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Financial Statements 2 Class 11 MCQs Questions with Answers
Choose the correct answer
Question 1.
Rahul’s trial balance provide you the following information :
Debtors – Rs. 80,000
Bad debts – Rs. 2,000
Provision for bad debts – Rs. 4,000
It is desired to maintain a provision for bad debts of Rs. 1,000. State the amount to be debited/credited in Profit & Loss A/c.
(a) Rs. 5,000 (Debit)
(b) Rs. 3,000 (Debit)
(c) Rs. 1,000 (Credit)
(d) None of these
Answer
Answer: (c) Rs. 1,000 (Credit)
Question 2.
If the rent of one month is still to be paid the adjustment entry will be
(a) Debit outstanding rent account and Credit rent account.
(b) Debit profit and loss account and Credit rent account.
(c) Debit rent account and Credit profit and loss account.
(d) Debit rent account and Credit outstanding rent account.
Answer
Answer: (d) Debit rent account and Credit outstanding rent account.
Question 3.
If the rent received in advance Rs. 2,000. The adjustment entry will be
(a) Debit profit and loss account and Credit rent account.
(b) Debit rent account Credit rent received in advance account.
(c) Debit rent received in advance account and Credit rent account.
(d) None of these
Answer
Answer: (b) Debit rent account Credit rent received in advance account.
Question 4.
If the opening capital is Rs. 50,000 as on April 1, 2005 and additional capital introduced Rs. 10,000 on January 1,2006. Interest charge on capital 10% p.a. The amount of interest on capital shown in profit and loss account as on March 31, 2006 will be:
(a) Rs. 5,250
(b) Rs. 6,000
(c) Rs. 4,000
(d) Rs. 3,000
Answer
Answer: (a) Rs. 5,250
Question 5.
If the insurance premium paid Rs. 1,000 and prepaid insurance Rs. 300. The amount of insurance premium shown in profit and loss account will be
(a) Rs. 1,300
(b) Rs. 1,000
(c) Rs. 300
(d) Rs. 700
Answer
Answer: (d) Rs. 700
Fill in the blanks with suitable.word/words
Question 1.
Trading and Profit & Loss Account shows the ………………. or ………………..
Answer
Answer: profit, loss
Question 2.
Adjustments are necessary to show the correct ………………., and ………………. of a business concern.
Answer
Answer: profit or loss, financial position
Question 3.
Items of income and expenditure which do not pertain to the accounting period should be ……………….
Answer
Answer: excluded
Question 4.
Items of income and expenditure which relates to the accounting period but are left out should be ……………….
Answer
Answer: accounted for
Question 5.
Expenses related to the current accounting period but have not been paid are known as ……………….
Answer
Answer: outstanding expenses
Question 6.
Part of expenses paid if relates to the next accounting year, it is called ……………….
Answer
Answer: prepaid expenses
Question 7.
Income earned but not received till the end of the accounting year is termed as ……………….
Answer
Answer: accrued income
Question 8.
Income if received before it becomes due is called ……………….
Answer
Answer: income received in advance
Question 9.
While making a provision for possible bad debts or for doubtful debts, we ………………. Reserves Debts Account.
Answer
Answer: credit
Question 10.
An unexpired expenditure is shown on the ………………. side of the Balance Sheet.
Answer
Answer: assets.
Mention whether the following are true or false
Question 1.
Income received in advance is written on the liabilities side of the balance sheet.
Answer
Answer: True
Question 2.
Prepaid expenses appearing inside the trial balance will appear on the liabilities side of the balance sheet.
Answer
Answer: False
Question 3.
Outstanding expenses appearing inside the trial balance are shown on the debit side of the profit & loss account.
Answer
Answer: False
Question 4.
Assets are to be shown in the balance sheet at the values realisable on liquidation.
Answer
Answer: True
Question 5.
Salary outstanding account is a personal account.
Answer
Answer: True
Question 6.
The provision for discount on debtors is calculated after deducting the provisions for doubtful debts from debtors.
Answer
Answer: True
Question 7.
Outstanding salaries appearing in the trial balance is shown in Profit & Loss Account.
Answer
Answer: False
Question 8.
Goods sold on approval basis is treated as a complete sale.
Answer
Answer: False
Question 9.
Deferred revenue expenditure is partly debited to Profit & Loss Account and the balance is shown in the Balance Sheet.
Answer
Answer: True
Question 10.
Provision for bad debts is debited to sundry debtors accounts.
Answer
Answer: False
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