Online Test — Final Accounts of a Sole Proprietorship — I
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
The Trading Account is prepared to find the:
Net profit
Gross profit
Capital
Cash
Explanation: It finds gross profit/loss.
Question 2 of 15
Gross Profit = Net Sales − :
Cost of goods sold
Net profit
Capital
Drawings
Explanation: Gross profit = Net Sales − Cost of Goods Sold.
Question 3 of 15
Which is a direct expense (Trading Account)?
Office salary
Wages
Advertising
Interest on loan
Explanation: Wages are a direct expense in the Trading Account.
Question 4 of 15
Closing stock appears on the ____ side of the Trading Account.
Debit
Credit
Both
Neither
Explanation: Closing stock is on the credit side of the Trading Account.
Question 5 of 15
Opening stock 10,000, purchases 70,000, sales 1,00,000, closing stock 15,000, wages 5,000. Gross profit =
Rs 30,000
Rs 35,000
Rs 25,000
Rs 40,000
Explanation: Credit 1,15,000 − Debit 85,000 = 30,000.
Question 6 of 15
The P&L Account begins with:
Sales
Gross profit b/d
Capital
Closing stock
Explanation: It starts with gross profit brought down from the Trading Account.
Question 7 of 15
Which is an indirect expense (P&L Account)?
Carriage inward
Wages
Advertising
Customs duty
Explanation: Advertising is an indirect (selling) expense in the P&L.
Question 8 of 15
Depreciation appears in the:
Trading Account
Profit and Loss Account
Cash book
Journal proper only
Explanation: Depreciation is an indirect expense in the P&L Account.
Question 9 of 15
Net profit is:
Added to capital
Subtracted from capital
Added to creditors
Ignored
Explanation: Net profit belongs to the owner and is added to capital.
Question 10 of 15
The Balance Sheet is a:
Ledger account
Statement of financial position
Subsidiary book
Source document
Explanation: It is a statement, not an account.
Question 11 of 15
Arranging assets/liabilities in a set order is called:
Posting
Marshalling
Balancing
Noting
Explanation: The order of presentation is marshalling.
Question 12 of 15
In order of liquidity, which asset comes first?
Building
Cash
Goodwill
Machinery
Explanation: Cash is the most liquid, so it comes first.
Question 13 of 15
Drawings are ____ capital in the balance sheet.
Added to
Deducted from
Equal to
Doubled in
Explanation: Drawings reduce the owner's capital.
Question 14 of 15
Outstanding expenses are a:
Current asset
Current liability
Fixed asset
Income
Explanation: Outstanding (unpaid) expenses are a current liability.
Question 15 of 15
Capital 80,000 + net profit 20,000 − drawings 5,000 =
Rs 95,000
Rs 1,00,000
Rs 1,05,000
Rs 75,000
Explanation: 80,000 + 20,000 − 5,000 = 95,000.