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CPT December 2013

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Ramanujar Institutional Learning

CPT December 2013 Exam Fundamentals of Accounting

Total Pages 6 1

Total Marks : 60

Which of the following should be valued compulsorily at the time of admission of a partner a Goodwill b Plant & Machinery c Land & Building d Furniture & Fittings Which accounts are used to prepare Bank Reconciliation Statement? b Bank Column & Bank Statement a Cash Column & Bank Statement c Cash Column & Bank Balance d None of the Above The opening stock is overstated by ` 10,000 and Closing Stock is understated by ` 15,000. The impact on the net profit of the current year is a ` 5,000 overstated b ` 25,000 overstated d ` 25,000 understated c ` 5,000 understated If nothing is given in the financial statements about the three accounting assumptions then it is to be treated as it b Is assumed to be followed a Is assumed that it is not followed c Is assumed to be followed to some d None of the above extent A & B have started a Joint Venture for purchase & Sale of garments. Initial capital contribution was ` 25,000 & ` 50,000. There is no written agreement about share of Profit & Loss among them. They purchased garments worth ` 50,000 & sold for ` 75,000, the profit to be shared among them is a ` 8,333 & ` 16,667 b ` 10,000 & ` 15,000 c ` 12,500 & ` 12,500 d ` 20,000 & ` 5,000 Preference shares cannot be redeemed, unless they are b Fully paid a Partly paid c Transferred d Re-issued On 01st April, Mr A sold goods of ` 10,000 to B and drew a bill for 3 months. Mr A discounted the bill with bank at 15%. Amount of discount will be a ` 125 b ` 250 c ` 375 d None Underwriting Commission will not be paid on shares taken by a Promoters b Employees d All of these c Directors Renewal fee of patents is a ___________ expenditure b Revenue a Capital c Deferred Revenue d Development

10 A & B are equal partners. They admitted C for 1/7th Share. New ratio of A & B is b 3/7 : 3/7 a 4/7 : 1/7 c 6/7 : 1/7 d 1/7 : 4/7

CPT December 2013

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11 The proprietor of the business is treated as creditor for the capital introduced by him due to _______ concept a Money Measurement b Cost c Entity d Dual Aspect 12 Where a machine produces products of uniform size, the method of depreciation to be applied ___________ a Machine hour method b Annuity Method d Production Units c Sinking Fund method 13 Debentures are shown under the heading ________ a Secured Loans B Reserves & Surplus c Capital Reserve d Current Liabilities 14 Fixed Assets are held by business for _________ b Generating Revenue a Converting into Cash c Resale d None of the above 15 Net Realisable value is ___________ a Estimated Selling Price c Estimated selling price less cost incurred in order to make sale b d Estimated cost price plus marketing cost Estimated selling price plus cost incurred in order to make sale

16 In Joint Venture the minimum number of co-venturers is a 2 b 5 c 7 d 4 17 Retirement of a bill means __________ a Discounting of a bill c Renewal of a bill b d Dishonour of a bill Payment made before due date

18 What are the options available to the holder of a bill in the bills of exchange (Besides retaining the bill, till the due date)? a Discount with the Bank b Sent to bank for collection d All of these c Endorse it to his creditor 19 A Bill is discounted ` 10,000. Where is it shown at the time of preparation of balance sheet? a Liability side of Balance Sheet b Asset side of Balance Sheet c Foot Note to Balance Sheet d Debit side of Profit & Loss Account 20 Expenditure Spend for increasing the cinema hall seats is called __________ a Capital expenditure b Revenue Expenditure c Deferred Revenue Expenditure d None of the above 21 Which of the following is the meaning of the entry recorded in the machinery account Dr Machinery Account Cr Date Particulars Date Particulars ` ` 31.03.2013 By P & L A/c 5,000 a Profit of sale of machinery b Machinery of ` 5,000 sold transferred to Profit & Loss Account d Loss on sale of machinery transferred to c Machinery of ` 5,000 purchased Profit & Loss Account
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22 Which accounting concept specifies the practice of crediting closing stock to the trading account? a Cost b Realisation d Matching c Going Concern 23 A company before commencing business, can it issue the shares at discount? b Not Possible a Possible c Possible with the permission of stock d Possible with the approval of shareholders exchange and with the permission of Government 24 In a Balance Sheet, _________ is not shown a Authorised Capital c Subscribed Capital b d Un-Issued Capital Paid-up Capital

25 Provision for Depreciation Account is created by debiting to b Profit & Loss account a Machinery Account c Profit & Loss appropriation Account d None of these 26 Amount spent to increase the earning capacity is a _________ expenditure a Capital b Revenue c Deferred Revenue d Capital Loss 27 Which of the following is true? a Co-Venturers always share profits equally c Relation between Co-Venturers is principal & agent b Number of Co-venturers can never be more than two D Co-Venturers may provide funds

28 Change in the Capital account of proprietor may occur due to ______ a Profit earned B Loss incurred D All of the above c Capital Introduced 29 If the goods sent on approval, two vehicles off ` 55,000 each, are recorded as ` 75,000 each, then the cost of goods lying with customers is a ` 1,10,000 B ` 55,000 c ` 75,000 D ` 1,50,000 30 Which of the following is not correct for debenture issue? a They can be issued for consideration other than b They can be issued for cash cash d Can be issued in lieu of dividend c A company can buy its own debentures 31 Goods purchased costing ` 60,000 and cash paid ` 45,000 after receipt of cash discount of ` 9,000. What is the percentage of trade discount got _____ b 10% a 15% c 7.5% d 25% ________ is prepared to ascertain the arithmetical accuracy of posting & balancing of accounts a Cash book b Journal c Trial Balance d Bank Reconciliation Statement
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33 If depreciation is charged at a fixed rate, then depreciation in Straight Line Method, when compared to Written Down Value method is a Equal in the first year & less in b Less in the first year & more in the subsequent year subsequent year c Equal in the first year & more in the d More in the first year & less in the subsequent year subsequent year Consistency with reference to application of accounting procedures means a All companies in the same industry should b Income & Assets have not been use identical accounting procedures overstated c Accounting methods & procedures shall d Any accounting method can be followed be followed uniform basis year after year as per convenience The manager earned a commission of ` 25,000, which is based on 10% of net profit. If sales is ` 3,50,000 is more than purchases. No opening & closing stock. Find Direct & Indirect Expenses b ` 1,00,000 a ` 75,000 c ` 2,50,000 d Not attainable Which is not a feature of company a Separate legal entity c Incorporated Association Perpetual existence No separation between management & ownership Calculate Delcredre commission of 10%. Cash Sales ` 1,00,000 and Credit sales ` 50,000. b ` 15,000 a ` 10,000 c ` 5,000 d None of the above For a depreciable asset, obsolescence is due to a Passage of time b Wear & Tear c Technological Changes d None of the above Salaries paid ` 4,500 is shown on credit side of trail balance. The debit side of trial balance will be ________ a Short by ` 4,500 b Excess by ` 4,500 c Short by ` 9,000 d Excess by ` 9,000 th The Value of inventory as on 04 April is ` 1,60,000. The following transactions took place during 01st April, to 04th April. The value of stock sold is ` 40,000. The mode of sale is as follows: i) The damaged goods are sold for ` 15,000, sold at 25% below cost ii) The remaining goods are sold at cost plus 25% The value of stock as on 31st March is (damaged goods valued at NRV) _______ b ` 1,95,000 a ` 2,00,000 c ` 2,05,000 d None of the above An asset purchased for ` 60,000 and paid ` 10,000 and remaining amount is payable in installments. This effect leads to _______ a Both assets & liabilities increased b Both assets & liabilities decreased by ` 50,000 by ` 50,000 c Assets increased by ` 10,000 & d Assets increased by ` 50,000 and liabilities liabilities decreased by ` 10,000 decreased by ` 50,000
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42 A company issued shares of 5,000 but applications are received for 7,500 shares. Mr X applied for 600 shares. How many shares he will get & how much amount is transferred to allotment money, where application money is ` 3 per share? a 400 shares & ` 600 b 600 shares & ` 600 c 500 shares & ` 300 d None of the above On 31.03.2013, balance of cash book is ` 7,074 (credit), balance as per bank statement is ` 3,159 (debit). On scrutiny it was found that, it was due to cheques issued but not yet presented. Bank balance on 31.03.2013 to be shown in Balance Sheet is ________ a Bank OD ` 3,159 b Cash at Bank ` 7,074 c Bank OD ` 7,074 d Cash at Bank ` 3,159 Karthik & Dhoni entered into Joint Venture, sharing profits & losses in the ratio of 2:1. Karthik purchased goods ` 2,00,000 and entitled to 1% commission on purchases. Dhoni sold goods for ` 2,50,000 and entitled to get a commission 5% on sales. The profit on venture will be _________ a ` 35,500 b ` 34,000 c ` 36,000 d ` 38,000 __________ method is used when repairs & maintenance goes on increase b WDV Method a SLM Method c Machine Hours Method d Production Units method Wages paid ` 2,500 for installation of new machinery wrongly debited to wages Account instead of machinery account. It is an error of _________ a Omission b Commission c Principle d Clerical Errors Which of the following are current assets? 1) Accounts receivable 2) Salaries Paid-in-advance 3) Bank Loan for 3 years 4) Preliminary expenses a 1&2 b c 3&4 d

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2&3 All of the above b d Calculated on credit sales None of the above

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Overriding commission is a commission, that is a Calculated on gross sales c Allowed for selling goods above invoice price

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On 31.03.2013, prepaid expenses Account (2012 13) shows a closing balance of ` 5,000. It means b Expenses transferred to next year for a Expenses transferred from previous accounting in that year only years for accounting in current year c Expenses transferred to next year for d Expenses to be transferred to Profit & loss accounting in that (or) future year Account of current year Petty cash book is used to record ___________ a Expenses for postage & conveyance b Purchase of Raw material c Paid salaries d None of the above
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51 Ram Limited has issued 15% Debentures of ` 20,00,000 at a discount of 10% on April, 2012. The company pays interest half yearly on 30th June & 31st December, every year. On 31st March, 2013, the amount shown as interest accrued is __________ b ` 75,000 a ` 2,25,000 c ` 3,00,000 d ` 1,50,000 In Profit & Loss Account, Selling & Distribution expenses does not include __________ a Commission on Sale b Packing Expenses c Legal Expenses d Advertisement Expenses The credit balance as per Pass Book of X was ` 65,000. Cheques issued but not paid ` 75,800. Cheques deposited by one of the customers of bank but wrongly credited in X account ` 20,600. The balance as per cash book is _________ b ` 31,400 overdraft a ` 31,400 debit c ` 1,20,000 debit d ` 10,400 overdraft Rectification of errors are first entered in a Journal Proper b c Trial balance d Subsidiary books Ledger

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Which of the following are not miscellaneous expenses ? b Amount spent for research & development a Preliminary expenses c Brokerage on issue of shares & d Goodwill yet to be written off debentures Uma, being a holder of 1,000 shares of ` 20 each issued at a discount of 10% per share. She did not pay the allotment money of ` 4 per share and first call of ` 8 per share. At the time of forfeiture, the discount on the shares must be _________ a Credited ` 2,000 b Debited ` 2,000 c Credited ` 1,000 d None of these C & D are the partners of a firm, who share profits & losses in the ratio of 5:3. D is entitled to get 5% commission. The net profit of the year is ` 33,600 before charging such commission. Find the share of the profits of C & D a C 20,000 & D 12,000 b C 19,950 & D 11,970 c C 21,000 & D 12,600 d C 21,600 & D 12,000 Which of the following is false? a Assets can be arranged in the order of their liquidity c Intangible asset is not an asset b d Balance Sheet can be prepared vertically None of these

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In which method, Joint Life Policy Premium paid is treated as an expense and not as an asset? a Ordinary expense method b Surrender Value method c Joint Life Policy reserve method d None of the above Interest on Drawings is a Debited to Profit & Loss Account c Debited to Capital Account b d Credited to Profit & Loss Account None of the above
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CPT December 2013