MGT101 Solved MCQs
Shared By Mehreen Humayun <mc090400472@vu.edu.pk>
-------- are the third persons/parties, who owe money from the business.
Business partner
Debtor
Customer
Creditors
Creditors are -------
Fixed Assets
Current Assets
Long term Assets
Current liabilities
At times, we receive discounts from our creditors. This discount is either treated as income of the business or as a reduction in the cost of
Income
Balance
Stock
Returned
When an expense or other payable is accrued it is
current liability
Assets
Income
current assets
------------ is made when it is known that an expense will arise but the exact amount is not known.
Accrual
Provision
Reserves
Good will
Accounting Treatment of Provision
Relevant Expense Account (Dr) Provisions (Cr)
cash (Dr) Provisions (Cr)
Account payable (Dr) Provisions (Cr)
Provisions (Dr) Relevant Expense Account (Cr)
Debtors is also called
Provisions
Stock
Receivables
none of them
Receivables are the ----------
current assets
Fixed assets
long term assets
all of above
When a debtor does not pay the amount due to him, it is said
Provision
Accrual
Debt
Bad Debts
Bad Debts charged to the
Profit & loss
Cost of goods
Capital
Drawings
Recording of Bad Debts
Bad Debts (Dr) Debtors a/c (Cr)
Drawings (Dr) Debtors a/c (Cr)
Bad Debts (Dr) Drawings (Dr)
Debtors a/c(Dr) Bad Debts (Cr)
Debtors 100,000 Provision for Bad Debts 5,000 so the net receivable income is
100000
105000
95000
none of them
Provision for bad debts is also --------- deboters
add
less
save
recorded
Debtors are 15000 and the provision is 37% calculate net Debtors
15000
9400
11000
9450
which one of them is current asset
cash
land
bill paid
advance income
Sales Ledger Control Account is also called
Debtors Control Account
Creditors Control Account
---
---
In General Ledger one account is kept for all the -------- Creditors Control Account.
Debtors Control Account,
Creditors Control Account.
--
---
List of debtors balances drawn up to the end of previous period is --------
Opening balance of debtors
Opening balance of account payable
Closing Balance of debtors
none of these
Opening balance of recorded on the ---------- side of Debtors Control Accounts
Dr
Cr
--
--
Credit Sales ---------- the debtors balance
equal to
decrease
no effect on
increase
Sales Return means
customer returned the goods
Supplier returned the goods
Store returned the goods
all of these
Cheques/Cash Received from the customer ------ the debter balance
increased
no affect
decreased
A & C
Which is the simple formula of calculating closing balance of deboter
Opening balance + Credit Sales +(Sales Return + Cheques/Cash Received)=
Opening balance + Credit Sales - (Sales Return - Cheques/Cash Received)=
Opening balance - Credit Sales - (Sales Return + Cheques/Cash Received)=
Opening balance + Credit Sales - (Sales Return + Cheques/Cash Received)=
List of creditors balances drawn up to the end of previous period is ------------ balance of creditor for this year
Closing
Opening
--
Credit Purchases shown on the ----------- side of Creditors Control Accounts
Right
Dr
Cr
A & C
Cheques/Cash Paid --- the creditor balance
increase
decrease
---
---
The formula for calculating closing balance of creditor is
Opening balance + Credit Purchases - (Purchase Return- Cheques/Cash Paid)
Opening balance - Credit Purchases - (Purchase Return + Cheques/Cash Paid)
Opening balance + Credit Purchases + (Purchase Return + Cheques/Cash Paid)
Opening balance + Credit Purchases - (Purchase Return + Cheques/Cash Paid)
calculate closing balance of deboter Opening Balance 50000 cash received 70000 Opening balance 30000 sale returned 2000
72000
80000
8000
32000
Prepare a Creditors Control Account from the following data Opening Balance 40000 Purchase Return 6000 Cheques and Cash paid 34000 Discounts received 2000 Total Credit Purchases 32,000
32000
72000
3000
30000
Discounts received shown on------------ of Creditors Control Account
Dr
Cr
--
--
A number of books are opened in connection with control accounts to reduce the volume of general ledger these books are called
Purchase book
Sales book
Subsidiary Books
A & C
Sale return is recorded on the ------ of Debtors control Account
Debit Side
Credit Side
--
---
Discounts allowed is ------
Income
Good will
Asset
Expense
In Debtors control Account the Debit Side is greater then----
Debtors control Account
Credit Sales
Credit Side
Cheques and Cash received
Debtor 45,000, amount received ------- closing balance is 19825
25175
21752
25751
22751
Individual purchases are recorded in ------
Purchase Journal / Purchase Day Book
Purchase Return / Return outward Journal
Creditors Ledger
all of these
-------- ledger maintains record of individual creditors
Purchase Journal / Purchase Day Book
Purchase Return / Return outward Journal
Creditors Ledger
none of these
Purchase Return is recorded on the ------- side of creditor control account.
Cr
Dr
--
--
Bad Debts are ------- expenses
General
Financial
Selling
Administration
When the Provision for Bad Debts increases Debtors
increased
decreases
remain constant
none of these
Individual invoice wise sales are recorded in this Journal. This book serves as source for all the recording of Credit sales.
Sales Return / Return Inward
Sales Journal / Sales Day Book
Debtors Ledger
none of above
Sales Return is recorded on the ------ of debtor acc
Dr
Cr
-
-
which one of them is current asset
Insurance expenses
prepaid expenses
Rent expenses
all of the following
which one is current liability?
land
income
Debtor
Creditors
which one is long term liability?
creditors
loan from mr A
bank loan
all of these
which one is liability?
UN earned income
furniture
account receivable
none of these
Creditor account increase with
credit
credit sale
credit purchase
A & B`
Debtor account increase with
Debit
Credit
Credit income
Credit sale
Creditor control account decreased when
Purchase Return
Cheques / Cash paid
Cheques / Cash received
A & B
Debtors control account decreased with
Opening balance of debtors
Cheques / Cash Received
Sales Return
purchase Return
Discount allowed showed on the -------- of debtors control account
Credit side
Debit side
--
---
sales return is also called
return inward
return outward
return to supplier
none of these
------ this ledger maintains record of individual creditors.
Purchase Day Book
Purchase Journal
Creditors Ledger
Return outward Journal
2nd name of Purchase Return is
return to customer
Creditors
Purchases inward
Return outward
----- this ledger maintains record of individual debtor.
Debtors Ledger
Sales Journal
Sales Return
Sales Day Book
extension of building is an example of ------- exp
Revenue
short
Capital
A & C
cost of good will is
Capital exp
value of good will
goodwill exp
prepaid exp
asset destroyed by fire is
Admn
financial loss
Capital loss
Revenue
rent not paid
utility bill paid
Income
rent & Income
advance rent paid
calculate closing balance of Creditor Opening Balance.5,000 Purchases for the month 70,00 return 1500 cash receive 6500
4000
8500
12500
7000
------ include both cash and credit receipts/payments.
cash sales/purchases
Credit sales/purchases
Receipts/Payments
none of above
Provision for doubtful debts has no effect on
account receivable
Control accounts.
control account
none of these
These errors in accounting require rectification. The procedure adopted to rectify errors in financial accounting is called
Rectification of error
Rectification
--
--
different kinds of errors are
6
8
5
4
event occurred but we did not record it is ------ type of error
Error of Commission
Error of Omission
Error of Original Entry
Reversal of Entry
debited is credited and vice versa is an example of ------ error
Error of Commission
Error of Principle
Error of Original Entry
Reversal of Entry
The errors in which recording is in correct account but the figure is incorrect are called
Reversal of Entry
Error of Original Entry
Error of Principle
Error of Commission
The errors in which an entry is recorded in the wrong class of account is
Error of Original Entry
Reversal of Entry
Error of Principle
Error of Omission
A receipt of Rs. 50,000 from a debtor is recorded as Rs. 5,000 in his account is ---- error
Reversal of Entry
Error of Commission
Error of Principle
Error of Original Entry
Purchase of an asset for Rs. 50,000 is recorded in the expense account. is ----------- error
Error of Principle
Error of Original Entry
Error of Omission
Reversal of Entry
A payment of Rs. 10,000 made to Mr. D is recorded on the receipt side of the cash book and credit is given to D's account. is ----- error
Errors of Commission
Error of Principle
Error of Omission
Reversal of Entry
Repair of vehicle worth of Rs. 5,000 was charged to asset account correct entry is
Cash A/C (Dr) Bank A/C (Cr)
Mr. A (Creditor) (Dr) Bank A/C (Cr)
Mr. A (Creditor) (Dr) Bank A/C (Cr)
Mr. A (Creditor) (Dr) Cash A/C (Cr)
Purchase of goods from Mr. B worth of Rs. 5,500 was recorded at Rs. 4,500. correct entry is
Purchase A/C (Dr) cash (Cr)
Mr. B's A/C (Dr) cash (Cr)
Purchase A/C (Dr) Mr. B's A/C (Cr)
Purchase A/C (Dr) account payable
Profit & Loss Account has ------ parts
2
4
5
3
Sales Less: Cost of Goods Sold =
Profit
income
Gross Profit
none of them
Revenue is always in ------- acc
Dr
Cr
Purchased
none of these
------- is the cost incurred in purchasing or manufacturing the product
Sales
Gross Profit
Cost of Goods Sold
manufacturing expenses
Wages paid to employees for manufacturing of goods is ---------- expense
Material
Labor
FOH
all of these
------- includes revenue from indirect source of income, such as return on investment, profit on PLS account etc.
Other charges
Other expenses
Other sales
Other Income
------- expenses are the expenses incurred in running a business effectively
Cost of Goods Sold/
Other
Administrative
General office
Administrative Expenses and Selling Expenses and Financial Expenses are present in the
financial statements
balance sheet
adjusting entries
none of these
-------usually denotes remuneration paid to daily basis
Salaries and Wages
Wages
Salaries
B & C
Salaries and benefits of sales and marketing staff become part of -----
Administrative Expenses
Selling Expenses
Financial Expenses
A & C
Salaries / wages paid to labor and supervisors/officers working for the manufacturing of goods become a part of
Administrative Expenses
Selling Expenses
Financial Expenses
Cost of Goods Sold
Transportation/carriage of goods sold Tax/freight paid on sale is an example of ------
Cost of Goods Sold.
Selling Expenses
Financial Expenses
Administrative Expenses
Interest on loan, Bank charges are ----------
Selling Expenses
Administrative Expenses
Financial Expenses
none of these
------- are the assets of permanent nature that a business acquires, such as plant, machinery, etc
Fixed assets
Current assets
non Current assets
B & C
An expense that has a future benefit in excess of one year and recorded in a capital asset account
Income Tax
Capital Work In Progress
Deferred Costs
all of above
