BACHELOR'S PREPARATORY PROGRAMME (B.P.P.)
(For Non 10+2)
Term-End Examination
December, 2014
PCO-101 : PREPARATORY COURSE IN COMMERCE
Time : 2 hours Maximum Marks : 50
General Instructions :
Preparatory Course in Commerce (PCO-101) Questions 1- 50
(i) This is an objective type question paper. Options for the correct answer must be marked only in OMR sheet.
(ii) All questions are compulsory.
(iii) The question paper consists of 50 questions each of which carries one mark.
(iv) Each question has four alternatives, one of which is correct. Write the Sl. No. of your correct alternative/answer below the corresponding question number in the OMR sheet and then mark the rectangle for the same number in that column. If you find that none of the given alternatives is correct then write 0 and mark in column 0.
(v) Do not waste time in reading the whole question paper. Go on solving questions one by one. You may come back to the left out questions, if you have time at the end.
1. Buying and selling activity is called
(1) Business
(2) Commerce
(3) Industry
(4) Trade
2. Goods purchased for cash from Anil will be credited to
(1) Cash A/c
(2) Purchases A/c
(3) Sales A/c
(4) Anil's A/c
3. The concept of conservatism implies
(1) Prudence in measuring income
(2) Overstatement of assets
(3) Understatement of loss
(4) Overstatement of profit
4. Which of the following equations is correct?
(1) Capital = Assets — Liabilities
(2) Assets = Capital + Liabilities
(3) Liabilities = Assets — Capital
(4) All of the above
5. Single entry system of book-keeping is a system of
(1) reliable records
(2) incomplete records
(3) providing true financial position
(4) helping in locating errors
6. Ledger Folio is the column in
(1) Cash Book
(2) Sales Book
(3) Journal
(4) All of the above
7. Which of the following is a Nominal Account ?
(1) Loan A/c
(2) Drawing A/c
(3) Furniture A/c
(4) Wages A/c
8. Goods sold to Rakesh for cash will be debited to
(1) Sales A/c
(2) Purchases A/c
(3) Cash A/c
(4) Rakesh's A/c
9. The debit balance of a personal account indicates
(1) Amount receivable
(2) Amount payable
(3) Cash in hand
(4) Cash at bank
10. Which of the following is not entered in the books of account?
(1) Cash discount
(2) Trade discount
(3) Interest paid
(4) Rent received
11. Trial Balance is prepared from
(1) Profit and Loss A/c
(2) Balance Sheet
(3) Journal
(4) Ledger
12. Preliminary expenses are an example of
(1) Capital expenditure
(2) Capital loss
(3) Revenue expenditure
(4) Deferred Revenue expenditure
13. Repairs of office building will be shown in
(1) Manufacturing A/c
(2) Balance Sheet
(3) Profit and Loss A/c
(4) Trading A/c
14. Depreciation basically arises from
(1) Physical wear and tear
(2) Fall in prices
(3) Fall in the value of money
(4) Fall in the market value of an asset
15. Sales are equal to
(1) Cost of goods sold + Gross profit
(2) Cost of goods sold — Gross profit
(3) Gross profit — Cost of goods sold
(4) Opening stock + Purchases — Closing stock
16. Closing stock is valued at
(1) Market price
(2) Cost price
(3) Cost price or market price whichever is lower
(4) Cost price or market price whichever is higher
17. A business has liabilities of 5,00,000 and owner's equity is 12,00,000. Its assets would be
(1) 17,00,000
(2) 7,00,000
(3) 12,00,000
(4) 24,00,000
18. Additional capital introduced is a
(1) Capital profit
(2) Revenue profit
(3) Revenue receipt
(4) Capital receipt
19. An example of representative personal account is
(1) Cash
(2) Prepaid expenses
(3) Commission received
(4) Interest paid
20. Which of the following statements is true?
(1) Posting is done in the journal.
(2) Ledger is the principal book of entry.
(3) Nominal accounts relate to persons.
(4) Assets always have credit balance.
All of the above statements are wrong
21. Goods taken away by the proprietor for personal use not recorded anywhere, is an error of
(1) principle
(2) commission
(3) omission
(4) compensation
22. In case of a Bill of Exchange, the drawer is the
(1) Payee
(2) Endorsee
(3) Debtor
(4) Creditor
23. Imprest System is related to
(1) Single Column Cash Book
(2) Double Column Cash Book
(3) Petty Cash Book
(4) Three Column Cash Book
24. Cash discount is given to the customers on
(1) Payment before due date
(2) Cash purchases
(3) Credit purchases
(4) Large scale purchases
25. 'Wages and Salaries' will be shown in
(1) Profit and Loss A/c
(2) Profit and Loss Appropriation A/c
(3) Balance Sheet
(4) Trading A/c
26. Cost of production will be transferred to
(1) Trading A/c
(2) Profit and Loss A/c
(3) Trial Balance
(4) Balance Sheet
27. Outstanding expenses given in Trial Balance will be recorded in
(1) Trading A/c
(2) Profit and Loss A/c
(3) Profit and Loss Appropriation A/c
(4) Balance Sheet
28. Expenditure incurred for maintaining the fixed assets are regarded as
(1) Capital expenditure
(2) Revenue expenditure
(3) Deferred Revenue expenditure
(4) None of the above
29. Interest on drawings is
(1) an expenditure for the business
(2) a loss for the business
(3) a gain for the business
(4) of no use for the business
30. A Balance Sheet reflects
(1) Assets only
(2) Liabilities only
(3) Incomes and Expenditures
(4) Assets and Liabilities
31. Error of principle arises when
(1) there is a wrong totalling
(2) there is a wrong posting
(3) there is an omission of recording a transaction
(4) correct distinction is not made between capital and revenue items
32. Bank overdraft is a
(1) Fixed asset
(2) Current asset
(3) Current liability
(4) Fixed liability
33. Income tax paid is
(1) an income
(2) an expense
(3) a liability
(4) an asset
34. Which of the following is sent to a customer when he returns the goods?
(1) Credit note
(2) Debit note
(3) Promissory note
(4) Cheque
35. Office equipments purchased on credit will be recorded in
(1) Purchase Book
(2) Journal Proper
(3) Sales Book
(4) Ledger
36. Credit balance of Pass Book shows
(1) an income
(2) an asset
(3) an expenditure
(4) a liability
37. Trading Account is prepared to find out
(1) Cost of sales
(2) Cost of production
(3) Net profit
(4) Gross profit
38. Returns Inwards Journal is meant for recording
(1) Cash sales
(2) Sales return
(3) Credit sales
(4) All sales
39. Which branch of accounting is concerned with the measurement and control of costs?
(1) Cost Accounting
(2) Financial Accounting
(3) Corporate Accounting
(4) Management Accounting
40. Which of the following errors is disclosed by a Trial Balance?
(1) Error of omission
(2) Error of commission in journal
(3) Error of principle
(4) Wrong casting of an account
41. All indirect expenses are shown in
(1) Trading A/c
(2) Profit and Loss A/c
(3) Manufacturing A/c
(4) Profit and Loss Appropriation A/c
42. Goodwill is a/an
(1) Tangible asset
(2) Wasting asset
(3) Fixed asset
(4) Intangible asset
43. Excess of income over expenditure is a
(1) Profit
(2) Loss
(3) Capital gain
(4) Capital loss
44. A statement showing assets and liabilities at the end of an accounting year is called
(1) Trial Balance
(2) Ledger
(3) Journal Proper
(4) Balance Sheet
45. When an asset is recorded at its price actually paid, it is based on
(1) Matching concept
(2) Cost concept
(3) Conservatism concept
(4) Materiality concept
46. Bad debts will be debited to
(1) Profit and Loss A/c
(2) Trading A/c
(3) Manufacturing A/c
(4) Profit and Loss Appropriation A/c
47. Loss on sale of an asset will be recorded in
(1) Balance Sheet
(2) Trading A/c
(3) Profit and Loss A/c
(4) Manufacturing A/c
48. Which of the following is a liquid asset?
(1) Cash
(2) Bank balance
(3) Short-term securities
(4) All of the above
49. Sales Return Journal is also called
(1) Sales Book
(2) Invoice Book
(3) Return Inwards Journal
(4) Return Outwards Journal
50. A cheque payable at the counter of the bank without identification is called
(1) Crossed cheque
(2) Specific cheque
(3) Order cheque
(4) Bearer cheque