# BPP PCO 101 Preparatory Course in Commerce Solved Question Paper – June 2012

## June 2012

### PCO-101 : Preparatory Course in Commerce

Time : 2 hours

Maximum Marks : 50

### 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 concept of conservatism takes into account

1. all expected income but no losses
2. all expected losses but no expected income
3. no expected profits and losses
4. all expected incomes and losses

2. Which of the following equations is correct?

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

3. Radha started business with ₹ 2,00,000. She purchased goods on credit from Krishan for ₹ 25,000. Her total assets will be

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

4. Commission outstanding account is a

1. personal A/c
2. nominal A/c
3. real A/c
4. both personal and nominal A/c

5. Shruti purchased a building from her friend for ₹ 3,00,000. Its market value is ₹ 4,00,000. What amount will she record in her books?

1. ₹ 4,00,000
2. ₹ 1,00,000
3. ₹ 3,00,000
4. ₹ 7,00,000

6. Nominal accounts are related to

1. liabilities only
2. expenses, incomes, losses and gains
3. assets only
4. expenses and losses only

7. Which of the following accounts normally shown a debit balance?

1. A debtor’s A/c
2. purchases A/c
3. discount allowed A/c
4. all of the above

8. A system of advancing a fixed amount to the petty cashier periodically is called

1. double entry system
2. imprest system
3. single entry system
4. hybrid system

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

1. Incomplete records
2. Reliable records
3. Providing true financial position
4. Helping is locating errors

10. Machine purchased on cash should be debited to

1. Cash A/c
2. Goods A/c
3. Machine A/c
4. Furniture A/c

11. Which of the following accounts is a real account?

1. Bank A/c
2. Cash A/c
3. Loan A/c
4. Capital A/c

12. The credit balance of a personal account indicates

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

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

1. Cash discount

14. Which book is used for recording credit sales of goods?

1. Cash book
2. Sales book
3. Petty cash book
4. Purchases book

15. Opening stock is ₹ 50,000, purchases are ₹ 30,000 and direct expenses are ₹ 20,000. The amount of closing stock is ₹ 10,000. Cost of sales will be

1. ₹ 50,000
2. ₹ 80,000
3. ₹ 90,000
4. ₹ 70,000

16. Income received in advance appearing in Trial Balance will be shown in

2. Profit and loss A/c
3. Assets side of Balance Sheet
4. Liabilities side of balance sheet

1. Profit and loss A/c only
2. Balance sheet only
3. Both trading A/c and balance sheet
4. Both profit and loss A/c and balance sheet

18. Goods returned worth ₹ 35,000 by Rohan and Co. were taken into stock for ₹ 3,500. It is an error of

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

19. The process of transferring the debit and credit balances from their respective accounts to a statement is termed as

1. Posting
2. Preparing a trial balance
3. Journalising
4. Balancing

20. Depreciation on furniture is charged to

2. Manufacturing A/c
3. Profit and loss A/c
4. Suspense A/c

21. Sale of old newspapers will be recorded in

1. Liabilities side of balance sheet
3. Profit and loss A/c
4. Assets

22. Sales tax is charged to

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

23. Carriage inwards shown in trial balance will be recorded in

2. Profit and loss A/c
3. Assets side of balance sheet
4. Liabilities side of balance sheet

24. Small donation received for general purpose is to be taken as

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

25. Bank reconciliation statement is prepared by

1. Debtors
2. Creditors
3. Bank
4. Customer of the bank

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26. Bank overdraft reflects

1. Debit balance in the passbook
2. Debit balance in the cash book
3. Credit balance in the passbook
4. No balance in the passbook

27. Goods sold to Mahesh for ₹ 715 were recorded in his account as ₹ 175. In the rectifying entry, Mahesh A/c will be debited with

1. ₹ 715
2. ₹ 890
3. ₹ 540
4. ₹ 175

28. Fixed assets do not include

1. Goodwill
2. Furniture
3. Prepaid expenses
4. Loose tools

29. Current liabilities do not include

1. Outstanding expenses
2. Proposed dividend
3. Bank overdraft
4. Accrued income

30. Purchase of goods from Vishnu on credit basis should be credited to

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

31. Main objective of preparing a ‘Journal’ is

1. To journalise the cash transactions
2. To prepare initial record of business transactions
3. To make posting in the ledger
4. To ascertain the financial position of the business

32. Cash given away as charity shall be debited to

1. Cash A/c
2. Purchases A/c
3. Sales A/c
4. Charity A/c

33. Goods given away as charity shall be credited to

1. Charity A/c
2. Sales A/c
3. Purchases A/c
4. Cash A/c

34. If Cash is ₹ 10,000, Land ₹ 2,00,000, Debtors ₹ 7,000 and Creditors oo₹ 17,000, the amount of capital would be

1. ₹ 2,00,000
2. ₹ 2,34,000
3. ₹ 2,14,000
4. ₹ 2,17,000

35. ₹ 6,000 received from Meera whose account was written off as bad debt in the previous year should be credited to

1. Meera’s A/c
3. Provision for bad debts A/c

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36. Contra entry appears on both the sides of

1. Purchases book
2. Sales book
3. Cash book
4. Balance sheet

37. Effect of salary paid on accounting equation salary

1. Only cash will increase
2. Only cash will decrease
3. Only capital will decrease
4. Cash and capital both will decrease

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

39. A copy of customer’s A/c given by bank is called

1. Sales book
2. Cash book
3. Passbook
4. Cheque book

40. Manufacturing A/c is prepared to find out

1. Cost of goods sold
2. Cost of goods produced
3. Net profit
4. Net loss

41. Depreciation on fixed assets is treated as a

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

42. Expenditures page in advance will be shown in balance sheet as

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

43. Sales returns journal is also called

1. Sales journal
2. Invoice book
3. Return inwards journal
4. Return outwards journal

44. Which of the following is not a liquid asset?

1. Cash
2. Bank balance
3. Short term securities
4. Closing stock

45. Interest on drawings is shown in the

1. Debit side of trading A/c
2. Debit side of profit and loss A/c
3. Credit side of profit and loss A/c
4. Credit side of trading A/c

46. Cost of goods purchased is ₹ 80,000, Net sales is ₹ 1,00,000 and Closing stock is ₹ 20,000. The gross profit would be

1. ₹ 20,000
2. ₹ 40,000
3. ₹ 80,000
4. ₹ 1,00,000

47. Sales are equal to

1. To cost of goods sold + gross profit
2. Cost of goods sold − gross profit
3. Opening stock + purchases − closing stock
4. Opening stock + gross profit

48. Brokerage/Commission received is shown on the

1. Debit side of trading A/c
2. Credit side of profit and loss A/c
3. Asset side of balance sheet
4. Liabilities side of balance sheet

49. Revenue is said to be realised when

3. Goods are manufactured
4. Offer to sale is made

50. A firm pays commission to its manager @ 10% of profits arrived at after charging such commission. What will be the amount of commission if the profits before charging such commission were ₹ 22,000?

1. ₹ 2,200
2. ₹ 1,100
3. ₹ 2,000
4. ₹ 1,000

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