Friday, May 17, 2019

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


Bachelor's Preparatory Programme (B.P.P.)
(For Non 10+2)
Term-End Examination
June, 2018
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 concept according to which the business is treated as a unit apart from its owner is called
1)         Matching concept
2)         Cost concept
3)         Business entity concept
4)         Going concern concept
2. Loan account is a
1)         Nominal A/c
2)         Personal A/c
3)         Real A/c
4)         Real A/c as well as Nominal A/c


3. Debit balance of Suspense A/c will be shown on
1)         The debit side of Profit and Loss A/c
2)         The credit side of Profit and Loss A/c
3)         The debit side of Trading A/c
4)         The assets side of the Balance Sheet
4. 5,000 paid as wages for erecting a machine should be debited to
1)         Machine A/c
2)         Wages A/c
3)         Cash A/c
4)         Repairs A/c
5. Business includes
1)         Industry and commerce
2)         Industry and aids to trade
3)         Trade and aids to trade
4)         Trade only
6. A person who owes some amount to a business is called a/an
1)         Debtor
2)         Creditor
3)         Owner
4)         Lender
7. What will be the effect of salaries paid on accounting equation ?
1)         Cash will decrease
2)         Cash will increase
3)         Capital will decrease and cash will also decrease
4)         Only capital will decrease
8. Which of the following is a Nominal Account ?
1)         Stock A/c
2)         Creditor's A/c
3)         Drawings A/c
4)         Commission A/c
9. The final step of accounting cycle is
1)         Journal
2)         Ledger
3)         Trial Balance
4)         Balance Sheet
10. Which of the following transactions leads to contra entry in the Cash Book ?
1)         Paid rent 5,000
2)         Interest received from Ram 700
3)         Goods purchased for Cash 9,000
4)         Withdrawal of 20,000 from Bank
11. Narration must be written
1)         for every transaction entered in the journal
2)         when goods are purchased for cash
3)         when goods are sold for cash
4)         at the time of preparing a Balance Sheet
12. Expenses incurred during the regular course of business are called
1)         Capital expenditure
2)         Revenue expenditure
3)         Deferred capital expenditure
4)         Deferred revenue expenditure
13. Amount realized on account of goods sold is called
1)         Gain
2)         Revenue
3)         Loss
4)         Profit
14. Posting into accounts is done in the
1)         Journal
2)         Trial Balance
3)         Ledger
4)         Balance Sheet
15. A copy of customer's account given by bank is called
1)         Cheque Book
2)         Cash Book
3)         Pass Book
4)         Purchases Book
16. A system of advancing a fixed amount to the cashier periodically is called
1)         Single Entry System
2)         Imprest System
3)         Double Entry System
4)         Money Lending System
17. Bank overdraft is a
1)         Current Liability
2)         Current Asset
3)         Fixed Asset
4)         Fixed Liability
18. Cost of Goods Sold is
1)         Opening Stock + Gross Profit
2)         Opening Stock — Gross Profit
3)         Closing Stock + Gross Profit
4)         Opening Stock + Purchases + Direct Expenses — Closing Stock
19. Depreciation on fixed assets is a
1)         Capital expenditure
2)         Revenue expenditure
3)         Revenue loss
4)         Deferred revenue expenditure
20. The main objective of preparing a Balance Sheet is
1)         To know about financial position of the business
2)         To know about Gross Profit of the business
3)         To know about Net Profit of the business
4)         To know about Total Capital of the business
21. Sales Return Journal is also called
1)         Returns Inwards Journal
2)         Invoice Book
3)         Returns Outwards Journal
4)         Cash Book
22. Interest on Capital is shown on the
1)         Debit side of Manufacturing A/c
2)         Debit side of Trading A/c
3)         Debit side of Profit and Loss A/c
4)         Debit side of Profit and Loss Appropriation A/c
23. A cheque payable at the counter of the bank without identification is called
1)         Order Cheque
2)         Crossed Cheque
3)         Specific Cheque
4)         Bearer Cheque
24. Sale of typewriter used in office should be credited to
1)         Cash A/c
2)         Bank A/c
3)         Typewriter A/c
4)         Sales A/c
25. Rent paid to landlord 500 was credited to Rent A/c with 5,000. In the rectifying entry, Rent A/c will be debited with
1)         5,500
2)         5,000
3)         4,500
4)         7 500
26. Sales is equal to
1)         Cost of goods sold + Gross profit
2)         Cost of goods sold — Gross profit
3)         Closing stock + Gross profit
4)         Closing stock ÷ Gross profit
27. Discount received account has
1)         A debit balance
2)         A credit balance
3)         No balance
4)         All of the above
28. Gross Profit is equal to
1)         Opening stock + Purchases
2)         Net sales — Cost of goods sold
3)         Opening stock — Purchases
4)         Net sales + Cost of goods sold
29. Trade discount is given to customers on
1)         Cash purchases
2)         Credit sales
3)         Credit purchases
4)         Large scale purchases
30. The item given as adjustments will be shown in final accounts at
1)         One place only
2)         Two places only
3)         Three places only
4)         Four places only
31. Donation received for a 'specific purpose' is a
1)         Revenue receipt
2)         Capital expenditure
3)         Revenue expenditure
4)         Capital receipt
32. Which of the following statements is correct?
1)         Loan account is a Personal A/c.
2)         Drawings A/c is a Real A/c.
3)         Capital A/c is a Nominal A/c.
4)         Patents are a tangible asset.
33. A business has liabilities of 5, 00,000 and owner's equity 2,00,000. Its assets would be
1)         3,00,000
2)         7,00,000
3)         5,00,000
4)         2,00,000
34. Selling and distribution expenses are transferred to
1)         Manufacturing A/c
2)         Capital A/c
3)         Profit and Loss Appropriation A/c
4)         Profit and Loss A/c
35. Which type of discount is not shown in the books of account?
1)         Cash discount
2)         Rebate
3)         Trade discount
4)         Discount on bills receivables
36. Amount brought in by the proprietor into the business should be credited to
1)         Cash A/c
2)         Drawings A/c
3)         Capital A/c
4)         Bank A/c
37. Which branch of accounting is concerned with measurement and control of costs?
1)         Management Accounting
2)         Corporate Accounting
3)         Financial Accounting
4)         Cost Accounting
38. Goodwill is a/an
1)         Wasting asset
2)         Intangible asset
3)         Tangible asset
4)         Fictitious asset
39. Ledger Folio is the column included in
1)         Journal
2)         Sales Book
3)         Cash Book
4)         All of the above
40. Which of the following is called a book of prime entry ?
1)         Journal
2)         Purchases Book
3)         Sales Book
4)         Purchases Returns Book
41. Which of the following accounts will increase by credit entry ?
1)         Building A/c
2)         Purchases A/c
3)         Sales A/c
4)         Sales Returns A/c
42. When an asset is recorded at its price actually paid, it is related to
1)         Going concern concept
2)         Dual aspect concept
3)         Matching concept
4)         Cost concept
43. 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
44. Depreciation primarily arises from
1)         Physical wear and tear
2)         Fall in the value of money
3)         Fall in prices
4)         Fall in market value of an asset
45. Petty Cash Book is used for recording
1)         Purchases of goods
2)         Purchases of current assets
3)         Small expenses like postage, stationery, etc.
4)         Payment of long-term liabilities
46. 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)         5,000
2)         5,500
3)         5,575
4)         6,000
47. Amount realized from sale of scrap is adjusted in
1)         Cost of goods sold
2)         Cost of goods produced
3)         Trading A/c
4)         Profit and Loss A/c
48. Current liabilities are payable
1)         After 2 years
2)         After 1 year
3)         After 5 years
4)         Within 1 year
49. If the profit is 1/4 of sale, then it is
1)         1/2 of the cost price
2)         1/5 of the cost price
3)         1/3 of the cost price
4)         1/4 of the cost price
50. Cost of sales is 90,000, Net sales 2,00,000 and Closing stock t 20,000. The Gross Profit would be
1)         2,90,000
2)         1,80,000
3)         1,10,000
4)         1,30,000

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