MID- TERM Examination
MQT-101 Financial Accounting
Syed M. Umair Saulat
Current Paper dated 26-11-2011 Time 8.00 am in North Nazimabad Campus Karachi
Time :: 60 min Total Marks 40
Qno.1 Why we use financial accounting
Business need
Accounting need
Financial need
Managerial need
Qno.2 Which of the following shows a debit balance under normal circumstances?
Asset
Capital
Liability
Profit
Qno.3 Normally the practice of Book Keeping under Single Entry System is followed by:
Small businesses only
Governments only
Large scale businesses only
Both small businesses and governments
Qno.4 An accounting system is used by a business to:
Analyze transactions
Handle routine book-keeping tasks
Classify and summarize financial information
All of the given options
Qno.5 All the costs incurred on the incomplete assets up to the balance sheet date
must be transferred to:
Capital account
Capital work in progress account
Relevant asset account
Owner's equity account
Qno.6 Which of the following is TRUE for Company's negative working capital?
Current Asset > Current Liability
Current Asset = Current Liability
Current Asset < Current Liability
None of the given options
Qno.7 What will be the effect of decrease in closing stock on gross profit?
Gross profit increased
Gross profit decreased
No effect on Gross profit
Gross profit will become positive
Qno.8 Which one of the following is NOT true about Capital Expenditure?
Creates future benefits
Incurred to acquire fixed assets
Incurred to increase the economic life of existing fixed assets
Reduce the profit of the concern
Qno.9 Consider the following:
Beginning inventory 10 units @ Rs. 10 per unit
First purchase 35 units @ Rs. 11 per unit
Second purchase 40 units @ Rs. 12 per unit
Third purchase 20 units @ Rs. 13 per unit
Sold 10 units @ 10
35 units @ 11
40 units @ 12
Eighty-five units were sold, what is the value of the ending inventory using the
FIFO method of inventory costing?
Rs.260
Rs.232
Rs.284
Rs.268
Qno.10 If, Cost of machine = Rs.400, 000
Useful life = 5 years
Residual value = Rs.25, 000
The depreciation of machine per year using straight line method is?
Rs. 160,000
Rs. 96,000
Rs. 75,000
Rs. 57,600
Qno.11 A decrease in value of a fixed asset due to age, wear and tear is known as:
Depreciation
Accumulated Depreciation
Appreciation
Written Down Value
Qno.11 Which of the following shows summary of a company's financial position at a
specific date?
Profit & Loss Account
Cash Flow Statement
Balance Sheet
Income & Expenditure Account
Qno.12 Which of the following item will appear on the Balance Sheet as current assets?
Prepaid expenses
Accrued expenses
Furniture and Equipment
Unearned revenue
Qno.13 which of the following entities is not profit oriented entity?
Sole - proprietorship
Partnership
Companies
Trust
Qno.14 Which concept of an accounting describes that for every debit there is a credit?
Dual aspect concept
Matching concept
Separate entity concept
Money measurement concept
Qno15 Which of the following is the act of recording each transaction in the Journal?
Journalizing
Posting
Folioing
Transferring
Qno.16 Which of the following account would be debited when direct material is
purchased on cash of Rs. 2,000?
Indirect material
FOH
Material/Stock
Cash
Qno.17 Which one of the following methods for inventory valuation may increase income
tax due during the period of inflation?
FIFO Method
Weighted Average Method
Specific Identification Method
LIFO Method
Qno.18 Which of the following is another name of salvage value?
Face value
Fair value
Break up value
Book value
Qno.19 What is the treatment of Depreciation in accounting?
Written in balance sheet under the head of fixed assets
Charged to profit and loss account
Written in balance sheet under the head of current assets
Written in balance sheet under the head of liabilities
Qno.20 If:
· Cost of machine = Rs.
· Useful life = 5 years
· Sale price at the end of
What will be the profit or loss?
Loss of Rs. 40,000
Profit of Rs. 40,000
Profit of Rs. 80,000
Loss of Rs. 80,000
Qno.21 The main goal of Bank Reconciliation Statement is to determine:
If the discrepancy is due to error rather than timing
If the discrepancy is due to timing rather than error
If the discrepancy is due to error rather than amount
If the discrepancy is due to amount rather than timing
Qno.22 Which of the following item appears in Trading Account of a business?
Interest expenses
Wages and salaries
Depreciation expenses
Discount Allowed
Qno.23 Which of the following journal entry will be recorded, if the goods are sold on credit to Mr. 'Been'?
Mr. "Been" / Accounts Receivable account (Dr) and Sales account (Cr)
Cash account (Dr) and sales account (Cr)
Sales account (Dr) and Mr. Been / Accounts Receivable account (Cr)
Goods Sold account (Dr) and Mr. Been / Accounts Receivable account (Cr)
Qno.24 Which of the following particulars are included in the specimen of a cash receipt
voucher?
1) Name of the organization
2) Cash code
3) Date of transaction
(1) & (2) only
(1) & (3) only
(2) & (3) only
(1), (2) & (3)
Qno.25Partially completed products that are not yet ready for sale are known as:
Raw material
Work in process
Finished goods
Closing stock
Qno.26 Which of the following organizations prepare Income & Expenditure account?
Public libraries
NGOs
Labor unions
All of the given options
Qno.27 Which of the following shows summary of a company's financial position at a specific
date?
Profit & Loss Account
Cash Flow Statement
Balance Sheet
Income & Expenditure Account
Qno.28 An informal accounting statement that lists the ledger account balances at a
point in time and compares the total of debit balances with the total of credit
balances is known as:
Income Statement
Balance Sheet
Trial Balance
Cash Book
Qno.29 If the cost of sales is Rs. 60,000, sales are Rs. 95,000 and operating expenses
are Rs.20,000 during the year. What would be the Net Profit?
Rs.15,000
Rs. 35,000
Rs. 55,000
Rs. 60,000
Qno.30 difference between journal voucher and payment voucher Marks3
Answer
Payment Voucher
The purpose of the payment vouchers is to provide a means for paying any taxes due on income which is not subject to withholding. This is to ensure that taxpayers are able to meet the statutory requirement that taxes due are paid periodically as income is received during the year.
Journal Voucher
A journal voucher is an integral part of the audit trail, and carries
(1) a serial number,
(2) transaction date,
(3) transaction amount,
(4) ledger account(s) affected,
(5) reference(s) to documentary evidence (such as invoices or receipts) supporting the entry,
(6) brief description of the transaction, and the
(7) signature(s) or initials of one or more authorized signatories. A journal is, in effect, a collection of financial data culled from journal vouchers.
2 Question mein bhool gaya hoon mager woh accumulated depreciation se related they,
Zindagi mein 2 Logo ka buhat khayal rahkoooo
2nd woh jiss ko tum ney har dukh me pukaara hoo (Mother)
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