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Punjab (PTB) · Chapter test · Free

1st Year Principles of Accounting Chapter 12 TestFinancial Statements

30 marks · 40 minutes · 21 questions. Covers: CHAP 13: Financial Statements.

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1st Year Principles of Accounting Chapter 12 Test

1st Year · Principles of Accounting · Punjab (PTB)

Name: ____________Roll No: ________Class/Section: ________Date: ________Total marks: 30Time: 40 minutes

Q1. Multiple choice questions (Attempt all · 10 × 1 = 10)

  1. The inflow of assets in return for services performed or products delivered during a period is :

    1. Asset

    2. Revenue

    3. Noncurrent asset

    4. None of these

  2. Net sales-cost of goods sold-operating expenses=?

    1. Net purchases

    2. Cost of goods sold available for sale

    3. Net operating income

    4. Gross profit

  3. From the business point of view, interest on drawings is:

    1. An asset

    2. An expense

    3. A liability

    4. A revenue

  4. Cost of goods sold is equal to:

    1. Sales –purchases

    2. Purchase+closing stock-returns outwards

    3. Opening stock-closing stock+purchases+returns inwards

    4. Opening stock+purchases+returns outwards-closing stock

  5. Income statement is prepared to ascertain the net result of the business concern under:

    1. British accounting system

    2. American accounting system

    3. Cash system of accounting

    4. None of these

  6. Sales are equal to:

    1. Cos of goods sold+profit

    2. Gross profit-cost of goods sold

    3. Cost of goods sold-gross profit

    4. None of these

  7. Allowance for doubtful debts normally has a:

    1. Debit balance

    2. Credit balance

    3. Both debit & credit balance

    4. None of these

  8. The gross amount of goods sold or services performed during an accounting period is known as:

    1. Purchase

    2. Sale

    3. Gross profit

    4. Net profit

  9. The amount by which the revenue for a particular period of time exceed from expenses incurred to generate them is called:

    1. Gross income

    2. Net income

    3. Revenue

    4. Expenses

  10. A statement, which is prepared to ascertain the net income or net loss for a specific accounting period is called:

    1. Position statement

    2. Statement of condition

    3. Financial statement

    4. Bank reconciliation statement

Q2. Short questions (Attempt any 6 of 8 · 6 × 2 = 12)

  1. What is meant by allowance for doubtful debts?

  2. What is meant by income statement?

  3. What do you understand by the term “Prepaid Expenses”?

  4. Define “Depreciation”.

  5. Explain the term “outstanding expenses”.

  6. Write down the three examples of administrative expenses?

  7. Differentiate between “Recurring expenses” and “Non recurring expenses”?

  8. What do you mean by financial statement?

Q3. Long questions (Attempt any 2 of 3 · 2 × 4 = 8)

  1. Ascertain the cost of goods sold from the following particulars:

        Rs.
    (i) Opening Merchandise Inventory 19,500
    (ii) Purchases (gross) 150,000
    (iii) Purchases Discounts 3,500
    (iv) Purchases returns and allowances 2,900
    (v) Freight Inwards 2,900
    (vi) Custom duty and clearing charges 2,700
    (vii) Closing Merchandise Inventory 30,900

  2. Following in the Trial Balance of a firm. From this you are required to prepare an income statement for the year ending on 31st December, 2022 and a Balance Sheet as on that date.
    Adjustments:
    1. Merchandise inventory on 31.12.2022 was valued at Rs. 35,000.
    2. Store supplies on hand 31.12.2022 Rs. 1,500.
    3. Depreciate furniture and fixture and plant and Machinery by 10% p.a.
    4. Write off bad debts from accounts receivable Rs. 1,500.

    Trial Balance On 31.12.2015
      Dr. Cr.
      Rs. Rs.
    Cash at Bank 95,500  
    Accounts receivable 35,200  
    Stores supplies 5,000  
    Prepaid Rent 11,240  
    Furniture and Fixtures 7,600  
    Accumulated depreciation- Furniture and Fixture   1,520
    Plant and Machinery 45,000  
    Accumulated depreciation- Plant and Machinery   9,000
    Capital   165,000
    Accounts payable   8,500
    Drawings 31,000  
    Sales revenue   212,980
    Salaries expense 9,500  
    Purchases 95,000  
    Wages 10,000  
    Purchases returns   6,500
    Sales returns 3,000  
    Merchandise Inventory on 1.1.2015 45,000  
    Traveling expenses 5,460  
    Miscellaneous expenses: 5,000  
      403,500 403,500

  3. The following are the balance extracted from the books of Usman Traders as at 31st December 20225.
    Adjustments:
    (1) Merchandise inventory at 31-12-2022 was valued at Rs. 25,470.
    (2) Insurance unexpired Rs. 2,140.
    (3) Allow interest on capital at 5% p.a. & 3% on drawings.
    Prepare income statement and balance sheet.

    Debit Balances Rs. Credit Balances Rs.
    Inventory (01-01-2022) 45,270 Capital 596,620
    Drawings 4,550 Accounts payable 45,750
    Buildings 400,000 Allowances for uncollectible 4,125
    Office Equipment 100,000 Discount 2,850
    Cash in Hand 29,150 Sales 392,470
    Cash in Bank 116,540 Purchases returns 12,280
    Accounts Receivable 69,750    
    Purchases 232,710    
    Sales Returns 5,540    
    Salaries 37,875    
    Travelers Commission 3,940    
    Office Expenses 4,500    
    Insurance 4,270    
      10,54,095   10,54,095