Accounting Process [CA (Chartered Accountant) Foundation Principles of Accounting]: Questions 5 - 6 of 67

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Question 5

Question MCQ▾

ABC & Co. started business on 1st January 2014 with a capital of ₹ 240000.

During the month, the following transactions took place:

2nd Bought goods from XYZ on credit ₹ 60000

5th Sold goods to MNO ₹ 75000

5th Cash Purchases ₹ 75000

8th Cash Sales ₹ 45000

9th Goods returned to XYZ ₹ 6000

15th Bought Furniture ₹ 45000

16th Cash paid to XYZ ₹ 36000

16th Loan taken from Mr. K ₹ 90000

17th Goods Returned by MNO ₹ 9000

20th ABC takes stock for personal use ₹ 9000

21st Cash received from MNO ₹ 36000

25th Salary paid ₹ 15000

28th Purchase of Stationery ₹ 3000

29th Amount paid to Mr. K on loan Account ₹ 54000

30th Interest received ₹ 12000

From the above information prepare the cash and stock account of ABC & Co. and calculate balance

Choices

Choice (4)Response

a.

6000

b.

4000

c.

9000

d.

12000

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Question 6

Question MCQ▾

In what ways replacement of fixed assets are treated?

Choices

Choice (4)Response

a.

If the asset is replace with a superior kind of asset, then such expenditure will be treated as partly capital and partly revenue in nature

b.

The normal value of the asset is treated as revenue expenses

c.

If the asset is replaced with a similar kind of asset, then such expenditure will be treated as a revenue expenditure as no new acquisition is made

d.

All a., b. and c. are correct

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