Financial Statements 2 Test 22

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Financial Statements 2 Test 22

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Question 1
1 / -0

Net profit before charging commission to manager - Rs. $$2,20,000$$. The manager is entitled to a commission of $$10\%$$ on net profit after charging such commission. The commission payable to manager will be:

A
Rs. $$21,800$$

B
Rs. $$24,200$$

C
Rs. $$22,000$$

D
Rs. $$20,000$$

Solution
Question 2
1 / -0

Sales include Rs. $$60,000$$ sent to Z & Co. on sale or return basis for which no approval has been received as on $$31-3-2015$$. The cost of the goods was Rs. $$50,000$$. Which of the following treatment will be correct while preparing final accounts?

A
Increase sales & debtors by Rs. $$60,000$$, Decrease closing stock in trading account and balance sheet by Rs. $$50,000$$

B
Increase sales & debtors by Rs. $$60,000$$, Increase closing stock in trading account and balance sheet by Rs. $$50,000$$

C
Reducing sales & debtors by Rs. $$60,000$$, Increase closing stock in trading account and balance sheet by Rs. $$50,000$$

D
Reduce sales & debtors by Rs. $$60,000$$, Reduce closing stock in trading account and balance sheet by Rs. $$50,000$$
Question 3
1 / -0

If the insurance premium paid is Rs. $$1,000$$ and prepaid insurance is Rs. $$300$$, the amount of insurance premium shown in Profit & Loss A/c will be.

A
Rs. $$1,300$$

B
Rs. $$700$$

C
Rs. $$1,000$$

D
Rs. $$300$$

Solution

According to the matching concept, Prepaid insurance is deducted from the insurance premium paid during the year because insurance paid in advance is related to next year (benefits will be received in the next year).
Therefore, Insurance premium to be debited to P&L A/c = Rs. 1000 - 300
= Rs. 700
Therefore, B is the correct answer.
Question 4
1 / -0

In the trial balance the balance of the Provision for Depreciation Account is _______.

A
Shown as a credit item

B
Shown as a debit item

C
Sometimes shown as a credit, sometimes as a debit

D
Not shown, as it is part of depreciation

Solution

All the liabilities and provisions account are always having a credit balance. When the depreciation is provided in the books by creating a depreciation provision account, following entry will be passed:

Depreciation A/c Dr.
To Provision for Depreciation A/c

Provision for depreciation will be shown as credit item in the trial balance.
Question 5
1 / -0

Net profit before charging commission to General & Sales manager - Rs. $$1,65,920$$
The General Manager is entitled to commission of $$10\%$$ on net profit after charging such commission and commission of Sales Manager.
The Sales Manager is entitled to commission of $$5\%$$ on net profit after charging such commission and commission of General Manager.
Commission payable to General Manager- Rs. ___________ & Sales Manager - Rs. __________.

A
$$7,214$$ & $$14,428$$

B
$$14,428$$ & $$7,214$$

C
$$16,592$$ & $$8,296$$

D
$$8,296$$ & $$16,592$$
Question 6
1 / -0

From the following particulars, calculate the amount of income to be credited to profit and loss account for the year ended $$31$$st March $$2012$$.
$$31-3-2011$$ $$31-3-2012$$
Outstanding Income $$1,500$$ $$1,200$$
Income received in advance $$900$$ $$540$$
A sum of Rs. $$14,670$$ was received as income during the year ended $$31$$st March $$2012$$.

A
$$15,930$$

B
$$14,010$$

C
$$15,330$$

D
$$14,730$$
Question 7
1 / -0

Net profit before charging commission to manager - Rs. $$2,20,000$$. The manager is entitled to commission of $$10\%$$ on net profit before charging such commission. The commission payable to manager will be.

A
Rs. $$21,802$$

B
Rs. $$24,200$$

C
Rs. $$22,000$$

D
Rs. $$20,000$$
Question 8
1 / -0

Expenses paid in cash and recorded as assets before they are used are called _____.

A
Accrued Expenses

B
Interim Expenses

C
Prepaid Expenses

D
Unearned Expenses

Solution

Prepaid expenses are future expenses that have been paid in advance. It can also be said to be costs that have been paid but have not yet been used up or have not yet expired. The amount of prepaid expenses that have not yet expired are reported on a company's balance sheet as an asset.
Question 9
1 / -0

A company had a doubtful debt provision of Rs. $$14,000$$ at $$31-12-2014$$. Its trade receivables at $$31-12-2015$$ were Rs. $$1,98,200$$/ The company considers that receivables totalling Rs. $$12,200$$ will not be paid and in addition planned to make a doubtful debts provision for $$10\%$$ of its net receivables at $$31-12-2015$$. What is the charge for bad and doubtful debts in the income statement for the year ended $$31-12-2015$$?

A
$$32,600$$

B
$$12,200$$

C
$$16,800$$

D
$$44,800$$

Solution
Question 10
1 / -0

Which of the following accounts is the odd one?

A
Salary A/c

B
Wages A/c

C
Rent A/c

D
Outstanding expense A/c

Solution

Salary a/c, Wages a/c, and Rent a/c are nominal accounts that represent expenses. On the other hand, Outstanding expense a/c is a representative personal a/c and represents a current liability that is incurred but not yet paid.

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	$$31-3-2011$$	$$31-3-2012$$
Outstanding Income	$$1,500$$	$$1,200$$
Income received in advance	$$900$$	$$540$$

Financial Statements 2 Test 22

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Financial Statements 2 Test 22

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Question 1

Rs. $$21,800$$

Rs. $$24,200$$

Rs. $$22,000$$

Rs. $$20,000$$

Solution

Question 2

Increase sales & debtors by Rs. $$60,000$$, Decrease closing stock in trading account and balance sheet by Rs. $$50,000$$

Increase sales & debtors by Rs. $$60,000$$, Increase closing stock in trading account and balance sheet by Rs. $$50,000$$

Reducing sales & debtors by Rs. $$60,000$$, Increase closing stock in trading account and balance sheet by Rs. $$50,000$$

Reduce sales & debtors by Rs. $$60,000$$, Reduce closing stock in trading account and balance sheet by Rs. $$50,000$$

Question 3

Rs. $$1,300$$

Rs. $$700$$

Rs. $$1,000$$

Rs. $$300$$

Solution

Question 4

Shown as a credit item

Shown as a debit item

Sometimes shown as a credit, sometimes as a debit

Not shown, as it is part of depreciation

Solution

Question 5

$$7,214$$ & $$14,428$$

$$14,428$$ & $$7,214$$

$$16,592$$ & $$8,296$$

$$8,296$$ & $$16,592$$

Question 6

$$15,930$$

$$14,010$$

$$15,330$$

$$14,730$$

Question 7

Rs. $$21,802$$

Rs. $$24,200$$

Rs. $$22,000$$

Rs. $$20,000$$

Question 8

Accrued Expenses

Interim Expenses

Prepaid Expenses

Unearned Expenses

Solution

Question 9

$$32,600$$

$$12,200$$

$$16,800$$

$$44,800$$

Solution

Question 10

Salary A/c

Wages A/c

Rent A/c

Outstanding expense A/c

Solution

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