Accounting — Mixed Practice — Part 1: 40 MCQs with Explanations

Warehouse rent is a part of distribution cost. .

Tender is an estimation of selling price .

Audit fess is a part of administration overhead .

Amortization is the correct answer to “The process of paying off debt over time in regular installment of interest & principal sufficient to repay the loan in fully by its maturity date.”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Accounts Receivable is the correct answer to “IFRS 9 explains about”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

A worker has a time rate of 15/hr. He makes 720 units of component (standard time: 5 minutes/ unit) in a week of 48 hours. His total wages including Rowan bonus for the week is 864.

No change occurs to inventories for either use absorption costing or variable costing methods is the correct answer to “When production is equal to sales, which of the following is TRUE”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

5,80,000 is the correct answer to “Budgeted sales for the next year is 5,00,000 units. Desired ending finished goods inventory is 1,50,000 units and equivalent units in ending W-I-P inventory is 60,000 units. The opening finished goods inventory for the next year is 80,000 units, with 50,000 equivalent units in beginning W-I-P inventory How many equivalent units should be produced”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Opening stock of raw material 11,570 Closing stock of raw material 10,380 Purchase of raw material during the month 1,28,450 Total manufacturing cost charged to product 3,39,165 Factory overheads are applied at the rate of 45% of direct labour cost. The amount of factory overheads applied to production is 65,025 is the correct answer to “Consider the following data pertaining to the production of a company for a particular month:”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

10,000 units is the correct answer to “If the minimum stock level and average stock level of raw material are 4,000 and 9,000 units respectively, find out its reorder quantity.”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

A cash book with cash, bank and discount column is commonly referred as Three columns cash book .

The most common imprest system is the Petty cash system.

T is the correct answer to “Which English alphabet is similar to the shape of an account”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

A cash book that is used to record the small payments of cash is generally referred as Petty cash book .

Payments is the correct answer to “Drawings by owner of business are generally recorded on which of the following side of a cash book”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Payments is the correct answer to “Payment of rent expenses is recorded on which side of cash book”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Cash discount is allowed on Prompt repayment of debt.

Receipts is the correct answer to “Introduction capital by owner of business is recorded on which side of a cash book”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Seller is the correct answer to “Which of the following is generally not the party to a check”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Cash book with cash and discount column is mostly referred as Two column cash book .

Cash is the correct answer to “A simple or one column cash book usually has which of the following main columns”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Payments is the correct answer to “Purchase of office equipment for cash will be recorded on which of the following sides of a cash book”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Postage stamps on hand are considered as Prepaid expenses .

Cash book is prepared by Accountant of business .

Payments is the correct answer to “Discount received is recorded on which of the following side of a cash book”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

The closing balance of petty cash book is considered as Asset .

Bank overdraft is the correct answer to “A credit balance in cash book indicates”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

At the end of every accounting period is the correct answer to “Petty cash fund is supposed to be replenished”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Postdated checks are considered as Accounts receivable .

Outstanding checks is the correct answer to “Which of the following error results in unadjusted cash book balance”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Uncredited checks Checks that are presented to bank but not yet credited by the bank.

Credit balance is the correct answer to “Favorable balance of bank statement implies that”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

$2,000 is the correct answer to “Balance as per cash book(adjusted.=$1000, Unpresented checks=$2000, Uncredited checks=$500, Deposit in transit=$500. Compute the balance as per bank statement.”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

$3000 will be subtracted from cash book balance is the correct answer to “A company was entered in hire purchase agreement and had to pay $1000 per month. Three payments were made via bank account but no entry was found in cash book. Identify the correct adjustment in cash book”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

$5000 will be credited is the correct answer to “$5000 deposited in bank account was entered twice in the cash book. Identify the correct adjustment in cash book.”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

An entry which is made on both sides of a cash book is called Contra entry .

Cash book records: Cash payments and cash receipts .

In bank reconciliation statement the amount of outstanding checks is added to Adjusted balance of cash book.

Unpresented checks also referred as Outstanding checks .

$2000 will be credited in cash book is the correct answer to “A discount of $2000 was given to a supplier on his prompt repayment of debt but the cashier entered the gross amount in cash book. What should be the adjustment in cash to work out the correct balance of cash book”. Items of this type are drawn from the Accounting — Mixed Practice — Part 1 syllabus of Pakistani competitive exams, where the fact is tested verbatim.