FOC bit bank - 3,4&5 PDF Past Paper

Unit 3– Ledgers, Subsidiary Books and Trail Balance Level – I (K1) 1. The total of the purchase Day book is posted periodically to the: [ K1] a. Debit of purchases a/c b. Credit of purchases a/c c. Cash book d. Debit of supplier a/c 2. Total of the sal...

Unit 3– Ledgers, Subsidiary Books and Trail Balance Level – I (K1) 1. The total of the purchase Day book is posted periodically to the: [ K1] a. Debit of purchases a/c b. Credit of purchases a/c c. Cash book d. Debit of supplier a/c 2. Total of the sales book for March indicates: [ K1] a. Total sales for the month b. Total credit sales for the month c. Total cash sales for the month d. Total sales less sales return 3. Purchases book is used to record: [ K1] a. All purchase of goods b. All credit purchases c. All credit purchases of goods d. All credit purchases of assets 4. The source document or voucher used for recording entries in sales book is: [ K1] a. Invoice received b. Invoice sent out c. Credit note d. Debit note 5. The debit note issued are used to prepare [ K1] a. Sales return book b. Purchase return book c. Sales book d. Purchases book 6. Purchased goods from E worth Rs. 5,000 on credit basis [ K1] a. Bills receivable book b. Purchases book c. Journal proper d. Purchases returns book 7. Unpaid salary is to be provided for in the accounts [ K1] a. Bills receivable book b. Purchases book c. Journal proper d. Purchases return book 8. The Sales returns book records [ K1] a. The return of goods purchased b. Return of anything purchased c. Return of goods sold d. Return of assets purchased 9. The sales book is [ K1] a. Part of the ledger b. Part of the journal c. Part of the balance sheet d. Part of the trial balance 10.The balance of Petty cash is: [ K1] a. An expense b. Revenue c. An asset d. Liability 11.Cash book is a form of: [ K1] a. Trial balance b. Ledger c. Journal d. All of the above 12.Double entry in cash book is completed when: [ K1] a. Salaries are paid by cheque b. Withdrawal of money from bank for personal use c. Deposited cash into bank d. None of these 13.Salaries due for the month of march will appear [ K1] a. On the receipt side of the cashbook b. On the payment side of the cashbook c. As a contra entry d. Nowhere in the cashbook 14.The cash book records [ K1] a. All cash receipts b. All cash payments c. All cash receipts and payments d. Cash and credit sale of goods 15.The balance of the cash column is always: [ K1] a. Debit b. Credit c. Debit or Credit d. None 16.Cash discount is provided on [ K1] a. Sale of goods b. Purchase of goods c. Prompt payment d. Delayed payment 17.Petty Cash book is a [ K1] a. Subsidiary book b. Subsidiary journal and ledger account c. Ledger account d. Statement 18.While making entries in cash book the rule of account is followed: [ K1] a. Nominal b. Real c. Personal d. None 19.Methods of preparation of Trial Balance are: [ K1] a. Balance method b. Total method c. Total and Balance method d. All of these  Level - II (K2) 20. A is sent to a customer when he returns goods:[ K2] a. Debit note b. Credit note c. Proforma invoice d. None of the above 21.Purchase of Fixed assets on credit basis is recorded in: [ K2] a. Purchases book b. Cash book c. Journal proper d. Journal 22. Trade discounts are: [ K2] a. Recorded in the books b. Not recorded in the books c. Not used for determining the net price d. Used for specific purposes in accounting 23. Total of sales book will be posted: [ K2] a. In Debit side of sales book b. In Credit side of Purchase account c. In Credit side of Sales account d. In Debit side of sales returns account 24. A note sent by buyer on return of goods is: [ K2] a. Debit note b. Credit note c. Return note d. None 25. Purchase of furniture on credit should be recorded in [ K2] a. Purchase book b. Sales book c. Cashbook d. Journal proper 26. An allowance of Rs.50 was offered for an early payment of cash of Rs. 1,050 will be received is [ K2] a. Sales book b. Cash book c. Journal proper d. Purchases book 27. A second hand motor car was purchased on Credit from B for Rs. 10,000 will be received is [ K2] a. Journal proper b. Sales book c. Cashbook d. Purchase book 28. Goods were sold on credit basis to A Company for Rs.1,000 will be received is [ K2] a. Cash book b. Journal proper c. Sales book d. Bills receivable book 29. Amount recovery from Mr. C of an amount of Rs2,000 earlier written off as bad debt will be received is [ K2] a. Journal proper b. Sales book c. Purchases book d. Cash book 30. Credit purchase of stationery worth Rs5,000 by a stationery dealer will be received is[ K2] [ ] a. Purchase book b. Sales book c. Cashbook d. Journal proper 31. A bills receivable of Rs. 1,000, which was received from a debtor in full settlement for a claim of Rs. 1,100, is dishonored, in which book it is recorded? [ K2] a. Purchases return book b. Bills receivable book c. Purchases book d. Journal proper. 32. Rectifying the error of a credit purchase of goods worth Rs.10,000 recorded as credit sale to Mr.D, discovered two months later. [ K2] a. Journal proper b. Sales book c. Cashbook d. Purchases book 33. Small payments are recorded in a book called: [ K2] a. Cash book b. Small payments book c. Purchase book d. Petty cashbook 34. In petty cash book, the system followed: [ K2] a. Accrual system b. Imprest system c. Cash system d. None of these 35. What will be journal entry when cash is withdrawn from bank for personal use? [ K2] a. Drawings a/c debit, Bank a/c credit b. Cash a/c debit, Bank a/c credit c. Bank a/c debit, Drawings a/c credit d. Bank a/c debit, Capital a/c credit 36. Cash book is a type of but treated as a of accounts. [ K2] a. Subsidiary book, principal book b. Principal book, subsidiary book c. Subsidiary book, subsidiary book d. Principal book, principal book 37. The balance on the debit side of the bank column in cash book indicates: [ K2] a. The total amount withdrawn from the bank b. The total amount deposited in the bank c. Cash at bank d. Bank O.D 38. A customer’s cheque returned dishonoured is recorded in [ K2] a. Returns inwards book b. Bills receivable c. Cash book d. Journal 39. The term Imprest system is used in relation to [ K2] a. Purchases book b. Sales book c. Cashbook d. Petty cashbook 40. Cash book without cash column is known as: [ K2] a. Double column cashbook b. Triple column cashbook c. Petty cashbook d. Bank cash book 41. Trial balance under balance method is known as: [ K2] a. Gross trial balance b. Net Trial balance c. Simple trial balance d. Trial balance appropriation 42. A Trial balance contains the balances of: [ K2] a. Only personal and real accounts b. Only real and nominal accounts c. Only nominal and personal accounts d. All accounts  Level – III Applying(K3) 43.Goods sold for cash Rs.10,000 plus 10% sales tax, sales a/c will be credited by: [ K3] a. Rs.11,000 b. Rs.10,000 c. Rs.9,000 d. None 44.The balance of sales day book is Rs.25,000. Rs.5,000 were recovered from debtors. Then balance of day book will be transferred by which amount? [ K3] a. Rs.25,000 b. Rs.5,000 c. Rs.20,000 d. Rs.10,000 45.If the debit and credit aspects of a transaction are recorded in the cash book it is a: [ K3] a. Simple entry b. Contra entry c. Double entry d. Single entry 46.Cheques received but deposited on the next day are recorded in: [ K3] a. Cash column of the cashbook b. Bank column of the cashbook c. Both of these d. None of these 47.Imprest amount Rs.500. What will be the amount of re-imbursement if following expenses were incurred by the petty cashier during the month telephone-Rs.150, Tiffin Rs.50, Repairs Rs.30, General expensesRs.100: [ K3] a. Rs.300 b. Rs.170 c. Rs.330 d. Rs.270 48.Interest received of Rs.100 was recorded as interest paid. What will be the effect on cash balance? [ K3] a. Cash will reduce by100 b. Cash will increase by200 c. Cash will reduce by200 d. No effect on cash balance 49.Trial Balance is a: [ K3] a. Statement b. Account c. Summary d. Ledger 50.Difference of total of both debit and credit side of trial balance is transferred to: [ K3] a. Trading account b. Suspense account c. Difference account d. Miscellaneous account  UNIT – IV - DEPRECIATION Level – I Remembering(K1) Depreciation starts on a machine from the date [ K1] A. It is purchased B. It is put to use C. It is installed D. Any of above Which of the following is Depleted? [ K1] A. Land B. Goodwill C. Machinery D. Coal Mines Depletion method of depreciation is normally applied in case of __ assets. [ K1] A. Intangible B. Tangible C. Wasting D. Current In case of reducing balance method of charging depreciation, depreciation is charged on the: [ K1] A. Original Cost B. Original Cost Less Scrap value C. Market Value D. Written Down Value The main objective of depreciation is [ K1] A. To show the previous profit B. To calculate net profit C. To reduce tax D. To satisfy the tax department Depreciation is generated due to [ K1] A. Increase in the value of liability B. Decrease in capital C. Wear and tear D. Decrease in the value of assets According to fixed instalment method, the depreciation is calculated on [ K1] A. Balance amount B. Original cost C. Scrap value D. None of them Salvage value means [ K1] A. Definite sale price of the asset B. Cash to be received when life of the asset ends C. Cash to be paid when asset is disposed off D. Estimated disposal value Depreciation is calculated under diminishing balance method, based on [ K1] A. Original value B. Book value C. Scrap value D. None of them  In accounting, becoming out of date or obsolete is known as [ K1] A. Amortization B. Obsolescence C. Depletion D. Physical deterioration Define Depreciation? [ K1] [ ] A. An increase in the value of an asset over time. B. Resource diminishes over the long run because of utilization. C. Assets that can quickly be turned into cash. D. Possession of assets over liabilities. What causes Depreciation? [ K1] [ ] A. Loss of goods B. Purchase of Goods C. Increased Liability D. Wear & Tear Define Market Value? [ K1] [ ] A. The combined cost of purchase and installation of an asset can be depreciated minus its salvage value B. The worth of a physical asset's components when the asset itself is deemed no longer usable C. Represents the value of a company according to the stock market D. The estimated resale value of an asset at the end of its useful life What is Fixed Instalment Method? [ K1] [ ] A. The amount of depreciation each year is fixed and equal. B. Way to work out the loss of value of an asset over time. C. System of recording larger depreciation expenses during the earlier years. D. An accelerated method for calculating an asset's depreciation. What is the Declining Balance Method? [ K1] [ ] A. The amount of depreciation each year is fixed and equal. B. Way to work out the loss of value of an asset over time. C. System of recording larger depreciation expenses during the earlier years. D. An accelerated method for calculating an asset's depreciation. What is obsolescence? [ K1] [ ] A. Accounting techniques are used to periodically lower the book value of a loan. B. Notable reduction in the utility of an inventory item or fixed asset. C. Accrual accounting technique used to allocate the cost of extracting natural resources D. The loss in the physical efficiency of an asset as it ages. What is Depletion? [ K1] [ ] A. Accounting techniques are used to periodically lower the book value of a loan. B. Notable reduction in the utility of an inventory item or fixed asset. C. Accrual accounting technique used to allocate the cost of extracting natural resources. D. The loss in the physical efficiency of an asset as it ages. What is physical deterioration? [ K1] [ ] A. Accounting techniques are used to periodically lower the book value of a loan. B. Notable reduction in the utility of an inventory item or fixed asset. C. Accrual accounting technique used to allocate the cost of extracting natural resources. D. The loss in the physical efficiency of an asset as it ages.  What is Amortization? [ K1] [ ] A. Accounting techniques are used to periodically lower the book value of a loan. B. Notable reduction in the utility of an inventory item or fixed asset. C. Accrual accounting technique used to allocate the cost of extracting natural resources D. The loss in the physical efficiency of an asset as it ages. Which of the following asset generally assumed not to depreciate? [ K1] [ ] (a) Machinery (b) Building (c) Land. (d) All of the above What is Depreciation? [ K1] [ ] A) Cost of a fixed asset B) Cost of a fixed asset’s repair C) The residual value of a fixed asset D) Portion of a fixed asset’s cost consumed during the current accounting period. An increase in the value of asset is referred to as: [ K1] [ ] A) Depreciation B) Appreciation C) Market capitalization D) Reverse depreciation What is the formula for calculating depreciation using the straight-line method? [ K1] [ ] A. Depreciation Expense = (Cost - Salvage Value) / Useful Life B. Depreciation Expense = Cost * (1 / Useful Life) C. Depreciation Expense = Cost / Useful Life D. Depreciation Expense = Cost * (Useful Life / Salvage Value) Factors are typically considered when calculating depreciation? [ K1] [ ] Statement 1: Asset's useful life Statement 2: Accounting cycle Statement 3: Salvage value Statement 4: Market demand for the asset A) 1, 2 and 4 B) Both 2 and 4 C) 1, 3 and 4 D) Both 2and 3 Following are methods used to calculate depreciation? [ K1] [ ] Statement 1: Straight-line method Statement 2: Double-entry method Statement 3: Diminishing balance method Statement 4: Single entry method A. only 1 and 3 B. 1, 2 and 3 C. only 2 and 4 D. 1, 3 and 4. Reasons why businesses use depreciation? [ K1] [ ] Statement 1: To allocate the cost of an asset over its useful life Statement 2: To reflect changes in the fair market value of an asset Statement 3: To match expenses with revenues Statement 4: To comply with tax regulations A. only 1and 2 B. 1, 3 and 4 C. only 2 and 4 D. 1, 2 and 3 Level – II(K2) A machinery is depreciated by Rs. 2,000 every year. Which method is being used to calculate depreciation? [ K2] [ ] A. Written Down value method B. Straight line method C. Sum of Years Digit method D. None of these. Which method of depreciation is suitable when expenditure on repairs and maintenance, increases as the machine grows old? [ K2] [ ] A. Reducing balance method B. Straight line method C. Machine hour rate method D. Sinking fund Method. According to the Income Tax Act, which method of Charging depreciation is provided? [ K2][ ] A. Reducing Balance Method B. Sinking Fund C. Annuity Method D. Straight Line Method. A depreciable asset may ‘suffer obsolescence due to:- [ K2] [ ] A. Passage of time B. Wear and tear C. Technological Changes D. None of the above. The amount of depreciation under straight line method. [ K2] [ ] A. Remains fixed for all year B. Decreases every year C. Revalued every year D. Increases every year Depreciation on asset is provided with the objective of [ K2] [ ] A. To accumulate funds for the replacement of assets B. To ascertain true cost of production C. To present true and fair view of the financial position D. All of the above. What is the purpose of making a provision for depreciation in the accounts? [ K2] [ ] A. To charge the cost of fixed assets against profits B. To show the current market value of fixed asset C. To make cash available to replace fixed assets D. To make a provision for repairs According to straight line method of providing depreciation, the depreciation [ K2] [ ] A. Remains constant B. Increase each year. C. Decrease each year D. None of them. Total amount of depreciation of an asset cannot exceed its [ K2] [ ] A. Depreciable value B. Scrap value C. Market value D. None of these  Depreciation amount charged on a machinery will be debited to: [ K2] [ ] A. Repair account B. Cash account C. Depreciation account D. Machinery account What is the reason behind making a provision for depreciation in accounts?[ K2] [ ] A. To show the current value of assets B. To show current liabilities C. To charge the cost of assets against profits D. To purchase new assets Depreciation charges are [ K2] [ ] A. Cash expenses. B. Financial expenses. C. Non-cash expenses. D. Non-operating expenses. Factors are considered when calculating depreciation using the straight-line method? [ K2] [ ] Statement 1: Asset's useful life Statement 2: Salvage value Statement 3: Asset's market value Statement 4: Cost of the asset A. only 1 and 2 B. 1, 2 and 4 C. 1, 2 and 3 D. 1, 3 and 4 In addition to financial reporting, depreciation is also used for: [ K2] [ ] Statement 1: Assessing employee performance Statement 2: Calculating insurance premiums Statement 3: Evaluating managerial skills Statement 4: Determining property tax assessments A. 1, 2 and 3 B. 1, 3 and 4 C. only 2 and 4 D. only 1 and 2 Options are INCORRECT? A reserve: [ K2] [ ] Statement 1: is an appropriation of profit. Statement 2: is created to cover a known liability or expected future loss. Statement 3: is a charge against profits. Statement 4: is meant to strengthen the financial position of the business. A. Both 1 and 2 B. 1, 2 and 4 C. 2, 3 and 4 D. Both 2 and 3 Accounts are involved in recording depreciation? [ K2] [ ] Statement 1: Accumulated Depreciation Statement 2: Depreciation Expense Statement 3: Cash Statement 4: Equipment A) 1 and 2 B) 1, 2 and 4 C) 2, 3 and 4 D) 2 and 3  Financial statement is affected, While recording depreciation [ K2] [ ] Statement 1: Income Statement Statement 2: Balance Sheet Statement 3: Cash Flow Statement Statement 4: Statement of Retained Earnings A) 2 and 3 B) 1, 2 and 4 C) 1 and 2 D) 2, 3 and 4 Given below are two statements, one labelled as Assertion(A) and the other labelled as Reason (R). Read the statements and choose the correct answer using the code given below [ K2] [ ] Assertion(A): Depreciation is a process of allocating the cost of an asset over its useful life. Reasoning(R): Depreciation is necessary to accurately reflect the fair market value of an asset in financial statements. Options: A. Both the (A) and (R) are true, and the (R) is the correct explanation of the assertion. B. Both the (A) and (R) are true, but the (R) is not the correct explanation of the (A). C. The (A) is true, but the (R) is false. D. The (A) is false, but the (R) is true. Given below are two statements, one labelled as Assertion(A) and the other labelled as Reason (R). Read the statements and choose the correct answer using the code given below [ K2] [ ] Assertion(A): Depreciation is a non-cash expense. Reasoning(R): Although depreciation represents a reduction in the value of an asset, it does not involve an actual outflow of cash. Options: A. Both the (A) and (R) are true, but the reasoning is not the correct explanation of the (A). B. Both the (A)and (R) are true, and the (R) is the correct explanation of the (A). C. The (A) is true, but the (R) is false. D. The (A) is false, but the (R) is true. Level – III(K3) A trader purchased a machinery for Rs. 10,000 in Jan 2004. Depreciation is charged @ 25% diminishing balance. At the end of third year it was sold for Rs. 1,000. Profit or Loss on sale of machine will be: [ K3] [ ] A. Profit Rs. 2,400 B. Profit Rs. 2,300 C. Loss Rs. 2,406 D. Loss Rs. 3,219 Cost of machinery Rs. 2,52,000 Salvage value Rs. 12,000 Useful life 6 years Annual depreciation under straight line method will be: [ K3] [ ] A. Rs. 42,000 B. Rs. 40,000 C. Rs. 15,000 D. Rs. 28,000  A machine was purchased on 1st April 2007 for Rs 5,00,000 and 1st October 2007 for Rs 2,00,000. Calculate depreciation @ 20% p.a. on written down value method for the year ending 31st March 2008. [ K3] [ ] A. Rs. 1,00,000 B. Rs. 1,40,000 C. Rs. 40,000 D. Rs. 1,20,000 Original cost = Rs.1, 50,000, Estimated life = 5 years, Expected salvage value = Rs. 3,000. Rate of depreciation p.a. =? [ K3] [ ] A. 19.6% B. 20% C. 19.8% D. 20.8% Salman and Usman Bros. acquired a machine on July 1, 2014 at a cost of Rs. 70,000 and spent Rs. 5,000 on its installation. The firm writes off depreciation @ 10% on straight line method. Calculate the net value of machine for the end of 2nd year? Accounts are prepared at the end of December. [ K3] [ ] A. Rs. 63,755 B. Rs. 63,000 C. Rs. 63,750 D. Rs. 64,000  UNIT 5 – FINAL ACCOUNTS Q1. What is the primary purpose of Final Accounts? [ K1] [ ] a. To calculate taxes b. To communicate financial information c. To prepare budgets d. To manage daily expenses Q2. The Profit & Loss Account is also known as: [ K1] [ ] a. Income Statement b. Balance Sheet c. Cash Flow Statement d. Trading Account Q3. Concerning the adjustments made for accrued expenses in Final Accounts: [ K1] [ ] a) Decrease in expenses b) Increase in liabilities c) Increase in assets d) Increase in revenue What is the correct answer? i) Both b and c ii) Both a and c iii) A only iv) C only Q4. What does the Trading Account show? [ K2] [ ] a. Profit or loss on manufacturing b. Gross profit or loss on trading activities c. Operating profit or loss d. Net profit or loss Q5. Which account reflects the financial performance of a business over a specific period? [ K2] [ ] a. Manufacturing Account b. Trading Account c. Profit & Loss Account d. Balance Sheet Q6. What does the Balance Sheet represent? [ K2] [ ] a. Income and expenses b. Assets and liabilities c. Revenue and costs d. Profit and loss Q7. Assertion: Adjustments in Final Accounts are necessary for accurate financial reporting. [ K2] [ ] Reasoning: They correct errors and ensure that financial statements represent a true and fair view. Adjustments are optional and do not impact the accuracy of financial statements. a. Statement 1 is true, Statement 2 is true b. Statement 1 is true, Statement 2 is false c. Statement 1 is false, Statement 2 is true d. Statement 1 is false, Statement 2 is false Q8. What does the term "Goodwill" represent on the Balance Sheet? [ K3] [ ] a. Intangible asset b. Current liability c. Accumulated depreciation d. Current asset Q9. [ K3] [ ] A Wages and Salaries appears in Trial i) Debit side of Profit and Loss Account Balance shown B Salaries and wages appears in Trial ii) Deducted from purchases Balance C Returns outwards appearing in Trial iii) Debit side of Trading Account Balance D Returns inwards appearing in Trial iv) Capital Balance E Drawing deducted from v) Deducted from sales a) A-i, B-ii, C-iii, D-iv, E-v b) A-iii, B-i, C-ii, D-v, E-iv c) A-iii, B-ii, C-v, D-iv, E-i d) A-iii, B-ii, C-iv, D-i, E-v Q10. [ K3] [ ] A Goodwill i) Debit side of the Profit and Loss Account B Sale of scrap appearing in Trial ii) Debit side of Trading Account Balance C Discounts Allowed appearing in the iii) Credit side of Trading Account Trial Balance D Freight inward appearing in Trial iv) Fictitious Asset Balance E Closing stock appearing in Trial v) Credit side of the Profit and Loss Account Balance a) A-i, B-ii, C-iii, D-iv, E-v b) A-iii, B-ii, C-i, D-iv, E-v, c) A-iii, B-ii, C-v, D-iv, E-i d) A-iv, B-v, C-i, D-ii, E-iii Q11. Which of the following is a feature of Manufacturing Account? [ K1] [ ] a. Includes only direct expenses b. Includes only indirect expenses c. Includes both direct and indirect expenses d. Excludes all expenses Q12. The Manufacturing Account is prepared by: [ K1] [ ] a. Service organizations b. Trading organizations c. Manufacturing organizations d. All of the above Q13. Which of the following is a long-term liability on the Balance Sheet? [ K2] [ ] a. Accounts Receivable b. Bank Loan c. Inventory d. Prepaid Expenses Q14. Adjustments in Final Accounts are made to: [ K2] [ ] a. Correct errors in the accounting records b. Reflect the true financial position c. Enhance tax liabilities d. All of the above Q15. Which of the following is included in the Profit & Loss Account? [ K3] [ ] a. Trade Payables b. Capital Expenditure c. Administrative Expenses d. Long-term Loans Q16. The formula for calculating Net Profit is: [ K3] [ ] a. Gross Profit - Operating Expenses b. Revenue - Cost of Goods Sold c. Gross Profit + Operating Expenses d. Revenue – Expenses Q17. Which account represents the value of goods held for resale in a trading business? [ K3] [ ] a. Depreciation Account b. Accumulated Depreciation Account c. Trading Account d. Profit & Loss Account Q18. Assertion: The main purpose of the Trading Account is to calculate the cost of goods sold. [ K3] [ ] Reasoning: It includes direct expenses related to selling activities. Cost of goods sold is a key component of the Trading Account. a. Statement 1 is true, Statement 2 is true b. Statement 1 is true, Statement 2 is false c. Statement 1 is false, Statement 2 is true d. Statement 1 is false, Statement 2 is false Q19. Which of the following is an example of an adjusting entry? [ K3] [ ] a. Recording a sale on credit b. Recording a cash purchase c. Recognizing accrued interest expense d. Paying off a bank loan Q20. What does the term "Accruals" refer to in accounting? [ K3] [ ] a. Revenues earned but not yet received b. Expenses paid in advance c. Long-term liabilities d. Fixed assets