PGT Commerce Level-3 (HTEТ), Exam 2024

Total Questions: 150

91. Answer the following questions by selecting the most appropriate option.

According to R.N. Carter, "_____is the science and art of recording correctly in the books of account all those business transactions that result in the transfer of money or money's worth."

Correct Answer: 2. Book-keeping
Solution:

According to R.N. Carter, book-keeping is defined as "the science and art of recording correctly in the books of account all those business transactions that result in the transfer of money or money's worth."
It focuses primarily on the systematic and chronological recording of monetary transactions, forming the foundation of accounting.

92. In sinking fund method of depreciation, the amount of depreciation:

Correct Answer: 1. Remains constant over years
Solution:

In the sinking fund method, a fixed amount is charged as depreciation every year throughout the asset's useful life. This fixed annual charge is invested outside the business to accumulate a fund (with interest) sufficient to replace the asset at the end of its useful life.
Although the total fund value increases due to the interest earned, the depreciation expense recorded in the books remains uniform each year.

93. What chart is used to identify the changes or the trend that exist in a series of data?

Correct Answer: 1. Line or Arithmetic chart
Solution:

A line or arithmetic chart is used to depict trends and changes over time in a data series.
By connecting plotted data points with straight lines, it clearly shows upward or downward movements, making it ideal for analyzing patterns or tendencies over a period.

94. The difference in both balances (bank balance as per cash book and pass book) may not arise due to which of the following reasons?

Correct Answer: 2. Like and dislikes
Solution:

Differences between balances as per the cash book and passbook usually arise due to timing differences (e.g., cheques not cleared), errors, or unrecorded transactions-not because of subjective reasons like "likes and dislikes." Hence, this option is not a valid cause.

95. From the following particulars, calculate balance as per pass book for Verma Offset Ltd.:

(i) Balance as per cash book is ₹2,40,000.
(ii) Cheques issued but not presented in the bank amounts to ₹1,36,000.
(iii) Cheques deposited in bank but not yet cleared amounts to ₹90,000.
(iv) Bank charges amount of ₹300.
(v) Interest credited by bank amounts of ₹ 1,250.

Correct Answer: 1. ₹2,86,950
Solution:

To find the balance as per Pass Book, the following adjustments are made to the Cash Book balance:
Given data: Balance as per Cash Book = ₹2,40,000
Cheques issued but not presented = ₹1,36,000
Cheques deposited but not yet cleared = ₹90,000
Bank charges =300; Interest credited by bank = ₹1,250
Calculation: Balance as per Cash Book = ₹2,40,000
Add: Cheques issued but not presented = + ₹1,36,000
Add: Interest credited by bank = +₹1,250
Less: Cheques deposited but not yet cleared = - ₹90,000
Less: Bank charges = - ₹300
Balance as per Pass Book = ₹ 2,86,950
Therefore, Balance as per Pass Book = ₹ 2,86,950.

96. The details pertaining to a company for the year 2022 are:

Current Ratio = 2.5 : 1; Liquid Ratio = 1.25 : 1; Inventory as on December 31, 2022 = ₹ 21 Lakh; and each of bank overdraft and pre-paid expenses is equal to zero.
Using these details find out the current liabilities of the company as on December 31, 2022:

Correct Answer: 2. ₹ 16,80,000
Solution:

Current Ratio = CA/CL = 2.5 : 1
⇒ CA = 2.5 x CL
Liquid Ratio = (CA - Inventory)/CL
= 1.25 : 1
Inventory = ₹ 21,00,000;
Bank overdraft = 0; Prepaid = 0
Calculation:
(CA Inventory)/CL = 1.25
⇒ (2.5CL 21,00,000)/CL = 1.25
2.5-21,00,000/CL = 1.25
⇒ 1.25 21,00,000/CL
⇒ CL =21,00,000/1.25 = 16,80,000.

97. How is interest on debentures typically treated in the financial statement of a company?

Correct Answer: 4. As a charge against the profits of the company
Solution:

Debenture interest is a finance cost debited to the Profit & Loss Account; it's a prior charge on profits (accrued unpaid portion also shown as a liability).

98. Which of the following is not exempted from GST?

Correct Answer: 3. Inter-State sale
Solution:

Interest on loans is exempt; staff travel reimbursements (in course of employment) are outside GST; certain services to government can be exempt. Inter-State sales are taxable (IGST), hence not exempt.

99. Accounting for retirement benefits in the financial statement of employers comes under which Indian Accounting Standard?

Correct Answer: 3. AS-15
Solution:

Employee/retirement benefits are accounted for as per AS-15 (Employee Benefits).

100. The original cost of the asset is ₹2,50,000. The useful life of the asset is 10 years and net residual value is estimated to be ₹50,000.

Calculate the amount of depreciation to be charged every year:

Correct Answer: 1. ₹ 20,000
Solution:

Straight-line depreciation = (Cost - Residual)/Life
= (₹ 2,50,000 - ₹50,000)/10
= 2,00,000/10 = ₹20,000 per year.