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CPT Model Question Papers

  1. A firm earns profit of Rs. 1,10,000. The normal rate of return ina similar type of business is 10%. The value of total assets (excluding goodwill) and total outside liabilities are Rs. 11,00,000 and Rs. 1,00,000 respectively. The value of goodwill is

    (a) Rs. 1,00,000
    (b) Rs. 10,00,000
    (c ) NIL
    (d) None of the above.
  2. The cost of stock as per physical verification of Bharat Ltd. On 10th April, 2006 was Rs. 1,20,000. The following transactions took place between 1st April, 2006 to 10th April, 2006:

    Cost of goods sold Rs. 10,000 Cost of goods purchased Rs. 10,000 Purchase returns Rs. 1,000 The value of inventory as per books on 31st March, 2006 will be

    (a) Rs. 1,19,000
    (b) Rs. 1,11,000
    (c ) Rs. 1,21,000
    (d) Rs. 1,20,000.
  3. The following data has been provided by Omega Ltd:

    Item No. Units Cost per unit Realization value per unit
    1 2 10 11
    2 10 5 4
    3 2 2 2
    The value of inventory
  4. RPC Ltd. follows the written down value method of depreciating machinery year after year due to

    (a) Comparability.
    (b) Convenience.
    (c) Consistency.
    (d) All of the above.
  5. A change in accounting policy is justified

    (a) To comply with accounting standard.
    (b) To ensure more appropriate presentation of the financial statement of the enterprise.
    (c) To comply with law.
    (d) All of the above.
  6. Purchases book records:

    (a) All cash purchases.
    (b) All credit purchases.
    (c) Credit purchases of goods in trade.
    (d) None of the above.
  7. A Bank Reconciliation Statement is prepared to know the causes for the difference between:

    (a) the balances as per cash column of Cash Book and the Pass Book.
    (b) the balance as per bank column of Cash Book and the Pass Book.
    (c) the balance as per bank column of Cash Book and balances as per cash column of Cash Book
    (d) None of the above.
  8. While finalizing the current year's profit, the company realized that there was an error in the valuation of closing stock of the previous year. In the previous year, closing stock was valued more by Rs.50,000. As a result

    (a) Previous year's profit is overstated and current year's profit is also overstated
    (b) Previous year's profit is understated and current year's profit is overstated
    (c) Previous year's profit is understated and current year's profit is also understated
    (d) Previous year's profit is overstated and current year's profit is understated
  9. In the absence of any provision in the partnership agreement, profits and losses are shared

    (a) In the ratio of capitals.
    (b) Equally.
    (c) In the ratio of loans given by them to the partnership firm.
    (d) None of the above.
  10. Fundamental accounting assumptions are

    (a) Materiality.
    (b) Business entity.
    (c) Going concern.
    (d) Dual aspect
  11. Which of the following errors are not revealed by the Trial Balance:
    (a) compensating errors;

    (b) errors of commission;
    (c) wrong balancing of an account;
    (d) wrong totalling of an account
  12. Which of the following are of capital nature?

    (a) Purchase of a goods
    (b) Cost of repair
    (c) Wages paid for installation of machinery
    (d) Rent of a factory
  13. Which of the following statement is not true:

    (a) If del-creder's commission is allowed, bad debt will not be recorded in the books of consignor
    (b) If del-creder's commission is allowed, bad debt will be debited in consignment account
    (c) Del-creder's commission is allowed by consignor to consignee
    (d) Del-creder's commission is generally relevant for credit sales
  14. Discount on issue of debentures is a __________

    (a) Revenue loss to be charged in the year of issue
    (b) Capital loss to be written off from capital reserve
    (c) Capital loss to be written off over the tenure of the debentures
    (d) Capital loss to be shown as goodwill
  15. Loss on issue of debentures is treated as ____________.

    (a) Intangible asset
    (b) Current asset
    (c) Current liability
    (d) Miscellaneous expenditure
  16. Dividends are usually paid as a percentage of ______

    (a) Authorized share capital
    (b) Net profit
    (c) Paid-up capital
    (d) Called-up capital
  17. At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partners.

    (a) Policy Amount.
    (b) Surrender Value.
    (c) Policy Value for the dead partner and Surrender Value for the rest.
    (d) Surrender Value for all the partners.
  18. Profit or loss on revaluation is shared among the partners in _______ ratio.

    (a) Old Profit Sharing.
    (b) New Profit Sharing.
    (c) Capital.
    (d) Equal.
  19. Interest on capital will be paid to the partners if provided for in the agreement but only from________

    (a) Profits.
    (b) Reserves.
    (c) Accumulated Profits.
    (d) Goodwill.
  20. The owner of the consignment stock is________

    (a) Consignor
    (b) Consignee
    (c) Debtors
    (d) None
  21. The parties to joint venture is called_________

    (a) Co-venturers
    (b) Partners
    (c) Principal & Agent
    (d) Friends
  22. The purpose of accommodation bill is_______

    (a) To finance actual purchase or sale of goods
    (b) To facilitate trade transmission
    (c) When both parties are in need of funds
    (d) None of the above
  23. The number of production or similar units expected to be obtained from the use of an asset by an enterprise is called as _________

    (a) Unit life
    (b) Useful life
    (c) Production life
    (d) Expected life
  24. Mr. A purchased a machinery costing Rs. 1,00,000 on 1st October, 2005. Transportation and installation charges were incurred amounting Rs. 10,000 and Rs. 4,000 respectively. Dismantling charges of the old machine in place of which new machine was purchased amounted Rs. 10,000. Market value of the machine was estimated at Rs. 1,20,000 on 31st March 2006. While finalising the annual accounts, A values the machinery at Rs. 1,20,000 in his books. Which of the following concepts was violated by A?

    (a) Cost concept
    (b) Matching concept
    (c) Realisation concept
    (d) Periodicity concept.
  25. M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation. The objection of the auditor is justified because

    (a) Change in the method of depreciation should be done only with the consent of the auditor
    (b) Depreciation method can be changed only from WDV to SLM and not vice versa
    (c) Change in the method of deprecation should be done only if it is required by some statute and change would result in appropriate presentation of financial statement
    (d) Method of depreciation cannot be changed under any circumstances.
  26. If Cost of goods sold is Rs.80,700, Opening stock Rs.5,800 and Closing stock Rs.6,000. Then the amount of purchase will be

    (a) Rs.80,500
    (b) Rs.74,900
    (c) Rs.74,700
    (d) Rs.80,900.
  27. External Econimics Is Form Of--

    (a) Firm
    (b) Group Of Firm
    (c) Society
    (d) None Of These
  28. Which Of Market Structure Is Known As Ideal Market Structure ?

    (a) Monopoly
    (b) Monopoly Competitation
    (c) Perpect Competation
    (d) OligopolY
  29. Revenue from sale of products, is generally, recognized in the period in which

    (a)Sale is made.
    (b)Cash is collected
    (c) Products are manufactured.
    (d) None of the above
  30. RPC Ltd. follows the written down value method of depreciating machinery year after

    year due to
    (a) Comparability.
    (b) Convenience.
    (c) Consistency.
    (d) All of the above.
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