GS: Hindi / English · Language questions stay in their original language.
120 questions · 120 marks · 2 hours
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Correct answer: (E) None of the above
Deposits exceeding withdrawals make a favourable balance, not an overdraft—so the first statement is wrong. The Bank Reconciliation Statement is prepared by the customer, not the bank—so the second is wrong too. Only the third is right, and it is not offered alone, so the answer is ‘None of the above’.
Correct answer: (A) Debit balance as per Cashbook
A favourable balance of the cash book means a debit balance in it—that is, money lying in the bank.
Correct answer: (C) Decreased, increased
An amount paid by customers straight into the bank is already in the passbook but not in the cash book. So in reconciling, the passbook balance has to be decreased or the cash book balance increased.
Correct answer: (E) None of the above
The depletion method is applied to wasting assets such as mines, quarries and oil wells, whose store falls as it is taken out. None of the three given is such an asset.
Correct answer: (E) None of the above
Capital reserve is not created out of distributable profits, a dividend equalisation reserve is not an instance of general reserve, and a general reserve is not tied to any specific purpose—all three statements are wrong.
Correct answer: (B) Preceding day
If the due date of a bill falls on a public holiday, the bill becomes due on the day just before it.
Correct answer: (B) Bank A/c
On the dishonour of a discounted bill the bank takes the money back, so the drawer credits the Bank A/c in his books.
Correct answer: (A) When the drawer retains the bill till maturity
When the drawer keeps the bill till maturity the payment comes to him, so the drawer and the payee are the same person.
Correct answer: (B) Invoice price less stock reserve
In the consignor's balance sheet the consignment stock is shown on the assets side at invoice price less the stock reserve, so that the profit loaded into it is removed.
Correct answer: (B) ₹15,00,000
The total cost = 10,00,000 + 1,00,000 + 1,00,000 = ₹12,00,000. A 20% margin on the selling price means the cost is 80% of it, so the sales value = 12,00,000 ÷ 0·8 = ₹15,00,000.
Correct answer: (B) When a separate set of books is maintained, expenses paid by a venturer will be credited to the Venturer’s Capital A/c.
When a separate set of books is kept, an expense paid by a venturer out of his own pocket is credited to his capital account, since the venture then owes him that sum.
Correct answer: (B) Revenue Expenditure
Legal expenses incurred in defending a suit for breach of a contract to supply goods are revenue expenditure, since they belong to the ordinary course of trade.
Correct answer: (E) None of the above
The salary was paid by cheque on 25 June; whether it was banked on 3 July makes no difference to the firm's books. So no entry falls to be made on the date of the final accounts, and the answer is ‘None of the above’.
Correct answer: (C) ₹22,000
For the year ended 31 March 2023, eight months of the first premium (₹18,000)—April to November 2022—fall in, that is 18,000 × 8/12 = ₹12,000. Four months of the second (₹30,000)—December 2022 to March 2023—that is 30,000 × 4/12 = ₹10,000. In all ₹22,000 is debited to Profit & Loss A/c.
Correct answer: (A) Accrual concept
Leaving out the adjustments for outstanding and prepaid expenses violates the accrual concept, since an expense must be shown in the period to which it belongs.
Correct answer: (E) None of the above
In an accounting information system the control sub-system neither collects the data nor processes it nor presents it in a standard form—it ensures the accuracy and the safety of all that. So none of the options is correct.
Correct answer: (E) None of the above
In the right matching MIS is the management-level system giving routine summary and exception reports, DSS helps in decisions, TPS handles the daily transactions and ESS serves the top management. No code given carries that order, so the answer is ‘None of the above’.
Correct answer: (D) More than one of the above
Software made to the needs and specifications of users is called both ‘customized’ and ‘tailor-made’—two names for the same thing, so the answer is ‘more than one’.
Correct answer: (B) Called-up amount
On the forfeiture of shares the Share Capital A/c is debited with the called-up amount, since the company had made its call to that extent.
Correct answer: (E) None of the above
The Receipts and Payments A/c records both revenue and capital items, so the first statement is false; a subscription received in advance is a liability and not an asset, so the third is false too. The false ones are 1 and 3, which no option offers.
Correct answer: (A) Should be credited to a separate account and shown on the liabilities side of the Balance Sheet
A donation received for a specific purpose is not treated as income; it is credited to a separate account and shown on the liabilities side, since it has to be spent on that purpose.
Correct answer: (E) None of the above
HDFC, TCS and Tata Steel are all profit-making business companies. None of them is a not-for-profit organisation, so the answer is ‘None of the above’.
Correct answer: (B) ₹10,00,000
Debtors get a month and a half's credit, so the debtors' balance of ₹1,25,000 on 31 March stands for a month and a half of credit sales. The credit sales for the year = 1,25,000 × 12/1·5 = ₹10,00,000.
Correct answer: (B) ₹67,000
A gross profit of 20% on cost means the sales are 1·2 times the cost, so the cost of goods sold = 6,00,000 ÷ 1·2 = ₹5,00,000. Then 50,000 + 5,00,000 + 10,000 + 7,000 − closing stock = 5,00,000, so the closing stock = ₹67,000.
Correct answer: (E) None of the above
Chandresh got 1/5, half of it (1/10) gifted by Adesh and the other half taken equally from both—1/20 from each. So Adesh comes to 3/5 − 3/20 = 9/20 and Bhadresh to 2/5 − 1/20 = 7/20, that is a new ratio of 9 : 7 : 4, which is not among the options.
Correct answer: (E) None of the above
Mathur's capital stood for twelve months and Goyal's for eight, so the ratio of capital-months is 2 : 1. By the question Goyal was given 25% of the total profit for conducting the business, which is ₹2,60,000—so the total profit is ₹10,40,000, and of the remaining ₹7,80,000 Mathur's two-thirds share is ₹5,20,000. That sum is not among the options, so the answer is ‘None of the above’.
Correct answer: (A) Yes
A new partner can come in only with the consent of all the present partners. If both Mannu and Bhanu agree, Channu can become a partner—so the answer is ‘Yes’; Bhanu's consent alone would not do.
Correct answer: (E) None of the above
The shares given—2/5, 3/7 and 3/10—add up to 79/70, which is more than one: the ratio itself is inconsistent. In such a case L's gain ratio on S's retirement cannot be worked out, so the answer is ‘None of the above’.
Correct answer: (A) ₹50,000
Last year a turnover of ₹30,00,000 gave a profit of ₹6,00,000, that is 20% of sales. This year the sales from 1 April to 30 June were ₹7,50,000, so the profit is taken as ₹1,50,000, of which Chelsi's one-third share is ₹50,000.
Correct answer: (A) The amount received on the forfeited share
The discount allowed on the reissue of forfeited shares cannot exceed the amount already received on those shares—otherwise the company would be out of pocket.
Correct answer: (D) More than one of the above
For the analysis of financial statements the funds flow statement, the cash flow statement, ratio analysis and net working capital analysis are all used, so the answer is ‘more than one’.
Correct answer: (B) Interest, preference dividend
To find the rate of return on equity share capital, both the interest and the preference dividend are taken out of the net profit before interest, since they are paid before the equity shareholders' share.
Correct answer: (A) a-4, b-3, c-2, d-1
The matching runs—the finished goods turnover ratio points to falling demand (a-4), the interest coverage ratio to an inability to pay interest (b-3), the debt-service coverage ratio to an inability to pay the financial institutions (c-2), and the current and quick ratios to a liquidity crisis (d-1).
Correct answer: (B) Fixed asset
For a cloth dealer furniture is a fixed asset, since it is kept not for sale but for running the business.
Correct answer: (B) Cash used for financing activities: ₹7,00,000
A dividend declared and paid is cash used in financing activities, being money returned to the providers of capital.
Correct answer: (D) More than one of the above
The basic function of financial accounting is to record transactions, to classify them and to summarise them—all three, so the answer is ‘more than one’.
Correct answer: (A) The sale is made
Revenue from the sale of goods belongs to the period in which the sale is made, even if the money comes later—that is the accrual principle.
Correct answer: (A) Trial Balance
The statement showing the balances of all the ledger accounts on a particular date is the trial balance.
Correct answer: (C) Credit Note
When a customer returns goods he is sent a credit note, so that his account may be credited with that amount.
Correct answer: (A) Bank
The passbook is the statement of the customer's account that the bank keeps and gives to him.
Correct answer: (E) None of the above
The statement prepared to reconcile the balances of the cash book and the passbook is the Bank Reconciliation Statement, which is not among the options.
Correct answer: (E) None of the above
For depreciation on leasehold property the appropriate method is held to be the annuity method, which is not among the options.
Correct answer: (C) Drawee
On the renewal of a bill the interest for the extra time is borne by the drawee, the acceptor, so the Interest A/c is debited in his books.
Correct answer: (A) Current A/c
A businessman keeps a current account with his bank, on which he may transact any number of times a day.
Correct answer: (E) None of the above
The right relation is: Sales = Cost of Goods Sold + Gross Profit. The options do not put it in exactly that form, so by the key the answer is ‘None of the above’.
Correct answer: (B) Revenue receipt
The money a club gets from selling grass comes in regularly, so it is a revenue receipt.
Correct answer: (B) Comparing capital between the opening and closing period
Under the net-worth method of single entry the profit is found by comparing the opening and closing capital, adding back the drawings and taking out any fresh capital.
Correct answer: (A) 20%
A profit of 25% on cost means a cost of 100 and sales of 125. The profit per cent on sales = (25 ÷ 125) × 100 = 20%.
Correct answer: (C) Cash A/c
The new partner brings in the goodwill in cash, so the Cash A/c is debited and the old partners' capital accounts credited.
Correct answer: (D) More than one of the above
Giving C a 1/3 share leaves 2/3 to be split between A and B in their old ratio of 2 : 1—A gets 4/9 and B 2/9. So the new ratio is 4 : 2 : 3, which can also be written 4/9 : 2/9 : 1/3—two options saying the same thing, so the answer is ‘more than one’.