CMA Foundation Question Paper with Detailed Solution | Dec 24 | Session 1

Table of Contents

1. Fundamentals of Business Laws and Business Communication (FBLC)
2. Fundamentals of Financial and Cost Accounting (FFCA)

CMA Inter Dec 24 Suggested Answer Other Subjects Blogs :

1. CMA Foundation Suggested Answer Dec 24 Session 2
2. CMA Foundation Syllabus (New Updates)
3. Check Result Dec 24

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Fundamentals of Business Laws and Business Communication

 

1. The decision of any High Court shall prevail over

1. subordinate courts under the High Court.
2. union territories.
3. all state High Courts.
4. throughout India.

Answer: a

Explanation:

• A High Court's decisions are binding only on the subordinate courts under its jurisdiction, as per the hierarchy of the Indian judicial system.
• High Court decisions are not binding on other High Courts or throughout India; only Supreme Court rulings have that level of authority.

2. Which among the following is a quasi-judicial body?

1. District court
2. Sessions court
3. High court
4. District Consumer Forum

Answer: d

Explanation:

• A quasi-judicial body has the authority to adjudicate and resolve disputes but does not function as a full-fledged court. It follows principles of natural justice and can make legal decisions on specific matters.
• District Consumer Forum is a quasi-judicial body established under the Consumer Protection Act to handle consumer grievances.
• District courts, Sessions courts, and High courts are part of the regular judicial system, not quasi-judicial bodies
  

3. Functions of the Parliament is to

1. execute laws.
2. give justice to people.
3. make laws.
4. give punishment.

Answer: c

Explanation:

• The primary function of the Parliament is law making. It formulates, amends, and repeals laws as per the requirements of the country.
• Execution of laws is the responsibility of the Executive, led by the government.
• Justice and punishment are functions of the Judiciary, not the Parliament.
  

4. A Bill becomes an Act on assent of

1. Prime Minister
2. Cabinet Committee
3. President of India
4. Solicitor General

Answer: c

Explanation:

• A Bill becomes an Act only after it receives the assent of the President of India as per Article 111 of the Indian Constitution.
• Once the President approves, the Bill is published in the official Gazette and becomes a law.
• The Prime Minister, Cabinet Committee, and Solicitor General do not have this authority.

5. What is a Private Bill?

1. Bill introduced by a private citizen.
2. Bill introduced by a private company.
3. A Bill introduced by a member other than a minister.
4. A Bill relating to affairs which are private to individual.

Answer:  

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6. In normal course, contract ends with

1. offer
2. proposal
3. promise
4. performance

Answer: d

Explanation:

• A contract typically ends when both parties fulfill their obligations as agreed in the terms of the contract. This is referred to as performance.
• Offer, proposal, and promise are stages in the formation of a contract but do not indicate its conclusion.

7. A contract between one existing company and one dissolved company is

1. valid
2. void
3. voidable
4. Any of the above

Answer:

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8. What is minor’s liability if he is a party to contract?

1. Minor not liable till minority.
2. Minor is personally liable.
3. Minor’s property is liable.
4. None of the above.

Answer: d

Explanation:

• A minor (a person below the age of 18 in most cases) is not capable of entering into a contract as per the Indian Contract Act, 1872. Any contract involving a minor is void ab initio (invalid from the beginning).
• Hence, a minor is not personally liable or liable through their property, and no legal liability is attached until they reach the age of majority.

9. Contract to make a contract is

1. also a contract
2. not a contract
3. None of the above is correct
4. Both options are correct

Answer:  

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10. You have got a job offer to be posted at Mumbai. You write back intimating that you can join provided you are posted at Kolkata. This amounts to

1. rejection of the offer
2. acceptance of the offer
3. modification of the offer
4. None of the above

Answer: a

Explanation:

• By adding a new condition (posting at Kolkata), the original offer is effectively rejected, and a counteroffer is made.
• As per the Indian Contract Act, 1872, an acceptance must be absolute and unqualified. Any variation or modification amounts to a rejection of the original offer and is considered a new offer instead.
  

11. Agreement with a person who is lunatic is

1. valid
2. void
3. voidable
4. None of the above

Answer: b

Explanation:

• Under the Indian Contract Act, 1872, an agreement with a lunatic is void, as a person of unsound mind is incapable of understanding the terms of a contract and forming a valid consent.
• Consent is a necessary element of a valid contract, and if the party cannot comprehend the implications, the contract becomes void ab initio (invalid from the beginning).

12. In case of merger of A Ltd. with B Ltd., all contracts pending with A Ltd. will

1. continue to be valid and to be executed by B Ltd.
2. revoked
3. terminated
4. becomes illegal

Answer:  a

Explanation:

• In a merger, the merged entity (B Ltd. in this case) assumes all rights, obligations, and liabilities of the dissolved entity (A Ltd.).
• Therefore, any contracts pending with A Ltd. will remain valid and enforceable, and B Ltd. will take responsibility for their execution.
• Such continuity is in line with legal principles governing mergers and acquisitions.

13. In case of independent performance

1. only proposer will perform.
2. only acceptor will perform.
3. both parties shall perform their part independent of each other.
4. None of the above

Answer: c

Explanation:

• In the case of independent performance, the obligations of the parties are separate, and each party is required to perform their respective part of the contract without waiting for the other party’s performance.
• Such contracts are structured so that the performance of one party is not contingent on the actions of the other.

14. When both parties more or less have equal rights and liabilities in a contract, it is called

1. bilateral
2. unilateral
3. formal
4. one sided

Answer: 

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15. A job application by a person is

1. only an information for the job to be done.
2. offer for doing the job.
3. invitation to start the job.
4. offering his candidature.

Answer: b

Explanation:

• A job application is considered an offer by the applicant to work under the terms specified by the employer.
• It is the employer’s prerogative to accept or reject this offer. Thus, the application represents the applicant’s willingness to contract for employment, subject to the employer's approval.

16. An understanding between two or more persons not expressly a contract, but in the nature of a contract is called

1. quasi contract
2. contingent contract
3. illegal contract
4. formal contract

Answer: a

Explanation:

• A quasi-contract is not an actual contract formed by agreement but an obligation imposed by law to prevent unjust enrichment.
• It arises when there is no formal agreement between the parties, yet circumstances exist where one party benefits at the expense of another, and fairness demands compensation.

17. A contract not performed by the performer, denotes

1. performance
2. breach
3. abandonment of contract
4. All of the above

Answer: b

Explanation:

• Breach of contract occurs when a party fails to fulfill their obligations under the terms of the contract without a lawful excuse.
• In the case of non-performance by the obligated party, it directly denotes a breach unless there are mitigating circumstances or valid defenses.
  

18. A contract is valid without consideration in a case of

1. sale
2. gift
3. agency
4. Both (B) and (C) above

Answer: 

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19. A contract shall not be void if it is not against

1. law
2. public policy
3. Both above
4. None of the above

Answer: c

Explanation:

• A contract is void if it is against the law or public policy under the Indian Contract Act, 1872.
• For a contract to be valid, it must be lawful (not prohibited by law) and should not contravene public policy.

20. A wagering agreement in India is declared by the Indian Contract Act, 1872 as

1. illegal and void.
2. void but not illegal.
3. voidable at the option of the aggrieved party.
4. illegal.

Answer: b

Explanation:

• Under the Indian Contract Act, 1872, a wagering agreement is declared void (Section 30).
• While it cannot be enforced in a court of law, it is not considered illegal, meaning parties to such agreements are not subject to criminal liability.
• However, agreements collateral to wagering contracts may be enforceable, provided they are lawful.

21. A sale between seller and buyer which requires goods to move from one state to another within the country will amount to

1. intra state sale
2. inter state sale
3. domestic sale
4. export sale

Answer: 

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22. Agreement “not sale” agreement to sale

1. precedes
2. succeeds
3. happens at the same time
4. are not related

Answer: 

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23. Delivery of car keys by seller of car to the buyer is ___ delivery.

1. symbolic
2. actual
3. constructive
4. None of the above

Answer: a

Explanation:

• Symbolic delivery occurs when something that represents the goods (like car keys in the case of a car) is delivered, instead of the goods themselves.
• Handing over the car keys symbolizes the transfer of ownership and control of the car to the buyer, without physically moving the car.

24. Delivery by the seller can be

1. actual delivery
2. symbolic delivery
3. constructive delivery
4. Any of the above

Answer: 

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25. Sale is not complete unless the possession and ___ is transferred.

1. title
2. ownership
3. papers
4. None of the above

Answer: 

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26. When a buyer’s goods are sold based on sample, the goods shall conform to

1. sample only
2. description only
3. both description and sample
4. None

Answer: 

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27. The doctrine of Caveat Emptor is not applicable

1. in the case of sale under a patent name.
2. where the seller is guilty of fraud.
3. in the case of sale under a trade name.
4. where the buyer relies on the skill and judgment of the seller.

Answer:

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28. The phrase "nemo dat quad non habet" means

1. no one having right to sell.
2. no one can give something which he does not possess.
3. everybody is having different habit.
4. None of the above

Answer: b

Explanation:

• The Latin phrase "nemo dat quod non habet" translates to "no one can give what they do not have."
• It is a legal principle under the Sale of Goods Act, 1930, which means that a seller cannot transfer a better title to the goods than they themselves possess. For example, if someone sells stolen goods, the buyer does not acquire a valid title.
  

29. An unpaid seller has

1. right of lien on goods.
2. stoppage of goods.
3. resale.
4. All of the above

Answer: d

Explanation:

Under the Sale of Goods Act, 1930, an unpaid seller has the following rights:

1. Right of lien on goods: The seller can retain possession of the goods until payment is made.
2. Right of stoppage in transit: The seller can stop the goods while they are in transit if the buyer becomes insolvent.
3. Right of resale: The seller can resell the goods under specific conditions, such as default in payment or perishable nature of goods.

30. Any stipulation essential to main purpose in sales contract is called

1. warranty
2. condition
3. price
4. after sale service

Answer:

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31. The Negotiable Instruments Act was enacted in the year

1. 1880
2. 1881
3. 1882
4. 1883

Answer: b

Explanation:

• The Negotiable Instruments Act, 1881 governs the law relating to negotiable instruments such as promissory notes, bills of exchange, and cheques in India.
• It was enacted to provide a legal framework for the smooth functioning and reliability of negotiable instruments in commercial transactions.

32. Bank may refuse payment against a cheque, if:

1. There is no balance in account.
2. The signature of the drawer is not matching.
3. Stop payment instruction has been received.
4. All or any of the above.

Answer: d

Explanation:

33. In course of negotiation, a bill goes from one person to other. They are called:

1. transferee
2. transferee in due course
3. holders
4. holders in due course

Answer: 

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34. In case of cheque, the drawee is

1. the account holder.
2. in whose favor the cheque is issued.
3. the bank.
4. None of the above.

Answer: c

Explanation:

In the case of a cheque:

• The drawer is the person who writes the cheque (account holder).
• The drawee is the bank on which the cheque is drawn and which is instructed to pay the amount.
• The payee is the person in whose favor the cheque is issued.

35. If a minor draws, endorses, delivers, or negotiates an instrument, such instrument binds

1. the minor.
2. all parties to the instrument except the minor.
3. the instrument and not other parties.
4. None of the above.

Answer: 

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36. Upon dishonor of a cheque, the payee can initiate legal action under section ___ of The NI Act.

1. 137
2. 175
3. 138
4. 180

Answer: c

Explanation:

• Under Section 138 of the Negotiable Instruments Act, 1881, the payee of a dishonored cheque can initiate legal action against the drawer.
• This section makes it a criminal offense if a cheque is dishonored due to insufficient funds or if the amount exceeds the arrangement with the bank, provided certain conditions are met (e.g., notice served to the drawer, and payment is not made within 15 days of receipt of notice).

37. In case of cheque, acceptance by the drawee is

1. not required.
2. required.
3. required if payee wants.
4. required if drawer wants.

Answer: 

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38. If the bill of exchange is payable after sight, acceptance is

1. necessary.
2. not necessary.
3. depends on drawee.
4. None of the above.

Answer: 

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39. In case of promissory note, date is

1. not required.
2. required.
3. at the wish of the drawer.
4. None of the above.

Answer: b

Explanation:

• In a promissory note, the date is essential as it specifies when the instrument was created and helps determine the due date for payment if it is payable after a certain period.
• Without a date, the instrument becomes ambiguous and may not be enforceable under the Negotiable Instruments Act, 1881.

40. Documents which are not specifically mentioned as negotiable instruments under the Act but are transferable as per the customs of trade, are called

1. quasi negotiable instruments.
2. not negotiable instruments.
3. non-documentary documents.
4. semi negotiable instruments.

Answer:

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41. Which one of the following is a trial presentation?

1. Seminars/Conferences
2. Presentation before clients for business
3. Presentation before teachers for practice
4. All of the above

Answer: d

Explanation:

A trial presentation refers to presenting in a practice or trial setting before the actual delivery to the intended audience. It helps the presenter refine their content and delivery style.

This can include:

• Seminars/Conferences: Practicing for professional events.
• Presentation before clients for business: Rehearsing business proposals.
• Presentation before teachers for practice: Academic practice or training purposes.

Thus, all the options listed qualify as examples of trial presentations.

42. Which of the following are non verbal communication?

1. Facial expression
2. Eye output
3. Gesture
4. All of the above

Answer: d

Explanation:

Non-verbal communication involves conveying messages without using spoken or written words. It includes:

• Facial expressions: Convey emotions such as happiness, anger, or confusion.
• Eye output (eye contact): Reflects interest, attentiveness, or avoidance.
• Gestures: Movements of hands, arms, or body to emphasize points or convey meaning.

All these elements are forms of non-verbal communication, making (D) All of the above the correct answer.

43. Which of the following is/are a constituent of the 7 C’s of communication?

1. Completeness
2. Clarity
3. Concreteness
4. All of the above

Answer: d

Explanation:

The 7 C’s of communication are fundamental principles that ensure effective and efficient communication. They include:

1. Completeness: Ensuring all necessary information is included.
2. Clarity: Ensuring the message is clear and easily understood.
3. Concreteness: Using specific facts and figures to avoid ambiguity.

Since all the options listed are part of the 7 C’s of communication, the correct answer is (D) All of the above.

44. Horizontal Communication takes place between

1. employees of the same status.
2. executives and subordinates.
3. Both (A) and (B).
4. None of the above.

Answer: a

Explanation:

• Horizontal communication occurs between individuals or groups at the same level of hierarchy in an organization.
• Its purpose is to facilitate coordination, collaboration, and the exchange of information among peers or employees of similar status.
• It does not involve communication between executives and subordinates (which is vertical communication).

Thus, (A) employees of the same status is the correct answer.

45. Which of the following communication has no interaction from audience?

1. Speech
2. Debate
3. Discussion
4. Deliberation

Answer: 

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46. A communication shall be considered as complete, when

1. listeners raise queries.
2. listeners are satisfied.
3. people don’t listen.
4. people don’t understand.

Answer: b

Explanation:

• A communication is considered complete when the message is delivered, understood, and meets the intended purpose, which often includes satisfying the listener's concerns or expectations.
• Merely raising queries (A), not listening (C), or failing to understand (D) indicate incomplete communication.

Thus, the correct answer is (B) listeners are satisfied.

47. Communication between lawyer and client is

1. internal and confidential.
2. external and not confidential.
3. personal.
4. internal, confidential and professional.

Answer: 

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48. Nowadays mass communication is through

1. Print media
2. Direct communication
3. Telephonic communication
4. Digital mode

Answer: d

Explanation: 

• In the modern era, mass communication primarily occurs through the digital mode, such as social media platforms, websites, emails, and streaming services.
• While print media (A) remains relevant, the digital mode offers faster and wider reach.
• Direct communication (B) and telephonic communication (C) are not typically used for mass communication as they focus on individual or small-group interactions.

Thus, the most accurate answer is (D) Digital mode

49. Proper grammar comes under which C of communication?

1. Coherence
2. Completeness
3. Correctness
4. Courteous

Answer: c

Explanation:

• Proper grammar, along with accurate spelling, punctuation, and factual information, falls under the principle of Correctness in communication.
• Correctness ensures that the message is clear, precise, and error-free, thereby enhancing its effectiveness.

50. Formal communication should be

1. only verbal.
2. only through email.
3. telephonic.
4. any mode recordable for future reference.

Answer: 

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Fundamentals of Financial and Cost Accounting 

 

51. Expense incurred to obtain license for starting a new factory is

1. Capital
2. Revenue
3. Deferred Revenue
4. Prepaid

Answer: a

Explanation:

• The expense incurred to obtain a license for starting a new factory is considered a capital expenditure because it creates a long-term benefit for the business by enabling it to operate.
• Capital expenditure involves spending on assets or investments that provide future economic benefits, rather than being consumed in the current period.

52. The framework of accounting has ___ pillars.

1. 2
2. 3
3. 4
4. 5

Answer: c

Explanation:

The framework of accounting is based on four pillars:

1. Conceptual Framework: Guides the objectives and fundamentals of financial reporting.
2. Legal Framework: Encompasses laws and regulations governing business entities (e.g., Companies Act).
3. Institutional Framework: Includes accounting bodies and institutions like ICAI and ICMAI.
4. Regulatory Framework: Involves standards and rules like the Indian Accounting Standards (Ind AS).

This classification helps maintain consistency and transparency in accounting practices.

53. Which of the following relationships is correct?

1. Assets = Liabilities – Equity
2. Assets = Equity – Liabilities
3. Assets = Liabilities + Equity
4. Equity = Liabilities – Assets

Answer:

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54. Ledger Folio (L.F.) column in the journal is filled at the time of

1. Journalising
2. Posting
3. Casting
4. Balancing

Answer: b

Explanation:

• The Ledger Folio (L.F.) column in the journal is filled at the time of posting entries from the journal to the ledger.
• It indicates the page number or reference of the ledger account where the corresponding entry has been posted, helping in cross-referencing and verification.

55. The total of discount column appearing on the debit side of Triple Column Cash Book is posted to the

1. Credit of Discount Allowed A/c.
2. Debit of Discount Received A/c.
3. Debit of Discount Allowed A/c.
4. Credit of Discount Received A/c.

Answer:

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56. Cheque received from a Debtor for ₹22,400 has been recorded as ₹24,200 in Cash Book, while the same has been collected and credited by bank as ₹22,400. How should it be treated while drafting Bank Reconciliation Statement, if the balance as per Cash Book is the starting point?

1. ₹1,800 is to be deducted.
2. ₹22,400 is to be deducted.
3. ₹1,800 is to be added.
4. ₹46,600 is to be added.

Answer: a

Explanation:

• The Cash Book erroneously recorded the cheque as ₹24,200 instead of ₹22,400.
• The Bank Statement correctly shows ₹22,400 as the amount collected.
• Since the Cash Book shows more than the actual amount received by the bank, the difference of ₹1,800 needs to be deducted from the Cash Book balance while preparing the Bank Reconciliation Statement.

57. Which of the following is/are not true about Trail Balance?

1. It is mandatorily prepared.
2. It is a part of books of account.
3. It proves accounting accuracy.
4. All of the above.

Answer: d

Explanation:

1. (A) It is mandatorily prepared: This is not true, as preparing a Trial Balance is not mandatory. It is a tool used for checking the arithmetical accuracy of ledger postings but is not legally required.
2. (B) It is a part of books of account: This is not true, as the Trial Balance is a statement and not part of the formal books of account like the journal, ledger, or cash book.
3. (C) It proves accounting accuracy: This is not true, because a Trial Balance only verifies arithmetical accuracy (debits = credits). It does not ensure that all transactions are recorded correctly or completely.

58. Goods worth ₹24,000 taken by the proprietor for personal use should be debited to ___ Account.

1. Debtors
2. Drawings
3. Capital
4. Purchases

Answer: b

Explanation:

• When goods are taken by the proprietor for personal use, the withdrawal is recorded as a drawing and should be debited to the Drawings Account.
• This reduces the proprietor's capital, as personal withdrawals are adjustments against capital.

59. Sale of office furniture has been credited to Sales Account. It is

1. a clerical error.
2. an error of principle.
3. a misposting error.
4. a compensating error.

Answer: b

Explanation:

• Sale of office furniture should be recorded in the Furniture Account (or Fixed Asset Account), not in the Sales Account, as it is not part of the normal trading activities of the business.
• Recording it in the Sales Account violates the principle of correct classification between capital and revenue items, making it an error of principle.

60. Obsolescence means decline in value due to

1. physical wear and tear.
2. fall in market price.
3. efflux of time.
4. change in taste, fashion, etc.

Answer:

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61. In a consignment, Account Sales is sent by

1. Consignor
2. Banker
3. Consignee
4. Customer

Answer: c

Explanation:

Account Sales is a statement prepared and sent by the consignee to the consignor, providing details of:

• Goods sold,
• Sale proceeds,
• Expenses incurred,
• Commission charged, and
• Balance payable to the consignor.

It serves as a summary of the consignment transactions handled by the consignee.

62. On March 1, 2024 Hardik of Ahmadabad consigned 300 bales of cotton to Kartick of Coimbatore (costing ₹ 1,50,000) to be sold at an invoice price of 25% profit on sales. By what amount should Consignment to Coimbatore Account be credited to account for the loading on goods sent on consignment?

1. ₹ 1,12,500
2. ₹ 37,500
3. ₹ 1,87,500
4. ₹ 50,000

Answer: d

Explanation:

Cost + Profit = Sales

• 150,000 + 0.25 x = X
• 150,000 = 0.75 x
• X = 200,000

Hence Loading is 50,000

63. On January 1, 2024 Kalpit draws a bill worth ₹ 3,00,000 on Shivam for 3 months. Kalpit got the bill discounted on January 4, 2024 @ 12% p.a. What is the amount of discount on bill?

1. ₹ 36,000
2. ₹ 27,000
3. ₹ 18,000
4. ₹ 9,000

Answer:

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64. When a bill of exchange is honoured on the maturity date, in the books of the drawee ___ is to be debited.

1. Drawer’s Account
2. Bills Payable Account
3. Bills Receivable Account
4. Bank Account

Answer: b

Explanation:

• When the drawee (the person who accepted the bill) honors the bill on the maturity date, they settle the liability created by the Bills Payable Account

65. What will be the accounting entry for goods taken over by co-venturer in case separate set of books are maintained?

1. Debit: Goods A/c; Credit: Credit: Co-Venturer’s A/c
2. Debit: Co-Venturer’s A/c;  Credit: Joint Venture A/c
3. Debit: Joint-Venturer’s A/c; Credit: Joint Bank A/c
4. Debit: Joint-Venturer’s A/c; Credit: Co-enturer’s A/c

Answer: b

Explanation:

In the case of separate books maintained for a joint venture, when a co-venturer takes over goods:

• The Co-Venturer’s Account is debited because they become liable to pay for the goods taken over.
• The Joint Venture Account is credited to reflect the reduction in goods held for the venture.

66. Joint Venture Account is of the nature of

1. Personal Account
2. Real Account
3. Nominal Account
4. Artificial Personal Account

Answer:

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67. Memorandum Joint Venture Account is preparedby

1. to ascertain profit/loss of venture.
2. to ascertain the amount due from co-venturer.
3. to ascertain the amount due to co-venturer.
4. to ascertain the amount of final statement 

Answer: a

Explanation:

• A Memorandum Joint Venture Account is prepared when co-venturers maintain their own records of the joint venture instead of keeping a separate set of books.
• Its primary purpose is to ascertain the profit or loss of the venture by combining the records maintained by all co-venturers

68. Work-in-progress gets reflected in which of the following component of financial statement of a manufacturing-cum-trading organizationy

1. Manufacturing A/c
2. Profit & Loss A/c
3. Trading A/c
4. Both (A) and (B)

Answer: a

Explanation:

• Work-in-progress (WIP) represents partially completed goods that are in the process of being manufactured. It is accounted for in the Manufacturing Account, which calculates the cost of goods manufactured during the period.
• WIP does not directly appear in the Trading Account or Profit & Loss Account, as it is part of the cost of production.

69. The balance of Depreciation on Plant account appearing in Trial Balance will be _________.

1. debited to Trading A/c only
2. debited to Profit & Loss A/c only
3. debited to Trading A/c & also deducted from Plant A/c in Balance Sheet
4. debited to Profit & Loss A/c & also deducted from Plant A/c in Balance Sheet

Answer: b

Explanation:

When depreciation is shown in the Trial Balance, it implies that:

• The depreciation has already been deducted from the Plant Account in the Balance Sheet.
• The amount in the Trial Balance needs to be debited to the Profit & Loss Account as an expense.

70. An asset having physical existence is known as ____ asset.

1. Current
2. Non-current
3. Tangible
4. Intangible

Answer:

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71. In Arjun’s garment business for the year 2023-24: Value of stock-in-trade on 01.04.2023 and 31.03.2024 were ₹ 2,50,000 and ₹ 2,00,000 respectively; Purchases during the year were ₹ 9,50,000; Rate of Gross Profit is 30% on Cost of Goods Sold. What is the Sales for the year 2023-24?

1. ₹ 13,00,000
2. ₹ 13,60,000
3. ₹ 12,10,000
4. None of the above

Answer: a

Explanation:

• COGS = Opening Stock+Purchases−Closing Stock
• COGS = ₹ 2,50,000 + ₹ 9,50,000 − ₹ 2,00,000 = ₹ 10,00,000
• Gross Profit = 30% × ₹ 10,00,000 = ₹ 3,00,000
• Sales = ₹ 10,00,000 + ₹ 3,00,000 = ₹ 13,00,000

72. An amount of donation received by a charitable organisation for a specific purpose is a

1. Revenue receipt
2. Capital receipt
3. Asset
4. Liability

Answer:

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73. Which of the following is the income statement of a non-profit organisation?

1. Balance Sheet
2. Income & Expenditure A/c
3. Profit & Loss A/c
4. Receipts & Payments A/c

Answer: 

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74. A social club received Subscription worth ₹ 1,19,000 in cash during the year 2023-24. Ascertain the amount of Subscription to be credited to Income & Expenditure A/c, given the following details:

Arrear Subscription: On March 31, 2023 ₹ 17,000 and March 31, 2024 ₹ 23,000.

1. ₹ 1,25,000
2. ₹ 1,59,000
3. ₹ 1,13,000
4. ₹ 79,000

Answer:

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75. Receipts & Payments A/c of a non-profit organisation is by nature

1. Income Statement
2. Nominal Account
3. Personal Account
4. Real Account

Answer: d

Explanation:

• The Receipts & Payments Account is a summary of cash and bank transactions of a non-profit organization during an accounting period.
• It is a Real Account because it deals with actual cash and bank balances, which are tangible in nature

76. All revenue receipts and expenditure are shown in

1. Balance Sheet.
2. Statement of Affairs.
3. Cash Flow Statement.
4. Trading and Profit & Loss Account.

Answer: d

Explanation:

Revenue receipts and expenditures relate to the day-to-day operations of a business and are recorded in the Trading and Profit & Loss Account:

• Trading Account: Records direct revenue and expenses (e.g., sales, purchases).
• Profit & Loss Account: Records indirect revenue and expenses (e.g., rent, salaries).

77. If opening capital is ₹ 18,00,000, closing capital is ₹ 22,00,000 and drawings are ₹ 8,00,000, what is the amount of profit or loss?

1. ₹ 12,00,000
2. ₹ 10,00,000
3. ₹ 4,00,000
4. ₹ 8,00,000

Answer:

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78. Noting charges paid by the ___ of the bill are to be reimbursed by the ___.
(A) Holder; Drawer
(B) Holder; Acceptor
(C) Drawer; Payee
(D) Holder; Payee

Answer: b

Explanation:

• Noting charges are expenses incurred by the holder of the bill when the bill is dishonored by the acceptor.
• These charges must be reimbursed by the acceptor, as they are responsible for the dishonor of the bill.

79. The amount of yearly depreciation under written down value method

1. remains same over the years.
2. increases year by year.
3. fluctuates every year.
4. decreases year by year.

Answer:

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80. Which of the following is/are the basic objective(s) of accounting?

1. Systematic recording of transactions
2. Determination of the operating results
3. Ascertainment of financial position of business
4. All the above

Answer: d

Explanation:

The basic objectives of accounting include the following:

1. Systematic Recording of Transactions: Ensures that all financial transactions are recorded accurately and in a structured manner.
2. Determination of Operating Results: Helps assess the profitability or losses of the business through the preparation of the Profit & Loss Account.
3. Ascertainment of Financial Position: Provides insights into the financial health of the business by preparing the Balance Sheet, showing assets, liabilities, and equity.