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FM - Revision - MCQ Formulas

The document contains multiple choice questions related to accounting concepts. It covers topics like calculation of gross profit, inventory holding period, current and fixed assets, depreciation, net profit and tax calculation. Formulas for key financial ratios are also provided. The questions test the understanding and application of these concepts.

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Bhavesh Gurav
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
33 views

FM - Revision - MCQ Formulas

The document contains multiple choice questions related to accounting concepts. It covers topics like calculation of gross profit, inventory holding period, current and fixed assets, depreciation, net profit and tax calculation. Formulas for key financial ratios are also provided. The questions test the understanding and application of these concepts.

Uploaded by

Bhavesh Gurav
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Q1. TheCost of the Machin.Purchasedis9L.

Transportationchrgs1l. Custom Duty1L. installation and training1L


Estimated Annual Depri.1L. What will be the Value of the Assest under
HistoricalCostConcept.
a)9Lakh
b)10lakh
c)11lakh
d)12lakh

Q2. The Cost of the Machine Purchased is9L.


Transportationchrgs1l. Custom Duty1L. installation and training1L
Estimated Annual Depri.1L. What will be the Value of the Assest under
On going concern Concept.
a)9Lakh
b)10lakh
c)11lakh
d)12lakh

Q3.The closing stock is 40cr, mkt value is 38cr, asper


conservatism convention the value of stk will be
A 40
B 38
C None of the above
AnswerB

Q4. Contingent liability not matured and not part of balance


Sheet but shown as footnote below balance sheet for information because
Of ___________ convention
a)materiality
b)consistency
c)conservatism
d)disclosure
Answer D

Q5) Goodwill is --------- account


1)Tangible
2)intangible
3)personal
4)real
Answer 4

CH 3

Q6 out of the given current asset which Asset is non Quick current Asset
A-Investment
b-machinary
c-Goodwill
D-Inventory
AnswerD

(List of current assets Bill receivable Debtors Cash and bank balance Prepaid expense Inventory/ stock
Short term investment)

(Current liabilities list: Creditors, Bills payable, Provision for tax,Proposed dividend, Bank overdraft, O/S
exp., Income received in advance, Advance from customers;)

Shareholders /net worth = Share capital + Reserves and Surplus

Holding inventory period =( Avg inventory * 360days )/ costofgoodssold

Inventory Cycle In mth ! = Ordering Phase in mth + Production Phase in Mth + Finished Goods and
Delivery Phase in mth

Q7 company's ordering period of stock is 2months, production phase


Period is 4months, finished goods and delivery phase is 2month, find the
Inventory cycle in months ?
A 8mth
B. 4
c. 6
d. 7

Q8 The cost of goods sold is Rs. 400 Cr. Average inventory is Rs.80Cr.
What is the inventory holding period? Assuming that a year has 360days?
a.100days
b 60days
c 72day
d none of the above
(hodinginventoryperiod=Avginventory*360days/costofgoodssold)

Q9 the following are the list of asset of the company P&M 8lakh
Furniture 6Lakh motorcar 10lakh stock 9lakh receivable 12lakhs
Cash bank 11lakhs, prepaid exp 4lakhs, goodwill 8lakh, find the value of
Current Asset
A. 20lak
B. 24lak
C. 32lak
D. 36lak
answerD (stock+receivable+prepaidexp+cashbank)

Q9 a. the following are the list of asset of the company P&M 8lakh
Furniture 6Lakh motorcar 10lakh stock 9lakh receivable 12lakhs
Cashbank 11lakhs,prepaidexp 4lakhs, goodwill 8lakh, find the value of
Fixed Asset
A. 20 lak
B. 24 lak
C. 32 lak
D. 36 lak

Ans. C

(Fixed Assets are those assets that are long term investments which enables the business to carry on its
operations. Fixed assets represent the use of cash to purchase physical assets whose life exceeds one
year. All tangible assets are fixed assets. E.g. Land, Building, Machinery and Equipment, Furniture and
Fixtures, Leasehold Land, Vehicles etc. and intangible assets like goodwill copyright patent trademark
etc.)

CH=4

1 Net Sales = (Cash Sales + Credit Sales) – Sales Return


2 Cost of Goods Sold (COGS i.e. Total of all factory expense) = (Opening stock of goods + Net Purchase +
All Factory Expense) – Closing stock
3. Gross Profit (GP) = Net Sales – COGS

Q10.The selling priceisRs.400/-of an product Cost price isRs.300/-find


Out the Gross profit%
A-20%
B-30%
C-25%
D-33.33%
GP%=(GP/SP)*100 (Soln-100/400*100=25%)
where, GP=SP-CP
answer C
Q11 If the cost of Product is 100RS and sold at 125RS. Find the gross profit
percentage?
A-20%
B-30%
C-25%
D-33.33%
%GP=(25/125)x100=20%
Answer A

Q12 Manish sold some product at 20,000RS. Thecost price of those


Product is 12,000RS.Find the gross profit percentage?
A-20%
B-30%
C-25%
D 40 %
Answer-40%

Q13.Thecost of goods sold is 48,00,000 opeining inventory is Rs3,00,000/-


Net purchase 50,00,000/-find the value of Closing stock
A-53lak
B-48lak
C-5lak
D-6lak
COGS : (Opening stock + Net Purchase + All Factory expenses) - Closing Stock
Answer C
48L= 3L+ 50L - cl stock

Q14.] Cash sales is Rs.3L. Credit sale is Rs.18L. Salesreturn (return


inward) is Rs.1L, cost of goods sold is Rs.16L. Find the gross profit
percentage
A-20%
B-40%
C-25%
D-33.33%
(Sales=Cashsales+creditsales-Salesreturns
GP=SP-CP
GP%=(GP/SP)*100
Soln=4/20x100=20%(3+18-1=20-16=4/20*100)
Where,CP=COGS
GP%=(GP/SP)*100
4,00,000/20,00,000*100=20%)
AnwerA
Formulas

1 Net Sales = (Cash Sales + Credit Sales) – Sales Return


2 Cost of Goods Sold (COGS i.e. Total of all factory expense) = (Opening stock of goods + Net Purchase +
All Factory Expense) – Closing stock
3. Gross Profit (GP) = Net Sales – COGS
4. Net Operating Profit = (Gross Profit + Operating Income) – Operating Expense
5. Net Profit Before Tax (NPBT) = (Net Operating Profit + Non-Operating Income) - Non-Operating
Expense
6. Net Profit After Tax (NPAT) = Net Profit Before Tax – Tax
7. Earnings per Share (EPS) = NPAT/no. of equity shares
8. % Gross Profit = (GP/Net Sales) *100

Q15 Gross profit is Rs.12L, operating income is Rs.2L, office expense is


Rs.3L. Selling & distributing expense Rs.4L. Finance expense is Rs.2L.
Loss by fire is Rs.1L, profit of sale of asset is Rs.5L. Find net operating
profit.
A. 3L
B. 5L
C. 9L
D. None of the above
Net operating profit = GP +Op Inc.- Op Exp (ADm +SD+FIN)
Soln = 12 + 2 -9 (3+4+2)

Answer=5L B

Q16. Gross profit is Rs.12L, operating income is Rs.2L, office expense is


Rs.3L. Selling & distributing expense Rs.4L. Finance expense is Rs.2L.
Loss by fire is Rs.1L, profit of sale of asset is Rs.5L .NET Profit Before
Tax.
a:3L
b:5L
c:9L
d:Noneoftheabove
answer C
NPBT=Net operating profit + Non op Inc – Non op Exp
=5+5-1=9L

(Non operating expense is that expense which is not a regular expense .


Non operating expenses list
Loss of theft, fire, loss due to exchange rate, preliminary exp written off, ,goodwill writtenoff, war risk
insurance premium,etc (happens mostly once and not regularly in
year)
Nonoperating income list
Profit on sale of assets/investment, interest recieved ,dividend recieved,)
Q17 Net profit before tax is 20crores. Tax percent is 30 percent. Calculate
The tax amount
A.9crores
B.14crores
C.6crores
D.20crores
Answer C

20 x 30 % = 6

Q17 B Net profit before tax is 40crores. Tax percent is 30 percent. Calculate
The Net Profit after tax amount
A.9crores
B.14crores
C.6crores
D.28crores
Soln= 40 - (40*30%)= 40-12= 28 Cr

Q18) Net profit before tax is 80L.Tax is 30%. Number of Equity shares is 8L.
Find earning per share
A.10rs
B.8rs
C.7rs
D.12rs
EPS=NPAT/No of Equity shares
Answer is C
Soln EPS=56/8=7(80L-24L56L/8L)

Q19.Purchase of M/C =2L, Written down value of m/c after 3Years is


=1.4L, Find the % of depreciation per year
a.30%
b.40%
C.20%
D.10%
Dep% = (Dep p.a / Cost ) x 100
Answer is D
SOLUTION :formula=depreciation/cost*100
Depreciation figure 2lac - 1.4lac = 0.6
Depreciation for 3yr 60000/3 = 20000 (amtfor1yr)
DeP=20000/2000000*100=10
Q20: Following are the list of Assets and liabilities, Equity share capital 5L,
Reserve and surplus 2L, Plant and Machinery 9L, Furn and Fix.5L, Stock 4
L,Creditors 6L, Bills payable 2L, Bankloan 5L, Outstanding expense 1L,
Debtors 4L. From the following calculate the total owners fund/Share
holdersfund?
a) 5L
b) 3L
c) 11L
d) 7L
answerD(5+2)
Shareholders /net worth = Share capital + Reserves and Surplus

Current liabilities list:


Creditors
Bills payable
Provision for tax
Proposed dividend
Bank overdraft
O/S exp
Income received in advance
Advance from customers;

Q21 Following are the list of Assets and liabilities, Equity share capital 5L,
Reserve and surplus 2L, Plant and Machinery 9L, Furn and Fix.5L, Stock 4
L,Creditors 6L, Bills payable 2L, Bankloan 5L, Outstanding expense 1L,
Debtors 4L. Adv Tax 4l stock 5l Bills receivable 2l
From the following calculate the total current liability
a) 5L
b) 3L
c) 9L
d) 17L
answer C
soln- current liability = creditors + bills payable + outstanding expense
=6lacs+2lacs+1lacs
=9lacs

List of current assets Bill receivable Debtors Cash and bank balance Prepaid expense Inventory/ stock
Short term investment.
Q22. Following are the list of Assets and liabilities, Equity share capital 5L,
Reserve and surplus 2L, Plant and Machinery 9L, Furn and Fix.5L, Stock 5L
,Creditors 6L, Bills payable 2L, Bankloan 5L, Outstanding expense 1L,
Debtors 4L. Adv Tax 4l , Bills receivable 2l
From the following calculate the total Current Asset
a) 15L
b) 3L
c) 9L
d) 17L
Ans A
( Stk 5L + Debtor4L + Adv Tax 4L + Bill Receivable 2L)

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