Tag: elements of book keeping and accountancy

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Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Net Profit of business before charging commission is Rs 110,000 and manager is entitled to get commission of net profit before charging commission 10% , the commission will be calculated as Rs. _________.

  1. 11,000

  2. 12,000

  3. 13,000

  4. 10,500
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Commission on net profit before charging such commission

  =  1,10,000 X 10 / 100
  =  11,000.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

A business concern usually provides _______ for its customers for prompt payments.

  1. Cash Discount

  2. Trade Discount

  3. Both A and B

  4. None of these.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An early payment discount (also called a prompt payment or cash discount) is a reduction in an invoice balance when it's paid before the due date. 

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

when provision is provided current years profit is ___________.

  1. Reduced

  2. Increased

  3. Doubled

  4. None
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A provision is not a form of saving, even though it is an amount that is put aside for a future cost or obligation. Provisions resulting impact is a reduction in the company's equity. When accounting, provisions are recognized on the balance sheet and then expensed on the income statement.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Provision for Discount on Debtors is ___________ to Profit and loss account.

  1. Debited

  2. Credited

  3. Not recorded

  4. No entry
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
The double effect of Provision for Discount on Debtors is:
It is shown on the debit side of Profit and Loss Account. 
It is shown as deduction from Debtors in Balance Sheet.
Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Percentage commission to manager can be  calculate on net profit _______.

  1. Before charging commission

  2. After charging commission

  3. Either on net profit before or after charging commission

  4. None
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The manager of the business is sometimes given the commission on the net profit of the company. The percentage of the commission is applied on the profit either before charging such commission or after charging such commission.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

The General Manager gets $\dfrac{1}{4}$ of the profit as commission after charging such commission of Works Manager, which is 10% of profits after charging such commission. If profit is Rs. 2,200, the commission of General manager is:

  1. Rs.495

  2. Rs.384

  3. Rs.500

  4. Rs.400
Reveal answer Fill a bubble to check yourself
D Correct answer
Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Debtors Closing Balance Rs 5000, R.D.D 10 % and Provision for discount on Debtors is  5% than what is its value of provision on discount.

  1. Rs. 225

  2. Rs. 200

  3. Rs. 300

  4. Rs. 350
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Provision for bad debts = 10% of 5000 = 500. Net debtors = 5000 - 500 = 4500. Provision for discount = 5% of 4500 = 225.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Opening capital Rs. 100000 and additional capital on 1st Oct was Rs. 20000
Interest on capital @ 10% on 31st march closing will be ?

  1. 5,000

  2. 8,000

  3. 11,000

  4. None of these.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest on capital = 100000 * 10 / 100

                                = 10000
Additional Capital Introduced on 1st Oct = 20000 * 10 / 100 * 6 / 12
                                                                     = 1000
Total = 10000 + 1000
          = 11000

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Interest on capital is calculated on _____________.

  1. Opening capital

  2. Additional Capital

  3. Closing capital

  4. Both A & B
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Interest on capital is to be calculated on the capitals at the beginning for the relevant period. If there is any additional capital introduced or capital withdrawn during the year, it will cause change in the capitals and interest is to be calculated proportionately on the changed capitals for the relevant period.

Interest on capital = Amount of capital x Rate of interest per annum x Period of interest