International Commerce Olympiad

1. Types of Account shown in Balance Sheet are

(a) Nominal and Personal (b) Real and Nominal

Ans: (d) Real, Nominal and Personal

2. A soft drink manufacturing company incurred huge expenditure on

advertisement, assuming that benefit will be availed during following years.

The Expenditure incurred is:

(a) Revenue expenditure

(b) Capital expenditure

(d) Partial revenue and partial capital expenditure

Ans: (c) Deferred revenue expenditure

3. Amount paid for the purchase of securities (Investments) is an example of

(a)Revenue Expenditure (b) Nominal Expenditure

Ans: (d) Capital Expenditure

4. Closing stock in the trial balance implies that it is

(a) Already adjusted in opening stock

(b) Adjusted in purchases account

(d) Adjusted in sales account

Ans: (b) Adjusted in purchases account

5. Goodwill is:

(a)Current Asset (b) Fictitious Asset

Ans: (d) Intangible Asset

6. Financial performance of business during the year is shown by:

(a)Balance Sheet

(b) Profit and Loss Account

(d) Trial Balance

Ans: (b) Profit and Loss Account

7. Arrangement of various assets and liabilities in a proper order is known as;

(a)Marshalling (b) Ordering

(c ) Arranging (d) Grouping

Ans: (a) Marshalling

8. Bills discounted from bank till date of maturity is an example of ..........

(a)Current Liabilities (b) Non-Current Liabilities

Ans: (c) Contingent Liabilities

9. Calculate gross profit if rate of gross profit is 20% on sales and cost of goods

sold is ₹ 1,20,000

(a) ₹ 30,000 (b) ₹ 24,000

Ans: (a) ₹ 30,000

10. Opening stock ₹ 38,500

Purchases ₹ 30,700

Direct Wages ₹ 34,800

Interest on Loan ₹ 32,800

Closing stock ₹ 39,000

Cost of goods sold will be

(a) ₹ 30,000 (b) ₹ 32,000

Ans: (c) ₹ 65,000

11. Full claim accepted by Insurance company for the loss of goods by fire is

credited to

(a) Trading as well as Profit and Loss Account

(b) Insurance company’s A/c only

(d) Trading Account only

11. (c)

12. Following information given in Trial balance: Bad debt ₹ 33,000

Provision for bad debts ₹ 33,500

Debtors ₹ 40,000

Additional information:

It is desired to make a provision for doubtful debts @ of 10% on debtors.

The amount debited to P & L A/c is

(a) ₹ 34,000 (b) ₹ 5,000

Ans; (d) ₹ 3,500

13. Net profit before the following adjustments ₹ 1,80,000

Outstanding salary ₹ 10,000

Prepaid Insurance ₹ 13,000 Calculate profit after adjustment

(a) ₹ 1,83,000 (b) ₹ 1,77,000

Ans: (b) ₹ 1,77,000

14. Unexpired Insurance at the end of current financial year related to:

(a) Previous financial year (b) Current financial year

Ans: (c) Following financial year

15. Net profit of a firm before charging manager’s commission is ₹ 21,000. If the manager is entitled to 5% commission after charging such commission. How much manager will get as commission?

(a) ₹ 31,050 (b) ₹ 1,000

Ans: (b) ₹ 1,000

16. Closing stock is shown in Financial statements at:

(a) Cost price (b) Market price

(d) Cost price or market price whichever is less

Ans: (d)Cost price or market price whichever is less

17. Life insurance premium paid by business for the proprietor is treated as:

(a)Expense (b) Drawing

Ans: (b) Drawing

18. Outstanding salaries, shown in Trial Balance will be:

(a) Deducted from salaries in P & L A/c and shown in liability side in balance

sheet

(b)Added to the salaries in P & L A/c and shown in assets

(d) Shown in liabilities side of balance sheet

Ans: (d) Shown in liabilities side of balance sheet

19. Opening stock ₹ 1,00,000, Sales ₹ 5,00,000, Gross Profit @ 25% on sales,

Purchases ₹ 5,00,000. There are no direct expenses. Closing stock is :

(a) ₹1,25,000 (b) ₹ 3,25,000

Ans: (d) ₹ 2,25,000

20. C’s Trial Balance provides you the following information: Bad Debts ₹ 800, Provision for Doubtful Debts ₹ 2,000.

It is decided to maintain a provision for Doubtful Debts of ₹ 1,000. The

accounting treatment of these adjustment is

(a) ₹ 1,800 to be debited to the P & L Account.

(b) ₹ 200 to be credited to the P & L account

(d) ₹ 4,200 to be debited to the P & L Account

Ans; (b)₹ 200 to be credited to the P & L account

21. The book value of the furniture in the beginning of the year is ₹ 50,000 and furniture worth ₹ 20,000 is purchased in the mid of the year. At the end of the year what amount of furniture will be shown in balance sheet if firm charges depreciation @ 10% p.a.?

(a) ₹ 63,000 (b) ₹ 65,000

Ans: (c) ₹64,000

22. Annual insurance premium of a firm ₹ 2,400 was paid on 1st October in 2011 and 2012. The amount of premium to be shown in P & LA/c for the year ended 31st December, 2012 will be:

(a) ₹ 4,800 (b) ₹ 2,400

Ans: (b) ₹ 2,400

23. The firm has 10% loan ₹ 80,000 taken from Mr. Harission on 30.9.2018 as a part of its liability on 31.3.2019 and trial balance shows interest on loan

₹ 2,800. The amount of interest to be debited in P & L Account for the year ending as on that date March 31, 2019, and shown in liability side of Balance sheet as on that respectively will be:

(a) ₹ 2,800 and ₹ 1,200 (b) ₹ 8,000 and ₹ 5,200

Ans: (c) ₹ 4,000 and ₹ 1,200

24. If sales are ₹ 6,00,000 and gross profit is calculated as 1/3 on sales. If purchases

are ₹ 4,90,000 and closing stock is ₹ 90,000, opening stock will be

(a) Nil (b) ₹ 1,80,000

Ans: (a)Nil

25. Proprietor used a rented building for business purpose. The rent paid during the year for the building was ₹1,32,000 debited to rent A/c in the books of business. One month rent is still outstanding. Liability of the business for rent outstanding will be

(a) ₹ 11,000 (b) ₹ 12,000

Ans: (b) ₹ 12,000

26. X purchased goods on credit from Y of worth ₹ 20,000. Y has given a trade discount of ₹ 1,000 on the same. He also allowed a cash discount of ₹ 500. At the end of the year, 40% of the goods purchased from Y remained unsold. What is the amount of cost of goods sold?

(a) ₹ 11,400 (b) ₹ 12,000

Ans: (a) ₹ 11,400

27. Goods costing ₹ 4,000 having normal sales value of ₹ 6,000 were destroyed by fire. Insurance company accepted a final claim of ₹ 2,700. What amount of loss by fire will be transferred to Profit and Loss A/c?

(a) ₹ 3,300 (b) ₹ 1,300

Ans: (b) ₹ 1,300

28. Income tax in sole proprietorship firm is shown

(a) On the debit side of Profit and loss account

(b) On the Credit side of profit and loss account

(d) On the liabilities side

Ans: (c)As deduction from the capital

29. For the financial year 2018-19, the gross profit was ₹1,75,000. During the year carriage inward ₹ 15,000, personal expenses of proprietor ₹75,000, carriage outward ₹17,500 and bad debts for the year were ₹12,000 incurred.

The net profit earned for the year 2018-19 would be:

(a) ₹ 85,000 (b) ₹ 1,45,500

Ans: (b) ₹ 1,45,500

30. Calculate Gross profit/Gross Loss from the given information.

Total Purchase during the year ₹ 9,00,000, 2/3 goods sold for ₹ 7,00,000

Expenses on sale ₹ 30,000

Choose the correct option:

(a) Gross Profit ₹ 1,00,000 (b) Gross Loss ₹ 2,00,000

Ans: (a) Gross Profit ₹ 1,00,000

31. Calculate Closing Stock

Opening Stock ₹ 20,000

Sales ₹ 2,00,000

Purchases ₹ 1,60,000

Gross Profit 25% on sales

(a) ₹ 20,000 (b) ₹ 30,000

Ans: (b) ₹ 30,000

32. Following is the extracts of trial balance:

Dr. Cr.

Debtors ₹ 5,10,000

Bad Debts ₹ 7,000

Provision for doubtful debts ₹ 23,000

Additional information:

1. Further Bad debts ₹ 10,000

2. Make a provision for doubtful debts @ 3% on debtors. The net amount transferred to profit and loss account:

(a) ₹ 33,000 on debit side (b) ₹ 1,000 on debit side

Ans: (c) ₹ 1,000 on credit side

33. Rent amount shown in Trial balance (Dr.) is ₹ 2,40,000. In additional information, it is given that rent has been paid for 4 months. (i) amount will be shown in Profit and Loss Account and (ii) amount will be shown on (iii) side of the balance sheet.

(a) (i) ₹ 7,20,000; (ii) ₹ 4,80,000; (iii) Liability

(b) (i) ₹ 4,80,000; (ii) ₹ 7,20,000; (iii) Liability

(d) (i) ₹ 3,60,000; (ii) ₹ 2,40,000; (iii) Liabilities

Ans: (a) i) ₹ 7,20,000; (ii) ₹ 4,80,000; (iii) Liability

34. Net profit of the firm before charging manager commission is ₹ 3,24,000. If the manager is entitled to get commission @ 8% after charging such commission. So Net profit transferred to capital account will be

(a) ₹ 24,000 (b) ₹ 25,920

Ans: (c) ₹ 3,00,000

35. While making an adjustment entry in respect of Interest on Capital, we credit:

(a) Interest on Capital (b) Capital Account

Ans: (b) Capital Account

36. Ram is a furniture dealer. Which one of the following will not be recorded

in the books?

(a) Purchase of timber for ₹ 10,000

(b) Sofa set worth of ₹ 20,000 taken to his home

(d) Dining table of ₹ 15,000 given to his friend as gift.

Ans: (c) Sale of his own household furniture for ₹ 20,000

37. Which of the following source documents needed for recording in the Purchase Return Book?

(a)Invoice (b) Debit note

Ans: (a)invoice

38. It is the way to reduce the list price of Goods and thereby selling more

quantity. What is it?

(a)Advantage of Cash discount (b) Advantage of Credit Sale

Ans: (d) Advantage of Trade discount

39. At the end of the period, expenses under different heads can be determined

easily by making ?

(a) Simple petty cash book (b) Journal

Ans: (c) Analytical petty cash book

40. Paid installment of loan ₹ 1,00,000 including interest of ₹ 20,000 will?

(a) Decrease loan by ₹ 1,00,000 and cash by ₹ 1,00,000

(b) Decrease loan by ₹ 80,000 and cash by ₹ 80,000

(d) Decrease loan by ₹ 1,00,000 and cash by 80,000 and capital by ₹ 20,000

Ans: (c) Decrease loan by ₹ 80,000 and cash by 1,00,000 and capital by ₹ 20,000

41. Car, personal asset of the proprietor was sold for ₹ 2,00,000 against cheque which he deposited in his saving account. How will it affect the Accounting Equation?

(a) Decrease bank balance and decrease asset (car)

(b) No effect on accounting equation

(d) Increase in Bank balance and decrease in Asset (Car)

Ans: (b) No effect on accounting equation

42. Pick the odd one out.

(a) Furniture (b) Goodwill

Ans: (d) Stock

43. Entry which shows multiple debits/credits and one credit/debit is called?

(a) Adjusting Entry (b) Sales Journal

Ans: (d) Compound Entry

44. It is a reduction in the value of goods sold and is allowed by seller of goods

due to poor quality of goods. It is ?

(a) Trade Discount (b) Rebate

Ans: (b)Rebate

45. Rahul sold 100 cricket bats to V.S Sports @ 5,000 each less 25% Trade discount plus GST @ 12% and 2% cash discount if V.S. Sports paid the amount in 14 days of sale. V.S. Sports paid the amount within 14 days. The amount will be credited to sales account.

(a) ₹ 4,20,000 (b) ₹ 5,60,000

Ans: (c) ₹ 3,75,000

46. While preparing Bank Reconciliation Statement if Debit Balance of Bank statement is given as ₹ 10,000 and there were unpresented cheques (issued) of ₹ 6,000. What will be the balance as per Cash Book?

(a) Credit ₹ 4,000 (b) Debit ₹ 16,000

Ans: (c) Credit ₹ 16,000

47. Which of the following is entered in the Journal Proper?

(a) Purchase of an asset for cash (b) Purchase of an asset on credit

Ans: (b) Purchase of an asset on credit

48. holds that Business firm will not be sold or liquidated in near future.

(a) Going concern Concept (b) Cost Concept

Ans: (a) Going concern Concept

9. Salary of ₹ 7,000 payable in the financial year has not been taken into account.

Which concept has not been followed in the above statement?

(a) Materiality (b) Historical cost

49. (c)

50. Match the following:

Column A Column B

A. Bank Balance (I) Credit Balance only

B. Cash Balance (II) Debit Balance only

C. Bills Payable (III) Either Credit or Debit Balance

Choose the correct option:

(a) A-I, B-III, C-II (b) A-II, B-I, C-III

Ans: (c) A-III, B-II, C-I

51. Which of the following transaction is to be recorded in the books of accounts

if cash basis is followed by the business firm?

(a) Rent outstanding ₹ 10,000 for the current year

(b) Rent already paid ₹ 10,000 in previous year, included an advance rent of

₹ 5,000 for current year.

(d) Salary paid from business ₹ 10,000 to the domestic servant of the owner

Ans: (d) Salary paid from business ₹ 10,000 to the domestic servant of the owner

52. Selection of an inappropriate accounting policy decision may

(a) Overstate performance and financial position of a business entity.

(b) Overstate/Understate the performance and financial position of business entity.

(d) Understate the financial position of the business entity.

Ans: (b) Overstate/Understate the performance and financial position of business entity.

53. Which of the following is not a nominal account?

(a) Outstanding salary account

(b) Salaries account

(d) Commission received account

Ans: (a) Outstanding salary account

54. Information given in trial balance of Ram as at 31.3.2018 Loan from Mrs. Ram 9% p.a. (Taken on 1.10.2017) ₹ 30,000 Interest on loan (Dr.) ₹ 350

Amount of interest outstanding shown in Balance Sheet of Ram as at 31st

March 2018 will be.................. .

(a) ₹ 1,350 (b) ₹ 2,700

Ans: (d) ₹ 1,000

55. A proprietor, Mr. A has reported a profit of ₹ 1,25,000 at the end of the Financial year after taking into consideration the following transaction. The cost of assets of ₹ 25,000 taken as an expense.

What will be the actual profit after doing necessary changes?

(a) ₹ 1,00,000 (b) ₹ 1,40,000

Ans: (d) ₹ 1,50,000

56. Closing Stock appearing in Trial Balance is shown in while preparing

Final Accounts.

(a) Trading A/c and Balance Sheet (b) Trading Account

Ans: (c) Balance Sheet

57. Amount spent for construction of Building will be considered as:

(a)Capital Expenditure (b) Revenue Expenditure

Ans: (a) Capital Expenditure

58. Salary = ₹ 11,000, Gross profit = 1/10th on cost, Sales = ₹ 1,10,000. Cost of

goods sold will be

(a) ₹ 88,000 (b) ₹ 1,00,000

Ans: (c) ₹ 1,00,000

59. When goods are destroyed by fire and partly insured, claim not admitted by

insurance company is debited to:

(a) Insurance Co Account (b) Purchase Account

Ans: (c) Loss by Fire Account

60. The following balances appearing in the trial balance Sundry Debtors ₹ 2,10,000

Bad Debts ₹ 12,000

Provision for bad debts ₹ 14,000

Additional Information:

There was a further Bad Debts of ₹ 10,000 and firm has to maintain a provision for doubtful debts @ 5% on debtors. What amount should be debited to profit and loss A/c.

(a) ₹ 17000 (b) ₹ 18000

Ans: (d) ₹ 31500

61. The following balance appearing the Trial Balance:

Dr. Cr.

Sales ₹ 5,00,000

Output IGST ₹ 60,000

Input IGST ₹ 40,000

Above items will be shown in financial statement as follows:

(a) ₹ 5,60,000 shown in Trading A/c and ₹ 40,000 shown in asset side of balance sheet.

(b) ₹ 5,00,000 shown in Trading A/c and ₹ 60,000 shown in liability side of balance sheet.

(d) ₹5,00,000 shown in Trading A/c and 20,000 shown in liability side of Balance Sheet.

Ans: (d) ₹5,00,000 shown in Trading A/c and 20,000 shown in liability side of Balance Sheet.

62. Gross Profit ₹ 68,000

Carriage inward ₹ 12,000

General Expenses ₹ 8,000 Selling and Distribution Exp. ₹ 6,000

Manager Commission is to be provided @ 8% on Net profit after charging such commission. What will be the Manager’s Commission?

(a) ₹ 3360 (b) ₹ 3111

Ans: (d) ₹ 4000

63. Insurance premium paid by a firm on 1st Dec. 2017 for the year upto 30th November 2018 was ₹18,000. What amount will be debited to P/L account for the year 31st March 2018.

(a) ₹ 18,000 (b) Nil

Ans: (c) ₹ 6,000

64. If sales are ₹ 6,00,000 and Gross profit is 20% on cost then Gross Profit will

be:

(a) ₹ 1,20,000 (b) ₹ 1,25,000

Ans: (d) ₹ 1,00,000

65. Excess of debit in Profit and Loss account is called:

(a) Net profit (b) Net loss

Ans: (b) Net loss

66. Which of the following is a special type of expenditure which is revenue in nature but its

treatment is similar to capital expenditure?

(a) Extension of building (b) Repairs of machinery

Ans: (c) Large scale advertising

67. What will be recorded in profit and loss account?

(a) Capital and revenue expenditure

(b) Capital and revenue receipt

(d) Revenue expenditure and revenue receipt

Ans: (d) Revenue expenditure and revenue receipt

68. On 1.4.2014 a piece of furniture costing ₹ 10,000 and a machine costing

₹ 20,000 were purchased. Charge depreciation@ 10% p.a. on furniture and 5% p.a. on machinery.

What amount of furniture and machinery will appear in the balance sheet as

at 31 March 2015?

(a) Machinery ₹ 19,000, Furniture ₹ 9,750

(b) Machinery ₹ 19,750, Furniture ₹ 9,000

(d)Machinery ₹ 19,000, Furniture ₹ 9,000

Ans: (d) Machinery ₹ 19,000, Furniture ₹ 9,000

69. While preparing Financial Statements where will you show the item ‘Profit

on sale of short-term marketable securities’?

(a) Debit side of Profit and Loss A/c

(b) Credit side of Profit and Loss A/c

(d) Asset side of Balance Sheet

Ans: (b) Asset side of Balance Sheet

70. C’s Trial Balance contains the following information: Bad Debt: ₹ 4,000.,

Provision for bad debts: ₹ 5,000

Sundry Debtors: ₹ 25,000

It is desired to create a provision for bad debts at 10% on sundry debtors at the end of the year.

Sundry debtors will appear in the balance sheet at a figure of:

(a) ₹ 22,500 (b) ₹ 21,000

Ans: (a) ₹ 22,500

71. A trial balance shows Suspense Account of ₹ 20,000 in its debit column. How will you treat it while preparing financial statements?

(a) By showing on the debit side of Profit andLoss Account

(b) By showing on the credit side of Trading Account

(d) By showing on the assets side of balance sheet

Ans: (d) By showing on the assets side of balance sheet

72. What is the correct sequence of the following steps required for the preparation

of Final Accounts ?

(i) Preparation of Trial Balance

(ii) Balancing of Accounts

(iii) Preparation of Annual financial statements

(iv) Making adjustment entries Choose the correct sequence:

(a) (iv), (ii), (i), (iii) (b) (ii), (iv), (iii), (i)

Ans: (c) (ii), (i), (iv), (iii)

73. Commission received in advance appearing In Trial Balance is

(a) Shown on Liability side of Balance Sheet

(b) Shown on Asset Side of Balance Sheet

(d) Shown in Debit side of P & L A/c and in Asset Side of Balance Sheet

Ans: (a) Shown on Liability side of Balance Sheet

74. Manager is entitled to a commission of 8% on net profits after charging such commission. If profits after Manager’s commission is ₹ 4,00,000. What will be the net profits before charging manager’s commission?

(a) ₹ 3,68,000 (b) ₹ 4,32,000

Ans: (b) ₹ 4,32,000

75. Mukesh sold goods to Suresh of ₹ 6,00,000 (Costing ₹ 4,80,000). 1/4th of goods were lost due to fire. Insurance claim of ₹ 72,000 is received. What is the amount of loss to be shown in debit side of PandL Account

(a) ₹ 1,20,000 (b) ₹ 48,000

Ans: (b) ₹ 48,000

76.A firm paid annual insurance premium of ₹ 80,000 on 01 July, 2017. Amount of (i) will be (ii) to Profit and Loss Account for the year ending 31 March,2018.

(a) (i) ₹ 80,000; (ii) Debited

(b) (i) ₹ 60,000; (ii) Credited

(d) (i) ₹ 60,000; (ii) Debited

Ans: (d) (i) ₹ 60,000; (ii) Debited

77. Balance Sheet gives information regarding

(a) Results of operations for a particular period

(b) The Financial position as on particular date

(d) Financial position of the firm for a particular period

Ans: (b) The Financial position as on particular date