Tag: meaning, kinds and important terms relating to stock

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Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

Economic order quantity is that quantity at which cost of holding and carrying inventory is ________________.

  1. Maximum and equal

  2. Minimum and equal

  3. It can be maximum or minimum depending upon case to case

  4. Minimum and unequal
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Economic Order Quantity (EOQ) is the level where the sum of ordering costs and holding costs is minimized.

Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

If a venturer draws a bill on his co-venturer and if the drawer discounts the bill with same sets of books maintained, the discounting charges will be borne by _______________.

  1. The drawer of the bill

  2. The drawee of the bill

  3. The discounting charges will be debited in the joint venture A/c

  4. The discounting charges will be borne by bank
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In a joint venture, all expenses related to the venture, including discounting charges on bills drawn for the venture, are debited to the Joint Venture account.

Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

A purchased goods costing 45,000. B sold goods costing Rs. 40,000 at Rs. 50,000. Balance goods were taken over by A at same gross profit percentage as in case of sale. The amount of goods taken over will be ________.

  1. Rs. 6,250

  2. Rs. 5,000

  3. Rs. 6,000

  4. Rs. 10,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Cost of goods sold is 40,000, sold for 50,000, so profit is 10,000 (25% on cost). A took goods costing 5,000. Adding 25% profit (1,250) gives 6,250.

Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

A and B enter into a joint venture sharing profits and losses equally. A provides goods from his stock Rs. 10,000. He pays expenses amounting to Rs 1000. B incurs further expenses on carriage Rs. 2,000. He receives cash for sales Rs. 15,000. He also takes over goods to the value of Rs. 3,000. What will be the amount to be remitted by B to A Rs.

  1. Rs. 13,500

  2. Rs. 15,000

  3. Rs. 11,000

  4. Rs. 10,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Total costs: 10,000 (A) + 1,000 (A) + 2,000 (B) = 13,000. Total sales: 15,000 (cash) + 3,000 (goods taken by B) = 18,000. Profit = 5,000. Profit share = 2,500 each. B owes A: 10,000 (goods) + 1,000 (expenses) + 2,500 (profit) - 3,000 (goods taken) = 10,500. Wait, calculation check: B collected 15,000 cash. B owes A 13,500.

Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

M and N enter into a joint venture where M supplies goods worth Rs. 6,000 and spends Rs. 300 on various expenses. N sells the entire lot for Rs. 7,800 meeting selling expenses amounting to Rs. 300. Profit sharing ratio equal. N remits to M the amount due. The amount of remittance will be _______________.

  1. Rs. 6,900

  2. Rs. 7,500

  3. Rs. 6,300

  4. Rs. 6,600
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

A bond whose price will rise above its face value is classified as _______________.

  1. premium face value

  2. premium bond

  3. premium stock

  4. premium warrants
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A bond that trades at a price higher than its face value is known as a premium bond.

Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

A invoiced out certain goods so as to show a profit of 20% on invoice price. 1/10th of the goods were lost in transit. The cost price of goods lost is Rs 40,000. The invoice value of goods sent out will be ___________.

  1. Rs 5,00,000

  2. Rs 4,00,000

  3. Rs 4,50,000

  4. Rs 4,80,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Profit is 20% on invoice price, which is 25% on cost. If 1/10th cost is 40,000, total cost is 400,000. Total invoice value = 400,000 + 25% = 500,000.

Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

Ram sends goods on approval basis as follows :

Date January Customer's name Sale price of Goods sent Goods accepted Goods returned
Rs Rs Rs
10 A 3,600 3,000 600
12 B 2,000 2,000 -
15 C 2,680 - 2,680
25 D 2,260 2,000 260

The stock of goods sent on approval on 31st January will be:

  1. Rs 500

  2. Nil

  3. Rs 260

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

All goods sent on approval were either accepted or returned by January 31st. Therefore, the stock of goods sent on approval is nil.

Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

In a joint venture, A contributes Rs. 8,000 and B contributes Rs. 10,000. Goods are purchased for Rs. 11,000. Expenses amount to Rs. 1,000. Sales amount to Rs. 14,000, the remaining goods were taken by B at an agreed price of Rs. 400. A and B share profits and losses in the ratio of 1:2 respectively. As a final settlement, how much A will receive ?

  1. Rs. 8,800

  2. Rs. 9,000

  3. Rs. 8,000

  4. Rs. 13,800
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverses the sale entry, then the accounting treatment for the goods returned by the customers on a subsequent date will be ______________.

  1. No entry for return of goods

  2. Entry for return of goods is passed

  3. Only the stock account will be adjusted

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

If the sale entry was reversed at the end of the year, the goods are already back in stock. Therefore, no further entry is needed when they are physically returned.