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PREPARATORY COURSE IN COMMERCE

BACHELOR'S PREPARATORY PROGRAMME


(B.P.P.)


Term-End Examination June 2010


PCO-01: PREPARATORY COURSE IN


COMMERCE


 

Time: 2 Hours Maximum                                                                  Marks: 50

Note: All questions are compulsory, each of which carries one mark.

  1. The main function of Financial Accounting is to:



  • Find out Gross Profit only

  • Find out Net Profit only

  • Record all the transactions

  • Record, classify and summarize the business transactions in a significant and systematic manner.



  1. Purchases Book is meant for recording:



  • (1) All types of purchases         (3) Cash purchases

  • (2) credit purchases of goods (4) Both cash and credit purchases



  1. An expenditure on Repairs of machinery was debited to machinery. What type of error is this?


(1) errors of principle                  (2) errors of commission

(3) errors of omission                   (4) compensatory error

  1. Sales returns book is kept to record:



  • returns of goods sold

  • credit sales of goods

  • credit purchase of goods

  • returns of goods purchased


The balance of cash book is:

(1) an asset                                                (2) an expense

(3) an income                                        (4) a liability

  1. 1,000 paid as wages for establishment of a machine should be debited to      (1)machine A/c                                           ( 2) cash Account                                                    (3) establishment A/c                             (4) Wages Account



  1. Trading account shows the:


(1) Net profit only                                  (2) Gross Profit only

(3) Total of expenses only                     (4) Total of income only

  1. Wages outstanding account is:


(1) real account                                      (2) representative personal account

(3) nominal account                               (4) both real and nominal account

  1. Rent paid in advance is treated as:


(1) a loss                                                   (2) a gain

(3) an asset                                               (4) a liability

  1. Credit balance of suspense A/c will be shown in:



  • debit side of trading A/c

  • credit side of trading A/c

  • the asset side of balance sheet

  • the liability side of balance sheet



  1. Main objective of preparing a 'Journal' is:



  • to ascertain the financial position of the business

  • to journalise the cash transactions

  • to make posting in ledger

  • to prepare a primary record of business transactions



  1. Personal accounts are related to:


(1) Assets only                                 (2) Liabilities only

(3) Expenses only                            (4) Debtors, creditors etc.

  1. Real accounts are related to:


(1) Assets                                          (2) Expenses, losses and incomes

(3) Liabilities                                     (4) Gains

  1. Nominal accounts are related to:


(1) Assets                                          (2) Liabilities

(3) Debtors, creditors etc.                 (4) Expenses, losses, incomes and

Gains

  1. Goods gave away as donation would be credited to:


(1) Purchase A/c                                (2) Sales A/c

(3) Cash A/ c                                     (4) Donation A/c

  1. What will be the amount of capital if cash is Rs 5,000; furniture


12,000 ; stock, 30,000 and creditors Rs. 5,000 ?

(1) Rs. 42000                                    (2) Rs. 41000

(3) Rs. 52000                                     (4) Rs. 47000

  1. 4,000 received from Y whose account was written off as bad debts should be credited to:


(1) Y's A/c                                         (2) Cash A/c

(3) Bad-debts A/c                                        (4) Bad debts recovered A/c

  1. Which of the following is not a current asset?


(1) Prepaid expense                          (2) Cash at bank

(3) Closing stock                               (4) Goodwill

  1. Pass Book is a copy of:



  • Customer's A/c in the bank's books

  • Cash Book relating to bank column

  • Cash Book relating to cash column

  • Firm's receipts and payments



  1. Bank reconciliation statement can be prepared with the balance of which of the following book (s) as a starting point?



  • Cash Book only

  • Pass Book only

  • Either Cash Book or Pass Book

  • Neither Cash Book nor Pass Book



  1. Unfavorable bank balance refers to:



  • Credit balance of the Cash Book

  • Credit balance of the Pass Book

  • Debit balance of the Cash Book

  • Favorable balance of the Cash Book



  1. Bank Reconciliation statement is prepared by:


(1) Auditor of the bank                               (2) Creditors

(3) Bank                                                           (4) Customers of the bank

  1. Sale of typewriter that has been used in office should be credited to:


(1) Sales A/c                                               (2) Cash A/c

(3) Capital A/c                                            (4) Typewriter A/c

  1. Rent paid to Landlord Rs. 500 was credited to Rent A/c with Rs. 5,000.


In the rectifying entry, Rent A/c will be debited with:

(1) Rs. 5000                                                (2) Rs. 500

(3) Rs. 5500                                                (4) Rs. 4500

  1. Purchased Goods from Y for Rs. 3,600 but it was credited to Y as Rs. 6300. In rectifying entry Y A/c will be debited with:


(1) Rs. 9900                                                (2) Rs. 2700

(3) Rs. 3600                                                (4) Rs. 6300

  1. Goods returned by Z for Rs. 4,200 was debited to Z as Rs. 2,400. In rectifying entry Z's A/c will be credited with:


(1) Rs. 1800                                                (2) Rs. 2400

(3) Rs. 4200                                                (4) Rs. 6600

  1. Goods sold to Ram for Rs. 640 was debited to in his A/c as Rs. 460. In the rectifying entry Ram's A/c will be debited with :


(1) Rs. 180                                                 (2) Rs. 460

(3) Rs. 640                                                  (4) Rs. 1100 28.

  1. All the direct expenses are shown in :



  • Profit and loss A/c

  • Trading A/c

  • Profit and loss appropriation A/c

  • Balance sheet



  1. Building is a :


(1) Current Asset                                        (2) Tangible Fixed Asset

(3) Intangible Asset                                    (4) Liability

  1. Bank overdraft is a :


(1) Current liability                                     (2) Long-term liability

(3) Current asset                                         (4) Fixed asset

  1. Sales Returns Journal is also called :


(1) Day Book                                              (2) Primary Book

(3) Invoice Book                                         (4) Returns Inwards Journal

  1. Profit and loss A/c is prepared to find out :


(1) Gross Profit                                          (2) Capital

(3) Cost of Goods sold                               (4) Net profit/Net loss

  1. Trade marks are treated as a :


(1) Current asset                                         (2) Fictitious asset

(3) Tangible asset                                                 (4) Intangible asset

  1. Preliminary expenses are shown in balance sheet as a :


(1) Fixed asset                                                        (3) Intangible asset

(2) Tangible asset                                                 (4) Fictitious asset

  1. Posting will be done in the :


(1) Trial Balance                                         (2) Ledger

(3) Journal                                                  (4) Trading A/c

  1. Depreciation on building will be charged to :


(1) Trading A/c                                           (2) Profit and loss A/c

(3) Manufacturing A/c                                (4) Profit and loss appropriation

A/c

  1. Balance sheet is a statement containing the assets and liabilities of a business:


(1) On a particular date                              (2) On a particular period

(3) Both (1) and (2)                                    (4) None of the above

  1. Revenue is said to be realized when :


(1) The sale is made                                    (2) Goods is manufactured

(3) Cash is received                                    (4) Both (1) and (2)

  1. Underwriting commission is an example of :


(1) Capital expenditure                               (2) Capital loss

(3) Revenue expenditure                                      (4) Deferred revenue  exp

  1. Sales is equal to :



  • Cost of goods sold + gross profit

  • Cost of goods sold - gross profit

  • Gross profit - cost of goods sold

  • Gross profit + closing stock



  1. Which of the following account is prepared to find out the cost of production ?


(1) Manufacturing A/c                                (2) Trading A/c

(3) Profit and loss A/c                                (4) Profit and loss appropriation A/c

  1. Which of the following transactions shall not be recorded in the books of a business unit ?



  • The manager appointed Ganesh as an assistant

  • Purchased a machine for the factory.

  • The proprietor took away same goods from his shop

  • Paid wages to factory workers.



  1. If the profit is 1/3rd of cost price, then it is :


(1) Y4 the sale price                                   (2) Y3 the sale price

(3) Y2 of the sale price                               (4) Y5 the sale price

  1. Interest on drawings is regarded as :



  • Expenditure of the business

  • Gain for the business

  • Profit for the business

  • Capital for the business



  1. A firm pays its manager a commission @ 10% of profits arrived at after charging such commission. What will be the commission if the profits before charging such commission were Rs. 22,000 ?


(1) Rs. 2,000        (2) Rs. 2,200        (3) Rs. 2,445       (4) Rs. 1,100

PCO-01                                                 7                                           P.T.O

  1. Which of the following is deducted out of the current assets to arrive at the amount of liquid assets ?


(1) Stock                                                     (2) Debtors

(3) B/R                                                        (4) Cash

  1. Rent and taxes are shown on the :



  • Debit side of trading A/c

  • Credit side of trading A/c

  • Debit side of profit and loss A/c

  • Credit side of profit and loss A/c



  1. Accrued income shown in Trial Balance will be shown in :


(1) Trading A/c                                           (2) Manufacturing A/c

(3) Profit and Loss A/c                               (4) Balance Sheet

  1. Under which concept the firm should be considered as a continuing unit and not as one closing down :


(1) Legal aspect concept                                       (2) Matching concept

(3) Going concern concept                          (4) Materiality concept

  1. Capital on Ist January, 2008 was Rs. 50,000 on October 1, 2008 proprietor introduced further capital of Rs. 10,000. The interest at 5% is to be allowed on capital. The interest on capital for the year 2008 will be :


(1) Rs. 2625                                                (2) Rs. 2750

(3) Rs. 2500                                                (4) Rs. 3000
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