MGT101 Final Term Solved Paper 4

Q1. Prepaid interest given in the Trial Balance will be treated as a (an): (1 marks)

1. Asset
2. Liability
3. Revenue
4. Deferred expense

Q2. The net income calculated in the income statement for the accounting period is reported on: (1 marks)

1. Bank Statement
2. Statement of retained earnings
3. Statement of cash flows
4. None of the given options

Q3. If the Capitals of partners are fixed then, at the end of financial year a partner’s drawings are transferred to the: (1 marks)

1. Credit side of the partner’s capital account
2. Credit side of the partner’s current account
3. Debit side of partnership bank account
4. Debit side of the partner’s current account

Q4. If one partner receives a salary which is credited to him at the end of the year, the share of profit available for distribution will be: (1 marks)

1. Increased
2. Decreased
3. Unchanged
4. Changed and become negative

Q5. In which situation(s) Partnership is dissolved? (1 marks)

1. In case of death of partner
2. At the admission of new partner
3. If any partner resigned from partnership
4. All of the given options

Q6. Rs. (1 marks)

Gross profit 50,000 Operating profit 42,000 Sales 250, 000

What is the amount of operating expenses

1. Rs. 8,000
2. Rs. 92,000
3. Rs. 62,500
4. Rs. 300,000

Correct answer: Rs. 8,000

Q7. Current ratio may be increased by: (1 marks)

1. Overstating current Assets
2. Overstating current Liabilities
3. Understating current Assets
4. Understating current assets and overstating current liabilities

Correct answer: Overstating current Assets

Q8. In which of the following interim dividend is treated? (1 marks)

1. In profit and Loss account
2. In profit and Loss appropriation account
3. On the asset side of the Balance Sheet
4. In trading account

Correct answer: In profit and Loss appropriation account

Q9. The statement of changes in equity basically shows the movement of: (1 marks)

1. share capital during the year
2. Capital reserves during the year
3. Revenue Reserves during the year
4. All of the given options

Correct answer: share capital during the year

Q10. Which of the following can offer its share to general public at large? (1 marks)

1. A private limited company
2. A listed company
3. A partnership firm
4. A trust

Correct answer: A listed company

Q11. The Joint Stock Company is formed under the Companies Ordinance: (1 marks)

1. 1984
2. I884
3. 1948
4. 1965

Correct answer: 1984

Q12. In case of fixed capital accounts, other transactions such as Drawings and Profit etc. are recorded in a separate account that is called ___________. (1 marks)

1. Fixed Capital Account
2. Current Account
3. Fluctuating Capital Account
4. Floating Capital Account

Correct answer: Current Account

Q13. Which of the following account will be debited when the interest on drawings is charged? (1 marks)

1. Partner’s capital account
2. Interest account
3. Partner’s current account
4. Profit & Loss account

Correct answer: Partner’s current account

Q14. Which of the following account will be credited when interest on capital is charged against the distribution of profit? (1 marks)

1. Interest account
2. Partner’s capital account
3. Profit and Loss account
4. Profit and loss appropriation account

Correct answer: Partner’s capital account

Q15. (1 marks)

1. Which of the following statement is TRUE about the partnership form of business? 
2. Partners must have to share their profits in equal proportion
3. 
4. Partners are personally liable for the liabilities of the business 
5. Partnerships must make their accounts available to the general public
6. 
7. Partnership agreement in writing is called Partnership deed

Correct answer: Partnership agreement in writing is called Partnership deed