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Chapter No. 1

Objective
Q1.Tick the most appropriate option:
1 Double entry system means,
  a) The recording of same things b) Double accounting c) The two sides of every transaction records d) Entry at two dates
2 Under single entry system sometimes,
  a) Double aspect of transaction are recorded b) single aspect of transaction recorded c) No aspect of transaction recorded d) All of above
3 Single entry system is generally adopted by,
  a) Small business concerns b) Large business concerns c) Medium business concerns d) All of above
4 Single entry system contains,
  a) A daybook of general Journal b) A cash book c) Ledger accounts for individuals customers and creditors d) All of above
5 In single entry system,
  a) Personal accounts are maintained b) Real accounts are maintained c) Normal accounts are maintained d) None of above
6 In single entry system ledger contains the account of,
  a) Debtors, editors and cash b) Wages and carriage c) Salaries and insurance d) Assets and Liabilities
7 In single entry system
  a) DEBTORS ACCOUNT b) Creditors account c) Trail balance d) Statements of affairs
8 In single entry system
  a) Correctly b) Effectively c) Wrongly d) Approximately
9 In single entry system
  a) Opening statement of affairs is not possible b) Closing statement of affairs is not possible c) Balance sheet is not possible d) “a” and “b”
10 How many methods are available to calculate the profit and loss under single entry system,
  a) One b) Two c) Three d) Four
11 Net worth is equal to,
  a) Assets– Liabilities b) Liabilities — Assets c) Liabilities—Capital d) Capital+ Assets
12 To calculate the value of capital both at the beginning and at the end of year in single entry system we prepare,
  a) Balance sheet b) Trading account c) Trail balance d) Statement of affairs
13 Opening capital is calculated by taking the difference between,
  a) Opening Assets and closing assets b) Opening assets and closing liabilities c) Opening assets and opening liabilities d) Closing assets and closing liabilities
14 Closing capital in single entry system is calculated by preparing,
  a) Opening state of affairs b) Closing statements of affairs c) Opening balance sheet d) Closing balance sheet
15 Due to fresh capital introduced during the year, the closing capital will,
  a) Increase b) Decrease c) Constant d) multiply
16 Due to drawings made during the year, the closing capital will,
  a) Increase b) decrease c) Constant d) multiply
17 To calculate the true net profit or net loss in single entry system it  is necessary that the amount of drawing should be added in,
  a) Fresh capital b) Opening capital c) Closing capital d) Adjusted closing capital
18 To calculate the true net profit to net loss in single entry system it is necessary that the amount of drawings should be added in,
  a) Adjusted closing capital b) Closing capital c) Cash in hand d) Cash at bank
19 Single entry system is suitable where,
  a) Small  amount of cash transactions more b) Large amount of cash transactions more c) Small amount of credit transactions more d) Large amount of credit transactions more
20 According to companies ordinance, single entry system cannot be adopted by,
  a) Sole proprietorship b) Partnership c) “a” and “b” d) Joint stock companies
21 Both aspects of a transaction must be recorded in,
  a) Single entry system b) Barter system c) Double entry system d) Islamic system
22 Increased net worth method, profit or loss is calculated by preparing,
  a) Income and expenditure account b) Profit and loss account c) Statement of profit or loss d) Balance sheet
23 We cannot prepare the trail balance  and precise balance sheet under,
  a) Single entry system b) Double entry system c) “a” and “b” d) Barter system
24 In single entry system, statement of assets, liabilities and capital is called
  a) Income statement b) Earning statement c) Statement of profit or loss d) Statement of affairs
25 Which one of the following  equation is correct to calculate the value of profit or loss under single entry system,
  a) Capital at the end + drawings – fresh capital introduced during the year=adjusted capital at the end-capital at the beginning = profit or loss b) Adjusted capital at the end + drawings-fresh capital introduced during the year=capital at the end-capital in the beginning = profit or loss c) Capital at the end-drawings-fresh capital introduced during the year=adjusted capital at the end-capital at the beginning = profit or loss d) Capital in the beginning -drawings-fresh capital introduced during the year=adjusted capital in the beginning –capital at the end=profit or loss
26 The format sketch of statement of affairs in similar to,
  a) Trail balance b) Profit and loss account c) Balance sheet d) Income and expenditure account
27 It is prepared to calculate the net profit or net loss under single entry system,
  a) Opening statement of affairs b) Statement of profit or loss c) Receipts and payments account d) Balance sheet
28 If the adjusted capital at the end is more than the capital in the beginning then the difference will be
  a) Gross profit b) Gross loss c) Net loss d) Net profit
29 If the capital at the end Rs.30000. drawings Rs. Trail 50 capital in the beginning Rs. 15000 then the amount of net profit will be
  a) 43750 b) 16250 c) 13750 d) 43500
30 If the capital at the end Rs.45000. fresh capital introduced during the year Rs.15000.then the amount of net profit will be
  a) 2500 b) 27500 c) 62500 d) 45000
31 If the capital at the end Rs.125000. drawing Rs.12000. capital in the beginning Rs.60000.profit during the year Rs.27000 then the amount of fresh capital introduced will be,
  a) 87000 b) 50000 c) 77000 d) 170000
32 If the capital at the end Rs.55000 capital in the beginning Rs.56375. loss during the year Rs.1375.then the amount of drawing will  be,
  a) 11000 b) 2750 c) Nil d) 112750
33 If the capital In the beginning Rs.65650.fresh capital introduced during the year Rs.16250.loss during the year Rs.11375. then the capital at the end will be,
  a) 70525 b) 93275 c) 38025 d) 48075
34 if the capital at the end Rs.82500. drawings Rs.12925 profit  during the year Rs.16500 then the capital in the beginning will be,
  a) 111925 b) 86075 c) 53075 d) 78925
35 if the capital in the beginning 01-01-2004 Rs.80000. capital introduced on 01-05-2004 Rs.20000 rate of interest 6% P.a., then the interest on capital at 31-12-2004 will be,
  a) 5600 b) 4800 c) 6000 d) 4000
36 the opening balance of debtors can be ascertained by preparing
  a) Total creditors account b) Cash account c) Balance sheet d) Total debtors account
37 The amount of cash purchase and cash sales can be ascertained by preparing
  a) Total debtors account b) Total credit account c) Sales account d) Income and expenditure account
38 The amount of cash purchases and cash sales can be ascertained by preparing,
  a) Total debtors’ account b) Total creditor’s account c) Profit and loss account d) None of the above
39 Cash paid to creditors can be ascertained by preparing
  a) Total debtors’ account b) Total creditor’s account c) Profit and loss account d) None of the above
40 The closing balance of creditors can be ascertained by preparing the,
  a) Bills receive able account b) Bills pay able account c) Total debtors account d) Total creditors account
41 The opening and closing balances of bills of receive able can be calculated by preparing the,
  a) Sales account b) Total debtors account c) Total creditors account d) Bills receive able account
42 If sales Rs. 90000 purchases 65625; closing stock Rs. 11250; rate of gross profit 20% on sales, then the stock in the beginning will be,
  a) Rs. 17625 b) Rs.18625 c) Rs.16625 d) Rs.15625
43 If the sales Rs. 25000, purchases Rs. 25000’ closing stock Rs. 1000 gross loss on cost 20% then the stock in the beginning will be,
  a) Rs. 16500 b) Rs.16250 c) Rs.16350 d) Rs.16275
44 If sales Rs. 45000; purchase Rs. 65000 opening stock Rs. 350; gross profit on sales 10% then the closing stock will be,
  a) Rs.28250 b) Rs.28260 c) Rs.28225 d) Rs.28275
45 If opening stock Rs. 15000; sales Rs. 180000; purchases Rs. 140000; gross profit on cost 20% then the closing stock will be,
  a) Rs. 10000 b) Rs.150000 c) Rs.5000 d) Nil
46 If cost of goods sold Rs. 35000; gross profit on cost 15% then the value of sale will be,
  a) Rs.42500 b) Rs.402500 c) Rs.42250 d) Rs.40500
47 If the cost of goods sold Rs. 1400000; gross loss sales 20%, then the value of sales will be,
  a) Rs.1166665 b) Rs.1166667 c) 1166660 d) Rs.1166000
48 If opening balance of debtors Rs. 26500; closing balance of debtors Rs. 44000; credit sales Rs. 44000; bad debts Rs. 2000, then the value of cash receive from debtors will be,
  a) Rs.24000 b) Rs.25000 c) Rs.24500 d) Rs.25500
49 If cash paid to creditors Rs. 8750; closing balance of creditors Rs. 8535; bills payable Rs. 2500, then the value of credit will be,
  a) Rs.14785 b) Rs.19785 c) Rs.2715 d) Rs.2285
50 If cash paid to creditors Rs. 33075; returns outwards Rs. 225; credit purchases Rs. 67500; cash purchases Rs. 25000 then the value of closing creditors will be,
  a) Rs.34300 b) Rs.34500 c) Rs.34200 d) Rs.34000

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