Financial Statements 1 Test 30

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Financial Statements 1 Test 30

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Weekly Quiz Competition

Question 1
1 / -0

Which one of the following is correct ____________________.

A
The term 'Purchases' include the purchases of fixed assets for cash as well as on credit.

B
The term 'Sales' include the sales of fixed assets for cash as well as on credit.

C
The term 'Opening stock' means the goods lying unsold at the end of previous accounting period

D
The term 'Closing Stock' means the goods lying unsold at the beginning of current accounting period.

Solution

Opening stock is the stock as on the first accounting day of the business which is carried forward from the previous accounting year, available for sale in the new accounting year.
It represents as a part of 'Current Assets' of the business and is shown on Assets side.
Question 2
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Raw-material consumed is equal to __________________.

A
Opening Stock of Raw-Materials - Closing stock of Raw-materials - Direct Expenses + Purchases

B
Direct Expenses - Closing Stock + Purchases + Opening Stock

C
Purchases + Closing Stock + Direct expenses - Opening Stock

D
None of these
Solution
The calculation of the cost of goods sold for a manufacturing company is:
Beginning Inventory of Finished Goods.
Add: Cost of Goods Manufactured.
Equals: Finished Goods Available for Sale.
Subtract: Ending Inventory of Finished Goods.
Equals: Cost of Goods Sold.
Question 3
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Which of the following does not appear in the Manufacturing account ____________________.

A
Depreciation on Plants machinery

B
Depreciation on Factory Land & Building

C
Salary of works manager

D
Closing Capital work-in-progress
Question 4
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Which of the following expenses is not considered as part of cost of consignment stock?

A
Packing, loading, & insurance paid by consignor.

B
Inward consignment freight paid by consignee.

C
Transport charges upto godown paid by consignee.

D
Insurance charges paid by consignee.

Solution

All expenses incurred on the stock till it is placed ready for sale would form direct expenses and will be included in the value of such stock.
1. All expenses incurred by the consignor are direct expenses as they are incurred before the goods reach to the consignee.

2. Expenses incurred by the consignee in relation to consigned stock, before it reaches godown, like cost of transportation, octroi duties, insurance in transit, unloading charges etc., are direct expenses and included in the value of the stock.

3. Any other expenditure by consignee would be indirect expenditure, for example, insurance charges paid after the goods have reached godown.
Question 5
1 / -0

Under statement of Closing Stock of Raw-materials in the period will ___________________.

A
Understate cost of goods manufactured in that period.

B
Overstate current assets

C
Overstate gross profit from sales in that period

D
Understate net profit in that period.
Question 6
1 / -0

Opening Stock of Raw-Materials Rs. 1,00,000. Closing stock of Materials Rs. 2,00,000, Purchases Rs. 3,00,000, Carriage Inward Rs. 10,000, Freight outward Rs. 5,000. Purchase Returns Rs. 20,000, the cost of raw-materials consumed is ____________.

A
Rs. 1,95,000

B
Rs. 1,90,000

C
Rs. 2,10,000

D
None of these
Question 7
1 / -0

Cost of Raw-Materials consumed Rs. 1,00,000, Closing Stock of Raw-materials Rs. 30,000, Opening Work-in-progress Rs. 60,000, Closing Work-in progress Rs. 15,000, Manufacturing overheads Rs. 8,000, Sales of scrap Rs. 3,000, Selling Overheads Rs. 10,000. The cost of manufactured goods is ____________.

A
Rs. 1,50,000

B
Rs. 1,60,000

C
Rs. 1,53,000

D
None of these
Question 8
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The manufacturing Account is closed by transferring its balance to the ________________.

A
debit side of capital account

B
debit side of profit & Loss account

C
debit side of Trading account

D
credit side of capital account

Solution

A manufacturer purchases raw materials and sells it after converting it into finished product. He has to incur many expenses in this process. For the purpose of finding the cost of manufacture, he prepares manufacturing account. Opening and closing stocks in the case of manufacturing concern may be of three types namely, raw material, work-in-progress and finished goods. It is closed by transferring its balance to the debit side of trading account.
Therefore, C is the correct option.
Question 9
1 / -0

Closing stock of work-in-progress Rs. 30,000, Cost of manufactured goods Rs. 1,00,000, Opening stock of Finished Goods Rs. 20,000, Closing Stock of Finished Goods Rs. 25,000. The manufacturing Cost of Finished Goods sold is ______________.

A
Rs. 95,000

B
Rs. 1,05,000

C
Rs. 65,000

D
None of these
Question 10
1 / -0

Under-statement of Closing Work in progress in the period will _________________.

A
Understate Cost of Goods manufactured in that period.

B
Overstate Current Assets

C
Overstate Gross Profit from sales in that period

D
Understate Net Profit in that period.

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Financial Statements 1 Test 30

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Financial Statements 1 Test 30

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SHARING IS CARING

Question 1

The term 'Purchases' include the purchases of fixed assets for cash as well as on credit.

The term 'Sales' include the sales of fixed assets for cash as well as on credit.

The term 'Opening stock' means the goods lying unsold at the end of previous accounting period

The term 'Closing Stock' means the goods lying unsold at the beginning of current accounting period.

Solution

Question 2

Opening Stock of Raw-Materials - Closing stock of Raw-materials - Direct Expenses + Purchases

Direct Expenses - Closing Stock + Purchases + Opening Stock

Purchases + Closing Stock + Direct expenses - Opening Stock

None of these

Solution

Question 3

Depreciation on Plants machinery

Depreciation on Factory Land & Building

Salary of works manager

Closing Capital work-in-progress

Question 4

Packing, loading, & insurance paid by consignor.

Inward consignment freight paid by consignee.

Transport charges upto godown paid by consignee.

Insurance charges paid by consignee.

Solution

Question 5

Understate cost of goods manufactured in that period.

Overstate current assets

Overstate gross profit from sales in that period

Understate net profit in that period.

Question 6

Rs. 1,95,000

Rs. 1,90,000

Rs. 2,10,000

None of these

Question 7

Rs. 1,50,000

Rs. 1,60,000

Rs. 1,53,000

None of these

Question 8

debit side of capital account

debit side of profit & Loss account

debit side of Trading account

credit side of capital account

Solution

Question 9

Rs. 95,000

Rs. 1,05,000

Rs. 65,000

None of these

Question 10

Understate Cost of Goods manufactured in that period.

Overstate Current Assets

Overstate Gross Profit from sales in that period

Understate Net Profit in that period.

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