MGT101 Final Term Past Paper 21

Q1. Net Profit + Expenses= _________ (1 marks)

1. Liabilities
2. Assets
3. Capital
4. Income

Q2. Which of the following fixed asset is shown at cost rather than book value? (1 marks)

1. Machinery
2. Furniture
3. Vehicles
4. Land

Q3. Firms charge depreciation each year: (1 marks)

1. To ensure there is enough money in the firm to replace the asset
2. To spread the cost of the asset over its working life
3. To reduce the profit and thus reduce the dividends they can pay to share holders
4. Because the law states they must be reduced

Q4. Depreciation arises because of: (1 marks)

1. Fall in the market value of an asset
2. Fall in the value of money
3. Physical wear and tear
4. All of the given options

Q5. The basic purpose of depreciation is to achieve the: (1 marks)

1. Matching principle
2. Dual aspect principle
3. Separate entity concept
4. Money measurement concept

Q6. Find out the missing value of an Accounting Equation with the help of given data: (1 marks)

Total Assets Rs. 34,500 Accounts payable Rs. 1, 000 Other liabilities Rs. 11,500

1. Rs. 22,000 owner’s equity
2. Rs. 23, 000 owner’s equity
3. Rs. 24,000 owner’s equity
4. Rs. 46,000 owner’s equity

Q7. 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

Q8. While adjusting the cash balance of cash book, which of the following is NOT taken into account. (1 marks)

1. Mistakes in the cash book
2. Mistakes in the pass book
3. Interest credited in the pass book but not entered in cash book
4. Interest debited in the pass book but not entered in cash book

Q9. 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

Q10. The main goal of Bank Reconciliation Statement is to determine: (1 marks)

1. If the discrepancy is due to error rather than timing
2. If the discrepancy is due to timing rather than error
3. If the discrepancy is due to error rather than amount
4. If the discrepancy is due to amount rather than timing

Q11. 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

Q12. 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

Q20. units Rs. 13 per unit Eighty-five units were sold, what is the value of the ending inventory using the FIFO method of inventory costing?

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

Q13. 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

Q80. units were sold, Use the FIFO method of inventory costing and determine the cost of goods sold.

1. Rs. 1,225
2. Rs. 1,015
3. Rs. 965