SSC CGL Finance – Final Accounts: Manufacturing, Trading, P&L, Appropriation & Balance Sheet – Level 2 · Exam Level · Paper III Sprint

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SSC CGL Finance – Final Accounts: Manufacturing, Trading, P&L, Appropriation & Balance Sheet – Level 2 · Exam Level · Paper III Sprint – 15 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.  
Statement-basedClosing stock given only in the adjustments (not in the trial balance).
I. It is credited to the Trading Account.
II. It is shown as a current asset in the Balance Sheet.
Which is/are correct?

Correct Answer: A [Both I and II]

Explanation:

An adjustment has a double effect: Trading Cr and Balance Sheet asset.

2.  
Closing stock ₹ 45,000 appears inside the trial balance (with adjusted purchases). It will be shown:

Correct Answer: C [only in the Balance Sheet]

Explanation:

Items inside the TB are shown once; purchases are already adjusted for it.

3.  
Debtors ₹ 1,20,000; bad debts in trial balance ₹ 3,000; old provision ₹ 4,000. Write off further bad debts ₹ 2,000 and keep a 5% provision on debtors. Total charge to P&L:

Correct Answer: D [₹ 6,900]

Explanation:

3,000 + 2,000 + 5% of 1,18,000 (5,900) − 4,000 = 6,900.

4.  
Net profit before the manager's commission is ₹ 63,000. The manager gets 5% of net profit after charging his commission. His commission is:

Correct Answer: B [₹ 3,000]

Explanation:

Answer: ₹ 3,000. 63,000 × 5/105 = 3,000.

5.  
Stock costing ₹ 25,000 was lost by fire; the insurer admitted a claim of ₹ 18,000. The amount debited to P&L is:

Correct Answer: A [₹ 7,000]

Explanation:

Loss = 25,000 − 18,000 = 7,000; claim ₹ 18,000 is an asset.

6.  
Gross profit is 33⅓% on cost. As a percentage of sales it is:

Correct Answer: D [25%]

Explanation:

Margin Switch: (100/3)/(100 + 100/3) = 1/4 = 25%.

7.  
Opening stock ₹ 20,000, purchases ₹ 1,40,000, sales ₹ 1,80,000, gross profit 20% on sales. Closing stock is:

Correct Answer: C [₹ 16,000]

Explanation:

COGS = 80% of 1,80,000 = 1,44,000 → 1,60,000 − 1,44,000 = 16,000.

8.  
Match the followingMatch the items with where they are debited:
P. Depreciation on factory machinery Q. Carriage inwards on goods for resale R. Interest on bank loan
1. Trading A/c 2. P&L A/c 3. Manufacturing A/c

Correct Answer: B [P-3, Q-1, R-2]

Explanation:

Factory depreciation → Manufacturing; carriage inwards → Trading; loan interest → P&L.

9.  
Assertion–Reason
A: Carriage outwards is debited to the Profit & Loss Account.
R: It is incurred in delivering goods to customers, a selling expense.

Correct Answer: B [Both A and R are true and R explains A]

Explanation:

Selling and distribution expenses are indirect → P&L.

10.  
Two-quantity comparison
Quantity I: gross profit of 20% on cost, expressed as % of sales
Quantity II: 16

Correct Answer: A [Quantity I > Quantity II]

Explanation:

Answer: Quantity I > Quantity II. 20/120 × 100 = 16.67 > 16.

11.  
Partners' capitals are ₹ 2,00,000 and ₹ 1,50,000; the deed allows interest on capital at 8% p.a. Total interest on capital is:

Correct Answer: C [₹ 28,000]

Explanation:

8% of 3,50,000 = 28,000 (16,000 + 12,000).

12.  
Commission earned ₹ 2,500 but not yet received at the year-end is:

Correct Answer: A [added to commission received in P&L and shown as a current asset]

Explanation:

Accrued income (OA adds): income up, asset created.

13.  
Rent received in advance ₹ 6,000 at the year-end is:

Correct Answer: D [deducted from rent received and shown as a current liability]

Explanation:

Income received in advance (PA deducts) → liability.

14.  
Arrange in orderArrange in order of liquidity, most liquid first: (1) Debtors (2) Cash in hand (3) Machinery (4) Closing stock

Correct Answer: A [2, 1, 4, 3]

Explanation:

Cash → debtors → stock → machinery.

15.  
Spot My Mistake“Salary outstanding ₹ 3,000 was added to salaries in P&L and shown on the assets side of the Balance Sheet.” What is the correct second effect?

Correct Answer: C [Show ₹ 3,000 as a current liability]

Explanation:

Outstanding expense = amount owed → liability, not asset.

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