CBSE Class 11 Accountancy Financial Statements - I MCQs Set C

Question: Which entry reflects the adjustment of closing stock in the accounts?
a) Closing stock A/c Dr. To Purchases A/c
b) Closing stock A/c Dr. To Trading A/c
c) Purchases A/c Dr. To Closing stock A/c
d) Trading A/c Dr. To Closing stock A/c
Answer: b

Question: What are outstanding expenses?
a) Expenses that have been paid
b) Expenses that are unpaid at the end of the accounting period
c) Expenses related to future periods
d) Revenue earned in advance
Answer: b

Question: Drawing is deducted from:
a) Sales
b) Purchase
c) Returns outward
d) Capital
Answer: d

Question: Outstanding Expenses are related to-
a) Current year
b) Next year
c) Last year
d) None of the options
Answer: a

Question: If a person fails to pay his debt, such amount is considered as-
a) Bad debts
b) Bad debts recovered
c) Provision for Bad debt
d) None of the options
Answer: a

Question: The Profit and loss Account always shows:
a) Gross profit
b) Net Profit
c) Gross loss
d) None of the options
Answer: b

Question: Goodwill is:
a) Asset
b) Liability
c) Expense
d) None of the options
Answer: a

Question: The object of non – trading concerns-
a) Social service
b) Profit earning
c) Both of these
d) None of the options.
Answer: a

Question: Financial statements reflect a combination of recorded facts, personal judgements and ______.
a) Postulates
b) Accounting Assumptions
c) Personal Judgements
d) Accounting Principles
Answer: d

Question: Choose the Current Assets from the following:
a) Cash
b) Stock
c) Debtors
d) All of these
Answer: d

Question: Such persons who earn remuneration against their services are called –
a) Seller
b) Purchaser
c) Professional
d) None of the options
Answer: c

Question: The goal of final accounts is to determine:
a) Capital
b) The value of assets
c) Profit or loss
d) Profit and loss and financial position
Answer: d

Question: Outstanding expenses are those expenses which have become _____ during the accounting year
a) Payable
b) Paid
c) Received
d) Receivable
Answer: a

Question: If Ankit has wages of Rs.8,000 recorded and owes an additional Rs.500, what total should be reported for wages in the profit and loss account?
a) Rs.7,500
b) Rs.8,000
c) Rs.8,500
d) Rs.9,000
Answer: c

Question: Profit earn through normal activities of business
a) operating profit
b) net profit
c) gross profit
d) manufacturing profit
Answer: a

Question: A trade purchase of Rs.5500 from Y was passed through Sales Day book as Rs.550, What rectification entry would be passed if the mistake is detected before preparation of trading and profit and loss A/c
a) Sales A/c Dr. Rs.550, Purchase A/c Dr. Rs.5500, Y's A/c Cr. Rs.6050
b) Profit and loss adjustment a/c Dr. Rs.6050, Y's A/c Cr. Rs.6050
c) Sales A/c Dr. Rs.550, Purchase A/c Dr. Rs.5500, Suspense A/c Cr. Rs.6050
d) None
Answer: a

Question: Trading Account discloses-
a) Gross profit
b) Net profit
c) Net loss
d) Gross profit or Gross loss
Answer: d

Question: The financial statements consist of:
a) Trial balance
b) Profit and Loss account
c) Balance sheet
d) Profit and Loss account & Balance sheet
Answer: e

Question: Expenditure incurred on a fixed asset which increases the earning capacity is accounted as:
a) Capital Expenditure
b) Revenue Expenditure
c) Deferred Revenue Expenditure
d) General Expenditure
Answer: a

Question: Petty Cash Balance:
a) Income
b) Expenses
c) Asset
d) Liability
Answer: c

Question: Choose the correct chronological order of ascertainment of the following profits from the profit and loss account:
a) Operating Profit, Net Profit, Gross Profit
b) Operating Profit, Gross Profit, Net Profit
c) Gross Profit, Operating Profit, Net Profit
d) Gross Profit, Net Profit, Operating Profit
Answer: c

Question: Withdraws of goods are deducted from:
a) Purchase
b) Sales
c) Returns outward
d) Capital
Answer: a

Question: We can know about profitability and financial position of a business by:
a) Balance sheet
b) Profit and loss account
c) Financial statement
d) None
Answer: c

Question: While calculating operating profit, the following are not taken into account.
a) Normal transactions
b) Abnormal items
c) Expenses of a purely financial nature
d) Abnormal items & Expenses of a purely financial nature
Answer: c

Question: What does the accrual basis of accounting emphasise?
a) Revenues on a receipt basis
b) Revenues on an earned basis
c) Expenses on a paid basis
d) None of the options
Answer: b

Question: How should Ankit record the journal entry for wages outstanding?
a) Wages outstanding A/c Dr. To Wages A/c
b) Wages A/c Dr. To Wages outstanding A/c
c) Outstanding expenses A/c Dr. To Wages A/c
d) Wages A/c Dr. To Cash A/c
Answer: b

Question: If Shiv paid a total salary of Rs.25,000, which includes an advance payment of Rs.5,000, what is the correct salary expense that should be reported in the profit and loss account?
a) Rs.20,000
b) Rs.25,000
c) Rs.30,000
d) Rs.15,000
Answer: a

Question: _____ is the diminution in the value of fixed assets whereas _____ is writing off the amount relating to intangible assets.
a) Amortization, Depreciation
b) Appreciation, Amortization
c) Revaluation, Depreciation
d) Depreciation, Amortization
Answer: d

Question: Charity of goods is-
a) Expenses
b) Loss
c) Profit
d) None of the options
Answer: b

Question: While preparing the statement of profit and loss, the revenue is included in the sales of the year in which the sale was undertaken, even though the sale price may be received over a number of years. The assumption is known as _____.
a) Money measurement postulate
b) Concern postulate
c) Going concern postulate
d) Realisation postulate
Answer: d

Question: If Closing Capital is Rs.70,000, Additional Capital introduced is Rs.50,000, Drawings Rs.80,000, Loss is Rs.1,00,000 then Capital in the beginning is equal to
a) Rs.2,00,000
b) Rs.1,80,000
c) Rs.1,20,000
d) Rs.3,00,000
Answer: a

Question: Trading Account Shows __ Profit/Loss:
a) Gross
b) Net
c) Both Gross and Net
d) None of above
Answer: a

Question: Preliminary expenses are to be written off completely in the year in which such expenses are incurred. Such expenses should be written off first from ______.
a) Securities Premium
b) Capital Reserve
c) Revaluation Reserve
d) General Reserve
Answer: a

Question: We get Profit & Loss account for_________.
a) net profit
b) capital
c) gross profit
d) gross loss.
Answer: a

Question: Which is an example of fictitious assets?
a) Building
b) Bill receivable
c) Adverting suspense
d) Cash
Answer: c

Question: As per Schedule III, Part I of the Companies Act, 2013, ‘Calls-in-arrears’ will be presented under which of the following head/sub-head in the Balance Sheet of a company?
a) Shareholders’ Funds
b) Contingent Liabilities
c) Current Liabilities
d) Reserves and Surplus
Answer: a

Question: Which of the following is not a sub-head of current liabilities?
a) Other Current Liabilities
b) Short Term Provisions
c) Deferred Tax Liabilities
d) Trade Payables
Answer: c

Question: If an insurance premium of Rs.1,200 is paid on July 01, 2016, and covers 12 months, how much should be charged to the profit and loss account for the year ending March 31, 2017?
a) Rs.1,200
b) Rs.900
c) Rs.300
d) Rs.1,000
Answer: b

Question: Which account reflects a liability in the trial balance?
a) Debtors
b) Bank
c) Long-term loan
d) Furniture
Answer: c

Question: Which of the following is not a part of Finance Cost in Statement of Profit and Loss?
a) Interest Paid on Debentures
b) Interest on Issue of Debentures
c) Bank SMS Chargescorrect
d) Interest Paid on Public Deposits
Answer: c