Quiz-1

PGDM-2019-21 (Term I)
Full Marks: 20 Name/enrol...........................................................................................
Sub: Accounting for Management Time: 30 minutes
Instructions: Answer the Following Questions (Q1-Q10=10*1=10 Marks with 50% negative
marking). Encircle the right answer in multiple choice questions
Q1. Kabsons Ltd’s retained earnings increased by 2,00,000 from last period. Also during the period the
company declared and paid Rs. 37,500 in dividends and transferred 12,500 to general reserve. The
Net Income for the period is:
a) 1,50,000
b) 2,00,000
c) 2,50,000
d) 2,25,000
Q2. An equipment of Sunrise Ltd. was sold for cash worth Rs 1,33,500. This equipment appeared on
books of accounts at a cost of Rs 1,83,500 less accumulated depreciation of Rs 55,050. What is the
effect of this transaction in the balance sheet?
(a) Increase in retained earning Rs 5050; Decrease in equipment Rs 138450; Increase in cash 1,33,500.
(b) Decrease in retained earning Rs 6050; Increase in equipment Rs 108450; Increase in cash 1,33,500.
(c) Decrease in retained earning Rs 5060; Decrease in equipment Rs 128450; Decrease in cash 1,33,500.
(d) Decrease in retained earning Rs 5050; Decrease in equipment Rs 128450; Increase in cash 1,33,500.

Q3. The amount of sales, when Opening inventory Rs 50000; Purchases Rs 1,50,000; Wages Rs 20000;
Closing inventory Rs 40000 and the Gross profit is 1/7th of sales, is………
a) 2,10,000
b) 1,80,000
c) 30,000
d) 1,75,000
Q4. The accounting process of converting the cost of intangible assets to expense is called
a) Amortization
b) Depreciation
c) Depletion
d) Accretion
Q5. Provision for Bad Debts are recorded in income statement as per .................concepts of accounting.
a) Realization Concept
b) Matching Concept
c) Conservatism Concept
d) Materiality Concept
Q6. A one-year fire insurance policy of Rs. 30, 000 purchased on 1 st October 2018. The prepaid insurance
amount shown as current assets in balance sheet as on 31 st march 2019 equals to......................
Q7. If a company has incurred expenses but has not yet been settled would be recorded in the books
following cash basis of accounting……………… (Indicate True/False)
Q8. The accounting concept applied when the effect of lock-out is not directly disclosed in
books..........................................................................................................................................
Q9. Inventory is a non-monetary asset………………… (Indicate True or False)
Q10. Goodwill appears in the financial statements only when you acquire paying for it…… (Indicate True
or False)
Q11. Based on the following 11 transactions of Acme Consulting during a given month of June, 2018;
prepare the income statement for the month and balance sheet at the end of the month. (10
Marks)
1. Owners invest $20,000 of equity capital in 6. Accounts payable of $1,500 are paid in
Acme Consulting. cash.
2. Equipment costing $7,000 is purchased for 7. Customers pay $1,000 of the $5,000 they
$5,000 cash and an account payable of $2,000. owe the company.
3. Supplies inventory costing $1,000 is 8. Rent Expense of $750 is paid in cash.
bought for cash. 9. Utilities of $500 are paid in cash.
4. Salaries of $4,500 are paid in cash. 10. A $200 travel expense has been incurred
5. Revenues of $10,000 are earned, of which but not yet paid.
$5,000 has been recovered in cash. The 11. Supplies inventory costing $200 are
remaining $5,000 is owed to the company by consumed.
its customers.
Income Statement Balance Sheet
 Quiz-1
PGDM-2019-21 (Term I)
Full Marks: 20 Name/enrol...........................................................................................
Sub: Accounting for Management Time: 30 minutes
Instructions: Answer the Following Questions (Q1-Q10=10*1=10 Marks with 50% negative
marking). Encircle the right answer in multiple choice questions
Q1. Kabsons Ltd’s retained earnings increased by 1,00,000 from last period. Also, during the period, the
company declared and paid Rs. 37,500 in dividends and transferred 12,500 to general reserve. The
Net Income for the period is:
A. 1,50,000
B. 2,00,000
C. 2,50,000
D. 2,25,000
Q2. An equipment of Sunrise Ltd. was sold for cash worth Rs 1,28,000. This equipment appeared on
books of accounts at a cost of Rs 1,83,500 less accumulated depreciation of Rs 55,050. What is the
effect of this transaction in the balance sheet?
A. Increase in retained earning Rs 450; Decrease in equipment Rs 138450; Increase in cash 1,28,000.
B. Decrease in retained earning Rs 450; Increase in equipment Rs 108450; Increase in cash 1,28,000.
C. Decrease in retained earning Rs 450; Decrease in equipment Rs 128450; Decrease in cash 1,28,000.
D. Decrease in retained earning Rs 450; Decrease in equipment Rs 128450; Increase in cash 1,28,000.

Q3. The amount of sales, when Opening inventory Rs 50,000; Purchases Rs 1,50,000; Wages Rs 20,000;
Closing inventory Rs 70,000 and the Gross profit is 1/7th of sales, is………
A. 2,10,000
B. 1,80,000
C. 30,000
D. 1,75,000
Q4. The accounting process of converting the cost of tangible long lived assets to expense is called
A. Amortization
B. Depreciation
C. Depletion
D. Accretion
Q5. Cost of goods sold (COGS) are recorded in income statement as per .................concepts of
accounting.
A. Realization Concept
B. Matching Concept
C. Conservatism Concept
 D. Materiality Concept

Q6. A one-year fire insurance policy of Rs. 30, 000 purchased on 1 st July 2018. The prepaid insurance
amount shown as current assets in balance sheet as on 31 st march 2019 equals to......................
Q7. If a company has incurred expenses but has not yet been settled would be recorded in the books
following accrual basis of accounting……………… (Indicate True/False)
Q8. The accounting concept applied when the effect of strike at the factory is not directly disclosed in
books..........................................................................................................................................
Q9. Account receivable is a non-monetary asset………………… (Indicate True or False)
Q10. A firm can record its own reputation/brand as Goodwill in the financial statements.…… (Indicate
True or False)
Q11. Based on the following 11 transactions of Acme Consulting during a given month of June, 2018;
prepare the income statement for the month and balance sheet at the end of the month. (10
Marks)
12. Owners invest $20,000 of equity capital in 17. Accounts payable of $1,500 are paid in
Acme Consulting. cash.
13. Equipment costing $7,000 is purchased for 18. Customers pay $1,000 of the $5,000 they
$5,000 cash and an account payable of $2,000. owe the company.
14. Supplies inventory costing $1,000 is 19. Rent Expense of $750 is paid in cash.
bought for cash. 20. Utilities of $500 are paid in cash.
15. Salaries of $4,500 are paid in cash. 21. A $200 travel expense has been incurred
16. Revenues of $10,000 are earned, of which but not yet paid.
$5,000 has been recovered in cash. The 22. Supplies inventory costing $200 are
remaining $5,000 is owed to the company by consumed.
its customers.
Income Statement Balance Sheet