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IGNOU: PCO-01 Solved Papers (Dec' 2016)


Bachelor's Preparatory Programme (B.P.P.)
(For Non 10+2)
Term-End Examination
December, 2016
PC0-01 : PREPARATORY COURSE IN COMMERCE
Time : 2 hours
Maximum Marks : 50
General Instructions :

Preparatory Course in Commerce (PC0-01) Questions 1— 50
1)      This is an objective type question paper. Options for the correct answer must be marked only in OMR sheet.
2)      All questions are compulsory.
3)      The question paper consists of 50 questions each of which carries one mark.
4)      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.
5)      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)         find out gross profit only
2)         find out net profit only
3)         record all the transactions only
4)         record, classify and summarize the business transactions in a significant and systematic manner
2. Sales Book is meant for recording
1)         all sales
2)         all credit sales
3)         all cash sales
4)         credit sales of merchandise only
3. Business includes
1)         Trade and Aids to trade
2)         Trade only
3)         Industry and Commerce
4)         Industry and Aids to trade
1)         a gain
2)         a loss
3)         an asset
4)         a liability
5. The balance of Petty Cash Book is
1)         an income
2)         an asset
3)         an expense
4)         a liability
6. Purchases made on credit not recorded would affect
1)         Purchases A/c and Suppliers A/c
2)         Sales A/c
3)         Purchases A/c
4)         Suspense A/c
7. Returns Outwards Book is kept to record
1)         return of anything purchased
2)         return of goods purchased
3)         return of goods sold
4)         credit purchase of goods
8. Commission outstanding account is
1)         a Real A/c
2)         a Personal A/c
3)         a Nominal A/c
4)         Both Real and Nominal A/cs
9. Which of the following will not be shown in the Balance Sheet?
1)         Creditors
2)         Goodwill
3)         Contingent liability
4)         Cash
10. 500 paid to Anil as wages should be debited to
1)         Wages A/c
2)         Cash A/c
3)         Anil's A/c
4)         Suspense A/c
11. Which of the following is a Real Account ?
1)         Loan A/c
2)         Machine A/c
3)         Drawings A/c
4)         Ram's A/c
12. Patents appear on
1)         the debit side of Profit and Loss A/c
2)         the credit side of Profit and Loss A/c
3)         the assets side of Balance Sheet
4)         the liabilities side of Balance Sheet
13. Which of the following will not be included in Balance Sheet ?
1)         Opening stock
2)         Closing stock
3)         Debtors
4)         Creditors
14. Postage and Telegram is charged to
1)         Manufacturing A/c
2)         Drawings A/c
3)         Trading A/c
4)         Profit and Loss A/c
15. Profit on sale of an asset will be recorded in
1)         Trading A/c
2)         Profit and Loss A/c
3)         Suspense A/c
4)         Balance Sheet
16. Donation received for a specific purpose is to be taken as
1)         Capital receipts
2)         Revenue receipts
3)         Capital expenditure
4)         Revenue expenditure
17. The final step of accounting cycle is
1)         Trial Balance
2)         Balance Sheet
3)         Ledger
4)         Journal
18. Real Accounts relate to
1)         Incomes only
2)         Expenses only
3)         Losses only
4)         Assets only
19. Amount realized on account of goods sold is called
1)         Gain
2)         Profit
3)         Revenue
4)         Equity
20. Which of the following transactions leads to contra entry in the Cash Book ?
1)         Received rent 1,000
2)         Goods purchased from Anil for cash 2,000
3)         Amount paid to Mohan 5,000
4)         Withdrawal of 10,000 from the bank
21. Narration is written
1)         while classifying the transactions
2)         for every transaction recorded in the Journal
3)         at the time of preparing Trial Balance
4)         while preparing Balance Sheet
22. Bank overdraft is a
1)         fixed asset
2)         short term liability
3)         current asset
4)         long term liability
23. A copy of customer's account given by the bank is called
1)         Pass Book
2)         Cash Book
3)         Cheque Book
4)         Purchase Book
24. Expenses incurred during the regular course of business are called
1)         Capital expenditure
2)         Revenue expenditure
3)         Revenue loss
4)         Deferred revenue expenditure
25. A system of advancing a fixed amount to the petty cashier periodically is called
1)         Single entry system
2)         Double entry system
3)         Imprest system
4)         Temporary advance system
26. Bank Reconciliation Statement is prepared by
1)         Bank
2)         Auditors
3)         Debtors
4)         Customers of the bank
27. Carriage outwards will be recorded in
1)         Profit and Loss A/c
2)         Trading A/c
3)         Suspense A/c
4)         Drawings A/c
28. Current liabilities do not include
1)         dividend payable
2)         short term loan
3)         outstanding expenses
4)         debentures
29. Sales Tax collected is a
1)         contingent liability
2)         fixed liability
3)         current liability
4)         current asset
30. The main objective of preparing the 'Journal' is
1)         to record business transactions
2)         to make posting in Ledger
3)         to journalise the cash transactions
4)         to ascertain gross profit only
31. Cash given away as charity shall be debited to
1)         Cash A/c
2)         Charity A/c
3)         Sales A/c
4)         Purchases A/c
32. Bad debts recovered will be shown in
1)         Trading A/c
2)         Manufacturing A/c
3)         the liabilities side of Balance Sheet
4)         Profit and Loss A/c
33. A contra entry appears on both the sides of
1)         Purchases Book
2)         Sales Book
3)         Cash Book
4)         Balance Sheet
34. Which of the following equations is correct ?
1)         Assets = Capital + Liabilities
2)         Assets = Capital — Liabilities
3)         Assets = Liabilities — Capital
4)         Assets = Capital ÷ Liabilities
35. What will be the effect of rent paid on accounting equation ?
1)         Cash will decrease
2)         Cash will increase
3)         Capital will decrease
4)         Cash and capital both will decrease
36. Which of the following accounts has debit balance?
1)         Income
2)         Asset
3)         Liability
4)         Outstanding expenses
37. Premium received on issue of debentures is an example of
1)         Capital profit
2)         Current asset
3)         Fixed asset
4)         Revenue profit
38. Cost of goods sold is
1)         Opening stock + Closing stock
2)         Opening stock — Closing stock
3)         Opening stock x Closing stock
4)         Opening stock + Purchases + Direct expenses — Closing stock
39. Manufacturing Account is prepared to find out
1)         Cost of goods sold
2)         Total cost
3)         Net profit/Net loss
4)         Cost of goods produced
40. Depreciation of fixed assets is treated as
1)         Revenue expenditure
2)         Deferred revenue expenditure
3)         Capital expenditure
4)         Capital loss
41. Trading Account is prepared to find out
1)         Cost of goods sold
2)         Cost of production
3)         Net profit/Net loss
4)         Gross profit/Gross loss
42. 'Income received in advance' will be shown in Balance Sheet as
1)         Current assets
2)         Current liabilities
3)         Fixed assets
4)         Long term liabilities
43. The main objective of preparing a Balance Sheet is to know about
1)         Net profit of business
2)         Arithmetical accuracy of accounting work
3)         Financial position of the business
4)         Cost of goods sold
44. A cheque payable at the counter of the bank without identification is called
1)         Bearer cheque
2)         Specific cheque
3)         Order cheque
4)         Crossed cheque
45. 'Salaries and Wages' are shown on the
1)         Debit side of Trading A/c
2)         Credit side of Trading A/c
3)         Debit side of Profit and Loss A/c
4)         Assets side of Balance Sheet
46. Goodwill is a/an
1)         Fictitious Asset
2)         Fixed Asset
3)         Intangible Asset
4)         Tangible Asset
47. All direct expenses are shown in
1)         Balance Sheet
2)         Capital A/c
3)         Trading A/c
4)         Profit and Loss A/c
48. Which of the following items is a liquid asset ?
1)         Machinery
2)         Land and Building
3)         Loose Tools
4)         Bank Balance
49. 'Interest on drawings' is shown on the
1)         Debit side of Trading A/c
2)         Credit side of Trading A/c
3)         Debit side of Profit and Loss A/c
4)         Credit side of Profit and Loss A/c
50. 'Accrued income' shown in Trial Balance will be shown in
1)         Balance Sheet
2)         Trading A/c
3)         Manufacturing A/c
4)         Profit and Loss A/c

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