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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.
| 2151. |
Balance shown in the Balance Sheet is of |
| Answer» Solution :Adjusted Cash Book | |
| 2152. |
Balance of Provision for Doubtful on 1st April, 2017.Rs Bad debts written off in the year ended 31st March, 2018. 3,000 Sundry Debtors after writing off bad debts.2,000 Bad debts after written off in the year ended 31st March, 2019.60,000 Sundry debtors before writing off bad debts.500 Maintain Provision for Doubtful debts at 5%.20,500 Prepare Bad Debts Account and Provision for Doubtful debts account . |
Answer» Solution :  Notes : 1. For the YEAR ended 31st March, 2018, BALANCE in the Provision for Doubtful Account (OLD Provision - Rs 3,000) is less than the amount required to meet Bad Debts (Rs 2,000) and New Provision (Rs 3,000), therefore, the short amount of Rs 2,000(i.e., `Rs 2,000 + Rs 3,000 - Rs 3,000`)is debited to Profit and Loss Account. 2. For the year ended 31st March, 2019, balance in the Provision for Doubtful Debts Account (Old Provision - Rs 3,000) is more than the amount required to meet Bad Debts (Rs 500) and New Prvision (Rs 1,000), therefore, the excess amount of Rs 1,500 is CREDITED (written back) to Profit and Loss Account. |
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| 2153. |
Balance sheet is prepared to know |
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Answer» FINANCIAL PERFORMANCE |
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| 2154. |
Balance of petty cash is an asset for the form .Do you agrree? |
| Answer» SOLUTION :YES , it is an ASSET | |
| 2156. |
Balance of nominal accounts are tranferred to Trading Account or ________ Account. |
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Answer» |
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| 2159. |
Balance of Capital Account is shown as |
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Answer» CAPITAL ACCOUNT |
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| 2161. |
Balance in Output CGST Account is shown |
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Answer» in the ASSETS side of the BALANCE Sheet |
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| 2162. |
Balance in Input IGST Account is shown |
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Answer» in the ASSETS side of the BALANCE SHEET |
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| 2165. |
Babu commenced business on 1st April, 2018 with a capital of Rs. 2,50,000. Out of this he purchased Furniture for Rs. 40,000. During the year he borrowed from his wife Rs. 50,000 and introduced a further capital of Rs. 30,000. From the following particulars extracted from his books of account which are kept under Sinlge Entry System, you are required to prepare the Trading and Profit and Loss Account for the year ended are reuired to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2019 and the Balance Sheet as on that date: Babu used goods of Rs. 13,000 for personal purposes which is not recorded in the books. On 31st March, 2019 his Debtors were Rs. 2,10,000 and Creditors Rs. 1,50,000. Stock-in-Trade on 31st March, 2019 was valued at Rs. 1,00,000. |
Answer» SOLUTION : 
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| 2167. |
Avtar established a small business and has not maintained regular books and records his transcations through acccounting equation .Whether his decision is correct? What is the effect thereof? |
| Answer» Solution :RECORDING the transactions by means of acconting equation is that the accounts are being maintained on double ENTRY sysem of accounting .In effect , avtar will know what his liabilites are and what are the assets owned by him. Since his business is small and presuming that the accounts are maintained by the proprietor himself the decision seems to be correct .Had ffhe maintained the accounts maintaining completeset of books, it WOULD have required specialised knowledge besides it being expensive and time consuming. | |
| 2168. |
At what value are the goods taken for personal use recored in the books of account and why ? |
| Answer» Solution :They are RECORDED at PURCHASE COST because it is not a SALE but DRAWING. | |
| 2169. |
At what value are the goods distributed as sample accounted and why? |
| Answer» Solution :They are ACCOUNTED at PURCHASE cost because it is not a sale but advertisement EXPENSE. | |
| 2170. |
At the time of preparing the financial statements, Drawings Account is transferred to capital account .Is it correct? |
| Answer» SOLUTION :YES, it is CORRECT | |
| 2171. |
At the end of financial year, during which sale of goods was worth Rs. 5,00,000,the closing stock is valued at Rs. 40,000. This is ……………… |
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Answer» An EVENT |
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| 2173. |
Assets which have a finite life depending upon the value of natural resources extracted is |
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Answer» FICTITIOUS ASSETS |
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| 2175. |
Assets (except Securities) may be valued under Ind-AS on. |
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Answer» HISTORICAL COST. |
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| 2177. |
Assets and Liabilities of a particular accounting period are shown in the Balance Sheet. Do you agree ? |
| Answer» Solution :Assets and liabilities at a particular DATE are shown in the BALANCE SHEET | |
| 2178. |
Ashok of Delhi started business on 1st April ,2019 with Machinery of ₹ 4,00,000 and Furniture of ₹1,00,000. He purchased these assets from Delhi and paid by cheque from his Savings Account. Heintroduced capital of ₹ 1,00,000 in case. Journalise the following transactions for the month of April, prepare the Ledger Accounts and balance them : CGST and SGST is levied @ 6% each on intra-state transaction and @ 12% on inter-state transactions marked with (*). |
Answer» SOLUTION :     
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| 2179. |
Ascetain Cost of Goods Sold from the following {:(,Rs,|,,Rs),("Indirect Expenses","15,200",,"Direct Expenses","18,600"),("Sales","1,20,000",,"Net Purchases","72,000"),("Return Inwards","12,000",,"Return Outwards","8,000"),("Opening Inventory","16,000",,"Closing Inventory ","28,000"):} |
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Answer» SOLUTION :Cost of Goods Sold = Opening INVENTORY + Purchases (Net) + DIRECT Expenses - Closing Inventory `= RS 16,000 + Rs 72,000 + Rs 28,000 = Rs 78,600` |
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| 2181. |
Ascertain appropriate missing value (figure) by preparing Total Debtors Account from the following information: |
Answer» Solution : *Proceeds of an printer DOEN not have EFFECT on the TOTAL Debtors ACCOUNT. |
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| 2182. |
As per Income Tax Act, accounting period is : |
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Answer» From 1st January to 31st December |
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| 2183. |
As per Dual Aspect Concept : |
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Answer» ASSETS = LIABILITIES - Capital |
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| 2184. |
Aruna decided to start busiess of fashion garments under the name of M/s Designer Wear from 1st April, 2018. She had saving ₹ 10,00,000. She invested ₹ 3,00,000 out of her saving and borrowed and equal amount from State Bank of India. She purchased a commercial space of 500sq. feet for ₹5,00,000. The space so purchased was suitably renovated to make it ready as showroom. She purchased furniture and fixtures for ₹75,000 plus CGST and SGST9% each. Total amount of bank loan is tobe repaid in 20 quarterly instalments beginnig 30th June, 2018. Annual rate of interest is 12% p.a. Repaymetn Schedule of Bank Loan in the first year is as follows : She started business on1st April, 2018 getting is registered under Goods and Services Tax (GST). In view of further capitalrequiremet, she further deposited ₹ 2,00,000 in the bank. She paid Security Deposits of ₹ 5,000 for the electricity connection with BSES Rajdhani Power Ltd. and ₹ 2,000 plus CGST and SGST @ 9% each to MTNL for telephone connection. Furniture for ₹10,000 plus CGST and SGST @ 9% each was purchsed further. All payments were to be mady by cheque. All the receipts were is cash and to be deposited in the bank in the morning of next day. At the end of the year, her results showed the following : All its purchased and sales were intra-state transactions subject to CGST and SGST @ 9% each. Transactions marked with (*) are not subject to levy of GSTand on transactions marked with (**), GST is levied but set-off is not allowed. She withdrew ₹ 5,000 by cheque each month for her personal expenses. Bank Loan was sevived and instalments were paid regularly. 1. Journalise the above transactions in the book of M/s Designer wear, post them into the Ledger and prepare the Trial Balances. 2. Also, prepare its Profit and Loss Accounts and Balance Sheet. Charge deprecitation @ 5% on Building and 10% on Furniture and Fixtures. Closing Stock at the end of the year was ₹ 5,50,000. 3. Prepare Bar Diagrams and Pie, Charts showing the expenses. |
Answer» Solution :INTRODUCTION : PROJECT is to record the transactions in Journal Book, post them into Legder Accounts, drawing a Trial BALANCE and preparing Profit and Loss Account and Balance Sheet.         * Nominal Accounts are not balanced but are closed at the end of the YEAR by tranferring them to Trading and Profit and Loss Account. Here, they have been balanced only for the purpose for showing them in Trial Balance.   Working Note: Adjustment of GST: `{:(,CGST(₹),SGST(₹)),("Input GST (Dr.)","1,72,980","1,72,980"),("LESS: Output GST (Cr.)",underline"1,80,000",underline"1,80,000"),("Balance in Output GST (GST Payable )(Cr.)",underlineunderline"7,020",underlineunderline"7,020"):}` BarDiagram and Pie Charts for Expenses 
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| 2185. |
Arun is a trader. While preparing his final accounts on 31st March, 2018 , he made a provision for doubtful debts @ 4%of the sundry debtors amounting to Rs 42,000. During the year ended 31st March, 2019, doubtful debts amounted to Rs 3,400. On 31st March, 2019, sundry debtors were Rs 56,500 and the provision for doubtful debts was maintained at the same rate. Show the entries to record the above matters in Arun's Ledger Accounts. |
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Answer» |
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| 2186. |
Are there any accounts which are not considered while preparing Trial Balance by Balance Method ? |
| Answer» Solution :YES. Accounts which show no BALANCE are not considered while PREPARING Trial balance by Balance Method. | |
| 2188. |
Application softwares |
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Answer» can OPERATE on its own. |
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| 2189. |
Application and software cannot operate without the operating software. |
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Answer» |
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| 2190. |
Anuj has prepared the accounts showning closing stock at higher value byvaluing them at market price so that higher profits are shown , which in turn will hepl getting better loan facility from the bank is it in line with the good business practices? |
| Answer» Solution :The ACTION of anuj is not in line with good business practice .Besides it amounts BTO misleading th bank.The stock should be valued at lower of cost or net REALISABLE value (market value) folwing the prudence CONCEPT. | |
| 2191. |
Anil had the following transactions: 1. Commenced business with cash ₹50,000. 2. Purchased goods for cash ₹20,000and credit ₹30,000. 3. Sold goods for cash ₹40,000, costing ₹30,000. 4. Rent paid ₹500, Salaries ₹5,000. 5. Rent outetanding ₹100, Salaries Outstanding ₹1,000. 6. Bought furniture for ₹5,000 on credit. 7. Bought refrigerator for personal use ₹5,000. 8. Purchased computer for cash₹20,000. 9.Cash withdrawn for personal use ₹10,000. 10. Interest on drawings charged ₹500 and the interest onCapital ₹1000. Use Accounting Equation to show the effected the above transactions on his assets, liabilities and capital and also show his Balance Sheet. |
Answer» SOLUTION :
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| 2192. |
Anil had the following transactions: 1. Commenced business with cash ₹50,000. 2. Purchased goods for cash ₹20,000and credit ₹30,000. 3. Sold goods for cash ₹40,000, costing ₹30,000. 4. Rent paid ₹500, Salaries ₹5,000. 5. Rent outetanding ₹100, Salaries Outstanding ₹1,000. 6. Bought furniture for ₹5,000 on credit. 7. Bought refrigerator for personal use ₹5,000. 8. Purchased computer for cash₹20,000. 9.Cash withdrawn for personal use ₹10,000. 10. Interest on drawings charged ₹500 and the interest onCapital ₹1000. Use Accounting Equation to show the effected the above transactions on his assets, liabilities and capital and also show his Balance Sheet. |
Answer» SOLUTION :
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| 2193. |
Anand Ltd., arrived at a net income of Rs 5,00,000 for the year ended March 31, 2017. Depreciation for the year was Rs 2,00,000. There was a profit of Rs 50,000 on assets sold which was transferred to Statement of Profit and Loss account. Trade Receivables increased during the year Rs 40,000 and Trade Payables also increased by Rs 60,000. Compute the cash flow from operating activities by the indirect approach |
| Answer» SOLUTION : RS 6,70,000 | |
| 2194. |
Analyse the following transactions , state the nature of accounts and state which account will be debited and which account will be credited on the basis of Modern Classification of Accounts : {:( ,,, "₹") , (1., "Dinesh started business with cash" ,, 5","00"," 000), (2.,"Borrowed from Naresh" ,, 1","00","000), (3.,"Purchased furniture for cash from Raj Furniture House" ,, 20"," 000), (4., "Purchased furniture from Delhi Safe",,40","000),(5.,"Purchased goods for cash",,15","000),(6.,"Purchased goods from Mahesh",,30","000),(7.,"Sold goods for cash to Karim" ,,25","000),(8.,"Sold goods to shyam on credit",,30","000),(9.,"Cash received fromShyam",,20","000),(10.,"Cash paid to Mahesh",,10","000):} |
Answer» SOLUTION :
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| 2195. |
Analyse the effect of each transaction on assets and liabilities and show that the both sides of Accounting Equation (A = L + C)remains equal : i) Introduced 8,00,000 as cash and50,000 by stock. (2)Purchased plant for3,00,000 by paying15,000 in cash and balance at a later date. (iii) Deposited 6,00,000 into the bank. (iv) Purchased office furniture for 1,00,000 and made payment by cheque. (v) Purchased goods worth 80,000 for cash and for 35,000 in credit. (vi) Goods amounting to45,000 was sold for 60,000 on cash basis. (vii) Goods costing to 80,000 was sold for1,25,000 on credit. (viii) Cheque issued to the supplier of goods worth35,000. (ix) Cheque received from customer amounting to75,000. (x) Withdrawn by owner for personal use25,000. |
Answer» Solution :Transaction (i) It affects Cash and Inventory on the ASSETS side and Capital on the other hand. There is increase in cash by8, 00,000 and Inventory of goods by50,000 on assets side of the equation. Capital is increased by8, 50,000.  Transaction (ii) It affects Cash and Plant and Machinery on the assets side and liabilities on the other side of the equation. There is an increase in plant and machinery by3, 00,000 and decrease in cash by15,000. Liability to pay to the SUPPLIER of plant and machinery increases by2,85,000  Transaction (iii)It affects assets side only. The composition of the asset side changes. Cash decreases by6,00,000 and by the same amount bank increases.  Transaction (IV) It affects assets side only. The composition of the asset side changes. Furniture increases by1,00,000 and by the same amount bank decreases.  (V) It affects Cash and Inventory on the assets side and liability on the other side. There is decrease in cash by80,000 and increase of inventory of goods by 1,15,000 on the assts side of the equation. Liabilities increases by35,000.  Transaction (VI) It affects Cash and Inventory on the assets side and capital on the other side. There is an increase in cash by60,000 and decrease in inventory of goods by45,000 on the assets side of the equation. Capital increases by 15000  Transaction (vii)It affects Debtors and Inventory on the assets side and capital on the other side. There is increase in debtors by1, 25,000 and decrease in Inventory of goods by80,000 on the assets side of the equation. Capital increases by Rs.45, 000.  Transaction (viii) It affects Bank on the assets side on ONE side and liability on the other side. There is decrease in bank by35,000 on the assets side and liability also decreases by 35000  Transaction (ix) It affects assets side only. The composition of the assets side changes. Bank increases by75,000 and by the same amount Debtors decreases.  It affects Cash on the asset side and Capital on the other hand. There is decrease in Cash by25,000 on the assets side whereas capital decreases by25,000 
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| 2196. |
Analyse the following transactions, state the nature of accounts and state which account will be debited and which account will be credited: {:(,,,"₹"),(1.,"Anujstarted business with cash",,1","00","000),(2.,"Deposited cash into bank for opening an account",,50","000),(3.,"Withdrew cash for personal use",,5","000),(4.,"Withdrew cash from bank for office use",,10","000),(5.,"Received a cheque from debtorShyam",,5","000),(6., "Deposited Shyam's cheque next day.",,),(7.,"Paidto a creditor Mahesh by cheque",,10","000),(8.,"Paid salary to staff",,20","000),(9.,"Paid rent by cheque",,6","000),(10.,"Paid interest onloan",,5","000):} |
Answer» SOLUTION :
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| 2197. |
An old machinery was sold to Manish for Rs. 56,000. Name the book in which this entry will be recorded. |
| Answer» SOLUTION :JOURNAL PROPER. | |
| 2198. |
An investment company has securities as current assets having market value substantially lower thanthe cost price . The company continues to show them at cost . Do you think the Concept of Prudence is being followed? |
| Answer» Solution :No , the COMPANY is not following the CONCEPT of Prudence . It should bring down the VALUE of currect assets to its market value because the finacial statements will otherwise SHOW a better picture than what it actually is. | |
| 2199. |
An item of ₹53 has been debited to a personal account as 35. It is an error of _________ |
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Answer» |
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| 2200. |
An infrastructure company building highways has a contract to construct road of 25 kms . The project is likely to be completed in 4 years . It has approached a bank seeking finance . The bank has requested them to prepare projected yearly accounts whereas the company has argued that since the project shall be completed in 4 years , projected accounts should be prepared for thr end of the project . Is the company correct in its view? Give reasons. |
| Answer» Solution :No , the COMPANY is not correct because the bank requires YEAR -wise projected accounts firstly , to assess the time when the funds shall be requiredand also how much funds shall be REQUIRED, and secondly it shall be in a position to MONITOR the progress of the project at regular INTERVALS. | |