Chapter 9: Financial Statements – II (With Adjustments) — Online MCQ Test
ACCOUNTANCY · CLASS 11 FIRST PUC · Karnataka State Board
Practice Chapter 9: Financial Statements – II (With Adjustments) with a free chapter-wise online MCQ test.
This chapter covers: Closing stock, Outstanding expenses, Prepaid expenses, Accrued income, Income received in advance, Depreciation, Further bad debts, Provision for doubtful debts, Provision for disc....
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Chapter 9: Financial Statements – II (With Adjustments) — Important Questions & Answers
What is closing stock?
- A. Inventory unsold at the end of the accounting period
- B. Inventory purchased during the period
- C. Inventory sold during the period
- D. Inventory at the beginning of the period
Answer: A. Inventory unsold at the end of the accounting period
Closing stock refers to the inventory remaining unsold at the end of an accounting period, which is valued and shown in the Balance Sheet.
Closing stock refers to the inventory remaining unsold at the end of an accounting period, which is valued and shown in the Balance Sheet.
Which of the following is an outstanding expense?
- A. Rent paid in advance
- B. Salaries due but not paid
- C. Income received in advance
- D. Depreciation on assets
Answer: B. Salaries due but not paid
Outstanding expenses are liabilities that have been incurred but not yet paid, such as unpaid salaries, rent, or wages.
Outstanding expenses are liabilities that have been incurred but not yet paid, such as unpaid salaries, rent, or wages.
What is the purpose of creating a provision for discount on debtors?
- A. To record actual discounts given
- B. To account for expected discounts that may be allowed to debtors
- C. To increase the debtor's balance
- D. To reduce the total debtors immediately
Answer: B. To account for expected discounts that may be allowed to debtors
Provision for discount on debtors is created to account for potential discounts that may be allowed to debtors for prompt payment in the future.
Provision for discount on debtors is created to account for potential discounts that may be allowed to debtors for prompt payment in the future.
A provision for bad debts of Rs. 2,000 already exists. New provision required is Rs. 3,000. The adjustment entry should be:
- A. Debit Bad Debts Rs. 3,000; Credit Provision Rs. 3,000
- B. Debit Bad Debts Rs. 1,000; Credit Provision Rs. 1,000
- C. Debit Bad Debts Rs. 2,000; Credit Provision Rs. 2,000
- D. Debit Provision Rs. 3,000; Credit Bad Debts Rs. 3,000
Answer: B. Debit Bad Debts Rs. 1,000; Credit Provision Rs. 1,000
Only the additional provision of Rs. 1,000 (Rs. 3,000 - Rs. 2,000) needs to be recorded in the current period's expenses.
Only the additional provision of Rs. 1,000 (Rs. 3,000 - Rs. 2,000) needs to be recorded in the current period's expenses.
A company has purchased goods for Rs. 2,00,000 (included in this is advance payment of Rs. 20,000 for next period). Opening stock was Rs. 50,000 and closing stock is Rs. 60,000. Cost of goods sold would be:
- A. Rs. 1,80,000
- B. Rs. 1,70,000
- C. Rs. 1,90,000
- D. Rs. 2,00,000
Answer: B. Rs. 1,70,000
COGS = Opening Stock (Rs. 50,000) + Purchases adjusted (Rs. 2,00,000 - Rs. 20,000) - Closing Stock (Rs. 60,000) = Rs. 1,70,000.
COGS = Opening Stock (Rs. 50,000) + Purchases adjusted (Rs. 2,00,000 - Rs. 20,000) - Closing Stock (Rs. 60,000) = Rs. 1,70,000.