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

(For Non 10+2)

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

December 2014

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 2014, Click on the Button below.

1. Buying and selling activity is called

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

2. Goods purchased for cash from Anil will be credited to

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

3. The concept of conservatism implies

1. Prudence in measuring income
2. Overstatement of assets
3. Understatement of loss
4. Overstatement of profit

4. Which of the following equations is correct?

1. Capital = Assets − Liabilities
2. Assets = Capital + Liabilities
3. Liabilities = Assets − Capital
4. All of the above

5. Single entry system of book-keeping is a system of

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

6. Ledger Folio is the column in

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

7. Which of the following is a Nominal Account?

1. Loan A/c
2. Drawing A/c
3. Furniture A/c
4. Wages A/c

8. Goods sold to Rakesh for cash will be debited to

1. Sales A/c
2. Purchases A/c
3. Cash A/c
4. Rakesh’s A/c

9. The debit balance of a personal account indicates

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

10. Which of the following is not entered in the books of account?

1. Cash discount
2. Trade discount
3. Interest paid
4. Rent received

11. Trial Balance is prepared from

1. Profit and Loss A/c
2. Balance Sheet
3. Journal
4. Ledger

12. Preliminary expenses are an example of

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

13. Repairs of office building will be shown in

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

14. Depreciation basically arises from

1. Physical wear and tear
2. Fall in prices
3. Fall in the value of money
4. Fall in the market value of an asset

15. Sales are equal to

1. Cost of goods sold + Gross profit
2. Cost of goods sold − Gross profit
3. Gross profit − Cost of goods sold
4. Opening stock + Purchases − Closing stock

16. Closing stock is valued at

1. Market price
2. Cost price
3. Cost price or market price whichever is lower
4. Cost price or market price whichever is higher

17. A business has liabilities of ₹ 5,00,000 and owner’s equity is ₹ 12,00,000. Its assets would be

1. ₹ 17,00,000
2. ₹ 7,00,000
3. ₹ 12,00,000
4. ₹ 24,00,000

18. Additional capital introduced is a

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

 19. An example of representative personal account is

1. Cash
2. Prepaid expenses
3. Commission received
4. Interest paid

20. Which of the following statements is true?

1. Posting is done in the journal.
2. Ledger is the principal book of entry.
3. Nominal accounts relate to persons.
4. Assets always have credit balance.

21. Goods taken away by the proprietor for personal use not recorded anywhere, is an error of

1. principle
2. commission
3. omission
4. compensation

22. In case of a Bill of Exchange, the drawer is the

1. Payee
2. Endorsee
3. Debtor
4. Creditor

23. Imprest System is related to

1. Single Column Cash Book
2. Double Column Cash Book
3. Petty Cash Book
4. Three Column Cash Book

24. Cash discount is given to the customers on

1. Payment before due date
2. Cash purchases
3. Credit purchases
4. Large scale purchases

25. ‘Wages and Salaries’ will be shown in

1. Profit and Loss A/c
2. Profit and Loss Appropriation A/c
3. Balance Sheet
4. Trading A/c

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26. Cost of production will be transferred to

1. Trading A/c
2. Profit and Loss A/c
3. Trial Balance
4. Balance Sheet

27. Outstanding expenses given in Trial Balance will be recorded in

1. Trading A/c
2. Profit and Loss A/c
3. Profit and Loss Appropriation A/c
4. Balance Sheet

28. Expenditure incurred for maintaining the fixed assets are regarded as

1. Capital expenditure
2. Revenue expenditure
3. Deferred Revenue expenditure
4. None of the above

29. Interest on drawings is

1. an expenditure for the business
2. a loss for the business
3. a gain for the business
4. of no use for the business

30. A Balance Sheet reflects

1. Assets only
2. Liabilities only
3. Incomes and Expenditures
4. Assets and Liabilities

31. Error of principle arises when

1. there is a wrong totalling
2. there is a wrong posting
3. there is an omission of recording a transaction
4. correct distinction is not made between capital and revenue items

32. Bank overdraft is a

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

33. Income tax paid is

1. an income
2. an expense
3. a liability
4. an asset

34. Which of the following is sent to a customer when he returns the goods?

1. Credit note
2. Debit note
3. Promissory note
4. Cheque

35. Office equipments purchased on credit will be recorded in

1. Purchase Book
2. Cash Book
3. Sales Book
4. Journal Proper

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36. Credit balance of Pass Book shows

1. an income
2. an asset
3. a liability
4. an expenditure

37. Trading Account is prepared to find out

1. Cost of sales
2. Cost of production
3. Net profit
4. Gross profit

38. Returns Inwards Journal is meant for recording

1. Cash sales
2. Sales return
3. Credit sales
4. All sales

39. Which branch of accounting is concerned with the measurement and control of costs?

1. Cost Accounting
2. Financial Accounting
3. Corporate Accounting
4. Management Accounting

40. Which of the following errors is disclosed by a Trial Balance?

1. Error of omission
2. Error of commission in journal
3. Error of principle
4. Wrong casting of an account

41. All indirect expenses are shown in

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

42. Goodwill is a/an

1. Tangible asset
2. Wasting asset
3. Fixed asset
4. Intangible asset

43. Excess of income over expenditure is a

1. Profit
2. Loss
3. Capital gain
4. Capital loss

44. A statement showing assets and liabilities at the end of an accounting year is called

1. Trial Balance
2. Ledger
3. Journal Proper
4. Balance Sheet

45. When an asset is recorded at its price actually paid, it is based on

1. Matching concept
2. Cost concept
3. Conservatism concept
4. Materiality concept

46. Bad debts will be debited to

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

47. Loss on sale of an asset will be recorded in

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

48. Which of the following is a liquid asset?

1. Cash
2. Bank balance
3. Short-term securities
4. All of the above

49. Sales Return Journal is also called

1. Sales Book
2. Invoice Book
3. Return Inwards Journal
4. Return Outwards Journal

50. A cheque payable at the counter of the bank without identification is called

1. Crossed cheque
2. Specific cheque
3. Order cheque
4. Bearer cheque

To Get the Answer Key: PCO 101 December 2014, Click on the Button below.

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