07-13-2011, 08:44 PM
[SIZE="4"]Mgt101 final term paper 2011 in attachment [/SIZE]
A summarized record of transactions related to individuals or things is called a/an ___________.
► Account
► Voucher
► Journal
► Trial balance
Question No: 2 ( Marks: 1 ) - Please choose one
An informal accounting statement that lists the ledger account balances at a point in time and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Question No: 3 ( 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
Written down value of asset at the end of 5th year Rs.25,000
Profit or loss on disposal of fixed assets ?
► Rs.25, 000 profit
► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profit
Question No: 4 ( 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: 5 ( 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: 6 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of an amount Rs.200 received from Mr.”P” wrongly credited to Mr.”Q’s” account?
► Only Cash Account
► Only P’s account
► Only Q’s account
► Both of Mr. P's & Mr.Q's Account
Question No: 7 ( 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) 1,000
► Rs. 600
► Rs. 1,000
► Rs. 2,000
► Rs. 2,600
Question No: 8 ( Marks: 1 ) - Please choose one
General office expenses are charged to which of the following head:
► Administrative expenses
► Marketing expenses
► Selling expenses
► Financial expenses
Question No: 9 ( Marks: 1 ) - Please choose one
Which of the following account is affected from the Drawings of cash in sole-proprietorship business?
► Capital account
► Shareholder account
► Liability account
► Expense account
Question No: 10 ( Marks: 1 ) - Please choose one
Which of the following can offer its share to general public at large?
► A private limited company
► A listed company
► A partnership firm
► A trust
Question No: 11 ( Marks: 1 ) - Please choose one
Merchandise on hand at either the beginning or end of the reporting period is called__________.
► Raw material
► Cost of good sold
► Work in process
► Inventory
Question No: 12 ( Marks: 1 ) - Please choose one
How dividend declared is treated in the Balance Sheet of the company?
► Provision
► Current liability
► Reserves and surplus
► Current assets
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following is NOT a cash inflow?
► Sale of fixed asset
► Issue of debentures
► Cash from business operation
► Purchase of fixed asset
Question No: 14 ( Marks: 1 ) - Please choose one
An example of financing activities in the context of cash flow statement is:
► Capital expenditures on purchase of fixed assets
► Long-term deposit
► Financial charges paid
► Dividend paid
Question No: 15 ( 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: 16 ( Marks: 1 ) - Please choose one
Receipts from debtors appear on the ___________ side of the Debtors control account.
► Left side or credit
► Left side or debit
► Right side or debit
► Right side or credit
Question No: 17 ( Marks: 1 ) - Please choose one
We usually allow the customer to deduct a certain amount from the invoice value for prompt payment. In doing so we are granting a:
► Commission
► Allowance
► Discount
► Rebate
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following is known as an asset account?
► Gains
► Prepaid insurance
► Unearned revenue
► Accounts payable
Question No: 19 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,500 and of Mr. B is Rs.2,800. The net income for the year is Rs.95,000. What will be the amount of distributable profit?
► Rs.89,700
► Rs.92,500
► Rs.95,000
► Rs.100,300
Question No: 20 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,000 and markup on drawings of Mr. B is Rs.3,000. The net income for the year is Rs.50,000. What will be the profit share of Mr. A?
► Rs.22,500
► Rs.25,500
► Rs.27,500
► Rs.55,000
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following is quoted company?
► Private Limited Company
► Public Limited Company
► Listed company
► Non Listed Company
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following items of balance sheet are useful in evaluating a company’s liquidity?
► Current assets and other assets
► Current liabilities and current assets
► Current liabilities and plant and equipment
► Non current liabilities and other assets
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following is an example of liability in a business enterprise?
► Accounts payable
► Accounts receivable
► Commission received
► Commission paid
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following is/are TRUE with respect to the rules of Debit & Credit?
► Increase in capital is Credit
► Decrease in capital is Debit
► Increase in expense is Debit
► All of the given options
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following is/are NOT the example of intangible assets?
► Copyright
► Goodwill
► Patent
► Land
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following account would be credited, when goods are returned to suppliers?
► Voucher payable account
► Stock account
► Sales account
► Work In Process account
Question No: 27 ( Marks: 1 ) - Please choose one
What would be the value of total manufacturing cost, if the cost of material consumed during the month is Rs. 5,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 1,000?
► Rs. 3,000
► Rs. 5,000
► Rs. 7,000
► Rs. 8,000
Question No: 28 ( Marks: 1 ) - Please choose one
If:
• Direct Material Cost is Rs. 15,000
• Factory overhead is Rs. 5,000
• Manufacturing Cost is Rs. 30,000
Then:
What is the amount of Prime Cost?
► Rs. 25,000
► Rs. 20,000
► Rs. 35,000
► Rs. 45,000
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following do NOT represent the Cost of goods sold?
► Sales – Gross Profit
► Opening Stock + Purchases – Return Outwards – Closing Stock
► Cost of goods Manufactured + Opening Finished Goods Inventory – Closing Finished Goods Inventory
► Opening Stock + Purchases – Return Inwards – Closing Stock
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following represents a possession that has a value in an exchange?
► Asset
► Liability
► Expense
► Revenue
Question No: 31 ( Marks: 1 ) - Please choose one
Written down value of an asset = ----------------.
► Original cost – Accumulated depreciation
► Original cost – Appreciation
► Book value – Accumulated depreciation
► Original cost – Salvage value
Question No: 32 ( Marks: 1 ) - Please choose one
Distinction between capital and revenue items is important for the preparation of:
► Income statement only
► Balance sheet only
► Final accounts
► Bank statement
Question No: 33 ( Marks: 1 ) - Please choose one
When Bank Statement shows a debit balance it means:
► Favourable balance as per cash book
► Debit balance as per cash book
► Favourable balance as per bank statement
► Overdraft as per bank statement
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following statement is correct, if a company fails to record estimated bad debts expense?
► Net realizable value is understated
► Expenses are understated
► Revenues are understated
► Receivables are understated
Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following is INCORRECT about subsidiary account?
► It is not a summary account
► It reduces the burden of control account
► It provides detailed information about individual accounts
► It summarizes the total of related items from other accounts
Question No: 36 ( Marks: 1 ) - Please choose one
If cash sale is the missing figure, it can be ascertained by the construction of:
► Creditors Control Accounts
► Debtors Control Accounts
► Cash Account
► None of the given options
Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following would be the example of Administrative Expenses?
► Financial charges
► Rent expenses
► Advertising expenses
► Selling expenses
Question No: 38 ( Marks: 1 ) - Please choose one
Which of the following would NOT be included in the heads of Current Assets?
► Stock
► General Stores
► Spare parts
► Bank over draft
Question No: 39 ( Marks: 1 ) - Please choose one
If:
Ø Capital at the start Rs. 100,000
Ø Profit during the year Rs. 50,000
Ø Withdrawal during the year Rs. 25,000
What would be the closing balance of capital?
► Rs. 175,000
► Rs. 150,000
► Rs. 125,000
► Rs. 75,000
Question No: 40 ( Marks: 1 ) - Please choose one
Rent receivable (given in trial balance) is an item of_____________.
► Balance Sheet
► Profit & Loss Account
► Trading Account
► Both Balance Sheet and Profit & Loss Account
Question No: 41 ( Marks: 1 ) - Please choose one
Which one of the following refers to the allotment of shares to the existing shareholders by capitalizing the reserves into additional capital?
► Reserve funds
► Accumulated profit
► Right issue
► Bonus issue
Question No: 42 ( Marks: 1 ) - Please choose one
XYZ Company has paid up capital of 20,000 shares of Rs. 100 each. The company offers to existing shareholders the right to buy 3 shares of Rs. 100 each at Rs. 125 for every 5 shares held. What would be the number of right shares?
► 120 right shares
► 12,000 right shares
► 15,000 right shares
► 25,000 right shares
Question No: 43 ( Marks: 1 ) - Please choose one
Which of the following is (are) type(s) of Public Limited Companies?
► Listed company
► Non listed company
► Private limited company
► Both listed company and non listed company
Question No: 44 ( Marks: 1 ) - Please choose one
Which of the following can be utilized to issue bonus shares?
► Share premium
► Term finance certificates
► Bonds
► Debentures
Question No: 45 ( Marks: 1 ) - Please choose one
The statement of cash flows consists of __________ main sections (activities).
► One
► Two
► Three
► Four
Question No: 46 ( Marks: 1 ) - Please choose one
If issuance of debentures against cash is Rs. 3,000 and repurchase of shares of Rs. 4,000 then which of the following is correct?
► Inflow of cash Rs. 7,000
► Outflow of cash Rs. 7,000
► Inflow of cash Rs. 1,000
► Outflow of cash Rs. 1,000
Question No: 47 ( Marks: 1 ) - Please choose one
Which of the following is adjusted as working capital change in operating activities section of a cash flow statement?
► Decrease in trade receivable
► Repayment of dividend
► Payment of goodwill
► Investment in associated companies
Question No: 48 ( Marks: 1 ) - Please choose one
If there is a portion of long term loan of Rs. 30,000 payable in the current accounting period. Where it will be shown in financial statement?
► Current liability
► Long term liability
► Current asset
► Owner’s equity
Question No: 49 ( Marks: 3 )
Mr. A, B & C entered into a partnership. At the beginning of the year their capital balances were Rs. 180,000, Rs. 140,000 and Rs. 80,000 respectively. Profit or loss is to be divided as:
Ø Mr. A: one-half
Ø Mr. B: one-third
Ø Mr. C: one-sixth
Required:
If profit is Rs. 390,000, calculate the share of profit for all the partners.
ANS:
Total profit 390,000
Share of A = 390,000 * 1/2 = 195,000
Share of b = 390,000 * 1/3 = 130,000
Share of C = 390,000 * 1/6 = 65000
Question No: 50 ( Marks: 3 )
Write down the components of Cash Flow Statement.
ANS:
Cash Flow statement has three components.
1. Cash related to operating activities of the business
2. Cash related to Investment made by the business
3. Cash related to the financial activities of the business
Question No: 51 ( Marks: 5 )
What is bank overdraft? Mention an example for this. Why companies have to pay mark up on it. Under which head mark up paid on overdraft is shown in financial statement.
ANS:
Bank overdraft is the amount drawn over the balance exists in the account of business in the bank. This amount is the liability of the business and a kind of short term loan. As the bank has provided loan, so the bank charge interest (markup) on this amount as they have provided the short term loan to the business for markup incentive.
As we know that the markup on overdraft relates to the finance of the business. So, it is placed under the head of financial charges in the financial statements.
Question No: 52 ( Marks: 5 )
Write note on following terms.
Ø Net capital employed
Ø Share holder's equity
Ø Gain on sale of Fixed Assets
Ø Return on Investment
Question No: 53 ( Marks: 5 )
Indicate in which section of the Balance Sheet each of the following accounts is classified. Use the symbols CA for current assets, NCA for non current assets, CL for current liabilities, LTL for long term liabilities, and SHE for stockholders’ equity.
ANS:
Accounts Section
Prepaid rent CA
Dividends payable CL
Salaries payable CL
Prepaid insurance CA
Retained earnings CA
Mortgage payable (due in 15 years) LTL
Unearned service revenue CA
Accounts receivable CA
Land NCA
Office supplies NCA
A summarized record of transactions related to individuals or things is called a/an ___________.
► Account
► Voucher
► Journal
► Trial balance
Question No: 2 ( Marks: 1 ) - Please choose one
An informal accounting statement that lists the ledger account balances at a point in time and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Question No: 3 ( 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
Written down value of asset at the end of 5th year Rs.25,000
Profit or loss on disposal of fixed assets ?
► Rs.25, 000 profit
► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profit
Question No: 4 ( 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: 5 ( 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: 6 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of an amount Rs.200 received from Mr.”P” wrongly credited to Mr.”Q’s” account?
► Only Cash Account
► Only P’s account
► Only Q’s account
► Both of Mr. P's & Mr.Q's Account
Question No: 7 ( 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) 1,000
► Rs. 600
► Rs. 1,000
► Rs. 2,000
► Rs. 2,600
Question No: 8 ( Marks: 1 ) - Please choose one
General office expenses are charged to which of the following head:
► Administrative expenses
► Marketing expenses
► Selling expenses
► Financial expenses
Question No: 9 ( Marks: 1 ) - Please choose one
Which of the following account is affected from the Drawings of cash in sole-proprietorship business?
► Capital account
► Shareholder account
► Liability account
► Expense account
Question No: 10 ( Marks: 1 ) - Please choose one
Which of the following can offer its share to general public at large?
► A private limited company
► A listed company
► A partnership firm
► A trust
Question No: 11 ( Marks: 1 ) - Please choose one
Merchandise on hand at either the beginning or end of the reporting period is called__________.
► Raw material
► Cost of good sold
► Work in process
► Inventory
Question No: 12 ( Marks: 1 ) - Please choose one
How dividend declared is treated in the Balance Sheet of the company?
► Provision
► Current liability
► Reserves and surplus
► Current assets
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following is NOT a cash inflow?
► Sale of fixed asset
► Issue of debentures
► Cash from business operation
► Purchase of fixed asset
Question No: 14 ( Marks: 1 ) - Please choose one
An example of financing activities in the context of cash flow statement is:
► Capital expenditures on purchase of fixed assets
► Long-term deposit
► Financial charges paid
► Dividend paid
Question No: 15 ( 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: 16 ( Marks: 1 ) - Please choose one
Receipts from debtors appear on the ___________ side of the Debtors control account.
► Left side or credit
► Left side or debit
► Right side or debit
► Right side or credit
Question No: 17 ( Marks: 1 ) - Please choose one
We usually allow the customer to deduct a certain amount from the invoice value for prompt payment. In doing so we are granting a:
► Commission
► Allowance
► Discount
► Rebate
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following is known as an asset account?
► Gains
► Prepaid insurance
► Unearned revenue
► Accounts payable
Question No: 19 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,500 and of Mr. B is Rs.2,800. The net income for the year is Rs.95,000. What will be the amount of distributable profit?
► Rs.89,700
► Rs.92,500
► Rs.95,000
► Rs.100,300
Question No: 20 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,000 and markup on drawings of Mr. B is Rs.3,000. The net income for the year is Rs.50,000. What will be the profit share of Mr. A?
► Rs.22,500
► Rs.25,500
► Rs.27,500
► Rs.55,000
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following is quoted company?
► Private Limited Company
► Public Limited Company
► Listed company
► Non Listed Company
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following items of balance sheet are useful in evaluating a company’s liquidity?
► Current assets and other assets
► Current liabilities and current assets
► Current liabilities and plant and equipment
► Non current liabilities and other assets
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following is an example of liability in a business enterprise?
► Accounts payable
► Accounts receivable
► Commission received
► Commission paid
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following is/are TRUE with respect to the rules of Debit & Credit?
► Increase in capital is Credit
► Decrease in capital is Debit
► Increase in expense is Debit
► All of the given options
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following is/are NOT the example of intangible assets?
► Copyright
► Goodwill
► Patent
► Land
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following account would be credited, when goods are returned to suppliers?
► Voucher payable account
► Stock account
► Sales account
► Work In Process account
Question No: 27 ( Marks: 1 ) - Please choose one
What would be the value of total manufacturing cost, if the cost of material consumed during the month is Rs. 5,000, labor cost incurred is Rs. 2,000 and the factory over head cost is Rs. 1,000?
► Rs. 3,000
► Rs. 5,000
► Rs. 7,000
► Rs. 8,000
Question No: 28 ( Marks: 1 ) - Please choose one
If:
• Direct Material Cost is Rs. 15,000
• Factory overhead is Rs. 5,000
• Manufacturing Cost is Rs. 30,000
Then:
What is the amount of Prime Cost?
► Rs. 25,000
► Rs. 20,000
► Rs. 35,000
► Rs. 45,000
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following do NOT represent the Cost of goods sold?
► Sales – Gross Profit
► Opening Stock + Purchases – Return Outwards – Closing Stock
► Cost of goods Manufactured + Opening Finished Goods Inventory – Closing Finished Goods Inventory
► Opening Stock + Purchases – Return Inwards – Closing Stock
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following represents a possession that has a value in an exchange?
► Asset
► Liability
► Expense
► Revenue
Question No: 31 ( Marks: 1 ) - Please choose one
Written down value of an asset = ----------------.
► Original cost – Accumulated depreciation
► Original cost – Appreciation
► Book value – Accumulated depreciation
► Original cost – Salvage value
Question No: 32 ( Marks: 1 ) - Please choose one
Distinction between capital and revenue items is important for the preparation of:
► Income statement only
► Balance sheet only
► Final accounts
► Bank statement
Question No: 33 ( Marks: 1 ) - Please choose one
When Bank Statement shows a debit balance it means:
► Favourable balance as per cash book
► Debit balance as per cash book
► Favourable balance as per bank statement
► Overdraft as per bank statement
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following statement is correct, if a company fails to record estimated bad debts expense?
► Net realizable value is understated
► Expenses are understated
► Revenues are understated
► Receivables are understated
Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following is INCORRECT about subsidiary account?
► It is not a summary account
► It reduces the burden of control account
► It provides detailed information about individual accounts
► It summarizes the total of related items from other accounts
Question No: 36 ( Marks: 1 ) - Please choose one
If cash sale is the missing figure, it can be ascertained by the construction of:
► Creditors Control Accounts
► Debtors Control Accounts
► Cash Account
► None of the given options
Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following would be the example of Administrative Expenses?
► Financial charges
► Rent expenses
► Advertising expenses
► Selling expenses
Question No: 38 ( Marks: 1 ) - Please choose one
Which of the following would NOT be included in the heads of Current Assets?
► Stock
► General Stores
► Spare parts
► Bank over draft
Question No: 39 ( Marks: 1 ) - Please choose one
If:
Ø Capital at the start Rs. 100,000
Ø Profit during the year Rs. 50,000
Ø Withdrawal during the year Rs. 25,000
What would be the closing balance of capital?
► Rs. 175,000
► Rs. 150,000
► Rs. 125,000
► Rs. 75,000
Question No: 40 ( Marks: 1 ) - Please choose one
Rent receivable (given in trial balance) is an item of_____________.
► Balance Sheet
► Profit & Loss Account
► Trading Account
► Both Balance Sheet and Profit & Loss Account
Question No: 41 ( Marks: 1 ) - Please choose one
Which one of the following refers to the allotment of shares to the existing shareholders by capitalizing the reserves into additional capital?
► Reserve funds
► Accumulated profit
► Right issue
► Bonus issue
Question No: 42 ( Marks: 1 ) - Please choose one
XYZ Company has paid up capital of 20,000 shares of Rs. 100 each. The company offers to existing shareholders the right to buy 3 shares of Rs. 100 each at Rs. 125 for every 5 shares held. What would be the number of right shares?
► 120 right shares
► 12,000 right shares
► 15,000 right shares
► 25,000 right shares
Question No: 43 ( Marks: 1 ) - Please choose one
Which of the following is (are) type(s) of Public Limited Companies?
► Listed company
► Non listed company
► Private limited company
► Both listed company and non listed company
Question No: 44 ( Marks: 1 ) - Please choose one
Which of the following can be utilized to issue bonus shares?
► Share premium
► Term finance certificates
► Bonds
► Debentures
Question No: 45 ( Marks: 1 ) - Please choose one
The statement of cash flows consists of __________ main sections (activities).
► One
► Two
► Three
► Four
Question No: 46 ( Marks: 1 ) - Please choose one
If issuance of debentures against cash is Rs. 3,000 and repurchase of shares of Rs. 4,000 then which of the following is correct?
► Inflow of cash Rs. 7,000
► Outflow of cash Rs. 7,000
► Inflow of cash Rs. 1,000
► Outflow of cash Rs. 1,000
Question No: 47 ( Marks: 1 ) - Please choose one
Which of the following is adjusted as working capital change in operating activities section of a cash flow statement?
► Decrease in trade receivable
► Repayment of dividend
► Payment of goodwill
► Investment in associated companies
Question No: 48 ( Marks: 1 ) - Please choose one
If there is a portion of long term loan of Rs. 30,000 payable in the current accounting period. Where it will be shown in financial statement?
► Current liability
► Long term liability
► Current asset
► Owner’s equity
Question No: 49 ( Marks: 3 )
Mr. A, B & C entered into a partnership. At the beginning of the year their capital balances were Rs. 180,000, Rs. 140,000 and Rs. 80,000 respectively. Profit or loss is to be divided as:
Ø Mr. A: one-half
Ø Mr. B: one-third
Ø Mr. C: one-sixth
Required:
If profit is Rs. 390,000, calculate the share of profit for all the partners.
ANS:
Total profit 390,000
Share of A = 390,000 * 1/2 = 195,000
Share of b = 390,000 * 1/3 = 130,000
Share of C = 390,000 * 1/6 = 65000
Question No: 50 ( Marks: 3 )
Write down the components of Cash Flow Statement.
ANS:
Cash Flow statement has three components.
1. Cash related to operating activities of the business
2. Cash related to Investment made by the business
3. Cash related to the financial activities of the business
Question No: 51 ( Marks: 5 )
What is bank overdraft? Mention an example for this. Why companies have to pay mark up on it. Under which head mark up paid on overdraft is shown in financial statement.
ANS:
Bank overdraft is the amount drawn over the balance exists in the account of business in the bank. This amount is the liability of the business and a kind of short term loan. As the bank has provided loan, so the bank charge interest (markup) on this amount as they have provided the short term loan to the business for markup incentive.
As we know that the markup on overdraft relates to the finance of the business. So, it is placed under the head of financial charges in the financial statements.
Question No: 52 ( Marks: 5 )
Write note on following terms.
Ø Net capital employed
Ø Share holder's equity
Ø Gain on sale of Fixed Assets
Ø Return on Investment
Question No: 53 ( Marks: 5 )
Indicate in which section of the Balance Sheet each of the following accounts is classified. Use the symbols CA for current assets, NCA for non current assets, CL for current liabilities, LTL for long term liabilities, and SHE for stockholders’ equity.
ANS:
Accounts Section
Prepaid rent CA
Dividends payable CL
Salaries payable CL
Prepaid insurance CA
Retained earnings CA
Mortgage payable (due in 15 years) LTL
Unearned service revenue CA
Accounts receivable CA
Land NCA
Office supplies NCA
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