Fundamentals of Accounting

1. Goods worth Rs. 2,000 were distributed as free samples in the market. The journal entry will be ___________
1. Drawing A/c Dr. 2,000  To Purchase A/c 2,000
2. Sales A/c Dr. 2,000  To Cash A/c 2,000
3. Advertisement A/c Dr. 2,000  To Purchases A/c 2,000
4. No entry
2. If goods are sold but not delivered to the customer, they will be included in ____________.
1. Closing inventory
2. Goods in transit
3. Sales
4. Sales Returns
3. Deewali advance given to an employee is ___
1. Revenue Expenditure
2. Capital Expenditure
3. Deferred Revenue Expenditure
4. Not an Expenditure
4. A purchased goods of Rs. 5,000 for cash at 20% trade discount and 5% cash discount, Purchase A/c is to be debited by Rs. ___________.
1. 3800
2. 5000
3. 3750
4. 4000
5. Bank reconciliation statement is used to show the differences between the balances of _______.
1. Cash columns of cashbook and passbook
2. Bank columns of cashbook and passbook
3. Cash columns of cashbook and bank columns of cashbook
4. None of the above
6. In the ledger, an account shows credit balance at the end of the year. This balance is shown as __________.
1. To balance c/d on the debit side
2. By balance c/d on the credit side
3. To balance b/d on the debit side
4. By balance b/d on the credit side
7. Debit balance as per cashbook of A Ltd. as on 31/03/2016 is Rs. 2,000. Cheques deposited but not cleared amount to Rs. 100 and cheques issued but not presented of Rs. 150. The bank allowed interest amounting Rs. 100 and collected dividend Rs. 50 on behalf of A Ltd. Balance as per passbook should be
1. Rs. 1,700
2. Rs. 2,000
3. Rs. 2,100
4. Rs. 2,200
8. The amount of depreciation charged under Annuity method _______
1. Remains Fixed for all the years
2. Decreases every year
3. Increases every year
4. Recalculated every year
9. Manu’s acceptance to Rishi of Rs.12,000 is retired two months before the due date at discount of 10% p.a. In the books of Rishi the journal entry will be _______
1. Cash A/c Dr. 10,800       Discount A/c Dr. 1,200     To B/R A/c 12,000
2. Manu’s A/c Dr. 10,800    Discount A/c Dr. 1,200     To B/R A/c 12,000
3. Cash A/c Dr. 11,800       Discount A/c Dr. 200        To B/R A/c 12,000
4. Manu’s A/c Dr. 11,800      Discount A/c Dr. 200      To B/R A/c 12,000
10. The debit balance in the bank columns of cash book indicates _______
1. Total amount withdrawn from bank
2. Total amount deposited in bank
3. Cash at bank
4. Bank overdraft
11. Securities premium account cannot be utilized for _______
1. Financing the redemption of preference shares
2. Issue of bonus shares
3. Financing the premium payable on redemption of preference shares
4. Writing off preliminary expenses
12. At the end of the accounting year nominal accounts are _______
1. Balanced and transferred to the P & L A/c
2. Not balanced and transferred to P & L A/c
3. Not balanced and transferred to balance sheet
4. Balanced and transferred to balance sheet
13. Which accounting concept satisfy the valuation criteria _______
1. Going concern, Realisation, Cost
2. Going concern, Cost, Dual aspect
3. Cost, Dual aspect, Conservatism
4. Realisation, Conservatism, Going concern
14. Mukesh sold goods to Suresh at an invoice price of Rs. 6,00,000 at cost plus 25%. 1/4 th of the goods are lost in transit. Insurance claim of Rs.72,000 is received. What is the amount of abnormal loss to be debited to P & L a/c?
1. Rs.1,20,000
2. Rs.48,000
3. Rs.72,000
4. Rs.1,50,000
15. _____ is a non-historical cost method and is also called as Retail inventory method.
1. LIFO method
2. Adjusted selling price method
3. Average price method
4. Standard price method
16. In the absence of agreement between the partners, on the death of a partner, his legal representatives are entitled to ________.
1. Profits till death, JLP, Interest on capital, Revaluation profit, Goodwill
2. Profits till death, JLP, Interest on capital, Goodwill
3. Profits till death, Capital, JLP, Revaluation profit, Goodwill
4. Profits till death, Interest on capital, Goodwill
17. The cost of an Asset is Rs.1,20,000. The scrap value will be 25% at end of 10 years. If straight line method of depreciation is followed, the rate of depreciation is ______
1. 10%
2. 9%
3. 8.5%
4. 7.5%
18. Trial balance is a statement which shows ___________ of all accounts.
1. Debit or Credit balances
2. Balances and Totals
3. Positive and Negative balances
4. Opening and Closing balances
19. Premium on redemption of debentures is _____ a/c.
1. Personal
2. Nominal
3. Real
4. None of the above
20. Correct sequence as per the order of permanency?    (i) Trade Receivables (ii) Patents    (iii) Machinery (iv) Cash in hand
1. (i), (ii), (iii), (iv)
2. (ii), (iii), (i), (iv)
3. (i), (iii), (iv), (ii)
4. (iii), (ii), (i), (iv)
21. A & B are partners in a firm in the ratio of 5:3. C is admitted as a new partner. He gets 1/4 th of A’s share and 1/5 th of B’s share. The new profit sharing ratio is ______
1. 19:8:9
2. 20:15:9
3. 75:45:37
4. None of the above