Accounting from Incomplete Records Test 4

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Accounting from Incomplete Records Test 4

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Weekly Quiz Competition

Question 1
1 / -0

Profit = Capital at the end+______- Capital introduced - Capital in the beginning.

A
Sales

B
Drawings

C
Loan

D
Net Purchases

Solution

Profit is calculated by the taking into account the fluctuations of the capital at the beginning and at the end of the year, by adding the drawings, and deducting the capital introduced to the capital at the end of the year.
Question 2
1 / -0

The capital in the beginning of the accounting year is ascertained by preparing ______.

A
closing statement of affairs

B
cash account

C
statement of profit or loss

D
opening statement of affairs

Solution

D. Opening statement of affairs.
We need to prepare the opening statement of affairs which contains the opening balances of the assets and liabilities. It is usually prepared where the books of accounts are kept as per the single entry system. It is prepared in the same manner as a Balance Sheet is prepared.
Question 3
1 / -0

Trading and Profit and Loss Account cannot be prepared from books maintained on single entry basis because :

A
Nominal accounts are not maintained in the ledger.

B
Real accounts are not maintained in the ledger.

C
Personal accounts are not maintained in the ledger.

D
All of the above
Question 4
1 / -0

A person started a business with capital of $$50,000$$ and he takes loan from his relative Rs. $$5,000$$. Profit for the year is Rs. $$10,000$$ and drawings Rs. $$9,000$$. What will be the amount of closing capital?

A
Rs. $$60,000$$

B
Rs. $$51,000$$

C
Rs. $$56,000$$

D
Rs. $$46,000$$

Solution

Opening capital 50,000
Add:- Additional capital    5,000
Profit for the year 10,000
   -------------
65,000
Less:- Drawings    (9,000)
   ----------------
Capital at the end of the year 56,000
Question 5
1 / -0

Opening balance of debtors is Rs. $$35,000$$ cash received from Debtors is Rs. $$30,000$$ cash sales Rs. $$20,000$$ which is $$20\%$$ of total sales. B/R Received for Rs. $$40,000$$ and discount allowed is $$1\%$$ of cash collection. Find the net debtor balance.

A
Rs. $$15,300$$

B
Rs. $$44,700$$

C
Rs. $$64,700$$

D
Rs. $$35,700$$

Solution

The calculation is as under:
Opening balance - cash collection + Credit sales - Bills Receivable received - discount allowed.
Rs.$$35,000$$-Rs.$$30,000$$+Rs.$$80,000$$ - Rs.$$40,000$$-Rs.$$ 300$$ = Rs.$$44,700$$

Note 1: If cash sales is Rs.$$20,000$$ which is 20% of total sales, hence 80% is credit sales i.e Rs.$$80,000$$.
Note 2: Discount allowed is 1% of cash collection , cash collected is Rs.$$30,000$$ , 1% of which is Rs.$$300$$.
Question 6
1 / -0

Profit, under Single Entry System is ascertained ____________ .

A
by preparing Profit and Loss Account.

B
by preparing Statement of Affairs

C
by preparing Cash Account

D
all of the above
Question 7
1 / -0

If opening capital is $$Rs.80,000$$, closing capital is $$Rs.1,80,000$$, withdrawals are $$Rs.10,000$$ and additional capital brought in the business is Rs. $$20,000$$, then the profit will be________.

A
$$Rs.90,000$$

B
$$Rs.1,10,000$$

C
$$Rs.70,000$$

D
$$Rs.1,50,000$$

Solution

Closing Capital 1,80,000
Add: Drawings 10,000
Less: Additional Capital (20,000)
____________________ ________
Adjusted Capital 1,70,000
Less: Opening Capital (80,000)
____________________ ________
Profit during the year 90,000
Question 8
1 / -0

A statement similar to balance sheet prepared to find out the amount of opening capital is ___________.

A
Opening statement of affairs

B
Balance sheet

C
Profit and loss accounts

D
Cash flow statement

Solution

Under Single entry system Opening Capital is ascertained from the Accounting equation "CAPITAL = ASSET - LIABILITIES"
Such statement which makes use of equation is called opening statement of affairs.
Balance sheet is the statement which comprises of the assets, liabilities and the capital which also satisfies the accounting equation.
Therefore, statement of affairs is considered similar to the balance sheet.
Question 9
1 / -0

To ascertain the profit, closing capital is to be adjusted by deducting ________ and adding _________.

A
Opening capital, Drawings

B
Opening capital, Cash deposit

C
Surplus, Opening balance

D
None of the Above

Solution

To ascertain the profit, closing capital is to be adjusted by deducting opening capital and adding drawings.

Below is the example:
Opening Capital Rs.30000
Drawings Rs.5000
Closing Capital Rs.50000

Solution:
Closing Capital Rs.50000
Add: Drawing Rs. 5000
----------------
Rs.55000
Less: Opening Capital Rs.30000
---------------
Profit during the year Rs.25000
-----------------
Question 10
1 / -0

Further capital introduced during the year is ____________ from closing capital in order to find out the correct profit.

A
Added

B
Deducted

C
Divided

D
Ignored

Solution

Additional capital during the year is a result of working capital requirements and closing capital is the composition of profit or loss along with some capital contribution.
Hence, to remove the capital effect additional capital is deducted from closing capital in order to derive the correct profit or loss earned by the company.

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Re-Attempt Weekly Quiz Competition

Accounting from Incomplete Records Test 4

Result

Accounting from Incomplete Records Test 4

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Rank

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SHARING IS CARING

Question 1

Sales

Drawings

Loan

Net Purchases

Solution

Question 2

closing statement of affairs

cash account

statement of profit or loss

opening statement of affairs

Solution

Question 3

Nominal accounts are not maintained in the ledger.

Real accounts are not maintained in the ledger.

Personal accounts are not maintained in the ledger.

All of the above

Question 4

Rs. $$60,000$$

Rs. $$51,000$$

Rs. $$56,000$$

Rs. $$46,000$$

Solution

Question 5

Rs. $$15,300$$

Rs. $$44,700$$

Rs. $$64,700$$

Rs. $$35,700$$

Solution

Question 6

by preparing Profit and Loss Account.

by preparing Statement of Affairs

by preparing Cash Account

all of the above

Question 7

$$Rs.90,000$$

$$Rs.1,10,000$$

$$Rs.70,000$$

$$Rs.1,50,000$$

Solution

Question 8

Opening statement of affairs

Balance sheet

Profit and loss accounts

Cash flow statement

Solution

Question 9

Opening capital, Drawings

Opening capital, Cash deposit

Surplus, Opening balance

None of the Above

Solution

Question 10

Added

Deducted

Divided

Ignored

Solution

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