1.
Current assets are converted into cash
a) Within one year
b) Within two year
c) With in three year
d) None of these
2. Stock owned by a firm are classified as
a) Fixed asset
b) Current asset
c) Current liability
d) None of these
3. Loss by fire of goods is credited to
a) Profit and loss a/c
b) purchase a/c
c) loss by fire a/c
d) None of these
4. Cost are equal to
a) Cost of good sold + gross profit
b) Cost of good sold – gross profit
c) Gross profit – cash of good sold
d) None of these
5. Wages paid by a trader is shown
a) On the debit side of trading account
b) On the debit side of profit and loss account
c) as deduction from capital in balance sheet
d) as addition to capital in balance sheet
6. Preliminary expense will be a
a) Fictitious assets
b) Tangible assets
c) Intangible assets
d) Expenses
7. Return outward appearing in the trial balance is deducted from
a) Purchases
b) Sales
c) Return outward
d) None of these
8. Balance in input IGST account is shown
a) In the assets side of balance sheet
b) In the liabilities side of balance sheet
c) In the expense in profit and loss account
d) at an income in profit and loss account
9. Balance in output CGST account is shown
a) In the asset side of balance sheet
b) In the liability side of balance sheet
c) as an expense in profit and loss account
d) as on income in profit and loss account
10. Statement prepared to know profit or loss and financial position of the business are called
a) Financial statement
b) Bank Reconciliation
c) Trial Balance
d) All of these
11. Account which shows gross profit or gross loss of the business is.
a) Profit and loss account
b) Balance sheet
c) Trial balance
d) Trading account
12. Trading account is prepared to know
a) Net profit or loss of business
b) Gross profit or loss of business
c) Both (a) and (b)
d) Financial position of business
13. On debit side of trading account we record
a) Direct expenses
b) Indirect expenses
c) Both of above
d) None of these
14. Closing stock is recorded in
a) Profit & Loss Account
b) Trading Account and Balance Sheet
c) Balance Sheet only
d) None of these
15. Profit and loss account shows the
a) Total capital employed
b) Profit and loss through sale of assets
c) Profit earned by business
d) None of these
16. Operating expense are recorded in
a) Trading Account
b) Profit and Loss Account
c) Balance Sheet
d) All of these
17. Expenses relating to sale of goods are shown in
a) Profit and loss account
b) Trading account
c) Trading and profit and loss account
d) Balance sheet
18. Carriage outward is an example of
a) Direct expenses
b) Indirect expenses
c) Indirect income
d) Direct income
19. Which are indirect expenses of the followings
a) Salary expenses
b) Insurance expense
c) Rent expense
d) All of these
20. Income earned from other than routine activities is called
a) General Income
b) Direct Income
c) Indirect Income
d) None of these
21. Balance sheet is a statement of
a) Assets
b) Capital
c) Liabilities
d) All
22. Properties, things and receivable having certain value owned by business are called
a) Assets
b) Liabilities
c) Goods
d) None of these
23. Any physical thing that has money value is
a) Intangible assets
b) Fictitious assets
c) Goodwill
d) Tangible Assets
24. Assets which do not have physical existence are called
a) Tangible assets
b) intangible assets
c) Contingent Liabilities
d) none of the above
25. Accounting furnishes data on
a) Income and cash for the Manager
b) Financial conditions of the institutions
c) Company’s tax liabilities for a particular year
26. Copyright, patent and trademarks are
a) Current assets
b) Fixed assets
c) Intangible assets
d) Investment
27. Gross profit is
a) Cost of good sold + opening stock
b) Sale – Cost of good sold
c) Sale of stock
d) None of these
28. Net profit is computed in the
a) Profit + Loss Account
b) Balance Sheet
c) Trial Balance
d) Trading Account
29. Suppliers personal account are seen in the
a) Sale Ledger
b) Purchase Ledger
c) Nominal Ledger
d) General Ledger
30. Sales invoice are first entered in
a) The Cash Book
b) The Purchases Journal
c) The Sale Journal
d) The Sale Account
31. Outstanding income is
a) an asset
b) a liability
c) an expense
d) an income
32. If we take goods for own use we should
a) Debit drawings account and credit purchases account
b) Debit drawing account and credit stock account
c) Debit sales account credit stock account
d) Debit purchases account, credit drawing account
33. We can say that the business is in profit when
a) Assets exceeds expenditure
b) Income exceeds liabilities
c) Income exceeds expenditure
d) Income exceeds liabilities
34. Which types of expenses are paid out of gross profit?
a) General expenses
b) Financial expenses
c) Selling Expenses
d) All of above
35. Which of the following is an example of business liability
a) Land
b) Building
c) Cash
d) bank loan
36. The unfavourable balance of profit + loss account should be
a) Added in liabilities
b) Subtracted from assets
c) Subtracted from capital
d) None of these
37. What kind of expenses are paid from trading account?
a) Selling expenses
b) Financial expenses
c) General expenses
d) none of these
38. Which option given a review report on the form’s financial status at a specified date?
a) Income and expenditure account
b) Balance sheet
c) Cash flow statement
d) Profit loss account
39. Which of the option is an example of business liability
a) Creditor
b) Cash
c) Building
d) Land
40. Depreciation is provided on
a) Current assets
b) Intangible assets
c) Fixed assets
d) All of these
41. Outstanding expense is
a) an assets
b) a liability
c) an expenses
d) an income
42. The Manager is entitled to a commission of 10% on profit before deducted his commission.
The profit is 9000, therefore the commission will be
a) 1000
b) 900
c) 800
d) 1100
43. Accrued income is shown as
a) An asset
b) A liability
c) An expense
d) An Income
44. Indirect expense is shown at
a) credit side of trading account
b) debit side of trading account
c) credit side of P/L a/c
d) debit side of P/L a/c
Answers to Trading, P/L Account and balance sheet
1) A
2) B
3) B
4) D
5) A
6) A
7) A
8) A
9) B
10) A
11) D
12) B
13) A
14) B
15) C
16) B
17) A
18) B
19) D
20) C
21) A
22) A
23) D
24) B
25) B
26) C
27) B
28) A
29) B
30) C
31) A
32) A
33) C
34) D
35) D
36) C
37) D
38) B
39) A
40) C
41) B
42) A
43) A
44) B
