accounts from incomplete records Test

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accounts from incomplete records Test - 16

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Weekly Quiz Competition

Question 1
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 2
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 3
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 4
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.
Question 5
1 / -0

Under the net worth method, the basis for ascertaining profit or loss is the difference between _______________.

A
Gross assets on two dates

B
Net assets on two dates

C
Capital on two dates

D
Liabilities on two dates

Solution

Profit or loss earned by the business under single entry system is based on the difference between its Opening and closing capital.
Opening Capital is the capital on 1st Day of financial year
Closing Capital is the capital on last Day of financial year
if Closing capital is More it indicates Profit and vice-versa
hence to ascertain Profit or loss under this method difference if two dates are taken.
Question 6
1 / -0

If opening capital is Rs. 40000, closing capital is Rs. 90000, withdrawal is Rs. 5000 and additional capital brought in is Rs. 10000, profit is Rs. ____________.

A
45000

B
55000

C
35000

D
50000

Solution

Profit/loss = Closing capital + drawings & interest on drawings - opening capital - additional capital & interest on capital.
Question 7
1 / -0

The single entry system is defective because,
I. Only one account is maintained.
II. The trial balance cannot be prepared.
III. The net profit cannot be accurately calculated.
IV. The possibility of fraud and misappropriation is great.
Select the correct answer from the following.

A
I, III and IV

B
I and II

C
II, III and IV

D
I only

Solution

Double entry system is a scientific system of accounting. For every debit there will be credit. By following this method profits are calculated on accurate basis with minimal possibility of fraud.
Single entry system is defective because trial balance can not be prepared, net profit can not be calculated accurately and there is a possibility of fraud.
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

If the opening capital is Rs.80000, closing capital is Rs.180000, withdrawals are Rs.10000 and additional capital brought in is Rs.20000 the profit will be Rs.________________.

A
90000

B
110000

C
70000

D
150000

Solution

Profit/loss = Closing capital + Drawings - (opening capital + additional capital)

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Re-Attempt Weekly Quiz Competition

accounts from incomplete records Test - 16

Result

accounts from incomplete records Test - 16

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SHARING IS CARING

Question 1

closing statement of affairs

cash account

statement of profit or loss

opening statement of affairs

Solution

Question 2

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 3

$$Rs.90,000$$

$$Rs.1,10,000$$

$$Rs.70,000$$

$$Rs.1,50,000$$

Solution

Question 4

Added

Deducted

Divided

Ignored

Solution

Question 5

Gross assets on two dates

Net assets on two dates

Capital on two dates

Liabilities on two dates

Solution

Question 6

45000

55000

35000

50000

Solution

Question 7

I, III and IV

I and II

II, III and IV

I only

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

90000

110000

70000

150000

Solution

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