Management Accounting Test paper

1. Goods are sold on credit to Madhavan for Rs.40,000 on 15-012005. On 20-01-2005, goods worth Rs. 4,000 were returned . How does this sales Retuns appear in ledger account of Madhavan? a. Madhavan's Account 15-1-05 To Sales 40,000 20-1-05 By sales Ret 4,000 b. Madhavan's Account 15-1-05 To Sales Returns 40,000 21-1-05 By sales 40,000 c. Madhavan's Account 20-01-05 To Sales 40,000 15-1-05 By Sales Ret 4,000 d. Madhavan's Account 21-1-05 To sales returns 4,000 15-1-05 By sales 40,000 2. If furniture is purchased from Raman & Co. on credit Raman & Co. account appears in. . a. General Ledger b. Sales Ledger c. Debtor's ledger d. Creditor's ledger 3. Insurance premium paid for a [period from 1-1-2006 to 31-12-2006 is Rs. 6000. But accounts are finalised on 30th June, 2006. How do you adjust the prepaid insrance? a. Insurance account Dr 1,500 Tp prepaid insurance account 1,500 b. Prepaid Insurance A/c Dr 1,500 To P & L Account 1,500 c. P & L Account Dr 1,500 To Prepaid insurance Account 1,500 d. Prepaid insurance account Dr 1,500 To Insurance account 1,500 4. Is the closing entry of one year, the opening entry for the succeeding year? a. No

b. They are different except for assts and liabilities c. Yes d. They are one and the same 5. M Co. received a bill for Rs.1,00,000 from N Co., and M Co., transferred it to Madan Mohan. What are prepared in M Co., books? a. Bills Receivable account and Bills Payable account b. Bills receivablke account and N Co., account c. Bills receivable account, N Co., account and Madan Mohan A/c d. Madan Mohan a/c and Bills Payable account 6. Mr Gurunanak has supplied goods to us on credit Rs.68,000 and also supplied furniture items worth Rs.50,000 on credit. In what ledgers the account of Gurunanak appears, if we are maintaining all three ledgers, General, debtor and creditor. a. General ledger only. b. General and Creditor's ledger c. General ledger and Debtor's ledger d. Debtor and Creditors ledgers 7. Identify in the following an error that can be disclosed by TB a. A transaction of purchase is completely not taken to journal at all b. b.Mr X a/c is debited more by Rs 100 and Mrs X a/c is debited less by Rs 100 c. Sales a/c is undercast by Rs 500 d. Salary account is wrongly debited instead of repairs are 8. If assets accounts and expenses accounts are shown on debit side of TB, what accounts are shown an credit side of TB a. Liabilities, capital and income accounts

b. Income accounts c. Liabilities and capital accounts d. Income & capital accounts 9. If personal account shows a credit balance, what does this indicate ? a. It indicates an asset b. It indicates a 'Debtors' c. It indicates an item of income d. It indicates 'Creditor' 10. If T.B does not tally , what is its consequence ? a. Balance sheet does not tally b. Trading A/C may not tally c. Profit/ loss may not be correct d. P&L A/C may not tally 11. Interest on fixed Deposit is an item found in TB a. Neither debit not credit b. Both debit and credit c. On credit d. On Debit side 12. The object of preparing trial balance is a. To summaries ledger accounts b. To classify different accounts such as personal, real & nominal c. To verify the correctness of journal entries d. To check arithmetic accuracy of ledger posting 13. The two methods of preparing trial balance are a. Journalizing & ledger b. Debit method & credit method c. Horizontal & vertical methods d. Total method & Balance method

14. There are 2 types of errors in accounting process. They are a. Disclosed and not disclosed by TB b. String & weak errors c. Good and bad errors d. Intentional and unintentional 15. What do you mean by error disclosed byTB ? a. Errors that are notified by TB b. Errors which are not closed c. Error that can be found as TB does nto tally d. Error that are dangerous 16. Which of the following contains error of commission? a. Ramanan,s account is debited instead of ramana's a/c b. Plant purchased is transferred to purchases a/c c. An invoice of Rs 1200 is takenas Rs 1020 in the journal d. Ravi,s account is debited by Rs 2000 but posted to the credit side of his a/c

17. A trial balance will not reveal the following error. a. A credit sale of Rs. 700 made to Uday, posted as debit in the sale account as Rs.700 and credit Uday account Rs.70 b. A cash sale of Rs. 1000, posted as credit sale of Rs. 1000 and debited Cash account by Rs. 100 c. A . A credit sale of Rs.700 to Uday is debited to Uday account only. d. A cash sale of Rs100 posted to the credit sales account only. 18. Identify in the following, where the error of duplication is committed.

a. Tamal Kanti Roy's is debited by Rs. 17,000 without any corresponding credit entry to any account b. Radheshyam a/c is debited by Rs. 672 instead of 762 c. Kumar a/c shows Rs.574 debited twice for the same transaction d. Manorama a/c is credited by Rs. 6,770 instead of crediting Manojrama a/c. 19. Identify the error of principle in the following. a. Cash received from Raghavan is wrongly debited to Raghavan's account b. Furniture account is wrongly debited for repairs to furniture account c. Purchases book is over cast by Rs.800 d. Total of sales book is transferred to debit side of sales account 20. Repairs to building Rs 70,000 has been debited to building account. What is the error and what is the rectification entry? a. Error of commission and the rectification entry is to debit building account and credit repairs to building account b. Error of principle and the entry is to debit repairs to building account and credit building account c. There is no error and there is no rectification needed. d. Error of set off and the rectification is debit repairs account and credit suspense account 21. Trial balance has not tallied. Is it a conclusive proof that errors are present? a. Trial balance need not tally for the preparation of final accounts. b. Yes, there may be disclosed and undisclosed errors c. No and a careful may be adequate to set it right d. Not necessarily

22. Bought goods on credit from Narayanan for Rs. 25,000 and included in Purchases book. How does this transaction appear in the ledger? . a. In Narayanan's a/c, purchases appear on the debit side and in Purchases a/c, Narayanan's a/c appears on the credit side. b. In Narayanan's a/c, Goods a/c appear on the credit side and in the Goods a/c, Narayanan's a/c appears on the debit side c. In Narayanan's A/c, goods a/c appear on the debit side and in the goods A/c, Narayanan's account appear on the credit side. d. In Narayanan's a/c, purchases appear on credit side and in Purchases a/c, Narayanan's a/c appears on the debit side 23. Cheque of Mr. Mehta , deposited in the bak for collection got dishonoured. What entry is made in cash book? . a. Cash account Dr To Bank account b. Mehta a/c Dr To Cash a/c c. Bank account Dr To cash account d. Mehta account Dr To Bank account 24. Discount allowed account and discount received account are individually closed by transferring them to a. Debit side of P & L Account b. Taking the net discount and transferring it to P & L Account c. Debit side of Trading account d. Discount allowed is transferred to debit side and discount received is transferred to credit side of P & L Account

25. Draw the journal entry if cash received Rs. 5,200 from Vinod in full settlement of his account Rs. 5,500 . a. Cash Account Dr 5,200 To Vinod's A/c 5,200 b. Cash account Dr 5,500 To Vinod's account 5,200 To discount recd a/c 300 c. Cash a/c Dr 5,500 To Vinod's a/c 5,500 d. Cash account Dr 5,200 Dis Allowed a/c Dr 300 To Vinod account 5,500 26. Goods are sold on credit to Madhavan for Rs.40,000 on 15-01-2005. On 2001-2005, goods worth Rs. 4,000 were returned . How does this sales Retuns appear in ledger account of Madhavan? a. Madhavan's Account 15-1-05 To Sales 40,000 20-1-05 By sales Ret 4,000 b. Madhavan's Account 15-1-05 To Sales Returns 40,000 21-1-05 By sales 40,000 c. Madhavan's Account 20-01-05 To Sales 40,000 15-1-05 By Sales Ret 4,000 d. Madhavan's Account 21-1-05 To sales returns 4,000 15-1-05 By sales 40,000 27. If furniture is purchased from Raman & Co. on credit Raman & Co. account appears in. . . . a. General Ledger b. Sales Ledger c. Debtor's ledger d. Creditor's ledger 28. Insurance premium paid for a [period from 1-1-2006 to 31-12-2006 is Rs. 6000. But accounts are finalised on 30th June, 2006. How do you adjust the prepaid insrance?

a. Insurance account Dr 1,500 Tp prepaid insurance account 1,500 b. Prepaid Insurance A/c Dr 1,500 To P & L Account 1,500 c. P & L Account Dr 1,500 To Prepaid insurance Account 1,500 d. Prepaid insurance account Dr 1,500 To Insurance account 1,500 29. Is the closing entry of one year, the opening entry for the succeeding year? . a. No b. They are different except for assts and liabilities c. Yes d. They are one and the same 30. M Co. received a bill for Rs.1,00,000 from N Co., and M Co., transferred it to Madan Mohan. What are prepared in M Co., books? a. Bills Receivable account and Bills Payable account b. Bills receivablke account and N Co., account c. Bills receivable account, N Co., account and Madan Mohan A/c

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