MGT101 quiz 2 2016 Solved Mega File

MGT101 quiz 2 2016 Solved Mega File

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Which one of the following is NOT true about Capital Expenditure?

• They create future benefits
• They are incurred to acquire fixed assets
• They improve the financial position of the business
• They reduce the profit of the concern

If Purchase price of machine = Rs. 400,000 Loss on disposal = Rs. 15,000 Residual value = Rs. 20,000 Useful life of machine = 5 years Find Sale price at the time of disposal =?

• Rs. 15,000
• Rs. 10,000
• Rs. 20,000
• Rs. 5,000

Which of the following is NOT a characteristic of Fixed Asset?

• Of long life
• To be used in the business
• to generate revenue Easily
• Convertible into Cash Not bought for the purpose of resale

When asset is sold, any profit or loss is computed by comparing the _______________with the amount received from sale.

• Book value
• Residual value
• Purchased value
• Salvage value

Which of the following is NOT a cause of disagreement between cash book and pass book?

Select correct option

• Unpresented Cheques
• Un-Credited Cheques
• Direct Receipts
• None of the above

Which of the following Organization converts raw material into finished goods?

• Trading concern
• Manufacturing concern
• Merchandising concern
• service concern

Bank Reconciliation Statement is prepared by:

• Bankers
• Accountant of the business
• Statutory auditor
• Manager

A sum of Rs. 50,000 was paid for customs duty and freight on machinery purchased from Japan. It is classified as:

• Capital expenditure
• Revenue expenditure
• Deferred revenue expenditure
• Capital receipt

Which of the following would be considered as revenue receipt?

Select correct option

• Amount received from sale of share
• Amount received from a debtor whose account was previously written off as bad
• Amount received on sale of a portion of plant and machinery
• Amount contributed by the proprietor in his business

Cost of goods sold + ending finished goods – opening finished goods=?

Select correct option

• Total factory cost
• Cost of goods manufactured
• Prime cost
• Conversion cost

Supervisor's salary and equipment repair cost are examples of:

Factory overhead cost

• Direct material cost
• Direct labor cos
• Finished goods cost

 

Which of the following is a revenue expenditure?

• Oil to lubricate machines
• Addition or extension of assets
• Wages paid for the construction of building
• Legal expenses on raising loans for the purchase of fixed assets

If, Cost of machine = Rs.400, 000 Useful life = 5 years Residual value = Rs.25, 000 Sale price = Rs.40, 000

• Rs.75, 000
• Rs.40, 000
• Rs.55, 000
• Rs.100, 000

The entry for Revaluation of an asset, in case of gain on revaluation will be:

• Debit: Revaluation Reserve A/c Credit: Cost of Asset A/c
• Debit: Revaluation Reserve A/c Credit: Accumulated Depreciation A/c
• Debit: Cost of Asset A/c Credit: Revaluation Reserve A/c
• Debit: Profit & Loss A/c Credit: Cost of Asset A/c

Which of the following assets are shown at written down value in balance sheet?

• Current assets
• Liquid assets
• Floating assets
• Fixed assets

Particulars Rs. Opening written down value of machine 4,10,000 Cost of machine purchased during the year 50,000 Depreciation during the year 20,000

• Rs. 4, 40,000
• Rs. 4, 30,000
• Rs. 4, 80,000
• Rs. 70,000

Money spent to acquire or upgrade physical assets is known as:

• Revenue Expense
• Capital Expense
• Administrative Expense
• Operating Expense

Depriaction causes due to

• Fall in the market value of an asset
• Fall in the value of money
• Physical wear and tear
• All of the given options

 Expenses incurred for Salaries, heating and lighting are the examples of:

·         Preliminary Expense

·         Deferred Expense

·         Revenue Expense

·         Capital Expense

When the company deposit the cash in her bank account then what is the nature of the deposited amount:

·         It is the liability of the bank

·         It is the asset of the bank

·         It is the equity of the bank

The cost of an incomplete asset at the end of year in balance sheet is transferred to:

Capital account

Capital work in progress account

Particulars Rs. Opening written down value of machine 3,75,000 Cost of machine 50,000 Depreciation during the year 11,500 Closing written down value (WDV) of the Machines ?

Select correct option

·         Rs. 4,13,5000

·         Rs. 4, 25,000

·         Rs. 3, 36,500

·         Rs. 61,500

Total depreciation of an asset can not exceed its:

Select correct option

·         Scrap value

·         Residual value

·         Market value

·         Depreciable value

Particulars Rs. Opening written down value of machine 3,50,000 Cost of machine purchased during the year 40,000 Depreciation during the year 13,000 Closing written down value (WDV) of the Machines

Select correct option

·         Rs. 3, 77,000

·         Rs. 3, 90,000

·         Rs. 4, 12,000

·         Rs. 63,000

When a fixed asset in progress is completed, all costs are transferred to:

Select correct option

·         Profit & Loss A/c

·         Statement of owner’s equity

·         Relevant asset A/c

·         Profit & loss appropriation A/c

Which of the following is NOT a revenue expenditure?

select correct option

·         Petrol consumed in motor vehicles

·         Cost of saleable goods

·         Bad debts

·         Installation charges of machinery

In cost of goods sold statement, the ‘cost of material consumed’ is equal to:

Select correct option

·         Opening raw material inventory + Purchases – Ending raw material inventory

·         Opening raw material inventory - Purchases + Ending raw material inventory

·         Ending raw material inventory + Opening raw material inventory - Purchases Ending

·         raw material inventory + Opening raw material inventory + Purchases

Which of the following item needs to be entered in the Cash Book in order to bring it in line with the entries on the Bank Statement

Select correct option

·         A bank charges

·         An error on the Bank Statement

·         An uncredited deposit

·         An unpresented cheque

The differences between the balance of bank book statement and cash book is removed by making an adjusting entry through:

Select correct option

·         cash voucher

·         bank voucher

·         journal voucher

·         sales voucher

Which of the following assets is most likely to appreciate rather than depreciate?

·         Select correct option

·         Land Motor vehicles

·         Plant and machinery

·         Fixtures and fittings

All of the below items are directly recorded by bank without intimating the business until the end of month, EXCEPT:

·         on Overdraft

·         bank chrges

_______ is the basic part of an item, which is processed to make a complete item:

·         Factory overhead

·         Raw material

·         Finished goods

·         work inproress

From the given particulars, calculate the rate of depreciation under the fixed installment method of depreciation:

Cost of Asset = Rs. 2,000 Residual Value = Rs. 400 Useful Life = 4 years

·         20%

·         30%

·         25%

·         33%

As asset has a cost of Rs. 2000 and rate of depreciation 10% p.a. What will be the amount of depreciation under diminishing balance method after 3 years?

·         rs. 542

·         Rs. 1458

·         Rs. 1400

·         None of the above

In accounting accumulated depreciation is:

·         Treated as a reserve

·         Treated as a contra asset

·         reated as a surplus

·         Treated as an expense

Following information is available relating to a manufacturing concern:

Cost of Goods Sold Rs. 240,000 Opening Stock Rs. 20,000 Purchases Rs. 255,000

What will be the amount of Closing Stock?

·         Rs. 15,000

·         Rs. 25,000

·         Rs. 35,000

·         Rs. 45,000

Which of the following is NOT a rule for revaluation of fixed assets?

·         The change in the value should be permanent

·         Revaluation has to be carried out at regular intervals

·         Whole class of asset has to be revalued

If you start with cash book favorable balance in Bank Reconciliation Statement, which item will be added?

·         Cheque deposited but not credited by the bank

·         Cheques omitted to be deposited into bank

·         Any amount directly collected by bank on behalf of customer but not recorded in cash book

·         Debit side of cash book was overcast

Expenses incurred for Salaries, heating and lighting are the examples of:

·         Preliminary Expense

·         Deferred Expense

·         Revenue Expense

·         Capital Expense

A machine is purchased for Rs. 400,000. It has a residual value of Rs. 10,000 after 5 years. If machine is sold at Rs. 15,000, what will be the amount of profit or loss on disposal of machine?

·         Loss on disposal Rs. 5,000

·         Profit on disposal Rs. 5,000

·         Loss on disposal Rs. 15,000

·         Profit on disposal Rs. 15,000

Bank Reconciliation Statement is:

·         A memorandum statement

·         A ledger account

·         A part of cash book

·         A part of journal

Fixed Assets are always written on ___________ in the books of accounts.

·         Market Value

·         Historical Cost

·         Residual Value

·         Written Down Value

Which of the following assets are shown at written down value in balance sheet?

·         Current assets

·         Liquid assets

·         Fixed asset

Cost of goods sold + ending finished goods – opening finished goods=?

·         Total factory cost

·         Cost of goods manufactured

·         Prime cost

The amount of depreciation charged on Furniture will be debited to:

·         Furniture Account

·         Depreciation Account

·         depriciation

·         Accumulated Depreciation A/c

In cost of goods sold statement the ‘total factory cost’ is equal to:

·         Cost of material consumed + Labor cost

·         Cost of material consumed + Conversion cost

·         Cost of material consumed + Total factory cost

·         Cost of material consumed + Factory overhead

The entry of raw material issued to production units is:

·         Debit: Raw material A/c Credit: Work in process A/c

·         Debit: Work in process A/c Credit: Finished goods A/c

·         Debit: Work in process A/c Credit: Factory overhead A/c

·         Credit: Material Stock A/c