Question 1 1 / -0
Salaries paid in cash Rs. $$2,00,000$$. It includes previous year's outstanding Rs. $$10,000$$ and salary paid in advance for the next year Rs. $$20,000$$ Salary outstanding for the year is Rs. $$15,000$$ Salary of ____________ shall be debited in the profit and loss account.
Question 2 1 / -0
Bonus given to employees is transferred to _________.
Solution
Bonus
given to employees is a deductible business expense. It is a nominal
account in the nature of expense and hence, is shown at the debit side of Profit
& Loss account at the end of the reporting period.
Question 3 1 / -0
Opening Stock Rs. 90,000, Cash Sales Rs. 36,000, Credit Sales Rs. 7,20,000, Returns outwards Rs. 6,000. Wages & Salaries Rs. 2,400 Carriage Inwards Rs. 1,200. Freight Inwards Rs. 1,800, Cartage Inwards Rs. 600, Cash Purchases Rs. 30,000, Credit Purchases 6,00,000, Returns Inward Rs. 12,000, Cost of closing Stock as on 31st March Rs. 54,000 but its market value is Rs. 50,400, Freight outwards Rs. 600. The Gross Profit for the year is _____________.
Solution
Net sales (cash sales + credit sales - return inward) 7,44,000
Add:- Closing stock (Lower of 54,000 or 50,400) 50,400
----------------
7,94,400
Less:- Opening stock (90,000)
purchases ( 30,000 + 6,00,000 - 6,000) (6,24,000)
Direct expenses (1,200 + 2,400 + 1,800 + 600) (6,000)
------------------
74,400
Question 4 1 / -0
A firm purchased goods of Rs. $$90,000$$ and spend Rs. $$6,000$$ on freight towards it. At the end of the year the cost of good still unsold was Rs. $$12,000$$. Sales during the year Rs. $$1,20,000$$. What is the gross profit earned by the firm?
Solution
Gross Profit = Sales + closing stock - ( purchases + direct expenses)
= 1,20,000 + 12,000 - ( 90,000 + 6,000)
= 1,32,000 - 96,000
= 36,000
Question 5 1 / -0
Adjusted Purchases Rs. 6,63,600, Sales Rs. 7,44,000, Closing Stock Rs. 50,400, Freight & Cartage Inward Rs. 3,600, Wages Rs. 2,400, Freight & Cartage outward Rs. 1.800 Opening stock 48,600. calculate gross profit for the year end ____________.
Solution
Net sales 7,44,000
Add: Closing stock 50,400
----------------
7,94,400
Less: Opening stock (48,600)
Purchases ( 30,000 + 6,00,000 - 6,000) (6,63,600)
Direct expenses (1,200 + 2,400 + 1,800 + 600) (7,800)
------------------
74,400
------------------
Question 6 1 / -0
The manager of a firm is entitled to a commission of $$10\%$$ on net profit after his commission. If the net profit of the firm before charging commission is Rs. $$4,40,000$$. The amount of manager's commission will be.
Question 7 1 / -0
A sells goods at $$33.33\%$$ above cost. His sales were Rs. $$10,20,000$$ during the year. However he sold damaged goods for Rs. $$20,000$$ costing Rs. $$30,000$$. This sale is included in Rs. $$10,20,000$$. The amount of gross profit is________.
Question 8 1 / -0
Sundry Debtors on $$31^{st}$$ March $$2006$$ are Rs. $$55,200$$. Further Bad debts are Rs. $$200$$.
Question 9 1 / -0
Selling and distribution expenses does not comprise of ___________.
Solution
Carriage inwards is the expenditure that is incurred by the company while purchasing goods. It is the cost of transportation of goods from the place of suppliers to the place of business. Carriage inwards is directly related to procurement of goods and hence is direct expense.
It is not a selling and distribution expense. A selling and distribution expense is incurred to perform sale or expenses after sales.
Question 10 1 / -0
Changing the value of closing stock from cost to expected selling price might be an application of which accounting concept?
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