Fundamentals of Accounting 8

It is essential to standardize the accounting principles and policies in order to ensure——

Revenue from sale of products, is generally, realized in the period in which—-

Which of the following is not a sub-field of accounting?

The determination of expenses for an accounting period is based on the principle of————

Which account is the odd one out?

Change in accounting estimate means———–

In Double Entry System of Book-keeping every business transaction affects:

Which of the following types of information are found in subsidiary ledgers, but not in the general ledger?

Contra entries are passed only when———–

The preparation of a trial balance is for:

Present liability of uncertain amount, which can be measured reliably by using a substantial
degree of estimation, is termed as ________

When preparing a Bank Reconciliation Statement, if you start with a debit balance as per
the Cash Book, then cheques issued but not presented within the period are __________

Under inflationary conditions, ______ method will show highest value of closing inventory?

In the case of downward revaluation of an asset, which is for the first time revalued, _______ account is debited.

The portion of the acquisition cost of the asset, yet to be allocated to Profit and Loss Account is known as ________

If a concern proposes to discontinue its business from March 2010 and decides to dispose off
all its assets within a period of 4 months, the Balance Sheet as on March 31, 2010 should
indicate the assets at their _________

The balance of the petty cash is _________

Sales for the year ended 31st March, 2010 amounted to Rs. 10,00,000. Sales included goods
sold to Mr. A for Rs. 50,000 at a profit of 20% on cost. Such goods are still lying in the
godown at the buyer’s risk. Therefore, such goods should be treated as part of

As per Section 37 of the Indian Partnership Act, 1932, the executors would be entitled at
their choice to the interest calculated from the date of death till the date of payment on the
final amount due to the dead partner at ________ percent per annum.

If del-credere commission is allowed for bad debt, consignee will debit the bad debt amount to:

Mr. A purchased a machinery costing Rs. 1,00,000 on 1st October, 2011. 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, 2012. 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?

Mohan purchased goods for Rs. 15,00,000 and sold 4/5th of the goods amounting Rs. 18,00,000
and paid expenses amounting Rs. 2,70,000 during the year, 2009. He paid Rs. 5,000 for an
electricity bill of Dec. 2008 and advance salaries amounting Rs. 15,000 was paid for the
month of Jan. 2010. He counted net profit as Rs. 3,50,000. The net profit calculated by him is correct according to _________

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_________

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 _________

G Ltd. acquired assets worth Rs.7,50,000 from H Ltd. by issue of shares of Rs.100 at a
premium of 25%. The number of shares to be issued by G Ltd. to settle the purchase
consideration will be_________

The following information pertains to X Ltd.:
Equity share capital called up Rs. 5,00,000
Calls in arrear Rs. 40,000
Calls in advance Rs. 25,000
Proposed dividend 15%
The amount of dividend payable will be

The subscribed share capital of S Ltd. is Rs.80,00,000 of Rs.100 each. There were no calls in
arrear till the final call was made. The final call made was paid on 77,500 shares. The calls
in arrear amounted to Rs.62,500. The final call on each share will be_________

A Company wishes to earn a 20% profit margin on selling price. Which of the following is
the profit mark up on cost, which will achieve the required profit margin?

A, B and C are the partners sharing profits and losses in the ratio of 5:3:2, took a joint life
policy of Rs. 30,000. On the death of B what amount will be payable to each partner?

A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1 respectively
with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire
from the firm and balance in reserve on the date was
Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was
Rs. 7,050 then what amount will be transferred to the loan account of B?

A and B, who share profits and losses in the ratio of 3:2 has the following balances: Capital
of A Rs. 50,000; Capital of B Rs. 30,000; Reserve Fund Rs. 15,000. They admit C as a partner,
who contributes to the firm Rs. 25,000 for 1/6th share in the partnership. If C is to purchase
1/6th share in the partnership from the existing partners A and B in the ratio of 3:2 for
Rs. 5,000 as goodwill find closing capital of C.

P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership
with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th
share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How
much cash will P & Q withdraw from the firm on account of goodwill?

A and B are partners sharing profits in the ratio 5:3, they admitted C giving him 3/10th share
of profit. If C acquires 1/5th share from A and 1/10th from B, new profit sharing ratio will be———

A, B and C are equal partners. D is admitted to the firm for one-fourth share. D brings
Rs. 20,000 capital and Rs. 5,000 being half of the premium for goodwill. The total value of
goodwill of the firm is_________

A and B are partners with capitals of Rs. 10,000 and Rs. 20,000 respectively and sharing
profits equally. They admitted C as their third partner with one-fourth profits of the firm
on the payment of Rs. 12,000. The amount of hidden goodwill 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 of A:B will be _________

Bill and Monica 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 Bill and Monica is _________

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 amount
of inventory on approval at the end of the year will be _________

On 16.6.2010 X draws a bill on Y for Rs 25,000 for 30 days. 19th July 2010 is a public holiday,
maturity date of the bill will be:

Bobby sold goods worth Rs 25,000 to Bonny. Bonny immediately accepted a bill on 1.11.09,
payable after 2 months. Bobby discounted this bill @ 18% p.a. on 15.11.09. On the due date
Bonny failed to discharge the bill. Later on Bonny became insolvent and 50 paise is recovered
from Bonny’s estate. How much amount of bad debt will be recorded in the books of Bobby?

Ram’s acceptance to Dinesh for Rs 8,000 renewed for 3 months on the condition that
Rs. 4,000 be paid in cash immediately and the remaining amount will carry interest @ 12%
p.a. The amount of interest will be _________

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 drew a bill on B for Rs. 50,000 for 3 months. Proceeds are to be shared equally. A got the
bill discounted at 12% p.a. and remits required proceeds to B. The amount of such remittance
will be _________

A and B enter into a joint venture to underwrite the shares of K Ltd. @ 5% underwritting
commission. K Ltd. make an equity issue of 100000 equity shares of Rs 10 each. 80% of the
issue are subscribed by the party. The profit sharing ratio between A and B is 3:2. The
balance shares not subscribed by the public, purchased by A and B in profit sharing ratio.
How many shares to be purchased by A?

R and M entered into a joint venture to purchase and sell new year gifts. They agreed to
share the profits and losses equally. R purchased goods worth Rs.1,00,000 and spent Rs.10,000
in sending the goods to M. He also paid Rs. 5,000 for insurance. M spent Rs. 10,000 as
selling expenses and sold goods for Rs.2,00,000. Remaining goods were taken over by him at
Rs. 5,000. Find out profit on venture.

A and B entered into a Joint Venture. A purchased goods costing Rs. 2,00,000, B sold 4/5th of
the same for Rs. 2,50,000. Balance goods were taken over by B at cost less 20%. If same set
of books is maintained, find out profit on venture.

If unsold goods costing Rs. 20,000 is taken over by Venturer at Rs. 15,000, the Joint Venture
A/c will be credited by:

X of Kolkata sends out goods costing Rs. 1,00,000 to consignee Y of Delhi. 3/5th of the goods
were sold by consignee for Rs. 70,000. Commission 2% on sales plus 20% of gross sales less
all commission exceeds cost price. The amount of Commission will be:

Rahim of Kolkata sends out 1,000 boxes to Ram of Delhi costing Rs. 100 each at an Invoice
Price of Rs. 120 each. Goods send out on consignment to be credited in general trading
account will be:

Goods sent out on consignment Rs. 2,00,000. Consignor’s expenses Rs. 5,000. Consignee’s expenses Rs.
2,000. Cash sales Rs. 1,00,000, credit sales Rs. 1,10,000. Consignment inventory Rs. 40,000. Ordinary
commission payable to consignee Rs. 3,000. Del-credere commission Rs. 2,000. The amount
irrecoverable from customer Rs. 2,000. What will be the profit on consignment?

A of Kolkata sends out 500 boxes to B of Delhi costing Rs. 200 each. Consignor’s expenses
Rs 5000. 1/5th of the boxes were still in transit. 3/4th of the goods received by consignee, were
sold. The value of goods still in transit will be:

If sales revenue are Rs. 4,00,000; cost of goods sold is Rs. 3,10,000 and operating expenses
are Rs.60,000 the gross profit is _________

If sales are Rs. 2,000 and the rate of gross profit on cost of goods sold is 25%, then the cost
of goods sold will be _________

Amit Ltd. purchased a machine on 1.1.2009 for Rs 1,20,000. Installation expenses
were Rs. 10,000. On 01.07.2009, expenses for repairs were incurred to the extent
of Rs. 2,000. Depreciation is provided under straight line method. Depreciation rate
is 10%. Annual Depreciation will be ________

In the books of D Ltd. the machinery account shows a debit balance of Rs. 60,000 as on
April 1, 2009. The machinery was sold on September 30, 2010 for Rs. 30,000. The company
charges depreciation @ 20% p.a. on diminishing balance method. Profit / Loss on sale of the
mahinery will be _________

The total cost of goods available for sale with a company during the current year is
Rs.12,00,000 and the total sales during the period are Rs.13,00,000. If the gross profit margin
of the company is 33 1/3 % on cost, the closing inventory during the current year is

When preparing a Bank Reconciliation Statement, if you start with the debit balance as per
Cash Book, cheques issued but not presented within the period should be _________

Rs. 200 paid as wages for erecting a machine should be debited to ———-

Rs. 2,500 spent on the overhaul of a machine purchased second-hand is———–

After re-issue of forfeited shares, the profit remaining in the Share forfeiture A/c is transferred to———-