Practice Test


1) The balance of the petty cash is


2) Fixed assets are


3) Goodwill is


4) Stock is


5) A new firm commenced business on 1st Jan , 2006 and purchased goods costings 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 ?


6) From the following figures ascertain the gross profit :Opening stock (1.1.2006) Rs.25,000 , Goods purchased during 2006 Rs.1,30,000 , Freight and packing on above Rs.5,000 , Closing stock (31.12.2006) Rs.15,000 , Sales Rs.1,90,000 , Selling expenses on Sales Rs.9,000


7) A prepayment of insurance premium will appear in the Balance Sheet and in the insurance account respectively as;


8) If Sales revenues 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


9) Sales are equal to


10) 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


11) Sales for the year ended 31 st march ,2005 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


12) Rent paid on 1st October ,2004 for the year to 30th September , 2005 was Rs.1,200 and Rent paid on 1st October ,2005 for the year to 30th September , 2006 was Rs.1,600 . Rent payable , as shown in the profit and loss account for the year ended 31st December 2005, would be ;


13) A decrease in the provision for doubtful debts would result in:


14) Sales Rs.15,000 , Opening stock Rs.6,000 , Purchases Rs.10,000 , Closing stock Rs.? , Cost of goods sold Rs.9,000 ,


15) Sales Rs.15,000 , Opening stock Rs.6,000 , Purchases Rs.10,000 , Closing stock Rs.? , Cost of goods sold Rs.9,000 , Gross profit Rs.? , Trading Expenses Rs.4,000 , Net profit Rs.? ; The Gross profit will be


16) Sales Rs.15,000 , Opening stock Rs.6,000 , Purchases Rs.10,000 , Closing stock Rs.? , Cost of goods sold Rs.9,000 , Gross profit Rs.? , Trading Expenses Rs.4,000 , Net profit Rs.? ; The Net profit will be


17) Opening Capital Rs.16,000 , Investment By Proprietor Rs.Nil , Drawing Rs.3,000 , Capital at the end of the year Rs.13,500 , Net Profit (loss) Rs. ? . The Net profit will be


18) Opening Capital Rs.16,000 , Investment By Proprietor Rs.Nil , Drawing Rs.3,000 , Capital at the end of the year Rs.13,500 , Net Profit (loss) Rs. ? . If given information , net loss is Rs.1,000, then the investments made by the proprietor during the year will be


19) Sales Rs.1,40,700 , Opening stock Rs.20,000 , Purchases Rs.85,800 , Closing stock Rs.18,000 , Carriage on Purchases Rs.2,300 , Carriage on Sales Rs.3,000, Rent of office Rs.5,000 , The Net profit will be


20) Sales Rs.1,40,700 , Opening stock Rs.20,000 , Purchases Rs.85,800 , Closing stock Rs.18,000 , Carriage on Purchases Rs.2,300 , Carriage on Sales Rs.3,000, Rent of office Rs.5,000 , The Gross profit will be


21) The Zed Company , a whole seller estimates the following Sales for the indicated months: June 2006 : Opening stock Rs.4,08,000, Credit Sales Rs.15,00,000 , Cash Sales Rs.2,00,000 , Total Sales Rs.17,00,000 , July 2006 :Opening stock Rs.4,34,400, Credit Sales Rs.16,00,000 , Cash Sales Rs.2,10,000 , Total Sales Rs.18,10,000 , August 2006 :Opening stock Rs.4,60,800, Credit Sales Rs.17,00,000 , Cash Sales Rs.2,20,000 , Total Sales Rs.19,20,000 . Selling price is 125% of the purchase price. The cost of goods sold for the month of June ,2006 is:


22) The Zed Company , a whole seller estimates the following Sales for the indicated months: June 2006 : Opening stock Rs.4,08,000, Credit Sales Rs.15,00,000 , Cash Sales Rs.2,00,000 , Total Sales Rs.17,00,000 , July 2006 :Opening stock Rs.4,34,400, Credit Sales Rs.16,00,000 , Cash Sales Rs.2,10,000 , Total Sales Rs.18,10,000 , August 2006 :Opening stock Rs.4,60,800, Credit Sales Rs.17,00,000 , Cash Sales Rs.2,20,000 , Total Sales Rs.19,20,000 . Selling price is 125% of the purchase price. Stock purchased in July ,2006 is:


23) MATCH THE PAIRS :- Capital is the difference between


24) Gross profit is ascertained by deducting


25) Wages paid for erecting machines are


26) Gross profit is equal to


27) Cost of good sold is equal to


28) operating cost is equal to


29) Net Profit is equal to


30) Trading account is prepared to ascertain


31) Profit & Loss account is prepared to ascertain


32) the sequence of preparation of 1. Balance sheet , 2 . Trial balance , 3. Income statement is


33) trading account is closed by transferring its balance to the


34) Profit & Loss account is closed by transferring its balance to the


35) Trading & Profit & Loss account is the result of posting of


36) Trading & profit & loss account is based on


37) Fixed asset are disclosed in the balance sheet at


38) current asset are disclosed in the balance sheet at


39) contingent liability is


40) provision is


41) if the amount of any known liability can be determined with substantial accuracy


42) under the liquidity approach


43) under permanence approach


44) Patents rights is in the nature of


45) provision is


46) Profit & Loss shows


47) Balance sheet shows


48) if the opening entry is not passed


49) closing entries are required to be passed before the preparation of


50) the effect of opening entries is the opening of


51) the effect of closing entries is the closure of


52) If the adjustment entries are not passed


53) if the closing stock is zero , it means


54) Closing stock appearing in the trail balance is shown


55) Income tax paid by a proprietor Rs.3,000 appearing in the trial balance


56) Which reserve has debit balance


57) Return outwards appearing in trial balance are deducted from


58) Return inwards appearing in trial balance are deducted from


59) salaries & wages appearing in the trail balance are shown in


60) Wages & salaries appearing in the trial balance are shown in


61) outstanding wages appearing in the trail balance are shown in


62) freight inwards appearing in trial balance are shown


63) Carriage outwards appearing in trial balance are shown


64) Advance salaries appearing in the trail balance are shown in


65) apprenticeship premium received appearing in the trial balance are shown


66) Discount allowed appearing in the trial balance are shown


67) closing stock appearing in the trail balance is shown


68) Prepaid insurance appearing in the trail balance are shown in


69) Patents is


70) trade mark is


71) Furniture is


72) capital work - in -progress


73) Bill Receivable is


74) Drawings are deducted from


75) Which of the following is correct ?


76) Which of the following is correct ?


77) the provision for discount on debtors is calculated


78) The provision for discount on debtors is


79) the provision for doubtful debts is


80) The debit balance in the profit & loss account is


81) The credit balance in the profit & loss account is


82) the gain from sale of capital asset need not be added to revenue to ascertain the


83) the gain from sale of capital asset is added to revenue to ascertain the


84) Freight & cartage expenses paid on purchase of goods


85) which of the following is True ?


86) outstanding wages refer to those expenses which have been


87) prepaid expenses refer to those expenses which have been


88) outstanding expenses are shown


89) Prepaid expenses are shown


90) accrued income refers to that income which has been


91) unaccrued income refers to that income which has been


92) accrued income is shown


93) unaccrued income is


94) which of the following is True ?


95) prepaid wages Rs.2,500 , appear in A's Trial balance. These will appear in


96) income tax paid by Mr.A amounts to Rs.3,000.The accounting treatment is


97) A's trail balance shows the opening stock Rs.20,000 , it will be


98) B's trial balance contains the following information :bad debt Rs.1,000 provision for doubtful debts Rs.1,500. It is desired to make a provision for doubtful debts Rs.2,000 at the end of the year .the amount to be debited to the profit & loss account is


99) C's trial balance contains the following information :bad debt Rs.800 provision for doubtful debts Rs.2,000. It is desired to make a provision for doubtful debts Rs.1,000 at the end of the year. The accounting treatment of these adjustments is


100) D's trial balance contains the following information :Discount allowed Rs.500 provision for discount on debtor Rs.1,100. It is desired to make a provision for discount on debtor Rs.1,800 at the end of the year `the amount to be debited to the profit & loss account is


101) E's trial balance contains the following information :Discount received Rs.1,000 provision for discount on creditor Rs.1,600. It is desired to maintain a provision for discount on creditors at Rs.1,100. The amount to be credited to the profit & loss account is


102) C's trial balance contains the following information :bad debt Rs.4,000 , provision for doubtful debts Rs.5,000 , sundry debtors Rs.25,000. . It is desired to make a provision for doubtful debts @ 10% on sundry debtors at the end of the year .sundry debtor will appear in the balance sheet at


103) F's capital on Jan 01 ,2002 Rs.45,000 .Interest on drawing Rs.5,000.Interest on capital Rs.2,000, drawing Rs.14,000. Profit for the year Rs.15,000,his capital as on 31.12.2002 is


104) H's Trail balance contains the following info.Bad debts Rs.3,000 , Discount allowed Rs.3,000 , Provision for discount on debtors Rs.3,200 , Provision for bad debts Rs.3,500. Sundry debtor Rs.50,000.At the end of the year , it is desired to maintain a provision for bad debts at Rs.4,000 & provision for discount on debtor at Rs.2,000.sundry debtor will appear in the balance sheet at


105) I's trial balance as at 31.12.2002 contains the following info.12% bank loan Rs.40,000. Interest paid Rs.3,800. Interest debited to the Profit & loss account is


106) opening stock Rs.1,00,000 .Sales Rs.5,00,000 , gross profit @ 25 % on sales ,purchase Rs.5,00,000 , closing stock is


107) opening stock Rs.1,00,000 .Sales Rs.5,00,000 , gross profit @ 25 % on cost ,purchase Rs.6,00,000 , closing stock is


108) Cost of goods sold Rs.6,69,600 , sales Rs.7,44,000.Closing stock Rs.50,400 . The gross profit for the year ending on 31.03.2002 is


109) stock (1.4.2001) Rs.40,000 , purchase Rs.3,60,000 , stock (31.3.2002) Rs.1,30,000 ,sales Rs.3,80,000 ,carriage inwards Rs.6,000 , freight inwards Rs.6,000 ,wages & salaries Rs.50,000.return inward Rs.20,000 , return outward Rs.40,000 .The market value of stock as on 31.03.2002 was Rs.1,20,000 . the gross profit for the year ending on 31.03.2002 is


110) Opening stock Rs.90,000 ,credit purchase Rs.6,00,000 ,cash purchase Rs.30,000 , credit sales Rs.7,20,000, cash sales Rs.36,000 ,carriage inwards Rs.1,200 , freight inwards Rs.1,800 ,wages & salaries Rs.2,400.return inward Rs.12,000 , return outward Rs.6,000, cartage inward Rs.600 , cost of closing stock as on 31st March Rs.54,000 . but The market value of stock as on 31.03.2002 was Rs.50,400,Freight outward Rs.600 . the gross profit for the year ending on 31.03.2002 is


111) Adjusted purchase Rs.6,63,600, sales Rs.7,44,000, closing stock Rs.50,400, freight & cartage inward Rs.3,600, wages Rs.2,400, ,freight & cartage outward Rs.1,800,the gross profit for the year ended 31.3.2002 is


112) Sales Rs.1,00,000 cost of goods sold Rs.80,000 , closing stock Rs.10,000, freight inwards Rs.1,000 ,freight outward Rs.3,000 , operating expenses Rs.5,000 .. the operating profit is


113) Goodwill is


114) A debit to an account may


115) Gross profit is the difference between:


116) Payment made to a creditor subject to cash discount will :


117) A customer returns goods already charged to him. We should:


118) Capital is the difference between


119) The capital of a sole trader would change as a result of: