FINAL Ac(Sole Proprietors)

1. Final Account include preparation of _____________.

(a) Trading A/c
(b) Profit & Loss A/C
(c) Balance Sheet
(d) All of the Above
2. _______ is the part of income Statement, which is prepared to ascertain the gross
profit/Loss for a given accounting Period.
(a) Manufacturing A/C
(b) Profit & Loss A/C
(c) Balance Sheet
(d) Trading A/C
3. In trading Account, closing stock is shown at __________.
(a) Cost Price
(b) Net Realizable Price
(c) A or b whichever Lower
(d) A or b whichever higher
4. ___________ is the difference between the selling price and cost price of goods sold.
(a) Gross Profit
(b) Gross Loss
(c) (a) 0r (b)
(d) (a) and (b)
5. Which of the following equation is correct?
(a) Gross Profit= Net Sale- Cost of the goods sold
(b) Gross Profit=sales+closing Stocks-opening stock purchase-wages.
(c) Cost of goods sold+goods profit= Sales.
(d) All of the above.
6. In Trading Account, closing stock is shown at cost price or Net realizable price which
above is lower. This is the due application of ________________.
(a) Convention of disclosure
(b) Convention of Materiality
(c) Convention of Consistency
(d) Convention of Conservatism
7. Gross Profit or Gross Loss of revealed by trading Account is transferred to _________
(a) Balance Sheet
(b) Profit & Loss A/C
(c) Manufacturing A/C
(d) Profit & Loss Appropriation Accounts
8. The Net Profit or Loss is Transferred to ______________.
(a) Drawing A/C
(b) Capital A/C
(c) Suspense A/C
(d) None Of the Above
9. Which of the following Business entity will not prepare Trading Account?
 (a) Banking Companies
(b) Insurance companies
(c) Investment Companies
(d) All of the Above
10. The total of the two sides of the Balance Sheet must agree because of the following
Equation?
(a) Assets=Liabilities- Capital
(b) Assets=Liabilities+Capital
(c) Assets=Fixed Assets+current Assets
(d) All of the Above
11. _________ is prepared for ascertaining the cost of Goods Produced or cost of
Production.
(a) Trading A/c
(b) Manufacturing A/c
(c) Profit & Loss A/c
(d) Purchase A/c
12. Balance of manufacturing Account i.e. Cost of production is transferred to __________
(a) Profit & Loss A/c
(b) Manufacturing A/c
(c) Trading A/c
(d) Purchase A/c
13. The arrangement of assets and liabilities in accordance with a particular order is known
as ____________ of Balance Sheet.
(a) Tallying
(b) Making
(c) Ruling
(d) Marshalling
14. ___________ approach assets which are to be used for long term in the business and are
not meant to be sold are presented first and assets which are most liquid such as case in
hand, are presented at the bottom.
(a) Alphabetical order
(b) Permanence Order
(c) Liquidity Order
(d) Non of the above
15. _______________ are those whish are acquired for long use in the business and not
meant for resale.
(a) Fictitious Assets
(b) Intangible Assets
(c) Fixed Assets
(d) Current or Floating Assets
16. _________________ are valueless assets but shown in the balance sheet on asset side
e.g. preliminary expenses.
(a) Fictitious Assets
(b) Intangible Assets
(c) Fixed Assets
 (d) Current or Floating Assets
17. ___________ are those that are meant to be converted into cash in short term.
(a) Fictitious Assets
(b) Intangible Assets
(c) Fixed Assets
(d) Current or Floating Assets

18. ________________ are those fixed assets which have a fixed content, like Coal in a
Coalmine, the value of the asset goes down as the contents are taken out.
(a) Intangible Assets
(b) Fictitious Assets
(c) Wasting Assets
(d) Floating Assets
19. _____________ which can be immediately be converted into cash such as Govt.
Securities.
(a) Intangible Assets
(b) Fictitious Assets
(c) Wasting Assets
(d) Floating Assets
20. In Which of the following closing stock does not appear?
(a) Trading Account
(b) Trial Balance
(c) Balance Sheet
(d) All of the Above
21. In order to prepare final accounts, all nominal Accounts will be transferred to trading
and Profit & Loss Accounts by passing account journal entries which are called
___________ as they close the nominal Ac.
(a) Opening Entries
(b) Adjustment Entries
(c) Closing Entries
(d) None of the above
22. From the following figures ascertain the gross profit:
Rs.
Opening Stock 2,50,000
Goods Purchase 13,00,000
Freight 50,000
Closing Stock 1,50,000
Sales 19,00,000
Salary 90,000
(a) 3,60,000
(b) 4,50,000
(c) 5,00,000
(d) 5,90,000
23. Opening Stock Rs. 40,000 purchases- Rs. 260,000, closing stock- Rs, 20,000, cost of
goods=?
 (a) Rs. 3,20,000
(b) Rs. 26,0000
(c) Rs. 3,00,000
(d) RS. 2,80,000
24. From the following information calculate net profit
Rs.
Opening stock 15,00,000
Direct Expenses 3,00,000
Selling & distribution Expenses 2,00,000
Administrative Expenses 1,00,000
Financial Expenses 50,000
Sales 24,00,0000
Gross Profit ration on sales 25%
(a) 2,50,000
(b) 3,50,000
(c) 2,00,000
(d) 1,50,000
25. Cost of Goods Sold- Rs. 2,00,000
Gross profit on Cost -25%
Salary – Rs. 15000
Rent-Rs. 7,000
Bad Debts- Rs. 1,500
Drawings – Rs. 2,000
Creditors- RS. 2500
Net Profit=?
(a) Rs. 22,000
(b) Rs. 24,500
(c) Rs. 26,500
(d) Rs.16,500
26. Salary Paid during the year-Rs.35,000.
Salary Outstanding 1.4.2011-RS. 2500
Salary Outstanding On 31.03.2012 – Rs. 7500
Net salary debited to profit n Loss Accounts for the year ended 31.3.2012 should be
__________?
(a) RS. 40,000
(b) RS.30,000
(c) Rs,25,000
(d) Rs.45,000

27. Debtors As per Trial Balance – Rs. 40,600

Bad Debt not yet provided- Rs. 600
Provisions for debt to be made at 5% on sundry debtors.
Provisions for discount on debtors to be credited @2%
Amount of provisions for discount on Debtors- Rs___________
(a) Rs, 760
(b) Rs. 600
(c) Rs.2000
(d) Rs. 26,00
Answers:

1(d), 2(d), 3(c), 4(c), 5(d), 6(d), 7(b), 8(b), 9(b), 10(b), 11(b), 12(c), 13(d), 14(b), 15(c),
16(a), 17(d), 18(c), 19(d), 20(b), 21(c), 22(b), 23(d), 24(a), 25(c), 26(a), 27(a)