Chapter 11 ACCOUNTANCY : Final Accounts with Adjustments — Online MCQ Test
COMMERCE · CLASS 11 INTER I YEAR · Andhra State Board
Practice Chapter 11 ACCOUNTANCY : Final Accounts with Adjustments with a free chapter-wise online MCQ test.
This chapter covers: The final chapter details preparing sole proprietorship trading account profit and loss account and balance sheet incorporating adjustments for stock prepaid expenses outstanding i....
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Chapter 11 ACCOUNTANCY : Final Accounts with Adjustments — Important Questions & Answers
Which of the following is considered an adjustment that is usually given outside the trial balance?
- A. Opening Stock
- B. Closing Stock
- C. Purchases
- D. Sales
Answer: B. Closing Stock
Closing stock is typically provided as an adjustment outside the trial balance as it is determined after the stocktaking at the end of the year.
Closing stock is typically provided as an adjustment outside the trial balance as it is determined after the stocktaking at the end of the year.
What is the accounting treatment for 'Outstanding Expenses' in final accounts?
- A. Debit to P&L, credit to Balance Sheet (Liability)
- B. Credit to P&L, debit to Balance Sheet (Asset)
- C. Debit to Trading A/c, debit to Balance Sheet
- D. Credit to Trading A/c, credit to Balance Sheet
Answer: A. Debit to P&L, credit to Balance Sheet (Liability)
Outstanding expenses represent liabilities to be paid, so they are added to the relevant expense in the P&L account and shown as a liability in the balance sheet.
Outstanding expenses represent liabilities to be paid, so they are added to the relevant expense in the P&L account and shown as a liability in the balance sheet.
If 'Prepaid Insurance' is given as an adjustment, what is the effect on the financial statements?
- A. Deduct from Insurance in P&L and show as Asset
- B. Add to Insurance in P&L and show as Liability
- C. Deduct from Insurance in P&L and show as Liability
- D. Ignore in P&L and show as Asset
Answer: A. Deduct from Insurance in P&L and show as Asset
Prepaid expenses are amounts paid in advance; they are deducted from the expense in the P&L account and recorded as an asset in the balance sheet.
Prepaid expenses are amounts paid in advance; they are deducted from the expense in the P&L account and recorded as an asset in the balance sheet.
If the Trial Balance shows 'Interest on Loan' at 10% per annum for Rs. 1,00,000 borrowed on 1st Oct, and the year ends on 31st March, how much is the outstanding interest?
- A. Rs. 10,000
- B. Rs. 5,000
- C. Rs. 2,500
- D. Rs. 7,500
Answer: B. Rs. 5,000
Interest for 6 months (Oct to March) = 1,00,000 * 10% * 6/12 = 5,000.
Interest for 6 months (Oct to March) = 1,00,000 * 10% * 6/12 = 5,000.
An adjustment for 'Goods destroyed by fire' (uninsured) requires:
- A. Crediting Trading Account and Debiting P&L
- B. Debiting Trading Account and Crediting P&L
- C. Crediting Purchases and Debiting Capital
- D. Debiting Trading and Debiting Asset
Answer: A. Crediting Trading Account and Debiting P&L
To account for the loss, goods are removed from Trading A/c (credit side) and the loss is charged to the P&L A/c (debit side).
To account for the loss, goods are removed from Trading A/c (credit side) and the loss is charged to the P&L A/c (debit side).