COCEDUCATION.
COM BASIC ACCOUNTING TERMS-1 CA/CMA Santosh kumar
MCQ PRACTICE OF BASIC ACCOUNTING TERMS- PART 1
1. Stock of materials used in production is called
(a) Raw Material
(b) work in Progress
(c) finished goods
(d) Merchandise
2. ___________ is the person to whom firm has sold goods on credit in the ordinary course
of business.
(a) Creditor
(b) Supplier
(c) vendor
(d) debtor
3. Liabilities which are payable after a period of more than one year from the end of
accounting year are called _____________.
(a) Current liabilities
(b) Non- current liabilities
(c) Capital
(d) None of above
4. cash sales = ₹2,00,000
Credit sales = ₹3,00,000
Cash purchase = ₹1,20,000
Credit purchase = ₹1,10,000
Salary paid = ₹30,000
Machine purchased for cash = ₹2,50,000
Calculate profit of the firm.
5. Profit =
(a) Revenue Receipt – Revenue expenditure
(b) All receipts – Revenue expenditure
(c) Revenue receipts – all expenditure
(d) All receipts – all expenditure
6. Sale of machine is ____________.
(a) Revenue receipts
(b) Capital receipts
(c) Revenue expenditure
(d) Capital expenditure
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7. sale of scrap is ___________.
(a) Revenue receipts
(b) Capital receipts
(c) Revenue expenditure
(d) Capital expenditure.
8. Commission received is ____________.
(a) Revenue receipts
(b) Capital receipts
(c) Revenue expenditure
(d) Capital expenditure
9. _______is a concession allowed by the seller on the basis of either Quantity or value of sale.
(a) Cash discount
(b) Trade discount
(c) Bad debt recovered
(d) Bad debts
10. _______is concession allowed to customers for making timely payments or early payments.
(a) Cash discount
(b) Trade discount
(c) Bad debt recovered
(d) Bad debts
11. _________________ is the amount which becomes irrecoverable from debtors.
(a) Cash discount
(b) Trade discount
(c) Bad debt recovered
(d) Bad debts
12. _____________ is the person who is not in a position to pay his debt.
(a) Solvent person
(b) Insolvent person
(c) Sound person
(d) Decent person
13. _____is the person who commence business and bears all risk associated with business.
(a) debtor
(b) Creditor
(c) Proprietor
(d) Solvent person
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14. _____________________ is an economic unit which performs economics activities.
(a) Owner
(b) Entity
(c) Debtors
(d) Creditor
15. _____________ is fall in value of fixed assets because of usage or with efflux of time.
(a) Expense
(b) Revenue expenditure
(c) Depreciation
(d) Loss of fixed asset
16. Ram commenced business and invested ₹ 20,00,000 into the business. He purchased goods
for ₹ 8,00,000 on cash basis and ₹ 3,00,000 on credit basis. He sold goods for ₹ 18,00,000 on
cash basis and ₹ 7,00,000 on credit basis. He also purchased machine for ₹ 3,00,000 on cash
basis and building for ₹ 2,00,000. During the year Ram again invested ₹ 5,00,000 into the
business. He also withdraws ₹ 5000 p.m. from the business for personal use.
Calculate:
(i) Capital of the firm at the end = 24,40,000
(ii) Total purchase = ₹ 11,00,000
(iii) Total sales = ₹ 25,00,000
17. Cash purchase = ₹ 5,00,000
Credit purchase = ₹ 3,00,000
Purchase of machine = ₹ 2,00,000
Purchase return = ₹ 40,000
Calculate net purchase
18. cash sales = ₹1,60,000
Credit sales = ₹2,40,000
Sales return = ₹20,000
Collection from debtors = ₹50,000
Discount allowed = ₹10,000
Calculate net sales
19. In previous Questions, calculate debtors at the end.
20. Goods sold to Mohan on credit for ₹ 10,00,000
Cash received from Mohan = ₹ 7,00,000
Discount allowed to Mohan = ₹ 20,000
Sales return from Mohan = ₹ 50,000
During 2018, Mohan become insolvent and only 30% of the amount could be recovered.
Calculate amount of bad debts.
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21. cash purchase = ₹ 5,00,000
Credit purchase = ₹ 3,00,000
Machine purchased for cash = ₹ 60,000
Machine purchased for credit = ₹ 50,000
Rent paid = ₹ 24,000
Salary paid = ₹ 26,000
Commission paid = ₹10,000
Payment to creditors = ₹1,70,000
Calculate total expenses
22. Rent Paid ₹ 60,000
Outstanding rent at the end ₹ 30,000
Payment to Creditors = ₹ 200000
Calculate total expenses for the year.
23. cost of machine = ₹ 5,00,000
Life of the asset = 10 years
Calculate value of machine at the end of 2nd year
24. On 1 Jan 2021, Ram Invested ₹ 20,00,000 into the business, On 1 April 2021, Ram again
invested ₹ 500,000 into the business. He withdraws ₹ 10,000 p.m. from the business for
household purpose. He also paid ₹ 2,000 p.m. as rent for his personal residence. He paid ₹
25,000 p.a. as tuition fees for his daughter. He also gifted L.C.D of ₹ 10,000 to his friend.
Calculate capital at the end.
25. Calculate total revenue.
Cash Sales = ₹ 8,00,000
Credit sales = ₹ 3,00,000
Sales of scrap = ₹ 40,000
Interest on investment = ₹ 30,000
Sales of machine = ₹ 1,00,000
Collection from debtors = ₹ 2,40,000
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