Hi Students we gives each question with answers 2011 July foundation level AAT Exam papers, Now discuss Basic Accounting.
01. Select from (1), (2), (3), (4) the most correct answer to each of the following questions. Write the umber of the selected answer in your answer booklet with the English letter assigned to the question.
(A) Select from the following, the most correct statement:
(1) Financial accounting provides information to both internal and external parties, whereas cost & management accounting provides information only to the management.
(2) Only annual accounts are prepared in financial accounting, whereas accounts at frequent intervals are prepared in cost & management accounting.
(3) Preparation of financial accounts is for both profit making and non-profit making entities, whereas preparation of cost accounts is only for profit making entities.
(4) Both statements (2) and (3) above are correct.
Answer :- 1
(B) The sales day book is best described as:
(1) A list of sales. (2) A list of credit sales.
(3) A collection of customer accounts. (4) A part of double entry system.
Answer :- 2
(C) The cashier of Candy limited had a cash in hand balance of Rs.3,000/-, and following petty cash payments details at the end of a particular day:
Stationery bill 500
Drinks for visitors (bill available) 500
I.O.U. (chits) 500
As per above information, what should be the petty cash imprest allocated to the cashier out of the following:
(1) Rs.4,500/-. (2) Rs.5,500/-. (3) Rs.1,500/-. (4) Rs.5,000/-.
Answer :- 3
(D) Star Company owns a land which costs Rs.100,000/-. The market value of the land is only Rs.80,000/-. The company continues to record the asset in the balance sheet at Rs.100,000/-. Out of the following this is justified under the concepts of:
(1) The historical-cost principle and prudence.
(2) The historical-cost principle and reliability.
(3) Verifiability and comparability.
(4) Relevance and reliability.
Answer :- 1
(E) When the seller agrees to take back goods already sold to a customer, the source document that has to be raised by the seller to record that transaction is:.
(1) Debit Note. (2) Credit Note.
(3) Goods Received Note. (4) Advice of Dispatch.
Answer :- 3
(F) A company purchased 10 printers on a credit basis at Rs.15,000/- each, less trade discount of 10%. Cash discount of 5%, offered if the debt is settled within the credit period. If the company wishes to settle the debt within the credit period, the value of the cheque that should be drawn is :
(1) Rs.142,500/-. (2) Rs.135,000/-.
(3) Rs.128,250/-. (4) Rs.127,500/-.
Answer :- 2
(G) The Accountant of Disney Computers states that the impact of a certain transaction to the accounting equation is as given below:
Assets: Inventories increased by Rs.2,000/-
Assets: Office equipment decreased by Rs.2,000/-
If the Accountant’s statement is correct, which one of the following best sets out the above mentioned transaction?
(1) A credit purchase of trading items for Rs.2,000/-, and depreciation of office equipment by Rs.2,000/-.
(2) Classification of an office equipment item of Rs.2,000/-, as an item for sale.
(3) Re-classification of office equipment recorded incorrectly in the stocks account.
(4) Goods worth Rs.2,000/- returned by customers, and disposal of office equipment of Rs.2,000/-.
Answer :- 2
(H) A cheque for Rs.20,000/- issued on account of building rent has been dishonoured by the bank. The double entry to record the dishonoured cheque in the books of the issuer of the cheque is:
Debit account with Rs.20,000/- Credit account with Rs.20,000/-
(1) Bank Rent Expense
(2) Bank Dishonoured Cheque
(3) Dishonoured Cheque Rent payable
(4) Bank Rent payable
Answer :- 4
(J) The following information related to the business Neluwa Saloon:
Rs.‘000
Capital introduced when the Saloon was started on 01st January 2010 300
Total assets as at 31st December 2010 320
Total liabilities as at 31st December 2010 30
Total Cash Drawings during the year 150
Total Income (receipts) during the year 170
Total of recorded expenses for the year 20
According to the above information, the total of unrecorded expenses for the year is:
(1) Rs.150,000/-. (2) Rs.10,000/-.
(3) Zero. (4) Rs.140,000/-.
Answer :- 2
(K)
Business Cost Centre / Cost Unit
Bakery Bread (i)
Garment factory Canteen (ii)
Tuition class Student (iii)
Car manufacturer Car (iv)
Which of the following correctly identifies in sequential order the classification for (i), (ii), (iii) and (iv) above of the table given above?
(1) Cost center, cost unit, cost center, cost center.
(2) Cost unit, cost center, cost center, cost unit.
(3) Cost unit, cost center, cost center, cost center.
(4) Cost unit, cost center, cost unit, cost unit.
Answer :- 4
(L) Cost of labour turnover includes:
(1) Costs of interviews, training and replacements.
(2) Costs of salaries, EPF and ETF.
(3) Costs of staff welfare and bonus.
(4) All types of costs given in (1), (2) and (3) above.
Answer :- 1
(M) Of the following what is the most correct statement in relation to overheads:
(1) Overhead costs do not add any value to the end product.
(2) Overhead cost is an element of prime cost.
(3) Overhead costs comprise of cost of indirect material, indirect labour and indirect expenses.
(4) All kinds of overhead costs vary with the level of production.
Answer :- 3
(N) The following information is related to a Manufacturing company for a period of 3 months:
Rs.
Raw materials consumed 1,200
Prime cost 3,000
Royalty (paid on units produced) 200
Direct labour 1,200
Factory overhead 2,000
Work-in-progress at the beginning of the period
(valued at manufacturing cost)
1,000
Work-in-Progress at the end of the period Nil
Number of units transferred to the sales division 2,000.
Based on the above information, the manufacturing cost of a unit is:
(1) Rs.2.80. 2) Rs.3.00.
(3) Rs.4.40. (4) None of these.
Answer :- 4
(O) A mattress manufacturer has provided the following cost data. The cost of fabric, foam, springs, and timber is Rs.68,000/-. The cost of indirect materials is Rs.21,000/-. Labour cost of manufacturing workers is Rs.52,000/- and Rs.14,000/- paid to production supervisors as wages.
Of the above data total indirect cost of production is:
(1) Rs.21,000/-. (2) Rs.35,000/-.
(3) Rs.89,000/-. (4) Rs.103,000/-.
Answer :- 2
(02 marks each, Total 30 marks)
