IGNOU: PCO-01 Solved Papers (Dec' 2018)

Bachelor's Preparatory Programme (B.P.P.)
(For Non 10+2)
Term-End Examination
December, 2018
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. Recording of business transactions in accounts with the help of documents should be based on
1)         Single entry system
2)         Double entry system
3)         Verifiability and objectivity of evidence
4)         Combination of Single and Double entry system
2. Wages paid to Billu should be debited to
1)         Billu's A/c
2)         Wages A/c
3)         Cash A/c
4)         Goods A/c

3. The concept of Conservatism is applicable
1)         In providing for discount on creditors
2)         While providing for depreciation
3)         To charge bad and doubtful debts
4)         In making the provision for future losses
4. Cash account is a/an
1)         Personal A/c
2)         Nominal A/c
3)         Real A/c
4)         Intangible asset
5. Loan from Bank is a/an
1)         Personal A/c
2)         Real A/c
3)         Nominal A/c
4)         Asset
6. Purchase of goods is a
1)         Nominal A/c
2)         Personal A/c
3)         Real A/c
4)         Representative Personal A/c
7. Rent paid to landlord will be credited to
1)         Landlord A/c
2)         Cash A/c
3)         Rent A/c
4)         Drawings A/c
8. Real accounts relate to
1)         Assets
2)         Expenses
3)         Losses
4)         Incomes
9. Financial position of the business means
1)         Position about profits and losses
2)         Position about incomes and expenses
3)         What the business owes to others and what it owns at a given point of time
4)         Position about liquid funds
10. Salary Outstanding account is a
1)         Personal A/c (Natural)
2)         Real A/c
3)         Nominal A/c
4)         Personal A/c (Representative)
11. Trial Balance is prepared
1)         Before posting into the ledger
2)         After preparation of final accounts
3)         After posting into the ledger and balancing of accounts
4)         All of the above
12. Posting is done in the
1)         Journal
2)         Ledger
3)         Trial Balance
4)         Balance Sheet
13. Goods given as charity should be credited to
1)         Sales A/c
2)         Purchases A/c
3)         Charity A/c
4)         Cash A/c
14. 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)         A customer's account in the bank's books
15. A Bank Reconciliation Statement is a
1)         Part of Pass Book
2)         Part of Cash Book
3)         Statement prepared by the bank
4)         Statement prepared by the customer
16. Suspense account given in the Trial Balance will be shown in the
1)         Manufacturing A/c
2)         Trading A/c
3)         Profit and Loss A/c
4)         Balance Sheet
17. Sale of old typewriter used in the office should be credited to
1)         Sales A/c
2)         Cash A/c
3)         Capital A/c
4)         Typewriter A/c
18. Sales Tax collected is a/an
1)         Liability
2)         Asset
3)         Expense
4)         Loss
19. Bank overdraft is a/an
1)         Liability
2)         Asset
3)         Revenue
4)         Expense
20. Income tax payable is a/an
1)         Liability
2)         Asset
3)         Loss
4)         Expense
21. Business includes
1)         Industry and Commerce
2)         Trade and Aids to trade
3)         Industry and Aids to trade
4)         Trade only
22. A person who owes some amount to the business is called
1)         Debtor
2)         Creditor
3)         Owner
4)         Auditor
23. The final step of accounting cycle is the preparation of
1)         Trial Balance
2)         Balance Sheet
3)         Trading and Profit & Loss A/c
4)         Ledger
24. Which of the following is a Personal account ?
1)         Bakul A/c
2)         Loan from Rakesh A/c
3)         Salaries Outstanding A/c
4)         All of the above
25. Equity is the
1)         Difference between the value of assets and value of liabilities
2)         Anything which has economic value
3)         Amount earned through business operations
4)         Amount realized from goods sold
26. Excess of Revenue over Expenses is
1)         Capital
2)         Loss
3)         Drawings
4)         Profit
27. Which of the following transactions leads to Contra entry in the Cash Book ?
1)         Deposited t 10,000 in the bank
2)         Received t 4,000 from Naresh
3)         Goods sold to Rakesh for cash t 1,000
4)         Goods purchased from Mohan for cash 1,000
28. Balance of Cash Book is a/an
1)         Asset
2)         Income
3)         Expense
4)         Liability
29. Depreciation on Fixed Assets is treated as
1)         Capital expenditure
2)         Revenue receipt
3)         Deferred revenue expenditure
4)         Revenue loss
30. Objective of preparing Balance Sheet is to ascertain
1)         Financial position of business
2)         Net results of business activities
3)         Arithmetical accuracy of the transactions recorded
4)         Assets of the business
31. Amount brought in by the proprietor, Ramesh, in the business should be credited to
1)         Cash A/c
2)         Capital A/c
3)         Ramesh A/c
4)         Drawings A/c
32. Office equipment purchased on credit will be recorded in
1)         Journal Proper
2)         Cash Book
3)         Sales Book
4)         Purchase Book
33. Which note is sent to the customer when he returns the goods ?
1)         Debit note
2)         Credit note
3)         Promissory note
4)         Cheque
34. Amount realized from the goods sold is called
1)         Revenue
2)         Gain
3)         Equity
4)         Profit
35. Goods sold to Mahesh for cash will be credited to
1)         Cash A/c
2)         Mahesh A/c
3)         Sales A/c
4)         Purchase A/c
36. The statement containing various ledger balances is known as
1)         Trial Balance
2)         Bank Reconciliation Statement
3)         Statement of Account
4)         Financial Statement
37. According to money measurement concept, which of the following will be recorded in the books of account ?
1)         Health of Manager
2)         Quality of goods
3)         Value of building
4)         Qualifications of employees
38. Revenue is said to have been realized when
1)         The sale is made
2)         Goods are manufactured
3)         Cash is received
4)         Sale is made and cash is received
39. Discount allowed on issue of shares is an example of
1)         Capital loss
2)         Capital expenditure
3)         Revenue expenditure
4)         Deferred revenue expenditure
40. Repair incurred for using a second-hand car is a
1)         Capital expenditure
2)         Revenue expenditure
3)         Capital loss
4)         Deferred revenue expenditure
41. Sales are equal to
1)         Cost of goods sold + Gross profit
2)         Cost of goods sold - Gross profit
3)         Gross profit - Cost of goods sold
4)         Cost of goods sold - Stock
42. Interest on drawings is regarded as
1)         Expenditure for the business
2)         Loss for the business
3)         Gain for the business
4)         Liability for the business
43. Which of the following is prepared to find out cost of production ?
1)         Manufacturing A/c
2)         Trading A/c
3)         Profit and Loss A/c
4)         Balance Sheet
44. Closing stock is valued at
1)         Cost price
2)         Market price
3)         Cost price or market price whichever is less
4)         Cost price or market price whichever is higher
45. Petty cash book is used for recording
1)         Purchases of current assets
2)         Purchases of fixed assets
3)         Payment of long term liabilities
4)         Small expenses like postage, stationery, etc.
46. Which of the following statements is false ?
1)         Ram's account is a Personal account.
2)         Loan account is a Personal account.
3)         Capital account is a Personal account.
4)         Rent account is a Personal account.
47. Single entry system of book-keeping is a system of
1)         Incomplete records
2)         Reliable records
3)         Providing true financial position
4)         Helping in locating errors
48. Which of the following equations is correct?
1)         Capital — Assets = Liabilities
2)         Capital + Assets = Liabilities
3)         Capital + Liabilities = Assets
4)         Capital x Liabilities = Assets
49. When an asset is recorded at its price actually paid, it is related to
1)         Materiality concept
2)         Conservatism concept
3)         Cost concept
4)         Matching concept
50. All indirect expenses are shown in
1)         Trading A/c
2)         Profit and Loss A/c
3)         Manufacturing A/c
4)         Profit and Loss Appropriation A/c

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