Chapter Exam

Chapter 11 ACCOUNTANCY : Final Accounts with Adjustments — Online MCQ Test

Q: Which of the following is considered an adjustment that is usually given outside the trial balance?

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.

Q: If 'Prepaid Insurance' is given as an adjustment, what is the effect on the financial statements?

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.

Q: 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?

Answer: B. Rs. 5,000 — Interest for 6 months (Oct to March) = 1,00,000 * 10% * 6/12 = 5,000.

Q: An adjustment for 'Goods destroyed by fire' (uninsured) requires:

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).

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 for Andhra State Board CLASS 11 INTER I YEAR COMMERCE. 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.... AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 11 ACCOUNTANCY : Final Accounts with Adjustments — Important Questions & Answers (FAQ)

Frequently asked questions from Andhra State Board CLASS 11 INTER I YEAR COMMERCE — Chapter 11 ACCOUNTANCY : Final Accounts with Adjustments, with answers and explanations. These are sample questions; the exam has its own separate question set.

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.

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.

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.

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.

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).

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Chapter 10 ACCOUNTANCY : Trial Balance and Rectification of Errors