Contents ‘Advan Accountin 2 & Auditing Principles of Accounting Financial Accounting Cost Accounting Audit Law of Contract I Ti Income Tax s Economics | < Business satrenels & Statistics Public sery@btonmision Lahore Paper 2011,Advanced Accounting And Auditing uoks of eriginal entry are calle ch)Worksheets (None of these2.2, For preparing halunce sheets prepaid expenses ace shown as part of (apLiability (hE quities (chdsscis” {al)Nong of these Linpaid and unrecorded expenses are cated (a}prepaid expenses. (b)Acerued! expenses (chAdditional expenses (d)None af these Amount, cash or other assets removed from business by owner is: (a)Capiual (biDrawings {chAssets (diNone af these Under the diminishing balance method, depreciation amount is: {ajpayment (bIRLeeipts {eExpenditurey’ (QyNone of these Users of aveounting snlocnstion include {a)The Tax Aullorities 4e)Creduors {uj Nome of these The business form (s} ‘owner (5) is Care} per the: {a)partnership thyproprictorsity only (eiCorporation only (dhparinership and proprictorship (e)None of these The investment of personal assets by iheowser (u)lncrease total assets aad increases owners equity” (hylncreascs Lotal assets only (¢)Has no effect on assets but increase owner's equi sO wy ae Rs {increases assets and Nabilties (e)Name of these 9. All atthe folios ing are forms of business ‘organizations execpt {a)propnctorship (b}Comporation {e)Relailer (dipartnership 10, Leonomie resourees of a business that ave espeetod to be of henelit in the faqure are eelevted to as (abLiabilitics ——_CiQwner's equity (c)Withdrawals (d)Asseis” (c}None of these 11. An owner investment of land into the busmess would. (a) Decrease withdrawals (bpincrease linbil (eincrease 0 (dyDecrease: (o)None pt thasew hse of supplies wouls: ‘owner's cqpily Feast liahilities Gp Have no clicet on total assets jdiNone of thesey An awner investment of cash inno tie business would: {a}fncrease assets (byDoerease liabilities {c}lucrease withdrawals {d)Deerease owner's equity {o)None of these 14, The payment of rent each month for ‘fice space would {a)Decrease total assets {b)Increase liabilities {e)increase owner's oquity {é)Nane of these £5, Which one of the following accounts would usually have a debu blance? (avCash quity (hiCreditors {e)Accounts payable (aiSalaries Expense” (e)None of these 16. Quick assets include, which of the fallowing? qayCash (b)Aceounts Receivableoat Accounting And Auditing 2 iventories Only (a) and (by setNone of these |) Not income plus operating expenses in al wo: iNet Sales (bil ost of goods available for sale fowest of goods sold viyGeuss profit? ePeone af these maximum number of partners in vhistan ean be Fixed at the fillowing: {b)s0~ (W)None of these ince sitect is always prepared: 1 Far the year ended iy Asuna specific datew (cy None of these Punng the Audit of Meat packers Ltd, yu are assigned to cover the audit of he payeolls of 800 employees numerate ie lost, you would cary out fo ensure sit Lt All cusployces are genuine [hypayments are only made for work done (e\Statuiory documents are property ‘ected its accordance with the law. wiproper allocation of wages is made 19 vious departments” wl iieaearde ie ofa TERS «ise if wesourees is referred to (a}4in opportunity cost” (eta diflerential cost (aA sunk cost teione of these 1A cost center ist {a} A.unil of production in relation to which costs are ascertained, 1 Which is responsible for fing direct costs. + Nort of the fuclory overhead system by which eusis are gathered. location or departaveot Which incurs eas, atc of these A Sok: (a)May Change is total when such change isnot related to changes is production, (by Will not change in total because it is not related to changes in production. (c) Is constant per unit for cach unit of change is production. (a)May change is total, depending on production with the relevant range. (e)None of these 24, Completion of a job is a result in: {a)DR Finished goods CRWIPY (bIDR Cost of goods CR Finished goods (c)DR WIP CR FOH control (@)DR FOH control CR FOH applied {e)None of these 25. Operating cost is aften pamed as: (a)Manufacturing cob pls commercial expenses (bjprime cost tory overheads. (c)Direct mplgfial plus direet labour. (d)Selli ‘administrative expenses” (ON ese such as rent and depreciation of so wilding are shared by several iments these are: 26, QPlaringirect expenses 3 (b)Direct expenses ~S (cMloint expenses (AAU of tie above (e)None of these 27. Ifunder-applied FOH is closed tocost of goods sold, the journal entry is: (a)DR cost of goods sold CR FOH control (b)DR FOH control CR cost of goods sold?” ()DR FOH control CR profit loss account (d)None of these 2B. Based on this date Re-order level is: {a)4500 units (4)3900 units {c)1200 units (4400 univ. 29. A credit balance remaining in }OH control is called (a)Over applicd overinead™ (b)Under-applied overhead (c)Actual overhad (None of these W, Direct material cost plus direct labour cost is called:Advanced Accounting And Auditing (alprime cost” (b}Conwersion cost (clpreduct cost (d)All of these (e) None of these 3). Productivity means: (a)The ability to produce’ (b)Al units produce {c}Good units produce (d)None of these 32. Eeonomic resources of a business thal are expected to be of benefit in the fisture are referred to as (a)Lisbilitics —(b)Owner’s cquity (c)Withdrawals (d)Asscts¥” (e)None of these 33, Short-Term Loan can be best described as (a)lf the period is three years (b)If the period is less than one year” (e}l0 the period is aver one year (d)None of these 34. Preparation of final financial reports is governed in Pakistan under: (a)No Law (b}Companies Ordinance (e}None of these” 35. Inventory tumover is calculated as under: (a}Cost of Goods sold closing Inventory Sales~” (b}Gross profit Closing Inventory sO (c}Opening Inventory Q (diNone af these & 36. There is a difference between: {a)Worksheet and Balane: worksheet asY . (by Worksheet and p ‘Account (c)Combination rezitts of profits and financial position (d)None of these 37. Preparation of annual report ofa firm is governed und: (2)Partnership Act 1932 (b)Linder partnership Deed {c) None of these 38, Reium of Equity will be calculated as under: (a)Operating profit x 100 Equity {b)Net profit x 100 paid up Capital only” id Loss (cone of these 39, Prime cost is calculated as under {a)Manufacturing Cast*Cast of Gonds Sold (b)Direet material plus factary overheads {¢)Direet Labour+Dircet Material” {d)None of these 40, Increase in income constitutes: (llnflows’ —_{b)Outfows (e)None of these 4]. Audit and special audit are the same: {a)in Insurance Company (b)In Banking Company” {e)Nanc of these 42. Rent of the premises constitutes variable expense for cast on, (ayTruc sev 43, Principal ands Markup payment withis es long term liability for the balance shect of a (OVFalse” ing Capital finance can be termed * Running Finance” in a limited ompany. fa}True (biFalse” 45. Conversion cost is caleulated as under: {a}Labour plus materials (b)Labour plus overheads~” (e)None of these 46. Current Ratio under: (a}Current Liabilities Current Assets {b}Current Assets Current Liabilities” (e)None of these 47. The need for keeping a record of income and expenditures in a clear ant systematic manner has given rise tw the subject of: (a)Bock keeping {b)Ascounting Cycle” (c)Manufacturing (d)None of these 48. If proper books of accounts are not kept in a business, the amount of profit {a)Can be ascertained (b)Cannot be ascertained” (c)Easily ascertained (d)Mone of these can be calculated asAvance! Avemuting And Auditing W. The state under which Wansaetions ae recoréed chronologically inthe books — of aiecoums is called (a)Sunmarizing —(b}Classifying {c)Recording —¢)Nane of these $0. Gook-Keeping is mainly — concerned with: (a}recording ef'a financial data-relating ta ‘usiness transaction.” (bldesigning the system in recording, classifying, summarizing the recorded data (chinterpreing the data for internal and extemal users (wyNone artbese 51, The lerms expense and expenditure are: (a)Same in Nature (byDufferent in Nature (c)Oppesite in Navure (ayNone of these 52, When yoods are given away as charity or fee sumnples, the purchases weeuunt should be: ‘ (a}Dehited (b)Credited¥ (c)Recorded in Balance Sheet ()None of these =\ $5.The sale ofa business ase on ens reconded in (a)Sules Houenal {yGeneral Joursaly (c)Cash Receipt Joumal (c)None of these #4. The discount account jog" {a)personal Account (b)Nominal Aec dc)teul Account (a) Asset Account Xe)None of these 53, The payments side of the eash book is. ner Cost by Rs 200 when overdraft as per bank statement is the starting point: (a)Rs 2040 will be deducted” (b)Rs 200 witl be added te)Rs 400 will be added td) Name of these 56. AIL the ditcet expenses are charged to: (a)Balance Sheet & ~— (bAccrued Jn (h)Profit and Loss Account (c) Trading Account (d)None of these 7. Those liabilities which arise only on the happening of some event, are called: (a)Current Liabilities (b)Contingent Liabilities” (c}Outstanding Liabilities (d)None of these $8, Marshalling of balance sheet means: {althe ordering of its assets and Viabilities” (bythe totaling of its assets and liabilities (clexcess of assets over liabilities (a)none of these 359. Commission rec: considered se advance isto be (a)Outstandi (aur Income’ (el IF these vision for discount on creditors is ope not provided in keeping with he principleof —* (a) Materilality {c} Conservatsim” {e)None of these GI.Which one of the following in not considered the permanent part of the accounting record: (alournal (b)Tnal Balance (c)Balance Shect (d)Final Accounts (e)None of theser’ 62, A working paper which is prepared by the accountant for his own convenience is called: {a)Work Sheet (b)Cash Flows Statement (c)Balance Sheet (a)Final Accounts (e)None of these 63. Any expenditure incurred to increase the profit eaming capacity of the concem isa: ; (a) Revenue Expenditurey” {b)Current Expenditure (c)Capital Receipt (b)Consistency (@)RealizationAdvanced Accounting Ana Auditing (@)Capital Expenditure 4e)None of these 64, Depreciation on Gxed example of (a)Revenue Expendirureé™ {b)Capital Expenditure (c)Doferred Revenue Expenditure (d)None of these 69, The capital receipts are shown in the balance sheet on the: (a)Liability Side” Ac)Debit Side (d)None of these 66.Enor due to wrong expenditure between capital and revenue as regarded as: (a)Error of Omission (b)Emrer of principle” ic)Compensation Errors (d)Error of Commission {e)None of these 67. The heat treatment department at Noort pipe is the third department in.a sequential process. The work in process “ accaunt for the department would consist of: {a)Cost transferred in from the prier depariment (b)materials costs added in the heat treatment departaient ~ fe)Conversion costs addled in the h treatment department (d)all af the above” @ fednone of these 68. Costs in the beginnis inventory are addi cunent period calculations by: {a)The FIFO cost method (byThe weighted average method (c)The quantity schedule method (A)LIFO method (e)None of these 69, A chemical process has normal wastage of 10% of input, In 8 period, 2500kys of material was input and there was an abnormal loss of 75 kgs. What quantity of goad production was achieved? (a)2175 Kgs”. (b)2250 Kes assets is an (b)Asset Side rk in’ process the cost of the ‘making units east allocation as 3 (ees Kes (ay42S Kes 70.Premium on issue of shares can be used for (a)Payment of Dividends (b)Writing off preliminary Expenses” {c)Paying Fees to Directar (d)Redemption of debentures (e)None of these TL. Right ‘shares mean the are: (a)issued to promoters for their services (bjissued to holders of convertible debernures (c)issued to directors of the campany {djoffered to the existing shareholders” (e)None of these 72, Pre-incorparation, shares which tobe credited ‘aceaunt above the li account below the line 73.,@hedexeess, of purchase price over the asseis is: fa) Goodwill” (b)Capital Reserve (e)Preliminary Expenses {e)Share premium {e}None of these 74, Statutory report in necessary in the cate of (a)All companies (b)Public Limited Companies” (c} Forigen Limited Companies (d)Private Limited Companies (e}None of these 75. Dividends are usually paid on (a)Called up Capital (b)Paid up Capital” (c)Paid up capital eall in advance (d)Subseribed Capital {e)None of these 76, Provision for taxation ofa previous year was Rs. 100,000 and tax assessed for that year Rs. 80,000. The adjustment for this is; . (a)a debit of Rs. 100,000 above the lineAdvanced Accounting And Auditing (b)a credit of Rs. 80,000 below the line {c)s credit of Rs. 20,000 above the line (cfu credit of Rs. 20,000 below the line (e}none of these 77. Amount set apart to meet losses 10 bad debt is a: (a) Provision” (e)Liability (c)None of these 78, Advance payment of tax is in the mature of: (a)Asset (b)Revenue Expense (e)Liabitity (d)prepaid Expense” (c)None of these 79, Evaluative-positive or negative- concerning peaple, objects, or are called: (a)perceptions te)Beliets {ciNono of these 80. The auditor is required to report that Financial Statements are: fayTrue & Correct tb)Complete & Correct (eyTrue de (d}Covering all required records (epNone of these 81. The auditers are appointed by che (biReserve (Contingent Liability events (b)Attitudes?” (d) Values following authorities: factors (yen, SO (c}Share Holders” org (e)None of these B2.Interim audit, is for cxamining the account fo (ayFull One Year (byNext One Year {e)Previous One {@iFor a part of currémt year” {e)None of these. 83. Payment should be made preferabiv through (a}Cross Chequey (b)Bank Draft (e)pay Order (d)Cash Basis {e)None of these 84. The purchase of machinery on account world: (a) Increase an asset and decrease anotney. asset, (b)increase an asset and decrease liability. @ 6 (e}lnerease an asset und increase liability” {d)Decrease an asset and increase liability 85. In general, the aceounts in the Incoms Statement are known as; (a)Real Account (b)Contra Asset (c)Nominat Account” {d)lnrecarded rever accout in gencral terms, financial assets appear in the Balance Sheet an: jajFace Value’ {b)Current Cash Value: (eyCash (Estimated future sales value 87, Which of the following is feast 5.4 measure of short-term ()Debtor Ratio {(5)Curremt Rati Ss {c)Cash How 86 ‘important liquidity, Operating acticitites~” td)Quick 88. Lzmai come was Rs 4,00,000 in 200; Rs 160,000 in 2004 what payed merease in net incune ru ‘Off let the decline in peofits in ore (a)S0% ce)20% (d)70% 89. Extermal ises of financial accounting information in cude 1 of u e following excep. (a)lnvestors” —_(b)[_abour Unions (cline Manager (d)General Public ‘90. A fixed budget is: (aJA budvet for single level of activity (BJA budget which ignored inflation (ell sed only for fixed cast” {djAn overhead cast budget 41. ileavy expenditure on advertisement — of anew product is a: (a)Capital expenditure (bJRevenue expenditure (c)Deferred Revenue expenditure (@)None of the above 92, Subscriptions reccived in advance is: (a)An Income. (bJAn Asset (c}A Liability” (dA Loss OeAdvanced Accounting And Auditing OR. At the time of admission of a new partner good will raiscd should be ‘written off ie {a)New prolit sharing ratio {b)OId profit sharing ratio {c)Saerificing ratio (dxGaining ratio O4.A and B are partners in the ratio of 2-1 They admit © for 1/4 share who conttibuics Rs 3000 fer his share of goodwilf The total value of the goodwill ofthe firn is: (a)Rs 3,008 (bJRs 9,000 (ORs 12.0004 — (ARs 15,000 95, Sales is Mustafa of Rs 10,000 not recorded in the books would affect {ajSales Account (b)Mastafa Account {c)Sales Account and Mustafa, Account (d)None of the above 96. Depreciation is a process of: {a)Valuation’” —_{b}Allocation (e)Both a&b — (d)None of these 97. Loss on sale of an asset should be ‘weilten off against: {a)Share premium account (h)Sales account {e)Depreciation fund account (d)None of the abovew’ 98, Income and expenditure at (a)Cash in hand {b)Surrplus or deficicmngly’” {e)Capiial account {d)None of 99. Which of the the work sheet. (allt is the fonn, whieh aa accountant uses for his own aid and convenience (b)N assists in the orderly preparation af the adjustmems and financial statemcuts at the end of the account periods. {cpt can substitute tor Journal and Leder. (d)Only a & bare true” 100, The post closing trial balance will {a}Contain only income statement accounts, (b)Contain both batance sheet accounts (2) & Teveals: rue regarding (e}Contain both wmcome Statenient and balance shect accounts” (4)Be prepared before closing, emtnes are posted fo the Lodger. 1OL-The cost of ponds and service used up in the process of obtaining rcvenuc are called: (a)Net Income (b)Revenue (c)Expenses*” (Liabilities 102.State which of following are characteristics of jab cast (iHomogencous products (ia}Customer driven production (iiijComplete production possible within a singl¢ accounting perjod_ fa) (i) only: 66 Ab} Gi) and (iagtadiy {e){inb and Ha) only i$) only above which of ihe foliowing are leristics of contract costing: fe ete 4ii)Customes dnven production (ii)Short time sealv-Ziom conmuncement to completion of the cost unit (3) (bind (i) only (b) (and (is) amty {e) {it} and (in) only (a) (ii) only {e}Nane of abave 14.The budyet vost allowance activity level of 4,000 units is. (a)Rs 7.200 (b) Rs 14,700 {eJRs 17,200 (djs 22,200 (eNonc of these values 115 Direet costs ure: {a)Costs which can be identified wath a cost center but not identified to a single cost unit (byCosts which can be identifigd with a single cost unit (e}Costs incurred as 1 dizoct result of a particular decision {a}Cosls incurred which can be attributed to 8 particular accounting periad. (e)None af above for anAdsunged Accounting And Auditing, JOG, A master budget comprises 1a)The bwslgeted profit and loss account thy Phe budgeted eash flow, budgeted loss account and budgeted blues sheet. te) the budgeted east flow 4d) The eallire set of budyets prepared” fe)Sone of abowe Lo7. Fhe hest description ofa by-praduet is. a Joint produet which: {ajHus no economics value {h) Accouuts for a relatively stall proportion of the total sales value of the production process (evAccounts for a relatively small praportion of the total valuc of the xh lin process. (Wl new tw be disposed off a a cost (e}None of above 108. What iype of budget is designed to take inte account forecast changes in costs, prices ete taiRulling budget (b)Funetusnal Budget (elFleuble Budget qd) Muster Budget” (etNone of then 109 Working capital és the {aSiflcctive capital of the compai the business isin lulls (hyCapital borrowed form d (c}Dillference between 1 anil current liabilities (a)None of them 11, The most aces inoome is (liv match the costs with revenue (byLe find out this difference in net worth ason iwe dates.” (cho apply normal rate of return on capital invested. (dyNone af above 111. Up what level Agriculture income is exempt from tax? {alts $0,000 (bIRs 100,000 {c)Futally exempt” (d}Torally taxable so unreal asscis method of measuring (eJNone of the above 142. Average relief is available on the following execpt {a)Donalion fo: Charitable purpose {h)Investivont in Shares {e)Retirement Annuity scheme” {d)Mark up on Housing Finance Scheme {¢)Donution of Baitul-MalFund {hNone of above 113. Special tax celief is granted ta a senior citizen if his age is {a)50 years or above (b}60 years oF abovew” (e)6S years or above (a)None of the above L4.When prop. Copiers shes of a company, Gi patents, Trade Mark and deSighs tome under the head oft (aFined gets cb) Fieti ene te iL Assots ellaneous Expenditure fone wf above comparison lo the excemal auditor, an internal avditor is more likely to be concemed wil (a}lrtemal Adininistrative Control {b)Cost Accounting procedures (e}Operational Auditing (d)Internal Accounting control” (e}None of above 116.An auditor's unqualified short form report. {a)Impties only, that items disclosed in the financial statement aud foot notes are properly presented! and takes no po: the adequacy of disclosure. (b)lmplies that disclosure is adequate im the finanetal Statements and foot notes. (e)Explicitly states that diselosure is adequate in the financial statements and foot notes (d)Explicitly states that all material items have been disclosed in conformity with generally accepted accounting, principles.“ (e}None ef above ion onAdvanced Accounting And Auditing 117, The role of finance fumetion in the future will be 4a) Factieal ¢b)Professtonal Advisor” 4eyStewards (Specialist tem member {c)None of above 118.Jn principle current Assets are Font 4a)Retained Earning, ¢bjLong term debis (e)lssuc of fresh Capital’ (d)Current Liabilities {e)None of above 119. A non-banking asset is: {a}liom of office equipment {b)Bank premises. te}Secured property acquired fom defaulting horrower (d)All of the ubove (e}None of the above? 120,.When preparing 2 production bude, the quantity to be produced equals {a}Sales quantitys Opening Stock+Clo Stock AbiSates quantity-Open Stock (elSales quantity-Opening stock-C! ee stock < (d)Sales quantity (elNone af the above EAL Which of the follow the nature of un asset? (a)Sontething (b)An ceononi provide some business. (c}The amount of the owner's invesiment ia business. {d)None of these 122.A halunce sheet is prepared to find ‘out financial position ef a fiem: 4wiFor a specified period {b)On x particular datey” (c)AL the ume of sale of business: (None of these financed sf desesibes jy market valuc c, which will nefits, owned by a 1g stock + Closing ee 3. The preparation oF * {a)Constitutes createc ts of 0: for stalcinct 8 thy seuss flr wa adjusting: ent {e)pravides the a jourmalizing anes coutries,¥ {dyNone of these: 12M, Assets would be overstated" aecessicy adjusting entry was omiied “a1 {a)Expired Insurance (b)Accrucd Sala 4e)Accrued Interest Harned {d) None of these The book ape vtabhe assel is hest del fa)The und asset {b)Phe pri ict wel Fe offered (Gt Zale. te lated de;sreciation of ne asset 5 squisitio jone of these hich of the fotlowing ‘snot an inns ble asset? LA)A pate: (hy ck {c)Anis wi it td) Nune of these” 132.4 company usent raivo CF 2 to | atthe end of year |. Woieh oue of the iB Trans ution Wili ineaease tins (b)Deciaration of a 20% cash divwicral (elColleetign of iarve aecous receivable (diNone of these 127. U sales inerease by ¥0%e from year] 40 2 and vest of pouds suld anerews only 6%, the gross peodii on sales will uicrease thy (u)None of these 128. Which of the following amounts appeat 1 both the income statement aund balance sheet? {a)Net Income" (bpAccumulsted (e}Dividendsanced al Auditing counting (pNowe off these: 129, Hoth Ue accaunls for depreciation expenise aml accuraulated Uepreciation. (u)Are elosed at the end of the period” (b)Appear in the Adjusted Trial Balance Columns of the worksheet {c)Appear in the Trial Balanec Columns of the worksheet {d)None of these 120, When a partnership in liquidated (a)Aay cash distribution to partners is allocated according to the profit and toss staring ratio, (b)Cash is distributed to each partner according ta his or her capital account balance before the sale of purlicrship. assets.” (e)Any gain or loss on disposal of panuceship assets is divided among, the partners according to their relative account balances. (d)None of these: 131.In projecting the future profitability of a trading company. investors will be concemed with changes in (a)The gross profil rate (by The quick ratio (c)Ssles volume (d)None of these 132.Revenuc is most common ced at the time when: @ (u)Cash is collected (b)The order is r (@)The sale in my (a)None of t 133.Which of tho® used sold? (a)purchases, inventory, and sales returns. (b)iross profit, purchase returns and carriage inward (c}lnventory, net sales and purchases” (d)None of these: 134.Which of the Following is ascertained by drawing up an income and expenditure account? {a)Cash is hand {b)Surplus or Deficicney” lowing list of accounts. is to compute the cost of goods least gS (@)Capital Fund (d)None of these 135.0n April 1, Hassan & Company received and paid a Rs, 700 bill for the advertising done in March. In addition to this bill the company paid Rs. 6,100 during April for expenses incumed in that month, Hassan & Company paid Rs. 3,600 as salary to cmplayecs for work done April. Based on these facts, total expenses for the month of April were: (Rs 6,100 (IRs. 6,800 (6)Rs, 10,700 (d)None of these” 126: ra a had current assets of Rs. T2000 ad nt ratio of 2 to 1. The = 1s capital must have (oes (by Poo Sfthese jond holders would be most in which of the following (a) Quiek ratiow” (b)Inventory tumover (c}Times interest earned (d)None of these: 138.The amount of overtime premium contained in direct wages would normally be classified as (a)Part of prime cost (b)Factory overhead (c)Direct labour cost (d)Administrative overhead 139.Whieh one of the following statements. is incorrect with respect of extemal auditors: (a)Extemal auditors are independent of ‘organization (b)The responsibility of extemal auditor is fixed by statue: {c)External auditors report to the members (a)External auditors work many range ‘over many areas of aclivities as determined by the management” 140:The first auditor of a public Limited Company is appointed by the directors interested.Advanced Accounting And Auditing u (41830 days of incorporation (hjinvesiment in Shares (b}60 days of incorporation (e}Mark-up on housing finan (e190 days of incorporation (d}Coniribution to employees Children (a) 120 days of incorporation education fund 14], Audit working papers arc the properly of 149. The mest iexportant reason for having an (arCliem (h)Accountant (etAuditor” U)Registrar of Companies 142. Which of the following would be least Tikely 4 be considered an objective of system of intemal control (alCheeking the aceuracy and reliability of aceounting dara (hyDeiceting management fra (eyEncouraging adherence of managerial policies (d)Safeguardiny assets 143. Dividend income is subject 10 ut source il (a0 thst [en 0% {A)1S% 144, Tax deducted al source will be treated as: (a) Taxable (bo xempe (ciDeductible from nei tay 145. One cof athe huske posed Ot bei combinalion is: NC (aVTe provide hotter services to th comunity (brTo sell the goods at co Ye prices {e)To reap profit by ci competition’ * (uy To increase sale 140. A coopera ciely is registered under cooperatigg Society act of: (apto2se (6)1930, (cH984 (yas 147, Which one of the following is not considered a legal document of joint stock company”? (a)Memorandum of association (bpArticles oF agsociaiion (e)prospeciuse” (d)Shares 148, Average relief is allowed on the following expenditures except: {a)Dunation for Charitable purpose” annual auslit is to: (a) Peovide assu thers stake holders that financial statements are dependable, {b)Enable Dircetnrs to aveid persemal responsibility for amy deficiency in the Financial statement teJMeet the requurement of government tdprovide vssarance that friad, (Cuny ‘exists, will be broyght to inh. 188A job-ordebe beading systein is mast appropriate, hich vf the foflewing types of yuu ng? falFloppahilling (i manufacturer?” ie mobile manufacturer hipbuilders he predetermined overhead awe is (aiDetermined at the end ef the accounting period (h)Determined by divicing the allocation base by the estimated averhiead (eiUsed in a normal cost system: Gi) Never applied to the work in process at the end of the peringd 152, Actual overhead costs sppears (a1On a jab cost sheet (bjln the work in process AEcount (eiln the Financial Guods Account (diln the Manufacturing Overhead Account 183. Which of the following is a cleaning account? (a)Munu facturing Summary (b{Mamufucturing Overhead (c)Depreciation Expense (WAccumulated Depreciation” 154, The basic concept which recognizes that the cost of internal control should nol exceed the beuctits expected to be derived is known as (ajReasonuble assurancey”Advanged Accouming Am Av hi Munagerient feiLinsted lab {é)Manageniont hy cxcey ot che (h)Canteal aceourise” (ePSupporting schedules. tdyAccounts unalysis He. Which one of th following wouht b Likely te be considered a control obigctive! talSaieguarding asscisy Hh yDerecting felAecuruey of sceounting data {d)Adherenee of thunagerial policies WP. Which of the following se (aiCheck hat ts ainethod of internal contol fore small business: AhyEwo iypes of audis tests are compl tests und substantive tests” te)Materuality and audi risk have direct telationshp Ad) Intemal contra! consists al ho accounting contrals and addministy controls 148, Which of che purpose of eval (aiComplianee with audit (biCheching efticieney fenssuance af letter intemal controt ()Dewnnining nate af substantive audit test (edNone oF the 149, Which one of the following assets is ol cligible for initial depreciation allowance (alVehicte for faetury labour dh)prolsssionat books (eWehicle plying for hirev aliShip 18, Which one of the following is an ayncultweal sncome? (wikuvehy ascome from mines wwemient frail xe Pe 2 from cultivation of ti from sale of irrigation water felineo [dJincome fron poultey Farin ISI Woick one of the following expenditures as admissible under the head income from Business? LaCost afssue of shares no) Wealth tax {ellos by trey’ (a)Inicrest payable we parmer 152. Which of the following rental income is exempled item tax under the head ‘imeome [rom property’? Lalproperty come bel wmer Lust ied residential property tc)hicome frome Or! building tu) Ail ef thes “iad market value of ute limited company cof the following combination of inessus makes different types of goods and have in common either raw jaterial er final product? lajHtarscontal Th)Wertiealy teiCienlar 18) ateral 185. The status of Chamber of Commerce and Industry iw Pasta is: (ayParuseeship {b)Assuciation af persons” fc)Lirnited company (d)Club 156, Markets are necessary because: {ayDemiand always excceds supply {b)Bartcr cannot work properly {e}Competition in encouraged (d) Buyers and sellers are different peoplew 187 Discovery of business opportunities and utaogement of propery, funds and management ability to set up a business is ealled: {a} Incorpation samation (byhmtegration (u)Premotion?Advanced Accounting And Auditing 188. Which of the following transaction represent an expense? (a\The owner withdrew Rs. 1 the business for personal use. (ch Are deliver goods ‘exchange is drawn by: icblor A creditor” QioyAtolder (U) Endorsee Bill receivable account is a: (ay Nominal aceount (bt Personal account” (c) Real account (d) Expense account Avihy time of drawing @ bill, the drawer credits: (a) Debtors account (b1 Creditors account (ch Bill receivable account (d) Suppliers account When a bill is discharged, the accepior debits: (a) Creditors account (b} Cash account (c} Bill payable account” (a) Bill receivable aceount Al the Lime of endorsement of a drawer eredits (a} The drawee afc (b) The endorsee’s personal account (ch Bill receivable secounn” thePrincipat of Accountiny 9. to, 6 (a) Endarsec’s account Retiring a bill under ¢chate means (a1 Making payment for the bill before the due datew” (h) Muking payment for the bill alter the due date (c) Dish ny bill Gi) Nong ofthe abowe At the time of endorsement Grawee debits; (21 Bill payable account (b} Other party's secount {e} 80 account 1Ne entry (d) None ofthe above Wa bill is dishonoured, when presented hy third party, the drawer bill, the foe paymen will debit: {a} Aceeptor's account” {b) Third party's account (e) Neither af that Wo (dt Prilarsee Wher noting charges are paid by the bank ai the time of the dishonour of the bill, the drawee credits (a) Bill payable (b) Diseount account (c) Noting churzes alc (a1 Drawer’s account The person to whom a bill is the (a) Debtor (v) Bolder Avbill from the pou iscalled a (a) Ball payahi (b) Bill roceaeWey (c} Bill acceptable (d) Bill reject able When the drawer discounts @ bill, he dehits: () Discount account” (b} Endaeserient account: (ch Interest account (d) Drawee’s aecount Refusal by the acceptor te make payment of the bill on the maturity date is called: (up Retirersent of the bill (b) Dishonour of the billy” Is. (€} Callection af the (d) Honour of the bill When noting charges are paid at the time of dishonout of the ball, the drawee always debits: (a} Noting charges uecount? {hy Lmerest ascou fe) Discount accu (d) Dragwer's wecount In case vf bill of exchange, there are rninitniuny (at Two parties (b) Three parties te) Four parties: 1d) Ong party Bill of e & Comventent method (ay Cash * ib) Goods (e} Debt (d) Investment The of time after which a bill payable is called: oe jo) Grace days {d) None atthe bore When a bill ts accepted without any condition to the” onder of the drawer, 11 as, called (a) Qualified acceptance (b) General uceeplincee™ (c} LE nqualified acceptance (a) Nene af the above nm case of accommodation bills. party becomes insolvent, then the short remittance is credited va: {ay Deficieney account? {b} Bad debls aceount (e} Insolvency account (a) Solvency account Accommodation hill are drawn, accepted and endorsed {a) Without any consideration (>) For some consideration (c) Half for corsideranon {d) None af the above: Amer of noting charges is the actual espense of: {ap Deawee {b} DrawerPrinvipal af Accomting, 4 ve) Banker (ah Endorsce 34 Interest on renewal of a bill is a expense 3s. be amount deducted by bamk of the bill tow the: tom the face value oF the bill is walled: (a) Drawer (b) Draweew 2) Interest (by Rebate (c) Fnuarsee (dh Seller te) Discount (Commission 35, In case of discounting of hill with the 20 The progedure by which a bill is ban tite ucceptor will passed framsferred fron) one person to artother {a) Discounting person tor the settlemem of debts. is tb) Acceptance entry culled fe) No entry? {a) Retirement {d) None of the above #5) Endorsement 36, In case of retiring a bill, rebate is treated te Renewal as expense for the: td None ofthe above (a) Holder (by Acceptor 27. Whon the bill is dishonoured bull payable fe) Banker (d) Agent nant iS-dehited in the books of the 37, ‘The rebate, in case of retiring of a bill is ta) Bank (hy Drawer revonat fart 6 fe) Drawee¥ [d) Endorsce fa) Holder (b) Acceptor” 28, When the hill is dishonoured acceptors fe) Banker 49OS* (dp Agent aiceoun! is debited in the books ofthe: 38. When bills gre Yawn in one country and 4a) Bark (by) Drawer” accepted apdspayable in another country (ec) Deawee (a) Endorse ca 29, When an endorsed bill is dishonoued ) ills endorsee’s or creditor's account is in the Eos bits hhooks of the Foretun bills” tay Bunk 'é) None of the above th) Drawer When bills aro drawn in s country upon te) Drawert a persons living in- the same country or 4) Sent made payable in the same country are 30, ‘The drawer always debits ac 40% Known as ta) Henows of a bil g@ 1h) Toreign bills th) Endorsement ofa Bill te) Overseas bills te) Dishonom {8) None’ of the above id) Nong of the abou 40. A promissory note contains. 34. Wher a bill is rene 2) A conditional order credited in the bal th) A promise ta) Drawer? (b) Drawee fe) A request to deliver goods fe} Bank (d) Endersee (d) An unconditional order whet a party becomes insolvent, the bill 41. A promissory ote is written by accepted by him is treated as: fa) Debtore (b) Creditor tay Honoured te) Bank (a) Agent 4b) Dishonoured™” 42. Promissory note is a written promise fe) Discouated between: 1d) None of the above (a) Four pacties 38, Interest on renewal of a bill is a revenue h) Three parties te the (¢) Two parties” ta) Drawer ) Drawee {d) Five parties fc} Endorsee fd) AcceptorPrincipal of Accounting a3 a, 4s 46. 47 49, 30, ‘A promissory nole should be: (2) Oral 1b) Written” {c) Verbal (id) Nene of the above Accommodation bills are deawn and accepted for: a) Financial assistance” (b) Consideration 2) Debt (4) Laon In case of bill of exchange fer obtaming the debt, legal action can be resorted by: (a) Drawer? (hy Drawee {c) Banker (d) Endorsee The due date of a bill of exchange, when the amount af the bill is payable by the drawee, is called the: ta} Acceptance date (b) Maturity datew” (c) Dishonoured date (d) Bill written date In ease of bill of exchange, every bill has to be accepted by the: (a) Drawer (b} Bank (c) Draweer” (d) Agent A liability that will only arise uf a event accurs, is called: {a) Contingent liability” S (b) Mutual liability e (c) Future fiability (d) None of the above ‘When a bill is dishp@ped, the holder of a the Bill, goes to: (a) Clerk (h) Notary public (c} Inspector (d) Agent In case of dishonour, the notary public will charge a small fee from the holder, is known as: (a) Interest {¢) Noting charges” (b} Rebate (d) Diseount Ps SUB-DIVISION OF JOUNRAL CASH BOOK, BANK RECONCILATION STATEMENT AND PETTY CASH BOOK Q.1 Four possible answers are given for the 2 3 4. 5. questions, -Tick mark (+) ASHEBOOK The a which are recorded the ahsactions as they place from yy. in a classified manner, are ‘Vouchers books Ze) Recording books (d) Receipis hooks Ail cash receipts and cash payments are recorded in: (a) Sales book {b) Purchases book (e) Cash book” (a) Recording book ‘The book is used to record all credit purchases is called: (a) Purchases book (b) Purchases return book (e} Cash dock (a) Creditor book Al the transactions, related lo credit sales recorded in: (a) Sales retum book {b} Sales book” {(¢} Cash book (2) Debtor's book ‘Those transactions for which there is no separate book, for recording are recorded in; (a) Joumal proper” (b) Bills receivable bookPrincipal of Accounting 36, 6. 9. to. (€) Bills payable book (a) Cash book Subsidiary books are called books of: (a) Original entry (b) Secondary entry (c} Temporary entry (d) Basic ontry Practically, the cash book is a substitute fir cash account in the: (aj Journal (e} Trial balance {d) Petty cash book When cash is received ftom a debior or customer, generally a receipt or cash mcm os issued to the debtor which is called: (at Receipt voucher?” (b) Payment voucher (¢) Cash voucher (al) Cash receipt When money 1s paid to creditor or supplier a reecipt is obtained fram him. which is culled: {u] Receipt voucher (h) Payment voucher? (ey Cash voucher (a Petty cash voucher > A document evidencing cash 1 and payments and forming 1 is for making entries in the cask bOOK is called: (a Receipt voucher (b) Payment veuches (et Cash vouche (d) Cash mee Single columa cash book is used for recording: (a) Cash transaetions only” (h) Cash and bank transactions (c1 Cash, book and discount transactions (a) None of the above The double column cash book makes the record of (2.1 Cash-transactions only (b) Cash and bunk transections” {c} Cash, bank and discount transactions (a) None ef the above: 14 1s, lo. 1. 19. ‘The ireble column cash book makes the record of (a) Cash transactions only (b) Cash and bank transactions (¢}Cash, bark and discount transactions” (d) None of the above Discount deducted from the catalogue or list price is called: (a) Trade discount (b) Cash discount {e) Catalogue discount (d) Credit diseount Ifa person pays his debit before the duc date Jf payment the recipient may grant him an aleraiei doing 50, this allowance is kad (aj Trade: dings (h} Cash ~ i jount is entered on the debit side aceount and the exact amount is entered on the eredit side of the (Pp same account, itis called a: ov (a) Contingent entry (h} Contra entry” (e} Compound entry {d) Double entry ‘The bulance on the debit side af the bank colamn in cash book indicates: (a) The total ammount withdrawn front ban (b) The total amount depasited from bank {e} Cash at banke (a) Cash in band The balance of the column is always: (a) Debit balance (b) Credit balance (e} Both debit and credit balances (a) None af the above ‘Discount columns’ of the cash book are totaled whereas bunk and eash columns are “balaneed’ because: (a) Discount columns represent rough work (b} Discount columns are in the nanste of memorandum secounts” {e) Itrepresent expense (d) It represent incomePrincipal of Accounting 20. 25. 28. The cash book in book-keeping records: (a) All receipts and payments in cash” (b) All cash and credit sale of goods {c) All credit and eash purchase of goods (al) Only cash payments ‘Cash discount is provided on; (a) Prompt payment?” tb) Sale {c) Purchase (U) List price (Cash account is a: a) Personal account (b) Real account¥ {c) Nominal account {d) Both real and personal account The discount account is a: (a) Personal account tb) Real account {e) Nominal account” {d) Asset account A contra entry is one which dacs not require posting to the: fa) Journal th) Ledger¥” {e} Cush book {d) None of the above a) Journal tb) Cash book {e) Trial batance {d) Sales book Cash account will sho} Cash book is La) Subsidiary journal (b)Subsidiary” journal and account” (e) Ledger account (2) Subsidiary journal or ledger account A customer's cheque returned dishoneured is recorded, fa) Retums inwards books {b) Cash book” (c) Ledger {d) Sales book ledger 29) 0. a 4. 35. 3. Cash sales are reared in (a) Sales book Xb) Cash book ™ {e) Debtor's book {8} None of tie above Bank coluznns of the cash book represent ‘bank aceount in the {a} Journal {b) Ledger” (c) Trial balance {d) Pass book In business concem, cash balance is a very important clement of its: (a) Financial condition” (b) Administrative eondition {c) Managerial condition. 4d) Marketing condision ‘The eustomer josit eash or cheque with the aid.ol (a) Bank sjat@mjent tb) Pay,ih-ahip~ tc) Kk Ww book py of the customer's account in the k's ledger is called. (a) Deposit statement (b} Balance statement (c) Bank statement?” (} Customer Disagreement in balances may arise ‘owing to mistake or mistakes in the: 4a) Cash book only (b} Bank statement 4c) Cash book or bank statement? 4d) Bank column of-the cash book only “The statement which contains a complete and satisfactory explanation of the differences in balances as per cash book and bank statement is known as: ta) Bank statement {b} Cash statement {c} Balance statement {d} Bank reconciliation statement? ‘Bunk account is a: (s) Personal account {(b) Real account’ (c) Nominal aecount (d) None of the above A. bank reconciliation prepared by: statement isPrincipal af Accounting 38 38 39, 4. al 42 4B. a4. 1a) Banker 5 (h) Accoumtant of the business” tc) Statutory auditors (a) Registrar When bank column of a cash book shows a credit balance, it means ta) Cash balance tb) Bank balance 4G, tc) Under dratt td) Over draft” Bank reconciliation is not a: {a} Ledger account? 4) Memorandum statement a2 fe) Reconcile records (1d) Procedure to prove cash book balance Bank reconciliation statervent is a part of: {a) Pass book tb) Ledger accounts te) Journal td) Cash book¥” 48 Bank statement is the slatement of aceount of the customer maintained hy the: ta} Customer (b) Accountant of the business (c) Bank (a) Statutory auditor sO The debit balance of the bank acugiytin the books of the business shau| ual to the credit balance af the tof the business in thc haoks of t aa) ja) Business tc) Registrar (d)Notary- publi When bank Islanee it mean: {a) Favourable balance” (bh) Unfavourublebalar, (ce) Overdrafi (al) None of the hove 31 ‘When hank column of a cash book shows a debit balanee it means {a) Overdraft as per bank (b) Unfavourable hulance as per cash book (e} Favourbale balance as per cash book” (d) Favourable balance as per pass book $2, Bank ent shows a eredit ‘When bank statement shaws a debit total balanee, it means: (a) Overdraft as per cash baok, (b) Lstavourbale balance as per cash book {c) Favourable halance as per cash book td) Gverdeaft as per bank statement? Bank reconciliation statement 1s: (a) A memorandum statement” tb) A ledger account fe) A pan of the cash book {d) A part of the journal In adjusting the cash balance one of the following, ig nat taken into account a) Mistakes in the gash book (o) Mistakes in gk statemen” (e) imerest ang'iridends credited in the thank stat (d) Nong gisite above Unfa le bank balance means: ta) rec balance in the cash book™ edit balance in the bank statement Debit balance in the eash book 14) Both debit, credit balance in cash hook The payments side of the cash book is under cast by Rs. 200, when overdraft as per bank statement is the starting point a) Rs. 200 will be dedusted¥™ {b) Rs. 200 will be added fe) Rs. 400 will be added [g) Rs, 400 will be deducted ‘An amount of Rs. 1000 is debited twice in the bank statement: when overdraft as per the cash book is the starting point: ta) Rs. 1006 wall be deducted (h) Rs. L000 will be added ic) Rs. 2000 will be deducted td) Rs. 2iKi0 will be added” The book in which small payments, which are nol convenient to record in the main cash hook, are recorded is called: a) Mini cash hook {b) Main cash book {c) Daily expenses book Ad) Petty eash book The balance of petty cash book i fa) A liability (b) An expensePrincipal of Accountiag, 39 sa. 56. 58, 59, (ey Again (d) An asset 60, ‘The petty cash book is used for recordinw (a) Petty cash payments” (h) Petty cash receipts from customers (e) All cash payments (d) All eredit payments Petty cash system is designed (a) To meet the needs of small business (b) To cover small and miscellaneous 61 income (c} To cover the small expenditure to be puid ineashy” (a) To cover both smali income and expenditures: The term imprest system is used to relation to! (a) Purchase book (b) Sales book te) Cash book (d) Petty cash book Peuy cash book is a branch af: (a Pass book (h} Sales bank (e1 Cash back (d) Purchase book Ge When the monthly bank statement is out which ane of the follow not appear: (a) Interest charged hy the bay {b) A dishonoured cheque (e} A direct debit @ (dl) A payment from The petty cash i system and the ce al the start of the month is Rs. iO, Lf petty eash expenses during the month of Rs. 720. are incurred, the amount received from the cashier at the start of the next. month should be: (ap Rs. 280 (b) Rs. 7200 (er Rs, 100 (d) Rs. 1720 An analytical petty cash hook (a) Lists different peuy cash expenses under their relevant headings” (b) Is used instead of a three column cash book {e) is not part of the double entry system (a) Is always run on the imprest system ashe on the imprest 64, 65, 66, & Ledgers na Under the imprest system the petty cash is (ab Increased every week tb) Reduced every week fc) Always restored amount¥ {d) Used up compleicly before being, restored After the preparation af a trial balance, the next level of work in accounting is called: (a) Rectification of the errors (b) Preparation ef bank reconciliation statement {e) Work sheet (d) Final acco Which of, tthe original lowing, enable ws to unduct of the husiness, and ef whether it is being run Triaibalance (a) Journal ‘The statements whieh are Sinally prepared to show the profit eamed “or loss soffered by the firm and financial state of affairs of the firm al the end of the period. (at Bank statements (h) Final accounts” (c} Bank reconciliation statements (a) Ledger sceounis The gross result (gross profit or gross Joss) of the business is shown by: {a} Profit and loss account (b) Profit and loss appropriation aceount (e) Trading account” (d) Balance sheet ‘The met result (net profit or net loss} of the business is shown by: (a) Profit and loss account” {(b) Projit and loss appropriation account (¢) Trading account (a) Balance sheet ‘The net profit or loss af the business has been distributed or dispused off is shown by: (a) Profit and loss account”Principal of Accounting 40 i) 70. 1 (} Profit and loss appropriation account 4c) Trading aecoumt WW) Balance sheet Which ef the following discloses the finaneial position of the business: (a) Trading aecount \(b) Profit and loss account {c} Profit & lass appropriation alc 40) Balance sheet™ ‘The profit and loss appropriation aecount is not prepared in the easc of 4a) Parinership business 4b} Public limited company 4c) Sole proprietorship business 4d} Private limited company ‘Trading account is the account which is prepared to determine the: {a} Only Gross profit of the business ) 8000 (c) 14000, td) 20000 The loss suffered by a business on the sale of a fixed asset is regarded as: BI (a) Capital loss¥” (b) Revenue loss (©) Ordinary loss (a) Regular loss Ge The loss suffered by the business in the ordinary course or day to day operation is regarded as: (2) capital loss (b) Revenue loss” (c) Non recurring loss (U) Long term, loss The loss incurred on raising capital of joint stock company is regarded as: (a) Recurring toss (b) Revenue loss (c) Capital loss#” (d) Ordinary loss Capital toss may be shows (a) Trading st (b) Income st in: fit and loss ale” Balance sheet Oia) None of these If a building having beck value of Rs. 60000 is sold for Rs.45000 the capital loss is: (a) 60000 (») 105000 {c} 150000 {d) None of these: The amount which is sctually paid on account of a capital expenditure is: {a} Capital payment {b) Revenue payment (c) Capital loss (a) Capital expenditure An amount which is actually paid on the account of some revenuc expenditure is: {a) Capital payment {) Revenue payment” {¢) Revenue loss {q) Revenue expenditure. A payment is a capital in nature, whee: fa) It is incurred. to decrease the tax lidbitiny (b} It arises due to abnormal reasons (c) It relates lo capital expenditure” {d) None of thesePrincipal af Accounting: 56 82, A payment is a revenue in mature, when {d) Any transaction affect one account (ap It arises due to normal reason 89. Frror due to wrong allocation, as (h) It relates of eapital losses expenditure between capital and revenue te) 1 relates to eapital expenditure is regarded as: 4d) IU relates to revenue expenditures” {a} Error of omission 83, Errors usually oceur in the baoks of (b) Error of principlew accounts ean beoadly be divided into: {e) Compensating errors ta) One class (a) Ercar of commission th) Two classes” 0, The errors in which amount have te) Thrce classes accurred on the apposite sides of twa or td) Four classes more accounts and have concealed 84. Errors which are made in original themselves in the net result, are documents, original entry books and in (a) Errors of principle the ; {b) Errors of omission posting from the original entry books into {c) Errors of commission the ledger are regarded as: (d) Compensating SY (a) Book-keepiny errors” O1. Ta transacti been journalized but th) Trial balance errors has heen wrongly in the ledger te) Error of final accounts account 4d) Nanc of these fa) sting 85. If a transaction has been completely (by) rineiple omitted feos the orginal books of ror of omission Account, it will be consider, as: }) Error of commission (2) Error af commission & Goods purchased from Robin for Rs. 600 {b) Error of omission?” have been posted to Rehim account, it is fc) Error of principle s\ an, ta) Compensating error N (a) Error of omission 86, Error of commission arises when’ (b) Error of casting ta) Any transaction is 7 (c} Error of posting” recorded, either wholly a pi v {d) Error of commission {b) Any transaction is leftgitfref wholly or 93. If the efter oceur due to short casting or partially . excess occur due to short casting or fe) Any transect reconted in a excess casting in any subsidiary book or Fandanentally in ‘manner in any account in the Jedger, itis an id) Any transi iffect one account (a} Error of posting 87. Errors in additions and earry-forwards in (b) Error of casting” hooks of original entry, is regarded as: fe) Error of omission ta) Error af omission. {d) Error af commission {b) Ervor of principle 94, Compensating errors, arises when: te) Compensating errors (a) Any transaction is left wholly or (a) Error of commission” partially 88. Error of principle arises when: (b) Any transaction is inconeetly fa) Any transaction is incorrcelly recorded either wholly or partially recorded, either wholly or partially 1) Any transaction is Teft cither whotly or partially te) Any transaction is reconled in a fundamentally incortect manner” (ch Any transaction is recorded in a fundamentally incorrect manner (d) One error is compensated by the other error’Principal of Accourning 95: 8, 90, 8. yo. 100) ra The process of totaling the tr the end of the period is eal (a) Posting (b) Castinuy 4c) Journalizing (dl) Compensating Waues paid Rs. 604 were pasted to wages account as Rs. Gil, Te rectify the error, the ‘wages account wall be {a) Debited by Rs. S400 (by Debited by Rs. 660 ic} Debited by Rs. 600 (uh Credited hy Rs. $50 Omission of a transaction subsidiary record affect: Salons at from a a) One account {b) Two accounts” 4c) Yhree accounts (d) Several accounts Ener of principle involves an incorrect receipt alicewion of between: (a) Capital and revenuer™ 4{b) Capital and capitalized {c) Revenue und defereed revenue 4d) Revenue and revenue The error in the easting of sales called as (a) Error of principle tb} Error of omission (e) Clerical error 40) Compensating erro Wages paid for t dybited to wanes: {a) Clerical (b} Estor of prineipiew (c) Ertor of omission Ad} Compensating error Envor of casting in bill receivable book aloes (a) Bill payable ae (b) Debtor we {c) Bill receivable aie (0) Creditors. we Over casting of purchases book i in example of error of 4) Carey forward Ab} Post expenditure or fon of a machine an example of; 37 (c) Compensating (d) Casting 102, Error of posting affects (a) One aceount ¥ (b) Two accounts (c) Three accounts (d) Four accounts 103, Sales of Rs. 625 to Ali were posted to his account as Its. 562, To rectify the error. - Ali's account will be: (a) Debited by Rs: 118 (b} Debited by Rs. 6” (c} Credited by Rs. 63 (d) Both debited and credued by Rs. 63 14, Sales of Rs. $00 10 Amjad were not reconted whil Getitying this error, Aaija's acp nN I be: (a) Cred 5. 1000 (b) Cregffed by Rs, Skt (ch by Rs. 5007 ( ein ed by Rs, 11K. 105, ¢Agsasset was purchased for the business, jwever, the amount was debited to purchases account. It is an error of: (a} Recording {b) Postinw, (6) Casting a) Principle ¥ Some expenses are incurred at the time of the sale of an assel, The amount will be debited to: (a) Assets account?” (b) Expenses account {¢) Cash account (d) Purchases account 107. Impersonal accounts are affected by: (a) Errors of carry forward (b) Errors, of custing (c) Errors of omission Ad) None of these Purchases from Kamvan Rs. 499, were not recorded, This will affect: {a) Only purchases we {b) Only Kamran ave {c) Both the accounts {d} None of these Sales to Fahad, Rs. $06, posted to his account as Rs. 605 affect: ta) Sales are (b) Fuhad lew 108.Principal of Ac 110, mW 112 113, 14, 115, unting e) Cash ae (a) Debtors ae Sales to Imran Rs. 336, have been debited to Kamran's account. This will be 116, rectified by: (a) Debiting Imran’s Ave and credited Kamran's ae” (b) Debiting Kamran’s A‘c and crediting Iran's ale (c) Crediting both the accounts, (d) None of these 117. Cartage paid Rs, 100, for the newly purchased machinery, if debited 10 cantage account will affect: (a) Both the cartage and machinery alew” (b) Only machinery ae (c) Only eartage ae (di Only cash ac 18, Goods purchased from Salman Rs. 3000, Were passed through sales book. The (a) increase the gross profit (by Decrease the gross profit” 1 (d) Have double effect on the gross profit An amount of Rs. 600, written off as bj X's personal account. The rectifi ao if this entry will 120, (b) Reduce net profit by (ic) Increase net profit reclificalion of the error will: (ch Have no effect on the gross profit é Was received from X and was ered (a) Increase net profit by Rs, (d) Reduce net profi Awis aceount error will: (a) Increase the net profit (b) Decrease the net profit {c) First increase, then decrease the net profit (d) Have no effecronthe net profit” A ctedit sale was wrongly passed through purchases book, the rectification of the entry will: (a) Increase the net profit, by double amount” (b) Decrease the met protit The rectification of the 121. 38 {c) Decrease the net profit by double amount (d) Have no effect on the net profit Goods sold for Rs. 1,000 were entered in the sales book by Rs. 2000, the rectification of the entry will: (a) Increase the net profit (b) Decrease the net profit~” {ch Have double cffect on net profit (d) Have no effect on net profit Paid our acceptance to Mr. | was posted fo the debit of M's account The rectification of the entry will: (a) Increase-the net profit (b) Decrease the fit (c) Have doubl con net profit (d) Have no in net profit (a) Ones only nt ror of omission from trial balance affects: (a) One account” {b) Two account (c) Three account (4) Pour account Engrs, which are made in the preparation of the trial balance arc called: (a) Errors of omission (b) Errors of commission (c) Ervors of principle (c) Trial balance errors” Only those errors affect the profit of the business which are related to: (a) Trading and profit and loss ae“ (5) Balance sheet (c) Trading alc only (d) Profit and loss ae only HE any expense afe or revenue alc is wrongly debited, the profit will decrease and when itis rectified: {a) The profit will become double (b) The profit will become half {(¢) The profit will increasew {a} The profit will lessPrincipal af Accounting. 123. 124. 125 126, 127. 128, 129, 130, If by eror, any revenue omilied to be recorded it will: (a) Understate the profit (b) Oversiate the profit~’ (c) Both understate and overs ate the profit (d) Having ne effect on profit If there is any error in cash account, it will affect (a) Trading ae {b) Profit and loss a/c (c} Balance sheet? (d) Both trading and profit and loss ae Hf the error is committed in liabilities account, it will have its impact-on the: (a) Trading ae only {b) Profit and loss ae only (c) Both trading & profit & loss-a’e (d) None of thesew” When all the errors are rectified and posted lo suspense ac. the suspense a/c shows: {a) Debit balance {b) Credit balance (d) None of these In ease of double sided errors, entry should be, equal to: (a) Wrong entry * Rectifyi “ (b) Wrong entry + Suspepsbgitry (e) Rectifying entry + 5 entry td) Correct entry + {e) Both sides are equal” se Under or over glgting of a subsidiary book is an ex: feror of (a) Omissi (b) Principle {c} Both omission and principle {d) Commission” Errors which affect profit and loss relate to: (a) Real a/c {e) Nominal wey’ {d) None of these Enpors of carry forward effect: (a) Impersonal accounts” {b) Personal accounts (c} Both personal and accounts (b) Personal a/c impersonal 9 (a) None of these 131, Shon debit to an account increases the credit side of the: (a) Trial balance¥ (b) Profit and loss account {c) Balance sheet (4) Both profit & loss ae & trial balance 132, Am account in which, are entered transactions, which cannot be placed-to their proper accounts for want of sufficient information is called: {a) Profit and loss a/c {b) Trading a’e (c) Real vc (a) Suspense aie’ 133. Sometimes balance may not agree und circumstances, the differencé'wiay be placed to a a) Taging ave ¢ sealer fit and loss a/c )) Personal ae ‘When the mistakes are discovered subsequently, they are rectified through the: {a) Suspense a'c ¥ (b) Trading ae {e) Profit and loss a/c {d) None of these 135. Double sided error is one which exisis simultaneously in: {a) One aie {b) Two afew (e) Several accounts (a) None of these 136. A purchases returns of Rs. 600 to P if catered in the sales book would affect: {a) P's account (b) Purchases retums account (e) Sales account {d) Purchases returns account and sales aicv 137. A company's share capital consists of 50,000 25c ordinary shares, which were all issued at a premium of 10%, The current market value of shares is 40c each.ncipal [Aviom 60 re 130 ‘What 8 the amount of share capital af the company appyaring is Stalement of Financial Pasition? 15 5,000 (by $ 12,5000 42 520,004) ed) $18,000 Share capital ~ No of shares issued » Par value per share PAM) 251K = § 12,500) Wa manager of a limited lability company is also a shareholder of that company, then the salary paid 1 that nager is treated as appropriation of profitand net as an expense of the comp: fa) True (b) False~” A limited liability company issued 80,000 ndimary shares of S0¢ cach at a premium: at 2S¢ per share. The cush recived was coretly recorded but the full amount ‘sus eredited to the ordinary share capital oi Which of the following joumal entries is ncede 10 correet this error? La) Share premium aecount20,000 Dr ‘share capital account 20,000 Cr {h) Shane capttal uccount20.000 Drv ‘Share premium account 20,000 Cr te) Share capital account Dr 40.000 Shave premium account 40,000 Cr cl) Share capital account Dr25,004 Cash23,000 Cr Which of the following entries correctly reco bonus could Ieupiialization) issues 1a) Cash 80,0000 De ry share capitalB0.000 Dr Share premium 80,000 Cr te) Share premiim $0,000 Dr ‘Ordinary share capital BOOK! Cr td) Investments 80.010) Dr Cosh $4,000 Cr ‘The issued share capital of Heta Limited is as follows: Ordinary shares of 23¢ each 400,000 4% Preference shares of 50¢ each east) 142, S so 14a in the year ended 31 December 2007, the company has paid the preference dividend for the yeur and an interim dividend af Le per shure on the ordinary shares. A final ordinary dividend of 4c per share is proposed, What is the total amount of dividends relating to the year ended 31 December 20077 4a) 5 180,000 te) 8.120.000 (by 110,004 {€9$ 125,000 According « IAS 1 Presentation of Financial Statements, dividends paid ducing the year should be disclosed in: {a) Statement of financial Position {b) Income Statement, (e) Statement of eg im ui {d) None of thes SA emia Ni A fimited. ligb! several typebvof reserves. Which of the i availuble for distribution as fare premium eveniue Feserves Capital reserve ‘S. General reserve a) 1.2.0.4 end (b) $ only fe) LBand S¥ (a) 1 and $ At 30 June 2007 2 company’s capital structure was as follows; ‘Ordinary share capital 9,000 shares of $c each — 300,000) Share premium account 120,000 In the year ended 30 June 2008 the company made a rights issue of I share for every 2 held at. 75e per share and this ‘was taken up in full. Later in the year the company made 2 benus issue of 1 share for every @ held, using the share premiuny aceount for the purpose. ‘What was the company’s capital struct at 30 June 2008? re fa) $50,000 143,000 () 355,000 170,008 te) 525,004 130,000 ta) $00,800 200,000Principal of Accounting 61 145 146, 447, 148, 449, Which of the following is not a pan of shareholder's equity of limited liability company. (a) Share premium (b) Revaluation reserves 4c) Ordinary share capital (d) Redeemable preferred share capitaly A company has an authorized share eapital af § 2,000,000 consisting af 50¢ ordinary shares. The issued share capital ‘of the compary consists of 800,000 shares. A dividend of 3c per share is declared. What is the amount of dividend payable to shareholders? 4a) $ 4,000, (b} $ 24,0004 fc) $ 18,000 td) § 250,000 Revenue reserves of a company would increase if the company, {a) Declares dividend (b) fssues shares at a premium {c) Retains profit in the company 4d} Creates reserves aut of retained scaming ‘A. company's authorized share capital consists of 8,000,000 25c ondinary maae\ ‘The company pays a dividend 3% a total amount received by the shay is $ 60,000, What is the amouny id up capital of the company gin its statement of Financial Pogiti a) $ 1,200,000" a ic) $ 1,400,000 (aps 13H A company has an authorized share capital of 900,000 ordinary shares of $1 each, of which 600,000 have been issued at a premium of 25c each, therehy raising capital of $ u7S0,000 (600,000x 1.25). The directors are considering allocating $ 480,000 for dividend payments this year. This amounts to a dividend of a) 45e per share (b) Off per share {¢) 68¢ per share (d) 80¢ per sharew” 150 Isl 152, 153. isa. 155. ‘The following information is available for LMB, a linsted liability company. S0¢ ordinary shares 5% preference shares of Se 3,000,000 2,001,000 600,000 350,000 In addition to providing for the preference dividend for a financial year, an ordinary dividend of 3c per share is to be paid. What is the to%al amount of dividend for the year? (a) $135,000 tb) $ 134,000 (c)$ 120,000 (4) $ 137.0004 AU 3 December 2007 the eypital structure of a company was as follows: Ordinary share qa 400,000 shares of 25e each at 75,000 Share premiuP¥ecount 50,000 During 206% the company made 2 honus ie share for every three held, share premium account for the se, and later issued for cash another shares at 75c per share. a) 130,000 93,000 (by 130,000 65,000 (c) 120,000 65,004 (d) 125,000 57,000 Under which of the following style of ‘business, retained carning account is maintained. (a) Sole ownership (b) Partnership business (c) Company” (d) All of above The amount for which an asset could be exchanged or a liability setled between knowledgeable willing parties in an arm's Jength transaction is called: (a) Revenue {0} Fair market vatiies# ic) Cast value (a) Dividend Minority interest account in the hooks af Holding compatly is a liability account (a) True, ib} False” In a limited liability company, the net profit or loss of the company is transferred. to:Principal of Accounting 156, Ls, ISB 159, (a) Share cupital account (ih) Capital reserve account (ch Retained earning account™ (al) General reserve account Following is the detail of assets and iabilitics of a limited liability company, Cash in hand 50,000 “ash at bank 80,004) Account receivable 25,000 Prepatd rent 10,000 Allowance for receivable 3,000 Plant at machinery 250,000 Furniture 40,000 ‘Account payable 20,000 What is the amount of working capital of the campany? ta} $ 142,000% (6) 145,000 fe) § 157.000 (a) $ 165,000 Faney Lid registered with an authorized share capital of $ 1,500,000 divided into 1,300,000 shares of $1 each, Faney Lid issued 500,000 shures at a premium of 30 per share. AU year end the company declared dividend of $ 200,000. What is the rate of dividend declared by the company’? (ai le per share {h) 38e per share (61 45¢ per share (al) 23e per share Nice and fair fimited ondinury shares of 80c, of 2Uc hare, Nice correctly but the to he ordinary Which of the eiowing journal entnes is needed 10 the ordinary share capital aceount (a) Share premium ve 18.00% Shure capital ae 18,080 (h) Share capital aie 72,000 Share premium we 72,080 {c) Share capital ve 18AMIODr Share premium alc 18,000Cr (a) Share capital ale 18,000 Cash 18,000 Benzon & Benzon Lid was registered with an authorized share capital of a2 $1,800,000 divided into 2,000,000 shares of $90¢ each, Benzon & Benzon Lid issued 1,000,000 shares at a discount of 40c per share. At year end the company declared dividend of $1,000,000 (a) 90¢ per share (h) $1 per sharew” (6) 870c per share (a) S1/5 per share 160, Which of the fillawing best describes the lel working capital of a business? (2) Total assets minus current Hiabi ies (b) Net Current assets minus current liabilities” (¢} Fixed assets plus current assets (d) Share caput general reserves ‘A company 4n issue for cash of 1,500,000 jares at a discount of 10¢ share, Whict@APihe following journal entries records the issuc? 750,000Dr 150,000Cr Bank ‘900,000 (b) Bank 900, 00008 Share capital 750,000D; Share premium 130,000Cr (e) Bank 750,000Dr Share capital ‘601,000, Share Discount 150,000Cr (4) Bank 600,000 Drv’ Share Discount 150,000Cr Share capital 730,000 162. The issued share capital af Alpha is as follows: Ordinary shares of 40c each 1,20,000 10% Preference shares of $1 each 500,010 In she year ended 30 September 2008, the compariy has paid the preference dividend for the year and an interim dividend of Se per share o the ordinary shares. A final ordinary dividend of 2c per share is proposed What is the total amount of dividends relating to the year ended 30 September 20087 (a) $50,000Principal af Aveo 6 103, 164, 165, 106. {by S270 Ke) $200,004 40) $280,000 A company has § 250,000 ordinary shares ala par value of 40 cents each and $40.00 6% preference shares at a par value af 80 cents each, The board of directors declare a dividend ‘of Se per ordinary share along with preference shares dividend. 4a) $ 50,000 {h) $ 56,7200 te) $6,720 (4) $56,000 ‘The following information is related w a invited liability company: ‘Ue per ordinary share 2.500.000 1,200,000 7% preference shares of $1 each. 700,000 350,000 AL year end the company paid ordinary dividend @5% in addition to. preference dividend, What is the total amount of dividends for the year? (a) S 84,5004 tb) $ 90,000 fe) $ 105,000 ta)511 A company made an issue for ©. 1,800,000 O0e shares at a premiu per share Which of the following iontin correctly records the issue? 4a) Shate capital 000 Share premium ,000 Bank 1,800,000 «b) Bank 1,800,000 Share capital 1,620,000 Share premium 180,000 (c) Bank 1,800,000 ‘Share capital 1,620,000 Share discount 189,000 Ad) Share capital 1,800,000 Share premium 180,000 Bank 1,620,000 Which of the following might appear as an item in a company’s statement of changes in equity? (1) Profit on disposat of properties. (2) Surplus on revaluation of properties (G) Equity dividends proposed sfter the statement of Finaneial position date (4) Issue of share capital fa) (1), 3} and (4) only Xb} (2) and (4) only {c) (1) and (2) only (a) (3) and (4) only Which of the following statements about financial statements are in accordance with AS 1? ~ 1, The authorized share capital of the company must be disclosed by nave or on the face of the statement ef financial 167, position 2. The total of. for the period must be disclosed hysbit or on the face of the income slat 3, The accotlpting polictes adopted by the ust be disclosed but only: if not comply with accounting posed ondinary dividends should not ¢ recognized as Habilities unless they have been proposed or declared before the statement of financial positian date. fa) Land 3 (bj 12 and (co) 2.3 and (d) 1,3-and 4 ich of the following statements about company financial statements correct, according 10 international accounting standards? 1. A material profit or loss on the sale of part of the entity must appear in the income statement as an extraordinary item. 2. dividends paid and proposed should be included in the income statement 3. the income statement must show separately any material profit or loss from operations discontinued during the year. 4. The statement of changes in equity must not include unrealized gains or 168 losses. ta) Land 3 tb) 2and4 {c) Fenly” (a) | and 464 COST CONCEPT & PRINCIPLES The main purpose of cost accounting is wo (a) Maximise profits (b} hetp in inventory valuation (c)Provide information to management for decision-making” (u) aid in the fixation of selling prices One of the mast importunt wols in east planning is, (a) direct cast tb) cost sheet de} budget {d) marginal costing The purpose af cost accounting is 10 provide information for La) preparing costing P & L-Ale th) cast contrel~” (cJlocating factors leading to wastages and losses {@) assessing the profitability and @) Finaneial position af the firm A Fixed cost per unit increases w! Oo {a} variahle cost per unit inc! (b) vanable cost per unit ds (e) production volume in (a) production volume dee Variable cost per (a) varies when, Le (¢) increasedhen output inereases (d} decreases when output decreases. increase in total vanable cost js due to {a} increase in fixed cost (6). increase im production” (c) increase in sales (a) increase in total cost An example of variable cost is (a) property taxes (b) direct material cost” (c) interest on capital (u) depreciation of machinery rn 15. L ‘An example of fixed cost is (a) direct material cost (b) depreciation of machinery (e} works manager's salary” (d) chargeable expenses. Cost accounting concepts include all of the dallowing exeept (a) planning (b) profit sharing” (e) controlling (d) product costing ‘The three major elements of product casts are all but (a) direct materials (b) direct Jabour (e} factory dyéthbad (@) ind ur Cast of, aduced includes Aa) \ction cost and finished gonds oat duction cost and work-in- progress production cost, work-in-progress and finished goods inventory. Cost of goods sold includes (a) cost of production and work-in- progress (bh) cost of production and fini goods inventory” (e} cost of production, work-in-progress and Gnished goods inventory, An overstatement of work-in-progress at the end of a period will (a) overstate eost af goods produced (0) understate current assets (c}_ understate gross profit (a) overstate net profit. ~~ Conversion cost is equal to the total of {al material cost and direct wages {b) material cost and indirect wages (eldirect wages and factory averhead’™ (d) material cust and factory overhead Multiple costing method is used in (a) oil refinery (b) car manufacturing company” (ec) sugar mill (4) multiproduct company. edCost Concept & Nenciples ts ce 2. Me Tay use (ah uniteasting hy hutch costing” 25. (cb job easting (d) multiply casting. Blecuicily wenerating company should employ (ab uniteasting {h} operation costing he leh process costing, (d) operating costing. “ Jabs casting is used in (31) paper mills (h} printing press a {e} chemical works (dp textile mill Output costing is employed i (a) mining quarries (Dy brick kits: ic} steel production: (dhall of these ¥ Contract casting i used in (a) ship-building? {by aulomobile industries ic) aeroplane industries (d) none af these. ~ Which mcthod of cost for interior deeorator ? ». {a} Job casting (b) Process: costin 4) Contract co; 4d) Operating’ Which m hospitals ® (a) Joh costing {hp Operating costing? 4e) Unis costing 4d) No method is used Costs which are uscérlained after they hi been incurred are known as 4) inmputed easis {by historical costs” (¢} sunk vosts aI (4) opportunity ens. Prime cost plus variable overhicad is known (is) production cast wfaviaring company Hin. He ‘of costing is used in (b) total cost (c} marginal cast (d) cost af sales, When premises are owned, a charge in hiew ofr (a) opportunity cost (ft sunk cost ich} ampated casi (lh duture cost Reseurch and development cust is 4 (a) pre-production cost? h) epponunity cost te) sunk cost (d) imputed cost, When ampuM)deposited in a bank is financing a project. tbe s digfhgerest on bank deposit will be ic) opportunity cost {dh replacement cast. Which of the following is vinually always afler-praduction cost ? (uj research and development cost (h) selling and distribution cos (c) interest on capital {dp all of these. Indirect matenal east 1s a pan af fa) Prime cast {b) Factory overheaiy” (c) Chargeable expanses Which of the following 4s the most imponiant advantage of cost accounting. to management ? (a) It imerease the reputation of the company (b) Ik mevis the summory requirements ‘of Companies Act {c) lt reveal profitable and unprofitable activities of the business. 4d) It checks the accuracy of financial accouals An example of direct expense is (a} Direct material eost (h) Direct Labour cost {¢) both ta) and (b>Cost Concept & Principles 32- 33 a as 36 a 3 9 (d) Hire of a spe plant for a particular job” Coal used in a factory is an example of (a) Direct material (b) Direct expense (c) Indirect material¥” (4) Indirect expense Which of he following is not a relevant cost (a) Replacement cost (b) Sunk cost” (c) Marginal cost (4) Replacement cost. A cost which inereases or decreases per + unit when volume of output decreases or increases is (2) Fixed cost” (b) Direct cost 2 (c) Variable cost (4) Indizect cost Which of he following is apart of both prime cast and conversion cost (a) Direct material * 40. 66 (c) Process costing (a) Multiple costing In tyre manufacture, which method of costing should be used? (a) Unit costing (b) Batch costing” {(€) Job costing (d) Process costing, MATERIAL COST Dircet material is a {a} Fixed cost (b) Variable costy’ (c} Semi vatiableed Direet mater janufacturing industries, the most (b) Direct labour” rtant element of cost is (c) Indirect material Sr as Masa (b) Labour (4) Indirect labour {c} Overheads Which of he Sterile iY P Arar the following is an accounting, rofil planning. record? (a) Sandad’ costing and wipe (a) Billof Material (b) Bin card analysis (c)stores ledger“ (4) All of these (6) Marginal costing and ume = 5 Oe ee (c) Uniform costing ~ (@) Multiple cost Which of he folding is an effective technique of cast tontral 7 {a) Standard costing” (b) Budgetary control & (c) Marginal costing (4) Uniform costing Which of the following industries are not suitable for use of multiple costing? (a) Car manufacture (b) Radio manufacture (e} Paper mill~” (4) locomotive works. % Batch costing is a vasiant of (a) Job costing” Which of the following documents is used for issuing materials to productions deparunenis ? {a} Purehase Requisition Note (b) Stores Requisition Note” (c) Goods Received Note (d) Stores Credit Note. Which of following is considered to be a normal loss of materials ? {a) Loss due to accidents (b) Pilferage {c) Loss due to breaking the bulk” (a) Loss due to careless handling of * materials (e) All of these According t9 which of the following methods of pricing, issues are close to current economic values ?‘Cost Concept & Principles 13 Me (a) Lastin-first-out price (6) First-in- first-out price (¢) Highest-in-first-out price (d) Weighted average price In which of the following methods of 15+ pricing, costs lag behind the current economic values ? (a) Last-in-first-out price (b} First-in-first-out price” (c} Replacement price (d) Weighted average price. Which of the following methods of 16 stock control aims at concentrating -efforis on selected items of materials ? (a) Perpetual inventory system. (b) Materiais tumover (c) Maximum, minimum and re-cder level setting (0) ABC analysis, u In hase stock methed of pricing the material issues, the term “baso stock! represents the (a) Quantity of stock being issued @ (b) Stock in balance {¢) Minimum stock” (d) Maximus stock. Which of the following. items should NOT be treated material (a) Electricity representi total cost : {b) Sand paper u: luction: tc) Thread used inpsigthing garments (d) All of the alfve. 19 ‘Continuous siock-taking is.a part of {a) Annual stock-taking {b) Perpetual inventory system? {c) ABC analysis. (d} Periodic inventory system. The classification of tems in ABC analysis is made on the basis of 20 {) Investment value of materials (b) Consumption value of materials (c) Quantity of materials consumed (d) All of these” In which of the following methods, issues of materials are priced at a pre- 21- determined rate ? 67 (a) Inilated price method (b) Standard price methody” (c) Replacement price method (a) Specific price method In which of the following methods, materials are issued at the price prevailing at the time or issue ? {a} Inflated price method {b) Standard price method (c) Replacement price method" (a) Specific price method ‘The storekeeper should initiate a purchase requisition when stock reaches (a) Minimum 1 © (b) maximu x (c) re-order ‘be transferred to Costing Profit Account’? ‘Loss by evaporation (b) Loss due to improper storage of materials” (c) Loss due to brevking the bulk (d) AL of these, When material prices fluctuate widely the method of pricing that gives absurd results is (a) Simple average pice” (b} Weighted average price (c) Moving average price (c) Inflated price. When prices fluctuate widely, the method that will smonth out the effect of fluctuations is (a) Simple average (by Weighted averages (c) FIFO (dy LIFO. In which of the following methods, the charge to production is at actual cost? (a) Weighted average price (b) Standard price 4c) Replacemem price (d) FIFO Expected annual usage of a particular raw material is 2,00,000 units and the