MCQs of Financial Statements of Sole Proprietorship Class 11 with Answers
MCQs of Financial Statements of Sole Proprietorship Class 11 with Answers for CBSE, ISC and State Boards
The purpose of preparing final accounts is to ascertain:
(a) Profit or loss
(b) Capital
(c) The value of assets
(d) Profit or loss and financial position
Ans – (d)
The Profit and Loss Account shows:
(a) Financial Position of the Concern
(b) Gross Profit
(c) Net Profit
(d) Net Profit and Financial Position
Ans – (c)
Expenditure incurred to make purchased machine ready for use is
(a) Deferred Revenue Expenditure
(b) Capital Expenditure
(c) Revenue Expenditure
(d) None of these
Ans – (b)
Balance Sheet shows:
(a) Profit or Loss
(b) Financial Position
(c) Errors of Accounts
(d) Total Debtors
Ans – (b)
Final Accounts are prepared:
(a) at the end of calendar year
(b) At the end of Assessment year
(c) On every Diwali
(d) At the end of Accounting Year
Ans – (d)
Expenditure incurred to repair an existing building is
(a) Deferred Revenue Expenditure
(b) Capital Expenditure
(c) Revenue Expenditure
(d) None of these
Ans – (c)
Trading and Profit and Loss Account is prepared:
(a) For a particular period
(b) On a particular date
(c) For the whole year
(d) None of above
Ans – (a)
Balance Sheet is prepared:
(a) For a particular period
(b) On a particular date
(c) For the whole year
(d) None of the above
Ans – (b)
Stamp Duty paid for registration of land purchased is
(a) Deferred Revenue Expenditure
(b) Capital Expenditure
(c) Revenue Expenditure
(d) None of these
Ans – (b)
Excess of debit in Profit and Loss Account is called:
(a) Net Profit
(b) Net Loss
(c) Gross Profit
(d) Gross Loss
Ans – (b)
“Salaries and Wages” appearing in Trial Balance is shown:
(a) On the Debit Side of Trading A/c
(b) On the Debit side of P& L A/c
(c) On the Asset Side of Balance Sheet
(d) On the Liabilities Side of Balance Sheet
Ans – (b)
Capital Expenditure if accounted as Revenue Expenditure will result in
(a) Profit being overstated
(b) Profit being understated
(c) Capital Expenditure being overstated
(d) No Effect
Ans – (b)
Balance Sheet is prepared with the balances of which of the following:
(a) All balances in the Ledger
(b) Balances of Personal Accounts
(c) Balances of Real Accounts
(d) Balances of Personal and Real Accounts
Ans – (d)
Balance of Petty Cash is:
(a) Expenses
(b) Income
(c) Liability
(d) Asset
Ans – (d)
Revenue Expenditure, if accounted as Capital Expenditure will result in
(a) Profit being overstated
(b) Profit being understated
(c) Capital Expenditure being overstated
(d) No effect
Ans – (a)
Expenditure which increases the earning capacity is a
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Deferred Revenue Expenditure
(d) None of these
Ans – (a)
Fixed assets are kept:
(a) For earning revenue
(b) For conversion into cash as quickly as possible
(c) For resale
(d) For getting loan by mortgage
Ans – (a)
Goodwill is:
(a) Current Asset
(b) Tangible Asset
(c) Intangible Asset
(d) Fictitious Asset
Ans – (c)
Large advertisement expense to introduce a new product is
(a) Deferred Revenue Expenditure
(b) Revenue Expenditure
(c) Capital Expenditure
(d) None of these
Ans – (a)
Choose the Current Asset from the following:
(a) Goodwill
(b) computers
(c) Patents
(d) Prepaid Expenses
Ans – (d)
Schedule of balances prepared from ledger accounts is known as:
(a) Balance Sheet
(b) Trial Balance
(c) Statement of Accounts
(d) Statement of Affairs
Ans – (b)
Capital introduced is
(a) Capital Receipt
(b) Revenue Receipt
(c) Advance Receipt
(d) None of these
Ans – (a)
Closing Stock appearing in the Trial Balance is shown:
(a) On the Dr. side of Trading A/c
(b) On the Cr. side of Trading A/c
(c) On the Assets side of Balance Sheet
(d) On the Cr. side of Trading A/c and on the Asset side of Balance Sheet
Ans – (c)
Calculate the gross profit if rate of gross profit is 25% on sales and cost of goods sold are ₹ 1,80,000.
(a) ₹ 60,000
(b) ₹ 36,000
(c) ₹ 45,000
(d) ₹ 30,000
Ans – (a)
Cash received from Debtor is
(a) Capital Receipt
(b) Revenue Receipt
(c) Advance Receipt
(d) None of these
Ans – (b)
Sale of Goods for Cash is
(a) Capital Receipt
(b) Revenue Receipt
(c) Advance Receipt
(d) None of these
Ans – (b)
Opening Stock – ₹ 8,500
Purchases – ₹ 30,700
Direct Wages – ₹ 4,800
Interest on Loan – ₹ 2,800
Closing Stock – ₹ 9,000
Cost of goods sold will be __ .
(a) ₹ 30,000
(b) ₹ 32,000
(c) ₹ 35,000
(d) ₹ 40,000
Ans – (c)
If sales are ₹ 1,50,000 and the rate of gross profit on cost of goods sold is 25%, then Gross Profit will be:
(a) ₹ 30,000
(b) ₹ 45,000
(c) ₹ 36,000
(d) ₹ 60,000
Ans – (a)
Insurance claim for machinery damaged by fire is
(a) Capital Receipt
(b) Revenue Receipt
(c) Advance Receipt
(d) None of these
Ans – (a)
Cost of Goods Sold ₹ 1,50,000; Closing Stock ₹ 40,000; Opening Stock ₹ 60,000; Amount of purchase will be:
(a) ₹ 1,30,000
(b) ₹ 1,70,000
(c) ₹ 50,000
(d) None of these
Ans – (a)
Choose the Liquid Assets from the following:
(a) Stock
(b) Prepaid Expenses
(c) Loose Tools
(d) None of these
Ans – (d)
Insurance claim for stock damaged by fire is
(a) Capital Receipt
(b) Revenue Receipt
(c) Advance Receipt
(d) None of these
Ans – (b)
Which of the following will be treated as drawings of the proprietor:
(a) Income Tax
(b) Advance Payment of Income Tax
(c) Life Insurance Premium
(d) All of these
Ans – (c)
Current liabilities are expected to be paid
(a) Within 3 months
(b) Within 6 months
(c) Within 1 year
(d) Within 2 year
Ans – (c)
Bad Debts recovered is
(a) Capital Receipt
(b) Revenue Receipt
(c) Advance Receipt
(d) None of these
Ans – (b)
Sale of Plant and Machinery is
(a) Capital Receipt
(b) Revenue Receipt
(c) Advance Receipt
(d) None of these
Ans – (a)
Computers owned by the enterprise are classified as:
(a) Current Assets
(b) Liquid Assets
(c) Tangible Assets
(d) Intangible Assets
Ans – (c)
Which of the following is not a part of financial statements:
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet
(d) Trial Balance
Ans – (d)
Loan raised is
(a) Capital Receipt
(b) Revenue Receipt
(c) Advance Receipt
(d) None of these
Ans – (a)
Which type of expenses are shown in Trading Account?
(a) Operating Expenses
(b) Direct Expenses
(c) Indirect Expenses
(d) Direct and Indirect Expenses
Ans – (b)
Current liabilities are the liabilities which are payable
(a) within one year
(b) withing two years
(c) within three years
(d) within four years
Ans – (a)
Computers owned by a firm are
(a) Tangible Assets
(b) Current Assets
(c) Liquid Assets
(d) Intangible Assets
Ans – (a)
Loss on sale of an old car is transferred to the debit of
(a) Profit & Loss Account
(b) Car Account
(c) Depreciation Account
(d) Trading Account
Ans – (a)
Sales equals to
(a) Cost of Goods Sold + Gross Profit
(b) Cost of Goods Sold – Gross Profit
(c) Gross Profit – Cost of Goods Sold
(d) Purchases + Gross Profit
Ans – (a)
Goodwill is a
(a) Fictitious Asset
(b) Tangible Asset
(c) Intangible Asset
(d) Current Asset
Ans – (c)
Returns Inward in the Trial Balance is deducted from
(a) Purchases
(b) Sales
(c) Returns Outward
(d) Gross Profit
Ans – (b)
Financial Statements includes
(a) Trial Balance
(b) Trading and Profit & Loss Account
(c) Balance Sheet
(d) Trading and Profit & Loss Account and Balance Sheet
Ans – (d)
Which type of expenses out of the following are shown in Trading Account?
(a) Direct Expenses
(b) Indirect Expenses
(c) Opening Expenses
(d) Direct and Indirect Expenses
Ans – (a)
Which statement shows financial position of the business?
(a) Trading Account
(b) Profit & Loss Account
(c) Balance Sheet
(d) Trial Balance
Ans – (c)
Which of the following is correct?
(a) Operating Profit = Net Profit – Non-operating Expenses – Non-operating Income
(b) Operating Profit = Net Profit + Non-operating Expenses + Non-operating Income
(c) Operating Profit = Net Profit + Non-operating Expenses – Non-operating Income
(d) Operating Profit = Net Profit – Non-operating Expenses + Non-operating Income
Ans – (c)
Carriage Outwards is transferred to
(a) Trading Account
(b) Profit & Loss Account
(c) Balance Sheet
(d) Any of Trading Account or Profit & Loss Account
Ans – (b)
Expenditure incurred on an existing fixed asset which increases the earning capacity is accounted as
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Deferred Revenue Expenditure
(d) General Expenditure
Ans – (a)
Closing Stock inside the Trial Balance is shown in
(a) Trading Account
(b) Profit & Loss Account
(c) Balance Sheet
(d) None of these
Ans – (c)
Closing Stock is valued at
(a) cost
(b) Net Realisable Value (Market Value)
(c) Cost or Market Price whichever is less
(d) Cost or market Price whichever is higher
Ans – (c)
Revenue Expense is transferred to
(a) Profit & Loss Account
(b) Trading and Profit & Loss Account
(c) Balance Sheet
(d) Purchases Account
Ans – (b)
Revenue is transferred to
(a) Profit & Loss Account
(b) Trading Account
(c) Balance Sheet
(d) None of these
Ans – (b)
Capital Expenditure is shown in
(a) Trading Account
(b) Profit & Loss Account
(c) Balance Sheet
(d) None of these
Ans – (c)
Capital Receipts are shown in
(a) Balance Sheet
(b) Trading Account
(c) Profit & Loss Account
(d) Capital Account
Ans – (a)
Outstanding Salaries is shown or transferred to
(a) an asset in the Balance Sheet
(b) a liability in the Balance Sheet
(c) Trading Account
(d) both (b) and (c)
Ans – (d)
Large advertisement expenditure to introduce a new product is
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Deferred Revenue Expenditure
(d) None of these
Ans – (c)
Purchase of machinery for sale is
(a) Revenue Expenditure
(b) Capital Expenditure
(c) Deferred Revenue Expenditure
(d) None of these
Ans – (a)
Computers purchased for use is
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Deferred Revenue Expenditure
(d) None of these
Ans – (a)
After closing entries have been posted, the balance of Profit & Loss Account will be
(a) A debit if profit has been earned
(b) A debit if loss has been incurred
(c) A credit if loss has been incurred
(d) Nil
Ans – (b)
Balance Sheet is
(a) a list of balances of all the accounts in the books of a business
(b0 an account showing trading activities of a business
(c) an account showing the financial position of a business as on a certain date
(d) a list of balances of assets, liabilities and capital of a business at a certain date
Ans – (d)
Which of the following is not the part of Financial Statements?
(a) Trial Balance
(b) Trading Account
(c) Profit & Loss Account
(d) Balance Sheet
Ans – (a)
Balance Sheet is prepared to determine
(a) Operating profit
(b) Gross Profit
(c) Net Profit
(d) Financial position
Ans – (d)
Which of the following assets is valued at lower of Cost and Net Realisable Value?
(a) Sundry Debtors
(b) Investments
(c) Goodwill
(d) Stock (Inventories)
Ans – (d)
Which of the following statements is correct?
(a) Balance Sheet is always prepared in the order of liquidity
(b) Balance Sheet is always prepared in the order of permanence
(c) Liabilities and Assets side of the Balance Sheet always match
(d) Liabilities and Assets side of the Balance Sheet do not match
Ans – (C)
Operating Profit means
(a) Gross Profit for the period
(b) Net Profit for the period
(c) Profit from the Operating Activities of the firm for the period
(d) None of the above
Ans – (c)
Net Profit of Mohan is ₹ 15,00,000. His non-operating expenses are ₹ 3,00,000 and non-operating incomes are ₹ 2,00,000. His operating profit is
(a) ₹ 15,00,000
(b) ₹ 18,00,000
(c) ₹ 16,00,000
(d) ₹ 20,00,000
Ans – (c)
Operating Profit earned by Sanjay in an year was ₹ 17,00,000. His non-operating income was ₹ 1,50,000 and non-operating expenses were ₹ 4,00,000. His Net Profit is
(a) ₹ 17,00,000
(b) ₹ 18,50,000
(c) ₹ 13,00,000
(d) ₹ 14,50,000
Ans – (d)
Goods purchased ₹ 2,00,000, Sales ₹ 1,10,000. Margin 25% on sales. The value of closing Stock is
(a) ₹ 90,000
(b) ₹ 7,500
(c) ₹ 1,17,500
(d) ₹ 1,50,000
Ans – (c)
If Sales are ₹ 20,000 and the rate of Gross Profit on Cost of Goods Sold is 25%, then the Cost of Goods Sold will be
(a) ₹ 16,000
(b) ₹ 17,000
(c) ₹ 15,000
(d) ₹ 18,000
Ans – (a)
If Cost of Goods Sold is ₹ 80,700, Opening Stock ₹ 5,800 and Closing Stock ₹ 6,000, then the amount of Purchase will be
(a) ₹ 80,500
(b) ₹ 74,900
(c) ₹ 74,700
(d) ₹ 80,900
Ans – (d)
During the year ended 31st March, 2025, all sales were made at a Gross Profit margin of 10%. Sales were ₹ 25,00,000, Purchases were ₹ 22,00,000 and Closing Stock was ₹ 5,00,000. Value of Opening Stock would be
(a) ₹ 3,00,000
(b) ₹ 17,00,000
(c) ₹ 5,50,000
(d) ₹ 20,00,000
Ans – (c)
X, who is a sole trader, earned a profit of ₹ 22,860 in the year ended 31st March, 2025. During the year, his drawings were ₹ 16,890. On 1st April, 2024, the balance of his Capital Account was ₹ 68,920. Balance of X’s Capital Account on 31st March, 2025 will be
(a) ₹ 74,000
(b) ₹ 75,000
(c) ₹ 74,890
(d) ₹ 76,250
Ans – (c)
