Tag: accounting equation and business transactions

Questions Related to accounting equation and business transactions

Manufacturing a/c is prepared by the enterprise engaged in________.

meaning, objectives, importance and preparation of final accounts meaning, objectives and importance of final accounts introduction to final accounts accounting equation and business transactions book keeping and accountancy

  1. trading activities

  2. manufacturing activities

  3. mining activities

  4. overseas export-import

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Correct Option: B
Explanation:

Manufacturing a/c is prepared by the enterprises engaged in manufacturing activities. This financial statement does not show profit and loss figures but rather the cost of direct materials and labour. A manufacturing account also includes production overhead. 

To ascertain profit and loss on consignment, ___________ is prepared.

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. trading account

  2. consignment a/c

  3. profit and loss a/c

  4. consignment stock a/c

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Correct Option: B

Which of the following statement is false with regard to final accounts of the company?

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. Balance Sheet is prepared as per Schedule VI (Part - I).

  2. There is no prescribed format for the preparation of financial statements.

  3. Profit and Loss Account is prepared as per prescribed format.

  4. Figures of Previous year are also shown in Profit and Loss Account and Balance Sheet.

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Correct Option: B

Manufacturing account is prepared to___________. 

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. ascertain the profit or loss on the goods produced

  2. ascertain the cost of the goods manufactured

  3. show the sale proceeds from the goods manufactured during the year

  4. none of the above

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Correct Option: B

Match List I with List II and select the correct answer using the codes given below:

List I List II
(Name of the Account/ Statement) (Items to be shown)
A. Trading A/c I. Assets and liabilities
B. Profit and Loss A/c II. Indirect expenses like salaries, rent rates and taxes, interest etc.
C. Balance Sheet III. Direct expenses like wages, dock dues, duties, freight etc.
book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. $A = III, B = II, C = I$

  2. $A = III, B = I, C = II$

  3. $A = I, B = II, C = III$

  4. $A = II, B = I, C = III$

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Correct Option: A

'Final Accounts' of a manufacturing company generally include the following types of documents:
1. Balance Sheet
2. Manufacturing Account
3. Profit and Loss Account
4. Trading Account
5. Profit and Loss Appropriation Account
The correct sequence in which these documents are prepared is________. 

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. $1, 4, 3, 2, 5$

  2. $2, 4, 3, 5, 1$

  3. $1, 2, 4, 3, 5$

  4. $2, 4, 5, 3, 1$

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Correct Option: B

Match List I (Items) with List II (Recorded in) and select the correct answer using the codes given below the lists:

List I List II
A. Wrapping material 1. Trading account
B. Wages and salaries 2. Profit and loss acount
C. Prepaid expenses 3. Balance sheet
D. Opening stock
book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. $A = 2, B = 1, C = 1, D = 3$

  2. $A = 2, B = 1, C = 3, D = 1$

  3. $A = 3, B = 2, C = 2, D = 1$

  4. $A = 3, B = 2, C = 1, D = 3$

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Correct Option: B

The correct sequence in preparation of periodical financial statement would be.
$1$. Preparation of balance sheet
$2$. Preparation of cash flow statement
$3$. Preparation of trial balance
$4$. Preparation of Profit & Loss A/c
Select the correct answer from the options given.

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. $4, 2, 1, 3$

  2. $3, 4, 1, 2$

  3. $2, 4, 3, 1$

  4. $1, 3, 2, 4$

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Correct Option: B

Which of these items will appear in a Manufacturing A/c?

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. Power and Steam A/c

  2. Salary and Wages A/c

  3. Carriage Outward

  4. Goodwill written off

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Correct Option: A

Which of the following would be an entry in the statement of changes in equity?

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. Revaluation gain

  2. Dividends paid

  3. Taxation

  4. Profit for the yeat

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Correct Option: C