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This section includes 7 InterviewSolutions, each offering curated multiple-choice questions to sharpen your Current Affairs knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Kuldeep, a general merchant, keeps his accounts on Single Entry System. He wants to know the results of his business on 31st March, 2019 and for that following information is available: `|{:(,,"1st April, 2018 (Rs.)","31st March, 2019 (Rs.)"),("Cash in Hand",.......................................................,"1,50,000","1,75,000"),("Bank Balance",.......................................................,"7,50,000","8,00,000"),("Furniture",.......................................................,"1,00,000","1,00,000"),("Stock",.......................................................,"5,00,000","6,50,000"),("Creditors",.......................................................,"3,50,000","4,00,000"),("Debtors",.......................................................,"2,50,000","3,00,000"):}|` During the year, he had withdrawn Rs. 5,00,000 for his personal use and invested Rs. 2,50,000 as additional capital. Calculate his profits on 31st March, 2019 and prepare the Statement of Affairs as on that date. |
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Answer» Correct Answer - Profit - Rs. 4,75,000. |
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| 2. |
Aditya a retailer, has not maintained proper books of account but it has been possible to obtain the following details: `{:(,," Last Year (Rs.)"," This Year (Rs.)"),("Trade Creditors","......................................"," 6,270"," 5,890"),("Loan from Naresh","......................................"," 5,000"," 5,000"),("Stock","......................................"," 12,350"," 11,980"),("Cash in Hand","......................................"," 570"," 650"),("Shop Fltting","......................................"," 7,250"," 7,800"),("Trade Debtors","......................................"," 5,280"," 4,560"),("Bank Balance","......................................"," 3,990"," 4,130"):}` Calculate the net profit for this year and draft the Statement of Affairs at the end of the year after noting that: ltbr. (a) Shop Fittings are to be depreciated by Rs. 780. (b) |
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Answer» Correct Answer - Net Profit - RS. 3,960; Total of Statement of Affairs - Rs. 28,070. |
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| 3. |
Mention three characteristics of Single Entry System. |
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Answer» Characteristics of Single Entry System 1) Maintenance of Cash Book: Cash Book is prepared and maintained, in which both business and personal transactions are included. 2)Personal Accounts: Only personal accounts are created and maintained, whereas the real and nominal accounts are not given due weight, in this system. 3) Original Vouchers: Under this system, original vouchers play an important role, as they help in gathering information about the date of transaction, amount, parties, discount (if any) and so forth. |
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| 4. |
If the gross profit is `20%` of cost of goods sold and sales are Rs. 1,00,000, the amount of gross profit will beA. Rs. 20,000.B. Rs. 25,000.C. Rs. 16,667.D. None of these. |
| Answer» Correct Answer - C | |
| 5. |
On 1st April, 2018, X started a business with Rs. 40,000 as his capital. On 31st March, 2019, his position was as follows: `{:(,," Rs."),("Creditors","....................................................","30.000"),("Bills Payable","....................................................","10,000"),("Bank","....................................................","10,000"),("Debtors","....................................................","50,000"),("Stock","....................................................","40,000"),("Plant","....................................................","68,000"),("Furniture","....................................................","12,000"):}` During the year 2018-19, X drew Rs. 24,000. On 1st October, 2018, he introduced further capital amounting to Rs. 30,000. You are required to ascertain proffit or loss made by him during the year 2018-19. Adjustments: (a) Plant is to be depreciated to `10%`. (b) A provision of `5%` is to be made against debtors. Also prepare the Statement of Affairs as on 31st March, 2019. |
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Answer» Correct Answer - Profit - Rs. 84,700; Adjusted Capital (31st March, 2019) - Rs. 1,30,700; Total of Statement of Affairs as on 31st March, 2019 - Rs. 1,70,7000. |
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| 6. |
Calculate the stock at the end: |
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Answer» Closing Stock = Opening Stock + Purchases + Gross Profit - Sales = Rs. 10,000 + Rs. 35,000 + Rs. `12,500^(**)`- Rs. 50,000 = Rs. 7,500. `.^(**)"Gross"` Profit = 1/3 of Cost = 1/4 of Sales =`1//4xx` Rs. 50,000 = Rs. 12,500. |
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| 7. |
Define Single Entry System. What are the defects of this system? |
| Answer» Single Entry System in Accounting is an accounting approach under which each and every accounting transaction is recorded with only a single entry in the accounting records which is centered towards results of the business enterprise which are shown in the statement of income of the company. | |
| 8. |
Bills Payable honoured during the year will be debited toA. Cash Account.B. Bills Payable Account.C. Creditors Account.D. None of these. |
| Answer» Correct Answer - B | |
| 9. |
Closing balance of creditors is determined by preparingA. Total Debtors Account.B. Total Creditors Account.C. Bills Receivable Account.D. Bills Payable Account. |
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Answer» Correct Answer - B Total Creditors Account. |
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| 10. |
Sales are calculated by addingA. Cash sales and cash received from debtors.B. Credit sales and cash received from debtors.C. Cash sales and credit sales.D. None of these. |
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Answer» Correct Answer - C Cash sales and credit sales. |
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| 11. |
When closing capital is greater than opening capital, it meansA. Profit.B. Loss.C. Loss if there is no drawing.D. None of these. |
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Answer» Correct Answer - C Loss if there is no drawing. |
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| 12. |
Bills Receivable endorsed dishonoured are debited toA. Debtors Account.B. Bills Receivable Account.C. Creditors Account.D. Bank Account. |
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Answer» Correct Answer - A Debtors Account. |
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| 13. |
Single Entry System can be adopted byA. Small firms.B. Joint Stock Companies.C. Co-operative Societies.D. None of these. |
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Answer» Correct Answer - A Small firms. |
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| 14. |
Chaman maintains his books according to Single Entry System. Following figures were available from the books for the six month ended 31st December, 2018:`{:(," 1st July, 2018 (Rs.)"," 31st December, 2018 (Rs.)"),("Plant and Machinery"," 1,50,000"," 1,40,000"),("Debtors"," 65,000"," 60,000"),("Cash and Bank balances"," 25,000"," 31,000"),("Stock"," 40,000"," 45,000"),("Creditors"," 9,000"," 10,000"):}` Adjustments: (a) He had withdrawn Rs. 200 in the beginning of every month for household purposes. (b) Depreciation on Plant and Mechinery `@10%` p.a. (c) Further Bad Debts Rs. 5,000 and Provision for Doubtful Debts to be created `@2%`. During the period, salaries have been prepaid by Rs. 500 while wages outstanding were Rs. 1,000. (e) Interest on drawings to be reckoned `@6%` p.a. You are required to prepare the Statement of Profit of Loss for the half year ended 31st December, 2018, followed by Revised Statement of Affairs as on that date. |
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Answer» Correct Answer - Capital (Opening Capital, 1st July 2018 ) - Rs. 2,71,000; Total of Statement of Affairs before Adjustments (31st December, 2018) - Rs. 2,76,500; Capital - Rs. 2,65,500; Capital (after all adjustments )- Rs. 2,52,400; Gross Loss = Rs. 2,65,500 + 1,200 (Drawings) - Rs. 2,71,000 = Rs. 4,300; Net Loss = Rs. 17,379. 1. Interest on Drawings: On Rs. 200 for 6 months = On Rs. 1,200 for 1 month On Rs. 200 for 5 month = On Rs. 1,000 for 1 month On Rs. 200 for 4 months = On Rs. 800 for 1 month On Rs. 200 for 3 months = On Rs. 600 for 1 month On Rs. 200 for 2 months = On Rs. 400 for 1 month On Rs. 200 for 1 month = On Rs. 200 for 1 month Or On Rs. 4,200 for 1 month Interest = Rs. `4,200xx6//100xx1//2=Rs.21.` 2. Depraciation on Plant = Rs. `1,40,000xx10//100xx6//12=Rs.7,000`. 3. Provision for Doubtful Debts = `2//100(Rs. 60,000-Rs.5,000)=Rs. 1,100.` Net Loss = Rs. 4,300 (Gross Loss) `+` Rs. 7,000 (Depreciation) `+` Rs. 5,000 (Bad Debts) `+` Rs. 1,100 (Provision for Doubtful Debts) `-` Rs. 21 (Interest on Drawings) = Rs. 17,379. |
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| 15. |
When closing capital is greater than opening capital it meansA. Profit.B. Loss.C. Profit if fresh capital is not introduced.D. No Profit, no Loss. |
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Answer» Correct Answer - C Profit if fresh capital is not introduced. |
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| 16. |
`{:("Calculate the value of Closing Stock from the following information:"," Rs."),("Purchases","93,000"),("Wages","20,000"),("Sales","40,000"),("Purchases","1,20,000"),("Carriage Outwards","3,200"),("Rate of Gross Profit "25%" on Cost.","16,000"):}` |
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Answer» Correct Answer - Closing Stock - Rs. 33,000. Let the Cost = Rs. 100, Gross Profit = `25%` of Cost, i.e., Rs. 25. Sales = Cost + Profit = Rs. 100 + Rs. 25 = Rs. 125, Gross Profit on Sales = Rs. 25/Rs. 125 or 1/5 on Sales, i.e., Rs. `1,20,0000xx1//5=Rs. 24,000.` |
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| 17. |
In case of net worth method of Single Entry System, Profit is ascertained byA. comparing the capital in the beginning of the accounting period and the capital at the end of the accounting period.B. Preparing a Profit and Loss Account.C. Preparing a Balance Sheet.D. None of these. |
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Answer» Correct Answer - A comparing the capital in the beginning of the accounting period and the capital at the end of the accounting period. |
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| 18. |
From incomplete records, it is possible to prepareA. Ledger Accounts.B. Trial Balance.C. Statement of Affairs.D. None of these. |
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Answer» Correct Answer - C Statement of Affairs. |
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| 19. |
Profit = Capital at the end + ? - Capital in the beginning.A. Sales.B. Drawings.C. Net Purchases.D. None of these. |
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Answer» Correct Answer - B Drawings. |
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| 20. |
Give any three advantages of Single Entry System of Accounting. |
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Answer» Advantages of Single Entry System: (i) Since this system is very simple, anyone can maintain it without any adequate knowledge of accounting. (ii) Limited accounts are to be opened under this system since the transactions relating to personal accounts are recognised only and not the Real and Nominal accounts. (iii) Since the number of books is limited, expenses related to the keeping of records are also very nominal. (iv) In the case of accounting for an event, i.e., household, social and festival etc., it is very helpful. |
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| 21. |
Capital of Ganesh Gupta in the beginning of the year was Rs. 70,000. During the year his business earned a profit of Rs. 20,000, he withdrew Rs. 7,000 for his personal use. He sold ornaments of his wife for Rs. 20,000 and invested that amount into the business. Find out his Capital at the end of the year. |
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Answer» Correct Answer - Capital at the end - Rs. 1,03,000. |
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| 22. |
Which Generally Accepted Accounting Principle (GAAP) is followed and which one is ignored while preparing the accounts under Single Entry System? |
| Answer» Money Measurement Concept is followed and Dual Aspect Concept is ignored in Single Entry System System of accounting. | |
| 23. |
Vikash maintains his books of account on Single Entry System. He proveids following information from his books. Find out additional capital introduced in the business during the year 2018-19. Opening Capital-Rs. - 1,30,000 Drawings during the year Rs. 50,000 Closing Capital Rs. 2,00,000 Profit made during the year Rs. 1,00,000 |
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Answer» Correct Answer - Additional Capital - Rs. 20,000. |
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| 24. |
Hari maintains his books of account on Single Entry System. His books provide the following information: `|{:(,,"1st April, 2018 (Rs.)","31 March, 2019 (Rs.)"),("Furniture",.......................................................,"2,000","2,000"),("Stock",.......................................................,"28,000","30,500"),("Sundry Debtors",.......................................................,"21,000","34,000"),("Cash",.......................................................,"1,500","2,00"),("Sundry creditors",.......................................................,"17,500","19000"),("Bills Receivable",.......................................................,"...","5,000"),("Loan",.......................................................,"...","5,000"),("Investments",.......................................................,"...","10,000"):}|` His drawing during the year were Rs. 5,000. Depreciate furniture by `10%` and provide a reserve for Bad and Doubtful Debts at `10%` on Sundry Debtors. Prepare the statement showing the profits for the year. |
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Answer» Correct Answer - Profit during the year - Rs. 23,900. |
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| 25. |
Calculate credit sales from the following details: Opening Debtors Rs. 2,50,000, Closing Debtors Rs. 3,00,000, Cash received from Debtors Rs. 7,50,000, Discount allowed to Debtors Rs. 50,000. |
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Answer» Credit Sales = Cash Received + Discount Allowed + Closing Debtors - Opening Debtors = Rs. 7,50,000 + Rs. 50,000 + Rs. 3,00,000 - Rs. 2,50,000 = Rs. 8,50,000. |
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| 26. |
Given the opening and closing balances of debtors and the figure of credit sales, the balancing figure of Total Debtors Account will giveA. Bills received during the year.B. Cash received from debtors.C. Closing balance of bill receivable.D. None of these. |
| Answer» Correct Answer - B | |
| 27. |
A firm sells goods at Cost plus `25%`. Sales to credit customers (3/4 of total) was Rs. 1,80,000. His Opening and Closing Stocks were Rs. 20,000 and Rs. 15,000 respectively. Find out the value of Purchases. |
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Answer» Correct Answer - Rs. 1,87,000. |
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| 28. |
Manu started business with a capital of Rs. 4,00,000 on 1st October, 2005. He borrowed from his friend a sum of Rs. 1,00,000. He brought further Rs. 75,000 as capital on 31st March, 2006, his position was: Cash Rs. 30,000, Stock Rs. 4,70,000, Debtors Rs. 3,50,000 and Creditors Rs. 3,00,000. Withdrew Rs. 8,000 per month during this period. Calculate profit or loss for the period. |
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Answer» Correct Answer - Capital at the end - Rs. 4,50,000; Profit - Rs. 23,000. |
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