IGNOU BPP - PCO Solved Question Papers (June' 2014)

(For Non 10+2)
Term-End Examination
June, 2014
Time : 2 hours Maximum Marks : 50
General Instructions:
Preparatory Course in Commerce (PC0-101) 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 Sl. No. of your correct alternative/ answer 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.
1. The main function of Financial Accounting is to

(1) find out the amount of capital only
(2) find out the Gross Profit only
(3) find out the cost of goods sold only
(4) record, classify and summarize the business transactions systematically
2. Purchase Book is meant for recording
(1) credit purchases of goods
(2) cash purchases
(3) all types of purchases
(4) both credit and cash purchases
3. The balance of Cash Book is
(1) a liability
(2) an asset
(3) an income
(4) an expense
4. Sale of goods to Mohan on credit should be credited to
(1) Mohan's A/c
(2) Cash A/c
(3) Sales A/c
(4) Goods A/c
5. Insurance premium paid in advance is treated as
(1) an asset
(2) a loss
(3) a gain
(4) a liability
6. Rent outstanding is
(1) Nominal A/c
(2) Cash A/c
(3) Real A/c
(4) Representative Personal A/c
7. Which of the following errors shall affect the Trial Balance?
(1) Error of commission
(2) Error of principle
(3) Error of partial omission
(4) Compensatory errors
8. Sales Returns Book is kept to record
(1) credit purchases of goods
(2) returns of goods sold
(3) credit sales of goods
(4) returns of goods purchased
9. The main objective of preparing a 'Journal' is
(1) to prepare a primary record of business transactions
(2) to make posting in ledger
(3) to journalise the cash transactions only
(4) to ascertain the financial position of the business
10. Credit balance of Suspense A/c will be shown in
(1) debit side of Manufacturing A/c
(2) credit side of Manufacturing A/c
(3) the liabilities side of Balance Sheet
(4) the assets side of Balance Sheet
11. 10,000 paid as wages for renovation of a cycle shed should be debited to
(1) Wages A/c
(2) Cash A/c
(3) Repair A/c
(4) Cycle Shed A/c
12. Trading A/c shows
(1) Gross Profit / Gross Loss
(2) Net Profit only
(3) Total of incomes only
(4) Total of expenses only
13. Salaries Outstanding account is
(1) Nominal A/c
(2) Artificial Personal A/c
(3) Real A/c
(4) Representative Personal A/c
14. Commission paid in advance will be treated as
(1) a loss
(2) an income
(3) an asset
(4) a liability
15. Which of the following will not be shown in Balance Sheet?
(1) Closing stock
(2) Contingent liability not provided for
(3) Outstanding expenses
(4) Debentures
16. Profit and Loss A/c shows
(1) accuracy of ledger accounts
(2) capital employed in a business
(3) profit or loss earned by a business
(4) financial position of a business
17. Trademarks will be shown on
(1) the debit side of Trading A/c
(2) the credit side of Trading A/c
(3) the liabilities side of Balance Sheet
(4) the assets side of Balance Sheet
18. Which account is generally used for rectification of one-sided errors?
(1) Capital A/c
(2) Suspense A/c
(3) Drawing A/c
(4) Cash A/c
19. What will be the effect of commission paid on accounting equation?
(1) Cash will decrease
(2) Cash will increase
(3) Capital will increase
(4) Cash and capital will decrease
20. Business includes
(1) Industry and commerce
(2) Trade only
(3) Trade and aids to trade
(4) Industry and aids to trade
21. Real accounts are related to
(1) Tangible assets only
(2) Intangible assets only
(3) Both Tangible and Intangible assets
(4) Gains and Incomes
22. 6,000 received from Anil whose account was written off as bad debts should be debited to
(1) Anil A/c
(2) Cash A/c
(3) Bad-debts A/c
(4) Bad-debts Recovered A/c
23. Goods given away as donation would be credited to
(1) Donation A/c
(2) Cash A/c
(3) Purchases A/c
(4) Profit and Loss A/c
24. Pass Book is a copy of
(1) Customer's A/c in the bank's books
(2) Firm's receipts and payments
(3) Cash Book relating to bank column
(4) Cash Book relating to cash column
25. Unfavourable bank balance refers to
(1) debit balance of Cash Book
(2) credit balance of Cash Book
(3) credit balance of Pass Book
(4) both (2) and (3)
26. Preliminary expenses are an example of
(1) Fictitious asset
(2) Current asset
(3) Tangible asset
(4) Intangible asset
27. Posting of a subsidiary book will be done in the
(1) Trial Balance
(2) Ledger
(3) Journal
(4) Manufacturing A/c
28. Depreciation on plant for a manufacturing concern will be charged to
(1) Profit and Loss A/c
(2) Profit and Loss Appropriation A/c
(3) Capital A/c
(4) Manufacturing A/c
29. Which of the following accounts is prepared to find out the cost of production?
(1) Trading A/c
(2) Manufacturing A/c
(3) Profit and Loss A/c
(4) Profit and Loss Appropriation A/c
30. Sales is equal to
(1) Cost of goods sold + Gross Profit
(2) Closing Stock + Gross Profit
(3) Closing Stock — Gross Profit
(4) Gross Profit — Cost of goods sold
31. Revenue is said to be realised when
(1) the sales are made
(2) goods are manufactured
(3) cash is received
(4) both (1) and (2)
32. Underwriting commission is an example of
(1) Capital expenditure
(2) Deferred revenue expenditure
(3) Capital loss
(4) Revenue expenditure
33. Balance Sheet is a statement containing the assets and liabilities of a business
(1) for a particular period
(2) on a particular date
(3) both (1) and (2)
(4) None of the above
34. Interest on drawings is regarded as
(1) expenditure for the business
(2) an asset for the business
(3) a liability for the business
(4) an income for the business
35. Which of the following is deducted out of the current assets to arrive at liquid assets?
(1) Stock
(2) Cash
(3) Bills
(4) Debtors
36. Rent and Taxes are shown on the
(1) Debit side of Manufacturing A/c
(2) Credit side of Manufacturing A/c
(3) Debit side of Profit and Loss A/c
(4) Credit side of Trading A/c
37. Accrued Income shown in Trial Balance will be shown in
(1) Profit and Loss A/c
(2) Manufacturing A/c
(3) Trading A/c
(4) the assets side of the Balance Sheet
38. Under which concept should the firm be considered as a continuing unit?
(1) Business entity concept
(2) Cost concept
(3) Going concern concept
(4) Conservatism concept
39. Narration must be written
(1) at the time of preparing Trial Balance
(2) for every transaction entered in the Journal
(3) while classifying the transactions
(4) All of the above
40. The final step of accounting process is preparation of
(1) Journal
(2) Ledger
(3) Financial statements
(4) Trial Balance
41. Which of the following transactions leads to contra entry in the Cash Book?
(1) Good purchased from Ram for cash 50,000
(2) Goods sold to Bhim for cash 70,000
(3) Withdrawal of 1,600 from bank
(4) All of the above
42. A system of advancing a fixed amount to the petty cashier periodically is called
(1) Temporary advance system
(2) Imprest system
(3) Single entry system
(4) Double entry system
43. A copy of customer's account given by bank is called
(1) Purchases Book
(2) Cheque Book
(3) Cash Book
(4) Pass Book
44. Loss on sale of asset will be recorded in
(1) Balance Sheet
(2) Profit and Loss Appropriation A/c
(3) Profit and Loss A/c
(4) Manufacturing A/c
45. Cost of goods purchased is 35,000; Sales 70,000 and Closing stock 5,000. The Gross Profit would be:
(1) 40,000
(2) 5,000
(3) 75,000
(4) 1,00,000
46. Single entry system of book-keeping is a system of
(1) reliable records
(2) incomplete records
(3) helping in locating errors
(4) providing true financial position
47. Goods returned worth 3,50,000 by Rohan and Co. were taken into stock for 35,000. It is an error of
(1) Commission
(2) Principle
(3) Omission
(4) Compensating
48. Sales of old newspapers will be recorded in
(1) Manufacturing A/c
(2) Trading A/c
(3) Balance Sheet
(4) Profit and Loss A/c
49. If Cash in hand is 20,000; Land 50,000; Furniture 30,000; and Bills Payable 15,000 Balance Sheet on a given date, the amount of capital would be
(1) 1,15,000
(2) 85,000
(3) 55,000
(4) 75,000
50. A firm pays commission to its manager @ 10% on profits arrived at after charging such commission. What will be the amount of commission if the profits before charging such commission is 22,000?
(1) 1,100
(2) 2,200
(3) 1,000
(4) 2,000