2427 + Interview Questions in Accounts in Class 11 Page 11 InterviewSolution

501.	Vinod's capital is â‚¹ 2,30,000 and liabilities are 90,000. His fixed and current assets are in the ratio of 3:1. His fixed and current assets will be â‚¹ 1,72,000 and â‚¹ 57,500.
Answer» SOLUTION : FALSE

Discussion

502.	Vikas'sCash Book showed an overdrawn Cash Book balance or Rs. 20,200 on 31st March, 2019. He received a bank statement showingan overdrawn balance of Rs. 20,310 on 31st March, 2019. The reason for the difference is that bank charged Rs. 310 adn allowed interest Rs. 200 has not been recorded in the Cash Book. What entries should Vikas pass to update his Case Book?
Answer» Solution :In the Paments (Cr.) side in the BANK COLUMN of CASH Book an ENTRY for Rs. 310will be recorde against Banks CHARGES. In the Receipts (Dr.) side in the bank column of Cash Book an entry for Rs.200 will be recorded against Intrest received.

Discussion

503.	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. - 1,30,000Drawings duringthe year Rs. 50,000 Closing Capital Rs. 2,00,000Profit made during the year Rs. 1,00,000
Answer» ANSWER :ADDITIONAL CAPITAL - RS. 20,000.

Discussion

504.	Vikas is keeping his accounts according to Single Entry System. His capital on 31st December, 2015 was Rs. 2,50,000 and his capital on 31st December, 2016 was Rs. 4,25,000. He further informs you that during the year he gave a loan of Rs. 30,000 to his brother on private account and withdrew Rs. 1,000 per month for personal purposes. He used a flat for his personal purpose, the rent of which @ Rs. 1,800 per month and electricity charges at an average of 10% of rent per month were paid from the businesss account. During the year he sold his 7% Goverment Bonds of Rs. 50,000 at 1% premium and brought that money into the business. Pepare a Statement of Profit of Loss for the year ended 31st December, 2016.
Answer» ANSWER :PROFIT - RS. 1,90,260.

Discussion

505.	Vijay commenced business as food grains merchant on 1st April, 2018 with a capital of Rs. 40,00,000. On the same day, he purchased furniture for Rs. 80,000. Form thefollowing particulars obtained from his books which do not conform to Double Entry principles, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2019 and the Balance Sheet as on that date: {:(,"Rs."),("Sales (including Cash Sales Rs. 2,00,000","5,00,000"),("Purchases (including Cash Purchases Rs. 1,20,000)","4,00,000"),("Vijay's Drawings (in Cash)"," 40,000"),("Salaries to Staff"," 48,000"),("Bad Debts written off","4,000"),("Trade Expenses paid"," 16,000"):} Vijay used goods of Rs. 12,000 for personal purposes during the year. On 31st March, 2019, his Debtors amounted to Rs. 1,40,000 and Creditors Rs. 80,000. Stock-in-Trade on that date was Rs. 1,60,000.
Answer» ANSWER :Gross Profit - RS. 2,72,000; NET Profit - Rs. 2,04,000; Balance SHEET TOTAL - Rs. 6,32,000.

Discussion

506.	Vijay, aconsultant, during thefinancial year 2018-19 earned Rs. 4,00,000. Out of which he received Rs. 3,50,000. He incurred an expense of Rs. 1,70,000, out of which Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs. 20,000 expenses of last year. (i) he follows Cash Basis of Accounting and (ii) he follows Accrual Basis of Accounting.
Answer» ANSWER :(i) RS. 2,45,000 ; (II) Rs. 2,30,000.

Discussion

507.	Valuation of stock at lower of cost or net realisable value is an example of
Answer» CONSISTENCY CONVENTION CONSERVATISM Convention. Realisation Concept. Matching Concept. Solution :Conservatism Convention.

Discussion

508.	Using the data given in Illustration 1, calculate cash flows from operating activities using indirect method.
Answer» Solution : You will notice that the amount of cash FLOWS from operating ACTIVITIES are the same whether we USE direct method or indirect method for its CALCULATION. Working Notes : The net profit before taxation and extraordinary items has been WORKED out as under: Net Profit = Rs 32,000 + Income Tax = Rs 10,000 = Net Profit before Tax and Extraordinary Items = Rs 42,000

Discussion

509.	Usually, capital reserves are notavailable fordistribution as eachdividends.
Answer» ANSWER :TRUE

Discussion

510.	Use accounting equation to show the effect of the following transactions of M/s Royal Traders: M/s Royal Traders: (a) Started business with cash 1,20,000 (b) Purchased goods for cash 10,000 (c) Rent receive 5,000 (d) Salary outstanding 2,000 (e) Prepaid Insurance 1,000 (f) Received interest 700 (g) Sold goods for cash (Costing5,0007,000 (h) Goods destroyed by fire 500
Answer» SOLUTION :ASSETS = CASH 1,21,200 + Goods4,500 + PREPAID insurance 1,000, Liabilities = Outstanding salary 2,000 + Capital 1,25,200

Discussion

511.	Unearned Incomes is credited to Profit and Loss Account. Do you agree with the statement ?
Answer» Solution :No, because Unearned income means amount that has been RECEIVED against which GOODS will be SOLD or SERVICES will be rendered in the NEXT year.

Discussion

512.	Unfavourable bank balance means:
Answer» Credit balance in passbook Credit balance in CASH book DEBIT balance in cash book (d NONE of these SOLUTION :A

Discussion

513.	Unfavourable bank balance means
Answer» CREDIT balance in the Cash Book Credit balance in the PASS Book Debit balance in the Cash Book FAVOURABLE balance in the Cash Book. Answer :A

Discussion

514.	Unearned income means
Answer» INCOME received in ADVANCE Income EARNED but not received. Income of the firm in the YEAR of receipt None of the above. Solution :Income received in advance

Discussion

515.	Unearned income means income received in ________
Answer» SOLUTION :ADVANCE

Discussion

516.	Unearned Income is
Answer» INCOME to be received Income received in ADVANCE Can be both (a) and (b) NONE of these. SOLUTION :Income received in advance

Discussion

517.	Undervaluation of Closing Stock will
Answer» Understate COST of Goodsmanufactured Overstate Current Assest. Overstate GROSS Profit. Understate NET Income. SOLUTION :Understate Net Income.

Discussion

518.	Undercasting of Sales Book is corrected by ______ Sales Account.
Answer» SOLUTION :CREDITING

Discussion

519.	Under which principle, resignation by a Marketing Manager is not recorded in books of accounts?
Answer» SOLUTION :MONEY MEASUREMENT CONCEPT.

Discussion

520.	Under which principle the calibre or quality of the management is not disclosed in the balance sheet?
Answer» SOLUTION :MONEY MEASUREMENT CONCEPT.

Discussion

521.	Under which method of depreciation asset is depreciated more in the initial years as compared to the later years of its life?
Answer» SOLUTION :WRITTEN Down VALUE METHOD.

Discussion

522.	Under which concept if advance is received against sale of goods , the advance received is recorded as Advance Against Sale ' and not Sales?
Answer» SOLUTION :REVENUE RECOGNITION CONCEPT.

Discussion

523.	Under which circumstances drawer and payee is same person. ?
Answer» When DRAWER discounted the BILL with banker When drawer endorses the bill to the THIRD pary When drawer holds the bill TILL maturity When drawer REJECTS to acceps the bill. Solution :When drawer holds the bill till maturity

Discussion

524.	Under which accounting principle, quality of manpower is not recorded in the books of account?
Answer» SOLUTION :MONEY MEASUREMENT PRINCIPLE.

Discussion

525.	Under which accounting concept asset is recorded at cost , even if the market price is more or less ?
Answer» SOLUTION :COST CONCEPT.

Discussion

526.	Under which accounting concept is Provision for Doubtful Debts made ?
Answer» SOLUTION :Under the PRUDENCE CONCEPT.

Discussion

527.	Under the Diminishing Balance Method, depreciation is calculated on the original cost of the asset.
Answer» SOLUTION : FALSE

Discussion

528.	Under the 'liquidity approach' assets which are most liquid are presented at the bottom of the Balance Sheet. Comment
Answer» SOLUTION :Under the 'liquidity approach' ASSETS which are more LIQUID are presented FIRST.

Discussion

529.	Under the Cash Basis of Accounting, expenses are recorded
Answer» on PAYMENT. on being incurred. either (a) or (B) . NONE of these. Solution :on payment.

Discussion

530.	Under the Accrual Basis of Accounting, expenses are recorded
Answer» on payment. on being INCURRED. either (a) or (B) . NONE of these. Solution :on being incurred.

Discussion

531.	Under Double Entry System, one aspect of each transcation is recorded
Answer» SOLUTION : FALSE

Discussion

532.	Under Straight Line Method, the depreciation charge is constant every year.
Answer» SOLUTION : TRUE

Discussion

533.	Under Cash Basis of Accounting, expenses are recorded
Answer» on PAYMENT on being incurred Both (a) and (B) NONE of these Solution :on payment

Discussion

534.	Under cash basis of accounting, entries in the books of accounts are passed when cash is received or paid.
Answer» SOLUTION : TRUE

Discussion

535.	Under Accrual Basis of Accounting, expenses are recorded
Answer» on payment on being INCURRED Both (a) and (B) NONE of these SOLUTION :on being incurred

Discussion

536.	Under Accrual Basis of Accounting
Answer» both CASH and CREDIT TRANSACTIONS are RECORDED . only credit transactions are recorded. None of the above. Solution :both Cash and Credit transactions are recorded .

Discussion

537.	Two primary qualitative characteristics of financial statements are : Understandability and Materiality.
Answer» SOLUTION :FALSE

Discussion

538.	Two primary qualitative characteristics of financial statements are :
Answer» UNDERSTANDABILITY and Materiality. RELEVANCE and RELIABILITY Relevance and Materiality All of these Solution :Relevance and reliability

Discussion

539.	Trial Balance shows
Answer» only credit BALANCE. only DEBIT balance. both debit and credit balances. EITHER debit or credit balance. SOLUTION :both debit and credit balances.

Discussion

540.	Trial Balance of Mr. Joe shows the following balances as on 31 March, 2019 Value of Closing Stock on 31st March, 2019 was Rs 50,000
Answer» Answer :1: Opening Stock; 2: Rs 30,000 3: Closing Stock; 4; Rs 50,000; 5: Rs 2,37,000; 6: Rs 5,50,000; 7: Rs 5,50,000; 8: Rs 2,37,000; 9: Allowed; 10: Rs 4,000; 11: Received ; 12: Rs 5,000; 13: Rs 78,000; 14: Rs 2,42,000; 15: Rs 2,42,000; 16: CREDITORS; 17: Rs 40,000; 18: Rs 5,000; 19: Debtors; 20: Rs 90,000; 21: Add: Net Profit; 22: Rs 78,000; 23: Rs 2,28,000; 24: Closing Stock; 25: Rs 50,000; 26: Rs 2,68,000; 27: Rs 2,68,000

Discussion

541.	Trial Balance of Gopal as at 31st March, 2019 was as follows : Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance sheet as at that date following adjustments : (i) Stock on 31st march, 2019 was Rs62,750. (ii) Depreciation on furniture is to be charged @10%. (iii) Sundry Debtors include an amount of Rs2,500 due from a customer who has become insolvent. (iv) The remaining debtors are not considered to be doubtful of recovery. (v) Goods costing Rs7,500 plus IGST@12% were destroyed by fire and insurance company admitted a claim for Rs 8,000 (vi) Received goods from Rahul & Co. of Rs 6,000 plus IGST @12% on 27th March. 2019 but the invoice of purchase was not recorded in the Puchases Book.
Answer» SOLUTION :

Discussion

542.	Trial balance of a business as at 31st March, 2019 is given below: Prepare Trading and Profit and Loss Account for the year ened 31st March, 2019 and Balance Sheet as at that date after taking into account the following adjustments: (i) Closing Stock was valued at Rs 7,000. (ii) Outstanding liabilites for wages were Rs 600 and salaries Rs 1,400. (iii) Depreciation is to be provided @ 5% p.a. on fixed assets. (iv) Plant and Machinery includes a machine purchased for Rs 10,000 on 1st October, 2018. (v) Insurance premium paid in advance Rs 200.
Answer» SOLUTION :NA

Discussion

543.	Trial Balance of Chatter Sen on 31st March, 2019 revealed the following balances: Stock on 31st March, 2019 was valued at Rs 35,000. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date
Answer» Answer :Gross PROFIT - Rs 53,525; Net Profit - Rs 41,900; BALANCE Sheet TOTAL - Rs 1,76,900

Discussion

544.	Trial Balance is prepared to locate
Answer» ERRORS of PRINCIPLE. Errors of omission. Compensating Errors. NONE of these. Solution :None of these.

Discussion

545.	Trial Balance is prepared on the basis of balances in the Ledger.
Answer» SOLUTION : TRUE

Discussion

546.	Trial balance is prepared from the balance taken from
Answer» DAY BOOKS Journal BALANCE SHEET Ledger ACCOUNTS. Solution :Ledger Accounts.

Discussion

547.	Trial Balance is prepared for a particular period.
Answer» SOLUTION : FALSE

Discussion

548.	Trial Balance is prepared from
Answer» Ledger Ledger and JOURNAL Book Ledger and Cash Book. NONE of these . SOLUTION :Ledger and Cash Book.

Discussion

549.	Trial Balance is prepared after preparing the Profit and Loss Account. Comment
Answer» Solution :Trial Balance is PREPARED before preparing the PROFIT and Loss Account.

Discussion

550.	Trial Balance is not a conclusive proof of correctness of the books of account.
Answer» SOLUTION : TRUE

Discussion

Explore topic-wise InterviewSolutions in .

Vinod's capital is â‚¹ 2,30,000 and liabilities are 90,000. His fixed and current assets are in the ratio of 3:1. His fixed and current assets will be â‚¹ 1,72,000 and â‚¹ 57,500.

Valuation of stock at lower of cost or net realisable value is an example of

Using the data given in Illustration 1, calculate cash flows from operating activities using indirect method.

Usually, capital reserves are notavailable fordistribution as eachdividends.

Unearned Incomes is credited to Profit and Loss Account. Do you agree with the statement ?

Unfavourable bank balance means:

Unfavourable bank balance means

Unearned income means

Unearned income means income received in ________

Unearned Income is

Undervaluation of Closing Stock will

Undercasting of Sales Book is corrected by ______ Sales Account.

Under which principle, resignation by a Marketing Manager is not recorded in books of accounts?

Under which principle the calibre or quality of the management is not disclosed in the balance sheet?

Under which method of depreciation asset is depreciated more in the initial years as compared to the later years of its life?

Under which concept if advance is received against sale of goods , the advance received is recorded as Advance Against Sale ' and not Sales?

Under which circumstances drawer and payee is same person. ?

Under which accounting principle, quality of manpower is not recorded in the books of account?

Under which accounting concept asset is recorded at cost , even if the market price is more or less ?

Under which accounting concept is Provision for Doubtful Debts made ?

Under the Diminishing Balance Method, depreciation is calculated on the original cost of the asset.

Under the 'liquidity approach' assets which are most liquid are presented at the bottom of the Balance Sheet. Comment

Under the Cash Basis of Accounting, expenses are recorded

Under the Accrual Basis of Accounting, expenses are recorded

Under Double Entry System, one aspect of each transcation is recorded

Under Straight Line Method, the depreciation charge is constant every year.

Under Cash Basis of Accounting, expenses are recorded

Under cash basis of accounting, entries in the books of accounts are passed when cash is received or paid.

Under Accrual Basis of Accounting, expenses are recorded

Under Accrual Basis of Accounting

Two primary qualitative characteristics of financial statements are : Understandability and Materiality.

Two primary qualitative characteristics of financial statements are :

Trial Balance shows

Trial Balance of Mr. Joe shows the following balances as on 31 March, 2019 Value of Closing Stock on 31st March, 2019 was Rs 50,000

Trial Balance of Chatter Sen on 31st March, 2019 revealed the following balances: Stock on 31st March, 2019 was valued at Rs 35,000. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date

Trial Balance is prepared to locate

Trial Balance is prepared on the basis of balances in the Ledger.

Trial balance is prepared from the balance taken from

Trial Balance is prepared for a particular period.

Trial Balance is prepared from

Trial Balance is prepared after preparing the Profit and Loss Account. Comment

Trial Balance is not a conclusive proof of correctness of the books of account.