Financial Statements 1 Test 8

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Financial Statements 1 Test 8

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Weekly Quiz Competition

Question 1
1 / -0

Net income equals _________________.

A
Assets-liabilities

B
Revenue-expenses

C
Cash-in-cash out

D
Liabilities-assets

Solution

Profit & Loss account of the firm having two sides. On the one side all the expenses are listed and on other side all revenues are listed down. The difference of revenue minus expenses is called as net income.
Question 2
1 / -0

XYZ Associates is not maintaining full-fledged accounts on Double entry system basis. From the following details estimates the capital of the firm as on $$31-3-2014$$.
Capital as on $$1-04-2013$$ Rs. $$80,000$$
Capital added during the year Rs. $$20,000$$
Drawing during the year Rs. $$35,000$$
Profit credit to the capital A/c Rs. $$60,000$$

A
Rs. $$1,50,000$$

B
Rs. $$1,25,000$$

C
Rs. $$1,75,000$$

D
Rs. $$1,45,000$$

Solution

Beg. capital = Rs. 80,000; Added capital = Rs. 20,000; Drawing = Rs. 35,000; Profit = Rs. 60,000; Ending Capital = ?
Ending capital = Profit + Beg. capital + Added capital - Drawing
Ending capital = Rs. 60,000 + Rs. 80,000 + Rs. 20,000 - Rs. 35,000
Ending capital = Rs. 1,25,000
Question 3
1 / -0

______ is (are) an example of operating expenses.

A
General administration expenses

B
Selling and marketing expenses

C
Financial charges

D
All the three

Solution

Operating expenses are those expenditure that a business incurs to engage in any activities not directly associated with the production of goods or services These expenditure are the same as selling, general and administration expenses.
Question 4
1 / -0

________ is the most important phase of accounting cycle.

A
Bank Reconciliation Statement

B
Preparing financial statement

C
Trial balance

D
Ledger Posting

Solution

There are eight steps in accounting cycle they are: Journal entries, Posting, trial balance, worksheet, adjusting journal entries, financial statements, and closing of the books. Preparing financial statement is the most important phase of accounting cycle.
Question 5
1 / -0

Select the most appropriate alternative from those given below:
An amount which is irrecoverable is called ________ .

A
Bad debts

B
R.D.D

C
good debts

D
doubtful debts

Solution

During the business operations, goods are sold on credit basis also. These are called sundry debtors and part of current assets.
There are few people , who in turn some time not pay the amount or party paid. Hence some amount is kept as unrecoverable which is called bad debts.
Question 6
1 / -0

Expenses that are incurred to operate the business smoothly and efficiently are known as ________.

A
Operating Expenses

B
Manufacturing Expenses

C
Trading Expenses

D
Financial Expenses

Solution

An operating expenses incurred in carrying out an organisation's day-to-day activities, but not directly associated with production. These expenses incurred to operate business smoothly and efficiently. Operating expenses include such things as payroll, sales commissions, etc.
Question 7
1 / -0

Major repair on a second hand plant purchased is debited to _________.

A
Repairs and Maintenance A/c

B
Purchase A/c

C
Plant A/c

D
Miscellaneous Expenses A/c

Solution

Normal repairs and maintenance of plant is a revenue expenditure and to be debited to the repairs and maintenance account.

Any major repair on a second hand plant purchase is considered as capital expenditure as it is incurred to increase the productivity of the plant. Hence this has to be debited to Plant Account.
Question 8
1 / -0

Which of these is not included in the term "factory building"?

A
Offices

B
Godowns

C
Officers and employees quarters

D
All of the above
Solution
Factory Building includes only building where the plant & machineries are installed. Factory building consist of building where the production activities are carried out.
Below are not part of factory building:
Offices
Godowns
Officers and employees quarters.
Question 9
1 / -0

Inventory that is ready for sale is called_________.

A
raw materials

B
work in process

C
finished goods

D
store supplies

Solution

Inventory may be classified as:

Inventory of Raw Material
Inventory of Finished Goods
Work In Progress

Raw material is converted in to finished goods by spending conversion cost.

Finished goods is that inventory which is ready for sale.
Question 10
1 / -0

Find the cost of goods sold from the following details:
Purchases Rs. 20,000
Closing stock Rs. 5,000.

A
$$Rs. 15,000$$

B
$$Rs. 25,000$$

C
$$Rs. 20,000$$

D
$$Rs. 22,500$$

Solution

Purchases = Cost of goods + Closing stock
$$Rs. 20,000$$ = Cost of goods sold + $$Rs. 5,000$$
Cost of goods sold= $$Rs. 20,000$$ - $$Rs. 5,000$$
Cost of goods sold = $$Rs. 15,000$$

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Re-Attempt Weekly Quiz Competition

Financial Statements 1 Test 8

Result

Financial Statements 1 Test 8

Score

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Rank

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SHARING IS CARING

Question 1

Assets-liabilities

Revenue-expenses

Cash-in-cash out

Liabilities-assets

Solution

Question 2

Rs. $$1,50,000$$

Rs. $$1,25,000$$

Rs. $$1,75,000$$

Rs. $$1,45,000$$

Solution

Question 3

General administration expenses

Selling and marketing expenses

Financial charges

All the three

Solution

Question 4

Bank Reconciliation Statement

Preparing financial statement

Trial balance

Ledger Posting

Solution

Question 5

Bad debts

R.D.D

good debts

doubtful debts

Solution

Question 6

Operating Expenses

Manufacturing Expenses

Trading Expenses

Financial Expenses

Solution

Question 7

Repairs and Maintenance A/c

Purchase A/c

Plant A/c

Miscellaneous Expenses A/c

Solution

Question 8

Offices

Godowns

Officers and employees quarters

All of the above

Solution

Question 9

raw materials

work in process

finished goods

store supplies

Solution

Question 10

$$Rs. 15,000$$

$$Rs. 25,000$$

$$Rs. 20,000$$

$$Rs. 22,500$$

Solution

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