Generally Accepted Accounting Principles and Cash

Topics: Generally Accepted Accounting Principles, Balance sheet, December Pages: 6 (929 words) Published: August 22, 2013
Q.No.1. (A). Encircle the correct answer. Marks (20*1) (Time Allowed 20 Min)

1. Resources owned by business are known as:
a. Assets
b. Expenses
c. Liabilities
d. Income
2. Amount withdrawn from business is recorded as:
e. Drawings
f. Capital
g. Liabilities
h. none
3. Assets minus capital equals to:
i. Assets
j. Capital
k. Liability
l. None
4. The payment of business debts:
m. Has no effect on owners’ equity
n. Increase assets
o. Decrease liabilities
p. none of the above
5. Which of the following is not an asset:
q. cash
r. equipment
s. notes receivable
t. all are assets
6. Both assets and owner’s equity would be increased by: u. Drawings
v. Purchase of machinery on credit
w. Payment of creditors
x. Profit earned retained in business
7. The amount brought in by the proprietor in the business should be credited to: y. Cash account
z. Salaries account
{. Capital account
|. Drawings account
8. Sales made to mahmood for cash should be debited to :
}. Cash account
~. Mahmood account
. Sales account
. None
9. Balance sheet shows the :
. Financial position of business
. Financial performance of business
. Profit of business
. none of the above
10. Income statement shows the :
. Financial position of business
. Financial performance of business
. Profit of business
. None
11. sales are equal to:
. CGS + profit
. CGS - G.P
. G.P - CGS
. None
12. G.P is equal to:
. Sales – closing stock
. Purchases – closing stock
. Sales - CGS
. none
13. Cost of goods sold is equal to:
. Sales – G.P
. Sales - Purchases
. Sales – closing stock
. None
14. Cash account will show :
. Debit or credit balance
. Debit balance
. Credit balance
. none of the above
15. Cash sales are recorded in :
. Cash book
. Sales book
. journal
. none
16. A three column cash book records:
. All cash transactions only
. Both cash and bank transactions
. Both cash and bank transactions including discount
. None
17. Journal is called :
. Book of cash transactions
. Book of original transactions
. Book of credit transactions
. None
18. The returned of goods by customer should be debited to: . Customer account
. Sales returns account
. Goods account
. None
19. Double entry means:
. Entry in two sets of books
. Entry at two dates
. Entry of two aspects of the transaction
. none of the above
20. Withdrawals by proprietor would:
. Reduce owner’s equity
. Reduce assets
. Reduce both assets and owner’s equity
. None

Part II: short Questions
Q.No.2. (A). Short question. Marks (10*2)

1. What is the difference between the trade discount and cash discount? 2. What is debit and credit? What are the rules of debit and credit? 3. What is GAAP?
4. Explain types of statements?
5. What are prepaid expenses how do you treat them in accounts? 6. Explain gross profit and net profit?
7. What is balance sheet? What is the difference between trial balance and balance sheet? 8. What do you understand by three column cash book?
9. Differentiate between journal and ledger?
10. What is an accounting cycle?

Part III: Long Questions Attempt any two questions out of four Q.No.3 Marks (10*1)
From the following transactions prepares three column cash book: 1984 Dec: 1 Rs 10000 paid in by proprietor on start of business of which Rs 2000 were banked. 6 Dec: an amount due to qasim Rs 500 for goods...
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