FUNDAMENTAL OF ACCOUNTING

Which of the following is wrong?

In Journal Entries which pertain to entries, prepaid entries, depreciation entriesoutstanding are called

In a three column cash book the discount columns are

Cash Book O.D. Balance Rs. 2,000. It was found that cheques of Rs. 100, Rs. 150, Rs. 175 which are issued but not presented till the date and the cheque of Rs. 600 deposited but have not been cleared, then O.D. Balance as per pass book is :

Bank Balance O.D. as per pass book Rs. 26,500. Calculate balance as per cash book is 1) Cheques deposited for Rs. 4700 but not collected 2) Cheques issued for Rs. 11,000 but not presented 3) Bill discounted and dishonoured Rs. 4000, and Bank paid noting charges Rs. 200

Agreement of Trial balance is not a ___ proof of accuracy

Capital- Rs. 2,00,000 ,Interest paid- Rs. 2310 ,Debtors- Rs. 15,200, Discount allowed- Rs. 820,Creditors-Rs.12,960, Discount received-Rs. 1030, Purchases- Rs. 92,670, Rent – Rs. 14,670, Sales- Rs. 1,16,850, Loan – Rs. 12,060, Opening stock – Rs. 56,000, Sales returns – Rs. 27,430. Debit Total of Trial Balance will be

From the following information find the amount to be debited to P & L A/c for the period ending 31-03-2014. Provision for doubtful debts – Rs. 800 (on 01-04-2013) Debtors on 31-03-2014 – Rs. 40,000 Bad debts – Rs. 2,000 Bad debts to be written off and provision for doubtful debts is to be created @ 5% on debtors

Opening Stock Rs.30,000, Cost of goods available for sale Rs. 1,60,000, Sales were Rs. 1,60,000. Gross profit on sales is 30% .Calculate closing stock.

By products are generally valued at __ when the cost of by products is not directly traceable.

The purpose of Accommodation bill

A draws a bill for Rs. 20,000 on ‘B’. ‘B’ Accepts for 2 months. After 1 month ‘B’ paid the bill amount @9%. Journal entry in the Books of ‘B’ will be

Promissory note features. 1) Must be stamped 2) Payee must sign 3) Conditional undertaking 4) Certain amount 5) Not transferable to bearer

In the absence of agreement, the loss of goods in consignee godown is borne by

Goods sent on consignment for Rs.50,000.During transit 1/10th of goods were destroyed by fire. Again 1/9th of goods received by consignee were destroyed by fire in godown.Half of the remaining goods were sold for Rs.30,000. Freight & insurance paid by consignor Rs.2,500 and Rs.1500 respectively. Calculate closing Stock.

In case of Joint Venture business, method of Accounting to be followed and decided by

In case of purchase of machinery in joint venture through joint bank A/c, while separate set of books is maintained. Which of the following is the correct entry

‘A’ and ‘B’ enter into a joint venture business ‘A’ purchased goods worth Rs. 30,000 and ‘B’  sold for Rs. 40,000. ‘A’ is entitled to 1% commission on purchases and ‘B’ is entitled to 5% commission on sales. The profit on venture to be shared by A & B is (The profit sharing ratio is 2:1)

Rohan Ltd is in the business of extracting coal from mines. It should charge depreciation as per _____ method.

Cost of machine is Rs.1,00,000 Scrap value Rs. 10,000 and life is 4 years. What will be the amount of depreciation in 3rd year according to sum of years digits method

A Trader followed WDV method of depreciation, the book value of Asset after 4 years is 24% of original cost. Find rate of depreciation.

Loss on sale of machinery is credited to __account.

A machine purchased for Rs. 2,50,000 on 1.1.2010. It can produce 30,000 units during its useful life, its estimated scrap value is Rs.10,000. The pattern of production over the next 4 years is as follows 2010 – 6250 units, 2011-2275 units, 2012-12,000 units, 2013-3452 units, the WDV of the machine after 3rd year will be

After rectification of the following errors, effect on Net profit will be i) A cheque dishonoured Rs.3,100 debited to discount A/c . ii) Sales book (undercast) short by Rs.23,000 iii) A customer returned goods of value of Rs.1,200, included in stock but not recorded

The following are the errors committed while the entries are posted in ledger.1) Errors of Principle 2) Errors of commission. 3) Errors of Partial omission 4) Errors of complete omission.

InCase of insufficient profits i.e., profits less than interest on capital then the profits are distributed in :

The assets which were earlier revalued upward and now revalued downward, to the extent of earlier upward revaluation amount should be.

A, B are partners sharing profit & losses in the ratio of 5 : 3. ‘C’ admitted as a new partner for 1/5th share and his capital is Rs. 1,20,000 & goodwill Rs. 60,000 Capitals of A, B & C were RS.

At the time of admission the unrecorded investments Rs. 30,000 should be treated, the adjustment entry will be

Kapur and sharma are partners in partnership firm. Calculate the interest on drawings of kapur and sharma @ 10% p.a. for the year ending on 31st December 2013. Kapur withdrew Rs. 2,000/- per month in the beginning where as sharma withdrew same amount at the end of every month

In Income measurement & recognisation of assets & liabilities which of the following concepts goes together?

____ is root cause for financial accounting?

Gyan received Rs.5,000 in advance but he credited to sale account. Which of the following concept he did not follow?

Change in Accounting estimate means :

Interpretation means

A trader purchased goods for Rs. 25,00,000, of these 70% of goods were sold during the year.At the end of 31st December 2009, the market value of such goods were Rs.5,00,000. But the trader recorded in his books for Rs.7,50,000.Which of the following concept is violated.

If wages are paid for construction of business premises ______ A/c is credited and _____ A/c is debited.

A building worth Rs.35 lakhs was purchased and it was dismantled with Rs.1 lakh and it was decided to build as shopping mall. The cost of construction of building was Rs.50,00,000 and other expenses of Rs.50,000. The amount of capital expenditure is

Which of the following is not a difference between provision & contingent liability

. __ is shown as foot note under the Balance Sheet.

Diwali advance given to an employee is ___

The amount of depreciation charged under
Annuity method _______

Who decides how much sales taxes should be paid by the concern?

Value of stock is taken at the year end at market price or cost price whichever is less

Keep separate record in individual accounts

If Mr.Praharsha starts a business m/s ABC&CO with a capital of Rs.50000, This amount is shown as a liability in the books of M/S ABC&co

Financial instrument:disclosures

Following is not an example of an accounting policy

According to AS-1 disclosure should be made

Capital of business is Rs.20000 and Liability if Rs.5000 then total assets of business would be

Journal records transactions of the firm in a

The preparation of trial balance is for

Unpaid salary For Rs.340 is to be provided for in the accounts

Which of the following is not a column of a Three column cash book?

Wages due for the month of March will appear

Heavy advertising cost of Rs.20000 spent on the launching of a company’s new product

In the case of —— either outflow of the resources to settle to the obligation is not probable or the amount expected to be paid to settle the liability can’t be measured with sufficient reliability

The consignor sends——– along with the consigned goods to the consignee.

Following are the characteristics of joint venture except

No cancellation entry is required when a bill is renewed.

Gopal was holding 100 shares of Rs. 10 each of a company on which he had paid Rs. 3 on application and Rs. 2 on allotment but could not pay Rs. 2 on first call. Directors forfeited his shares. Share capital will be debited by

A manager gets 5% commission on net profit after charging such commission. If gross profit is Rs. 48,000 and expenses of indirect nature other than manager’s commission are Rs. 6,000. Commission amount will be ________

A machinery of Rs. 3,000 was sold for Rs. 4,200. Depreciation provision till date of sale was Rs. 400 and commission paid to the selling agent was Rs. 420 and wages paid to the workers for removing the machine was Rs. 30. Profit on sale of machinery will be

On 1st January, 2016 Badri of Bombay consigned 100 cases (cost price Rs. 7,500) at a proforma invoice price of 25% profit on sales to his agent Anil of Agra. On the same date Badri paid non recurring expenses of Rs. 600. On 5th January Anil took delivery and paid Rs. 1,200 for octroi. On 31st January he sold 80 cases for Rs. 10,500. He charged Rs. 775 as his commission. Consignment profit will be

Anwar Ltd. Purchased building worth Rs. 99,00,000 and issued 12% debentures of 100 each at a premium of 10%. Premium amount will be

C and D entered into a Joint Venture to construct a bridge. They did not open separate set of books. They shared profits and losses as 3:2. C contributed Rs. 1,50,000 for purchase of materials. D paid wages amounting to Rs. 80,000. Other expenses paid were by C – Rs. 5,000 and D – Rs. 15,000
C purchased one machine for Rs. 20,000. The machine was taken over by C for Rs. 10,000. Total contract value of Rs. 3,00,000 was received by D. What will be the profit on venture?

Estimated life of an asset is 10 years and estimated scrap value is Rs. 3,200. Depreciation as per SLM is charged at Rs. 2,500 every year on the asset. Find the cost of the asset.

Mr. X paid commission to his consignee Mr. Y Rs. 25,000 @ 5% on sales made by him. Goods were sold by Mr. Y at a profit of 25% on cost. Stock in hand as on 31.3.2016 is Rs. 50,000 at cost. What is the cost of goods sent by Mr. X on consignment to Mr. Y?

Rent paid is debited to landlord’s personal account. It is

Cost of machinery Rs. 75,000, salvage value Nil, estimated life 4 years. Depreciation for the first year by sum of digit method is

Dividends are usually paid as a percentage of

A trader gives the cash book balance of bank column to be Rs. 10,000 (Cr.)
Find the pass book balance, if interest debited in pass book not recorded in cash book Rs. 150 and cheque issued but not presented Rs. 2,500.

P shows a profit of Rs. 7,00,000 for the year ended 31.3.2016. The figure has been arrived at after charging following against revenue:
(i) Purchase of Car on 28.3.2016 for use in business Rs. 3,00,000 and treated as vehicle expenses.
(ii) Omitted to record unpaid electricity bills for February and March, 2016 of Rs. 15,000 per month. The correct profit for the year ended 31st March, 2016 will be

The total of debit and credit side of Mr. Raja Ram’s Trial balance as on 31st March, 2016 were Rs. 20,000 and Rs. 10,000 respectively. The difference was transferred to suspense A/c. On 4th April 2016, it was found that the total of sales book was carried forward as 5,000 instead of 4,000. The balance of suspense A/c after rectification of this error will be –

Goodwill is to be calculated at one year’s purchase of the average of the last 3 years profit. The profit of the first year was Rs.6,000,second year twice the profit of the first year and the third year one and half times of the profit of the second year goodwill amount will be –

Huge Ltd. issued 25,000 equity shares of Rs.100 each at a premium of Rs. 15 each payable as Rs. 25 on application, Rs. 40 on allotment and balance in the first call. The applications were received for 75,000 equity shares but the company issued to them only 25,000 shares. Excess money was refunded to them after adjustment for further calls. Last call on 500 shares were not received and were forfeited after due notice. The above is the case of

When balance as per cash book is the starting point, and cheques issued for payment Rs. 400 was wrongly credited by Bank as Rs.900 then in the bank reconciliation statement cash balance will be

There was difference in the bank column of cash book and passbook by Rs. 2,500. On scrutiny it was found that interest of Rs. 500 charged directly by the bank was not entered in the cash book. The same was adjusted in the cashbook before reconciliation statement. Now, in the bank reconciliation statement, this interest of Rs.500 is to be

The plant and machinery account of a firm had a debit balance of Rs. 1,47,390 (before charging depreciation for the year) as on 31st December, 2016. On 1st Jan., 2013 firm started business and has been following the practice of charging full year’s depreciation every year on Diminishing balance method @ 15%. Cost of machinery on 01.01.2013 will be

Fluctuating capital account is credited with

All of the following have debit balance except

Double column cash book records

Interest on capital at 6% p.a. is to be allowed. Capital in the beginning was Rs. 3,00,000. Interest amount will be

Net salary paid to employees Rs. 45,000 in cash after deducting income tax Rs. 1,000, professional tax Rs. 200, employees provident fund Rs. 2,000, staff welfare fund Rs. 100 and recovery of loan Rs. 1,700. Salary A/c will be debited with –

Unexpired portion of Capital expenditure is shown in

On 01.09.2016, A draws a bill on B “for 30 days after sight”. The date of acceptance is 08.09.2016. The maturity date of the bill will be

If the firm pays Income Tax on behalf of partners, such payment of personal income tax should be treated as

Petty expenses paid in cash are recorded in:

On April 1, 2016, a bill was drawn for two months. The maturity date of payment will fall on:

Current assets does not include:

P of Faridabad sent out goods costing Rs. 45,000 to Y of Delhi at cost + 33 1/3. 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, 2015 for the year to 30th September, 2016 was
Rs. 1,200 and rent paid on 1st October, 2016 for the year to 30th September, 2017 was
Rs. 1,600. Rent paid, as shown in the profit and loss account for the year ended 31st
December 2016, would be:

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 in the books will be

R, J and D are partners sharing profits in the ratio 7:5:4. D died on 30th June 2016 and profits for the accounting year 2015-2016 were Rs. 24,000. How much share in profits for the period 1st April 2016 to 30th June 2016 will be credited to D’s Account?

Mr. A is a partner in a firm along with Mr. B. Both contributed capitals of Rs. 40,000 and Rs. 50,000 respectively on the 1st of July, 2016. Interest on capital is to be charged @ 10% p.a. Books of account are to be closed on 31st December, 2016. Interest on capital is

E Ltd. had allotted 10,000 shares to the applicants of 14,000 shares on pro rata basis. The amount payable on application is Rs.2. F applied for 420 shares. Calculate the number of shares allotted and the amount carried forward for adjustment against allotment money due from F.

The bill of Rs. 10,000 accepted by Ritesh on 1 July 2016, was discounted by Hitesh on 15 July 2016 for Rs. 9,600. On 4th October 2016, the bill was dishonoured and bank notified it for Rs. 200. The amount to be received from Ritesh would be

Brave Ltd. issued 60,000 shares of Rs. 10 each at a discount of Rs. 1 per share. The application money was Rs. 2, allotment money was Rs. 4, and first call was of Rs.1. The amount of final call will be

Jadu Ltd. reissued 2,000 shares (originally issued at Rs. 10), which were forfeited by crediting Share forfeiture account by Rs. 3,000. These shares were reissued Rs. 9 per share. The amount to be transferred to Capital Reserve account will be

In the bank reconciliation statement, when balance as per the cash book is taken as the starting point, then direct deposits from the customer of Rs. 2,500 in the bank will be

Which of the following is not a transaction?

Following figures have been taken from the trial balance of a trader:
Purchases Rs. 30,000, Purchase Returns Rs. 5,000
Sales Rs. 40,000,Sales Returns Rs. 5,000
The amount of profit will be

Radha, Seeta and Laxmi were partners sharing profits and losses in the ratio of 2:3:5. Seeta retired on 1st June, 2016 and Goodwill of the firm is to be valued at Rs. 1,20,000 on that date. What will be the treatment for Goodwill ?.

Find the goodwill of the firm using capitalization method from the following information:
Total capital employed in the firm Rs. 80,00,000
Reasonable rate of return 15%
Profits for the year Rs. 12,00,000

Opening stock of the year is Rs. 20,000, Goods purchased during the year is Rs. 1,00,000, Carriage Rs. 2,000 and Selling expenses Rs. 2,000. Sales during the year is Rs. 1,50,000 and closing stock is Rs. 25,000. The gross profit will be:

18% investment of Rs. 1,00,000 and interest received on investment Rs. 15,000 have been given in the trial balance for the period ended on 31.3.2016. The amount of interest outstanding in the final accounts will be ______

If the profit is 25% of the cost price then it is

The profits of last three years are Rs.84,000, Rs.78,000 and Rs. 90,000. Find out the goodwill at two years purchase.

Overdraft as per pass book is given Rs. 10,000
(i) Cheques deposited in the Bank but not recorded in Cash Book Rs. 100
(ii) Cheques drawn but not presented for payment Rs. 6,000
(iii) Bank charges recorded twice in cash book Rs. 30
Overdraft as per Cash Book will be

“Bill payable discounted in cash by creditor.” This transaction will be recorded in

A Company issued 2,000, 12% debentures of Rs. 100 each at par but redeemable at 5% premium. Loss on issue of debentures will be

Amit, Rohit and Sumit are partners sharing profits and losses in the ratio of 5:4:3. Sumit retires and if Amit and Rohit shares profits of Sumit in 4:3, then new profit sharing ratio will be

When separate set of books is maintained, expenses paid by venturer will be credited to

C and D enter in to a joint venture to share profit in the ratio of 5:3. Apart from the profits, D is entitled to a commission of 5% of net profit after charging such commission. If net profit of joint venture is Rs. 33,600 before charging such commission. What will be share of profit of C and D.

Delcredere commission is fixed in terms of percentage say, 10%. The Credit Sales is of Rs. 1,00,000 and Cash Sales is of Rs. 50,000; amount of _____________commission will be allowed.

Mr. X purchased a computer for Rs. 60,000 by making a down payment of Rs. 10,000 and balance of Rs. 50,000 by signing the agreement of bills payable due in 50 days. As a result of these transactions

Goods destroyed by fire Rs. 20,000 and insurance company admitted full claim. Claim receivable from insurance company will be shown in the

X sent some goods costing Rs. 3500 at a Profit of 25% on sale on return basis to Y. Y returned goods costing Rs. 800. At the end of accounting year, remaining goods were neither returned nor approved by him. The stock on approval will be shown in the Balance sheet at:

In journal, the entries which pertain to outstanding expenses, prepaid expenses or depreciation are called:-

Ajay Ltd. decides to redeem 10,000 Preference Shares of Rs. 10 each at a 10% premium. Balance in Profit & Loss A/c is Rs. 65,000 and in Securities Premium A/c is Rs. 5,000. Calculate the minimum number of equity shares of Rs. 10 each to be issued for the purpose of redemption, if fresh shares are to be issued at par.