is debited to concerns.
A. Profit and loss Account A. non-trading B. trading
B. Furniture Account C. partnership D. sole proprietor
C. Trading Account 159. Life membership fee received by a club are shown in
D. Depreciation Account ................ .
148. ` 500 spent on servicing office typewriter should be A. balance sheet
debited to ............... . B. profit and loss account
A. Expenses account B. Typewriter account C. income and expenditure account
C. Repairs account D. Services account D. revenue account

149. Wages paid to workers must be debited to ................... 160. A receipts and payments account, the payments are
account recorded on the ............... side.
A. Credit B. Debit
A. Wages B. Machinery
C. Upper D. Lower
C. Factory expenses D. Offices expenses
161. The closing debit balance in the receipts and payments
150. Interest on capital is credited to .................. account.
account indicates the ............. balance at the end of
A. Expenses account B. Income account
the year.
C. Capital account D. Asset account
A. Opening B. Closing
151. Depreciation deducted from the concerned ................... C. Trading D. Cash
.
162. The income and expenditure account is prepared on
A. Liability B. Asset the basis of ............... system of accounting.
C. Expenses D. Incomes A. Basic B. Main
152. Receipts and payments account is a ........... . C. Cash D. Mercantile
A. Personal account 163. A debit balance in the income and expenditure
B. Nominal account account denotes excess of ............ over .......... .
C. Real account A. income, expenditure B. assets, liabilities
D. Representative account C. liabilities, assets D. expenditure, incomes
153. Receipts and payment account record receipt and 164. Income and expenditure matches all ............. receipts
payments of ................ . against ............. payments pertaining to the relevant
A. revenue nature only accounting years.
B. capital nature only A. revenue, revenue B. cash, cash
C. both revenue and capital nature C. cash, credits D. credit, cash
D. capital receipts
165. Any amount received towards endowment fund is a
154. The receipts and payments account begins with .................. receipt.
................. . A. Ordinary B. Special
A. debit balance B. credit balance C. Revenue D. Capital
C. no balance D. normal balance
166. Interest received on special fund investments will be
155. Non-trading institutions prepare ................. . added to .............. fund in the balance sheet.
A. Income and expenditure account A. investment fund B. bank fund
B. Trading and profit and loss account C. general D. special
C. Only trading account 167. Subscriptions received in advance will figure in the
D. Only revenue account .................. .
156. Subscription received in advance by a club is shown A. balance sheet
on the ............ side of the balance sheet. B. receipts and payment account
A. Liabilities B. Assets C. income and expenditure account
C. Credit D. Debit D. revenue account
168. Any revenue expenditure relating to special fund must 178. Subscriptions for the current year received during the
be deducted from .................. . current year are to be ................ .
A. last fund B. special fund A. credited to receipts and payments account
C. annual fund D. entrance fee B. debited to income and expenditure account
C. credited to income and expenditure account
169. Any revenue expense for when a separate fund is
D. credited to revenue account
available will be ................ .
A. debited to the separate fund 179. Non-trading institutions prepare ............... .
B. debited to income and expenditure account A. profit and loss account
C. capital issued and shown in the balance sheet B. trading account
D. credited to the separate fund C. manufacturing account
D. income and expenditure account
170. Sales of old material must be shown on the credit side
of ................ . 180. Receipts and payment account shows .............. .
A. cash book A. income and expenditure
B. income and expenditure account B. cash receipts and payments
C. balance sheet C. assets and liabilities
D. trading account D. profit on sale
171. The information for the preparation of receipt and 181. Income and expenditure account reveals ................. .
payments account is taken from .......... . A. cash in hand B. surplus or deficiency
A. cash book C. capital account D. revenue account
B. income and expenditure 182. Income and expenditure account records transaction
C. cash book and balance sheet of ................ .
D. revenue account A. revenue nature only
172. Income and expenditure account is a .......... . B. capital nature only
A. Real account B. Nominal account C. both capital and revenue nature
C. Personal account D. Representative account D. personal nature

173. Which of the following items should not be entered 183. Subscription received in advance is ............. .
in receipts and payments account of a club? A. an income B. an asset
A. Sale of old newspaper C. a liability D. an expense
B. Loss on sale of old furniture 184. Subscription in arrears (given in adjustment) is shown
C. Subscriptions received in advance on the ................. .
D. Expenses for previous year A. credit side of income and expenditure account
174. Donations received by a non-profit organisation are and assets side of balance sheet
usually a ................. . B. debit side of the income and expenditure and
A. revenue receipt B. capital receipt liabilities side of the balance sheet
C. capital expenditure D. revenue expenditure C. only in the assets side of balance sheet
D. only in the liabilities side of balance sheet
175. Sale of old newspaper is to be shown on the credit
185. Donation received for a specific purpose:
side of the ................... .
A. should be credited to a separate account and
A. cash book B. income and expenditure
shown on the liabilities side of the balance sheet
C. balance sheet D. trading account
B. should be credited to income and expenditure
176. Specific donations received by a non-trading concern account
are usually .............. . C. should not be recorded at all
A. revenue receipt B. capital receipt D. should be debited to income and expenditure
C. capital expenditure D. revenue expenditure account
177. Any profit on the sale of furniture of a cricket club 186. If there is a prize fund and prizes are awarded, expenses
will be taken to ................. . and income are transferred to ........... .
A. income and expenditure account A. income and expenditure account
B. cash account B. assets side of the balance sheet
C. profit and loss account C. the liabilities side of the balance sheet
D. furniture account D. trading account
187. Admission fee income should be ............... . 196. Bills Receivable book is to keep record of .................
A. capitalized A. bills received from customers
B. treated as a revenue B. bills received from supplier
C. treated as revenue unless the amount is pretty C. credit purchases
large D. credit sales
D. treated as a liability 197. Bills Payable book is to keep a record of ...................
188. The main purpose of this ............. accounting is to A. bills payable to creditors
ascertain profit or loss during a specific period, to B. bills received from supplier
show financial position of the business. C. credit purchases
A. financial accounting D. credit sales
B. cost accounting 198. The prime function of accounting is to:
C. management account A. record economic data
D. human resource accounting B. provide the informational basis for action
189. The main aim of ............... accounting is to ascertain C. classifying and recording business transactions
cost relating to the various activities of the business D. attain non-economic goals
and to have cost control. 199. The basic function of financial accounting is to:
A. financial accounting A. record all business transactions
B. cost accounting B. interpret the financial data
C. management account C. assist the management in performing functions
D. human resource accounting effectively
190. ................ supplies the management significant D. information to management
information in order to assist the management to 200. Book-keeping is mainly concerned with:
discharge its various functions such as planning, A. recording of financial data relating to business
control and decision making. operations
A. Financial accounting B. designing the system in recording, classifying,
B. Cost accounting summarizing the recorded data
C. Management account C. interpreting the data for internal and external end
D. Human resource accounting users
D. only for internal purposes
191. Any written document in support of a business
transaction is called a .................. . 201. Accounting principles are generally based on:
A. Voucher B. Bill A. practicability
C. Carbon copy D. Expense bill B. subjectivity
C. convenience in recording
192. If some goods from business are given away as charity
D. applicability
to a particular person or institution, it should be
................. . 202. The system of recording transactions based on dual
A. debited to charity account aspect concept is called:
B. credited to charity account A. double account system
C. debit sales account B. double entry system
D. debit to donation account C. single entry system
D. single account system
193. ................ is given to promote sales.
A. Cash discount B. Trade discount 203. The convention of conservatism is applicable:
C. Quantity discount D. Price discount A. in providing for discount on creditors
B. in making provision for bad debts and doubtful
194. .................. is allowed to encourage early cash payment. debts
A. Cash discount B. Trade discount C. in making provision for depreciation
C. Quantity discount D. Price discount D. in making provision for contingencies
195. The process of recording financial transactions in the 204. The amount brought in by the proprietor in the
journal is called ................. business should be credited to:
A. Journalizing B. Utilizing A. cash account B. capital account
C. Posting D. Balancing C. drawing account D. bank account
205. Ledger is a book of: 217. State which of the following errors will not be revealed
A. original entry B. final entry by the trial balance?
C. all cash entry D. all credit entry A. errors of complete omission
206. Purchase of machinery is recorded in: B. errors of carrying forward
A. sales book B. journal proper C. wrong totalling of the purchases book
C. purchases book D. sales returns book D. error of partial omission

207. Credit sales are recorded in: 218. Cost of goods purchased for resale is an example of:
A. sales book B. cash book A. Deferred Revenue Expenditure
C. journal proper D. purchases book B. Revenue Expenditure
C. Capital Expenditure
208. The cash book records: D. Common Expenditure
A. all cash payments
B. all cash receipts 219. Revenue receipts are ............... in the business.
C. all cash receipts and payments A. non-recurring
D. only credit payments B. Recurring
C. Accumulating
209. If a cheque sent for collection is dishonoured, the
D. non-accumulating
debit is given to:
A. suppliers account B. bank account 220. Shankar introduces ` 5000 as additional capital in
C. customers account D. cash account the business. This amount will be considered as:
A. capital receipt
210. In triple column cash book, cash withdrawn from
B. revenue receipt
bank for office use will appear in:
C. capital and revenue receipt
A. debit side of the cash book only
D. deferred revenue expenditure
B. both sides of the cash book
C. credit side of the cash book only 221. Preliminary expenses are an example of:
D. credit side of the bank account A. Deferred Revenue Expenditure
B. Revenue Expenditure
211. Bank reconciliation statement is prepared by the:
A. bank B. creditors of a business C. Capital Expenditure
C. customer of a bank D. suppliers D. Common Expenditure

212. Debit balance in cash book means: 222. An expenditure is treated as capital nature, when:
A. overdraft as per pass book A. the receiver of the amount is going to use it for
B. overdraft as per cash book the purchase of fixed assets
C. credit balance as per pass book B. it increases the quantity of fixed assets
D. debit balance as per day book C. it is paid for meeting the normal expenses of the
business
213. A bank pass book is a copy of: D. it decreases the quantity of other assets
A. the cash column of a customers cash book
B. the bank column of a customers cash book 223. Trading account is prepared to find out:
C. the customer’s account in the banks ledger A. gross profit or loss
D. the customer’s account in the suppliers ledger B. net profit or loss
C. financial position
214. Errors which affect one side of an account are called: D. position of the partners
A. single sided errors B. double sided errors
C. triple sided errors D. compensation errors 224. Outstanding salaries are shown as:
A. an expense B. a liability
215. A Purchases returns of ` 200 to Mr. P if entered in the
C. an asset D. an income
sales book would affect:
A. P’s account 225. Interest on drawings is:
B. purchases returns account A. expenditure for the business
C. sales account B. expense for the business
D. purchases returns account and sales account C. gain for the business
D. loss for the business
216. Sales to Ram ` 336 posted to his account as ` 363
would effect: 226. Balance sheet is a:
A. sales account B. Ram’s account A. Statement B. Account
C. cash account D. bank account C. Ledger D. Book
227. Wages is an example of: 239. Del Credere commission is allowed to the consignee
A. capital expenses B. indirect expenses to bear:
C. direct expenses D. revenue expenses A. normal loss
228. A bill of exchange payable after a certain period is B. abnormal loss
known as ................. bill. C. loss on account of bad debts
A. Time B. Accommodation D. profit on account of sender
C. Revenue D. Dishonored 240. The abnormal loss debited to:
229. A bill drawn and accepted for a genuine trade A. profit & loss account
transaction is termed as a .............. bill. B. consignee’s account
A. Trade B. Time C. consignor’s account
C. Inland D. Personal D. consignment account

230. A bill which is not an inland bill is a ............... bill. 241. Jay account is:
A. Outward B. Inward A. a nominal account B. a personal account
C. Foreign D. New C. a real account D. a trading account

231. A person who draws a bill of exchange is known as 242. Cash purchase in the account of:
the: A. purchases account B. joint venture account
A. Drawee B. Drawer C. venturers account D. cash account
C. Payer D. Payee 243. Final Account is:
232. A person named in the negotiable instrument to whom A. one account B. two account
or to whose order the money in the instrument is C. three account D. four account
directed to be paid is called as the: 244. Donations received for a special purpose will be taken
A. Payer B. Payee to:
C. Consignor D. Consignee A. income and expenditure account
233. Noting charges are paid in the event of ............... of a B. asset side of the balance sheet
bill. C. liabilities side of the balance sheet
A. Withdrawal B. Payment D. debit side of the ledger
C. Dishonour D. Deposit 245. Legacies are generally:
234. In case of accommodation bills, if one party becomes A. capitalized and taken to balance sheet
insolvent then that party credits the short remittance B. treated as income
to: C. treated as expenditure
A. deficiency account B. cash account D. treated as other incomes
C. loan account D. bill account 246. Income and expenditure account is:
235. At the time of the renewal of a bill, interest account A. a real account B. a nominal account
is .............. in the books of the drawee. C. a personal account D. cash account
A. Credited B. Totalled 247. In case a sports fund is kept expenses on account of
C. Debited D. Posted sports events should be:
236. ............... days of grace are allowed in case of time A. charged to sports fund
bills for calculation date of maturity. B. charged to the income and expenditure account
A. Five B. Seven C. Taken to the balance sheet on the asset side
C. Three D. Two D. Taken to the balance sheet on the liability side
237. A bill drawn and accepted for providing funds to a 248. Profits can be fraudulently inflated by:
friend in need is known as: A. Suppression of sales returns
A. cheque B. Treating capital expenditure as revenue
B. promissory note C. Overestimation of liabilities
C. accommodation bill D. Omission of prepaid expenses
D. demand bill 249. A credit sale of goods to Shivendra should be debited
238. Salary account is of the nature of a: to:
A. real account B. nominal account A. Sales Account B. Goods Account
C. personal account D. trading account C. Shivendra’s Account D. Purchase Account
250. Which of the following assets does not depreciate? C. No effect will be in the pass book
A. Machinery and equipment D. None of these.
B. Patents 260. An amount of ` 300 is debited twice in the pass book
C. Land when overdraft as per the cash book is the starting
D. Furniture point:
251. Valuing the stock in trade at market price or cost A. ` 600 will be added
price which is less is an example of the convention of: B. ` 500 will be deducted
A. consistency B. disclosure C. No effect will be in the cash book
C. knowing the value D. None of these D. None of these
252. Double entry principle means: 261. Expenditure incurred by a publisher for acquiring
A. Having debit for every credit and similarly credit copy rights is a:
for each debit. A. Capital expenditure
B. Writing all the entries twice in the book. B. Revenue expenditure
C. Maintaining the double account for all business C. Deferred revenue expenditure
transactions. D. None of these
D. Writing two times the same entry. 262. Immediately after purchasing a new truck ` 1,000 is
253. A sale of goods to Vaibhav Deep for cash should be paid to have the name of the company and other
advertising material painted on the truck this ` 1,000
debited to:
is a:
A. Vaibhav’s A/c B. Cash A/c
A. Capital expenditure
C. Sale of goods A/c D. None of these
B. Deferred revenue expenditure
254. A withdrawal of cash from business by the proprietor C. Revenue expenditure
of the firm should be credited to: D. None of these
A. Capital Account B. Cash Account
263. A return Inwards book is kept to record:
C. Drawing Account D. Proprietor’s Account
A. return of goods sold
255. The preparation of a trial balance helps in: B. returns of anything purchased
A. Locating errors of principle C. returns of goods purchased
B. Locating errors of ommission D. returns of anything sold
C. Locating clerical errors 264. Bill Receivable Book is a part of the:
D. Locating compensatory errors A. Ledger
256. A cheque received and deposited in the bank on the B. Balance Sheet
same day is recorded in the: C. Journal
A. Cash column of the cash book D. Profit and Loss Account
B. Bank column of the cash book 265. A sales of ` 2000 wrongly entered in the purchase
C. Credited in the cash book book:
D. Debited in the cash book A. decreases the gross profit by ` 2000
257. Petty cash may be used to pay: B. increases the gross profit by ` 2000
A. the expenses relating to postages and conveyance C. increases the gross profit by ` 4000
B. salaries and wages to the final staff D. none of these
C. for the purchase of furniture and fittings 266. Which of the following are current assets?
D. None of these A. Bank loan for three years
258. A reserve is charge against: B. Account receivable
C. Long-term investments
A. Trading account
D. Debentures sinking fund investments
B. Profit and loss account
C. Profit and loss appropriation account 267. Insurance unexpires accounts is a:
D. None of these A. Real account B. Personal account
C. Nominal account D. None of these
259. The payment side of cash book is under cost by ` 200
when over draft as per pass book is the starting point: 268. Goodwill account is a:
A. ` 200 will be deducted A. Nominal Account B. Real Account
B. ` 200 will be added C. Personal Account D. None of these
269. Bank overdraft account is a: 281. If a receipt of ` 200 from Rajesh out debtor has not
A. Personal Account B. Real Account been recorded in the books, the profit would show:
C. Nominal Account D. All of these A. an increase of ` 200
B. a decrease of ` 200
270. Contingent liability is shaken due to:
C. neither an increase nor a decrease
A. Convention of full disclosure
D. None of these
B. Convention of conservatism
C. Convention of materiality 282. Closing stock is valued at:
D. Dual aspect concept A. Market price
B. Cost price
271. Which item is shown on the debit side of a trial
C. Cost price or market price whichever is lower
balance?
D. Cost price or market price whichever is higher
A. Rent outstanding
B. Prepaid expenses 283. Unearned income account is:
C. Purchases A. an asset B. a liability
D. Excess of income over expenses by the firm C. an expense D. an income
272. Purchase for office furniture is recorded in: 284. Depreciation is provided on:
A. General Journal B. Cash book A. Current Assets B. Liquid Assets
C. Purchase book D. Sales book C. Fictitious Assets D. Fixed Assets
273. Sales on account is recorded in: 285. A bill of exchange is drawn by a:
A. Cash book B. Journal A. Creditor B. Debtor
C. Sales book D. General Journal C. Shareholder D. Debentureholder
274. The credit balance in the bank account is: 286. Bills receivable account is:
A. capital B. a liability A. an expense Account B. an asset Account
C. an asset D. an expense C. a liability Account D. a revenue Account
275. Cash sales are recorded in: 287. When goods are purchased for the joint venture out
A. Sales book B. Cash book of joint bank A/c the amount is debited to:
C. Journal D. Purchase book A. Joint bank A/c B. Joint venture A/c
C. Purchases account D. None of these
276. Error of commission does not permit :
A. The trial balance to agree 288. Bills receivable endorsed are debited to:
B. Correct the total of balance sheet A. Debtor’s Account
C. Correct totalling of trial balance B. Creditor’s Account
D. None of these C. Bills payable Account
D. Bills receivable Account
277. An item of ` 72 has been debited to a personal account
as ` 27, is an error of: 289. Subscription received during the year were ` 800 for
A. Commission B. Omission the current year. ` 100 for the previous year and
C. Principle D. None of these ` 100 for the next year. In the receipts and payments
account the receipts from subscriptions would appear
278. Sales to Shyam of ` 500 not recorded in the books at:
would affect: A. ` 700 B. ` 800
A. Shyam’s account B. Purchase account C. ` 900 D. ` 1000
C. Sales account D. Cash account
290. Any donation received for a specific purpose is a:
279. Which of the following accounts is increased by credit A. Liability B. Assets
entries? C. Revenue receipts D. Capital receipts
A. Bank Overdraft B. Purchases Account
C. Goodwill Account D. Sales Returns Account 291. The convention of conservatism will have the effect
of:
280. Profit and loss account of business shows the: A. Over statement of assets
A. Net profit earned B. Under statement of assets
B. Gross profit earned C. Under statement of liabilities
C. Balance of all accounts D. Under statement of provision for bad and doubtful
D. Capital employed in business debts
292. An accountant is mainly concerned with: 301. LIFO inventory method was used in year I, FIFO in
A. Audit work year II and weighted average in year III. Which
B. Preparation of budget for his employees accounting principle is violated?
C. Management Constancy Services A. Cost principle
D. Filling tax returns B. Consistency
C. Materiality
293. Expenses incurred on research and development is an
D. No principle of accounting is violated
example of:
A. Capital expenditure 302. Land was reported at its selling price which is
B. Revenue expenditure substantially higher than its cost. The increase in
C. Deferred revenue expenditure value was included in the income statement, which
D. None of these accounting principle is violated?
A. Cost principle
294. Amount spent on increasing the seating capacity in a
B. Going concern concept
cinema hall is:
C. Entity concept
A. Capital expenditure
D. Conservatism
B. Revenue expenditure
C. Deferred revenue expenditure 303. The cost of three small files (of ` 4 each) was charged
D. None of these to expenses when purchased even though they had a
useful life of several years. This was done according
295. Which of the following is not capital expenditure?
to the:
A. Cost of issuing shares and debentures
A. Cost principle B. Conservatism principle
B. Wages paid for construction of building
C. Full disclosure D. Materiality
C. Repairs on a second-hand machinery newly
purchased 304. The amount spent on unsuccessful patent rights is a:
D. Purchase of new spark plug at a cost of ` 8.50 for A. Capital expenditure
a two-year old car B. Deferred revenue expenditure (if the amount is
large)
296. Window dressing is prohibited due to:
C. Revenue expenditure (even though the amount is
A. Convention of conservatism
large)
B. Convention of disclosure
D. None of these
C. Convention of materiality
D. Accrual concept 305. Double entry system of bookkeeping refers to a system
where:
297. Quantitative transactions are not recorded in accounts
A. the number of accounts with a debit balance must
due to:
agree with the number of accounts with the credit
A. dual concept
balance
B. accrual concept
B. each transaction is recorded twice, once in journal
C. money measurement concept
and then in ledger
D. None of these
C. equal debit and credit entries are made for each
298. Concept of Realisation implies: transaction
A. When cash is received from debtors D. each transaction is recorded in two set of account
B. When goods are delivered to customer books
C. When order is received
306. An entry of ` 500 was wrongly posted to wages
D. None of these
account instead of machinery account, as wages are
299. Which of the following are not current liabilities? to be capitalised. It is an error of:
A. Bank overdraft A. Commission B. Omission
B. Redeemable debentures C. Principle D. Clerical error
C. Provision for doubtful debts
307. Which of the following statements best explains the
D. Accounts payable
relationship between journal and ledger?
300. Provision for doubtful debts account is a: A. First recording in journal and then posting to
A. Personal account ledger com pletes the double entry of the
B. Real account transaction.
C. Nominal account B. The journal is the book of original entry where
D. None of these as the ledger is the book of second entry.
(2715) Accountancy—3-II
 C. The journal is the book for analytical record and 314. An invoice of ` 560 is entered in the sales book as
ledger is the book for chronological record. ` 650. The total of the debit side of the trial balance
D. The process of recording, in the journal is called is ` 21,440. Assuming no other error what is the total
journalising, the process of recording in the ledger of the credit side of the trial balance?
is called posting. A. ` 21,240 B. ` 21,350
C. ` 21,330 D. None of these
308. In order to determine the amount of sales, to which of
the following records one should refer? 315. Which of the following books should be used to
A. Sales book B. Sales account record purchase of a type writer on account?
C. Journal D. Total debtors account A. Cash books B. Purchase book
C. Sales book D. Journal
309. Which of the following errors is revealed by trial
balance? 316. Which of the following books should be used to
A. Wrong amount entered in the book of original record purchase of merchandise an account?
entry A. Cash book B. Purchase book
B. Wrong amount entered in a ledger account C. Sales book D. Journal
C. Complete omission of an entry from the book of 317. Agreement of the trial balance may not indicate that:
original entry A. no error remains undetected
D. All of these B. double entry has been completed
310. Which of the following errors are revealed by trial C. arithmetic accuracy is reasonably proved
balance? D. all ledger accounts have been correctly posted
A. Omission of an amount from the trial balance 318. Use of subsidiary books can be made by:
B. Posting of the wrong amount A. Only large business concerns
C. Wrong totalling of the book of original entry B. Only small business concerns
D. None of these C. Only medium size business concerns
311. Which of the following errors will cause the trial D. All of these
balance to be out of balance? 319. Petty cash system is designed:
A. The total of the Purchase book is ` 1000 short A. to meet the needs of small businesses
B. Goods received back from Mahesh, ` 250 have B. to cover small and miscellaneous income
not been entered in the Returns Inward book C. to cover the small expenditure to be paid in cash
C. Office furniture purchased from Ravi and Co. D. to cover both small incomes and expenditures
` 950 has been entered in the Purchase book
320. The term “Imprest system” is used in relation to:
D. A purchase of ` 251 from Gopal and Co. has been
A. Purchase book B. Sales book
entered in the Purchase book as ` 215.
C. Cash book D. Petty cash book
312. Which of the following errors will not cause the trial
321. Trial balance is a proof that:
balance to be out of order?
A. every transaction is recorded twice
A. ` 590 received from P. Das has been debited to
B. no error remains in the books of accounts
(b) ` 10 Das
C. books are authentically and correctly written
B. A purchase of ` 258 from Lekhi has been debited
D. None of these
to his account as ` 285
C. The total of the discount columm of the cash 322. Which of the following is an error of commission?
book (cr.) is ` 20 short A. A sale of ` 560 ommitted to be recorded
D. An invoice for ` 460 is entered in the sales book B. A purchase of ` 840 was wrongly posted
as ` 640 C. Treating charges as addition to asset
D. Sales book over cost by ` 600 and purchase book
313. Which of the following errors will not cause the trial
was under cost by the same amount
balance to be out of balance?
A. ` 310 for goods sold, was posted to the credit of 323. Which of the following errors is disclosed by trial
charges balance?
B. Purchases returns book for December 1978 was A. Error of principle
overcast by ` 220 B. Wrong amount posted in ledger account
C. Sales book carried forward ` 2400 instead of C. Non-recording of a transaction in the book of
` 2004 original entry
D. All of these D. None of these
324. ‘Bank over draft’ should be classified as: 333. From the following find out the correct equation:
A. Current asset B. Current liability I. A represents opening stock
C. Intengible asset D. Intangible asset II. B represents purchases
325. Assets appearing in the book but having no value are III. C represents closing stock
known as: IV. D represents cost of goods sold
A. Wasting assets B. Intangible assets A. A – C = D – B B. A + B = D – C
C. Current assets D. Fictitious assets C. D – A = B + C D. None of these

326. Which of the following is an accounting equation? 334. While assertaining profit in single entry system the
A. Assets – Capital – Liabilities amount of additional capital introduced is:
B. Capital – Assets – Liabilities A. added to the capital in the beginning
C. Assets – Liabilities – Capital B. deducted from the capital in the beginning
D. Liabilities – Assets – Capital C. added to the capital at the end
D. deducted from the capital at the end
327. Which of the following is an equation?
A. Assets = Equities 335. When capital at the end is ` 21,500 drawings ` 4,300
B. Assets = Liabilities – Capital and capital in the beginning ` 19,400, what is the
C. Assets = Liabilities – Equities amount of profit or loss?
D. Assets = Equities + Liabilities A. ` 2,200 (profit) B. ` 2,200 (loss)
C. ` 6,400 (profit) D. ` 6,400 (loss)
328. The capital in a business on Jan. 1 and Jan. 31 is
` 17,000 and ` 17,200 respectively. Investment by 336. Generally, under single entry system:
owner and withdrawal by owner during Jan. amount A. only personal accounts are maintained
to ` 1,000 and ` 700 respectively. What is the net B. only personal, cash and bank accounts are
income for January? maintained
A. ` 100 (Loss) B. ` 300 C. all accounts are maintained
C. ` 200 D. ` 500 D. no account is maintained
329. Which of the following transactions will result in 337. Opening debtors ` 12,000, closing debtors ` 15,000
decrease in assets and decrease in liabilities? cash received from debtors ` 25,000 what is the
A. Payment of a promissory note with cash amount for sales?
B. Materials returned to supplier on account A. ` 22,000 B. ` 28,000
C. Redemption of debentures C. ` 2,000 D. None of these
D. All of these
338. If the rate of gross profit on sales is 25% and the cost
330. Cost of goods sold – ` 13,300, Gross Profit – ` 3,200, of goods sold is ` 75,000, then the amount of total
Netprofit – ` 700, what is the amount of sales? sales will be:
A. ` 14,000 B. ` 10,100 A. ` 1,00,000 B. ` 93,750
C. ` 16,500 D. ` 17,200 C. ` 92,150 D. Cannot be known
331. Select the correct amount of purchases, given on the 339. Total debtors account will be affected by:
following information: A. Cash sales B. Credit sales
Cost of goods sold – ` 1,20,000; C. B/R closing balance D. All of these
Carriage inwards – ` 1,890;
Opening stock – ` 43,640; 340. If the cost of goods sold is ` 1,20,000 and the rate of
Closing stock – ` 38,500; gross loss is 1/4 on sales, the amount of sales is:
Purchase returns – ` 2,150; A. ` 1,20,000 B. ` 90,000
Sales – ` 2,82,650 C. ` 80,000 D. ` 96,000
A. ` 1,15,120 B. ` 62,650 341. Cost of goods sold is ` 1,00,000 rate of gross profit
C. ` 1,10,420 D. None of these on sales is 20%. What is the amount of sales?
332. Depreciation is appearing in the trial balance of a A. ` 1,20,000 B. ` 80,000
company. While making final accounts, it should be C. ` 1,25,000 D. None of these
shown in: 342. The single entry system is defective because—
A. the profit and loss account I. only one account is maintained
B. the balance sheet as a deduction from the asset II. the trial balance cannot be prepared
concerned III. the net profit cannot be accurately calculated
C. the profit and loss account and balance sheet IV. the possibility of fraud and misappropriation is
D. the profit and loss account or balance sheet great
 Select the correct answer from the following: 351. Stock as on January 5 – ` 27,000; purchases between
A. I, III and IV B. I and II Dec. 31st and Jan. 5 – ` 700; cost of sales between
C. II, III and IV D. I only Dec. 31st and Jan. 5 – ` 1,500 what was the stock on
Dec. 31?
343. Assets in the beginning of the year ` 10,000, Assets
A. ` 27,800 B. ` 26,200
at the end of the year ` 18,000 Drawing during the
C. ` 26,300 D. ` 28,500
year ` 2,000. Therefore the profit is:
A. ` 6,000 B. ` 8,000 352. Which method of inventory valuation is most widely
C. ` 10,000 D. None of these used in accounting?
A. Cost price
344. Depreciation, as the term is used in accounting, means:
B. Market price
A. physical deterioration of a fixed asset
C. Cost or market price whichever is greater
B. decline in the market value of an asset
D. Cost or market price whichever is lower
C. allocation of the cost of fixed asset over its useful
life 353. A company may resort to “window dressing” by
D. making a provision for the replacement of the manipulating the data such as:
fixed asset I. inventory valuation
II. omission of liability for goods purchased
345. The term depletion is used in relation to:
III. treating a short-term liability long-term debt
A. Fixed assets B. Wasting assets
IV. recording in advance cash receipts applicable
C. Current assets D. Intangible assets
to next accounting period
346. Under the annuity method the amount of total A. I, III and IV B. II and IV
depreciation is determined by: C. I, II and III D. I, II, III and IV
A. deducting the scrap value from the cost of the
354. Match List-I with List-II and select the correct answer
asset
using the codes given below the list:
B. deducting the amount of interest from the cost of
List-I List-II
the asset
I. Compensating (a) Not recording a business
C. adding the cost of the assets and interest there on
errors transaction
D. adding the cost of the assets and expected cost of II. Errors of (b) Charging a
maintenance omission Revenue item to capital
347. Which method of depreciation is suggested for coal III. Errors of principle (c) Writing a debit item on
mines? the credit side and a credit
A. Diminishing balance item on the debit side of
B. Fixed instalment method equal amount
C. Sum of years’ digits method IV. Errors of (d) Posting a correct amount
D. Depletion method commission to a wrong account
348. In which of the following methods, the asset account Codes:
appears at its original cost through out its life? A. I -(c), II-(a), III-(d), IV-(b)
A. Annuity method B. I- (b), II-(a), III-(d), IV-(c)
B. Depreciation fund method C. I- (c), II-(a), III-(b), IV-(d)
C. Sum of years, digits method D. I- (b), II-(a), III-(c), IV-(d)
D. Machine hour rate method Directions (Qs. 355 and 356): These questions consist of
349. The amount of depreciation provided in the sinking two statements, Assertion (A) and Reason (R). You have to
fund method when compared to annuity method is: examine these two statements and select your answers to
A. higher B. lower these items using the codes given below:
C. equal D. unpredictable Codes:
350. The cost of a machine having a span of life of 5 years A. Both A and R are true, and R is the correct
is ` 1,00,000. It has a scrap value of `10,000. The explanation of A
amount of depreciation under the sum of years, digit B. Both A and R are true, but R is not a correct
method will be: explanation of A
A. ` 16,000 B. ` 18,000 C. A is true, but R is false
C. ` 25,000 D. ` 30,000 D. A is false, but R is true
355. Assertion (A) : Amount realised on the disposal (sale C. only profit realised
of a discarded) machine of the factory D. profit realised and all possible losses
should be treated as revenue receipt 362. Which one of the following accounting standards is
Reason (R) : Sale proceeds are usually of revenue not mandatory in India?
in nature A. Fixed assets accounting and revenue recognition
356. Assertion (A) : An accounting principle is that the B. Inventory and depreciation accounting
relatively small item and values C. Non-monetary assets and fixed assets
should be ignored from accounts D. Monetary assets and depreciation accounting
Reason (R) : The cost of the effort in the 363. If the total charge of depreciation and maintenance is
allocation of small items over a long considered as the method which would provide a
period does not justify the benefit unifrom charge is:
derived from this operation and the A. annuity method
cost of such items is treated as B. straight line method
expense for the period in which they C. diminishing balance method
are incurred D. insurance policy method
357. A second hand machinery was purchased for 364. Which of the following expenditures are to be treated
` 1,00,000 five years ago and was overhauled by as revenue expenditure?
carrying out some current repairs at a cost of ` 10,000. I. Interest paid on m oney borrow ed during
It has also an accumulated depreciation of ` 50,000. construction period
It has been disposed of in the beginning of the sixth II. Cost of patent rights
year for ` 60,000. Profit/loss on such disposal shall III. Loss of uninsured stock due to fire
be IV. Retirement gratuity paid to an employee
A. Profit of ` 10,000 B. Loss of ` 50,000 Select the correct answer using the codes given below:
C. Loss of ` 40,000 D. No profit, no loss
Codes:
358. Match List-I with List-II and select the correct answer A. I, II and III B. II, III, and IV
using the codes given below the lists: C. III and IV D. I and II
List-I List-II
365. Payment of compensation to a worker, who has been
I. Income (a) Accrues to owner’s
discharged from service, is a:
measurement equity
A. Capital expenditure
II. Expense recognition (b) Revenue recognition
B. Revenue expenditure
III. Basis for realisation (c) Matching
C. Deferred – revenue expenditure
in accounting revenues
D. Non-business expenditure
IV. Recognised revenue (d) Accounting period
366. Book-keeping is often confused with:
Codes: A. Algebra B. Statistics
A. I-(c), II-(d), III-(b), IV-(a) C. Cashier D. Accounting
B. I-(c), II-(d), III-(a), IV-(b)
C. I-(b), II-(c), III-(d), IV-(a) 367. If the operating expenses exceed gross profit, the
D. I-(b), II-(c), III-(a), IV-(d) excess is referred to as:
A. Operating income
359. Charging a period for the proportionate cost of an B. Operating loss
Intangible asset is termed as: C. Non-operating expenses
A. depreciation B. diminution D. Non-operating income
C. amortisation D. expiration
368. On using reducing balance method on an asset of `
360. Obsolescence means decline in the value due to: 20,000 at the rate of 10% per annum, depreciation of
A. Fall in the market price 3rd year will be:
B. Physical wear and tear A. ` 6,000 B. ` 1,800
C. Innovations and inventions C. ` 1,620 D. ` 2,000
D. Efflux of time
369. ` 19,500 debited to building repairs on 31st Dec.
361. Concept of conservatism refers to taking into account: 1993 included ` 9,500 as the cost of building a small
A. all profit room for the watch man. A bill of ` 800 for colour
B. only cash profit wash of the whole building during the year was not
 received till 1993 Dec. The amount to be debited to 374. In stock valuation, appilcation of the principle ‘at
profit and loss account would be: cost price or market price whichever is lower’ will
A. ` 20,300 B. ` 19,500 result in the valuation of stock sometimes at cost
C. ` 10,800 D. ` 9,500 price and at other times at market price. This is an
application of the principle of:
370. The term loan of ` 5,00,000 was received from IFCI.
It was used as under: A. Consistency
B. Materiality
I. ` 2,00,000 was advanced to suppliers for capital-
C. Conservatism
work-in-progress and
II. ` 3,00,000 was used for financing the working D. Disclosure
capital 375. Match List-I with List-II and select the correct answer
using the codes given below the lists:
The interest payable would be treated:
List-I List-II
A. on both I and II as capital expenditure
B. on I as capital expenditure and on II as revenue I. Heavy amount of (a) Capital
premium on redemption expenditure
expenditure
of preference shares
C. on I as deferred expenditure and on II as revenue
expenditure II. Excess of sale proceeds (b) Deferred revenue
fixed assets over their expenditure
D. on I as deferred revenue expenditure and on II as
original cost
capital expenditure
III. Cost of installation (c) Capital gain
371. Accounting is: of an old machine
A. the art of recording, classifying and summarising IV. Freight paid on (d) Revenue of
in a significant manner and in terms of money, purchase of raw material expenditure
transactions and events which are, in part at best
financial in character, and interpreting there of Codes:
A. I-(b), II-(c), III-(d), IV-(a)
B. a systematic and regular record of events affecting
B. I-(c), II-(b), III-(d), IV-(a)
a firm with a view to obtaining a clear financial
picture C. I-(b), II-(c), III-(a), IV-(d)
D. I-(c), II-(b), III-(a), IV-(d)
C. preparation of various financial statements over a
period of time of a firm to measure its performance 376. Amount spent on an advertisement campaign,
in monetary terms the benefit of which is likely to last for three years
D. nothing but book-keeping is a:
A. Capital expenditure
372. Ayush started business on 1st April, 1995 with a
B. Revenue expenditure
capital of ` 25,000 and a loan of ` 12,500. Total
assets and liabilities at the end of 31st March, 1996 C. Deferred revenue expenditure
D. Contingent expenditure
amounted to ` 75,000 and ` 12,500 respectively. He
invested a further capital of ` 12,500 during the year 377. Match List-I with List-II and select the correct answer
and withdrew ` 7,500 during the relevant financial, using the codes given below the lists:
period. His closing capital and profits would be List-I List-II
respectively: I. Preliminary expense (a) Capital expenditure
A. ` 62,500 and ` 32,500 II. Travelling expenses (b) Revenue
B. ` 50,000 and ` 40,000 of the salesman expenditure
C. ` 70,000 and ` 47,500 III. Profit on sale of a (c) Capital gain
D. ` 55,000 and ` 42,500 part of the business
373. A person started business with a cash of ` 22,000 and building
IV. Nazrana paid on (d) Deferred revenue
stock of ` 3,000 on 1st January, 1996. During the
the purchase of
year he made a profit of ` 6,000. His creditors were
paid ` 4,500 for the office furniture supplied. He took land for business
goods worth ` 3,500 for his daugher’s wedding on Codes:
30th June, 1996. The gross assets of his business on A. I-(d), II-(b), III-(c), IV-(a)
31st December, 1996 was: B. I-(d), II-(b), III-(a), IV-(c)
A. ` 27,500 B. ` 26,500 C. I-(b), II-(d), III-(c), IV-(a)
C. ` 23,500 D. ` 20,500 D. I-(b), II-(d), III-(a), IV-(c)
378. Revenue is generally recognised as being earned at Amount paid for medicines
that point of time when: during the years 15,000
A. Sale is effected Value of medicines spoiled
B. Cash is received during the year stock of
C. Production is completed medicines 400
D. Debts are collected On 31st December, 1995 3,500
379. Which one of the following will be treated as revenue The amount to be debited to income and expenditure
expenditure? account would be
A. Cost incurred for a new exit as required under the A. ` 15,000 B. ` 18,500
local bodies, by laws C. ` 18,000 D. ` 13,500
B. Interest paid on loan during the construction of
385. Which one of the following statements is correct?
works
A. Depreciation is not the process of valuation of
C. Cost of pulling down on old building as also the
asset–it is a process of allocation of cost of asset
payment made to the architect for the plan of a
to the period of its economic life
new building
B. If the cost of machinery is more than the book
D. A dealer in purchases sewing machines and spends
value, then depreciation need not be provided
some money on the repair of the machines damaged
C. When the plant and machinery and maintained in
while goods in transit
good condition, through repairs and renewals,
380. Which one of the following is capital expenditure? depreciation need not be provided
A. Cost of advertisement D. In the absence of any legal provisions, if the
B. Purchase of a delivery van auditor finds that provision made for depreciation
C. Purchase of raw material is inadequate, then he is not required to refer to
D. Purchase of machine oil it in his report
381. Which one of the following depreciation methods is 386. Which of the following items should be entered in the
most suitable for a coal mine? receipts and payments account of a club?
A. Diminishing balance method I. Sale of old newspapers
B. Depletion method II. Loss on sale of some asset
C. Fixed instalment method III. Payments for investment
D. Sum of year’s digits method
Select the correct answer using the codes given below
382. In the case of a sole proprietorship, Assets in Balance Codes:
sheet items are conveniently shown in: A. I, II and III B. I and III
A. Order of fixity C. I and II D. II and III
B. Order of liquidity
C. Alphabetical order 387. A cultural club discloses that subscriptions received
D. Order of dates of acquisition during a particular accounting period as per receipts
and payments account am ount to ` 57,360.
383. A business concern provides the following details— Subscription outstanding (opening and closing) was
Cost of goods sold ............. ` 1,50,000 ` 4,800 and ` 6,000 respectively. Subscription
Sales ............. ` 2,00,000 received in advance (opening balance and closing
Opening stock .............. ` 60,000 balance) amounted to ` 3,600 and ` 2,160 respectively.
Closing stock .............. ` 40,000 The amount to be posted to income and expenditure
Debtors ............... ` 45,000 account would be
Creditors ............... ` 50,000 A. ` 57,360 B. ` 54,000
The concerns, purchses would amount to (in `): C. ` 60,000 D. ` 63,360
A. 1,30,000 B. 2,20,000 Directions (Qs. 388-391): These questions consist of four
C. 2,60,000 D. 2,90,000 statements, Assertion (A) and Reason (R). You have to
384. The following figures (all in `) relate to non-trading examine these four statements and select your answers to
concern: these items using the codes given below:
1st January, 1995 stock of medicines 5,000 Codes:
1st January,1995 outstanding A. Both A and R are true, and R is the correct
creditors for medicines 3,000 explanation of A
 B. Both A and R are true, but R is NOT a correct 395. Money measurement concept of accounting theory is
explanation of A based on the assumption that the value of money
C. A is true, but R is false will:
D. A is false, but R is true A. remain constant
B. fluctuate
388. Assertion (A) : In accounting, a distinction is made
C. decrease
between the business and the owner
D. go up
Reason (R) : Accounting concepts are based on
adjectivity and not on subjectivity 396. Match List-I (Items of expenditure and receipt) with
List-II (Nature of expenditure and receipt) and select
389. Assertion (A) : Materiality concept refers to the state
the correct answer using the codes given below the
of ignoring relatively small items and
lists:
values from accounts
List-I List-II
Reason (R) : The effort involved in allocating the
I. Premium paid for a (a) Revenue
cost of a small item over a long period
lease hold property expenditure
should be justified in terms of the
II. Insurance premium paid (b) Capital
benefit derived from this operation. for risks against accidental receipt
Therefore, cost of such items may be losses of properties (fixed
treated as expenses for the period in assets)
which they are acquired III. Amount realised from the (c) Deferred
390. Assertion (A) : The balance sheet fails to reveal the sale of securities revenue
worth of a business (investment)\purchased earlier expenditure
Reason (R) : Assets are merely unamortised costs IV. Huge sales promotion (d) Capital
expenses expenditure
391. Assertion (A) : The cost of demolishing an old
Codes:
building preparatory to the
A. I-(d), II-(b), III-(a), IV-(c)
construction of a new building in that
B. I-(c), II-(b), III-(a), IV-(d)
place is to be treated as capital
C. I-(d), II-(a), III-(b), IV-(c)
expenditure D. I-(c), II-(a), III-(b), IV-(d)
Reason (R) : Such cost is not incidental to the
construction of the new building 397. Match List-I (Items of expenditure and receipt) with
List-II (Nature of expenditure and receipt) and select
392. The fundamental accounting equation, Assets = the correct answer using the codes given below the
Equities + liabilities is the formal expression of: lists:
A. dual aspect concept List-I List-II
B. matching concept I. Compensation paid (a) Capital
C. going – concern concept to retrenched workers expenditure
D. money measurement concept of the factory for the
393. A business is considered to be having and indefinite loss of service
life according to: II. Legal expenses incurred in (b) Capital
A. accounting period concept connection with the purchase receipt
B. cost concept of a plot of land
C. going concern concept III. Compensation received from (c) Revenue
D. dual aspect concept the government for the expenditure
compulsory removal
394. Which of the following pairs are correctly matched? of a business premises
I. Business entity – Accounting standard to another place
II. Stock valuation – Consistency IV. Sale proceeds of merchandise (d) Revenue
III. Capital – Drawings (goods) receipt
IV. Going concern – Assumption
Codes:
Select the correct answer using the codes given below: A. I-(a), II-(c), III-(d), IV-(b)
Codes: B. I-(a), II-(c), III-(b), IV-(d)
A. I, III and IV B. I, II and III C. I-(c), II-(a), III-(d), IV-(b)
C. I, II and IV D. I, III and IV D. I-(c), II-(a), III-(b), IV-(d)
(2715) Accountancy—4
398. The cash price of a machine is ` 1,20,000 and its hire 403. A trader maintains his books of accounts on Single
purchase price is ` 1,50,000 to be paid in five equal Entry basis. His books of accounts show that his total
yearly instalments. If a company purchases the purchases during the year were ` 90,000 of which he
machine on hire purchase basis, the amount of capital returned goods worth ` 10,000. His credit sales were
expenditure will be: ` 50,000 and cash sales were ` 80,000 of the total
A. ` 1,20,000 sales goods returned were ` 30,000. Closing stock is
B. ` 1,35,000 1
C. ` 1,50,000 ` 12,000. He sells his goods at cost plus 33 %. His
3
D. ` 1,60,000 opening stock is:
399. Which one of the following is a capital expenditure? A. ` 12,000 B. ` 10,000
A. Compensation paid to directors on termination of C. ` 8,000 D. ` 7,000
their services 404. A firm which keeps its books of accounts on single
B. Expenditure incurred in connection with the
entry system has opening balance and closing balance
renewal of a Trademark
of Bills Receivable as ` 9,000 and `11,000
C. Gratuities paid to employees on their retirement
respectively. Bills collected during the financial
D. Royalty paid in instalments for the purchase of
period amount to ` 20,000. Bills receivable received
rights to manufacture and sell patient medicines
during the financial period amount to:
400. The following information pertains to a cultural club: A. ` 22,000
Stock of tinned provisions : ` 25,000 B. ` 18,000
(as on 1.4.94) C. ` 12,000
Purchased during the year : ` 1,50,000 D. ` 11,000
Stock of tinned provisions : ` 50,000
405. Which preparing accounts from incomplete records,
(as on 31.3.95)
the amount of credit sales is determined by?
Sale of tinned provisions : ` 1,50,000
A. preparing total creditors account
during the year
B. preparing total debtors account
The amounts to be debited and credited respectively C. ascertaining the balance in trading account other
to the Income and Expenditure account would be: than closing stock
A. ` 1,75,000 and ` 1,50,000 D. ascertaining the balance in debtors account and
B. ` 1,25,000 and ` 1,75,000 cash book
C. ` 1,25,000 and ` 1,50,000
D. ` 1,75,000 and ` 1,25,000 406. An asset is purchased for ` 50,000 on which
depreciation is to be provided annually according to
401. A cricket club has 50 members and each member pays the straight line method. The useful life to the asset
` 200 as monthly subscription 5 members paid is 10 years and the residual value is ` 10,000. The
advance subscription for the financial year 1994–95 rate of depreciation is:
and 10 members failed to pay subscription for the A. 20 % B. 18 %
year 1993–94. The amount to be credited as C. 10 % D. 8 %
subscription to income and expenditure account would
be: 407. An asset is never reduced to zero in the:
A. ` 12,000 B. ` 10,000 A. fixed instalment method
C. ` 9,600 D. ` 8,000 B. reducing balance method
C. annuity method
402. The following information is provided by a cultural
D. sum of years method
club:
Stock of sports goods : ` 20,000 408. The main objective of providing depreciation is to:
Purchase of sports goods : ` 80,000 A. create secret reserves
during the accounting period B. reduce the book value of assets
Sports goods sold as scrap : ` 500 C. value the assets properly
Closing balance : ` 30,000 D. allocate cost of the assets
The amount to be charged to Income and Expenditure 409. Match List-I (financial statements and accounts) with
Accounts as sports goods consumed will be: List-II (special matters associated with statements and
A. ` 69,500 B. ` 70,000 accounts) and select the correct answer using the codes
C. ` 70,500 D. ` 80,000 given below the lists:
 List-I List-II 414. Given that the value of furniture on 1.1.93 is ` 8,000,
I. Receipts and payments (a) Revenue account furniture purchased during the year is ` 4,000, sale of
II. Income and expenditure (b) Cash furniture no loss no profit basis is ` 2,000, and the
account furniture is valued at ` 7,000 on 31.12.93, the
III. Dividend equalisation (c) Liability depreciation for the year 1993 will be:
reserve A. ` 1,000 B. ` 3,000
IV. Club subscription received (d) Balancesheet C. ` 5,000 D. ` 7,000
in advance account 415. Which of the following are applicable to sinking fund
(e) General reserve method of depreciation?
Codes: I. Periodic depreciation is smaller than the assets,
A. I-(b), II-(a), III-(d), IV-(c) actual annual depreciable cost
B. I-(c), II-(b), III-(d), IV-(e) II. Amount of interest constantly declines due to
C. I-(b), II-(a), III-(e), IV-(c) assets, reducing balances
D. I-(a), II-(b), III-(d), IV-(e) III. Annual net incidence on profit and loss account
410. Profit under single entry system of Book Keeping remains constant due to incorporation of only
means: fixed depreciation
A. the difference between opening and closing cash IV. Periodic depreciation is recorded through the assets
balances and reduced by fresh capital introduced account
B. the difference between opening net assets and Select the correect answer using the codes given
closing net assets as increased by drawings and below:
reduced by new capital introduced Codes:
C. profit shown by Trading and Profit and Loss A. II and IV B. I and III
Account and Balance sheet C. I, II and III D. II, III and IV
D. the amount of closing cash balance as reduced by 416. Match List-I with List-II and select the correct answer
expenses using the codes given below the lists:
411. Given that List-I List-II
Opening capital : ` 5,000 I. Amortisation (a) Diminition in the life of the
Closing capital : ` 6,000 assets due to excessive use
Drawings : ` 1,000 II. Depreciation (b) Exhaustion of natural
New capital invested : ` 500 resource
III. Depletion (c) Expiration of tangible assets
The profit for the year will be: IV. Obsolescence (d) Expiration of intangible
A. ` 2,000 B. ` 1,500 assets
C. ` 1,000 D. ` 500 (e) Economic deterioration due
412. W hich of the follow ing are prepared by the to improved inventions
organisations keeping only incomplete accounting Codes:
records? A. I-(a), II-(b), III-(c), IV-(d)
I. Cash book B. I-(a), II-(b), III-(d), IV-(e)
II. Customer’s Accounts C. I-(e), II-(b), III-(c), IV-(d)
III. Expenses Accounts D. I-(d), II-(c), III-(b), IV-(e)
IV. Day Books 417. Match List-I with List-II and select the correct answer
Choose the correct answer using the codes given using the codes given below the lists:
below: List-I List-II
(Accounting concept) (Principle involved)
Codes:
I. Consistency (a) Losses are anticipated and
A. I, II and III B. I, II and IV
accounted for in advance but
C. I, III and IV D. II, III and IV
profits are not accounted for
413. Depreciation Accounting is a process of: until realised
A. allocation of cost II. Comparability (b) All the relevant financial
B. valuation of assets inform ations should be
C. provision for replacement of assets summarised and presented in
D. estimation of net profit the accounting statements
 III. Conservatism (c) Accounting procedures in an Codes:
entity should be followed A. I-(b), II-(c), III-(a), IV-(e)
uniform ly from period to B. I-(d), II-(b), III-(e), IV-(a)
period C. I-(c), II-(d), III-(a), IV-(e)
IV. Disclosure (d) A ccounting statem ent of D. I-(d), II-(c), III-(a), IV-(e)
different periods of an entity 421. While preparing the annual financial statements, the
and those of different entities balance of rent account should be treated as the
of a period should be based balance of a:
on the sam e accounting A. Personal Account
principles and procedures. B. Nominal Account
(e) Personal Judgem ent of C. Real Account
accountants should not D. Deferred Expenditure Account
influence accounting
measurements. 422. What is the correct sequence of the preparation of the
Codes: following accounts and statement of a non–profit
A. I-(d), II-(c), III-(e), IV-(b) organisation?
B. I-(c), II-(d), III-(a), IV-(b) I. Income and expenditure account
C. I-(d), II-(c), III-(a), IV-(e) II. Receipts and payment account
D. I-(c), II-(d), III-(b), IV-(e) III. Balance sheet

418. Which one of the following should be considered as Select the correct answer from the codes given below:
a revenue expenditure? Codes:
A. I, II, III B. I, III, II
A. ` 1,000 paid for the erection of a new plant
C. II, I, III D. II, III, I
B. Cost of ` 10,000 incurred in increasing the sitting
accommodation of a hotel 423. Profit as per accounts from incomplete records may
C. Damages paid on account of breach of a contract constructed as equivalent of:
to supply certain goods A. Excess of assets over liabilities at the close of the
D. Repairs to machinery purchased second hand period
B. Excess of capital at the end over the capital at the
419. The written down value of a plant is 6,000 (the
beginning
original value being `10,000). It is sold for ` 12,000
C. Excess of assets over liabilities at the
during the current financial year. Which one of the
commencement of the period
following is true in this regard?
D. Excess of capital at the beginning over the capital
A. Capital profit = ` 6,000
at the end
B. Revenue profit = ` 6,000
C. Capital profit = ` 2,000 424. According to records of a firm which not keep its
D. Revenue profit = ` 4,000 accounts on double entry systems, all sales were made
420. Match List-I (Item of expenditure/receipt) with List- 1
on credit so as to realise a profit of 33 per cent on
II (Nature of expenditure/receipt)and select the correct 3
answer using the codes given below the lists: sales proceeds. The stock of unsold goods at the
List-I List-II beginning and at the end of the trading period were
I. Carriage charges on a new (a) Revenue valued at ` 21,000 and 18,000 respectively. Goods
machine purchased for factory receipt worth ` 1,39,500 were purchased for resale during the
II. Legal expenses incurred in (b) Revenue period
defending a case of violation expenditure
of a provision of Factories Act The proprietor withdraw goods worth ` 1,500 during
accounting period for personal use. What were the
III. Grant-in-aid received from the (c) Deferred
total sales during the period?
Goverment for the construction revenue
A. ` 1,80,000 B. ` 2,11,500
of a building expenditure
C. ` 2,25,000 D. ` 2,31,500
IV. Amount received for a part of (d) Capital
the office building sublet expenditure 425. Consider the following statement, while preparing
(e) Capital annual financial statements, the balance of bills
receipt receivable account can be treated as—
 I. an accrued income 432. A business entity has assets of ` 26,000 and liabilities
II. an item of assets of ` 6,000. Owner’s equity in this case is:
III. a “personal account” balance A. ` 32,000 B. ` 26,000
C. ` 20,000 D. ` 6,000
Of these statement:
A. II and III are correct 433. Accounting records transactions in terms of:
B. I and III are correct A. Commodity units B. Monetary units
C. I and II are correct C. Production units D. None of these
D. None of these 434. Market price or actual cost, whichever is less, is the
426. On January 1, 1992 there was a balance of ` 4,000 in generally accepted accounting principle for valuation
the plant and machinery account. An addition of of:
` 2,000 was made on July 1, 1992. Accounts were A. Stock-in-trade B. Fixed assets
closed for the year on December 31, 1992. If C. Current assets D. All of these
depreciation was charged at 10% per annum, the 435. Match List-I with List-II and select the correct answer
balance in the plant and machinery account on the using the codes given below the lists:
closing date would be: List-I List-II
A. ` 5,300 B. ` 5,400 (Types of accounts) (Principles)
C. ` 5,500 D. ` 5,600 I. Real Accounts (a) D ebit the receiver
427. A machinery having a residual value of ` 5,000 was credit the giver
purchased on 1.1.1998 for ` 1,00,000 and was II. Nominal Accounts (b) Debit what comes in
depreciated @ 9.5% on a straight line method. On credit what goes out
1.1.1998, it was estimated that its useful life has been III. Personal Accounts (c) D ebit all expenses
reduced to eight years. Under the changed circum- credit all gains
stances, the annual depreciation charges for the year Codes:
1991 and onwards will be: A. I-(c), II-(b), III-(a) B. I-(a), II-(c), III-(b)
A. ` 11,875 B. ` 13,300 C. I-(b), II-(c), III-(a) D. I-(a), II-(b), III-(c)
C. ` 9,500 D. ` 12,500 436. Renewal fee for patents is a:
428. In which one of the following methods of charge A. Capital expenditure
depreciation shall be balance never be reduced to B. Revenue expenditure
zero? C. Deferred revenue expenditure
A. Fixed instalment method D. Development expenditure
B. Depreciation fund method 437. A manufacturing company spent the following
C. Diminishing balance method amounts on the import and installation of machine:
D. Depletion unit method (a) ` 50,000 : Price of the machine
429. “Holding gains in relation to stocks should not be (b) ` 5,000 : Freight
used for payment of dividend.” Which one of the (c) ` 1,050 : Insurance premium
following accounting principles is involved in this? (d) ` 6,000 : Replacement of a part damaged
A. Consistency B. Cost intransit, not covered under the
C. Materiality D. Realisation insurance policy
430. X started business with a capital of ` 20,000 and Based on the above data, capital expenditure would
purchased goods worth ` 2,000 on credit. These be:
transactions may be expressed in the from of A. ` 50,000 B. ` 56,050
‘Accounting equation’ such as: C. ` 62,050 D. ` 51,050
A. ` 22,000 = ` 20,000 + ` 2,000 438. If trial a balance does not tally inspite of through
B. ` 20,000 = ` 22,000 – ` 2,000 scruting and the diffrence is substantial, then which
C. ` 22,000 = ` 22,000 + 0 one of the following courses would be accountant
D. ` 22,000 = 0 + ` 22,000 adopt?
431. Long-term liabilities are: A. Defer preparation of financial statements
A. Fixed assets minus current assets B. Open suspense A/c
B. Fixed assets minus current liabilities C. Write off the difference to profit and loss A/c
C. Current assets plus current liabilities D. Ignore the difference and prepare financial
D. Total liabilities minus current liabilities statements
439. Given, subscription received in 1990: 444. Trade discount allowed on sales is:
For the year 1989 – ` 500 A. debited to customer’s account
For the year 1990 – ` 7,000 B. credited to customer’s account
For the year 1991 – ` 400 C. debited to profit and loss account
D. None of these
1990 – subscription outstanding on 31st December,
1990 : ` 250 445. Accounting principles represent:
A. a consensus at a particular time to the recording
The amount of subscription to be posted to income of accounting transactions
and expenditure account of 1990 is: B. inviolable laws fixed by the legal boards
A. ` 7,000 B. ` 7,250 C. laws fixed by accounting experts
C. ` 7,900 D. ` 8,150 D. laws fixed by the respective governments
440. Assertion (A) : The matching concept requires that 446. How does an over costing of purchase day book affect
costs should be recognised as the cost of sales and profit?
expenses in the period in which A. Cost of sales is decreased while profit is increased
revenue is realised B. Cost of sales is increased while profit is decreased
Reason (R) : There m ay not be a m atching C. Both cost of sales and profit are increased
between expenditure and expense D. Cost of sales is increased, gross profit is decreased,
over a short period but net profit remains unaffected
In the context given above, which one of the following 447. Consistency w ith reference to application of
is correct ? accounting principles refers to the fact that:
A. Both A and R are true, and R is the correct A. Companies in the same industry use identical
explanation of A accounting procedures and methods, and are
B. Both A and R are true, but R is not a correct consistent
explanation of A B. Income and assets have not been over stated
C. A is true, but R is false C. Accounting methods and procedures used have
D. A is false, but R is true been consistently applied from year to year
D. All methods and procedures have been utilised
441. In financial statements, adequate disclosure is ensured
by companies as per the requirements of: 448. What is the correct sequence of the following in the
I. management policies preparation of periodical financial statements?
II. materiality concept I. preparation of Balancesheet
III. disclosure concept II. preparation of Funds flow statement
III. preparation of Trial balance
IV. relevant provision of the Companies Act
IV. preparation of Profit/Loss statement
V. internal control
Select the correct answer from the codes given below
Of these statements:
and mark your answer sheet accordingly.
A. I and III are correct
Codes:
B. I, II and III are correct
A. IV, II, I, III B. III, IV, I, II
C. II, III and V are correct C. II, IV, III, I D. I, III, II, IV
D. II, III and IV are correct
449. Depreciation is:
442. The proprietor of a business is treated as a creditor for A. A source of fund
capital introduced by him according to: B. A use of fund
A. money measurement concept C. Neither a source nor a use of fund
B. cost concept D. Partly a source and partly an application of fund
C. business entity concept
450. The following are the figures relating to a trader:
D. dual aspect concept
Opening stock – ` 10,000
443. Which one of the following statements is correct? Closing stock – ` 11,000
A. Capital of a firm is reduced by borrowing Purchase – ` 70,000
B. When there is no change in proprietor’s capital it The goods are sold at a profit of 30% on cost. The
is an indication of loss in business amount of sales will be:
C. Nominal accounts refer to false transactions A. ` 1,04,000 B. ` 91,000
D. Real accounts relate to assets of a business C. ` 89,700 D. ` 21,000
451. Subscriptions amounting to ` 7,500 appear on the 456. The amount of depreciation under straight line method
credit side of income and expenditure account after vis-a-vis written down value method, when the rate of
adjusting subscriptions out standing ` 600 and depreciation is same, would be:
subscriptions received in advance ` 450. The amount A. equal in all years
of subscriptions to be shown in the receipts and B. equal in the first year but higher is subsequent
payments account for the same year will be: years
A. ` 6,450 B. ` 7,350 C. equal in the first year but lower in subsequent years
C. ` 7,650 D. ` 8,550 D. lower in the first year but equal in subsequent
years
452. Which of the following item/items will be included in
income and expenditure account? 457. If on January 1, 1983 a plant is purchased for
I. Accrued expenses ` 1,20,000, its estimated life is ten years and its
II. Credit purchases salvage value is ` 10,000 under which one of the
following method would the 1983 depreciation be
III. Prepaid expenses
the largest?
IV. Opening cash balance
A. Straight line method
Select the correct answer from the codes given below B. Double-declining balance method
and mark your answer sheet accordingly. C. Sum of the year’s digits method
Codes: D. 15% on original cost
A. I B. I and II 458. Accumulated depreciation account is shown in the
C. II and III D. III and IV final accounts:
453. If, A. on the liability side of the balance sheet
Capital at the end = ` 7,000 B. on the debit side of the profit and loss account
Capital introduced = ` 5,000 C. by deducting from the related asset account in the
Drawings = ` 8,000 balance sheet
Loss = ` 10,000 D. on the credit side of the profit and loss account

Then capital in the beginning is equal to: 459. A particular firm provided the following data for an
accounting year
A. ` 12,000 B. ` 16,000
Current ratio ........................... 2.5 : 1
C. ` 20,000 D. ` 30,000
Liquid ratio ............................ 1.5 : 1
454. Company accounting conforms more to dual aspect Net working capital ............... ` 6,00,000
concept than to incomplete recording system because:
Current assets and current liabilities of the firm are,
I. Companies Act insists upon the adoption of
respectively:
double entry systems of book keeping
A. ` 9,00,000 and ` 3,00,000
II. Balance sheet could not be preprared under sec. B. ` 10,00,000 and ` 4,00,000
211 of Com pany’s A ct according to the C. ` 8,50,000 and ` 2,50,000
incomplete recording system D. ` 7,50,000 and ` 1,50,000
III. To show true and fair view of the affairs of the
company 460. When shares are forfeited, the share capital account is
IV. To ensure adequate disclosure debited by:
A. Paid-up amount
Select the correct answer from the codes given below B. Called-up amount
and mark your answer sheet accordingly. C. Nominal value of the shares
Codes: D. Market value of the shares
A. I and II
461. When one of the following reflects the over all
B. II and III
efficiency with which capital is used?
C. II, III and IV
A. Return on shareholders funds
D. I, II and III B. Investment turnover ratio
455. The purpose of depreciation is to: C. Earning per share
A. reduce fixed assets to market value each year D. Operating ratio
B. save income tax and wealth tax 462. A company pays dividend out of:
C. reduce fixed assets to nil as soon as possible A. Profits of the company for year for which
assets top expense over their working lives dividends are to be paid
D. allocate the cost of fixed B. Undistributed profit of the previous financial years
 C. M oney provided by the central and state Codes:
governments for the payment of dividends in A. I-(d), II-(c), III-(a), IV-(b)
pursuance of their guaranters B. I-(a), II-(b), III-(d), IV-(c)
D. All of these C. I-(d), II-(b), III-(a), IV-(c)
463. A limited company has to redeem redeemable D. I-(a), II-(c), III-(d), IV-(b)
preference shares of the value of ` 1,00,000 for which 468. In a partnership business if there is no specific
the company has issued 3000 equity shares of ` 10 agreement among partners, profit is distributed in the:
each at a premium of 10 %. The amount to be A. ratio of capital contributions
transferred to capital redemption reserve account will B. ratio of time spent in the business
be: C. ratio to be decided by the court
A. ` 1,00,000 B. ` 97,000 D. equal ratio
C. ` 70,000 D. ` 67,000
469. Consider the following statements:
464. To test the liquidity of a concern, which of the I. In case of the marine insurance, the insurable
following ratios are useful? interest must exist at the time the loss occurs
I. Acid test ratio II. In case of fire insurance, insurable interest must
II. Capital turnover ratio exist both at the time of the contract and at the
III. Bad debts to sales ratio time of loss
IV. Inventory turnover ratio
Which of the statements given above is/are correct?
Select the correct answer using the codes given below: A. I only B. II only
A. I and III B. I and IV C. Both I and II D. Neither I nor II
C. II and IV D. II and III
470. Consider the following statements:
465. The following figures are taken from a balance sheet: I. Workm en’s com pensation and third party
(`) insurance are examples of guarantee insurance
Equity share capital................ 1,10,000 II. Re-insurance is more common under fire and
6% preference share capital... 30,000 marine insurance
General reserve.................... 50,000
Reserve for contingencies...... 20,000 Which of the statements given above is/are correct ?
6% mortgage debentures...... 50,000 A. I only B. II only
Sundry creditors.................. 20,000 C. Both I and II D. Neither I nor II
Preliminary expenses............ 5,000 471. The dividend per share in a company is ` 2, earning
Prepaid expenses.................. 4,000 per share is ` 5, and the market value is ` 25. What
In this case, the debt equity ratio is: will be its yield?
A. 1 : 2 B. 2 : 1 A. 20 per cent B. 12.5 per cent
C. 24 : 1 D. None of these C. 8 per cent D. 25 per cent

466. Who among the following is a bear operator? 472. When an incoming partner purchases his share from
A. A stock broker who sells shares now and buys the any one of the existing partners, then:
same shares later A. total assets of the firm do not change
B. An investor who expects the price of a security or B. total assets of the firm will be augmented to the
that of the whole securities market to rise extent of payment received from the new partner
C. An investor who sells securities anticipation of C. total assets of the firm will be reduced to the
being able to repurchase them later at a lower extent of payment received from the new partner
price D. change in total assets of the firm will depend
D. A broker who indulges in rigging of share prices upon the new profit sharing ratio of the partners
467. Match List-I with List-II and select the correct answer 473. If the good will raised at the time of retirement of
using the codes given below the lists: a partner is to be written off, then the capital accounts
List-I List-II of the remaining partners are debited in:
I. Financial leverage (a) Efficiency A. New profit sharing ratio
II. Quick ratio (b) Profitability B. Capital ratio
III. Stock turnover (c) Liquidity C. Old profit sharing ratio
IV. Margin on sales (d) Risk D. Sacrificing ratio
474. Match List-I with List-II and select the correct answer A. Matured debentures of a company
using the codes given below the Lists: B. Tax arrears
List-I List-II C. Proceeds of sale of property
I. Partner’s current (a) Dissolution of D. Provision for doubtful debts
accounts partnership 479. Match List-I with List-II and select the correct answer
II. Goodwill account (b) Admission of a partner using the codes given below the lists:
III. Partner’s drawings (c) Fixed capital of List-I List-II
account partners I. Uncertain liability (a) Amortisation
IV. Realisation (d) Goods taken by a partner II. Expiry of tangible (b) Long-term
account for self- consumption asset liability
Codes: III. Basis for all (c) Research and
A. I-(a), II-(d), III-(b), IV-(c) valuations in the development
B. I-(c), II-(b), III-(d), IV-(a) balancesheet
C. I-(a), II-(b), III-(d), IV-(c) IV. Accounting (d) Estimated
D. I-(c), II-(d), III-(b), IV-(a) standard-As-8 obligation
475. Which one of the following securities cannot be issued (e) Conservatism
by a public limited company in India? convention
A. Participating preference shares Codes:
B. Redeemable preference shares A. I-(e), II-(a), III-(b), IV-(c)
C. Deferred shares B. I-(d), II-(c), III-(e), IV-(a)
D. Debentures C. I-(e), II-(c), III-(d), IV-(a)
D. I-(d), II-(a), III-(e), IV-(c)
476. Match List-I with List-II and select the correct answer
using the codes given below the lists: 480. Consistency w ith reference to application of
List-I List-II accounting principles refer to the fact that:
I. Receipts and payments account (a) Revenue A. Companies in the same industry use identical
II. Income and expenditure account (b) Cash accounting procedures and methods
III. Dividend equalization reserve (c) Liability B. Income and assets have not been over stated
IV. Subscription received in (d) General C. Accounting methods and procedures used have
advance account reserve been consistently applied from year to year
Codes: D. All the methods and procedures have been utilised
A. I-(b), II-(a), III-(d), IV-(c) 481. A company purchased the following assets and paid
B. I-(c), II-(d), III-(a), IV-(b) through 1,00,000 fully paid equity shares of ` 10 at
C. I-(b), II-(d), III-(a), IV-(c) a premium of ` 2:
D. I-(c), II-(a), III-(d), IV-(b) Building ` 5,00,000
477. Which one of the following is not a valid observation Machinery ` 4,00,000
with reference to the declaration or payment of Stock in trade ` 1,00,000
dividend for any financial year? In the context of funds flow statement, this transaction
(a) Depreciation for the current financial year must will result in:
be provided A. Funds in flow of ` 10,00,000
(b) Arrears of depreciation must be provided B. Funds in flow of ` 12,00,000
(c) Losses incurred in previous year(s) must be set off C. Funds in flow of ` 1,00,000
(d) 10% of the profit must be transferred to the reserves D. Funds in flow of ` 9,00,000
in all cases
482. Call option is:
Codes:
A. a contract to buy a certain number of shares at a
A. I-(b), II-(a), III-(d), IV-(c)
stated price within a specified period of time
B. I-(c), II-(d), III-(a), IV-(b)
B. a contract to sell a certain number of shares at a
C. I-(b), II-(d), III-(a), IV-(c)
stated price within a specified period of time
D. I-(c), II-(a), III-(d), IV-(b)
C. the option of the issuing company to demand the
478. Which of the following amounts shall be credited to shareholders to pay for the partly paid shares
Investor Education and Protection Fund, if they remain D. the option available to the convertible
unpaid/unclaimed for seven years from the date they debenture holders to demand equity shares in
become due? conversion of debentures
(2715) Accountancy—5-II
Directions (Q. 483-485): The questions consist of two 487. Following data appear in the books of XY & Co. as
statements, one labelled as (Assertion (A) and the other on 31-03-2003
labelled as ‘Reason (R)’. You are to examine these two Capital account....................... ` 13,00,000
statements carefully and select the answers to these items Drawings account................... ` 12,000
using the codes. Land & building account.... ` 10,00,000
Goodwill account................... ` 3,50,000
483. Assertion (A) : Holding company is a partial consoli- Suspense account (Dr).......... ` 50,000
dation Loss by theft account........... ` 20,000
Reason (R) : If company C is the subsidiary of B, Business loss........................... ` 50,000
and B is a subsidiary of A, then C Loan given to AB & Co..... ` 60,000
will be deemed to be a subsidiary of
What will be the amount of sundry creditors?
A through the medium of B
A. ` 2,30,000 B. ` 1,72,000
Codes:
C. ` 3,42,000 D. ` 2,42,000
A. Both A and R are true, and R is the correct
explanation of A 488. Under the accrual concept, which one of the following
B. Both A and R are true, but R is not a correct will not be shown as an asset/liability in the
explanation of A balancesheet of an entity?
C. A is true, but R is false A. Interest due but not paid
D. A is false, but R is true B. Interest due but not received
C. Interest due and paid
484. Assertion (A) : While preparing trading and profit D. Interest paid but not due
and loss A/c and balancesheet, the
489. A Company purchased 8% bonds at a cost of
adjustments given out side the trial
`12,00,000 (face value `10,00,000) on January 1,
balance are to be shown in final
2003. Half yearly interest is payable on this investment
accounts at two places, if treated
on June 30 and December 31st each year. The
directly
company closes its accounts on 31-3-2003. The
Reason (R) : Adjustment are to be made to comply amount of accured interest shown in profit and loss
with the matching principle. account for the year ended is:
Codes: A. ` 40,000 B. ` 60,000
A. Both A and R are true, and R is the correct C. ` 20,000 D. ` 80,000
explanation of A
B. Both A and R are true, but R is not a correct 490. Goods worth ` 24,000 were returned by X. The
accountant, however, credited the sales returns
explanation of A
account by ` 42,000. In order to rectify this error,
C. A is true, but R is false
what should be done?
D. A is false, but R is true
A. Debit the sales return account by ` 42,000
485. Assertion (A) : Current ratio shows the ability of B. Credit the sales return account by ` 24,000
the firm to m eet its short-term C. Debit the sales return account by ` 66,000
obligations. D. Debit the sales return account by ` 18,000
Reason (R) : Current ratio is also used in inventory 491. A machine with a written down value of ` 10,000 has
valuation. been sold for ` 13,000. The amount realized is a:
Codes: A. Capital receipt and profit involved should be
A. Both A and R are true, and R is the correct transferred to capital reserve
explanation of A B. Revenue receipt
B. Both A and R are true, but R is not a correct C. Capital receipt and profit involved should be
explanation of A transferred to General Reserve
C. A is true, but R is false D. Capital receipt and profit involved should be
D. A is false, but R is true transferred to profit and loss A/c
486. Making the provision for bad and doubtful debts in 492. ` 10,000 spent on the replacement of worn-out parts
anticipation of actual bad debts is on basis of: of an electronic machinery is treated as:
A. Convention of disclosure A. Capital expenditure
B. Convention of consistency B. Revenue expenditure
C. Convention of conservatism C. Deferred revenue expenditure
D. Conventions of disclosures and consistency D. Capital loss
493. Preliminary expenses are an example of: 498. Given the following data extracted from the book of
A. Revenue expenditure Abdul traders:
B. Capital expenditure (`)
C. Deferred revenue expenditure Opening stock.................... 30,000
D. All of these Closing stock..................... 40,000
494. Which of the following is/are capitalised along with Purchases........................... 1,25,000
Carriage inwards................ 2,000
the purchase price a fixed asset?
Carriage outwards.............. 3,000
I. Import duty
II. Delivery and handling cost Return outwards................. 5,000
Sales................................... 1,50,000
III. Cash discount
IV. Cost of installation The cost of goods sold will be
A. ` 1,30,000 B. ` 1,12,000
Select the correct answer using the codes given below:
A. III only B. II and III C. ` 1,20,000 D. ` 1,15,000
C. I, II and IV D. I, II, III and IV 499. Consider the following statements:
495. Match List-I (Items) with List-II (Standards) and select A credit purchase during the accounting year which
the correct answer using the codes given below the was not recorded in the books of account but included
lists: in the closing stock is to be:
List-I List-II I. added to the credit purchases account
(Items) (Standards) II. added to the creditors account
I. Accounting for fixed assets (a) AS-9 III. subtracted from the closing stock
II. Revenue recognition (b) AS-10 IV. added to the opening stock
III. Depreciation accounting (c) AS-3
Which of the statements given above is/are correct?
IV. Cash flow statement (d) AS-6
A. III only B. I and II
Codes: C. II and III D. II, III and IV
A. I-(b), II-(c), III-(d), IV-(a)
B. I-(d), II-(a), III-(b), IV-(c) 500. Match List-I (Items) with List-II (Headings) and select
C. I-(b), II-(a), III-(d), IV-(c) the correct answer using the codes given below the
D. I-(d), II-(c), III-(b), IV-(a) lists:
List-I List-II
496. Accounting standard-AS-2 provides that inventories
(Items) (Headings)
should be valued at
I. Provision for (a) Miscellaneous expenses
A. lower of historical cost and net realisable value income tax not written off
B. lower of historical cost and market value
II. Share premium (b) Current liabilities
C. only estimated selling price
III. Unclaimed dividend (c) Reserves and surplus
D. All of these IV. Discount issue (d) Profit and loss account
497. While making an adjustment entry in respect of of shares
interest on capital, credit is made to: Codes:
A. Capital account A. I-(d), II-(c), III-(b), IV-(a)
B. Interest on capital account B. I-(b), II-(c), III-(d), IV-(a)
C. Profit & loss account C. I-(d), II-(a), III-(b), IV-(c)
D. Interest account D. I-(b), II-(a), III-(d), IV-(c)

ANSWERS
1 2 3 4 5 6 7 8 9 10
C B B C B A C C C A
11 12 13 14 15 16 17 18 19 20
A C A A B B B D D B
21 22 23 24 25 26 27 28 29 30
A B A C A A B C A C
31 32 33 34 35 36 37 38 39 40
C C A C B A C D D B
41 42 43 44 45 46 47 48 49 50
C B D C A A A C C C
51 52 53 54 55 56 57 58 59 60
A A B D A D B D A B
61 62 63 64 65 66 67 68 69 70
A D A C C B D D B A
71 72 73 74 75 76 77 78 79 80
B A A A C D B A C D
81 82 83 84 85 86 87 88 89 90
A C D C B A B B B A
91 92 93 94 95 96 97 98 99 100
B A B A C C B B A C
101 102 103 104 105 106 107 108 109 110
B B B C C C C B C B
111 112 113 114 115 116 117 118 119 120
B A B A B D A C B A
121 122 123 124 125 126 127 128 129 130
C B B B A A C A C B
131 132 133 134 135 136 137 138 139 140
A B B B A C B D B B
141 142 143 144 145 146 147 148 149 150
C A A C B C A C A C
151 152 153 154 155 156 157 158 159 160
B B C A A A B A A A
161 162 163 164 165 166 167 168 169 170
D A D A A D A B A B
171 172 173 174 175 176 177 178 179 180
A B B A B B A C D B
181 182 183 184 185 186 187 188 189 190
B A C A A C C A B C
191 192 193 194 195 196 197 198 199 200
A A B A A A A C A A
201 202 203 204 205 206 207 208 209 210
A B B B B B A C C B
211 212 213 214 215 216 217 218 219 220
C C C A D B A B B A
221 222 223 224 225 226 227 228 229 230
B B A B C A C A A C
231 232 233 234 235 236 237 238 239 240
B B C A C C C B C A
241 242 243 244 245 246 247 248 249 250
A D C A A B A A C C
251 252 253 254 255 256 257 258 259 260
D A B B C B A C B B
261 262 263 264 265 266 267 268 269 270
A C A C D B B B B A
271 272 273 274 275 276 277 278 279 280
B A C C B A A C A A
281 282 283 284 285 286 287 288 289 290
C C B D A B B B D D
291 292 293 294 295 296 297 298 299 300
B A C A D A C B B B
301 302 303 304 305 306 307 308 309 310
B B D C C C D C B C
311 312 313 314 315 316 317 318 319 320
A D D B D B D D C D
321 322 323 324 325 326 327 328 329 330
A B B B D B D A D C
331 332 333 334 335 336 337 338 339 340
D A A D C B B A B C
341 342 343 344 345 346 347 348 349 350
C C C C B C D B A D
351 352 353 354 355 356 357 358 359 360
B D C C B A D A C C
361 362 363 364 365 366 367 368 369 370
D C B C B D B C C B
371 372 373 374 375 376 377 378 379 380
A A A C C C A A A B
381 382 383 384 385 386 387 388 389 390
B B A D A B C B A D
391 392 393 394 395 396 397 398 399 400
C A C D A C D A A C
401 402 403 404 405 406 407 408 409 410
B A D A B D B D A B
411 412 413 414 415 416 417 418 419 420
B B A B B D B C A B
421 422 423 424 425 426 427 428 429 430
A C B B A C A C D A
431 432 433 434 435 436 437 438 439 440
D C B A C B C B B B
441 442 443 444 445 446 447 448 449 450
D C D C A B C B A C
451 452 453 454 455 456 457 458 459 460
B B C D D B C A B B
461 462 463 464 465 466 467 468 469 470
A D C B D C A D C C
471 472 473 474 475 476 477 478 479 480
A A C B C A D A D C
481 482 483 484 485 486 487 488 489 490
C A D C C C D C C C
491 492 493 494 495 496 497 498 499 500
A B C C C A A B B A
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