Bachelor's Preparatory Programme (B.P.P.)
(For Non 10+2)
Term-End Examination
June, 2017
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 net profit
2) find out gross profit
3) record all financial transactions in business
4) assist the management in decision-making
2. Which note is sent to the customer when he returns the goods?
1) Credit note
2) Promissory note
3) Debit note
4) Cheque
3. A person who draws a bill of exchange is known as
1) Drawee
2) Endorser
3) Drawer
4) Payee
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1) an asset
2) an income
3) an expense
4) a liability
5. Profit and Loss Account shows the
1) Net profit/Net loss
2) Gross profit only
3) Total of expenses only
4) Total of incomes only
6. Rent Outstanding Account is
1) Nominal A/c
2) Representative Personal A/c
3) Real A/c
4) Both Real and Nominal A/c
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7. Debit balance of Suspense A/c will be shown in
1) Manufacturing A/c
2) Trading A/c
3) The asset side of Balance Sheet
4) Profit and Loss A/c
8. Posting is done in
1) Journal
2) Ledger
3) Trial Balance
4) Balance Sheet
9. Amount brought in by the proprietor into the business should be debited to
1) Cash A/c
2) Capital A/c
3) Drawing A/c
4) Trading A/c
10. Sales Returns Journal is also called
1) Sales book
2) Return inwards book
3) Invoice book
4) Return outwards book
11. Which of the following is a Nominal account?
1) Drawings A/c
2) Purchases A/c
3) Bad debts A/c
4) Sales A/c
12. Which type of discount is not shown in the books of accounts ?
1) Cash discount
2) Rebate
3) Discount on bills receivable
4) Trade discount
13. Debit balance of pass book shows
1) an asset
2) a liability
3) an income
4) an expenditure
14. Which of the following errors is disclosed by a Trial Balance?
1) Compensating error
2) Posting to wrong account
3) Error of omission
4) Posting on the wrong side
15. Purchase of machine should be debited to
1) Machine A/c
2) Cash A/c
3) Purchases A/c
4) Capital A/c
16. Which account is generally used for rectification of one-sided errors?
1) Capital A/c
2) Suspense A/c
3) Cash A/c
4) Trading A/c
17. A machine was bought for Rs. 5,000 and cartage of Rs. 1,000 paid thereon. For this, Machine Account should be
debited by
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1) Rs. 1,000
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2) Rs. 5,000
3) Rs. 6,000
4) Rs. 4,000
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18. Cost of goods purchased is Rs. 40,000; Net sales Rs. 1,00,000; Opening stock Rs. 20,000 and Closing stock Rs. 30,000. The Gross Profit will be
1) Rs. 40,000
2) Rs. 60,000
3) Rs. 1,90,000
4) Rs. 70,000
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19. Purchases of goods should be debited to
1) Purchases A/c
2) Capital A/c
3) Cash A/c
4) Suspense A/c
20. Which of the following accounts is not a personal account?
1) Loan A/c
2) Cash A/c
3) Drawings A/c
4) Capital A/c
21. Outstanding expenses given in Trial Balance will be shown in the
1) Trading A/c
2) Manufacturing A/c
3) Profit and Loss A/c
4) Liabilities side of the Balance Sheet
22. Insurance premium paid in advance is treated as
1) a gain
2) a liability
3) an asset
4) a loss
23. Purchases book is meant for recording
1) credit purchases of goods only
2) cash purchases
3) all types of purchases
4) Both credit and cash purchases
24. 10,000 paid as wages for the 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
25. Which of the following will not be shown in a Balance Sheet?
1) Goodwill
2) Loose tools
3) Contingent liability not provided for
4) Reserves and Surplus
26. Trademarks will be 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) Asset side of Balance Sheet.
27
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What will be the effect of commission received on accounting equation?
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1) Cash will increase
2) Cash will decrease
3) Capital will increase
4) Both cash and capital will increase
28. The system of recording transactions based on dual aspect concept is called
1) Double entry system
2) Single entry system
3) Imprest system
4) Double account system
29. The difference of Trial Balance is shown in
1) Capital A/c
2) Trading A/c
3) Cash A/c
4) Suspense A/c
30. Excess of income over expenditure is a
1) Capital loss
2) Capital gain
3) Revenue loss
4) Revenue profit
31. 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 the above
32. Cost of goods sold is equal to
1) Sales x Gross profit
2) Sales ± Gross profit
3) Sales — Gross profit
4) Sales + Gross profit
33. Real accounts reflect
1) Assets
2) Liabilities
3) Expenses
4) Gains
34. Which of the following item is not a liquid asset?
1) Cash in hand
2) Cash at Bank
3) Debtor
4) Marketable securities
35. Underwriting commission is an example of
1) Capital expenditure
2) Deferred revenue expenditure
3) Revenue expenditure
4) Capital loss
36. Preliminary expenses are an example of a
1) Fixed asset
2) Current asset
3) Fictitious asset
4) Tangible asset
37. Debtor is a/an
1) Current liability
2) Intangible asset
3) Fictitious asset
4) Current asset
38.Revenue is said to be realized when
1) Cash is received
2) Sales are made
3) Purchases are made
4) Goods are manufactured
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39. Dividend payable is an example of
1) Current asset
2) Current liability
3) Fixed asset
4) Intangible asset
40. Goods returned worth 3,000 by Anil & Co. were taken into stock for 300. It is an error of
1) Commission
2) Principle
3) Omission
4) Compensating
41. A small donation received for general purpose is to be taken as
1) Capital expenditure
2) Revenue expenditure
3) Capital receipts
4) Revenue receipts
42. Sales tax paid is shown in
1) Balance Sheet
2) Trading A/c
3) Profit and Loss A/c
4) Manufacturing A/c
43. Sale of old newspapers will be recorded in
1) Capital A/c
2) Trading A/c
3) Manufacturing A/c
4) Profit and Loss A/c
44. 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
45. If Cash is 25,000, Land 50,000, Furniture 10,000 and Bills Payable 20,000 in a Balance Sheet on a given date, the amount of Capital would be
1) 75,000
2) 70,000
3) 1,05,000
4) 65,000
46. Under which concept is a firm considered to be a continuing unit?
1) Going concern concept
2) Matching concept
3) Conservatism concept
4) Separate entity concept
47. Balance Sheet is a statement containing the assets and liabilities of a business
1) for a particular period
2) on a particular date
3) on a given time
4) None of the above
48. Which of the following is deducted out of the current assets to arrive at liquid assets?
1) Cash in hand
2) Cash at Bank
3) Debtors
4) Stock
49. Depreciation on plant for a manufacturing concern will be charged to
1) Balance Sheet
2) Capital A/c
3) Manufacturing A/c
4) Profit and Loss A/c
50. Sales is equal to
1) Cost of goods sold + Gross profit
2) Opening stock — Purchases
3) Closing stock + Gross profit
4) Closing stock — Gross profit
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