MGT101 MCQs Modules 10-14 Set 2

MGT101

MCQs

Q1. A business event which can be measured in terms of money and must be recorded in books of accounts is called:

1. Data
2. Transaction
3. Information
4. Record

Q2. After specific intervals, sum of sales return journal is posted to the debit side of. Select the correct option:

1. Total debtors account
2. Sales return account
3. Total creditors account
4. None of the given options

Q3. Which of the following account is 'Debit' if “The owner has paid Rs.500 from the business for his personal use"?

1. Cash account
2. Drawings account
3. Bank account
4. Capital account

Q4. All of the following items may appear in Trade payable control account EXCEPT:

1. Purchases return
2. Cheques paid to creditors
3. Bad debts
4. Discount received

Q5. A purchase of plant and machinery is a

1. Capital Expenditure
2. Revenue Expenditure
3. Capital Receipt
4. Revenue Receipt

Q6. Which of the following is a Capital expenditure?

1. Purchase of a building
2. Payment of salaries
3. Long term loan from bank
4. Sales revenue

Q7. While preparing a Debtors Control Account, Debit side posted items cause:

1. Increase in debtors' balance
2. Decrease in debtors' balance
3. Both increase and decrease in debtors' balance
4. Increase in creditors' balance

Q8. Sales return account is a/an

1. Contra item
2. Expense item
3. Purchase item
4. Liability item

Q9. A payables ledger control account had a closing balance of Rs.9,000. A credit purchase of Rs. 500 had been omitted to record in this control account. What should be the correct balance of payables control account?

1. Rs. 8,000 credit
2. Rs. 8,500 credit
3. Rs. 9,500 credit
4. Rs. 10,000 credit

Q10. Which of the following is an error of principle?

1. Bank charges being deducted by the bank without our knowledge
2. A payment to a debtor Mr. A is recorded in the account of another debtor Mr. B
3. Purchase of vehicle is recorded in repairs account
4. A receipt of Rs. 50,000 from a debtor is recorded as Rs. 5,000 in his account

Q11. Purchases Rs. 500, Returns inwards Rs. 50, Gross Sales Rs. 700 and Gross Profit Rs. 100, Net Purchases:

1. Rs. 450
2. Rs. 500
3. Rs. 550
4. Rs. 650

Q12. Mr. Y has recorded a stationary expense of Rs. 50 as salaries expense. What will be its effect on net profit?

1. Overstated by Rs. 100
2. Understated by Rs.100
3. Understated by Rs.50
4. No effect

Q13. Cotton thread to make fabric in manufacturing concern is:

1. Raw material
2. Work in process
3. Finished goods
4. Stock in trade

Q14. Which of the following is/are the function of financial accounting?

1. Recording
2. Posting
3. Reporting
4. All of the given options

Q15. If Work in Process closing inventory is provided as additional information, other than trial balance, then that inventory treated in:

1. Balance Sheet only
2. Profit and loss account only
3. Both profit & loss account and balance sheet
4. Expense only

Q16. Prime cost = Direct material cost +

1. Direct labor cost
2. Indirect material cost
3. Other indirect costs
4. Other costs

Q17. Wood used to make a table in manufacturing concern is:

1. Raw material
2. Work in process
3. Finished goods
4. Stock in trade

Q18. Unconsumed office supplies are considered as:

1. Admin expense
2. Inventory
3. Selling expense
4. Financial expense

Q19. Carriage inward is Debited under main head:

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

Q20. When correct accounting effect (Dr/Cr) is given in the wrong accounting head but the main head remains correct, is known as:

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

Q21. Service fee received is a

1. Capital Expenditure
2. Revenue Expenditure
3. Capital Receipt
4. Revenue Receipt

Q22. Expired portion of direct cost is treated as:

1. Expense
2. Cost
3. Liability
4. Income

Q23. Control accounts are maintained for all of the following EXCEPT:

1. Trade receivables
2. Trade payables
3. Depreciation
4. Inventory

Q24. Factory overhead is a/an:

1. Expense
2. Liability
3. Income
4. Cost

Q25. Bank charges of Rs. 1,000 have been deducted by the bank without our knowledge. What will be its effect on net profit?

1. Overstated by Rs. 1000
2. Understated by Rs. 2,000
3. Understated by Rs. 1.000
4. No effect

Q26. Income = ?

1. Profit-expenses