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a) Fill in the Blanks: 1. Discount allowed column appears in _______ side of the cash book. 2. In the triple column cash book, when a cheque is received the amount is entered in the _______ column. 4. Discount received column appears in _____ side of the cash book. 5. A cheque received and paid into the bank on the same day is recorded in the ______ column of the three column cash book. 6. When a cheque received from a customer is dishonoured, his account is ________. 7. Cash Book is one of the _______ books. [Answers : 1. debit, 2. cash, 4. credit, 5. bank, 6. debited 7. subsidiary] 8. The cash book records a) all cash payments b) all cash receipts c) all cash receipts & payments 10. When goods are purchased for cash, the entry will be recorded in the a) cash book b) purchases book c) journal 11. The balance of cash book indicates a) net income b) cash in hand c) difference between debtors and creditors 12. In triple column cash book, cash withdrawn from bank for office use will appear in a) debit side of the cash book only b) both sides of the cash book. c) credit side of the cash book only. 13. If a cheque sent for collection is dishonoured, the debit is given to a) suppliers A/c b) bank A/c c) customers A/c 14. If a cheque issued by us is dishonoured the credit is given to a) supplier’s A/c b) customer’s A/c c) bank A/c [Answers : 8 (c), 10. (a), 11. (b), 12. (b), 13. (c), 14. (a)] a) Fill in the blanks: 15. Sub division of the journals into various books for recording transactions of similar nature are called ________. 16. The total of the ________ book is posted to the debit of purchases account. 17. The person who prepares a bill is called the ________. 18. Days of grace are ________ in number. [Answers : 15. subsidiary books, 16. purchases, 17. drawer, 18. three] b) Choose the correct answer : 19. Purchase of machinery is recorded in a) sales book b) journal proper c) purchases book 20. Purchases book is kept to record

a) all purchases b) only cash purchases c) only credit purchases 21. Credit sales are recorded in a) sales book b) cash book c) journal proper 22. Goods returned by customers are recorded in a) sales book b) sales return book c) purchases return book [Answers : 19. (b), 20.(c), 21.(a), 22. (b) a) Fill in the blanks: 23. Ledger is the _________ book of account. 24. The process of transferring entries from Journal to the Ledger is called _________. 25 When is the suspense account created Ans. When the debit and credit side of the trial balance do not match 26. What treatment is given to the net profit or net loss which arises from P/L a/c? Ans. Net profit is added to the liability side of Balance sheet and net loss is added to assets side. 27. Debiting an account signifies recording the transactions on the _________ side. 28. The left hand side of an account is known as _________and the right hand side as _________. 29. Credit Balance means _________ is heavier than _________. 30. Real accounts cannot have _________ balance. 31. Account having debit balance is closed by writing _________. 32. L.F. column in the journal is filled at the time of _________ . [Answers: 23. principal, 24. posting, 27. debit side, 28. debit side; credit side, 29. credit total; debit total, 30. credit, 31. By Balance c/d, 32. posting] b) Choose the correct answer : 33. Ledger is a book of : a. original entry b. final entry c. all cash transactions. 34. Personal and real accounts are: a. closed b. balanced c. closed and transferred 35. The column of ledger which links the entry with journal is a. L.F column b. J.F column c. Particulars column 36. Posting on the credit side of an account is written as a. To b. By c. Being 37. Nominal account having credit balance represents a. income / gain b. expenses / losses c. assets

38. Nominal account having debit balance represents a. income / gain b. expenses / losses c. liability 39. Real accounts always show a. debit balances b. credit balances c. nil balance. 41. Account having credit balance is closed by writing a. To Balance b/d b. By Balance c/d c. To Balance c/d 42. When the total of debits and credits are equal, it represents a. debit balance b. credit balance c. nil balance 43. The balances of personal and real accounts are shown in the a. profit and loss account b. balance sheet c. both. [Answers: 33(b), 34 (b), 35. (b), 36 (b), 37 (a), 38 (b), 39 (a), 41 (c), 42 (c), 43 (b)] I. Objective Type:

a) Fill in the Blanks : 44. The source document gives information about the nature of the _________. 45. The accounting equation is a statement of _________ between the debits and credits. 46. In double entry book-keeping, every transaction affects at least two _________. 47. Assets are always equal to liabilities plus _________. 48. A transaction which increases the capital is called _________. 49. The journal is a book of _________. 50. Recording of transaction in the journal is called _________. 51. The _________ column of journal represents the place of posting of an entry in the ledger account. 52. _________ account is debited for the amount not recovered from the customer. 53. The assets of a business on 31st December, 2002 were worth Rs.50,000 and its capital was Rs.35,000. Its liabilities on that date were Rs. _________. [Answer : 44. transactions, 45. equality, 46. accounts, 47. capital, 48. revenue or income, 49. original entry, 50. journalising, 51. L.F, 52. bad debts, 53. Rs.15,000] 54. What are the 2 factors due to which we consider depreciation? Ans. 1. Wear & Tear

2. Efflux of Time 55. What is capital maintenance concept? Ans. Unless Capital is maintained profit is not possible. This is the capital maintenance concept 56. What is Salvage? Ans. The estimated scrap value after particular period 57. What is average profit? Ans. Sum of all the profits of all the years divided by the number of years 58. How is Goodwill calculated by taking average profit into consideration? Ans. Average Profit * No. of years of purchases 59. What are the 3 types of Goodwill? Ans. CAT,RAT and DOG Goodwill CAT- depends on loacation. Eg.mall DOG- attached to owner RAT- hidden goodwill, cant track 60. What are the various types of errors in a trial balance? Ans. Error of Commission, Error of Omission, Error of Principle, Compensating Error (Miscellaneous Questions) . Tell about GAAP? The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information. GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. . What are the headings in a balance sheet? Liabilities Share holder’s Funds Secured & Unsecured loans Current liabilities & provisions Assets Short term & long term investments Current Assets, loans & advances Fixed Assets

Miscellaneous expenses -Here Share holder’s funds include Share capital & Reserves & Surplus 4. What is the difference between ledger and journal? Journal is the daily record of the transactions of the business. Ledger is the book where the entries are posted from the ledger to find the balances of individual accounts. 5. What is COGS? COGS reflect the cost of the product or good that a company sells to generate revenue, appearing on the income statement as an expense unto it. COGS also referred to as "cost of sales". It is essentially a cost of doing business, such as the amount paid to purchase raw materials to manufacture them into finished goods 6. Talk about Ratios. Ratios are mainly calculated from the balance sheet of companies to analyze the company’s performance and to forecast the future prospects of the company. This will be more useful for company’s existing and potential stake holders to invest on company’s stock. These ratios are also more helpful to banks, government organizations, and lenders and public. 7. Why is closing stock absent in Trial Balance? It is an adjustment item which will appear in Profit & Loss account and Balance Sheet as it does not come under the double entry system having corresponding debit and credit entries. Hence it does not appear in the trial balance. And the stock valuation happens only after 31st march so it will not appear. 8. What is the effect of depreciation in cash flow and P & L? Effect in P/L – The expenses is boosted and the profit is reduced due to depreciation. Effect in Cash Flow – Deprecation is not a Cash expense and therefore it does not result in a cash outflow. 9. Where will goodwill come? P&L or B/S? Goodwill will come in the balance sheet 11. Explain on inventory valuation? Three methods are used – FIFO, LIFO, WAM,HIFO. LIFO is not used now. Usually WAM method is used when the company wants to pay less tax and show low profit . 12. Explain Inventory management Inventory Management is an ongoing process of keeping track of everything needed to run your operation and keep it running. Proper Inventory Management will keep your business flowing from the time an order is placed right down to the point your product gets into your customer's hands. Track your materials, your products during manufacturing, your ready to ship products, and

your products in transit and on store shelves. 16. What is Net worth? It is the amount by which a company or individual's assets exceed their liabilities. For a company, this is the shareholder's (or owner's) equity and is determined by subtracting liabilities on the balance sheet from assets. 17. How will u calculate the working capital required of a firm? To estimate the cash requirement for working capital, one may follow a 2 step process i) estimate the cash cost of various current assets required by the firm ii) Deduct the spontaneous current liabilities from the cash cost of current assets. 18. Which of the following books should be used to record purchase of furniture on credit? a. cash book

b. journal proper

c. purchases book

19. Which of the following accounts is increased by debit entries a.machinery accounts

b.purchases return account

c.discount received accounts

20. The credit balance in the bank accounts is A liability

21. Return outward book makes a record of Goods returned to the supplier (purchases returns)

22. Sales book is kept to record Credit Sales