SSC CGL Finance – Accounting Concepts, Conventions & GAAP – Exam-Level Drill

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SSC CGL Finance – Accounting Concepts, Conventions & GAAP – Exam-Level Drill – 10 questions, subject: Finance & Economics (Tier II Paper III). Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
Sales ₹ 12,00,000; cost of goods sold ₹ 7,80,000. Salary is ₹ 13,000 a month but only ₹ 1,44,000 was paid. Rent is ₹ 5,000 a month; ₹ 66,000 was paid, including one month's rent for next year. Profit for the year is:

Correct Answer: D [₹ 2,04,000]

Explanation:

Expenses: salary 1,56,000 + rent 60,000 → 12,00,000 − 7,80,000 − 2,16,000 = 2,04,000.

2.  
Debtors ₹ 4,20,000, of which ₹ 20,000 is to be written off as bad. A provision of 2.5% is to be kept on the remaining debtors. Old provision ₹ 6,000. Debtors appear in the Balance Sheet at:

Correct Answer: C [₹ 3,90,000]

Explanation:

4,20,000 − 20,000 = 4,00,000; less 2.5% (10,000) = 3,90,000.

3.  
Stock: K cost ₹ 30,000, price ₹ 34,000, selling cost ₹ 5,000; L cost ₹ 22,000, price ₹ 30,000 after completion costing ₹ 3,000, selling cost ₹ 1,500; M cost ₹ 18,000, price ₹ 19,000, selling cost ₹ 2,000. Closing stock is valued at:

Correct Answer: B [₹ 68,000]

Explanation:

NRVs 29,000, 25,500, 17,000 → lower: 29,000 + 22,000 + 17,000 = 68,000.

4.  
Cash profit ₹ 5,10,000. Depreciation for the year ₹ 40,000; outstanding expenses increased by ₹ 9,000; income receivable increased by ₹ 12,000. Profit on the accrual basis is:

Correct Answer: D [₹ 4,73,000]

Explanation:

5,10,000 − 40,000 − 9,000 + 12,000 = 4,73,000.

5.  
Which statement about AS 1 is correct?

Correct Answer: A [Significant accounting policies should normally be disclosed in one place]

Explanation:

AS 1: policies disclosed as part of the statements, normally in one place; the other three statements contradict AS 1.

6.  
Two-quantity comparisonTwo-quantity comparison (machine: cost ₹ 8,00,000; accumulated depreciation ₹ 3,20,000; could be sold today for ₹ 3,50,000):
Quantity I: amount shown in the Balance Sheet of a going concern
Quantity II: its realisable value

Correct Answer: A [Quantity I > Quantity II]

Explanation:

QI = 8,00,000 − 3,20,000 = 4,80,000 > QII 3,50,000.

7.  
Rent received during the year ₹ 1,95,000. It includes ₹ 12,000 of last year's arrears and ₹ 15,000 received in advance for next year. Rent of this year still receivable ₹ 18,000. Rent income of the year is:

Correct Answer: C [₹ 1,86,000]

Explanation:

1,95,000 − 12,000 − 15,000 + 18,000 = 1,86,000.

8.  
During the year a firm delivered and invoiced goods worth ₹ 9,40,000. Orders worth ₹ 1,10,000 are pending delivery (advances of ₹ 25,000 received). Goods worth ₹ 30,000 sent on approval have not yet been approved. Sales revenue for the year is:

Correct Answer: D [₹ 9,40,000]

Explanation:

Only delivered goods are revenue; orders, advances and unapproved goods are not.

9.  
Spot My MistakeA firm reported profit ₹ 1,40,000 but ignored outstanding rent ₹ 8,000 and charged prepaid insurance ₹ 3,000 as this year's expense. The correct profit is:

Correct Answer: C [₹ 1,35,000]

Explanation:

1,40,000 − 8,000 (outstanding rent) + 3,000 (prepaid insurance) = 1,35,000.

10.  
An annual insurance premium of ₹ 24,000 is paid on 1 October. The accounting year ends on 31 March. The insurance expense for the year (matching and accounting period concepts) is:

Correct Answer: B [₹ 12,000]

Explanation:

Only October–March (6 months) belongs to this year: 24,000 × 6/12 = 12,000; the rest is prepaid.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics

📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
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