Question : Investment purchased during the year Rs 60,000 and interest on investment received Rs 1,000. 8% interest has accrued on Investment for five month. Calculate the amount credited to Income and Expenditure account and balance of investment at the end of the year.
Option 1: interest on investment credited to Income and Expenditure Account Rs 1,000 and closing balance of Investment is Rs 61,000
Option 2: interest on investment credited to Income and expenditure account Rs 3,000 and investment at the end of the year Rs 62,000
Option 3: Interest on investment credited to Income and Expenditure Account by Rs 2,000 and balance of investment at the end of the year Rs 60,000
Option 4: interest on investment credited to Income and Expenditure Account Rs 1,000 and Investment Balance at the end of the Year Rs 60,000
Correct Answer: interest on investment credited to Income and expenditure account Rs 3,000 and investment at the end of the year Rs 62,000
Solution : Investment purchased during the year = Rs 60,000 (+) 8% interest due for five month = Rs.2,000 (60,000 X 8% X 5/12) Closing balance of investment = Rs.62,000 Amount credited to I&E A/c = Rs.2,000 + Rs.1,000 = Rs.3,000. Hence, the correct option is 2.
Question : Municipal Taxes paid during the year Rs 4,000. Municipal taxes amount to 4,000 per year and are paid upto 30th June every year. Calculate the amount of the subscription debited to the Income and Expenditure Account and also calculate the amount of subscription received in advance last year and also calculate the amount of subscription received in advance at the end of the year.
Option 1: Rs 4,000 debited to Income and Expenditure account and advance paid at the beginning of the year Rs 1,000 and Rs 1,000 paid in advance at the end of the year.
Option 2: Rs 3,000 debited to Income and Expenditure account and Rs 1,000 paid in advance at the end of the year.
Option 3: Rs 4,000 debited to Income and Expenditure Account and advance at the beginning of the year Rs 500 and Rs 500 at the end of the year.
Option 4: Rs 5,000 debited to Income and Expenditure.
Question : Interest on investment received @8%pa for full year Rs 40,000.
Calculate the amount of Investment at the beginning of the year and also calculate of value of Investment at the end of the year.
Option 1: opening balance of investment Rs 5,00,000 and closing balance Rs 5,40,000
Option 2: opening balacne of Investment Rs 5,40,000 and clsoing balance of investment Rs 5,40,000
Option 3: opening balance of investment is nil and closing balance of investment Rs 5,40,000
Option 4: opening balance of Investment is Rs 5,00,000 and closing balance of Investment is Rs 5,00,000
Question : Furniture as of 1st April, 2019—Rs. 2,20,000; Furniture (having book value as on 1st April, 2019—Rs. 20,000) sold at a gain (profit) of 20% on 31st December, 2019. Furniture purchased on 1st October, 2019 for Rs. 1,00,000; Charge depreciation @ 10% p.a. on furniture. How much the amount is to be shown in the Income and Expenditure Account?
Option 1: Profit Rs 3,700 credited to Income and Expenditure Account. Depreciation charged Rs 26,500 debited to Income and Expenditure Account.
Option 2: Profit Rs.3,700 credited to Income and Expenditure Account Rs.1,500 depreciation debited to Income and Expenditure Account
Option 3: Loss Rs. 3,700 debited to Income and Expenditure Account Rs. 20,000 depreciation debited to Income and Expenditure Account
Option 4: None of the above
Question : Interest received on match fund Investment should be
Option 1: Credited to Income and expenditure account
Option 2: Debited to Income and expenditure account
Option 3: Credited to capital fund
Option 4: Debited to the building fund
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