MGT101 Midterm MCQs

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MCQ,s

Q1. An organization operating with the objective of making profit from the sale of goods or services is called: (1 marks)

1. Transaction
2. Business
3. Society
4. Trust

Q2. We can say that the business is in profit, when: (1 marks)

1. Assets exceed Expenditure
2. Assets exceed Liabilities
3. Income exceeds Expenditure
4. Income exceeds Liabilities

Q3. Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance). (1 marks)

1. Capital account
2. Sundry creditors account
3. Accounts payable account
4. Cash account

Q4. If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs.20,000 during the year. What would be the Net Profit? (1 marks)

1. Rs.15,000
2. Rs. 35,000
3. Rs. 55,000
4. Rs. 60,000

Q5. In cost of goods sold statement the ‘cost of goods manufactured’ is equal to: (1 marks)

1. Total factory cost + Opening work in process + Ending work in process
2. Total factory cost + Opening work in process – Ending work in process
3. Total factory cost - Opening work in process + Ending work in process
4. Ending work in process +Total factory cost – Opening work in process

Q6. If, Cost of machine = Rs.400, 000 (1 marks)

Useful life = 5 years Residual value = Rs.25, 000 The depreciation of machine per year using straight line method is?

1. Rs. 160,000
2. Rs. 96,000
3. Rs. 75,000
4. Rs. 57,600

Q7. Find out the missing value of an Accounting Equation with the help of given data: (1 marks)

Cash Rs.1, 00, 000 Debtors Rs.10, 000 Other Assets Rs. 1,000 Owner’s equity Rs. 1, 000

1. Rs. 12,000 liabilities
2. Rs. 11,000 liabilities
3. Rs. 1, 10,000 liabilities
4. Rs. 1, 11,000 liabilities

Q8. Upon checking the Bank Statement against the Cash Book by Mr. A, It was discovered that an amount of Rs.120 for dividend from XYZ Co. had not been entered in the Cash Book. Which of the following entry should be recorded to rectify the mistake? (1 marks)

1. Bank Account(Dr.) and Dividend Account (Cr.)
2. XYZ Co. Account (Dr.) and Bank Account (Cr.)
3. Dividend Account (Dr.) and Bank Account (Cr.)
4. Bank Account (Dr.) and XYZ Co. Account (Cr.)

Q9. Which one of the following transactions will cause the balance in Mr. Terry's Cash Book to be greater than his Bank Statement balance? (1 marks)

1. A cheque is drawn but not yet presented at the bank for payment
2. The bank has not yet notified to Mr. Terry about a dishonoured cheque
3. A credit transfer into Terry's Bank Account
4. A cheque payment of Rs.101 is recorded in the Cash Book as Rs.110

Q10. If Bad Debts written off are given in adjustment, then which of the following entry for bad debts written off is CORRECT? (1 marks)

1. Bad debts a/c (Dr) and Trading a/c (Cr)
2. Provision for Bad and Doubtful debts a/c (Dr) and Bad debts a/c(Cr)
3. Bad debts a/c (Dr) and debtors a/c (Cr)
4. Trading a/c (Dr) and Bad debts a/c (Cr)

Q11. Which of the following is (are) benefit/s of subsidiary ledger accounts to business? (1 marks)

1. It tells about customer attitude of payments
2. It can be checked against the control account to pick up recording errors
3. It tells about the complete history of transactions of business client 50%
4. All of the given options50%

Q12. When one or both aspects of a transaction are recorded in the wrong class or category of account, this is called: (1 marks)

1. Error of principle
2. Error of omission
3. Error of commission
4. Error of original entry

Q13. Which of the following is the first phase of the typical operating cycle? (1 marks)

1. Sell goods and services to customers
2. Purchase goods and services
3. Receive cash from customers
4. Pay cash to suppliers