MGT101 Quiz No.4 Shared by Amir Ali

Goods sold to Mr. Naeem for Rs. 5,000 are wrongly recorded in sales journal at Rs. 500 and same amount is posted in Mr. Naeem’s account, this is an example of:
Select correct option:
Compensating errors
Error of Commission
Error of Principle
Error of Original entry

Which of the following is the first book to record a transaction?
Select correct option:
Trial Balance
Journal
Trial Balance
Balance Sheet

Which of the following would NOT be considered as a component of 'cost' of stock?
Select correct option:
Salaries of selling staff
Transportation inward costs
Import duties
Purchase price

Which of the following is (are) characteristic(s) of Bad Debt?
Select correct option:
It is a definite loss to the business
It must be shown in Profit & loss account
No provision is necessary for it
All of the given options


The difference between Management Accounting and Financial Accounting is that:
Select correct option:
Financial accounting is used by managers to plan strategies in the area of company growth
Financial accounting is used by external investors to gain information about the company
Managerial accounting is used by the internal managers to plan for daily business activities
Both 2 and 3

If Current Assets Rs. 100,000, Current Liability Rs. 50,000 and Fixed Assets Rs. 2, 00,000. Calculate working capital.
Select correct option:
Rs. 50,000
Rs. 1, 00,000
Rs. 1, 50,000
Rs. 3, 00,000

Which of the following is NOT a revenue expenditure?
Select correct option:
Petrol consumed in motor vehicles
Cost of saleable goods
Bad debts
Premium given on lease

The Amount changed to deprecation goes on declining in:
Depreciation fixed method
Annuity method
Written-down value method
Straight line depreciation method

If Cost of sales in Rs. 90,000, income from sales Rs. 200,000 and operating expenses Rs.100,000,. What will be net results?
Rs. 5,000 Losses
Rs. 10,000 Profits
Rs. 1,95,000 Profits
Rs. 1,95,000 Losses

The main purpose of ______________ is to as certain true result of the business operation during particular period of time.
Cost Accounting
Financial Accounting
Managerial Accounting
Tax Accounting

The bank loan or the bank charges are called:
Cost of good expenses
Selling expenses
Financial expenses
Administrative expenses

Question # 1 of 20 ( Start time: 01:11:56 PM)
Which of the following item is found in a Journal entry? (1) Date of each transaction (2) Rupee amount of each debit and credit (3) Explanation of each transaction
1 only
1 & 2 only
2 & 3 only
1, 2 & 3

Question # 2 of 20 ( Start time: 01:12:47 PM)
If Purchase price of machine = 400,000 Profit on disposal = Rs. 5,000 Residual value = Rs. 10,000 Useful life of machine = 5 years Find Sale price at the time of disposal =?
Rs. 15,000
Rs. 10,000
Rs. 20,000
Rs. 5,000

Question # 3 of 20 ( Start time: 01:14:10 PM)
Which of the following is the main cause of depreciation?
Fall in the market value of money
Fall in the market value of an asset
Physical wear and tear

Question # 4 of 20 ( Start time: 01:15:19 PM)
The estimated value of an asset after the expiry of its useful life is called as:
Written Down value
Residual Value
Accumulated depreciation
Sales value

Question # 5 of 20 ( Start time: 01:16:13 PM)
In the creditors control account, all of the below exist execept:
credit purchases
purchase returns
cash purchases
cash/cheques paid

Question # 6 of 20 ( Start time: 01:17:13 PM)
Franchise rights, goodwill and patents are the examples of:
Liquid assets
Tangible assets
Intangible assets
Current assets

Question # 7 of 20 ( Start time: 01:17:54 PM)
In which of the following statement opening stock is shown?
Profit and loss account
Balance sheet
Cash flow statement
Owner’s equity

Question # 8 of 20 ( Start time: 01:18:44 PM)
On the receipts side of the cash and bank book, a column is added in which the receipts from debtors are seperately noted, this type of cash/bank book is also called:
single column cash/bank book
cash/bank book
multi column cash/bank book
none of the above


Question # 9 of 20 ( Start time: 01:20:03 PM)
If you start with cash book favorable balance in Bank Reconciliation Statement, which item will be added?
Cheque deposited but not credited by the bank
Cheques omitted to be deposited into bank
Any amount directly collected by bank on behalf of customer but not recorded in cash book
Debit side of cash book was overcast

Question # 10 of 20 ( Start time: 01:21:33 PM)
Which of the following is NOT a characteristic of Cash Book?
It has two identical sides—left hand side, the debit side and right hand side, the credit side
It verifies the arithmetic accuracy of posting of entries from the Journal to the Ledger
The difference between the total of two sides of cash book shows cash in hand
It always shows debit balance. It can never show credit balance

Question # 12 of 20 ( Start time: 01:23:13 PM)
Which of the following is NOT a rule for revaluation of fixed assets?
The change in the value should be permanent
Revaluation has to be carried out at regular intervals
Whole class of asset has to be revalued
The profit on revaluation should be credited to revaluation reserve account

Question # 13 of 20 ( Start time: 01:24:38 PM)
A transaction in which Cash A/c and Bank A/c are involved, is recorded on both the sides of Double Column Cash Book, it is called ______________.
Rectifying Entry
Adjusting Entry
Contra Entry
Closing Entry

Question # 14 of 20 ( Start time: 01:25:57 PM)
What would conversion costs if costs of raw materials, direct labor costs, and manufacturing overhead costs Rs.80,000, Rs.50,000, and Rs.60,000, respectively?
Rs.130, 000
Rs.110, 000
Rs.140, 000
Rs.190, 000

Question # 15 of 20 ( Start time: 01:27:02 PM)
The Sales Returns Day Book would include:
Goods bought on credit
Fixed Assets bought that are inappropriate for business
Stock that customers have returned
Goods bought on credit that are returned to the original supplier

Question # 16 of 20 ( Start time: 01:27:44 PM)
Loss on the sale of plant and machinery should be written off against:
Sales premium account
Depreciation fund account
Sales account
Plant and machinery

Question # 17 of 20 ( Start time: 01:29:07 PM)
In an account if debit side > credit side, the balance is known as the:
Negative Balance
Debit balance
Positive Balance
Credit balance

Question # 18 of 20 ( Start time: 01:29:56 PM)
Any expense that becomes a source of income generation for a long time period is called __________
Capital Expense
Revenue Expense
Revenue Receipt
Capital Receipt

Question # 19 of 20 ( Start time: 01:30:46 PM)
Which one of the following is NOT a feature of sole proprietorship business.
Easy Formation
Easy Dissolution
Unlimited Liability
Separate Legal Entity

Question # 20 of 20 ( Start time: 01:31:35 PM)
Carriage paid Rs. 50 for the newly purchased machinery if debited to carriage account will effect:
Only carriage account
Only machinery account
Both carriage and machinery account
None of the given options