CPT Exam Fundamentals of Accounting 7

Purchases book records:

A change in accounting policy is justified———–

ABC  Ltd. follows the written down value method of depreciating machinery year after year by applying the principle of———-

A Bank Reconciliation Statement is prepared to know the causes for the difference between:

While finalizing the current year’s profit, the company realized that there was an error in the valuation of closing inventory of the previous year.                    In the previous year, closing inventory was valued more by Rs.50,000. As a result

In the absence of any provision in the partnership agreement, profits and losses are shared–

Fundamental accounting assumption is————-

Which of the following errors are not revealed by the Trial Balance?

Which of the following are of capital nature?

Which of the following statement is not true?

Discount on issue of debentures is a __________

Loss on issue of debentures is treated as ____________

Dividends are usually paid as a percentage of ______

At the time of death of a partner, firm gets ________ from the insurance company against
the Joint Life Policy taken jointly for all the partners

Profit or loss on revaluation is shared among the partners in _______ ratio.

Interest on capital will be paid to the partners if provided for in the agreement but only from________

The owner of the consignment inventory is________

The parties to joint venture is called_________

The accommodation bill is drawn_______

The number of production or similar units expected to be obtained from the use of an asset by an enterprise is called as _________

Mr. A purchased a machinery costing Rs. 1,00,000 on 1st October, 2009. Transportation and installation charges were incurred

amounting Rs. 10,000 and Rs. 4,000 respectively.Dismantling charges of the old machine in place of which new machine was purchased
amounted Rs. 10,000. Market value of the machine was estimated at Rs. 1,20,000 on 31st March 2010. While finalising the annual

accounts, A values the machinery at Rs. 1,20,000 in his books.
Which of the following concepts was violated by A?

M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line
Method (SLM) of depreciation. In the current year it changed its method from Straight
Line to Written Down Value (WDV) Method, since such change would result in the additional
depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a
sick industrial unit. The auditor raised objection to this change in the method of depreciation.
The objection of the auditor is justified because

If cost of goods sold is Rs.80,700, Opening inventory Rs.5,800 and Closing inventory Rs.6,000. Then the amount of purchase will be

Original cost = Rs. 1,26,000. Salvage value = 6,000. Useful Life = 6 years. Annual depreciation under SLM will be—-

A new firm commenced business on 1st January, 2009 and purchased goods costing
Rs. 90,000 during the year. A sum of Rs. 6,000 was spent on freight inwards. At the end of
the year the cost of goods still unsold was Rs.12,000. Sales during the year Rs.1,20,000.
What is the gross profit earned by the firm?

X of Kolkata sends out goods costing Rs. 3,00,000 to Y of Mumbai at cost + 25%. Consignor’s
expenses Rs. 5,000. 1/10th of the goods were lost in transit. Insurance claim received
Rs. 3,000. The net loss on account of abnormal loss is

A and V enter into a joint venture to sell a consignment of biscuits sharing profits and
losses equally. A provided biscuits from his inventory Rs. 10,000. He paid expenses
amounting to Rs. 1,000. V incurred further expenses on carriage Rs. 1,000. He received
cash for sales Rs. 15,000. He also took over goods to the value of Rs. 2,000. The profit
on joint venture will be

X draws a bill on Y for Rs. 20,000 for 3 months on 1.1.10. The bill is discounted with banker
at a charge of Rs. 100. At maturity the bill return dishonoured. In the books of X, for
dishonour, the bank account will be credited by

A sent some goods costing Rs.3,500 at a profit of 25% on sale to B on sale or return basis.
B returned goods costing Rs.800. At the end of the accounting period i.e. on 31st December,
2009, the remaining goods were neither returned nor were approved by him. The inventory
sent on approval will be shown in the balance sheet at

A and B are partners sharing profits and losses in the ratio of 3:2 having the capital of
Rs. 80,000 and Rs. 50,000 respectively. They are entitled to 9% p.a. interest on capital before
distributing the profits. During the year firm earned Rs. 7,800 after allowing interest on
capital. Profits apportioned among A and B is

A & B are partners sharing profits and losses in the ratio 5:3. On admission, C brings Rs.
70,000 cash and Rs. 48,000 against goodwill. New profit sharing ratio between A, B and C
are 7:5:4. The sacrificing ratio among A & B will be

The cash book showed an overdraft of Rs.1,500, but the pass book made up to the same date
showed that cheques of Rs.100, Rs. 50 and Rs.125 respectively had not been presented for
payments; and the cheque of Rs.400 paid into account had not been cleared. The balance as
per the pass book will be

A second hand car is purchased for Rs.10,000, the amount of Rs. 1,000 is spent on its repairs,
Rs. 500 is incurred to get the car registered in owner’s name and Rs. 1,200 is paid as dealer’s
commission. The amount debited to car account will be

If a purchase return of Rs.84 has been wrongly posted to the debit of the sales return
account, but had been correctly entered in the suppliers account, the total of the trial
balance would show

The amount due to the deceased partner is paid to his——-

R, J and D are the partners sharing profits in the ratio 7:5:4. D died on 30th June 2009. It
was decided to value the goodwill on the basis of three year’s purchase of last five years
average profits. If the profits are Rs. 29,600; Rs. 28,700; Rs. 28,900; Rs. 24,000 and Rs.
26,800. D’s share of goodwill will be

A company forfeited 2,000 shares of Rs.10 each (which were issued at par) held by Mr. John
for non-payment of allotment money of Rs.4 per share. The called-up value per share was
Rs.9. On forfeiture, the amount debited to share capital will be

S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at
a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares
of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference
Shares, the amount to be transferred by the company to the Capital Redemption Reserve
Account will be

W Ltd. issued 20,000, 8% debentures of Rs.10 each at par, which are redeemable after
5 years at a premium of 20%. The amount of loss on redemption of debentures to be
written off every year will be

X sent out certain goods to Y of Delhi. 1/10 of the goods were lost in transit. Invoice value of
goods lost Rs 12,500. Invoice value of goods sent out on consignment will be:

T Ltd. purchased land and building from U Ltd. for a book value of Rs.2,00,000. The
consideration was paid by issue of 12% Debentures of Rs.100 each at a discount of 20%.
The debentures account will be credited with

B Ltd. issued shares of Rs.10 each at par. Mr. C purchased 30 shares and paid Rs.2 on
application but did not pay the allotment money of Rs.3. If the company forfeits his entire
shares, the forfeiture account will be credited by

A, B and C are partners sharing profits and losses in the ratio 9:4:3. The firm took separate
life policy of Rs. 25,000 for A, Rs. 20,000 for B and Rs. 51,000 for C. What is the share of C
in the policy amount?

A and B are partners sharing profits and losses in the ratio of 3:2 (A’s Capital is Rs.30,000
and B’s Capital is Rs.15,000). They admitted C and agreed to give 1/5th share of profits to
him. How much C should bring in towards his capital?

A and B are partners with the capital Rs. 50,000 and Rs. 40,000 respectively. They share
profits and losses equally. C is admitted on bringing Rs. 50,000 as capital only and nothing
was brought against goodwill. Goodwill valued as Rs. 35,000 which was adjusted through
the Capital accounts of the partners. What will be value of goodwill in the books after the
admission of C?

X, Y and Z are partners in a firm. At the time of division of profit for the year there was
dispute between the partners. Profits before interest on partner’s loan was Rs. 6,000 and Y
determined interest @ 24% p.a. on his loan of Rs. 80,000. There was no agreement on this
point. Calculate the amount payable to X, Y and Z respectively.

A merchant sends out his goods casually to his dealers on approval basis. All such transactions
are, however, recorded as actual sales and are passed through the sales book. On
31-12-2009, it was found that 100 articles at a sale price of 200 each sent on approval basis
were recorded as actual sales at that price. The sale price was made at cost plus 25%. The
value of inventory on approval will be amounting

A draws a bill on B for Rs 30,000. A wants to endorse it to C in settlement of Rs 35,000 at 2%
discount with the help of B’s acceptance and balance in cash. How much cash A will pay to B?

A and B enter into a joint venture for purchase and sale of Type-writer. A purchased
Typewriter costing Rs. 1,00,000. Repairing expenses Rs. 10,000, printing expenses Rs. 10,000.
B sold it at 20% margin on selling price. The sales value will be:

P of Faridabad sent out goods costing Rs. 45,000 to Y of Delhi at cost + 331/3%. 1/10th of
goods were lost in transit. 2/3rd of the goods received are sold at 20% above invoice price.
The amount of sale value will be:

Rent paid on 1st October, 2008 for the year to 30th September, 2009 was Rs. 1,200 and rent
paid on 1st October, 2009 for the year to 30th September, 2010 was Rs. 1,600. Rent paid, as
shown in the profit and loss account for the year ended 31st December 2009, would be:

H Ltd. purchased a machinery on April 01, 2005 for Rs.3,00,000. It is estimated that the
machinery will have a useful life of 5 years after which it will have no salvage value. If the
company follows sum-of-the-years’ digits method of depreciation, the amount of depreciation
charged during the year 2009-2010 was

If Average inventory = Rs. 12,000. Closing inventory is Rs. 3,000 more than opening inventory
then the value of closing inventory will be

After the death of a partner , amount payable is received by——

Debit balance as per Cash Book of ABC Enterprises as on 31.3.2012 is Rs. 1,500. Cheques
deposited but not cleared amounts to Rs.100 and Cheques issued but not presented of Rs.
150. The bank allowed interest amounting Rs.50 and collected dividend Rs. 50 on behalf of
ABC Enterprises. Balance as per pass book should be

If a purchase return of Rs.1,000 has been wrongly posted to the debit of the sales returns
account, but has been correctly entered in the suppliers’ account, the total of the

If repair cost is Rs.25,000, whitewash expenses are Rs. 5,000, cost of extension of building is
Rs.2,50,000 and cost of improvement in electrical wiring system is Rs. 19,000; the amount to
be expensed is

Sunset Tours has Rs. 3,500 account receivable from Mohan. On January 20, the later
makes a partial payment of Rs. 2,100 to Sunset Tours. The journal entry made on January
20 by Sunset Tours to record this transaction includes:

A company forfeited 1,000 shares of Rs. 20 each (which were issued at par) held by Mr.
Mohan for non-payment of allotment money of Rs. 8 per share. The called-up value per
share was Rs. 18. On forfeiture, the amount debited to share capital will be

A, B and C are partners sharing profits in the ratio 2:2:1. On retirement of B, goodwill was
valued as Rs. 30,000. Contribution of A and C to compensate B will be