Final Accounts Test 1

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Final Accounts Test 1

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Weekly Quiz Competition

Question 1
1 / -0

Economic order quantity is that quantity at which cost of holding and carrying inventory is ________________.

A
Maximum and equal

B
Minimum and equal

C
It can be maximum or minimum depending upon case to case

D
Minimum and unequal
Question 2
1 / -0

Goods sold on the basis of 'sales or return' should ______________.

A
be included in the stock

B
not be included in the stock

C
not be checked by auditor

D
None of the above

Solution

When sold on ‘sale or return’ basis, the goods neither approved nor rejected need some adjustment at the end of the accounting year. They are included in the stock either at cost price or market price, whichever is less.
Question 3
1 / -0

Which of the following is not included in cost of inventory?

A
Purchase Cost

B
Transport in Cost

C
Import Duty

D
Selling Costs

Solution

Selling cost is an indirect cost which does not have any direct association with the cost of production.
Selling cost should be included and selling & distribution cost.
Question 4
1 / -0

A gross profit is transferred to the ____________ side of the profit and loss account.

A
Debit

B
Credit

C
Current

D
Asset

Solution

Trading account is prepared to know the gross profit/loss of the business. Gross profit taken out from trading account is transferred to credit side of the profit & loss account to meet out the indirect expense.
Question 5
1 / -0

From the following find out the correct equation:
I. A represents opening stock
II. B represents purchases
III. C represents closing stock
IV. D represents cost of goods sold.

A
A$$-$$C$$=$$D$$-$$B

B
A$$+$$B$$=$$D$$-$$C

C
D$$-$$A$$=$$B$$+$$C

D
None of the above

Solution

Opening Stock+Purchases-Closing Stock=Cost of Goods sold.

This can be reproduced as:
Opening Stock - Closing Stock = COGS-Purchases

For example: Opening Stock Rs.45000, Purchases Rs.100000, Closing Stock Rs.35000, Cost of Goods Sold Rs.110000

Op Stock Rs.45000 - Cl Stock Rs.35000 = COGS Rs.110000 - Purchase Rs.100000
Question 6
1 / -0

Trading account is prepared to find out __________.

A
Gross profit or loss

B
Net profit or loss

C
Financial position

D
Position of the partners

Solution

Trading account is prepared to find out the direct profit on the product sold. This includes the sales and closing stock as credit item and purchases and direct expenses as debit item. The result of trading account shows gross profit or loss.
Question 7
1 / -0

Carriage outward is charged to _______________.

A
Debit side Profit & Loss a/c

B
Debit side Trading a/c

C
Credit side of Profit & Loss a/c

D
Credit side of Trading a/c

Solution

Carriage is a term used for cost of transportation of goods from either side. This may be of two types, carriage inward which is paid at the time of purchasing the goods and carriage outwards which is paid while doing the sales.

Carriage outward is an expenses of seller when the goods is sold on FOB basis. Its an indirect cost and to be debited to profit & loss account.
Question 8
1 / -0

Assets in the beginning of the year Rs. 10,000. Assets at the end of the year Rs. 18,000. Drawing during the year Rs. 2,000. Therefore the profit is equal to ___________.

A
Rs. 6,000

B
Rs. 8,000

C
Rs. 10,000

D
None of the Above

Solution

In absence of double entry system of accounting, profits can be calculated by comparing the opening and closing assets by giving the effect of drawings.

This can be represented as:
Opening Assets+Profits during the year-Drawings=Closing Assets

By putting the given information in the equation:
Rs.10000+Profit-Rs.2000=Rs.18000
Rs.8000+Profit=Rs.18000
Profit will be Rs.10000
Question 9
1 / -0

All direct & indirect expenses related to business are charged to the ____________.

A
Profit and loss account

B
Trading account

C
Trading account and profit & loss account

D
Directly to balance sheet

Solution

Trading and Profit & loss account is prepared by the organization to know the gross profit and net profit.
Direct expenses are directly associated with the production/trading activity and to be charged to the trading account to know the gross profit.
Indirect expenses that are not directly associated but related to the business are to be charged to the profit & loss account to know the net profit.
Question 10
1 / -0

Profit and loss account of business shows the _________.

A
Net Profit Earned

B
Gross Profit Earned

C
Balance of all Accounts

D
Capital Employed in Business

Solution

Profit & loss account of the business shows the net profit of the organization for a particular period. This has been calculated by reducing all the indirect expenses from the gross profit.

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Re-Attempt Weekly Quiz Competition

Final Accounts Test 1

Result

Final Accounts Test 1

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Rank

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SHARING IS CARING

Question 1

Maximum and equal

Minimum and equal

It can be maximum or minimum depending upon case to case

Minimum and unequal

Question 2

be included in the stock

not be included in the stock

not be checked by auditor

None of the above

Solution

Question 3

Purchase Cost

Transport in Cost

Import Duty

Selling Costs

Solution

Question 4

Debit

Credit

Current

Asset

Solution

Question 5

A$$-$$C$$=$$D$$-$$B

A$$+$$B$$=$$D$$-$$C

D$$-$$A$$=$$B$$+$$C

None of the above

Solution

Question 6

Gross profit or loss

Net profit or loss

Financial position

Position of the partners

Solution

Question 7

Debit side Profit & Loss a/c

Debit side Trading a/c

Credit side of Profit & Loss a/c

Credit side of Trading a/c

Solution

Question 8

Rs. 6,000

Rs. 8,000

Rs. 10,000

None of the Above

Solution

Question 9

Profit and loss account

Trading account

Trading account and profit & loss account

Directly to balance sheet

Solution

Question 10

Net Profit Earned

Gross Profit Earned

Balance of all Accounts

Capital Employed in Business

Solution

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