Embedded Files
Subscribe for Latest Update
ONE WORD TO ONE SENTENCE QUESTIONS
ONE WORD TO ONE SENTENCE QUESTIONS
Q.1. What do you mean by outstanding expenses ?
Ans. all those expenses which are due for payment but not paid in an accounting period.
Q.2. What are prepaid expenses ?
Ans. such expenses which are ready paid before the actual time of their payment.
Q.3. What are bad debts ?
Ans. Bad debts are irrecoverable debts from customers due to death insolvency dishonesty or other reason.
Q.4. What is Accrued Income ?
Ans. These are those incomes which have been earned during the year but not received till the end of the year.
Q.5. accrued income and income due but not received are same Do you agree ?
Ans. yes.
Q.6. give two examples of revenue expenditure.
Ans. (i) Purchase of Goods
(ii) salary
Q.7. give an example of capital expenditure treated as revenue expenditure
Ans. wages include rs.5000 spent on the installation of a new machine.
Q.8. the cost of obtaining a license to carry out business is a capital expenditure or Revenue Expenditure ?
Ans. capital Expenditure because it is taken only at the time of starting a business.
Q.9. What is income received in advance ?
Ans. These incomes are received during the trading period but are to be earthed in future.
Q.10. What is Depreciation ?
Ans. depreciation is the value of fixed assets that diminishes gradually with their use.
Q.11. What is the provision for Bad debts ?
Ans. provision for bad debts is an attempt to anticipate possible losses due to bad debts and keep aside an amount against the profit to meet loss.
Q.12. What is abnormal loss of Stock ?
Ans. it is that part of stock which is lost or destroyed due to an accident.
Q.13. What journal entry will be passed for outstanding expenses ?
Ans. expenses A/c Dr.
To outstanding Expenses
Q.14. Give an example of prepaid expenses ?
Ans. rent for 6 months paid in advance.
Q.15. Why is the Input GST (CGST and SGST or IGST) Account credited when the proprietor takes the goods for personal use ?
Ans. It is a creditor because GST credit is allowed only when goods are sold. Goods taken by proprietors are not a sale but drawings.
Q.16. What is meant by adjusted purchases?
Ans. Adjusted Purchases means Opening Stock is added to purchases while closing stock is deducted. In other words we can say that entry for closing stock is passed in the books of account
Q.17. if both Adjusted Purchases and Closing Stock are given in the Trial Balance where are the two accounts shown in the Final Accounts?
Ans. Adjusted Purchases are shown in the Trading Account on the debit side. Closing Stock is shown on the assets side of the Balance Sheet under the main head Current Assets
FILL IN THE BLANKS
FILL IN THE BLANKS
Salary outstanding account is a ……………..account.
Provision for discount on debtors shows a ……………..balance.
Accrued interest given in trial balance should appear in…………
Items given in the adjustments are recorded at least at ………… places.
Depreciation given in trial balance will not be …………..from assets.
Goods taken by proprietors for personal use are deducted from …………… in the Balance Sheet.
Provision for Doubtful Debt has …………..balance.
Ans. 1. Personal 2. Credit 3. Balance Sheet 4. Two 5. Deducted 6. Capital 7. Credit .
C. TRUE OR FALSE STATEMENTS
C. TRUE OR FALSE STATEMENTS
Provision for discount on debtors is created before provision for bad debts.
If closing stock is given in trial balance it will be recorded in the Balance Sheet only.
Closing Stock of stationery will be shown in trading a/c.
When goods are destroyed by any reason, they are either deducted from purchases or credited to trading a/c.
Inventory valuation affects only the position statement.
Accrued income appearing in the Trial Balance is shown in P&L A/c
Bank Overdraft is a contingent Liability.
Prepaid rent is a personal account.
Int on drawings is an income for the business.
Life Insurance Premium is treated as drawing.
Unearned Income is shown in Liabilities side of Balance Sheet.
Debts written off as bad if recovered subsequently are credited to the Debtors Account .
Depreciation Account in Trial Balance is taken as profit & Loss account.
Income Tax is a drawing of the proprietor . It is deducted from the capital Balance Sheet.
Ans. 1. False 2. True 3. False 4. True 5. False 6. False 7. False. 8. True 9. True 10. True 11. True 12. False 13. True 14. True.
D. MULTIPLE CHOICE QUESTIONS
D. MULTIPLE CHOICE QUESTIONS
The manager is entitled to a commission of 5% on profit of Rs. 4,2000 after charging such commission The amount of commission will be.
200
210
220
100
2. Closing Stock is credited to :
Trading a/c
P/L a/c
Goods a/c
Balance Sheet
3. Accrued income is treated as :
Assets
Liability
Income
Expenses
4. Outstanding expense will also shown as :
Expense
Asset
Liability
Income
5. If closing stock is adjusted or shown in trial balance only then it will transfer only to.
Trading a/c
Asset side of Balance Sheet
Liability side of balance sheet
Both a and c
6. Types of Account shown in Balance Sheet are
Nominal and Personal
Real and Nominal
Real and Personal
Real Nominal and Personal
7. Net Profit before the following adjustment : Rs. 200,000
Outstanding salary 10,000
Prepaid insurance 13,000
197000
203000
223000
177000
8. Closing stock is shown in Financial Statement at
Cost Price
Realizable value
Coat price or Realizable Value whichever is greater
Cost price or Realizable Value whichever is less
9. Heavy amount spent for the advertisement of new company product is
Revenue Expenditure
Deferred Revenue Expenditure Expenditure
Capital Expenditure
None of the above
10. Income tax in case of sole trader is treated as
Personal expenses
Debtors expenses
Business expenses
None of the above
11. Adjustments given are record in Trading and Profit 7 Loss Account and again in Balance Sheet it is so because of ;
Matching Principle
Dual Aspect Principle
Accrual Concept
Materiality Principle
12. Expenses incurred but not yet paid are accounted because of ;
Matching Principle
Dual Aspect Principle
Accrual Concept
Materiality Principle
13. Wags paid for installation of machine is added to cost of machine because of
Accrual Concept
Matching Principle
Materiality Principle
Cost Principle
14. Indirect Expenses are transferred to
Trading Account
Profit & LOss Account
Balance Sheet
Trading Account & Balance Sheet
15. Income received in advance is deducted from income because of:
Revenue Recognition concept
Accrual concept
Matching Sheet
Prudence Concept
16. Balance Sheet is prepared to know
Financial Performance
Financial Position
Liabilities Position
Assets Position
Ans. 1. A 2. A 3. A 4. C 5. B 6. C 7. B 8. D 9. B 10. A 11. B 12. C 13. C 14. B 15. B 16. B .
Page updated
Google Sites
Report abuse