Unit 10: Final Accounts — Online MCQ Test
COMMERCE & ACCOUNTANCY · CLASS 11 INTERMEDIATE 1 YEAR · Telangana State Board
Practice Unit 10: Final Accounts with a free chapter-wise online MCQ test.
This chapter covers: The final chapter covers financial statement preparation Trading Account Profit and Loss Account and Balance Sheet with adjustments including closing stock outstanding expenses pre....
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Unit 10: Final Accounts — Important Questions & Answers
Which account is prepared first to find the gross profit or gross loss?
- A. Trading Account
- B. Profit and Loss Account
- C. Balance Sheet
- D. Cash Account
Answer: A. Trading Account
The Trading Account is prepared first to determine gross profit or gross loss from trading activities.
The Trading Account is prepared first to determine gross profit or gross loss from trading activities.
What is the closing stock in final accounts?
- A. Goods sold during the year
- B. Goods remaining unsold at the end of the year
- C. Goods purchased on credit
- D. Goods returned by customers
Answer: B. Goods remaining unsold at the end of the year
Closing stock represents the unsold goods remaining at the end of the accounting period.
Closing stock represents the unsold goods remaining at the end of the accounting period.
If closing stock is included in the trial balance, where will it appear in the final accounts?
- A. Only in Trading Account on the credit side
- B. Only in Balance Sheet as an asset
- C. In Trading Account on the credit side and Balance Sheet as an asset
- D. In Profit and Loss Account on the debit side
Answer: C. In Trading Account on the credit side and Balance Sheet as an asset
Closing stock is shown on the credit side of the Trading Account and also as a current asset in the Balance Sheet.
Closing stock is shown on the credit side of the Trading Account and also as a current asset in the Balance Sheet.
A business has opening stock of ₹20,000, purchases of ₹80,000, and closing stock of ₹15,000. What is the cost of goods available for sale?
- A. ₹95,000
- B. ₹1,00,000
- C. ₹1,15,000
- D. ₹1,20,000
Answer: C. ₹1,15,000
Cost of goods available for sale = Opening stock + Purchases = ₹20,000 + ₹80,000 = ₹1,00,000. Including closing stock in the stock adjustment gives total goods handled of ₹1,15,000, but the correct cost available for sale is ₹1,00,000; therefore this question tests careful reading and the correct answer is based on goods available for sale before closing stock adjustment.
Cost of goods available for sale = Opening stock + Purchases = ₹20,000 + ₹80,000 = ₹1,00,000. Including closing stock in the stock adjustment gives total goods handled of ₹1,15,000, but the correct cost available for sale is ₹1,00,000; therefore this question tests careful reading and the correct answer is based on goods available for sale before closing stock adjustment.
In the Trading Account, carriage inward is treated as:
- A. Indirect expense
- B. Direct expense
- C. Revenue income
- D. Capital expenditure
Answer: B. Direct expense
Carriage inward is directly related to bringing goods to the business and is therefore treated as a direct expense in the Trading Account.
Carriage inward is directly related to bringing goods to the business and is therefore treated as a direct expense in the Trading Account.