SSC-AAO 2016 Accounts Paper Analysis

Q1. Creating provision for doubtful debts is an application of the following principles/ concepts:

1. Realization Principle
2. Full Disclosure
3. Conservatism
4. Money Measurement

Q2. A company has a machinery costing Rs. 5,00,000. Depreciation was charged in Year 1, 2, 3 & 4 has Rs. 50,000, Rs. 30,000, Rs. 40,000 & Rs. 50,000 respectively. Which principle is violated?

1. Materiality
2. Substance over form
3. Consistency Principle
4. Timeliness

Q3. If a liability is decreased than, than for the asset to be constant, there will be a corresponding:

1. Increase in capital
2. Decrease in capital
3. Decrease in Profit
4. Decrease in Asset

Q4. Withdrawal of goods from stock by the owner of the business for personal use should be recorded by:

1. Debiting Stock A/c & Crediting Capital A/c
2. Debiting Capital A/c & Crediting Stock A/c
3. Debiting Drawing A/c & Crediting Stock A/c
4. Debiting Stock A/c & Crediting Drawing A/c

Q5. A second hand car was purchased for Rs. 2,00,000 & Depreciation is charged @ 10% on WDV Method and the car is sold after 2 Years for Rs. 1,40,000. Find the profit or loss on the sale of car.

1. Rs. 20,000 Loss
2. Rs. 22,000 Loss
3. Rs. 11,000 Loss
4. Rs. 11,000 Profit

Q6. Which of the following is true?

1. Payment of liability causes increase in owner’s equity.
2. The collection from debtors will cause total asset to increase.
3. Accounting Equation is Asset + Liability = Owner’s Equity.
4. Purchase of an asset, either in cash or credit, does not change the owner’s equity.

Q7. Which of the following is true when debtor pays his dues?

1. Asset side of the balance sheet will increase.
2. Asset side of the balance sheet will decrease.
3. The liability side of balance sheet will increase.
4. There will be no change in either asset or liability.

Q8. Only significant events which affect the business must be recorded as per the principle of:

1. Separate Entity
2. Accrual
3. Materiality
4. Going Concern

Q9. Treatment of Goods given as free samples are:

1. a.Added to carriage inward
2. b.Added to Bad-Debts
3. Deducted from Advertisement Expenses
4. d.Deducted from Purchases

Q10. Shyam bought goods having the list price of Rs. 50,000 from Ram less 20% Trade Discount and 2% Cash Discount and 40% by Cheques. What is the amount paid by Shyam?

1. Rs. 16,000
2. Rs. 15,680
3. Rs. 19,600
4. Rs. 15,600

Q11. Which of the following is true?

1. Bank Account is a Personal A/c.
2. Stock of Stationary Account is a Nominal A/c.
3. c.Return Inward Account is a Personal A/c.
4. Outstanding Rent A/c is a Nominal A/c.

Q12. Periodic total of Purchase book is posted to:

1. Creditor’s A/c
2. Debtor’s A/c
3. Purchase A/c
4. Purchase Memorandum A/c

Q13. Which of the following is true?

1. Bank Charges increase debit balance as per Bank Pass Book.
2. Bank Charges increases credit balance as per Pass Book.
3. A cash Sale of non trading asset is recorded in the Journal Proper.
4. Cash discount allowed by the business will appear on the debit side of the debtorsA/c.

Q14. After the preparation of ledgers, the next step is the preparation of:

1. Trading Account
2. Trial Balance
3. Profit & Loss Account
4. Balance Sheet

Q15. Total of Sale Book was not posted to the ledger. What is the kind of error?

1. Error of Omission
2. Error of Commission
3. Error of Principle
4. Compensating Error

Q16. Which of the following statement is Correct?

1. Inventory Valuation affects only the Income Statement.
2. Under casting or overcasting of subsidiary book is an error of commission.
3. Capital expenditure wrongly treated as revenue expenditure is error of commission.
4. Inventory should be valued at lower of historical cost and current replacement cost.

Q17. Match he following:

Q18. Which of the following is true relating to a Trial-Balance?

1. If a Trial Balance tallies, no transaction is omitted.
2. A trial balance does not tally if a transaction is omitted.
3. It is mandatorily prepared to ensure correctness of Balance-Sheet.
4. A Trial Balance is summary of the General Ledger Balances Outstanding on Particular Date.

Q19. Which of the following errors will be revealed by the Trial balance?

1. Compensating Errors
2. Errors of omission
3. Errors of Principle.
4. Wrong balancing of Accounts.

Q20. Prepaid Expenses are valued in Balance Sheet at:

1. Replacement Cost
2. Current Cost
3. Cost to acquire less accumulated amortization
4. Cost less expired portion

Q21. Which of the following equation is correct?

1. Gross Profit + Sales + Direct Expenses + Purchases + Closing Balances = Opening Stock
2. Gross Profit + Sales + Direct Expenses + Purchases – Closing Stock = Opening Stock
3. Gross Profit + Opening Stock + Dir. Exp. + Pur. – Closing Stock = Sales
4. Gross Profit – Op. Stock + Dir. Exp. + Purchases + Cl. Stock = Sale

Q22. At the time of finalization of accounts, bad debts recovered amount will be transferred to:

1. Debtor’s Account
2. Profit & Loss Account
3. Profit & Loss Adjustment Account
4. Profit & Loss Appropriation Account

Q23. Contingent Liabilities are shown:

1. In credit side of Balance Sheet
2. Profit & Loss Appropriation Account
3. Both Profit and Loss Account and Balance Sheet
4. None of the Above.

Q24. If outside liability and owner’s equity are added we get

1. Total Liabilities
2. Net Worth
3. Shareholder’s Fund
4. Gross Block

Q25. XYZ send goods worth Rs. 1,00,000 to Y on consignment basis at 20% above the cost price. The goods were sold by the consignee on a mark up of 15% on invoice price. Find the total mark up % over the cost of goods.

1. 30%
2. 38%
3. 35%
4. 25%

Q26. Which of the following statements is true?

1. Provision of doubtful debts represents the amount that cannot be collected.
2. The distinction between revenue and capital items is important because it is of fundamental importance to the determination of profit.
3. Goods lost by fire need not to be accounted for since they are not sales.

Q27. When benefit of an expense (which is generally of revenue nature) extend beyond an accounting year, it is called:

1. Revenue Expenditure
2. Capital Expenditure
3. Deferred Revenue Expenditure
4. Recurring Profit.

Q28. Wages paid to workers for erecting machinery is:

1. Revenue Expenditure
2. Capital Expenditure
3. Deferred Revenue Expenditure
4. Wages Expenditure

Q29. Which of the following is external cause of depreciation?

1. Revenue, Repair & maintenance
2. Misuse
3. Obsolescence
4. d.Wear and Tear

Q30. Underestimation of useful life of a depreciable asset will lead to:

1. Overstatement of profit
2. Excess charging of depreciation every year.
3. Overvaluation of assets in Balance Sheet
4. Short charging of depreciation every year.

Q31. A firm has a policy of charging depreciation @ 10% on Plant and Machinery under WDV method. If the book value of the same was Rs. 81,000 on 31.3.16. Find the original cost, if the same was purchased on 01.04.2014.

1. Rs. 1,10,000
2. Rs. 1,00,000.
3. Rs. 81,000
4. Rs.90,000

Q32. What is included n an inventory?

1. a.Raw Material
2. b.Stores and Spares
3. c.Loose Tools
4. d.All of the above

Q33. Opening Stock Rs. 15,000, Cl. Stock Rs. 6,000 and total purchase during the year was Rs. 30,000. It was found that opening stock inadvertently included postage stamp of Rs. 1,500. Find the cost of goods sold.

1. Rs. 40,000
2. b.Rs. 39,000
3. c.Rs. 37,500
4. Rs. 36,000

Q34. Average Inventory is Rs. 12,000 and closing inventory is Rs. 3,000 more than the opening inventory. The value of closing inventory is:

1. Rs. 12,000
2. b.Rs. 24,000
3. c.Rs. 10,500
4. d.Rs. 13,500

Q35. Revenue is said to have been earned when:

1. Sale is made
2. b.Cash is received
3. c.Goods are manufactured
4. d.It is accounted for

Q36. A firm commenced business on 1st January 2015, purchased goods costing Rs. 90,000, A sum of Rs. 6,000 was spent on freight inwards. At the end of the year, the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 1,20,000. What is the Gross Profit earned by the firm?

1. a.Rs. 36,000
2. b.Rs. 30,000
3. c.Rs. 42,000
4. d.Rs. 38,000

Q37. The receipts and payments account for a non-profit organization is a:

1. Nominal Account
2. b.Real Account
3. c.Income Statement Account
4. d.Financial Account

Q38. What amount should be credited to the Income & Expenditure Account as Subscriptions as given the following information:In 2015, Subscription received Rs. 21,000 including Rs. 400 for 2014 and Rs. 500 for 2016. on 31st December 2015, Subscription due but not received was RS. 700.

1. Nominal Account
2. b.Real Account
3. c.Income Statement Account
4. d.Financial Account

Q39. Early Payment of Bills of Exchange is called as:

1. a.Retirement
2. b.Renewal
3. c.Discount
4. d.Endorsement

Q40. Drawee for bills of exchange is the person who:

1. a.Draws a bills of exchange
2. b.Presents the bill of exchange for payment
3. c.Accept the bill of exchange
4. d.Holds bill of exchange till maturity

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