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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.
| 1551. |
Give the formula to calculate the Annual Depreciation as per 'Straight Line Method'. |
| Answer» Solution :`"Annual Depreciation "=("COST of Asset-Estimated SCRAP Value")/("Number of Years of EXPECTED USEFUL Life")` | |
| 1552. |
Give the formula to Calculate Operating Profit from net profit. |
| Answer» Solution :OPERATING PROFIT = NET Profit + Non-operating EXPENSES - Non - operating INCOMES. | |
| 1553. |
Give the correct chronological order of ascertainment of the following profits from Trading and Profit and Loss Account: Operating Profit, Gross Profit, Net Profit |
| Answer» SOLUTION :GROSS PROFIT, OPERATING Profit, NET Profit | |
| 1554. |
Give one point of distinction between Purchases Book and Purchases Account. |
| Answer» SOLUTION :PURCHASES book is a PART of JOURNAL whereas purchases account is a part of LEDGER. | |
| 1555. |
Give one point of importance of bank reconciliation statement. |
| Answer» Solution :A bank reconciliation statement locates the errose or OMISSION that may have been commited EITHER on the PART of the customer or the customer or the bank. The erroseso detected can be rectified accordingly. | |
| 1556. |
Give one point of distinction between Book-keeping and accountancy. |
| Answer» Solution :The MAIN objective of book-keeping is to maintain systematic record of BUSINESS transactions whereas the main objective of ACCOUNTING is to ASCERTAIN profit or loss and the FINANCIAL position of the business. | |
| 1557. |
Give one limitation of incomplete record. Or State any two limitations of Incomplete Record System. |
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Answer» SOLUTION :(i) It does not reflect correct PROFIT. (II) BALANCE Sheet does not reflect correct financial position. |
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| 1558. |
Give one example of each of the following transactions : (i) Increase in an asset and a liability. (ii) Decrease in an asset anda liability. (iii) Increase in assets and capital. (iv) Decrease in assets andcapital. |
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Answer» Solution :(i) PURCHASE of an ASSET on credit. (ii) Payment of a liability. (iii) CAPITAL introduced by proprietor. (IV) Drawings or Expenses. |
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| 1559. |
Give one example of Error of Principle. |
| Answer» SOLUTION :RECORDING freight on PURCHASE of FIXED asset as a revenue expenditure. | |
| 1560. |
Give one example of error of Omission. |
| Answer» SOLUTION :Suppose goods for Rs. 10,000 have been purchased from Dinesh on credit and the transaction was omitted to be RECORDED in the books. The OMISSION will not affect the TRIAL BALANCE in any way, because neither has it been recorded on the credit side of Dinesh nor on the debit side of purchase account. | |
| 1561. |
Give one example of error of Commission. |
| Answer» SOLUTION :PURCHASE of GOODS from Ravi for Rs. 5,000 on CREDIT entered in the purchase books as Rs. 500 | |
| 1562. |
Give one example of Compensating Error. |
| Answer» Solution :The total of PURCHASES BOOK is posted in the LEDGER as RS. 10,000 in place of Rs. 1,00,000 and at the same time total of Sales Book is posted as Rs. 1,00,000 instead of Rs. 1,90,000. These two errors neutralise the EFFECT of each other. | |
| 1563. |
Give one example each of 'provision' and 'reserve' |
| Answer» Solution :`{:("Provision":,"Provision FO Tax"),("RESERVE":,"GENERAL Reserve"):}` | |
| 1564. |
Give one distinction between books of original entry and ledger. |
Answer» SOLUTION :
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| 1565. |
Give one difference between provision and reserve. |
| Answer» SOLUTION :Provision is a CHARGE on PROFIT whereas RESERVE is an appropriation of profit. | |
| 1566. |
Give one advantage of Ledger. |
| Answer» Solution :A TRIAL BALANCE can be PREPARED with the help of LEDGER balances which helps in ascertaining the ARITHMETICAL accuracy of the accounts. | |
| 1567. |
Give one advantage of maintaining a Cash Book . |
| Answer» SOLUTION :It is a journal as well as LEDGER . When a CASH book is MAINTAINED , there is no need of opening a SEPARATE cash account in ledger . | |
| 1569. |
Give fundamental accounting equation. |
| Answer» SOLUTION :ASSETS = LIABILITIES + CAPITAL | |
| 1570. |
Give any two objectives of accounting. |
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Answer» Solution :1. To KEEP SYSTEMATIC record of business transactions. 2. To ASCERTAIN profit earned or LOSS suffered during a particular period. |
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| 1571. |
give any two items that are debited to Profit and Loss Account |
| Answer» Solution :(i) Business PROMOTION EXPENSES, and (ii) INSURANCE PREMIUM | |
| 1572. |
give any two items that are credited to Profit and Loss Account |
| Answer» Solution :(i) GROSS PROFIT, and (ii) INTERSET earned on FIXED deposits | |
| 1573. |
Give any two examples of Intangible Assets |
| Answer» SOLUTION :(i) GOODWILL, (ii) Patents, (III) Trademarks | |
| 1574. |
Give any two examples of Current Assets |
| Answer» SOLUTION :Stock-in-Trade (INVENTORIES) and CASH in HAND | |
| 1575. |
Give any two causes of Depreciation. |
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Answer» Solution :CAUSES of depreciation are: (i) use of asset, and(II) OBSOLESCENCE. |
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| 1576. |
Give any three examples of revenues. |
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Answer» Solution :(i) Amount RECEIVED from sale of goods, (II) Amount received fromproviding service to customers, (iii) Receipts of commission, INTEREST, rent ETC. |
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| 1577. |
Give an example ofa transaction due to which owner's capital and an asset will decrease |
| Answer» Solution :GOODS taken by the PROPRIETOR for PERSONAL USE. | |
| 1578. |
Give an example of recording in wrong Subsidiary Book. |
| Answer» SOLUTION :GOODS RETURNED to KABIR of Rs. 5,000 RECORDED in the Sales Return Book. | |
| 1579. |
Give an example of error of principle. |
| Answer» Solution :PURCHASE of furniture is DEBITED to purchase account INSTEAD of furniture account. | |
| 1580. |
Give an example of decrease in an asset and decrease in a liability. |
| Answer» SOLUTION : CASH PAID to a CREDITOR. | |
| 1582. |
Give an example of a transaction which increases one liability and decreases another. |
| Answer» SOLUTION : ACCEPTANCE of BILLS PAYABLE. | |
| 1583. |
Give an example of a transaction which has offect on two items on the assets side. |
| Answer» SOLUTION :SALES of GOODS on CREDIT. | |
| 1584. |
Give an example of a transacticn where an asset will increase and also the hability. |
| Answer» SOLUTION :GOODS PURCHASED an CREDIT | |
| 1585. |
Give an example of a transacticn where an asset and owner's capital will increase |
| Answer» SOLUTION :CAPITAL INTRODUCED by the PROPRIETOR. | |
| 1586. |
Give an example for each of the following type of transactions : (i) Increase in one asset, decreae in another asset. (ii) Increase in asset, increase in liability. (iii) Increase in asset, increase in owner's capital. (iv) Decease in asset, decrease in liablility. (v) Decrease in asset, decrease in owner's capital. |
| Answer» Solution :`{:((i),"Purchase of MACHINERY for Cash",:,"Increase in Machinery and decrease in Cash"),((ii),"Purchase of Machinery on Credit",:,"Increase in Machinery and increase inliability"),((iii),"Capital INTRODUCED by PROPRIETOR",:,"Increase in Cash and increase in Capital"),((iv),"Payment to Creditors",:,"Decrease inCash and decrease in Creditors"),((v),"Cash withdrawn by proprietor from thebusiness for PERSONAL use",:,"Decrease in Cash and decrease in Capital"):}` | |
| 1587. |
Give an example for each of the following types of transactions: 1. Increase in one asset, decrease in another asset 2 Inerease in asset, increase in liability. 3.Inerease in asset, increase in owner's capital 4 Decrease in asset, decrease in liability 5. Decrease in asset, decrease in owner's capital. 6 Decrease in liabilities, increase in owner's capital. 7 Increase in one liability, decrease in another liability 8. Increase in liabilities, decrease in owner's capital |
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Answer» Solution :1. Purohase of furniture for cash-INCREASE in furniture and DECREASE in cash. 2. Parchase of furniture on credit-Increase in furniture and increase in liability. 3. Capital INTRODUCED by proprietor-Increase in cash and increase in capital. 4. Payment to creditors-Decrease in cash and decrease in creditors. 5. Cash withdrawn by proprietor-Decrease in cash and decrease in capital. 6. Conversion of partner's loan into capital-Increase in capital and decrease in loan 7 Bills Payable accepted-Increase in bills payable and decrease in creditors. 8. OUTSTANDING expenses provided-Increase in creditors for outstanding expenses and decrease in capital. |
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| 1588. |
Give a formula to calculate the 'Cost of Goods Sold' |
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Answer» Solution :Cost of GOODS Sold = Opening Stock + NET PURCHASES + Direct EXPENSES - Closing Stock Or = Net Sales - Gross Profit |
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| 1590. |
Ghanshyam is a furniture dealer. Which one of the following will not be recorded in his books? |
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Answer» Purchase of TIMBER for RS. 50,000 |
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| 1592. |
Ganga Ltd. purchased a machinery on January 01, 2014 forRs. 5,50,000 and spent Rs. 50,000 on its installation. On September 01, 2014 it purchased another machine forRs 3,70,000.On May01,2015 itpurchased another machine for Rs. 8,40,000 ( including installation expenses). (a) Machinery account and depreciation account for the years 2014, 2015, 2016 and 2017. (b) If depreciation is accumulated in provision for Depreciation account then prepare machine accountand provision for depreciation account for the years 2014, 2015, 2016 and 2017. |
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Answer» SOLUTION :(a) BALANCE of MACHINE accountas on 01.01.15 `Rs`.12,22,666. (b) Balance of provision for DEP. ACCOUNT as on 01.01.15`Rs`.5,87,334 |
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| 1593. |
From the information given below you are required to calculate the cash paid for the inventory: |
| Answer» SOLUTION : RS 1,59,500 | |
| 1594. |
From the following Trial Balance you are required to prepare trading and profit and loss account for the year ending March 31, 2017 and Balance Adjustments 1. Closing stock valued at Rs.36,000. 2. Private purchases amounting to Rs.5000 debited to purchases account. 3. Provision for doubtful debts @ 5% on debtors. 4. Sign board costing Rs. 4,000 includes in advertising. 5. Depreciate furniture by 10%. |
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| 1595. |
From the following Trial Balance, Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date: On 31st March, 2019 the stock was valued at Rs 1,00,000 |
Answer» SOLUTION : 
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| 1596. |
From the following Trial Balance, prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date : Adjustments : (i) Closing Stock is Rs6,000 at cost. (ii) Goods costing Rs 1,000 were distributed among staff members as free of cost while godds costing Rs 500 were taken by proprieter for his personal use. These goods were purchased paying CGST and SGST @6% each. (iii) Credit sale to Naresh of Rs 2,000 plus IGST @12 % was not recoreded in the sales Book. (iv) Closing stock included goods coasting Rs 1,000 which were sold and recorded as sales but not delivered to the customer. Maintain Provision for Doubtful Debts @5%. |
Answer» Solution :   `*` Balance in OUTPUT IGST = RS 8,000 (as PER Trial Balance ) + Rs 240 (GST on Sale on NARESH ) = Rs 8,240. |
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| 1597. |
From the following Trial Balance of Shradha as on 31st March, 2019, prepare Trading and Profit and Loss Account and Balance Sheet: Adjustments : (i) Closing Stock Rs 64,000. (ii) Wages outstanding Rs 2,400. (iii) Bad Debts Rs 600. (iv) Provision for Doubtful Debts to be 5%. (v) Rent is paid for 11 months. (vi) Insurance premium is paid per annum, ended 31st May, 2019. (vii) Loan form the bank was taken on 1st October, 2018. (viii) Provides Depreciation on machinary @ 10% and on Furniture @ 5%. |
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| 1598. |
From the following Trial Balance of Rajan, prepare Trading and Profit and Loss Account for the year ended 31st March , 2019 and Balance Sheet as at that date after taking into account the adjustments given below: Adjustments: (i) Stock at cost on 31st March, 2019 was rs 18,000. Its Net Realisable Value (market value) was rs 15,000, (ii) Insurance of rs 400 was prepaid, (iii) Outstanding liabilities were: Salaries rs 2,000, Taxes rs 1,300, and (iv) Depending Building at 2%p.a |
Answer» SOLUTION : 
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| 1599. |
From the following Trial Balance of Ram Narain as at 31st March, 2019, prepare Trading and Profit and Profit and Loss Account and Balance Sheet. Following further information was given : (i) Wages for March, 2019 amounting to Rs 2,100 have not yet been paid. (ii) General Expenses include Insurance Premium of Rs 600 paid in advance for the next year. (iii) Provision for Doubtful Debts @5%on Sundry Debtors is to be made. (iv) Depreciation is to be charged as follows: Land and Building @2% Mechinery @10% and Furniture and Fixtures @15%. (v) Loan from Mrs. Ram Narain was taken on 1st October, 2018. Interest has not yet been paid. (vi) Value of stock at hand on 31st March, 2019 was Rs14,900. (vii) Manager is entitled to a commission of 10% of the net profit after charging the commission. |
Answer» SOLUTION :  Working Notes : 1. Profit before charging COMMISSION is `Rs31,000`. Commission payable @`10%` of net profit after charging such commission. Manager's Commission `="Net Profit" xx(%"of Commission ")/(100+%"of Commission")=Rs 31,000xx(10)/(110)=Rs2,818`. 
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| 1600. |
From the following Trial Balance of Ram Chandra on 31st March, 2019 prepare Trading and Profit and Loss Account and Balance Sheet. Value of Closing Stock as on 31st March, 2019 was Rs 50,000 |
Answer» SOLUTION :
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