Financial Statements 1 Test 35

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Financial Statements 1 Test 35

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Weekly Quiz Competition

Question 1
1 / -0

Trading Account is prepared to ascertain _________________.

A
Operating profit

B
Net profit

C
Cost of Goods Manufactured

D
Gross profit

Solution

Trading account is prepared to calculate gross profit or gross loss. Trading account takes into account purchases, sales and all the direct expenses. Hence, gross profit is calculated by deducting cost of goods sold from sales.
Question 2
1 / -0

In books of manufacturing concern, Opening Stock consists of _______.

A
Raw Materials

B
Work in Progress

C
Finished goods

D
All of the above

Solution

Opening stock includes raw material, work in progress and finished goods. Raw material are the products purchased to convert into finished goods. Work in progress are the raw materials which are in the process of getting converted into finished goods. Finished goods is the output that is converted from the raw material. All these are a part of the inventory.
Question 3
1 / -0

The gross profit ratio is the ratio of gross profit to ______________.

A
Capital employed

B
Net credit sales

C
Net cash sales

D
Net total sales
Question 4
1 / -0

A machinery which cost Rs. 2,00,000 is depreciation at 25% per year using the Written Down Value method. At the end of three years, it will have a net book value of ___________.

A
Rs. 1,50,000

B
Rs. 84,375

C
Rs. 1,12,500

D
Rs. 1,12,000

Solution
Question 5
1 / -0

Opening Stock Rs. 1,00,000, Sales Rs. 5,00,000, Gross Profit @ 25% on sales, Purchases Rs. 5,00,000, Closing stock is ___________.

A
Rs. 1,25,000

B
Rs. 2,25,000

C
Rs. 3,00,000

D
Rs. 3,25,000

Solution

Closing stock = (Opening stock + purchases + gross profit) - sales
= (1,00,000 + 5,00,000 + 1,25,000) - 5,00,000
= 2,25,000
Working notes : -
Calculation of gross profit
= 25% of 5,00,000
= 1,25,000
Question 6
1 / -0

General reserve account and dividend equalization fund account are ______________.

A
Personal A/C

B
Real A/C

C
Nominal A/C

D
None

Solution

When the business retain some amount aside from the profits achieved then it is known as the general reserve.
Dividend Equalization Fund is maintained by companies to equalize the dividends on year to year basis. it helps in maintaining the reputation of the business.
Question 7
1 / -0

Opening Stock = Rs.50,000
Purchases = Rs. 1,00,000
Purchase return = Rs. 29,000
Sales = Rs. 2,00,000
Find the Gross Profit.

A
Rs. $$1,21,000$$

B
Rs. $$79,000$$

C
Rs. $$21,000$$

D
None of the above

Solution

Gross profit = Sales - cost of goods sold (Working note 1)
= 2,00,000 - 1,21,000
= 79,000

Working note
1) Calculation of cost of goods sold
   = Opening + purchases - purchase return
   = 50,000 + 1,00,000 - 29,000
   = 1,21,000
Question 8
1 / -0

An asset with a useful life of five years is to be depreciated by the sum of year's digits method. What will be the denominator of the depreciation fraction for the second year?

A
5

B
10

C
12

D
15
Question 9
1 / -0

In which method depreciation is charged according to hours used ________________.

A
Fixed installment method

B
Annuity method

C
Machine hour rate method

D
Sum of years method
Question 10
1 / -0

Opening Stock Rs. 1,00,000, Sales Rs. 5,00,000, Gross profit @ 25% on cost, Purchase Rs. 6,00,000. Closing Stock is ___________.

A
Rs. 1,25,000

B
Rs. 2,25,000

C
Rs. 3,00,000

D
Rs. 3,25,000

Solution

Closing stock = (Opening stock + purchases + gross profit) - sales
= (1,00,000 + 6,00,000 + 1,00,000)- 5,00,000
= 8,20,000 - 5,00,000
= 3,00,000
Working note:- Calculation of gross profit
(Gross profit is 25% of cost because we don't have cost we will calculate it with the help of sales)
If cost is 100 gross profit is 25% of cost then sale will be Gross profit + cost
Hence 100 +25 = 125
therefore,
gross profit = 25/125 x 5,00,000
= 1,00,000

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Financial Statements 1 Test 35

Result

Financial Statements 1 Test 35

Score

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SHARING IS CARING

Question 1

Operating profit

Net profit

Cost of Goods Manufactured

Gross profit

Solution

Question 2

Raw Materials

Work in Progress

Finished goods

All of the above

Solution

Question 3

Capital employed

Net credit sales

Net cash sales

Net total sales

Question 4

Rs. 1,50,000

Rs. 84,375

Rs. 1,12,500

Rs. 1,12,000

Solution

Question 5

Rs. 1,25,000

Rs. 2,25,000

Rs. 3,00,000

Rs. 3,25,000

Solution

Question 6

Personal A/C

Real A/C

Nominal A/C

None

Solution

Question 7

Rs. $$1,21,000$$

Rs. $$79,000$$

Rs. $$21,000$$

None of the above

Solution

Question 8

5

10

12

15

Question 9

Fixed installment method

Annuity method

Machine hour rate method

Sum of years method

Question 10

Rs. 1,25,000

Rs. 2,25,000

Rs. 3,00,000

Rs. 3,25,000

Solution

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