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CodeVID-M11-WS
Final Accounts of a Sole Proprietorship — I — Practice Worksheet
Chapter: Final Accounts of a Sole Proprietorship — I
Topic: Final Accounts of a Sole Proprietorship — I
Maximum Marks: 35
Time: 30 minutes
Name: ____________________ Roll No.: __________ Date: ____________

General Instructions

  • All questions are compulsory.
  • Choose the correct option (A, B, C or D) for each question.
  • The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each) 15 × 1 = 15 marks
1.
The Trading Account is prepared to find the:
  • A.Net profit
  • B.Gross profit
  • C.Capital
  • D.Cash
2.
Gross Profit = Net Sales − :
  • A.Cost of goods sold
  • B.Net profit
  • C.Capital
  • D.Drawings
3.
Which is a direct expense (Trading Account)?
  • A.Office salary
  • B.Wages
  • C.Advertising
  • D.Interest on loan
4.
Closing stock appears on the ____ side of the Trading Account.
  • A.Debit
  • B.Credit
  • C.Both
  • D.Neither
5.
Opening stock 10,000, purchases 70,000, sales 1,00,000, closing stock 15,000, wages 5,000. Gross profit =
  • A.Rs 30,000
  • B.Rs 35,000
  • C.Rs 25,000
  • D.Rs 40,000
6.
The P&L Account begins with:
  • A.Sales
  • B.Gross profit b/d
  • C.Capital
  • D.Closing stock
7.
Which is an indirect expense (P&L Account)?
  • A.Carriage inward
  • B.Wages
  • C.Advertising
  • D.Customs duty
8.
Depreciation appears in the:
  • A.Trading Account
  • B.Profit and Loss Account
  • C.Cash book
  • D.Journal proper only
9.
Net profit is:
  • A.Added to capital
  • B.Subtracted from capital
  • C.Added to creditors
  • D.Ignored
10.
The Balance Sheet is a:
  • A.Ledger account
  • B.Statement of financial position
  • C.Subsidiary book
  • D.Source document
11.
Arranging assets/liabilities in a set order is called:
  • A.Posting
  • B.Marshalling
  • C.Balancing
  • D.Noting
12.
In order of liquidity, which asset comes first?
  • A.Building
  • B.Cash
  • C.Goodwill
  • D.Machinery
13.
Drawings are ____ capital in the balance sheet.
  • A.Added to
  • B.Deducted from
  • C.Equal to
  • D.Doubled in
14.
Outstanding expenses are a:
  • A.Current asset
  • B.Current liability
  • C.Fixed asset
  • D.Income
15.
Capital 80,000 + net profit 20,000 − drawings 5,000 =
  • A.Rs 95,000
  • B.Rs 1,00,000
  • C.Rs 1,05,000
  • D.Rs 75,000
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
A student puts 'carriage outward' in the Trading Account. The error is that carriage outward is:
  • A.An indirect (selling) expense belonging to the P&L Account
  • B.A direct expense
  • C.An income
  • D.An asset
17.
Sales 2,00,000; sales returns 10,000; opening stock 25,000; purchases 1,30,000; closing stock 35,000; wages 8,000. Gross profit =
  • A.Rs 62,000
  • B.Rs 72,000
  • C.Rs 52,000
  • D.Rs 60,000
18.
Why is closing stock shown BOTH in the Trading Account and the Balance Sheet?
  • A.Credited in Trading (to compute COGS) and shown as a current asset in the Balance Sheet
  • B.It is an error to show it twice
  • C.It is an expense and income
  • D.It is capital
19.
Net sales 5,00,000, gross profit ratio 25%. The cost of goods sold is:
  • A.Rs 3,75,000
  • B.Rs 1,25,000
  • C.Rs 6,25,000
  • D.Rs 4,00,000
20.
A firm has gross profit 90,000, indirect expenses 1,00,000 and other incomes 5,000. The result is a:
  • A.Net loss of Rs 5,000
  • B.Net profit of Rs 5,000
  • C.Net profit of Rs 95,000
  • D.No profit, no loss
21.
Which arrangement does a balance sheet in 'order of permanence' begin with?
  • A.Goodwill / fixed assets first, cash last
  • B.Cash first
  • C.Debtors first
  • D.Stock first
22.
Net profit overstated because closing stock was overvalued by Rs 5,000 means next year's profit will be:
  • A.Understated by Rs 5,000 (this year's closing is next year's opening)
  • B.Also overstated
  • C.Unaffected
  • D.Overstated by 10,000
23.
Wages AND salaries both appear in a trial balance. The correct treatment is:
  • A.Wages → Trading Account; Salaries → P&L Account
  • B.Both in Trading
  • C.Both in P&L
  • D.Both in Balance Sheet
24.
If both sides of a balance sheet do not agree, it indicates:
  • A.An error somewhere in the final accounts
  • B.High profit
  • C.Normal practice
  • D.More drawings
25.
Place these correctly: (i) bank overdraft, (ii) prepaid insurance. They are respectively a:
  • A.Current liability and a current asset
  • B.Current asset and a current liability
  • C.Both assets
  • D.Both liabilities

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (B) Gross profit
  2. (A) Cost of goods sold
  3. (B) Wages
  4. (B) Credit
  5. (A) Rs 30,000
  6. (B) Gross profit b/d
  7. (C) Advertising
  8. (B) Profit and Loss Account
  9. (A) Added to capital
  10. (B) Statement of financial position
  11. (B) Marshalling
  12. (B) Cash
  13. (B) Deducted from
  14. (B) Current liability
  15. (A) Rs 95,000
Section B — Challenge / Olympiad (2 marks each)
  1. (A) An indirect (selling) expense belonging to the P&L Account
  2. (A) Rs 62,000
  3. (A) Credited in Trading (to compute COGS) and shown as a current asset in the Balance Sheet
  4. (A) Rs 3,75,000
  5. (A) Net loss of Rs 5,000
  6. (A) Goodwill / fixed assets first, cash last
  7. (A) Understated by Rs 5,000 (this year's closing is next year's opening)
  8. (A) Wages → Trading Account; Salaries → P&L Account
  9. (A) An error somewhere in the final accounts
  10. (A) Current liability and a current asset
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