Chapter 11 ACCOUNTANCY : Final Accounts — Online MCQ Test
ACCOUNTANCY · CLASS 11 INTER I YEAR · Andhra State Board
Practice Chapter 11 ACCOUNTANCY : Final Accounts with a free chapter-wise online MCQ test.
This chapter covers: This chapter covers preparing sole proprietorship trading account profit and loss account and balance sheet without adjustments..
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Chapter 11 ACCOUNTANCY : Final Accounts — Important Questions & Answers
Which account is prepared to determine the Gross Profit or Gross Loss of a business?
- A. Balance Sheet
- B. Trading Account
- C. Profit and Loss Account
- D. Trial Balance
Answer: B. Trading Account
Trading account is specifically prepared to ascertain the Gross Profit or Gross Loss by comparing net sales with the cost of goods sold.
Trading account is specifically prepared to ascertain the Gross Profit or Gross Loss by comparing net sales with the cost of goods sold.
Which of the following items is recorded on the debit side of the Trading Account?
- A. Sales
- B. Closing Stock
- C. Carriage Inwards
- D. Interest Received
Answer: C. Carriage Inwards
Carriage Inwards is a direct expense related to the purchase of goods, thus it is debited to the Trading Account.
Carriage Inwards is a direct expense related to the purchase of goods, thus it is debited to the Trading Account.
If the debit side of the Profit and Loss Account is greater than the credit side, it results in:
- A. Gross Profit
- B. Gross Loss
- C. Net Profit
- D. Net Loss
Answer: D. Net Loss
Excess of expenses (debits) over incomes (credits) in the Profit and Loss Account results in a Net Loss.
Excess of expenses (debits) over incomes (credits) in the Profit and Loss Account results in a Net Loss.
Why are 'Drawings' deducted from the Capital in the Balance Sheet?
- A. Because they are considered a business expense
- B. Because they represent a reduction in the owner's investment
- C. Because they are a current liability
- D. Because they increase the firm's assets
Answer: B. Because they represent a reduction in the owner's investment
Drawings reflect the withdrawal of cash or goods for personal use, which reduces the owner's capital invested in the business.
Drawings reflect the withdrawal of cash or goods for personal use, which reduces the owner's capital invested in the business.
Which item will NOT appear in the Final Accounts of a sole trader?
- A. Wages
- B. Trade Expenses
- C. Authorized Capital
- D. Capital
Answer: C. Authorized Capital
Authorized Capital is a term specifically used for Companies (Corporations) to define the maximum share capital, not for sole proprietorships.
Authorized Capital is a term specifically used for Companies (Corporations) to define the maximum share capital, not for sole proprietorships.