MGT101 Final Term Solved Paper 7

Q1. What will be the effect on accounting equation, when payment is made to the creditor of the business? (1 marks)

1. Increase in an asset, increase in owner's equity
2. Increase in an asset, increase in a liability
3. Decrease in an asset, decrease in owner's equity
4. Decrease in an asset, decrease in a liability

Correct answer: Decrease in an asset, decrease in a liability

Q2. Which one of the following is a type of General Ledger? (1 marks)

1. Book of original entry
2. ‘T’ Account
3. Source document
4. Day book

Correct answer: Day book

Q3. Which of the following summarizes the cash movements during a specified period? (1 marks)

1. Trading account
2. Profit & Loss account
3. Receipts & Payments account
4. Balance Sheet

Correct answer: Receipts & Payments account

Q4. Which of the following is/are the END product of accounting cycle? (1 marks)

1. Financial Statements
2. General Journal
3. General Ledger
4. Voucher

Correct answer: Financial Statements

Q5. Which of the following shows summary of a company's financial position at a specific date? (1 marks)

1. Profit & Loss Account
2. Cash Flow Statement
3. Balance Sheet
4. Income & Expenditure Account

Correct answer: Balance Sheet

Q6. Accounts Receivable & Inventory are the examples of: (1 marks)

1. Liquid assets
2. Current assets
3. Fixed assets
4. Capital assets

Correct answer: Current assets

Q7. Which of the following is an alternate term which can be used for “Capital”? (1 marks)

1. Liability
2. Owner’s net worth
3. Working capital
4. Asset

Correct answer: Owner’s net worth

Q8. Which of the following particular is NOT included in the specimen of a payment voucher? (1 marks)

1. Name of organization
2. Cash payment amount
3. Date of transaction
4. Bank receipt

Correct answer: Bank receipt

Q9. The total of all costs incurred to convert raw material into finished goods is known as: (1 marks)

1. Prime cost
2. Conversion cost
3. Sunk cost
4. Opportunity cost

Correct answer: Conversion cost

Q10. All the costs incurred on the incomplete assets up to the balance sheet date must be transferred to: (1 marks)

1. Capital account
2. Capital work in progress account
3. Relevant asset account
4. Owner's equity account

Correct answer: Capital work in progress account

Q11. Rs. (1 marks)

Opening stock of raw material 100,000 Closing stock of raw material 80,000 Purchases of raw material during the period 200, 000

Cost of Material Consumed

1. Rs. 205,000
2. Rs. 215,000
3. Rs. 220,000
4. Rs. 225,000

Correct answer: Rs. 220,000

Q12. 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

Correct answer: Reduce the profit of the concern

Q13. Find out the missing value of an Accounting Equation with the help of given data: (1 marks)

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

Correct answer: Rs. 22,000 owner’s equity

Q14. 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

Correct answer: Physical wear and tear