Financial Accounting
KVS – 2018
- Voucher prepared for the transaction with multiple debits and multiple credits is known as :
1. Complex Voucher
2. Debit Voucher
3. Credit Voucher
4. Compound Voucher - Reshma has return goods worth Rs. 10,000 to Rajesh as she found them defective. Which document is to be prepared by Rajesh for the same
(1) Debit Note
(2) Credit Note
(3) Invoice
(4) Cash Memo of Rs. 10,000 - Which one is false?
1. Sub-fields of accounting are book-keeping, financial accounting and management accounting.
2. There exists a wide gulf between accounting and economics
3. accounting means recording transactions and events, not their interpretation
4. Materiality principle is an exception to the full disclosure principle - Which one is true?
1. Accounting involves only the recording of business transactions
2. A transaction which increases the capital is called ‘Income’
3. The value of human resource is shown as an asset in the balance sheet
4. Accounting is a service function - Which one is true ?
1. Accounting is a social science.
2. Economic life of an enterprise is artificially split into periodic intervals in accordance with the Going Concern Assumption.
3. The assets are classified as current assets and fixed assets in accordance with Accounting Period Assumption.
4. Revenue is generally recognised at the point of sale in accordance with the matching principle. - Trade discount is allowed at the time of :
1. Sale of goods
2. Receiving the payment for sale of goods
3. Receiving the payment before due date
4. Making payment for purchase of goods - Which one of the following statements is not appropriate for ‘Provision’?
1. Creation of provision satisfies the principle of conservatism
2. Provision is a charge against profits
3. Provision is created for known liability
4. Provision is created for strengthening the financial position of the business. -
Rs. Opening stock 85,000 Purchases 3,07,000 Wages 48,000 Interest on loan 28,000 Closing stock 90,000 Cost of goods sold will be——————-
1. Rs. 4,00,000
2. Rs. 3,00,000
3. Rs. 3,20,000
4. Rs. 3,50,000 - A machine was purchased on April 1, 2017 for Rs. 10,00,000 and on October 1,2017, a new machine was added for Rs. 4,00,000. Calculate the balance of ‘Machine Account’ as on March 31, 2018, if depreciation is charged @ 20% p.a. on Diminishing Balance method.
1. Rs. 11,20,000
2. Rs. 13,20,000
3. Rs. 11,60,000
4. Rs. 12,00,000 - A machine is purchased for Rs. 3,00,000 and its salvage value, after its useful life of 9 years, will be Rs. 30,000. Repairing expenses of the machine a the end of 4th year will be Rs. 20,000. What will be the rate of depreciation per annum under straight line method?
1. 11.11%
2. 10 %
3. 9.37%
4. 10.34% - Anil endorse a bill for Rs. 10,000 in favour of Chinki. This bill was drawn on Bijender . On the due date, the bill was honoured by Bijender. On Due date, which account will be debited by Bijender in his books ?
(1) Bills Receivable Account
(2) Bills Payable Account
(3) Chinki’s Account
(4) Anil’s Account - Ankit draws a bill on Bhawana for Rs. 60,000. Ankit endorses it to Charu in settlement of Rs. 70,000 at a discount of 2% and the balance in case. If the bill is dishounoured on the due date, by what amount will Charu debit Ankit?
1. Rs. 61,400
2. Rs. 60,000
3. Rs. 70,000
4. Rs. 68,600. - Meena draws a bill on Parveen on August 39, 2018 for 1 month. The due date of the bill will be:
1. October 1, 2018
2. October 2, 2018
3. September 29, 2018
4. October 3, 2018 - ‘Income and Expenditure Account’ is prepared by ‘Not-for-Profit Organisation’ on:
1. Cash basis
2. Receipts basis
3. Expenditure basis
4. Accrual basis
KVS – 2017
- Which one is true?
(a) Balance sheet is the best tools to show the financial health of a business.
(b) Profit and loss accounts considered as the tool to measure net worth of business.
(c) Dual aspect concept assume indefinite life of the entity.
(d) None of the above. - The accounting principles can be classified into
(a) Accounting concepts
(b) Accounting conventions
(c) Both (1) and (2)
(d) None of the above - Luca pacioli, who gave origin to modern accounting got published his book on principles of double entry system in
(a) 1944
(b) 1864
(c) 1494
(d) 1649 - The excess of debit in trading account is called
(a) Net loss
(b) Net profit
(c) Gross loss
(d) Gross profit - Match the following
List I
A. Equity Shares
B. Debentures
C. Public Deposits
D. Microcredit
List II
1. For impoverished borrowers
2. Provides tax benefits
3. No fix burden
4. Directly received from public
Codes
A B C D
(1) 4 2 1 3
(2) 1 2 3 4
(3) 3 1 2 4
(4) 1 3 2 4 - Which of the following statements is correct?
(a) Accounting involves only the recording of business transactions
(b) Amount owed to outsiders (other than proprietor) is called capital
(c) Debit means decrease in assets
(d) Accounting is the language of business - The net profit shown by profit and loss account is transferred to
(a) Profit and loss appropriation account
(b) Trading account
(c) Balance sheet
(d) Income statement - What is the amount of gross profit when opening stock is Rs 1,200, closing stock is Rs 750, sales is Rs 30,000, cost of goods sold is Rs 22,750?
(a) Rs 6500
(b) Rs 7700
(c) Rs 7250
(d) Rs 5300 - Net profit or net loss is shown by
(a) Trading account
(b) Balance sheet
(b) Profit and loss account
(d) All of the above - The object of preparing trial balance is
(a) To check the arithmetical accuracy of accounts
(b) To check the accounting book completely and in total nature
(c) To find the economic conditions of business
(d) To get the information of assets and liabilities - Items included in current ratio but excluded from liquid ratio by
(a) Inventory
(b) Prepaid expenses
(c) Both (a) and (b)
(d) None of these - The main object of ledger is to ascertain
(a) Total sales
(b) Total purchases
(c) Profit or loss of the business
(d) Net effect of all the similar nature transactions - Which one of the following is not a part of accounting process?
(a) Recording
(b) Classification
(c) Distribution
(d) Interpretation - If a trial balance does not agree, then accountant opens
(a) Drawing account
(b) suspense account
(c) capital account
(d) nominal account - Original cost = Rs 100000, life = 5 years, expected salvage value = Rs 5000, rate of depreciation per annum = ?
(a) 20.0%
(b) 19.5%
(c) 19%
(d) 19.4% - If total assets of the business are Rs 450000 outside liabilities are Rs 200000. Calculate owner equity
(a) Rs. 2,00,000
(b) Rs. 2,50,000
(c) Rs. 3,00,000
(d) Rs. 6,50,000 - Amortisation refers to writing-off
(a) Depleting assets
(b) wasting assets
(c) intangible assets
(d) fictitious assets - X and Y share profits and losses in the ratio of 3 : 2. The admit Z for 1/6th share in profit. The new ratio of distribution of profit will be
(a) 3 : 2 : 1
(b) 3 : 2 : 2
(c) 4 : 1 : 1
(d) 3 : 2 : 3 - Receipts and payments account records receipts and payments of
(a) capital nature only
(b) revenue nature only
(c) capital and revenue nature both
(d) none of these - Which of the following is incorrect?
(a) Joint venture can be formed with minor
(b) joint venture is not based on going concern
(c) a bill of exchange is a negotiable instrument
(d) Noting charges are the expenses of drawee
KVS – 2016
- The ending balance of owner’s equity is Rs. 1,02,000. During the year the owner contributed Rs. 15,000 and withdrew Rs. 6,000. If the firm had a net income of Rs. 13,000 for the year, what was the beginning owner’s, what was the beginning owner’s equity?
(1) Rs. 80,000
(2) Rs. 93,000
(3) Rs 96,000
(4) Rs. 89,000 - The practice of appending notes regarding contingent liabilities in accounting statements is in pursuant to :
(1) Money measurement concept
(2) Convention of disclosure
(3) Convention of conservatism
(4) Convention of consistency - Accounting Period Postulate:
(1) Suggest the companies to prepare financial statements on the basis of a systematic time interval, even though the operating cycle (s) of the entity may be incomplete
(2) Refers to the fact that adjusting entries must be made before financial statements are prepared periodically
(3) Suggest companies to prepare financial statements on a periodic basis – when all operating cycles are complete
(4) Refers to the limited life of a joint venture - Which one of the following errors is disclosed by Trial Balance?
(1) Omission of the recording of a transaction
(2) Partial omission of an entry
(3) Compensating error
(4) Error of principle - A machinery was purchased and installed on 1st April, 2015 by X Ltd. Costing Rs. 5,00,000 with projected useful life of 10 years and estimated salvage value of Rs. 50,000. If the company charges depreciation @ 20% by diminishing balance method, amount of depreciation to be charged in 2nd year, i.e., on 31st March 2017 shall be:
(1) Rs. 72,000
(2) Rs. 90,000
(3) Rs. 80,000
(4) Rs. 1,00,000 - A transport company purchased a delivery truck for Rs. 60,00,000. The company estimates that the truck will be driven 1,00,000 km over it’s 10 years useful life. The estimated salvage value is Rs. 12,00,000. The truck was driven 15,000 km in 2015. Which method results in the highest depreciation expenditure for 2015?
1. Written down value method
2. Double decline balance
3. Straight line method
4. Sum of the years digits - Which one is false?
(1) Depreciation is an amortised expenditure
(2) Reducing Balance Method of Depreciation is followed to have a uniform charge for depreciation and Repairs and Maintenance together
(3) Straight Line Method of Depreciation is followed to have a uniform charge for depreciation and Repairs and Maintenance together
(4) Providing depreciation in the accounts reduces the amount of profits available for dividend. - X and Y are partners sharing profits and losses in the ration of 3:1. They admit Z as a partner who pays Rs. 4,000 as his share of goodwill. The new profit sharing will be 2:1:1. The amount of goodwill will be credited to :
(1) X and Y as Rs. 3,000 and Rs. 1,000 respectively
(2) X only
(3) X and Y as Rs. 1,000 and Rs 3,000 respectively
(4) Y only - Which one is true?
(1) When goodwill does not appear in the books, goodwill is raised by crediting continuing partners in the gaining ratio unless agreed otherwise
(2) In the event of retirement of a partner, if the Joint Life Policy already appears at its surrender value, no further adjustment is required.
(3) Joint Life Policy becomes due in the event of death of any of the partners or on the maturity of policy, whichever is later.
(4) When goodwill appears at an amount which is more than its agreed value, the difference will be credited to all partners’ capital accounts in the case of retirement of a partner. - Which one is true?
(1) In case Memorandum Revaluation account is opened, the assets and liabilities appear in the New Balance Sheet at their revised values
(2) The retiring partner may claim a share in the profits of the firm even after his retirement if his accounts are not settled
(3) All accumulated profits and reserves are to be transferred to the Profit and Loss Adjustment Account on admission of a new partner.
(4) A dormant partner has to give public notice of his retirement - Which of the following rights usually not available to a partner consequent to the dissolution of a firm ?
1. Right to restrain any partner or his representatives from the use of firm name or property
2. Right to return of premium on premature winding up
3. Right of equitable distribution of firm’s property
4. Right to be consulted