opencveng

Which of the following statements best describes the main purpose of accounting in a firm?

• Recording of transactions of the firm in the books of account

• To record transactions of the firm to prepare financial reports

• To communicate information about the firm for the use of managers

• Communication of information for decision making of the stakeolders of the firm

• Preperation of financial statements of the firm for the use of managers

Recognition of depreciation of each period in the income statement is done in accordance with which of the following accounting concepts?

• Matching

• Going Concern

• Prudence

• Realization

• Accruals

A firm has purchased goods with a list price of Rs 800 000 on credit subject to a 5% trade discount and thereafter , sold for Rs 850 000 on cash .The amount due to creditors hasn't been settled.The net effect of these transaction is shown in the accounting equation as

• 
• 
• 
• 
• 

An entity reported a profit of Rs 400 000 for the year ending 31/3/2023. However in a subsequent investigation the following errors where revealed in the accounting books

• * The total credit sales of Rs.950 000 for the month of march 2023 has been recorded as Rs.590 000 in the sales account and debtors control account

• * A cash discount of Rs 50000 allowed to a trade debtor has been posted only in the debtors control account

• * An interest income Rs.65000 received from a bank deposit has been credited to interest expenses account.However this amount has been correctly recorded in the cash account.

• * The depreciation on motor vehicles for the year Rs.50000 has not yet been provided.

• What is the correct profit for the year ending 31/3/2023 after correcting the above errors?

• Rs.760000

• Rs.660000

• Rs.750000

• Rs.400000

• Rs.860000

The prime cost and the total production cost of a manufacturing business for the year ending 31/3/2023 were Rs.1000 000 and Rs.1900 000 respectively .The work-in-progress inventories which were measured at production cost as at 31/3/2022 and 31/3/2023 were Rs.300 000 and Rs.430 000 respectively.What is the production overheads for the year ending 31/3/2023?

• Rs.670000

• Rs.800000

• Rs.930000

• Rs.1000000

• Rs.1030000

Keerthi commenced a retail business on 1/3/2023 investing Rs.800 000 in cash .During the month ending 31/3/2023 , goods costing Rs.350 000 were purchased on credit & were sold for Rs.400 000 on cash .Further the business incurred Rs.60 000 as expenses for the month of which Rs.20 000 was payable as at 31/3/2023. State the assets and liabilities at 31/3/2023

• Rs 1160 000-310 000

• Rs. 1100 000-370 000

• Rs.1160 000-370 000

• Rs.1100 000-310 000

• Rs.1160 000-270 000

The following information has been provided for Mihindu welfare association for the year ending 31/12/2023.

• * Subscription receivable as at 1/1/2023 Rs.392 000

• * Subscription received in advance as at 1/1/2023 Rs.80000

• * Subscription received during the current year

  • - for the year 2022 Rs. 244 000

  • - for the year 2023 Rs. 1192 000

  • - for the year 2024 Rs. 308 000

  • The subscription income recognized for the year ending 31/12/2023

• Rs.2420 000

• Rs. 2728 000

• Rs. 2108 000

• Rs. 2404 000

• Rs. 2124 000

Which of the following statements is correct in relation to a partnership ?

A - The salaries paid to partners when they contribute to the management of the business as partners are treated as expenses of the partnership

B - The equity of a partnership is represented by the total of capital and current account balances of the partners and other reserves, if available

C - In a written agreement , the partners can agree to share profit and losses based on their capital contribution ratio.

D - When there is a change in the ownership of a partnership its goodwill is estimated.

• A and B only

• B and C only

• A and D only

• A,B,C only

• All

Below are some of the types of accounts available in a business

A - Purchase

B - Accumulated depreciation

C - Provision for doubtful debts

D - Sales

Among the above accounts the section that includes asset accounts is

• B only

• A and B only

• A , B and C only

• C and D only

• B and C only

Minu, Niru and Lal carried out a partnership sharing profits and losses in the ration of 3:2:1 respectively . The capital and current account balances of partners as at 1/4/2022 were as shown in the image .

The partnership earned a profit of Rs. 600 000 for the year 31/3/2023. Lal retired from the partnership on 31/3/2023 and the total amount payable to him on this date Rs. 1500 000 was transfered to loan amount . Minu and Niru continued the partnership from this date sharing profits and losses at the ratio os 2:1 respectively.The goodwill of the partnership is adjusted through the partners' capital accounts and good account is not maintained in the partnership.

What is the value of good will of the partnership as at 31/3/2023

• Rs. 800 000

• Rs. 400 000

• Rs. 500 000

• Rs. 1500 000

• Rs. 1800 000