Marks: 40
Time: 120min
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Instructions
Please read the following instructions carefully before attempting any question:
All questions are compulsory.
This exam consists of 10 Multiple Choice Questions (MCQs) carrying one mark each, 5 true false carrying one mark each, 2 short
questions carrying 5 marks each and one comprehensive numerical question carrying 15 marks.
For each MCQ and T/F, read the choices available and ENCIRCLE one which you consider is the most suitable answer. Zero
marks will be given if more than one option will be marked. Don’t make tick mark (v), only ENCIRCLE the correct option.
Attempt all MCQs and True/False on the question paper, no credit will be given to the MCQs and True/False attempted on the
answer sheet.
Remember not to spend too much time on any MCQ. Since all MCQs carry equal marks, it is important to manage your time and
response to test questions effectively.
Do not ask any questions about the contents of this examination from anyone.
If you believe that some essential piece of information is missing, make an appropriate assumption and use it to solve the problem.
This examination is closed book, closed notes, closed neighbors.
You may wish to pace yourself with your own watch, but the Supervisor will be the official timekeeper of the test.
Use of calculator is allowed
Use of mobile phones is strictly prohibited; switch it off if it is in your custody.
Failure to comply with the Supervisor’s directions will result in your exam paper being cancelled. Please comply with supervisor’s
directions to avoid any unpleasant event.
For Teacher's use only
Question 1 2 3 4 5 6 7 8 9 10 Total
Marks
Question 11 12 13 14 15 16 17 18
Marks
Question
Marks
Question No: 1 ( Marks: 1 ) - Please choose one
A Balance Sheet discloses the financial position of a firm:
.
For a given period
.
On a particular point of time
.
On quarterly basis
.
None of the given options
Question No: 2 ( Marks: 1 ) - Please choose one
Cost of sales is equal to:
.
Opening stock – Closing stock + Purchases – Return outwards
.
Sales – Purchases
.
Purchases – Return out + Closing stock
.
None of the given options
Question No: 3 ( Marks: 1 ) - Please choose one
A loss will be considered as capital loss if it:
.
Relates to fixed assets
.
Arises due to abnormal reasons
.
Represents the withdrawal of capital
.
None of the given options
Question No: 4 ( Marks: 1 ) - Please choose one
An expenditure will be considered as capital expenditure if:
.
The amount is paid in lump sum
.
It is intended to benefit the current period
.
It is intended to benefit the future period
.
All of the given options
Question No: 5 ( Marks: 1 ) - Please choose one
A written evidence in support of a business transaction is called:
.
A business letter
.
Store ledger card
.
Voucher
.
All of the given options
Question No: 6 ( Marks: 1 ) - Please choose one
Under diminishing balance method, depreciation is calculated on:
.
The original cost
.
The scrap value
.
Book value
.
None of the given options
Question No: 7 ( Marks: 1 ) - Please choose one
The books of account in which business transactions are originally recorded in
chronological order is known as:
.
Ledger
.
Journal
.
Trial Balance
.
Balance sheet
Question No: 8 ( Marks: 1 ) - Please choose one
A firm purchased marketable securities for Rs. 10,000. What would its effect be on
working capital?
.
Increased by Rs. 10,000
. Decreased by Rs. 10,000
.
Increased by Rs. 20,000
.
Remain unchanged
Question No: 9 ( Marks: 1 ) - Please choose one
If the profit is 25% of the cost price then it would be:
.
25% of the sale price
.
33% of the sale price
.
20% of the sale price
.
None of the given options
Question No: 10 ( Marks: 1 ) - Please choose one
Current liabilities are such obligations which must be paid within:
.
One year
.
Two years
.
Three years
.
Five years
Question No: 11 ( Marks: 1 ) - Please choose one
Book-keeping and accounting are synonymous terms.
.
True
.
False
Question No: 12 ( Marks: 1 ) - Please choose one
The Accounting Equation is based on going concern concept of Accounting.
.
True
.
False
Question No: 13 ( Marks: 1 ) - Please choose one
The ledger is the book of original entry.
.
True
.
False
Question No: 14 ( Marks: 1 ) - Please choose one
Balance Sheet is the other name of Profit and Loss Account.
.
True
.
False
Question No: 15 ( Marks: 1 ) - Please choose one
Capital expenditures incurred irregularly.
.
True
.
False
Question No: 16 ( Marks: 5 )
If:
• Opening inventory of Raw Material Rs. 20,000
• Closing inventory of Raw Material Rs. 10,000
• Purchases Rs. 40,000
• Direct Labour Cost Rs. 10,000
• Factory overhead Cost Rs. 20,000
Then find:
1. Prime cost
2. Conversion cost
Question No: 17 ( Marks: 5 )
If:
• Original cost of machinery Rs. 140,000
• Salvage Value Rs. 40,000
• Estimated useful life is 10 years
Then:
Find the annual value of depreciation using the straight line method and the
value of machinery at the end of 2nd year.
Question No: 18 ( Marks: 15 )
From the following Trial Balance extracted from the Rehman & Sons, prepare a Profit and
Loss Account for the year ended
Particulars Rs. Rs.
Sales 204,000
Capital 120,000
Bank over Draft 103,560
Sundry Creditors 120,000
Stock 1.1.2006 60,400
Purchases 231,600
Sundry Debtors 109,660
Returns Inward 3,640
General Expenses 6,980
Plant 22,620
Wages & Salaries 16,740
Building 50,000
Cash in Hand 680
Cash at Bank 8,720
Drawings 16,960
Motive Power 2,300
Dock & Clearing Charges 1,300
Coal, Gas, Water 1,700
Salaries 9,820
Interest on Over Draft 4,440
Total 547,560 547,560
Closing Stock has been valued at Rs.40,000
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