SSC CGL Mock – Paper III Finance & Economics Mock Test 04 – Part A · Finance & Accounts | Online Quiz

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SSC CGL Mock – Paper III Finance & Economics Mock Test 04 – 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.

Match the followingMatch each accounting concept with the practice based on it:
P. Going concern Q. Conservatism R. Consistency S. Matching
1. Same depreciation method every year 2. Provision made for doubtful debts 3. Machinery shown at cost less depreciation, not at break-up value 4. Outstanding wages charged this year

Correct Answer: D [P-3, Q-2, R-1, S-4]

Explanation:

Going concern → cost less depreciation; conservatism → provide for losses; consistency → same method; matching → this year's expenses against this year's revenue.

Situation-basedA wholesaler is deciding whether to supply goods on credit to a retail firm. From the firm's accounts, the wholesaler is mainly interested in

Correct Answer: A [the firm's ability to pay its dues on time]

Explanation:

Suppliers and trade creditors are external users who look at short-term ability to pay.

CalculationA firm's cash receipts from fees were ₹ 7,40,000 and its cash expenses ₹ 4,15,000. During the year fees receivable rose from ₹ 18,000 to ₹ 27,000, outstanding expenses from ₹ 9,000 to ₹ 14,500, prepaid expenses fell from ₹ 3,000 to ₹ 2,000 and fees received in advance rose from ₹ 6,000 to ₹ 11,000. Depreciation is ₹ 20,000. The accrual-basis profit is

Correct Answer: B [₹ 3,02,500]

Explanation:

Income ₹ 7,44,000 − expenses including depreciation ₹ 4,41,500 = ₹ 3,02,500.

Under Section 128(1) of the Companies Act, 2013, a company must keep its books of account

Correct Answer: C [on the accrual basis and according to the double entry system]

Explanation:

s. 128(1) requires the accrual basis and the double entry system.

CalculationA trader's total assets are ₹ 6,40,000 and liabilities ₹ 1,90,000. During the month he buys machinery on credit for ₹ 75,000, pays creditors ₹ 60,000, earns commission of ₹ 12,000 in cash and withdraws ₹ 25,000. His capital at the end of the month is

Correct Answer: A [₹ 4,37,000]

Explanation:

Capital ₹ 4,50,000 + commission ₹ 12,000 − drawings ₹ 25,000 = ₹ 4,37,000; credit purchase and payment of creditors change assets and liabilities equally.

Under the modern (accounting equation) rules, which of these items is recorded on the CREDIT side when it increases?

Correct Answer: D [Outstanding salary]

Explanation:

Liabilities, capital and revenues increase by credit; outstanding salary is a liability, the other three are assets or drawings.

CalculationHari owes ₹ 84,000 to his supplier Veera & Co. He settles the account by cheque after a cash discount of 2½%. The cheque is for

Correct Answer: B [₹ 81,900]

Explanation:

Discount = 2½% of ₹ 84,000 = ₹ 2,100; cheque = ₹ 84,000 − ₹ 2,100 = ₹ 81,900; Veera & Co.

CalculationDuring a week a shirt dealer (a) sold 80 shirts @ ₹ 450 to Ravi on credit, less 10% trade discount; (b) sold 40 shirts @ ₹ 600 to Lakshmi on credit, less 5% trade discount; (c) sold 20 shirts @ ₹ 500 to Kumar for cash; (d) sold an old office typewriter on credit for ₹ 6,000. The Sales Book total is

Correct Answer: C [₹ 55,200]

Explanation:

Only credit sales of goods, net of trade discount: ₹ 32,400 + ₹ 22,800 = ₹ 55,200; cash sales go to the cash book and the typewriter to the journal proper.

CalculationA cash account shows a closing balance of ₹ 31,450. Receipts during the month were ₹ 87,600 and payments ₹ 92,150. The opening cash balance was

Correct Answer: C [₹ 36,000]

Explanation:

Opening = closing − receipts + payments = ₹ 31,450 − ₹ 87,600 + ₹ 92,150 = ₹ 36,000.

10.

CalculationMuthu keeps books by single entry. On 1 April his assets were ₹ 2,80,000 and liabilities ₹ 70,000; on 31 March assets were ₹ 3,46,000 and liabilities ₹ 81,000. He withdrew ₹ 36,000 during the year and brought in fresh capital of ₹ 25,000. His profit for the year is

Correct Answer: D [₹ 66,000]

Explanation:

Profit = closing capital ₹ 2,65,000 − opening capital ₹ 2,10,000 + drawings ₹ 36,000 − fresh capital ₹ 25,000 = ₹ 66,000.

11.

CalculationThe pass book shows an overdraft of ₹ 24,600. Cheques deposited ₹ 8,300 have not been credited; a cheque of ₹ 2,350 issued was entered in the cash book as ₹ 3,250; bank charges ₹ 240 are not in the cash book. The balance as per the cash book is

Correct Answer: A [Overdraft ₹ 16,960]

Explanation:

Start −24,600: + 8,300 (deposit only in cash book) + 240 (charge only in pass book) − 900 (cash book shows 900 more payment) = -16,960 → overdraft ₹ 16,960.

12.

CalculationBank column of the cash book: ₹ 52,000 debit. Not yet in the cash book: interest credited ₹ 600, bank charges ₹ 200 and a customer's cheque of ₹ 4,000 dishonoured. Timing items: cheques issued not presented ₹ 9,500, cheques deposited not credited ₹ 11,000. The pass book balance is

Correct Answer: B [₹ 46,900]

Explanation:

Amended cash book ₹ 48,400; then ₹ 48,400 + ₹ 9,500 − ₹ 11,000 = ₹ 46,900.

13.

A cheque of ₹ 6,500 received from Ganesh and deposited has been dishonoured; only the bank has recorded the dishonour so far. The entry made while amending the cash book is

Correct Answer: D [Ganesh A/c Dr; To Bank A/c ₹ 6,500]

Explanation:

The dishonour reduces the bank balance and revives Ganesh's debt: Ganesh Dr, To Bank (B12 ch 5).

14.

The only difference between the cash book and the pass book is one amount in which two digits were interchanged in the cash book. Which of these could be the difference?

Correct Answer: C [₹ 4,950]

Explanation:

A transposition changes a number by a multiple of 9: 4,950 = 9 × 550 (e.g.

15.

CalculationA trial balance was made to agree by putting ₹ 2,700 on the debit side of a Suspense Account. The errors found were: (i) Sales Returns of ₹ 1,200 not posted to the Sales Returns Account; (ii) salary of ₹ 6,300 posted to Salaries Account as ₹ 3,600; (iii) one error in the Purchases Returns Book. For Suspense to close, the Purchases Returns Book must have been

Correct Answer: B [undercast by ₹ 1,200]

Explanation:

Suspense Dr 2,700 = debit side short by 2,700.

16.

A credit purchase of ₹ 6,840 from Mohan was entered in the Purchases Book as ₹ 6,480. Which is correct?

Correct Answer: A [The trial balance agrees; rectify by Purchases A/c Dr, To Mohan A/c ₹ 360]

Explanation:

An error in the book of original entry is carried to both postings, so the TB agrees; both accounts are short by 360.

17.

Goods sold on credit to Ramesh for ₹ 3,250 were posted to the credit side of Suresh's account. The rectifying entry after the trial balance is

Correct Answer: D [Ramesh A/c Dr ₹ 3,250; Suresh A/c Dr ₹ 3,250; To Suspense A/c ₹ 6,500]

Explanation:

Ramesh needs a debit of 3,250; Suresh's wrong credit of 3,250 is cancelled by a debit; the credit side was 6,500 heavier, so Suspense is credited ₹ 6,500.

18.

The credit side of a trial balance exceeds the debit side by ₹ 7,300, and there is only one error. Which of these errors explains it?

Correct Answer: A [Discount allowed of ₹ 3,650 posted to the credit side of Discount Allowed Account]

Explanation:

Posting 3,650 on the wrong side moves the TB by twice the amount: credit side +3,650 and debit side −3,650 = credit excess 7,300 (B12 ch 6, Half the Difference).

19.

An asset costing ₹ 2,00,000 is expected to have a book value of ₹ 81,920 after 4 years under the written down value method. The rate of depreciation is

Correct Answer: B [20%]

Explanation:

(1 − r)⁴ = 81,920 ÷ 200,000 = 0.4096 = 0.8⁴, so r = 20%.

20.

CalculationA machine was sold after 4 years for ₹ 1,06,000 at a profit of ₹ 6,000. Depreciation had been ₹ 22,500 a year by the straight line method. The original cost of the machine was

Correct Answer: C [₹ 1,90,000]

Explanation:

Book value = ₹ 1,06,000 − ₹ 6,000 = ₹ 1,00,000; cost = book value + 4 × ₹ 22,500 = ₹ 1,90,000 (B12 ch 7, Back-solve the Cost).

21.

CalculationA mine is taken on lease for ₹ 48,00,000; the estimated reserve is 1,200,000 tonnes. Extraction is 150,000 tonnes in year 1 and 210,000 tonnes in year 2. Total depletion for the two years is

Correct Answer: B [₹ 14,40,000]

Explanation:

Depletion = ₹ 4 per tonne × 360,000 tonnes = ₹ 14,40,000.

22.

Under AS 10, a part of an item of property, plant and equipment whose cost is significant in relation to the total cost of the item is

Correct Answer: A [depreciated separately]

Explanation:

Each significant part is depreciated separately (component approach).

23.

CalculationA firm charges 10% p.a. straight line depreciation on machinery, year ending 31 March. Machine X (₹ 1,50,000) was held all year, Machine Y (₹ 90,000) was bought on 1 October and Machine Z (₹ 60,000), held for several years, was sold on 30 June. Depreciation for the year is

Correct Answer: C [₹ 21,000]

Explanation:

X ₹ 15,000 + Y 6 months ₹ 4,500 + Z 3 months ₹ 1,500 = ₹ 21,000.

24.

CalculationStock was counted on 8 April at ₹ 1,64,000, while the Balance Sheet date is 31 March. Between 1 and 8 April: purchases ₹ 21,500; sales ₹ 36,000; sales returns received ₹ 2,400 (at selling price). Goods are sold at cost plus 20%. Stock on 31 March was

Correct Answer: D [₹ 1,70,500]

Explanation:

₹ 1,64,000 − ₹ 21,500 + cost of sales ₹ 30,000 − cost of returns ₹ 2,000 = ₹ 1,70,500.

25.

CalculationOpening stock 120 units @ ₹ 50; purchased 200 units @ ₹ 55; issued 180 units; purchased 150 units @ ₹ 60; issued 220 units. Under FIFO (perpetual), the total cost of the units issued is

Correct Answer: C [₹ 21,800]

Explanation:

Issue 1: 120 @ 50 + 60 @ 55 = ₹ 9,300; issue 2: 140 @ 55 + 80 @ 60 = ₹ 12,500; total ₹ 21,800.

26.

CalculationGoods are sold at 25% above cost. Up to the date of a fire: opening stock ₹ 54,000, purchases ₹ 2,86,000, sales ₹ 3,60,000; the owner had taken goods costing ₹ 6,000 for personal use (not recorded). Goods worth ₹ 8,000 were saved. The loss of stock by fire is

Correct Answer: B [₹ 38,000]

Explanation:

Cost of sales = ₹ 3,60,000 × 100/125 = ₹ 2,88,000; stock = ₹ 54,000 + ₹ 2,86,000 − ₹ 6,000 − ₹ 2,88,000 = ₹ 46,000; loss = ₹ 46,000 − ₹ 8,000 = ₹ 38,000.

27.

AS 2 (Valuation of Inventories) does NOT apply to

Correct Answer: A [shares and debentures held as stock-in-trade]

Explanation:

Financial instruments held as stock-in-trade are outside the scope of AS 2.

28.

CalculationExtract from the trial balance of Malar Traders (₹): sales 6,20,000; purchases 3,85,000; opening stock 70,000; wages 26,000; carriage inwards 9,000; salaries 72,000; rent 36,000; insurance 12,000; advertising 15,000; discount received 3,000; commission received 8,000; interest on loan 6,000; machinery 2,00,000; furniture 50,000. Adjustments: closing stock 92,000; salaries outstanding 6,000; insurance prepaid 3,000; commission accrued 2,000; depreciation 10% on machinery and furniture. The net profit is

Correct Answer: D [₹ 66,000]

Explanation:

Gross profit ₹ 2,22,000; + other income 13,000 − expenses (78,000 + 36,000 + 9,000 + 15,000 + 6,000 + depreciation 25,000) = ₹ 66,000.

29.

CalculationA partner draws ₹ 3,000 in the middle of every month throughout the year. Interest on drawings is 12% p.a. The interest charged is

Correct Answer: C [₹ 2,160]

Explanation:

Drawings in the middle of each month earn interest for 6 months on average: ₹ 36,000 × 12% × 6/12 = ₹ 2,160.

30.

CalculationOpening stock ₹ 64,000; purchases ₹ 3,46,000; carriage inwards ₹ 10,000; sales ₹ 4,80,000. The firm earns a gross profit of 20% on cost. The closing stock is

Correct Answer: D [₹ 20,000]

Explanation:

20% on cost = 1/6 of sales; cost of sales = ₹ 4,80,000 × 100/120 = ₹ 4,00,000; closing stock = ₹ 64,000 + ₹ 3,46,000 + ₹ 10,000 − ₹ 4,00,000 = ₹ 20,000.

31.

CalculationDebtors ₹ 3,00,000. Adjustments: write off further bad debts ₹ 10,000, create a provision for doubtful debts at 5% and a provision for discount on debtors at 2%. Debtors are shown in the Balance Sheet at

Correct Answer: B [₹ 2,69,990]

Explanation:

₹ 2,90,000 − 5% (₹ 14,500) = ₹ 2,75,500; − 2% discount on that (₹ 5,510) = ₹ 2,69,990 (B12 ch 9).

32.

Interest on a loan given to the firm by a partner is

Correct Answer: A [debited to the Profit and Loss Account as a charge against profit]

Explanation:

Interest on a partner's loan is a charge against profit, not an appropriation (B12 ch 9, Trap Alert).

33.

CalculationSubscription income in a club's Income and Expenditure Account is ₹ 96,000. Subscriptions outstanding were ₹ 5,000 at the start and ₹ 7,500 at the end; subscriptions received in advance were ₹ 3,000 at the start and ₹ 4,200 at the end. Cash received from subscriptions during the year was

Correct Answer: D [₹ 94,700]

Explanation:

Cash = ₹ 96,000 + ₹ 5,000 − ₹ 7,500 − ₹ 3,000 + ₹ 4,200 = ₹ 94,700 (B12 ch 10, converters).

34.

CalculationA Prize Fund stood at ₹ 75,000. During the year interest of ₹ 6,000 was earned on its investments, donations for prizes of ₹ 4,500 were received and prizes of ₹ 9,800 were awarded. The closing balance of the Prize Fund is

Correct Answer: A [₹ 75,700]

Explanation:

₹ 75,000 + ₹ 6,000 + ₹ 4,500 − ₹ 9,800 = ₹ 75,700; the fund's own income is added to it (B12 ch 10).

35.

CalculationA club received: legacy ₹ 50,000; life membership fees ₹ 30,000; entrance fees ₹ 12,000; donation for a new building ₹ 1,00,000; sale of old newspapers ₹ 1,500; general donation ₹ 8,000; sale of old furniture ₹ 6,000. Treating entrance fees as revenue (the usual treatment), the total of capital receipts is

Correct Answer: C [₹ 1,86,000]

Explanation:

Capital: legacy + life membership + building donation + sale of furniture = ₹ 1,86,000; entrance fees, newspapers and the general donation are revenue.

36.

Interest of ₹ 4,800 earned on the investments of a Scholarship Fund is

Correct Answer: B [added to the Scholarship Fund]

Explanation:

The income of a special fund's investments belongs to that fund (B12 ch 10).

37.

Work out the date of maturity: drawn 25 June 2026, payable three months after sight, sighted and accepted on 29 June 2026.

Correct Answer: D [1 October 2026]

Explanation:

After sight counts from acceptance: 29 September + 3 days of grace = 2 October, a national holiday, so the bill is due on the preceding business day, 1 October 2026.

38.

CalculationArjun's acceptance for ₹ 18,500 is dishonoured and noting charges of ₹ 100 are paid. Arjun is declared insolvent and his estate pays 35 paise in the rupee. The amount written off as bad debts is

Correct Answer: C [₹ 12,090]

Explanation:

Due ₹ 18,600 (noting included); received ₹ 6,510; bad debts ₹ 12,090 (B12 ch 11, Paise Split).

39.

Statement-basedConsider the statements:
I. In the sectional balancing system only the general ledger is made to balance.
II. In the self-balancing system, the General Ledger Adjustment Account in the creditors' ledger normally has a credit balance.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

Sectional balancing keeps memorandum total accounts in the general ledger only; the GLA in the creditors' ledger mirrors the credit-balance Creditors' Ledger Adj.

40.

CalculationData for the Debtors' Ledger Adjustment Account: opening ₹ 1,40,000; credit sales ₹ 3,60,000; bills receivable received ₹ 60,000, of which ₹ 20,000 were discounted with the bank; a discounted bill of ₹ 8,000 was dishonoured; cash received from debtors ₹ 2,90,000; bad debts recovered ₹ 2,500; interest charged on an overdue account ₹ 1,200; transfer to the creditors' ledger ₹ 9,000. The closing balance is

Correct Answer: B [₹ 1,50,200]

Explanation:

1,40,000 + 3,60,000 + 8,000 + 1,200 − 60,000 − 2,90,000 − 9,000 = ₹ 1,50,200; discounting and recoveries do not touch customers' accounts.

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