SSC CGL Mock – Paper III Finance & Economics Mock Test 01 – Part A · Finance & Accounts
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A provision changes no customer's balance; control accounts hold only items that move the personal accounts (B12 ch 12).
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SSC CGL Mock – Paper III Finance & Economics Mock Test 01 – Part A · Finance & Accounts – 40 questions, subject: Full Mock Tests. 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.
Situation-basedMr Selvam, owner of Selva Hardware, pays his son's college fees of ₹ 48,000 from the business bank account. Which accounting concept requires the payment to be shown as drawings and not as an expense of the business?
Correct Answer: A [Business entity concept]
Explanation:
The business is treated as separate from its owner, so his private payment is drawings, not a business expense.
2.
Under AS 1 (Disclosure of Accounting Policies), the fundamental accounting assumptions are
Correct Answer: D [Going concern, consistency and accrual]
Explanation:
AS 1 names going concern, consistency and accrual as assumptions (disclosed only if not followed); prudence, substance over form and materiality are its major considerations.
3.
CalculationKarthik starts a business with cash ₹ 3,00,000. He buys goods on credit for ₹ 80,000 and furniture for cash ₹ 50,000, sells goods costing ₹ 40,000 for ₹ 55,000 in cash, pays ₹ 30,000 to the creditor and withdraws ₹ 10,000 for personal use. What are his total assets now?
Correct Answer: B [₹ 3,55,000]
Explanation:
Cash ₹ 2,65,000 + stock ₹ 40,000 + furniture ₹ 50,000 = ₹ 3,55,000; check: creditors ₹ 50,000 + capital ₹ 3,05,000 = ₹ 3,55,000.
4.
In the accounting process, which step comes immediately after recording transactions in the books of original entry?
Correct Answer: C [Classifying]
Explanation:
The order is identifying, measuring, recording, classifying, summarising, analysing and interpreting, communicating.
5.
CalculationGoods with a list price of ₹ 64,000 are bought on credit from Mani Traders at a trade discount of 15%. With what amount is the Purchases Account debited?
Correct Answer: B [₹ 54,400]
Explanation:
Trade discount is not recorded; only the net amount ₹ 64,000 × 85% = ₹ 54,400 is entered.
6.
Rent of ₹ 18,000 is paid by cheque. Under the golden rules, which account is credited?
Correct Answer: D [Bank Account]
Explanation:
Rent (nominal) is debited as an expense; the bank, the giver, is credited – Rent A/c Dr, To Bank A/c.
7.
The owner of a grocery shop takes goods costing ₹ 3,500 for household use. The correct journal entry is
Correct Answer: A [Drawings A/c Dr; To Purchases A/c]
Explanation:
Goods taken by the owner are drawings and are removed from purchases at cost.
8.
CalculationA trader settles at once for goods catalogued at ₹ 1,20,000. The supplier first deducts 10% trade discount and then 2% cash discount for prompt settlement. The cheque issued by the trader is for
Correct Answer: C [₹ 1,05,840]
Explanation:
Invoice = ₹ 1,20,000 × 90% = ₹ 1,08,000; cash discount 2% of ₹ 1,08,000 = ₹ 2,160; paid ₹ 1,05,840 (cash discount is on the amount after trade discount).
9.
CalculationA petty cashier works on an imprest of ₹ 6,000. During the week he spends ₹ 740 on stationery, ₹ 515 on postage, ₹ 1,280 on conveyance, ₹ 465 on cartage and ₹ 600 on refreshments. How much does the main cashier give him at the end of the week?
Correct Answer: B [₹ 3,600]
Explanation:
Under the imprest system the amount spent is reimbursed: ₹ 3,600, which restores the float to ₹ 6,000.
10.
Which of the following accounts normally shows a credit balance?
Correct Answer: A [Purchases returns]
Explanation:
Purchases returns reduce an expense and carry a credit balance; sales returns, carriage inwards and bills receivable carry debit balances (B12 ch 4).
11.
Starting from the credit balance as per the pass book, how are cheques deposited but not yet credited by the bank treated?
Correct Answer: C [Added]
Explanation:
The cash book already includes them; the bank has not credited them yet – so they are added to reach the cash book balance.
12.
CalculationThe cash book of Vel Stores shows a debit bank balance of ₹ 42,800. Cheques issued ₹ 9,600 have not been presented, cheques deposited ₹ 14,300 have not been credited, and the bank has credited interest of ₹ 750. The balance as per the pass book is
Correct Answer: D [₹ 38,850]
Explanation:
₹ 42,800 + ₹ 9,600 − ₹ 14,300 + ₹ 750 = ₹ 38,850 (a favourable balance – a credit balance in the pass book).
13.
Bank charges of ₹ 350 debited by the bank appear in the customer's pass book in the
Correct Answer: D [withdrawals (debit) column]
Explanation:
The pass book is the customer's account in the bank's books: deposits are credited, withdrawals and charges debited.
14.
Which of the following is NOT a reconciling item between the bank column of the cash book and the pass book?
Correct Answer: B [Cash sales of ₹ 5,000 kept in the office cash box]
Explanation:
Cash kept in the office never touches the bank account; the other three are recorded by only one party (B12 ch 5).
15.
Four errors are found after the books are closed. Which one would still have let the trial balance agree?
Correct Answer: C [A computer bought for office use debited to Purchases Account]
Explanation:
Debiting an asset to an expense is an error of principle – both sides carry the same amount, so the TB still agrees.
16.
CalculationA credit sale of ₹ 4,750 to Mala was correctly entered in the Sales Book but posted to the credit side of Mala's account. By how much will the two sides of the trial balance differ?
Correct Answer: A [₹ 9,500]
Explanation:
Mala's account lost a debit of ₹ 4,750 and gained a wrong credit of ₹ 4,750: difference 2 × ₹ 4,750 = ₹ 9,500.
17.
CalculationThe trial balance of Pandian Stores contains (₹): cash 15,400; bank 46,000; debtors 58,300; opening stock 41,500; furniture 35,000; purchases 2,24,000; wages 18,600; rent 24,000; salaries 42,000; drawings 30,000; sales 3,62,500; creditors 49,200; bank loan 60,000; discount received 1,800; and capital. The capital is
Correct Answer: B [₹ 61,300]
Explanation:
Debit balances ₹ 5,34,800 − other credit balances ₹ 4,73,500 = capital ₹ 61,300 (balancing figure).
18.
After the trial balance was drawn up, it was found that the Sales Book had been undercast by ₹ 3,600. Which rectifying entry is correct, and what is its effect on profit?
Correct Answer: A [Suspense A/c Dr; To Sales A/c ₹ 3,600 – profit rises by ₹ 3,600]
Explanation:
Customers were posted correctly; only Sales A/c is short on its credit side, so the one-sided error is completed through Suspense; crediting a nominal account raises profit.
19.
An outlay that must be capitalised (added to an asset's cost) rather than charged to revenue is
Correct Answer: D [Wages paid for installing a newly purchased machine]
Explanation:
Installation brings a new asset to working condition and is part of its cost; the others keep the business running this year.
20.
CalculationA machine is bought for ₹ 3,46,000; freight ₹ 6,000 and installation ₹ 8,000 are paid. Its residual value is ₹ 36,000 and useful life 5 years. Annual depreciation by the straight line method is
Correct Answer: C [₹ 64,800]
Explanation:
Cost = ₹ 3,60,000 (freight and installation included); (₹ 3,60,000 − ₹ 36,000) ÷ 5 = ₹ 64,800.
21.
CalculationA delivery van costing ₹ 2,50,000 is depreciated at 15% p.a. by the written down value method. Its book value at the end of the second year is
Correct Answer: B [₹ 1,80,625]
Explanation:
₹ 2,50,000 × 0.85 × 0.85 = ₹ 1,80,625 – the rate applies to the opening book value each year.
22.
Situation-basedA machine was bought on 1 June, installed and made ready for use on 1 September, and actually started production on 1 November. Under AS 10, depreciation begins on
Correct Answer: D [1 September]
Explanation:
Depreciation begins when the asset is available for use.
23.
For a trader, which of the following is a capital receipt?
Correct Answer: C [A loan of ₹ 2,00,000 received from a bank]
Explanation:
A loan must be repaid – it is a capital receipt, not income.
24.
CalculationClosing stock of three items (cost / net realisable value): A ₹ 22,000 / ₹ 25,500; B ₹ 18,000 / ₹ 15,600; C ₹ 31,000 / ₹ 31,400. As per AS 2 the stock is valued at
Correct Answer: A [₹ 68,600]
Explanation:
Lower of cost and NRV item by item: 22,000 + 15,600 + 31,000 = ₹ 68,600.
25.
CalculationA half-finished item has cost ₹ 780 so far. It can be sold for ₹ 900 after spending ₹ 85 to complete it and ₹ 55 on selling it. At what value is it carried in inventory?
Correct Answer: C [₹ 760]
Explanation:
NRV = ₹ 900 − ₹ 85 − ₹ 55 = ₹ 760, lower than cost ₹ 780.
26.
CalculationA dealer begins with 150 units @ ₹ 40, buys 300 units @ ₹ 44 and later 150 units @ ₹ 52, and sells 420 units in all. At what value will the 180 unsold units be carried under the FIFO method?
Correct Answer: D [₹ 9,120]
Explanation:
Closing 180 units are the latest: 150 @ ₹ 52 + 30 @ ₹ 44 = ₹ 9,120.
27.
For items that are ordinarily interchangeable, the cost formulas named in AS 2 are
Correct Answer: B [FIFO and weighted average cost]
Explanation:
AS 2 names FIFO or weighted average; LIFO is not named; specific identification is for items that are not interchangeable.
28.
CalculationFrom the following find the gross profit: opening stock ₹ 48,000; purchases ₹ 2,64,000; purchases returns ₹ 4,000; carriage inwards ₹ 7,000; wages ₹ 11,000; sales ₹ 3,60,000; sales returns ₹ 6,000; closing stock ₹ 52,000.
Correct Answer: A [₹ 80,000]
Explanation:
Net sales ₹ 3,54,000 − cost of goods sold (₹ 48,000 + ₹ 2,60,000 + ₹ 7,000 + ₹ 11,000 − ₹ 52,000 = ₹ 2,74,000) = ₹ 80,000.
29.
Carriage outwards paid on goods delivered to customers is shown on the
Correct Answer: A [debit side of the Profit and Loss Account]
Explanation:
Carriage outwards is a selling expense (indirect) – P&L debit; carriage inwards goes to Trading (B12 ch 9).
30.
CalculationNet profit before adjustments is ₹ 1,25,000. Adjustments: salary outstanding ₹ 6,000; rent prepaid ₹ 2,500; commission accrued ₹ 3,000; interest received in advance ₹ 1,800. The adjusted net profit is
Correct Answer: D [₹ 1,22,700]
Explanation:
₹ 1,25,000 − ₹ 6,000 + ₹ 2,500 + ₹ 3,000 − ₹ 1,800 = ₹ 1,22,700 (outstanding and advance lower profit; prepaid and accrued raise it).
31.
A shop fixes its selling price by adding one-third of cost as gross profit. Expressed on selling price, the gross profit margin is
Correct Answer: B [25%]
Explanation:
On cost 1/3 → on sales (1/3) ÷ (1 + 1/3) = 1/4 = 25%.
32.
In a sole trader's Balance Sheet arranged in the order of liquidity, the first item on the assets side is
Correct Answer: C [Cash in hand]
Explanation:
Order of liquidity begins with the most liquid asset – cash in hand – and ends with goodwill and land (B12 ch 9, marshalling).
33.
A club receives a legacy of ₹ 1,50,000. Unless the question says otherwise, it is
Correct Answer: D [added to the capital fund in the Balance Sheet]
Explanation:
Legacies and life membership fees are usually capital receipts added to the capital fund.
34.
CalculationSubscriptions received by a club during 2025-26 were ₹ 1,08,000, including ₹ 7,000 for 2024-25 and ₹ 5,500 for 2026-27. Subscriptions of ₹ 9,000 for 2025-26 are still due, and ₹ 4,000 for 2025-26 had been received in advance in 2024-25. Subscription income for 2025-26 is
Correct Answer: C [₹ 1,08,500]
Explanation:
₹ 1,08,000 − ₹ 7,000 − ₹ 5,500 + ₹ 9,000 + ₹ 4,000 = ₹ 1,08,500 (B12 ch 10, Subscription Sieve).
35.
Which of the following is true of a Receipts and Payments Account?
Correct Answer: A [It begins with the opening cash and bank balances]
Explanation:
R&P is a summary of the cash book: all cash receipts and payments, capital or revenue, starting with the opening cash and bank balance; it never shows non-cash items (B12 ch 10).
36.
CalculationOn 1 April a library had cash ₹ 14,000, furniture ₹ 45,000, books ₹ 80,000, investments ₹ 60,000 and subscriptions due ₹ 3,000; subscriptions received in advance ₹ 2,000, salary outstanding ₹ 4,500 and a prize fund of ₹ 25,000. Its capital fund on that date was
Correct Answer: B [₹ 1,70,500]
Explanation:
Assets ₹ 2,02,000 − liabilities including the prize fund ₹ 31,500 = ₹ 1,70,500.
37.
A bill drawn on 31 October 2025 is payable 4 months after date. Assuming no holiday falls on the relevant days, its due date is
Correct Answer: C [3 March 2026]
Explanation:
31 October + 4 months = 28 February 2026 (February has no 31st, so its last day) + 3 days of grace = 3 March 2026.
38.
Match the followingMatch the section of the Negotiable Instruments Act, 1881 with its subject:
P. Section 4 Q. Section 5 R. Section 6 S. Section 22
1. Bill of exchange 2. Days of grace 3. Promissory note 4. Cheque
P. Section 4 Q. Section 5 R. Section 6 S. Section 22
1. Bill of exchange 2. Days of grace 3. Promissory note 4. Cheque
Correct Answer: D [P-3, Q-1, R-4, S-2]
Explanation:
s. 4 promissory note; s. 5 bill of exchange; s.
39.
CalculationDebtors' ledger figures for April: opening balances ₹ 85,000; credit sales ₹ 2,10,000; cash sales ₹ 40,000; returns inward ₹ 6,500; cash received from debtors ₹ 1,72,000; discount allowed ₹ 3,500; bills receivable received ₹ 25,000; bad debts written off ₹ 2,000. The closing balance of the Debtors' Ledger Adjustment Account in the general ledger is
Correct Answer: A [₹ 86,000]
Explanation:
85,000 + 2,10,000 − 6,500 − 1,72,000 − 3,500 − 25,000 − 2,000 = ₹ 86,000; cash sales touch no customer's account.
40.
Which item never enters the Debtors' Ledger Adjustment Account?
Correct Answer: B [Provision for doubtful debts]
Explanation:
A provision changes no customer's balance; control accounts hold only items that move the personal accounts (B12 ch 12).
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