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CA Foundation Final Accounts of Sole Proprietors — practice questions — page 2

Explore 80 free Final Accounts of Sole Proprietors questions in CA Foundation Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Final Accounts of Sole Proprietors questions and exercises with answers

Showing questions 31–60 of 80.

Closing stock cost Rs 50,000 but its net realisable value is Rs 42,000. It is shown atRead the answer and worked solution →Rent is Rs 4,000 a month. Rs 44,000 was paid for the year. Outstanding rent at year end isRead the answer and worked solution →Rs 18,000 premium paid on 1 October for twelve months. At the 31 March year end, prepaid insurance isRead the answer and worked solution →Rs 24,000 premium paid on 1 July covers twelve months. Insurance charged for the year ending 31 March isRead the answer and worked solution →Debtors are Rs 2,50,000 and bad debts to be written off are Rs 10,000. A 5% provision on the remaining debtors isRead the answer and worked solution →Old provision 8,000, bad debts 6,000, new provision 11,000. Net charge to profit and loss isRead the answer and worked solution →Cash taken by the owner for personal use is deducted fromRead the answer and worked solution →Opening capital Rs 3,00,000, extra capital Rs 20,000, net profit Rs 80,000, drawings Rs 30,000. Closing capital isRead the answer and worked solution →Assets are Rs 9,00,000 and outside liabilities Rs 3,50,000. The owner's capital isRead the answer and worked solution →A trader began with Rs 2,00,000 capital, then lost Rs 25,000 and withdrew Rs 15,000. Closing capital isRead the answer and worked solution →Gross profit 3,50,000; salaries 90,000; rent 60,000; depreciation 40,000; discount received 10,000. Net profit isRead the answer and worked solution →Gross profit 2,10,000; expenses 1,35,000; loan interest 15,000; commission received 8,000. Net profit isRead the answer and worked solution →Which income statement format totals all revenues and subtracts all expenses in one step?Read the answer and worked solution →A multi-step income statement begins by calculatingRead the answer and worked solution →The main purpose of an income statement is to showRead the answer and worked solution →The profit and loss account is prepared forRead the answer and worked solution →Interest on a bank loan is classified as aRead the answer and worked solution →Rent received from subletting part of a shop is shown asRead the answer and worked solution →Legal and professional fees are generally classed asRead the answer and worked solution →Classing expenses as cost of sales, selling and administrative is analysis byRead the answer and worked solution →Which item cannot be reported because it is not reliably measurable?Read the answer and worked solution →Choosing between FIFO and LIFO affects reportedRead the answer and worked solution →The depreciation charge depends on judgement about the asset'sRead the answer and worked solution →A change in the estimated useful life of an asset is appliedRead the answer and worked solution →Two units bought at Rs 10 and two at Rs 12 are all bought before two units are sold. FIFO cost of goods sold isRead the answer and worked solution →A shop buys 2 units at Rs 10, later 2 at Rs 12, then sells 2. Under LIFO the cost charged isRead the answer and worked solution →A trader holds four identical units costing Rs 10, 10, 12 and 12, and sells two. Using average cost, cost of goods sold isRead the answer and worked solution →When purchase prices rise, FIFO compared with LIFO reportsRead the answer and worked solution →Over the whole life of a business, FIFO, LIFO or average cost changes only theRead the answer and worked solution →Recoverable VAT paid on purchases is treated asRead the answer and worked solution →

Worked practice questions

Closing stock cost Rs 50,000 but its net realisable value is Rs 42,000. It is shown at

  1. Rs 50,000
  2. Rs 46,000
  3. Rs 8,000
  4. Rs 42,000
Show answer and solution

Correct answer: D. Rs 42,000

Inventory is written down to net realisable value when that is below cost, so Rs 42,000 is used.

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Rent is Rs 4,000 a month. Rs 44,000 was paid for the year. Outstanding rent at year end is

  1. Rs 48,000
  2. Rs 44,000
  3. Rs 4,000
  4. Rs 8,000
Show answer and solution

Correct answer: C. Rs 4,000

Annual rent is 48,000; with 44,000 paid, one month's rent of Rs 4,000 is still owed.

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Rs 18,000 premium paid on 1 October for twelve months. At the 31 March year end, prepaid insurance is

  1. Rs 6,000
  2. Rs 18,000
  3. Rs 9,000
  4. Rs 4,500
Show answer and solution

Correct answer: C. Rs 9,000

Six of the twelve months remain unexpired, so half of the premium, Rs 9,000, is prepaid.

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