MGT101 MID TERM mcQZ SPRING 2011

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Question No: 1 ( Marks: 1 ) - Please choose one

We can say that the business is in profit, when:


► Assets exceed Expenditure
► Assets exceed Liabilities
► Income exceeds Expenditure
► Income exceeds Liabilities

Question No: 2 ( Marks: 1 ) - Please choose one
Obligations to pay cash or un-earned incomes by the business are the:

► Expenses
► Assets
► Liabilities
► Equities

Question No: 3 ( Marks: 1 ) - Please choose one
Which one of the following is a type of General Ledger?

► Book of original entry
► ‘T’ Account
► Source document
► Day book

Question No: 4 ( Marks: 1 ) - Please choose one
A book, in which receipts and payments are recorded, is known as:



► Pass Book
► Cash Book
► Purchase Book
► Sales Book

Question No: 5 ( Marks: 1 ) - Please choose one
Which of the following summarizes the cash movements during a specified period?



► Trading account
► Profit & Loss account
► Receipts & Payments account
► Balance Sheet

Question No: 6 ( Marks: 1 ) - Please choose one
Gross Profit > Operating Expenses=?


► Net Profit
► Cost of Goods Sold
► Net Loss
► Gross Loss

Question No: 7 ( Marks: 1 ) - Please choose one
What type of expenses are paid out of Gross Profit?

► Selling Expenses
► General Expenses
► Financial Expenses
► All of the given options

Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following shows summary of a company's financial position at a specific date?

► Profit & Loss Account
► Cash Flow Statement
► Balance Sheet
► Income & Expenditure Account

Question No: 9 ( Marks: 1 ) - Please choose one
The favorable balance of Profit and Loss account should be:
► Added in liabilities
► Subtracted from current assets
► Subtracted from liabilities
► Added in capital

Question No: 10 ( Marks: 1 ) - Please choose one
Which of the following account will be credited in the books of XYZ Co. Ltd, if the business purchased a vehicle though cheque?


► Vehicle account
► Cash account
► Business account
► Bank account

Question No: 11 ( Marks: 1 ) - Please choose one
In cost of goods sold statement the ‘cost of goods manufactured’ is equal to:


► Total factory cost + Opening work in process + Ending work in process
► Total factory cost + Opening work in process – Ending work in process
► Total factory cost - Opening work in process + Ending work in process
► Ending work in process +Total factory cost – Opening work in process

Question No: 12 ( Marks: 1 ) - Please choose one
Cost of asset Rs. 1,00,000
Life of asset 5 years
Depreciation for each year Rs. 15,000
Sale price after 5 years 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: 13 ( Marks: 1 ) - Please choose one
Bank Reconciliation Statement is prepared by:

► Bankers
► Accountant of the business
► Statutory auditor
► Manger

Question No: 14 ( 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

Question No: 15 ( Marks: 1 ) - Please choose one
Consider the following data:

Particulars Rs.
Assets ?
Owner's equity 1,50,000
Liabilities 1,00,000


► Rs. 49,000
► Rs. 55,000
► Rs. 50,000
► Rs. 2, 50,000

Question No: 16 ( Marks: 1 ) - Please choose one
When the Bank Statement balance is more than the Cash Book balance, it is because of:



► Unpresented cheques
► Unrecorded bank charges
► Uncredited cheques
► None of the given options

Question No: 17 ( Marks: 1 ) - Please choose one
A debit balance in the Bank Statement indicates:

► Cash at bank
► Bank overdraft
► Overpayment to creditors
► Cash in hand

Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following option is TRUE about the characteristic(s) of Bad Debt?


► It is a definite loss to the business
► It is not shown in Balance Sheet
► No provision is necessary for it
► All of the given options

Question No: 19 ( Marks: 1 ) - Please choose one
Consider the following data and identify the amount which will be deducted from Sundry Debtors in Balance Sheet.
Particulars Rs.
Bad debts (from trial balance) 1,600
Provision for doubtful debts (old) 2,000
Current year’s provision (new) 800

► Rs. 400
► Rs. 800
► Rs. 2,000
► Rs. 2,400

Question No: 20 ( Marks: 1 ) - Please choose one
If the (New provision + Bad debts) > Amount of old provision then resulting figure will be shown at:


► Debit side of Profit & Loss Account
► Credit side of Profit & Loss Account
► Asset side of Balance Sheet
► Liability side of Balance Sheet

Question No: 21 ( Marks: 1 ) - Please choose one
It is supposed that on 31-12-2007, the sundry debtors are amounted to Rs. 40,000. On the basis of past experience, it is estimated that 5 % of the sundry debtors are doubtful. It is also suppose that during the year 2008 actual bad debts were Rs. 1,600. What entry will pass to create provision for doubtful debts?

► Profit & Loss a/c Rs. 2,000 (Dr) & Provision for doubtful debts a/c Rs. 2,000 (Cr)
► Provision for doubtful debts a/c Rs. 2,000 (Dr) & Profit & Loss a/c Rs. 2,000 (Cr)
► Provision for doubtful debts a/c Rs. 1,600 (Dr) & Profit & Loss a/c Rs. 1,600 (Cr)
► Profit & Loss a/c Rs. 1,600 (Dr) & Provision for doubtful debts a/c Rs. 1,600 (Cr)

Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following entry is passed to record discount allowed in control account?

► Discount Allowed (Dr) and Debtors Control A/c (Cr)
► Discount Allowed (Dr) and Debtors A/c (Cr)
► Debtors Control A/c (Dr) and Discount Allowed (Cr)
► Debtors A/c (Dr) and Discount Allowed (Cr)

Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of purchases return of Rs. 200 to “Mr.P” mistakenly entered in sales book?


► P’s account
► Purchases return account
► Sales account
► Purchases returns account and sales account

Question No: 24 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ

Particulars Rs.
Bad Debts (Given in trial balance) 500
Old provisions (Given in trial balance) 700
Sundry Debtors (Given in trial balance) 44,800

If the Provision for doubtful debts has been increased by 5%, which amount of new provision will be shown in Profit & Loss Account?
► Rs. 2,240
► Rs. 2,425
► Rs. 1,925
► Rs. 3,025

Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following is normally treated as the last expense listed in the income statement of a company?

► Interest expense
► General and administrative expenses
► Salaries and wages expense
► Income tax expense

Question No: 26 ( Marks: 1 ) - Please choose one
An asset is considered to be a current asset if:

► It has been bought recently and was bought new and not used
► It can be realized in cash or sold or consumed in the business within one year
► It is a piece of new machinery that is expected to last for at least ten years
► All of the given options

Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following account will be credited when interest on capital is charged against the distribution of profit?
► Interest account
► Partner’s capital account
► Profit and Loss account
► Profit and loss appropriation account

Question No: 28 ( Marks: 1 ) - Please choose one
A, B, C are partners. Their profit sharing ratio is equal. Capital balance on July 1st of Partner A --- Rs. 40,000 Partner B --- Rs. 30,000 and Partner C--- Rs. 20,000.Their private property of Partner A is Rs.15,000, Partner B is Rs. 7,000 and Partner C is Rs. 1,500. What is the level of their liabilities under the partnership firm?
►Partner A—Rs. 40,000, Partner B---- Rs. 30,000, Partner C – 20,000
►Partner A—Rs. 40,000, Partner B---- Rs. 30,000, Partner C – 21,500
►Partner A—Rs. 40,000, Partner B---- Rs. 37,000, Partner C – 20,000
►Partner A—Rs. 55,000, Partner B---- Rs. 37,000, Partner C – 21,500

Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following represents the relationship between persons who have agreed to share the profit of business carried on by all or any of them acting for all?
► Sole-ownership
► Private limited company
► Public limited company
► Partnership

Question No: 30 ( Marks: 1 ) - Please choose one
By which if the following Act/ Ordinance, a company is allowed to issue shares at a higher price than their face value.
► Companies ordinance 1984
► Contract act 1872
► Sales of Goods act 1930
► None of the given options

Question No: 31 ( Marks: 1 ) - Please choose one
When goods are acquired from the supplier the gross cost of such goods is recorded in:
► Debtor Account
► Purchases Account
► Factory overhead account
► Sales Account

Question No: 32 ( Marks: 1 ) - Please choose one
In which of the following auditor’s remuneration payable is shown?

► In balance sheet under the head of current liabilities only
► In balance sheet under the head of current assets only
► In income statement under the administrative expense only
► In both balance sheet under the head of current liabilities and income statement under the administrative expense

Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following is a type of business formed under the Companies Ordinance 1984?

► Sole-Proprietorship
► Partnership
► Joint Stock Company
► All of the given options

Question No: 34 ( Marks: 1 ) - Please choose one
Which of the given Asset is Not included in the calculation acid test ratio?

► Stock
► Cash
► Debtors
► Bills Receivable

Question No: 35 ( Marks: 1 ) - Please choose one
Rs.
Gross profit 50,000
Operating profit 42,000
Sales 250, 000
What is the amount of operating expenses ?

► Rs. 8,000
► Rs. 92,000
► Rs. 62,500
► Rs. 300,000

Question No: 36 ( Marks: 1 ) - Please choose one
What types of changes (is) are made at the admission of partner in partnership?
► Assets of old business will be revalued
► Liabilities of old business will be revalued
► Good will of business will be revalued
► All of the given options

Question No: 37 ( Marks: 1 ) - Please choose one
If company has distributable profit is Rs. 4, 90,000. Profit sharing share ratio of Mr. A, Mr. B and Mr. C is 2:3:5 respectively what will be the Profit share for Mr. B in distributable profit.

► Rs. 98,000
► Rs. 1, 47,000
► Rs. 2, 45,000
► Rs. 3, 43,000

Question No: 38 ( Marks: 1 ) - Please choose one
If the Capitals of partners are fixed then, at the end of financial year a partner’s drawings are transferred to the:

► Credit side of the partner’s capital account
► Credit side of the partner’s current account
► Debit side of partnership bank account
► Debit side of the partner’s current account

Question No: 39 ( Marks: 1 ) - Please choose one
The beginning balance of retained earnings was Rs. 7,500. The dividends paid to stockholders' were Rs.1, 500. The ending balance of retained earnings is Rs. 5,000. What was the net income or net loss for the accounting period?
► Net loss of Rs.1, 000
► Net income of Rs. 1,000