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651.

The main purpose of preparing a Trial Balance is to check the arithmetical accuracy of double entry.

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SOLUTION : TRUE
Discussion
652.

The main objective of providing depreciation is to calculate the correct profit.

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SOLUTION : TRUE
Discussion
653.

The main cause of depreciation is wear and tear caused by its usage.

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SOLUTION :T
Discussion
654.

The liabilities of a firm are 3,000, the capital of the proprietor is 7,000. The totalassets are :

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₹7,000.
₹10,000
₹4,000
NONE of these.

Solution :₹10,000
Discussion
655.

The last step in accounting as a process of information is

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recording the transaction.
preparation of FINANCIAL STATEMENTS.
COMMUNICATION of information.
All of these

Answer :A::C
Discussion
656.

The journal entry to record the sale of services on credit should include:

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Debit to DEBTORS and CREDIT to CAPITAL
Debit to CASH and Credit to debtors
Debit to fees income and Credit to debtors.
Debit to debtors and Credit to fees income.

Solution :d
Discussion
657.

The ledger folio column of journal is used to:

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RECORD the DATE on which amount POSTED to a ledger ACCOUNT.
Record the NUMBER of ledger account to which information is posted.
Record the number of amounts posted to the ledger account.
Record the page number of the ledger account.

Solution :d
Discussion
658.

The journal entry to record purchase of equipment for2,00,000 cash and a balance of8,00,000 due in 30 days include:

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Debit EQUIPMENT for2,00,000 and CREDIT cash2,00,000.
Debit equipment for10,00,000 and Credit cash 2,00,000 and CREDITORS 8,00,000.
Debit equipment2,00,000 and Credit debtors8,00,000
Debit equipment10,00,000 and Credit cash10,00,000.

Solution :B
Discussion
659.

The Journal entry to record a gain ( profit) on the sale of fixed assets is : If Asset Disposal Account is not maintained :

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`{:("Debit","Credit"),("FixedAsset Account ","PROFIT and LOSS Account "):}`
`{:("Debit","Credit"),("BANK Account ","Profit and Loss Account "):}`
`{:("Debit","Credit"),("Profit and Loss Account "," Fixed Asset Account "):}`

Solution :`{:("Debit","Credit"),("FixedAsset Account ","Profit and Loss Account "):}`
Discussion
660.

The journal entry to record payment of monthly bill will include:

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Debit monthly bill and Credit CAPITAL.
Debit capital and Credit CASH.
Debit monthly bill and Credit cash.
Debit monthly bill and Credit creditors.

SOLUTION :c
Discussion
661.

The Journal entry to record a gain ( profit) on the sale of fixed assets is : If Asset Disposal Account ismaintained :

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`{:("DEBIT","CREDIT"),("Asset DisposalAccount ","Profit and Loss ACCOUNT "):}`
`{:("Debit","Credit"),("FixedAsset Account ","Profit and Loss Account "):}`
`{:("Debit","Credit"),("Profit and Loss Account ","Asset DISPOSAL Account "):}`

Solution :`{:("Debit","Credit"),("Asset DisposalAccount ","Profit and Loss Account "):}`
Discussion
662.

The hundi Payable at sight is called Darshant hundi.

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ANSWER :1
Discussion
663.

The following Trial Balance is drawn from the books of Brown Traders: You are required to comment whether it is correct or not. If this Trial Balance is not correct, draw the correct one.

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Solution :Even though the DEBIT and credit sides agree,the TRIAL Balance is INCORRECT. ASSETS, i.e., Fixtures and Debtors are wrongly shown on the credit side and Returns Outword, Discount Received, Bank Overdraft and Creditors on the debit side. The redrafted Trial Balance will be as bollow:
Discussion
664.

The following transactions took place in Prabhat Electric Co., Delhi. Prepare the debit vouchers:

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SOLUTION :
Discussion
665.

The following transactions took place in M/s Ace Traders, Patna. Prepare the debit vouchers:

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SOLUTION :
Discussion
666.

The following is the Profit and Loss Account of Yamuna Limited: Additional information: (i) Trade receivables decrease by Rs 30,000 during the year. (ii) Prepaid expenses increase by Rs 5,000 during the year. (iii) Trade payables increase by Rs 15,000 during the year. (iv) Outstanding expenses payable increased by Rs 3,000 during the year. (v) Other expenses included depreciation of Rs 25,000. Compute net cash from operations for the year ended March 31, 2017 by the indirect method.

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SOLUTION : CASH from OPERATIONS RS 2,18,000
Discussion
667.

The following information are extract from the Trial Balance of M/s Nisha traders on 31 March 2017 {:("Sundary Debtors" , "80,500"),("Bad debts","1,000"),("Provision for had debts","5,000"),("Additional Infromation",),("Bad Debts",Rs."500"):} Provision is to be maintained at 2% of Debtors. Prepare bad debts accound, Provision for bad debts account and profit and loss account.

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SOLUTION : New PROVISION`Rs.` 1,600 Profit and LOSS account [CR.] `Rs.`1,9000
Discussion
668.

The following are the balances as on 31st March, 2019 extracted from the books of Dass: The stock on 31st March, 2019 was valued at Rs 2,40,000 You are required to prepare Trading Account, Profit and Loss Account and Balance Sheet as at 31st March, 2019

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ANSWER :Gross Profit - RS 2,86,000; Net Profit - Rs 1,81,100; BALANCE Sheet TOTAL - Rs 8,65,000
Discussion
669.

The following are the balances extracted from the books of Mr. A. Mukhopadhyay. Prepare a Trial Balance as on 31st March, 2019:

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ANSWER :Teial BALANCE TOTAL - RS. 2,43,400.
Discussion
670.

The following balances were extracted from the books of Harish Chandra on 31st March, 2019: Stock on 31st March, 2019 was valued at Rs 2,35,000 Prepare final accounts for the year ended 31st March, 2019

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SOLUTION :INPUT CGST A/C and Input SGST A/c will be SET off against Output IGST A/c
Discussion
671.

The Financial statements under Ind-AS include a statement of financial position.

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SOLUTION : TRUE
Discussion
672.

The expression depreciation at 10% and 10% p.a. convey the same meaning.

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SOLUTION : FALSE
Discussion
673.

The fact that a business is separate and distinguishable from its owner is bestexemplified by the ……………….concept.

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ANSWER :BUSINESS ENTITY
Discussion
674.

The financial statements consist of:

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TRIAL balance
Profit and LOSS account
balance sheet
II & III
Discussion
675.

The essence of convention of prudence is to anticipate no profit and provide for all possible losses.

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ANSWER :TRUE
Discussion
676.

The essence of Consevatism Concept is to anticipate no profit and provided for all possible losses.

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SOLUTION : TRUE
Discussion
677.

The errors are credited or debited to the Suspense Account in the next year and the balance, if any, is transferred to the Capital Account.

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SOLUTION : TRUE
Discussion
678.

The difference of the capital at the end and the capital in the beginning will show _____ provided that there are neither drawings nor additional capital introduced during the year.

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SOLUTION :PROFIT EARNED.
Discussion
679.

The debts written off as bad, if recovered subsequently, are credited to the Debtor's Account. It is correct ? Why ?

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Solution :No, because Bad debts when WRITTEN off are debited to Bad debts Account by CREDITING DEBTOR's Account and the Debors's account is closed. THEREFORE, when Bad Debts are recovered , they are credited to Bad Debts Recovered Account and becomes an income.
Discussion
680.

The Diminishing Value Method mean a method by which

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the RATE of Depreciation FALLS YEAR by year.
the AMOUNT on which depreciation is calculated falls year by year.
the rate as well as the Amount to which it is applied fall year by year
None of these

Solution :the amount on which depreciation is calculated falls year by year.
Discussion
681.

The debit balance of the bank account as per the cash book should be equal to the credit balance of the account of the business in the books of the bank.

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SOLUTION :T
Discussion
682.

The cost of a small calculator is accounted as an expense and not shown as an asset in a financial statement of a business entity due to ……………..

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MaterialityConvention
Matching concept
Periodicityconcept
Convention of FULL DISCLOSURE

ANSWER :A
Discussion
683.

The credit balance of a personal account is ……….

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CASH in hand
AMOUNT receivable
Income EARNED
Amount payable

Answer :D
Discussion
684.

The ______ Concept requires that accounting transactions should be free from the bias of accountants and others.

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SOLUTION :VERIFIABLE OBJECTIVE (EVIDENCE )
Discussion
685.

The correct accounting equation is

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Assets=LIABILITIES-CAPITAL
Assets=Liabilities + Capital
Liabilities=Assets+Capitals
Capital=Assets + Liabilities.

SOLUTION :Assets=Liabilities + Capital
Discussion
686.

The Convention of Conservatism takes into account

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all PROSPECTIVE PROFITS and prospective LOSSES.
all prospective profits and LEAVES out prospective losses.
all prospective losses but leaves out prospective profits.
None of the above.

Solution :all prospective losses but leaves out prospective profits.
Discussion
687.

The _________ Concept rquires that the same accounting method should be used form one

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SOLUTION :CONSISTENCY
Discussion
688.

The Concept of Conservatism takes into account

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all prospective PROFITS and all prospective losses.
all prospective profits and LEAVES all prospectives losses.
all prosepective losses but not the prospective profits.
NONE of the above.

Solution :all prosepective losses but not the prospective profits.
Discussion
689.

The chief accountant of rana motors has taken a decision that adjustments for outstanding expenses and prepaid expenses of the current year should not be mae while preparing the finanical statement (i) Whether his decision is correct? (ii) Which accounting concepts are not being followed?

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Solution :(i) The decision of the chief accountant is not correct
(ii) The decision is not CORRECTY because the fundalmental accounting concept , i.e accrual concept and matching concept is being IGNORED .As a result ,profit and loss account will not show correct profit earned or loss INCURRED . ALSO balance sheet will not show correct financial position
Discussion
690.

The chief accountant of grand marketing has taken decision that adjustements for acccrued incomesand incomes received in advance of the current year should not be adjusted while preparing the finanacial statements (i) Whether his decision is correct? (ii) Which accounting concepts are not being followed?

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Solution :(i) The decision of the CHIEF accountant is not correct
(ii) The decision is not correct because thefundamental accounting concept i.e
Accrual concept and matching concept , is not being follwed .In the case of accrued
income being not accounted in the current year COST will be accounted whereas income will not be accounted .similary in the case of INCOMES received in advance , income will be acconted whereas cost will be accounted in the next year . Thus profit and LOSS accout will not show correct profit earned or loss
INCURRED . Also balance sheet will not show correct financial position
Discussion
691.

The column in a Journal is not filled at the time of Journalising?

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Solution :The COLUMN 'LEDGER FOLIO' is filled at THETIME of posting into the ledger and not at thetime of Journalising.
Discussion
692.

The cash Book recorded

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all CASH RECEIPT and payments.
cash and CREDIT sale of goods
Both (a) and (B)
None of these.

Solution :all cash receipt and payments.
Discussion
693.

The Capitalof a businessis ₹2,00,000and outside liabilitiesare ₹1,50,000. Calculate the totalassets of a business.

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Solution :₹3,50,000 ( CAPITAL + OUTSIDE Liabilities =Total ASSETS -Capital).
Discussion
694.

The Capitalof a businessis ₹2,00,000and outside liabilitiesare ₹1,50,000. Calculate the totalassets of a business.

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Solution :₹3,50,000 ( CAPITAL + Outside LIABILITIES =Total ASSETS -Capital).
Discussion
695.

The Capitalin the beginning of the accouting year is ascertained by preparing:

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Debtor's Account
Cash Account
Opening STATEMENT of AFFAIRS.
Creditor's Account.

SOLUTION :Opening Statement of Affairs.
Discussion
696.

The book in which every account is maintained is known as _______

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SOLUTION :LEDGER
Discussion
697.

The Bills Receivable Book is part of

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the Journal
the LEDGER
theprofit
Balance SHEET.

SOLUTION :the Ledger
Discussion
698.

The bank has given a wrong credit or Rs. 10,000 . The accountant of the firm recorded it inthe books of accountby credtting the amount to 'Miscellaneous Income'. Give your opinion with reason is he correct is doing go ?

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Solution : No. The accountant is not correct because the monery does not the firm and the BANK will DEBIT the account when ERROR is dectected.
Discussion
699.

The book in which all accounts are maintained is known as:

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CASH BOOK
JOURNAL
PURCHASES Book
Ledger

Solution :IV
Discussion
700.

The balance of sales column in the sales day book is Rs. 30,000. Rs. 5,000 were recovered from debtors. Then balance of sales column will be transferred by which amount?

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RS. 25,000
Rs. 30,000
Rs. 20,000
Rs. 35,000

Answer :B
Discussion