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Q.3 Multiple Choice Questions:--1.Which one of the following is considered as a depreciable asset?

(a) Land
(b) Live stock
(c) Building
(d) Forest and Plantation
2. Net worth is excess of
(a) Fixed Assets over Current Liabilities
(b) Total Assets over Total Liabilities
(c) Fixed Assets over Current Assets
(d) Long Term Loan over Short Term Loan
3. On 31st December 2011, a club had subscription in arrears of Rs. 16,000 and in advance Rs.
4,000 respectively. During the year ended 31.12.2012, the club received subscription of Rs.
2,08,000 which includes Rs. 10,400 relating to 2013. What amount of subscription will be
recognized as income for the year 2012?
(a) 2,12,000
(b) 1,96,000
(c) 1,81,600
(d) 1,85,600
4. Pre-paid expenses will not be reflected in
(a) Profit & Loss Account
(b) Cash Book
(c) Balance Sheet
(d) Cash Flow Statement
5. Which one of the following balance will not be carried to the next accounting period?
(a) Rent paid in advance
(b) Salary outstanding
(c) Closing cash balance
(d) Consultancy fees paid
6. A bill for Rs. 2,75,000 for building extension was treated as repair of building, which
rectification entry is correct?
Debit Credit
(a) Building A/c Cash A/c
(b) Building Repair A/c Cash A/c
(c) Building A/c Repair A/c
(d) Profit & Loss A/c Building Repair A/c

7. Which of the following is not a personal account?


(a) Capital account
(b) Pre-paid rent account
(c) Salary account
(d) Interest outstanding account
8. Which of the following concepts, if violated, would make comparison of financial
statements over a period of time difficult?
(a) Cost concept
(b) Consistency concept
(c) Accounting period concept
(d) Accrual concept
9. The benefit foregone as a result of taking a particular action is
(a) Sunk cost
(b) Conversion cost
(c) Opportunity cost
(d) Programmed cost
10. Identify Personal Account from the following :

(A) Furniture A/c


(B) Bank of India A/c
(C) Rent A/c
(D) Investment A/c
11. Which of the following will appear in the Balance Sheet?
(A) Wages paid
(B) Outstanding wages
(C) Wages deducted for strike
(D) Wages not due
12. Which of the following errors will affect the trial balance

(A) Sales Book undercast with Rs. 6,000


(B) A credit purchase for Rs. 11,000 entered in sales book
(C) Stationery purchased on credit has been recorded in purchases book
(D) Goods sold for Rs. 7,000 has been recorded as Rs. 7,900
13. If goods worth Rs. 13,800 are destroyed by fire and the Insurance Company admits the

claim for Rs. 10,400, the purchases account will be


(A) Debited with Rs. 13,800
(B) Debited with Rs. 3,400
(C) Credited with Rs. 13,800
(D) Credited with Rs. 3,400

14. Sales Rs. 18,00,000; Purchases Rs. 11,90,000 and Opening stock Rs. 3,30,000. If the rate of

gross profit is 50 percent on cost, the value of closing stock will be


(A) Rs. 3,20,000
(B) Rs. 3,15,000
(C) Rs. 5,95,000
(D) Rs. 6,20,000
15. The cost of a Fixed Assets of a business has to be written off over its

(A) Natural Life


(B) Accounting Life
(C) Physical Life
(D) Estimated Economic Life

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