Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

Net profit before charging commission to manager - Rs. $2,20,000$. The manager is entitled to commission of $10\%$ on net profit before charging such commission. The commission payable to manager will be.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. Rs. $21,802$

  2. Rs. $24,200$

  3. Rs. $22,000$

  4. Rs. $20,000$

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Correct Option: C

Net profit before charging commission to General & Sales manager - Rs. $1,65,920$
The General Manager is entitled to commission of $10\%$ on net profit after charging such commission and commission of Sales Manager.
The Sales Manager is entitled to commission of $5\%$ on net profit after charging such commission and commission of General Manager.
Commission payable to General Manager- Rs. ___________ & Sales Manager - Rs. __________.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. $7,214$ & $14,428$

  2. $14,428$ & $7,214$

  3. $16,592$ & $8,296$

  4. $8,296$ & $16,592$

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Correct Option: B

Capital is all assets less fictitious assets.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. True

  2. False

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Correct Option: B

Debtors as appearing in Trial Balance are f $25,000$. Provision for doubtful debts is to be provided @ $5\%$ and $2\%$ of amount is to be provided for discount. What is the amount of debtors to be shown in balance sheet?

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. f$23,750$

  2. f$23,250$

  3. f$23,275$

  4. f$1,750$

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Correct Option: C

The provision for discount on debtors is often provided in keeping with the concept of _______________.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. Conservatism

  2. Going Concern

  3. Materiality

  4. Consistency

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Correct Option: A
Explanation:

Conservatism:
This convention ensures that uncertainties and risks inherent in business transactions should be given a proper consideration. As per this convention the accountants follow the rule 'anticipate no profit but provide for all possible losses'. Examples Making provisions for Bad Debts, Making General Reserve, Valuing the stock at lower of cost or market value etc.

The net' profit of a sole proprietorship firm is f$1,320$(before commission). The manager of the firm gets$10/%$ commission on the net profit after charging such commission. Manager's commission would be ___________.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. f120

  2. f132

  3. f1,188

  4. f1,200

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Correct Option: A

If Capital = $70,000$; Liability = $40,000$. 

Find Assets.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. $30,000$

  2. $1,10,000$

  3. $40,000$

  4. $70,000$

Show answer
Correct Option: B
Explanation:

Capital Employed is the total amount of investment made for running the business.

Capital Employed = Assets - Current Liabilities
OR
Assets = Capital Employed+Current Liabilities
Hence 
1,10,000 = 70,000 + 40,000.

T Ltd. has issued 14% debentures of Rs.20,00,000 at a discount of 10% in April, 2013 and the company pays interest half yearly on June 30, and December 31, every year. On March 31, 2014 the amount shown as interest accrued but not due in the balance sheet will be________.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. Rs. 1,40,000

  2. Rs. 2,10,000

  3. Rs. 2,80,000

  4. Rs. 70,000

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Correct Option: D

X limited is in the business of trading. It is to received Rs.$7,000$ from Vinod and to pay Rs.$8,000$ to Vinod. Similarly, it is to pay Rs.$8,000$ to Sudhir and to receive Rs.$9,000$ from Sudhir. Except above but after all the adjustment, the books of X Limited show the debtors balance at Rs.$72,000$ (Dr.) and creditors balance at Rs.$39,000(Cr.)$. The correct value of debtors and creditors to be shown in balance sheet would be___________.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. Debtors (Rs.$72,000$), Creditors (Rs.$39,000$)

  2. Debtors (Rs.$88,000$), Creditors (Rs.$55,000$)

  3. Debtors (Rs.$80,000$), Creditors (Rs.$47,000$)

  4. Debtors (Rs.$79,000$), Creditors (Rs.$46,000$)

Show answer
Correct Option: B
Explanation:

As per question,

Calculation of debtors

It implies Rs 7,000 from Vinod + Rs 9,000 from Sudhir + debtors balance at Rs.72,000 (Dr.) = Rs 88000

 

Calculation of creditors

It implies pay Rs.8,000 to Vinod + pay Rs.8,000 to Sudhir + creditors balance at Rs.39,000(Cr.) = Rs 55,000

Creating Reserve for Discount on Creditors is an example of __________.

elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

  1. Increase in Asset & Owner's Liability

  2. Decrease in Asset & Owner's Liability

  3. Increase in Liability & Owner's Liability

  4. Decrease in Liability & Increase in Owner's Liability

  5. Increase in Liability & Decrease in Owner's Liability

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Correct Option: D