Chapter 12: Final Accounts of Sole Proprietors - I — Online MCQ Test
ACCOUNTANCY · CLASS 11th · Tamil Nadu State Board
Practice Chapter 12: Final Accounts of Sole Proprietors - I with a free chapter-wise online MCQ test.
This chapter covers: Focusing on financial statement preparation without adjustments this chapter details trading account profit and loss account and balance sheet structures. Students learn gross prof....
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Chapter 12: Final Accounts of Sole Proprietors - I — Important Questions & Answers
Which account is prepared to ascertain the Gross Profit or Gross Loss of a business?
- A. Trading Account
- B. Profit and Loss Account
- C. Balance Sheet
- D. Trial Balance
Answer: A. Trading Account
Trading account is prepared to determine the gross result of buying and selling of goods.
Trading account is prepared to determine the gross result of buying and selling of goods.
The excess of debit side over credit side in the Profit and Loss account denotes:
- A. Gross Profit
- B. Net Profit
- C. Net Loss
- D. Gross Loss
Answer: C. Net Loss
If total expenses (debit) exceed total incomes (credit) in the P&L account, it results in a net loss.
If total expenses (debit) exceed total incomes (credit) in the P&L account, it results in a net loss.
Which of the following is considered an indirect expense?
- A. Wages
- B. Freight on purchases
- C. Office lighting
- D. Customs duty on imports
Answer: C. Office lighting
Office lighting is an administrative expense, which is an indirect expense recorded in the Profit and Loss account.
Office lighting is an administrative expense, which is an indirect expense recorded in the Profit and Loss account.
If Sales = Rs. 5,00,000, Purchases = Rs. 3,00,000, Opening Stock = Rs. 50,000, Closing Stock = Rs. 70,000, what is the Gross Profit?
- A. Rs. 2,20,000
- B. Rs. 2,00,000
- C. Rs. 1,80,000
- D. Rs. 2,50,000
Answer: A. Rs. 2,20,000
Gross Profit = Sales - (Opening Stock + Purchases - Closing Stock) = 5,00,000 - (50,000 + 3,00,000 - 70,000) = 5,00,000 - 2,80,000 = 2,20,000.
Gross Profit = Sales - (Opening Stock + Purchases - Closing Stock) = 5,00,000 - (50,000 + 3,00,000 - 70,000) = 5,00,000 - 2,80,000 = 2,20,000.
Why are 'Purchase Returns' deducted from Purchases in the Trading Account?
- A. To calculate gross sales
- B. To determine net purchases
- C. To increase the cost of goods sold
- D. To account for tax benefits
Answer: B. To determine net purchases
Deducting returns from purchases gives the net cost of goods actually purchased, which is essential for accurate gross profit calculation.
Deducting returns from purchases gives the net cost of goods actually purchased, which is essential for accurate gross profit calculation.