Final Accounts Test 8

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Final Accounts Test 8

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Weekly Quiz Competition

Question 1
1 / -0

Select the most appropriate alternative from those given below:
Interest on loan taken is debited to ______ A/c.

A
Profit and Loss

B
Trading

C
Profit and Loss Appropriation

D
Capital

Solution

A profit and loss account is prepared to find out the net profit/loss earned by a firm in a financial year. All the indirect expenses are debited to the profit & loss account.
Interest on loan is an indirect expense and is debited to the profit & loss account.
Question 2
1 / -0

Carriage is on goods purchased is shown in______________.

A
Profit and Loss A/c

B
Trading A/c

C
Balance sheet

D
Suspense A/c

Solution

Carriage inward refers to the transportation costs associated with the purchases of merchandise or other assets. Each type of carriage will be an expense and therefore will have a debit balance in the trial balance. These expenses are paid in respect of purchases made during the year and are debited to the trading account.
Question 3
1 / -0

Trading a/c is____________.

A
nominal a/c

B
real a/c

C
personal a/c

D
dummy a/c

Solution

Nominal accounts are the accounts that report revenues, expenses, gains and losses. Nominal or temporary accounts are closed at the end of each accounting year. All expenses which related to either purchases or manufacturing of goods and debited to trading account are nominal accounts.
Question 4
1 / -0

Trading a/c is prepared by the enterprise engaged in_______.

A
trading activities

B
manufacturing activities

C
mining activities

D
overseas export-import

Solution

At the end of every financial year, books of account of business are closed to prepare the financial statements. Financial statements consist of the following:

Manufacturing Account
Trading Account
Profit & Loss Account
Balance Sheet

Trading account is prepared to know the gross profit earned from the trading activity.
Question 5
1 / -0

Trading a/c is prepared on ___________ basis.

A
accrual

B
cash

C
hybrid

D
single entry

Solution

At the end of financial year, books of account are closed to prepare the financial statement.
Financial statements are prepared on the basis of matching concept which defines that all the expenses and incomes of the particular accounting period should be recorded in the same financial year irrespective of the payment received/paid or not.
Hence, accrual system of accounting records all the transactions of the particular accounting period irrespective of the payment received/paid.
Trading account is prepared on accrual basis.
Question 6
1 / -0

Trading a/c shows the________.

A
gross profit/gross loss

B
cost of goods manufactured

C
net profit

D
work in progress

Solution

Trading account shows the gross profit or gross loss during an accounting year. It's main components are sales, services rendered in the credit side of such sales or services rendered in the debit side. the trading account is prepared to know the gross profit or gross loss during the accounting period.
Question 7
1 / -0

Purchase as per trading account excludes___________.

A
salary and wages

B
postage stamps

C
stationery stamps

D
all the three

Solution

Trading account is prepared to find out the gross profit earned by the firm by core trading business.
While preparing the trading account, only stock of traded goods is considered. Purchase of traded goods is only included in the calculation of trading account. Salary and wages paid, postage stamps and stationery items to be excluded from the purchases while preparing the trading account.
Question 8
1 / -0

Which of these a/c is closed by transferring to debit side of Trading a/c?

A
Rent a/c

B
Carriage inward

C
Depreciation on plant

D
Factory rent

Solution

The carriage inward account is written off to the trading account at the end of accounting period. When the buyer sells the goods to his customer, he incurs further delivery charges. The cost is referred to as "carriage outward".
Question 9
1 / -0

Rs 1500 being LIC premium of proprietor paid by the firm will be debited to ________________.

A
Income tax a/c

B
Drawing a/c

C
Profit and loss a/c

D
None

Solution

LIC premium is a personal liability of the proprietor. Hence, any amount paid or withdrawn from the business for personal purposes is to be debited to drawing account.
Question 10
1 / -0

Which of these is part of opening stock in trading a/c?

A
Salary and wages

B
Postage stamps

C
Trading goods

D
Stationery items

Solution

At the end of every financial year, books of account of business are closed to prepare the financial statements. Financial statements consist of the following:

Manufacturing Account
Trading Account
Profit & Loss Account
Balance Sheet

Trading account is prepared to know the gross profit earned from the trading activity.

Opening stock of trading goods to be shown in debit side of trading account.

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Re-Attempt Weekly Quiz Competition

Final Accounts Test 8

Result

Final Accounts Test 8

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SHARING IS CARING

Question 1

Profit and Loss

Trading

Profit and Loss Appropriation

Capital

Solution

Question 2

Profit and Loss A/c

Trading A/c

Balance sheet

Suspense A/c

Solution

Question 3

nominal a/c

real a/c

personal a/c

dummy a/c

Solution

Question 4

trading activities

manufacturing activities

mining activities

overseas export-import

Solution

Question 5

accrual

cash

hybrid

single entry

Solution

Question 6

gross profit/gross loss

cost of goods manufactured

net profit

work in progress

Solution

Question 7

salary and wages

postage stamps

stationery stamps

all the three

Solution

Question 8

Rent a/c

Carriage inward

Depreciation on plant

Factory rent

Solution

Question 9

Income tax a/c

Drawing a/c

Profit and loss a/c

None

Solution

Question 10

Salary and wages

Postage stamps

Trading goods

Stationery items

Solution

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