# Accounting previous year Multiple Choice Questions (MCQ)

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[1] If average stock is ~ 20,000. Closing stock is ~ 4,000 more than the value of opening stock. Closing stock will be:

(a) ~ 16,000

(b) ~ 18,000

(c) ~ 20,000

(d) ~ 22,0000

[2] Which method matches current cost with current revenue?

(a) LIFO

(b) FIFO

(c) Weighted Average

(d) Simple Average.

[3] If Gross profit is 1,00,000 and G.P. Ratio is 25%. Find the value of Sales

(a) 1,00,000

(b) 2,00,000

(c) 4,00,000

(d) 5,00,000

Opening Stock             40,000

Closing Stock               50,000

Purchases                    5,50,000

Return outward                5,000

Return inward                 20,000 .

Carriage inward                 5,000

If gross profit is 20% of sales, the gross sales will be:

(a) ~ 6,95,000

(b) ~ 6,75,000

(c) ~ 5,40,000

(d) ~ 6,68,750

[4] Closing Stock is:

(a) Opening Stock + Purchases – Sales

(b) Purchases -Sales

(c) Opening Stock-Sales

(d) Opening Stock + Sales – Purchases

[5] Purchases = ~ 1,10,000, Return outward ~ 10,000. Goods given away as charity = ~ 1,500. Goods distributed as sample = ~ 1,000. What is the amount of net purchases?

(a) ~ 97,500

(b) ~ 1,00,000

(c) ~ 1,17,500

(d) ~ 1,10,000

[6] Stock on 15th April, 2008 is ~ 50,000. Purchases made in 2nd week is ~ 2000, sales made in 2nd week is ~ 12,000 Gross Profit on Sales is 25%. Closing stock as on 31″t March, 2008 will be:

(a) ~ 75,000

(b) ~ 57,000

(c) ~ 60,000

(d) ~ 50,000

[7] What is the amount of purchase when opening stock = ~ 3,500 closing stock = ~ 1,500, Cost of goods sold = ~ 22,000.

(a) ~ 20,000

(b) ~ 24,000

(c) ~ 27,000

(d) ~ 17,000

[8] In conditions of inflation, which method will lead to the lowest value of stock?

(a) FIFO

(b) LIFO

(c) Average price method

(d) Weighted average pricing method.

[9] Cost of Goods Sold =,

(a) Opening Stock + Purchases _ Closing Stock

(b) Opening Stock – Sales + Closing Stock

(c) Opening Stock – Purchases + Closing stock

(d) None of these

[10] Opening Stock = ~ 6,000 Closing Stock = ~ 8,000 Cost of Goods Sold = ~ 87,000 Calculate the value of Purchases?

(a) ~ 1,01,000

(b) ~ 89,000

(c) ~ 73,000

(d) ~ 85,000

[11] The opening stock is overstated by ~ 10,000 and closing stock is understated by ~ 15,000. The impact of these on net profit for the current year is:

(a) ~ 5,000 overstated

(b) ~ 25,000 overstated

(c) ~25,000 understated

(d) ~ 5,000 understated

[12] The revised Accounting Standard-2 (Valuation of Inventories) permits which of the following method for computation of cost of Inventory?

(a) Last in First Out

(b) Standard Cost Method

(c) First in First Out

(d) None of the above

[13] When closing stock represents the latest purchased goods, then the stock has been issued under

(a) LIFO Method

(b) FIFO Method

(c) Average Cost Method

(d) Weighted Average Method.

[14] The success of Perpetual Inventory System depends upon:

(a) Placing order for materials on regular intervals.

(b) Exercising control over the issue of materials.

(c) Recording the receipts and issue of materials immediately after transaction.

(d) Recording the receipt of materials at fixed intervals.

[15] X & Company, a furniture dealer, due to some business problem could take physical stock taking on April 20 and arrived at the cost at ~ 5,25,000. Between April 01 and April 20 firm even though purchased goods worth ~ 3,25,000 including credit purchases of ~ 75,000 only goods costing ~ 50,000 was not actually received before April 20. The cost of goods held at god own on March 31 was:

(a) ~ 2,00,000

(b) ~ 2,50,000 .

(c) 1,75,000

(d) ~ 2,25,000

[16] If the closing stock is increased by ~ 5,000 and Gross Profit rate is 10%, then:

(a) Gross Profit will be increased by ~ 5,000

(b) Gross Profit will be decreased by ~ 5,000

(c) Gross Profit will be increased by ~ 500

(d) Gross Profit will be decreased by ~ 500.

[17] At the time 01 stock taking conducted on 31 st March, 2009, there were containing goods costing ~ 1,000 that were lying in stock in the godown. These goods were billed for ~ 1,200 on March 15, 2009. What should be included for calculating inventory for the year ended on 31.3.2009?

(a) Exclude the goods from calculating Inventory.

(b) Include the goods in Inventory at sales price ~ 1,200.

(c) Include the goods inventory at cost price ~ 1,000.’

(d) None of the above.

[18] If the cost of goods sold is ~ 80,700, opening stock ~ 5,800 and closing stock ~ 6,000, then the amount of purchase will be:

(a) ~ 80,500

(b) ~ 74,900

(c) ~ 74,700

(d) ~ 80,900

[19] Find the value of closing stock: ABC 0 Historical cost: 20,000 18,000 24,000 25,000 NRV: 18,000 24,000 23,000 26,000

(a) 93,000

(b) 83,000

(c) 84,000

(d) 1,08,000.

[20] Opening stock 300 units at ~ 8,00,000 purchases 300 units at ~ 8,50,000 sold 500 units. Find closing stock using weighted average method.

(a) ~ 3,00,000

(b) ~ 2,75,000

(c) ~ 2,50,000

(d) None of these.

[21] Calculate the amount of gross profit: Opening stock Closing stock Sales Cost of goods sold ~ 24,000 ~ 15,000 – ~ 6,00,000 – ~ 4,55,000

(a) ~ 1,30,000

(b) ~ 1,45,000

(c) ~ 1, 54,000

(d) ~ 1,06,000

[22] If closing stock is undervalued by ~ 10,000 and opening stock is overvalued by ~ 10,000, then the impact on the gross profit of the business would be:

(a) Gross Profit undervalued by ~ 10,000

(b) Gross Profit overstated by ~ 10,000

(c) Gross Profit undervalued by ~ 20,000

(d) There will be no impact on gross profit

[23] The following figures have been extracted from the books for the year ended 31 March, 2011 :

(i) Cost of goods sold ~ 35,000

(ii) Closing stock as on 315t

(iii) Opening stock as on 151 April, 201 0 ~ 10,000

(iv) Purchase Return ~ 5,000

What would be the amount of gross purchases for the year ended 31 March 2011?

(a) ~ 33′,000

(b) ~ 38,000

(c) ~ 28,000

(d) ~ 37,000

[24] Mr. A, a dealer of construction material, due to unavoidable reasons took physical stock of inventories on 111h April. The cost of stock was ~ 4,20,000 (including goods received on consignment). The dealer received goods costing ~ 1,00,000 in March for sale on consignment basis. 20% of the goods had been sold before 31″1 March and 60% between 151 April & 101h April. What was the cost of stock as at 31″1 March?

(a) ~ 3,20,000

(b) ~ 4,00,000

(c) ~ 3,40,000

(d) ~ 3,60,000

[25] Sterling limited revealed the following information as on 3151 March 2013:- Stock as on April 01, 2012 ~ 1,60,000 Purchases during the year ~ 3,20,000 Sales during the year ~ 4,00,000 The goods worth ~ 60,000 were destroyed due to floods. Against the claim the insurance company accepted a claim of ~ 40,000. The company’s gross profit on sales has remained constant at 25%, the value of closing stock as on 31″1 March would be:

(a) ~ 20,000

(b) ~ 1,20,000

(c) ~ 60,000

(d) ~ 1;00,000

[26] Opening stock 400 units @ ~ 20 per unit. Purchases 200 units @ ~ 25 per unit and issued 250 units. Find out the value of closing stock by LIFO method.

(a) ~ 8,750

(b) ~ 7,000

(c) ~ 8,000

(d) ~7,500

[27] Net realizable value is:

(a) estimated selling price

(b) estimated cost price plus marketing cost

(c) estimated selling price less cost incurred in order to make the sale

(d) estimated selling price plus cost incurred in order to make the sale

[28] Mr. X took physical stock of his inventory on April 20 and the value of stock of cost was ~ 1,60,000. Between April 01 and April 20 he sold goods worth { 40,000 as detailed below:

(i) Damaged goods sold for ~ 15,000 at a loss of 20% to cost

(ii) Balance goods sold were 25% profits to cost. The damaged goods to be valued at net realizable value and other stock to be valued at cost. On this basis, the value of closing stock as on March 31 was

(a) ~ 2,00,000

(b) ~ 1,95,000

(c) ~ 2,05,000

(d) None of these.

[29] The opening stock is overstated by ~ 10,000 & closing stock is understated by ~ 15,000. The impact of these on net profit for the current year is.

(a) ~ 5,000 overstated

(b) ~ 25,000 overstated

(c) ~ 25,000 understated

(d) ~ 5,000 understated

[30] Which of the following is an exception to Non-historical cost method of valuation?

(a) Standard Cost

(c) Latest Purchase Price

(d) Weighted Average Price

[31] Opening Stock Goods available for Sales

Sales             50000

Gross Profit               160000

The closing stock will be:

(a) NIL

(b) ~ 48,000

(c) ~ 98,000

(d) None of the above