MGT101 Quiz 3 MCQs Feb 2021 Modules 11-14

Q1. Expired portion of direct cost is treated as: Handout page 276, chap 14

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

Correct answer: Expense

Q2. Discount received from a creditor is Credited under main head: Handout page 150

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

Correct answer: Income

Q3. Accumulated depreciation of furniture is a/an__________. Handout page 134

1. Expense account
2. Contra asset account
3. Liability account
4. Asset account

Correct answer: Contra asset account

Q4. If Work in Process closing inventory is provided in trial balance, then that inventory is treated in:

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

Correct answer: Balance Sheet only

Q5. Factory overhead is a/an: Handout page 273, chap 14

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

Correct answer: Cost

Q6. Purchases Rs.500, Carriage outward Rs.50, Gross Sales Rs. 700 and Gross Profit Rs. 100. Net Purchases = ?

1. Rs. 500
2. Rs.550
3. Rs. 600
4. Rs. 650

Correct answer: Rs. 500

Q7. Carriage inward is Debited under main head: Handout page 259, chap 13

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

Correct answer: Expenses

Q8. Capital introduced by the owner is a __________. Handout page 253, chap 12

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

Correct answer: Capital Receipt

Q9. Factory overhead cost = Power & fuel cost + ____. Handout page 277, chap 14

1. Direct labor cost
2. Direct material cost
3. Indirect material cost
4. Other direct cost

Correct answer: Indirect material cost

Q10. Consumed direct supplies are considered as: Handout page 274, chap 14

1. Admin expense
2. Cost of sales
3. Selling expense
4. Financial expense

Correct answer: Cost of sales

Q11. All of the following items may appear in Trade payable control account

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

Correct answer: Bad debts

Q12. When correct accounting effect (Dr/Cr) is given in the wrong accounting head as well as the wrong main head, it is known as: Handout page 247, chap 12

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

Correct answer: Error of principle

Q13. The unexpired portion of direct cost is treated as: Handout page 274, chap 14

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

Correct answer: Asset

Q14. A control account is an individual account that appears in the

1. Journal
2. General ledger
3. Trial balance
4. Invoice

Correct answer: General ledger

Q15. Mr. X receives a discount of Rs. 50 from a supplier. The discount is debited to discount allowed account. What will be its effect on net profit?

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

Correct answer: Understated by Rs.50

Q16. A creditors’ control account is used to record all the transactions related to:

1. Cash sales
2. Credit sales
3. Cash purchases
4. Credit purchases

Correct answer: Credit purchases

Q17. While preparing a Debtors Control Account, Credit side posted items

1. Increase in debtors’ balance
2. Decrease in debtors’ balance
3. Both increase and decrease in debtors balance
4. Increase in creditor’s balance

Correct answer: Decrease in debtors’ balance

Q18. Which of the following is a Revenue receipt? Handout page 253, chap 12

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

Correct answer: Sales revenue

Q19. Direct cost is also known as: Handout page 274, chap 14

1. Factory overhead cost
2. Conversion cost
3. Prime cost
4. Cost of sales

Correct answer: Prime cost

20. A minor repair to a photocopy machine was paid in cash. Correct entry was made to cash account but no entry was made to other account. What will be the debit effect of journal entry to rectify this error, if there is suspense account in trial balance? Handout page 251, chap 12

1. Photocopy machine repair account
2. Suspense account
3. Photocopy machine account
4. Cash account

Correct answer: Photocopy machine repair account

21. A new accountant of ABC Corporation has prepared the trial balance. But there is difference in total of both sides of trial balance: such difference

can be due to: Handout page 248, chap 12 a. Under casting of a ledger account b. Omission of a particular account’s balance in trial balance c. Over casting of a ledger account

d. All of the given options

Q22. Mostly, control accounts are maintained for: Handout page 231,chap 11

1. Trade receivables
2. Trade payables
3. Inventory
4. All of the given options

Correct answer: All of the given options

Q23. When correct accounting effect (Dr/Cr) is given in the wrong accounting head but the main head remains correct, is known as: Handout page 247, chap 12

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

Correct answer: Error of commission

Q24. If the debit side of trial balance is heavier than the credit side, suspense account will be written on __________ Handout page 248, chap 12

1. Credit side
2. Debit side
3. Both debit and credit side
4. None of the given options

Correct answer: Credit side

Q25. Purchases Rs.500, Return inward 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

Correct answer: Rs.500

26. All of the following items appear on credit side of Trade receivable

control account EXCEPT: Handout page 232, chap 11

a. Cheques dishonored

b. Cash received from debtors c. Bad debts d. Discount allowed

Q27. Purchase return account is a/an _________. Handout page 134

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

Correct answer: Contra item

28. Which of the following Organization converts raw material into finished

goods? Handout page 273, chap 14

a. Trading concern

b. Manufacturing concern

c. Merchandising concern d. Service concern

Q29. If the credit side of trial balance is heavier than the debit side, suspense account will be written on __________ Handout page 248, chap 12

1. Credit side
2. Debit side
3. Both debit and credit side
4. None of the given options

Correct answer: Debit side

Q30. Carriage outward is Debited under main head: Handout page 259, chap 13

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

Correct answer: Expenses

Q31. In a manufacturing concern, rent of office building is included in __________.

1. Cost of sales
2. Preliminary expenses
3. Cost of goods sold
4. Operating expense

Correct answer: Operating expense