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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.
| 1151. |
Name the category of account that is not balanced. |
| Answer» Solution :Expense and REVENUE ACCOUNTS are not balanced. They are totalled and TRANSFERRED to Trial BALANCE. | |
| 1152. |
Name the branch of commerce, which keeps a record of monetary transactions in a set books. |
| Answer» SOLUTION :Book-keeping. | |
| 1153. |
Name the category of account that are balanced. |
| Answer» SOLUTION :Assests, Liabilities and CAPITAL ACCOUNTS are BALANCED. | |
| 1155. |
Name the books of original entry where the following transactions willbe recorded with reasons thereof: (i) Goods purchased from Ram Lal for Rs. 5,000 on credit. (ii) Provision for doubtful debts created @ 5% on debtors with books value of Rs. 10,000 (iii) Defectivegoods sold to Babita on credit worth Rs. 4,000 were returned by her. (iv) Purchasedfurniture on credit from Mr. Ratan Singh for Rs. 15,000 for use in the business. |
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Answer» Solution :(i) Purchases Book because it is credit PURCHASE of goods for sale. (ii) Journal PROPER because it will not be recorded in any other SUBSIDIARYBOOKS. (iii) SALES Return Book because it is return of goods sold. (iv) Journal Proper because it will not be recorded in other SUBSIDIARY books. |
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| 1157. |
Name any two source documents. |
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Answer» SOLUTION :Two source DOCUMENTS are: (i) CASH Memo, and(ii)Invoice. |
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| 1158. |
Name any two objectives of Accounting. |
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Answer» Solution :The TWO objectivesof ACCOUNTING are: (i) ASCERTAINING profit or loss, and(II) Ascertaining financial position. |
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| 1159. |
Name any two items that are debited to the Trading Account |
| Answer» SOLUTION :OPENING STOCK and PURCHASES | |
| 1160. |
Name any two items that are credited to the Trading Account |
| Answer» SOLUTION :SALES and CLOSING STOCK | |
| 1161. |
Name any two external users of accounting information? |
| Answer» SOLUTION :Any two of these : POTENTIAL INVESTORS, creditors, lenders, employee unions, customers, government etc. | |
| 1164. |
Name and describle the various books of priginal entries. |
| Answer» | |
| 1165. |
Mr. Wise keeps his books on Single Entry System and the following information is disclosed from his records: {:(,"As at 1st April, 2018 (Rs.)","As at 31st March, 2019 (Rs.)"),("Balance at Bank","3,150(Cr.)","8,400"),("Stock-in-Trade","22,500","30,000"),("Sundry Debtors","45,000","42,8000"),("Furniture","7,500","7,500"),("Investments","7,500","7,500"),("Cash in Hand","150","600"),("Sundry Creditors","37,5000","40,500"),("Bills Payable","1,500","750"),("Loan from Mr. Faithful","...","4,500"):} Mr. Wise transferred Rs. 375 every month during the first half of the year and Rs. 300 every month for the remaining period from the business to his personal bank account by way of drawings. In addition, he withdrew Rs. 7,500 for his daughter's marriage and Rs. 3,000 for domestic purposes. In September, 2018, he had received a lottery prize of Rs. 6,000, which he invested in the business. He sold his personal car for Rs. 7,000 and the proceeds were utilised for business. He wants his furniture to be depreciated at 10% and a provision for doubtful debts to becreated at 5%. He had not paid two months' salary to his peon @ rs. 225 per month and two month's rent outstanding amounting to Rs. 300Commission earned but not received by him was Rs. 3,600. Prepare Statement of Profit or Loss for the year ended 31st March, 2019. |
Answer» SOLUTION :CALCULATION of OPENING CAPITAL:  Calculation of CLOSING Capital: 
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| 1166. |
Mr. Jaspal Singh dealing in electronic goods sold 20 TV sets costing Rs.30,000 each at Rs.40,000 each. Out of this Rs. 5,00,000 were received in cash andthe balance is not yet received. State the amount of revenue. |
| Answer» Solution :REVENUE will be Rs. 8,00,000 (i.e. 20 TV SETS `xx` Rs.40,000) Revenue is theamount either received or receivable from sale of goods and services. Both CASH sales andcredit sales are INCLUDED in revenue. | |
| 1167. |
Mr. Vishwanath established a travel agency. Over the years the travel agency earned high reputation. Mr. Vishwanath considers the value of goodwill of his travel agency at Rs. 50 lac. He want to recorded the value of the goodwill in the books of accounts. Can he do so ? |
| Answer» Solution :No. Only the PURCHASED goodwill can be recorded in the books of accounts. As per Accounting Standard 26 (Intangible ASSETS), self generated goodwill is not recorded in the books of accounts because consideration in money or moneys worth has to been paid for it. | |
| 1168. |
Mr. Tushar decided to start a computer business. For this purpose he built the first floor of his hourse at a cost of Rs. 200000 and inversted a further sum of Rs. 350000 in this business He wanted to start with 12 computers costing Rs. 40000 each. He approached ICICI Bank and secured a loan to the extent of 75% of the cost of computers. It was agreed that the loan will be repaid in four annual instalmeets as follows: At the end of First Year:Rs. 90000 + Rs. 36000 for interset At the end of second year:Rs 90000 + Rs. 27000 for interset At the end of Third year:Rs. 90000+Rs. 18000 for interset At the end of Fourth year:Rs. 90000+ Rs. 9000 for interset He started business on1st April, 2016. On the same date he deposited Rs. 3,30,000 in the Bank. He purchased Computers and Paid 25% of the value of computer from his bank Rs. 3,60,000 out of bank loan availed. He deposited Rs. 10000 for the electric connection with the Electricty Board and also deposited Rs. 150000 with the VSNL for internet and telephone connection. He spent Rs. 40000 for getting the Computer Cafe furnished and also spent Rs. 6000 in getting the pamphlets printed and distributed. All payments were to be made by cheques and all the receipts were to be deposited in bank on the same day. At the end of the year, the results were: Purchases of Computer stationary like floppy discs, CDs etc.Rs. 92000 Revenu from fees recevied from students of Computer classesRs. 270000 Revenu on Account of Internet FactilityRs. 220000 Revenu from sale of Computer Stationery160000 Wages paid to servant12000 Electricity Charges48000 Telephone Charges73000 Entertainment Expenses7000 General Expenses5200 He withdraw Rs.5000 by cheque each month for his personal expenses and duly paid the bank loan. You are requried to: (i) Journalize the above transaction post them into the Ledger and prepare a trial balance. (ii) Prepare Profit and Loss Account and Balance Sheet taking into consideration that a telephone bill of Rs. 6800 is yet to be paid (iii) Depreciate Building by 5% furniture by 20% and computers by 30%. |
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Answer» Solution :The project work is (i) to make acccounting record of all the transactions from the very start of the business of Mr. Tushar (ii) to prepare the Profit & Loss Account of the business to ascertain the net profit for the perod: (iii) to prepare the Balance sheet of the business to ascertain the financial POSITION, The necessary data is provided and is used for the PURPOSE of project work. The project work is planned and exeuted as follows: (i) Prepare journal, ledger and TRIAL balance, (ii) Prepare Trading and Profit & loss Account for the YEAR ENDING 31st March 2017 and a Balance Sheet as at 31st March 2017.        
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| 1169. |
Mr Prem commenced business of trading in electronic goods with an initial capital of Rs 15,00,000. out of the said Rs 15,00,000, he paid Rs 10,00,000 towards purchase of electronic goods. He further spent Rs 2,00,000 on furnishing the shop and Rs 35,000 for purchase of computer and printer. Rs 10,000 is yet to be paid to supplier of computer. He sold goods costing Rs 5,00,000 for Rs 7,00,000 in cash and goods costing Rs 2,50,000 for Rs 3,10,000 on credit. Goods sold on credit for Rs 25,000 were returned being defective. These goods (costing Rs 20,000) were returned to the supplier. Looking into the response, he decided to trade in home appliances also and further invested Rs 5,00,000. He purchased electronic goods and home appliances for Rs 8,00,000 out of which purchaese of Rs 2,00,000 were on credit. Due to an earthquake, 2 LCD Televisions costing Rs 50,000 were completely destroyed Mr. Prem received an insurance claim of Rs 30,000. A customer purchased goods costing Rs 2,25,000 for Rs 3,00,000 and was allowed discount of Rs 15,000. He was further allowed discount of Rs 5,000 for payment within agreed time. He paid salary to Shyam of Rs 55,000 were yet to be paid. He insured the goods and paid insurance premium of Rs 10,000. out of this, Rs 5,000 are for the next year. Yor are required to answer the following questions on the basis of the above : (i) What is the amount of capital invested in the business by Mr. Prem ? (ii) What is the amount invested by Mr. Prem in fixed assets ? (iii) What is the amount of total purchases ? (iv) What is the amount of long -term liabilities ? (v) What is the amount of current liabilities ? (vi) What is the amount of prepaid expenses ? (vii) What is the amount of outstanding expenses ? (viii) What is the income earned by Mr.Prem ? (ix) How much profit is earned by Mr. Prem ? (x) What is the amount due form debtors ? (xi) What is the amount due to creditors ? (xii) What is the value of Closing Stock ? (xiii) What is the value of net purchases ? (xiv) What is the amount of Trade Discount allowed ? (xv) Has Mr. Prem allowed Cash Discount ? If yes, what is the amount ? (xvi) What is the amount of Drawings ? (xvii) What is the amount of Sales Return ? (xviii) What is the amount of Purchases Return ? |
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Answer» Solution :(i) Capital invested by Mr. Prem in the business is Rs 20,00,000 (i.e., Rs 15,00,000 + Rs 5,00,000). (ii) Mr. Prem has invested Rs 2,35,000 (i.e., Rs 2,00,000 + Rs 35,000) in the FIXED assets. (iii) Purchases made by Mr.Prem are Rs 18,00,000 (i.e., Rs 10,00,000 + Rs 8,00,000) during the year. (iv) Long -term liabilities of Mr. Prem are nil (v) Current libilities of Mr. Prem are Rs 1,95,000 [Rs 10,000 (Computer and Printer) + Rs 2,00,000 (Purchases + Rs 5,000 (Salaries) - Rs 20,000 (Purchases RETURN)] (vi) Amount of prepaid EXPENSES is Rs 5,000 being insurance PREMIUM. (vii) Outstanding expenses are Rs 5,000 being salary payable. (viii) Income earned by Mr. Prem is Rs 1,75,000 [Rs 12,70,000 (Sales) - Rs 10,95,000 (Expenses)] (ix) PROFIT earned by Mr. Prem is Rs 1,75,000 as he has no income from non-operating activities (x) Amount due from debtors is Rs 2,85,000 (xi) Amount due to creditors is Rs 1,80,000. (xii) The value of Closing Stock is Rs 7,75,000 `[Rs 10,00,000 + Rs 20,000 + Rs 8,00,000 - Rs 5,00,000 - Rs 2,50,000 - Rs 20,000 - Rs 50,000 - Rs 2,25,000 = Rs 7,75,000]` (xiii) The amount of net purchases is Rs 17,80,000 (xiv) The amount of Trade Discount allowed is Rs 15,000 (xv) Yes, Mr Prem has allowed cash discount and the amount is Rs 5,000 (xvi) The amount of Drawings is Rs 30,000. (xvii) The amount of Sales Return in Rs 25,000 (xviii) The amount of Purchases Return is Rs 20,000 |
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| 1170. |
Mr Gopal started business for buying and selling of readymade garments with Rs 8,00,000 as an initial investment. Out of this he paid Rs 4,00,000 for the purchase of garments and Rs 50,000 for furniture and Rs 50,000 for computers and the remaining amount was deposited into the bank. He sold some of the ladies and kids garments for Rs 3,00,000 for cash and some garments for Rs 1,50,000 on credit to Mr. Rajesh. Subsequently, he bought men's garments of Rs 2,00,000 from Mr. Satish. In the first week of the next month, a fire broke out in his office and stock of garments worth Rs 1,00,000 was destroyed. Later on, some garments which cost Rs 1,20,000 were sold for Rs 1,30,000. Expenses paid during the same period were Rs 15,000. Mr. Gopal withdrew Rs 20,000 from business for his domestic use. From the above, answer the following: (i) What is the amount of capital with which Mr. Gopal started the business ? (ii) What fixed assets did he buy ? (iii) What is the value of the goods purchased ? (iv) Who is the creditor and state the amount payable to him ? (v) Who is the debtor and what is the amount receivable from him ? (vi) What is the total amount of expenses ? (vii) What is the amount of drawings of Mr. Gopal ? |
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| 1171. |
Mr. Dinanath who owed us Rs.50,000 became insolvent and paid only 40% of this amount. What is term used for the amount not received? |
| Answer» SOLUTION :BAD DEBTS. | |
| 1172. |
Mr. Ganpati, the properietor of a business, sold his residential house for Rs. 50 Lac. Will it be recorded in the books of accounts ? |
| Answer» SOLUTION :No. Personal dealings of the PROPRIETOR are not recorded in the books of the firm. However, if the INVESTS this AMOUNT in the business it will be TREATED as additional capital introduced by the proprietor and then it will be recoded in books of the firm. | |
| 1173. |
Mr. A started a business with a capital of Rs. 5,00,000. At the end of the year his position was: Sundry creditors on this date totalled Rs. 80,000. During the year he introduced a fruther capital of Rs. 1,50,000 and withdrew for household expenses Rs. 90,000. You are required to calculate Profit or Loss during the year. |
Answer» SOLUTION :
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| 1174. |
Money Measurement Concept takes into account changes in the value of monetary unit. |
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| 1175. |
Mohit has the following transactions, prepare accounting equation: (a) Business started with cash 1,75,000 (b) Purchased goods from Rohit 50,000 (c) Sales goods on credit to Manish (Costing17,50020,000) (d) Purchased furniture for office use 10,000 (e) Cash paid to Rohit in full settlement 48,500 (f) Cash received from Manish 20,000 (g) Rent paid1,000 (h) Cash withdrew for personal use 3,000 |
| Answer» SOLUTION : CASH 1,32,500 + GOODS 32,500 + Furniture10,000 1,75,000, Liabilition = CAPITAL 1,75,000 | |
| 1176. |
Mohan's bankreconciliation statement shows cheque deposited but not credited by bank of ₹ 3,800 and cheques issued but not presented by suppliers of ₹ 3,500. His bank balance as per Cash Book is ₹25,000. Balance as per pass book statement is |
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Answer» ₹ 25,000 |
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| 1177. |
Mohan, the owner of a business receives an order for supply of goods worth ₹2,00,000. He has also received ₹25,000 against this order. Mohan wants to record it as a sale. Is Mohan correct in doing so? |
| Answer» Solution :No, he will not be correct in RECORDING it as SALES because the goods have not been delivered as yet and hence the sale is not completed. Mohan has not earned the revenue so FAR. Under the matching concept, revenue is recognised as earned only when COST incurred to earn that revenue is ALSO recognised as expense in that period. | |
| 1178. |
Mohan started a business on 1st April, 2018 with a capital of₹25,000 and a loan of₹12,500 borrowed from Shyam. During 2018-19 he had introduced additional capital of ₹12,500 and had withdrawn₹7,500 for personal use. On 31st March, 2019 his assets were₹75,000. Find out his capital as on 31st March, 2019 and'profit made or loss incurred dring the year 2018-19. |
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| 1179. |
Mohan started a business on 1st April, 2018 with a capital of₹25,000 and a loan of₹12,500 borrowed from Shyam. During 2018-19 he had introduced additional capital of ₹12,500 and had withdrawn₹7,500 for personal use. On 31st March, 2019 his assets were₹75,000. Find out his capital as on 31st March, 2019 and'profit made or loss incurred dring the year 2018-19. |
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| 1180. |
Mohan maintains books on Single Entry System. He gives you the following information: {:(,"Rs."),("Capital on 1st April, 2018","15,200"),("Capital on 31st March, 2019","16,900"),("Drawings made during the year","4,800"),("Capital introduced on 1st August, 2018","2,000"):} You are required to calculate the Profit or Loss made by Mohan. |
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| 1181. |
Mohan maintains books on Single Entry System. He gives you the following information: {:(,"Rs."),("Capital on 1st April, 2018","30,400"),("Capital on 1st April, 2019","33,800"),("Drawings made during the period, April, 2018 to March, 2019","9,600"),("Capital introduced on 1st August, 2018","4,000"):} You are required to calculate the profit earned or loss incurred by Mohan. |
Answer» SOLUTION :
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| 1182. |
Miss Priti, an electronic goods dealer, gifted a washing machine valued Rs. 25,000 to her friend Suruchi. Will it be recorded in the books of accounts? |
| Answer» Solution :Yes. It will be TREATED as drawings of Miss PRITI and will be RECORDED in the BOOKS. | |
| 1183. |
Mention the subsidiarybooks in which following transactions arerecorded along with reason thereof : (i) Purchase of furniture on credit for use in shop. (ii) Sale of goods on credit. (iii) Goods returned by Debtors. (iv)Purchase of stock on credit. (v) Providing for interest on capital to proprietor. (vi) Goods returned to creditors. (vii) Sale of goods for cash. |
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Answer» Solution :(i) Journal PROPER: Because purchase of FIXED ASSETS on credit is recorded in Journal Proper. (ii) Sales Book: Because Sales Book records only credit sales of goods. (iii) Sales RETURN Book: Because goods returned by customer are recordedin Sales Return Book. (iv) Purchases Book: Because Purchases Book records only Credit Purchases of goods. (v) Journal Proper: Because Journal Proper records all those transactionswhich cannot be recorded in any of the other subsidiarybooks . Interest on proprietor'scapital is also ONE of those items which can only berecorded in Journal Proper. (vi) Purchases Return Book: Because it records only goods returned by the firm to its suppliers. (vii) Cash Book: Because it records cash receipts and cash payments. |
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| 1184. |
Mention two transactions which are recorded in Journal Proper. |
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Answer» SOLUTION :(i) OPENING Entry (ii) Closing ENTRIES. |
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| 1185. |
Mention two items which not recorded in an amended Cash Book. |
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Answer» SOLUTION :(i) CHEQUES DEPOSITED into bank but not yet credited by bank. (ii) Cheques issued but not yet PRESENTED for payment in the Bank. |
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| 1186. |
Mention two charactristics of 'Accounts from Incomplete Records'. |
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Answer» Solution :(i) This SYSTEM is suitable for SOLE traders or partnership FIRM doing small SCALE business. (ii) There is no uniformity as this system DIFFERS from firm to firm. |
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| 1187. |
Mention the subsidiary books in which the following transactions are recorded along with reason thereof : (i) Purchase of furniture on credit for use in shop. (ii) Sale of goods on credit. (iii) Goods returned by Debtors. (iv) Purchase of stock on credit. (v) Providing for interest on capital to proprietor.(vi) Goods returned to creditors. (vii) Bill accepted by proprietor from creditor. (viii) Sale of goods for cash. |
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Answer» Solution :(i) Journal Proper : Because purchase of fixed assets on credit is recorded in Journal Proper. (ii) Sales Book : Because sales book records only the SALE of goods on credit. (iii) Sales Return Book : Because goods returned by customers is recorded in Sales Return Book. (iv) Purchase Book : Because purchase book records only the purchase of goods on credit. (v) Journal Proper : Because Journal Proper records all those transactions which COULD not be recorded in any of other subsidiary books. Interest on CAPITAL is ALSO ONE of those items which cannot be recorded in any other subsidiary books. (vi) Purchase Return Book : Because Purchase Return Book records only goods returned by the firm to its suppliers. (vii) Journal Proper : Because bill accepted by the proprietor on behalf of the firm is called Bill Payable and it is recorded in this book. (viii) Cash Book : Because Cash Book records all cash receipts and cash payments. |
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| 1188. |
Mention two causes of differences in the Cash Book and Pass Book balances. |
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Answer» Solution :(i) Cheques issued but not YET presented for payment in the Bank. (II) Cheques paid into the bank for COLLECTION but not yet credited by the Bank. |
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| 1189. |
Mention two advantages of accounting. |
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Answer» SOLUTION :(i) It provides COMPLETE and systematic record, (II) It provides information regarding PROFIT or loss |
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| 1190. |
Mayank does not keep proper records of his business, he gives you the following information: {:(," Rs."),("Opening Capital","1,00,000"),("Closing Capital","1,25,000"),("Drawing during the year"," 30,000"),("Capital added during the year"," 37,500"):} Calculate the profit of loss for the year. |
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| 1191. |
Mention any one difference between fixed asset and current asset |
| Answer» Solution :Fixed ASSETS increase the EARNING capacity whereas current assets MAINTAIN the earnings | |
| 1192. |
Meena is owner of a restaurant. She paid son's fees her personal bank account Rs. 20,000. Whether this constitute her Business Transaction? Give reason. |
| Answer» SOLUTION :No. It is not a business TRANSACTION. It RELATED to personal dealing of the PROPRIETOR which are not RECORDED in the books. | |
| 1193. |
Materiality principle is an excetion to the 'Full Disclosure Convention'. |
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| 1194. |
Match the transactions in column I with relevant subsidiary books in column II {:(,"Column I",,"Column II"),((i),"Credit purchases",(A),"Return outward Book"),((ii),"Depreciation",(B),"Sales Book"),((iii),"Goods returned to Alisha",(C),"Journal proper"),((iv),"Trade discount allowed",(D),"Purchase Book"):} |
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Answer» (i)-(A), (II)-(B), (III)-C, (IV)-D |
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| 1196. |
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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| 1197. |
Manish has paid salaries of Rs 1,50,000 for the year ended 31st March, 2019 . Salaries include Rs 20,000 paid in advance for the year ending 31st March, 2020. Show how it will be shown in the Profit and Loss Account and the Balance Sheet. |
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| 1198. |
Management of the business enterprises is internal user of financial statements. |
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| 1199. |
Management creates provisions for doubtful debts @ 5% on deptors every year based on its past experiece.Name the two accouting principal followed in this process |
| Answer» SOLUTION :CONSISTENCY and PRUDENCE | |
| 1200. |
Makingexcessive provision for doubtful debts buildsup the secret reserves inthe business. |
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