MIDTERM EXAMINATION
2nd dec 2009
MGT101- Financial Accounting
Question No: 1 ( Marks: 1 ) - Please choose one
Depreciation arises because of:
► Fall in the market value of an asset
► Fall in the value of money
► Physical wear and tear
► All of the given options
Question No: 2 ( Marks: 1 ) - Please choose one
Consider the following:
| Beginning inventory | 10 units @ Rs. 10 per unit |
| First purchase | 35 units @ Rs. 11 per unit |
| Second purchase | 40 units @ Rs. 12 per unit |
| Third purchase | 20 units @ Rs. 13 per unit |
Eighty-five units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?
► Rs.260
► Rs.232
► Rs.284
► Rs.268
Question No: 3 ( Marks: 1 ) - Please choose one
Which of the following is NOT an example of Current Asset?
► Bank Overdraft
► Accounts Receivable
► Notes Receivable
► Prepaid Expenses
Question No: 4 ( Marks: 1 ) - Please choose one
Which of the following statement is NOT TRUE about Current liabilities?
► These are due within one year
► These are short-term loans
► These are consist of all debts, payable after 12 months
► In working capital, these are deducted from current assets
Question No: 5 ( Marks: 1 ) - Please choose one
Which of the following essentials are shown in Bank Book?
(1) Date of transaction
(2) Narration of transaction
(3) Cheque number
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Question No: 6 ( Marks: 1 ) - Please choose one
Income of the business includes:
► Cash sales only
► Credit sales only
► Credit purchases only
► Both cash sales and credit sales
Question No: 7 ( Marks: 1 ) - Please choose one
|
| Rs. |
| Opening stock of raw material | 100,000 |
| Closing stock of raw material | 80,000 |
| Purchases of raw material during the period | 200, 000 |
| Cost of Material Consumed | ? |
► Rs. 205,000
► Rs. 215,000
► Rs. 220,000
► Rs. 225,000
Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, when the goods are purchased on cash?
► Stock account
► Cash account
► Supplier account
► Work in process account
Question No: 9 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs.20,000 during the year. What would be the Net Profit?
► Rs.15,000
► Rs. 35,000
► Rs. 55,000
► Rs. 60,000
Question No: 10 ( Marks: 1 ) - Please choose one
Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance).
► Capital account
► Sundry creditors account
► Accounts payable account
► Cash account
Question No: 11 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business bought goods on credit from Mr. Ali?
► Purchases account
► Mr. Ali account
► Cash account
► Sales account
Question No: 12 ( Marks: 1 ) - Please choose one
A summarized record of transactions related to individuals or things is called a/an ___________.
► Account
► Voucher
► Journal
► Trial balance
Question No: 13 ( Marks: 1 ) - Please choose one
When a Liability is reduced or decreased, it is recorded on the:
► Right or debit side of the account
► Left or debit side of the account
► Left or credit side of the account
► Right or credit side of the account
Question No: 14 ( Marks: 1 ) - Please choose one
Cost incurred for the maintenance of shop is considered as _________.
► Deferred expense
► Capital expense
► Revenue expense
► Preliminary expense
Question No: 15 ( Marks: 1 ) - Please choose one
Double entry accounting system includes:
► Accrual accounting only
► Cash accounting only
► Both cash and accrual accounting
► None of the given options
Question No: 16 ( Marks: 1 ) - Please choose one
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as:
► Appreciation
► Depreciation
► Fluctuation
► None of the given options
Question No: 17 ( Marks: 1 ) - Please choose one
Under the reducing balance method of depreciation:
► Amount of depreciation increases every year
► Amount of depreciation remains constant for every year
► Amount of depreciation decreases every year
► None of the given options
Question No: 18 ( Marks: 1 ) - Please choose one
Consider the following:
| Beginning inventory | 10 units @ Rs. 10 per unit |
| First purchase | 35 units @ Rs. 11 per unit |
| Second purchase | 40 units @ Rs. 12 per unit |
| Third purchase | 20 units @ Rs. 13 per unit |
Eighty units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?
► Rs.260
► Rs.232
► Rs.284
► Rs.320
Question No: 19 ( Marks: 1 ) - Please choose one
|
| Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for each year | Rs. 5,000 |
| | Rs.50,000 |
| Book value of Asset after 5 years | ? |
► Rs.25, 000
► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000
Question No: 20 ( Marks: 1 ) - Please choose one
In cost of goods sold statement the ‘total factory cost’ is equal to:
► Cost of material consumed + Labor cost
► Cost of material consumed + Conversion cost
► Cost of material consumed + Total factory cost
► Cost of material consumed + Factory overhead
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance).
► Cash Account
► Furniture Account
► Motor Account
► All of the above
Question No: 22 ( Marks: 1 ) - Please choose one Which of the following account will be credited, if business sold goods for Rs.10,000 on credit?
► Cash account
► Sales account
► Accounts receivable account
► Purchases account
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, if business purchased a vehicle on cash?
► Vehicle account
► Cash account
► Business account
► Bank account
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following essentials are shown in Bank Book?
(1) Date of transaction
(2) Narration of transaction
(3) Cheque number
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Question No: 25 ( Marks: 1 ) - Please choose one
Commercial Accounting is based on:
► Single entry book keeping
► Double entry book keeping
► Both single and double entry book keeping
► Cash basis of book keeping
Question No: 26 ( Marks: 1 ) - Please choose one
|
| Rs. |
| Opening written down value of machine | Rs. 2,00,000 |
| Cost of new machine purchased during the year | Rs. 50,000 |
| Depreciation during the year | Rs. 25,000 |
| Closing written down value (WDV) of machines | ? |
► Rs. 2, 25,000
► Rs. 2, 50,000
► Rs. 2, 75,000
► Rs. 75,000
Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following is an example of direct materials cost?
► Polish and finishing material for chair
► A piece of wood for the production of chair
► Production worker’s wages
► Depreciation expenses
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, when the goods are purchased on cash?
► Stock account
► Cash account
► Supplier account
► Work in process account
Question No: 29 ( Marks: 1 ) - Please choose one
Following are the inventories of Manufacturing Concern EXCEPT:
► Raw material
► Work in process
► Finished goods
► Merchandise inventory
Question No: 30 ( Marks: 1 ) - Please choose one
Word “Credit” is derived from ______ language.
► Latin
► English
► French
► Chinese
Question No: 31 ( Marks: 1 ) - Please choose one
Consider the following inventory record:
| Date | Item | Quantity | Cost/Unit Rs. | Total Rs. |
| Jan. 2 | Beginning inventory | 10 | 10 | 100 |
| Mar. 4 | Purchase | 35 | 11 | 385 |
| May 8 | Purchase | 40 | 12 | 480 |
| Nov. 3 | Purchase | 20 | 13 | 260 |
| De31 | Merchandise available | 105 |
| 1,225 |
85 units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.
► Rs. 1,225
► Rs. 1,015
► Rs. 965
► Rs. 905
Question No: 32 ( Marks: 1 ) - Please choose one
The assets which have a limited useful life are termed as:
► Limited assets
► Depreciateable assets
► Unlimited assets
► None of the given options
The cost of moving plant and machinery to a new site will be treated as:
► Revenue expense
► Capital expense
► Administrative expense
► Operating expense
Question No: 33 ( Marks: 1 ) - Please choose one
A decrease in value of a fixed asset due to age, wear and tear is known as:
► Depreciation
► Accumulated Depreciation
► Appreciation
► Written Down Value
Question No: 34 ( Marks: 1 ) - Please choose one
What would be the value of 'cost of goods manufactured' if the total factory cost of the month is Rs. 6,000, opening work in process is Rs. 2,000 and the closing work in process is Rs. 2,500?
► Rs. 5,500
► Rs. 8,000
► Rs. 4,500
► Rs. 8,500
Question No: 35 ( Marks: 1 ) - Please choose one
The area of accounting concerned with reporting financial information to the interested parties is called:
► Cost Accounting
► Financial Accounting
► Management Accounting
► Tax Accounting
Question No: 36 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
| Cash | Rs. 22,500 |
| Debtors | Rs. 500 |
| Total Assets | Rs. 80, 385 |
| Accounts payable | Rs. 1,000 |
| Total liabilities | Rs. 20,000 |
► Rs. 60,385 owner’s equity
► Rs. 61,385 owner’s equity
► Rs. 99,885 owner’s equity
► Rs. 99,385 owner’s equity
Question No: 41 ( Marks: 10 )
Show the effect of the following transactions upon the Accounting Equation.
| 2007 June1, | Mr. Salman started business with cash Rs. 1,00,000 |
| 5, | Purchased furniture for cash Rs. 4,000 |
| 6, | Purchased goods for cash Rs. 25,000 |
| 10, | Paid transportation on goods purchased Rs.1,000 |
| 12, | Sold goods for cash Rs. 15,000, costing 11,000 |
| 15, | Purchased goods on credit basis for Rs. 15,000 |
| 19, | Sold goods to Rashid on credit basis for Rs. 8,000, costing Rs. 6,500 |
| 25, | Received cash from Rashid Rs. 4,000 |
| 28, | Cash paid to creditor Rs. 9,000 |
| 30, | Paid rent and salaries for the month Rs. 4,000 |
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