MGT101 Mid Term 1
MIDTERM EXAMINATION
MGT101- Financial Accounting
Question No: 1 ( Marks: 1 ) - Please choose oneMr. “A” sold goods to Mr. “B” for Rs. 3,000 on October 8, 2008 and Mr. “B” paid at the
same time. It will be case of ______________ sales.► Cash► Credit
► Accrual based
► None of the given optionsQuestion No: 2 ( Marks: 1 ) - Please choose oneWhich of the following is non- profit organization?
► Sole proprietorship
► Partnership
► Limited company► Trust
Question No: 3 ( Marks: 1 ) - Please choose oneCost incurred for the maintenance of shop is considered as _________.
► Deferred expense
► Capital expense
► Revenue expense► Preliminary expenseQuestion No: 4 ( Marks: 1 ) - Please choose oneWhich of the following is correct according to the double entry system of book-keeping?► Debit = Credit► Debit > Credit
► Debit < Credit
► All of the given optionsQuestion No: 5 ( Marks: 1 ) - Please choose oneWhich of the following is NOT true about Double Entry System?
► Both credit and debit transactions are recorded
► Accurate profit and loss is calculated
► Financial statements can be made directly from the accounts
► Non cash transaction are not recorded under this system
Question No: 6 ( Marks: 1 ) - Please choose oneAn Asset that is NOT physical in nature is called _________.
► Intangible Asset► Liquid Asset
► Current Asset
► Fixed AssetQuestion No: 7 ( Marks: 1 ) - Please choose oneWhat would be the affect on the components of the accounting equation, if goods are
purchased on cash?
► Increase in cash and decrease in equity
► Increase in cash and increase in goods
► Increase in goods and decrease in cash► Increase in equipment and increase in equityQuestion No: 8 ( Marks: 1 ) - Please choose oneWhen Capital is increased by an amount, it is recorded on the:► Left or credit side of the account
► Right or debit side of the account
► Left or debit side of the account
► Right or credit side of the account
Question No: 9 ( Marks: 1 ) - Please choose oneWhich of the following is also called "The original book of entry"?► General Journal► General Ledger
► Trial Balance
► Profit and Loss AccountQuestion No: 10 ( Marks: 1 ) - Please choose oneAn informal accounting statement that lists the ledger account balances at a point in time
and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance► Cash BookQuestion No: 11 ( Marks: 1 ) - Please choose oneWhich one of the following is NOT prepared by Non profit organizations?► Profit & Loss account► Income & Expenditure account
► Receipts & Payments account
► Balance Sheet
Question No: 12 ( Marks: 1 ) - Please choose oneWhile making Income & Expenditure account, Excess of income over expenses in a
specified accounting period is called:
► Profit► Loss
► Surplus
► DeficitQuestion No: 13 ( Marks: 1 ) - Please choose oneAn asset on the balance sheet which is expected to be sold or used within one year is
known as:
► Tangible asset
► Current asset► Fixed asset
► Long term assetQuestion No: 14 ( Marks: 1 ) - Please choose oneAccounts Receivable & Inventory are the examples of:
► Liquid assets
► Current assets► Fixed assets
► Capital assetsQuestion No: 15 ( Marks: 1 ) - Please choose oneWhich of the following shows the categories of assets in a Balance Sheet?
► Current assets, Long term assets and Accounts payable► Current assets, Long term assets and Fixed assets
► Current assets, Quick assets and Business debts
► Current assets, Fixed assets and Deferred costQuestion No: 16 ( Marks: 1 ) - Please choose oneIf the cost of sales is Rs. 95,000, sales are Rs. 100,000 and operating expenses are Rs.
200,000 during the year, what would be the net result?► Loss of Rs. 1, 95,000► Profit of Rs. 1, 95,000
► Profit of Rs 5,000
► Loss of Rs 5,000
Question No: 17 ( Marks: 1 ) - Please choose oneWhich of the following is an alternate term which can be used for “Capital”?
► Liability
► Owner’s net worth► Working capital
► AssetQuestion No: 18 ( Marks: 1 ) - Please choose onePartially completed products that are not yet ready for sale are known as:
► Raw material
► Work in process► Finished goods
► Closing stockQuestion No: 19 ( Marks: 1 ) - Please choose oneWhicWhich of the following is an example of direct materials cost?
► Polish and finishing material for chair
► A piece of wood for the production of chair► Production worker’s wages
► Depreciation expensesQuestion No: 20 ( Marks: 1 ) - Please choose one
► Rs. 20,000
► Rs.40, 000
► Rs.90, 000► Rs.160, 000
Question No: 21 ( Marks: 1 ) - Please choose oneIn the cost of goods sold statement, the sum of labor cost and the factory over head is
known as:
► Conversion cost
► Prime cost► Total factory cost► Cost of goods manufactured
Question No: 22 ( Marks: 1 ) - Please choose oneIn cost of goods sold statement, the ‘cost of material consumed’ is equal to:
► Opening raw material inventory + Purchases – Ending raw material
inventory► Opening raw material inventory - Purchases + Ending raw material inventory
► Ending raw material inventory + Opening raw material inventory - Purchases
► Ending raw material inventory + Opening raw material inventory + PurchasesQuestion No: 23 ( Marks: 1 ) - Please choose oneIn cost of goods sold statement the ‘total factory cost’ is equal to:
► Cost of material consumed + Labor cost
► Cost of material consumed + Conversion cost► Cost of material consumed + Total factory cost
► Cost of material consumed + Factory overheadQuestion No: 24 ( Marks: 1 ) - Please choose oneIn cost of goods sold statement the ‘cost of goods manufactured’ is equal to:
► Total factory cost + Opening work in process + Ending work in process
► Total factory cost + Opening work in process – Ending work in process► Total factory cost - Opening work in process + Ending work in process
► Ending work in process +Total factory cost – Opening work in processQuestion No: 25 ( Marks: 1 ) - Please choose one
► Rs.25, 000 loss► Rs. 75,000 loss
► Rs. 15,000 profit
► Rs. 1, 00,000 profitQuestion No: 26 ( Marks: 1 ) - Please choose one
► Rs.25, 000► Rs. 75,000
► Rs. 15,000
► Rs. 1, 00,000Question No: 27 ( Marks: 1 ) - Please choose oneConsider the following inventory record:
85 units were sold, Use the FIFO method of inventory costing and determine the cost of
goods sold.
► Rs. 1,225
► Rs. 1,015► Rs. 965► Rs. 992Question No: 28 ( Marks: 1 ) - Please choose oneConsider the following:
Eighty-five units were sold, what is the value of the ending inventory using the FIFO
method of inventory costing?
► Rs.260► Rs.232
► Rs.284
► Rs.268Question No: 29 ( Marks: 1 ) - Please choose oneWhich one of the following is NOT true about revenue expenditure?
► These are the running expenses of the business
► They improve the financial position of the business► They reduce the profit of the concern
► They do not appear in the balance sheetQuestion No: 30 ( Marks: 1 ) - Please choose oneInterest on loan paid by business is an example of :
► Deferred expense
► Revenue expense
► Capital expense► None of the given optionsQuestion No: 31 ( Marks: 1 ) - Please choose oneCash book is a part of:
► Voucher
► General Journal► General Ledger
► Trial BalanceQuestion No: 32 ( Marks: 1 ) - Please choose oneFind out the missing value of an Accounting Equation with the help of given data:
► Rs. 12,000 liabilities
► Rs. 11,000 liabilities
► Rs. 1, 10,000 liabilities► Rs. 1, 11,000 liabilitiesQuestion No: 33 ( Marks: 1 ) - Please choose oneFind out the missing value of an Accounting Equation with the help of given data:
► Rs. 22,000 owner’s equity
www.virtualinspire.com► Rs. 23, 000 owner’s equity
► Rs. 24,000 owner’s equity
► Rs. 46,000 owner’s equityQuestion No: 34 ( Marks: 1 ) - Please choose oneThe basic purpose of depreciation is to achieve the:
► Matching principle► Dual aspect principle
► Separate entity concept
► Money measurement conceptQuestion No: 35 ( Marks: 1 ) - Please choose oneFind out the missing value of an Accounting Equation with the help of given data:
► Rs. 1, 02,885 other assets
► Rs. 1, 02,885 other liabilities
► Rs. 99,885 current liabilities► Rs. 99,385 other assets
Question No: 36 ( Marks: 1 ) - Please choose oneTotal depreciation of an asset can not exceed its:
► Scrap value► Residual value
► Market value
► Depreciable valueQuestion No: 37 ( Marks: 1 ) - Please choose oneWhich of the following is CORRECT regarding depreciation?
► It refers to the end life of an asset
► It refers to the increase in value of asset
► It is another name of Impairment► It is a systematic allocation of depreciable amount of an asset over its
estimated useful life
Question No: 38 ( Marks: 1 ) - Please choose one
Which one of the following is another name of carrying cost of an asset?
► Book Value► Residual Value
► Fair Value
► Break up ValueQuestion No: 39 ( Marks: 1 ) - Please choose oneUnfavorable balance of the cash book means:
► Credit balance in cash book
► Credit balance in pass book
► Debit balance in cash book► All of the given options
Question No: 40 ( Marks: 1 ) - Please choose oneWhat would be the value of 'cost of goods manufactured' if the total factory cost of the
month is Rs. 6,000, opening work in process is Rs. 2,000 and the closing work in process
is Rs. 2,500?► Rs. 5,500► Rs. 8,000
► Rs. 4,500
► Rs. 8,500Question No: 41 ( Marks: 10 )
Following information of Ahmad & Company is given for the year ended 2007.
Required:1. Conversion Cost
2. Total Factory Cost
3. Cost of Goods Manufactured
4. Cost of Good Sold statement
CONVERSION COST:
Conversion cost = labor cost + FOH= 20,000 + 16,000= 36,000 Rs.
TOTAL FACTORY COST:
Total factory cost= cost of material consumed + conversion cost
= 30,000 + 36,000
= 66,000 Rs.
COSTS OF GOOD MANUFACTURED:
= total FOH + Opening Stock WIP – Closing Stock WIP
= 16,000 + 0 – 4,500
= 11,500 Rs.
COST OF GOODS SOLD:
= total factory cost + cost of good manufactured + opening stock of finished goods –
closing stock of finished goods
= 66,000 + 11,500 + 13,500 – 15,000
= 76,000 Rs.
MGT101- Financial Accounting
Question No: 1 ( Marks: 1 ) - Please choose oneMr. “A” sold goods to Mr. “B” for Rs. 3,000 on October 8, 2008 and Mr. “B” paid at the
same time. It will be case of ______________ sales.► Cash► Credit
► Accrual based
► None of the given optionsQuestion No: 2 ( Marks: 1 ) - Please choose oneWhich of the following is non- profit organization?
► Sole proprietorship
► Partnership
► Limited company► Trust
Question No: 3 ( Marks: 1 ) - Please choose oneCost incurred for the maintenance of shop is considered as _________.
► Deferred expense
► Capital expense
► Revenue expense► Preliminary expenseQuestion No: 4 ( Marks: 1 ) - Please choose oneWhich of the following is correct according to the double entry system of book-keeping?► Debit = Credit► Debit > Credit
► Debit < Credit
► All of the given optionsQuestion No: 5 ( Marks: 1 ) - Please choose oneWhich of the following is NOT true about Double Entry System?
► Both credit and debit transactions are recorded
► Accurate profit and loss is calculated
► Financial statements can be made directly from the accounts
► Non cash transaction are not recorded under this system
Question No: 6 ( Marks: 1 ) - Please choose oneAn Asset that is NOT physical in nature is called _________.
► Intangible Asset► Liquid Asset
► Current Asset
► Fixed AssetQuestion No: 7 ( Marks: 1 ) - Please choose oneWhat would be the affect on the components of the accounting equation, if goods are
purchased on cash?
► Increase in cash and decrease in equity
► Increase in cash and increase in goods
► Increase in goods and decrease in cash► Increase in equipment and increase in equityQuestion No: 8 ( Marks: 1 ) - Please choose oneWhen Capital is increased by an amount, it is recorded on the:► Left or credit side of the account
► Right or debit side of the account
► Left or debit side of the account
► Right or credit side of the account
Question No: 9 ( Marks: 1 ) - Please choose oneWhich of the following is also called "The original book of entry"?► General Journal► General Ledger
► Trial Balance
► Profit and Loss AccountQuestion No: 10 ( Marks: 1 ) - Please choose oneAn informal accounting statement that lists the ledger account balances at a point in time
and compares the total of debit balances with the total of credit balances is known as:
► Income Statement
► Balance Sheet
► Trial Balance► Cash BookQuestion No: 11 ( Marks: 1 ) - Please choose oneWhich one of the following is NOT prepared by Non profit organizations?► Profit & Loss account► Income & Expenditure account
► Receipts & Payments account
► Balance Sheet
Question No: 12 ( Marks: 1 ) - Please choose oneWhile making Income & Expenditure account, Excess of income over expenses in a
specified accounting period is called:
► Profit► Loss
► Surplus
► DeficitQuestion No: 13 ( Marks: 1 ) - Please choose oneAn asset on the balance sheet which is expected to be sold or used within one year is
known as:
► Tangible asset
► Current asset► Fixed asset
► Long term assetQuestion No: 14 ( Marks: 1 ) - Please choose oneAccounts Receivable & Inventory are the examples of:
► Liquid assets
► Current assets► Fixed assets
► Capital assetsQuestion No: 15 ( Marks: 1 ) - Please choose oneWhich of the following shows the categories of assets in a Balance Sheet?
► Current assets, Long term assets and Accounts payable► Current assets, Long term assets and Fixed assets
► Current assets, Quick assets and Business debts
► Current assets, Fixed assets and Deferred costQuestion No: 16 ( Marks: 1 ) - Please choose oneIf the cost of sales is Rs. 95,000, sales are Rs. 100,000 and operating expenses are Rs.
200,000 during the year, what would be the net result?► Loss of Rs. 1, 95,000► Profit of Rs. 1, 95,000
► Profit of Rs 5,000
► Loss of Rs 5,000
Question No: 17 ( Marks: 1 ) - Please choose oneWhich of the following is an alternate term which can be used for “Capital”?
► Liability
► Owner’s net worth► Working capital
► AssetQuestion No: 18 ( Marks: 1 ) - Please choose onePartially completed products that are not yet ready for sale are known as:
► Raw material
► Work in process► Finished goods
► Closing stockQuestion No: 19 ( Marks: 1 ) - Please choose oneWhicWhich of the following is an example of direct materials cost?
► Polish and finishing material for chair
► A piece of wood for the production of chair► Production worker’s wages
► Depreciation expensesQuestion No: 20 ( Marks: 1 ) - Please choose one
| Direct materials costs | Rs.70,000 |
| Direct labor costs | 30,000 |
| Manufacturing overhead costs | 60,000 |
| conversion cost | ? |
► Rs.40, 000
► Rs.90, 000► Rs.160, 000
Question No: 21 ( Marks: 1 ) - Please choose oneIn the cost of goods sold statement, the sum of labor cost and the factory over head is
known as:
► Conversion cost
► Prime cost► Total factory cost► Cost of goods manufactured
Question No: 22 ( Marks: 1 ) - Please choose oneIn cost of goods sold statement, the ‘cost of material consumed’ is equal to:
► Opening raw material inventory + Purchases – Ending raw material
inventory► Opening raw material inventory - Purchases + Ending raw material inventory
► Ending raw material inventory + Opening raw material inventory - Purchases
► Ending raw material inventory + Opening raw material inventory + PurchasesQuestion No: 23 ( Marks: 1 ) - Please choose oneIn cost of goods sold statement the ‘total factory cost’ is equal to:
► Cost of material consumed + Labor cost
► Cost of material consumed + Conversion cost► Cost of material consumed + Total factory cost
► Cost of material consumed + Factory overheadQuestion No: 24 ( Marks: 1 ) - Please choose oneIn cost of goods sold statement the ‘cost of goods manufactured’ is equal to:
► Total factory cost + Opening work in process + Ending work in process
► Total factory cost + Opening work in process – Ending work in process► Total factory cost - Opening work in process + Ending work in process
► Ending work in process +Total factory cost – Opening work in processQuestion No: 25 ( Marks: 1 ) - Please choose one
| Cost of asset | Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for each year | Rs. 5,000 |
| Sale price after 5 years | Rs.50,000 |
| Written down value of asset on 5th year | Rs.75,000 |
| profit or loss on disposal of fixed assets | ? |
► Rs. 15,000 profit
► Rs. 1, 00,000 profitQuestion No: 26 ( Marks: 1 ) - Please choose one
| Cost of asset | Rs. 1,00,000 |
| Life of asset | 5 years |
| Depreciation for each year | Rs. 15,000 |
| Sale price after 5 years | Rs.50,000 |
| Book value of Asset after 5 years | ? |
► Rs. 15,000
► Rs. 1, 00,000Question No: 27 ( Marks: 1 ) - Please choose oneConsider the following inventory record:
| Date | Item | Quantity | Cost/Unit Rs. | Total Rs. |
| Jan. 2 | Beginning inventory | 10 | 10 | 100 |
| Mar. 4 | Purchase | 35 | 11 | 385 |
| May 8 | Purchase | 40 | 12 | 480 |
| Nov. 3 | Purchase | 20 | 13 | 260 |
| De31 | Merchandise available | 105 | 1,225 |
goods sold.
► Rs. 1,225
► Rs. 1,015► Rs. 965► Rs. 992Question No: 28 ( Marks: 1 ) - Please choose oneConsider the following:
| Beginning inventory | 10 units @ Rs. 10 per unit |
| First purchase | 35 units @ Rs. 11 per unit |
| Second purchase | 40 units @ Rs. 12 per unit |
| Third purchase | 20 units @ Rs. 13 per unit |
method of inventory costing?
► Rs.260► Rs.232
► Rs.284
► Rs.268Question No: 29 ( Marks: 1 ) - Please choose oneWhich one of the following is NOT true about revenue expenditure?
► These are the running expenses of the business
► They improve the financial position of the business► They reduce the profit of the concern
► They do not appear in the balance sheetQuestion No: 30 ( Marks: 1 ) - Please choose oneInterest on loan paid by business is an example of :
► Deferred expense
► Revenue expense
► Capital expense► None of the given optionsQuestion No: 31 ( Marks: 1 ) - Please choose oneCash book is a part of:
► Voucher
► General Journal► General Ledger
► Trial BalanceQuestion No: 32 ( Marks: 1 ) - Please choose oneFind out the missing value of an Accounting Equation with the help of given data:
| Cash | Rs.1, 00, 000 |
| Debtors | Rs.10, 000 |
| Other Assets | Rs. 1,000 |
| Owner’s equity | Rs. 1, 000 |
► Rs. 11,000 liabilities
► Rs. 1, 10,000 liabilities► Rs. 1, 11,000 liabilitiesQuestion No: 33 ( Marks: 1 ) - Please choose oneFind out the missing value of an Accounting Equation with the help of given data:
| Total Assets | Rs. 34,500 |
| Accounts payable | Rs. 1, 000 |
| Other liabilities | Rs. 11,500 |
www.virtualinspire.com► Rs. 23, 000 owner’s equity
► Rs. 24,000 owner’s equity
► Rs. 46,000 owner’s equityQuestion No: 34 ( Marks: 1 ) - Please choose oneThe basic purpose of depreciation is to achieve the:
► Matching principle► Dual aspect principle
► Separate entity concept
► Money measurement conceptQuestion No: 35 ( Marks: 1 ) - Please choose oneFind out the missing value of an Accounting Equation with the help of given data:
| Owner’s equity | Rs. 22,500 |
| Total Liabilities | Rs. 80, 385 |
| Cash in hand | Rs. 1,000 |
| Cash at bank | Rs. 2,000 |
| Debtors | Rs. 500 |
► Rs. 1, 02,885 other liabilities
► Rs. 99,885 current liabilities► Rs. 99,385 other assets
Question No: 36 ( Marks: 1 ) - Please choose oneTotal depreciation of an asset can not exceed its:
► Scrap value► Residual value
► Market value
► Depreciable valueQuestion No: 37 ( Marks: 1 ) - Please choose oneWhich of the following is CORRECT regarding depreciation?
► It refers to the end life of an asset
► It refers to the increase in value of asset
► It is another name of Impairment► It is a systematic allocation of depreciable amount of an asset over its
estimated useful life
Question No: 38 ( Marks: 1 ) - Please choose one
Which one of the following is another name of carrying cost of an asset?
► Book Value► Residual Value
► Fair Value
► Break up ValueQuestion No: 39 ( Marks: 1 ) - Please choose oneUnfavorable balance of the cash book means:
► Credit balance in cash book
► Credit balance in pass book
► Debit balance in cash book► All of the given options
Question No: 40 ( Marks: 1 ) - Please choose oneWhat would be the value of 'cost of goods manufactured' if the total factory cost of the
month is Rs. 6,000, opening work in process is Rs. 2,000 and the closing work in process
is Rs. 2,500?► Rs. 5,500► Rs. 8,000
► Rs. 4,500
► Rs. 8,500Question No: 41 ( Marks: 10 )
Following information of Ahmad & Company is given for the year ended 2007.
| Particulars | Units | Cost (Rs.) |
| Sales during the year | 8,000 | 80,000 |
| Opening Inventories: | ||
| Work in process | ------ | ------ |
| Finished goods | 1,800 | 13,500 |
| Closing Inventories: | ||
| Work in process | 100 | 4,500 |
| Finished goods | 2,000 | 15,000 |
| Manufacturing Cost: | ||
| Direct Material | 30,000 | |
| Direct Labor | 20,000 | |
| Factory Overhead | 16,000 |
2. Total Factory Cost
3. Cost of Goods Manufactured
4. Cost of Good Sold statement
CONVERSION COST:
Conversion cost = labor cost + FOH= 20,000 + 16,000= 36,000 Rs.
TOTAL FACTORY COST:
Total factory cost= cost of material consumed + conversion cost
= 30,000 + 36,000
= 66,000 Rs.
COSTS OF GOOD MANUFACTURED:
= total FOH + Opening Stock WIP – Closing Stock WIP
= 16,000 + 0 – 4,500
= 11,500 Rs.
COST OF GOODS SOLD:
= total factory cost + cost of good manufactured + opening stock of finished goods –
closing stock of finished goods
= 66,000 + 11,500 + 13,500 – 15,000
= 76,000 Rs.