MGT101 Midterm Exam

MGT101Financial#3
Accounting
MID TERM EXAMINATION
Prepared by
S.Roomi Khan
saddiyahkhan@hotmail.com
Question No: 1 ( Marks: 1 ) - Please choose one
An accounting system is used by a business to:

► Analyze transactions
► Handle routine book-keeping tasks
► Classify and summarize financial information
► All of the given options
The assets which have a limited useful life are termed as:
► Limited assets
► Depreciateable assets
► Unlimited assets
► None of the given options
Accountancy covers which of the following area(s):
► Book-keeping
► Accounting
► Auditing
If a business pays rent in advance for 12 months, it will be treated as:
► Prepaid expenses of business

► Long term liability of business
► Fixed assets of business
► Current liability of business
Which of the following transaction have NO affect on stockholders' equity?

► Purchase of land on credit
► Dividends to stockholders
► Net loss
► Investment in cash by stockholders
Which of the following account balance is shown on credit side of Trial Balance?
(It is assumed that all account balances are shown on normal balance)
► Cash account
► Furniture account
► Vehicle account
► Capital account
If you start with cash book balance (Dr.), which of the following item will be
deducted in Bank Reconciliation Statement?
► Any cheque drawn to creditor but not paid by bank

► Interest credited by the bank in pass book
► Cheque deposited but not credited by the bank
► Dividend collected by bank on behalf of the customer
The cost of moving plant and machinery to a new site will be treated as:
► Revenue expense
► Capital expense
► Administrative expense
► Operating expense
Which one of the following is NOT true about Capital Expenditure?

► Creates future benefits
► Incurred to acquire fixed assets
► Incurred to increase the economic life of existing fixed assets
► Reduce the profit of the concern
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
Sold 10 units @ 10
35 units @ 11
40 units @ 12
Balance
20 units @ 13 = 260
Eighty-five 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.268
Consider the following inventory record:
Cost/Unit Total
Date Item Quantity Rs. 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
Opening Stock 100

Add purchases 1125
Total material available
for sale 1225
Less closing ** 320
Cost of good sold 905
Detail of 80 units sold
10 @ 10
35 @ 11
35 @ 12
now remaining are
5 units @ 12 = 60
20 units@ 13 =260
closing stock = 25 units and value = 320
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
If, Cost of machine = Rs.400, 000

Useful life = 5 years
Residual value = Rs.25, 000
The depreciation of machine per year using straight line method is?
= 400,000-25000 / 5 = 75000
► Rs. 160,000
► Rs. 96,000
► Rs. 75,000
► Rs. 57,600

Rs. 1,00,000
Cost of asset
Life of asset 5 years
Depreciation for each year Rs. 15,000
Sale price after 5 years Rs.50,000
Book value of Asset after 5 years ?
Asset year 1 = 100,000 - 15000 = 85000

Year 2 = 85000 - 15000 = 70000
Year 3 = 70000 – 15000 = 55000
Year 4 = 55000 – 15000 = 40000
Book value after year 5 = 40000 – 15000 = 25000
► Rs.25, 000
► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000
A decrease in value of a fixed asset due to age, wear and tear is known as:
► Depreciation
► Accumulated Depreciation
► Appreciation
► Written Down Value
In balance sheet fixed assets are shown at:
► Cost price
► Market value
► Fair value
► Written down value (WDV)
In cost of goods sold statement, the ‘cost of material consumed’ is equal to:
► Opening raw material inventory + Purchases – Ending raw material

inventory
► Opening raw material inventory - Purchases + Ending raw material
inventory
► Ending raw material inventory + Opening raw material inventory -
Purchases
► Ending raw material inventory + Opening raw material inventory +
Purchases

Rs.
Particulars
Direct materials costs 80,000
Direct labor costs 50,000
Manufacturing overhead costs 60,000
Prime cost = dm + dl 130000
► Rs.1 Rs.130, 000

► Rs.110, 000
► Rs.140, 000
► Rs.190, 000
What would be the value of 'cost of goods manufactured' if the total factory cost
of the month is Rs. 6,000, opening work in process is Rs. 2,000 and the closing
work in process is Rs. 2,500?
► Rs. 5,500
► Rs. 8,000
► Rs. 4,500
► Rs. 8,500
Following are the inventories of Manufacturing Concern EXCEPT:
► Raw material
► Work in process
► Finished goods
► Merchandise inventory
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
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
► Vehicle account
The return of goods by a customer should be debited to:
► Customer’s account
► Sales return account
► Goods account
► Accounts receivable
Which of the following account will be credited in the books of ABC Co. Ltd., if
furniture is purchased on cash?
► Cash account
► Business account
► Bank account
Which of the following account will be credited, If Mr. “A” started business with
cash
Rs. 2, 00,000?
► Capital account
► Cash account
► Mr. A’s account

Which of the following journal entry will be recorded, if the goods are sold on
credit to Mr. 'B'?
► Mr. “B” / Accounts Receivable account (Dr) and Sales account (Cr)
► Cash account (Dr) and sales account (Cr)
► Sales account (Dr) and Mr. B / Accounts Receivable account (Cr)
► Goods Sold account (Dr) and Mr. B / Accounts Receivable account (Cr)
Which of the following is NOT an item of a Balance Sheet?
► Accounts Receivable
► Accounts Payable
► Sales Revenue
► Marketable Securities
Accounts Receivable & Inventory are the examples of:
► Liquid assets
► Current assets
► Fixed assets
► Capital assets
Which of the following shows summary of a company's financial position at a

specific date?
► Profit & Loss Account

► Cash Flow Statement
► Balance Sheet
► Income & Expenditure Account
Which of the following summarizes the cash movements during a specified

period?
► Trading account
► Profit & Loss account
► Receipts & Payments account
► Balance Sheet
Which of the following financial statement summarizes the profitability of an

organization for a particular period?
► Balance Sheet
► Trading and Profit & Loss account
► Statement of Retained Earnings
In an account, if credit side < debit side then the balance is known as:
► Negative Balance
► Debit Balance
► Positive Balance
► Credit Balance
Which of the following is CORRECT about the flow of recording a transaction?
► Occurrence of event – voucher—Journal—Ledger—Trial Balance—profit

and loss account—Balance Sheet
► Occurrence of event—Journal – voucher —Ledger—Trial Balance—profit

► Occurrence of event—Ledger – voucher—Journal—Trial Balance—profit

► Occurrence of event—Trial Balance – voucher—Journal—Ledger—profit

Which of the following is used to record financial transactions in chronological

(day-to-day) order?
► Voucher
► General Journal
► General Ledger
► Trial balance
When a Liability is reduced or decreased, it is recorded on the:

► Right or debit side of the account
► Left or debit side of the account
► Left or credit side of the account
► Right or credit side of the account
What is the nature of an expense account?
► Debit
► Credit
► Revenue
Economic resources owned by a business and expected to benefit for the future
operations are called:
► Expenses
► Assets
► Capital
► Liabilities
Assets total Rs.50, 000 and Liabilities total Rs.10, 000. What is the equity of the
business?
► Rs. 40, 000

► Rs. 60, 000
► Rs. 10,000
► Rs. 50,000
An expense incurred by the business for the purchase of land & building is an
example of:
► Capital Expense
► Revenue Expense
► Deferred Expense
► Preliminary Expense
Which of the following is non- profit organization?

► Sole proprietorship
journal
Date Particulars (Dr.) (Cr.)
Rs. Rs.
► 2008 jan1 Cash account 50,000
Capital account 50,000
(owner invested cash )
jan.2 Furniture account 10,000

Cash account 10,000
(purchased furniture for
cash)
Jan.3 Purchases account 30,000

Cash account 30,000
(goods purchased for
cash)
Jan.5 Cash account 40,000

Sales account 40,000
(sold goods for cash)
Jan. 6 Salaries account 5,000

Cash account 5,000
(Salaried paid)
Partnership
► Limited company
► Trust
The area of accounting concerned with reporting financial information to the

interested parties is called:
► Cost Accounting
► Financial Accounting
► Management Accounting
► Tax Accounting
Question No: 41 ( Marks: 10 )
Prepare Cash and Capital Accounts with the help of given Journal entries.
CASH A/C (IN STATEMENT FORM)
Date V. No Detail Ref Debit Credit Balance

01/01/08 CAPITAL A/C 50000 0 50000 DR
02/01/08 FURNITURE A/C 0 10000 40000 DR
03/01/08 PURCHASES A/C 0 30000 10000 DR
05/01/08 SALES A/C 40000 0 50000 DR
06/01/08 SALARIES A/C 0 5000 45000 DR
TOTAL 90000 45000 45000 DR
MIDTERM EXAMINATION
Spring 2009
MGT101- Financial Accounting
Time: 60 min
Marks: 50
Student Info
StudentID:
Center:
ExamDate:
For Teacher's Use Only

Q No. 1 2 3 4 5 6 7 8 Total
Marks
Q No. 9 10 11 12 13 14 15 16
Marks
Q No. 17 18 19 20 21 22 23 24
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Q No. 25 26 27 28 29 30 31 32
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Q No. 33 34 35 36 37 38 39 40
Marks
Q No. 41
Marks
Net Profit + Expenses= _________
► Liabilities
► Assets
► Capital
► Income
The allocation of the cost of a tangible plant asset to expense in the periods, in which
services are received from the asset, is termed as:
► Appreciation
► Depreciation
► Fluctuation
The basic purpose of depreciation is to achieve the:

► Matching principle
► Dual aspect principle
► Separate entity concept
► Money measurement concept

Cash book is a part of:
► Voucher
► General Journal
► General Ledger
► Trial Balance
Bank Reconciliation Statement is:
► A memorandum statement
► A ledger account
► A part of cash book
► A part of journal
If you start with cash book balance (Dr.), which of the following item will be deducted in
Bank Reconciliation Statement?

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
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
Under the reducing balance method of depreciation:
► Amount of depreciation increases every year

► Amount of depreciation remains constant for every year
► Amount of depreciation decreases every year

Date Item Quantity Cost/Unit Total
2007Jan. 2 Opening inventory 100 Rs.18.00 Rs.1,800
Mar. 4 Purchase 400 19.00 7,600
May 8 Purchase 800 20.00 16,000
Nov. 3 Purchase 500 21.00 10,500
Four hundred units are unsold, Use the FIFO method of inventory costing and determine
the value assigned to the 400 units on hand at the end of the period.
► Rs.7, 500
► Rs.7, 978
► Rs.8, 000
► Rs.8, 400

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

Rs.
Particulars
Opening stock of raw material 100,000
Closing stock of raw material 85,000
Purchases of raw material during the 200, 000
period
Cost of Material Consumed ?
► Rs. 205,000
► Rs. 215,000
► Rs. 220,000
► Rs. 225,000
The amount of depreciation charged on machinery will be debited to:
► Machinery account
► Depreciation account
► Cash account
► Capital account
Under the straight line method of depreciation:
► Amount of depreciation increases every year

► Amount of depreciation remains constant for every year
► Amount of depreciation decreases every year

Rs. 1,00,000
Cost of asset
Book value of Asset after 5 years ?
► Rs.25, 000
► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000

Rs. 1,00,000
Cost of asset
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

Rs. 1,00,000
Cost of asset
Depreciation for the each year Rs. 5,000
Written Down Value of Asset on 5th year Rs. 75,000
Profit or loss on disposal of fixed asset ?
► Rs. 60,000 loss

► Rs. 25,000 loss
► Rs. 1, 00,000 profit
In cost of goods sold statement the ‘total factory cost’ is equal to:
► Cost of material consumed + Labor cost

► Cost of material consumed + Conversion cost
► Cost of material consumed + Total factory cost
► Cost of material consumed + Factory overhead
Which of the following organization converts raw material into finished goods?
► Trading concern
► Manufacturing concern
► Merchandising concern
► Service concern
Which of the following item appears in Trading Account of a business?
► Interest expenses
► Wages and salaries
► Depreciation expenses
► Discount Allowed
Which of the following is an alternate term which can be used for “Capital”?
► Liability
► Owner’s net worth
► Working capital
► Asset
If salaries expense is Rs. 2,500, purchases are Rs. 16,000 and rent (office building) is Rs.
300 during the year, what would be the total of "general & administrative expenses"?
► Rs. 300
► Rs. 2,500
► Rs. 2,800
► Rs.18, 800
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
The amount brought by the proprietor in the business should be credited to:
► Cash account
► Capital account
► Drawings account
► Proprietor account
Which of the following account will be credited, if business sold goods for Rs.10,000 on
credit?
► Cash account
► Sales account
► Accounts receivable account
► Purchases account
Which of the following account will be credited, if business purchased a vehicle on cash?
► Vehicle account
► Cash account
► Bank account
Which of the following journal entry will be recorded, if the goods are sold on credit to
Mr. 'B'?
► Mr. “B” / Accounts Receivable account (Dr) and Sales account (Cr)
► Cash account (Dr) and sales account (Cr)
► Sales account (Dr) and Mr. B / Accounts Receivable account (Cr)
► Goods Sold account (Dr) and Mr. B / Accounts Receivable account (Cr)
Accrued expenses are the example of:

► Current liabilities
► Long term liabilities
► Deferred costs
► Capital expenses
Which of the following shows summary of a company's financial position at a specific

date?

► Balance Sheet
What type of expenses are paid out of Gross Profit?
► Selling Expenses
► General Expenses
► Financial Expenses
An informal accounting statement that lists the ledger account balances at a point in time
and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Which of the following essentials are shown in Bank Book?

(1) Date of transaction
(2) Narration of transaction
(3) Cheque number
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Which of the following book(s) is(are) a part of General Ledger?
► Cash Book
► Purchase Return Book
► Purchase Book
A book, in which receipts and payments are recorded, is known as:
► Pass Book
► Cash Book
► Purchase Book
► Sales Book
► Debit Balance
► Credit Balance
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
According to the double entry system of accounting, an account that obtains benefit is:
► Debit
► Credit
► Income
► No need to show as accounting record
Which of the following is non- profit organization?

► Sole proprietorship
► Partnership
► Limited company
► Trust
Mr. “A” sold goods to Mr. “B” for Rs. 3,000 on October 8, 2008 and Mr. “B” paid at the
same time. It will be case of ______________ sales.
► Cash
► Credit
► Accrual based
State with reasons whether the following items of expenditure are capital or revenue
in nature.
1. Wages paid on the purchase of goods.
2. Carriage paid on goods purchased.
3. Transportation paid on purchase of machinery.
4. Octroi duty paid on machinery.
5. Octori duty paid on goods.
6. A second hand car was purchased for Rs. 7,000 and Rs, 5,000 were spent for its
repair and overhauling.
7. Office building was whitewashed at a cost of Rs. 3,000.
8. A new machinery was purchased for Rs. 80,000 and a sum of Rs. 1,000 was spent
on its installation and erection
9. Old furniture was repaired at a cost of Rs. 500.
10. Land was purchased for Rs. 1, 00,000 and Rs. 5,000 was paid for legal expenses.
MIDTERM EXAMINATION
Spring 2009
MGT101- Financial Accounting (Session - 4)
Ref No: 564819
Time: 60 min
Marks: 50
Student Info
StudentID:
Center: OPKST
ExamDate: 4/25/2009 12:00:00 AM

Q No. 1 2 3 4 5 6 7 8 Total
Marks
Q No. 9 10 11 12 13 14 15 16
Marks
Q No. 17 18 19 20 21 22 23 24
Marks
Q No. 25 26 27 28 29 30 31 32
Marks
Q No. 33 34 35 36 37 38 39 40
Marks
Q No. 41
Marks
Expenditures incurred annually are known as:
► Revenue Expenditures
► Capital Expenditures
► Financial Expenditures
► Operating Expenditures
Which one of the following is NOT true for Profit & Loss Account?
► It shows whether a business has made a profit or loss over a financial
year
► It shows the financial performance of a business for the period
► It shows revenues and expenses for the period
► It is used to calculate surplus/deficit for a particular period
Which of the following is NOT a characteristic of Joint Stock Company?
► Separate Legal Entity

► Limited Liability
► Easy Formation
► Common Seal

Rs.
Particulars
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
The assets which have a limited useful life are termed as:
► Limited assets
► Depreciate able assets
► Unlimited assets
Increase in an asset is recorded on the:
► Left or credit side of the account

► Right or debit side of the account
► Left or debit side of the account
► Right or credit side of the account
Which of the following particular is NOT included in the specimen of a Journal

Voucher?
► Name of organization
► Bank receipt
► Debit amount
► Credit amount
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
While adjusting the cash balance of cash book, which of the following is NOT
taken into account.
► Mistakes in the cash book

► Mistakes in the pass book
► Interest credited in the pass book but not entered in cash book
► Interest debited in the pass book but not entered in cash book
Sale proceeds of goods are an example of:
► Revenue expense
► Capital expense
► Capital receipt
► Revenue receipt

The cost of moving plant and machinery to a new site will be treated as:
► Revenue expense
► Capital expense
► Administrative expense
► Operating expense

Eighty-five 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.268

Rs.
Particulars
Opening stock of raw material 100,000
Closing stock of raw material 85,000
Purchases of raw material during the 200, 000
period
Cost of Material Consumed ?
► Rs. 205,000
► Rs. 215,000
► Rs. 220,000
► Rs. 225,000
Under the reducing balance method, deprecation is calculated on:
► Scrap value of an asset

► Original cost of an asset
► Book value of an asset
► Fair value of an asset

If, Cost of machine= Rs.400, 000
Useful life = 5 years, Residual value= Rs.25, 000
The depreciation of machine per year using straight line method is?
► Rs. 160,000
► Rs. 96,000
► Rs. 75,000
► Rs. 57,600

Rs. 1,00,000
Cost of asset
► Rs.25, 000 loss

► Rs. 75,000 loss
► Rs. 1, 00,000 profit

Rs.70,000
Direct materials costs
Direct labor costs 30,000
Manufacturing overhead costs 60,000
conversion cost ?
► Rs. 20,000
► Rs.40, 000
► Rs.90, 000
► Rs.160, 000
Which 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

Which of the following account will be credited, when the goods are purchased
on cash?
► Stock account
► Cash account
► Supplier account
Following are the inventories of Manufacturing Concern EXCEPT:
► Raw material
► Work in process
► Finished goods
► Merchandise inventory
The stock of manufacturing concern consists of:
► Work in Process Inventory

► Raw Materials Inventory
► Finished Goods Inventory
Which of the following particulars are included in the specimen of a cash receipt
voucher?
1) Name of the organization
2) Cash code
3) Date of transaction
► (1) & (2) only

► (1) & (3) only
► (2) & (3) only
► (1), (2) & (3)
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
If the cost of sales is Rs. 95,000, sales are Rs. 100,000 and operating expenses
are Rs. 200,000 during the year, what would be the net result?
► Loss of Rs. 1, 95,000

► Profit of Rs. 1, 95,000
► Profit of Rs 5,000
► Loss of Rs 5,000
If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses
are Rs.20,000 during the year. What would be the Net Profit?
► Rs.15,000
► Rs. 35,000
► Rs. 55,000
► Rs. 60,000
"Mr. “A” collected cash from debtors", the journal entry for this transaction is:
► Mr. "A" a/c Dr. and debtors a/c Cr.

► Mr. "A" a/c Dr. and cash a/c Cr.
► Cash a/c Dr. and debtors a/c Cr.
Which of the following account will be credited, if the goods are sold on credit to
Mr. Mahmood?
► Cash account
► Mr. Mahood account
► Sales account
► Purchases account
“Electricity bill for the month is paid by Mr. Imran Rs. 325”. What is the journal
entry to record this transaction?
► Cash a/c Rs. 325 (Dr.) , Utilities Expense a/c Rs. 325 (Cr.)
► Utilities Expense a/c Rs. 325 (Dr.), Cash a/c Rs. 325 (Cr.)
► Accounts Receivable a/c Rs. 325 (Dr.), Utilities Expense a/c Rs. 325 (Cr.)
► Utilities Expense a/c Rs. 325 (Dr.), Accounts Receivable a/c Rs. 325 (Cr.)
Which of the following entry will be recorded in the books of accounts for the
goods returned to Mr. 'A'?
► Purchases return account (Dr) and Trading account (Cr)

► Mr.” A”/ creditor account (Dr) and purchases return account (Cr)
► Purchases return account (Dr) and Mr.” A” / creditor account (Cr)
► Mr.” A”/ creditor account (Dr) and Profit & Loss account (Cr)
Which of the following is NOT an example of Current Asset?

► Bank Overdraft
► Notes Receivable
► Prepaid Expenses
Which of the following is NOT an item of a Balance Sheet?
► Accounts Payable
► Sales Revenue
► Marketable Securities
Which of the following is NOT an example of intangible assets?
► Franchise rights
► Goodwill
► Patents
► Land
Which one of the following is NOT prepared by Non profit organizations?

► Income & Expenditure account
► Balance Sheet
An informal accounting statement that lists the ledger account balances at a point
in time and compares the total of debit balances with the total of credit balances
is known as:
► Income Statement
► Balance Sheet
► Trial Balance
► Cash Book
Which of the following essentials are shown in Bank Book?

(1) Date of transaction
(2) Narration of transaction
(3) Cheque number
► (1) & (2) only

► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Which of the following book(s) is(are) a part of General Ledger?
► Cash Book
► Purchase Return Book
► Purchase Book
Which of the following are the components of General Ledger?

1) Title of account
2) Amount of transaction
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
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
Word “Credit” is derived from ______ language.
► Latin
► English
► French
► Chinese
Mr.” A” sold goods for Rs. 3, 00,000 to Mr. “B”, Rs. 3, 00,000 will be treated as
_____________ for business.
► Revenue
► Net profit
► Gross profit
► Operating profit
Briefly explain the features of Trial Balance.
We can define trail balance is a statement of all the open debit and credit
items in a double-entry ledger, made to test their equality whether it is correct or
not.
As the definition indicate us we can easily removed error through trial balance
MIDTERM EXAMINATION
Spring 2009
MGT101- Financial Accounting (Session - 6)
Ref No:
Time: 60 min
Marks: 50
Student Info
StudentID:
Center: OPKST
ExamDate: 4/29/2009 12:00:00 AM

Q No. 1 2 3 4 5 6 7 8 Total
Marks
Q No. 9 10 11 12 13 14 15 16
Marks
Q No. 17 18 19 20 21 22 23 24
Marks
Q No. 25 26 27 28 29 30 31 32
Marks
Q No. 33 34 35 36 37 38 39 40
Marks
Q No. 41
Marks
Net Profit + Expenses= _________
► Liabilities
► Assets
► Capital
► Income
Which of the following fixed asset is shown at cost rather than book value?
► Machinery
► Furniture
► Vehicles
► Land
Firms charge depreciation each year:
► To ensure there is enough money in the firm to replace the asset

► To spread the cost of the asset over its working life
► To reduce the profit and thus reduce the dividends they can pay to share holders
► Because the law states they must be reduced
Depreciation arises because of:
► Fall in the market value of an asset

► Fall in the value of money
► Physical wear and tear
The basic purpose of depreciation is to achieve the:

► Matching principle
► Dual aspect principle
► Separate entity concept
► Money measurement concept
Find out the missing value of an Accounting Equation with the help of given data:
Total Assets Rs. 34,500

Accounts payable Rs. 1, 000
Other liabilities Rs. 11,500
► Rs. 22,000 owner’s equity

► Rs. 23, 000 owner’s equity

While adjusting the cash balance of cash book, which of the following is NOT taken into
account.
► Mistakes in the cash book

► Mistakes in the pass book
► Interest credited in the pass book but not entered in cash book
► Interest debited in the pass book but not entered in cash book
If you start with cash book balance (Dr.), which of the following item will be deducted in
Bank Reconciliation Statement?

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
Which one of the following is NOT true about Capital Expenditure?

► Creates future benefits
► Incurred to acquire fixed assets
► Incurred to increase the economic life of existing fixed assets
► Reduce the profit of the concern

Eighty-five 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.268
Cost/Unit Total
Date Item Quantity Rs. 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

Rs. 1,00,000
Cost of asset
► Rs.25, 000 loss

► Rs. 75,000 loss
► Rs. 1, 00,000 profit
The products that are ready for sale are known as:
► Raw material
► Work in process
► Finished goods
► Closing stock
Which of the following account will be credited, when the goods are purchased on cash?
► Stock account
► Cash account
► Supplier account
Partially completed products that are not yet ready for sale are known as:
► Raw material
► Work in process
► Finished goods
► Closing stock
Which of the following particulars are included in the specimen of a cash receipt
voucher?
4) Name of the organization
5) Cash code
► (1) & (2) only

► (1) & (3) only
► (2) & (3) only
► (1), (2) & (3)
In which of the following condition a company will have positive working capital?
► If current assets > current liabilities
► If current Assets < current Liabilities
► If current assets = current liabilities
► If current assets < current liabilities
The return of goods by a customer should be debited to:
► Customer’s account
► Sales return account
► Goods account
► Accounts receivable
Which of the following account will be credited in the books of ABC Co. Ltd., if
furniture is purchased on cash?
► Cash account
► Bank account
Which of the following account will be credited in the books of XYZ Co. Ltd, if the
business purchased a vehicle though cheque?
► Vehicle account
► Cash account
► Bank account
Identify the business transaction for given entry below.
Vehicle Account XXX (Dr.)

Bank Account XXX (Cr.)
► Paid for vehicle through cheque
► Paid for vehicle through cash
► Purchased vehicle on credit
Accrued expenses are the example of:

► Current liabilities
► Long term liabilities
► Deferred costs
► Capital expenses
Which of the following item will appear on the Balance Sheet as current assets?
► Prepaid expenses
► Accrued expenses
► Furniture and Equipment
► Unearned revenue
Which of the following shows summary of a company's financial position at a specific

date?

► Balance Sheet
Which of the following organizations prepare Income & Expenditure account?
► Public libraries
► NGOs
► Labor unions
Which of the following is NOT considered a part of financial statements?
► General Ledger
► Balance Sheet
► Profit and Loss Account
Which one of the following is NOT prepared by Non profit organizations?

► Income & Expenditure account
► Balance Sheet

Which of the following financial statement summarizes the profitability of an
organization for a particular period?
► Balance Sheet
► Trading and Profit & Loss account
► Statement of Retained Earnings
The process of transferring journal entry information to the ledger is called:
► Journalizing
► Posting
► Balancing
► Analyzing
Which of the following are the components of General Ledger?

4) Title of account
5) Amount of transaction
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
The original book of entry, in which all vouchers are first recorded, is called:
► General Journal
► General Ledger
► Trial Balance
► Balance Sheet
► Debit Balance
► Credit Balance

Which of the following is CORRECT about the flow of recording a transaction?
► Occurrence of event – voucher—Journal—Ledger—Trial Balance—profit and

loss account—Balance Sheet
► Occurrence of event—Journal – voucher —Ledger—Trial Balance—profit and

► Occurrence of event—Ledger – voucher—Journal—Trial Balance—profit and

► Occurrence of event—Trial Balance – voucher—Journal—Ledger—profit and

An Asset that is NOT physical in nature is called _________.
► Intangible Asset
► Liquid Asset
► Current Asset
► Fixed Asset
What is the nature of an expense account?
► Debit
► Credit
► Revenue
Term "Credit" means_______ by the business.

► Receiving of benefits
► It has no effect on business
► Providing of benefits
► It depends upon items
We can say that the business is in profit, when:
► Assets exceed Expenditure

► Assets exceed Liabilities
► Income exceeds Expenditure
► Income exceeds Liabilities
An organization operating with the objective of making profit from the sale of goods or
services is called:
► Transaction
► Business
► Society
► Trust
State with reasons whether the following events are transactions to Mr. Afnan’s
business
7) Mr. Afnan started business with Rs. 50,000.
8) Mr. Afnan bought furniture for Rs. 2,000 for business use.
9) Submitted a tender for goods worth Rs. 10,000.
10) Appointed a cashier on a salary of Rs. 2,000 per month.
11) Paid salary to cashier Rs. 2,000.
Use the following format to solve question.
Event YES/NO Reasons

For example Mr. Bilal Yes it is transaction It changes financial position
took away goods worth of business.
Rs. 500 from the business
for his private use.
QUIZ
Mark the correct answer
(1)_____ courses help managers gain a better understanding of motivation, leadership,

trust, employee selection, performance appraisals, and training techniques.
0 Psychology
1 Sociology
2 Political science
3 Anthropology
► In general, entrepreneurs are better able than managers in a traditional

hierarchical organization to
0 lead.
1 organize.
2 respond to a changing environment.
3 respond to a static environment.
► A construction supervisor site who sees an impending thunderstorm, tells workers to go home,
and secures the site is demonstrating
0 authority.
1 delegation.
2 accountability.
3 responsibility
► _________ involves the delegation of decision-making and authority to lower levels in the
organization.
0 Decentralization
1 Departmentalization
2 Specialization
3 Centralization
(5)The belief that a firm's obligation goes beyond that required by law and economics,
and includes a pursuit of long-term goals that are good for society is known as
¾ social responsiveness.
¾ ethical responsibility.
¾ social responsibility.
¾ social obligation)
(7) The objective of TQM is to create an organization committed to continuous

_________
¾ Improvement.
¾ Development
¾ Struggle
¾ a&b
(8) The process of assigning authority and responsibility to one’s subordinates to manage a
project is called
http://vustudents.ning.com 1
centralization.
supervision.
delegation.
specialization.
(8)One of the greatest effects of e-commerce is that

¾ costs will be reduced.
¾ customers will be empowered.
¾ employees become more powerful.
¾ computers will be less important.
(10) Time -and- motion study introduced by

¾ Henri Fayol
¾ Fredrick W. Taylor
¾ Frank and Lillian Gilberth
¾ Adam Smith
(11) __________focused on the work or the job and how to do it better.
¾ Scientific management
¾ Bureaucratic management
¾ Classical management
¾ Administrative management
http://vustudents.ning.com
QUIZ
Choose the correct option.
► Strategic management entails all of the basic management functions:

0 Planning, organizing, leading, and controlling.
1 Motivation, efficiency, authority and effectiveness.
2 Planning, bossing, controlling, and organizing.
3 Making things happen, meeting the competition, organizing the people
and leading.
► Which of the following is not a part of strategy formulation?

0 Identifying the mission and strategic goals.
1 Conducting competitive analysis.
2 Developing specific strategies.
3 Carrying strategic plans.
► Planning involves two important elements:

0 Goals and plans.
1 Organizing and controlling.
2 Lead and plans.
3 Staffing and leading.
► Strategic goals are concerned with :

0 Top level managers.
1 Middle level managers.
2 First-Line Managers.
3 Non-managerial Employees.
(5) Tactical goals and plans typically involve time periods of _________.
¾ 1 year.
¾ 1 to 3 years.
¾ 3 to 5 years.
¾ More than 5 years.
(6) ______________are those targets or future end results set by lower management
that address specific, measurable outcomes required from the lower levels.
¾ Strategic goals.
¾ Tactical goals.
¾ Operational goals.
¾ None of given options.
(7) MBO was first described by _________.

¾ Peter Drucker.
¾ Henry Minzberg.
¾ Henri Fayol.
¾ Fredrick W. Taylor.
(8) A__________ is a prescribed series of related steps to be taken under certain recurring
circumstances.
¾ Procedure.
¾ Plans.
¾ Policy.
¾ Project.
(9) Tactical plans tend to be_________ specific and concrete than strategic plans.
¾ More.
¾ Less.
¾ Lower.
¾ None of given options
(10)A mission statement is a __________declaration of the basic, unique purpose.

¾ Narrow.
¾ Broad.
¾ Contracted.
¾ None of given options.
QUIZ
Choose the most appropriate choice.
1. __________ is the degree to which followers perceives someone as honest,

competent, and able to inspire.
¾ Credibility
0 Trust
1 Integrity
2 Consistency
► Women leaders tend to adopt a more ____________than men do.

0 Autocratic
1 Democratic
2 Directive
3 None of above mentioned
► __________leadership is described as going beyond charisma with the

ability to create and articulate a realistic, credible, attractive vision of the
future for an organization or organizational unit that grows out of and
improves on the present.
0 Charismatic
1 Transformational
2 Visionary
3 None of above mentioned
► ___________studied three leadership styles: autocratic, democratic, and

laissez-faire.
0 Ohio State Studies
1 University of Michigan Studies
2 University of Iowa Studies
3 Hawthorne studies
5.When a divisional structure is superimposed over a functional structure, the

type of structure that results is called a _________organization.
¾ functional
¾ divisional
¾ matrix
¾ product
7. _________ would NOT be considered a source of position or legitimate

power for a manager.
¾ The ability to give special monetary rewards to deserving subordinates
¾ Possession of a charismatic personality
¾ The ability to recommend disciplinary action for subordinates
¾ Being a high-ranking executive in the company
8. The rights inherent in a managerial position to give orders and expect them
to be obeyed is known as:
¾ responsibility
¾ span of control
¾ authority
¾ accountability
9. Power can be viewed as a three-dimensional concept. It includes functional

and hierarchical dimensions as well as a third dimension called:
¾ influence.
¾ legitimacy.
¾ departmentalization.
¾ centrality
10. An organization that groups activities according to women's footwear,

men's footwear, apparel, accessories, and leggings would use ___________
departmentalization.
¾ functional
¾ product
¾ customer
¾ geographic
11. One of the following is characteristic of Democratic Leaders:

¾ Unilateral decisions
¾ Involve group in decision making
¾ Dictate work method
¾ Participate only to answer question.
QUIZ
1. Conceptual skills relate to a manager’s ability to:
¾ Take a strategic view of how the part of the organization function.
¾ Solve detailed problems in groups.
¾ Correctly evaluate organizational problems.
¾ Understand and interact effectively with others in the organization.
2. Which of the following statements about middle managers is not true?

¾ Middle managers coordinate the work of supervisors.
¾ Middle managers implement the objectives and plans of top
management.
¾ The number of middle managers in the most
organizations is
increasing
0 Operatives can report directly to middle managers.
► When the CEO of a large retail store chain decided to sell off or close some of the
locations that were not profitable, he was performing the management function
referred to as _________.
¾ Leading
¾ Planning
¾ Controlling
¾ Organizing
5. -------------- involves cultivating a learning culture where organizational members

systematically gather knowledge and share it with others to achieve better
performance.
¾ Knowledge management
¾ Learning Organization
¾ Entrepreneurship
¾ None of the given options
6. Mr. A. is a manager in a manufacturing company, he attempts to establish a culture

of quality affecting the attitudes and actions of every employee and relies on a
workforce that wants to improve quality. He focuses on establishing:
¾ Total Quality Management
¾ Knowledge management
¾ Operations Management
¾ Management of Information System
7. Ali is working in XYZ Company, he desires to get himself secure from crimes,
company lay offs and other adverse impacts. We can say that he fulfils the
----------------
- need.
¾ Self Actualization
¾ Social need
¾ Esteem
¾ Safety
8. In -------------- theory management assumes that employees may be ambitious, self-

motivated, and anxious to accept greater responsibility, and exercise self-control,
self-direction, autonomy and empowerment.
¾ Theory Y manager
¾ Theory X manager
¾ Theory Z manager
¾ All of the above
9. ----------- involves the products, services, and other outcomes produced by the
organization.
¾ Inputs
¾ Transformation process
¾ Outputs
¾ Feed Back
10. ----------- is known as the father of scientific management.

¾ Fredrick Winslow Taylor.
¾ Max Weber
¾ Peter Drucker
¾ None of the given options
11. --------------- searches organization and its environment for opportunities and
initiates “improvement projects” to bring about changes.
¾ Disturbance handler
¾ Liaison
¾ Leader
¾ Entrepreneur
12. Mr. A is a manager in Xyz Company. He gets his work done with and through other
people. He leads the employees motivates them and have a good interaction with
his employees, which of the following skills he has:
¾ Technical Skills
¾ Human Skills
¾ Conceptual Skills
¾ Decisional Skills
13. ---------------- is the final step in the decision-making process.
¾ Implementing the decision
¾ Evaluating the decision
¾ Recognizing the decision
¾ Evaluating the alternatives
14. A --------- is a series of interrelated sequential steps that can be used to respond to
a structural problem.
¾ Policy
¾ Rule
¾ Well structured problems
¾ Procedure
15. Mintzberg grouped the ten managerial roles into three primary headings. Which of
the following is not one of these headings?
¾ interpersonal relationships
¾ transfer of information
¾ planning
¾ decision making
16. Organizations that have a high potential of offering rival products or services are
called
¾ Suppliers
¾ Competitors
¾ Clients
¾ Customers
Mr. Zafar has undertaken a new business of leather bags investing

17.
150,000; usually with some accountability of risk. We may call Mr. Zafar:
Manager
Leader
Competitor
Entrepreneur
17.
------------------- is achieved when the cost of producing a given output is
as low as possible.
Efficiency
Effectiveness
http://vustudents.ning.co
m 7
Break
evenBoth
A and B
18. Set of the attitudes, experiences, beliefs and values of an

organization is called organization’s
Strengths
Environment
Culture
Resources
19. Mr. X the HR manager of Star Mini Miners Club recruits labor with different skills for
different jobs. This approach is characteristic of
Equity
Impersonality
Division of labor
Discipline
20. In ABC Company, all the activities particularly those regarding decision-making,
are concentrated within a particular location and/or group. The company observes
Centralization
Decentralization
Span of
control
Job Rotation
QUIZ
1. Which of the following is not allowed in a brainstorming session?
¾ Clear definition of the problem
¾ Criticism of poor ideas
¾ Large number of alternatives
¾ Recording of all alternatives
2. Mr. A is the HR Manager of XYZ Company. He decided to terminate a group of

employees because their positions were no longer necessary in the organization. What
will you say Mr. A has decided for?
¾ Restructuring
¾ Turnover
¾ Downsizing
¾ Job Rotation
3. A job has high -------------- if workers are given substantial freedom, independence, and
discretion in scheduling the work and determining the procedures to be used in carrying it
out.
¾ Autonomy
¾ Feed back
¾ Skill Variety
¾ Enlargement
► A ------------- Structure is well suited to organizations which have a single or dominant
core product because each subunit becomes extremely adept at performing its particular
portion of the process.
0 Divisional
1 Functional
2 Matrix
3 Both A and B
► Which of the following has not contributed to the boundaryless organization?

0 Changes in technology
1 Complex and dynamic environments
2 Static environments
3 Increases in telecommunication
► Managers will often not choose the decision alternative that rational decision making
indicates to be best because they have a “vague feeling” that another alternative will be
better. Which of the behavioral factors that influence decision-making does this behavior
reflect?
0 Bounded rationality
1 Escalation of commitment
2 Intuition
3 Satisficing
► ------------ means that the two merging companies became history and a new firm is
established
0 Acquisition
1 Merger
2 Joint Venture
3 Both A and B
► ------------- means only one company became history which is the acquired company while
the acquiring company remain.
0 Joint Venture
1 Merger
2 Acquisition
3 Both A and B
► A ------------- takes as input an object or situation described by a set of properties, and
outputs a yes/no decision.
0 Decision Criteria
1 Decision Making Process
2 Decision Tree
3 None of the given options
► Maslow's hierarchy of needs proposes that an individual begins by satisfying -----------

needs.
0 Self-actualization
1 Esteem
2 Physiological
3 Safety
► Which element of structure refers to the continuous line of authority that extends from the
highest organizational levels to the lowest and clarifies who reports to whom?
0 Work specialization
1 Span of control
2 Centralization
3 Unity of command
► For a manager to control or direct the work of an employee, the manager must have
_____.
¾ Line authority
¾ Responsibility
¾ Referent power
¾ Staff authority
14. Organizations that have developed the capacity to continuously adapt and change
because their members take an active role in identifying and resolving work-related
issues are called _____
organizations.
¾ Learning
¾ Visionary
¾ Community
¾ Interdependent
15. Master Sofa Makers recently bought an upholstery firm, Fabulous Fabrics, in an effort to
control its inputs by becoming its own supplier. This is an example of -------------.
¾ Concentration
¾ Vertical integration
¾ Horizontal integration
¾ Diversification
15. When an organization is in several different businesses, these single businesses

that are
independent and formulate their own strategies are often called _____.
¾ Strategic business units
¾ Monopolistic advantages
¾ Quality controllers
¾ Stars
17. Organizations using Porter's _____ strategy select a market segment in an industry and
attempt to exploit it rather than serve the broad market.
¾ Cost leadership
¾ Differentiation
¾ Stuck in the middle
¾ Focus
18. ----------- involves increasing----------.

¾ Job enrichment; job variety
¾ Job enlargement; job depth
¾ Job enlargement; job scope
¾ Job enrichment; job feedback
19. ---------- are an organization's objectives, and --------- are the documented ways that
organizations intend to meet those objectives.
¾ Goals; plans
¾ Stated goals; real goals
¾ Standing plans; single-use plans
¾ Specific plans; directional plans
20. Which of the following is NOT one of the characteristics of well-designed goals?
¾ Goals should be written in terms of actions rather than outcomes.
¾ Goals should be measurable and quantifiable.
¾ Goals should be challenging but attainable.
10
0 Goals should be communicated to all organizational members who need to know
about them.
► Work specialization, departmentalization, chain of command, and span of control are

----------- f an organization that managers may be able to change.
0 technologies
1 human resources
2 strategies
3 structural components
QUIZ
(1) When we classify managers according by their level in the organization
they are described as _______.
¾ .Functional, staff and line managers
¾ Top managers, middle managers and supervisors
¾ High level and lower level managers
¾ General Managers and administrative managers
(2) All of the following are primary management functions except _______.
¾ Setting goals
¾ Hiring employees
¾ Monitoring activities
¾ Motivating employees
(3) A manager is someone who

¾ Actually performs the service or produces the product.
¾ Works anonymously behind the scenes.
¾ Sets the goals of the organization.
¾ Who supervises the work of others.
(4) A manager who has a reputation for being open and honest and understands how to motivate
employees and customers is said to have good ________ skills.
¾ Sales
¾ Political
¾ Interpersonal
¾ Technical
(5) Which of the following is not the branch of quantitative management?

¾ Operations Research
¾ Project Management
¾ Management Information System
¾ Operations management
(6) The ____________ performs symbolic legal or social duties.

¾ Figurehead
¾ Monitor
¾ Liaison
¾ Leader
(7) The concept of organizational performance was analyzed by ___________
¾ Henry Mintzberg
¾ .Peter Drucker
¾ Adam Smith
¾ Max Weber
(8)___________ examines the nature of things, particularly values and ethics.

Philosophy
Psychology
Anthropolog
ySociolog
y
(9)___________ Plans specify the details on how overall objectives are to be achieved.
¾ Tactical
¾ Strategic
¾ Long term
¾ Operational
(11) Vertical thinking is ___________ but only in one direction

¾ Logical
¾ Rational
¾ Illogical
¾ None of the above
QUIZ
Choose the most appropriate option.
(1) The strategic management process is an/a _______________process.

¾ Eight step
¾ Eleven step
¾ Twelve step
¾ None of above
(2) MBO was first described by ______________.

¾ Abraham Maslow
¾ Peter Drucker
¾ Fredrick W. Taylor
¾ Adam Smith
(3) Corporate-level strategy is developed by ____________and the board of directors.

¾ Top level manager
¾ Middle level manager
¾ Lower level manager
¾ Non-manager
12
► An ________________is the purchase of all or part of one organization by another.
► merger
► Concentration
► Acquisition
► Joint venture
► A _____________is a mean whereby an organization that is unable to pay its debts can seek
court protection from creditors and from certain contract obligations while it attempts to regain
financial stability.
► Bankruptcy
► Divestiture
► Harvest
► Liquidation
6) The planning process can be used to promote ________in organizations.

0 Technology
1 Relation
2 Innovation
3 None of above
► Tactical goals and plans typically involve time periods of ________years.

0 1 to 3
1 3 to 5
2 5 to 7
3 7 to 10
► A __________involves attempting to develop products and services that is viewed as

unique in the industry.
0 Differentiation strategy
1 Focus strategy
2 Cost leadership strategy
3 Portfolio strategy
► ___________is the obligation or expectation to perform and carry out duties and achieve
goals related to a position.
0 Accountability
1 Authority
2 Responsibility
3 Liability
► ___________is a form of departmentalization that adopts parts of both functional and

divisional structures at the same level of management.
0 Hybrid structure
1 Divisional structure
2 Functional structure
3 Matrix structure
13
QUIZ
1) The person most closely associated with bureaucratic management is
¾ Adam Smith
¾ Frederick Taylor
¾ Frank Gilbreth
¾ Max Weber
2) Which of the following characteristics is NOT related to bureaucratic management?
¾ Short-term career commitment

¾ Highly formal system of rules
¾ Division of labor
¾ Impersonality
3) An organization which relies on rules and has a set hierarchy of authority is using what
type of management?
¾ Bureaucratic
¾ Contingency
¾ Administrative
¾ Scientific
4) For his fast-food restaurant, Bob Stevens recruits labor with different skills for
different jobs. This approach is characteristic of
¾ rationality
¾ impersonality
¾ division of labor
¾ hierarchical structure
5) The divine right of kings is characteristic of what type of authority?
¾ Traditional
¾ Charismatic
¾ Rational-legal
¾ Neoclassical
6) An important emerging skill for future managers is
¾ computer literacy
¾ media management
¾ international politics
¾ human resources
14
7) In what specific sequence do managers perform their functions to help achieve
company goals?
¾ Controlling, planning, organizing, directing

¾ Directing, controlling, planning, organizing
¾ Organizing, directing, controlling, planning
¾ Planning, organizing, directing, controlling
8) A regional vice president lets local store managers operate each store as if it were a
separate business. In this effort to better coordinate company human and material
resources, the VP was seeking to improve what managerial function?
¾ Controlling
¾ Directing
¾ Organizing
¾ Planning
9) Which managerial role is the simplest and most basic?
¾ Decisional
¾ Figurehead
¾ Stakeholder
¾ Spokesperson
10) Which of the following sets of managerial roles classify Mintzberg's ten most
common roles of managers?
¾ Controlling, planning, and directing

¾ Entrepreneurial, decisional, and logistical
¾ Figurehead, monitor, and spokesperson
¾ Interpersonal, informational, and decisional
QUIZ
► The greater the uncertainty, the more plans should be of the

_____
variety.
0 long-term
1 short-term
2 intermediate in length
3 rigid
► What types of goals produce higher levels of output?

0 goals of moderate difficulty
1 generalized goals such as "do your best"
2 specific, hard goals
3 easy goals
15
(3) The importance of environmental scanning (outside of national
security agencies) was first recognized by firms in the _____ industry.
¾ television
¾ advertising
¾ computer
¾ life insurance
(4) Which of the following is not one of the grand strategies?

¾ growth
¾ stability
¾ retrenchment
¾ cost-leadership
(5) Strategy formulation involves__________.

¾ Developing and evaluating a set of alternative strategies
¾ Evaluating a set of alternative strategies and selecting the
best for each level
¾ Selecting a strategy that will increase the level of operations
¾ Completing a SWOT analysis
(6) The greatest number and concentration of managers in most

organizations can be found at the _____ level.
¾ top manager
¾ middle manager
¾ district manager
¾ First-line supervisor
(7) Managers in not-for-profit organizations, as opposed to profit-

seeking organizations, do not face a(n) _____ test for performance.
¾ profit-maximizing
¾ evaluation
¾ employee accountability
¾ management by objectives
16
(8) When Gina Wright, Head of Plant Safety brought employees
together to discuss the fire safety procedures at the plant after the
fire, she was performing the following role:
¾ Leader
¾ Disturbance handler
¾ Disseminator
¾ Spokesperson
(10) Getting work done with a minimum effort, expense, or waste is

the definition of __________
¾ management
¾ planning
¾ efficiency
¾ effectiveness
(10) The utilitarian view of ethical behavior is that which

provides_______.
¾ the greatest good for the greatest number of people
¾ respect and protects the individual’s fundamental rights
¾ fair and impartial enforcement of rules
¾ protection of individual rights to free speech, privacy.
QUIZ
Please choose the right option
► An organization’s ------------ is the organization’s purpose or fundamental reason for
existence.
► Goal
► Plan
► Mission
► Vision
► In the brutal world of athlete endorsements, the two big sporting-apparel companies --
Reebok and Adidas frequently go head to head. Adidas acquired Reebok in 2006 and
combined with each other as one organization, the process is called:
► Acquisition
► Divesture
► Merger
► Joint venture
► ABC Company is unable to pay its debts and seek court protection from creditors and
from contract obligations while it attempts to regain its financial ability. The status of the
organization is:
► Divesture
► Harvest
► Turnaround
► Bankruptcy
17
► A firm pursuing --------------- attempts to gain a competitive advantage primarily by
reducing its economic costs below its competitors.
► Differential strategy
► Focus Strategy
► Stability Strategy
► Cost Leadership Strategy
► Mr. Umar undertook a new business of providing internet fiber cables to corporations and
homes by investing Rs. 1000000 and assumes some accountability for the inherent risks.
We can say that Mr Umar is an
► Entrepreneur
► Intrapreneur
► Innovator
► Risk taker
18
► ---------------is the downward transfer of formal authority from superior to subordinate. The
employee is empowered to act for the supervisor, while the supervisor remains
accountable for the outcome.
► Accountability
► Delegation
► Authority
► ---------------is an environmental condition that offers significant prospects for

improving an organization’s situation relative to competitors.
► Threat
► Weakness
► Strength
► Opportunity
► All the organizations make --------------- that are also called large scale action plans for
interacting with the environment in order to achieve long-term goals.
► Policies
► Plans
► Strategies
► Rules
► Mr. Amir is the Chief Executive officer of ABC Company. All of his subordinates
coordinate with him in order to achieve organizational goals. The type of coordination
they have with one an other is called:
► Vertical Coordination
► Horizontal Coordination
► Flat coordination
► In ABC Company, middle level managers are also given the authority to
give
their opinion in decision making process. It is called as:
► Centralization
► Decentralization
► Span of control
► Downsizing
QUIZ
1. _____ teams rely on the use of information technology and a

strong
19
commitment to the group instead of frequent personal exchange
and face-to-face meetings.
0 Virtual
1 Cross-functional
2 Transnational
3 Self-managed
► High-performing teams have members who possess both

technical and _____ skills.
0 Managerial
1 Technological
2 Interpersonal
3 Nonconformity skills
►A group that engages in collective work that requires joint

effort and generates a positive synergy is a ______.
0 Work group
1 Work team
2 Quality circle
3 Functional team
► _____________ is/are the combination of psychological traits

that characterize a person.
0 Perceptions
1 Norms
2 Personality
3 Values
5. After having a very bad experience waiting on line for 3 hours

at the
Motor Vehicles Bureau, Gretchen tells her father, “In the future, I
am going to renew my license on the website and am never
going back to wait on that long line again.” This is an example of
which component of an attitude?
¾ The cognitive component
¾ The affective component
¾ The behavioral component
¾ The conceptual component
7. Which of the following essentially attempts to determine

which
20
applicant, if hired, will be successful?
¾ Selection process
¾ Human resource inventory report
¾ Recruitment
¾ Strategic human resource planning
8. _________ involves the delegation of decision-making and

authority to lower levels in the organization.
¾ Decentralization
¾ Departmentalization
¾ Specialization
¾ Centralization
9. ____________ is a potential disadvantage of the matrix

structure.
¾ Inefficient use of scarce resources
¾ Lack of flexibility
¾ Conflict between product and functional managers
¾ Development of cross-functional skills by employees
10. __________ is the ability to influence the behavior of other

people because of one's capacity to offer rewards or other
desirable outcomes.
¾ Legitimate power
¾ Expert power
¾ Coercive power
¾ Reward power
11. Martin is the physician who heads the Critical Care Unit at
Mercy Hospital, the most important roles that he performs
probably
__________ roles.
¾ Monitor
¾ Decisional
¾ Figurehead
¾ Disseminator

MGT101 Midterm Exam

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MGT101 Midterm Exam

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MGT101Financial#3

Question No: 1 ( Marks: 1 ) - Please choose one

An accounting system is used by a business to:

Question No: 3 ( Marks: 1 ) - Please choose one

Accountancy covers which of the following area(s):

Question No: 4 ( Marks: 1 ) - Please choose one

If a business pays rent in advance for 12 months, it will be treated as:

► Prepaid expenses of business

Question No: 5 ( Marks: 1 ) - Please choose one

Which of the following transaction have NO affect on stockholders' equity?

Question No: 6 ( Marks: 1 ) - Please choose one

Question No: 7 ( Marks: 1 ) - Please choose one

► Any cheque drawn to creditor but not paid by bank

Question No: 8 ( Marks: 1 ) - Please choose one

Question No: 9 ( Marks: 1 ) - Please choose one

Which one of the following is NOT true about Capital Expenditure?

Question No: 10 ( Marks: 1 ) - Please choose one

Consider the following:

Beginning inventory 10 units @ Rs. 10 per unit

Question No: 11 ( Marks: 1 ) - Please choose one

Consider the following inventory record:

Opening Stock 100

Detail of 80 units sold

Question No: 12 ( Marks: 1 ) - Please choose one

If, Cost of machine = Rs.400, 000

Question No: 13 ( Marks: 1 ) - Please choose one

Asset year 1 = 100,000 - 15000 = 85000

Question No: 14 ( Marks: 1 ) - Please choose one

Question No: 15 ( Marks: 1 ) - Please choose one

In balance sheet fixed assets are shown at:

Question No: 16 ( Marks: 1 ) - Please choose one

► Opening raw material inventory + Purchases – Ending raw material

Question No: 17 ( Marks: 1 ) - Please choose one

► Rs.1 Rs.130, 000

Question No: 18 ( Marks: 1 ) - Please choose one

Question No: 19 ( Marks: 1 ) - Please choose one

Following are the inventories of Manufacturing Concern EXCEPT:

► Rs. 5,000 Loss

Question No: 21 ( Marks: 1 ) - Please choose one

Question No: 22 ( Marks: 1 ) - Please choose one

The return of goods by a customer should be debited to:

Question No: 23 ( Marks: 1 ) - Please choose one

Question No: 24 ( Marks: 1 ) - Please choose one

Question No: 25 ( Marks: 1 ) - Please choose one

Question No: 26 ( Marks: 1 ) - Please choose one

Which of the following is NOT an item of a Balance Sheet?

Question No: 27 ( Marks: 1 ) - Please choose one

Accounts Receivable & Inventory are the examples of:

Question No: 28 ( Marks: 1 ) - Please choose one

Which of the following shows summary of a company's financial position at a

► Profit & Loss Account

Question No: 29 ( Marks: 1 ) - Please choose one

Which of the following summarizes the cash movements during a specified

Which of the following financial statement summarizes the profitability of an

Question No: 31 ( Marks: 1 ) - Please choose one

Question No: 32 ( Marks: 1 ) - Please choose one

Which of the following is CORRECT about the flow of recording a transaction?

► Occurrence of event – voucher—Journal—Ledger—Trial Balance—profit

► Occurrence of event—Journal – voucher —Ledger—Trial Balance—profit

► Occurrence of event—Ledger – voucher—Journal—Trial Balance—profit

► Occurrence of event—Trial Balance – voucher—Journal—Ledger—profit

Question No: 33 ( Marks: 1 ) - Please choose one

Which of the following is used to record financial transactions in chronological