CBSE Class 11 Accountancy Financial Statements - II MCQs Set C

Question: The interest can be computed on the additional capital __________.
a) from the date on which it was brought into the business
b) from the beginning of year
c) from middle of the year
d) None of the options
Answer: a

Question: When R.D.D. is given in Trial balance, it is known as_______________.
a) Old R.D.D.
b) New R.D.D.
c) Both of the above
d) None of the options
Answer: a

Question: Every adjusting entry affects?
a) Income statement account only
b) Balance sheet account only
c) Both Income statement account only & Balance sheet account only
d) None of the options
Answer: c

Question: Vikas started business with a cash of Rs. 22,000 and stock of Rs. 3,000 on 1st Jan., 2014. During the year, he made a profit of Rs.6,000. His creditors were paid Rs.4,500 for Office furniture supplied. He took goods worth Rs.3,500 for his daughter's wedding on 30th June,2014. The gross assets of his business on 31st Dec.,2014 is _____________.
a) Rs. 27,500
b) Rs. 26,500
c) Rs. 23,500
d) Rs. 20,500
Answer: a

Question: Stock-in-trade does NOT include ______________.
a) goods in the process of manufacture
b) raw materials
c) items held as fixed assets
d) finished goods
Answer: c

Question: Patents fall under which category?
a) Current Assets
b) Fictitious Assets
c) Intangible Assets
d) None of the options
Answer: c

Question: What is the treatment of Discount on purchase?
a) Debited to Trading Account
b) Credited to Profit & Loss Account
c) Debited to Profit & Loss Account
d) None of the options
Answer: b

Question: Which type of expenses is written in the Profit & Loss Account?
a) Direct
b) Indirect
c) Direct & Indirect
d) None of the options
Answer: b

Question: New bad debts are added to ______.
a) Creditor account
b) Debtors account
c) Bad debts account
d) Cash account
Answer: c

Question: Which of the following amounts is debited to profit & loss account?
a) Old Bad Debts
b) New Bad debts
c) New Reserves on doubtful debts
d) All of the options
Answer: d

Question: If the opening capital is Rs. 50,000 as on April 1, 2005, and additional capital introduced Rs. 10,000 on January 1, 2006, with interest on capital at 10% p.a., the amount of interest on capital shown in the profit and loss account as on March 31, 2006, will be:
a) Rs. 5,250
b) Rs. 6,000
c) Rs. 4,000
d) Rs. 3,000
Answer: a

Question: What is the arrangement of various assets and liabilities in a proper order called?
a) Balancing
b) Grouping
c) Marshalling
d) All of the options
Answer: c

Question: Closing stock appearing in the Trial Balance will be taken to __________.
a) Trading account only
b) Balance sheet only
c) Trading account and balance sheet
d) None of the options
Answer: b

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

Question: Under the diminishing balance method, depreciation is calculated on:
a) Scrap value
b) Original value
c) Book value
d) None of them
Answer: c

Question: If the insurance premium paid Rs. 1,000 and prepaid insurance Rs. 300. The amount of insurance premium shown in profit and loss account will be
a) Rs. 1,300
b) Rs. 1,000
c) Rs. 300
d) Rs. 700
Answer: d

Question: Income earned but not received is shown in:
a) Liabilities
b) Foot notes
c) Assets
d) None of the options
Answer: c

Question: Any expenditure incurred in the installation of Machinery is:
a) Deferred Revenue Expenditure
b) Promotional Exp.
c) Revenue Exp.
d) Capital Exp.
Answer: d

Question: If wages paid are Rs. 4,000 and outstanding wages are Rs. 500, the amount of wages shown in the Trading Account will be:
a) Rs. 4,500
b) Rs. 3,500
c) Rs. 500
d) None of the options
Answer: a

Question: Trial Balance shows the value of Machinery as Rs. 20,000 purchased on 1st January 2018. The rate of Depreciation is 10%. What is the amount of machinery to be shown in the balance sheet as on 31st March 2019?
a) Rs. 19,500
b) Rs. 18,000
c) Rs. 22,000
d) None of the options
Answer: d

Question: Calculation of Operating Profit:
a) Gross profit – (Office & Admin exp. + Selling & Distribution Exp.)
b) Gross profit – (Office & Admin exp. – Selling & Distribution Exp.)
c) Gross profit – (Factory exp. + Office & Admin exp. + Selling & Distribution Exp.)
d) Gross profit – (Office & Admin exp. + Selling & Distribution Exp. + Direct Exp.)
Answer: a

Question: In a balance sheet, the assets and liabilities are arranged in the order of ___________.
a) Randomly
b) Permanence
c) Order of liquidity
d) Both Permanence and Order of liquidity
Answer: d

Question: If Commission received in advance Rs. 3000 is given in the Trial Balance, it will be shown in:
a) Liabilities
b) Assets
c) Profit & Loss Account (Credit)
d) Trading Account (Debit)
Answer: a

Question: The manager is entitled to a commission of 10% on Net Profit after charging such commission. If Net Profit is Rs. 110000, then manager’s commission will be:
a) Rs. 11000
b) Rs. 20000
c) Rs. 10000
d) None of the options
Answer: c

Question: Accrued income is:
a) A liability
b) Revenue
c) An Asset
d) An Expense
Answer: c

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

Question: 'Manufacturing Account' is prepared by _________.
a) Pharma Industry
b) Cement Industry
c) Iron Industry
d) All of the options
Answer: d

Question: Arrangement of balance sheet in a proper way is known as __________.
a) Marshalling of Balance Sheet
b) Formatting of Balance Sheet
c) Finalization of Balance Sheet
d) Grouping of Balance Sheet
Answer: a

Question: Types of account to be shown in the balance sheet?
a) Real & Personal
b) Nominal & Real
c) Nominal & Personal
d) None of the options
Answer: a

Question: Contingent assets usually arise from unexpected events which give rise to ____________________.
a) the possibility of an inflow of economic benefits to the business entity
b) the possibility of an outflow of economic benefits to the business entity
c) either the possibility of an inflow of economic benefits to the business entity or the possibility of an outflow of economic benefits to the business entity
d) None of the options
Answer: a

Question: If closing stock appears in the trial balance, then it will appear in:
a) Trading Account
b) Balance Sheet
c) Profit & Loss Account
d) Trading & Balance Sheet account
Answer: b

Question: If the rent received in advance is Rs. 2,000, the adjustment entry will be:
a) Debit Profit and Loss Account and Credit Rent Account
b) Debit Rent Account and Credit Rent Received in Advance Account
c) Debit Rent Received in Advance Account and Credit Rent Account
d) None of the options
Answer: b

Question: If the rent of one month is still to be paid, the adjustment entry will be:
a) Debit Outstanding Rent Account and Credit Rent Account
b) Debit Profit and Loss Account and Credit Rent Account
c) Debit Rent Account and Credit Profit and Loss Account
d) Debit Rent Account and Credit Outstanding Rent Account
Answer: d

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: Adjusting Entries?
a) Assign revenue to the period in which they are earned
b) Help to properly measure the period's Net Profit/Loss
c) Bring asset and liability account to correct balances
d) All of the options statements are true regarding Adjusting Entries
Answer: d

Question: Prepaid expenses are shown in-
a) Liability side
b) Asset side
c) Assets or Liability side
d) None of the options
Answer: b

Question: Prepaid Insurance existing in the Trial Balance is shown in the Balance Sheet in the assets side because of
a) Accrual Concept
b) Matching Principle
c) Materiality Principle
d) Cost principle
Answer: b

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

Question: Which of the following is recorded in income & expenditure account -
a) Revenue items
b) Capital items
c) Revenue and capital items
d) None of the options
Answer: a

Question: Given that cost of goods amounts to Rs.18,000, Closing stock Rs. 7000, purchase will amount to_______.
a) Rs.18,000
b) Rs.20,000
c) Rs.25,000
d) Rs.10,000
Answer: c

Question: Cost of goods sold = Rs. 2,40,000; Gross loss = 1/4 of sales. What is the amount of sales?
a) Rs. 1,00,000
b) Rs. 1,92,000
c) Rs. 1,44,000
d) Rs. 1,50,000
Answer: b

Question: A business entity has assets of Rs.28,000 and liabilities of Rs.8,000. Owner's equity in this case is _______________.
a) Rs.32,000
b) Rs.26,000
c) Rs.20,000
d) Rs.6,000
Answer: c