IGNOU BPP - PCO Solved Question Papers (Dec; 2015)

(For Non 10+2)
Term-End Examination
December, 2015
Time: 2 hours Maximum Marks: 50
General Instructions:
Preparatory Course in Commerce (PCO-01) Questions 1— 50
(i) This is an objective type question paper. Options for the correct answer must be marked only in OMR sheet.
(ii) All questions are compulsory.
(iii) The question paper consists of 50 questions each of which carries one mark.
(iv) Each question has four alternatives, one of which is correct. Write the Sl. No. of your correct alternative/answer below the corresponding question number in the OMR 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.
(v) 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.
1. The primary function of accounting is to record
(1) Economic data
(2) All types of data
(3) Business transactions
(4) Only profit
2. Which of the following will not be recorded in the books of accounts?
(1) Machinery purchased
(2) Quality of goods
(3) Discount allowed
(4) Discount received
3. The amount brought in by the owner of business is credited to
(1) Cash account
(2) Bank account
(3) Drawings account
(4) Capital account
4. Goods returned by a customer should be debited to
(1) Customer account
(2) Sales returns account
(3) Cash account
(4) Sales account
5. Commerce is related to
(1) Production
(2) Distribution only
(3) Trade and Aids to Trade
(4) Distribution and Consumption
6. The cash discount allowed to a debtor is credited to
(1) Discount account
(2) Customer's account
(3) Sales account
(4) Purchases account
7. Goods withdrawn by the owner for the personal use should be debited to
(1) Drawings account
(2) Purchases account
(3) Capital account
(4) Sales account
8. Which of the following is not a personal account ?
(1) Salary prepaid account
(2) Proprietor's account
(3) Salary outstanding account
(4) Patent account
9. The concession given by the seller to buyer on the list price at the time of sale is called
(1) Commission
(2) Cash discount
(3) Trade discount
(4) Expenditure
10. Persons who supply the goods and services on credit are called
(1) Investors
(2) Creditors
(3) Debtors
(4) Lenders
11. Ledger is a principal book of entries in which
(1) Only personal accounts are opened
(2) Only real and personal accounts are opened
(3) All types of accounts are opened
(4) No accounts are opened
12. In case of bad debts the bad debt amount should be debited to
(1) Debtor's account
(2) Discount allowed account
(3) Bad debts account
(4) Creditor's account
13. The debit balance of personal account shows
(1) Cash in hand
(2) Cash at bank
(3) Amount receivable
(4) Amount payable
14. Which of the following statements is correct?
(1) The process of recording a transaction is called posting.
(2) All the transactions are recorded in personal accounts.
(3) Journal is a book of original entry.
(4) All of the above
15. The debit balance of real accounts implies that
(1) they are assets accounts
(2) they are liabilities accounts
(3) it is the amount payable by the firm
(4) All of the above
16. Which of the following statements is false ?
(1) Posting is required in personal accounts for trade discount.
(2) Compound entry is posted to more than two accounts.
(3) No narration is written while posting into ledger.
(4) All of the above
17. The debit balance of nominal accounts reflects
(1) Gains/Incomes
(2) Net profit
(3) Gross profit
(4) Expenses/Losses
18. Which of the following transactions leads to a contra entry in Cash Book ?
(1) Deposited 2,000 in a Bank.
(2) Received 1,000 from Mohan.
(3) Goods sold for Cash to Suresh 5,000.
(4) Goods purchased for Cash from Meera t 1,000.
19. Profit and Loss account is prepared by transferring the balances of
(1) Nominal accounts only
(2) Real accounts only
(3) Personal accounts only
(4) Real and Personal accounts
20. Sales book is meant for recording
(1) All types of sales
(2) All cash sales
(3) Credit sales of goods only
(4) Cash sales of goods only
21. The balance of petty cash book is
(1) an expense
(2) an income
(3) an asset
(4) a liability
22. Bank reconciliation statement is prepared by
(1) a Business firm
(2) a Bank
(3) a Debtor
(4) a Creditor
23. Bills receivable book is
(1) a book of recording customers' invoices
(2) a subsidiary book
(3) three column cash book
(4) details of debtors
24. A bill of exchange
(1) has three parties
(2) is drawn on a bank
(3) cannot be discounted
(4) All of the above
25. Profits which are not earned in the regular course of business operations are called
(1) Capital receipts (2) Revenue receipts
(3) Capital profits (4) Revenue profits
26. An error not disclosed by the trial balance is usually
(1) an error of principle
(2) an error of complete omission
(3) an error of commission in journal
(4) All of the above
27. Gross profit is ascertained by preparing
(1) Trading account
(2) Manufacturing account
(3) Profit and Loss account
(4) Balance Sheet
28. Bank overdraft is a
(1) Fixed asset
(2) Current asset
(3) Long-term liability
(4) Short-term liability
29. Balance Sheet discloses
(1) Cash position of a business
(2) Financial position of a business
(3) Profit earning capacity of a business
(4) Yearly working of a business
30. If closing stock is given in trial balance, it will be shown in final accounts as
(1) debited to trading account
(2) credited to trading account
(3) shown on the assets side of balance sheet
(4) shown on the liabilities side of balance sheet
31. Carriage inwards is not charged to
(1) Trading account
(2) Manufacturing account
(3) Profit and Loss account
(4) Goods account
32. Capital receipts are amounts received in the form of
(1) additional capital brought by the owner
(2) loans received
(3) sale proceeds of fixed assets
(4) All of the above
33. An example of a current liability is
(1) Share capital
(2) Long-term loans
(3) Trade creditors
(4) Fixed deposits
34. The assets which can be converted into cash easily are called
(1) Fixed assets
(2) Current assets
(3) Intangible assets
(4) Liquid assets
35. When a bank refuses to make payment of a cheque presented to it, it is called
(1) General crossing of a cheque
(2) Special crossing of a cheque
(3) Endorsement of a cheque
(4) Dishonour of a cheque
36. Which of the following is a 'deferred revenue expenditure' ?
(1) Expenditure on formation of a company.
(2) Depreciation on fixed assets
(3) Expenditure incurred for buying goods for resale
(4) Interest on loan for business
37. Amount paid to David posted on the credit side of his account would affect
(1) David's account only
(2) Cash account only
(3) Purchases account and Cash account
(4) Cash account and David's account
38. A bill is drawn on June 12 for two months. It becomes due on 15 th August, which is a public holiday. The due date of the bill will be
(1) 15 August (2) 16 August
(3) 14 August (4) 13 August
39. When a buyer returns the goods to the supplier, a statement is sent to the buyer called
(1) Bank note (2) Promissory note
(3) Debit note (4) Credit note
40. Sales are equal to
(1) Cost of goods sold — Profit
(2) Cost of goods sold + Gross profit
(3) Gross profit — Cost of goods sold
(4) Sales + Purchases + Profit
41. A firm allows a commission of 5% on net profit to its sales manager before charging such commission. The net profits are 21,000. The amount of commission will be
(1) 1,000 (2) 1,050
(3) 1,100 (4) 1,200
42. The assets and liabilities of a firm are : Cash 4,000; Stock 36,000; Debtors 54,200; Bills receivable 12,600; Furniture 28,000; Creditors 42,000 and Rent outstanding 3,700. What will be the amount of capital ?
(1) 89,100 (2) 92,000
(3) 1,34,000 (4) 1,81,000
43. Capital of 'A' was 50,000 on 1-1-2013. He put further capital of 6,000 on 1-10-2013. Interest on capital @ 5% upto 31-12-2013 will be
(1) 2,575 (2) 2,750
(3) 2,800 (4) 2,625
44. Sundry debtors are 50,000, bad debts are 1,500, provision for discount is 2,180. The net sundry debtors amount shown in the Balance Sheet will be
(1) 46,320
(2) 51,500
(3) 45,150
(4) 58,530
45. Goodwill is
(1) Tangible asset (2) Fixed asset
(3) Liquid asset (4) Intangible asset
46. Which of the following statements is true?
(1) A bill of exchange is a bill given to a customer for purchasing goods.
(2) A cheque is a bill of exchange drawn on a bank.
(3) A bill of exchange has three parties.
(4) All of the above
47. Which of the following is a revenue expenditure?
(1) 1,000 spent on repair of machinery
(2) 25,000 spent on issue of shares
(3) 5,00,000 spent on building construction
(4) All of the above
48. Adjustment entries given outside the trial balance are recorded
(1) in Profit and Loss account only
(2) both in Balance Sheet and Profit and Loss account
(3) in Balance Sheet only
(4) in Trading account only
49. Balance Sheet shows the
(1) balances of personal accounts only
(2) balances of personal accounts and real accounts
(3) balances of personal accounts and nominal accounts
(4) balances of nominal accounts and real accounts
50. According to which concept are the owner and his business two separate entities?
(1) Money measurement concept
(2) Cost concept
(3) Business entity concept
(4) Objective evidence concept