1.A person started the business with 200,000 in the cash & a car worth $300,000 and took a loan from the National Bank of Pakistan 500,000. Now how much will be treated as capital for his/her business?Required to answer. Single choice.

(2 Points)

200,000

500,000

800,000

1,000,000

2.Which of the following items can be considered as assets? Please note: (The question has more than one answer, in that case, you have to select all of the correct answers to gain marks.)Required to answer. Multiple choice.

(5 Points)

Land

Copy rights

Patents

Buildings

90 days Loan from X&co

Prepaid expenses

Plant & machinery

Creditors

Debtors

Cash

Bank overdraft

Accured Expenses

Staff Salaries

Income received in advance from customer

Drawings

3.A company purchased plant and machinery for one million, on 1 January 2008. The company uses straight-line depreciation. The company estimates that the plant and machinery will have a useful life of 3 years, after which it may be disposed of for RS 100,000. The machine was sold on 30th April 2010 for 100,000. Which of the following accounting entry is correct for recording the Accumulated depreciation for plant and machinery at the time of sale :Required to answer. Single choice.

(2 Points)

Dr: Plant & Machinery 700,000 Cr: Accumulate Depreciation 700,000

Dr: Accumulate Depreciation 600,000 CR: Plant & Machinery 700,000

Dr: Accumulate Depreciation 700,000 CR: Plant & Machinery 700,000

Dr: Accumulate Depreciation 777,777 CR: Plant & Machinery 777,777

4.Long-term Assets having no physical existence are known as:Required to answer. Single choice.

(1 Point)

Current assets.

Fixed asset

Intanagble Fixed Assets

They are not recognised at all

5.Journal entry for sold gods to Mr Ali. worth 30,000 on cash and discount allowed 1000 should be entered as:Required to answer. Single choice.

(2 Points)

DEBIT Cash 30,000 --------- CREDIT Sales 29,000, Discount allowed 1000

None of the above

DEBIT Cash 31,000, Discount allowed 1000 --------- CREDIT Sales 31,000,

DEBIT Cash 29,000, --------- CREDIT Sales 29,000,

DEBIT Cash 30,000 --------- CREDIT Sales 30,000,

6.The following are extracts from an income statement for the year ended 31 December 2009 000 Sales revenue 10,000 Cost of sales (8,500) Distribution costs (300) Administrative expenses (200) Net interest paid (150) Taxation (500) Dividends (100) Required; The Gross profit for the period should be:Required to answer. Single choice.

(2 Points)

1500

1200

1000

150

7.Under the accrual basis of accounting, revenues are recognized in the accounting period in whichRequired to answer. Single choice.

(2 Points)

Cash Is Received

Revenues Are Earned

Both a & b

None of Above

8.Mr. Amman opened P.K stores by investing 1 million in inventory and 2 million in cash, which was obtained from bank loan from Askari bank. the correct entry for recoding the above transaction should be:Required to answer. Single choice.

(3 Points)

DR- Inventory 1 million CR Bank loan 1 Million

DR- Cash 2 million DR - Inventory 1 million CR Bank loan 2 Million, CR Capital 1 Million

DR- Cash 2 million DR - Inventory 1 million CR Capital 3 Million

DR- Cash 1 million DR - Inventory 2 million CR Bank loan 2 Million, CR Capital 1 Million

9.The double-entry of the purchase of office stationary on credit from P.S & co should be:Required to answer. Single choice.

(3 Points)

.Debit: P.S & co Credit: Purchase

.Debit: P.S & co Credit: Cash

.Debit: P.S & co Credit: Cash

.Debit: Purchases Credit: P.S & co

.Debit: Office stationary Credit: P.S & co

10.A company purchased plant and machinery for one million, on 1 January 2008. The company uses straight-line depreciation. The company estimates that the plant and machinery will have a useful life of 3 years, after which it may be disposed of for RS 100,000. The machine was sold on 30th April 2010 for 100,000. Which of the following accounting entry is correct for the sales transaction of plant and machinery :Required to answer. Single choice.

(2 Points)

Debit: Cash 100,000 CR: Plant and machinery 100,000

Debit: Cash 100,000 , Loss on sale of plant and machinery 200,000 CR: Plant and machinery 200,000

Debit: Plant and machinery 100,000 CR: Cash 100,000

Debit: Cash 300,000 , CR: Plant and machinery 200,000 , Profit on sale of plant and machinery 200,000

11.The closing entry for interest received given in the trial balance will:Required to answer. Single choice.

(2 Points)

Dr : Interest Cr: P&L

Dr: Operating Expenses Cr: P&L

Dr: P&L Cr: Interest

Dr: P&L Cr: Operating Expenses

12.The trial balance of Bronze Meadow Ltd on 31 March 2020 is shown below. Please note: (The question has more than one answer, in that case, you have to select all of the correct answers to gain marks.) A. Administrative expenses (including depreciation) 36,000 B. Rent paid 12,000 C. Motor vehicle expenses 21,000 D. Salaries 106,800 E. Insurance 12,000 F. Cost of goods sold 489,000 G. Sales revenue 804,000 H. Motor vehicles (net book value) 84,000 I. Accounts payable 102,000 J. Accounts receivable 122,700 K. Buildings at valuation 600,000 L. Cash at bank 42,000 M. Share capital 720,000 N. Closing inventories 31 March 2020 90,000 O. Tax payable 60,000 P. Tax charge (income statement) 60,000 Q. Selling and distribution costs 40,500 (i) Identify the assets in the above Trial balanceRequired to answer. Multiple choice.

(4 Points)

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

13.Which of the following asset is not depreciated?Required to answer. Single choice.

(3 Points)

Factory Buildings

Office Equipment

Plant & Machinery

Land

All of the above

None of the above

14.A company purchased plant and machinery for one million, on 1 January 2008. The company uses straight-line depreciation. The company estimates that the plant and machinery will have a useful life of 3 years, after which it may be disposed of for RS 100,000. The accumulated depreciation on 1st January 2010 will be:Required to answer. Single choice.

(2 Points)

666,666

600,000

300,000

333,333

15.A Profit is earned if?Required to answer. Single choice.

(2 Points)

Assets exceed Expenditure

Income exceeds Expenditure

Cash Inflow exceeds Cash Outflow

Income exceeds Liabilities

None of the above