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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 701. |
The balance of bank column of cash bok alwaysshows a …… balance. |
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Answer» DEBIT |
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| 702. |
The balance at bank in Z's Cash Book on 30th April, 2019 is Rs. 12,460 debit. However,cheque for Rs. 14,470 receivedfrom X and cheque or Rs.1,740 paid to Z zapperin the Cash Book, but not in the Bank Statement. Banke charges of Rs, 4,500 have not been entered intheCash Book. What is the balace shown in the Bank Statement on 30th April,2019? |
| Answer» SOLUTION : Balance ASPER BANK STATEMENT is Rs. 4,770overdraft | |
| 704. |
The assets of Standard Sugar Co. were acquired by the Government on1st April , 2000 and the company received a compensation of Rs.10 crores . The also not ventured into any otherbusiness as on the date of acquisition and has also not ventured into any other business after aquisition of assets . The company placed the amount so received in a fixed deposit with a bank , whichis a lying deposited with the as on date also . It has also filed a case in the Court seeking higher compensation. Is the company a going concern? |
| Answer» Solution :The company is not a going concern because it has not commenced anybusiness post acquisition . The company is only seeking higher compensation and not quashing the acquisition order of the GOVERNMENT . It has invested thecompensation RECEIVED in the FIXED DEPOSIT which remains deposited as on DATE also . Thus , the company does not have intentions to conduct the business . | |
| 705. |
Theassetsof a business on 31st March, 2019 are ₹50,000 andits captialis ₹35,000. Calculate its liabilities on that date. |
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Answer» |
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| 706. |
Theassetsof a business on 31st March, 2019 are ₹50,000 andits captialis ₹35,000. Calculate its liabilities on that date. |
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Answer» |
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| 707. |
The amount paid to the petty cashier at the beginning of a period is known as ………..amount. |
| Answer» SOLUTION :IMPREST | |
| 708. |
The amount of Depreciation charged on machinery is debited to |
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Answer» DEPRECIATION ACCOUNT |
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| 709. |
The amount invested by the proprietor in a business is called |
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Answer» CAPITAL |
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| 710. |
The adjustment entry passed for Provision for Doubtful Debt is : |
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Answer» DEBIT Provision for Doubtful Debts ACCOUNT and Credit PROFIT and Loss Account |
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| 711. |
The adjustment entry passed for interest on capital is : |
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Answer» DEBIT Profit and Loss Account and CREDIT DRAWINGS Account |
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| 712. |
The accountatn of a small firm feels that incomplete records system should not be followed .In spite of that it is easy to maintain accounts on single entry basisi.The accountant suggests that Double Entry accouting system should be followed .Is the suggestion correct? Give reasons. |
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Answer» Solution :The suggestion given by the accoutant is CORRECT. Double entry system GIVES better and reliable results. Under the incomplete records system, all the accounts are not maintained and therefore , TRIAL balance cannot be prepared . As a result , locating ERRORS becomes difficult |
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| 713. |
The accountant of the firm found an error in the books of accounts but neither her rectified the error nor disclosed it to the management fearing that it will risk his job. Which value has been violated by the accountant? |
| Answer» Solution :Accountant has VIOLATED the VALUE of honesty and TRUST. | |
| 714. |
The accountant opens the following account when Trial Balance does not match |
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Answer» capital Account. |
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| 715. |
The Accountant of Shiv wrongly prepared the following Trial Balance. You are required to draw the correct Trial Balance stating reasons for the change made: |
Answer» Solution : Note: Closing Stock will not appear in the Trial Balance because it is not ADJUSTED with purchases. At the end of the YEAR, if the following ENTRY is passed, then Closing Stock will appear in theTrial Balance. Closing Stock A/c`".....DR."` `"To Purchases A/c"` |
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| 716. |
The Account Manager of Poineer Sports does not want too give previous year amounts , a practice followed by the firm for the past many years . Is it a good decision? |
| Answer» Solution :It is not a good DECISION because CONSISTENCY CONCEPT is being IGNORED. | |
| 717. |
The accountant feels that since sales book is maintained ,there is no need to open sales account . Is he correct in his views? |
| Answer» | |
| 718. |
Temporary rise or fall in the price of an asset is called ________ |
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Answer» |
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| 719. |
Taking the figures in Illustration 1, find out the net income according to Accrual Basis of Accounting. |
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Answer» SOLUTION :`{:(,,"Rs."),("TOTAL SALES = Cash Sales (Rs. 3,90,000)+Credit Sales (Rs. 1,60,000)",,"5,50,000"),("Less : Total Expenses for the Year",,"2,70,000"),("Net Income",,ulbar(ul("2,80,000"))):}` Note : Rs. 80,000 expenses still to be paid belong to this year and hence are to be charged to the revenue of this year. Similarly, credit sales of Rs. 1,60,000 are taken in the year in which sales TRANSACTION is done. |
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| 720. |
Taking the figuresgiven in Q.5, find out the net income according to Accrual Basis of Accounting. |
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Answer» |
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| 722. |
SuspenseAccount will give the |
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Answer» Debit balance |
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| 723. |
Suspense Account will give the |
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Answer» DEBIT BALANCE |
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| 724. |
Suspense Account is opened when: |
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Answer» BALANCE SHEET does not match. |
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| 725. |
Suspense Account appears in the Trial Balance because of |
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Answer» one sided ERRORS |
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| 726. |
Surya does not keeps a systematic record of his transactions. He is able to give you the following information regarding his assets and liabilities: Bad Debts during the year were Rs. 900. As regards sale, Surya tells you that he always sells goods at Cost plus 25%. Furniture and Fittings are to be depreciated at 10% of the value in the beginning of the year. Prepare Surya's Trading and Profit and Loss Account for the year ended 31st March, 2019 and his Balance Sheet on that date. |
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Answer» 2. Total Sales = Cost of Goods Sold + `25%` of Cost of Goods Sold 3. CREDIT Sales = Total Sales - Cash Sales. |
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| 727. |
Sundry Debtors of a firm on 31st March, 2018 , were Rs 4,00,000. On that date, it was decided to create Provision for Discount at 2% on Sundry Debtors During the year ended 31st March, 2019, amount of discount allowed was Rs 4,000. The debtors on 31st March, 2019, were Rs 3,00,000 and it decided to create Provision for Discount on debtors at 2%. Pass Journal entries and prepare Discount Allowed Account and Provision for Discount on Debtors Account for both the years. |
Answer» SOLUTION :  
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| 728. |
Sunil is an architect and has got a contract in which he hgas received an advance fee of 100,000 He has hsown it as his income for the year .Is he correct in doing so? |
| Answer» Solution :Sunil is not correct in treating it as his income because he has not rendered the SERVICE yet. It MEANS he has not EARNED the income .It should be accounted as income received in ADVANCE i.e LIABILITY. | |
| 729. |
Sundry Debtors in a Trial Balance are Rs 90,000. Write off Rs 5,000 as bad debts and make a provision for doubtful debts @ 10 % on sundry debtors. Pass necessary Journal entries. |
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Answer» |
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| 730. |
Sundry Creditors Account is a |
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Answer» REVENUE ACCOUNT |
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| 731. |
Straight Line Method of Depreciation is that method under which |
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Answer» Depreciation is CHARGED at a FIXED percentage on the book VALUE of the asset. |
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| 732. |
Stock is valued at Cost or Net Realisable Value (Market Value ), whichever is higher. |
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Answer» |
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| 733. |
Stock is valued at |
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Answer» Cost or NET Realisable Value (Market Value), whichever is LOWER |
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| 734. |
Statement of affairs shows only the ______ financial position of the business. |
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Answer» |
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| 736. |
State withreasonswhethere the followingare capitalorrevenueexpenditures :(i) A newmachineis purchasefor₹ 60,000,₹ 800 were spenton itscarriageand₹ 1,500 were paidas wagesforits installation. (ii) A sum of₹ 10,000 was spent on paintingthe new factory.(iii) ₹ 5,000 paidfortheerectionofanew machine. (iv)₹ 2,000 were spentonrepairs before usinga second handgenerator purchased recently.(v)₹ 1,500 were spent ontherepairofa machinery. (vi) ₹ 10,000 werepaidas brokerageon issueofsharesandotherexpenses of issue were ₹ 25,000. |
| Answer» SOLUTION :CAPITALEXPENDITURE (i),(ii),(iii), (IV) and(vi),RevenueExpenditure (V) . | |
| 737. |
State with reasons whether the following statements are True or False , (i) Making excessive provision for doubtful debits builds up the secret reserve in the business. (ii)Capital reserves are normally created out of free or distributable profits. (iii) Dividend equalisation reserve is an example of general reserve (iv) General reserve can be used only for some specific purposes. (v)‘Provision’ is a charge against profit. (vi) Reserves are created to meet future expenses or losses the amount of which is not certain. (vii)Creation of reserve reduces taxable profits of the business. |
| Answer» Solution : (i) TRUE (ii) False (iii) False (IV) False (V) True (VI) False (vii) False | |
| 738. |
State withreasonswhether the followingare CapitalorRevenueexpenditures :-(a) An old plant cosing ₹ 1,00,000 waspurchased ,₹ 2,000 were paid on itscarriage ,₹ 3,000 were spent on itsrepairs and₹ 4,000 werepaidtoanengineerwho hadsuperviseditsinstallation.(b) ₹ 2,00,000 spent for repairingthefactorybuilding. (c ) Legalexpenses incurred on puchase of Land. (d) ₹ 10,000 werespenton lawyer's fees todefend a suit claimingthat the firm's factory sitebelonged totheplaintiff.(e)ExpenditureonAdvertisment₹ 25,000. (f)₹ 25,000 paidtoadischarges employee as compensation. (g) Repairs for₹ 2,000 necessitated bynegligence.(h) Insuranceclaim of₹ 20,000 received fromtheinsurance company for loss ofgoods byfire of₹ 25,000. |
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Answer» Solution :(a) ₹ 1,09,000 is capitalexpenditurebecause all expenditurehas beenmadebeforetheplantis putto USE. (b )It isrevenueexpenditurebecauseit isnormaland regularexpenditureincurred to maintainedandexistingbuilding. (c)It iscapitalexpendituresincethefeesis paidto maintain thetitle on anoldasset and notto acquire any NEW asset. (E) It isrevenueexpenditure sinceit isincurred inthenormalcouseofthebusiness. (g) It isrevenueexpenditure SINCE it isnotgoingto improve THEASSET in any way. (h) ₹ 5,000 isrevenue expenditure. |
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| 739. |
State with reasons whether following are Capital or Revenue Expenditures: (i) Custom duty paid on import of a machinery. (ii) Wages paid in connection with the erection of a new machinery. (iii) Rs 5,000 spent on repainting the factory. (iv) Repairs for Rs 2,000 necessitated by negligence of an operator of machine. (v) Rs 10,000 paid for electricity bill |
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Answer» Solution :(i) Custom duty paid on import of a machinery is a Capital Expenditure because it is incurred for the ACQUISITION of a new asset. (ii) Wages paid in connection with the ERECTION of a new machinery is Capital Expenditure because it is in connection with the acquisition of new asset. (iii) Rs 5,000 SPENT on repainting the factory is Revenue Expendilure because it has been incurred to maintain the factory building. (iv) Repairs for Rs 2,000 necessitated by negligence of an operator of machine is Revenue Expenditure since it has not improved the asset (machine) in any way. (v) Rs 10,000 paid for electricity BILL is Revenue Expendilure because it is a part of operating cost. |
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| 740. |
State withreasonswhetherthe followingreceipts would be treated as Capital orRevenue : -(a)₹ 5,000 received from acustomer whoseaccountwaspreviouslywrittenoff asbad.(b)₹ 20,000 received from saleof old machine.(c)₹ 2,60,000 received fromsale ofstock-in trade.(d)₹5,00,000 is contributed by apartner as capital. (e)Tooka loanof₹ 10 Lac fromPunjab National Bank.(f) Received ₹ 4 Lac as subsidyfrom state Government. (g) Received ₹ 8 Lac as grant fromState Government forthe construction ofquarters forthestaff. |
| Answer» Solution :CAPITALRECEIPTS (B) ,(d) ,(E) ,(g) ,RevenueReceipts (a) , (c) ,(f) | |
| 741. |
State with reason whether the following are Capital or Revenue Expenses, (i) Excise duty paid on purchase of new machine (ii) Wages paid to install a machine (iii) Repairs carried out on existing car. (iv) Office block of building repainted for Rs 50,000. (v) Paid telephone bill Rs 2,500 |
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Answer» |
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| 742. |
State with reason whether the following statements are True or False: (i) Sales Book is a part of the Ledger. (ii) Sales Return Book records return of goods sold. (iii) In Purchases Book, the record is in respect of cash purchases of goods. (iv) Total of the Sales Book is postedto the credit of the Sales Account. |
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Answer» Solution :(i) False: Sales Book is a book of original entries. (ii) True: Goods returned by customers are RECORDED in Sales Return Book. (III) False: Only credit PURCHASES of goods are recordedin Purchases Book. (iv) True: Total of the Sales Book is posted to the Credit of the Sales ACCOUNT inLedger periodically. |
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| 743. |
State, whichof the followingreceiptswould betreated as capitalreceipts andrevenue receipts. Givereasons. (i)Recived ₹5,00,000 form the issue of shareand the issue amountto₹ 10,000. (ii) Recived ₹ 1,00,000 as subsidyform State Goverment. (iii) Compensation recived fromImpprovmentTrustfor compulsory removel of business to another place. (iv) Investment whichwere purchased in2007 for ₹ 10 Lac soldis 2015 for ₹12 Lac. (v) For thewelfare of employmees, a reacreation centre was constructedat a cost of ₹ 8 Lac,₹ 4 Lac was recived fromthe state Govt. as grantfor itsconstruction. |
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Answer» Solution :(i) ₹ 5,00,000 is capitalreceipt andexpenses foissueamountingto₹ 10,000 is acapitalexpenditure since it isincurredin raisingcapitalforbusiness. (ii) It isarevenuereceiptbecause it isreceivedinthe normalcourseof BUSINESS asndreducesthe costof productionofthe goods produced bythefirm. (iii) It isarevenuereceipt since itwill reduce the costofremovingthebusiness toanother place. (IV) ₹ 12 LAC iscapitalreceiptbecause it isthe saleproceeds of a fixed asset.₹2 Lac iscapitalgain. (v)₹ 8Lac iscapitalexpendituresince it is SPENT on theconstructionof building , Grant of₹ 5Lac isacapitalreceipt. |
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| 744. |
State which of the following correctly complete the sentences gibve below: Which of the following is not recorded in the Cash Book ? |
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Answer» CREDIT Sales. |
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| 745. |
State which of the following correctly complete the sentences gibve below: When a firm maintains two-column Cash Book, it does not maintain |
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Answer» Purchases Book. |
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| 746. |
State which of the following correctly complete the sentences gibve below: Which is both a book of Journal and Lendger |
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Answer» Cash BOOK. |
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| 747. |
State which of the following correctly complete the sentences gibve below: Simple Petty Cash Book is like a |
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Answer» Cash BOOK. |
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| 748. |
State which of the following correctly complete the sentences gibve below: Withdrawal of Cash from Bank is recorded in |
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Answer» DEBIT of Bank Column and CREDIT of Cash Column. |
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| 749. |
State which of the following correctly complete the sentences gibve below: Ravi has purchased goods from Girish for Rs.10,000 plut 12% IGST. It will be recorded in |
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Answer» CASH Book. |
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| 750. |
State which of the following correctly complete the sentences gibve below: Mohit paid Rs. 9,800 in settlement of his account of Rs.10,000 Discount Allowed will be recorded in |
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Answer» CASH Book. |
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