Financial Accounting (Mgt-101) Solution

1-d
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5-d
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Choose the correct/best option from given MCQs and put your answer in
tabular form as drawn above.

1. Which of the following account balance is shown on debit side of Trial Balance?
(It is assumed that all account balances are shown on normal balance).
a. Capital account
b. Sundry creditors account
c. Accounts payable account
d. Sundry debtors account

2. If cost of sales is Rs. 95,000, income from sales Rs. 200,000 and operating
expenses Rs. 300,000. What will be net result?
a. Rs.195,000 Losses
b. Rs.195,000 Profits
c. Rs.105,000 Profits
d. Rs.105,000 Losses

3. In which of the following statement opening stock is shown?
a. Profit and loss account
b. Balance sheet
c. Cash flow statement
d. Owner’s equity

4. Working capital Rs. 20,000, Current liabilities Rs. 30,000 and fixed assets Rs.
100,000; calculate current assets?
a. Rs. 10,000
b. Rs. 50,000
c. Rs. 110,000
d. Rs. 120,000

5. Which of the following content(s) is (are) included in the Cost of goods sold?
a. Opening stock
b. Purchases
c. Freight in
d. All of the given options

6. Which of the following Organization converts raw material into finished goods?
a. Trading concern
b. Manufacturing concern
c. Merchandising concern
d. Service concern
7. Which of the following is an example of direct materials cost?
a. Production worker’s wages
b. Depreciation expenses
c. A piece of wood for the production of chair
d. Polish and finishing material for chair
8. In cost of goods sold statement, the ‘cost of material consumed’ is equal to:
a. Opening raw material inventory + Purchases – Ending raw material
inventory
b. Opening raw material inventory - Purchases + Ending raw material
inventory
c. Ending raw material inventory - Opening raw material inventory –
Purchases
d. Ending raw material inventory + Opening raw material inventory +
Purchases
9. What would be the value of Total Factory Cost, if cost of raw materials, direct
labor costs, and manufacturing overhead costs are Rs.80,000, Rs.50,000, and
Rs.60,000 respectively?
a. Rs.130, 000
b. Rs.110, 000
c. Rs.140, 000
d. Rs.190, 000
10. Which of the following assets are shown at written down value in Balance Sheet?
a. Current assets
b. Liquid assets
c. Floating assets
d. Fixed assets
11. An asset cost Rs. 50,000, has an estimated residual value of Rs.1, 500, and an
estimated useful life of 5 years. What is the depreciation rate?
a. 20.0%
b. 25.0%
c. 35.5%
d. 50.4 %
12. Calculate depreciation of machine after first year by using diminishing balance
method with the help of given data?
If, Cost of machine = Rs.400, 000
Useful life = 5 years
Residual value = Rs.25, 000
Sale price = Rs.40, 000
Rate of depreciation = 40%
a. Rs. 160,000
b. Rs. 11,840
c. Rs. 34,560
d. Rs. 34,860
13. Which one of the following is INCORRECT about closing Stock?
a. It is added into current assets
b. It is deducted from material available for use
c. It becomes opening stock of next year
d. It increases the owner’s equity of business
14. In the cost of goods sold statement, Cost of direct material consumed + Direct
labor= ___________
a. Conversion cost
b. Prime cost
c. Total factory cost
d. Cost of goods manufactured
15. The total of all costs incurred to convert raw material into finished goods is
known as:
a. Prime cost
b. Conversion cost
c. Sunk cost
d. Opportunity cost
16. In cost of goods sold statement the ‘total factory cost’ is equal to:
a. Cost of material consumed + Labor cost
b. Cost of material consumed + Conversion cost
c. Cost of material consumed + Total factory cost
d. Cost of material consumed + Factory overhead
17. Which of the following is (are) inventory valuation method(s)?
a. FIFO
b. LIFO
c. Weighted average
d. All of the given options
18. The cost of an incomplete fixed asset is transferred to _________ as on Balance
Sheet date.
a. Capital account
b. Capital work in progress account
c. Relevant asset account
d. Owner's equity account
19. Under the straight line method of depreciation:
a. Amount of depreciation increases every year
b. Amount of depreciation remains constant for every year
c. Amount of depreciation decreases every year
d. None of the given options
20. Which of the following asset is NOT depreciated?
a. Factory Buildings
b. Office Equipment
c. Land
d. Plant & Machinery