Financial Statements 2 Test 25

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Financial Statements 2 Test 25

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Weekly Quiz Competition

Question 1
1 / -0

Bad debts Rs. $$3,000$$
Provision for bad debts Rs. $$3,500$$
It is desired to make a provision of Rs. $$4,000$$ at the end of the year. The amount debited to P & L A/c is?

A
Rs. $$4,000$$

B
Rs. $$5,000$$

C
Rs. $$6,000$$

D
Rs. $$3,500$$
Question 2
1 / -0

Where a partner is entitled to interest on capital subscribed by him, such interest will be payable ___________.

A
only out of profit

B
only out of capital

C
out of profits or out of capital

D
none of these

Solution

Where a partner is entitled to interest on capital subscribed by him, such interest will be payable only out of profit. Interest on capital is an appropriation and hence will be provided only out of profits.
Question 3
1 / -0

Insurance claim for loss-in-transit received by consignor is _________________.

A
Credited to Bank Account

B
Debited to Insurance Co.

C
Credited to Abnormal Loss Account

D
Debited to Consignment Account

Solution

A loss by theft or losses by fire, flood, earthquake, war, accidents, in transit, etc. are abnormal losses. These losses are avoidable and not inherent in nature. These losses reduce the value of closing stock as well as profit.
After finding out the value, credit the Consignment A/c and debit the Abnormal Loss A/c.
Question 4
1 / -0

Outstanding expenses refer to those expenses which have been _____________________.

A
Paid out not incurred during the current accounting period.

B
Incurred but not paid during the current accounting period.

C
Incurred but not paid during current accounting period.

D
Paid but not incurred during the previous accounting period.
Question 5
1 / -0

B's Trial Balance contains the following information: Bad debts, Rs. 1,000 Provision for Doubtful debts Rs. 1,500. It is desired to make a Provision for Doubtful Debts of Rs. 2,000 at the end of the year. The amount to be debited to the Profit & Loss Account is:

A
Rs. 4,500

B
Rs. 5,000

C
Rs. 1,500

D
Rs. 3,500

E
Rs. 500

Solution
Question 6
1 / -0

C's Trial Balance provides you the following information: Bad debts Rs. 800, Provision for Doubtful Debts Rs. 2,000. It is desired to maintain a Provision for Doubtful debts of Rs. 1,000. The accounting treatment of these adjustment is ___________________.

A
Rs. 1,800 to be debited to the Profit & Loss Account

B
Rs. 200 to be debited to the Profit & Loss Account

C
Rs. 200 to be credited to the Profit & Loss Account

D
Rs. 4,200 to be credited to the Profit & Loss Account

Solution
Question 7
1 / -0

If adjusting entries are not passed __________________.

A
Trial Balance will be not be tallied

B
Balance Sheet will not be tallied

C
Both trial balance & Balance Sheet will be tallied

D
None of these

Solution

Adjusting entries are the entries which are passed at the year end. The balance sheet as well as the trial balance will tally but the financial statements will not show a correct picture of the financial position of the company.
Question 8
1 / -0

When the interest on capital is allowed to partners, interest on capital account is debited and partner's capital account is credited. It is called _____________.

A
an opening entry

B
a closing entry

C
an adjusting entry

D
a transfer entry

Solution

When the interest on capital is allowed to partners, interest on capital account is debited and partner's capital account is credited. It is called as an adjusting entry. Adjusting entries are usually done at the end of the year for incomes and expenses.
Question 9
1 / -0

When the interest on drawings is charged to partners, interest on drawing account is credited, and partner's capital account is debited. It is called __________.

A
an opening entry

B
a closing entry

C
an adjusting entry

D
an transfer entry

Solution

When the interest on drawings is charged to partners, interest on drawing account is credited, and partner's capital account is debited. It is called as an adjusting entry. Adjusting entries are usually done at the end of the year for incomes and expenses.
Question 10
1 / -0

Net profit before the flowing adjustments $$=$$ Rs. $$1,80,000$$
Outstanding salary $$=$$Rs. $$10,000$$
Prepaid insurance $$=$$ Rs. $$13,000$$
Calculate profit after adjustments.

A
Rs. $$1,77,000$$

B
Rs. $$183,000$$

C
Rs. $$2,03,000$$

D
None of the above

Solution

Net profit before adjustments 1,80,000
less:- outstanding salary    (10,000)
Add:- Prepaid insurance 13,000
   ------------------
Net profit after adjustment    1,83,000

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Financial Statements 2 Test 25

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Financial Statements 2 Test 25

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Question 1

Rs. $$4,000$$

Rs. $$5,000$$

Rs. $$6,000$$

Rs. $$3,500$$

Question 2

only out of profit

only out of capital

out of profits or out of capital

none of these

Solution

Question 3

Credited to Bank Account

Debited to Insurance Co.

Credited to Abnormal Loss Account

Debited to Consignment Account

Solution

Question 4

Paid out not incurred during the current accounting period.

Incurred but not paid during the current accounting period.

Incurred but not paid during current accounting period.

Paid but not incurred during the previous accounting period.

Question 5

Rs. 4,500

Rs. 5,000

Rs. 1,500

Rs. 3,500

Rs. 500

Solution

Question 6

Rs. 1,800 to be debited to the Profit & Loss Account

Rs. 200 to be debited to the Profit & Loss Account

Rs. 200 to be credited to the Profit & Loss Account

Rs. 4,200 to be credited to the Profit & Loss Account

Solution

Question 7

Trial Balance will be not be tallied

Balance Sheet will not be tallied

Both trial balance & Balance Sheet will be tallied

None of these

Solution

Question 8

an opening entry

a closing entry

an adjusting entry

a transfer entry

Solution

Question 9

an opening entry

a closing entry

an adjusting entry

an transfer entry

Solution

Question 10

Rs. $$1,77,000$$

Rs. $$183,000$$

Rs. $$2,03,000$$

None of the above

Solution

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