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ONE WORD TO ONE SENTENCE QUESTIONS
ONE WORD TO ONE SENTENCE QUESTIONS
Q.1. What is a Financial Statement ?
Ans. financial statements are organized summary of detailed information about the Financial position and performance of enterprise.
Q.2. What is a Trading Account ?
Ans. Trading Account is a part of income statement. It is a nominal account and i prepared to assets gross profit or gross lo of a business enterprise during an accounting yaar.
Q.3. What is a Profit and Loss Account?
Ans. A profit and loss account is an account in which all gains and loss are collected in order to ascertain the excess of gains over the vice versa.
Q.4. Give a formula to calculate Cost of Goods Sold’.
Ans. Cost of Goods Sold = Sales - Gross Profit Or Opening stock + Purchase + Direct Expenses - Cloning stock.
Q.5. Name any two current et?
Ans. Cash, Debtors.
Q.6. What accounts are prepared under a financial statement ?
Ans. Trading a/c profit & loss a/c Balance Sheet
Q.7. Write one object to prepare final accounts
Ans. To find out the profit or loss of a business.
Q.8. What is COGS?
Ans. It is the cost of acquiring the goods for sale.
Q.9. What is the need for preparing trading a/c.
Ans. To find gross profit or gross loss.
Q.10. Statement one difference between Trading a/c Profit and Loss a/c
Ans Gross profit i revealed by Trading a/c where s net profit is revealed by profit and loss a/c
Q.11. Name any two direct expenses.
Ans. 1. Wages 2. Carriage
Q.12. State one difference between Trading a/c and Profit and Loss a/c
Ans. An error in a Trading account will affect P/L a/c where as error P/L a/c has no effect on Trading a/c.
Q.13. What is a Balance Sheet ?
Ans. Balance Sheet is a statement of position of assets and liabilities on a particular point of time.
Q.14. Write on a feature of the Balance Sheet?
Ans. It is a document.
Q.15. State one similarity between Trial Balance and Balance Sheet
Ans. Both are prepared on a particular date.
Q.16. Where Balance in input IGST Account will be shown?
Ans. Balance of input IGST shown in the asset side of the Balance Sheet
Q.17. Where Balance in output CGST Account will be shown?
Ans. It i shown in the liabilities side of the Balance Sheet
Q.18. Profit and Loss Account shows the financial Position of the enterprise ? Do you agree?
Ans. No. It doesn't show the financial position of the enterprise.
Q.19. What is meant by Marshalling of Assets and Liabilities?
Ans. Marshaling is the arrangement of assets and liabilities in the balance sheet.
(i) In order of liquidity.
(ii) In order of permanence.
Q..20. “Under” the liquidity approach assets which are not liquid are presented at the top of the balance sheet Do you agree?
Ans. Yes.
Q.21. “T’ From presentation of financial Statement is known a Horizontal Form or Vertical Form ?
Ans. Horizontal Form.
Q.22. Liabilities side of the Balance Sheet always represents Credit balance. Do you agree?
Ans. Yes.
B. FILL IN THE BLANKS
B. FILL IN THE BLANKS
P & L A/c is a ………………account.
All direct expenses are taken to ……………account.
The mount which owes a firm is called …………..of the firm.
Life insurance premium paid on the life of the owner of business is treated as……………….
Final accounts are prepared from…………..
Profit and Loss a/c is also known as …………….. Statement.
Gross Profit or Gross loss is determined by preparing……………….
Asset Accounts always show ……………. Balances.
Profit & Loss Account shows……………..
Wages paid on the installation of a new machine are debited to …………………
Ans. 1. Nominal 2. Trading 3. Liabilities 4. Drawings 5. Trial balance 6. Income 7. Trading 8. Debit 9. Net profit /Net loss 10. Machinery Account
C. TRUE OR FALSE STATEMENT
C. TRUE OR FALSE STATEMENT
All indirect expenses are transferred to profit and loss a/c
Manufacturing account is prepared to know the cost of goods sold.
Profit and loss account is a real account.
Patent rights are tangible assets.
Valuation of closing stock is done at cost price and market price whichever is less.
Closing stock is recorded only Trading a/c.
Prepaid expenses are treated as Liquid assets.
Current assets do not include closing stock.
Grouping means showing items of similar nature under a common heading.]
The least liquid asset is shown first and the least urgent liability is shown last in order of permanence.
Profit & Loss Account shows the financial position of the enterprise.
Trial Balance is prepared after preparing the Trading and Profit & Loss Account.
Goodwill is not a fictitious asset.
Income Tax paid by sole trade is debited to a profit & loss account.
Grouping and Marshalling have the same meanings.
Closing Stock is always valued at cost price.
Sales are equal to cost of good sold plus Gross Profit.
Revenue Expenditure is transferred to the Balance Sheet.
Ans. 1. True 2. True 3. False 4. False 5. True 6. False 7. False 8. False 9. True 10. False 11. False 12. False 13. True 14. False 15. False 16. False 17. True 18. false .
D. MULTIPLE CHOICE QUESTIONS
D. MULTIPLE CHOICE QUESTIONS
A balance Sheet depicts financial position of a firm :
For a year
For a given period
On a particular point of time
On a certain date
2. Stock in trade is
A fixed asset
An intangible asset
A current asset
A Fictitious
3. If closing stock is shown in trial balance them it is transferred to :
P & L account
Balance Sheet
Trading A/c
Trading a/c and Balance Sheet
4. Profit and Loss a/c is prepared to know
Financial position of business
Balance of all accounts
Profit earned by business
None of these
5. Goodwill i a type of
Intangible asset
Current asset
Tangible asset
Fixed asset
6. The purpose of preparing final accounts is to ascertains
Profit or Loss
Capital
The value of assets
Profits or loss and financial position
7. Final account are prepared
Ar the end of calendar year
At the end of assessment year
On every Diwali
At the end of Accounting yr
8. Salaries and Wages appearing in Trial balance is shown :
On the debit side of trading A/c
On the debit side of P & L A/c
On the Assets side of Balance sheet
On the Liabilities side of Balance Sheet
9. Balance of petty Cash is
Expenses
Income
Liabilities
assets
10. Schedule of balance prepared from Ledger accounts is known a
Balance sheet
Trial balance
Statement of account
Statement of affairs
11. Computer owned by a firm as classified as
Tangible asset
Current asset
Liquid asset
Intangible assets
12. Loss on sale of an old car is debited to :
Profit & loss account
Car account
Depreciation account
Trading account
13. Sales are equal
Cot of good sold + gross profit
Cost of good sold - gross profit
Gross Profit - Cost of good sold
Purchase + Gross Profit
14. Income Tax paid by a sole trader is known
On the debit side of Trading Account
On the debit side of the Profit & Loss Account
As deduction from capital in the balance Sheet
As deduction to capital in the Balance Sheet
15. Return Inward in the trial balance is deducted from
Purchases
Sales
Return Outward
Gross Profit
16. Which type of expenses out of the following are shown in Trading Account.
Direct Expenses
Indirect Expenses
Opening Expenses
Direct and Indirect Expenses
17. Closing Stock shown inside the Trial Balance is shown in
Trading Account
Profit & Loss Account
Balance Sheet
None of these
18. Which of the following is not in the Balance Sheet ?
Opening Stock
Closing Stock
Patents
Debtors
Ans. 1. C 2. C 3. B 4. C 5. A 6. D 7. D 8. B 9. D 10. B 11. A 12. A 13. A 14. C 15. B 16. A 17. C 18. A .
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