MGT101 Final Term Past Paper 16

MIDTERM EXAMINATION · Spring 2009 · MGT101- Financial Accounting (Session - 5) · Time: 60 min Marks: 50

Q1. An accounting system is used by a business to: (1 marks)

1. Analyze transactions
2. Handle routine book-keeping tasks
3. Classify and summarize financial information
4. All of the given options

Q2. The assets which have a limited useful life are termed as: (1 marks)

1. Limited assets
2. Depreciateable assets
3. Unlimited assets
4. None of the given options

Q3. Accountancy covers which of the following area(s): (1 marks)

1. Book-keeping
2. Accounting
3. Auditing
4. All of the given options

Q4. If a business pays rent in advance for 12 months, it will be treated as: (1 marks)

1. Prepaid expenses of business
2. Long term liability of business
3. Fixed assets of business
4. Current liability of business

Q5. Which of the following transaction have NO affect on stockholders' equity? (1 marks)

1. Purchase of land on credit
2. Dividends to stockholders
3. Net loss
4. Investment in cash by stockholders

Q6. Which of the following account balance is shown on credit side of Trial Balance? (It is assumed that all account balances are shown on normal balance) (1 marks)

1. Cash account
2. Furniture account
3. Vehicle account
4. Capital account

Q7. If you start with cash book balance (Dr.), which of the following item will be deducted in Bank Reconciliation Statement? (1 marks)

1. Any cheque drawn to creditor but not paid by bank
2. Interest credited by the bank in pass book
3. Cheque deposited but not credited by the bank
4. Dividend collected by bank on behalf of the customer

Q8. The cost of moving plant and machinery to a new site will be treated as: (1 marks)

1. Revenue expense
2. Capital expense
3. Administrative expense
4. Operating expense

Correct answer: Capital expense

Q9. Which one of the following is NOT true about Capital Expenditure? (1 marks)

1. Creates future benefits
2. Incurred to acquire fixed assets
3. Incurred to increase the economic life of existing fixed assets
4. Reduce the profit of the concern

Q10. Consider the following: (1 marks)

Beginning inventory 10 units Rs. 10 per unit First purchase 35 units Rs. 11 per unit Second purchase 40 units Rs. 12 per unit Third purchase 20 units Rs. 13 per unit Sold

Balance

Eighty-five units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?

1. Rs.260
2. Rs.232
3. Rs.284
4. Rs.268

Q11. Consider the following inventory record: (1 marks)

Item · Quantity · Cost/Unit

Rs. Total Rs. Jan. 2 Beginning inventory Mar. 4 Purchase May 8 Purchase Nov. 3 Purchase De31 Merchandise available 1,225

Opening Stock Add purchases 1125 Total material available for sale 1225 Less closing ** Cost of good sold

Detail of 80 units sold

now remaining are