Test 3

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Subject: Basic Concept of Accounting

Total Number of Question: 40

Time: 41 Minutes

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1. Which of the following items are not included in Cost Sheet?

Bank Interest

Cash Discount

Donations

All of the above

2. Prime cost may be correctly termed as:

The sum of direct material and labour cost with all other cost excluded

The total of all cost items which can directly charge to product items.

The total cost incurred in producing a finished unit.

The sum of the large costs in a product cost.

3. Sales, Opening Stock and Closing Stock are ₹ 2,40,000, ₹ 36,000 and ₹ 45,000 respectively. If the rate of G.P on cost of goods sold is 25%, then the amount of purchases will be:

₹ 1,83,000

₹ 1,92,000

₹ 2,01,000

₹ 1,89,000

4. From the following information, find out purchases of raw material when raw material consumed is ₹ 26,500; closing stock ₹ 4,500 and opening stock ₹ 3,000.

₹ 29,500

₹ 31,000

₹ 28,000

₹ 34,000

5. Direct Material and Direct Wages are ₹ 2,32,000 and ₹ 2,05,000 respectively. If the ratio of direct wages and factory overhead is 5:3 then Factory Cost will be:

₹ 4,37,000

₹ 5,60,000

₹ 7,78,667

₹ 5,46,667

6. Prime cost-plus factory overheads is known as-

Marginal Cost

Conversion Cost

Commercial Cost

Factory Cost

7. Which costing method is used by Spare-parts manufacturing industry?

Process Costing

Job Costing

Batch Costing

Absorption Costing

8. Which of the following is not a relevant cost?

Replacement Cost

Sunk Cost

Marginal Cost

Opportunity Cost

9. Cost of rectification of defective articles are treated as:

Production Overhead

Distribution Overhead

Selling Overhead.

Administrative Overhead

10. Which of the following would be classified as indirect labour?

Assembly workers in a company manufacturing unit

Stores assistant in a factory store.

An audit clerk in a auditors' firm

Masons in a construction company

11. Cost of free samples and gifts are included in:

Prime Cost

Factory Overhead

Office and Administrative Overheads

Selling & Distribution Overheads

12. Which one is False?

Fixed costs per unit increase with increase in output

Out of pocket costs involve payment to outsiders.

Rent on own building is imputed cost

Tender is an estimation of selling price

13. CAS-16 is related to:

Cost Accounting Standard on Depreciation and Amortisation

Cost Accounting Standard on Joint Costs

Cost Accounting Standard on Quality Control

Cost Accounting Standard on Overburden Removal Cost

14. Wages for abnormal idle time are charged to:

Production Cost

Job Cost.

Abnormal Overhead

Costing Profit and Loss Account

15. Which statement is not True?

Replacement cost is the current market cost of replacing an asset or a material

Cost accounts provide information for determination of profit or loss

Bad debts, legal charges for recovery of debts are considered as selling & distribution expenses

Imputed costs are hypothetical cost

16. Any revenue expense for which a separate fund is available will be:

Capitalised and shown in the balance sheet

Debited to income and expenditure account

Debited to the separate fund

Debited to profit and loss account

17. Subscription received during the year ₹ 50,000; subscription outstanding at the beginning of the year ₹ 6,000. Income from subscription was shown as ₹ 52,000. What amount will be shown as subscription outstanding at the end of the year in the Balance Sheet?

₹ 8,000

₹ 6,000

₹ 2,000

₹ 4,000

18. Which one of the following is not prepared by non-profit organizations?

Profit and Loss Account

Income and Expenditure Account

Receipts and Payments Account

Balance Sheet

19. The information for the preparation of receipts and payments account is taken from:

Income and Expenditure Account

Cash Book

Cash Book and Balance Sheet

General Ledge

20. The Receipt and Payment Account shows advance subscriptions ₹ 6,000 and current year's subscription ₹ 44,500. If outstanding subscription of ₹ 4,500 then how much amount of subscription to be credited in the Income and Expenditure Account?

₹ 50,000

₹ 49,000

₹ 44,500

₹ 45,000

21. Which of the following items are shown in the Receipt and Payment Account?

Only items of capital nature

Only items of revenue nature which are received during the period of accounts

Only items of revenue nature pertaining to the period of accounts.

Both the items of capital and revenue nature which are received during the period of accounts

22. The manager is entitled to a commission of 5% on profits after deducting this commission. If the profits before charging such commission and interest on capital of ₹ 5,000 are ₹ 89,000, then manager's commission will be:

₹ 4,200

₹ 4,450

₹ 4,000

₹ 4,476

23. Which of the following statement is true?

Fixed assets - Current liabilities = Current assets

Discount on bills is a loss for the drawer and gain for the drawee

Profit and loss account covers a period and not the position of a particular day

The surplus of a non-profit organisation is distributed among the members

24. Which one of the following statements is true?

Comparatively is one of the accounting concepts

Accounting is concerned with both monetary and non-monetary transactions.

Joint venture follows the going concern concept

Financial statements are part of Accounting

25. The manufacturing account is prepared:

To ascertain gross profit

To ascertain the cost of goods manufactured.

To ascertain profit or loss on the goods manufactured.

To ascertain the cost of sales

26. At the time of dishonour of an endorsed bill which one out of these accounts would be debited by the drawer?

Bill Receivable Account

Drawee's Account

Bank Account

Bill Dishonoured Account

27. If a bill drawn on 3rd July, 2022 for 40 days payment must be made on:

16th August, 2022

15th August, 2022

14th August, 2022

12th August, 2022

28. When no separate set of books of accounts are maintained but each co-venturer keeps record of ail transactions then goods are purchased by a co-venturer for the joint venture, the account to be debited:

Joint venture account

Venture's capital account

Purchase account

None of the above

29. A, for joint venture with B, purchased goods costing ₹ 2,20,000. B sold 80% of the goods for ₹ 2,80,000 Balance of goods were taken over by B at cost plus 10%. Find out profit on joint venture.

₹ 60,000

1,21,600

₹ 1,08,400

₹ 99,600

30. Which of these accounts is not opened in the books of consignor?

Consignment Account

Commission Account

Goods send on Consignment Account

Consignee's Personal Account

31. Del Credere Commission in consignment business is generally payable:

Only on credit sales

On cash sales

On total sales

On recovery of bad debt

32. For closing stock held by consignee which account must be debited to:

Consignment Stock Account

Sales Account

Consignee Account

Consignment Account

33. X sends out goods to Y, costing ₹ 1,50,000. Goods are to be sold at cost + 25% of sales price. The consignor asked consignee to pay an advance for an amount equivalent to 60% of sales value. The amount of advance will be:

₹ 1,20,000

₹ 1,00,000

₹ 1,50,000

₹ 1,12,500

34. No adjustment is required while ascertaining debtors balance at the end of a period against:

Bad debt

Trade discount

Cash discount

Return inward

35. Provision for discount on debtors is created only on:

Bad and doubtful debtors

Insolvent debtors

Total debtors after providing provision for bad debts

Total debtors

36. A bad debt recovered during the year is a:

Revenue receipt

Capital expenditure

Reduction of Sundry Debtors

Capital Receipt

37. A machine is purchased on 1st July, 2022 for ₹ 14,00,000. Expenses incurred on its carriage and installation ₹ 6,00,000. Calculate the amount of depreciation @ 20%, per annum according to Straight Line Method for the first year ending on 31st March, 2023.

₹ 4,00,000

₹ 3,00,000

₹ 2,00,000

₹ 1,00,000

38. Which of the following error is an error of principle?

₹ 5,000 received from Shyam credited to Ram's A/c

₹ 5,000 paid to employees on installation of new plant debited to Wages A/c

₹ 500 paid for wages debited to salary A/c

₹ 500 being purchase of raw material debited to purchase A/c ₹ 500

39. Goods purchased from Mr. A. but wrongly entered in the sales returns book. After rectification of error the result will:

Be increased in gross profit

Be decreased in gross profit

Be no effect on gross profit

Either (a) or (b)

40. Find the correct statement:

Not recording a business transaction is an error of principle

Charging a revenue item to capital is a compensating error

Writing a debit item on the credit side and vice versa is an error of Commission

Bills received from Sohan passed through Bills Payable Book is an error of omission

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