Amity PGDM In Hospital Administration For Financial Accounting Assignment

Assignment c

OBJECTIVE QUESTIONS

In each of the following cases indicate the alternative which you consider to be correct:

Q1. Which of the following financial statements is prepared as of a particular date? (a) Profit and loss account

Balance sheet

Cash flow statement

Income and expenditure statement

Profit and loss appropriation account.

Q2. Based on which of the following concepts, share capital account is shown on the liability side of balance sheet?

Business entity concept

Money measurement concept

Cost concept

Going concern concept

Conservatism concept.

Q3. Which of the following is not an accounting transaction? (a) Sale of goods for cash

Payment of salary of office staff

Agreement to sell

Purchase of office furniture

Repayment of bank loan.

Q 4. Which of the following is false?

Taking the favourable balance as per pass book as the starting point, the amount in respect of charges made by the bank will be added to the pass book balance

Taking the favourable balance as per pass book as the starting point, the amount in respect of dividends received directly will be deducted from the pass book balance

Bank charges recorded twice in cash book will be added to the overdraft as per cash book in the preparation of reconciliation statement

Cheque issued but not presented for payment will be added when favourable balance as per cash book is the starting point

The amount of the undercasting of the credit side of the bank column of the cash book will be deducted from the overdraft as per pass book.

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Financial Accounting

Q5. From the books of Mr.Neelam, it was observed that cheques amounting to Rs.2,40,000 were deposited in the bank, out of which cheques worth Rs.20,000 were dishonored and cheques worth Rs.40,000 are still in the process of collection. The treatment of this while preparing Bank Reconciliation Statement is

Deduct Rs.60,000 from bank balance as per pass book

Add Rs.20,000 and deduct Rs.40,000 from overdraft balance as per cash book

Deduct Rs.60,000 from overdraft balance as per pass book

Add Rs.60,000 to overdraft balance as per pass book

Deduct Rs.40,000 and add Rs.20,000 from overdraft balance as per pass book.

Q6 . Which of the following is true?

Bank account is a personal account

Stock of stationery account is a nominal account

Returns inward account is a personal account

Outstanding rent account is a nominal account (e) Capital account is a real account.

Q7 . A sales day book is to record

all credit sales only

All cash sales only

all credit and cash sales

credit sales of goods and trade discount

all cash and credit sales and trade discount.

Q8. Which of the following is a liability of a firm?

Debit balance of discount column of cash book

Credit balance of bank pass book

Debit balance of bank column of cash book

 Credit balance of bank column of cash book.

Financial Accounting

Q9. Which of the following accounts will invariably have a debit balance?

I. Accounts receivable.

II. Accounts payable.

III. Purchases account.

IV. Bank account.

Prepaid expenditure.

Only (I) and (III) above

Both (II) and (III) above

Both (I) and (III) above

All of the above

Q10. The following is not a book of original entry

Purchase book

Journal proper

Cash book

General ledger

sales book

Q11. The Accountant of a company is recording the transactions of the day in various Books of Original Entry. Which of the following transactions is recorded in the wrong book? (a) Goods purchased on credit - Purchase Book

Goods purchased on credit - Purchase Book

Goods sold on credit - Sales Book

Wages paid in cash - Cash Book

None of the above

Q12. The impact on assets, profit and liabilities of a firm, on account of salary paid will be

Assets              Profit               Total Liabilities (a)

No effect        Decreases               Decreases

Assets                         Profit               Total Liabilities (a)

Decreases                No effect                Decreases

Assets                                 Profit               Total Liabilities (a)

Decreases                       Decreases              Decreases

None of the above

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Financial Accounting

Q13. Which of the following is true?

Discount columns in cash book are totaled and not balanced

A petty cash book in which a separate column is provided to record payment under each head is called impress system

The total of purchases book is posted periodically on the credit side of sundry creditors account

The total of sales book is posted periodically on the debit side of sundry debtors account

Petty cash book is used to record all cash transactions.

Q14. Total of sales day book at the end of the month indicates

The total sales for the month

The total credit sales for the month

Total cash sales of the month

Total amount due to suppliers

Total amount receivable from credit sales.

Q15. Which of the following is true?

Cash book may be defined as the record of transactions concerning cash receipts and payments

Discount account should be balanced in the cash book

The ledger is the book of original entry

Sales journal is used for recording cash sales

Purchase return book is used for recording the return of goods purchased from suppliers against cash.

Q16. Journal entry for receiving interest in cash from Mr. Prashant against the loan given to him

Interest on loan account Dr.

To Prashant account

Prashant account Dr.

To Interest account

Cash account Dr.

To Prashant account

None of the above

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Financial Accounting

Q 17. Which of the following entries recorded in the books of the drawee of a bill is false?

When a bill is accepted, the account to be debited is drawer’s a/c

When a bill is discharged, the account to be debited is bills payable a/c

When a bill presented for payment by a bank is dishonored, the account to be debited is bills payable a/c

When noting charges of a dishonored bill is paid by the endorsee ,the account to be debited is noting charges a/c

At the time of retirement of a bill the account to be debited is the drawer’s a/c.

Q 18. Which of the following is true?

A bill sent for collection by bank when dishonored, the drawer will credit bank a/c

At the time of renewal of bill interest a/c is credited in the books of the drawee

Accommodation bills are drawn, accepted and endorsed for some consideration

None of the Above

Q19. Bills receivable account is a

Nominal account

Personal account

Intangible asset

None of the Above

Q20. Closing stock is generally valued at

Cost price

Replacement cost

Market price

None of the Above

Financial Accounting

Q21. The provision for discount on debtors is calculated on the amount of debtors

Before deducting the provision for doubtful debts

Left after deducting the provision for doubtful debts

Before deducting the actual bad debts

None of the Above

Q22. Consider the following information of Thumbs-up Company for the year 2006-2007:

The amount to be debited to profit and loss account to make the estimated provision is

Rs. 8,600

Rs.10,400

Rs.10,520

None of the Above

Q23. At the time of preparation of final accounts, bad debts recovered account will be transferred to

Debtor’s account

Profit & loss account

Profit & loss adjustment account

None of the Above

Q24. Which of the following is false about diminishing balance method of depreciation?

Higher amount of depreciation is charged when the machine is more efficient

It recognizes the risk of obsolescence by higher amount of depreciation in the early years

The total amount of depreciation and repairs is almost uniformally distributed over the useful life

 None of the Above

Financial Accounting

Q25. The following is not an example of fixed asset

Plant and machinery

Land and building

Patent

None of the Above

Q26. Under depletion method, depletion per unit is calculated as

Acquisition cost divided by average production units per annum

Acquisition cost divided by actual production units in the year

Acquisition cost minus residual value divided by average production units per annum

None of the Above

Q 27. Which one of the following is a capital expenditure?

Compensation paid to Directors on termination of their services

Expenditure for renewal of trade mark

Gratuity paid to employees

None of the Above

Q28. Entries passed for outstanding expenses, depreciation, interest on capital etc. are

Opening entries

Journal entries

Adjustment entries

None of the above

Q29. Which of following transactions does not change the total amount of liabilities in the balance sheet?

Purchase of office furniture on credit

Payment of bank loan

Issue of debentures

None of the above

Financial Accounting

Q30. Which of the following is false?

Capital plus liabilities will be equal to assets

The difference between assets and liabilities is bank borrowing

Capital account is a personal account

None of the above

Q31. The expenses and incomes pertaining to full trading period are taken to the Profit and Loss account of a business, irrespective of their actual payment or receipt. This is in recognition of

Time period concept

Business entity concept

Going concern concept

None of the above

Q32. Which of the following statements can be used to assess the liquidity of a company?

Balance sheet

Profit and loss account

Profit and loss appropriation account

None of the above

Q33. Which of the following state that “Anticipate no profit and provide for all possible losses”?

Convention of materiality

Convention of consistency

Convention of disclosure

None of the above

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Financial Accounting

Q34. Which of the following statements is/are true?

 I. Drawings account is a nominal account.

II. Capital account is a real account.

III. Sales account is a nominal account.

IV. Outstanding salaries account is a nominal account.

Patents account is a personal account.

Only (I) above

Only (III) above

Both (II) and (IV) above

None of the above

Q35. RS Ltd., makes purchases on credit. If the purchases are not as per the specifications, the company returns them to the suppliers. The book, that is used to record such returns is

Returns inward book

Returns outward book

Cash book

None of the above

Q36. Which one of the following is not a reason for discrepancy in the balance as per cash book and bank pass book of a company?

Cheque issued to suppliers may not have been presented

Cheque deposited in the account may not have been realized

Bill discounted with bank is not due for payment

None of the above

Q37. The bank balance in the cash book of Mr.Avinash, a proprietor showed a credit balance of Rs.10,500 on March 31, 2008. On comparing it with his pass book he discovered the following discrepancies.

i. Cheque No. 51 for Rs.540 in favour of Mr.Raman has not yet been presented.

Financial Accounting