Opening direct material inventory is adjusted with ____________ of direct material, to calculate the cost of sales.

• A) Income
• B) Purchases
• C) Liabilities
• D) Sales

Sales return account is a/an __________.

• A) Contra item
• B) Expense item
• C) Liability item
• D) Purchase item

Which of the following is an error of commission?

• A) A payment to a debtor Mr. A is recorded in the account of another debtor Mr. B
• B) Purchase of vehicle is recorded in repairs account
• C) A receipt of Rs. 50,000 from a debtor is recorded as Rs. 5,000 in his account
• D) Bank charges being deducted by the bank without our knowledge

The entry of raw material issued to production units is:

• A) Debit: Work in process A/c Credit: Material Stock A/c
• B) Debit: Raw material A/c Credit: Work in process A/c
• C) Debit: Work in process A/c Credit: Factory overhead A/c
• D) Debit: Work in process A/c Credit: Finished goods A/c

Which of the following should be debited when production is completed in manufacturing concern?

• A) Finished goods account
• B) Material account
• C) FOH account
• D) Work in process account

An income statement is prepared for a specific period, which is also known as:

• A) Reporting date
• B) Statement of cash flow
• C) Reporting period
• D) Financial health

Factory overhead cost = Power & fuel cost + ___________.

• A) Other indirect cost
• B) Direct labor cost
• C) Direct material cost
• D) Other direct cost

In a trading concern, salaries of marketing staff is included in _________.

• A) Preliminary expense
• B) Cost of goods sold
• C) Cost of sales
• D) Operating expense

Purchases Rs. 500, Returns outward Rs. 50, Gross Sales Rs. 700 and Gross Profit Rs. 100, Net Purchases =?

• A) Rs. 650
• B) Rs. 450
• C) Rs. 550
• D) Rs. 500

Which of the following should be credited on sale of completed goods on cash basis in manufacturing concern?

• A) Sales account
• B) Cash account
• C) Finished goods account
• D) Material account

If Work in Process closing inventory is provided as additional information, other than trial balance, then that inventory treated in:

• A) Profit and loss account only
• B) Both profit & loss account and balance sheet
• C) Balance Sheet only
• D) Expense only

Net realizable value of inventory =

• A) Cost of purchase + conversion cost
• B) Cost of purchase - conversion cost
• C) Selling Price + Further Costs to Sell
• D) Selling Price – Further Costs to Sell

Discount received from a creditor is Credited under main head:

• A) Assets
• B) Liabilities
• C) Income
• D) Expenses

Which of the following should be credited on return of raw material to supplier in manufacturing concern?

• A) Voucher payable account
• B) Debtors account
• C) Purchase account
• D) Material account

When correct accounting entry is recorded in the books of accounts but the amount in both accounting effect (Dr & Cr) is wrong, it is known as:

• A) Error of omission
• B) Error of original entry
• C) Error of principle
• D) Error of commission

Factory overhead is a/an:

• A) Liability
• B) Expense
• C) Income
• D) Cost

Sales Rs. 500, Returns inwards Rs. 50, Gross Profit Rs. 100, Net Sales =?

• A) Rs. 500
• B) Rs. 650
• C) Rs. 450
• D) Rs. 550

Expired portion of direct cost is treated as:

• A) Income
• B) Expense
• C) Cost
• D) Liability

Mr. A recorded a cash payment of Rs.300,000 as salaries. Both the salaries and cash account were debited. What would be the credit effect of journal entry to rectify this error, if there is suspense account in trial balance?

• A) Cash account
• B) Suspense account
• C) Bank account
• D) Salaries account

Which of the following should be debited on purchase of raw material on credit basis in manufacturing concern?

• A) Purchases account
• B) Debtors account
• C) Material account
• D) Voucher payable account