1. Which of the following is not a sub-field of accounting?
(a) Management accounting.
(b) Cost accounting.
(c) Financial accounting.
(d) Book-keeping.

2. Revenue from sale of products, is generally, realized in the period in which
(a) Cash is collected.
(b) Sale is made.
(c) Products are manufactured.
(d) None of the above.

3. The determination of expenses for an accounting period is based on the principle of
(a) Objectivity.
(b) Materiality.
(c) Matching.
(d) Periodicity.

4. It is essential to standardize the accounting principles and policies in order to ensure
(a) Transparency.
(b) Consistency.
(c) Comparability.
(d) All of the above.

5. Change in accounting estimate means
(a) Differences arising between certain parameters estimated earlier and reestimated
during the current period.
(b) Differences arising between certain parameters estimated earlier and actual
results achieved during the current period.
(c) Differences arising between certain parameters re-estimated during the
current period and actual results achieved during the current period.
(d) Both (a) and (b).

6. Which account is the odd one out?
(a) Office Furniture & Equipment.
(b) Freehold Land and Buildings.
(c) Stock of raw materials.
(d) Plant and Machinery.

7. In Double Entry System of Book-keeping every business transaction affects:
(a) Two accounts.
(b) Two sides of the same account.
(c) The same account on two different dates.
(d) All of the above.

8. Which of the following types of information are found in subsidiary ledgers, but not
in the general ledger?
(a) Total cost of goods sold for the period.
(b) The quantity of a particular product sold during the period.
(c) The amount owed to a particular creditor.
(d) The portion of total current assets that consist of cash.

9. Contra entries are passed only when
(a) Double column cash book is prepared
(b) Three-column cash book is prepared
(c) Simple cash book is prepared
(d) None of the above

10. The preparation of a trial balance is for:
(a) Locating errors of commission;
(b) Locating errors of principle;
(c) Locating clerical errors.
(d) All of the above

PART II

11. Present liability of uncertain amount, which can be measured reliably by using a
substantial degree of estimation, is termed as ________
(a) Provision
(b) Liability
(c) Contingent liability
(d) None of the above

12. When preparing a Bank Reconciliation Statement, if you start with a debit balance as
per the Cash Book, then cheques issued but not presented within the period are
__________
(a) Added
(b) Deducted
(c) Not required to be adjusted
(d) None of the above.

13. Under inflationary conditions, ________ method will show highest value of closing
stock?
(a) FIFO
(b) LIFO
(c) Weighted Average
(d) None of the above

14. In the case of downward revaluation of an asset, which is for the first time revalued,
_______ account is debited.
(a) Fixed Asset
(b) Revaluation Reserve
(c) Profit & Loss account
(d) General Reserve

15. The portion of the acquisition cost of the asset, yet to be allocated is known as
________
(a) Written down value
(b) Accumulated value
(c) Realisable value
(d) Salvage value

16. If a concern proposes to discontinue its business from March 2005 and decides to
dispose off all its assets within a period of 4 months, the Balance Sheet as on March
31, 2005 should indicate the assets at their _________
(a) Historical cost
(b) Net realizable value
(c) Cost less depreciation
(d) Cost price or market value, whichever is lower

17. The balance of the petty cash is _________
(a) an expense,
(b) income,
(c) an asset.
(d) liability

18. Sales for the year ended 31st March, 2005 amounted to Rs. 10,00,000. Sales included
goods sold to Mr. A for Rs. 50,000 at a profit of 20% on cost. Such goods are still lying
in the godown at the buyer’s risk. Therefore, such goods should be treated as part of
(a) Sales.
(b) Closing stock.
(c) Goods in transit.
(d) Sales return.

19. As per Section 37 of the Indian Partnership Act, 1932, the executors would be entitled
at their choice to the interest calculated from the date of death till the date of payment
on the final amount due to the dead partner at ________ percentage per annum.
(a) 7.
(b) 4.
(c) 6.
(d) 12.

20. If del-credere commission is allowed for bad debt, consignee will debit the bad debt
amount to:
(a) Commission Earned A/c
(b) Consignor A/c
(c) Debtors A/c
(d) General Trading A/c

PART III

21. Mr. A purchased a machinery costing Rs. 1,00,000 on 1st October, 2005. Transportation
and installation charges were incurred amounting Rs. 10,000 and Rs. 4,000
respectively. Dismantling charges of the old machine in place of which new machine
was purchased amounted Rs. 10,000. Market value of the machine was estimated at
Rs. 1,20,000 on 31st March 2006. While finalising the annual accounts, A values the
machinery at Rs. 1,20,000 in his books.
Which of the following concepts was violated by A?
(a) Cost concept
(b) Matching concept
(c) Realisation concept
(d) Periodicity concept.

22. Mohan purchased goods for Rs.15,00,000 and sold 4/5th of the goods amounting
Rs.18,00,000 and paid expenses amounting Rs.2,70,000 during the year, 2005. He
paid Rs. 5000 for an electricity bill of Dec. 2004 and advance salaries amounting Rs.
15,000 was paid for the month of Jan. 2006. He counted net profit as Rs.3,50,000.
The profit calculated by him is correct according to
(a) Entity concept.
(b) Periodicity concept.
(c) Matching concept.
(d) Conservatism concept.

PART IV

23. W Ltd. issued 20,000, 8% debentures of Rs.10 each at par, which are redeemable after
5 years at a premium of 20%. The amount of loss on redemption of debentures to be
written off every year will be
(a) Rs.40,000
(b) Rs.10,000
(c) Rs.20,000
(d) Rs.8,000

24. S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are
redeemable at a premium of 10%. For the purpose of redemption, the company issued
1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of
redemption of Preference Shares, the amount to be transferred by the company to the
Capital Redemption Reserve Account will be
(a) Rs.50,000
(b) Rs.40,000
(c) Rs.2,00,000
(d) Rs.2,20,000

25. G Ltd. acquired assets worth Rs.7,50,000 from H Ltd. by issue of shares of Rs.100 at a
premium of 25%. The number of shares to be issued by G Ltd. to settle the purchase
consideration will be
(a) 6,000 shares
(b) 7,500 shares
(c) 9,375 shares
(d) 5,625 shares

26. The following information pertains to X Ltd.:
Equity share capital called up Rs.5,00,000
Calls in arrear Rs. 40,000
Calls in advance Rs. 25,000
Proposed dividend 15%
The amount of dividend payable will be
(a) Rs.75,000
(b) Rs.72,750
(c) Rs.71,250
(d) Rs.69,000

27. The subscribed share capital of S Ltd. is Rs.80,00,000 of Rs.100 each. There were no
calls in arrear till the final call was made. The final call made was paid on 77,500
shares. The calls in arrear amounted to Rs.62,500. The final call on share will be
(a) Rs.25
(b) Rs.7.80
(c) Rs.20
(d) Rs.62.50

28. A Company wishes to earn a 20% profit margin on selling price. Which of the following
is the profit mark up on cost, which will achieve the required profit margin?
(a) 33%.
(b) 25%.
(c) 20%.
(d) None of the above.

29. A, B and C are the partners sharing profits and losses in the ratio of 5:3:2, took a joint
life policy of Rs. 30,000. On the death of B what amount will be payable to each
partner.
(a) A – Rs. 22,000 and B – Rs. 8,000.
(b) A – Rs. 14,000 and B – Rs. 16,000.
(c) A – Rs. 15,000, B – Rs. 9,000 and C – Rs. 6,000.
(d) A – Rs. 10,000, B – Rs. 8,000 and C – Rs. 10,000.

30. A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1
respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B
declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If
goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050
then what amount will be transferred to the loan account of C?
(a) Rs. 70,820.
(b) Rs. 50,820.
(c) Rs. 25,820.
(d) Rs. 58,820.

31. A and B, who share profits and losses in the ratio of 3:2 has the following balances:
Capital of A Rs. 50,000; Capital of B Rs. 30,000; Reserve Fund Rs. 15,000. They admit
C as a partner, who contributes to the firm Rs. 25,000 for 1/6th share in the partnership.
If C is to purchase 1/6th share in the partnership from the existing partners A and B in
the ratio of 3:2 for Rs. 25,000, find closing capital of C.
(a) Rs. 25,000.
(b) Rs. 19,000.
(c) Rs. 20,000.
(d) Rs. 18,000.

32. P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership
with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th
share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q.
How much cash can P & Q withdraw from the firm (if any)?
(a) 3,000:1,500.
(b) 6,000:3,000.
(c) NIL.
(d) None of the above.

33. A and B are partners sharing profits in the ratio 5:3, they admitted C giving him 3/10th
share of profit. If C acquires 1/5th share from A and 1/10th from B, new profit sharing
ratio will be:
(a) 5:6:3.
(b) 2:4:6.
(c) 18:24:38.
(d) 17:11:12

34. A, B and C are equal partners. D is admitted to the firm for one-fourth share. D brings
Rs. 20,000 capital and Rs. 5,000 being half of the premium for goodwill. The value of
goodwill of the firm is
(a) Rs. 10,000
(b) Rs. 40,000.
(c) Rs. 20,000.
(d) None of the above.

35. A and B are partners with capitals of Rs. 10,000 and Rs. 20,000 respectively and
sharing profits equally. They admitted C as their third partner with one-fourth profits of
the firm on the payment of Rs. 12,000. The amount of hidden goodwill is:
(a) 6,000.
(b) 10,000.
(c) 8,000.
(d) None of the above.

36. A & B are partners sharing profits and losses in the ratio 5:3. On admission C brings
Rs. 70,000 cash and Rs. 48,000 against goodwill. New profit sharing ratio between A, B
and C are 7:5:4. Find the scarificing ratio as A:B
(a) 3:1.
(b) 4:7.
(c) 5:4.
(d) 2:1.

37. Bill and Monica are partners sharing profits and losses in the ratio of 3:2 having the
capital of Rs. 80,000 and Rs. 50,000 respectively. They are entitled to 9% p.a. interest
on capital before distributing the profits. During the year firm earned Rs. 7,800 after
allowing any interest on capital. Profits apportioned among Bill and Monica is:
(a) 4,680 and 3,120.
(b) 4,800 and 3,000.
(c) 5,000 and 2,800.
(d) None of the above.

38. A merchant sends out his goods casually to his dealers on approval basis. All such
transactions are, however, recorded as actual sales and are passed through the sales
book. On 31-12-2005, it was found that 100 articles at a sale price of 200 each sent on
approval basis were recorded as actual sales at that price. The sale price was made at
cost plus 25%. The amount of stock on approval will be amounting
(a) Rs.16,000.
(b) Rs. 20,000.
(c) Rs. 15,000.
(d) None of the above.

39. On 16.6.05 X draws a bill on Y for Rs 25,000 for 30 days. 19th July is a public holiday,
due date of the bill will be:
(a) 19th July
(b) 18th July
(c) 17th July
(d) 16th July

40. Mr Bobby sold goods worth Rs 25,000 to Mr Bonny. Bonny immediately accepted a bill
on 1.11.01, payable after 2 months. Bobby discounted this bill @ 18% p.a. on 15.11.01.
On the due date Bonny failed to discharge the bill. Later on Bonny became insolvent
and 50 paise is recovered from Bonny’s estate. How much amount of bad debt will be
recorded in the books of Bobby?
(a) 12,500
(b) 9,437
(c) 11,687
(d) 13,650

41. Ram’s acceptance to Din for Rs 8,000 renewed at 3 months on the condition that
Rs 4,000 be paid in cash immediately and the remaining amount will carry interest @
12% p.a. The amount of interest will be:
(a) 120
(b) 80
(c) 90
(d) 160

42. A draws a bill on B for Rs. 30,000. A wants to endorse it to C in settlement of Rs.
35,000 at 2% discount with the help of B’s acceptance and balance in cash. How much
cash A will pay to B?
(a) 4,300
(b) 4,000
(c) 4,100
(d) 5,000

43. A drew a bill on B for Rs. 50,000 for 3 months. Proceeds are to be shared equally. A
got the bill discounted at 12% p.a. and remits required proceeds to B. The amount of
such remittance will be:
(a) 24,250
(b) 25,000
(c) 16,167
(d) 32,333

44. A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd make an
equity issue of 100000 equity shares of Rs 10 each. 80% of the issue are subscribed
by the party. The profit sharing ratio between A and B is 3:2. The balance shares not
subscribed by the public, purchased by A and B in profit sharing ratio. How many
shares to be purchased by A?
(a) 80000 shares
(b) 72000 shares
(c) 12000 shares
(d) 8000 shares

45. R and M entered into a joint venture to purchase and sell new year gifts. They agreed
to share the profit and losses equally. R purchased goods worth Rs 1,00,000 and spent
Rs 10,000 in sending the goods to M. He also paid Rs 5,000 for insurance. M spent
Rs 10,000 as selling expenses and sold goods for Rs.2,00,000. Remaining goods were
taken over by him at Rs 5,000. Find out profit on venture.
(a) Rs.70,000
(b) Rs.75,000
(c) Rs.80,000
(d) Rs.85,000

46. A purchased goods costing 2,00,000, B sold 4/5th of the goods for Rs 2,50,000.
Balance goods were taken over by B at cost less 20%. If a same set of books is
maintained, find out profit on venture.
(a) Rs. 82000
(b) Rs .90000
(c) Rs. 50000
(d) None

47. If unsold goods costing Rs 20000 is taken over by Venturer at Rs 15000, the Joint
Venture A/c will be credited by:
(a) Rs.20000
(b) Rs.15000
(c) Rs.5,000l
(d) Nil

48. X of Kolkata sends out goods costing Rs 1,00,000 to Y of Delhi. 3/5th of the goods were
sold by consignee for Rs 70,000. Commission 2% on sales plus 20% of gross sales
less all commission exceeds cost price. The amount of Commission will be:
(a) Rs.2833
(b) Rs.2900
(b) Rs.3000
(d) Rs.2800

49. Rahim of Kolkata sends out 1000 boxes to Ram of Delhi costing Rs 100 each at an
Invoice Price of Rs 120 each. Goods send out on consignment to be credited in general
trading account will be:
(a) Rs.1,00,000
(b) Rs.1,20,000
(c) Rs.20,000
(d) None

50. Goods sent out on consignment Rs.2,00,000. Consignor’s expenses Rs.5,000.
Consignee’s expenses Rs.2000. Cash sales Rs.1,00,000, credit sales Rs.1,10,000.
Consignment stock Rs.40,000. Ordinary commission payable to consignee Rs.3,000.
Del-credere commission Rs.2000. The amount irrecoverable from customer Rs.2,000.
What will be the profit on consignment?
(a) Rs.38,000
(b) Rs.40,000
(c) Rs.36,000
(d) None

51. A of Kolkata sends out 500 boxes to B of Delhi costing Rs 200 each. Consignor’s
expenses Rs 5000. 1/5th of the boxes were still in transit. 3/4th of the goods received by
consignee, were sold. The amount of goods still in transit will be:
(a) Rs.20,000
(b) Rs.21,000
(c) Rs.21,200
(d) None

52. If sales revenues are Rs. 4,00,000; cost of goods sold is Rs. 3,10,000 and operating
expenses are Rs.60,000 the gross profit is
(a) Rs. 30,000.
(b) Rs. 90,000.
(c) Rs. 3,40,000.
(d) Rs. 60,000

53. If sales are Rs. 2,000 and the rate of gross profit on cost of goods sold is 25%, then the
cost of goods sold will be
(a) Rs. 2,000.
(b) Rs. 1,500.
(c) Rs. 1,600.
(d) None of the above.

54. Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses
were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for
repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight
line method. Depreciation rate is 10%. Annual Depreciation will be
(a) Rs.13,000
(b) Rs.17,000
(c) Rs.21,000
(d) Rs.25,000

55. In the books of D Ltd. the machinery account shows a debit balance of Rs.60,000 as on
April 1,2003.The machinery was sold on September 30, 2004 for Rs.30,000. The
company charges depreciation @ 20% p.a. on diminishing balance method. Profit /
Loss on sale will be
(a) 13,200 Profit
(b) 13,200 loss
(c) 6,800 profit
(d) 6,800 loss

56. The total cost of goods available for sale with a company during the current year is
Rs.12,00,000 and the total sales during the period are Rs.13,00,000. If the gross profit
margin of the company is
3
33 1 % on cost, the closing inventory during the current year
is
(a) Rs.4,00,000
(b) Rs.3,00,000
(c) Rs.2,25,000
(d) Rs.2,60,000.

57. Consider the following data pertaining to H Ltd. for the month of March 2005:
Particulars As on March 01, 2005 (Rs.) As on March 31, 2005 (Rs.)
Stock 1,80,000 90,000
The company made purchases amounting Rs. 3,30,000 on credit. During the month of
March 2005, the company paid a sum of Rs.3,50,000 to the suppliers. The goods are
sold at 25% above the cost. The sales for the month of March 2005 were
(a) Rs.4,12,500
(b) Rs.5,25,000
(c) Rs.90,000
(d) Rs.3,15,000.

58. When preparing a Bank Reconciliation Statement, if you start with a debit balance as
per the Cash Book, cheques issued but not presented within the period should be:
(a) Added
(b) Deducted
(c) Not required to be adjusted
(d) None of the above.

59. Rs. 200 paid as wages for erecting a machine should be debited to
(a) Repair account.
(b) Machine account.
(c) Capital account.
(d) Furniture account

60. Rs. 2,500 spent on the overhaul of machines purchased second-hand is
(a) capital expenditure
(b) revenue expenditure
(c) deferred revenue expenditure
(d) None of the above

Thanks a lot aarya...this is really helpful..