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Financial Statements Test - 7

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Financial Statements Test - 7
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Weekly Quiz Competition
  • Question 1
    1 / -0

    A firm spent a huge amount of Rs.200000 on advertisement to introduce a new product in the market and it is estimated that its benefit will last for 4 years. How much will be charged to Profit and Loss A/c each year for 4 consecutive years?

    Solution

    the amount of advertisement will be distributed equally for four years = 50,000

  • Question 2
    1 / -0

    Manish has paid salaries of Rs.150000 for the year ended 31st March, 2012. The salaries include a sum of Rs.20000 paid in advance for the year ended 31st March 2013. Show how it would appear in the profit and loss account

    Solution

    salaries - prepaid salaries

    = 150000 - 20000

    = 130000

  • Question 3
    1 / -0

    Manish has paid salaries of Rs.150000 for the year ended 31st March,2012. The salaries include a sum of Rs.20000 paid in advance for the year ended 31st March 2013. Show how it would appear in the balance sheet

    Solution

    prepaid salaries are current asset so asset side of balance sheet.

  • Question 4
    1 / -0

    Freight outward will be shown in the :

    Solution

    it is indirect expense so it is shown in profit and loss account.

  • Question 5
    1 / -0

    Trading Account is prepared to find out :

    Solution

    it helps in calculating profit from sale and purchase goods known as gross profit or gross loss

  • Question 6
    1 / -0

    Taken interest on 1st October amounting Rs. 100000(10% interest) and interest paid till 31st March was 4000.Calclute interest outstanding on 31st March

    Solution

    1 for the whole year interest will be 5000

    so outstanding is 1000

  • Question 7
    1 / -0

    Income Tax, if given in the Trial Balance is recorded in :

    Solution

    In balance sheet subtracted from capital as it is drawings.

  • Question 8
    1 / -0

    Sales less cost of goods sold is known as:

    Solution

    gross profit = sales - cost of goods sold

  • Question 9
    1 / -0

    Stock on 31st March was valued at Rs.25000 whereas its reliable value was Rs.32000. At what price will the closing stock shown in the final accounts?

    Solution

    closing stock is shown at a price lower of actual value and market price

  • Question 10
    1 / -0

    Trade Expenses are shown in :

    Solution

    trade expenses are indirect expense of business. so they are shown in profit and loss profit.

  • Question 11
    1 / -0

    Discount Received will be shown in :

    Solution

    since it is profit so it is shown on the credit side of profit and loss account.

  • Question 12
    1 / -0

    Life Insurance Premium is :

    Solution

    it is treated as personal expense of the owner.

  • Question 13
    1 / -0

    Arrangement of Assets and Liabilities in the Balance sheet is known as :

    Solution

    arrangement is called marshalling. it can be done by two methods - on the basis of liquidity and on the basis of permanence.

  • Question 14
    1 / -0

    Prepaid insurance given in the trial balance will be shown in:

    Solution

    it is treated as current asset

  • Question 15
    1 / -0

    Adjustment entries are passed through :

    Solution

    all the adjustment entries are passed in journal proper i.e simple journal

  • Question 16
    1 / -0

    What should be journal entry of commission earned but not received Rs. 2000

    Solution

    accrued commission is asset so it is debited and commission is income so it is credited.

  • Question 17
    1 / -0

    A manager is entitled to a commission of 10% on net profit before charging such commission. Net profit before charging net commission is Rs.100000. Find out the commission payable to the manager

    Solution

    manager commission = 10% of profits ie 10,000

  • Question 18
    1 / -0

    Calculate closing stock from the information given below Opening stock: Rs.36000, Net purchases: Rs.45000, Wages: Rs.7000, Sale: Rs.60000, Gross Loss: Rs.5000, Freight inward: Rs.6000

    Solution

    cost of goods of sold = 36000+ 45000 + 7000 + 6000 - x

    = 94000 - x

    gross loss = cost - sales

    5000 = 94000 - x- 60000

    5000 = 34000 -x

    x  = 29000

  • Question 19
    1 / -0

    Value of Closing Stock is shown at :

    Solution

    closing stock is valued at cost or market price whichever is less.

  • Question 20
    1 / -0

    If Opening Stock is 30,000 Net Purchases 2,00,000 and Closing Stock 10,000, Cost of goods sold will be :

    Solution

    cost of goods sold = opening stock + purchases - closing stock

    = 30000 + 200000 - 10000

    = 2,20000

  • Question 21
    1 / -0

    Calculate gross profit – Net sales Rs. 500000 and gross profit is 25% on cost

    Solution

    gross profit will be one fifth of sales = 1,00,000

  • Question 22
    1 / -0

    General Manager is to get Commission @ 10% on Net Profit after charging such commission. If profits before commission is 22,000 , amount of commission will be :

    Solution

    manager commission = 10/110 of 22000 because it is after charging

  • Question 23
    1 / -0

    Calculate operating profit from the information given here. Net profit: Rs.100000, Gain on sale of machine: Rs.15000, Donation: Rs.2000, Rent received: Rs.10000, Interest on loan: Rs.20000

    Solution

    net profit+donation+interest on loan-gain on sale of machine-rent received

    100000 + 2000 + 20000 - 15000 - 10000

    122000 - 25000

    = 97000

  • Question 24
    1 / -0

    An adjustment related to expense is recorded in Final Accounts :

    Solution

    it is recorded at two places i.e either trading or profit and loss accountand balance sheet.

  • Question 25
    1 / -0

    Closing Stock given in the Trial Balance is shown in :

    Solution

    since it is in trial balance it is already adjusted in purchases so it shown only in balance sheet and not in trading account.

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