MGT101- Financial Accounting (Session - 6) Midterm Spring 2009 Solved....
Salman Majeed
MIDTERM EXAMINATION
Spring 2009
MGT101- Financial Accounting (Session - 6)
Ref No:
Time: 60 min
Marks: 50
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OPKST |
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ExamDate: |
4/29/2009 12:00:00 AM |
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Question No: 1 ( Marks: 1 ) - Please choose one
Net Profit + Expenses= _________
► Liabilities
► Assets
► Capital
► Income
Question No: 2 ( Marks: 1 ) - Please choose one
Which of the following fixed asset is shown at cost rather than book value?
► Machinery
► Furniture
► Vehicles
► Land
Question No: 3 ( Marks: 1 ) - Please choose one
Firms charge depreciation each year:
► To ensure there is enough money in the firm to replace the asset
► To spread the cost of the asset over its working life
► To reduce the profit and thus reduce the dividends they can pay to share holders
► Because the law states they must be reduced
Question No: 4 ( Marks: 1 ) - Please choose one
Depreciation arises because of:
► Fall in the market value of an asset
► Fall in the value of money
► Physical wear and tear
► All of the given options
Question No: 5 ( Marks: 1 ) - Please choose one
The basic purpose of depreciation is to achieve the:
► Matching principle
► Dual aspect principle
► Separate entity concept
► Money measurement concept
Question No: 6 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:
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Total Assets |
Rs. 34,500 |
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Accounts payable |
Rs. 1, 000 |
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Other liabilities |
Rs. 11,500 |
► Rs. 22,000 owner’s equity
► Rs. 23, 000 owner’s equity
► Rs. 24,000 owner’s equity
► Rs. 46,000 owner’s equity
Question No: 7 ( Marks: 1 ) - Please choose one
If a business pays rent in advance for 12 months, it will be treated as:
► Prepaid expenses of business
► Long term liability of business
► Fixed assets of business
► Current liability of business
Question No: 8 ( Marks: 1 ) - Please choose one
While adjusting the cash balance of cash book, which of the following is NOT taken into account.
► Mistakes in the cash book
► Mistakes in the pass book
► Interest credited in the pass book but not entered in cash book
► Interest debited in the pass book but not entered in cash book
Question No: 9 ( Marks: 1 ) - Please choose one
If you start with cash book balance (Dr.), which of the following item will be deducted in Bank Reconciliation Statement?
► Any cheque drawn to creditor but not paid by bank
► Interest credited by the bank in pass book
► Cheque deposited but not credited by the bank
► Dividend collected by bank on behalf of the customer
Question No: 10 ( Marks: 1 ) - Please choose one
The main goal of Bank Reconciliation Statement is to determine:
► If the discrepancy is due to error rather than timing
► If the discrepancy is due to timing rather than error
► If the discrepancy is due to error rather than amount
► If the discrepancy is due to amount rather than timing
Question No: 11 ( Marks: 1 ) - Please choose one
Which one of the following is NOT true about Capital Expenditure?
► Creates future benefits
► Incurred to acquire fixed assets
► Incurred to increase the economic life of existing fixed assets
► Reduce the profit of the concern
Question No: 12 ( Marks: 1 ) - Please choose one
Consider the following:
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Beginning inventory |
10 units @ Rs. 10 per unit |
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First purchase |
35 units @ Rs. 11 per unit |
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Second purchase |
40 units @ Rs. 12 per unit |
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Third purchase |
20 units @ Rs. 13 per unit |
Eighty-five units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?
► Rs.260
► Rs.232
► Rs.284
► Rs.268
Question No: 13 ( Marks: 1 ) - Please choose one
Consider the following inventory record:
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Date |
Item |
Quantity |
Cost/Unit Rs. |
Total Rs. |
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Jan. 2 |
Beginning inventory |
10 |
10 |
100 |
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Mar. 4 |
Purchase |
35 |
11 |
385 |
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May 8 |
Purchase |
40 |
12 |
480 |
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Nov. 3 |
Purchase |
20 |
13 |
260 |
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De31 |
Merchandise available |
105 |
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1,225 |
80 units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.
► Rs. 1,225
► Rs. 1,015
► Rs. 965
► Rs. 905
Question No: 14 ( Marks: 1 ) - Please choose one
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Cost of asset |
Rs. 1,00,000 |
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Life of asset |
5 years |
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Depreciation for each year |
Rs. 5,000 |
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Sale price after 5 years |
Rs.50,000 |
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Written down value of asset on 5th year |
Rs.75,000 |
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profit or loss on disposal of fixed assets |
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► Rs.25, 000 loss
► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profit
Question No: 15 ( Marks: 1 ) - Please choose one
The products that are ready for sale are known as:
► Raw material
► Work in process
► Finished goods
► Closing stock
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following account will be credited, when the goods are purchased on cash?
► Stock account
► Cash account
► Supplier account
► Work in process account
Question No: 17 ( Marks: 1 ) - Please choose one
Partially completed products that are not yet ready for sale are known as:
► Raw material
► Work in process
► Finished goods
► Closing stock
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following particulars are included in the specimen of a cash receipt voucher?
1) Name of the organization
2) Cash code
3) Date of transaction
► (1) & (2) only
► (1) & (3) only
► (2) & (3) only
► (1), (2) & (3)
Question No: 19 ( Marks: 1 ) - Please choose one
In which of the following condition a company will have positive working capital?
► If current assets > current liabilities
► If current Assets < current Liabilities
► If current assets = current liabilities
► If current assets < current liabilities
Question No: 20 ( Marks: 1 ) - Please choose one
The return of goods by a customer should be debited to:
► Customer’s account
► Sales return account
► Goods account
► Accounts receivable
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following account will be credited in the books of ABC Co. Ltd., if furniture is purchased on cash?
► Furniture account
► Cash account
► Business account
► Bank account
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following account will be credited in the books of XYZ Co. Ltd, if the business purchased a vehicle though cheque?
► Vehicle account
► Cash account
► Business account
► Bank account
Question No: 23 ( Marks: 1 ) - Please choose one
Identify the business transaction for given entry below.
Vehicle Account XXX (Dr.)
Bank Account XXX (Cr.)
► Paid for vehicle through cheque
► Paid for vehicle through cash
► Purchased vehicle on credit
► None of the given options
Question No: 24 ( Marks: 1 ) - Please choose one
Accrued expenses are the example of:
► Current liabilities
► Long term liabilities
► Deferred costs
► Capital expenses
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following item will appear on the Balance Sheet as current assets?
► Prepaid expenses
► Accrued expenses
► Furniture and Equipment
► Unearned revenue
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following shows summary of a company's financial position at a specific date?
► Profit & Loss Account
► Cash Flow Statement
► Balance Sheet
► Income & Expenditure Account
Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following organizations prepare Income & Expenditure account?
► Public libraries
► NGOs
► Labor unions
► All of the given options
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following is NOT considered a part of financial statements?
► General Ledger
► Balance Sheet
► Profit and Loss Account
► Cash Flow Statement
Question No: 29 ( Marks: 1 ) - Please choose one
Which one of the following is NOT prepared by Non profit organizations?
► Profit & Loss account
► Income & Expenditure account
► Receipts & Payments account
► Balance Sheet
Question No: 30 ( Marks: 1 ) - Please choose one
Which of the following financial statement summarizes the profitability of an organization for a particular period?
► Balance Sheet
► Trading and Profit & Loss account
► Cash Flow Statement
► Statement of Retained Earnings
Question No: 31 ( Marks: 1 ) - Please choose one
The process of transferring journal entry information to the ledger is called:
► Journalizing
► Posting
► Balancing
► Analyzing
Question No: 32 ( Marks: 1 ) - Please choose one
Which of the following are the components of General Ledger?
1) Title of account
2) Amount of transaction
3) Date of transaction
► (1) & (2) only
► (2) & (3) only
► (1) & (3) only
► (1), (2) & (3)
Question No: 33 ( Marks: 1 ) - Please choose one
The original book of entry, in which all vouchers are first recorded, is called:
► General Journal
► General Ledger
► Trial Balance
► Balance Sheet
Question No: 34 ( Marks: 1 ) - Please choose one
In an account, if credit side < debit side then the balance is known as:
► Negative Balance
► Debit Balance
► Positive Balance
► Credit Balance
Question No: 35 ( Marks: 1 ) - Please choose one
Which of the following is CORRECT about the flow of recording a transaction?
► Occurrence of event – voucher—Journal—Ledger—Trial Balance—profit and loss account—Balance Sheet
► Occurrence of event—Journal – voucher —Ledger—Trial Balance—profit and loss account—Balance Sheet
► Occurrence of event—Ledger – voucher—Journal—Trial Balance—profit and loss account—Balance Sheet
► Occurrence of event—Trial Balance – voucher—Journal—Ledger—profit and loss account—Balance Sheet
Question No: 36 ( Marks: 1 ) - Please choose one
An Asset that is NOT physical in nature is called _________.
► Intangible Asset
► Liquid Asset
► Current Asset
► Fixed Asset
Question No: 37 ( Marks: 1 ) - Please choose one
What is the nature of an expense account?
► Debit
► Credit
► Revenue
► None of the given options
Question No: 38 ( Marks: 1 ) - Please choose one
Term "Credit" means_______ by the business.
► Receiving of benefits
► It has no effect on business
► Providing of benefits
► It depends upon items
Question No: 39 ( Marks: 1 ) - Please choose one
We can say that the business is in profit, when:
► Assets exceed Expenditure
► Assets exceed Liabilities
► Income exceeds Expenditure
► Income exceeds Liabilities
Question No: 40 ( Marks: 1 ) - Please choose one
An organization operating with the objective of making profit from the sale of goods or services is called:
► Transaction
► Business
► Society
► Trust
Question No: 41 ( Marks: 10 )
State with reasons whether the following events are transactions to Mr. Afnan’s business
4) Mr. Afnan started business with Rs. 50,000.
5) Mr. Afnan bought furniture for Rs. 2,000 for business use.
6) Submitted a tender for goods worth Rs. 10,000.
7) Appointed a cashier on a salary of Rs. 2,000 per month.
8) Paid salary to cashier Rs. 2,000.
Use the following format to solve question.
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Event |
YES/NO |
Reasons |
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For example Mr. Bilal took away goods worth Rs. 500 from the business for his private use. |
Yes it is transaction |
It changes financial position of business. |
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mc090402666 Saqib Ali
Dear Salman Majeed,