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

(For Non 10+2)

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

December 2010

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.

To Get the Answer Key: PCO 101 December 2010, Click on the Button below.

1. Which of the following equation is correct?

1. Capital = Assets – Liabilities
2. Capital = Assets + Liabilities
3. Assets = Capital × Liabilities
4. Liabilities = Assets + Capital

2. The concept of conservatism takes into account

1. All expected incomes and losses
2. All expected losses but no expected incomes
3. All expected income but no losses
4. No expected profit and losses

3. Buying and selling activity is called

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

4. Book-keeping is

1. Identifying, measuring, recording and classifying business transitions
2. Analysing the business transactions
3. Classifying the business transactions only
4. Interpreting the business transactions only

5. Purchase book is meant for recording

1. All types of credit purchases
2. All types of purchases
3. All cash purchases
4. Credit purchases of merchandise only

6. Sales of goods to Anil for cash should be debited to

1. Goods A/c
2. Cash A/c
3. Sales A/c
4. Anil’s A/c

7. Which of the following statement is false?

1. Process of journalising is called posting
2. Capital account is a personal account
3. Ledger is the principal book of entry
4. Goodwill account is a real account

8. The Debit balance of a nominal account shows

1. Gross profit
2. Net profit
3. Gains, incomes etc.
4. Expenses, losses etc.

9. An example of representative personal account is

1. Wages
2. Salary
3. Prepaid expenses
4. Cash

10. Single entry system of book-keeping is a

1. System of incomplete records
2. System of reliable records
3. System of providing true financial position
4. System of helping in locating errors

11. Furniture purchased should be debited to

1. Goods A/c
2. Premises A/c
3. Furniture A/c
4. Equipment A/c

12. Which of the following account is a nominal account?

1. Capital A/c
2. Rams A/c
3. Vehicle A/c
4. Wages A/c

13. Ledger folio is the column in

1. Cash book
2. Journal
3. Sales book
4. All of the above

14. The debit balance of a personal account indicates

1. Amount receivable
2. Amount payable
3. Cash in hand
4. Cash at Bank

15. Which of the following errors cell affect the trial balance?

1. Errors of principle
2. Compensatory errors
3. Error of complete omission
4. Error of partial omission

16. Returns outwards book is kept to record

1. Credit purchase of goods
2. Credit sales of goods
3. Returns of goods sold
4. Returns of goods purchased

17. Prepaid insurance is

1. A liability
2. An asset
3. A gain
4. A loss

18. The balance of petty cash book is

1. An income
2. A liability
3. An expense
4. An asset

19. Closing stock is valued at

1. Cost price or market price whichever is less
2. Cost price
3. Market price
4. Cost price or market price whichever is more

20. Profit and loss account shows

1. Accuracy of ledger accounts
2. Capital employed in a business
3. Financial position of a business
4. Profit earned by a business

21. Rent outstanding account is

1. Personal A/c
2. Real A/c
3. Nominal A/c
4. Representative personal A/c

22. Which of the following will not be shown in balance sheet?

1. Missionary
2. Contingent liability
3. Debtors
4. Closing stock

23. Debit balance of suspense A/c will be shown on

1. The credit side of trading A/c
2. The debit side of trading A/c
3. The liabilities side of balance sheet
4. The assets side of balance sheet

24. All transactions are recorded first in the journal, therefore, it is called book of

1. Original entries
2. Adjustment entries
3. Transfer entries
4. Closing entries

25. Impersonal accounts mean

1. Only real accounts
2. Only nominal accounts
3. Personal accounts
4. Real and nominal accounts

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26. Trial balance includes

1. Only real accounts
2. Real, personal and nominal accounts
3. Only personal accounts
4. Only nominal accounts

27. Discount allowed account has

1. A Debit balance
2. A credit balance
3. No balance
4. Both the balance i.e. Debit balance and credit balance

28. Which of the following will increase by a credit entry?

1. Bank overdraft
2. Goodwill
3. Purchase
4. Sales returns

29. The term book of prime entry is normally used for

1. Ledger
2. Journal
3. Sales book
4. Purchase book

1. Which of the following is not entered in the books of accounts?
2. Cash discount
3. Commission received
4. Interest received
5. Trade discount

31. Preliminary expenses are an example of

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

1. Repairs of office building will be shown in
2. Manufacturing A/c
3. Trading A/c
4. Profit and loss A/c
5. Balance sheet

33. Which of the following items are not charged to profit at and loss account?

1. Carriage inwards
2. Carriage outwards
3. Bad debts
4. Depreciation on furniture

34. Depreciation on machinery is shown in

1. Manufacturing A/c
2. Trading A/c
3. Profit and loss A/c
4. Balance sheet

35. Cost of goods sold is

1. Cost of goods purchased + Opening Stock – Closing Stock
2. Sales + Closing Stock = Opening Stock
3. Sales – Closing Stock + Opening Stock
4. Purchases = Opening Stock + Closing Stock

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36. If purchases are ₹42,300; Sales ₹67,550; Wages ₹12,000; Opening stock ₹10,550; and Closing stock ₹12,000; the gross profit would be

1. ₹15,100
2. ₹14,800
3. ₹14,399
4. ₹14,600

37. Additional money brought into business by the proprietor is a

1. Capital receipt
2. Revenue receipt
3. Capital profit
4. Revenue profit

38. Balance sheet is a statement containing the Assets and liabilities of a firm

1. On a particular date
2. For a particular period
3. During a particular period
4. In the form of an accounts

39. Payment by cheque should be debited to

1. Check A/c
2. Cash A/c
3. Customer’s A/c
4. Bank A/c

40. A promissory note is written by the

1. Buyer
2. Seller
3. Bank
4. All of the above

41. Credit purchase of furniture will be recorded in in

1. Cash book
2. Purchases journal
3. Sales journal
4. Journal proper

42. Cash discount is given to the customers on

1. Bulk purchase
2. Cash purchases
3. Payment before due date
4. Credit purchases

43. The packing expenses are shown on the

1. Debit side of Profit and Loss A/c
2. Debit side of Trading A/c
3. Debit side of Manufacturing A/c
4. Liability side of the balance sheet A/c

44. Which of the following items is debited to trading account?

1. Wages and salaries
2. Salaries and wages
3. Salaries
4. Bonus to employees

45. Income Tax payable is

1. A liability
2. A loss
3. An asset
4. An expense

46. Bank overdraft is a

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

47. Interest on drawings is

1. Expenditure for the business
2. Loss for the business
3. Gains for the business
4. Receipt for the business

48. Standing expenses given in trial balance will be shown in

1. Trading A/c
2. Profit and Loss A/c
3. Manufacturing A/c
4. Balance sheet

49. A balance sheet shows

1. Only current assets
2. Only current liabilities
3. Only fixed assets and fixed liabilities
4. All Assets and all liabilities

50. Balance of profit and loss account reflects

1. Gross profit
2. Gross loss
3. Net profit
4. Net profit or net loss

To Get the Answer Key: PCO 101 December 2010, Click on the Button below.

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