BACHELOR'S PREPARATORY PROGRAMME (B.P.P.)
(For Non 10+2)
Term-End Examination
June 2015
PC0-01: PREPARATORY COURSE IN COMMERCE
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 I 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 basic function of Financial Accounting is to
(1) record all business transactions
(2) assist the management in decision-making
(3) present a fair view about the financial position of a business
(4) All of the above
2. Purchase Returns Book is kept to record
(1) returns outwards
(2) credit sales of goods
(3) credit purchases of goods
(4) returns of goods sold
3. The balance of Petty Cash Book is
(1) an income
(2) an asset
(3) an expense
(4) a liability
4. Which of the following will not be shown in the Balance Sheet?
(1) Machinery
(2) Debtors
(3) Closing stock
(4) Contingent liability
5. Rent Outstanding Account is a
(1) Real A/c
(2) Nominal A/c
(3) Personal A/c
(4) None of the above
6. Debit balance of Suspense A/c will be shown on the
(1) credit side of Trading A/c
(2) debit side of Trading A/c
(3) assets side of Balance Sheet
(4) liabilities side of Balance Sheet
7. Prepaid insurance is
(1) an asset
(2) an expense
(3) a gain
(4) a loss
8. Which account is used for rectification of one-sided errors?
(1) Cash A/c
(2) Suspense A/c
(3) Trading A/c
(4) Profit and Loss A/c
9. Patents are a/an
(1) Tangible asset
(2) Intangible asset
(3) Current asset
(4) Wasting asset
10. Salaries and wages are shown on the
(1) debit side of Profit and Loss A/c
(2) debit side of Trading A/c
(3) credit side of Trading A/c
(4) credit side of Profit and Loss A/c
11. Manufacturing Account is prepared to find out
(1) Cost of production
(2) Gross profit
(3) Net profit
(4) Cost of sales
12. Income received in advance will be shown in the Balance Sheet as
(1) Fixed assets
(2) Long-term liability
(3) Current liability
(4) Current assets
13. All direct expenses are shown in
(1) Profit and Loss A/c
(2) Profit and Loss Appropriation A/c
(3) Balance Sheet
(4) None of the above
14. Profit on sale of an asset will be recorded on the
(1) debit side of Trading A/c
(2) credit side of Profit and Loss A/c
(3) debit side of Profit and Loss A/c
(4) credit side of Trading A/c
15. Printing and stationery is charged to
(1) Manufacturing A/c
(2) Trading A/c
(3) Profit and Loss A/c
(4) Balance Sheet
16. Bad debts recovered will be shown on the credit side of
(1) Profit and Loss A/c
(2) Trading A/c
(3) Profit and Loss Appropriation A/c
(4) Capital A/c
17. A person who draws a bill of exchange is known as
(1) Endorser
(2) Drawer
(3) Payee
(4) Drawee
18. Which of the following is sent to a customer when he returns the goods ?
(1) Credit note
(2) Debit note
(3) Cheque
(4) Promissory note
19. Purchases made on credit would affect
(1) Cash A/c only
(2) Purchases A/c only
(3) Supplier's A/c only
(4) Purchases A/c and Supplier's A/c
20. The system of recording transactions based on dual aspect concept is called
(1) Imprest system
(2) Double entry system
(3) Single entry system
(4) Double account system
21. Which of the following accounts shows a credit balance?
(1) Plant A/c
(2) Wages A/c
(3) Debtors A/c
(4) Rent Received A/c
22. Interest on capital is shown on the
(1) debit side of Trading A/c
(2) debit side of Profit and Loss A/c
(3) credit side of Trading A/c
(4) credit side of Profit and Loss A/c
23. The difference of Trial Balance is shown in
(1) Trading A/c
(2) Profit and Loss A/c
(3) Suspense A/c
(4) Capital A/c
24. Excess of expenditure over income is a
(1) Revenue loss
(2) Revenue profit
(3) Capital gain
(4) Capital loss
25. Double entry system of book-keeping is a system of
(1) reliable records
(2) providing true financial position of a business
(3) helping in locating errors
(4) All of the above
26. Which of the following equations is correct ?
(1) Assets = Capital + Liabilities
(2) Assets = Capital — Liabilities
(3) Capital ÷ Liabilities = Assets
(4) Assets = Capital x Liabilities
27. Cost of goods sold is equal to
(1) Sales + Gross profit
(2) Sales ÷ Gross profit
(3) Sales x Gross profit
(4) Sales — Gross profit
28. Real accounts reflect
(1) Liabilities
(2) Gains
(3) Expenses
(4) Assets
29. Goods given away as donation would be credited to
(1) Sales A/c
(2) Donation A/c
(3) Purchases A/c
(4) Cash A/c
30. 1,000 paid as wages for installation of a machine should be debited to
(1) Cash A/c
(2) Machine A/c
(3) Wages A/c
(4) None of the above
31. Which of the following is not a current asset?
(1) Patents
(2) Debtors
(3) Closing stock
(4) Prepaid expenses
32. Pass Book is a copy of
(1) Cash Book relating to bank column
(2) Cash Book relating to cash column
(3) Firm's receipts and payments
(4) Customer's A/c in the bank's books
33. Bank Reconciliation Statement is prepared by the
(1) Auditor of the bank
(2) Creditors
(3) Bank
(4) Customers of the bank
34. Bank overdraft is a/an
(1) Current asset
(2) Current liability
(3) Intangible asset
(4) Tangible fixed asset
35. Trade marks are treated as
(1) Fictitious asset
(2) Tangible asset
(3) Intangible asset
(4) Current asset
36. Underwriting commission is an example of
(1) Capital loss
(2) Capital expenditure
(3) Revenue expenditure
(4) Deferred revenue expenditure
37. Revenue is said to be realized when
(1) Sales are made
(2) Cash is received
(3) Goods are manufactured
(4) Both (1) and (3)
38. Preliminary expenses are a/an
(1) Fixed asset
(2) Fictitious asset
(3) Tangible asset
(4) Intangible asset
39. Which of the following is treated as a liquid asset?
(1) Prepaid expenses
(2) Cash in hand
(3) Credit balance of a bank account
(4) Bills Receivable (B/R)
40. Rent outstanding appearing in Trial Balance will be shown in
(1) Trading A/c
(2) Manufacturing A/c
(3) Liabilities side of Balance Sheet
(4) Assets side of Balance Sheet
41. Goods returned worth 30,000 by Shyam & Co. were taken into stock for 3,000. It is an error of:
(1) Commission
(2) Principle
(3) Omission
(4) Compensating
42. Current liabilities do not include
(1) Outstanding expenses
(2) Accrued income
(3) Proposed dividend
(4) Bank overdraft
43. Small donation received for general purpose is to be taken as
(1) Capital receipts
(2) Capital expenditure
(3) Revenue expenditure
(4) Revenue receipts
44. Sales tax is charged to
(1) Profit and Loss A/c
(2) Manufacturing A/c
(3) Trading A/c
(4) Balance Sheet
45. Sale of old newspapers will be recorded in
(1) Balance Sheet
(2) Trading A/c
(3) Profit and Loss A/c
(4) Profit and Loss Appropriation A/c
46. Carriage inwards are shown in
(1) Profit and Loss A/c
(2) Trading A/c
(3) Balance Sheet
(4) Capital A/c
47. 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
48. Contra entry appears on both the sides of
(1) Cash Book
(2) Sales Book
(3) Balance Sheet
(4) Purchases Book
49. Premium received on issue of shares is treated as
(1) Current liability
(2) Capital profit
(3) Current asset
(4) Fixed asset
50. A copy of Customer's A/c given by the bank is called
(1) Cash Book
(2) Sales Book
(3) Pass Book
(4) Cheque Book