Chapter Exam

Chapter 12: Final Accounts of Sole Proprietors - I — Online MCQ Test

Q: Which account is prepared to ascertain the Gross Profit or Gross Loss of a business?

Answer: A. Trading Account — Trading account is prepared to determine the gross result of buying and selling of goods.

Q: The excess of debit side over credit side in the Profit and Loss account denotes:

Answer: C. Net Loss — If total expenses (debit) exceed total incomes (credit) in the P&L account, it results in a net loss.

Q: Which of the following is considered an indirect expense?

Answer: C. Office lighting — Office lighting is an administrative expense, which is an indirect expense recorded in the Profit and Loss account.

Q: 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?

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.

Q: Why are 'Purchase Returns' deducted from Purchases in the Trading Account?

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.

ACCOUNTANCY · CLASS 11th · Tamil Nadu State Board

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Chapter 12: Final Accounts of Sole Proprietors - I — Important Questions & Answers (FAQ)

Frequently asked questions from Tamil Nadu State Board CLASS 11th ACCOUNTANCY — Chapter 12: Final Accounts of Sole Proprietors - I, with answers and explanations. These are sample questions; the exam has its own separate question set.

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.

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.

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.

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.

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.

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Chapter 13: Final Accounts of Sole Proprietors - II