Question:

The manufacturing account is prepared

A.

to ascertain the cost of goods manufactured.

B.

to ascertain gross profit.

C.

to ascertain profit or loss on the goods manufactur

Answer» a. to ascertain the cost of goods manufactured.

Question:

What happens when a bad debt is recovered?

A.

Current asset decreases

B.

Debtor’s balance decreases

C.

Profit increases

D.

Owner’s fund decreases

Answer» c. Profit increases

Question:

Reduction in value of asset due to its continuous use is treated as

A.

Appreciation

B.

Depreciation

C.

Loss

D.

Profit

Answer» b. Depreciation

Question:

The source document or voucher used for recording entries in Sales Book is

A.

invoice recieved

B.

invoice sent out

C.

credit notes sent out

D.

debit notes received

Answer» b. invoice sent out

Question:

Original cost of a machine is 1,50,000, residual value 10,000, if depreciation is charged @105 per annum under WDV method then depreciation for 3rd year will be

A.

12,240

B.

11,340

C.

12,150

D.

14,000

Answer» c. 12,150

Question:

Which of the following is capital expenditure?

A.

Repairs of fixed asset

B.

Demolition cost

C.

Locker rent

D.

Annual subscription

Answer» d. Annual subscription

Question:

Purchase price of Machine 8,90,000; Freight and Cartage 7,000; Installation charges 30,000; Insurance charges 20,000; Residual value is 40,000; estimated useful life 5 years. The amount of annual depreciation under straight line method will be

A.

1,77,400

B.

1,81,400

C.

1,97,400

D.

1,77,900

Answer» a. 1,77,400

Question:

Goods of the invoice value of 2,40,000 sent out to consignee at 20% profit on cost, theloading amount will be

A.

40,000

B.

48,000

C.

50,000

D.

None of the above

Answer» a. 40,000

Question:

When goods are purchased for the joint venture, the account to be debited is

A.

Purchase account

B.

Joint Venture account

C.

Venture’s capital account

D.

either Purchase account or Joint venture account

Answer» d. either Purchase account or Joint venture account

Question:

Which of the following is not a paper transaction?

A.

Charge of depreciation

B.

Discount received

C.

Bad debts written off

D.

Cash stolen from office

Answer» a. Charge of depreciation