FINALTERM EXAMINATION
Fall 2009
MGT101- Financial Accounting (Session - 3)
Ref No: 1195700
Time: 120 min
Marks: 87
| Student Info | |
| StudentID: | |
| Center: | OPKST |
| ExamDate: | 2/22/2010 12:00:00 AM |
| For Teacher's Use Only |
| Q No. | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | Total |
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| Q No. | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | |
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| Q No. | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | |
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| Q No. | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 | |
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| Q No. | 33 | 34 | 35 | 36 | 37 | 38 | 39 | 40 | |
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| Q No. | 41 | 42 | 43 | 44 | 45 | 46 | 47 | 48 | |
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| Q No. | 49 | 50 | 51 | 52 | 53 | 54 | 55 | 56 | |
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| Q No. | 57 | 58 | 59 | | | | | | |
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Question No: 1 ( Marks: 1 ) - Please choose one
Shares for which amount is paid by public are called ________ shares. ► Paid up
► Authorized
► Bonus shares
► All are correct options
Question No: 2 ( Marks: 1 ) - Please choose one
Income of the business includes: ► Cash sales only
► Credit sales only
► Credit purchases only
► Both cash sales and credit sales
Question No: 3 ( Marks: 1 ) - Please choose one
Which of the following is used to record financial transactions in chronological (day-to-day) order? ► Voucher
► General Journal
► General Ledger
► Trial balance
Question No: 4 ( Marks: 1 ) - Please choose one
The original book of entry, in which all vouchers are first recorded, is called: ► General Journal
► General Ledger
► Trial Balance
► Balance Sheet
Question No: 5 ( Marks: 1 ) - Please choose one
A book, in which receipts and payments are recorded, is known as: ► Pass Book
► Cash Book
► Purchase Book
► Sales Book
Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following period is known as a fiscal Year of the Government of Pakistan? ► 1st January to 31st December
► 1st June to 31st May
► 1st July to 30th June
► 1st October to 30th September
Question No: 7 ( Marks: 1 ) - Please choose one
Which of the following is/are the END product of accounting cycle? ► Financial Statements
► General Journal
► General Ledger
► Voucher
Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following is NOT considered a part of financial statements? ► General Ledger
► Balance Sheet
► Profit and Loss Account
► Cash Flow Statement
Question No: 9 ( Marks: 1 ) - Please choose one
The amount of salary paid to Mr. Sohail should be debited to: ► Mr. Sohail account
► Salaries account
► Cash account
► Drawings account
Question No: 10 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs. 60,000, sales are Rs. 90,000 and operating expenses are Rs. 25,000 during the year. What would be the Net Profit? ► Rs. 5,000
► Rs. 25,000
► Rs. 55,000
► Rs. 60,000
Question No: 11 ( Marks: 1 ) - Please choose one
If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses are Rs. 20,000 during the year, what would be the value of Gross Profit? ► Rs. 15,000
► Rs. 35,000
► Rs. 55,000
► Rs. 60,000
Question No: 12 ( Marks: 1 ) - Please choose one
If salaries expense is Rs. 2,500, purchases are Rs. 16,000 and rent (office building) is Rs. 300 during the year, what would be the total of "general & administrative expenses"? ► Rs. 300
► Rs. 2,500
► Rs. 2,800
► Rs.18, 800
Question No: 13 ( Marks: 1 ) - Please choose one
The Primary objective of providing depreciation is: ► To calculate true profit
► To show the asset on market value
► To reduce tax Burdon
► To provide funds for replacement
Question No: 14 ( Marks: 1 ) - Please choose one
Accounting is the language of: ► Business
► School
► Proprietor
► Management
Question No: 15 ( Marks: 1 ) - Please choose one
Depreciation arises because of: ► Fall in the market value of an asset
► Fall in the value of money
► Physical wear and tear
► All of the given options
Question No: 16 ( Marks: 1 ) - Please choose one
Find out the missing value of an Accounting Equation with the help of given data:| Owner’s equity | Rs. 22,500 |
| Total Liabilities | Rs. 80, 385 |
| Cash in hand | Rs. 1,000 |
| Cash at bank | Rs. 2,000 |
| Debtors | Rs. 500 |
► Rs. 1, 02,885 other assets
► Rs. 1, 02,885 other liabilities
► Rs. 99,885 current liabilities
► Rs. 99,385 other assets
Question No: 17 ( Marks: 1 ) - Please choose one
When the Bank Statement balance is more than the Cash Book balance, it is because of: ► Unpresented cheques
► Unrecorded bank charges
► Uncredited cheques
► None of the given options
Question No: 18 ( Marks: 1 ) - Please choose one
Upon checking the Bank Statement against the Cash Book by Mr. A, It was discovered that an amount of Rs.120 for dividend from XYZ Co. had not been entered in the Cash Book. Which of the following entry should be recorded to rectify the mistake? ► Bank Account(Dr.) and Dividend Account (Cr.)
► XYZ Co. Account (Dr.) and Bank Account (Cr.)
► Dividend Account (Dr.) and Bank Account (Cr.)
► Bank Account (Dr.) and XYZ Co. Account (Cr.)
Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following subsidiary book(s) is (are) maintained for debtors control account? ► Sales Day Book
► Sales Return
► Debtors Ledger
► All of the given options
Question No: 20 ( Marks: 1 ) - Please choose one
Which of the following is shown on credit side of creditors control account? ► Bills Receivable
► Return inwards
► Credit purchases
► Discount allowed
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following account(s) will be affected, while rectifying the error of carriage charges, paid for a new plant purchased mistakenly debited to carriage account? ► Plant account
► Carriage account
► Both plant account and carriage account
► Trading account
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following rectifying entry will be recorded, if sales to Mr. “A” of Rs.336 have been debited to Mr. “B” account? ► A’s account (Dr.) and B’s account (Cr.)
► B’s account (Dr.) and A’s account (Cr.)
► Sales account (Dr.) and B’s account (cr.)
► B’s account (Dr.) and Sales account (Cr.)
Question No: 23 ( Marks: 1 ) - Please choose one
Following information are extracted from books of Mr. XYZ| Particulars | Rs. |
| Bad Debts (Given in trial balance) | 500 |
| Old provisions (Given in trial balance) | 700 |
| Sundry Debtors (Given in trial balance) | 44,800 |
If the Provision for doubtful debts has been increased by 5%, which amount of new provision will be shown in Profit & Loss Account?
► Rs. 2,240
► Rs. 2,425
► Rs. 1,925
► Rs. 3,025
Question No: 24 ( Marks: 1 ) - Please choose one
An asset which is NOT easily convertible to cash or not expected to become cash within a period of twelve months is called: ► Liquid asset
► Current asset
► Fixed asset
► Floating asset
Question No: 25 ( Marks: 1 ) - Please choose one
When closing stock is given in trial balance, then it will effect: ► Trading account only
► Balance sheet only
► Owner's equity only
► Both Trading account and Balance sheet
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is CORRECT if depreciation is given in trial balance? ► All of the given options are correct
► It means depreciation has already been deducted from concerned asset account
► It will be shown as an expense in income statement only
► It will not be deducted from concerned asset in Balance Sheet
Question No: 27 ( Marks: 1 ) - Please choose one
Identify the selling expenses of manufacturing concern with the help of given data. | Particulars | Rs. |
| Salesman’s salary | 70,000 |
| Commission on sales | 28,000 |
| Carriage outward | 10,000 |
| Carriage inward | 5,000 |
► Rs. 80,000
► Rs. 60,000
► Rs. 38,000
► Rs. 1, 08,000
Question No: 28 ( Marks: 1 ) - Please choose one
In case of fixed capital accounts, other transactions such as Drawings and Profit etc. are recorded in a separate account that is called ___________. ► Fixed Capital Account
► Current Account
► Fluctuating Capital Account
► Floating Capital Account
Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following clause/s are discussed in Memorandum of Association of Companies? ► Name of company
► Place of registered office of company
► Objective of the company
► All of the given options
Question No: 30 ( Marks: 1 ) - Please choose one
In Income Statement, both beginning inventory and ending inventory appear in the section of: ► Cost of good sold
► Indirect cost
► Selling cost
► Factory over head cost
Question No: 31 ( Marks: 1 ) - Please choose one
In which of the following auditor’s remuneration payable is shown? ► In balance sheet under the head of current liabilities only
► In balance sheet under the head of current assets only
► In income statement under the administrative expense only
► In both balance sheet under the head of current liabilities and income statement under the administrative expense
Question No: 32 ( Marks: 1 ) - Please choose one
How dividend declared is treated in the Balance Sheet of the company? ► Provision
► Current liability
► Reserves and surplus
► Current assets
Question No: 33 ( Marks: 1 ) - Please choose one
The balance sheet reported a beginning balance of Rs. 20,000 in Accounts Receivable and an ending balance of Rs. 15,000. Credit Sales of Rs. 200,000 were made during the year. Using this information, compute cash collected from customers. ► Rs. 205,000
► Rs. 215,000
► Rs. 195,000
► Rs. 200,000
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following statement in NOT TRUE about the limited company form of business? ► The limited company form of business allows ownership of the business to be spread amongst many people
► Shareholders can appoint professionals
► Shareholders are personally liable for all the liabilities incurred by the business
► Regular filing of information about the affairs of the company is a legal requirement
Question No: 35 ( Marks: 1 ) - Please choose one
In calculating earning per share (EPS), the net profit is divided by which of the following? ► Number of ordinary shares
► Number of preference shares
► Paid up capital
► Authorized capital
Question No: 36 ( Marks: 1 ) - Please choose one
Which of the given Asset is Not included in the calculation acid test ratio? ► Stock
► Cash
► Debtors
► Bills Receivable
Question No: 37 ( Marks: 1 ) - Please choose one
| Particulars | Rs. |
| Debentures | 1, 50, 000 |
| Equity Capital | 2, 00,000 |
| General Reserve | 90, 000 |
| Accumulated profit | 60,000 |
| What is debt equity ratio | ? |
► 15: 20 (or 3:4)
► 15:24 (or 5: 8)
► 15:29
► 15:35 (or 3: 7)
Question No: 38 ( Marks: 1 ) - Please choose one
Normally the practice of Book Keeping under Single Entry System is followed by: ► Small businesses only
► Governments only
► Large scale businesses only
► Both small businesses and governments
Question No: 39 ( Marks: 1 ) - Please choose one
In which of the following case the bank cannot refuse the payment? ► Stale cheque
► Bearer cheque
► Insolvency of the customer
► Post dated cheque
Question No: 40 ( Marks: 1 ) - Please choose one
Stock account is debited and creditors account is credited, which of the following is reflecting the statement? ► Discount received
► Goods returned
► Purchase of goods on credit
► Payment of goods
Question No: 41 ( Marks: 1 ) - Please choose one
Payment is made of a company’s purchases on credit, which of the following is correct: ► Debit stock account and credit creditors account
► Debit creditors account and credit cash account
► Debit cash account and credit creditors account
► Debit stock account and credit cash account
Question No: 42 ( Marks: 1 ) - Please choose one
We usually allow the customer to deduct a certain amount from the invoice value for prompt payment. In doing so we are granting a: ► Commission
► Allowance
► Discount
► Rebate
Question No: 43 ( Marks: 1 ) - Please choose one
What will be obtained from the Purchases Returns Book? ► Discount received
► Returns outward
► Credit purchases
► Discount allowed
Question No: 44 ( Marks: 1 ) - Please choose one
Deferred cost is classified as: ► Current liability
► Current asset
► Non-current asset
► Non-current liability
Question No: 45 ( Marks: 1 ) - Please choose one
Which of the following is increased when an asset is converted into expense in adjustment? ► Revenue
► Net income
► Expense
► Liability
Question No: 46 ( Marks: 1 ) - Please choose one
Accumulated depreciation is a ____________ account? ► Fixed asset
► Current asset
► Contra asset
► Liability
Question No: 47 ( Marks: 1 ) - Please choose one
Failure to record ___________ will result in understates net income. ► Accrued expenses
► Expenses incurred
► Accrued revenues
► Accounts payable
Question No: 48 ( Marks: 1 ) - Please choose one
Puget Sound Co. sold marketable securities Costing Rs.80,000 for Rs.92,000 cash. In the company’s income statement and statement of cash flows, respectively, this will appear as: ► A Rs.12,000 gain and a Rs.92,000 cash receipt
► A Rs.92,000 gain and a Rs.8,000 cash receipt
► A Rs.12,000 gain and a Rs.80,000 cash receipt
► A Rs.92,000 sale and a Rs.92,000 cash receipt
Question No: 49 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership invested Rs.50,000 and Rs.65,000 with an equal share in profit or loss. Markup on drawings of Mr. A is Rs.1,500 and of Mr. B is Rs.1,800. The net income for the year is Rs.85,000. What will be the amount of distributable profit? ► Rs.81,700
► Rs.88,300
► Rs.131,700
► Rs.146,700
Question No: 50 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership with an equal investment and equal share in profit or loss. Markup on capital of Mr. A is Rs.2,000 and markup on drawings of Mr. B is Rs.3,000. The net income for the year is Rs.50,000. What will be the profit share of Mr. A? ► Rs.22,500
► Rs.25,500
► Rs.27,500
► Rs.55,000
Question No: 51 ( Marks: 1 ) - Please choose one
Mr. A & B entered into a partnership invested Rs.50,000 and Rs.65,000 with an equal share in profit or loss. Markup on capital of Mr. A is Rs.2,000 and markup on drawings of Mr. B is Rs.3,000. The net income for the year is Rs.85,000. What will be the profit share of Mr. B? ► Rs.40,000
► Rs.43,000
► Rs.130,000
► Rs.133,000
Question No: 52 ( Marks: 1 ) - Please choose one
The value of a share as quoted on the stock exchange is known as: ► Book value
► Par value
► Market value
► Face value
Question No: 53 ( Marks: 1 ) - Please choose one
Which of the following is not a measure of short-term liquidity? ► Current ratio
► Quick ratio
► Acid-test ratio
► Debt ratio
Question No: 54 ( Marks: 1 ) - Please choose one
Short term investments in marketable securities and treasury bills that will mature within ninety days from the date of acquisition, must be classified as: ► Receivables
► Receipts from Capital
► Current and intangible assets
► Cash equivalents
Question No: 55 ( Marks: 3 )
Show how the following items will appear in profit and loss account. | Particulars | Rs. |
| Bad debts | 3,600 |
| Provision for doubtful debts (old) | 8,500 |
| Provision for doubtful debts (new) | 1,500 |
Question No: 56 ( Marks: 5 )
What is the Purpose of Control Accounts? Question No: 57 ( Marks: 5 )
Umer and Usman, both of whom are CPAs, form a partnership, with Umer investing Rs.100,000 and Usman, Rs.80,000. They agree to share net income as follows:1. Salary allowances of Rs.80,000 to Umer and Rs.50,000 to Usman.
2. Interest allowances at 15 percent of beginning capital account balances.
3. Any partnership earnings in excess of the amount required to cover the interest and salary allowances to be divided 60 percent to Umer and 40 percent to Usman.
The partnership net income for the first year of operations amounted to Rs.247,000 before interest and salary allowances. Show how this amount should be divided between the two partners.
Question No: 58 ( Marks: 10 )
Following information are extracted from the books of XY and Sons for the year 2007. | Particulars | Rs. |
| Fixed Asset at WDV | 529,500 |
| Material 31-12-2007 | 188,000 |
| Work in process on 31-12-2007 | 178,000 |
| Finished Goods on 31-12-2007 | 198,000 |
| Debtors | 160,000 |
| Bank | 7,000 |
| Creditors | 100,000 |
| Expenses payable | 15,000 |
| Profit for the year | X:90,000 Y:80,000 |
| Drawings for the year | X:10,000 Y:15,000 |
| Capital | X:400,000 Y: 350,000 |
| Current Account | X: 13,000 Y:10,000 |
| Long term loans | 2,27,500 |
You are required to prepare Balance Sheet as on 31st December 2007. Show complete working.
Question No: 59 ( Marks: 10 )
Prepare Bank Reconciliation Statement as on 31st March 2009 with the help of given data. | | Particulars | Rs. |
| 1 | Balance as per Cash Book (Dr.) | 180,000 |
| 2 | Cheques paid into Bank in March 2009 but credited by the bank in April 2009 | 7,900 4,500 1,300 |
| 3 | Cheques issued in March 2009 but cashed in April 2009 | 11,000 5,800 |
| 4 | Cheques entered in the Cash Book in March 2009 but paid into bank in April 2009 | 1,000 |
| 5 | Interest allowed by the bank | 2,500 |
| 6 | Interest charged by the bank | 500 |
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