Friday, May 17, 2019

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


Bachelor's Preparatory Programme (B.P.P.)
(For Non 10+2)
Term-End Examination
June, 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 dual aspect concept of recording business transactions is called
1)         Double entry system
2)         Double account system
3)         Single entry system
4)         Hybrid system
2. The basic function of financial accounting is
1)         To classify and record all business transactions
2)         To interpret financial data
3)         To assist management
4)         To ascertain the progress of business


3. Which of the following will not be recorded in the books of accounts?
1)         Cash withdrawn by the owner from the business
2)         Rent paid
3)         Gift received
4)         Cartage
4. The amount of salary paid to Anil should be debited to
1)         Anil's account
2)         Salary account
3)         Cash account
4)         Wages account
5. Goods returned to supplier should be credited to
1)         Supplier's account
2)         Purchases returns account
3)         Cash account
4)         Purchases account
6. Received Rs. 1,980 against the amount due 2,000 with discount allowed 20. The amount of discount allowed should be debited to
1)         Discount account
2)         Sales account
3)         Personal account
4)         Profit and Loss account
7. In case of bad debts, its amount should be credited to
1)         Debtor's account
2)         Bad debts account
3)         Sales account
4)         Profit and Loss account
8. Which of the following is not a personal account?
1)         Rent prepaid account
2)         Rohan's account
3)         ABC Ltd. account
4)         Bad debts account
9. Double entry system of book-keeping means
1)         Entry in two sets of books
2)         Entry for two aspects of a transaction
3)         Entry at two places
4)         Entry on two sides of an account
10. Writing a brief description about the transaction in Particulars column in Journal is called
1)         Posting
2)         Narration
3)         Entry
4)         Journalising
11. Purchase of furniture is debited to
1)         Purchases account
2)         Goods account
3)         Furniture account
4)         Cash account
12. When bad debts are recovered, they should be credited to
1)         Bad debts recovered account
2)         Bad debts account
3)         Debtor's account
4)         Cash account
13. The liabilities of a firm are 60,000; the claims of the owner are 1, 40,000. The total assets will be
1)         60,000
2)         1,40,000
3)         2,00,000
4)         80,000
14. Which of the following accounts is not a real account?
1)         Salary account
2)         Furniture account
3)         Building account
4)         Cash account
15. Purchases Journal is used for recording
1)         Credit purchases of goods
2)         All purchases of goods
3)         Cash purchases of goods
4)         All cash purchases
16. According to which concept is the entity of business treated separate from its owner?
1)         Matching concept
2)         Dual aspect concept
3)         Business entity concept
4)         Realisation concept
17. Which of the following transactions is not entered in the Cash Book?
1)         Cash sales
2)         Rent paid
3)         Cash discount
4)         Trade discount
18. Buying and selling activity is called
1)         Commerce
2)         Industry
3)         Trade
4)         Business
19. When both the debit and credit aspects of a transaction are recorded in the Cash Book, it is called
1)         Opening entry
2)         Double entry
3)         Closing entry
4)         Contra entry
20. The main aim of preparing a Trial Balance is
1)         To prepare final accounts
2)         To know the financial position of business
3)         To test the accuracy of posting
4)         To find out gross profit
21. Journal Proper is meant for recording
1)         Credit purchases of fixed assets
2)         Cash purchases of fixed assets
3)         Return of goods purchased
4)         All such transactions for which no special journal is kept
22. Bank Reconciliation Statement is a
1)         Ledger account
2)         Part of Cash Book with bank column
3)         Statement which reconciles the balances as per Pass book and Cash Book
4)         Pass book statement
23. If payment of Bills of Exchange is made before the due date, it is called
1)         Retiring the Bill
2)         Honouring the Bill
3)         Endorsing the Bill
4)         Retaining the Bill
24. Maintenance charges of a fixed asset is a
1)         Capital expenditure
2)         Revenue expenditure
3)         Revenue loss
4)         Deferred revenue expenditure
25. A basis of accounting according to which accounts are prepared for cash received and cash paid is called
1)         Cash basis
2)         Accrual basis
3)         Mixed basis
4)         Dual basis
26. Goods worth 2,000 received back by the company were taken in stock, but no entry was made. What type of error is this?
1)         Commission
2)         Omission
3)         Principle
4)         Compensatory
27. Nominal accounts are related to
1)         Liabilities only
2)         Expenses, incomes, losses and gains
3)         Assets only
4)         Expenses and losses only
28. Patents are examples of
1)         Fixed assets
2)         Current assets
3)         Intangible assets
4)         Liquid assets
29. Outstanding income is shown in the Balance Sheet as
1)         Fixed assets
2)         Current assets
3)         Short-term liability
4)         Long-term liability
30. Which of the following expenses are shown on the debit side of Profit and Loss account?
1)         Carriage outward
2)         Wages and salaries
3)         Carriage inwards
4)         Goods returned
31. 'Wages and Salaries' are shown in
1)         Profit and Loss account
2)         Trading account
3)         Balance Sheet
4)         Profit and Loss Appropriation account
32. Preliminary expenses are an example of a
1)         Capital expenditure
2)         Revenue expenditure
3)         Deferred revenue expenditure
4)         Development expenditure
33. An example of fictitious asset is
1)         Preliminary expenses
2)         Discount allowed
3)         Prepaid rent
4)         All of the above
34. Current liabilities are liabilities payable
1)         After one year
2)         Within one year
3)         Within five years
4)         After five years
35. Overcasting of Purchases Journal would affect
1)         Sales account
2)         Purchases account
3)         Supplier's account and Purchases account
4)         Supplier's account
36. Which of the following is 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 taken for business
37. 10, 00,000 spent in developing a new area for an estate is a
1)         Capital loss
2)         Capital expenditure
3)         Revenue expenditure
4)         Revenue loss
38. Shiva started business with 2, 00,000. He purchased goods on credit from Girish for 25,000. His total business assets will be
1)         2,25,000
2)         2,00,000
3)         1,75,000
4)         1,50,000
39. 'Income received in advance' appearing in the Trial Balance will be shown in
1)         Trading account
2)         Profit and Loss account
3)         Assets side of Balance Sheet
4)         Liabilities side of Balance Sheet
40. Outstanding salaries are shown in Balance Sheet as a
1)         Current asset
2)         Liability
3)         Fixed asset
4)         Contingent liability
41. A loan of 10,000 was made on September 1 @ 6% per annum. No interest was paid till December 31. The accrued interest will be
1)         150
2)         200
3)         500
4)         600
42. Opening stock: 15,000; Purchase of goods: 82,000; Direct expenses: 9,100; Indirect expenses: 10,500; and Closing stock: 18,000. The cost of goods sold will be
1)         1,06,100
2)         1,16,600
3)         88,100
4)         98,100
43. A manager gets 10% commission on net profits after charging such commission. Before charging the commission the profits were 55,000. The commission will be
1)         5,575
2)         5,000
3)         5,500
4)         6,000
44. Bad debts are 400; new provision for bad debts is 1,850 and old provision for bad debts is 60. The amount to be debited to Profit and Loss account in this context will be
1)         2,190
2)         2,250
3)         460
4)         1,850
45. Accounts are divided into
1)         Personal accounts
2)         Real accounts
3)         Nominal accounts
4)         All of the above
46. The concept of costs and revenues comparison is
1)         Matching concept
2)         Consistency concept
3)         Materiality concept
4)         Going concern concept
47. Sale of old newspaper will be recorded in
1)         Liabilities side of Balance Sheet
2)         Trading account
3)         Profit and Loss account
4)         Assets side of Balance Sheet
48. Which of the following is false?
1)         Assets = Liabilities + Capital
2)         Liabilities = Assets — Capital
3)         Capital = Assets — Expenses
4)         Capital = Assets — Liabilities
49. Amount realised from the sale of scrap is adjusted in the
1)         Cost of goods sold
2)         Cost of goods produced
3)         Profit and Loss account
4)         Trading account
50. Manufacturing account is prepared to ascertain
1)         Cost of goods sold
2)         Cost of goods produced
3)         Cost of goods purchased
4)         Cost of work-in-progress

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