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MGT101
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Exam Term : Mid
Total MCQS : 26
Prepared By :
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1 - Which of the following account would be credited, when goods are sold on credit?
1. Stock account
2. Accounts receivable account
3. Accounts payable account
4. Sales account
Correct Choice : 4 From Lectuer # 3
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2 - Cash Rs. 100, Account Receivable Rs. 500, Account Payable Rs. 200, Bank Loan Rs.
1000. Based on the information provided, what are the total assets of Mr. B?
1. Rs.200
2. Rs. 600
3. Rs. 800
4. Rs. 1,700
3 - An Asset that is NOT physical in nature is called _________.
1. Intangible Asset
2. Liquid Asset
3. Current Asset
4. Fixed Asset
4 - Which account is increased with a debit and decreased with a credit?
1. Cash
2. Accounts Payable
3. Contributed Capital
4. Retained Earnings
5 - Which of the following is used to record financial transactions in chronological
(day-to-day) order?
1. Voucher
2. General Journal
3. General Ledger
4. Trial balance
6 - Adjusting entries are recorded in which of the following?
1. Voucher
2. General journal
3. Ledger
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4. Trial balance
7 - Which of the following is the recording phase of an accounting system?
1. Financial Accounting
2. Cost Accounting
3. Management Accounting
4. Book-keeping
9 - Which of the following is a selling expense?
1. Interest on deposits
2. Any tax/freight is paid on purchases
3. General salaries paid to laborers
4. Tax & freight paid on sale
10 - The accounting equation is based on:
1. Dual aspect concept
2. Money measurement concept
3. Going concern concept
4. Separate entity concept
11 - Which of the following is used to record the receipts of cash or cheque?
1. Journal Voucher
2. Receipt Voucher
3. Payment Voucher
4. Cash voucher
12 - Stock of Trading concern consists of:
1. Raw material
2. Work in process
3. Merchandise inventory
4. All of the given options
13 - Which of the following is TRUE during the periods of deflation?
1. The use of FIFO will result in greater net income than LIFO
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2. The use of FIFO will result in a smaller cost of goods sold than LIFO
3. The use of FIFO will result in a lower net income and higher ending inventory
than LIFO
4. The use of FIFO will result in a lower net income and lower ending inventory
than LIFO
15 - An asset cost Rs. 50,000, has an estimated residual value of Rs.1, 500, and an
estimated useful life of 8 years. What is the depreciation rate under reducing balance
method?
1. 11.50%
2. 20.00%
3. 25.00%
4. 35.50%
16 - If: ( Cost of machine= Rs. 200,000 ) ( Rate of depreciation = 10% p.a. )( Sale price=
Rs. 50,000 ) What will be book value of machine after two years using diminishing balance
method?
1. Rs. 150,000
2. Rs. 162,000
3. Rs. 160,000
4. Rs. 180,000
17 - Purpose of charging depreciation expense is the application of:
1. Matching principle
2. Dual aspect concept
3. Separate entity concept
4. Money measurement concept
18 - Which of the following is/are TRUE about fixed assets?
1. Fixed assets have a long life
2. Fixed assets are used in the business for future generation of income
3. Fixed assets are not bought with the main purpose of resale
4. All of the given options
19 - Which of the following is NOT a method of calculating depreciation?
1. Straight Line Method
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2. Written Down Value Method
3. Diminishing Balance Method
4. Specific Identification Method
20 - Which of the following is TRUE about capital receipt?
1. It decreases value of property or increases value of liability
2. It is shown in the income and expenditure account
3. It is recurring in nature
4. It is not shown in the statement of financial positions
21 - Expenditure is revenue in nature when it:
1. Benefits the current period
2. Benefits the future period
3. Belong to the previous period
4. None of the given options
22 - Which of the following item must be recorded in the adjusted Cash Book in order to
bring it in line with the entries in the Bank Statement?
1. Bank charges
2. An error on the Bank Statement
3. An uncredited deposit
4. An unpresented cheque
23 - Bank reconciliation statement is a part of:
1. Pass book
2. Ledger account
3. Cash book
4. Journal
24 - Bank Reconciliation Statement is:
1. A memorandum statement
2. A ledger account
3. A part of cash book
4. A part of journal
25 - Which of the following indicates cash discount received?
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1. Discount in paying debt earlier
2. Discount in receiving debt earlier
3. Discount in purchasing huge goods
4. Discount in selling huge goods
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