Monday, 18 April 2011

MIDTERM EXAMINATION MGT101 Financial Accounting Fall 2008

Question No: 1    ( Marks: 1 )    - Please choose one
 Particulars
Rs.
Opening written down value of machine
3,00,000
Cost of machine purchased during the year
50,000
Depreciation during the year
9,000
closing written down value (WDV) of the Machine
?

       ► Rs. 3, 41,000
       ► Rs. 3, 50,000
       ► Rs. 3, 59,000
       ► Rs. 59,000
   
Question No: 2    ( Marks: 1 )    - Please choose one
 Particulars
Rs.
Opening written down value of machine
Rs. 2,00,000
Cost of  new machine purchased during the year
 Rs. 50,000
Depreciation during the year
Rs. 25,000
Closing written down value (WDV) of machines
?

       ► Rs. 2, 25,000
       ► Rs. 2, 50,000
       ► Rs. 2, 75,000
       ► Rs. 75,000
   
Question No: 3    ( Marks: 1 )    - Please choose one
 Consider the following data:     

Particulars
Rs.
Assets
1,98,000
Owner's equity
95,000
Liabilities
?

       ► Rs. 49,000
       ► Rs. 55,000
       ► Rs. 1, 25,000
       ► Rs. 1, 03,000
   
Question No: 4    ( Marks: 1 )    - Please choose one
 Find out the missing value of an Accounting Equation with the help of given data:

Cash
Rs. 22,500
Debtors
Rs. 500
Total Assets
Rs. 80, 385
Accounts payable
Rs. 1,000
Total liabilities
Rs. 20,000

       ► Rs. 60,385 owner’s equity 
       ► Rs. 61,385 owner’s equity 
       ► Rs. 99,885 owner’s equity 
       ► Rs.  99,385 owner’s equity
   
Question No: 5    ( Marks: 1 )    - Please choose one
 Find out the missing value of an Accounting Equation with the help of given data:

Furniture
Rs. 90,000
Cash
Rs.1, 00, 000
Debtors
Rs.10, 000
Other Assets
Rs. 1,000
Owner’s equity
Rs. 90, 000

       ► Rs. 2, 01,000 liabilities
       ► Rs. 1, 11, 000 liabilities
       ► Rs. 2, 90, 000 liabilities
       ► Rs. 2, 91, 000 liabilities
   
Question No: 6    ( Marks: 1 )    - Please choose one
 When the process of production is completed, all the costs must be charged to:

       ► Raw material account
       ► Work in process account
       ► Finished goods account
       ► Merchandise account
   
Question No: 7    ( Marks: 1 )    - Please choose one
 Which of the following assets are shown at written down value in balance sheet?

       ► Current assets
       ► Liquid assets
       ► Floating assets
       ► Fixed assets
   
Question No: 8    ( Marks: 1 )    - Please choose one
 Which of the following asset is NOT depreciated?

       ► Factory Buildings
       ► Office Equipment
       ► Plant & Machinery
       ► Land
   
Question No: 9    ( Marks: 1 )    - Please choose one
 The main goal of Bank Reconciliation Statement is to determine:

       ► If the discrepancy is due to error rather than timing
       ► If the discrepancy is due to timing rather than error
       ► If the discrepancy is due to error rather than amount
       ► If the discrepancy is due to amount rather than timing
   
Question No: 10    ( Marks: 1 )    - Please choose one
 Sale proceeds of goods are an example of:

       ► Revenue expense
       ► Capital expense
       ► Capital receipt
       ► Revenue receipt
   
Question No: 11    ( Marks: 1 )    - Please choose one
 Which one of the following is NOT true about revenue expenditure?

       ► These are the running expenses of the business
       ► They improve the financial position of the business
       ► They reduce the profit of the concern
       ► They do not appear in the balance sheet
   
Question No: 12    ( Marks: 1 )    - Please choose one
          Consider the following:
Beginning inventory
10 units @ Rs. 10 per unit
First purchase
35 units @ Rs. 11 per unit
Second purchase
40 units @ Rs. 12 per unit
Third purchase
20 units @ Rs. 13 per unit
Eighty units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?

       ► Rs.260
       ► Rs.232
       ► Rs.284
       ► Rs.320
   
Question No: 13    ( Marks: 1 )    - Please choose one
          Consider the following inventory record:

Date
Item
Quantity
Cost/Unit
Rs.
Total
Rs.
Jan. 2
Beginning inventory
10
10
100
Mar. 4
Purchase
35
11
385
May 8
Purchase
40
12
480
Nov. 3
Purchase
20
13
260
De31
Merchandise available
105

1,225

80 units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.

       ► Rs. 1,225
       ► Rs. 1,015
       ► Rs. 965
       ► Rs. 905
   
Question No: 14    ( Marks: 1 )    - Please choose one
 If, Cost of machine            = Rs.400, 000
Useful life                  = 5 years
Rate of depreciation= 40%
The book value of machine after one years using diminishing balance method is ?



       ► Rs.86, 400
       ► Rs. 1, 44,000
       ► Rs. 2, 40,000
       ► Rs. 51,840
   
Question No: 15    ( Marks: 1 )    - Please choose one
 Cost of asset
Rs. 1,00,000
Life of asset
5 years
Depreciation for each year
Rs. 5,000
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: 16    ( Marks: 1 )    - Please choose one
 Cost of asset
Rs. 1,00,000
Life of asset
5 years
Depreciation for each year
Rs. 5,000
Sale price after 5 years
Rs.50,000
Written down value of asset on 5th year
Rs.75,000
profit or loss on disposal of fixed assets
?

       ► Rs.25, 000 loss
       ► Rs. 75,000 loss
       ► Rs. 15,000 profit
       ► Rs. 1, 00,000 profit
   
Question No: 17    ( Marks: 1 )    - Please choose one
 Cost of asset
Rs. 1,00,000
Life of asset
5 years
Depreciation for the each year
Rs. 5,000
Sale price after 5 years
Rs.15,000
Written Down Value of Asset on 5th year
Rs. 75,000
Profit or loss on disposal of fixed asset
?

       ► Rs. 60,000 loss
       ► Rs. 75,000 profit
       ► Rs. 25,000 loss
       ► Rs. 1, 00,000 profit
   
Question No: 18    ( Marks: 1 )    - Please choose one
 The total of all costs incurred to convert raw material into finished goods is known as:

       ► Prime cost
       ► Conversion cost
       ► Sunk cost
       ► Opportunity cost
   
Question No: 19    ( Marks: 1 )    - Please choose one
 WhicWhich of the following is an example of direct materials cost?


       ► Polish and finishing material for chair
       ► A piece of wood for the production of chair
       ► Production worker’s wages
       ► Depreciation expenses
   
Question No: 20    ( Marks: 1 )    - Please choose one
 If the working capital and the current assets of company XYZ are Rs. 5,000 and Rs.15,000 respectively, calculate the current liabilities.


       ► Rs. 5,000
       ► Rs. 10,000
       ► Rs. 15,000
       ► Rs. 20,000
   
Question No: 21    ( Marks: 1 )    - Please choose one
 Which of the following item appears in Trading Account of a business?


       ► Interest expenses
       ► Wages and salaries
       ► Depreciation expenses
       ► Discount Allowed
   
Question No: 22    ( Marks: 1 )    - Please choose one
 Which of the following is an alternate term which can be used for “Capital”?


       ► Liability
       ► Owner’s net worth
       ► Working capital
       ► Asset
   
Question No: 23    ( Marks: 1 )    - Please choose one
 Which of the following financial statement DO NOT show the financial health of a business at a specific date?

       ► Profit and loss account
       ► Balance sheet
       ► Statement of financial position
       ► All of the given options
   
Question No: 24    ( Marks: 1 )    - Please choose one
 If cost of sales is Rs. 95,000, sales are Rs. 200,000 and operating expenses are Rs. 100,000. What will be the net result?

       ► Rs. 5,000 Loss
       ► Rs. 5, 000 Profit
       ► Rs.1, 95,000 Profit
       ► Rs.1, 95,000 Loss
   
Question No: 25    ( Marks: 1 )    - Please choose one
 Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance)

       ► Cash account
       ► Furniture account
       ► Vehicle account
       ► All of the given options
   
Question No: 26    ( Marks: 1 )    - Please choose one
 Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance).

       ► Capital account
       ► Sundry creditors account
       ► Accounts payable account
       ► Cash account
   
Question No: 27    ( Marks: 1 )    - Please choose one
 Which of the following journal entry will be recorded, if the payment of furniture purchased is made through cheque?

       ► Furniture account (Dr) and Bank account (Cr)
       ► Furniture account (Dr) and Profit & Loss account (Cr)
       ► Furniture account (Dr) and Cash account (Cr)
       ► Cash account (Dr) and Furniture account (Cr)
   
Question No: 28    ( Marks: 1 )    - Please choose one
 Which one of the following statement is CORRECT about Long term liabilities?

       ► These are due within one year
       ► These are consist of all debts, payable after 12 months
       ► In working capital, these are deducted from current assets
       ► All of the given options
   
Question No: 29    ( 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: 30    ( Marks: 1 )    - Please choose one
 While making Income & Expenditure account, Excess of income over expenses in a specified accounting period is called:

       ► Deficit
       ► Surplus
       ► Profit
       ► Loss
   
Question No: 31    ( Marks: 1 )    - Please choose one
 Which one of the following is NOT prepared by Non profit organizations?

       ► Profit & Loss account
       ► Income & Expenditure account
       ► Receipts & Payments account
       ► Balance Sheet
   
Question No: 32    ( Marks: 1 )    - Please choose one
 Which of the following financial statement summarizes the profitability of an organization for a particular period?


       ► Trading and Profit & Loss account
       ► Cash Flow Statement
       ► Statement of Retained Earnings
       ► Balance Sheet
   
Question No: 33    ( Marks: 1 )    - Please choose one
 Which of the following period is known as a fiscal Year of the Government of Pakistan?


       ► 1st January to 31st December
       ► 1st June to 31st May
       ► 1st July to 30th June
       ► 1st October to 30th September
   
Question No: 34    ( Marks: 1 )    - Please choose one
 What would be the affect on the components of the accounting equation, if goods are purchased on cash? 

       ► Increase in cash and decrease in equity
       ► Increase in cash and increase in goods
       ► Increase in goods and decrease in cash
       ► Increase in equipment and increase in equity
   
Question No: 35    ( Marks: 1 )    - Please choose one
 Obligations to pay cash or un-earned incomes by the business are the:

       ► Assets
       ► Liabilities
       ► Equities
       ► Expenses
   
Question No: 36    ( Marks: 1 )    - Please choose one
 Commercial Accounting is based on:
       ► Single entry book keeping
       ► Double entry book keeping
       ► Both single and double entry book keeping
       ► Cash basis of book keeping
   
Question No: 37    ( Marks: 1 )    - Please choose one
 Word “Credit” is derived from ______ language.

       ► Latin
       ► English
       ► French
       ► Chinese
   
Question No: 38    ( Marks: 1 )    - Please choose one
 The basic accounting principle/concept according to which Business is independent from its owner(s) is known as:

       ► Separate Entity Concept
       ► Matching Concept
       ► Going Concern Concept
       ► Materiality Concept
   
Question No: 39    ( Marks: 1 )    - Please choose one
 Double entry accounting system includes:


       ► Accrual accounting only
       ► Cash accounting only
       ► Both cash and accrual accounting
       ► None of the given options
   
Question No: 40    ( Marks: 1 )    - Please choose one
 An accounting system is used by a business to:
       ► Analyze transactions
       ► Handle routine book-keeping tasks
       ► Structure information
       ► All of the given options
   
Question No: 41    ( Marks: 10 )
 Record the following transactions in the General Journal.

Date:
Transactions
Jan 1, 2007
Mr. Asghar started business with cash Rs. 1, 00,000.
Jan 2, 2007
Opened bank account with amount Rs. 50,000.
Jan 4, 2007
Purchased goods for cash Rs. 15,000.
Jan 9, 2007
Payment made to Karachi store (Creditor) Rs. 15,000 by cheque.
Jan14, 2007
Goods returned to Karachi store worth Rs. 1,500.
Jan22, 2007
Goods sold for cash Rs. 2,000.



DR
Bank account  50,000
Purchased goods for cash Rs. 15,000
Payment made to Karachi store (Creditor) Rs. 15,000 by cheque
Goods returned to Karachi store worth Rs. 1,500
Credit balance 20500



Cr
Mr. Asghar started business with cash Rs. 1, 00,000
Goods sold for cash Rs. 2,000.
at

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