Bachelor’s Preparatory Programme (B.P.P.)

(For Non 10+2)

Term-End Examination (T.E.E.)

June 2016

PCO-101 : Preparatory Course in Commerce

Time : 2 hours

Maximum Marks : 50

General instructions :

Preparatory course in Commerce (PCO – 101)

Questions 1 – 50. 

 (i) All questions are compulsory, each of which carries one mark.

(ii)  Each question has four alternatives, one of which is correct. Write the serial number of your correct alternatives/answers below the corresponding question number in the answer Sheet and then mark the rectangle for the same number in that column. If you find that none of the given alternatives is correct, then write 0 and mark in column 0.

(iii) Do not waste time in reading the whole question paper. Go on solving questions one by one. You may come back to the left out questions, if you have time at the end.

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1. The dual aspect concept of recording business transactions is called

1. Double entry system
2. Double account system
3. Single entry system
4. Hybrid system

2. The basic function of financial accounting is

1. To classify and record all business transactions
2. To interpret financial data
3. To assist management
4. To ascertain the progress of business

3. Which of the following will not be recorded in the books of accounts?

1. Cash withdrawn by the owner from the business
2. Rent paid
3. Gift received
4. Cartage

4. The amount of salary paid to Anil should be debited to

1. Anil’s account
2. Salary account
3. Cash account
4. Wages account

5. Goods returned to supplier should be credited to

1. Supplier’s account
2. Purchases returns account
3. Cash account
4. Purchases account

6. Received ₹ 1,980 against the amount due ₹ 2,000 with discount allowed ₹ 20. The amount of discount allowed should be debited to

1. Discount account
2. Sales account
3. Personal account
4. Profit and Loss account

7. In case of bad debts, its amount should be credited to

1. Debtor’s account
2. Bad debts account
3. Sales account
4. Profit and Loss account

8. Which of the following is not a personal account?

1. Rent prepaid account
2. Rohan’s account
3. ABC Ltd. account
4. Bad debts account

9. Double entry system of book-keeping means

1. Entry in two sets of books
2. Entry for two aspects of a transaction
3. Entry at two places
4. Entry on two sides of an account

10. Writing a brief description about the transaction in Particulars column in Journal is called

1. Posting
2. Narration
3. Entry
4. Journalising

11. Purchase of furniture is debited to

1. Purchases account
2. Goods account
3. Furniture account
4. Cash account

12. When bad debts are recovered, they should be credited to

1. Bad debts recovered account
2. Bad debts account
3. Debtor’s account
4. Cash account

13.  The liabilities of a firm are ₹ 60,000; the claims of the owner are ₹ 1,40,000. The total assets will be

1. ₹ 60,000
2. ₹ 1,40,000
3. ₹ 2,00,000
4. ₹ 80,000

14. Which of the following accounts is not a real account?

1. Salary account
2. Furniture account
3. Building account
4. Cash account

15. Purchases Journal is used for recording

1. Credit purchases of goods
2. All purchases of goods
3. Cash purchases of goods
4. All cash purchases

16. According to which concept is the entity of business treated separate from its owner?

1. Matching concept
2. Dual aspect concept
3. Business entity concept
4. Realisation concept

17. Which of the following transactions is not entered in the Cash Book?

1. Cash sales
2. Rent paid
3. Cash discount
4. Trade discount

18.  Buying and selling activity is called

1. Commerce
2. Industry
3. Trade
4. Business

19. When both the debit and credit aspects of a transaction are recorded in the Cash Book, it is called

1. Opening entry
2. Double entry
3. Closing entry
4. Contra entry

20. The main aim of preparing a Trial Balance is

1. To prepare final accounts
2. To know the financial position of business
3. To test the accuracy of posting
4. To find out gross profit

21. Journal Proper is meant for recording

1. Credit purchases of fixed assets
2. Cash purchases of fixed assets
3. Return of goods purchased
4. All such transactions for which no special journal is kept

22. Bank Reconciliation Statement is a

1. Ledger account
2. Part of Cash Book with bank column
3. Statement which reconciles the balances as per Pass book and Cash Book
4. Pass book statement

23. If payment of a Bill of Exchange is made before the due date, it is called

1. Retiring the Bill
2. Honouring the Bill
3. Endorsing the Bill
4. Retaining the Bill

24. Maintenance charges of a fixed asset is a

1. Capital expenditure
2. Revenue expenditure
3. Revenue loss
4. Deferred revenue expenditure

25. A basis of accounting according to which accounts are prepared for cash received and cash paid is called

1. Cash basis
2. Accrual basis
3. Mixed basis
4. Dual basis

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26. Goods worth ₹ 2,000 received back by the company were taken in stock, but no entry was made. What type of error is this?

1. Commission
2. Omission
3. Principle
4. Compensatory

27. Nominal accounts are related to

1. Liabilities only
2. Expenses, incomes, losses and gains
3. Assets only
4. Expenses and losses only

28. Patents are examples of

1. Fixed assets
2. Current assets
3. Intangible assets
4. Liquid assets

29. Outstanding income is shown in the Balance Sheet as

1. Fixed assets
2. Current assets
3. Short-term liability
4. Long-term liability

30. Which of the following expenses are shown on the debit side of Profit and Loss account?

1. Carriage outward
2. Wages and salaries
3. Carriage inwards
4. Goods returned

31. ‘Wages and Salaries’ are shown in

1. Profit and Loss account
2. Trading account
3. Balance Sheet
4. Profit and Loss Appropriation account

32. Preliminary expenses are an example of a

1. Capital expenditure
2. Revenue expenditure
3. Deferred revenue expenditure
4. Development expenditure

33. An example of fictitious asset is

1. Preliminary expenses
2. Discount allowed
3. Prepaid rent
4. All of the above

34. Current liabilities are liabilities payable

1. After one year
2. Within one year
3. Within five years
4. After five years

35. Overcasting of Purchases Journal would affect

1. Sales account
2. Purchases account
3. Supplier’s account and Purchases account
4. Supplier’s account

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36. Which of the following is deferred revenue expenditure?

1. Expenditure on formation of a company
2. Depreciation on fixed assets
3. Expenditure incurred for buying goods for resale
4. Interest on loan taken for business

37.  ₹ 10,00,000 spent in developing a new area for an estate is a

1. Capital loss
2. Capital expenditure
3. Revenue expenditure
4. Revenue loss

38. Shiva started business with ₹ 2,00,000. He purchased goods on credit from Girish for ₹ 25,000. His total business assets will be

1. ₹ 2,25,000
2. ₹ 2,00,000
3. ₹ 1,75,000
4. ₹ 1,50,000

39. ‘Income received in advance’ appearing in the Trial Balance will be shown in

1. Trading account
2. Profit and Loss account
3. Assets side of Balance Sheet
4. Liabilities side of Balance Sheet

40. Outstanding salaries are shown in Balance Sheet as a

1. Current asset
2. Liability
3. Fixed asset
4. Contingent liability

41. A loan of ₹ 10,000 was made on September 1 @ 6% per annum. No interest was paid till December 31. The accrued interest will be

1. ₹ 150
2. ₹ 200
3. ₹ 500
4. ₹ 600

42. Opening stock: ₹ 15,000; Purchase of goods: ₹ 82,000; Direct expenses: ₹ 9,100; Indirect expenses: ₹ 10,500; and Closing stock: ₹ 18,000. The cost of goods sold will be

1. ₹ 1,06,100
2. ₹ 1,16,600
3. ₹ 88,100
4. ₹ 98,100

43. A manager gets 10% commission on net profits after charging such commission. Before charging the commission the profits were ₹ 55,000. The commission will be

1. ₹ 5,575
2. ₹ 5,000
3. ₹ 5,500
4. ₹ 6,000

44. Bad debts are ₹ 400; new provision for bad debts is ₹ 1,850 and old provision for bad debts is ₹ 60. The amount to be debited to Profit and Loss account in this context will be

1. ₹ 2,190
2. ₹ 2,250
3. ₹ 460
4. ₹ 1,850

45. Accounts are divided into

1. Personal accounts
2. Real accounts
3. Nominal accounts
4. All of the above

46. The concept of costs and revenues comparison is

1. Matching concept
2. Consistency concept
3. Materiality concept
4. Going concern concept

47. Sale of old newspaper will be recorded in

1. Liabilities side of Balance Sheet
2. Trading account
3. Profit and Loss account
4. Assets side of Balance Sheet

48. Which of the following is false?

1. Assets = Liabilities + Capital
2. Liabilities = Assets − Capital
3. Capital = Assets − Expenses
4. Capital = Assets − Liabilities

49. Amount realised from the sale of scrap is adjusted in the

1. Cost of goods sold
2. Cost of goods produced
3. Profit and Loss account
4. Trading account

50. Manufacturing account is prepared to ascertain

1. Cost of goods sold
2. Cost of goods produced
3. Cost of goods purchased
4. Cost of work-in-progress

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